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G.R. No. 153821 - FORBES PARK ASSOCIATION INC. v. PAGREL, INC., ET AL.

G.R. No. 153821 - FORBES PARK ASSOCIATION INC. v. PAGREL, INC., ET AL.

PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. NO. 153821 : February 13, 2008]

FORBES PARK ASSOCIATION, INC., Petitioner, v. PAGREL, INC., PILAR R. DE LAGDAMEO, ENRIQUE B. LAGDAMEO, ATTY. MILA B. FLORES in her capacity as the Register of Deeds of Makati City, and the Hon. CESAR D. SANTAMARIA in his capacity as Presiding Judge of Branch 145 of the RTC of Makati, Respondents.

D E C I S I O N

VELASCO, JR., J.:

Forbes Park is an exclusive, plush subdivision in Makati City. The members of petitioner Forbes Park Association, Inc. (FPA) agreed to have a deed of restrictions annotated on their Transfer Certificates of Title (TCTs), the pertinent portions of which read:

DEED OF RESTRICTIONS

Annotated on all Transfer [Certificates of Title]

I. The owner of this lot or his successor in interest is required to be and is automatically a member of the Forbes Park Association and must abide by the rules and restrictions laid down by the Association covering the use and occupancy of the lot.

II. Subject to such amendments and additional restrictions, reservations, servitudes, etc., as the Forbes Park Association may from time to time adopt and prescribe, this lot is subject to the following restrictions:

x x x

III. The term of the foregoing restrictions is for fifty (50) years from January 1, 1949 and may be extended, amended or cancelled by means of a resolution approved by 2/3 vote of the Forbes Park Association and registered with the Register of Deeds of Rizal.

For a better understanding of the petition before us, we find it necessary to recall the events that transpired prior to December 31, 1998, the expiration date of the restrictions.

On March 25, 1996, FPA, during its annual general meeting, deliberated on the extension of the corporate life of the Association, the extension of the Deed of Restrictions, and the date of the meeting when these matters would be voted on. Consequently, then incumbent FPA President Enrique Lagdameo, herein respondent, called a Special General Meeting on November 26, 1996 and the two itemsthe extension of the corporate life of FPA and the Deed of Restrictionswere put to a vote. Since the quorum was questioned, another meeting was set for December 8, 1996. With the secretary's certification that there was no quorum during the November 26 meeting, the Board of Governors sent a circular that the matters discussed then were invalid and had no binding effect, including the setting of a meeting for December 8, 1996.

Just the same, on December 8, 1996, Jose Concepcion presided as chairperson of the meeting. The designated commission on elections reported on the attendance and the votes cast during the November 26 and December 8, 1996 meetings.

As a reaction, some FPA members filed separate cases before the Home Insurance Guaranty Corporation (HIGC). In HIGC Case No. HOA-97-003 entitled Arturo V. Rocha v. Forbes Park Association, Inc., Arturo Rocha sought the annulment of the FPA resolutions passed during the November 26 and December 8, 1996 meetings, extending the corporate life of FPA and the Deed of Restrictions, on the ground of no-quorum. In HIGC Case No. HOA-97-010 entitled Jose Concepcion, Jr., Federico V. Borromeo and Jaime Augusto Zobel de Ayala II v. Rosa Caram, on the other hand, the three (3) complaining homeowners asked HIGC to enjoin Rosa Caram, the FPA secretary, from misrepresenting that the resolutions passed extending the corporate life of FPA and the Deed of Restrictions were vitiated for lack of quorum. The two cases were consolidated.

Meantime, the Board of Governors of the FPA, chaired by Lagdameo, issued several circulars on the guidelines for the nominations and qualifications of candidates, and validation of proxies for the general assembly and election set for March 30, 1997. The Hearing Panel then canceled the scheduled election and directed the holding of one on June 30, 1997. During the June 30, 1997 election, the FPA members voted for the 25-year extension of FPA's corporate life.

Subsequently, Lagdameo instituted another case before the HIGC docketed as HIGC Case No. HOA-98-111 and entitled Enrique B. Lagdameo, Jose M. Cabarrus, Antonio C. Cuyegkeng II, et al. v. Forbes Park Association, Inc., Leonardo Siguion-Reyna and the Register of Deeds of Makati City that was consolidated with HIGC Case Nos. HOA-97-003 and HOA-97-010. Since, however, the latter two cases had already been submitted for resolution, HIGC Case No. HOA-98-111 was separately heard.

