ATANASIO PINEDA, PLAINTIFF AND APPELLEE, VS. MARGARITA SANTOS, IN HER OWN BEHALF AND AS JUDICIAL ADMINISTRATRIX OF THE INTESTATE ESTATE OF NATALIO SANTOS, DEFENDANT AND APPELLANT.

The defendant Margarita Santos in her own behalf and as judicial
administratrix of the intestate estate of Natalio Santos, appealed from the
judgment of the Court of First Instance of Rizal requiring her to pay the
plaintiff the sum of P8,000 with legal interest from March 28, 1926 until fully
paid, and the amount of P2,334.30 as damages, and costs.

The action was brought by the plaintiff-appellee to annul the contract of
sale hereinafter discussed.

On July 14, 1925, appellant and appellee executed Exhibit D whereby the
former bound herself to sell to the latter 213,370 square meters of calcareous
land in the municipality of Montalban, Province of Rizal, belonging to the late
Natalio Santos, whose judicial administratrix she was, for the sum of P8,000,
the contract to be subject to the approval of the proper probate court.
According to Exhibit C the appellee made a part payment of P500 to the
appellant. Having obtained the judicial approval on the 30th of that month, the
parties executed the deed Exhibit A, whereby the appellant sold the land in fee
simple to the appellee at the price stipulated, receiving a check (Exhibit B)
for the remainder of the agreed price, P7,500. The appellee entrusted the
draughting of the deed of sale to his lawyer, Lorenzo Sunico and upon the date
of its execution and acknowledgment both parties appeared before the latter, who
acted as notary public. In the deed the appellant expressly stated that she was
the owner in fee simple of the property, and that she conveyed it “free of all
charge, lien, and liability.” At that time the property was registered under the
Torrens system and the transfer certificate of title No. 8986 was issued in
favor of one Gabriel Cruz who had previously executed another absolute deed of
sale in favor of the late Natalio Santos, but as it had not been presented for
registration, no new transfer certificate was issued. On that occasion the
appellant exhibited the said transfer certificate to the notary public; the
latter as well as the appellee examined it and saw that it bore no annotation of
any encumbrance, or of the lis pendens which now appears thereon and
which we shall discuss later. After the deed had been signed Attorney Sunico
took it with him, together with the transfer certificate of title, to the office
of the registrar of deeds for the Province of Rizal, in order to have the first
recorded and the second cancelled, and a new transfer certificate issued in
favor of the appellee. When the lawyer went back to said office to get those
documents he was surprised to see that the Us pendens notice had been entered on
the transfer certificate of title as of April 25, 1925, 8.16 a. m. He spoke to
registrar Jose Tupas, and upon asking him why he had made the annotation with an
earlier date, he was told that one A. A. Addison had filed a lis pendens notice
on April 24, 1925, and that, having noted the 25th of said month on the original
certificate of title to the land, he had to do so on the transfer certificate as
well. Sunico left the office and returning to his own, informed his client, the
appellee, of what had happened, who thereupon took steps to have the deed of
sale set aside, and later brought an action for nullity, which was nonsuited,
and later reproduced in the action which gave rise to this appeal.

Some time before the discovery of the lis pendens notice, the
appellee had conveyed the same property at the same price to the Pineda, Ampil
Manufacturing & Co., Inc., but when the latter found that there was such a
notice recorded, it sought and obtained the rescission of the sale.

While the appellee was in possession of the land and before he transferred it
and brought the action for nullity, he was engaged in the lime business for
which he had purchased the property, and spent the sum of P2,334.30 which is one
of the sums awarded to him by the court.

The appellant has assigned a number of alleged errors as committed by the
court a quo, but they all hinge on the main question, whether the
lis pendens notice appearing on the transfer certificate of title was
entered after the consummation of the contract of sale, and whether there was
fraud in the contract vitiating the appellee’s consent. For this reason we shall
not stop to consider or take up these assignments of error separately.

We have carefully examined all the evidence and arrived at the conclusion
that said annotation was entered on the transfer certificate of title after the
execution of the deed of sale, and that the appellant’s statement in the deed to
the effect that the property was absolutely free of all liens and encumbrances
was untrue and therefore misled the appellee into giving his consent. This
conclusion is borne out both by the testimony of the appellee and Attorney
Sunico, and by the admissions of the registrar of deeds, Jose Tupas. The latter
plainly admitted during his testimony that he entered the lis pendens
notice upon the transfer certificate of title many days after the date therein
set forth, probably after the 1st of May, and from this it may be reasonably
inferred that this official did not exactly remember the correct date of the
annotation, which leads us to believe that the testimony of Attorney Sunico and
the appellee was not altogether improbable when they said that such annotation
was made after July 30,1925, and only when the transfer certificate of title was
presented at the office of the registrar together with the deed of sale.

A notice of the pendency of an action in accordance with section 79 of Act
No. 496, applicable to the case in question, constitutes a legal lien and the
result of the litigation referred to affects the parties thereto and all who
might have any interest in the lands which are the subject of such action.
(Section 79, Act No. 496; Atkins, Kroll & Co. vs. Domingo, 46
Phil., 362.) The present case must not be governed by the provisions of articles
42 and 43 of the Mortgage Law, invoked by the appellant.

The judgment appealed from being in accordance with ,the law, it is hereby
affirmed in its entirety, with the costs of this instance against the appellant.
So ordered.

Avanceña, C. J., Johnson, Street, Malcolm, Villamor, Ostrand,
Romualdez, and Villa-Real, JJ., concur.