RULE 68- FORECLOSURE OF REAL ESTATE MORTGAGE

DIGEST BY: KRISTEL

#1 G.R. No. 183984 April 13, 2011.

ARTURO SARTE FLORES, petitioner, vs. SPOUSES ENRICO L. LINDO, JR. and EDNA C. LINDO, respondents.

CARPIO, J

Facts:

Edna Lindo (Edna) obtained a loan from Arturo Flores (petitioner) amounting to P400,000 amounting to P400,000 payable on 1 December 1995 with
3% compounded monthly interest and 3% surcharge in case of late payment. To secure the loan, Edna executed a Deed of Real Estate Mortgage 4
(the Deed) covering a property in the name of Edna and her husband Enrico (Enrico) Lindo, Jr. (collectively, respondents). Edna also signed a
Promissory Note 5 and the Deed for herself and for Enrico as his attorney-in-fact.

Edna issued three checks as partial payments for the loan. All checks were dishonored for insufficiency of funds, prompting petitioner to file a
Complaint for Foreclosure of Mortgage with Damages against respondents.

RTC ruled that petitioner was not entitled to judicial foreclosure of the mortgage. The RTC, Branch 33 found that the Deed was executed by Edna
without the consent and authority of Enrico. It further ruled that petitioner was not precluded from recovering the loan from Edna as he could file a
personal action against her. However, it had no jurisdiction over the personal action which should be filed in the place where the plaintiff or the
defendant resides in accordance with Section 2, Rule 4 of the Revised Rules on Civil Procedure. Thus, petitioner filed a Complaint for Sum of
Money with Damages against respondents in RTC Branch 42.

ISSUE: WON the filing of the complaint for Sum of Money with Damages by the Petitioner mortgage-creditor after the filing filing foreclosure
constitutes res Judicata?

HELD: The rule is that a mortgage-creditor has a single cause of action against a mortgagor-debtor, that is, to recover the debt. The mortgage-
creditor has the option of either filing a personal action for collection of sum of money or instituting a real action to foreclose on the mortgage
security. An election of the first bars recourse to the second, otherwise there would be multiplicity of suits in which the debtor would be tossed from
one venue to another depending on the location of the mortgaged properties and the residence of the parties.

The two remedies are alternative and each remedy is complete by itself. If the mortgagee opts to foreclose the real estate mortgage, he waives the
action for the collection of the debt.

The Court has ruled that if a creditor is allowed to file his separate complaints simultaneously or successively, one to recover his credit and another to
foreclose his mortgage, he will, in effect, be authorized plural redress for a single breach of contract at so much costs to the court and with so much
vexation and oppressiveness to the debtor.

In that case, however, this Court pro hac vice, ruled that respondents could still be held liable for the balance of the loan, applying the principle that
no person may unjustly enrich himself at the expense of another since Edna claimed that her husband did not give his consent and that he was not
aware of the transaction. Considering the circumstances of this case, the principle against unjust enrichment, being a substantive law, should prevail
over the procedural rule on multiplicity of suits. Edna should not be allowed to unjustly enrich herself because of the erroneous decisions of the two
trial courts when she questioned the validity of the Deed.

DIGEST BY: KRISTEL

#2 [G.R. No. 201892. July 22, 2015.]

NORLINDA S. MARILAG, petitioner, vs. MARCELINO B. MARTINEZ, respondent.

Facts: Rafael Martinez (Rafael), respondent's father, obtained from petitioner a loan in the amount of P160,000.00, with a stipulated monthly interest
of five percent (5%), payable within a period of six (6) months. The loan was secured by a real estate mortgage over a parcel of land covered by
Transfer Certificate of Title (TCT) No. T-208400. Rafael failed to settle his obligation upon maturity and despite repeated demands, prompting
petitioner to file a Complaint for Judicial Foreclosure of Real Estate Mortgage.

Rafael failed to file his answer and, upon petitioner's motion, was declared in default. Records do not show that this Decision had already attained
finality.

Meanwhile, prior to Rafael's notice of the above decision, respondent agreed to pay Rafael's obligation to petitioner which was pegged at
P689,000.00. After making a total payment of P400,000.00, 11 he executed a promissory note binding himself to pay on or before March 31, 1998
the amount of P289,000.00, "representing the balance of the agreed financial obligation of [his] father to [petitioner]. After learning of the Decision,
respondent refused to pay the amount covered by the subject PN despite demands, prompting petitioner to file a complaint for sum of money and
damages before the court a quo.

ISSUE WON the dismissal of the collection case by the CA is proper? YES. – No res judicata but it is barred by litis pendentia
HELD: After a punctilious review of the records, the Court finds the principle of res judicata to be inapplicable to the present case. This is because
the records are bereft of any indication that the August 28, 2003 Decision in the judicial foreclosure case had already attained finality. This
notwithstanding, the Court holds that petitioner's prosecution of the collection case was barred, instead, by the principle of litis pendentia in
view of the substantial identity of parties and singularity of the causes of action in the foreclosure and collection cases, such that the prior foreclosure
case barred petitioner's recourse to the subsequent collection case.

Petitioner cannot split her cause of action on Rafael's unpaid loan obligation by filing a petition for the judicial foreclosure of the real estate
mortgage covering the said loan, and, thereafter, a personal action for the collection of the unpaid balance of said obligation not comprising a
deficiency arising from foreclosure, without violating the proscription against splitting a single cause of action, where the ground for dismissal is
either res judicata or litis pendentia.

In loan contracts secured by a real estate mortgage, the rule is that the creditor-mortgagee has a single cause of action against the debtor-
mortgagor, i.e., to recover the debt, through the filing of a personal action for collection of sum of money or the institution of a real action to
foreclose on the mortgage security. The two remedies are alternative, not cumulative or successive, and each remedy is complete by itself.
Thus, if the creditor-mortgagee opts to foreclose the real estate mortgage, he waives the action for the collection of the unpaid debt, except
only for the recovery of whatever deficiency may remain in the outstanding obligation of the debtor-mortgagor after deducting the bid price
in the public auction sale of the mortgaged properties. Accordingly, a deficiency judgment shall only issue after it is established that the
mortgaged property was sold at public auction for an amount less than the outstanding obligation.

