G.R. No.

142406

May 16, 2005

SPOUSES CONRADO and MA. CORONA ROMERO, petitioners, vs. COURT OF APPEALS and SATURNINO S. ORDEN,
respondents.
(cancellation of lis pendens)
FACTS::
Romero and her siblings executed a letter-contract to sell with private respondent Orden. In said contract,
private respondent proposed to purchase from Romero and her siblings a property located at Denver cor. New York
Sts., Cubao, Quezon for the total amount of P17M. The contract stipulated that private respondent shall pay
petitioner the amount of P7M upon the execution of the deed of absolute sale, the balance of P10M not later than
December 19, 1996 and that private respondent shall shoulder the expenses to evict the squatters on the property.
When private respondent failed to pay the down payment, petitioner Corona told him that she was rescinding the
contract to sell. Private respondent then filed a complaint for specific performance and damages against petitioners
before the Regional Trial Court alleging that he has complied with his obligation to evict the squatters on the
property and is entitled to demand from petitioners the performance of their obligation under the contract.
Simultaneous with the filing of the complaint, private respondent caused the annotation of a notice of lis
pendens Limsico, Jr. and Santos, subsequent buyers of the subject property sold by petitioner Corona and her
siblings, filed a motion for leave to intervene and filed a motion for the cancellation of lis pendens which the RTC
granted in its Resolution. The RTC reasoned that the inscription is not necessary to protect the alleged right of
the plaintiff over the subject property. The plaintiff is not entitled to the inscription of the notice on TCT in the name
of the defendants and others because he does not have any actionable right over the subject property there being
no deed of sale executed. Therefore said notice should be cancelled.
Respondent filed a petition for certiorari before the CA seeking the nullification of the resolutions of the RTC and
asked for the re-annotation of the notice of lis pendens on the TCT. The CA granted the portions of which read:
First, the general rule is that a notice of lis pendens cannot be cancelled while the action is pending and
undetermined except in cases expressly provided by statute. Section 77, P.D. 1529 (Property Registration Decree) In
the instant case, there was not even a hearing upon which could be predicated a "proper showing" that any of the
grounds provided by law exists.
Second, as shown in the above cited provisions, there are only two grounds for the court to order the cancellation
of a notice of lis pendens during the pendency of an action, and they are: (1) if the annotation was for the purpose
of molesting the title of the adverse party, or (2) when the annotation is not necessary to protect the title of the
party who caused it to be recorded. While the parties are locked up in legal battle and until it becomes convincingly
shown that either of the two grounds exists, the court should not allow the cancellation.
Third, the Doctrine of Lis Pendens is founded upon reasons of public policy and necessity, the purpose of which is
to keep the properties in litigation within the power of the court until the litigation is terminated, and to prevent the
defeat of the judgment or decree by subsequent alienation. In the case at bench, the judgment is even defective, in
that the same does not specify who among the private respondents whether the defendants-vendors or
intervenors-vendeesshould file a bond.
Fourth, if there was indeed an agreement to sell between the petitioner and the private respondents- then the said
parties are bound by the provisions of Article 1475 of the Civil Code, to wit:
ART. 1475. The contract of sale is perfected at the moment there is a meeting of minds upon the thing
which is the object of the contract and upon the price.
In any case, a notation of lis pendens does not create a non-existent right or lien. It serves merely as a warning to a
person who purchases or contracts on the subject property that he does so at his peril and subject to the result of
the pending litigation. It is not even required that the applying party must prove his right or interest over the
property sought to be annotated. Thus, it was legally erroneous for the respondent court to order the cancellation of
the notice.
ISSUE: whether or not the CA committed grave abuse of discretion in ordering the re-annotation of the lis pendens
HELD:

We rule in the negative.

