Seveses v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Henry C. Seveses is the registered owner of a parcel of land. The property was initially sold by Rexcon Philippines to private respondent Ramon N. Carreon via a Contract of Sale on November 29, 1977. Carreon took possession and paid installments. However, Carreon discovered that a mortgage in favor of Makati Leasing and Finance Corporation was annotated on the title shortly after the sale, which was later cancelled. Subsequently, a Deed of Absolute Sale in favor of Reynaldo M. Reyes was annotated, leading to the cancellation of the original title and issuance of a new one to Reyes. Another mortgage in favor of Ayala Investment and Development Corporation was then annotated. Carreon demanded the restoration of the title free from encumbrances, but Reyes ignored this. Consequently, Carreon suspended payments. Procedural History: Reyes considered the sale rescinded due to Carreon's non-payment and filed an action for rescission before the Regional Trial Court (RTC) of Pasay City on November 13, 1979 (Civil Case No. 7648-P). A writ of preliminary injunction dispossessed Carreon of the property. Carreon annotated a notice of lis pendens on Reyes' title on April 1, 1981. On January 17, 1985, the RTC rendered a Decision approving Reyes' extra-judicial rescission. Petitioner Seveses subsequently acquired the property from Reyes on September 22, 1987, and the notice of lis pendens was carried over to his title. Seveses claimed Reyes informed him the case was terminated and obtained a Certificate of Finality, leading to the cancellation of the lis pendens on October 12, 1987. On August 10, 1990, Seveses received a notice to vacate. It was revealed that Carreon had appealed the RTC decision to the Court of Appeals (CA-G.R. CV No. 06498), which reversed the RTC decision on December 28, 1988, ordering the dismissal of Reyes' complaint, restoration of Carreon's possession, restoration of the title to its original condition, and payment of back amortizations by Carreon. This CA decision became final and executory on July 10, 1989, after the Supreme Court denied Reyes' Petition for Review (G.R. No. 87985). The Petition: Seveses filed an "Urgent Motion for Leave to Intervene" and a "Motion for Protective Order and/or Restraining Order" with the Pasay City RTC. The RTC denied these motions, holding Seveses responsible for his predicament. The RTC also denied Seveses' Motion for Reconsideration and Motion for Inhibition. Seveses then filed a petition for certiorari with the Court of Appeals, which was also denied. Hence, the instant petition before the Supreme Court, arguing denial of due process and that the CA made conclusions of law that ran roughshod over jurisprudence.
Issue(s)
Whether petitioner Seveses, as a transferee pendente lite, can be considered an innocent purchaser for value. Whether the denial of petitioner's Motion for Intervention violated his right to due process. Whether the cancellation of the notice of lis pendens and subsequent events justified non-enforcement of the final and executory judgment. Whether the respondent Judge committed grave abuse of discretion in denying the Motion for Inhibition.
Ruling
The petition is denied. The assailed Decision of the Court of Appeals is affirmed in toto.
Ratio Decidendi
On the issue of being an innocent purchaser for value: The Court held that petitioner Seveses could not qualify as a buyer in good faith. The notice of lis pendens annotated on April 1, 1981, was present on Reyes' title when Seveses purchased the property on September 22, 1987, and was carried over to Seveses' title. This clearly indicated that the property was subject to litigation. Therefore, Seveses was bound by the outcome of the litigation between Reyes and Carreon. His claim to the property must yield to Carreon's lien. On the issue of denial of due process and intervention: The Court found that Seveses' Motion for Intervention was filed late, as it was made after the rendition of judgment by the Court of Appeals. Under the Rules of Court then controlling, intervention must be filed before rendition of judgment. Furthermore, even if timely filed, intervention is generally not allowed in a case already terminated by final judgment. The Court reiterated that a transferee pendente lite cannot claim a further right to intervene as they are not strangers to the action and have stepped into the shoes of their predecessor in interest, who is already represented in the action. Thus, Seveses was not denied due process as he was represented by his predecessor, Reyes. On the issue of cancellation of lis pendens and non-enforcement of judgment: The Court stated that the cancellation of the notice of lis pendens based solely on a certification of case finality from a court personnel was irregular, as judicial authority is required. More importantly, by virtue of the notice of lis pendens, Seveses, as a transferee pendente lite, was bound by the outcome of the litigation. His interest was subject to the results of the pending suit, and his Certificate of Title afforded him no special protection. The alleged "actual contingencies" that Seveses claimed changed the complexion of the case (property no longer Reyes' to give back, title in Seveses' name, title mortgaged) occurred before the judgment became final and executory, and thus could not justify non-enforcement of the judgment. The Court emphasized that a notice of lis pendens serves as an announcement to the world that a property is in litigation and warns that any acquisition of interest therein is at the acquirer's risk, subject to the outcome of the litigation. On the issue of denial of inhibition: The Court found no basis for the claim of grave abuse of discretion in denying the Motion for Inhibition. The questioned orders themselves did not sufficiently prove bias or prejudice. Bias must stem from an extrajudicial source or result in an opinion based on something other than what the judge learned from participation in the case. Opinions formed during judicial proceedings, even if erroneous, do not prove personal bias. Moreover, since Seveses was not allowed to intervene, he lacked the legal standing to seek the disqualification of the respondent judge.
Main Doctrine
A transferee pendente lite, having acquired interest in the property during the pendency of litigation, is bound by the outcome of the suit and stands in the shoes of the transferor, with the notice of lis pendens affording no special protection against the judgment.