Heirs of Juan Esquivel vs. Charles Pielago Clemente III

A subsequent purchaser of registered land who is not impleaded in a pending in personam reconveyance case is bound by the judgment only upon actual or constructive knowledge of the litigation; a facially defective cancellation of a notice of lis pendens does not terminate constructive notice and instead imposes a duty to inquire, and the issue of innocent purchaser for value must be resolved after hearing, not summarily in a certiorari petition.

The dispute concerns Lot No. 647, originally covered by OCT No. 980(2324) in the names of Ramon Esquivel and Pia Altavano, parents of Juan Esquivel. Petitioners are Juan's heirs, who filed a reconveyance case against relatives and transferees, including Allied Moulding Corporation (AMC). Respondent Charles Pielago Clemente III is a subsequent purchaser of the subject property from AMC. The case arises under the Torrens system governed by Presidential Decree No. 1529, particularly the rules on notice of lis pendens, constructive notice, and the protection of innocent purchasers for value.

Lot No. 647 was originally covered by OCT No. 980(2324) in the names of Ramon Esquivel and Pia Altavano, the deceased parents of Juan Esquivel. Petitioners are the Heirs of Juan Esquivel, who claimed a share in the property. On June 1, 1998, Gloria Esquivel-Samar and Roger Esquivel executed an Extrajudicial Settlement of Estate, which cancelled OCT No. (980)2324 and caused the property to be registered in their names under TCT No. 49305. The property was then subdivided into Lots 647-A, 647-B, and 647-C. Lot 647-B was donated to the City of Legazpi and converted into a public road, while Lots 647-A and 647-C were registered under TCT Nos. 49440 and 49439 in the names of Roger and Gloria, respectively.

Sometime in October 1998, Gloria and Roger sold Lots 647-A and 647-C to Allied Moulding Corporation (AMC). TCT Nos. 49439 and 49440 were cancelled, and TCT Nos. 49569 and 49570 were issued in AMC's name. On August 11, 1999, petitioners filed a Complaint for Reconveyance, Legal Redemption and Damages against Roger, Gloria, the City of Legazpi, AMC, and the Register of Deeds of Legazpi City. On September 6, 1999, petitioners caused the annotation of a Notice of Lis Pendens on TCT Nos. 49569 and 49570 as Entry No. 14221.

On May 26, 2005, while the Reconveyance Case was pending, Entry No. 14221 was cancelled by Entry No. 11302 on the basis of a Supreme Court Decision in G.R. No. 163877. That case involved a certain Juan Sarza against Roger, Gloria, AMC, the City of Legazpi, and the Register of Deeds of Legazpi City, and was distinct from the Reconveyance Case. From May 2005 to December 3, 2014, the Notice of Lis Pendens was neither reinstated nor replaced by a new annotation. On February 17, 2010, the RTC rendered its Decision in the Reconveyance Case, finding that Lot No. 647 remained part of the Estate of Ramon Esquivel when he died on March 9, 1930; that his heirs inherited it in equal shares; and that Gloria and Roger could not unilaterally adjudicate it to themselves. The RTC ordered the restoration of OCT No. (980)2324 and the cancellation of TCT No. 49305 and succeeding titles, including TCT Nos. 49439, 49440, 49569, and 49570. It also found that Legazpi City and AMC were not innocent purchasers for value, although Lot 647-B had become public domain, subject to just compensation.

On January 14, 2014, the CA affirmed with modification the RTC Decision. It nullified the Extrajudicial Settlement of Estate dated June 1, 1998; declared the Deed of Sale over Lot No. 647 in favor of AMC valid only as to the proportionate shares of the Heirs of Felisberto represented by Roger, Gloria, and the Heirs of Felix Esquivel; decreed the cancellation of TCT No. 49305 and TCT Nos. 49439, 49440, 49569, and 49570; and ordered the restoration of OCT No. (980)2324 in the names of Spouses Ramon and Pia Esquivel, with cancellation of the TCTs covering only Lots 647-A and 647-C. The CA Decision was appealed to the Supreme Court in G.R. No. 212055. On January 26, 2015, the Supreme Court dismissed the appeal for failure to show reversible error; the Resolution became final and executory on October 28, 2015. Meanwhile, on December 3, 2014, while G.R. No. 212055 was pending, respondent Charles Pielago Clemente III bought Lots 647-A and 647-C from AMC. The Deeds of Absolute Sale were registered, TCT Nos. 49569 and 49570 were cancelled, and TCT Nos. 085-2014000513 and 085-2014000514 were issued in respondent's name.