In the present case, records show that petitioner, as creditor-mortgagee, instituted an action for judicial foreclosure pursuant to the provisions of Rule
68 of the Rules of Court in order to recover on Rafael's debt. In light of the foregoing discussion, the availment of such remedy thus bars recourse to
the subsequent filing of a personal action for collection of the same debt, in this case, under the principle of litis pendentia, considering that the
foreclosure case only remains pending as it was not shown to have attained finality.

DIGEST BY: ED

#3. G.R. No. 137566. February 28, 2001

ROBERTO G. ROSALES, as successor-in-interest of NAPOLEON S. ROSALES and LUIS BUSTILLO
vs. THE HON. COURT OF APPEALS and NATIONAL DEVELOMENT CORPORATION, as substituted plaintiff and the successor-in-
interest of CONTINENTAL BANK
YNARES-SANTIAGO, J.:
FACTS: On April 12, 1966, the Continental Bank instituted Civil Case with the then Court of First Instance of Balayan, Batangas,
entitled, Continental Bank, Plaintiff versus Atlas Timber Company, Napoleon S. Rosales and Luis Bustillo, Defendants. The complaint[1] alleged that
Atlas Timber Company, through its Managing Partner Napoleon Rosales, and Luis Bustillo, executed in favor of Continental Bank a promissory
note, in the amount of P1,000,000.00; that as security for the payment of the note, Bustillo executed in favor of the bank a real estate mortgage over
forty-four (44) parcels of land registered in his name, situated in Nasugbu, Batangas; that likewise as security for the payment of the note, Rosales
executed a real estate mortgage over forty-nine (49) parcels of land registered in his name, also in Nasugbu, Batangas; that defendants failed and
refused to pay the first amortization on the loan of P90,000.00, thus rendering the whole principal amount thereof due and demandable. Plaintiff bank
prayed that defendants be ordered to pay the amount of P1,000,000.00 with interest thereon at 8% per annum and attorneys fees equivalent to 10%
thereof, and, in default thereof, that the real estate mortgages executed by defendants Rosales and Bustillo in favor of the bank be judicially
foreclosed.
In their Answer, defendants admitted the execution of the promissory note and real estate mortgages. By way of affirmative defenses, they averred
that the loan was applied for under the Industrial Guaranty Loan Fund (IGLF) of the Central Bank, through Continental Bank, and was intended for
the completion of the veneer plant of Atlas Timber Company, then being constructed in Butuan City. Pursuant to the terms of the Fund, the proceeds
of the loan in the amount of P1,000,000.00 were deposited by the Central Bank with Continental Bank. However, instead of delivering to them the
entire amount of P1,000,000.00, Continental Bank delivered only P424,000.00 and retained the balance of P576,000.00, despite repeated demands
for the turn-over thereof. Consequently, defendants were unable to complete the construction of the plant and to manufacture veneer for exportation
to the United States. Defendants, therefore, set up a counterclaim for pecuniary, moral and exemplary damages and for attorneys fees. Continental
Bank filed its answer to the counterclaim, alleging that out of the net proceeds of the loan, in the amount of P999,730.00, the sum of P575,535.82
was applied to previous loans obtained by Atlas Timber for the initial construction of the veneer plant.
RTC ruled in favor of Continental Bank. At the foreclosure sale, Continental Bank was awarded the lands as the highest bidder.
Herein petetioner Roberto G. Rosales, as successor-in-interest of Napoleon S. Rosales, and Luis Bustillo, filed with the lower court, a Motion to
Reopen the case. Petitioners prayed, among others, that the sheriff’s sale and order of confirmation be set aside; and that ninety-day period be fixed
within which they shall pay the judgment debt. The trial court denied petitioners’ motion to reopen the case. Petitioners filed a motion for
reconsideration of the denial of their motion to reopen the case, but the same was denied. Thus, petitioners filed with the Court of Appeals a petition
for certiorari. But it was denied by the CA. However, the CA failed to address petitioners primary argument in their petition for certiorari that the
issuance of the writ of execution was null and void for failure to afford petitioners the full ninety-day period within which to pay the judgment debt
and avoid the sale of their properties at public auction. Hence this petition.
Issue: W/N the issuance of the writ of execution was null and void for failure to afford petitioners the full ninety-day period within which to pay the
judgment debt and avoid the sale of their properties at public auction. YES.
Held: We agree with petitioners that their period of appeal and the ninety days grace period within which they could have paid the judgment debt
should have been counted from service of the Order dated April 23, 1975, which substantially amended the decision. As such, the period to appeal
should be reckoned from service of the said amendatory Order. Where a judgment is amended, the date of the amendment should be considered the
date of the decision in the computation of the period for perfecting the appeal. For all intents and purposes, the lower court rendered a new judgment
from which the time to appeal must be reckoned.
(T)he rule is that a judgment may be modified prior to the perfection of the appeal while the lower court still has control over said judgment. In the
case involved, there was an actual material amendment of the dispositive portion of the original decision before an appeal was perfected by the
defendant. It is likewise settled that, in such a situation and for all intents and purposes, a new judgment has been promulgated and it is from receipt
thereof that the period to appeal must be reckoned.
Since petitioners were deprived of the full use of the ninety-day period within which to pay the judgment debt, the writ of execution and the
order to sell the properties at public auction were null and void. A judgment in an action for foreclosure of mortgage could only be executed
in a manner prescribed in the Rules. Where the order of execution was not in conformity with the Rules, the same is null and void. The
order for defendants to pay the judgment debt within ninety days, prior to the sale of the foreclosed properties at public auction, is a
substantive requirement which cannot be omitted.
This 90-day period given in the rule is not a procedural requirement merely; it is a substantive right granted to the mortgage debtor as the
last opportunity to pay the debt and save his mortgaged property from final disposition at the foreclosure sale. It is one of the two steps
necessary to destroy what in law is known as the mortgagors equity of redemption, the other being the sale. It may not be omitted. As the
writ of execution or the order allowing the sale of the mortgaged property was issued without granting the mortgage debtor said 90-day
period, the order for the sale of the property would be a denial of a substantial right and void. Page 315 of the book.
Petitioners are hereby granted a new period of one hundred twenty (120) days within which to pay the same, otherwise the lands covered by TCT
Nos. 11828 and 11839 shall be sold at public auction to satisfy the debt. Under the 1997 Rules of Civil Procedure, the period prescribed for that
purpose in cases of judicial foreclosure is not less than ninety (90) days nor more than one hundred twenty (120) days, counted from entry of
judgment .
DIGEST BY: ED

