J. Casim Construction Supplies, Inc. vs. Registrar of Deeds of Las Piñas

The power to cancel a notice of lis pendens is inherent in and ancillary to the court having jurisdiction over the main action to which the notice relates; an original action for cancellation filed before another court is dismissible for lack of jurisdiction. After final judgment in the main action, the notice is functus officio and may be cancelled administratively under Section 77 of P.D. No. 1529.

J. Casim Construction Supplies, Inc. is a domestic corporation and registered owner of TCT No. 49936, covering a 10,715-square meter parcel in Las Piñas City. The property was acquired in 1982 by a Deed of Absolute Sale from the mother title TCT No. 30459. The notice of lis pendens sought to be cancelled was registered at the instance of Bruneo F. Casim in relation to Civil Case No. 2137, an annulment of sale and recovery of real property case filed against the spouses Jesus and Margarita Casim, petitioner's predecessors-in-interest and stockholders. The case requires determining which court has jurisdiction over an original petition to cancel that notice under P.D. No. 1529 and the Rules of Court.

J. Casim Construction Supplies, Inc., represented by Rogelio C. Casim, is a duly organized domestic corporation and the registered owner of Transfer Certificate of Title (TCT) No. 49936, covering a 10,715-square meter parcel of land. Sometime in 1982, it acquired the property by virtue of a Deed of Absolute Sale; as a result, the mother title, TCT No. 30459, was cancelled and TCT No. 49936 was issued in its stead. Petitioner claimed that its owner's duplicate copy of TCT No. 49936 was clean at the time of delivery, but it later learned that the original copy on file with the Register of Deeds contained several entries indicating that the property had been subjected to various claims, including the notice of lis pendens.

The memorandum of encumbrances on the title showed four entries. Entry No. 81-8334/T-30459 was an adverse claim by Bruno F. Casim, who claimed a right and interest over the property under a document dated August 4, 1981, inscribed on August 5, 1981. Entry No. 82-4676/T-49936 cancelled that adverse claim under a document dated April 21, 1982, inscribed on the same date. Entry No. 82-4678/T-49936 was an affidavit stating that the title was cancelled and that TCT No. 49936/T-228 was issued in lieu thereof under a document dated April 21, 1982, also inscribed on the same date. Entry No. 81-12423/T-30459 was the notice of lis pendens, presented by Cesar P. Manalaysay, counsel for the plaintiff, stating that a petition for review had been commenced and was pending in the Court of First Instance of Rizal, Branch XXIX, Pasay, in Civil Case No. LP-9438-P, Bruneo F. Casim vs. Spouses Jesus A. Casim and Margarita Chavez, Spouses Urbano Nobleza and Cristita J. Nobleza, and Filomena C. Antonio, involving the property. The instrument was dated September 17, 1981, and inscribed on September 18, 1981.

On March 22, 2004, petitioner filed with the RTC of Las Piñas City, Branch 253, an original petition for cancellation of the notice of lis pendens and all other entries of involuntary encumbrances annotated on the original copy of TCT No. 49936. Invoking the inherent power of the trial court, petitioner prayed for cancellation. It alleged that the notice of lis pendens was a forgery, based on inconsistencies in the inscriber's signature and the fact that the notice was entered non-chronologically, its date being earlier than that of the preceding entry. It also noted the lack of any transaction record on file with the Register of Deeds supporting the noticed. Petitioner further stated that while Section 59 of P.D. No. 1529 requires the carry-over of subsisting encumbrances in new issuances of TCTs, its duplicate copy of the title did not contain any such carry-over, which meant it was an innocent purchaser for value, especially since it was never a party to the civil case referred to in the notice. Finally, it invoked the indefeasibility of its title despite the fact that the mother title, TCT No. 30459, might have suffered from defects and constraints.

The Intestate Estate of Bruneo F. Casim intervened and filed a Comment/Opposition. It maintained that the RTC of Las Piñas did not have jurisdiction over the action because the matter of cancelling a notice of lis pendens lies within the jurisdiction of the court before which the main action referred to in the notice is pending. It emphasized that the case referred to in the notice had already attained finality, as the Supreme Court had issued an entry of judgment, and that the RTC of Makati City had ordered execution. It cited the lack of legal basis for the petition because nothing in the allegations hinted at any of the legal grounds for cancellation. It also opposed petitioner's claim that there was no carry-over of encumbrances, stating that TCT No. 30459 would show the same inscriptions as those found in TCT No. 49936, only that they were entered in the original copy on file with the Register of Deeds. According to a certification issued by the Register of Deeds, petitioner's claim of lack of transaction record could not stand because the certification stated merely that the corresponding transaction record could no longer be retrieved and might be considered lost or destroyed.