After finality, petitioners sought execution of the judgment cancelling TCT No. 49305 and the succeeding titles. On December 15, 2016, the RTC issued a Writ of Execution. The Register of Deeds could not restore OCT No. (980)2324 because TCT Nos. 49569 and 49570 had already been cancelled and superseded by respondent's TCTs. Petitioners sent demand letters to respondent asking him to surrender his TCTs, but he did not act. Petitioners then filed a Motion to Direct Charles Pielago Clemente III to Produce TCT Nos. 085-2014000513 and 085-2014000514. Respondent opposed the motion, claiming he acquired the property in good faith by a valid absolute sale from AMC, that there was no adverse claim annotation on AMC's titles when he bought the property, and that he was not impleaded in the Reconveyance Case and was denied an opportunity to defend his claim. The cancellation entry, Entry No. 11302, stated that the lis pendens under Entry No. 14221 was cancelled by virtue of a court order issued by Teresita G. Dimaisip, Supreme Court, under Case No. G.R. # 163877, with date of instrument November 20, 2004 and date of inscription May 26, 2005. The RTC found that the Notice of Lis Pendens was erroneously cancelled under Entry No. 11302 and that respondent should have inquired about the annotations on the titles. The CA found that from May 26, 2005 to December 3, 2014, the Notice of Lis Pendens was never reinstated and no new notice was annotated.

• Lis Pendens and Duty to Inquire: Petitioners maintained that respondent may be directed to surrender his certificates of title even if he is not a party in the Reconveyance Case because he remains bound by the Notice of Lis Pendens under Entry No. 14221; the mere existence of Entry No. 14221 on TCT Nos. 49569 and 49570 should have put respondent on guard and prompted him to inquire beyond the four corners of AMC's titles.
• Investigation of Cancellation: Petitioners argued that respondent should have investigated the termination of the Reconveyance Case because Entry No. 11302, which cancelled Entry No. 14221, merely mentioned a purported Supreme Court ruling in G.R. No. 163877 without expressly stating the parties thereto and the incidents involved in that case.
• Misapplication of Constantino: Petitioners asserted that the CA misapplied the legal concept of a buyer in good faith and erroneously relied on Constantino as basis for its ruling; Constantino does not apply because the Notice of Lis Pendens dated September 6, 1999 was clearly inscribed on TCT Nos. 49570 and 49569 as Entry No. 14221.

• Reliance on Cancelled Lis Pendens: Respondent countered that the CA correctly applied Constantino in his favor; the factual circumstances in Constantino are similar to his case, in that the buyer therein was deemed in good faith when it relied on the cancelled annotation of a Notice of Lis Pendens, even though the cancellation was later shown to have been improper or illegal.
• Applicability of Constantino: Respondent argued that Constantino is applicable to him because when he bought the property covered by TCT Nos. 49570 and 49569, the annotated lis pendens had already been cancelled.
• Due Process and Jurisdiction: Respondent maintained that he was never impleaded in the Reconveyance Case; hence, the judgment in the Reconveyance Case cannot be enforced against him without violating his right to due process, and the RTC did not acquire jurisdiction over his person and committed grave abuse of discretion when it directed him to surrender the TCTs in his possession.

• Transferee Pendente Lite and Jurisdiction: Whether the CA correctly held that the RTC lacked jurisdiction over respondent because he cannot be deemed a transferee pendente lite of AMC.
• Cancellation of Notice of Lis Pendens: Whether the cancellation of the Notice of Lis Pendens under Entry No. 11302 terminated its constructive notice despite being based on an unrelated Supreme Court order.
• Innocent Purchaser for Value: Whether the CA correctly ruled that respondent was a buyer in good faith and for value without a hearing.

• Transferee Pendente Lite and Jurisdiction: Partly. The RTC's order directing respondent to surrender his TCTs was premature and constituted grave abuse of discretion because actual or constructive knowledge was not sufficiently established; however, the CA erred in definitively ruling that respondent cannot be a transferee pendente lite merely because the lis pendens had been cancelled, since the cancellation was patently defective and required inquiry.
• Cancellation of Notice of Lis Pendens: No. The cancellation did not terminate constructive notice because Entry No. 11302 was irregular on its face, having been based on an unrelated Supreme Court order in G.R. No. 163877; respondent was charged with constructive knowledge of that defect.
• Innocent Purchaser for Value: No. The CA prematurely declared respondent an innocent purchaser for value without hearing; good faith is a factual issue that must be proved with clear and convincing evidence, and the case must be remanded for reception of evidence.