On November 5, 1999, the Hearing Panel, in the consolidated cases, HIGC Case Nos. HOA-97-003, HOA-97-010, and HOA-98-111, ruled that the Deed of Restrictions had not been validly extended because only 407 of the 424 members present, or less than the required two-third (2/3) votes of the members, voted affirmatively. It also declared that the proceedings during the December 8, 1996 meeting and the decision to allow additional members to register and vote were not capable of ratification because the meeting was improperly held. But, the Hearing Panel went on to state, however, that it is essential to ascertain the real will of the members considering that based on the November 26 and December 8, 1996 meetings, albeit held under improper circumstances, more than 2/3 of the general membership, 464 out of 489, including the votes of those who were allowed to register and vote during the December 8 meeting, expressed approval for the extension of the Deed of Restrictions. The panel ordered a referendum within 30 days.

On appeal to the HIGC Appeals Board which was docketed as HIGC AB Case No. 99-012, the Board reversed the panel's decision, thus:

WHEREFORE, PREMISES CONSIDERED, the Decision of the Hearing Panel dated November 5, 1999 is hereby REVERSED except insofar as it declared the December 8, 1996 meeting as illegally and improperly held which we hereby affirm.

Therefore, judgment is hereby rendered [declaring as] VALID AND EFFECTIVE the Resolution of the general membership of the Forbes Park Association, Inc. dated June 30, 1997 extending the corporate term of the Association and the Deed of Restrictions of the Forbes Park Subdivision, for another twenty-five (25) years from expiry date.

Unhappy with the outcome, Rocha filed a petition before the Court of Appeals (CA), the recourse docketed as CA-G.R. SP No. 59359. In a Decision dated August 29, 2003, the CA declared the extension of the deed of restrictions and FPA's corporate life for another 25 years to be valid.

Rocha then challenged the CA Decision before this Court in G.R. No. 163869 that was subsequently closed and terminated after his death. The Rocha heirs, on July 8, 2004, manifested that they were no longer interested in pursuing the case.

On August 29, 2003, the Decision of the CA upholding the extension of the Deed of Restrictions and FPA's corporate life became final and executory. Judgment was entered on September 22, 2004.

Forbes Park Association, Inc. v. Register of Deeds of Makati City
(Lis Pendens Case), CA-G.R. SP No. 61245
and subsequently G.R. No. 148733

On January 27, 1999, FPA filed an application with the Register of Deeds of Makati City for the registration by FPA of notices of lis pendens over certain Forbes Park lots in connection with HIGC Case Nos. HOA-97-003, HOA-97-010, and HOA-98-111. The issue in the above HIGC cases was the extension of the Deed of Restrictions.

On February 5, 1999, the Register of Deeds denied FPA's application on the ground that a notice of lis pendens may only be sought in actions to recover possession of real estate, or to quiet title thereto, or to remove clouds upon the title thereof, or to partition the property, and in any other proceedings of any kind in court directly affecting the title to the land or the use or occupation thereof on the building thereon.1

This denial compelled FPA to appeal via a consulta with the Land Registration Authority (LRA). This was entitled as Forbes Park Association, Inc. v. Register of Deeds of Makati City and docketed as Consulta No. 3038. The principal issue FPA raised before the LRA was whether or not a notice of lis pendens can be registered given the circumstances of FPA's application. On August 21, 2000, the LRA issued a resolution denying the appeal filed by FPA and essentially adopting the reasoning of the Register of Deeds.2

The denial of the appeal by the LRA prompted FPA to file a Petition for Review with the CA, docketed as CA-G.R. SP No. 61245. Attached to the petition was a verification and certification against non-forum shopping signed by one Reynaldo N. Rigor, Village Manager of Forbes Park.

