Rule 68 Judicial Foreclosure of Real Estate Mortgage

Spouses Ricardo Rosales and Erlinda Sibug vs Spouses Alfonso and Lourdes Suba
The spouses Ricardo Rosales and Erlinda Sibug were indebted to a certain Felicisimo Macaspac. Later,
Macaspac sued the spouses for their failure to pay. During trial, it was found out that there existed an
equitable mortgage between the spouses and Macaspac. The court ordered the spouses to pay Macaspac
and if they fail to do so, their property shall be foreclosed.
The spouses failed to pay Macaspac hence the court ordered the sale at a public auction of their land in May
1998. The highest bidder was the spouses Alfonso and Lourdes Suba. In June 1998, the trial court issued
an order confirming the sale made to the spouses Suba. The spouses Rosales then filed a motion for
reconsideration. The trial court ruled against their motion as it ruled that there is no right of redemption in
judicial foreclosures. The Court of Appeals affirmed the decision of the trial court.
ISSUE: Whether or not the debtor-mortgagor can exercise the right of redemption in judicial foreclosure.
HELD: No. There is no right of redemption in judicial foreclosure. What can be exercised is equity of
redemption.
Equity of redemption is simply the right of the mortgagor to extinguish the mortgage and retain ownership
of the property by paying the secured debt within the 90-day period after the judgment becomes final, in
accordance with Rule 68 of the Rules of Court, or even after the foreclosure sale but prior to its confirmation
by the court (prior to the courts confirmation of the sale).
In this case, unfortunately, the spouses Rosales never exercised their equity of redemption.
When can equity of redemption be exercised?
The mortgagor may exercise his equity of redemption even beyond the 90-day period from the date of
service of the order, and even after the foreclosure sale itself, provided it be before the order of
confirmation of the sale.
Are there any exceptions to the rule that there is no right of redemption in judicial foreclosure?
Yes, the only exemption is when the mortgagee is the Philippine National Bank or a bank or a banking
institution. In such cases, the mortgagor can exercise the right of redemption.

ROLANDO ROBLES, REPRESENTED BY ATTY. CLARA C. ESPIRITU, PETITIONER, VS.

FERNANDO FIDEL YAPCINCO, PATROCINIO B. YAPCINCO, MARIA CORAZON B.
YAPCINCO, AND MARIA ASUNCION B. YAPCINCO-FRONDA, RESPONDENTS., G.R. No.
169568, 2014 Oct 22, 1st Division
The effect of the failure of Apolinario Cruz to obtain the judicial confirmation was only to prevent the
title to the property from being transferred to him. For sure, such failure did not give rise to any right in
favor of the mortgagor or the respondents as his successors-in-interest to take back the property already
validly sold through public auction. Nor did such failure invalidate the foreclosure proceedings. To
maintain otherwise would render nugatory the judicial foreclosure and foreclosure sale, thus unduly
disturbing judicial stability. The non-transfer of the title notwithstanding, Apolinario Cruz as the
purchaser should not be deprived of the property purchased at the foreclosure sale. With the respondents
having been fully aware of the mortgage, and being legally bound by the judicial foreclosure and
consequent public sale, and in view of the unquestioned possession by Apolinario Cruz and his
successors-in-interest (including the petitioner) from the time of the foreclosure sale until the present, the
respondents could not assert any better right to the property. It would be the height of inequity to still
permit them to regain the property on the basis alone of the lack of judicial confirmation of the sale. After
all, under the applicable rule earlier cited, the judicial confirmation operated only "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."
Consequently, the late Fernando F. Yapcinco and the respondents as his successors-in-interest were
divested of their right in the property, for they did not duly exercise the equity of redemption decreed in
the decision of the trial court. With Yapcinco having thereby effectively ceased to be the owner of the
property sold, the property was taken out of the mass of the assets of Yapcinco upon the expiration of the
equity of redemption.

Huerta Alba Resort Inc v CA

GR No. 128567, September 1, 2000

FACTS:
Syndicated Management Group, Inc. (SMGI), as mortgagee-assignee, filed a complaint before the RTC
for foreclosure of 4 parcels of land mortgaged by Huerta Alba Resort to Intercon Fund Resource
(Intercon).
DECISION OF LOWER COURTS:
(a) RTC granted the complaint
(b) CA dismissed appeal due to late payment of docket fees (c) Supreme Court dismissed petition for
certiorari.
SMGI then filed with the trial court of origin a motion for execution of decision. Thus, a writ of execution
was issued. Petitioner filed an urgent motion to quash and set aside the writ of execution. The dispute is
principally is as to when the 150 period within which Huerta Alba may exercise its equity of redemption
be counted.