• Transferee Pendente Lite and Jurisdiction: An action for reconveyance is an action in personam that binds only the parties properly impleaded and their successors-in-interest by title subsequent to the commencement of the action. Under Rule 39, Section 47(b) of the Rules of Court, a judgment in personam is conclusive between the parties and their successors in interest by title subsequent to the commencement of the action. Under Rule 3, Section 19, a transferee pendente lite need not be impleaded because the transferee stands in the shoes of the transferor and is bound by the judgment. However, a subsequent purchaser who was not impleaded in a pending suit for the recovery of title to or possession of registered land becomes bound only when the purchaser had actual or constructive knowledge of the pending litigation. Section 44 of Presidential Decree No. 1529 provides that every subsequent purchaser of registered land taking a certificate of title for value and in good faith holds the same free from all encumbrances except those noted in the certificate and statutory liens. A decision involving title to registered land binds only the parties thereto unless a notice of the pendency of the action is duly registered and annotated on the certificate of title, or the transferee's actual knowledge of the proceedings appears on record. Here, none of these circumstances were sufficiently established by petitioners. Thus, the CA correctly determined that the RTC gravely abused its discretion when it directed respondent to surrender the TCTs. However, the CA erred in definitively ruling that respondent cannot be a transferee pendente lite merely because the notice of lis pendens had been cancelled, because the cancellation itself was patently defective and respondent was charged with constructive knowledge of that defect.
• Cancellation of Notice of Lis Pendens: Actual knowledge of the pending suit may bind a purchaser even when the pending litigation was unrecorded or when the notice was already cancelled at the time of the transfer. Actual notice and knowledge are deemed equivalent to registration. Knowledge ordinarily requires presentation and evaluation of evidence, and may be established without evidence only through judicial admissions or stipulations, which are not present here; respondent disclaimed any knowledge of the pending Reconveyance Case. As to constructive knowledge, Sections 44 and 76 of Presidential Decree No. 1529 and Rule 13, Section 19 of the Rules of Court provide that no court proceeding directly affecting title to or use of registered land shall have any effect against persons other than the parties unless a notice of lis pendens is registered and duly annotated on the certificate of title. Lis pendens serves as constructive notice of a pending case affecting title to or possession of registered land and charges all strangers with knowledge of the pending case. In cases where a notice of lis pendens was duly annotated, a writ of execution may be issued against a person who, though not impleaded, acquired the property while the suit was pending or is a transferee pendente lite, and no separate action need be filed. Here, the notice of lis pendens was annotated on September 6, 1999 as Entry No. 14221 on AMC's titles. It was cancelled by Entry No. 11302 on May 26, 2005, and was not reinstated until respondent bought the property on December 3, 2014. Generally, cancellation of a notice of pendency terminates its effects, and the Torrens certificate is deemed free from notice of the pending suit. However, the general rule admits an exception: a purchaser cannot rely on the presumption of regularity in favor of the annotations on a Torrens certificate of title if the defect is apparent on the face of the document. Entries in official records made by a public officer in the performance of a duty specially enjoined by law are prima facie evidence of the facts stated therein, and the public may presume that an instrument recorded by the Register of Deeds exists and is genuine. Thus, as a general rule, when the Register of Deeds inscribes an entry cancelling a notice of lis pendens, the public may safely presume that the cancellation was correct and therefore terminates the effect of the notice. By way of exception, a purchaser or encumbrancer cannot rely on that presumption if the defect is apparent on the face of the document, as where the cancellation was patently irregular. In Voluntad vs. Spouses Dizon, the cancellation of lis pendens was effected a mere four days from the issuance of the RTC Order, before the lapse of the 15-day period to appeal, and the transferee was required to inquire into the status of the suit. In Mendoza vs. Spouses Garana, the fact that a different person sought the cancellation of an adverse claim was a suspicious circumstance. In Torbela vs. Spouses Rosario, the cancellation did not mention any court order as basis and was caused by an entirely different person. If the defect is not apparent, Muñoz vs. Yabut, Jr. teaches that the presumption of regularity stands and the transferee is considered a stranger to the suit; the victorious party must file a separate action. Here, Entry No. 11302 shows on its face that the Notice of Lis Pendens was cancelled based on a Supreme Court Order in G.R. No. 163877 dated November 20, 2004, recorded on May 26, 2005. Under Section 52 of Presidential Decree No. 1529, the Order in G.R. No. 163877 that was registered constituted constructive knowledge to all persons from the time it was registered. A purchaser is presumed to have examined every instrument of record affecting the title and is charged with notice of every fact shown by the record. Respondent is therefore deemed to have constructive knowledge of the existence and contents of the Order in G.R. No. 163877, which pertained to an entirely different case and parties, i.e., a certain Juan Sarza against