On November 28, 2000, the CA, in a single page resolution, dismissed FPA's Petition for Review on the sole ground that the person who signed the subject verification and certification was not a duly authorized representative of FPA.3 FPA's motion for reconsideration was denied in the CA's June 25, 2001 Resolution.4

On April 25, 2005, FPA filed before the Court a Petition for Review, docketed as G.R. No. 148733, assailing the above resolutions of the CA and praying that the CA be directed to give due course to FPA's Petition for Review on the issue of registration of the notices of lis pendens on certain Forbes Park lots. In this recourse, FPA faulted the CA for ruling against the validity of the verification and certification signed by Rigor.

Subsequently, FPA filed a Manifestation and Motion to Withdraw the Petition dated March 15, 2005,5 contending that the lis pendens issue in question has been rendered moot by the development in Arturo V. Rocha v. FPA, G.R. No. 163869.

In the Rocha case, as may be recalled, the CA Decision in CA-G.R. SP No. 59359, which upheld the extension of the Deed of Restrictions and the corporate life of FPA, became final and executory because of the withdrawal by the Rocha heirs of their appeal in G.R. No. 163869. Thus, according to FPA, the issue in G.R. No. 148733, specifically the registration of notices of lis pendens, had essentially become moot and academic.

Acting on FPA's manifestation and motion to withdraw the petition, this Court issued a Resolution dated April 25, 2005, stating that G.R. No. 148733 dismissing the petition was deemed closed and terminated.6 The entry of judgment in G.R. No. 148733 was made on June 14, 2005.7

The PAGREL Cases
(LRC Case Nos. M-4150, M-4151 and M-4152 [CA-G.R. SP No. 67263])
are the subject matters of instant G.R. No. 153821

Earlier, on March 29, 2001, respondent PAGREL, Inc., represented by Gregorio Araneta III, respondent Pilar R. De Lagdameo, and respondent Lagdameo, separately filed ex parte petitions with the Makati City Regional Trial Court8 (RTC) to cancel the restrictions over their respective lot titles. These were docketed as LRC Case Nos. M-4150, M-4151, and M-4152, respectively (PAGREL cases). They claimed that the Deed of Restrictions had expired and remained so until the time of the filing of their petitions without any extensions or new restrictions registered with the Registry of Deeds of Makati City as of midnight of December 31, 1998. Significantly, FPA was not impleaded as a party in any of the above cases filed with the RTC.

The RTC granted the relief in its April 10, 2001 Order, the fallo of which reads:

WHEREFORE, in view of the foregoing, the Court rules to:

1.] Give due course and GRANTS the petition filed by Pagrel Inc. as represented herein by Gregorio Araneta III, through counsel in LRC Case No. M-4150. And as prayed for, the Register of Deeds of Makati City is ordered to cancel, remove or delete from Transfer Certificate of Title No. (63307) S-30612 the restriction inscribed therein as primary no. 2655 File T-37356, at the expense of petitioner-Pagrel Inc.;

2.] Give due course and GRANTS the petition filed by Pilar R. De Lagdameo, through counsel, in LRC Case No. M-4151. And as prayed for the Register of Deeds of Makati City, is ordered to cancel, remove or delete from: [2.a] Transfer Certificate of Title No. (27039) S-80092, the restriction inscribed therein as primary no. 42535, and [2.b] Transfer Certificate of Title No. (252548), the restriction inscribed therein as primary no. 38638 File T-25258, at the expense of the petitioner Pilar R. De Lagdameo; andcralawlibrary

3.] Give due course and GRANTS the petition filed by Petitioner Enrique B. Lagdameo, through counsel, in LRC Case No. M-4152. And as prayed for the Register of Deeds of Makati City is ordered to cancel, remove or delete from Transfer Certificate of Title No. (389324) the primary no. being 25469, at the expense of the petitioner Enrique B. Lagdameo.

SO ORDERED.9

The order became final and executory on May 3, 2001.

