G.R. No. L-15689




Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-15689 April 29, 1960 MARIA GERVACIO BLAS, ET AL, petitioners, vs. HON. CECILIA MUÑOZ-PALMA, ET AL., respondents. Teofilo Sison for petitioners. Jose T. delos Santos and Rodolfo Caluag for respondents. BAUTISTA ANGELO, J.: This is a petition to set aside on order of respondent judge dated July 14,1955 directing the cancellation of the notice of lis pendens annotated on Transfer Certificates of Title Nos. 8401 and 133944 of the land record of Pampanga covering two fishponds included in the inventory of the estate of Maxima Santos Vda. de Blas. Petitioners are the plaintiffs in Civil Case No. 4395 of the court of the first Instance of Rizal which they brought against Rosalina Santos in her capacity as executrix of the estate of Maxima Santos Vda. de Blas to recover one-half of the properties included in the inventory submitted by the latter in the testate proceeding of the said deceased. Pursuant to the provision of the Rules of Court Petitioners though counsel caused the annotation of a notice of lis pendens on the all the certificates of the covering the estate including Certificates of the estate, including Certificates of Titles Nos. 8401 and 13944. After trial judgment was rendered in said Civil case No. 4395 dismissing plaintiffs complaint. Plaintiffs reasonably appealed from the adverse decision to the Supreme Court which was orally argued and submitted for decision on May 8, 1959. While the case was pending appeal in the Court the executrix filed motion to cancel the notice of lis pendens on the lands covered by Certificates of Title Nos. 8401 and 13944 on the ground that she had sold the said lands for P138, 438.00 and P142,064.40 respectively to pay certain estate and inheritance taxes due on the of Maxima Santos Vda. de Blas. Petitioner opposed the motion on the ground that respondent judge had no more jurisdiction over the cases, except to deny the motion because according to Section 9, Rule 41 of the Rules of Court, "Upon the filling of the notice of appeal and the approval of the appeal bond and the record of the appeal the appeal is deemed perfected and the trial court loses of jurisdiction over the case except to issue order for the protection and preservation of the right of the parties which do not involve any matter litigated by the appeal, and to approve compromises on the appeal to the appellate court." Petitioner also contend that the cancellation of the notice of lis pendens far from preserving the right of the parties would destroy and extinguish the right ; that its cancellation would remove the lands form the jurisdiction of the trial court and would render in effectivee any judgement that may be rendered in their favor by the appellate court that the payment of the estate and inheritance taxes was premature. because petitioner claim if sustained would considerably reduce said taxes. Over petition respondent judge issued an order on the July 14 1955 directing the cancellation of the notice of lis pendens prayed for by the executrix upon the filling of a bond in favor of petitioner in the amount of P 142,000,00 subject to the approval of the court. Hence the present appeal. Section 9, Rule 41 of the Rule of the Court provides: Sec. 9. When appeal deemed perfected effect thereof . — Upon the filing of the notice of the appeal and the appproval of the appeal bond and the record on appeal the appeal is deemed perfected and the trial court loses its jurisdiction over the case except the issue order for the protection and preservation of the right of the parties which do not involve any mater litigated by the appeal and to approve compromises offered by the parties prior to the transmittal of the record on the appeal to the appeal court. In holding that he trial court has jurisdiction to act on the petition for cancellation of lis pendence on the two lots in the question in spite of the appeal taken by petitioners to the Supreme Court because its purpose is the protect and preserve the right of the parties which do not involve any matter litigated by the appeal the trial court made the following observation: It is settled rule that in the absence of a statutory prohibition the Court has an inherent power to cancel a notice of lis pendens even if the action is still pending and undetermined when there are exceptional circumstances which justify such cancellation . (Mun Council of the Parañaque Rizal et al., 70 Phil 363; Moran's VOL. p. 134, 1957 ed) The situation as given above present exceptional circumstances and this tribunal believes that the will be no abuse of it discretion were it to grant the herein petition. This court having jurisdiction over the present Civil Action is duty bound to take judicial notice of the proceeding held in Sp. Proc. 2524, and to assist the probate court in giving full force and effect to its Orders. From the record it appeal that the two fishponds in question were sold to pay principally the