Heirs of Eugenio Lopez, Sr. vs. Enriquez

A notice of lis pendens cannot be registered based merely on a motion filed by non-parties in a land registration proceeding where an order of general default exists; parties seeking to challenge decrees of registration after finality must file an independent action for reconveyance rather than file a motion in the original registration case.

The case involves a land registration proceeding (in rem) where an order of general default was issued, binding the whole world. After the decision became final and decrees were issued, the heirs of a claimed buyer sought to intervene by filing motions to have the decrees issued in their names and later to declare them void, without first lifting the order of general default or filing a separate action for reconveyance.

• Alfonso Sandoval and Roman Ozaeta, Jr. filed an application for registration of title before the Regional Trial Court of Pasig City, Branch 152, docketed as LRC No. N-18887.
• The land registration court issued an order of general default and conducted hearings on the application.
• On 31 May 1966, the land registration court granted the application for registration.
• The decision became final and executory, and a certificate of finality was issued on 8 March 1991.
• Decree Nos. N-217643 and N-217644 were prepared on 20 October 1977 but were actually signed by the Administrator sometime between 8 and 13 August 1998.
• On 16 July 1997, petitioners (heirs of Eugenio Lopez, Sr.) filed a motion in LRC No. N-18887 alleging that Sandoval and Ozaeta sold the lots to Eugenio Lopez, Sr. on 23 September 1970, and prayed that the decree of registration be issued in their names as successors-in-interest under Section 22 of Presidential Decree No. 1529.
• The land registration court gave due course to the motion and conducted hearings.
• On 18 August 1998, the Register of Deeds of Marikina City issued Original Certificate of Title Nos. O-1603 and O-1604 in favor of Sandoval and Ozaeta and their respective spouses.
• On 25 November 1998, petitioners filed a motion to declare void Decree Nos. N-217643 and N-217644 and the corresponding OCTs, pointing out date inconsistencies in the decrees.
• On the same date (25 November 1998), petitioners filed an application with the Register of Deeds of Marikina City to annotate a notice of lis pendens at the back of OCT Nos. O-1603 and O-1604 based on the pending motion to declare the titles void.
• The Register of Deeds denied the application on 15 December 1998 for lack of the original petition or complaint.
• Petitioners elevated the denial to the LRA, which ruled on 21 May 1999 that the notice was not registrable because petitioners were not parties to the case.

• The motion to declare void the decrees and titles is a proper basis for filing a notice of lis pendens under Section 76 of PD 1529.
• Petitioners have legal personality to file the motion and the notice because they are successors-in-interest of Eugenio Lopez, Sr., who stepped into the shoes of the sellers-applicants (Sandoval and Ozaeta) by virtue of the Deed of Absolute Sale dated 23 September 1970.
• Citing Mendoza v. Court of Appeals and Section 22 of PD 1529, petitioners argued that the law does not require the buyer to be a party to the land registration proceedings, and that the court's giving of due course to their 16 July 1997 motion conferred upon them legal standing.
• Petitioners claimed they do not dispute the judgment of the land registration court but merely seek to enforce the sale and have the decree issued in their names.
• Petitioners complied with all the requirements for the registration of a notice of lis pendens under Section 76 of PD 1529, including the statement of the filing of the motion, the name of the court, the date of filing, the certificate of title numbers, and the description of the land.

• A notice of lis pendens based on a mere motion is not registrable; it must be based on an action or complaint affecting title or possession.
• Only parties to a case have the legal personality to file a notice of lis pendens relative to the pending case under Section 14, Rule 14 of the Rules of Civil Procedure.
• Petitioners are not parties to LRC No. N-18887; they are mere movants whose personality the court has not admitted.
• In land registration proceedings which are in rem, an order of general default binds the whole world, and petitioners are deemed included in that default.
• Under Section 26 of PD 1529, petitioners should have first filed a motion to lift the order of general default before filing any opposition or motion to declare the decrees void; until the order is lifted, petitioners have no legal standing.
• The proper remedy for petitioners is an action for reconveyance, not a motion in the land registration court which has already issued a final and executory decision.

• Procedural Issues:
  • Whether a notice of lis pendens may be registered based on a mere motion to declare void decrees of registration filed by non-parties in a land registration case.
  • Whether petitioners may file a motion to declare void the decrees despite the existence of an order of general default without first moving to lift such order.
• Substantive Issues:
  • Whether petitioners have legal personality to file a notice of lis pendens in the land registration case.
  • Whether the Register of Deeds and the Land Registration Authority correctly denied the application for notice of lis pendens.

