SPOUSES ROBERT DINO AND CRISTINA DINO, PETITIONERS, VS. COURT OF APPEALS, CONSORCIA SOMBRIO AND SPOUSES FROILAN PERNITO AND PROSERFINA PERNITO, RESPONDENTS.

This is a petition to review on certiorari the decision^[1]
dated August 6, 1990 of the Court of Appeals affirming the decision of the
trial court^[2] in ordering the
Register of Deeds of Cebu City to cancel TCT No. 87156 which emanated from TCT
No. 73069 and to reinstate TCT No. 67441 in the name of the late Consorcia
Sombrio or issue another one in lieu of the old one, as well as the resolution
dated October 24, 1990 denying petitioners’ motion for reconsideration of the
appealed decision.

The facts as found by the trial court are as follows:

On December 21, 1978, Consorcia Sombrio, an old and illiterate
lady who is the registered owner of a parcel of land and its improvements
covered by TCT No. 67441 located at 15 F. Gochan Street, Mabolo, Cebu City
containing an area of 1,008 square meters, more or less, was made to sign a
document by Maria Ching purportedly to be a letter authorizing the latter to
sell said property to Benedicto. However, said document turned out to be a Deed of Sale of said property
in favor of Maria Ching.^[3]
Consequently, TCT No. 67441 was cancelled and TCT No. 87156 was issued in the
name of Maria Ching.^[4]

Upon Sombrio’s discovery of said fraud, she filed, on May 11,
1979, an action against Maria Ching and notary public Ciriaco Alcazar, who notarized
said document without the presence of Sombrio, with the Regional Trial Court of
Cebu City, Branch IV in Civil Case No. R-18073 for the annulment of the sale
and the cancellation of TCT No. 87156 alleging that Maria Ching through
fraudulent representations and without any consideration tricked and deceived
Sombrio into signing said Deed of Sale.

Thereafter, Maria Ching mortgaged said property to petitioners
spouses Robert and Cristina Dino with the notice of lis pendens
annotated on the TCT No. 87156 as evidenced by Entry No. 2814-V-19-D.B. on said
TCT.^[5]

On July 22, 1981, a decision based on a compromise agreement
executed between Sombrio and Maria Ching was rendered, to wit:

“A Compromise Agreement, duly signed by the parties,
plaintiff, assisted by counsel, and defendants likewise assisted by their
counsel, has been submitted to this Court with a prayer that the same be
approved and that judgment be rendered in accordance with the terms and
conditions thereof. The said agreement
reads:

‘COMPROMISE
AGREEMENT

With the assistance of counsel, this Compromise Agreement,
involving the above-entitled case, made and entered at Cebu City, Philippines,
this 23rd day of June, 1981 by and between plaintiff and the defendants
above-named,

WITNESSETH:

1. That plaintiff,
Consorcia Vda. de Sombrio makes known that she has not caused the filing of the
above-entitled case, the truth being that she was influenced, forced, coerced,
manhandled and intimidated to sign the complaint by one Froilan Pernito who is
interested in the land subject-matter of this suit; the occupancy of Froilan
Pernito is merely tolerated whose right, if any, is subordinate to that of
defendant Maria Buracan Ching;

2. That right from
the start or commencement of this suit, plaintiff has never engaged the
services of counsel; it was Froilan Pernito who secured, shouldered and paid
the services of counsel in the prosecution of the above-entitled case; just
recently, without authority and consent from the plaintiff, the said Froilan
Pernito has engaged the services of new counsel, Atty. Jose Batiquin, who is
not personally known to the plaintiff;

3. That apart from
the reason stated, supra, plaintiff hereby declares voluntarily and upon
her own free will, without any mental reservation, that the deed of absolute
sale dated December 21, 1978, involving the land subject matter of this suit
executed by and between her and Maria B. Ching, notarized by Ciriaco
Alcazar per document No. 884, Page No. 44, Book III, Series of 1978 is regular
and valid and was executed for a consideration in the amount of ONE HUNDRED
THOUSAND (P100,000.00) PESOS, receipt of which was acknowledged at the time of
the execution of that presents and that she was not deceived nor fraudulently
induced and unlawfully influenced into signing the aforesaid deed of sale; for
which reason, she freely and voluntarily DESIST from further prosecuting the
above-entitled case;

4. That plaintiff is
turning over the physical or actual possession of the land in question,
together with all the improvements found therein, to the defendant Maria B.
Ching, entitling the latter to such writ of possession as may be necessary
against parties, like Froilan Pernito, whose possession is illegal and
unauthorized;

5. That defendants,
on the other hand, hereby waive their right to proceed with their counterclaims
against plaintiff.

WHEREFORE, it is most
respectfully prayed that the foregoing compromise agreement be approved and
that judgment be rendered in accordance therewith.