#4 G.R. No. L-45322 July 5, 1989

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner,
vs. THE COURT OF FIRST INSTANCE OF ILOILO, BRANCH III, ILOILO CITY and NELITA M. VDA. DE BACALING & MARIA
TERESA INTEGRATED DEVELOPMENT CORPORATION, respondents.
GRIÑO-AQUINO, J.:
FACTS: In 1957, a real estate loan of P600,000 payable in monthly installments within a period of ten (10) years with 7% interest per annum, was
granted to the spouses Bacaling by the GSIS for the development of the Bacaling-Moreno subdivision. To secure the repayment of the loan, the
Bacalings executed in favor of the GSIS a real estate mortgage on four (4) lots owned by them. Out of the approved loan of P600,000, only P240,000
had been released to them by the GSIS as of November 11, 1957.
The Bacalings failed to finish the subdivision project and pay the amortizations on the loan so the GSIS filed in the Court of First Instance of Iloilo a
complaint for judicial foreclosure of the mortgage. During the pendency of the case, Ramon Bacaling passed away. The lower court ordered the
widow to pay the GSIS. Mrs. Bacaling failed to pay the judgment debt within 90 days after receipt of the decision of the court. Consequently, the
mortgaged lots were sold at public auction. The GSIS was the highest bidder at the sale.
Consequently, respondent Maria Teresa Integrated Development Corporation (MTIDC), as alleged assignee of the mortgagor's "right of redemption,"
filed a "Motion to Exercise the Right of Redemption.” The motion was granted by the trial court in an order dated December 20, 1972. A check
amounting to 100,000.00 was delivered by MTIDC to the GSIS as payment of the redemption price. However, the check was dishonored by the
drawee bank because it was drawn against a closed account. On motion of the GSIS the court issued an order declaring null and void the redemption
of the property by respondent MTIDC. Thereafter, written proposals were sent by said respondent to the GSIS for the redemption of the foreclosed
property, but the GSIS required cash payment of the redemption price.
On December 19, 1975, fourteen (14) years after the foreclosure sale on February 28, 1961 and almost three (3) years after the court had annulled on
February 3, 1973 its redemption of the foreclosed property, respondent MTIDC filed a motion for reconsideration of the court's order and sought the
restoration of its right of redemption. The court, over the strong opposition of the GSIS, reconsidered on January 19, 1976 its order of December 8,
1975 and granted MTIDC a period of one year after the finality of its order of January 19, 1976 to redeem the Bacaling properties. The GSIS sought
a reconsideration of that order on the ground that the court may not extend the period for the redemption of the property.
However, the court modified its order by giving MTIDC one (1) year from January 19, 1976 within which to redeem the Bacaling property, instead
of one year from the finality of the January 19, 1976 order. On March 1, 1976, the GSIS appealed by certiorari to this Court raising purely legal
questions.
Issue/legal question raised: Whether after the judicial foreclosure of a real estate mortgage and the confirmation of the sale, the trial court may grant
or fix another period for the redemption of the foreclosed property by the assignee of the mortgagor's equity of redemption.
Held: No,Sections 2 and 3, Rule 68 of the Rules of Court provide:
SEC. 2. Judgment on foreclosure for payment or sale. — if upon the trial in such action the court shall find the facts set forth in the complaint to be
true, it shall ascertain the amount due to the plaintiff upon the mortgage debt or obligation, including interest and costs, and shall render judgment for
the sum so found due and order that the same be paid into court within a period of not less than ninety (90) days from the date of the service of such
order, and that in default of such payment the property be sold to realize the mortgage debt and costs.
SEC. 3. Sale of mortgaged property; effect. — When the defendant, after being directed to do so as provided in the last preceding section, fails to pay
the principal, interest, and costs at the time directed in the order, the court shall order the property to be sold in the manner and under the regulations
that govern sales of real estate under execution. Such sale shall not affect the rights of persons holding prior encumbrances upon the property or a
part thereof, and when confirmed by an order of the court, it shall operate to divest the rights of all the parties to the action and to vest their rights in
the purchaser, subject to such rights of redemption as may be allowed by law. (Emphasis supplied.)
There is no right of redemption from a judicial foreclosure sale after the confirmation of the sale, except those granted by banks or banking
institutions as provided by the General Banking Act (Limpin vs. Intermediate Appellate Court, G.R. No. 70987, Sept. 29,1988). This has been the
consistent interpretation of Rule 68 in a long line of decisions of this Court.
Since the GSIS is not a bank or banking institution, its mortgage is covered by the general rule that there is no right of redemption after the judicial
foreclosure sale has been confirmed. Hence, Judge Numeriano Estenzo exceeded his jurisdiction and acted with grave abuse of discretion in granting
the respondent, MTIDC, another one-year period to redeem the Bacaling properties over the opposition of petitioner GSIS as mortgagee- purchaser
thereof at the public sale. His orders dated January 19, 1976 and February 12, 1976 are null and void.
DIGEST BY: ED

