G.R. No. 238201 , November 22, 2021
FEDERAL LAND, INC., METROPOLITAN BANK & TRUST COMPANY, BELLA ANG, SERGRE MARIO IYOG, ALFRED TY, ROSA P. CHUA, AND MICHAEL LUCIANO P. ARANAS, PETITIONERS, VS. NORTHLANDER REAL ESTATE AND DEVELOPMENT, INC., RESPONDENT.

FACTS

Central Realty & Development Corporation (Central Realty) is the registered owner of a parcel of land in Binondo, Manila. On September 23, 2011, petitioner Federal Land, Inc. entered into a Joint Venture Agreement with Central Realty to develop the property. On December 6, 2012, respondent Northlander Real Estate and Development, Inc. (Northlander) filed a Complaint for recovery of ownership and possession against petitioners and the Register of Deeds of Manila. Northlander alleged it purchased the property from Dolores Molina, who allegedly bought it from Central Realty in 1993, and that the joint venture agreement used a forged title. Petitioners moved to dismiss the Complaint on several grounds, including litis pendentia and res judicata. They cited a prior Petition for Cancellation of Adverse Claim (Adverse Claim case) filed by Central Realty on February 4, 2011, before the Regional Trial Court (RTC) of Manila, Branch 4, seeking to cancel Molina’s adverse claim annotated on the title. The RTC denied the motion to dismiss, finding no litis pendentia as the Adverse Claim case was a land registration proceeding with limited jurisdiction. Pending appeal, the RTC in the Adverse Claim case rendered a Decision on April 11, 2014, cancelling Molina’s adverse claim and declaring Central Realty’s title as genuine, which became final on October 26, 2015. The Court of Appeals dismissed petitioners’ consolidated petitions for certiorari, upholding the trial court’s denial of the motion to dismiss and the denial of Northlander’s application for a writ of preliminary injunction. The Court of Appeals agreed there was no litis pendentia due to a lack of identity of parties, rights, and reliefs, and that the Adverse Claim case, being a land registration proceeding, had limited jurisdiction.

ISSUE

Whether the Complaint filed by Northlander should be dismissed on the ground of litis pendentia or res judicata in light of the final and executory Decision in the Adverse Claim case.

RULING

No. The Supreme Court denied the Petition. The elements of litis pendentia are: (1) identity of parties, or at least such as representing the same interests in both actions; (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (3) identity of the two cases such that judgment in one would constitute res judicata in the other. These elements were not present. First, there was no identity of parties. The parties in the Adverse Claim case were Central Realty (as petitioner) and Dolores Molina (as respondent). Northlander was not a party to that case. While there may be a community of interest between Molina and Northlander as successive buyers, they are distinct juridical entities. Second, there was no identity of rights asserted and reliefs prayed for. The Adverse Claim case was a summary proceeding under Section 70 of Presidential Decree No. 1529 (Property Registration Decree) solely to determine the validity of Molina’s adverse claim. The relief sought was merely its cancellation. In contrast, Northlander’s Complaint sought multiple reliefs including recovery of ownership and possession, annulment of documents, injunction, and damages, which require a full-blown trial and are beyond the limited scope of a petition to cancel an adverse claim. Third, a judgment in the Adverse Claim case would not constitute res judicata in Northlander’s Complaint. The issue of the validity of Molina’s adverse claim is separate from the issue of Northlander’s ownership claims based on its own title. The RTC in the Adverse Claim case did not rule on the validity of the deeds of sale or Northlander’s rights; it only ruled that Molina’s adverse claim was not valid. Furthermore, the Court clarified that while the distinction between a court’s general and limited jurisdiction as a land registration court has been eliminated, a petition for cancellation of an adverse claim remains a special proceeding with a specific, limited purpose. Therefore, the Court of Appeals correctly ruled that the trial court did not commit grave abuse of discretion in denying the motion to dismiss.