3. CATHAY METAL CORP. V LAGUNA WEST MULTI-PURPOSE COOPERATIVE G.R.NO. 17220
Storyboard Text
- Laguna West Entered into a joint venture agreement with farmer beneficiaries.
- We are entering into a joint venture agreement.
- Laguna West caused the annotation of its adverse claim on the farmer beneficiaries' certificates of title.
- I want these titles annotated.
- In 1999, Cathay Metal Corp. and the farmer beneficiaries executed contracts of sale of the properties, and Transfer certificates of title were also issued in the name of petitioner in the same year.
- We are selling our lands to you.
- Cathay filed a consolidated petition for cancellation of adverse claims on its transfer certificates of title with the Regional Trial Court of Tagaytay City.
- I would like to cause the cancellation of adverse claims on the certificates of title.
- NOThe purpose of annotations of adverse claims on title is to apprise the whole world of the controversy involving a property. These annotations protect the adverse claimant's rights before or during the pendency of a case involving a property. It notifies third persons that rights that may be acquired with respect to a property are subject to the results of the case involving it.
- ISSUE: Whether or not Laguna West has a claim over the lands.
- RULING:
- Republic Act No. 6657 or the Comprehensive Agrarian Reform Law prohibits its own circumvention. The prohibition on disposition includes all rights relating to disposition such as sale, and promise of sale of property upon the happening of conditions that remove the restrictions on disposition. Republic Act No. 6657 prohibits the sale, transfer, or conveyance of awarded lands within ten (10) years, subject only to a few exceptions. Republic Act No. 6657 also provides that the awarded lands may be converted to residential, commercial, or industrial use if these are not economically feasible anymore or because of urbanization, greater economic value will be derived with their conversion.
- RULING:
- In this case, the CLOAs were awarded to the farmer-beneficiaries between 1990 and 1992.114 Since the affidavit of adverse claim annotated on petitioner’s certificates of title was annotated in 1996 and the properties were converted only in 1998, respondent’s joint venture agreement with the farmer-beneficiaries could not have validly transferred rights to respondent. The 10-year period of prohibition against conveyance had not yet lapsed at that time. Neither were the properties already converted to non-agricultural use at that time. Respondent’s adverse claim, therefore, based on its alleged payment of the farmer-beneficiaries’ 40% could not be valid. In sum, whether or not there were provisions on transfer of rights or promise to transfer rights in the joint venture agreement, there could be no basis for respondent’s adverse claim.
- A claim based on a future right does not ripen into an adverse claim as defined in Section 70 of Presidential Decree No. 1529. A right still subject to negotiations cannot be enforced against a title holder or against one that has a legitimate title to the property based on possession, ownership, lien, or any valid deed of transfer. Respondent’s claim was not based on any of those. Its claim was based on a deal with the CLOA farmer-beneficiaries, which did not materialize.
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