The notice of lis pendens had been recorded at the instance of Bruneo F. Casim in relation to Civil Case No. 2137, an action for annulment of sale and recovery of real property, which he filed before the RTC of Makati City, Branch 62, against the spouses Jesus and Margarita Casim, the predecessors-in-interest and stockholders of petitioner corporation. That case involved the property subject of the present case, then covered by TCT No. 30459. At the close of trial, the RTC of Makati rendered a decision adverse to Bruneo and dismissed the complaint for lack of merit. Bruneo appealed to the Court of Appeals, docketed as CA-G.R. CV No. 54204, which reversed and set aside the trial court's decision. The spouses Jesus and Margarita Casim elevated the case to the Supreme Court, docketed as G.R. No. 151957, but their appeal was dismissed for being filed out of time.

On April 14, 2005, the trial court, ruling that it did not have jurisdiction over the action, dismissed the petition and declared that the action must have been filed before the same court and in the same action in relation to which the annotation of the notice of lis pendens had been sought. On the allegation that the entries in the TCT were forged, the trial court pointed out that petitioner resorted to the wrong forum to determine the existence of forgery, and that forgery could not be presumed merely from the alleged non-chronological entries but must be positively proved. It noted petitioner's failure to name exactly who had committed the forgery and the lack of evidence on which the allegation could be based. Petitioner moved for reconsideration, but it was denied in the trial court's June 24, 2005 Order. Petitioner then filed the present petition for review under Rule 45, raising a pure question of law.

• Jurisdiction over Independent Action: Petitioner argued that an action for cancellation of a notice of lis pendens is not always ancillary to an existing main action because a trial court has the inherent power to cause such cancellation, especially in this case where petitioner was never a party to the litigation to which the notice of lis pendens relates.
• Forgery and Non-Chronological Entries: Petitioner maintained that the trial court erred in declining to rule on the allegation of forgery, especially since there is no transaction record on file with the Register of Deeds relative to the entries; the non-chronological annotation of the notice was the best evidence of forgery.
• Clean Duplicate Title: Petitioner posited that even if the notice of lis pendens was properly annotated on the title, the fact that its owner's duplicate title is clean suggests that it was never a party to the civil case referred to in the notice.
• Indefeasibility of Title: Petitioner argued that TCT No. 49936 is indefeasible and holds the property free from any liens and encumbrances which its mother title, TCT No. 30459, might have suffered.
• Forgery as Ground for Independent Action: In its Reply, petitioner contended that forgery of the notice of lis pendens suffices as a ground for cancellation thereof and may be availed of in an independent action by the aggrieved party.

• Intervenor's Lack of Jurisdiction: The intervenor, Intestate Estate of Bruneo F. Casim, maintained that the RTC of Las Piñas did not have jurisdiction over the action because the matter of cancelling a notice of lis pendens lies within the jurisdiction of the court before which the main action referred to in the notice is pending; only the court exercising jurisdiction over the property may order cancellation.
• Intervenor's Finality of Main Action: The intervenor emphasized that the case referred to in the notice had already attained finality, as the Supreme Court had issued an entry of judgment therein, and the RTC of Makati City had ordered execution.
• Intervenor's Lack of Legal Basis: The intervenor cited the lack of legal basis for the petition because nothing in the allegations hinted at any of the legal grounds for cancellation of a notice of lis pendens.
• Intervenor's Carry-Over of Encumbrances: The intervenor opposed petitioner's claim that there was no carry-over of encumbrances, stating that TCT No. 30459 also had the same inscriptions as those found in TCT No. 49936, only that they were entered in the original copy on file with the Register of Deeds; the Register of Deeds certification stated merely that the corresponding transaction record could no longer be retrieved and might be considered lost or destroyed.
• Intervenor's No Ground for Cancellation: Even assuming the trial court had jurisdiction, the intervenor argued that the petition for cancellation still had no legal basis because petitioner failed to establish the grounds therefor, and the notice of lis pendens was validly carried over to TCT No. 49936 from the mother title.

• Jurisdiction over Cancellation of Notice of Lis Pendens: Whether the RTC of Las Piñas City, Branch 253, has jurisdiction over an original action to cancel a notice of lis pendens annotated on a certificate of title as an incident in a previous case.
• Grounds for Cancellation / Forgery: Whether the alleged forgery and non-chronological entries in the original copy of TCT No. 49936, and the absence of a transaction record, justify cancellation of the notice of lis pendens in an independent action.
• Indefeasibility and Innocent Purchaser: Whether TCT No. 49936 is indefeasible and petitioner is an innocent purchaser for value such that the notice of lis pendens and other encumbrances must be cancelled.
• Proper Remedy after Final Judgment: Whether the proper remedy to cancel the notice of lis pendens after final judgment in the main action is judicial or administrative under Section 77 of P.D. No. 1529.