#5 G.R. No. L-26752 March 19, 1971

PATERNO SANTOS, ET AL., petitioners, LEONILA POLICARPIO, petitioner-appellant,
vs.
REGISTER OF DEEDS OF MANILA and PABLO LUCAS, respondents-appellees.
CONCEPCION, C.J.:
Facts: Natividad Sanchez and Pablo Lucas bought from Imelda Reyes and Maria Consuelo Mendoza a parcel of land together with its improvements,
situated in the City of Manila, with assumption of an P8,000 real estate mortgage in favor of the Monte de Piedad and Savings Bank. In view,
however, of the violation of some terms in the mortgage contract by the mortgagors, the mortgagee-bank initiated foreclosure proceedings and in the
public auction sale Leonila Policarpio was adjudged the highest bidder. On September 2, 1963 Policarpio filed the Sheriff's Certificate of Sale for
registration in the office of the respondent Register of Deeds. However, due to the fact that there were some defects in the document as pointed out
by the said Register of Deeds, the registrant withdrew the same on the following day, September 3, 1963, and they were not re-entered for
registration until almost a year after — August 26, 1964.
Subsequently, Policarpio assigned all her right and interests in the certificate of sale in favor of Mr. Paterno Santos who in turn had it registered on
July 19, 1965. On August 17, 1965, one of the herein mortgagors exercised his right to redeem the property subject of the auction sale by paying to
the Sheriff of Manila the amount representing the purchase price and interests due thereon, and so was issued a certificate of redemption. The
redemptioner presented the said certificate of redemption for registration in the office of the Manila Registry but was withheld pending submission of
the owner's duplicate certificate of title. On the other hand, the Monte de Piedad and Savings Bank, as attorney-in-fact of the vendee in the auction
sale, probably not knowing that the property was already redeemed, executed on September 6, 1965 a Deed of Absolute Sale in favor of Leonila
Policarpio, who, in turn, confirmed her assignment of rights in favor of Paterno Santos on September 8, 1965. The Deed of Confirmation of
Assignment as well as the affidavit of consolidation previously executed by Santos were annotated on, but then, it was discovered that the certificate
of redemption which was earlier presented was still pending registration.
Issue: W/N the redemption period of "one year from and after the date of the sale” for the redemption of property sold in extrajudicial foreclosure
proceedings, should be computed from the date of the auction sale. No!
Held: We have held that the period of redemption "begins to run not from the date of sale but from the time of registration of the sale in the
Office of the Register of Deeds." (page 316 of the book)
This view, expressed in Garcia v. Ocampo, et al.,2was reiterated in Agbulos v. Alberto.3 Although these cases referred to execution sales, the rule
therein laid down was applied to foreclosure cases in Salazar, et al. v. Meneses, et al.,4 Reyes v. Noblejas, et al.,5 Rosario, et al. v. Tayug Rural Bank,
Inc.,6 Campillo v. Philippine National Bank7 and Reyes v. Manas, et al.8 In Reyes v. Noblejas, et al.,9 this Court even held:
But it is further argued by the petitioner that the rule should not be applied to this case where there are no third parties involved. He cites a number of
authorities, to the effect that as between the parties, registration is not necessary to bind the immediate parties to a transaction involving registered
land. He would then conclude that since the only purpose of registration is to protect the buyer from third party claims, it stands to reason that when,
as in this case, there are no third party claimants to the land, registration is not necessary and the sale between the parties should be made to take
effect from the date of the auction sale. We are not impressed by the argument. Apparently, herein petitioner failed to see the "other side of the coin"
and overlooked the doctrine, also well settled, that the registration required by Section 50 of the Land Registration Law is intended primarily for the
protection of innocent third persons, i.e., persons who, without knowledge of the sale and in good faith, have acquired rights to the
property.lâwphî1.ñèt The same protection to third parties is obviously one of the objects of Section 27, Rule 39 of the Revised Rules of Court in
requiring that the certificate of sale issued by the sheriff in an auction sale be registered in the office of the register of deeds, for the purpose of the
legislature in providing for our present system of registration is to afford some means of publicity so that persons dealing with real property may
reach the records and thereby acquire security against instruments the execution of which has not been revealed. Redemption is not the concern
merely of the auction-vendee and the mortgagor, but also of the latter's successors in interest or any judicial creditor or judgment creditor of said
mortgagor, or any person having a lien on the property subsequent to the mortgage under which the property has been sold. It is precisely for this
reason that the certificate of sale should be registered, for only upon such registration may it legally be said that proper notice, though constructive,
has been served unto possible redemptioners contemplated in the law. We have to conclude, therefore, that the date of sale mentioned in Section 6 of
Act 3135, as amended, should be construed to mean the date of registration of the certificate of sale in the office of the register of deeds concerned.
Only after the lapse of the twelve-month redemption period from the date of registration of the certificate of sale and in the absence of any
redemptioner within the said period, may the deed of final sale be executed in favor of the purchaser who may then consolidate the title of the
property in his favor. Consequently, We have to declare that the Land Registration Commissioner was right in ordering the Register of Deeds of
Rizal to deny the registration of the Deed of Sale and the Affidavit of Consolidation of Ownership, the simultaneous registration of which documents
was sought by herein petitioner even before the certificate of sale issued by the sheriff was registered.

RULE 69- PARTITION

DIGEST BY: LEE

#1 G.R. No. 192486 November 21, 2012

RUPERTA CANO VDA. DE VIRAY and JESUS CARLO GERARD VIRAY vs.SPOUSES JOSE USI and AMELITA USI

VELASCO, JR., J.:

The Facts

The case involves a piece of land, lot no. 733, registered under the name of Ellen and Moses Mendoza.

