Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 137792

August 12, 2003

SPOUSES RICARDO ROSALES and ERLINDA SIBUG, Petitioners,

vs.
SPOUSES ALFONSO and LOURDES SUBA, THE CITY SHERIFF OF MANILA, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
Challenged in the instant petition for review on certiorari are the Resolutions1 dated November 25, 1998 and February 26,
1999 of the Court of Appeals dismissing the petition for certiorari in CA G.R. SP No. 49634, "Spouses Ricardo Rosales
and Erlinda Sibug vs. Alfonso and Lourdes Suba."
On June 13, 1997, the Regional Trial Court, Branch 13, Manila rendered a Decision2 in Civil Cases Nos. 94-72303 and
94-72379, the dispositive portion of which reads:
"WHEREFORE, judgment is rendered:
(1) Declaring the Deed of Sale of Exhibit D, G and I, affecting the property in question, as an equitable mortgage;
(2) Declaring the parties Erlinda Sibug and Ricardo Rosales, within 90 days from finality of this Decision, to
deposit with the Clerk of Court, for payment to the parties Felicisimo Macaspac and Elena Jiao, the sum
ofP65,000.00, with interest at nine (9) percent per annum from September 30, 1982 until payment is made, plus
the sum of P219.76 as reimbursement for real estate taxes;
(3) Directing the parties Felicisimo Macaspac and Elena Jiao, upon the deposit on their behalf of the amounts
specified in the foregoing paragraph, to execute a deed of reconveyance of the property in question to Erlinda
Sibug, married to Ricardo Rosales, and the Register of Deeds of Manila shall cancel Transfer Certificate of Title
No. 150540 in the name of the Macaspacs (Exh. E) and issue new title in the name of Sibug;
(4) For non-compliance by Sibug and Rosales of the directive in paragraph (2) of this dispositive portion, let the
property be sold in accordance with the Rules of Court for the release of the mortgage debt and the issuance of
title to the purchaser.
"SO ORDERED."3
The decision became final and executory. Spouses Ricardo and Erlinda Rosales, judgment debtors and herein petitioners,
failed to comply with paragraph 2 quoted above, i.e., to deposit with the Clerk of Court, within 90 days from finality of the
Decision, P65,000.00, etc., to be paid to Felicisimo Macaspac and Elena Jiao. This prompted Macaspac, as judgment
creditor, to file with the trial court a motion for execution.
Petitioners opposed the motion for being premature, asserting that the decision has not yet attained finality. On March 5,
1998, they filed a manifestation and motion informing the court of their difficulty in paying Macaspac as there is no correct
computation of the judgment debt.
On February 23, 1998, Macaspac filed a supplemental motion for execution stating that the amount due him
isP243,864.08.
Petitioners failed to pay the amount. On March 25, 1998, the trial court issued a writ of execution ordering the sale of the
property subject of litigation for the satisfaction of the judgment.
On May 15, 1998, an auction sale of the property was held wherein petitioners participated. However, the property was
sold for P285,000.00 to spouses Alfonso and Lourdes Suba, herein respondents, being the highest bidders. On July 15,
1998, the trial court issued an order confirming the sale of the property and directing the sheriff to issue a final deed of
sale in their favor.
On July 28, 1998, Macaspac filed a motion praying for the release to him of the amount of P176,176.06 from the proceeds
of the auction sale, prompting petitioners to file a motion praying that an independent certified public accountant be
appointed to settle the exact amount due to movant Macaspac.
Meanwhile, on August 3, 1998, the Register of Deeds of Manila issued a new Transfer Certificate of Title over the subject
property in the names of respondents.

On August 18, 1998, respondents filed with the trial court a motion for a writ of possession, contending that the
confirmation of the sale "effectively cut off petitioners equity of redemption." Petitioners on the other hand, filed a motion
for reconsideration of the order dated July 15, 1998 confirming the sale of the property to respondents.
On October 19, 1998, the trial court, acting upon both motions, issued an order (1) granting respondents prayer for a writ
of possession and (2) denying petitioners motion for reconsideration. The trial court ruled that petitioners have no right to
redeem the property since the case is for judicial foreclosure of mortgage under Rule 68 of the 1997 Rules of Civil
Procedure, as amended. Hence, respondents, as purchasers of the property, are entitled to its possession as a matter of
right.
Forthwith, petitioners filed with the Court of Appeals a petition for certiorari, docketed as CA-G.R. SP No. 49634, alleging
that the trial court committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing a writ of
possession to respondents and in denying their motion for reconsideration of the order dated July 15, 1998 confirming the
sale of the property to said respondents.
On November 25, 1998, the CA dismissed outright the petition for lack of merit, holding that there is no right of
redemption in case of judicial foreclosure of mortgage. Petitioners motion for reconsideration was also denied.
Hence this petition.
In the main, petitioners fault the Appellate Court in applying the rules on judicial foreclosure of mortgage. They contend
that their loan with Macaspac is unsecured, hence, its payment entails an execution of judgment for money under Section
9 in relation to Section 25, Rule 39 of the 1997 Rules of Civil Procedure, as amended,4allowing the judgment debtor
one (1) year from the date of registration of the certificate of sale within which to redeem the foreclosed property.
Respondents, upon the other hand, insist that petitioners are actually questioning the decision of the trial court dated June
13, 1997 which has long become final and executory; and that the latter have no right to redeem a mortgaged property
which has been judicially foreclosed.
Petitioners contention lacks merit. The decision of the trial court, which is final and executory, declared the transaction
between petitioners and Macaspac an equitable mortgage. In Matanguihan vs. Court of Appeals,5 this Court defined an
equitable mortgage as "one which although lacking in some formality, or form or words, or other requisites demanded by a
statute, nevertheless reveals the intention of the parties to charge real property as security for a debt, and contains
nothing impossible or contrary to law." An equitable mortgage is not different from a real estate mortgage, and the lien
created thereby ought not to be defeated by requiring compliance with the formalities necessary to the validity of a
voluntary real estate mortgage.6 Since the parties transaction is an equitable mortgage and that the trial court ordered its
foreclosure, execution of judgment is governed by Sections 2 and 3, Rule 68 of the 1997 Rules of Civil Procedure, as
amended, quoted as follows:
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 other charges as approved by the court, and costs, and shall render judgment for the sum so
found due and order that the same be paid to the court or to the judgment obligee within a period of not less that
ninety (90) days nor more than one hundred twenty (120) days from the entry of judgment, and that in default of
such payment the property shall be sold at public auction to satisfy the judgment.
SEC. 3. Sale of mortgaged property, effect. When the defendant, after being directed to do so as provided in the next
preceding section, fails to pay the amount of the judgment within the period specified therein, the court, upon
motion, shall order the property to be sold in the manner and under the provisions of Rule 39 and other regulations
governing sales of real estate under execution. Such sale shall not effect the rights of persons holding prior
encumbrances upon the property or a part thereof, and when confirmed by an order of the court, also upon motion, it
shall operate to divest the rights in the property 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.
x x x."
In Huerta Alba Resort, Inc. vs. Court of Appeals,7 we held that the right of redemption is not recognized in a judicial
foreclosure, thus:
"The right of redemption in relation to a mortgageunderstood in the sense of a prerogative to re-acquire
mortgaged property after registration of the foreclosure saleexists only in the case of the extrajudicial
foreclosure of the mortgage. No such right is recognized in a judicial foreclosure except only where the
mortgagee is the Philippine National bank or a bank or a banking institution.
"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.
"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 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 as
may be allowed by law. Such rights exceptionally allowed by law (i.e., even after the confirmation by an order of the
court) are those granted by the charter of the Philippine National Bank (Act Nos. 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 foreclosureafter confirmation by the court of the foreclosure sale
which right may be exercised within a period of one (1) year, counted from the date of registration of the certificate of sale
in the Registry of 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 x shall operate to divest the rights of all the parties to the action and to vest their rights in the
purchaser. 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 within the 90-day period after the judgment becomes final, in accordance with Rule 68, or even after the
foreclosure sale but prior to its confirmation.
xxx
"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." (Italics
supplied)
Clearly, as a general rule, there is no right of redemption in a judicial foreclosure of mortgage. The only exemption is when
the mortgagee is the Philippine National Bank or a bank or a banking institution. Since the mortgagee in this case is not
one of those mentioned, no right of redemption exists in favor of petitioners. They merely have an equity of redemption,
which, to reiterate, is simply their right, as mortgagor, to extinguish the mortgage and retain ownership of the property by
paying the secured debt prior to the confirmation of the foreclosure sale. However, instead of exercising this equity of
redemption, petitioners chose to delay the proceedings by filing several manifestations with the trial court. Thus, they only
have themselves to blame for the consequent loss of their property.
WHEREFORE, the petition is DENIED. The Resolutions of the Court of Appeals dated November 25, 1998 and February
26, 1999 in CA G.R. SP No. 49634 are AFFIRMED.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 161417