• Jurisdiction over Cancellation of Notice of Lis Pendens: No. The power to cancel a notice of lis pendens is inherent in and ancillary to the court having jurisdiction over the main action; the RTC of Las Piñas correctly dismissed the original petition for lack of jurisdiction.
• Grounds for Cancellation / Forgery: Not resolved. The Court declined to rule on the forgery and non-chronological entries because they raise factual matters beyond the competence of a Rule 45 petition; forgery cannot be presumed and must be positively proved.
• Indefeasibility and Innocent Purchaser: Not resolved. The claim of indefeasibility and innocent purchaser status likewise required factual determination and was not passed upon in this petition.
• Proper Remedy after Final Judgment: Administrative. After finality of the main action, cancellation is effected by presenting to the Register of Deeds a clerk of court certificate under Section 77 of P.D. No. 1529.

• Jurisdiction over Cancellation of Notice of Lis Pendens: 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. Founded on public policy and necessity, it keeps the property in litigation within the power of the court until the litigation is terminated and prevents the defeat of the judgment or decree by subsequent alienation. Its notice is an announcement to the whole world that the property is in litigation and warns that one who acquires an interest over it does so at his own risk. A notice of lis pendens, once duly registered, may be cancelled by the trial court before which the action involving the property is pending. This power is inherent in the trial court and is exercised only under express provisions of law. Section 14, Rule 13 of the 1997 Rules of Civil Procedure authorizes the trial court to cancel a notice of lis pendens where it is properly shown that the purpose of its annotation is for molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be annotated. The power is exercised only under exceptional circumstances, such as where the circumstances are imputable to the party who caused the annotation; where the litigation was unduly prolonged to the prejudice of the other party because of several continuances procured by petitioner; where the case which is the basis for the lis pendens notation was dismissed for non prosequitur on the part of the plaintiff; or where judgment was rendered against the party who caused such a notation. In such instances, the notice is deemed ipso facto cancelled. The subject notice was recorded at the instance of Bruneo F. Casim in relation to Civil Case No. 2137, an annulment of sale and recovery of real property case filed before the RTC of Makati City, Branch 62, against the spouses Jesus and Margarita Casim, petitioner's predecessors-in-interest and stockholders. The property involved was then covered by TCT No. 30459. The RTC of Makati dismissed the complaint for lack of merit; the Court of Appeals reversed and set aside the dismissal; the Supreme Court dismissed the appeal in G.R. No. 151957 for being filed out of time. A necessary incident of registering a notice of lis pendens is that the property covered thereby is effectively placed, until the litigation attains finality, under the power and control of the court having jurisdiction over the case to which the notice relates. Parties dealing with the property are charged with knowledge of the action and are deemed to take the property subject to the outcome of the litigation. The power to cancel the notice is inherent because it is merely ancillary to the main action. Jurisprudence holds that the precautionary notice may be ordered cancelled at any time by the court having jurisdiction over the main action. Thus, the action for cancellation must have been filed before the RTC of Makati City, Branch 62, as an incident of the annulment case in relation to which the registration was sought, not before the RTC of Las Piñas City via an original action. The latter court had no jurisdiction.

• Grounds for Cancellation / Forgery: The Court declined to rule on petitioner's assumptions that the annotations on the original TCT were forged because they raise matters that call for factual determination, which are beyond the competence of the Court in this petition. The trial court had noted that forgery could not be presumed merely from the alleged non-chronological entries in the TCT but must be positively proved, and that petitioner failed to name exactly who had committed the forgery and lacked evidence on which the allegation could be based. The Supreme Court did not resolve the factual claim. The petition was also taken directly on a pure question of law, and the forgery issue was not a proper matter for resolution in that posture.

• Indefeasibility and Innocent Purchaser: Petitioner's claim that TCT No. 49936 is indefeasible and that it was an innocent purchaser for value because its owner's duplicate title was clean likewise raised matters calling for factual determination. The Court declined to rule on these assumptions. The rights of the parties, as well as of their successors-in-interest, including petitioner, in relation to the subject property are to be decided according to the final decision in the main action.