On April 28, 1986, Geodetic Engineer Abdon G. Fajardo prepared a subdivision plan (Fajardo Plan) for Lot 733, in which Lot 733 was divided into
six (6) smaller parcels

Mendoza executed two separate deeds of absolute sale, the first, transferring Lot 733-F to Jesus Viray , and the second deed conveying Lot 733-A to
spouses Avelino Viray and Margarita Masangcay (Sps. Viray). As of that time, the Fajardo Plan has not been officially approved by the LMB,
formerly the Bureau of Lands. And at no time in the course of the controversy did the spouses Viray and Jesus Viray cause the annotations of the
conveying deeds of sale,

The aforementioned conveyances notwithstanding, Mendoza, Emerenciana M. Vda. de Mallari (Vda. de Mallari) and respondent spouses Jose Usi
and Amelita T. Usi (Sps. Usi or the Usis), as purported co-owners of Lot 733, executed a Subdivision Agreement, or the 1st subdivision agreement
(1st SA). Pursuant to this agreement which adopted, as base of reference, the LMB-approved subdivision plan prepared by Geodetic Engineer Alfeo
S. Galang (Galang Plan), Lot 733 was subdivided into three lots, i.e., Lots A to C. Three derivative titles were issued to the following, as indicated:
Lot 733-A to Emerencia M. Vda. Mallari; Lot 733-B to Sps. Jose B. Usi and Amelita B.Usi; and Lot 733-C to Ellen P. Mendoza.

On April 5, 1991, another Subdivision Agreement (2nd SA) was executed, covering and under which, Lot 733-C was further subdivided into 13
smaller lots .

Based on the ocular inspection and survey conducted on Lot 733, as an undivided whole, by Geodetic Engr of the LMB, Lot 733-A of the Fajardo
Plan that Sps. Viray bought is within Lot 733-B (Galang Plan) allotted under 1st SA to Sps. Jose and Amelita Usi; and Lot 733-F of the Fajardo Plan
is almost identical to the combined area of Lots 733-C-8 to 733-C-12 awarded to Ellen Mendoza and her children.

The foregoing overlapping transactions involving the same property or portions thereof spawned several suits and countersuits between petitioner and
respondents herein.

In lieu, Spouses Usi instituted complaints against Viray, among others is a Petition for accion publiciana/reivindicatoria before the RTC. On the other
hand, petitioners moved for the dismissal of the said petition, on the ground of litis pendencia and res judicata.

The RTC dismissed the petition for failure to establish preponderant evidence to support their claim of title, possession and ownership over the
subject lots. Hence, they appealed before the CA.

The CA reversed RTC’s decision basing its ruling on the 2 notarized subject agreements. Viray appealed but was denied. Hence, this.

Issue: WON the two (2) subdivision agreements dated August 20, 1990 and April 5, 1991, respectively, partake of a bona fide and legally binding
partition contracts or arrangements among co-owners that validly effectuated the transfer of the subject lots to respondent spouses Usi, which the
validity of deeds of absolute sale upon which the petitioners hinged their claim of ownership and right of possession over said lots depended.

Ruling: The Court rules in favor of petitioners.

The subdivision agreements not partition of co-owners

Partition, in general, is the separation, division, and assignment of a thing held in common by those to whom it may belong.
Contrary to the finding of the CA, the subdivision agreements forged by Mendoza and her alleged co-owners were not for the partition of pro-
indiviso shares of co-owners of Lot 733 but were actually conveyances, disguised as partitions, of portions of Lot 733 specifically Lots 733-A and
733-B, and portions of the subsequent subdivision of Lot 733-C.

It is fairly clear that Lot 733, even from the fact alone of its being registered under the name of the late Moses Mendoza and Ellen Mendoza, formed
part of the couple’s conjugal property at the time Moses’ demise on April 5, 1986. Equally clear, too, is that Vda. de Mallari became a co-owner of
Lot 733 by virtue of the purchase of its 416-square meter portion on February 14, 1984, during the lifetime of Moses. Be that as it may and given that
the Sps. Usi have not been shown to be co-owners of Mendoza and Vda. de Mallari prior to the sale by Mendoza on April 29, 1986 of Lots 733-A
and 733-F (Fajardo Plan) to the Sps. Viray and Jesus Viray, respectively, then the execution of the 1st SA on August 20, 1990 could not have been a
partition by co-owners of Lot 733. The same could be said of the 2nd SA of April 5, 1991 vis-à-vis Lot 733-C, for the records are similarly
completely bereft of any evidence to show on how the purported participating co-owners, namely Sps. Usi, the Sps. Lacap, the Sps. Balingit and the
Sps. Jordan became co-owners with Mendoza and her children, i.e., McDwight, Bismark, Beverly and Georgenia.

The April 29, 1986 Deeds of Absolute Saleof Lot 733-A and Lot 733-F are Valid

It must be noted that the RTC, in its decision in Civil Case Nos. 88-0265-M and 88-0283-M, upheld the validity of the separate April 29, 1986 deeds
of absolute sale of Lots 733-A and 733-F (Fajardo Plan). The combined area of Lot 733-A (366 sq. m.) and Lot 733-F (3,501) is less than one half of
the total area coverage of Lot 733 (9,137). The sale of one-half portion of the conjugal property is valid as a sale. It cannot be gainsaid then that the
deeds, executed as they were by the property owner, were sufficient to transfer title and ownership over the portions covered thereby. And the
aforesaid RTC decision had become final and executory as far back as December 11, 1995 when the Court, in G.R. No. 122287, in effect, affirmed
the RTC decision. Likewise, the MCTC’s decision in Civil Case No. 91 (13) for forcible entry, declaring Vda. de Viray, as successor-in-interest of
Jesus Viray, as entitled to the physical possession, or possession de facto, of Lot 733-F (Fajardo Plan), and the RTC’s decision in Civil Case No. 99-
0914M, disposing of the belated appeal of the MCTC decision in the forcible entry case, have become final and executory on February 12, 2003
under G.R. No. 154538.

From the facts, there is no valid sale from Mendoza to respondents Usi. The parties did not execute a valid deed of sale conveying and transferring
the lots in question to respondents. What they rely on are two subdivision agreements which do not explicitly chronicle the transfer of said lots to
them.

Given the above perspective, the Sps. Viray and Vda. de Viray (vice Jesus Viray) have, as against the Sps. Usi, superior rights over Lot 733-A and
Lot 733-F (Fajardo Plan) or portions thereof.