DECISIONS:
(a) RTC denied to urgent motion to quash.
Meanwhile, the auction sale proceeded with SMGI as the sole bidder.
(b) CA held that the 150 periods should be computed from the date petitioner was notified of the Entry
of Judgment but the same period has expired already.
Huerta Alba filed with the RTC a motion for clarification seeking clarification whether or not the 12
month period of redemption for ordinary execution should apply.

DECISIONS:
(1) RTC: redemption should be governed by the rule on the sale of judicially foreclosed property under
Rule 68 of the Rules of Court
Huerta Alba again sought clarification with CA of the date of the commencement of the 1 year period for
the redemption of the properties
(2) CA: Foreclosure in this case is judicial and as such mortgagor has only the equity and not the right or
redemption. Even if under section 78 of RA 337 (General Banking Act), a mortgagor of a bank, banking
or credit institution, whether the foreclosure was done judicially or extrajudicially, has a period of 1 year
from the auction sale within which to redeem the foreclosed property, it was never raised whether SMGI
is a bank or credit institution.
Upon motion for a writ of possession by SMGI, Huerta Alba then filed in opposition a motion to compel
respondent to accept redemption, alleging for the first time his right under RA 337, theorizing that the
original mortgagee being a credit institution, its assignment of mortgage credit did not remove the
coverage of RA 337

DECISIONS:
(1) RTC: denied SMGIs writ of possession.
(2) CA: set aside the RTCs decision.
Hence, the present petition.

ISSUE:
Whether or not Huerta Alba has the one year right of redemption of subject properties under Section 78 of
RA 337

RULING:
YES, however, this was not seasonably filed.

The claim that it is entitled to the beneficial provisions of RA 337 since SMGIs predecessor-in-interest
is a credit institution is in a nature of a compulsory counterclaim which should have been averred in its
answer to the complaint for judicial foreclosure.
The failure of petitioner to seasonably assert its right under RA 337 precludes it from so doing at this late
stage case. Estoppel may be successfully invoked if the party fails to raise the question in the early stages
in proceeding.
The sale of the properties, as confirmed by the court, operated to divest Huerta Alba of its right of
redemption. There then existed only what is known as equity of redemption, which is simply the right of
the petitioner to extinguish the mortgage and retain ownership of the property by paying the secured debt
within the 90 day period after the judgment became final. However, redemption can no longer be effected
since petitioner failed to exercise its equity of redemption within the prescribed period.
The equity of redemption is, to be sure, different from and should not be confused with the right of
redemption.

RIGHT OF REDEMPTION
General Rule:
The right of redemption in relation to a mortgage understood in the sense of a prerogative to re-acquire
mortgaged property after registration of the foreclosure sale exists only in the case of the extrajudicial
foreclosure of the mortgage.
Exception:
No such right is recognized in a judicial foreclosure except only where the mortgagee is the Philippine
National Bank or a bank or banking institution.
I. Extrajudicial foreclosure right of redemption
Where a mortgage is foreclosed extrajudicially, Act 3135 grants to the mortgagor the right of
redemption within one (1) year from the registration of the sheriffs certificate of foreclosure sale.
II. Judicial foreclosure
Where the foreclosure is judicially effected, however, no equivalent right of redemption exists. The law
declares that a judicial foreclosure sale, when confirmed by an order of the court, x x 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 a may be allowed by law.
Such rights exceptionally allowed by law (i.e. even after confirmation by an order of the court) are
those granted by the charter of the Philippine National Bank (Acts No. 2747 and 2938), and the General
Banking Act (R.A. 337). These laws confer on the mortgagor, his successors in interest or any
judgment creditor of the mortgagor, the right to redeem the property sold on foreclosure after
confirmation by the court of the foreclosure sale which may be exercised within a period of one (1)
year, counted from the date of registration of the certificate of sale in the Registry Property.
But, to repeat, no such right of redemption exists in case of judicial foreclosure of a mortgage if the
mortgagee is not the PNB or a bank or banking institution. In such a case, the foreclosure sale, when
confirmed by an order of the court. x x shall operate to divest the rights of all the parties to the action and
to vest their rights in the purchaser.

