Fernandez v. Court of Appeals
REITERATIONFacts
The Antecedents: This case concerns Lot 435 of the Bacolod cadastre, originally owned by Prudencio Fernandez. After Fernandez's death, his heirs became involved in a dispute with private respondent Jesus Ciocon and several intervenors who claimed to have purchased portions of the lot from Ciocon. The core of the dispute revolves around Civil Case Nos. 7687 and 7723, filed to determine the rightful ownership and possession of the property, with allegations of forgery and disputed repurchase prices. Procedural History: Civil Case Nos. 7687 and 7723 were consolidated. The Regional Trial Court (RTC) of Negros Occidental, Branch 47, initially dismissed the complaints and ordered the return of the lot to the heirs of Fernandez. However, the RTC later set aside this decision and rendered a new one favoring Ciocon and the intervenors, ordering the cancellation of the title issued to Fernandez and the issuance of a new one in the names of Ciocon and intervenors. This second decision was also appealed. Subsequently, the RTC ordered the cancellation of a notice of lis pendens (Entry No. 178073) annotated on the title. The heirs of Fernandez filed a special civil action for certiorari, prohibition, and mandamus with the Court of Appeals (CA) to annul the RTC's order cancelling the lis pendens and its decision setting aside the original judgment. The CA dismissed this petition, finding that the remedy of appeal was available and more adequate. The Petition: The petitioners, as heirs of Prudencio Fernandez, seek review of the CA's decision dismissing their special civil action for certiorari. They argue that the RTC's order cancelling the notice of lis pendens (Entry No. 178073) was void for lack of jurisdiction, violation of due process, and procedural infirmities, particularly since no motion for its cancellation was filed and the RTC had already lost jurisdiction upon the perfection of appeals. They contend that the CA erred in dismissing their petition for certiorari by refusing to pass on the impropriety and invalidity of the cancellation of the lis pendens and the lack of jurisdiction of the RTC when it granted execution pending appeal. The petitioners are asking for the annulment of the cancellation order and the re-annotation of the notice of lis pendens.
Issue(s)
Whether the Court of Appeals erred in dismissing the petition for certiorari. Whether the Regional Trial Court (RTC) acted with grave abuse of discretion amounting to lack of jurisdiction in ordering the cancellation of the notice of lis pendens (Entry No. 178073). Whether the RTC lost jurisdiction to issue the order of cancellation of the notice of lis pendens after the perfection of the appeal from its first decision. Whether the RTC lost jurisdiction to grant execution pending appeal after the perfection of the appeal from its second decision.
Ruling
The Supreme Court modified the decision of the Court of Appeals. It annulled and set aside the Order dated July 23, 1992, of the RTC insofar as it directed the cancellation of the notice of lis pendens, Entry No. 178073. The Register of Deeds of Bacolod City was directed to re-annotate the notice of lis pendens. The judge-designate was ordered to elevate the records to the Court of Appeals for consideration on appeal, and the CA was directed to immediately proceed with the appeal to determine rightful ownership and possession.
Ratio Decidendi
On the propriety of the Court of Appeals' dismissal of the petition for certiorari: While the Court of Appeals dismissed the petition for certiorari on the ground that appeal was a more speedy and adequate remedy, the Supreme Court found that the RTC's order cancelling the notice of lis pendens was issued without jurisdiction and with grave abuse of discretion. Therefore, the cancellation was null and void. The Supreme Court's modification of the CA's decision effectively addressed the substantive issues raised by the petitioners, even though the CA's procedural reasoning was not entirely overturned. The Supreme Court's ultimate action was to set aside the erroneous cancellation and direct the re-annotation of the lis pendens, while still remanding the case for appeal on the merits. On the cancellation of the notice of lis pendens: The Supreme Court held that a notice of lis pendens can only be cancelled upon proper showing that its purpose is to molest the adverse party or that it is not necessary to protect the rights of the party who caused its annotation. The Court found no such showing in the records. Furthermore, the cancellation order was issued ex parte and without a motion specifically seeking the cancellation of Entry No. 178073, which was annotated after the motion for cancellation of other entries was filed. This violated due process and the rules of procedure. The Court emphasized that the trial court's inherent power to cancel a notice of lis pendens is exercised only under exceptional circumstances, which were not present in this case. The peculiar circumstances, including two conflicting decisions by the same judge, indicated the necessity of the annotation to protect petitioners' interests. The Court underscored that a notice of lis pendens serves as an announcement to the world that a property is in litigation, intended to keep the property within the power of the court and prevent the defeat of a judgment by subsequent alienation. Its cancellation requires a showing of bad faith or lack of necessity, neither of which was demonstrated by the private respondents. The fact that the property was subsequently sold and mortgaged after the cancellation highlighted the necessity of maintaining the notice. On the jurisdiction of the RTC: The Supreme Court reiterated the doctrine that upon the perfection of an appeal, the trial court loses jurisdiction over the case, except for residual functions. The notices of appeal from the first decision were filed within the reglementary period and were duly approved, thus perfecting the appeals. Consequently, the RTC lost jurisdiction to amend its decision or issue orders for execution pending appeal. The Court clarified that while a notice of lis pendens can be cancelled at any time by the court having jurisdiction, the RTC had already lost its jurisdiction upon the perfection of the appeals. On the execution pending appeal: The Supreme Court found the execution pending appeal to be invalid because it was granted ex parte and after the RTC had lost jurisdiction due to the perfection of the appeal from its second decision. The granting of such a motion without notice to the adverse party violates due process. This flawed execution order was the basis for the subsequent cancellation of the notice of lis pendens, further compounding the errors.
Main Doctrine
A notice of lis pendens can only be cancelled upon order of the court after proper showing 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. Furthermore, a trial court loses jurisdiction to cancel a notice of lis pendens upon the perfection of an appeal from its decision.