The Supreme Court’s decision in Biglang-Awa v. Philippine Trust Company clarifies the circumstances under which a notice of lis pendens, a warning that property is subject to a lawsuit, can be cancelled. The Court ruled that once a judgment affecting the property becomes final, and the party who filed the lis pendens no longer has a valid claim to the property, the notice can be removed. This ensures property titles remain clear and marketable, promoting stability in real estate transactions.

From Family Dispute to Property Dispute: When Can a Lis Pendens Be Lifted?

The case began with a family dispute over several parcels of land in Quezon City. Ligaya, Charito, Paraluman, and Efren Biglang-Awa filed a complaint against Roberth Tolentino and the Philippine Trust Company (PTC), claiming fraudulent transfer and mortgage of their properties. They also annotated a notice of lis pendens on the titles, alerting potential buyers that the properties were subject to litigation. However, a key turning point occurred when their mother, Encarnacion, withdrew from the case, claiming the suit was filed without her consent and that she had validly sold her properties to Tolentino. This withdrawal triggered a series of legal challenges, ultimately focusing on whether the notice of lis pendens on Encarnacion’s former properties should be cancelled.

At the heart of the legal issue was the interplay between property rights, the finality of court judgments, and the purpose of a notice of lis pendens. The petitioners argued that the notice should remain because they were co-owners of the properties and had been defrauded. They also attempted to amend their complaint to reflect these claims. However, the Supreme Court emphasized that the earlier dismissal of Encarnacion’s claims, which included her acknowledgment of the sale to Tolentino, had become final and executory. This meant that the factual finding of Encarnacion’s valid ownership and subsequent sale could no longer be challenged. Building on this principle, the Court addressed the petitioners’ attempt to amend their complaint, noting that while amendments are generally allowed, they cannot contradict a final and immutable judgment.

The Supreme Court underscored the purpose of a lis pendens, explaining that it serves to keep the subject matter of the litigation within the court’s power and to prevent the defeat of the judgment through subsequent transfers. As the Court stated in Romero v. Court of Appeals:

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.

Applying this principle to the case at hand, the Court highlighted that since Encarnacion’s claims had been dismissed with prejudice and that the dismissal order had become final, there was no longer any pending litigation regarding her former properties. More significantly, the petitioners, having conceded that the titles to be owned solely by Encarnacion had failed to prove a valid claim to these specific properties. Given these circumstances, the Court concluded that continuing the notice of lis pendens was no longer necessary and could, in fact, improperly cloud the title. It is imperative that properties that may be subjected to lis pendens are resolved based on the law to prevent unwanted, prolonged legal disputes that may jeopardize ownership.

Ultimately, the Supreme Court’s decision serves as a reminder of the importance of clear and final judgments in property disputes. It reinforces that a notice of lis pendens is not a permanent encumbrance but a temporary measure that must be lifted when the underlying litigation is resolved and the party who filed the notice no longer has a legitimate claim. This promotes fairness and certainty in real estate transactions, encouraging a stable and reliable property market. Furthermore, the Supreme Court made clear that decisions which have attained finality are immutable and unalterable, except for clerical errors. Modifying final judgments is impermissible as it undermines stability. This is aligned with the rule of law.

FAQs

What is a lis pendens?	Lis pendens, meaning “pending suit”, is a notice filed in a registry of deeds to inform third parties that a property is involved in a legal dispute. It serves as a warning that anyone acquiring an interest in the property does so subject to the outcome of the litigation.
When can a notice of lis pendens be cancelled?	A notice of lis pendens can be cancelled if the annotation was for the purpose of molesting the title of the adverse party, or when the annotation is not necessary to protect the rights of the party who caused it to be recorded. A judgment on the property which has reached finality also justifies the cancellation of lis pendens.
What was the main issue in Biglang-Awa v. Philippine Trust Company?	The central question was whether the Court of Appeals erred in ordering the cancellation of the notice of lis pendens on properties formerly owned by Encarnacion Biglang-Awa, given the dismissal of her claims and the petitioners’ ongoing dispute.
Why did Encarnacion withdraw from the case?	Encarnacion withdrew because she claimed the complaint was filed without her permission and that she had validly sold her properties to Tolentino. She had never met plaintiff’s counsel before and that she never authorized counsel to file the present complaint.
What effect did Encarnacion’s withdrawal have on the case?	Her withdrawal led to the dismissal of her claims with prejudice, meaning she could not refile the same claims. This also influenced the court’s decision regarding the notice of lis pendens on her former properties.
Could the petitioners amend their complaint to include new claims?	While amendments are generally allowed, the Court ruled that the petitioners could not amend their complaint to contradict the final judgment regarding Encarnacion’s ownership and sale of the properties. This is aligned with the rule that properties which have attained finality are immutable and unalterable, except for clerical errors.
What happens if a case is dismissed without prejudice?	Dismissal of the case without prejudice means the complaint can be refiled at a later time, so long as the dismissal had become final and immutable and no attempt to amend has been made. However, this does not prevent the cancellation of Lis Pendens that already has attained finality.
What is the significance of a judgment becoming “final and executory”?	A final and executory judgment is one that can no longer be appealed or modified. It represents the definitive resolution of the case and binds all parties involved, which encourages the stability of ownership of the real property involved.
What happens to Lis Pendens when a Motion to Amend has been denied?	Once the Motion to Amend has been denied, the original compliant stands. The party who lost in the motion to amend can no longer the Amended Complaint as basis that the notice of lis pendens should not be cancelled as it does not form part of the records.

In summary, the Biglang-Awa case illustrates that while a notice of lis pendens is a valuable tool for protecting potential property rights, it is not an indefinite encumbrance. Once a final judgment has been rendered and the underlying litigation is resolved, the notice must be lifted to ensure clear and marketable titles.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Biglang-Awa, et al. vs. Philippine Trust Company, G.R. No. 158998, March 28, 2008