National Housing Authority v. Evangelista
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns a parcel of land originally awarded by the People's Homesite and Housing Corporation (NHA's predecessor) to Adela Salindon. Following Salindon's death, her heirs transferred the property to Arsenio Florendo, Jr., et al. However, the Supreme Court later nullified this award. Despite this, the property was auctioned for unpaid taxes, leading to the issuance of a Transfer Certificate of Title (TCT) to Luisito Sarte. Sarte subsequently divided the property and assigned one portion to respondent Jose Evangelista, who obtained TCT No. 122944. 2. Procedural History: The National Housing Authority (NHA) filed Civil Case No. Q-91-10071 for recovery of the property, naming Sarte and others as defendants. NHA's motion to include Evangelista and other subsequent transferees as defendants was denied. Subsequently, NHA filed Civil Case No. Q-95-23940 for annulment of the deed of assignment and other transactions, which was dismissed due to litis pendentia. In Civil Case No. Q-91-10071, the trial court declared the auction sale and subsequent transfers void. Evangelista, not having been a party to this case, filed a petition for annulment of judgment with the Court of Appeals (CA), arguing extrinsic fraud and lack of jurisdiction. The CA granted this petition, annulling the trial court's decision as it pertained to Evangelista's title. NHA's motion for reconsideration was denied, leading to the present petition. 3. The Petition: The National Housing Authority filed this petition for review on certiorari under Rule 45 of the Rules of Court, assailing the CA's decision to annul the trial court's judgment. NHA argues that the CA erred in holding that the trial court's decision was not binding on Evangelista due to lack of jurisdiction over his person and in annulling the decision on grounds of lack of due process. NHA contends that Evangelista, as a subsequent transferee from Sarte, could not acquire rights superior to those declared in the original case, especially since the auction sale was void and Evangelista was allegedly aware of the pending litigation.
Issue(s)
Whether the trial court's decision in a recovery of title case is binding on a subsequent purchaser who was not impleaded as a party defendant. Whether the annotation of a notice of lis pendens and adverse claim after the issuance of the respondent's title constitutes constructive notice that binds the respondent to the outcome of the litigation.
Ruling
The petition is denied for lack of merit. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 51646 are affirmed.
Ratio Decidendi
On Issue 1: The Supreme Court held that the trial court's judgment is void as against Evangelista because he was never made a party to Civil Case No. Q-91-10071. Under Philippine Jurisprudence, specifically the rulings in Heirs of Antonio Pael v. Court of Appeals and Arcelona v. Court of Appeals, no man shall be affected by a proceeding in which he is a stranger. A trial court acquires jurisdiction over the person of a defendant only through service of summons or voluntary appearance. Since Evangelista was not impleaded, the RTC failed to acquire jurisdiction over him, and consequently, its decree nullifying his title (Paragraph 3) was issued without authority. To allow the nullification of a title without giving the titleholder the opportunity to present evidence is a patent violation of the constitutional guarantee that no person shall be deprived of property without due process of law. Even if the NHA was not at fault for the RTC's refusal to implead Evangelista, the legal reality remains that a judgment cannot bind a non-party who holds a recorded title. On Issue 2: The Court ruled that the notice of lis pendens did not serve as constructive notice to Evangelista. Applying Section 52 of the Property Registration Decree (P.D. No. 1529), a notice of lis pendens only operates as constructive notice from the date of its registration. In this case, Evangelista's TCT No. 122944 was issued on December 21, 1994, whereas the NHA's adverse claim and notice of lis pendens were registered only on May 4, 1995, and May 31, 1995, respectively. Because the transfer occurred and the new title was issued long before the registration of the notice, the 'warning' provided by a lis pendens was non-existent at the time of Evangelista's acquisition. Furthermore, the Court noted that the notice of lis pendens actually referred to a different case (Civil Case No. Q-95-23940) and not the one resulting in the assailed judgment. Therefore, the constructive notice cannot be applied retroactively to bind a purchaser whose title preceded the annotation.
Main Doctrine
A person not impleaded in a complaint cannot be bound by the decision rendered therein, as no man shall be affected by a proceeding in which he is a stranger. A judgment that affects a party without affording them due process is void.