Lis pendens, which literally means pending suit, refers to the jurisdiction, power or control which a court acquires
over property involved in a suit, pending the continuance of the action, and until final judgment. Founded upon
public policy and necessity, lis pendens is intended to keep the properties in litigation within the power of the court
until the litigation is terminated, and to prevent the defeat of the judgment or decree by subsequent alienation. Its
notice is an announcement to the whole world that a particular property is in litigation and serves as a warning that
one who acquires an interest over said property does so at his own risk or that he gambles on the result of the
litigation over said property.
The filing of a notice of lis pendens has a two-fold effect: (1) to keep the subject matter of the litigation within the
power of the court until the entry of the final judgment to prevent the defeat of the final judgment by successive
alienations; and (2) to bind a purchaser, bona fide or not, of the land subject of the litigation to the judgment or
decree that the court will promulgate subsequently.
Petitioners contend that: the notice of lis pendens is not necessary in this case since the complaint does not pray
for an express award of ownership or possession; what is involved in this case is a contract to sell and not a
contract of sale, thus, no title has passed to private respondent yet which needs to be protected by a
notice of lis pendens; by ordering the re-annotation of the notice of lis pendens, when private respondent did not
even assert a claim of possession or title over the subject property, the CA went against the doctrine in Villanueva
vs. Court of Appeals, where this Court held that the applicant must, in the complaint or answer filed in the
subject litigation, assert a claim of possession or title over the subject property in order to give due course to his
application; the CA, in concluding that there was no hearing before the annotation was cancelled, overlooked the
fact that the motion for cancellation was set for hearing on November 12, 1997, that private respondent was duly
notified but failed to appear, and that he was able to file his opposition to the motion to cancel lis pendens which
the RTC considered before promulgating its Resolution
Private respondent, on the other hand, contends that: the court a quo cancelled the notice of lis pendens even
before it has been apprised of all the relevant facts of the case; the CA was correct in ruling that while the parties
are locked in legal battle and until it becomes manifest that the grounds set forth in Sec. 77, P.D. No. 1529 exist, the
trial court should not allow the cancellation of the lis pendens; the RTC ruling in this case is proscribed by the case
of Tan vs. Lantin which held that the law does not authorize a judge to cancel lis pendens pending litigation, upon
the mere filing of a bond; the danger sought to be prevented by the Tan ruling
In their Reply, petitioners reiterate their arguments and cited AFP Mutual Benefit Association, Inc. vs. Court of
Appeals where it was held that a notice of lis pendens may be annotated only where there is an action or
proceeding in court which affects title to or possession of real property. They further maintain that the requirement
of prior hearing was sufficiently complied with in this case and petitioners did not act in bad faith when she sold the
subject property pending the outcome of this case since there was no outstanding injunction or restraining order
which would have prevented her from doing so.
We disagree with petitioners claim that lis pendens is not proper since private respondent has no title
over the property neither did he pray specifically in his complaint for the ownership or possession
thereof. The complaint for specific performance and damages filed by private respondent specifically prayed that
petitioners, as defendants thereat, be bound by the terms and conditions of their letter-contract. By praying thus,
private respondent in effect asks the court to order petitioners to fulfill their promise to sell the property covered by
tct and amount of P17M. While private respondent did not explicitly state that he was running after the ownership
of the property, a simple reading of the complaint would show that such was his intent. This is sufficient for
purposes of annotating lis pendens. There is nothing in the rules which requires a party seeking annotation of lis
pendens to show that the land belongs to him. There is no requirement that the party applying for the annotation
must prove his right or interest over the property sought to be annotated. Thus, we have held that even on the
basis of an unregistered deed of sale, a notice of lis pendens may be annotated on the title. Said annotation cannot
be considered as a collateral attack against the certificate of title based on the principle that the registration of a
notice of lis pendens does not produce a legal effect similar to a lien. The rules merely require that an affirmative
relief be claimed since a notation of lis pendens neither affects the merits of a case nor creates a right or a lien. It
only protects the applicants rights which will be determined during trial.
In fine, petitioners failed to show that the CA committed grave abuse of discretion in ordering the re-annotation of
the notice of lis pendens.

G.R. No. 104769

March 3, 2000

AFP MUTUAL BENEFIT ASSOCIATION, INC., petitioner, vs. COURT OF APPEALS, SOLID HOMES, INC., INVESTCO, INC.,
and REGISTER OF DEEDS OF MARIKINA, respondents.
FACTS:
Investco, Inc. was the owner of six (6) parcels of raw land, located in Quezon City and Marikina (Metro
Manila, now a City), registered under titles in the names of its predecessors-in-interests, Angela Perez-Staley and
Antonio Perez, Jr. Investco, Inc. agreed to sell the six (6) parcels of land to Solid Homes for P10,211,075.00, payable
in instalments with stipulation that the parties further agreed that Solid Homes would evict the squatters in the
property or obtain a waiver from them, that it would cause the original titles to be cancelled and new ones issued in
the name of Investco, Inc. and that Investco, Inc. would contribute one-half of the expenses in clearing the property
of occupants, in an amount not exceeding P350,000.00. However, after paying the amount corresponding to the
downpayment, and the amount of P4,084,430.00 representing the first four (4) semi-annual installments and a
portion of the fifth installment, Solid Homes made no further payment to Investco, Inc. Angela Perez-Staley
and Antonio Perez, Jr. filed with the Court of First an action for specific performance and damages against Solid
Homes. Solid Homes filed with the trial court an answer to Investco, Inc.'s complaint alleging that the purchase
price under the contract was "not yet due" and that the former, in fact, exceeded the installment payments due
thereon. Solid Homes prayed for dismissal of Investco, Inc.'s complaint, Solid Homes filed with the Register of
Deeds of Marikina a notice of lis pendens requesting that the same be annotated on the titles in Investco, Inc.'s
name. However, the notice of lis pendens was not actually annotated on the titles in the name of Investco, Inc.
the trial court rendered judgment in favor of Investco, Inc. ordering Solid Homes to pay plaintiffs
the trial court ordered the original record transmitted to the appellate court in view of Solid Homes' filing of a notice
of appeal.
In the meantime, Investco, Inc. offered to sell the property to AFP Mutual Benefit Association, Inc. For
P24,000,000.00, payable in installments. Investco, Inc. furnished AFP MBAI with certified true copies of the titles
covering the Marikina property.
Moreover, AFP MBAI, through its Real Estate Committee, made an ocular inspection of the property. AFP MBAI
confirmed the presence of squatter shanties numbering about twenty (20) to thirty (30). Except for a foot path used
by the squatters, there was no development on the property.
After determining that the Investco property was suitable for the housing project of the Armed Forces of the
Philippines and that the titles covering the same were "clean" and "genuine," AFP MBAI agreed to purchase the
same from Investco, Inc. for the price of P24,000,000.00, payable in installments for a period of one (1) year.
Among other terms, Investco, Inc. warranted to AFP MBAI that "it has good and valid title over the properties
subject of (the) sale and (that it) shall hold (AFP MBAI) free from any adverse claim of whatever nature and from
liens and encumbrances of third parties".
AFP MBAI completed its payments of the purchase price.