February 8, 2007

MA. TERESA CHAVES BIACO, Petitioner,

vs.
PHILIPPINE COUNTRYSIDE RURAL BANK, Respondent.
DECISION
TINGA, J.:
Petitioner, Ma. Teresa Chaves Biaco, seeks a review of the Decision1 of the Court of Appeals in CA-G.R. No. 67489 dated
August 27, 2003, which denied her petition for annulment of judgment, and the Resolution2 dated December 15, 2003
which denied her motion for reconsideration.
The facts as succinctly stated by the Court of Appeals are as follows:
Ernesto Biaco is the husband of petitioner Ma. Teresa Chaves Biaco. While employed in the Philippine Countryside Rural
Bank (PCRB) as branch manager, Ernesto obtained several loans from the respondent bank as evidenced by the
following promissory notes:
Feb. 17, 1998

P 65,000.00

Mar. 18, 1998

30,000.00

May 6, 1998

60,000.00

May 20, 1998

350,000.00

July 30, 1998

155,000.00

Sept. 8, 1998

40,000.00

Sept. 8, 1998

120,000.00

As security for the payment of the said loans, Ernesto executed a real estate mortgage in favor of the bank covering the
parcel of land described in Original Certificate of Title (OCT) No. P-14423. The real estate mortgages bore the signatures
of the spouses Biaco.
When Ernesto failed to settle the above-mentioned loans on its due date, respondent bank through counsel sent him a
written demand on September 28, 1999. The amount due as of September 30, 1999 had already reached ONE MILLION
EIGHTY THOUSAND SIX HUNDRED SEVENTY SIX AND FIFTY CENTAVOS (P1,080,676.50).
The written demand, however, proved futile.
On February 22, 2000, respondent bank filed a complaint for foreclosure of mortgage against the spouses Ernesto and
Teresa Biaco before the RTC of Misamis Oriental. Summons was served to the spouses Biaco through Ernesto at his
office (Export and Industry Bank) located at Jofelmor Bldg., Mortola Street, Cagayan de Oro City.
Ernesto received the summons but for unknown reasons, he failed to file an answer. Hence, the spouses Biaco were
declared in default upon motion of the respondent bank. The respondent bank was allowed to present its evidence ex
parte before the Branch Clerk of Court who was then appointed by the court as Commissioner.
Arturo Toring, the branch manager of the respondent bank, testified that the spouses Biaco had been obtaining loans from
the bank since 1996 to 1998. The loans for the years 1996-1997 had already been paid by the spouses Biaco, leaving
behind a balance of P1,260,304.33 representing the 1998 loans. The amount being claimed is inclusive of interests,
penalties and service charges as agreed upon by the parties. The appraisal value of the land subject of the mortgage is
only P150,000.00 as reported by the Assessors Office.
Based on the report of the Commissioner, the respondent judge ordered as follows:

WHEREFORE, judgment is hereby rendered ordering defendants spouses ERNESTO R. BIACO and MA. THERESA
[CHAVES] BIACO to pay plaintiff bank within a period of not less than ninety (90) days nor more than one hundred (100)
days from receipt of this decision the loan of ONE MILLION TWO HUNDRED SIXTY THOUSAND THREE HUNDRED
FOUR PESOS and THIRTY THREE CENTAVOS (P1,260,304.33) plus litigation expenses in the amount of SEVEN
THOUSAND SIX HUNDRED FORTY PESOS (P7,640.00) and attorneys fees in the amount of TWO HUNDRED FIFTY
TWO THOUSAND THIRTY PESOS and FORTY THREE CENTAVOS (P252,030.43) and cost of this suit.
In case of non-payment within the period, the Sheriff of this Court is ordered to sell at public auction the mortgaged Lot, a
parcel of registered land (Lot 35802, Cad. 237 {Lot No. 12388-B, Csd-10-002342-D}), located at Gasi, Laguindingan,
Misamis Oriental and covered by TCT No. P-14423 to satisfy the mortgage debt, and the surplus if there be any should be
delivered to the defendants spouses ERNESTO and MA. THERESA [CHAVES] BIACO. In the event however[,] that the
proceeds of the auction sale of the mortgage[d] property is not enough to pay the outstanding obligation, the defendants
are ordered to pay any deficiency of the judgment as their personal liability.
SO ORDERED.
On July 12, 2000, the sheriff personally served the above-mentioned judgment to Ernesto Biaco at his office at Export and
Industry Bank. The spouses Biaco did not appeal from the adverse decision of the trial court. On October 13, 2000, the
respondent bank filed an ex parte motion for execution to direct the sheriff to sell the mortgaged lot at public auction. The
respondent bank alleged that the order of the court requiring the spouses Biaco to pay within a period of 90 days had
passed, thus making it necessary to sell the mortgaged lot at public auction, as previously mentioned in the order of the
court. The motion for execution was granted by the trial court per Order dated October 20, 2000.
On October 31, 2000, the sheriff served a copy of the writ of execution to the spouses Biaco at their residence in #92 9th
Street, Nazareth, Cagayan de Oro City. The writ of execution was personally received by Ernesto. By virtue of the writ of
execution issued by the trial court, the mortgaged property was sold at public auction in favor of the respondent bank in
the amount of ONE HUNDRED FIFTY THOUSAND PESOS (P150,000.00).
The amount of the property sold at public auction being insufficient to cover the full amount of the obligation, the
respondent bank filed an "ex parte motion for judgment" praying for the issuance of a writ of execution against the other
properties of the spouses Biaco for the full settlement of the remaining obligation. Granting the motion, the court ordered
that a writ of execution be issued against the spouses Biaco to enforce and satisfy the judgment of the court for the
balance of ONE MILLION THREE HUNDRED SIXTY NINE THOUSAND NINE HUNDRED SEVENTY FOUR PESOS AND
SEVENTY CENTAVOS (P1,369,974.70).
The sheriff executed two (2) notices of levy against properties registered under the name of petitioner Ma. Teresa Chaves
Biaco. However, the notices of levy were denied registration because Ma. Teresa had already sold the two (2) properties
to her daughters on April 11, 2001.3
Petitioner sought the annulment of the Regional Trial Court decision contending that extrinsic fraud prevented her from
participating in the judicial foreclosure proceedings. According to her, she came to know about the judgment in the case
only after the lapse of more than six (6) months after its finality. She claimed that extrinsic fraud was perpetrated against
her because the bank failed to verify the authenticity of her signature on the real estate mortgage and did not inquire into
the reason for the absence of her signature on the promissory notes. She moreover asserted that the trial court failed to
acquire jurisdiction because summons were served on her through her husband without any explanation as to why
personal service could not be made.
The Court of Appeals considered the two circumstances that kept petitioner in the dark about the judicial foreclosure
proceedings: (1) the failure of the sheriff to personally serve summons on petitioner; and (2) petitioners husbands
concealment of his knowledge of the foreclosure proceedings. On the validity of the service of summons, the appellate
court ruled that judicial foreclosure proceedings are actions quasi in rem. As such, jurisdiction over the person of the
defendant is not essential as long as the court acquires jurisdiction over the res.Noting that the spouses Biaco were not
opposing parties in the case, the Court of Appeals further ruled that the fraud committed by one against the other cannot
be considered extrinsic fraud.
Her motion for reconsideration having been denied, petitioner filed the instant Petition for Review,4 asserting that even if
the action is quasi in rem, personal service of summons is essential in order to afford her due process. The substituted
service made by the sheriff at her husbands office cannot be deemed proper service absent any explanation that efforts
had been made to personally serve summons upon her but that such efforts failed. Petitioner contends that extrinsic fraud
was perpetrated not so much by her husband, who did not inform her of the judicial foreclosure proceedings, but by the
sheriff who allegedly connived with her husband to just leave a copy of the summons intended for her at the latters office.
Petitioner further argues that the deficiency judgment is a personal judgment which should be deemed void for lack of
jurisdiction over her person.
Respondent PCRB filed its Comment,5 essentially reiterating the appellate courts ruling. Respondent avers that service of
summons upon the defendant is not necessary in actions quasi in rem it being sufficient that the court acquire jurisdiction
over the res. As regards the alleged conspiracy between petitioners husband and the sheriff, respondent counters that
this is a new argument which cannot be raised for the first time in the instant petition.
We required the parties to file their respective memoranda in the Resolution6 dated August 18, 2004. Accordingly,
petitioner filed her Memorandum7 dated October 10, 2004, while respondent filed its Memorandum for Respondent8 dated
September 9, 2004.
Annulment of judgment is a recourse equitable in character, allowed only in exceptional cases as where there is no
available or other adequate remedy. Jurisprudence and Sec. 2, Rule 47 of the 1997 Rules of Civil Procedure (Rules of