• Proper Remedy after Final Judgment: The decision in the annulment case had already attained finality before both the Court of Appeals and the Supreme Court on the appellate level, unless there existed substantial and genuine claims against the parties relative to the main case subject of the notice of lis pendens. There were none. The precautionary notice registered relative to the annulment case had served its purpose. With the finality of the decision therein on appeal, the notice had already been rendered functus officio. Petitioner was not altogether precluded from pursuing a specific remedy, but the suitable course of action legally available was not judicial but administrative. Section 77 of P.D. No. 1529 provides the appropriate measure to have a notice of lis pendens cancelled from the title: by presenting to the Register of Deeds, after finality of the judgment rendered in the main action, a certificate executed by the clerk of court before which the main action was pending to the effect that the case has already been finally decided by the court, stating the manner of the disposal thereof. Before final judgment, the notice may be cancelled upon order of the court after proper showing that it is for molesting the adverse party or not necessary to protect the rights of the party who caused it to be registered, or by the Register of Deeds upon verified petition of the party who caused the registration. Since the main action had attained finality, the administrative cancellation under Section 77 was the appropriate remedy.

• Lis pendens — It literally means pending suit and 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. It is founded on public policy and necessity, intended to keep properties in litigation within the power of the court until the litigation is terminated and to prevent the defeat of the judgment or decree by subsequent alienation. Its notice is an announcement to the whole world that a particular property is in litigation and warns that one who acquires an interest over the property does so at his own risk. The Court applied this definition to characterize the notice and its effects on petitioner as successor-in-interest.
• Inherent and ancillary power to cancel notice of lis pendens — A notice of lis pendens, once duly registered, may be cancelled by the trial court before which the action involving the property is pending. This power is inherent in the trial court and is exercised only under express provisions of law. It is ancillary to the main action because the property covered by the notice is effectively placed under the power and control of the court having jurisdiction over the case to which the notice relates. The Court applied this to hold that the RTC of Las Piñas had no jurisdiction over an original petition for cancellation; the proper court was the RTC of Makati, Branch 62, which handled the main annulment case.
• Grounds and exceptional circumstances for cancellation — Under Section 14, Rule 13 of the 1997 Rules of Civil Procedure, the trial court may cancel a notice of lis pendens where it is properly shown that the purpose of the annotation is to molest the adverse party or that it is not necessary to protect the rights of the party who caused it. The power is exercised only under exceptional circumstances: (a) circumstances imputable to the party who caused the annotation; (b) undue prolongation of the litigation to the prejudice of the other party because of several continuances procured by petitioner; (c) dismissal of the case for non prosequitur on the part of the plaintiff; or (d) judgment rendered against the party who caused the notation. In such instances, the notice is deemed ipso facto cancelled. The Court cited these rules but found the jurisdictional defect decisive.
• Functus officio of notice of lis pendens after final judgment — Once the main action attains finality, the notice of lis pendens has served its purpose and is rendered functus officio. The rights of the parties and their successors-in-interest are then to be decided according to the final decision. The Court applied this because the annulment case had already attained finality before the Court of Appeals and the Supreme Court, leaving no substantial or genuine claims relative to the main case.
• Administrative cancellation under Section 77 of P.D. No. 1529 — After final judgment in favor of the defendant or other disposition terminating all rights of the plaintiff in the land, the notice of lis pendens is deemed cancelled upon registration of a certificate of the clerk of court in which the action was pending stating the manner of disposal. Before final judgment, cancellation may be ordered by the court upon proper showing of molestation or lack of necessity to protect the rights of the party who caused registration, or by the Register of Deeds upon verified petition of the party who caused registration. The Court held that petitioner's proper remedy was administrative, not judicial.
• Factual issues in a Rule 45 petition — The Court declined to rule on allegations of forgery, non-chronological entries, indefeasibility, and innocent purchaser status because they call for factual determination beyond the competence of the Court in a petition for review raising a pure question of law. The trial court's observation that forgery must be positively proved and cannot be presumed from non-chronological entries was left undisturbed.

• "Lis pendens — which literally means pending suit — refers to the jurisdiction, power or control which a court acquires over the property involved in a suit, pending the continuance of the action, and until final judgment." — This is the Court's canonical definition of lis pendens, anchoring its ruling on the nature and effect of the notice.
• "A notice of lis pendens, once duly registered, may be cancelled by the trial court before which the action involving the property is pending. This power is said to be inherent in the trial court and is exercised only under express provisions of law." — This passage states the jurisdictional rule: the power to cancel is vested in the court handling the main action, not in any court where an independent petition is filed.
• "Clearly, the action for cancellation of the notice of lis pendens in this case must have been filed not before the court a quo via an original action but rather, before the RTC of Makati City, Branch 62 as an incident of the annulment case in relation to which its registration was sought." — This is the ratio decidendi on jurisdiction, directly disposing of the principal issue.
• "Section 77 of P.D. No. 1529 provides the appropriate measure to have a notice of lis pendens cancelled out from the title, that is by presenting to the Register of Deeds, after finality of the judgment rendered in the main action, a certificate executed by the clerk of court before which the main action was pending to the effect that the case has already been finally decided by the court, stating the manner of the disposal thereof." — This passage identifies the administrative remedy after final judgment and explains why the judicial petition was not the proper course.

