G.R. No. 202384 & G.R. No. 202397, May 04, 2021
EQUITABLE PCI BANK, INC. (NOW BANCO DE ORO UNIBANK, INC.), PETITIONER, VS. SOUTH RICH ACRES, INC., TOP SERVICE, INC. AND THE CITY OF LAS PIÑAS, RESPONDENTS. / SOUTH RICH ACRES, INC. AND TOP SERVICE, INC., PETITIONERS, VS. EQUITABLE PCI BANK, INC. (NOW BANCO DE ORO UNIBANK, INC.), RESPONDENT.

FACTS

South Rich Acres, Inc. (SRA) and Top Service, Inc. (Top Service) filed a Petition for Declaratory Relief and Damages against the City of Las Piñas to annul City Ordinance No. 343-97, Series of 1997, which declared Marcos Alvarez Avenue as a public road. SRA and Top Service claimed ownership of seven parcels of land forming part of the private road network referred to as Marcos Alvarez Avenue, acquired through assignment and purchases, with supporting Transfer Certificates of Title and deeds of sale. They alleged that other landowners and developers had secured and paid for right-of-way authorities from them. The City of Las Piñas, in its Answer, asserted that the avenue was already government property, withdrawn from commerce as an open space. Royal Asia Multi-Properties, Inc. (RAMPI), owner and developer of the Royal South Subdivision which used the avenue, intervened, arguing the ordinance was valid under Presidential Decree No. 1216, which mandates that open spaces and roads in subdivisions are for public use. The Regional Trial Court (RTC) granted a preliminary injunction against the ordinance. RAMPI’s rights were later transferred to Equitable PCI Bank, Inc. (EPCIB, now BDO). The RTC declared the ordinance invalid and unconstitutional for taking property without just compensation but denied SRA and Top Service’s claim for damages against EPCIB. Both parties appealed. The Court of Appeals (CA) dismissed SRA and Top Service’s appeal for failure to file an appellant’s brief. In its Decision, the CA affirmed the RTC’s declaration of the ordinance’s unconstitutionality, finding it constituted a taking without compensation, and rejected EPCIB’s police power argument, stating the issue was eminent domain. However, the CA ruled that the annotation of a notice of lis pendens on EPCIB’s (BDO’s) subdivision titles was improper, as only the specific properties subject to litigation (those of SRA and Top Service) should be covered. EPCIB (BDO) and SRA and Top Service filed separate Petitions for Review before the Supreme Court.

ISSUE

The primary issues were: (1) Whether City Ordinance No. 343-97, which declared Marcos Alvarez Avenue a public road, is valid; and (2) Whether the annotation of a notice of lis pendens on the titles of EPCIB’s (BDO’s) Royal South Subdivision properties was proper.

RULING

The Supreme Court denied the petitions and affirmed the CA Decision. On the first issue, the Court upheld the declaration that City Ordinance No. 343-97 is unconstitutional. The ordinance effected a taking of private property for public use without the requisite just compensation, constituting an exercise of eminent domain, not police power. The City of Las Piñas failed to institute expropriation proceedings or prove a valid donation. The Court rejected EPCIB’s (BDO’s) argument that the ordinance was a valid exercise of police power, noting the City never raised this defense in its Answer. The Court also dismissed EPCIB’s (BDO’s) reliance on PD 1216, citing precedent that such laws do not automatically transfer ownership of open spaces to the government without donation or expropriation. On the second issue, the Court affirmed the CA’s ruling that the annotation of the notice of lis pendens on EPCIB’s (BDO’s) subdivision titles was improper. A notice of lis pendens may only be annotated on the specific property directly involved in the litigation, which here were the lots owned by SRA and Top Service, not the separate subdivision properties of EPCIB (BDO). The lis pendens was correctly ordered cancelled.