EQUITY OF REDEMPTION
There then exists only what is known as the equity of redemption. This is simply the right of the
defendant mortgagor to extinguish the mortgage and retain ownership of the property by paying the
secured debt:

1. within the 90-day period after the judgment becomes final, in accordance with Rule 68, or
2. even after judgment becomes final, in accordance with Rule 68, or
3. even after the foreclosure sale but prior to its confirmation.
Section 2, Rule 68 provides that xx If upon the trial xx 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 the
same to 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. This is the mortgagors equity (not right) of redemption which, as above stated, may be exercised
by him even beyond the 90-day period from the date of service of the order, and even after the
foreclosure sale itself, provided it be before the order of confirmation of the sale. After such order of
confirmation, no redemption can be effected any longer.

In relation to mortgage, the right of redemption exists in extra-judicial foreclosure; while equity of
redemption exists only in judicial foreclosure. In extrajudicial foreclosure, the mortgagor may exercise his
right of redemption within 1 year from the registration of the sale in the Office of the Registry of Deeds;
while in judicial foreclosure, the mortgagor may exercise his equity of redemption during the period of
not less than 90 days nor more than 120 days from entry of judgment of foreclosure or even after the
foreclosure sale but before the judicial confirmation of the sale. There is no right of redemption in judicial
foreclosure of mortgage, except only if the mortgagee is the Philippine National Bank or any banking
institution. Thus, in judicial foreclosure of mortgage where the mortgagee is the Philippine National Bank
or any banking institution, there exist both equity of redemption and right of redemption. (HUERTA
ALBA RESORT V. CA, GR NO. 128567, SEPTEMBER 1, 2000).

Monzon v Relova
Doctrine : A cause of action is the act or omission by which a party violates the right of another. A cause
of action exists if the elements are present:
1. Right in favor of plaintiff by whatever means and under whatever law it arises or is created
2. An obligation on the part of the named defendant to respect or not to violate such right
3. An act or omission on the part of such defendant violative of the right of plaintiff or constituting
breach of the obligation of defendant to the plaintiff for which the latter may maintain an action
for recovery of damages

Fast Recit : Spouses Relova and Perez filed a petition for injunction since Monzon issued promissory
notes to the respective spouses with lots as security (2A- Perez, Lot 2B- Relova). Monzon was indebted to
Coastal Lending which foreclosed the property due to the non-payment of Monzons 3.4 million debt.
Addio was the highest bidder in the sale. There was an excess of 1.6 M from Addios payment of 5M.
The Spouses contend that they should be given the residue as stated in Rule 68, Sec 4. The residue money
is with Atty. Luna (clerk of court). However, case at bar involves Extrajudicial Foreclosure (Act 3135)
and not Rule 68s judicial foreclosure. Spouses do not have cause of action against Atty. Luna. Case is
remanded back to trial court to check if motion for injunction is to be treated as complaint for collection
of money.

Facts :
Spouses Relova and Perez filed a petition for Injunction. They allege that Monzon issued a
promissory note in favor of sps. Perez. The amount was P600K and secured by Lot2A in Brgy
Kaybagal, Tagaytay City with about 300 sqm. A deed of absolute sale over the parcel of land was
later executed in favor of the Perez spouses.

The same thing happened with sps. Relova wherein a promissory note in the amount of P200k
was issued secured by Lot2B with about 200 sqm. There was a 5% interest per month. A deed of
conditional sale over the parcel of land was later issued in favor of sps. Relova.

Monzon was indebted to the Coastal Lending Corporation. Coastal Lending then extrajudicially
foreclosed the property of Monzon which included Lots 2A and 2B. The winning bidder in this
extrajudicial foreclosure was Addio properties. Of the amount paid by Addio, there was a residue
of roughly P1.6M (indebtedness of Monzon was only around P3.4M while Addio paid P5M for
the property thats why theres an excess). This residue is in the custody of Atty. Luna as Branch
Clerk of Court.

Monzon argues that she has already fulfilled her obligation to the spouses via dacion en pago
evidenced by the Deed of Conditional Sale and the Deed of Absolute Sale.
RTC:
Due to Monzon and counsels absence on said hearing date despite due notice, granted an oral
Motion by the respondents by issuing an Order allowing the ex parte presentation of evidence by
respondents.

Atty. Luna should deliver the residue to spouses Relova and Perez. At this point in time, Addio
properties intervened.