Court) provide that judgments may be annulled only on grounds of extrinsic fraud and lack of jurisdiction or denial of due
process.9
Petitioner asserts that extrinsic fraud consisted in her husbands concealment of the loans which he obtained from
respondent PCRB; the filing of the complaint for judicial foreclosure of mortgage; service of summons; rendition of
judgment by default; and all other proceedings which took place until the writ of garnishment was served.10
Extrinsic fraud exists when there is a fraudulent act committed by the prevailing party outside of the trial of the case,
whereby the defeated party was prevented from presenting fully his side of the case by fraud or deception practiced on
him by the prevailing party.11 Extrinsic fraud is present where the unsuccessful party had been prevented from exhibiting
fully his case, by fraud or deception practiced on him by his opponent, as by keeping him away from court, a false promise
of a compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of
the plaintiff; or where an attorney fraudulently or without authority assumes to represent a party and connives at his
defeat; or where the attorney regularly employed corruptly sells out his clients interest to the other side. The overriding
consideration is that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court.12
With these considerations, the appellate court acted well in ruling that there was no fraud perpetrated by respondent bank
upon petitioner, noting that the spouses Biaco were co-defendants in the case and shared the same interest. Whatever
fact or circumstance concealed by the husband from the wife cannot be attributed to respondent bank.
Moreover, petitioners allegation that her signature on the promissory notes was forged does not evince extrinsic fraud. It
is well-settled that the use of forged instruments during trial is not extrinsic fraud because such evidence does not
preclude the participation of any party in the proceedings.13
The question of whether the trial court has jurisdiction depends on the nature of the action, i.e., whether the action is in
personam, in rem, or quasi in rem. The rules on service of summons under Rule 14 of the Rules of Court likewise apply
according to the nature of the action.
An action in personam is an action against a person on the basis of his personal liability. An action in rem is an action
against the thing itself instead of against the person. An action quasi in rem is one wherein an individual is named as
defendant and the purpose of the proceeding is to subject his interest therein to the obligation or lien burdening the
property.14
In an action in personam, jurisdiction over the person of the defendant is necessary for the court to validly try and decide
the case. In a proceeding in rem or quasi in rem, jurisdiction over the person of the defendant is not a prerequisite to
confer jurisdiction on the court provided that the court acquires jurisdiction over the res. Jurisdiction over the res is
acquired either (1) by the seizure of the property under legal process, whereby it is brought into actual custody of the law;
or (2) as a result of the institution of legal proceedings, in which the power of the court is recognized and made effective.15
Nonetheless, summons must be served upon the defendant not for the purpose of vesting the court with jurisdiction but
merely for satisfying the due process requirements.16
A resident defendant who does not voluntarily appear in court, such as petitioner in this case, must be personally served
with summons as provided under Sec. 6, Rule 14 of the Rules of Court. If she cannot be personally served with summons
within a reasonable time, substituted service may be effected (1) by leaving copies of the summons at the defendants
residence with some person of suitable age and discretion then residing therein, or (2) by leaving the copies at
defendants office or regular place of business with some competent person in charge thereof in accordance with Sec. 7,
Rule 14 of the Rules of Court.
In this case, the judicial foreclosure proceeding instituted by respondent PCRB undoubtedly vested the trial court with
jurisdiction over the res. A judicial foreclosure proceeding is an action quasi in rem. As such, jurisdiction over the person
of petitioner is not required, it being sufficient that the trial court is vested with jurisdiction over the subject matter.
There is a dimension to this case though that needs to be delved into. Petitioner avers that she was not personally served
summons. Instead, summons was served to her through her husband at his office without any explanation as to why the
particular surrogate service was resorted to. The Sheriffs Return of Service dated March 21, 2000 states:
xxxx
That on March 16, 2000, the undersigned served the copies of Summons, complaint and its annexes to the defendants
Sps. Ernesto R. & Ma. Teresa Ch. Biaco thru Ernesto R. Biaco[,] defendant of the above-entitled case at his office
EXPORT & INDUSTRY BANK, Jofelmore Bldg.[,] Mortola St., Cagayan de Oro City and he acknowledged receipt thereof
as evidenced with his signature appearing on the original copy of the Summons.17[Emphasis supplied]
Without ruling on petitioners allegation that her husband and the sheriff connived to prevent summons from being served
upon her personally, we can see that petitioner was denied due process and was not able to participate in the judicial
foreclosure proceedings as a consequence. The violation of petitioners constitutional right to due process arising from
want of valid service of summons on her warrants the annulment of the judgment of the trial court.
There is more, the trial court granted respondent PCRBs ex-parte motion for deficiency judgment and ordered the
issuance of a writ of execution against the spouses Biaco to satisfy the remaining balance of the award. In short, the trial
court went beyond its jurisdiction over the res and rendered a personal judgment against the spouses Biaco. This cannot
be countenanced.1awphil.net
In Sahagun v. Court of Appeals,18 suit was brought against a non-resident defendant, Abelardo Sahagun, and a writ of
attachment was issued and subsequently levied on a house and lot registered in his name. Claiming ownership of the

