Republic of the
Supreme Court
FIRST DIVISION
SPOUSES
VICENTE YU AND G.R. No. 147902
DEMETRIA
LEE-YU,
Petitioners, Present:
PANGANIBAN, C.J.,
(Chairperson)
YNARES-SANTIAGO,
- versus - AUSTRIA-MARTINEZ,
CALLEJO, SR., and
CHICO-NAZARIO, JJ.
PHILIPPINE
COMMERCIAL
INTERNATIONAL
BANK, Promulgated:
Respondent. March 17, 2006
x
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D E C I S I O N
AUSTRIA-MARTINEZ, J.:
Before the Court is a Petition for Review
on Certiorari of the Decision[1]
dated
The factual background of the case is
as follows:
Under a Real Estate Mortgage dated August
15, 1994[2]
and Amendments of Real Estate Mortgage dated April 4, 1995[3]
and December 4, 1995,[4] spouses
Vicente Yu and Demetria Lee-Yu (petitioners) and spouses Ramon T. Yu and
Virginia A. Tiu, or Yu Tian Hock aka Victorino/Vicente Yu, mortgaged their
title, interest, and participation over several parcels of land located in
Dagupan City and Quezon City, in favor of the Philippine Commercial International
Bank (respondent) as security for the payment of a loan in the amount of P9,000,000.00.[5]
As the petitioners failed to pay the
loan, the interest, and the penalties due thereon, respondent filed on
At the auction sale on
About two months before the
expiration of the redemption period, or on
On September 30, 1999, petitioners
filed a Motion to Dismiss and to Strike Out Testimony of Rodante Manuel stating
that the Certificate of Sale dated September 14, 1998 is void because respondent
violated Article 2089 of the Civil Code on the indivisibility of the mortgaged
by conducting two separate foreclosure proceedings on the mortgage properties
in Dagupan City and Quezon City and indicating in the two notices of extra-judicial
sale that petitioners’ obligation is P10,437,015.20[12]
as of March 31, 1998, when petitioners are not indebted for the total amount of
P20,874,031.56.[13]
In the meantime, petitioners filed a
complaint for Annulment of Certificate of Sale before the
On
On
On
On June 1, 2000, petitioners filed a Petition
for Certiorari with the CA.[17]
On November 14, 2000, the CA dismissed petitioners’ Petition for Certiorari on the grounds that petitioners violated Section 8 of Act No.
3135 and disregarded the rule against multiplicity of suits in filing Civil
Case No. 99-03169-D in RTC Branch 44 despite full knowledge of the pendency of
Spec. Proc. No. 99-00988-D in RTC Branch 43; that since the one-year period of
redemption has already lapsed, the issuance of a writ of possession in favor of
respondent becomes a ministerial duty of the trial court; that the issues in
Civil Case No. 99-03169-D are not prejudicial questions to Spec. Proc. No.
99-00988-D because: (a) the special proceeding is already fait accompli, (b) Civil Case No. 99-03169-D is deemed not filed for
being contrary to Section 8 of Act No. 3135, (c) the filing of Civil Case No.
99-03169-D is an afterthought and dilatory in nature, and (d) legally speaking
what seems to exist is litis pendentia
and not prejudicial question.[18]
Petitioners filed a Motion for
Reconsideration[19] but it
was denied by the CA on
Hence, the present Petition for Review
on Certiorari.
Petitioners pose two issues for
resolution, to wit:
A. Whether or not a
real estate mortgage over several properties located in different locality [sic]
can be separately foreclosed in different places.
B. Whether or not the
pendency of a prejudicial issue renders the issues in Special Proceedings No.
99-00988-D as [sic] moot and academic.[21]
Anent the first issue, petitioners contend
that since a real estate mortgage is indivisible, the mortgaged properties in P10,437,015.20[22] each
as of March 31, 1998 or a total of P20,874,030.40,[23]
yet their own computation yields only P9,957,508.90 as of February 27,
1998.
As to the second issue, petitioners posit
that the pendency of Civil Case No. 99-03169-D is a prejudicial issue, the
resolution of which will render the issues in Spec. Proc. No. 99-00988-D moot
and academic. Petitioners further aver
that they did not violate Section 8 of Act No. 3135 in filing a separate case
to annul the certificate of sale since the use of the word “may” in said
provision indicates that they have the option to seek relief of filing a
petition to annul the certificate of sale in the proceeding involving the
application for a writ of possession or in a separate proceeding.
Respondent contends[24]
that, with respect to the first issue, the filing of two separate foreclosure
proceedings did not violate Article 2089 of the Civil Code on the indivisibility
of a real estate mortgage since Section 2 of Act No. 3135 expressly provides
that extra-judicial foreclosure may only be made in the province or
municipality where the property is situated.
