G.R. No. L-58193 August 30, 1984
LEONORA A. PUNONGBAYAN, petitioner, vs. HON. GREGORIO G. PINEDA, as Presiding Judge of the Court of First Instance of Rizal, Branch XXI, ANGEL L. BAUTISTA and REGISTER OF DEEDS OF ILIGAN CITY, respondents.

FACTS

Leonora Punongbayan and St. Peter’s College, Inc. owned two parcels of land mortgaged to Manila Banking Corporation. St. Peter’s College later sold its property to Angel Bautista, who assumed the mortgage obligation. Bautista defaulted, leading to the foreclosure and auction sale of both properties to the bank. Within the redemption period, Punongbayan redeemed her own property (TCT No. 296). Separately, Bautista paid the bank a sum intended to redeem both properties. The bank, however, issued a certificate of redemption only for Bautista’s original property, refunding the excess amount, which Bautista refused. Bautista then sued the bank for specific performance.
Pending the bank’s appeal of a trial court decision in Bautista’s favor, Bautista secured an ex-parte order for a certificate of final conveyance over both properties. This led to the cancellation of Punongbayan’s TCT No. 296 and the issuance of a new title (TCT No. 19417) solely in Bautista’s name. Upon learning this, Punongbayan annotated an adverse claim and notice of lis pendens on the new title. Bautista filed an ex-parte motion for its cancellation, which the trial court granted without notifying Punongbayan or hearing her side. The Register of Deeds subsequently cancelled the annotation.

ISSUE

Whether the trial court committed grave abuse of discretion in ordering the cancellation of the notice of lis pendens without notice and hearing for the party who caused its annotation.

RULING

Yes. The Supreme Court granted the petition and annulled the cancellation order. The legal logic is anchored on the mandatory procedural requirement for cancelling a notice of lis pendens under the Rules of Court. The rule explicitly states that such a notice may be cancelled only upon court order and after a proper showing that it is for molesting the adverse party or is unnecessary to protect the rights of the party who recorded it. This process inherently requires notice and an opportunity to be heard for the annotating party. The Court, citing precedents like Sarmiento v. Ortiz and Natano v. Esteban, emphasized that a cancellation granted ex-parte constitutes a denial of due process. It deprives the party of the chance to demonstrate the necessity of the notice to preserve their rights, especially where, as here, the underlying property dispute remained pending and unresolved. The trial court’s failure to observe this fundamental procedural safeguard constituted grave abuse of discretion, rendering its order void. Consequently, the Supreme Court ordered the reannotation of the notice of lis pendens on TCT No. 19417 to protect Punongbayan’s claimed interest pending the final resolution of the property controversy.