house, his wife, Carmelita Sahagun, filed a motion to intervene. For failure of plaintiff to serve summons extraterritorially
upon Abelardo, the complaint was dismissed without prejudice.
Subsequently, plaintiff filed a motion for leave to serve summons by publication upon Abelardo. The trial court granted the
motion. Plaintiff later filed an amended complaint against Abelardo, this time impleading Carmelita and Rallye as
additional defendants. Summons was served on Abelardo through publication in the Manila Evening Post. Abelardo failed
to file an answer and was declared in default. Carmelita went on certiorari to the Court of Appeals assailing as grave
abuse of discretion the declaration of default of Abelardo. The Court of Appeals dismissed the petition and denied
reconsideration.
In her petition with this Court, Carmelita raised the issue of whether the trial court acquired jurisdiction over her husband,
a non-resident defendant, by the publication of summons in a newspaper of general circulation in the Philippines. The
Court sustained the correctness of extrajudicial service of summons by publication in such newspaper.
The Court explained, citing El Banco Espaol-Filipino v. Palanca,19 that foreclosure and attachment proceedings are both
actions quasi in rem. As such, jurisdiction over the person of the (non-resident) defendant is not essential. Service of
summons on a non-resident defendant who is not found in the country is required, not for purposes of physically acquiring
jurisdiction over his person but simply in pursuance of the requirements of fair play, so that he may be informed of the
pendency of the action against him and the possibility that property belonging to him or in which he has an interest may
be subjected to a judgment in favor of a resident, and that he may thereby be accorded an opportunity to defend in the
action, should he be so minded.
Significantly, the Court went on to rule, citing De Midgely v. Ferandos, et. al.20 and Perkins v. Dizon, et al.21 that in a
proceeding in rem or quasi in rem, the only relief that may be granted by the court against a defendant over whose person
it has not acquired jurisdiction either by valid service of summons or by voluntary submission to its jurisdiction, is limited to
the res.
Similarly, in this case, while the trial court acquired jurisdiction over the res, its jurisdiction is limited to a rendition of
judgment on the res. It cannot extend its jurisdiction beyond the res and issue a judgment enforcing petitioners personal
liability. In doing so without first having acquired jurisdiction over the person of petitioner, as it did, the trial court violated
her constitutional right to due process, warranting the annulment of the judgment rendered in the case.
WHEREFORE, the instant petition is GRANTED. The Decision dated August 27, 2003 and the Resolution dated
December 15, 2003 of the Court of Appeals in CA-G.R. SP No. 67489 are SET ASIDE. The Judgment dated July 11, 2000
and Order dated February 9, 2001 of the Regional Trial Court of Cagayan de Oro City, Branch 20, are likewise SET
ASIDE.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
SECOND DIVISION
G.R. No. 129704 September 30, 2005
ULPIANO BALO, LYDIA BALO-LUMPAS, EUGENIO BALO, ULPIANO BALO, JR., NIDA BALO-MORALETA, NORA
BALO-CATANO, ZAIDA BALO, JUDITH BALO-MANDREZA, DANILO BALO and RONILO BALO,Petitioners,
vs.
vs.
THE HON. COURT OF APPEALS, HON. JUDGE ENRIQUE ASIS and JOSEFINA GARRIDO, Respondent.
DECISION
CHICO-NAZARIO, J.:
A complaint for Judicial Partition of Real Properties and Accounting with Damages, docketed as Civil Case No. 279, was
filed by private respondent Josefina Garrido against petitioners Ulpiano Balo, Lydia Balo-Lumpas, Eugenio Balo, Ulpiano
Balo, Jr., Nida Balo-Moraleta, Nora Balo-Catano, Zaida Balo, Judith Balo-Mandreza, Danilo Balo and Ronilo Balo, before
the Regional Trial Court (RTC) of Abuyog, Leyte, Branch 10, alleging that she (private respondent) and petitioners are the
co-owners of undivided parcels of land located at Mayorga, Leyte. According to her, these lands were originally owned by
the spouses Eugenio Balo, Sr. and Ma. Pasagui-Balo, who, at the time of the filing of the complaint, were already
deceased. The Balo spouses were survived by their two (2) children, Ulpiano, Sr. and Maximino, the latter likewise
deceased. Private respondent is the daughter of Maximino Balo and Salvacion Sabulao. Petitioner Ulpiano Balo is the son
of Eugenio Balo, Sr., while the other petitioners, the children of Ulpiano, are Eugenios grandchildren.
Private respondent further alleged in her complaint that immediately upon the death of her grandfather, Eugenio Sr., the
petitioners took possession of the said real properties without her knowledge and consent. The petitioners being her uncle
and cousins, private respondent earnestly requested them that they come up with a fair and equal partition of the
properties left by her grandparents. The petitioners having outrightly refused her proposal, private respondent filed the
complaint.1
In lieu of an Answer, petitioners filed a Motion to Dismiss2 on the following grounds:
1. Failure to state a cause of action - plaintiff, though she claims to be a daughter of Maximino who died sometime in
1946, failed to allege whether or not she is a legitimate child. Plaintiffs failure to allege legitimacy is fatal considering the
provision of Article 992 of the Civil Code.3 To allow Plaintiff to inherit from the estate of the spouses Eugenio and Maria
Balo in representation of her father Maximino Balo would be to permit intestate succession by an illegitimate child from the
legitimate parent of his father, assuming that she is the child of Maximino Balo.
2. The complaint does not show that the estate of the spouses Eugenio and Maria Balo have been settled and its
obligations have been paid.
3. The properties enumerated in the Complaint were proceeded against by way of execution to satisfy a judgment against
Eugenio and Maria Balo. Subsequently, defendant Ulpiano repurchased the said properties and has been, together with
his children, openly, exclusively and adversely in possession of the real estate properties in question.
Private respondent filed her comment/opposition to the motion to dismiss.4
In an Order dated 12 September 1996, the RTC denied the motion to dismiss for lack of merit.5 The trial court held:
The complaint clearly states that the late Eugenio Balo, Sr., and Maria Pasagui Balo had two (2) children, namely:
Ulpiano, Sr. and Maximino. The plaintiff is the daughter of the late Maximino Balo and Salvacion Sabulao; while the
defendants are children of the late Ulpiano Balo, Sr. and Felicidad Superio.
The complaint enumerates/annexes 13 tax declarations in the name of Eugenio Balo, Sr. marked as Annexes "A" to "M."
The plaintiff as an heir prays that these parcels of land be partitioned in accordance with Article 982 of the Civil Code
which states:
"The grandchildren and other descendants shall inherit by right of representation, and if any one of them should have
died, leaving several heirs, the portion pertaining to him shall be divided among the latter in equal portions."

No evidence may be alleged or considered to test the sufficiency of the complaint except the very facts pleaded therein. It
would be improper to inject into the allegation, facts not alleged and use them as basis for the decision on the motion.
The Court is not permitted to go beyond and outside of the allegations in the complaint for data or facts.
Therefore, the allegation of illegitimacy and claim of absolute ownership are modifications and unreasonable inferences. If
there is doubt to the truth of the facts averred in the complaint, the Court does not dismiss the complaint but requires an
answer and proceeds to hear the case on the merit.6
Petitioners filed a Motion for Reconsideration7 which the RTC denied in its Order8 dated 07 November 1996.
Petitioners filed a Petition for Certiorari9 before the Court of Appeals. After the filing of Comment and other pleadings, the
case was deemed submitted for decision. In a resolution dated 16 April 1997, the Court of Appeals denied due course to
the petition and accordingly dismissed the same. The Court of Appeals justified the dismissal in the following manner:
It is an established rule that an order denying a motion to dismiss is basically interlocutory in character and cannot be the
proper subject of a petition for certiorari. When a motion to dismiss is denied, the proper procedure is to proceed with the
trial and if the decision be adverse to the movant, the remedy is to take an appeal from said decision, assigning as one of
the errors therefore the denial of the motion to dismiss.10
Petitioners filed a Motion for Reconsideration11 which the Court of Appeals denied in a resolution dated 30 June
1997.12 Hence this petition for review13 under Rule 45 of the Rules of Court.
Petitioners cite the following grounds for the allowance of their petition, to wit:
I
WHETHER OR NOT THE FAILURE TO ALLEGE THE NATURE AND EXTENT OF PLAINTIFFS TITLE IN A PETITION
FOR PARTITION IS FATAL TO ITS CAUSE OF ACTION.
II
WHETHER OR NOT THE ACTION FOR JUDICIAL PARTITION AND ACCOUNTING HAS PRESCRIBED, WAS WAIVED,
OR WAS OTHERWISE ABANDONED.14
At the threshold of the instant petition for review is the correctness of the appellate courts dismissal of the petition
for certiorari filed by the petitioners.
In resolving to deny the petition, the Court of Appeals relied on the long established jurisprudence that an order denying a
motion to dismiss is interlocutory and cannot be the proper subject of a petition forcertiorari.
The general rule regarding denial of a motion to dismiss as a basis of a resort to the extraordinary writ ofcertiorari is that:
. . . [A]n order denying a motion to dismiss is an interlocutory order which neither terminates nor finally disposes of a case
as it leaves something to be done by the court before the case is finally decided on the merits. As such, the general rule is
that the denial of a motion to dismiss cannot be questioned in a special civil action for certiorari which is a remedy
designed to correct errors of jurisdiction and not errors of judgment.
To justify the grant of the extraordinary remedy of certiorari, therefore, the denial of the motion to dismiss must have been
tainted with grave abuse of discretion. By "grave abuse of discretion" is meant, such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised in
an arbitrary or despotic manner by reason of passion or personal hostility and must be so patent and gross as to amount
to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act all in contemplation of law.15
Specific instances whereby the rule admits certain exceptions are provided as follows:
. . . Under certain situations, recourse to certiorari or mandamus is considered appropriate, i.e., (a) when the trial court
issued the order without or in excess of jurisdiction; (b) where there is patent grave abuse of discretion by the trial court;
or (c) appeal would not prove to be a speedy and adequate remedy as when an appeal would not promptly relieve a
defendant from the injurious effects of the patently mistaken order maintaining the plaintiffs baseless action and
compelling the defendant needlessly to go through a protracted trial and clogging the court dockets by another futile
case.16
Applying the foregoing, the Court of Appeals should not have dismissed the petition outright as the same alleges grave
abuse of discretion. Instead, it should have proceeded to determine whether or not the trial court did commit grave abuse
of discretion as alleged by the petitioners. The Court of Appeals having failed in this regard, it behooves upon this Court to
discuss the merits of the petition to put to rest the issues raised by the petitioners.
Contrary to petitioners contention, allegations sufficient to support a cause of action for partition may be found in private
respondents complaint.17