Res Judicata Applies

Notably, the Sps. Viray and Vda. de Viray, after peremptorily prevailing in their cases supportive of their claim of ownership and possession of Lots
733-A and 733-F (Fajardo Plan), cannot now be deprived of their rights by the expediency of the Sps. Usi maintaining, as here, an accionpubliciana
and/or accionreivindicatoria, two of the three kinds of actions to recover possession of real property. The third, accioninterdictal, comprises two
distinct causes of action, namely forcible entry and unlawful detainer, the issue in both cases being limited to the right to physical possession or
possession de facto, independently of any claim of ownership that either party may set forth in his or her pleadings, albeit the court has the
competence to delve into and resolve the issue of ownership but only to address the issue of priority of possession. Both actions must be brought
within one year from the date of actual entry on the land, in case of forcible entry, and from the date of last demand to vacate following the expiration
of the right to possess, in case of unlawful detainer.

When the dispossession or unlawful deprivation has lasted more than one year, one may avail himself of accionpubliciana to determine the better
right of possession, or possession de jure, of realty independently of title. On the other hand, accionreivindicatoria is an action to recover ownership
which necessarily includes recovery of possession.

Now then, it is a hornbook rule that once a judgment becomes final and executory, it may no longer be modified in any respect, even if the
modification is meant to correct an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the
court rendering it or by the highest court of the land, as what remains to be done is the purely ministerial enforcement or execution of the judgment.
Any attempt to reopen a close case would offend the principle of res judicata.

The better right to possess and the right of ownership of Vda. de Viray (vice Jose Viray) and the Sps. Viray over the disputed parcels of land cannot,
by force of the res judicata doctrine, be re-litigated thru actions to recover possession and vindicate ownership filed by the Sps. Usi. The Court, in
G.R. No. 122287 (Ellen P. Mendoza and Jose and AmelitaUsi v. Spouses AvelinoViray and Margarita Masangcay and Jesus Carlo Gerard Viray),
has in effect determined that the conveyances and necessarily the transfers of ownership made to the Sps. Viray and Vda. de Viray (vice Jose Viray)
on April 29, 1986 were valid. This determination operates as a bar to the Usi’sreivindicatory action to assail the April 29, 1986 conveyances and
precludes the relitigation between the same parties of the settled issue of ownership and possession arising from ownership. It may be that the
spouses Usi did not directly seek the recovery of title or possession of the property in question in their action for annulment of the deed sale of sale.
But it cannot be gainsaid that said action is closely intertwined with the issue of ownership, and affects the title, of the lot covered by the deed. The
prevalent doctrine, to borrow from Fortune Motors, (Phils.), Inc. v. Court of Appeals,"is that an action for the annulment or rescission of a sale of real
property does not operate to efface the fundamental and prime objective and nature of the case, which is to recover said real property."

WHEREFORE, the instant petition is GRANTED. The assailed Decision dated July 24, 2009 and Resolution dated June 2, 2010 of the Court of
Appeals in CA-G.R. CV No. 90344 are REVERSED and SET ASIDE. The Decision dated June 21, 2007 in Civil Case No. 01-1118(M) of the RTC,
Branch 55 in Macabebe, Pampanga is accordingly REINSTATED.
DIGEST BY: LEE

#2 G.R. No. 176492 October 20, 2014

MARIETTA N. BARRIDO, Petitioner,

vs. LEONARDO V. NONATO, Respondent.

PERALTA, J.:

Facts: In the course of the marriage of respondent Leonardo V. Nonato and petitioner Marietta N. Barrido, they were able to acquire a property
situated in Eroreco, Bacolod City, consisting of a house and lot, covered by Transfer Certificate of Title (TCT) No. T-140361. On March 15, 1996,
their marriage was declared void on the ground of psychological incapacity. Since there was no more reason to maintain their co-ownership over the
property, Nonato asked Barrido for partition, but the latter refused. Thus, on January 29, 2003, Nonato filed a Complaint for partition before the
Municipal Trial Court in Cities (MTCC) of Bacolod City, Branch 3.

Barrido claimed, by way of affirmative defense, that the subject property had already been sold to their children, Joseph Raymund and Joseph Leo.
She likewise moved for the dismissal of the complaint because the MTCC lacked jurisdiction, the partition case being an action incapable of
pecuniary estimation.

Bacolod MTCC: ordering the conjugal property of the former Spouses Leonardo and Marietta Nonato adjudicated to the defendant Marietta Nonato,
the spouse with whom the majority of the common children choose to remain.

RTC: Reversed the ruling of the MTCC, to equitably partition the house and lot

CA: Aaffirmed the RTC Decision.. It held that since the property’s assessed value was only ₱8,080.00, it clearly fell within the MTCC’s jurisdiction.
Also, although the RTC erred in relying on Article 129 of the FamilyCode, instead of Article 147, the dispositive portion of its decision still correctly
ordered the equitable partition of the property.

ISSUE: WON THE MTCC HAD JURISDICTION TO TRY THE PRESENT CASE.

HELD: Contrary to Barrido’s contention, the MTCC has jurisdiction to take cognizance of real actions or those affecting title to real property,
or for the recovery of possession, or for the partition or condemnation of, or foreclosure of a mortgage on real property.7 Section 33 of Batas
Pambansa Bilang 1298 provides:

Section 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in civil cases.– Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit

Trial Courts shall exercise:

xxxx

(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed
value of the propertyor interest therein does not exceed Twenty thousand pesos (₱20,000.00)or, in civil actions in Metro Manila, where such assessed
value does not exceed Fifty thousand pesos (₱50,000.00) exclusive of interest, damages of whatever kind, attorney's fees, litigation expenses and
costs: Provided, That value of such property shall be determined by the assessed value of the adjacent lots. (as amended by R.A. No. 7691) 9

Here, the subject property’s assessed value was merely ₱8,080.00, an amount which certainly does not exceed the required limit of
₱20,000.00 for civil actions outside Metro Manila tofall within the jurisdiction of the MTCC. Therefore, the lower court correctly took
cognizance of the instant case.

