FACTS: Petitioner sold a parcel of land to Manuel Sy and Sy Ka Kieng.

The Deed
of Sale executed between the parties contained special conditions of sale: Submission
of building plans for Ayala’s approval, period of construction, and no resale of the said
property. The buyers failed to construct and the lot was then sold to herein respondent,
with Ayala’s approval, promising to abide by the said special conditions. Building plans
of “The Peak” were sent to Ayala and, a substantially different one, to the building
official of Makati. Ayala filed before the lower court an action for specific performance
of contractual obligation, in an alternative, rescission of the sale, which was denied.
Undeterred, Ayala tried to cause the annotation of a notice of lis pendens on the title
but was denied by the Register of Deeds of Makati. The Land Registration Authority
reversed the ruling but was overturned by the CA. Rosa-Diana filed a Demurrer to
Evidence averring that Ayala failed to establish its right to the relief sought which was
sustained by the trial court. Ayala was guilty of abandonment and/or estoppel due to its
failure to enforce the terms of the deed of restrictions and special conditions of sale.
The CA affirmed the ruling of the trial court saying that the appeal is sealed by the
doctrine of the law of the case with reference to a previous case. Thus, Ayala is barred
from enforcing the Deed of Restrictions. Hence, the appeal to this Court.

ISSUE: Whether or not the Court of Appeals erred in dismissing Ayala’s appeal based
on its decision on Ayala vs. Ray Burton Development Corporation under the doctrine of
stare decisis.

HELD: Yes. There is no reason how the law of the case or stare decisis can be
held to be applicable in the case at bar. If at all, the pronouncement made by the Court
of Appeals that petitioner Ayala is barred from enforcing the deed of restrictions can
only be considered as an obiter dicta. As earlier mentioned, the only issue before the
Court of Appeals at the time was the propriety of the annotation of the lis pendens. The
additional pronouncement of the Court of Appeals that Ayala is estopped from enforcing
the deed of restrictions even as it recognized that the said issue is being tried before
the trial court was not necessary to dispose of the issue as to the propriety of the
annotation of the lis pendens. A dictum is an opinion of the judge, which does not
embody the resolution or determination of the court, and made without argument, or
full consideration of the point, not the proffered deliberate opinion of the judge himself.
It is not necessarily limited to the issues essential to the decision but may also include
expressions or opinion, which are not necessary to support the decision reached by the
court. Mere dicta are not binding under the doctrine of stare decisis.
The appellate court’s decision in Ayala vs. Ray Burton cannot also be cited as a
precedent under the doctrine of stare decisis. It must be pointed out that the time the
presently assailed decision of the CA was rendered, the Ayala vs. Ray Burton case was
on appeal to the Court. As held by the Court in Ayala vs. Ray Burton, the CA went
beyond the sole issue raised before it and made factual findings without any basis in
the record to rule inappropriately that Ayala is in estoppel and has waived its right to
enforce the subject restrictions. Thus, the assailed Decision and Resolution of the Court
of Appeals was reversed and set aside. Rosa Diana was also ordered to pay Ayala
development charges and damages.