Roger, Gloria, AMC, the City of Legazpi, and the Registry of Deeds of Legazpi. Having been issued in a different case involving different parties, the Order patently fails to meet any of the requisites in Section 77 of Presidential Decree No. 1529 for a valid cancellation of a notice of lis pendens. It was not issued by the RTC that acquired jurisdiction over the Reconveyance Case, nor by the CA or the Court pending resolution of the appeal, nor was it a cancellation by order of the Register of Deeds or through a certification from the clerk of court after final judgment. Unlike other cases where cancellation was based on an order issued by the same trial court in the same case, the cancellation here is manifestly flawed. Respondent is thus charged with knowledge of the patent irregularity and must prove that he exercised reasonable precaution by inquiring beyond TCT Nos. 49569 and 49570 in ascertaining the validity of AMC's title.
• Innocent Purchaser for Value: The question of whether a transferee is a buyer in good faith and for value is a factual inquiry. Unless the parties made judicial admissions or stipulations as to intentional and voluntary commission of wrongdoings, the issue of a buyer's good faith or lack thereof can only be resolved through a full-dressed hearing in an appropriate proceeding where the parties are afforded the full opportunity to adduce their respective evidence. The Reconveyance Case settled only the controversy concerning the certificates of title of the parties thereto and did not include respondent's Torrens titles, i.e., TCT Nos. 085-2014000513 and 085-2014000514. In the absence of proof that respondent had actual notice of the Reconveyance Case or failed to exercise reasonable precaution, Section 48 of Presidential Decree No. 1529 must be applied, which prohibits a collateral attack on the certificates of title in respondent's name. By precipitously concluding that respondent is a buyer in good faith without the presentation of evidence, the CA not only dispensed with respondent's burden to prove his status as such, but also deprived petitioners of their right to due process and the full opportunity to defend their interest in the subject property. Considering that the CA was acting in its original jurisdiction as a certiorari court, it should have instead conducted hearings and directed the parties to submit their evidence pursuant to Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902, which grants it the power to conduct hearings, receive evidence, and to perform any and all acts necessary to resolve factual issues pertinent to a case before it. The apparent defect in the cancellation of the notice of lis pendens does not automatically warrant the execution of the final judgment in the Reconveyance Case against respondent. Case law provides that when a buyer has notice of suspicious circumstances concerning the validity of the seller's title over registered land, such that reliance on the face of the land title is no longer sufficient for the transferee to be considered an innocent purchaser for value, they may still establish their good faith by showing that they exercised reasonable precaution by inquiring beyond the title. As explained in Voluntad, if circumstances exist that require a prudent person to investigate and they do not, they are deemed to have acted in mala fide. Hence, respondent should be given the opportunity to assert his status as an innocent purchaser for value, to prove that he exercised reasonable precaution by inquiring beyond the titles of AMC, and to raise any other defenses that he may have against petitioners. In the same vein, petitioners should be allowed to controvert respondent's defenses and evidence, and to raise any other claims that they may have against respondent. The due diligence or reasonable precaution that an innocent purchaser for value must exercise is that of an average person who weighs facts based on common sense, without resorting to the calibration of technical rules of evidence. Indicators of due diligence or precautionary measures must be presented by the party claiming the status of an innocent purchaser for value, e.g., (1) verifying the origin, history, authenticity, and validity of the title with the Register of Deeds and the Land Registration Authority; (2) confirming the status and capacity of the putative vendor to alienate or encumber the property; (3) identifying the metes and bounds of the property with the assistance of a competent and reliable geodetic engineer; (4) conducting an ocular inspection of the property; (5) inquiring with the adjoining lot owners as regards the true and legal owner of the property; and (6) undertaking measures to make the general public aware of the sale or encumbrance to be constituted on the property. The CA is further reminded of the general rule that a void certificate of title cannot be the source of a valid title over a property upon the legal truism that a spring cannot rise higher than its source. A void certificate of title being the root of a valid title over registered land is only an exception to the general rule. The status of a transferee as a buyer in good faith and for value is therefore a matter of defense; hence, the party claiming such status cannot simply rely on the presumption of good faith but must instead prove it with clear and convincing evidence. If the CA determines that respondent did not act with reasonable precaution, then he is deemed a buyer in bad faith and the final judgment in the Reconveyance Case may be enforced against him. If he did, such that respondent is an innocent purchaser for value, then he enjoys the protection granted to subsequent transferees under Section 53 of Presidential Decree No. 1529, without prejudice to the other legal remedies available to petitioners against the person who caused the fraudulent transfer of the subject property to respondent.

