G.R. No. 167140, November 23, 2011
Doctrine
Once a notice of lis pendens has been duly registered, any cancellation or issuance of the title of the land involved as well as any subsequent transaction affecting the same, would have to be subject to the outcome of the litigation.
Facts
The case involved five parcels of land originally registered in the name of Jose Zulueta, as evidenced by Transfer Certificate of Title (TCT) No. 26105. Later, the Zulueta spouses mortgaged several lots contained in TCT No. 26105 to the GSIS, which eventually foreclosed on the mortgaged properties, including the subject properties. Upon consolidation of GSIS’s ownership, TCT No. 26105 in Zulueta’s name was cancelled, and TCT No. 23554 was issued in GSIS’s name.
Upon learning of the foreclosure sale Dela Merced filed a complaint for the nullity of the foreclosure sale on the ground that that he is the owner of the properties in question and not the Zuluetas. Meanwhile, Dela Merced caused the annotation of lis pendens on GSIS’s TCT No. 23554 on September 21, 1984 in order to protect his interests in the subject properties. On July 29, 1985 and August 24, 1998, TCT No. 23554 was cancelled with respect to Lots 7 and 8 of Block 2 and new individual titles were issued to Victorino and Dimaguila. Both titles had the notice of lis pendens. Dela Merced died in 1988 and was substituted by his heirs, the petitioners in the instant case.
Thereafter, the case reached the Supreme Court as G.R. No. 140398 in which the Court nullified GSIS’s foreclosure of the subject properties because these lots were never part of its mortgage agreement with the Zulueta spouses.
Issue
Whether a final and executory judgment against GSIS and Manlongat can be enforced against their successors-in-interest or holders of derivative titles?
Held
Yes. A notice of lis pendens is an announcement to the whole world that a particular real property is in litigation, serving 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 the said property. Once a notice of lis pendens has been duly registered, any cancellation or issuance of the title of the land involved as well as any subsequent transaction affecting the same, would have to be subject to the outcome of the litigation. In other words, upon the termination of the litigation there can be no risk of losing the property or any part thereof as a result of any conveyance of the land or any encumbrance that may be made thereon posterior to the filing of the notice of lis pendens. As held in Selph v. Vda. de Aguilar, an order to cancel the transferor’s title may be enforced against his transferee, whose title is expressly subject to the outcome of the litigation by the fact of the annotation of lis pendens.
In this case, petitioners caused the annotation of lis pendens as early as September 21, 1984. On July 29, 1985 and August 24, 1998, TCT No. 23554 was cancelled with respect to Lots 7 and 8 of Block 2 and new individual titles were issued to Victorino and Dimaguila. Both titles had the notice of lis pendens. Thus, both Victorino and Dimaguila had notice of the litigation involving GSIS’s ownership over the subject properties, and were bound by the outcome of the litigation. Hence, Victorino and Dimaguila’s titles on the land are subject to the outcome of the litigation.
What Dimaguila and Victorino possess are derivative titles of the GSIS’s title over the disputed property, which the Supreme Court has finally adjudicated to be null and void. Given the legal maxim that a spring cannot rise higher than its source, it follows that Dimaguila’s and Victorino’s titles, or any other title over the subject properties that are derived from TCT No. 23554 of the GSIS, are likewise null and void.
Moreover, theory that the dispositive portion of the Decision in G.R. No. 140398 is enforceable only against GSIS’s title because it does not contain the phrase “and all its derivative titles” would render nugatory the principle that a final judgment against a party is binding on his privies and successors-in-interest.
Hence, the judgment by the Court annulling the foreclosure sale can be enforced against Dimaguila and Victorino.