Du v. Ortile
REITERATIONFacts
The Antecedents: Malayan Savings and Mortgage Bank (Malayan Bank) purchased a parcel of land through a foreclosure sale. Subsequently, Malayan Bank entered into a memorandum of agreement (MOA) with Deanna Du (petitioner) and Primarosa B. Cuison to sell the property for P20,500,000.00. Petitioner Du paid P11,000,000.00 as a down payment, with Malayan Bank warranting the property would be free from liens and encumbrances by August 15, 2008. However, Malayan Bank failed to fulfill this undertaking due to an action for annulment of the foreclosure sale filed by Melissa Tuason-Principe, an heir of the property's former owner. Malayan Bank then offered to return the amounts paid, including interest, which petitioner Du rejected. Melissa Principe eventually reacquired the property through a compromise agreement with Malayan Bank. Procedural History: Aggrieved by these events, petitioner Du filed a petition for annulment of judgment against Malayan Bank, George J. Martinez, and Melissa Principe. Following this, petitioner Du filed a notice of lis pendens with the Register of Deeds of Manila. The Register of Deeds denied the registration, citing the failure to implead the registered owners. Petitioner Du appealed this denial via consulta to the Land Registration Authority (LRA), which was also denied by Deputy Administrator Ronald A. Ortile. The LRA ruled that a notice of lis pendens cannot be registered when the object of the proceeding is for the recovery of money and that the registered owners were not impleaded. Dissatisfied, petitioner Du filed a petition for review under Rule 43 of the Rules of Court before the Court of Appeals (CA), which denied her petition. The CA's resolution was subsequently denied upon petitioner Du's motion for reconsideration. The Petition: Petitioner Deanna Du filed the present Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Decision and Resolution of the Court of Appeals. The petition raises two main issues: (1) whether the CA erred in ruling that the registered owner must be impleaded as a party for the annotation of a notice of lis pendens, and (2) whether the CA erred in holding that there was no proof that the registered owners were the same person and that Melissa Principe was the sole heir. Petitioner argues that the law does not expressly require the registered owner to be impleaded and cites previous cases where lis pendens was allowed without the registered owner being a party, provided the impleaded party was a successor-in-interest. The Supreme Court, however, affirmed the CA's ruling, holding that while not expressly stated, the impleading of the registered owner is impliedly required for due process and to prevent clouds on title, and that petitioner failed to substantiate her claims regarding the identity of the registered owners and heirship.
Issue(s)
Whether the CA erred in ruling that in the annotation of the notice of lis pendens, the registered owner should be impleaded as a party. Whether the CA erred in holding that there was no proof that the registered owners are one and the same person and that Melissa Principe is the sole heir of the registered owner.
Ruling
The Petition is denied. The Decision dated September 11, 2020, and Resolution dated February 10, 2021, of the Court of Appeals in CA-G.R. SP No. 156777 are affirmed.
Ratio Decidendi
On the first issue (Impleading Registered Owner): The Court affirmed the CA's ruling that the registered owner must be impleaded as a party for the annotation of a notice of lis pendens. While Section 76 of PD 1529 and Section 19, Rule 13 of the Rules do not expressly mandate this, the Court held that it is impliedly required. The annotation of a notice of lis pendens directly affects the rights of the registered owner, potentially creating a cloud on the title and hindering the owner's ability to dispose of the property. To ensure due process and protect the registered owner's rights, they must be given an opportunity to be heard and to controvert any unfounded claims by being impleaded as a party. This interpretation aligns with the purpose of the Torrens system, which is to protect registered owners. The Court distinguished this from cases like Voluntad and Ver-Reyes, where the successors-in-interest who applied for the annotation were already parties or the situation was different. On the second issue (Proof of Ownership and Heirship): The Court agreed with the CA that petitioner failed to substantiate her claims that the registered owners, "Pacita Tuason and Pacita T. Principe," are the same person and that Melissa Principe is the sole heir. The CA's findings of fact are binding on the Supreme Court in a Rule 45 petition, and petitioner did not present additional proof. Therefore, the CA's conclusion that petitioner's assertion of Melissa Principe being impleaded as sufficient to compel annotation was unsubstantiated was upheld. The Court reiterated that the factual circumstances in Voluntad and Ver-Reyes were not comparable to the present case, thus rendering those precedents inapplicable.
Main Doctrine
While the annotation of a notice of lis pendens does not create a lien or encumbrance, it casts a cloud on the title and affects the registered owner's rights. Therefore, for the annotation of a notice of lis pendens, the registered owner must be impleaded as a party to the pending case to afford them due process and protect their rights.