• Action in personam and reconveyance — An action for reconveyance seeks to transfer property wrongfully registered by another to its rightful and legal owner. It is an action in personam that binds only the parties properly impleaded in the case and their successors-in-interest by title subsequent to the commencement of the action. A judgment in a reconveyance is binding only upon the parties properly impleaded and duly heard or given an opportunity to be heard. In this case, the Reconveyance Case was in personam, so its judgment could not bind respondent unless he was a party or a successor-in-interest with actual or constructive knowledge of the pending suit.
• Transferee pendente lite — A transferee pendente lite is one who acquires an interest in the property in litigation during the pendency of the case. Under Rule 3, Section 19 of the Rules of Court, it is not necessary for a transferee pendente lite to be impleaded in the pending case because the law considers its interest joined or substituted in the pending action from the exact moment the transfer is perfected. The transferee stands exactly in the shoes of the transferor, and its title is deemed subject to the incidents and results of the pending litigation. However, a subsequent purchaser who was not impleaded in a pending suit for recovery of title to or possession of registered land becomes bound by the judgment only when it had actual or constructive knowledge of the pending litigation.
• Lis pendens and constructive notice — Lis pendens literally means a pending suit. It serves as constructive notice of a pending case that affects title to or possession of the registered land on whose title the notice was recorded. It is an announcement and warning to the whole world that a particular property is in litigation and charges all strangers with knowledge of the pending case, such that any interest in the property that they may thereafter acquire is subject to the eventuality of the suit. Under Sections 44 and 76 of Presidential Decree No. 1529 and Rule 13, Section 19 of the Rules of Court, a court proceeding directly affecting title to or use of registered land has no effect against persons other than the parties unless a notice of lis pendens is registered and duly annotated on the certificate of title. In this case, the notice of lis pendens was annotated on AMC's titles, but its subsequent cancellation was patently defective.
• Cancellation of lis pendens and apparent-defect exception — Cancellation of a notice of pendency generally terminates the effects of such notice, and the Torrens certificate of title is deemed free from any notice of the pending suit. However, a purchaser or encumbrancer cannot rely on the presumption of regularity in favor of the annotations appearing on a Torrens certificate of title if the defect is apparent on the face of the document. The presumption of regularity in the performance of official functions cannot apply if there is an apparent flaw or patent defect appearing in a public document, when the public document or official act is irregular on its face, or when the public document is facially deficient and incomplete due to material omissions apparent thereon. Here, Entry No. 11302 was patently defective because it cancelled the notice of lis pendens based on an unrelated Supreme Court order in G.R. No. 163877, which did not satisfy any of the modes for cancellation under Section 77 of Presidential Decree No. 1529.
• Presumption of regularity of Register of Deeds entries — Entries in official records made by a public officer in the performance of a duty specially enjoined by law are prima facie evidence of the facts therein stated. The Register of Deeds is enjoined to immediately register an instrument presented for registration dealing with real property which complies with all the requisites for registration. The entries made by the Register of Deeds in the Primary Entry Book and in the memorandum of encumbrances of a Torrens certificate of title are prima facie evidence of the facts stated therein, and the public may rightfully presume that an instrument recorded by the Register of Deeds exists and is genuine. As a general rule, when the Register of Deeds inscribes an entry cancelling a notice of lis pendens, the public may safely presume that the cancellation was correct and therefore terminates the effect of the notice. The exception is when the defect is apparent on the face of the document.
• Innocent purchaser for value and burden of proof — The question of whether a transferee is a buyer in good faith and for value is a factual inquiry. Unless the parties made judicial admissions or stipulations, the issue of a buyer's good faith or lack thereof can only be resolved through a full-dressed hearing where the parties are afforded the full opportunity to adduce their respective evidence. The status of a transferee as a buyer in good faith and for value is a matter of defense; the party claiming such status cannot simply rely on the presumption of good faith but must instead prove it with clear and convincing evidence. A buyer who has notice of suspicious circumstances concerning the validity of the seller's title may still establish good faith by showing that it exercised reasonable precaution by inquiring beyond the title. If circumstances exist that require a prudent person to investigate and they do not, they are deemed to have acted in mala fide.
• Due diligence indicators for innocent purchaser — The due diligence or reasonable precaution that an innocent purchaser for value must exercise is that of an average person who weighs facts based on common sense, without resorting to the calibration of technical rules of evidence. Indicators of due diligence include: (1) verifying the origin, history, authenticity, and validity of the title with the Register of Deeds and the Land Registration Authority; (2) confirming the status and capacity of the putative vendor to alienate or encumber the property; (3) identifying the metes and bounds of the property with the assistance of a competent and reliable geodetic engineer; (4) conducting an ocular inspection of the property; (5) inquiring with the adjoining lot owners as regards the true and legal owner of the property; and (6) undertaking measures to make the general public aware of the sale or encumbrance to be constituted on the property.
• Collateral attack on Torrens title — Section 48 of Presidential Decree No. 1529 provides that a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. In the absence of proof that respondent had actual notice of the Reconveyance Case or failed to exercise reasonable precaution, Section 48 must be applied to prohibit a collateral attack on the certificates of title in respondent's name. The Reconveyance Case settled only the controversy concerning the certificates of title of the parties thereto and did not include respondent's Torrens titles.