Nothing is more settled than the rule that in a motion to dismiss for failure to state a cause of action, the inquiry is into the
sufficiency, not the veracity, of the material allegations.18 Moreover, the inquiry is confined to the four corners of the
complaint, and no other.19
In a motion to dismiss a complaint based on lack of cause of action, the question submitted to the court for determination
is the sufficiency of the allegations made in the complaint to constitute a cause of action and not whether those allegations
of fact are true, for said motion must hypothetically admit the truth of the facts alleged in the complaint.
The test of the sufficiency of the facts alleged in the complaint is whether or not, admitting the facts alleged, the court
could render a valid judgment upon the same in accordance with the prayer of the complaint. (Garcon vs. Redemptorist
Fathers, 17 SCRA 341)
If the allegations of the complaint are sufficient in form and substance but their veracity and correctness are assailed, it is
incumbent upon the court to deny the motion to dismiss and require the defendant to answer and go to trial to prove his
defense. The veracity of the assertions of the parties can be ascertained at the trial of the case on the merits. (Galeon vs.
Galeon, 49 SCRA 516-521)20
Section 1, Rule 8 of the 1997 Rules of Civil Procedure provides that the complaint needs only to allege the ultimate facts
upon which private respondent bases her claim.
The rules of procedure require that the complaint must make a concise statement of the ultimate facts or the essential
facts constituting the plaintiffs cause of action. A fact is essential if it cannot be stricken out without leaving the statement
of the cause of action inadequate. A complaint states a cause of action only when it has its three indispensable elements,
namely: (1) a right in favor of the 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; and (3) an act or omission on the part
of such defendant violate of the right of plaintiff or constituting a breach of the obligation of defendant to the plaintiff for
which the latter may maintain an action for recovery of damages.21
In her Complaint, the private respondent made the following assertions:
. . . That the afore-described parcels of lands were originally owned by Eugenio Balo, Sr. and Ma. Pasagui-Balo, who are
now both deceased and after their death, were inherited into two (2) equal shares by their two (2) children, namely:
Ulpiano, Sr. and Maximino, both surnamed Balo, the later (sic) being already dead.
That plaintiff is the daughter of the late Maximino Balo and Salvacion Sabulao, who after her fathers death, had inherited
her fathers share of the inheritance.
That defendant Ulpiano Balo, Sr. aside from being the son of Eugenio Balo, Sr., is married to Felicidad Superio, and is the
father of all the other defendants in this case.
The defendants took possession of the above-described real properties immediately after the death of plaintiffs
grandfather Eugenio Balo, Sr. without her knowledge and consent.
That plaintiff is desirous that the above-described real properties be partitioned between her and defendants.
That plaintiff has proposed to the defendants that the above-described real properties be amicably partitioned between
them by mutual agreement in a very fair and practical division of the same, but said defendants refused and continue to
do so without any justifiable cause or reason to accede to the partition of the said properties.22
The foregoing allegations show substantial compliance with the formal and substantial requirements of a Complaint for
Partition as required under Section 1, Rule 69 of the 1997 Rules of Civil Procedure.23
On the insistence of petitioners that private respondent first prove her legitimacy before an action for partition may be
maintained, this Court, in the case of Briz v. Briz,24 pronounced that proof of legal acknowledgment is not a prerequisite
before an action for partition may be filed. We said:25
. . . In other words, there is no absolute necessity requiring that the action to compel acknowledgment should have been
instituted and prosecuted to a successful conclusion prior to the action in which that same plaintiff seeks additional relief
in the character of heir. Certainly, there is nothing so peculiar to the action to compel acknowledgment as to require that a
rule should be here applied different from that generally applicable in other cases. For instance, if the plaintiff had in this
action impleaded all of the persons who would be necessary parties defendant to an action to compel acknowledgement,
and had asked for relief of that character, it would have been permissible for the court to make the judicial pronouncement
declaring that the plaintiff is entitled to be recognized as the natural child of Maximo Briz, and at the same time to grant
the additional relief sought in this case against the present defendants; that is, a decree compelling them to surrender to
the plaintiff the parcel of land sued for and to pay her the damages awarded in the appealed decision.
The conclusion above stated, though not heretofore explicitly formulated by this court, is undoubtedly to some extent
supported by our prior decisions. Thus, we have held in numerous cases, and the doctrine must be considered well
settled, that a natural child having a right to compel acknowledgment, but who has not been in fact legally acknowledged,
may maintain partition (proceedings for the division of the inheritance against his coheirs (Siguiong vs. Siguiong, 8 Phil. 5;
Tiamson vs. Tiamson, 32 Phil 62); and the same person may intervene in proceedings for the distribution of the estate of

his deceased natural father, or mother (Capistrano vs. Fabella, 8 Phil. 135; Conde vs. Abaya, 13 Phil. 249; Ramirez vs.
Gmur, 42 Phil 855). In neither of these situations has it been thought necessary for the plaintiff to show a prior decree
compelling acknowledgment. The obvious reason is that in partition suits and distribution proceedings the other persons
who might take by inheritance are before the court; and the declaration of heirship is appropriate to such proceedings.
To further reiterate that in partition proceedings, dismissal prior to answer is premature, this Court has held:
In a complaint for partition, the plaintiff seeks, first, a declaration that he is a co-owner of the subject properties; and
second, the conveyance of his lawful shares. As the Court of Appeals correctly held, an action for partition is at once an
action for declaration of co-ownership and for segregation and conveyance of a determine portion of the properties
involved. If the defendant asserts exclusive title over the property, the action for partition should not be dismissed. Rather,
the court should resolve the case and if the plaintiff is unable to sustain his claimed status as a co-owner, the court should
dismiss the action, not because the wrong remedy was availed of, but because no basis exists for requiring the defendant
to submit to partition. If, on the other hand, the court after trial should find the existence of co-ownership among the
parties, the court may and should order the partition of the properties in the same action.26
The case of Vda. De Daffon v. Court of Appeals27 is almost most appropriate. In said case, the action for partition filed by
the plaintiffs was met by a motion to dismiss filed by the defendants based on the grounds of failure of the complaint to
state a cause of action, waiver, abandonment and extinguishment of the obligation. The trial court denied the motion to
dismiss and the denial was affirmed by the appellate court and by this Court. We held there that the trial court and the
Court of Appeals were correct in dismissing the petition for certiorari absent a clear showing of grave abuse of discretion
amounting to lack or excess of jurisdiction. We further expressed our dismay over the delay in the resolution of the said
case due to the fact that the issue of the denial of the Motion to Dismiss was elevated to this Court by petitioner and
counsel instead of just filing an Answer and meeting the issues head-on.
On the matter of prescription cited by the petitioners as a ground for the dismissal of the complaint, it is noteworthy that
the motion to dismiss filed by the petitioners did not ipso facto establish prescription. An allegation of prescription can
effectively be used in a motion to dismiss only when the complaint on its face shows that indeed the action has already
prescribed;28 otherwise, the issue of prescription is one involving evidentiary matters requiring a full-blown trial on the
merits and cannot be determined in a mere motion to dismiss.29
Wherefore, premises considered, the instant Petition is DENIED and the decision of the Court of Appeals in CA-G.R. SP
No. 42803, affirming the Order of the Regional Trial Court dated 12 September 1996, is AffIRmed. This case is ordered
remanded to the court of origin which is directed to resolve the case with dispatch. Costs against petitioners.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 152195

January 31, 2005

PEDRO SEPULVEDA, SR., substituted by SOCORRO S. LAWAS, Administratrix of His Estate, petitioner,
vs.
ATTY. PACIFICO S. PELAEZ, respondent.
DECISION
CALLEJO, SR., J.:
Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, of the Decision1 of the Court of Appeals
(CA) in CA-G.R. CV No. 43758 affirming the decision of the Regional Trial Court (RTC) of Danao City, Branch 25, in Civil
Case No. SF-175.
On December 6, 1972, private respondent Atty. Pacifico Pelaez filed a complaint against his granduncle, Pedro
Sepulveda, Sr., with the then Court of First Instance (CFI) of Cebu, for the recovery of possession and ownership of his
one-half (1/2) undivided share of several parcels of land covered by Tax Declaration (T.D.) Nos. 28199, 18197, 18193 and
28316; his undivided one-third (1/3) share in several other lots covered by T.D. Nos. 28304, 35090, 18228, 28310, 26308,
28714, 28311, 28312 and 28299 (all located in Danao, Cebu); and for the partition thereof among the co-owners. The
case was docketed as Civil Case No. SF-175.
The eleven (11) lots were among the twenty-five (25) parcels of land which the private respondents mother, Dulce
Sepulveda, inherited from her grandmother, Dionisia Sepulveda under the Project of Partition2 dated April 16, 1937
submitted by Pedro Sepulveda, Sr. as the administrator of the formers estate, duly approved by the then CFI of Cebu in
Special Proceeding No. 778-0. Under the said deed, Pedro Sepulveda, Sr. appeared to be the owner of an undivided
portion of Lot No. 28199, while his brother and Dulces uncle Santiago Sepulveda, was the undivided owner of one-half
(1/2) of the parcels of land covered by T.D. Nos. 18197, 18193 and 28316. Dulce and her uncles, Pedro and Santiago,
were likewise indicated therein as the co-owners of the eleven other parcels of land, each with an undivided one-third
(1/3) share thereof.
In his complaint, the private respondent alleged that his mother Dulce died intestate on March 2, 1944, and aside from
himself, was survived by her husband Rodolfo Pelaez and her mother Carlota Sepulveda. Dulces grandfather Vicente
Sepulveda died intestate on October 25, 1920,3 and Dulce was then only about four years old. According to the private
respondent, his grandmother Carlota repeatedly demanded the delivery of her mothers share in the eleven (11) parcels of
land, but Pedro Sepulveda, Sr. who by then was the Municipal Mayor of Tudela, refused to do so. Dulce, likewise, later
demanded the delivery of her share in the eleven parcels of land, but Pedro Sepulveda, Sr. still refused, claiming that he
needed to continue to possess the property to reap the produce therefrom which he used for the payment of the realty
taxes on the subject properties. The private respondent alleged that he himself demanded the delivery of his mothers
share in the subject properties on so many occasions, the last of which was in 1972, to no avail.
The private respondent further narrated that his granduncle executed an affidavit4 on November 28, 1961, stating that he
was the sole heir of Dionisia when she died intestate on June 5, 1921, when, in fact, the latter was survived by her three
sons, Santiago, Pedro and Vicente. Pedro Sepulveda, Sr. also executed a Deed of Absolute Sale5 on July 24, 1968 over
the property covered by T.D. No. 19804 (T.D. No. 35090) in favor of the City of Danao for P7,492.00. According to the
private respondent, his granduncle received this amount without his (private respondents) knowledge.
The private respondent prayed that, after due hearing, judgment be rendered in his favor, thus:
ON THE FIRST CAUSE OF ACTION:

1. Declaring the plaintiff the absolute owner of ONE-HALF (1/2) portion of the TWO (2) parcels of land described
in paragraph 2 of the complaint;
2. Declaring the plaintiff the absolute owner of the ONE-THIRD (1/3) portion of the NINE (9) parcels of land
described in paragraph 3 of the complaint;
3. Ordering the defendant to deliver to the plaintiff the latters ONE-THIRD (1/3) share of the SEVEN
THOUSAND FOUR HUNDRED NINETY-TWO PESOS (P7,492.00) representing the purchase price of the parcel
of land described in paragraph 3(a) of the complaint with interest thereon until the amount is fully paid;
ON THE SECOND CAUSE OF ACTION:
1. Ordering the partition and segregation of the ONE-HALF (1/2) portion belonging to the plaintiff of the TWO (2)
parcels of land described in paragraph 2 of the complaint;
2. Ordering the partition and segregation of the ONE-THIRD (1/3) portion belonging to the plaintiff of the
remaining EIGHT (8) parcels of land described in paragraph 3 of the complaint;
COMMON TO THE FIRST AND SECOND CAUSES OF ACTION:
1. Ordering the defendant to pay the plaintiff the amount of FIFTY THOUSAND PESOS (P50,000.00) as moral
damages;
2. Ordering the defendant to pay the plaintiff exemplary damages the amount of which is left to the discretion of
this Honorable Court;
3. Ordering the defendant to deliver to the plaintiff the latters share of the fruits of the ELEVEN (11) parcels of
land subject-matter of this complaint, the value of which will be proven during the trial;
4. Ordering the defendant to pay the plaintiff actual litigation expenses, the value of which will be proven during
the trial;
5. Ordering the defendant to pay attorneys fee in the amount of TWELVE THOUSAND PESOS (P12,000.00);
6. Granting to the plaintiff such other reliefs and remedies as he may be entitled to in accordance with law and
equity.6
In his answer to the complaint, Pedro Sepulveda, Sr. admitted having executed a deed of sale over the parcel of land
covered by T.D. No. 19804 in favor of Danao City, but averred that the latter failed to pay the purchase price thereof;
besides, the private respondent had no right to share in the proceeds of the said sale. He likewise denied having received
any demand for the delivery of Dulces share of the subject properties from the latters mother Carlota, or from the private
respondent.
During the trial, Pedro Sepulveda, Sr. died intestate. A petition for the settlement of his estate was filed on May 8, 1975
with the RTC of Cebu, docketed as Special Proceeding No. SF-37. His daughter, petitioner Socorro Sepulveda Lawas,
was appointed administratrix of his estate in July 1976. In compliance with the decision of this Court in Lawas v. Court of
Appeals,7 docketed as G.R. No. L-45809 and promulgated on December 12, 1986, the deceased was substituted by the
petitioner.
To prove the delivery of Dulces share under the project of partition, the petitioner presented the Affidavit of Consolidation
she executed in October 1940 covering thirteen (13) of the twenty-five (25) parcels of land which were deeded to her
under the Project of Partition,8 as well as the Order9 dated March 24, 1962 of the then CFI in Special Proceeding No. 778R, denying Carlotas motion for the reconstitution of the records of the said case, and for the delivery of Dulces share in
the eleven parcels of land. The court likewise declared therein that Dulce, through her grandchildren and her mother,
Carlota, had already received her share of the estate from Pedro Sepulveda, Sr. as early as January 10, 1938.
According to the petitioner, Dulce and Pedro Sepulveda, Sr. had a verbal agreement wherein the eleven parcels of land
covered by the complaint would serve as the latters compensation for his services as administrator of Dionisias estate.
Thus, upon the termination of Special Proceeding No. 778-0, and subsequent to the distribution of the shares of Dionisias
heirs, Pedro Sepulveda, Sr. then became the sole owner of Dulces shares.
The petitioner likewise adduced evidence that Santiago Sepulveda died intestate and was survived by his wife, Paz Velez
Sepulveda and their then minor children.10 It was pointed out that the private respondent failed to implead Paz Sepulveda
and her minor children as parties-defendants in the complaint.
It was further claimed that Pedro Sepulveda, Sr. declared the property covered by T.D. No. 1819911 under his name for
taxation purposes since the beginning of 1948.12 It was likewise alleged that the eleven (11) parcels of land deeded to
Dulce under the Project of Partition had been declared for taxation purposes under the name of Pedro Sepulveda since
1974, and that he and his heirs paid the realty taxes thereon.13
On June 7, 1993, the trial court rendered judgment14 in favor of the private respondent. The fallo of the decision reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff and against the defendant by
declaring that the plaintiff is legally and rightfully entitled to the one half (1/2) portion of the two (2) parcels of land
described in paragraph 2 of the Complaint and to the one third (1/3) portion of the nine (9) parcels of land described in
paragraph 3 of the complaint as co-owner thereof, and ordering the partition and segregation of the said one half (1/2)
portion of the said two (2) parcels of land and of the said one third (1/3) portion of the nine (9) parcels of land, and in the
partition thereof, the mechanics of partition outlined in Rule 69 of the Revised Rules of Court must be followed (Magallon
vs. Montejo, 146 SCRA 282); ordering the defendant Socorro Lawas, as administratrix of the Estate of Pedro Sepulveda,
Sr., to deliver to plaintiff the latters one third (1/3) share of theP7,492.00 representing the purchase price of the parcel of
land sold to Danao City with interest of twelve [per] centum (12%) per annum (Reformina vs. Tomol, 139 SCRA 260) from
the date of filing of the Complaint until the amount due to plaintiff is fully paid, to pay attorneys fees to plaintiffs attorney in
the sum of P10,000.00, and to pay the costs. The counterclaim is hereby dismissed.
SO ORDERED.15
The trial court ruled that the private respondents action for reconveyance based on constructive trust had not yet
prescribed when the complaint was filed; that he was entitled to a share in the proceeds of the sale of the property to
Danao City; and that the partition of the subject property among the adjudicatees thereof was in order.
The petitioner appealed the decision to the CA, which rendered judgment on January 31, 2002, affirming the appealed
decision with modification.
The petitioner now comes to the Court via a petition for review on certiorari, contending that the appellate court erred as
follows:
1. THE COURT OF APPEALS ERRED IN THE INCORRECT APPLICATION OF ART. 494 OF THE CIVIL CODE AND IN
UPHOLDING THE REGIONAL TRIAL COURTS FINDING THAT A TRUST RELATIONSHIP WAS CREATED BETWEEN
HEREIN RESPONDENT AND PEDRO SEPULVEDA [SR.].
2. THE COURT OF APPEALS ERRED IN NOT APPLYING THE LAWS ON PRESCRIPTION AND LACHES TO THE
FACTS AS PROVEN IN THE CASE AGAINST HEREIN RESPONDENT.
3. THE COURT OF APPEALS ERRED IN UPHOLDING THE FINDING OF THE REGIONAL TRIAL COURT, BRANCH 25
IN DANAO CITY THAT PAYMENT WAS MADE BY DANAO CITY FOR ONE (1) OF THE ELEVEN (11) PARCELS
INVOLVED IN THE CASE AND OF WHICH HEREIN RESPONDENT SHOULD BE PAID BY PETITIONER ONE THIRD
(1/3) OF THE PURCHASE PRICE.
4. THE COURT OF APPEALS ERRED IN AWARDING MORAL AND EXEMPLARY DAMAGES AND A SHARE IN THE
RENTS AND PROFITS OF THE ELEVEN (11) PARCELS TO HEREIN RESPONDENT.
5. THE COURT OF APPEALS ERRED IN UPHOLDING THE REGIONAL TRIAL COURTS FINDING THAT ATTORNEYS
FEES ARE TO BE AWARDED AND EVEN INCREASING THE AMOUNT THEREOF.16
The petition is granted for the sole reason that the respondent failed to implead as parties, all the indispensable parties in
his complaint.
As gleaned from the material averments of the complaint and the reliefs prayed for therein, the private respondent, as
plaintiff therein, sought the recovery of the ownership and possession of the ten (10) parcels of land and the partition
thereof; and for the payment of his share in the proceeds of the sale of the property which Pedro Sepulveda, Sr. sold to
Danao City amounting to P7,492.00, which Pedro Sepulveda, Sr. claimed was left unpaid. It appears that when the private
respondent filed the complaint, his father, Rodolfo Pelaez, was still alive. Thus, when his mother Dulce Pelaez died
intestate on March 2, 1944, she was survived by her husband Rodolfo and their son, the private respondent. Under Article
996 of the New Civil Code,17 Rodolfo Pelaez, as surviving spouse, is entitled to a portion in usufruct equal to that
corresponding by way of legitime to each of the legitimate children who has not received any betterment. The rights of the
usufructuary are provided in Articles 471 to 490 of the old Civil Code.18 In Gamis v. Court of Appeals,19 we held that:
Under articles 807 and 834 of the old Civil Code the surviving spouse is a forced heir and entitled to a share in usufruct in
the estate of the deceased spouse equal to that which by way of legitime corresponds or belongs to each of the legitimate
children or descendants who have not been bettered or have not received any share in the one-third share destined for
betterment. The right of the surviving spouse to have a share in usufruct in the estate of the deceased spouse is provided
by law of which such spouse cannot be deprived and which cannot be ignored. Of course, the spouse may waive it but the
waiver must be express.
Section 1, Rule 69 of the Rules of Court provides that in an action for partition, all persons interested in the property shall
be joined as defendants.
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 in this rule prescribed, 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 the 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.20 The mere fact that Pedro Sepulveda, Sr. has repudiated the

