Biglangawa vs. Constantino

A notice of lis pendens may be annotated only where the pending action directly affects title to or the right of possession of the real property; it cannot be predicated on a complaint that is purely a claim for money judgment. Constantino’s amended complaint, alleging an agency for commissions and fees rather than a partnership or partition, did not affect title or possession and therefore could not support the annotation.

Biglangawa and Espiritu owned a parcel of land in Marulas, Polo, Bulacan, covered by Transfer Certificate of Title No. 5459. Constantino was appointed their exclusive agent to develop the area into subdivision lots and to sell them, for a 20% commission on gross sales and a 10% fee on collections. The dispute concerns the notice of lis pendens, a remedy governed by Section 24, Rule 7 of the Rules of Court and Section 79 of the Land Registration Act.

Lucina Biglangawa and Lucia Espiritu owned a parcel of land in Marulas, Polo, Bulacan, covered by Transfer Certificate of Title No. 5459. On January 14, 1950, Biglangawa, with Espiritu’s consent, appointed Pastor B. Constantino their exclusive agent to develop the area into subdivision lots and to sell them to prospective homeowners. As compensation, Constantino was promised a commission of 20% on gross sales and a fee of 10% on collections made by him, payable from the first collections received from purchasers for each lot sold. A notarial document executed on March 3, 1950 confirmed the power granted to Constantino and added that the contract of agency could not be revoked without his consent.

Constantino advanced the expenses for the development and administration of the project, caused the property to be subdivided into 203 lots, and advertised them for sale under the name “BBB Marulas Subdivision No. 3.” By October 1951, he had disposed of more than half of the entire area at P10.00 and P12.00 per square meter. According to Constantino, the defendants paid his compensation out of only 30% of the gross monthly collections, leaving a balance of P48,899.20 as of October 15, 1951. In October 1951, the defendants terminated the agency contracts, which Constantino claimed deprived him of commissions on the remaining lots and of the 10% collection fee. The defendants nevertheless acknowledged liability of P48,899.20 as of October 16, 1951 and promised to pay it in successive monthly installments beginning November 1951. Constantino consented to the installment settlement after the termination of the agency in consideration of the defendants’ promise to compute and pay the percentage of monthly installments based on their monthly gross collections from the operation of the subdivision, as stipulated in Exhibit “C,” until the total indebtedness was fully settled.

From October 16, 1951 to March 31, 1953, the defendants made total monthly gross collections of around P52,849.63. Under Exhibit “C,” Constantino was entitled to minimum payments of P8,711.13, but he received only P6,204.13, or P2,507.00 less than what he should have received. After learning of the breach about the end of March 1953 and verifying it, Constantino demanded the difference, but the defendants refused to settle. The balance of his commissions remaining unpaid as of the filing of the complaint, excluding the underpayments from November 1951 to March 1953, was P39,534.62. Constantino also claimed attorney’s fees of P7,000.00 for the defendants’ alleged bad faith in refusing his claim.

On June 25, 1953, Constantino filed an amended complaint in the Court of First Instance of Rizal, docketed as Civil Case No. 2138, against Biglangawa and Espiritu. He prayed for payment of the P2,507.00 underpayment with interest; a declaration that the defendants had lost the right to pay in monthly installments and an order for them to pay the balance of his commissions and fees in the amount of P89,543.62 with interest; moral damages of P40,000.00; exemplary damages of P30,000.00; attorney’s fees of P7,000.00; and costs. Biglangawa and Espiritu filed their answer on August 25, 1953.

While Civil Case No. 2138 was pending, Constantino, on April 5, 1955, filed with the Register of Deeds of Bulacan a notice of lis pendens. The notice stated that a complaint was pending involving, among other things, rights and interests and claims for services and damages on the property converted into a subdivision as shown by Plan Psd-29964, situated in Marulas, Polo, Bulacan, and described in Transfer Certificate of Title No. 5459; copies of the complaint and amended complaint were attached. On April 6, 1955, the Register of Deeds requested Biglangawa and Espiritu to surrender their owner’s copy of Transfer Certificate of Title No. 5459 for annotation, but they refused. On May 17, 1955, when they registered an absolute deed of sale in favor of Carmelita L. Santos covering some of the subdivision lots, the Register of Deeds, without their knowledge and consent, annotated the lis pendens on their title and on the title issued to Santos.

Biglangawa and Espiritu filed a petition in the Court of First Instance of Bulacan on June 11, 1955 for cancellation of the notice of lis pendens. Constantino answered on June 17, 1955; they replied on June 23, 1955; and Constantino filed a rejoinder on June 24, 1955. On July 19, 1955, the court ordered the Register of Deeds to cancel Entry No. 28176 for lis pendens on Transfer Certificate of Title No. T-5459 and the annotation on Transfer Certificate of Title No. T-014480 of Carmelita L. Santos. The court found from Constantino’s amended complaint that the action was purely and clearly a claim for money judgment which did not affect the title or right of possession of the real property. Constantino moved for reconsideration on August 8, 1955, but the court denied the motion on September 30, 1955.

• Nature of the Pending Action: Respondent-appellant Constantino argued that the lower court erred in holding that his pending action in Civil Case No. 2138 was purely a claim for money judgment which did not affect the title or right of possession of the real property covered by Transfer Certificate of Title No. T-5459.
• Partnership and One-Fifth Participation: Constantino contended that the agreement granting him a 20% commission on gross sales and a 10% fee on collections converted him into a partner and gave him a one-fifth participation in the property itself.
• Settlement, Accounting, or Partition: Constantino maintained that his suit was one for the settlement and adjustment of partnership interest, or a partition action or proceeding, and therefore affected the real property.