Displeased with the RTC Order, FPA filed on October 19, 2001 with the CA a Petition for Annulment of Final Order with prayer for Temporary Restraining Order (TRO) and Writ of Injunction docketed as CA-G.R. SP No. 67263. According to FPA, PAGREL, Inc., et al., as private respondents, committed extrinsic fraud when they did not implead FPA as party-in-interest in the three petitions for cancellation of the restrictions on their respective titles. FPA claimed further that: (1) private respondents, as Forbes Park lot owners and FPA members, are bound by the terms and conditions contained in the Deed of Restrictions; (2) they were aware that at least 2/3 of the members of FPA approved the extension of the corporate life of FPA, and the extension in toto of the Deed of Restrictions in question; (3) the Deed of Restrictions was designed to maintain the exclusive residential nature of the village, and to protect the residents and lot owners from the ravages of noise and pollution which commercialization of the lots within Forbes Park would consequently bring;10 and (4) FPA had successfully defended the extension of its corporate life and the extension of the deed of restrictions before the HIGC.

The Ruling of the Court of Appeals in
CA-G.R. SP No. 67263 (PAGREL Cases)

In its March 7, 2002 Resolution,11 the CA denied FPA's petition for annulment of the final order of the RTC. The CA found that between the PAGREL cases and G.R. No. 148733, the elements of litis pendentia existed.

FPA's motion for reconsideration was subsequently denied.

The Issue

FPA's failure in the CA prompted it to file this Petition for Review under Rule 45 of the Rules of Court on the lone issue formulated as follows:

THE HONORABLE COURT OF APPEALS COMMITTED REVERSIBLE EROR IN FINDING THAT THE PETITIONER IS GUILTY OF LITIS PENDENTIA AND/OR FORUM SHOPPING

In dismissing FPA's petition for annulment in CA-G.R. SP No. 67263 (PAGREL cases), the CA observed that the parties in G.R. No. 148733 (lis pendens case) were FPA, as petitioner, and the Register of Deeds, as respondent, while in CA-G.R. SP No. 67263 (PAGREL cases), the parties were FPA, as petitioner, while the respondents were PAGREL, Inc., De Lagdameo, Lagdameo, and Judge Cesar D. Santamaria. Thus, the CA concluded that there was identity of parties since the parties in both actions substantially represented the same interests.

Furthermore, the CA explained that the interests of the parties were founded on the same rights: for the FPA to enforce a collective agreement to safeguard the interest and welfare of its residents/members by having the lots governed by a set of restrictions, and for respondentsto exercise their rights of ownership. The CA also said that FPA forum-shopped when it filed multiple suits. The appellate court thus concluded that litis pendentia was present and consequently dismissed the annulment case.

The elements of litis pendentia do not exist in the case at bar

Litis pendentia or auter action pendant is the pendency of another action between the same parties for the same cause.12 The policy behind litis pendentia is that a party should not be allowed to vex another more than once regarding the same subject matter and for the same cause of action. This theory is founded on sound public policy that the same subject matter should not be the subject of controversy in court more than once in order that possible conflicting judgments may be avoided, for the sake of the stability of the rights and status of persons.13

In numerous cases, this Court has defined what constitutes litis pendentia. The essential elements of litis pendentia are as follows: (1) identity of parties or representation in both cases; (2) identity of rights asserted and reliefs prayed for; (3) reliefs founded on the same facts and the same basis; and (4) identity of the two preceding particulars should be such that any judgment, which may be rendered in the other action, will, regardless of which party is successful, amount to res judicata in the action under consideration.14

The elements of litis pendentia are not present in the cases at bar. For one, there is no identity of parties. In both the lis pendens case (G.R. No. 148733) and PAGREL cases (CA-G.R. SP No. 67263), the petitioner is FPA. However with respect to respondents, the similarity ends. In G.R. No. 148733, the respondent is the Makati City Register of Deeds with the CA as public respondent. In CA-G.R. SP No. 67263 (PAGREL cases), the respondents are PAGREL, Inc., De Lagdameo, and Lagdameo with Judge Santamaria as public respondent. Hence, the parties are not the same.

For another, there is also no identity of causes of action. In G.R. No. 148733 (lis pendens case), the cause of action is the legality of annotating the notice of lis pendens pertaining to three (3) HIGC cases, namely: HIGC Case Nos. HOA-97-003, HOA-97-010, and HOA-98-111 on the certificates of title.

In CA-G.R. SP No. 67263 (PAGREL cases), however, the cause of action of FPA relates to the annulment of the order of the Makati City RTC, canceling the annotation of the Deed of Restrictions at the back of the titles of PAGREL, Inc., De Lagdameo, and Lagdameo due to extrinsic fraud by reason of the non-joinder of FPA as an adverse partry.