Respondent further submits that the filing of separate applications for
extra-judicial foreclosure of mortgage involving several properties in
different locations is allowed by A.M. No. 99-10-05-0, the Procedure on Extra-Judicial
Foreclosure of Mortgage, as further amended on
As to the second issue, respondent maintains
that there is no prejudicial question between Civil Case No. 99-03169-D and
Spec. Proc. No. 99-00988-D since the pendency of a civil action questioning the
validity of the mortgage and the extra-judicial foreclosure thereof does not
bar the issuance of a writ of possession.
Respondent also insists that petitioners should have filed their Petition
to Annul the Certificate of Sale in the same case where possession is being
sought, that is, in Spec. Proc. No. 99-00988-D, and not in a separate
proceeding (Civil Case No. 99-01369-D) because the venue of the action to
question the validity of the foreclosure is not discretionary since the use of
the word “may” in Section 8 of Act No. 3135 refers to the filing of the
petition or action itself and not to the venue. Respondent further argues that even
if petitioners filed the Petition to Annul the Certificate of Sale in Spec.
Proc. No. 99-00988-D, the writ of possession must still be issued because
issuance of the writ in favor of the purchaser is a ministerial act of the
trial court and the one-year period of redemption has already lapsed.
Anent the first issue, the Court finds that petitioners
have a mistaken notion that the indivisibility of a real estate mortgage relates
to the venue of extra-judicial foreclosure proceedings. The rule on indivisibility of a real estate
mortgage is provided for in Article 2089 of the Civil Code, which provides:
Art. 2089. A pledge or mortgage is indivisible, even though the debt may be divided among the successors in interest of the debtor or of the creditor.
Therefore, the debtor’s heir who has paid a part of the debt cannot ask for the proportionate extinguishment of the pledge or mortgage as the debt is not completely satisfied.
Neither can the creditor’s heir who received his share of the debt return the pledge or cancel the mortgage, to the prejudice of the other heirs who have not been paid.
From these provisions is excepted the case in which, there being several things given in mortgage or pledge, each one of them guarantees only a determinate portion of the credit.
The debtor, in this case, shall have a right to the extinguishment of the pledge or mortgage as the portion of the debt for which each thing is specially answerable is satisfied.
This rule presupposes several heirs
of the debtor or creditor[25]
and therefore not applicable to the present case. Furthermore, what the law proscribes is the
foreclosure of only a portion of the property or a number of the several
properties mortgaged corresponding to the unpaid portion of the debt where,
before foreclosure proceedings, partial payment was made by the debtor on his
total outstanding loan or obligation.
This also means that the debtor cannot ask for the release of any
portion of the mortgaged property or of one or some of the several lots
mortgaged unless and until the loan thus secured has been fully paid,
notwithstanding the fact that there has been partial fulfillment of the
obligation. Hence, it is provided that
the debtor who has paid a part of the debt cannot ask for the proportionate
extinguishment of the mortgage as long as the debt is not completely satisfied.[26] In essence, indivisibility means that the
mortgage obligation cannot be divided among the different lots,[27] that
is, each and every parcel under mortgage answers for the totality of the debt.[28]
On the other hand, the venue of the extra-judicial foreclosure proceedings is
the place where each of the mortgaged property is located, as prescribed
by Section 2 of Act No. 3135,[29] to
wit:
SECTION
2. Said sale cannot be made legally outside of the province in which the
property sold is situated; and in case the place within said province in which
the sale is to be made is subject to stipulation, such sale shall be made in
said place or in the municipal building of the municipality in which the
property or part thereof is situated.
A.M. No. 99-10-05-0,[30]
the Procedure on Extra-Judicial Foreclosure of Mortgage, lays
down the guidelines for extra-judicial foreclosure proceedings on mortgaged properties
located in different provinces. It provides that the venue of the
extra-judicial foreclosure proceedings is the place where each of the mortgaged
property is located. Relevant portion
thereof provides:
Where
the application concerns the extrajudicial foreclosure of mortgages of real
estates and/or chattels in different locations covering one indebtedness, only
one filing fee corresponding to such indebtedness shall be collected. The collecting Clerk of Court shall, apart
from the official receipt of the fees, issue a certificate of payment
indicating the amount of indebtedness, the filing fees collected, the mortgages
sought to be foreclosed, the real estates and/or chattels mortgaged and their
respective locations, which certificate shall serve the purpose of having
the application docketed with the Clerks of Court of the places where the other
properties are located and of allowing the extrajudicial foreclosures to
proceed thereat. (Emphasis supplied)
The indivisibility of the real estate
mortgage is not violated by conducting two separate foreclosure proceedings on
mortgaged properties located in different provinces as long as each parcel of
land is answerable for the entire debt. Petitioners’ assumption that their
total obligation is P20,874,030.40 because the two notices of
extra-judicial sale indicated that petitioners’ obligation is P10,437,015.20[31]
each, is therefore flawed. Considering
the indivisibility of a real estate mortgage, the mortgaged properties in P10,437,015.29.[32]
As to the second issue, that is, whether a civil case for annulment of a certificate of sale
is a prejudicial question to a petition for issuance of a writ of possession,
this issue is far from novel and, in fact, not without precedence. In Pahang
v. Vestil,[33] the
Court said:
A prejudicial question is
one that arises in a case the resolution of which is a logical antecedent of
the issue involved therein, and the cognizance of which pertains to another tribunal. It generally comes into play in a situation
where a civil action and a criminal action are both pending and there exists in
the former an issue that must be preemptively resolved before the criminal
action may proceed, because howsoever the issue raised in the civil action is
resolved would be determinative juris et
de jure of the guilt or innocence of the accused in the criminal case. The rationale behind the principle of prejudicial question is to avoid two
conflicting decisions.