Cebu City, Philippines, June 23, 1981.

(Sgd.) CONSORCIA VDA. DE SOMBRIO

Plaintiff

(Sgd.) MARIA B. CHING

Defendant

Assisted by:

(Sgd.) EXEQUIL L. RUBI Atty. Pablo Badong
&

Counsel for the plaintiff Associates,

counsel for

defendants,

By: (SGD.) MIGUEL R. ZOSA

SIGNED IN THE PRESENCE OF:

(Sgd.) CORAZON PANTINO

(Sgd.) REMEDIOS SOLON

Finding the Compromise Agreement quoted above to be not contrary to
law, public order, public policy, morals or good customs, the same is hereby
approved, and judgment is hereby rendered in accordance therewith, without
pronouncement as to costs. Strict
compliance with the said Compromise Agreement is hereby enjoined.”^[6]

From said decision, Maria Ching went to the Register of Deeds of
Cebu City to cancel the notice of lis pendens as evidenced by Entry No.
6008-21-D.B. dated July 27, 1981.^[7]

On the other hand, Sombrio appealed said decision to the Court of
Appeals alleging that the Compromise Agreement was done under dubious
circumstances since she was kidnapped and released only after said Compromise
Agreement had been signed by her. Moreover, Atty. Jose Batiquin who was Sombrio’s counsel of record was
substituted by another counsel, Atty. Exequil Rubi who was a partner of Maria
Ching’s lawyer, in said Compromise Agreement.

In the meantime, on May 30, 1983, while said appeal was still
pending with the appellate court, Maria Ching sold to the petitioners the
subject property free from any written notice of liens or encumbrances. Thereafter, TCT No. 73069 was cancelled and
a new one, TCT No. 87156, was issued in the name of the petitioners by the
Register of Deeds of Cebu City.

Since then, petitioners have been in continuous and peaceful
possession of the subject property which they turned into a clinic and center
of autistic and behaviorally handicapped children.

On February 7, 1989, the Court of Appeals rendered its decision,
the dispositve portion of which reads:

“WHEREFORE, the decision approving the compromise agreement is
hereby set aside and another one is rendered annulling the deed of sale of
December 21, 1978 and cancelling Transfer Certificate of Title No. 73069 of the
Registry of Deeds of Cebu in the name of defendant-appellant and ordering the
Register of Deeds of Cebu to reinstate Transfer Certificate of Title No. 67441
in the name of plaintiff-appellant or to issue another one in the name of said
plaintiff appellant in lieu of the old one. No pronouncement as to damages and costs.”^[8]

On March 2, 1989, said decision became final and executory. When the records were remanded to the trial
court, Sombrio filed a Motion for Execution on July 18, 1989.

On July 19, 1989, the trial court ordered the issuance of a writ
of execution. However, when the Deputy
Provincial Sheriff went to the Register of Deeds of Cebu City to execute said
writ, the latter informed the former that TCT No. 73069 was already cancelled
and transferred to petitioner Dino who was not a party in Civil Case No. R-18073.

On July 22, 1989, Sombrio filed a motion for the issuance of
a writ of possession
which was granted in an Order
dated July 24, 1989, the pertinent portion of which reads:

“Finding the motion to be in order, the same is hereby granted
and accordingly, the Register of Deeds for Cebu City is ordered to implement
within three (3) days from receipt hereof, the said judgment of the Honorable
Court of Appeals.

Let a Writ of Possession issue directing the Provincial Sheriff or
his duly authorized representative to place plaintiff Consorcia Sombrio in
actual, physical and peaceful possession of a parcel of land and the
improvements thereon covered by Transfer Certificate of Title No. 67441, Lot
No. 1, Block 7 of the Consolidation and Subdivision Plan Pcs-326, being a part
of the Consolidation Lots Nos. 675 and 1424 of Banilad Friar Estate GLRO Record
5988 situated in Cebu City, and containing an area of ONE THOUSAND AND EIGHT
(1,008) SQUARE METERS.”