estate and inheritance taxes due to the government which totalled P 252, 954.61. Non payment of said taxes rendered the estate liable for surcharge monthly interest and other penalties. AS a matter of the fact the estate had actually to pay in addition to the assessed estate tax of P 159, 774644 the sum of P 7, 988.48 representing 5% surcharge plus P 17,574.66 representing the 1% monthly interest. With respect to the inheritance tax of P 93, 179.97 the estate has to pay in addition the sum of P4,659.00 as penalty plus another sum of P7,454.40 representing 1% interest per month from the date of the assessment to the date of payment. These facts clearly show that continued non-payment of said obligations to the Government would have caused great prejudice to the estate. Considering, therefore, that the sale of the two fishponds was absolutely necessary for the best interest of the estate, it is incumbent upon this Court to aid there herein defendant in the fulfillment of her commitment that a clear and clean title will be given to the purchasers, especially if we take into account that her account redounds in the long run to the benefit of all those who have claims on said estate including the plaintiffs herein. Petitioners disagree with the above observation for the reason that the fact that the sale is necessary for the payment of the estate and inheritance taxes which were assessed by the government on all the inventoried properties not a legal justifications to cancel the lis pendens because the annotation of the lis pendens cannot in any manner prevent the probate court from selling the lands in question if it believes necessary to do so to apply the proceeds of the sale to the payment of said taxes, but by force of law, since the properties are still in litigation, the sale should be subject to the his Pendens. Moreover, petitioners contend, it is premature at this stage of the appeal to pay the taxes assessed by the government because in view of the pending litigation it cannot be definitely ascertained what constitutes the assets of the estate that would be subject to said taxes for, if the claim of petitioners is sustained, the taxes would inevitably be reduced to one-half because petitioners claim one-half of the entire estate. In other words, petitioners contend that the appeal involves a prejudicial question whose final resolution should be awaited before any further action can be taken on the claim for estate and inheritance taxes. We are inclined to uphold petitioners' contention for indeed the pendency of their appeal before this Court which involves their claim of ownership over one-half of the properties of the estate would substantially affect the volume of the estate that would be subject to taxation for if they win the amount of the estate and inheritance taxes would Proportionately be reduced which they redound to the benefit of the each. It is, therefore, quite correct Say that the immediate sale of the two fishponds as Proposed by the executrix with the sanction of the court would promote the best interest of the estate for, as already stated, it may still result upon the, fin determination of the appeal that the estate may have to Pay Much less in taxes which may in effect redound t the benefit of the estate. In this sense, it is our opinion that the action taken by the trial court cannot be said to come within the exemption of Section 9, Rule 41 an as such it cannot be legally justified. Moreover, as petitioners' claim is over one-half pro indiviso of all the properties involved in the special proceedings, they may have some good sentimental reasons for opposing the disposition of the two fishpond which reason they want to maintain pending the annotation of lis pendens on the titles covering them. At any rate, the main purpose of the rule is to keep the subject matter of the litigation within the power of the court until the litigation is over and since the litigation is not yet terminated petitioners are entitled to have their right respected against third persons. The reasons advanced by the trial court are, in our opinion, not sufficient in law to nullify this protection to which Petitioners entitled. The effect of filing a notice of lis pendens is to charge the stranger with notice of the particular litigation referred to in the notice; and if the notice is effective, a third party who acquires likes subject to the eventuality of the litigation. And its purpose is "to hold property within the jurisdiction and control of the court Pending determination of the controversy, thereby preventing third persons from acquiring such interests therein as would precluded giving effect to the judgment" (Roberta Diaz y Cruz vs. Hon. Jesus Y. Perez, log Phil., 1023; 55 Off. Gaz. [52] 10678.) Wherefore, petition is granted, with costs against respondent executrix. Paras, C.J., Bengzon, Padilla, Labrador, Concepcion, Endencia and Gutierrez David, JJ., concur. The Lawphil Project - Arellano Law Foundation