CA: Affirmed RTC, denied Monzons appeal re : violation of due process since she was not allowed to
present in court again after not appearing in first hearing (order of default)

Issue : Whether or not there was a cause of action against Atty Luna. No.
Held.
SC : Reversed and set aside the ruling of the CA. Atty. Luna should not deliver the residue to the spouses
since Rule 68 governs judicial foreclosure and the issue at bar is under Act 3135 Extrajudicial
Foreclosure.
Also, the SC ruled that the Failure to file a responsive pleading within the reglementary period is the sole
ground for an order of default and not the non-appearance during oral motion.

The case is remanded back to trial court for respondents to submit a manifestation where the petition for
injunction should be treated as complaint for the collection of money.
Ratio:
Rule 68 governs judicial foreclosure of mortgages. Extrajudicial foreclosure of mortgages which was
what transpired in the case at bar is governed by Act 3135. Unlike Rule 68, Act 3135 does not grant to
junior encumbrancers the right to receive the balance of the purchase price. The only right given to
second mortgagees in said issuances is the right to redeem foreclosed property pursuant to Sec 6 of Act
3135 any person having lien on the property subsequent to mortgage or deed of trust under which the
property is sold, may redeem the same at any time within the term of one yr from and after date of the
sale.
A cause of action is the act or omission by which a party violates the right of another. A cause of action
exists if the elements are present:
1. Right in favor of plaintiff by whatever means and under whatever law it arises or is created
2. An obligation on the part of the named defendant to respect or not to violate such right
3. An act or omission on the part of such defendant violative of the right of plaintiff or constituting
breach of the obligation of defendant to the plaintiff for which the latter may maintain an action
for recovery of damages

In view of the foregoing, the respondent spouses do not have a cause of action against Atty Luna for the
delivery of amounts. The case should be dismissed in so far Atty Luna is concerned but the same is not
necessarily true with respect to Monzon.
The case is remanded back to trial court for respondents to submit a manifestation where the petition for
injunction should be treated as complaint for the collection of money. If respondents answer in
affirmative, case shall proceed with presentation of evidence for defense. If Monzon successful in proving
defense of dacion en pago, there would be double sales with Addio. The remedy of respondent is to
recover possession. If Addio is entitled to properties, respondents remedy is to file action for damages
against Monzon.
If respondents answer in negative, the case shall be dismissed without prejudice to the exercise of
respondents rights as mortgage creditors. They will be first mortgagor if their mortgage was executed
prior to execution of contract with Addio.

BPI Family Savings Bank, Inc. v. Avenido

In the recent case of BPI Family Savings Bank, Inc. v. Avenido, we reiterated the well-entrenched rule
that a creditor is not precluded from recovering any unpaid balance on the principal obligation if the
extrajudicial foreclosure sale of the property subject of the real estate mortgage results in a deficiency, to
wit:
It is settled that if the proceeds of the sale are insufficient to cover the debt in an extrajudicial foreclosure
of mortgage, the mortgagee is entitled to claim the deficiency from the debtor. While Act No. 3135, as
amended, does not discuss the mortgagees right to recover the deficiency, neither does it contain any
provision expressly or impliedly prohibiting recovery. If the legislature had intended to deny the creditor
the right to sue for any deficiency resulting from the foreclosure of a security given to guarantee an
obligation, the law would expressly so provide. Absent such a provision in Act No. 3135, as amended, the
creditor is not precluded from taking action to recover any unpaid balance on the principal obligation
simply because he chose to extrajudicially foreclose the real estate mortgage.
Rule 69 - Partition

VILMA QUINTOS, REPRESENTED BY HER ATTORNEY-IN-FACTS FIDEL I. QUINTOS, JR.,

ET AL. VS. PELAGIA I. NICOLAS, ET AL.
G.R. No. 210252. June 16, 2014

FACTS: Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra, and respondents Pelagia
Nicolas, Noli Ibarra, Santiago Ibarra, Pedro Ibarra, David Ibarra, Gilberto Ibarra, and the late Augusto
Ibarra are siblings. Their parents, Bienvenido and Escolastica Ibarra, were the owners of the subject
property, a 281 sqm. parcel of land situated along Quezon Ave., Poblacion C, Camiling, Tarlac, covered
by TCT No. 318717.

The deceased parents left their 10 children ownership over the subject property. In 2002, respondent
siblings brought an action for partition against petitioners. The case was docketed as Civil Case No. 02-52
and was raffled to the RTC at Camiling, Tarlac but was later on dismissed as neither of the parties
appeared and appealed.

