MAGDALENA HOMEOWNERS ASSOCIATION, INC., RICARDO CHUNG, JOSE ESTRELLA, LEONCIO PALANCA, NORBERTO ROBLEZA, J.S. VALBUENA, GREGORIO CANCIO, FRANCISCO BUENCAMINO, AND JESUS TOMACRUZ…

Magdalena Homeowners Association versus Magdalena Estate

The Case

This is a special civil action of certiorari brought by the Magdalena Homeowners Association and several individual residents against the Magdalena Estate, Incorporated and the Development Bank of the Philippines. The petitioners ask the Supreme Court to nullify two resolutions of the Court of Appeals which, on motion, ordered the Register of Deeds to cancel a notice of lis pendens annotated on several Torrens titles. The case matters because it settles a procedural question every litigator must know: who has power to cancel a notice of lis pendens while the main case is still pending, and on what grounds. It teaches that the notice is a mere incident of the action, cancellable at any time by the court that has jurisdiction over the case, even before final judgment.

Procedural History

The homeowners filed a complaint for recovery of an open space against Magdalena Estate in the Court of First Instance at Quezon City, later amended to implead the Quezon City Government. While the case was pending, the plaintiffs caused notices of lis pendens to be inscribed on the titles of lots in Block 12. The trial court rendered judgment dismissing the complaint against Quezon City but authorizing the plaintiffs to recover the subject space from Magdalena Estate, thereafter to be donated to the City Government. Not satisfied, the petitioners appealed to the Court of Appeals. While the appeal was pending, Magdalena Estate and the Development Bank filed separate motions praying for cancellation of the notice of lis pendens. The Court of Appeals granted the motions by resolution dated December 10, 1981, and denied reconsideration by resolution dated February 8, 1982. The petitioners then came to the Supreme Court by petition for certiorari, on the theory that the Court of Appeals acted with grave abuse of discretion, if not without or in excess of jurisdiction.

Facts

The Magdalena Estate owned a subdivision in New Manila, Quezon City, with a total area of 355,490 square meters. Within it was Lot 15, Block 18, with an area of 21,460 square meters. A portion of that lot, measuring 7,100 square meters, had initially been set aside as the subdivision's open space, reserved for use as a park, playground, or recreational zone. An amended subdivision plan substituted that area with another area of the same size, and the City Council of Quezon City approved the plan and authorized the disposition of the former open space to the public. The Court of First Instance of Quezon City also approved the amended plan under Republic Act Number 44, subject to the condition that the roads, alleys, drainage, and open space dedicated for public use shall be subject to the limitations imposed by law.

Magdalena Estate then had the original open space resurveyed and subdivided into several lots, and the new plan was approved by the Land Registration Commission. It later donated certain lots to the City Government for use as parks and playgrounds, and the donation was ratified by the City Council. After that donation, Magdalena Estate disposed of the entire Lot 15, Block 18, including the part originally designated as open space. An area of 15,778 square meters within that lot was conveyed to the Development Bank of the Philippines by way of dacion en pago, and the rest were sold to third parties who built houses thereon.

The purchasers of the other subdivision lots organized themselves into the Magdalena Homeowners Association, Incorporated. Believing that the City Government had no authority to release Lot 15 as open space after it had been so declared and dedicated, and to substitute another portion for it, they sued Magdalena Estate for recovery of the lot as open space for public use. While the case was pending, they caused notices of lis pendens to be inscribed on the titles of the lots in Block 12, which were among those previously conveyed to the Development Bank.

Issues

• Whether or not the Court of Appeals had jurisdiction to take cognizance of and grant the motion to cancel the notice of lis pendens, considering that no such motion had ever been filed in the trial court.
• Whether or not the Court of Appeals acted with grave abuse of discretion in ordering the cancellation of the notice of lis pendens before final judgment.

Applicable Provisions

Section 24 of Rule 14 of the Rules of Court, as discussed in the decision, provides:

An action affecting the title or the right of possession of real property.

This provision identifies the actions in which a notice of lis pendens is proper, and it bears on the case because the main action directly affected the title to and use of the land, making the notice initially appropriate.

Section 24 of Rule 14 of the Rules of Court, last paragraph, provides:

After proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded.

This is the ground for cancellation, and it bears on the case because the Court of Appeals found that the annotation was intended to molest and harass the defendants.

Section 77 of Presidential Decree Number 1529 provides:

After proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded.

This provision authorizes the cancellation of notices of lis pendens before final judgment upon order of the court, and it bears on the case because it supplies the statutory basis for the questioned resolutions.

Ruling

On the first issue, the Court held that the argument cannot be sustained. A notice of lis pendens is ordinarily recorded without the intervention of the court where the action is pending. It is but an incident in an action, an extrajudicial one, and does not affect the merits. Its purpose is merely to constructively advise or warn all people who deal with the property that they deal with it at their own risk, and that whatever rights they acquire are subject to the results of the action. The cancellation of such a precautionary notice is therefore also a mere incident in the action, and may be ordered by the court having jurisdiction of it at any given time. Its continuance or removal, like that of a preliminary attachment or injunction, is not contingent on the existence of a final judgment and ordinarily has no effect on the merits. Since the case had properly come within the appellate jurisdiction of the Court of Appeals by the perfection of the appeal, that court had power to deal with and resolve any incident in connection with the action, even before final judgment. The rule that no questions may be raised for the first time on appeal refers only to those affecting the merits, not to mere incidents such as the cancellation of notices of lis pendens.

On the second issue, the Court held that no grave abuse of discretion was shown. A notice of lis pendens may be cancelled upon order of the court after proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded. The Court of Appeals found as a fact that the case had dragged on and had been unnecessarily prolonged by repeated amendments of the complaints by the plaintiffs, and that the circumstances on record justified the conclusion that the annotation was intended to molest and harass the defendants. That determination, and the conclusion that Presidential Decree Number 1529 authorizes cancellation before final judgment upon the grounds mentioned, were not whimsical, capricious, despotic, arbitrary, or oppressive so as to call for correction by certiorari.

Doctrine

A notice of lis pendens is not a provisional remedy in the strict sense but a mere incident of the action, recorded extrajudicially to warn all persons dealing with the property that they do so at their own risk. Its cancellation is likewise a mere incident, and may be ordered at any time by the court having jurisdiction over the action, even before final judgment, and even by the appellate court after the appeal has been perfected. The rule against raising questions for the first time on appeal applies only to matters affecting the merits, not to incidents such as the cancellation of a notice of lis pendens. Cancellation is warranted upon proper showing that the notice is for the purpose of molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be recorded, as provided in Section 24 of Rule 14 of the Rules of Court and Section 77 of Presidential Decree Number 1529.

Disposition

The petition was dismissed, with costs against the petitioners, so the resolutions of the Court of Appeals cancelling the notice of lis pendens stand.

Remember This

The one line to memorize: a notice of lis pendens is a mere incident of the action, cancellable at any time by the court with jurisdiction, even before final judgment, upon a showing of molestation or lack of necessity. Examiners use this case in civil procedure and land registration to test the nature of lis pendens, the power of the appellate court over incidents pending appeal, and the grounds for cancellation under the Rules of Court and Presidential Decree Number 1529.