• Procedural: The Court held that the motion to declare void the decrees was insufficient to confer standing upon petitioners in the land registration proceedings. A motion to lift the order of general default should have been filed before the entry of final judgment (which occurred when the certificate of finality was issued on 8 March 1991), but petitioners filed their motion only on 16 July 1997, rendering it out of time. Petitioners confused their role as successors-in-interest under Section 22 of PD 1529 with that of oppositors-intervenors, thereby committing a fatal procedural error by filing a motion in a case where they had no standing.
• Substantive: The Court affirmed the denial of the notice of lis pendens. Under Section 76 of PD 1529 and Section 14, Rule 13 of the 1997 Rules of Civil Procedure, only parties to an action affecting title or possession may file a notice of lis pendens. Petitioners were not parties to LRC No. N-18887 as they failed to lift the order of general default. The proper remedy for petitioners, whose property was allegedly wrongfully registered in another's name, is an action for reconveyance under Section 55 of Act No. 496, which is an action in personam cognizable by ordinary courts of justice, not the land registration court.

• Lis Pendens — A doctrine referring to the jurisdiction, power, or control which a court acquires over property involved in a suit pending the continuance of the action. It serves to protect the rights of the party causing the registration and to advise third persons that they deal with the property at their peril subject to the litigation result. It does not create a right or lien but binds subsequent purchasers to the judgment. The Court applied this to emphasize that only parties to the action may file such notice.
• Order of General Default in Land Registration Proceedings — In proceedings in rem, an order of general default binds the whole world. A party declared in default loses standing in court and cannot appear, adduce evidence, be heard, or be entitled to notice unless the order is set aside under Section 3, Rule 9 of the 1997 Rules of Civil Procedure. The Court applied this to find that petitioners, having not lifted the default order, lacked personality to file the motion.
• Reconveyance — An action in personam available to a person whose property has been wrongfully registered under the Torrens system in another's name, filed in ordinary courts to prevent unjust enrichment. The Court invoked this to direct petitioners to the proper remedy instead of filing a motion in the concluded registration proceedings.

• "Lis pendens literally means a pending suit. The doctrine of lis pendens refers to the jurisdiction, power or control which a court acquires over property involved in a suit, pending the continuance of the action, and until final judgment."
• "The purposes of lis pendens are (1) to protect the rights of the party causing the registration of the lis pendens, and (2) to advise third persons who purchase or contract on the subject property that they do so at their peril and subject to the result of the pending litigation."
• "A party declared in default loses his standing in court. As a result of his loss of standing, a party in default cannot appear in court, adduce evidence, be heard, or be entitled to notice."
• "Petitioners committed a fatal procedural error when they filed a motion in LRC No. N-18887 on 16 July 1997. The remedy of petitioners is an action for reconveyance against Sandoval, Ozaeta and their spouses."

• Mendoza v. Court of Appeals (84 SCRA 67) — Cited for the procedure under Section 22 of PD 1529 regarding dealings with land pending registration; explained that the buyer need not be a party to the registration proceedings but must present the instrument to the court with a motion.
• Magdalena Homeowners Association, Inc. v. Court of Appeals (184 SCRA 325) — Cited for the enumeration of cases where notice of lis pendens is proper and where it has no application.
• Lim Toco v. Go Fay (80 Phil. 166) — Cited for the rule that a party declared in default loses standing in court and cannot appear or be heard unless the default is set aside.
• Serrano v. Palacio (52 O.G. 260) — Cited for the rule that oppositors in land registration cases must first file a motion to lift the order of general default before filing an opposition.
• Viewmaster Construction Corp. v. Hon. Maulit (383 Phil. 729) — Cited regarding the purposes and effects of lis pendens.
• Po Lam v. Court of Appeals (347 SCRA 86) — Cited for the principle that filing of notice of lis pendens does not create a right or lien that previously did not exist.
• Casillan v. Espartero (95 Phil. 799) — Cited for the rule that reconveyance is an action in personam filed in ordinary courts, not land registration courts.

• Section 14, Rule 13 of the 1997 Rules of Civil Procedure — Governs the recording of notice of lis pendens and requires that the plaintiff or defendant (when affirmative relief is claimed) may record the notice containing names of parties, object of action, and description of property.
• Section 76 of PD 1529 (Property Registration Decree) — Requires that notice of lis pendens contain the institution of action, court where pending, date of institution, reference to certificate of title number, and adequate description of land and registered owner.
• Section 22 of PD 1529 — Governs dealings with land pending original registration; allows interested parties to present instruments to the court before issuance of decree.
• Section 26 of PD 1529 — Provides that in land registration proceedings, an order of default binds all the world described in the notice "To All Whom It May Concern."
• Section 55 of Act No. 496 — Basis for reconveyance actions in cases of registration procured by fraud.
• Section 3, Rule 9 of the 1997 Rules of Civil Procedure — Governs the grounds for setting aside an order of default.