On July 26, 1989, the trial court issued a writ of possession
directing the provincial sheriff of Cebu City to place Consorcia Sombrio in
actual physical possession of the subject property and its improvement.^[9]

Upon receipt of said writ, the Register of Deeds, on July 27,
1989, filed with the trial court a motion for
the issuance of an Order directing the Register of Deeds of Cebu City to
perform his duty consistent with
his ministerial function while petitioners, on July 31, 1989, filed with said
court an Extremely Urgent Motion to Quash Writ of Possession together with an
Affidavit of Third-Party claims.^[10]

On August 8, 1989, private respondents spouses Froilan and
Proserfina Pernito filed their comments on petitioners’ Motion to Quash Writ of
Execution. Said private respondents
entered their appearance for the first time in Civil Case No. R-18073 claiming
to be the successors-in-interest of the late Consorcia Sombrio pursuant to a
Deed of Sale executed between private respondents and Sombrio during the
pendency of this case,^[11]
to which petitioners filed its Rejoinder on August 11, 1989.^[12]

Acting on said motions, the trial court issued an Order dated
August 17, 1989, the dispositive portion of which reads:

“WHEREFORE, for all the foregoing considerations, the motion of spouses Robert and Cristina Dino
is denied. The Register of Deeds of
Cebu City is directed to follow and implement the final judgment of the Court
of Appeals by cancelling
Transfer Certificate of Title. No. 73069 and Transfer Certificate of Title No.
87156 emanating therefrom and reinstate Transfer Certificate of Title No. 67441
in the name of plaintiff-appellant Consorcia Sombrio or issue another one in
her name in lieu of the old one by annotating therein ‘issued pursuant to a
final judgment rendered by the Court of Appeals in CA-G.R. CV No. 04725,
entitled Consorcia Sombrio v. Maria Buracan Ching, et al. dated February 7,
1989.’”^[13]

From said Order, petitioners filed their Motion for
Reconsideration which was denied on September 30, 1989.

On October 18, 1989, the trial court issued the following Order:

“Deputy Sheriffs Rene Natividad and Jessie Belarmino in their
manifestation dated October 10, 1989 declared that in compliance with their
appointment as special sheriffs dated July 28, 1989, they implemented the writ
of execution issued in this case but withheld delivery of possession until the
rightful possessor shall have been determined on account of the fact that
plaintiff Consorcia Sombrio is already deceased. The Deputy Sheriffs found themselves in a quandary as to whom to
deliver the possession of the property because they received a letter dated
October 4, 1989 sent by Atty. Manuelito Inso, counsel for Spouses Roberto Dino
and Cristina Dino, claiming ownership of the subject property. This matter is already settled in the Order
dated September 30, 1989.

Spouses Froilan Pernito and Proserfina Pernito on record appear as
the successors-in-interest of the deceased Consorcia Sombrio pursuant to the
memorandum of agreement for the sale of said
land executed on April 23, 1979 marked as Annex ‘B’ in the Sheriff’s report
dated August 1, 1989. The record shows
that so far no heir or successor-in-interest of the deceased Consorcia Sombrio
appeared to claim possession over the property except the herein spouses
Froilan Pernito and Proserfina Pernito.

IN VIEW THEREOF, the above-mentioned Deputy Sheriffs are directed
to deliver the property subject of the writ of execution in favor of spouses
Froilan Pernito and Proserfina Pernito who are the present claimants or
successors-in-interest of Consorcia Sombrio until they are lawfully
dispossessed by other rightful claimant or successor-in-interest with a
better right.”^[14]

On October 23, 1989, petitioners filed with the Court of Appeals
a Petition for Certiorari, Prohibition and Mandamus which was
denied on August 6, 1990. Petitioners’
Motion for Reconsideration was, likewise, denied on October 24, 1990.

Hence, this petition.

Petitioners contend that the Court of Appeals acted with grave
abuse of discretion when it ordered the cancellation of petitioners’ Transfer
Certificate of Title of the subject property considering that they are not
privies Civil Case No. R-18073 and to consider them privies to the same would
outrightly deny petitioners their right to due process. Petitioners also contend that they had
acquired the subject property in good faith and for value because the notice of
lis pendens was already cancelled at the time the Deed of Sale was
executed therefore they are
innocent holder for value of a certificate of title.

We find the petition meritorious.

Section 76 of P.D. 1529 provides that:

“SEC. 76. Notice of lis pendens.– No action to recover
possession of real estate, or to quiet title thereto, or to remove clouds upon
the title thereof, or for partition, or other proceedings of any kind in court
directly affecting the title to land or the use or occupation thereof or the
buildings thereon, and no judgment, and no proceeding to vacate or reverse any
judgment, shall have any affect upon registered land as against persons other
than the parties thereto, unless a memorandum or notice stating the institution
of such action or proceeding and the court wherein the same is pending, as well
as the date of the institution thereof, together with a reference to the number
of the certificate of title, and an adequate description of the land affected
and the registered owner thereof, shall have been filed and registered.”

