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Protecting Property Rights through Adverse Claim Registration

The Purpose of an Adverse Claim is to Protect Real Property Rights

An adverse claim is a formal statement in writing, made by another, claiming rights or interest in registered land which is adverse to the registered owner. The purpose of registering an adverse claim is to apprise third persons that there is a controversy over the ownership of the land covered thereby, and to protect the right of the adverse claimant during the pendency of the controversy.

Examples of registrable adverse claims include contracts and other voluntary instruments, such as sales or leases.

For example, when the registered owner of a land refuses to surrender the duplicate certificate of title for annotation of the deed of sale, registering an adverse claim would be appropriate. The registration of hereditary rights as an adverse claim would also be proper, if there is a proceeding for the settlement of estate of the registered owner of the property. What is important to note here is that the right or interest sought to be registered or annotated must involve the property, or any right thereto, and must arise after the date of original registration of the property. Thus, a simple money claim against the registered owner of the property cannot be registered as an adverse claim, as it does not involve any right or interest over real property. Also, rights in expectation, such as hereditary rights in expectancy (i.e., the source of the hereditary right is still alive), or claims based on prescription of adverse possession, where the land is already registered in the name of another person, are likewise not registrable as adverse claims. In the former, the hereditary right is a mere right in expectancy from which no cause of action or legal right arising therefrom can be raised. In the latter case, the right which is adverse to the owner arose prior to registration of the titled property.

No Discretion Exercised by the Register of Deeds

It is the ministerial duty of the Register of Deeds to annotate the Notice of Adverse Claim. Thus, the Register of Deeds cannot exercise discretion as to whether the adverse claim may or may not be registered. In the case of Gabriel vs. Register of Deeds of Rizal, G.R. No. L-17956, 30 September 1963 the Supreme Court held:

“In addition to the well-taken disquisitions of the L.R.C., it should be observed that Section 110 of Act No. 496 (now, Section 70 of P.D. 1529) which is the legal provision applicable to the case, is divided into two (2) parts: the first refers to the duty of the party who claims any part or interest in registered land adverse to the registered owner, subsequent to the date of the original registration; and the requirements to be complied with in order that such statement shall been titled to registration as an adverse claim, thus showing the ministerial function of the Register of Deeds, when no defect is found on the face of such instrument; and the second applies only when, after registration of the adverse claim, a party files an appropriate petition with a competent court shall resolve whether the adverse claim is frivolous or vexatious, which shall serve as the basis in taxing the costs. x x x”.

The only requirement is that the Affidavit of Adverse Claim must not contain any defect on the face of the instrument. Thus, the Register of Deeds should annotate or register the Adverse Claim of any applicant once the affidavit and the supporting evidence, on its face, show no defect in the document.

Formal Requirements to Register an Adverse Claim

In the case of Lozano vs. Ballesteros, G.R. No. 49470, 08 April 1991, the Supreme Court enumerated the requirements which must be complied with, to register an Adverse Claim:

“… Hence, for the purpose of registration and as required by the above quoted provision, as amended, the following are the formal requisites of an adverse claim:

1. the adverse claimant must state the following in writing:

a. his alleged right or interest;

b. how and under whom such alleged right or interest is acquired;

c. the description of the land in which the right or interest is claimed, and

d. the certificate of title number

2. the statement must be signed and sworn to before a notary public or other officer authorized to administer oath; and

3. the claimant should state his residence or the place to which all notices may be served upon him. …”

Therefore, where an Affidavit of Adverse claim is in writing, indicating “the place to which all notices may be served upon him”, “signed and sworn to before a notary public or other officer authorized to administer oath”, and clearly stating the person’s “right or interest subject of the claim, how, and under whom such alleged right or interest was acquired, the description of the land in which the right or interest is claimed, and the certificate of title number”, it becomes obligatory upon the Register of Deeds to annotate the adverse claim on the transfer certificate of title covering the property claimed.

In addition to these formal requirements, Presidential Decree No. 1529 otherwise known as the Property Registration Decree of the Philippines also adds a further requirement – that there be no other provision under Presidential Decree No. 1529 to annotate the person’s claim, except through the annotation of an adverse claim over the subject certificate of title. This means that if there is another applicable provision under the law which allows for registration of the person’s claim over the property, then the claim cannot be registered as an adverse claim. Instead, it should be registered under that other particular provision of the law, which takes precedence for purposes of registering property rights.

Period of Effectivity of an Adverse Claim

The 2nd paragraph of Section 70 of Presidential Decree No. 1529 provides that an adverse claim shall be effective for a period of 30 days from the date of registration. An adverse claim may be cancelled after the lapse of the 30 day period, upon the filing by the claiming party of a verified petition for such purpose. Thereafter, the claimant is precluded from registering a second adverse claim, based on the same ground.

However, the Supreme Court, in the case of Sajonas v. CA, G.R. No. 102377, 05 July 1996, held that there is no automatic cancellation of the adverse claim upon the lapse of 30-day period. Thus, even after the lapse of the 30 day period, cancellation of the adverse claim is still necessary to render it ineffective. Otherwise, the inscription will remain.

The person that registered his or her adverse claim may also file a sworn petition before a court, withdrawing his or her adverse claim, before the lapse of the 30 day period. In such case, the court, particularly a Regional Trial Court acting as a land registration court, may, after notice and hearing cancel the adverse claim, if it determines that the claim is invalid. The court may also fine the claimant if the court finds that the adverse claim is frivolous.

source: ndvlaw


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