co-ownership between him and the respondent does not deprive the trial court of jurisdiction to take cognizance of the
action for partition, for, in a complaint for partition, the plaintiff seeks, first, a declaration that he is a co-owner of the
subject property; and, second, the conveyance of his lawful shares.21 As the Court ruled in De Mesa v. Court of Appeals:22
The first stage of an action for judicial partition and/or accounting is concerned with the determination of whether or not a
co-ownership in fact exists and a partition is proper, that is, it is not otherwise legally proscribed and may be made by
voluntary agreement of all the parties interested in the property. This phase may end in a declaration that plaintiff is not
entitled to the desired partition either because a co-ownership does not exist or a partition is legally prohibited. It may also
end, on the other hand, with an adjudgment that a co-ownership does in truth exist, that partition is proper in the premises,
and that 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 by all the parties." In either case, whether the action
is dismissed or partition and/or accounting is decreed, the order is a final one and may be appealed by any party
aggrieved thereby.
The second stage commences when the parties are unable to agree upon the partition ordered by the court. In that event,
partition shall be effected for the parties by the court with the assistance of not more than three (3) commissioners. This
second phase may also deal with the rendition of the accounting itself and its approval by the Court after the parties have
been accorded the opportunity to be heard thereon, and an award for the recovery by the party or parties thereto entitled
of their just shares in the rents and profits of the real estate in question.23
In the present action, the private respondent, as the plaintiff in the trial court, failed to implead the following indispensable
parties: his father, Rodolfo Pelaez; the heirs of Santiago Sepulveda, namely, Paz Sepulveda and their children; and the
City of Danao which purchased the property covered by T.D. 19804 (T.D. No. 35090) from Pedro Sepulveda, Sr. and
maintained that it had failed to pay for the purchase price of the property.
Rodolfo Pelaez is an indispensable party he being entitled to a share in usufruct, equal to the share of the respondent in
the subject properties. There is no showing that Rodolfo Pelaez had waived his right to usufruct.
Section 7, Rule 3 of the Rules of Court reads:
SEC. 7. Compulsory joinder of indispensable parties. Parties in interest without whom no final determination can be had
of an action shall be joined either as plaintiffs or defendants.
Indeed, the presence of all indispensable parties is a condition sine qua non for the exercise of judicial power. It is
precisely when an indispensable party is not before the court that the action should be dismissed. Thus, the plaintiff is
mandated to implead all the indispensable parties, considering that the absence of one such 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.24 One who is a party to a case is not bound by any decision of the court, otherwise, he will be deprived of his right
to due process. Without the presence of all the other heirs as plaintiffs, the trial court could not validly render judgment
and grant relief in favor of the private respondent. The failure of the private respondent to implead the other heirs as
parties-plaintiffs constituted a legal obstacle to the trial court and the appellate courts exercise of judicial power over the
said case, and rendered any orders or judgments rendered therein a nullity.25
To reiterate, 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.26 Hence, the trial court should have
ordered the dismissal of the complaint.27
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The Decisions of the Court of Appeals in CA-G.R. CV
No. 43758 and of the Regional Trial Court are SET ASIDE. The Regional Trial Court is ORDERED to dismiss the
complaint without prejudice. No pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Baguio City
SECOND DIVISION

G.R. No. 109387 April 25, 1994

LEONARDO LIM DE MESA, petitioner,
vs.
HON. COURT OF APPEALS, HON. RODRIGO V. COSICO, as Presiding Judge of the Regional Trial Court, Bian,
Laguna; ROGELIO S. MOLINA, Branch Sheriff; and ALFREDO, NUMERIANO, ZENAIDA, ROGELIO, YOLANDA,
OLIVIA, BENJAMIN, TERESITA and WILSON, all surnamed LIM DE MESA, respondents.
REGALADO, J.:
In a resolution promulgated on March 4, 1993 in CA-G.R. SP No. 29818, entitled ("Leonardo Lim de Mesa vs. Hon.
Rodrigo V. Cosico, etc., et al.,") respondent court denied due course to the petition for certiorari which sought the
nullification of three orders of the Regional Trial Court, Branch 24, Bian, Laguna which were issued as incidents of Civil
Case No. B-1942 thereof. Petitioner is now before us impugning the forestalled resolution. 1
The case stemmed from an action for partition filed by herein private respondents against their eldest brother, herein
petitioner Leonardo Lim de Mesa, and his sister Leticia Lim de Mesa, which suit was docketed in the Regional Trial Court
of Laguna, Branch 24, as Civil Case No. B-1942. Private respondents prayed therein for the partition of the property left
by their parents, Manuel de Mesa and Lucia Lim, consisting of a house and lot in Sta. Rosa Estate Subdivision, Laguna
and a funeral parlor; that petitioner Leonardo de Mesa be compelled to render an accounting of the income of the funeral
parlor business from October 24, 1980, the date when the mother of the parties died; and that private respondent Rogelio
Lim de Mesa be declared the owner of eight-tenths (8 /10) of the entire estate, as the other heirs had assigned their
interests to him.
In his answer, petitioner admitted that their deceased parents left the house and lot described in the complaint, but
claimed that the funeral parlor, known as Lim de Mesa Memorial Chapel, was solely owned by him. Petitioner also alleged
that their deceased parents left other properties and businesses which are in the possession and under the management
of the two other plaintiffs therein.
After trial, the court rendered the following judgment:
WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered as follows:
1. Ordering the partition of the estate of the deceased spouses Manuel de Mesa and Lucia Lim
described in paragraph 1 of the complaint as Lot No. 329 of the Sta. Rosa Estate Subdivision with a