Under said law, lis pendens may lie
only where there is an action or proceeding in court, which affects title to,
or possession of real property. In
other words, lis pendens is the jurisdiction, power, or control
which the court acquires over the property involved in the suit pending the
continuance of the action; and until its final judgment therein, it has for its
object the keeping of the subject or res within the power of the court until
the judgment or decree shall be entered, to make it possible for courts of
justice to give effect to their judgments and decrees.^[15]
This, in effect, is the essence of the rule of lis pendens. When a case is commenced involving any right
to land registered under the Land Registration Law, any decision therein will
bind the parties only, unless a notice of the pendency of such action is
registered on the title of the said land, in order to bind the whole world as
well. Therefore, in order that a notice
of lis pendens may affect the right of a subsequent purchaser, such
notice should be annotated on the back of the certificate of title, which is
not present in the case at bar.

The appellate court acted without jurisdiction when it ordered
the cancellation of petitioners’ title as the judgment which was rendered in
Civil Case No. R-­18073 and affirmed by the Court of Appeals on February 7,
1989 did not bind petitioners because at the time petitioners purchased the
subject property, the vendor’s (Maria Ching) title to said property was clean
and free from any lien and encumbrance since the notice of lis pendens
which was annotated on said title or certificate had already been cancelled for
more than a year.

Where the certificate of title was already in the name of the
forger when the land was sold to an innocent purchaser, the vendee had the
right to rely on what appeared in the certificate and, in the absence of
anything to excite suspicion, was under no obligation to look beyond the
certificate and investigate the title of the vendor appearing on the face of
said certificate.^[16]
Under the Torrens system, registration is the operative act that gives validity
to the transfer or creates a
lien upon the land. A person dealing
with registered land is not required to go behind the register to determine the
condition of the property. He is only
charged with notice of the burdens on the property which are noted on the face
of the register or the certificate of title. To require him to do more is to defeat one of the primary objects of the
Torrens system.^[17]
Moreover, registration of land under the Torrens system extinguishes all
claims, liens and encumbrances asserted prior to registration except statutory
liens and those noted in the certificate of title.^[18]

As the registered owner of the subject property, petitioners are
not bound by the decision in Civil Case No. R-18073 for they were never
summoned in said case and the notice of lis pendens annotated on TCT No. 73069 was already cancelled
at the time petitioners purchased the subject property. While it is true that petitioners are
indispensable parties in Civil Case No. R-18073, without whom no complete
relief could be accorded to the private respondents, the fact still remains
that petitioners were never actually joined as defendants in said case. Impleading petitioners as additional defendants
only in the execution stage of said case violated petitioners’ right to due
process as no notice of lis pendens was
annotated on the existing certificate of title of said property nor were
petitioners given notice of the pending case, therefore petitioners remain
strangers in said case and the Order of the trial court involving them is null
and void, considering that petitioners are innocent purchasers of the subject
property for value.

Private respondents’ remedy is to file a claim for damages against
Maria Ching to recover the consideration for said property.

WHEREFORE, the decision dated August 6, 1990 of the Court
of Appeals and the resolution dated October 24, 1990 are annulled and set
aside. TCT No. 87156 in the name of
petitioners are hereby reinstated. Costs de officio.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, and Regalado, JJ., concur.

Melo, J., no part.

^[1]
Penned by Justice Jorge S. Imperial with the concurrence of Justice Reynato S.
Puno and Justice Filemon H. Mendoza.

^[2]
Penned by Judge Jose Burgos.

^[3]
CA’s Rollo, p. 65.

^[4]
Id., at p. 18.

^[5]
Id., at p. 16.

^[6]
RTC’s Decision, pp. 1-2; CA’s Rollo, pp. 54-55.

^[7]
CA’s Rollo, p. 16.

^[8]
CA’s Decision, pp. 5-6; CA’s Rollo, pp. 67-68.

^[9]
CA’s Rollo, pp. 19-20.

^[10]
Id., at pp. 21-25.

^[11]
Id., at pp. 30-34.

^[12]
Id., at pp. 35-42.

^[13]
Order, CA’s Record, p. 47.

^[14]
CA’s Decision, pp. 7-8; Rollo, pp. 30-31.

^[15]
Noblejas and Noblejas, Registration
of Land Titles and Deeds, 1986 Edition, p. 301.

^[16]
De Lara vs. Ayroso, 95 Phil. 185 (1954).

^[17]
Noblejas and Noblejas, Registration of Land Titles and Deeds, 1986 Edition, p.
224.

^[18]
Felix Gochan and Sons Realty Corp. vs. Cañada, 165 SCRA 207 (1988).