Punongbayan v. Pineda
REITERATIONFacts
The Antecedents: Leonora Punongbayan and St. Peter's College, Inc. jointly mortgaged two parcels of land to Manila Banking Corporation (Manila Bank). St. Peter's College, Inc. sold its property to Angel L. Bautista, who assumed the mortgage obligation. Bautista failed to pay, leading to the extrajudicial foreclosure and sale of the properties to Manila Bank. Leonora Punongbayan redeemed one property, while Bautista paid the redemption price for both. Manila Bank issued a certificate of redemption only for Bautista's property, citing that the other had been redeemed by Punongbayan. Bautista filed a case for Specific Performance with Damages against Manila Bank. Procedural History: The trial court ruled in favor of Bautista. Pending Manila Bank's appeal, Bautista obtained an ex-parte order for a certificate of final conveyance, leading to the cancellation of TCT No. 296 and issuance of TCT No. 19417 in Bautista's name. Punongbayan caused the annotation of an adverse claim and notice of lis pendens on TCT No. 19417. Her motion to set aside the order for the certificate of final conveyance was denied. Bautista then filed an ex-parte motion for the cancellation of the adverse claim and notice of lis pendens, which the trial court granted without hearing Punongbayan. Punongbayan's subsequent motion to set aside this order was also denied, leading to the cancellation of the annotations by the Register of Deeds. The Petition: Leonora Punongbayan filed a petition for certiorari with preliminary mandatory injunction and restraining order to annul the order directing the cancellation of the adverse claim and notice of lis pendens, and to compel its reannotation.
Issue(s)
Whether the notice of lis pendens annotated at the back of TCT No. T-19417, under Entry No. 434, was properly and legally ordered cancelled. Whether the respondent judge committed grave abuse of discretion in ordering the cancellation of the notice of lis pendens without notice to the petitioner.
Ruling
The petition is granted. The questioned order directing the cancellation of the notice of lis pendens is annulled and set aside. The Register of Deeds of Iligan City is ordered to reannotate the notice of lis pendens on TCT No. 19417. The temporary restraining order issued by the Court is made permanent.
Ratio Decidendi
On the issue of the cancellation of the notice of lis pendens: The Court finds merit in the petitioner's contention that the cancellation was illegal because she was not notified of the hearing for the motion to cancel the annotation, thereby denying her the right to be heard. The Rules of Court explicitly state that a notice of lis pendens may be cancelled only upon court order after proper showing that it is for the purpose of molesting the adverse party or is not necessary to protect the rights of the party who caused it to be recorded. This requires affording the party who caused the annotation an opportunity to present their side. On the issue of grave abuse of discretion: The Court reiterated the principle that a trial court commits grave abuse of discretion in ordering the cancellation of a notice of lis pendens without notice to the party who caused it to be recorded, citing Sarmiento vs. Ortiz, et al. and Natano vs. Esteban et al.. The ex parte nature of the order, without notice and hearing, violates fundamental due process rights. The Court emphasized that such cancellation, especially when the order dismissing the complaint had not yet become final, could open the floodgates to fraud, such as the subsequent sale of the land to a buyer in good faith and for value, thereby prejudicing the rights of the annotating party. Therefore, the respondent judge's order was issued with grave abuse of discretion.
Main Doctrine
A trial court commits grave abuse of discretion in ordering the cancellation of a notice of lis pendens without affording the party who caused its annotation an opportunity to be heard.