G.R. No. 171947-48 - Metropolitan Manila Development Authority vs. Concerned Residents of Manila Bay

In 1976, Investco, Inc. (Investco) entered into a contract to sell certain properties in Quezon City and Marikina City to Solid Homes, Inc. (Solid Homes).
Solid Homes defaulted in payments, prompting Investco to file suit for specific performance and damages.
During the pendency of the action, Investco sold the properties to the Armed Forces of the Philippines Mutual Benefit Association, Inc. (AFPMBAI).
After full payment, the Register of Deeds issued new certificates of title to AFPMBAI.

Solid Homes filed an action with the Regional Trial Court (RTC) of Marikina City against the Register of Deeds, AFPMBAI, and Investco for the annotation of lis pendens and for damages.
Two related cases eventually reached the Supreme Court, which directed the Register of Deeds to cancel Solid Homes’ notice of lis pendens and declared AFPMBAI a buyer in good faith and for value.

On August 26, 2003, Solid Homes filed another action before the RTC (Branch 193) seeking cancellation of the certificates of title issued to AFPMBAI.
AFPMBAI moved, and the RTC subsequently dismissed Solid Homes’ complaint on January 23, 2004, on grounds of res judicata based on the earlier final decisions.
Solid Homes filed a motion for reconsideration, which the RTC denied, also treating its second motion for reconsideration as a prohibited pleading.

Solid Homes pursued a petition for relief from judgment from the order of dismissal dated November 26, 2004.
The petition alleged that extrinsic fraud was committed by Investco and AFPMBAI—specifically, that AFPMBAI failed to disclose its knowledge of an earlier sale between Investco and Solid Homes—thereby warranting a re-litigation of issues previously decided.
Solid Homes asserted it had evidence to prove the alleged fraud and even caused the annotation of lis pendens on AFPMBAI’s titles, based on its pending petition for relief.

On July 18, 2008, without a motion for reconsideration, the RTC granted due course to Solid Homes’ petition for relief from judgment.
In response, AFPMBAI directly filed a petition for prohibition and mandamus with an application for a temporary restraining order (TRO) and preliminary mandatory injunction with the Supreme Court.
On August 27, 2008, the Supreme Court issued a TRO enjoining the RTC from further proceedings in the case and preventing Solid Homes from annotating any lis pendens on AFPMBAI’s certificates of title.

AFPMBAI alleged that the RTC gravely abused its discretion by giving due course to the petition for relief from judgment on several grounds:

The petition was filed beyond the period allowed by the rules.
It lacked an affidavit of merit showing the fraud, accident, mistake, or excusable negligence relied upon.
The alleged fraud—AFPMBAI’s acquisition of the subject property—did not constitute the fraud contemplated by Section 2, Rule 38 of the Rules of Civil Procedure.
Relief based on such fraud was barred by res judicata, since the issues had been previously adjudicated in G.R. 104769 and G.R. 135016, AFPMBAI v. CA.
Annotation of a notice of lis pendens is limited to actions affecting title or possession of real property, not to a petition for relief from judgment.

AFPMBAI failed to file the required motion for reconsideration of the RTC order.
Mandamus was not the proper remedy and that the petition should have been filed with the Court of Appeals since both questions of fact and law were raised.
The petition’s jurat mistakenly used a community tax certificate for identification.
The petition omitted an affidavit of service and an explanation for not using personal service.

Is AFPMBAI’s petition for prohibition and mandamus technically deficient based on the alleged defects raised by Solid Homes?
Did AFPMBAI improperly bypass the required motion for reconsideration?

Was Solid Homes’ petition for relief from judgment filed within the period allowed under the Rules of Civil Procedure?
Should the petition be dismissed on the ground that it was filed beyond the allowed 60-day or six-month period?

Did Solid Homes include an appropriate affidavit of merit that sufficiently demonstrated the alleged fraud, accident, mistake, or excusable negligence?
Can the absence of a proper affidavit of merit affect the petition’s validity?

Is the fraud alleged by Solid Homes—namely, AFPMBAI’s alleged non-disclosure of a prior sale—commensurate with the fraud contemplated under Section 2, Rule 38 of the Rules of Civil Procedure?
Does the nature of the alleged fraud relate to extrinsic fraud (preventing the party from being heard) or intrinsic fraud (merely affecting the merits) of the case?

Is the issue of AFPMBAI being a buyer in good faith already decided by res judicata in previous cases (G.R. 104769 and G.R. 135016)?
Does allowing the petition for relief from judgment undermine the finality and effect of the earlier decisions?

Is the annotation of a notice of lis pendens proper in connection with a pending petition for relief from judgment?
Does such annotation overstep the scope of applicable procedural rules regarding actions affecting title or possession?