• "A subsequent purchaser who was not impleaded in a pending suit for the recovery of title to or possession of registered land becomes bound by the judgment rendered in the case only when they have actual or constructive knowledge of the pending litigation." — This states the controlling rule on when a non-impleaded purchaser of registered land is bound by a judgment in a pending suit, which is the core ratio of the decision.
• "The Court finds that the cancellation of the Notice of Lis Pendens on TCT Nos. 49569 and 49570 is irregular on its face." — This is the pivotal factual and legal finding that the cancellation entry was patently defective, thereby charging respondent with constructive knowledge and requiring him to prove reasonable precaution.
• "The question of whether a transferee is a buyer in good faith and for value is a factual inquiry." — This defines the nature of the innocent-purchaser issue and explains why the CA exceeded its certiorari jurisdiction in resolving it without a hearing.
• "If the CA determines that respondent did not act with reasonable precaution, then he is deemed a buyer in bad faith and the final judgment in the Reconveyance Case may be enforced against him. If he did, such that respondent is an innocent purchaser for value, then he enjoys the protection granted to subsequent transferees under Section 53 of Presidential Decree No. 1529, without prejudice to the other legal remedies available to petitioners against the person who caused the fraudulent transfer of the subject property to respondent." — This passage sets out the alternative consequences on remand and the legal effect of the CA's factual determination on respondent's good faith.