In the present case, the complaint of the petitioners for
Annulment of Extrajudicial Sale is a civil action and the respondent’s petition
for the issuance of a writ of possession of Lot No. 3-A, Block 1,
Psd-07-021410, TCT No. 44668 is but an incident in the land registration case
and, therefore, no prejudicial question can
arise from the existence of the two actions. A similar issue was raised in Manalo v. Court of Appeals, where we
held that:
At
any rate, it taxes our imagination why the questions raised in Case No. 98-0868
must be considered determinative of Case No. 9011. The basic issue in the former is whether the
respondent, as the purchaser in the extrajudicial foreclosure proceedings, may
be compelled to have the property repurchased or resold to a mortgagor’s successor-in-interest
(petitioner); while that in the latter is merely whether the respondent, as the
purchaser in the extrajudicial foreclosure proceedings, is entitled to a writ
of possession after the statutory period for redemption has expired. The two cases, assuming both are pending, can
proceed separately and take their own direction independent of each other.[34]
In the present case, Civil Case No. 99-01369-D
and Spec. Proc. No. 99-00988-D are both civil in nature. The issue in Civil Case No. 99-01369-D is
whether the extra-judicial foreclosure of the real estate mortgage executed by
the petitioners in favor of the respondent and the sale of their properties at
public auction are null and void, whereas, the issue in Spec. Proc. No.
99-00988-D is whether the respondent is entitled to a writ of possession of the
foreclosed properties. Clearly, no prejudicial question can arise from the
existence of the two actions. The two cases can proceed separately and take
their own direction independently of each other.
Nevertheless, there is a need to
correct the CA’s view that petitioners violated Section 8 of Act No. 3135 and
disregarded the proscription on multiplicity of suits by instituting a separate
civil suit for annulment of the certificate of sale while there is a pending
petition for issuance of the writ of possession in a special proceeding.
Section 8 of Act No. 3135 provides:
Sec.
8. Setting aside of sale and writ of possession. – The debtor may, in the proceedings in which possession
was requested, but not later than thirty days after the purchaser was given
possession, petition that the sale be set aside and the writ of possession
cancelled, specifying the damages suffered by him, because the mortgage was
not violated or the sale was not made in accordance with the provisions hereof,
and the court shall take cognizance of this petition in accordance with the
summary procedure provided for in section one hundred and twelve of Act
Numbered Four hundred and ninety-six; and if it finds the complaint of the
debtor justified, it shall dispose in his favor of all or part of the bond
furnished by the person who obtained possession. Either of the parties
may appeal from the order of the judge in accordance with section fourteen of
Act Numbered Four hundred and ninety-six; but the order of possession shall
continue in effect during the pendency of the appeal. (Emphasis supplied)
Under the provision above cited, the
mortgagor may file a petition to set aside the sale and for the cancellation of
a writ of possession with the trial court which issued the writ of possession
within 30 days after the purchaser mortgagee was given possession. It provides
the plain, speedy, and adequate remedy in opposing the issuance of a writ of
possession.[35] Thus, this
provision presupposes that the trial court already issued a writ of possession.
In Sps.
Ong v. Court of Appeals,[36]
the Court elucidated:
The law is clear that the purchaser must first be placed in possession of the mortgaged property pending proceedings assailing the issuance of the writ of possession. If the trial court later finds merit in the petition to set aside the writ of possession, it shall dispose in favor of the mortgagor the bond furnished by the purchaser. Thereafter, either party may appeal from the order of the judge in accordance with Section 14 of Act 496, which provides that “every order, decision, and decree of the Court of Land Registration may be reviewed…in the same manner as an order, decision, decree or judgment of a Court of First Instance (RTC) might be reviewed.” The rationale for the mandate is to allow the purchaser to have possession of the foreclosed property without delay, such possession being founded on his right of ownership.[37]
Accordingly, Section 8 of Act No.
