G.R. No. 238201 - Federal Land, Inc. vs. Northlander Real Estate and Development, Inc.

Petitioners: Federal Land, Inc., Metropolitan Bank & Trust Company (Metrobank), Bella Ang, Sergre Mario Iyog, Alfred Ty, Rosa P. Chua, and Michael Luciano P. Aranas.
Respondent: North Lander Real Estate and Development, Inc.
Central Realty is identified as the registered and true owner of a parcel of land in Binondo, Manila, covered by TCT No. 198996, which spans approximately 7,350 square meters.

Central Realty purchased the property from Philippine National Bank in 1989 and paid its real estate taxes from 1991 to 2010.
On September 23, 2011, Federal Land entered into a Joint Venture Agreement with Central Realty to develop the property into a residential and commercial condominium project known as "Four Seasons Riviera."
Construction commenced shortly after the signing of the Joint Venture Agreement.

On December 6, 2012, North Lander filed a Complaint seeking recovery of ownership and possession of the property.
Reliefs sought included the cancellation of encumbrances (annotations and entries) on the title, annulment of documents, recovery of possession, confirmation of ownership, and issuance of injunctions and temporary writs.
North Lander alleged that Central Realty sold the property to Dolores Molina on September 7, 1993, who subsequently transferred it to North Lander on October 30, 2012.
It further claimed that the Joint Venture Agreement with Federal Land was based on a forged owner's duplicate of the title and that fictitious loans and mortgages were annotated on the title.

The emphasis on res judicata and litis pendentia centered on the existence of a pending action – the Adverse Claim case – filed on February 4, 2011 by Central Realty before the RTC of Manila, Branch 4.

The Adverse Claim case involved Central Realty’s petition to cancel Dolores Molina’s adverse claim on TCT No. 198996, initiated on May 7, 2010.
Petitioners argued that because the Adverse Claim case and North Lander’s Complaint involved the same property, parties, and interests, any decision in the former would operate as res judicata in the latter.
The RTC denied the Motion to Dismiss in its January 9, 2013 Order, noting the limited jurisdiction of the land registration proceeding and that certain issues (e.g., injunctive relief) were not within its purview.
On March 25, 2013, petitioners pursued a Petition for Certiorari before the Court of Appeals (docket CA-G.R. SP No. 129133) while North Lander concurrently sought a writ of preliminary injunction.
The two petitions (including CA-G.R. SP No. 129625 filed by North Lander) were consolidated, and while the Adverse Claim case reached a Decision on April 11, 2014, it attained finality on October 26, 2015.
The Court of Appeals, in its April 21, 2017 Decision, dismissed the petitions for certiorari and upheld the RTC’s denial of North Lander’s application for an injunctive writ, finding no litis pendentia due to the absence of identity in parties and claims.
Petitioners raised a motion for partial reconsideration in February 2018, arguing that the final Decision in the Adverse Claim case should bar North Lander’s Complaint. This motion was denied.

Petitioners asserted that there exists a community of interest and an identity of parties, subject matter, and causes of action between North Lander’s Complaint and the Adverse Claim case, thereby necessitating dismissal on grounds of litis pendentia and res judicata.
They further contended that:

North Lander acquired the property from Molina with actual or constructive knowledge of her questionable title.
No valid Deed of Sale existed between Central Realty and Molina to confer ownership.
The alleged Deed of Sale and related documents were fraudulent; and
The statute of frauds and prescription should bar respondent’s claim.

No essential identity of parties, rights, or reliefs existed between the two cases;
Its Complaint primarily sought determination of ownership and possession rather than a collateral attack on Central Realty’s title; and
The deeds of sale relied upon were valid as written and notarized, discounting the Statute of Frauds argument.

The RTC and later the CA ruled against dismissing North Lander’s Complaint on the grounds of litis pendentia, holding that the Adverse Claim was a summary land registration proceeding with a limited scope.
The CA specifically found that the issues involving injunctive relief, damages, and recovery of possession fell outside the jurisdiction of a land registration proceeding, which justified a trial on merits for respondent’s claims.

Whether the pending Adverse Claim case, filed by Central Realty for the cancellation of an adverse claim on TCT No. 198996, creates litis pendentia and consequently, res judicata, thereby barring respondent North Lander’s Complaint for recovery of ownership and possession.

Whether there is an identity of parties, or if a community of interest can suffice for the application of litis pendentia and res judicata, considering that:

North Lander’s Complaint and the Adverse Claim case involve overlapping parties, albeit not absolutely identical;
Both cases assert claims based on the same underlying property and evidence pertaining to ownership.

Whether the limited jurisdiction of the court sitting as a land registration court in the Adverse Claim case precludes it from addressing all the reliefs sought in the Complaint.
Whether issues such as the Statute of Frauds, prescription, and the alleged fraud in the execution of the deeds of sale should be determined during trial rather than summarily resolved on dismissal motions.

The threshold for establishing litis pendentia (identity of parties, rights, and reliefs) and its impact on the dismissal of subsequent or concurrent actions.
The application of the doctrine of res judicata in scenarios where a prior decision, even from a land registration proceeding, may affect ordinary civil claims concerning property ownership.