• Ching vs. Court of Appeals, 260 Phil. 14 (1990) — Cited for the rule that an action for reconveyance or for declaration of nullity of title and recovery of ownership of real property is an action in personam that binds only the parties properly impleaded and their successors-in-interest by title subsequent to the commencement of the action.
• Mazy's Capital, Inc. vs. Republic, 957 Phil. 37 (2024) — Cited for the rule that a subsequent purchaser who was not impleaded in a pending suit for recovery of title to or possession of registered land becomes bound by the judgment only when they have actual or constructive knowledge of the pending litigation; also cited for the due diligence indicators and the requirement that good faith be proved with clear and convincing evidence.
• Voluntad vs. Spouses Dizon, 372 Phil. 82 (1999) — Cited as the leading example of the apparent-defect exception; the cancellation of lis pendens was effected four days from the RTC Order, before the lapse of the appeal period, and the transferee was required to inquire into the status of the suit.
• Muñoz vs. Yabut, Jr., 665 Phil. 488 (2011) — Cited for the rule that if the defect in the cancellation of a notice of lis pendens is not apparent, the presumption of regularity stands in favor of the transferee, who is considered a stranger to the suit; the victorious party must file a separate action to assail the certificate of title.
• Constantino vs. Espiritu, 150-A Phil. 953 (1972) — Cited by the CA and respondent for the proposition that a buyer may be deemed in good faith when relying on a cancelled annotation of a notice of lis pendens; the Supreme Court distinguished it because the cancellation in this case was patently defective on its face.
• Torbela vs. Spouses Rosario, 678 Phil. 1 (2011) — Cited for the rule that a bank cannot be deemed a mortgagee in good faith where the defect in the entry cancelling an adverse claim was apparent on the face of the instrument, such as failure to mention any court order as basis and cancellation by an entirely different person.
• Mendoza vs. Spouses Garana, 765 Phil. 744 (2015) — Cited for the rule that the mere fact that a different person sought the cancellation of an adverse claim is a suspicious circumstance that should prompt the potential buyer to inquire beyond the four corners of the Torrens certificate of title.
• Sumaya vs. Intermediate Appellate Court, 278 Phil. 201 (1991) — Cited for the rule on constructive notice under Section 52 of Presidential Decree No. 1529; a purchaser is charged with notice of every fact shown by the record and is presumed to know every fact which an examination of the record would have disclosed.
• Cayton vs. Zeonnix Trading Corp., 618 Phil. 136 (2009) — Cited for the rule that under the constructive notice rule, it is presumed that the purchaser has examined every instrument of record affecting the title and is charged with notice of every fact shown by the record.
• Dela Merced vs. Government Service Insurance System, 677 Phil. 88 (2011) — Cited for the rule that where a notice of lis pendens was duly annotated, a writ of execution may be issued against a person who, though not impleaded, acquired the property while the suit was pending or is a transferee pendente lite, and no separate action need be filed.
• Republic vs. Sundiam, 880 Phil. 254 (2020) — Cited for the rule that the question of whether a transferee is a buyer in good faith and for value is a factual inquiry and that the party claiming such status has the burden to prove it.
• Grand Planters International, Inc. vs. Maine City Property Holdings Corp., 928 Phil. 929 (2022) — Cited for the rule that unless the parties made judicial admissions or stipulations, the issue of a buyer's good faith or lack thereof can only be resolved through a full-dressed hearing.
• Crispino vs. Tansay, 801 Phil. 711 (2016) — Cited for the CA's power under Section 9 of Batas Pambansa Blg. 129, as amended by Republic Act No. 7902, to conduct hearings, receive evidence, and perform any and all acts necessary to resolve factual issues pertinent to a case before it.
• Francisco Motors Corp. vs. Court of Appeals, 535 Phil. 736 (2006) — Cited for the rule that cancellation of a notice of pendency terminates the effects of such notice.
• Spouses Po Lam vs. Court of Appeals, 400 Phil. 858 (2000) — Cited for the definition of lis pendens as an announcement to the whole world that a particular property is in litigation, charging all strangers with knowledge of the pending case.
• Sps. Dino vs. Court of Appeals, 288 Phil. 306 (1992) — Cited for the rule that a decision involving any title to registered land binds only the parties thereto unless a notice of the pendency of the action is duly registered and annotated on the back of the certificate of title covering the property in issue.
• J. Casim Construction Supplies, Inc. vs. Registrar of Deeds of Las Piñas, 636 Phil. 725 (2010) — Cited for the rule that a notice of lis pendens, once duly registered, may be cancelled by the trial court before which the action involving the property is pending.
• Du vs. Ortile, 925 Phil. 822 (2022) — Cited for the modes of cancellation of a notice of lis pendens under Section 77 of Presidential Decree No. 1529.
• Calma vs. Atty. Lachica, 821 Phil. 607 (2017) — Cited for the general rule that when the Register of Deeds inscribes an entry cancelling a notice of lis pendens, the public may safely presume that the cancellation was correct and therefore terminates the effect of the notice.
• Isenhardt vs. Real, 682 Phil. 19 (2012) — Cited for the rule that entries in official records made by a public officer in the performance of a duty specially enjoined by law are prima facie evidence of the facts therein stated.
• Hegna vs. Paderanga, 615 Phil. 1 (2009) — Cited for the rule that the public may rightfully presume that an instrument recorded by the Register of Deeds exists and is genuine.
• Nation Petroleum Gas, Inc. vs. Rizal Commercial Banking Corp., 766 Phil. 696 (2015) — Cited for the exception that the presumption of regularity in the performance of official functions cannot apply if there is an apparent flaw or patent defect appearing in a public document.
• Billote vs. Spouses Badar, 940 Phil. 833 (2023) — Cited for the general rule that a void certificate of title cannot be the source of a valid title over a property upon the legal truism that a spring cannot rise higher than its source.
• Plana vs. Chua, 932 Phil. 1036 (2023) — Cited for the rule that if the transferee is an innocent purchaser for value, it enjoys the protection granted to subsequent transferees under Section 53 of Presidential Decree No. 1529, without prejudice to other legal remedies against the person who caused the fraudulent transfer.