The records reveal that Nonato and Barrido’s marriage had been declared void for psychological incapacity under Article 3610 of the Family Code.
During their marriage, however, the conjugal partnership regime governed their property relations. Although Article 129 11 provides for the procedure
in case of dissolution of the conjugal partnership regime, Article 147 specifically covers the effects of void marriages on the spouses’ property
relations. Article 147 reads:

Art. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the
benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of
them through their work or industry shall be governed by the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts,
work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the
other party of any property shall be deemed to have contributed jointly in the acquisition thereof if the former's efforts consisted in the care and
maintenance of the family and of the household.

This particular kind of co-ownership applies when a man and a woman, suffering no illegal impediment to marry each other, exclusively live together
as husband and wife under a void marriage or without the benefit of marriage. 12 It is clear, therefore, that for Article 147 to operate, the man and the
woman: (1) must be capacitated to marry each other; (2) live exclusively with each other as husband and wife; and (3) their union is without the
benefit of marriage or their marriage is void. Here, all these elements are present. 13 The term "capacitated" in the first paragraph of the provision
pertains to the legal capacity of a party to contract marriage. 14 Any impediment to marry has not been shown to have existed on the part of either
Nonato or Barrido. They lived exclusively with each other as husband and wife. However, their marriage was found to be void under Article 36 of
the Family Code on the ground of psychological incapacity. 15

Under this property regime, property acquired by both spouses through their work and industry shall be governed by the rules on equal co ownership.
Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. A party who did not participate in
the acquisition of the property shall be considered as having contributed to the same jointly if said party's efforts consisted in the care and
maintenance of the family household.16 Efforts in the care and maintenance of the family and household are regarded as contributions to the
acquisition of common property by one who has no salary or income or work or industry.17

Here, the former spouses both agree that they acquired the subject property during the subsistence of their marriage. Thus, it shall be presumed to
have been obtained by their joint efforts, work or industry, and shall be jointly owned by them in equal shares. Barrido, however, claims that the
ownership over the property in question is already vested on their children, by virtue of a Deed of Sale. But aside from the title to the property still
being registered in the names of the former spouses, said document of safe does not bear a notarization of a notary public. It must be noted that
without the notarial seal, a document remains to be private and cannot be converted into a public document, 21 making it inadmissible in evidence
unless properly authenticated.22 Unfortunately, Barrido failed to prove its due execution and authenticity. In fact, she merely annexed said Deed of
Sale to her position paper. Therefore, the subject property remains to be owned in common by Nonato and Barrido, which should be divided in
accordance with the rules on co-ownership.

DIGEST BY: LEE

#3 G.R. No. 187524 August 5, 2015

SPOUSES MARIA BUTIONG and VILLAFRlA, DR. RUEL B. SPOUSES MARIA FRANCISCO substituted by VILLAFRIA, Petitioners,
vs. MA. GRACIA RINOZA PLAZO and MA. FE RINOZA ALARAS, Respondents.

PERALTA, J.:

FACTS:

Pedro L. Rifioza died intestate, leaving several heirs, including his children with his first wife, respondents Ma. Gracia R. Plazo and Ma. Fe
Alaras, as well as several properties including a resort and a family home.

In their Amended Complaint for Judicial Partition with Annulment of Title and Recovery of Possession, respondents alleged that they discovered
that their co-heirs, Pedro’s second wife, “Benita" Tenorio and other children, had sold the subject properties to petitioners, spouses Francisco
Villafria and Maria Butiong.

When confronted about the sale, Benita acknowledged the same, showing respondents a document she believed evidenced receipt of her share in
the sale, which, however, did not refer to any sort of sale but to a previous loan obtained by Pedro and Benita from a bank.

Upon inquiry, the Register of Deeds of Nasugbu informed respondents that he has no record of any transaction involving the subject properties,
giving them certified true copies of the titles to the same.

Subsequently, respondents learned that a notice of an extra-judicial settlement of estate of their late father was published in a tabloid called Balita.
Because of this, They caused the annotation of their adverse claims over the subject properties before the Register of Deeds of Nasugbu and filed
their complaint praying, among others, for the annulment of all documents conveying the subject properties to the petitioners and certificates of
title issued pursuant thereto.

In their Answer, petitioners denied the allegations of the complaint on the ground of lack of personal knowledge and good faith in acquiring the
subject properties.

TRIAL COURT: nullified the transfer of the subject Properties to petitioners and spouses Bondoc due to irregularities in the Documents of
conveyance offered by petitioner’s as well as the circumstances Surrounding the execution of the same. Specifically, the Extra-Judicial Settlement
was notarized by a notary public that was not duly commissioned as such on the date it was executed. The Deed of Sale was Undated, the date of
the acknowledgment therein was left blank, and the Typewritten name "Pedro Rifioza, Husband" on the left side of the document Was not signed.

CA: affirmed the trial court’s Judgment.

Aggrieved, petitioners, substituted by their son Ruel Villafria, filed a Motion for Reconsideration raising the trial court’s lack of jurisdiction.

On appeal, this Court denied on petitioner's Petition for Review on Certiorari for submitting a verification of the petition, a certificate of non-
forum shopping and an affidavit of service that failed to comply with the 2004 Rules on Notarial Practice regarding competent evidence of affiant'
s identities.

This Court also denied petitioner's Motion for Reconsideration in the absence of any compelling reason to warrant a modification of the previous
denial.
 The foregoing notwithstanding, petitioner filed a Petition for Annulment of Judgment and Order before the CA assailing the decision and order of
the RTC on the grounds of extrinsic fraud and lack of jurisdiction, which the CA dismissed.

ISSUE:

WON THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR IN NOT RULING THAT THE REGIONAL TRIAL COURT ACTED
WITHOUT JURISDCITION IN ENTERTAINING THE SPECIAL PROCEEDING FOR THE SETTLEMENT OF ESTATE OF PEDRO RINOZA
AND THE CIVIL ACTION FOR ANNULMENT OF TITLE OF THE HEIRS AND THIRD PERSONS IN ONE PROCEEDING.

