Moreno v. Forbes Park Association, Inc.
REITERATIONFacts
The Antecedents: Petitioners RMFPU Holdings, Inc. (RMFPU) and Quick Silver Development Corporation (Quick Silver) filed separate petitions before the Regional Trial Court (RTC) for the cancellation of Deeds of Restrictions annotated on their respective Transfer Certificates of Title (TCTs). These restrictions were imposed for a period of 50 years from January 1, 1949, and were set to expire on December 31, 1998. The RTC granted these petitions in separate orders, directing the Register of Deeds to cancel the annotations. Procedural History: Respondent Forbes Park Association, Inc. (FPA) filed petitions for annulment of judgment before the Court of Appeals (CA), arguing that the RTC orders were void due to FPA's lack of notice and non-impleadment as an indispensable party. The CA granted these petitions, annulling and setting aside the RTC orders and ordering the restoration of the Deeds of Restrictions. The CA denied motions for reconsideration filed by RMFPU and Quick Silver. The Petition: RMFPU and Quick Silver filed consolidated petitions for review before the Supreme Court, assailing the CA's decision and resolution. They argued that FPA was not an indispensable party, questioned the CA's application of prior jurisprudence, and raised issues of due process and prescription.
Issue(s)
Whether the Court of Appeals erred in annulling and setting aside the assailed Orders of the RTC pertinent to RMFPU and ordering the Register of Deeds to restore the Deed of Restrictions annotated on their titles. Whether the Court of Appeals erred in ruling that FPA is an indispensable party in the action for cancellation of the Deed of Restrictions and its application of PAGREL, Inc. v. Forbes Park Association, Inc. in Quick Silver's case. Whether the Court of Appeals erred in rendering a judgment on the merits based on the pleadings and without giving the parties the opportunity to present evidence. Whether the Court of Appeals erred when it rendered judgment in favor of FPA despite the latter's failure to justify the 11 years delay in the filing of the action for annulment of judgment. Whether the Court of Appeals erred in denying Quick Silver's request to remove the name of Jaime Gonzalez in the title of the case, and whether RMFPU's rights to due process and equal protection of the law were violated.
Ruling
The Supreme Court denied the consolidated petitions, affirming the Decision and Resolution of the Court of Appeals. The assailed RTC Orders were annulled and set aside, and the Register of Deeds was ordered to restore the Deed of Restrictions annotated on the certificates of title of RMFPU Holdings, Inc., Raymond M. Moreno, RMFPU Properties, Inc., and Quick Silver Development Corporation.
Ratio Decidendi
On the restoration of the Deed of Restrictions: The Court stated that the restoration of the annotation of the Deed of Restrictions was a logical consequence of the nullification of the RTC orders that had ordered their cancellation. If the orders were nullified, the original status quo, which included the annotations, had to be restored. On the issue of FPA being an indispensable party and the applicability of PAGREL: The Court held that FPA is an indispensable party in petitions for the cancellation of Deeds of Restrictions annotated on certificates of title within Forbes Park Village. Section 108 of Presidential Decree No. 1529 requires notice to all parties in interest for any amendment or alteration of certificates of title. FPA, as the entity responsible for enforcing these restrictions and whose interests are directly affected by their cancellation, must be impleaded. The failure to implead FPA deprived the RTC of jurisdiction and constituted extrinsic fraud, rendering the assailed orders void. The Court reiterated its ruling in PAGREL, Inc. v. Forbes Park Association, Inc., which established FPA's status as an indispensable party in similar cases. On the proper proceedings before the CA: The Court found that the CA correctly followed the procedure for annulment of judgment under Rule 47 of the Rules of Court. Section 6 of Rule 47 does not mandate a pre-trial or trial if the pleadings are sufficient for a determination of the issues. The CA has the discretion to decide the case based on the submitted pleadings, and the submission of memoranda is not a prerequisite for rendering judgment. On prescription of action and laches: The Court affirmed the CA's finding that there was no undue delay or laches on the part of FPA in filing its petitions for annulment. FPA had actively participated in related cases concerning the same Deed of Restrictions, demonstrating vigilance in asserting its rights. The Court noted that the period for filing an action for annulment based on lack of jurisdiction is before it is barred by laches or estoppel, and FPA's actions did not amount to such. On other matters raised by petitioners: The Court found the remaining issues raised by RMFPU and Quick Silver, including those concerning equal protection and the public purpose of restrictions in posh communities, to be either irrelevant to the present cases or requiring proper forum for their adjudication. These issues did not affect the outcome of the petitions concerning the annulment of the RTC orders.
Main Doctrine
The failure to implead an indispensable party, such as the Forbes Park Association, Inc. (FPA) in petitions for cancellation of annotated Deeds of Restrictions, renders the Regional Trial Court's orders void for lack of jurisdiction and constitutes extrinsic fraud, warranting annulment of the judgment.