The difference between the causes of action between the two sets of cases is obvious. One seeks for the annotation of notices of lis pendens relating to several pending cases, while the other is for re-annotations of the liens on the titles of lot owners which were canceled. Indeed, there is a material and substantial difference between the causes of action in the two cases.

Lastly, there is no identity of reliefs prayed for. In G.R. No. 148733 (lis pendens case), the prayer is for the annotation of the notice of lis pendens by the Makati City RTC. In CA-G.R. SP No. 67263 (PAGREL cases), FPA asked the following reliefs, namely: (1) issuance of a TRO enjoining the Register of Deeds of Makati City from further canceling the Deed of Restrictions annotated on all other TCTs covering lots in Forbes Park; (2) issuance of an order directing respondent Register of Deeds to annotate notices of lis pendens on the original copies of TCT No. (63307) S-30612 in the name of PAGREL, Inc., TCT Nos. (27039) S-80092 and (25258) S-80093 in the name of De Lagdameo; (3) issuance of a TRO enjoining respondents PAGREL, Inc., De Lagdameo, and Lagdameo from disposing of their respective properties covered by TCT Nos. (63307) S-30612, (27039) S-80092, (25258) S-80093, and (380324) S-36620 until the above-mentioned notices of lis pendens are annotated on said original TCTs; (4) conduct proceedings to convert the TROs to preliminary injunctions before the expiration of the TROs; (5) after due hearing, set aside the Order dated April 10, 2001 issued by Branch 145 and convert the preliminary injunctions into permanent injunctions; (6) order the Register of Deeds of Makati City to restore the canceled annotations of the deed of restrictions on the TCTs of PAGREL, Inc., De Lagdameo, and Lagdameo canceled by the Order dated April 10, 2001; and (7) order private respondents PAGREL, Inc., De Lagdameo, and Lagdameo to pay moral and exemplary damages, attorney's fees, and the costs of the suit.15 Thus, there is no parity between the two cases with respect to reliefs prayed for.

Since there is no parallellism between the two sets of cases, then the CA erred in dismissing CA-G.R. SP No. 67263 (PAGREL cases) on the ground of litis pendentia.

Lest it be overlooked, this Court, acting on FPA's manifestation and motion to withdraw petition dated March 15, 2005, issued on April 25, 2005 a resolution dismissing the petition in G.R. No. 148733 and considered the case closed and terminated. Thus, there no longer exists any other case that can be used as a bar to CA-G.R. SP No. 67263 (PAGREL cases) on the ground of litis pendentia. Necessarily, such obstacle has now been removed and the aforementioned CA petition for annulment can now proceed.

WHEREFORE, the petition is GRANTED. The Resolutions of the CA dated March 7, 2002 and June 4, 2002 in CA-G.R. SP No. 67263 are hereby REVERSED and SET ASIDE. FPA's Petition for Annulment of Final Order in CA-G.R. SP No. 67263 is given due course and the case is remanded to the CA which is ordered to immediately commence proceedings therein and resolve the petition with dispatch.

No costs.

SO ORDERED.

Endnotes:


1 Rollo (G.R. No. 148733), p. 55.

2 Id. at 55-57.

3 Id. at 29.

4 Id. at 31.

5 Id. at 157-160.

6 Id. at 185.

7 Id. at 186.

8 The case was raffled to Branch 145 of the said court, presided over by Judge Cesar D. Santamaria.

9 Rollo (G.R. No. 153821), pp. 85-86.

10 Id. at 61-63.

11 Id. at 48-52.

12 Bauan v. Lopez, No. L-75349, October 13, 1986, 145 SCRA 34, 37.

13 Sherwill Development Corporation v. Sitio Sto. Niño Residents Association, Inc., G.R. No. 158455, June 28, 2005, 461 SCRA 517, 531; Tirona v. Alejo, G.R. No. 129313, October 10, 2001, 367 SCRA 17, 33; Tourist Duty Free Shops, Inc. v. Sandiganbayan, G.R. No. 107395, January 26, 2000, 323 SCRA 358.

14 Id.

15 Rollo (G.R. No. 153821), pp. 33-35.

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