HELD: NO

Petitioner is mistaken. It is true that some of respondents' causes of action pertaining to the properties left behind by the decedent Pedro, his known
heirs, and the nature and extent of their interests thereon may fall under an action for settlement of estate. However, a complete reading of the
complaint would readily show that, based on the nature of the suit, the allegations therein, and the relief’s prayed for, the action, is clearly one for
judicial partition with annulment of title and recovery of possession.

Section 1, Rule 74 of the Rules of Court provides:

RULE 74
Summary Settlement of Estate

Section 1. Extrajudicial settlement by agreement between heirs. - If the decedent left no will and no debts and the heirs are all of age5 or the minors
are represented by their judicial or legal representatives duly authorized for the purpose, the parties may without securing letters of administration,
divide the estate among themselves as they see fit by means of a public instrument filed in the office of the register of deeds, and should they
disagree, they may do so in an ordinary action of partition. If there is only one heir, he may adjudicate to himself the entire estate by means of an
affidavit filed in the office of the register of deeds. The parties to an Extrajudicial settlement, whether by public instrument or by stipulation in a
pending action for partition, or the sole heir who adjudicates the entire estate to himself by means of an affidavit shall file, simultaneously with and
as a condition precedent to the filing of the public instrument, or stipulation in the action for partition, or of the affidavit in the office of the register of
deeds, a bond with the said register of deeds, in an amount equivalent to the value of the personal property involved as certified to under oath by the
parties concerned and conditioned upon the payment of any just claim that may be filed under section 4 of this rule. It shall be presumed that the
decedent left no debts if no creditor files a petition for letters of administration within two (2) years after the death of the decedent.

The fact of the Extrajudicial settlement or administration shall be Published in a newspaper of general circulation in the manner provided in the next
succeeding section; but no Extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof.

In this relation, Section 1, Rule 69 of the Rules of Court provides:

Section 1. Complaint in action for partition of real estate. - A person having the right to compel the partition of real estate may do so as provided in
this Rule, setting forth in his complaint the nature and extent of his title and an adequate description of the real estate of which partition is demanded
and joining as defendants all other persons interested in the property.

As can be gleaned from the foregoing provisions, the allegations of respondents in their complaint are but customary, in fact, mandatory, to a
complaint for partition of real estate. Particularly, the complaint alleged: (1) that Pedro died intestate; (2) that respondents, together with their co-
heirs, are all of legal age, with the exception of one who is represented by a judicial representative duly authorized for the purpose; (3) that the heirs
enumerated are the only known heirs of Pedro; (4) that there is an account and description of all real properties left by Pedro; (5) that Pedro's estate
has no known indebtedness; and (6) that respondents, as rightful heirs to the decedent’s estate, pray for the partition of the same in accordance with
the laws of intestacy. It is clear, therefore, that based on the allegations of the complaint, the case is one for judicial partition. That the complaint
alleged causes of action identifying the heirs of the decedent, properties of the estate, and their rights thereto, does not perforce make it an action for
settlement of estate.

In this case, it was expressly alleged in the complaint, and was not disputed, that Pedro died without a will, leaving his estate without any pending
obligations. Thus, contrary to petitioner’s contention, respondents were under no legal obligation to submit the subject properties of the estate of a
special proceeding for settlement of intestate estate, and are, in fact, encouraged to have the same partitioned, judicially or extrajudicially.

Thus, respondents committed no error in filing an action for judicial partition instead of a special proceeding for the settlement of estate as law
expressly permits the same.

Moreover, the fact that respondents' complaint also prayed for the annulment of title and recovery of possession does not strip the trial court off of its
jurisdiction to hear and decide the case. Asking for the annulment of certain transfers of property could very well be achieved in an action for
partition, as can be seen in cases where courts determine the parties' rights arising from complaints asking not only for the partition of estates but also
for the annulment of titles and recovery of ownership and possession of property.

Indeed, an action for partition does not preclude the settlement of the issue of ownership. In fact, the determination as to the existence of the same is
necessary in the resolution of an action for partition, as held in Municipality of Bifzan v. Garcia:

The first phase of a partition and/or accounting suit is taken up with the determination of whether or not a co-ownership in fact exists, and a partition
is proper (i.e., not otherwise legally proscribed) and may be made by voluntary agreement of all the parties interested in the property. This phase may
end with a declaration that plaintiff is not entitled to have a partition either because a co-ownership does not exist, or partition is legally prohibited. It
may end, on the other hand, with an adjudgment that a co-ownership does in truth exist, partition is proper in the premises and an accounting of rents
and profits received by the defendant from the real estate in question is in order. x x x

The second phase commences when it appears that "the parties are unable to agree upon the partition" directed by the court. In that event, partition
shall be done for the parties by the court with the assistance of not more than three (3) commissioners. This second stage may well also deal with the
rendition of the accounting itself and its approval by the court after the. Parties have been accorded opportunity to be heard Thereon, and an award
for the recovery by the party or parties thereto entitled of their just share in the rents and profits of the real estate in question.

An action for partition, therefore, is premised on the existence or non-existence of co-ownership between the parties. Unless and until the issue of co-
ownership is definitively resolved, it would be premature to effect a partition of an estate.

In view of the foregoing, petitioner's argument that the trial court acted without jurisdiction in entertaining the action of settlement of estate and
annulment of title in a single proceeding is clearly erroneous for the instant complaint is precisely one for judicial partition with annulment of title
and recovery of possession, filed within the confines of applicable law and jurisprudence. Under Section 1 of Republic Act No. 7691 (RA 7691),
amending Batas Pambansa Big. 129, the RTC shall exercise exclusive original jurisdiction over all civil actions in which the subject of the litigation
is incapable of pecuniary estimation. Since the action herein was not merely for partition and recovery of ownership but also for annulment of
title and documents, the action is incapable of pecuniary estimation and thus cognizable by the RTC (Cited in the Book. COURT WITH
JURISDICTION p. 327). Hence, considering that the trial court clearly had jurisdiction in rendering its decision, the instant petition for annulment
of judgment must necessarily fail.