ATTY. ROLANDO S. JAVIER AND CESAR CRUZ, IN HIS CAPACITY AS SHERIFF OF BRANCH 120, REGIONAL TRIAL COURT OF CALOOCAN CITY, METRO MANILA; SATURNINA BAJAMONDE; LEONORA BAJAMONDE AND…

Javier versus Bajamonde

The Case

This is a petition for review on certiorari under Rule 45 of the Rules of Court, as amended, of the Resolution of the Court of Appeals in CA-G.R. SP No. 22761 dated September 27, 1990, dismissing the petition for certiorari of the petitioners (except petitioner Rolando Javier), on the ground that the petition was insufficient in substance, and its Resolution dated March 8, 1991 denying their motion for reconsideration. The case matters because it settles who may be reached by a writ of execution and demolition in a decades-old land dispute, and because it teaches the reach of a notice of lis pendens against persons who buy or build after the annotation.

Procedural History

The long trail begins in the Court of First Instance of Rizal, which in 1950 ordered the expropriation of the Gonzales Estate subject to reconveyance to the occupants, a ruling affirmed by this Court with the modification that the property be resold to the occupants-tenants. The tenants then sued in the Court of First Instance of Rizal, later transferred to the Regional Trial Court of Caloocan City as Civil Case No. C-760, to compel the sale of the property only to them. In 1985 the trial court granted the omnibus motion of tenants Cosca and Aquino and ordered the National Housing Authority to comply strictly with the December 11, 1961 Partial Compromise Agreement. In 1986 it nullified the title of the Gregorio Araneta University Foundation and ordered a new title in the names of the heirs of Gregorio Bajamonde. In 1988 it ordered execution and eviction of the foundation's employees. The foundation's personnel homeowners association brought prohibition before the Court of Appeals, which dismissed the petition in June 1989, holding that the petitioners were privies of the foundation and could not claim to be innocent purchasers because of the notice of lis pendens annotated on the title. This Court denied the association's petition for review in January 1990 for lack of merit, and denied its motion for reconsideration with finality. In May 1990 the trial court granted the motion for a writ of demolition. The foundation then filed an action for annulment of the new titles and a petition with the Court of Appeals to annul the joint order and the order of December 1988. The present petition for review followed the Court of Appeals' dismissal of the petitioners' certiorari.

Facts

The late Don Francisco Gonzales owned the Gonzales Estate in Barrio Baesa, Caloocan City, occupied and tilled by more than two hundred tenants and their families. Pursuant to Commonwealth Act No. 539, the Republic, through the Rural Progress Administration, applied for expropriation in 1947, and in 1950 the Court of First Instance of Rizal ordered expropriation subject to reconveyance to the occupants at one peso and fifty centavos per square meter. Among the occupants were the Spouses Gregorio and Saturnina Bajamonde, who claimed Lots 54 and 75. The Philippine Housing and Homesite Corporation succeeded the Rural Progress Administration, and in 1960 the President ordered that the area sold to each tenant be limited to one thousand square meters.

Seventy-five tenants, including Gregorio Bajamonde, sued to compel sale only to the occupants. The Araneta Institute of Agriculture intervened and produced a Compromise Agreement dated November 28, 1961 with thirteen tenants, but the housing corporation and the Republic were not signatories. In December 1961 twenty-eight tenants, including Gregorio Bajamonde, entered into a partial compromise agreement with the housing corporation at three pesos and eighty centavos per square meter, and the trial court approved it in a partial decision. A notice of lis pendens was annotated on the title in February 1963.

In 1979 the National Housing Authority executed a deed of absolute sale over Lots 54 and 75 in favor of the Bajamonde spouses, and a title was issued in their names. Days later the spouses conveyed their rights to the Gregorio Araneta University Foundation, and a new title was issued in the foundation's name with the annotations carried over. The foundation later entered into contracts to sell the lots to its employees and faculty, who began building houses. The trial court nullified the foundation's title and ordered new titles in the names of the Bajamonde heirs, then ordered execution, eviction, and finally demolition. The sheriff, with counsel for the tenants, began enforcing the writ in July 1990, prompting the employees to sue for injunction, invoking Article 448 of the Civil Code on builders in good faith.

Issues

• Whether or not a writ of execution may issue against persons who were not parties to the case but who are privies or successors-in-interest of the judgment debtor.
• Whether or not the petitioners may be considered innocent purchasers for value despite the notice of lis pendens annotated on the certificate of title.

Applicable Provisions

Article 448 of the Civil Code, invoked by the petitioners as builders in good faith, provides:

The owner of the land on which anything has been built, sown or planted in good faith shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof.

This provision bears on the case because the petitioners anchored their claim to remain on the lots on their status as builders in good faith.

Ruling

On the first issue, the Court held that although a writ of execution can be issued only against a party and not against one who did not have his day in court, one who is privy or a successor-in-interest of the judgment debtor can be reached by the order of execution. Although the petitioners were not parties in Civil Case No. C-760, the decision in that case binds them as successors-in-interest of the foundation.

On the second issue, the Court held that the petitioners cannot claim to be innocent purchasers for value. The notice of lis pendens was annotated on the foundation's title as early as February 1963, while the contracts of sale were entered into only in 1987. At the time they contracted, they already had notice of the existing encumbrance. The Court quoted the Court of Appeals with approval:

The notice was inscribed on February 18, 1963, and since then, there was an announcement to the whole world that a particular property is in litigation, serving as a warning that one who acquires an interest over said property does so at his own risk, or that he gambles on the result of the litigation over said property.

Doctrine

First, a writ of execution may issue not only against a party but also against one who is a privy or successor-in-interest of the judgment debtor, for such a person is bound by the judgment though not a party to the case. Second, a notice of lis pendens annotated on a certificate of title is notice to the whole world that the property is in litigation; one who acquires an interest thereafter does so at his own risk and cannot be considered an innocent purchaser for value. These rules tie directly to the quoted lis pendens warning and to the Court's reliance on the annotation date against the later contracts of sale.

Disposition

The Court denied the petition and upheld the dismissal of the petitioners' certiorari, leaving the writ of execution and demolition in favor of the Bajamonde heirs standing against the foundation's employees and successors-in-interest.

Remember This

Memorize the line that a notice of lis pendens is an announcement to the whole world that the property is in litigation, so that one who acquires an interest thereafter does so at his own risk. Examiners use this case to test execution against privies and successors-in-interest, and the defense of innocent purchaser for value against an annotated lis pendens.