G.R. No. 142406 . May 16, 2005.
Spouses Conrado and Ma. Corona Romero, petitioners, vs. Court of Appeals and Saturnino S. Orden, respondents.

FACTS

Petitioner Ma. Corona Romero and her siblings executed a letter-contract to sell a Quezon City property to respondent Saturnino Orden for P17 million. The contract required Orden to pay a down payment upon the execution of a deed of absolute sale and to shoulder the expenses of evicting squatters. When Orden failed to pay the down payment, Romero rescinded the contract. Orden filed a complaint for specific performance and damages, alleging he had complied by evicting the squatters and was entitled to demand performance. Simultaneously, he caused the annotation of a notice of lis pendens on the title.
Subsequent buyers of the property, Manuel Y. Limsico, Jr. and Aloysius R. Santos, intervened in the case and moved for the cancellation of the lis pendens. The Regional Trial Court granted the motion, reasoning that Orden had no actionable right over the property as no deed of sale had been executed, making the annotation unnecessary. The RTC cancelled the notice without a formal hearing on the matter. Orden’s motion for reconsideration was denied, prompting him to file a petition for certiorari before the Court of Appeals.

ISSUE

Whether the Court of Appeals committed grave abuse of discretion in reversing the RTC and ordering the re-annotation of the notice of lis pendens.

RULING

The Supreme Court dismissed the petition, upholding the CA’s decision. The legal logic centers on the proper grounds and procedure for cancelling a notice of lis pendens under Section 77 of Presidential Decree No. 1529. The law permits cancellation before final judgment only upon a proper showing that the notice was for molesting the adverse party or that it is not necessary to protect the rights of the party who caused its registration. The RTC’s cancellation was procedurally flawed because it was ordered without a hearing to establish either statutory ground. The RTC prematurely ruled on the merits of Orden’s claim by concluding he had no actionable right, which is a matter for full trial.
The Court emphasized that the doctrine of lis pendens is a precautionary measure to keep the property within the court’s jurisdiction and to prevent subsequent alienations from rendering a judgment ineffectual. The annotation does not create a lien nor adjudicate rights; it merely serves as a warning to prospective purchasers. The rules do not require a party seeking annotation to prove ownership or a meritorious claim upfront. It is sufficient that the action directly affects the title to the land, as Orden’s complaint for specific performance did. Therefore, the CA correctly found that the RTC acted without jurisdiction or with grave abuse of discretion in cancelling the notice without the requisite factual basis established in a hearing.