Star Asset Management Ropoas v. Register of Deeds of Davao City and Foothills Realty Development Corporation, G.R. No. 233737, February 03, 2021

FACTS:

The case involves three parcels of land located in Davao City previously registered in the name of Star Asset.

On December 12, 2012, Star Asset filed a Petition for Cancellation of Adverse Claim in said TCTs before the trial court. In its petition, Star Asset asserted that the subject properties were previously owned by Davao Goldland Development Corporation which were however mortgaged to Philippine Bank of Communication. The properties were foreclosed by PBCOM and later, the ownership of the same was transferred to Unimark Investments Corporation. Star Asset claimed that it eventually acquired the properties from Unimark.

In the meantime, after the foreclosure of the properties, Goldland impugned the validity of the foreclosure proceedings which prompted Star Asset to enter into a Compromise Agreement with the former with an undertaking to sell back the properties to Goldland.

Star Asset claimed that Goldland failed to comply with its obligation under the compromise agreement, hence, on March 21, 2012, Star Asset was constrained to cancel said compromise agreement. On March 22, 2012, one day after the cancellation of the Compromise Agreement, Foothills Realty, as successor-in-interest of Goldland, caused the annotation of its adverse claim on the subject TCTs.

In its application to cancel the adverse claim, Star Asset argued that the cancellation is in order because the compromise agreement, upon which Foothills Realty's (successor in interest of Goldland) right was anchored, was already terminated as of March 21, 2012. Moreover, Star Asset asserted that the adverse claim was only valid for 30 days, such that after the lapse of said period, the adverse claim must be cancelled without any positive action on the part of Star Asset. Thus Star Asset prayed for the cancellation and removal of Foothill's Realty's adverse claim annotated on the TCTs of the subject properties.

On Februazy 4, 2013, Star Asset moved that it be substituted by Dallas Energy because its interests over the properties were already sold to the latter. Because of the transfer of ownership to Dallas Energy, TCT Nos. 146-2013003721, 146-2013003720 and 146-2013003722 were issued in its name whereby the same adverse claim was carried over and annotated therein. Meanwhile, in its Comment to the petition for cancellation of the adverse claim, Foothills Realty alleged that it has assumed the obligation of Goldland pursuant to the compromise agreement but suffered a major set-back in its cash flow in the year 2011-2012. However, in December 2011, it paid to Star Asset's Vice President the amount of P2,850,000 with an understanding that such payment shall not cancel the compromise agreement. In fact, Foothills Realty asserted that it has already paid the total amount of P21,279,773.11, equivalent to 38 monthly payments in favor of Star Asset, the predecessor-in-interest of Dallas Energy.

Foothills Realty also argued that the cancellation of the compromise agreement should have complied with R.A. No. 6552, otherwise known as the "Realty Installment Buyer Act" or the "Maceda Law." According to Foothills Realty, there should have been a notarial act of rescission as required by R.A. 6552 and failure to serve the same will not be tantamount to cancellation of the compromise agreement. Hence, the annotation of the adverse claim anchored on the compromise agreement is still proper.

The RTC denied the petition for cancellation of the adverse claim.

The CA affirmed the denial.

 

ISSUE:

            Whether the trial court's refusal to cancel the adverse claim annotated on the subject TCTs is correct

RULING:

NO. The Maceda Law is not applicable in this case.

The properties subject of this case have an aggregate land area of 300,000 square meters. By its sheer size, the subject properties can hardly be classified as residential properties as to be covered by the Maceda law. As aforesaid, the Maceda law was enacted to curb out the bad practices of real estate developers like Foothills Realty. For that reason, We find that Foothills Realty is taking an incongruous position by invoking the Maceda law in as much as the said law was enacted precisely to guard against its practice.

 

The cancellation of the compromise agreement no longer supports the continued annotation of the adverse claim on the TCTs of the subject properties.

In Association of Baptists for World Evangelism, Inc. v. First Baptist Church,41 it was held that a Contract of Purchase and Sale entered into by the parties which had already been rescinded can no longer support the continued annotation of the notice of adverse claim on the seller's TCT. Similarly, in the present case, the compromise agreement embodying the contract to sell the 30 hectares of land, which has been cancelled by virtue of the inability of the buyer to pay the purchase price, can no longer be a ground for the continuous annotation of an adverse claim in the subject TCTs.