the Register of Deeds of Marikina issued Transfer Certificates of Title. The titles issued were "clean" and contained
no annotation of any lien, encumbrance, or adverse claim by a third party.
Solid Homes commenced action before the Regional Trial Court, Marikina, against the Register of Deeds, AFP MBAI
and Investco, Inc. for "annotation of lis pendens and damages" with temporary restraining order and preliminary
injunction
In due time, AFP MBAI and Investco, Inc. filed with the trial court an answer to the complaint, the trial court
rendered decision ordering defendant Register of Deeds for (sic) Marikina to annotate the Notice of Lis
Pendens, Declaring defendant AFP MBAI as a buyer in bad faith
Aggrieved thereby, AFP MBAI appealed the decision to the Court of Appeals. Court of Appeals rendered decision
which denied the motion. Hence, this petition.
ISSUE: Whether or not Solid Homes is entitled to the annotation of its notice of lis pendens on the titles of Investco,
Inc. and AFP Mutual Benefit Association, Inc.
HELD:
The doctrine of lis pendens is inapplicable to this case. The Register of Deeds of Marikina correctly denied
the annotation of the notice of lis pendens on the titles of Investco, Inc. and the AFP MBAI. The Register of Deed's
obligation to annotate the notice of lis pendens is one that arises from law. Hence, the action is actually one for
mandamus to compel the performance of a clear legal duty. There is no such action as one for "annotation of lis
pendens," as Solid Homes sought in its complaint. A notice of lis pendens is not and can not be sought as a principal
action for relief. "The notice is but an incident to an action, an extra-judicial one to be sure. It does not affect the
merits thereof. It is intended merely to constructively advise, or warn, all people who deal with the property that
they so deal with it at their own risk, and whatever rights they may acquire in the property in any voluntary
transaction are subject to the results of the action, and may well be inferior and subordinate to those which may be
finally determined and laid down therein." The notice of lis pendens that real property is involved in an action
is ordinarily recorded without the intervention of the court where the action is pending. As a settled rule, notice
of lis pendens may be annotated only where there is an action or proceeding in court which affects
title to or possession of real property.
Under Presidential Decree No. 1529, known as the "Property Registration Decree of 1978", the Register of Deeds
may deny registration of the notice of lis pendens, which denial may be appealed by the applicant en consulta
(Section 10, paragraph 2) to the Commissioner of Land Registration. 25 Section 117 of P.D. No. 1529 provides:
When the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made in
pursuance of any deed, mortgage or other instrument present to him for registration, or where any party in interest
does not agree with the action taken by the Register of Deeds with reference to any such instrument, the question
shall be submitted to the Commissioner of Land Registration by the Register of Deeds, or by the party in interest
thru the Register of Deeds.
Here, the Register of Deeds of Marikina denied the annotation of the notice of lis pendens on the
ground that the complaint was for collection of a sum of money and did not involve the titles to or
possession of the subject property. If Solid Homes did not agree with the denial of the Register of Deeds, it
could appeal the same en consulta to the Commissioner of Land Registration. The resolution of the Commissioner
may then be appealed to the Court of Appeals, which has exclusive jurisdiction to decide the same, "within the
period and in the manner provided in Republic Act No. 5434."
In its questioned decision, the Court of Appeals held that the action filed by Investco, Inc. against Solid Homes "is
not exclusively for payment of the unpaid installments on the purchase price of the subject properties and
damages, but also one for rescission of the contract to sell and to buy the subject properties executed by defendant
Investco, Inc. in favor of (Solid Homes) which necessarily involves delivery of possession and ownership of the
same."
We do not agree. This ruling conflicts with the final decision of the Supreme Court on the case. What is more, in
determining the nature of plaintiffs (Investco, Inc.) action and defendant Solid Homes' counterclaim thereto, the
Court of Appeals went beyond the allegations in the complaint and ventured into speculation and conjecture. There
is nothing in Investco's that even remotely suggests that Investco, Inc. has rescinded the contract, or that it sought

the rescission of the sale as an alternative remedy. Specific performance and rescission are alternative remedies
which a party may not avail himself of at the same time.
The nature of an action is determined by the allegations of the complaint.
"Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of
proof." 38 Here, Solid Homes alleged that Investco, Inc. and AFP MBAI "confederated with each other in entering
into the aforementioned sale in order to deprive herein plaintiff (Solid Homes) of its rights over subject properties
under the Contract to Sell and to Buy. . ." However, Solid Homes adduced no evidence to prove such allegation of
bad faith.