• Rule 39, Section 47(b), Rules of Court — Provides that in other cases, the judgment or final order is conclusive between the parties and their successors in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity. The Court applied this to hold that the Reconveyance Case, being an action in personam, binds only the parties and their successors-in-interest with notice.
• Rule 3, Section 19, Rules of Court (as amended by A.M. No. 19-10-20-SC) — Provides that in case of any transfer of interest, the action may be continued by or against the original party, unless the court directs the person to whom the interest is transferred to be substituted or joined. The Court cited this to explain that a transferee pendente lite need not be impleaded because its interest is considered joined or substituted from the moment the transfer is perfected.
• Section 44, Presidential Decree No. 1529 — Provides that every subsequent purchaser of registered land taking a certificate of title for value and in good faith shall hold the same free from all encumbrances except those noted in said certificate and statutory liens. The Court applied this in relation to the rule that a decision involving registered land binds only the parties unless a notice of lis pendens is registered and annotated or the transferee had actual knowledge.
• Section 76, Presidential Decree No. 1529 — Provides that no action to recover possession of real estate, to quiet title, or other proceedings directly affecting the title to land or the use or occupation thereof shall have any effect upon registered land as against persons other than the parties thereto, unless a notice of lis pendens is filed and registered. The Court cited this to explain the necessity of registration and annotation for constructive notice.
• Rule 13, Section 19, Rules of Court — Provides that in an action affecting the title or right of possession of real property, a notice of lis pendens may be recorded, and only from the time of filing such notice for record shall a purchaser or encumbrancer be deemed to have constructive notice of the pendency of the action. The Court applied this to the notice annotated on AMC's titles.
• Section 77, Presidential Decree No. 1529 — Provides the modes for cancellation of a notice of lis pendens: before final judgment, by order of the court after proper showing, or by the Register of Deeds upon verified petition of the party who caused registration; after final judgment, upon registration of a certificate of the clerk of court stating the manner of disposal. The Court found that the cancellation under Entry No. 11302 did not comply with any of these modes.
• Section 10, Presidential Decree No. 1529 — Enjoins the Register of Deeds to immediately register an instrument presented for registration dealing with real or personal property which complies with all the requisites for registration. The Court cited this in relation to the prima facie evidentiary value of entries made by the Register of Deeds.
• Section 52, Presidential Decree No. 1529 — Provides that every conveyance, mortgage, lease, lien, attachment, order, judgment, instrument or entry affecting registered land shall, if registered, filed or entered in the office of the Register of Deeds, be constructive notice to all persons from the time of such registering, filing or entering. The Court applied this to charge respondent with constructive knowledge of the contents of the Order in G.R. No. 163877 annotated on AMC's titles.
• Section 48, Presidential Decree No. 1529 — Provides that a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law. The Court applied this to hold that in the absence of proof of actual notice or failure to exercise reasonable precaution, respondent's Torrens titles cannot be collaterally attacked.
• Section 53, Presidential Decree No. 1529 — Provides that in all cases of registration procured by fraud, the owner may pursue all legal and equitable remedies against the parties to such fraud without prejudice to the rights of any innocent holder for value of a certificate of title. The Court cited this to state that if respondent is an innocent purchaser for value, he enjoys the protection granted to subsequent transferees, without prejudice to petitioners' remedies against the person who caused the fraudulent transfer.
• Section 70, Presidential Decree No. 1529 — Provides the procedure for registration and cancellation of an adverse claim. The Court cited this in its discussion of Torbela vs. Spouses Rosario, where the cancellation of an adverse claim was patently irregular because it did not mention any court order as basis and was caused by an entirely different person.
• Section 9, Batas Pambansa Blg. 129, as amended by Republic Act No. 7902 — Grants the Court of Appeals original jurisdiction to issue writs of certiorari and the power to try cases and conduct hearings, receive evidence, and perform any and all acts necessary to resolve factual issues raised in cases falling within its original and appellate jurisdiction. The Court held that the CA should have conducted hearings and received evidence instead of prematurely ruling on respondent's status as an innocent purchaser for value.
• Rule 130, Section 46, 2019 Amendments to the Rules on Evidence — Provides that entries in official records made in the performance of duty by a public officer of the Philippines, or by a person in the performance of a duty specially enjoined by law, are prima facie evidence of the facts therein stated. The Court applied this to the entries made by the Register of Deeds on the Torrens certificates of title.

Justices Gaerlan and Dimaampao concurred. Justice Caguioa (Chairperson) filed a concurring opinion, emphasizing that erroneous or fraudulent cancellations of notices of lis pendens cannot be used to launder or sanitize titles to the prejudice of the registrant who, in good faith, caused the annotation to protect his or her rights. He stressed that because the cancellation was based on an unrelated Supreme Court order and was annotated on the title, the purchaser was on constructive notice of the defect and cannot escape the effects of the judgment unless he proves that he exercised due diligence by inquiring into the status of the case before acquiring the property. Justice Singh was on leave.