Short answer. Yes, that sale is rescissible under Article 1381 of the Civil Code. A contract over a thing under litigation entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority falls squarely within the enumerated grounds for rescission.
What the law says
Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority
Civil Code, Article 1381 — Which Contracts Are Rescissible. Read the full provision →
The specific ground for rescission
Article 1381 lists five categories of rescissible contracts. Item (4) covers contracts that "refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority." The moment a case is filed and a property becomes the subject of pending litigation, the defendant is legally constrained from disposing of that property unilaterally. Selling it without judicial approval or the plaintiff's knowledge falls precisely within this ground.
Why the law treats this as rescissible
Rescissible contracts are not void from the start — they are valid but may be annulled in the proper proceeding when they cause damage to a party who has a legally protected interest. Here, the plaintiff in the pending case has such an interest: the court's ability to grant effective relief depends on the property still being available. A defendant who secretly sells the disputed property before judgment effectively pre-empts the court. Rescission undoes the sale and restores the property's availability to satisfy whatever the court ultimately decides.
What you need to show
To rescind the sale you must establish: first, that the case was already pending when the sale was made; second, that the property sold was the same property at issue in the litigation; third, that the sale was entered into without the plaintiff's knowledge or court approval; and fourth, that you have no other adequate remedy to recover what was taken. Rescission is generally considered a remedy of last resort — meaning it is available when other legal avenues cannot repair the harm — but a concealed sale of litigated property typically leaves no other adequate path.
The buyer's position
A buyer who purchased with actual or constructive knowledge that the property was under litigation may find the sale rescinded even though they were not a party to the original case. If the lis pendens (notice of pending action) was annotated on the title before the sale, the buyer is presumed to have known. This is why annotation of a notice of lis pendens early in litigation is so important — it puts prospective buyers on notice and makes any subsequent transfer much harder to defend. If no annotation was made, the position of a buyer without actual knowledge is stronger but still not guaranteed.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- The Wellex Group, Inc. vs. U-Land Airlines, Co., Ltd, G.R. No. 167519, January 14, 2015 — read the decision on LawPhil →
- Congregation of the Religious of the Virgin Mary, etc. vs. Emilio Orola, et al, G.R. No. 169790, April 30, 2008 — read the decision on LawPhil →
- Union Bank of the Phil. vs. Sps. Alfredo Ong etc, G.R. No. 152347, June 21, 2006 — read the decision on LawPhil →
- Dr. Restituto C. Buenviaje vs. Spouses Jovito R. and Lydia B. Salonga, et al, G.R. No. 216023, October 5, 2016 — read the decision on LawPhil →