Respondent siblings instead resorted to executing a Deed of Adjudication to transfer the property in favor
of the 10 siblings. As a result, TCT No. 318717 was canceled and TCT No. 390484 was issued in the
names of the 10 heirs of the Ibarra spouses. The siblings sold their 7/10 undivided share over the property
in favor of their co-respondents, the spouses Recto and Rosemarie Candelario by virtue of a Deed of
Absolute Sale and Agreement of Subdivision, and the title was partially cancelled as a result.

Petitioners filed a complaint for Quieting of Title and Damages against respondents wherein they alleged
that during their parents lifetime, the couple distributed their real and personal properties in favor of their
10 children. Upon distribution, petitioners alleged that they received the subject property and the house
constructed thereon as their share. They had been in adverse, open, continuous, and uninterrupted
possession of the property for over 4 decades and are allegedly entitled to equitable title. Participation in
the execution of the aforementioned Deeds was denied.

Respondents, on the other hand, countered that petitioners cause of action was already barred by estoppel
when in 2006, one of petitioners offered to buy the 7/10 undivided share, which is an admission
petitioners part that the property is not entirely theirs. The Ibarras allegedly mortgaged the property but
because of financial constraints, respondent spouses Candelario had to redeem the property. Not having
been repaid, the Candelarios accepted their share in the subject property as payment. Lastly, respondents
sought, by way of counterclaim, the partition of the property.

RTC: dismissed petitioners complaint, as it did not find merit in petitioners asseverations that they have
acquired title over the property through acquisitive prescription and noted there was no document
evidencing that their parents bequeathed the property. Subsequent transfer of the siblings interest in favor
of respondent spouses Candelario was upheld.

CA: upheld lower court decision and held that since the property is co-owned by the plaintiffs- appellants,
( 3/10 undivided interest) and defendants-appellees Spouses Candelarios (7/10 undivided interest) and
considering that plaintiffs-appellants had already constructed a 3-storey building at the back portion of the
property, partition is in order, in accord with the subdivision plan.

ISSUES:
1. Whether or not the petitioners were able to prove ownership over the property;
2. Whether or not the respondents counterclaim for partition is already barred by laches
or res judicata; and
3. Whether or not the CA was correct in approving the subdivision agreement as basis for the partition of
the property.

HELD: PETITION IS PARTLY MERITORIOUS.

Petitioners were not able to prove equitable title or ownership over the property. Quieting of title is a
common law remedy for the removal of any cloud, doubt, or uncertainty affecting title to real property.

For an action to quiet title to prosper, two indispensable requisites must concur, namely:
(1) the plaintiff or complainant has a legal or equitable title to or interest in the real property subject of the
action; and
(2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on the title must be shown to
be in fact invalid or inoperative despite its prima facie appearance of validity or efficacy.

In the case at bar, the CA correctly observed that petitioners cause of action must necessarily fail mainly
in view of the absence of the first requisite.

At the outset, it must be emphasized that the determination of whether or not petitioners sufficiently
proved their claim of ownership or equitable title is substantially a factual issue that is generally improper
for Us to delve into.In any event, a perusal of the records would readily show that petitioners, as aptly
observed by the courts below, indeed, failed to substantiate their claim. Their alleged open, continuous,
exclusive, and uninterrupted possession of the subject property is belied by the fact that respondent
siblings, in 2005, entered into a Contract of Lease with the Avico Lending Investor Co. over the subject
lot without any objection from the petitioners. Petitioners inability to offer evidence tending to prove that
Bienvenido and Escolastica Ibarra transferred the ownership over the property in favor of petitioners is
likewise fatal to the latters claim.

The cardinal rule is that bare allegation of title does not suffice. The burden of proof is on the plaintiff to
establish his or her case by preponderance of evidence. Regrettably, petitioners failed to discharge the
said burden. There is no reason to disturb the finding of the RTC that all 10 siblings inherited the subject
property from Bienvenido and Escolastica Ibarra, and after the respondent siblings sold their aliquot share
to the spouses Candelario, petitioners and respondent spouses became co-owners of the same.

The counterclaim for partition is not barred by prior judgment.

As to the issue of partition as raised by respondents in their counterclaim, the petitioners countered that
the action for partition has already been barred by res judicata.

The Court had the occasion to rule that dismissal with prejudice satisfies one of the elements of res
judicata. It is understandable why petitioners would allege res judicata to bolster their claim. However,
dismissal with prejudice under Rule 17, Sec. 3 of the Rules of Court cannot defeat the right of a co-owner
to ask for partition at any time, provided that there is no actual adjudication of ownership of shares yet.
This is pertinent to Article 494 of the Civil Code which discusses how the law generally does not favor
the retention of co-ownership as a property relation, and is interested instead in ascertaining the co-
ownersspecific shares so as to prevent the allocation of portions to remain perpetually in limbo. Thus, the
law provides that each co-owner may demand at any time the partition of the thing owned in common.

Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to co-owners under Art. 494
of the Civil Code, the latter must prevail. To construe otherwise would diminish the substantive right of a
co-owner through the promulgation of procedural rules. Such a construction is not sanctioned by the
principle, which is too well settled to require citation, that a substantive law cannot be amended by a
procedural rule. Art. 494 is an exception to Rule 17, Sec. 3 of the Rules of Court to the effect that even if
the order of dismissal for failure to prosecute is silent on whether or not it is with prejudice, it shall be
deemed to be without prejudice.

This is not to say, however, that the action for partition will never be barred by res judicata. There can
still be res judicata in partition cases concerning the same parties and the same subject matter once the
respective shares of the co-owners have been determined with finality by a competent court with
jurisdiction or if the court determines that partition is improper for co- ownership does not or no longer
exists.

The counterclaim for partition is not barred by laches. We now proceed to petitionerssecond line of
attack. According to petitioners, the claim for partition is already barred by laches since by 1999, both
Bienvenido and Escolastica Ibarra had already died and yet the respondent siblings only belatedly filed
the action for partition, Civil Case No. 02-52, in 2002. And since laches has allegedly already set in
against respondent siblings, so too should respondent spouses Candelario be barred from claiming the
same for they could not have acquired a better right than their predecessors-in-interest.

Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that whichby
the exercise of due diligencecould or should have been done earlier. It is the negligence or omission to
assert a right within a reasonable period, warranting the presumption that the party entitled to assert it has
either abandoned or declined to assert it. The principle is a creation of equity which, as such, is applied
not really to penalize neglect or sleeping upon ones right, but rather to avoid recognizing a right when to
do so would result in a clearly inequitable situation. As an equitable defense, laches does not concern
itself with the character of the petitioners title, but only with whether or not by reason of the
respondents long inaction or inexcusable neglect, they should be barred from asserting this claim at all,
because to allow them to do so would be inequitable and unjust to petitioners.

As correctly appreciated by the lower courts, respondents cannot be said to have neglected to assert their
right over the subject property. They cannot be considered to have abandoned their right given that they
filed an action for partition. The fact that respondent siblings entered into a Contract of Lease with Avico
Lending Investor Co. over the subject property is evidence that they are exercising rights of ownership
over the same.

The CA erred in approving the Agreement for Subdivision. There is merit, however, in
petitioners contention that the CA erred in approving the proposal for partition submitted by respondent
spouses. Art. 496, as earlier cited, provides that partition shall either be by agreement of the parties or in
accordance with the Rules of Court. In this case, the Agreement of Subdivision allegedly executed by
respondent spouses Candelario and petitioners cannot serve as basis for partition for respondents admitted
that the agreement was a falsity and that petitioners never took part in preparing the same. The
"agreement" was crafted without any consultation whatsoever or any attempt to arrive at mutually
acceptable terms with petitioners. It, therefore, lacked the essential requisite of consent. Thus, to approve
the agreement in spite of this fact would be tantamount to allowing respondent spouses to divide
unilaterally the property among the co-owners based on their own whims and caprices.

Marasigan vs. Marasigan (del Rosario)

FACTS:
Alicia owned in common with her siblings 13 parcels of land called Hacienda Sta. Rita in Pili and
Minalabac, Camarines Sur. Alicia left behind her 2/21 shares in the 13 parcels of land.

Alicia was survived by her siblings: Cesar, Apolonio, Lilia, and Benito; Marissa, a sister-in-law; and the
children of her brothers who predeceased her: Francisco, Horacio, and Octavio. Complaint for Judicial
Partition of the Estate of Alicia Marasigan was filed before the RTC by her heirs (private respondents)
namely, Apolonio, Lilia, Octavio, Horacio, Benito, and Marissa, against Cesar.

RTC decided in favor of the heirs and issued an order of partition of the estate of Alicia Marasigan. They
ordered the partition into 1/7 each of the 2/21 shares of the 13 parcels of land.

The parties could not agree on how they shall physically partition among themselves Alicias estate, private
respondents filed a Motion to Appoint Commissioners following the procedure outlined in Sections 4, 5, 6,
and 7 of Rule 69 of the Rules of Court.

