Biglang-Awa v. Philippine Trust
REITERATIONFacts
The Antecedents: Petitioners, together with their mother Encarnacion, filed a complaint for declaration of nullity of deeds, cancellation of titles, reconveyance, and recovery with damages against Roberth B. Tolentino (Tolentino) and Philippine Trust Company (respondent). They alleged ownership over eight parcels of land. Petitioners claimed that Tolentino, through fraudulent manipulations and falsified documents, encumbered four of Encarnacion's parcels of land with respondent and later secured new titles in his name over all eight parcels. A notice of lis pendens was annotated on Tolentino's titles. Procedural History: Tolentino filed a Motion to Dismiss. Encarnacion filed a Notice of Dismissal, stating the complaint was filed without her conformity and that she had sold her properties to Tolentino. Respondent also filed its Answer. The Regional Trial Court (RTC) dismissed Encarnacion's complaint with prejudice. Petitioners filed a Motion for Reconsideration and a Motion for Leave to Amend Complaint, seeking to implead Encarnacion and a sister as defendants, alleging co-ownership. The RTC denied the motion for reconsideration, granted the motion to dismiss filed by Tolentino and respondent, and denied the motion for leave to amend the complaint. The RTC stated the dismissal was without prejudice to the commencement of appropriate actions by proper parties. Tolentino moved for cancellation of the notice of lis pendens on Encarnacion's former properties. The RTC denied this motion, as well as petitioners' motion for reconsideration. Respondent filed a motion for reconsideration of the August 14, 2001 Order, arguing the February 2, 2001 Order regarding cancellation had become final. The RTC denied this motion. Respondent then filed a petition for certiorari with the Court of Appeals (CA), arguing grave abuse of discretion by the RTC in denying the cancellation of the notice of lis pendens. Petitioners also filed a petition for certiorari questioning the RTC's grant of the motion to dismiss and denial of the motion to amend. The CA reversed the RTC's August 14, 2001 Order, ordering the cancellation of the notice of lis pendens on TCT Nos. N-198629 to N-198632. The CA denied petitioners' motion for reconsideration. The Petition: Petitioners seek review of the CA's decision, raising issues on the finality of the RTC's February 2, 2001 Order, the right to amend the complaint, and the propriety of canceling the notice of lis pendens.
Issue(s)
Whether the Court of Appeals committed an error of law in reversing and setting aside the order of the RTC dated 14 August 2001 wherein it denied the motion of Roberth B. Tolentino praying for the cancellation of the lis pendens annotated at the back of torrens titles issued in the name of Encarnacion Biglang-Awa. Whether the Court of Appeals committed an error of law in disregarding the fact that it is [a] matter of right of the petitioners to amend their complaint prior to the submission of an answer or responsive pleading by the adverse parties. Whether the Court of Appeals committed an error of law in finding that the petitioners have no more cause of action against the respondents since petitioners have no more any "direct or indirect interest to protect."
Ruling
The petition is DENIED. The Decision of the Court of Appeals dated April 30, 2003 and its Resolution of July 4, 2003 are AFFIRMED.
Ratio Decidendi
On the propriety of canceling the notice of lis pendens: The Court agreed with the CA that the cancellation of the notice of lis pendens annotated on TCT Nos. N-198629 to N-198632 was proper. A notice of lis pendens serves to keep the property within the power of the court and to bind purchasers to the outcome of the litigation. However, it can be canceled under Section 14, Rule 13 of the Rules of Civil Procedure if the annotation is for molesting the adverse party or is unnecessary to protect the annotating party's rights. In this case, petitioners had categorically declared in their original complaint that these specific parcels of land were exclusively owned by Encarnacion. Consequently, they had no direct interest in these properties, making the annotation of lis pendens on them unnecessary to protect their individual titles to other properties. Furthermore, since petitioners' complaint had been dismissed without prejudice and no other case involving these properties was pending, there was no longer any suit to speak of, justifying the cancellation. The Court emphasized that petitioners could not rely on their amended complaint, which was not admitted by the RTC and whose denial had become final and executory, to prevent the cancellation. On the finality of the RTC's February 2, 2001 Order and the right to amend the complaint: The Court affirmed the CA's ruling that the RTC's February 2, 2001 Order, dismissing the complaint with respect to Encarnacion and all defendants, had become final and executory. The subsequent April 16, 2001 Resolution of the RTC, which dismissed the complaint of the remaining plaintiffs (petitioners) without prejudice, did not amend the earlier dismissal concerning Encarnacion's complaint. Furthermore, the RTC's denial of petitioners' Motion for Leave to Amend Complaint had also become final and executory. The Court reiterated that under Section 2, Rule 10 of the Rules of Court, a party may amend a pleading once as a matter of right before a responsive pleading is served. In this case, respondent had already filed its Answer with Counterclaim before petitioners filed their Motion for Leave to Amend Complaint. Therefore, any amendment thereafter required leave of court. The RTC's denial of the motion to amend was correct, not because the amendment drastically altered the cause of action (as the CA erroneously stated), but because the amended complaint sought to alter factual conclusions in the RTC's prior final and executory orders, which is impermissible due to the immutability of judgments. Moreover, the RTC had dismissed the original complaint for lack of jurisdiction due to non-payment of docket fees, a ruling that also became final and executory, rendering the motion to amend moot. On the cause of action and interest to protect: The Court found that petitioners had no cause of action against respondent concerning the properties formerly owned by Encarnacion. Their original complaint explicitly stated Encarnacion's exclusive ownership of these parcels. The RTC's February 2, 2001 Order affirmed Encarnacion's dismissal of her complaint, and the subsequent orders and resolutions, including the CA's decision, confirmed that the dismissal of the complaint and the finality of related orders precluded petitioners from asserting claims that would alter these established facts. The cancellation of the notice of lis pendens was therefore justified because petitioners demonstrated no direct or indirect interest to protect concerning the properties formerly titled under Encarnacion's name, especially given the final and executory dismissal of their complaint and the denial of their motion to amend.
Main Doctrine
A notice of lis pendens may be canceled if it is not necessary to protect the rights of the party who caused it to be annotated, especially when the underlying complaint has been dismissed and has become final and executory, and the annotating party has no further interest to protect.