• Vda. de Kilayko vs. Judge Tengco, G.R. No. 45425 and G.R. No. 45965, March 27, 1992, 207 SCRA 600 — Cited for the rule that the precautionary notice of lis pendens may be ordered cancelled at any time by the court having jurisdiction over the main action, because the notice is merely an incident to that action.
• Heirs of Maria Marasigan vs. Intermediate Appellate Court, G.R. No. L-69303, July 23, 1987, 152 SCRA 253 — Cited to the same effect, that cancellation of the notice is an incident of the main action and may be ordered by the court with jurisdiction over it.
• Tanchoco vs. Aquino, 238 Phil. 1 (1987) — Cited for the same rule on the ancillary nature of the power to cancel a notice of lis pendens.
• Heirs of Eugenio Lopez, Sr. vs. Enriquez, G.R. No. 146262, January 21, 2005, 449 SCRA 173 — Cited for the principle that the notice of lis pendens is an incident in an action, recorded extrajudicially, and its cancellation is likewise a mere incident that may be ordered by the court having jurisdiction of the action at any given time.
• Magdalena Homeowners Association, Inc. vs. Court of Appeals, G.R. No. 60323, April 17, 1990, 184 SCRA 325 — Cited in Heirs of Eugenio Lopez, Sr. vs. Enriquez for the same rule on the extrajudicial and incidental character of the notice and its cancellation.
• St. Mary of the Woods School, Inc. vs. Office of the Registry of Deeds of Makati City, G.R. No. 174290 and G.R. No. 176116, January 20, 2009, 576 SCRA 713 — Cited for the definition of lis pendens and for the rule that the power to cancel a notice of lis pendens is inherent in the trial court and exercised only under express provisions of law.
• Romero vs. Court of Appeals, G.R. No. 142406, May 16, 2005, 458 SCRA 483 — Cited for the definition of lis pendens and the principle that the property is placed under the power and control of the court having jurisdiction over the case to which the notice relates.
• Fernandez vs. Court of Appeals, 397 Phil. 205 (2000) — Cited for the exceptional circumstances under which the power to cancel a notice of lis pendens may be exercised and for the rule that the notice is deemed ipso facto cancelled in those instances.
• Garchitorena vs. Director of Lands, 91 Phil. 157 (1952) — Cited as suggesting that an original action may be brought for cancellation of a notice of lis pendens where the parties appear to have substantial claims against each other relative to the civil case subject of the notice; the Court found no such substantial claims in this case.
• Yared vs. Ilarde, 391 Phil. 722, 730 (2000) — Cited for the principle that the notice of lis pendens is an announcement to the whole world that the property is in litigation and warns those who acquire an interest to do so at their own risk.
• Lim vs. Vera Cruz, 356 SCRA 386, 393 (2001) — Cited in Romero vs. Court of Appeals for the public policy and necessity underlying lis pendens.

• Section 14, Rule 13, 1997 Rules of Civil Procedure — Authorizes the trial court to cancel a notice of lis pendens where it is properly shown that the purpose of the annotation is for molesting the adverse party, or that it is not necessary to protect the rights of the party who caused it to be annotated. The Court cited this as the express provision governing cancellation, but held that the power is exercised by the court having jurisdiction over the main action, not by another court in an original action.
• Section 77, P.D. No. 1529 — Provides for cancellation of lis pendens. Before final judgment, the notice may be cancelled upon order of the court after proper showing that it is for molesting the adverse party or not necessary to protect the rights of the party who caused it to be registered; it may also be cancelled by the Register of Deeds upon verified petition of the party who caused registration. After final judgment in favor of the defendant or other disposition terminating all rights of the plaintiff, the notice is deemed cancelled upon registration of a certificate of the clerk of court in which the action was pending stating the manner of disposal. The Court held this administrative route was the appropriate remedy after the main action attained finality.

Antonio T. Carpio (Chairperson), Antonio Eduardo B. Nachura, Roberto A. Abad, and Jose Catral Mendoza concurred.