Title
Spouses Gonzales vs. Marmaine Realty Corp.
Case
G.R. No. 214241
Decision Date
Jan 13, 2016
Spouses Gonzales sought tenancy recognition against Marmaine Realty. After DARAB ruled in Marmaine's favor, the lis pendens was cancelled. SC upheld cancellation, citing finality of judgment and legal exceptions.

Case Summary (G.R. No. 214241)

Key Dates and Forum(s)

Complaint for recognition as tenant filed October 30, 1997 (Tenancy Case) before PARAD, DARAB Region IV. PARAD issued preliminary injunction January 6, 1998; notice of lis pendens filed September 26, 2000. PARAD decision dismissing petitioners’ complaint dated June 27, 2002; DARAB affirmed October 17, 2008; DARAB denial of reconsideration March 23, 2009; DARAB decision became final and executory May 7, 2009 (Entry of Judgment January 19, 2012). Marmaine moved for cancellation of lis pendens January 31, 2012; PARAD initially denied May 15, 2012, but on reconsideration ordered cancellation December 4, 2012; PARAD denied petitioners’ reconsideration October 16, 2013. Petitioners filed a petition for review under Rule 43 in the Court of Appeals; CA dismissed for non-exhaustion April 24, 2014, denial of reconsideration September 10, 2014. The Supreme Court decision under review was rendered in 2016 and thus is governed by the 1987 Constitution.

Applicable Law and Governing Constitutional Basis

The 1987 Constitution governs the exercise of judicial review and the relationship between courts and administrative bodies for cases decided after 1990. Procedural law implicated includes Rule 13, Section 14 of the Rules of Court (cancellation of notice of lis pendens) and the doctrine of exhaustion of administrative remedies as developed in jurisprudence cited by the Court (e.g., Universal Robina Corp., Samar II Electric Cooperative, Vigilar v. Aquino).

Procedural History Summary

Petitioners filed a tenancy complaint that resulted in annotation of a notice of lis pendens on respondent’s titles. After the tenancy complaint was finally adjudicated against petitioners and became final and executory, respondent moved to cancel the notice of lis pendens. PARAD initially denied the motion as premature because a related civil case remained pending in the Regional Trial Court, but on reconsideration ordered cancellation limited to the tenancy case. Petitioners’ motion for reconsideration at PARAD was denied. Rather than appealing to DARAB, petitioners filed a Rule 43 petition for review before the Court of Appeals, which dismissed the petition for failure to exhaust administrative remedies. Petitioners elevated the case to the Supreme Court by certiorari.

Issues Presented to the Supreme Court

(1) Whether the Court of Appeals erred in dismissing petitioners’ petition for review for failure to exhaust administrative remedies; and (2) Whether the PARAD correctly ordered cancellation of the notice of lis pendens annotated on respondent’s certificates of title.

Doctrine of Exhaustion of Administrative Remedies (Court’s Restatement)

The Court reaffirmed that exhaustion of administrative remedies is a fundamental precondition to judicial intervention: courts generally allow administrative agencies to exercise jurisdiction and expertise, which promotes economy, speed, comity, and convenience. Absent waiver or estoppel, premature resort to the courts is fatal and may result in dismissal for lack of cause of action. The principle is derived from and applied in the jurisprudence cited (Universal Robina Corp.; Samar II Electric Cooperative).

Exception to Exhaustion: Pure Questions of Law

The Court reiterated the well-established exception where the issue is purely legal and ultimately within the courts’ exclusive province. Quoting Vigilar v. Aquino, the Court explained that when the dispute concerns only what the law is on a given set of facts and does not require an assessment of probative value or technical administrative fact-finding, administrative exhaustion does not apply because the final decision rests with the judiciary.

Court’s Application of the Exception to the Present Case

The Court accepted petitioners’ argument that the propriety of the cancellation of the notice of lis pendens raised a pure question of law. Because resolving that issue did not require examination of the probative value of evidence or technical administrative fact-finding, it fell within the exception to the exhaustion doctrine. Consequently, the Court held that the Court of Appeals erred in dismissing the petition for review outright for non-exhaustion and determined that the matter could properly be resolved on the merits.

Nature and Effects of Lis Pendens (Law and Policy)

The Court explained that lis pendens denotes the jurisdiction or control a tribunal acquires over property involved in litigation to preserve the subject matter until final judgment and to prevent defeat of any future judgment by subsequent alienation. A notice of lis pendens serves public notice that property is in litigation and warns that acquiring an interest in such property is at the acquirer’s risk. The filing of a notice of lis pendens has two principal effects: (a) it keeps the subject matter within the court’s power pending final judgment, and (b) it binds purchasers (bona fide or not) to subsequent judgment.

Cancellation of Notice of Lis Pendens: Standards under Rule 13, Section 14 and Jurisprudence

Under Section 14, Rule 13 of the Rules of Court, a notice of lis pendens may be cancelled after a proper showing that the notice was intended to molest the adverse party or that it is not necessary to protect the rights of the party who caused its recording. The Court summarized case law iden

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