The RTC granted the Motion and appointed Badiong, Assistant Provincial Assessor of Camarines Sur, as
Chairman of the Board of Commissioners. Private respondents nominated Dacara as the second
commissioner. Cesar failed to nominate a third commissioner despite due notice. Upon lapse of the period
given, only two commissioners were appointed.

Commissioners conducted an ocular inspection. Commissioners Report was released: Considering that
the physical division of the 2/21 pro-indiviso share of the decedent, Alicia Marasigan cannot be done
because of the different locations and conditions of the properties, undersigned Commissioners hereby
recommend that the heirs may assign their 1/7 share to one of the parties willing to buy the same (Sec. 5,
Rule 69 of the Rules of Court) provided he pays to the heir[s] willing to assign his/her 1/7 share such
amounts the Commissioners have recommended and duly approved by the Honorable Court. Cesar
opposed and prayed for the disapproval of the report.

RTC issued an Order approving the recommendations embodied in the Commissioners Report, particularly
that the property be assigned to one of the heirs. Motion for Reconsideration by Cesar that was denied.

In the meantime, Cesar died. He was substituted by his heirs and herein petitioners. The heirs of Cesar,
petitioners, elevated the case to the Court of Appeals via a Petition for Certiorari and Prohibition under
Rule 65 claiming grave abuse by the RTC judge in approving the Commissioners Report. CA dismissed
the petition and ruled that the RTC acted within its authority.

ISSUE: Whether or not the Court of Appeals erred in affirming in toto the RTC Order adopting the
Commissioners recommendation on the manner of partition of the estate of Alicia Marasigan. They did
not err in affirming the RTC Order!!

HELD:
In this jurisdiction, an action for partition is comprised of two phases: first, the trial court, after determining
that a co- ownership in fact exists and that partition is proper, issues an order for partition; and, second, the
trial court promulgates a decision confirming the sketch and subdivision of the properties submitted by the
parties (if the parties reach an agreement) or by the appointed commissioners (if the parties fail to agree),
as the case may be.

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 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. In the latter case, the
parties may, if they are able to agree, make partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition so agreed upon.

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. Such an order is, to be sure, final and appealable.

While the lack of notice to Cesar of the viewing and examination by the Commissioners of the real
properties comprising Alicias estate is a procedural infirmity, it did not violate any of his substantive rights
nor did it deprive him of due process. It is a matter of record, and petitioners cannot deny, that Cesar was
able to file his Comment/Opposition to the Commissioners Report. He had sufficient opportunity to present
before the RTC whatever objections or oppositions he may have had to the Commissioners Report.

The Commissioners found, after a viewing and examination of Alicias estate, that the same cannot be
divided without causing prejudice to the interests of the parties. The impracticality of physically dividing
Alicias estate becomes more apparent, considering that Hacienda Sta. Rita is composed of parcels and
snippets of land located in two different municipalities, Pili and Minalabac, Camarines Sur. Cesar and his
heirs are entitled only to his 1/7 share in the yet unidentified, unsegregated 2/21 pro-indiviso shares of
Alicia in each of the 13 parcels of land that comprises Hacienda Sta. Rita. Dividing the parcels of land even
further, each portion allotted to Alicias heirs, with a significantly reduced land area and widely scattered
in two municipalities, would irrefragably diminish the value and use of each portion, as compared to
keeping the entire estate intact.

The correctness of the finding of the RTC and the Commissioners that dividing Alicias estate would be
prejudicial to the parties cannot be passed upon by the Court of Appeals in a petition for certiorari. The writ
of certiorari issues for the correction of errors of jurisdiction only or grave abuse of discretion amounting
to lack or excess of jurisdiction. In the absence of evidence to the contrary, this Court can only presume
that the proceedings before the RTC, including the recommendation made by the Commissioners, were
fairly and regularly conducted.

Inasmuch as the parties continued to manifest their desire to terminate their co-ownership, but the co-
heirs/co- owners could not agree on which properties would be allotted to each of them, this Court finds
that the Court of Appeals was correct in ruling that the RTC did not act with grave abuse of discretion
amounting to lack or excess of jurisdiction when it approved the Commissioners recommendation that the
co-heirs/co-owners assign their shares to one of them in exchange for proper compensation.