• Nature of the Pending Action: Whether the amended complaint in Civil Case No. 2138 is purely a claim for money judgment that does not affect the title to or right of possession of the real property.
• Partnership and Property Participation: Whether the agreement granting Constantino a 20% commission on gross sales and a 10% collection fee converted him into a partner with a one-fifth participation in the property.
• Lis Pendens Annotation: Whether the notice of lis pendens annotated on Transfer Certificate of Title No. T-5459 and Transfer Certificate of Title No. T-014480 was valid and should be cancelled.

• Nature of the Pending Action: No. The amended complaint alleged an agency for commissions and fees, not a partnership or partition, and sought only a money judgment; it did not affect title or possession.
• Partnership and Property Participation: No. Constantino expressly described himself as an agent entitled to compensation, not as a partner or participant in the property; his advances were treated as indebtedness, not contributions.
• Lis Pendens Annotation: No. A notice of lis pendens cannot be based on an action that does not affect title or possession; the order cancelling the annotation was affirmed.

• Nature of the Pending Action: The lower court’s order was affirmed because the amended complaint did not qualify as an action affecting title or right of possession. The Court examined the allegations and purpose of the action, not merely its label. Constantino’s complaint expressly averred that Biglangawa and Espiritu appointed him their exclusive agent to develop the area into subdivision lots and to sell them, and that he was entitled to compensation in the form of a 20% commission on gross sales and a 10% fee on collections. The prayer sought recovery of fixed amounts of underpayments, commissions, and fees, not liquidation, accounting, or partition. Thus, the action was purely a claim for money judgment and could not support a notice of lis pendens under Section 24, Rule 7 of the Rules of Court and Section 79 of the Land Registration Act.
• Partnership and Property Participation: Constantino’s theory that the agreement made him a partner with a one-fifth participation in the property was not supported by the allegations of his amended complaint or by the purpose of his action. No word or expression in the complaint suggested a partnership. He categorically referred to himself as an agent, not a partner; entitled to compensation, not participation; and to a commission or fee, not a share. Although he claimed advances for expenses, he never treated them as contributions to a business that would make him a partner. After liquidation of the advances and commissions due at the termination of the agency, the whole balance was considered the appellees’ indebtedness, which Constantino consented to be settled in monthly installments. The prayer likewise sought fixed amounts rather than liquidation, accounting, or partition.
• Lis Pendens Annotation: Because the amended complaint was neither an action affecting the title or right of possession of real property nor one to recover possession, quiet title, remove clouds on title, or for partition or other proceeding affecting title to real estate or the use or occupation thereof or the buildings thereon, it could not be the basis for annotating a notice of lis pendens on the petitioners’ title. The Court found no error in the appealed order and affirmed it, with costs against Constantino. The Court also found it unnecessary to decide the incidental matters raised by the parties during the pendency of the appeal.

• Lis Pendens; Scope — A notice of lis pendens may be annotated only when the pending action directly affects title to or the right of possession of the real property. It is not available to secure a purely monetary claim. In this case, Constantino’s complaint for unpaid commissions and fees did not affect title or possession and could not support the annotation.
• Nature of Action Determined by Allegations and Relief — The nature of an action is determined by the allegations of the complaint and the relief sought, not by the plaintiff’s subsequent characterization. The Court held that Constantino’s complaint alleged agency and a money claim, not partnership or partition, despite his argument on appeal.
• Agency and Compensation Distinguished from Partnership — An agent who is entitled to a commission or fee for services is not thereby converted into a partner or given a proprietary share in the principal’s property where the complaint does not allege partnership or contribution to a business. The Court applied this distinction to reject Constantino’s claim of one-fifth participation.

• "The only issue, which is of law, involved in this appeal, is the legality of the annotation of lis pendens predicated on the complaint of respondent-appellant Pastor B. Constantino." — The Court framed the sole issue as the legality of the lis pendens annotation based on Constantino’s complaint.
• "Categorically, appellant referred to himself as an agent, not a partner; entitled to compensation, not participation, in the form of commission or fee, not a share." — This passage states the core distinction the Court used to reject Constantino’s partnership theory.
• "There is no word or expression in the various paragraphs of his amended complaint that suggests any idea of partnership." — The Court relied on the absence of partnership allegations in the complaint to characterize the action as a money claim.
• "The four paragraphs of the prayer seeks the recovery of fixed amounts of underpayments and commissions and fees; not liquidation or accounting or partition as now insisted upon by appellant." — The Court used the relief sought to confirm that the action was not one affecting title or possession.

• Section 24, Rule 7, Rules of Court — The Court cited this provision in determining whether the amended complaint was “an action affecting the title or the right of possession of real property.” Because Constantino’s complaint sought only money judgment, it did not fall within the provision and could not justify the lis pendens.
• Section 79, Land Registration Act (Act No. 496, as amended) — This provision enumerates the actions that may support a notice of lis pendens, including actions to recover possession of real estate, quiet title, remove clouds on title, or for partition or other proceeding affecting title to real estate or the use or occupation thereof or the buildings thereon. The Court held that Constantino’s money claim was not such an action.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., and Gutierrez David, JJ., concur.