3135 is not applicable to the present case since at the time of the filing of
the separate civil suit for annulment of the certificate of sale in RTC Branch
44, no writ of possession was yet issued by RTC Branch 43.
Similarly, the Court rejects the CA’s
application of the principle of litis
pendentia to Civil Case No. 99-03169-D in relation to Spec. Proc. No.
99-00988-D. Litis pendentia refers
to that situation wherein another action is pending between the same parties
for the same cause of actions and that the second action becomes unnecessary
and vexatious. For litis
pendentia to be invoked, the concurrence of the following
requisites is necessary: (a) identity of parties or at least such as represent
the same interest in both actions; (b) identity of rights asserted and reliefs
prayed for, the reliefs being founded on the same facts; and, (c) the identity
in the two cases should be such that the judgment that may be rendered in one
would, regardless of which party is successful, amount to res judicata
in the other.[38]
Applying the foregoing criteria in
the instant case, litis pendentia does not obtain in
this case because of the absence of the second and third requisites. The
issuance of the writ of possession being a ministerial function, and summary
in nature, it cannot be said to be a judgment on the merits, but simply an
incident in the transfer of title. Hence, a separate case for annulment of
mortgage and foreclosure sale cannot be barred by litis pendentia or res
judicata.[39] Thus, insofar as Spec. Proc. No. 99-00988-D
and Civil Case No. 99-03169-D pending before different branches of
To sum up, the Court holds that the
rule on indivisibility of the real estate mortgage cannot be equated with the
venue of foreclosure proceedings on mortgaged properties located in different
provinces since these are two unrelated concepts. Also, no prejudicial question
can arise from the existence of a civil case for annulment of a certificate of
sale and a petition for the issuance of a writ of possession in a special
proceeding since the two cases are both civil in nature which can proceed
separately and take their own direction independently of each other.
Furthermore, since the one-year
period to redeem the foreclosed properties lapsed on
WHEREFORE, the petition is DENIED.
SO
ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
ARTEMIO
V. PANGANIBAN
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice
MINITA
V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution,
it is hereby certified that the conclusions in the above Decision were reached
in consultation before the case was assigned to the writer of the opinion of
the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1] Penned by Associate Justice Andres B. Reyes, Jr. and concurred in by Associate Justices Cancio C. Garcia (now Associate Justice of this Court) and Romeo A. Brawner (now retired).
[2] Records, pp. 7-8.
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12] Should be P10,437,015.29 per
Notice of Extra-Judicial Sale, records, p. 52.
[13]
[14]
[15]
[16]
[17] CA rollo, p. 1.
[18]
[19]
[20]
[21] Petition, rollo, p. 15; and Memorandum, rollo, pp. 143-144.
[22]
[23]
[24] Comment, rollo, p. 114; and Memorandum, rollo, p. 152.
[25] Rose
Packing Co., Inc. v. Court of Appeals, G.R. No. L-33084,
[26] Philippine
National Bank v. De los Reyes, G.R. Nos. 46898-99, November 28, 1989, 179
SCRA 619, 626; Philippine National Bank
v. Amores, G.R. No. L-54551,
[27] Aquino v. Macondray & Co. Inc., 97 Phil. 731, 741 (1955).
[28] Philippine
National Bank v.
[29] Entitled “An Act To Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real-Estate Mortgages,” approved on March 6, 1924.
[30] Dated
[31] Supra, note 12.
[32]
[33] G.R. No. 148595,
[34] Id. at 145-146, citing Yulienco v. Court of Appeals, 441 Phil. 397, 405-407 (2002) and Manalo v. Court of Appeals, 419 Phil. 215, 232 (2001).
[35] Samson
v. Rivera, G.R. No. 154355,
[36] 388 Phil. 857 (2000).
[37]
[38] Agilent
Technologies
[39] Arquiza v. Court of Appeals, G.R. No. 160479, June 8, 2005, 459 SCRA 753, 765; Sps. Ong v. Court of Appeals, supra, note 36 at 867-868.
[40] De Vera v. Agloro, G.R. No.
155673, January 14, 2005, 448
SCRA 203, 214; Chailease Finance Corporation v. Ma, G.R. No. 151941,
[41] Philippine National Bank v. Sanao
Marketing Corporation, supra, note 37 at 303.
[42] Idolor v. Court of Appeals, G.R. No. 161028, January 31, 2005, 450 SCRA 396, 403; Sps. Ong v. Court of Appeals, supra, note 36 at 866.
[43] Idolor v. Court of Appeals, supra, note 42 at 403; Sps. Ong v. Court of Appeals, supra, note 36 at 866-867.