Thus, contrary to petitioners averments, this Court finds that the Court of Appeals did not err in ruling that
the RTC did not commit grave abuse of discretion amounting to lack or excess of jurisdiction in adopting
and confirming the recommendations of the Commissioners. PETITION DENIED.
Divinagracia v. Parilla, et al.,
G.R. No. 196750, March 11, 2015
Facts:
Conrado, Sr. owned a parcel of land in Iloilo City. He had 2 children with his first wife, namely,
Cresencio and Conrado, Jr.; and 7 children with his second wife, namely, Mateo, Sr, Coronacion, Cecilia,
Celestial, Celedonio, Ceruleo and Cebeleo, Sr. He also begot 3 illegitimate children, namely Eduardo,
Rogelio and Ricardo. Both Mateo, Sr. and Cebeleo, Sr. pre-deceased Conrado, Sr. leaving children, namely:
(a) for Mateo, Sr.: Felcon, Landelin, Eusela, Giovanni, Mateo, Jr., Tito, and Gaylord; and (b) for Cebeleo,
Sr.: Cebeleo, Jr. and Neobel. Santiago, who allegedly bought the shares of majority of the heirs of a
property left by Conrado, Sr. He filed a complaint for partition but did not implead Mateo, Sr.s children.
RTC found that through the subject document, Santiago became a co-owner of the subject land
and, as such, has the right to demand the partition of the same. However, the RTC held that Santiago did
not validly acquire Mateo, Sr.s share over the subject land, considering that Felcon admitted the lack of
authority to bind his siblings with regard to Mateo, Sr.s share thereon.
CA, on appeal, dismissed Santiagos complaint for judicial partition. It held the Mateo, Sr.s
children are indispensable parties to the judicial partition and thus, their non-inclusion as defendants would
necessarily result in its dismissal. CA denied the motion for reconsideration of the heirs of Santiago, hence,
the petition for review on certiorari.
Issue: Is the action for partition proper without impleading Mateo, Sr.s children?
Held: No because the co-heirs are indispensable parties.
The aforementioned heirs whether in their own capacity or in representation of their direct
ascendant have vested rights over the subject land and, as such, should be impleaded as indispensable
parties in an action for partition thereof. However, a reading of Santiagos complaint shows that as regards
Mateo, Sr.s interest, only Felcon was impleaded, excluding therefrom his siblings and co-representatives.
Similarly, with regard to Cebeleo, Sr.s interest over the subject land, the complaint impleaded his wife,
Maude, when pursuant to Article 972 of the Civil Code, the proper representatives to his interest should
have been his children, Cebeleo, Jr. and Neobel. Verily, Santiagos omission of the aforesaid heirs renders
his complaint for partition defective.
An indispensable party is one whose interest will be affected by the courts action in the litigation,
and without whom no final determination of the case can be had. The partys interest in the subject matter
of the suit and in the relief sought are so inextricably intertwined with the other parties that his legal
presence as a party to the proceeding is an absolute necessity. In his absence, there cannot be a resolution
of the dispute of the parties before the court which is effective, complete, or equitable. (Gabatin v. Land
Bank of the Philippines, 486 Phil. 366, 379-380 (2004), citing Bank of the Philippine Islands v. CA, 450
Phil. 532, 541 (2003); further citation omitted). Thus, the absence of an indispensable party renders all
subsequent actions of the court null and void, for want of authority to act, not only as to the absent parties
but even as to those present. (Domingo v. Scheer, 466 Phil. 235, 265 (2004).
With regard to actions for partition, Section 1, Rule 69 of the Rules of Court requires that all persons
interested in the property shall be joined as defendants, viz.:
SEC. 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.
Thus, all the co-heirs and persons having an interest in the property are indispensable parties; as
such, an action for partition will not lie without the joinder of the said parties.
However, the CA erred in ordering the dismissal of the complaint on account of Santiagos failure
to implead all the indispensable parties in his complaint. In Heirs of Mesina v. Heirs of Fian, Sr., G.R. No.
201816, April 8, 2013, 695 SCRA 345, the Court definitively explained that in instances of non-joinder of
indispensable parties, the proper remedy is to implead them and not to dismiss the case, to wit:
The non-joinder of indispensable parties is not a ground for the dismissal of
an action. At any stage of a judicial proceeding and/or at such times as are just, parties
may be added on the motion of a party or on the initiative of the tribunal concerned. If the
plaintiff refuses to implead an indispensable party despite the order of the court, that court
may dismiss the complaint for the plaintiffs failure to comply with the order. The remedy
is to implead the non-party claimed to be indispensable. x x x
In view of the foregoing, the correct course of action in the instant case is to order its remand to the
RTC for the inclusion of those indispensable parties who were not impleaded and for the disposition of the
case on the merits.