residential house of strong material(s) and a funeral business therein, all located at Sta. Rosa, Laguna,
among the following surviving heirs in the following proportions;
1. Rogelio Lim de Mesa - 9.8787872 /13 shares representing the sum total of his participations plus all
the shares sold to him by co-heirs Alfredo, Numeriano, Zenaida, Yolanda, Olivia, Benjamin, and
Teresita, all surnamed Lim de Mesa
2. Leonardo Lim de Mesa - 0.6515151 /13 share
3. Leticia Lim de Mesa - 1.818181 /13 share
4. Wilson Lim de Mesa - 0.6515151 /13 share
as regards the property of the estate, namely, Lot No. 329 and the residential house of strong
material(s) erected therein, and
1. Rogelio Lim de Mesa - 8 /11 shares
2. Leonardo Lim de Mesa - 1 /11 shares
3. Leticia Lim de Mesa - 1 /11 shares
4. Wilson Lim de Mesa - 1 /11 shares
as regards the proceeds from the funeral business from November 1980 up to the
present after an accounting thereof to be rendered by Leonardo Lim de Mesa.
2. Ordering the defendants Leonardo Lim de Mesa and Leticia Lim de Mesa and plaintiff Wilson Lim de
Mesa to execute a deed of confirmation of the Extra-Judicial Partition with Sale (Exhibit "H") and
"Reformation of Instrument" (Exhibit "I") dated January 27, 1983 and November 12, 1984, respectively.
3. Ordering defendant Leonardo Lim de Mesa to render an accounting of the operation and
management of the funeral business from November 1980 up to the present within thirty (30) days from
the date this decision becomes final.
4. Ordering the defendants to pay the plaintiffs the amount of P30,000.00 as moral damages and the
amount of P20,000.00 as reimbursement for attorney's fees.
5. Ordering defendants to pay costs of suits. 2
On appeal, the Court of Appeals affirmed the aforesaid judgment with some modifications, that is, by deleting those
portions thereof directing therein defendants Leonardo and Leticia Lim de Mesa, aside from plaintiff Wilson Lim de Mesa,
to execute a deed confirming the extrajudicial partition with sale and the reformation of instrument, and to pay the awards
for moral damages and attorney's fees. 3 Not satisfied therewith, petitioners further sought relief from this Court which,
however, denied their appeal in a resolution dated January 27, 1992. On June 4, 1992, entry of said judgment was made,
thereby making the judgment of the lower court, as modified by respondent Court of Appeals, final and executory.
Thereafter, private respondents filed a motion for execution which was granted by the lower court. 4 A writ of execution
was issued, but the same was returned unsatisfied on September 21, 1992 due to petitioner's refusal to comply with the
same. Private respondents then filed a motion to enforce judgment which was granted by the lower court in its order dated
October 14, 1992. 5
Subsequently, petitioner filed a motion to be furnished copies of the basic pleadings and/or orders. Private respondents
filed their opposition thereto, arguing that petitioner was not entitled to the relief prayed for since private respondents were
entitled to execution as a matter of right, and that all incidental matters flowing therefrom may be resolved motu
proprio without prior notice and hearing to petitioner. The court a quo acted on petitioner's motion by an order, dated
November 13, 1992, directing private respondent Rogelio Lim de Mesa to furnish petitioner a copy of the deed of partition
and such documents as the latter would specify. 6
Private respondents then filed a motion to resolve the incident subject of the order of October 14, 1992 and this, in turn,
led to the issuance of the lower court's order dated November 18, 1992. 7 Upon motion filed by private respondents, the
lower court issued another order, dated November 25, 1992, granting the former's motion for a writ of possession and
delineation of property lines. 8 Petitioner thereafter moved for the reconsideration of the orders dated November 18 and
25, 1992, contending that the same were issued in violation of Section 4, Rule 15 of the Rules of Court, as these were
issued ex parte. 9 In its order dated December 23, 1992, the court below denied the motion for reconsideration. 10
A petition for certiorari was then filed by petitioner in the Court of Appeals assailing, on the same grounds, the following
orders of the trial court, to wit:

1. ORDER dated October 14, 1992 designating Atty. Luzod, Jr. to sign the deed of partition for and in
behalf of Leonardo Lim de Mesa, petitioner, to enforce the judgment, and ordering petitioner to explain
within 10 days from notice why he should not be cited (for) contempt of court pursuant to Sec. 3 (a) in
relation to Sec. 6 and 7, Rule 71 of the Revised Rules of Court;
2. ORDER dated November 18, 1992, giving petitioner an extension of 15 days to render an accounting
and in case of failure, to cite him (for) contempt of court (for) violation of Sec. 3(b) in relation to Sec. 6,
(Rule 71), Rules of Court, and if he continues to disobey, the public respondent may be constrained to
order his imprisonment.
3. ORDER dated November 25, 1992, granting a writ of possession directing the respondent Sheriff to
place private respondent Rogelio Lim de Mesa in possession of the property pertaining to him by virtue
of ANNEXES "X", "A", to "A-4". 11
In its resolution of March 4, 1993, as stated at the outset, respondent Court of Appeals ruled against therein
petitioner, 12 hence the instant petition with the following assignment of errors:
1. The Court of Appeals erred in applying Rule 39 of the Rules of
Court and, therefore, in concluding that the judgment in the action
for partition in Civil Case No. B-1942 became final and executory
as of June 4, 1992 and the prevailing party is entitled to a writ of
execution the issuance of which is a ministerial duty of the court.
2. The Court of Appeals also erred in holding that the three (3)
assailed orders in Civil Case No. B-1942 were issued consequent
to the execution of a judgment that has already become final and
executory.
3. The Court of Appeals finally erred in holding that the three (3)
assailed orders in Civil Case No. B-1942 having been issued exparte is of no moment where the execution is a matter of right and
the losing party need not be given advance notice of hearing of
such motion. 13
It is from the foregoing perceptions that the main thrust of herein petitioner's arguments postulates the supposed nullity of
the writ of execution issued by the trial court since the same was issued without prior notice and hearing. We disagree.
Jurisprudentially entrenched is the rule that a judgment ordering partition with damages is final and duly appealable,
notwithstanding the fact, which petitioner seeks to capitalize on, that further proceedings will still have to take place in the
trial court. 14
There are two stages involved in the special civil action of judicial partition and accounting under Rule 69 of the Rules of
Court.
The first stage of an action for judicial partition and/or accounting is concerned with the determination of whether or not a
co-ownership in fact exists and a partition is proper, that is, it is not otherwise legally proscribed and may be made by
voluntary agreement of all the parties interested in the property. This phase may end in a declaration that plaintiff is not
entitled to the desired partition either because a co-ownership does not exist or a partition is legally prohibited. It may also
end, on the other hand, with an adjudgment that a co-ownership does in truth exist, that partition is proper in the premises,
and that 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 by all the parties." 15 In either case, whether the
action is dismissed or partition and/or accounting is decreed, the order is a final one and may be appealed by any party
aggrieved thereby. 16
The second stage commences when the parties are unable to agree upon the partition ordered by the court. In that event,
partition shall be effected for the parties by the court with the assistance of not more than three (3) commissioners. This
second phase may also deal with the rendition of the accounting itself and its approval by the Court after the parties have
been accorded the opportunity to be heard thereon, and an award for the recovery by the party or parties thereto entitled
of their just shares in the rents and profits of the real estate in question. Such an order is, to be sure, also final and
appealable. 17
In the decision ordering partition, the execution of that part of the judgment which will not necessitate any further
proceedings may be enforced. Further proceedings, such as the appointment of commissioners to carry out the partition
and the rendition and approval of the accounting, may be had without prejudice to the execution of that part of the
judgment which needs no further proceedings. Thus, it has been held that execution was entirely proper to enforce the
defendant's obligation to render an accounting and to exact payment of the money value of the plaintiffs' shares in the
personal property and attorney's fees due defendants, as well as the costs of the suit and damages. 18
In the present case, the decision ordering partition and the rendition of accounting had already become final and
executory. The execution thereof thus became a matter of right on the part of the plaintiffs, herein private respondents,
and is a mandatory and ministerial duty on the part of the court. Once a judgment becomes final and executory, the

prevailing party can have it executed as a matter of right, and the judgment debtor need not be given advance notice of
the application for execution nor be afforded prior hearings thereon. 19
On the bases of the foregoing considerations, therefore, the Court of Appeals acted correctly in holding that the failure to
serve a copy of the motion for execution on petitioner is not a fatal defect. In fact, there was no necessity for such service.
However, notwithstanding our aforesaid observations, the orders of the trial court dated October 14, 1992 and November
25, 1992, respectively directing Atty. Luzod, Jr. to sign the deed of partition for and in behalf of petitioner and granting the
writ of possession, must be set aside for having been rendered in excess of jurisdiction.
The trial court cannot compel herein petitioner to sign the extrajudicial deed of partition prepared solely by private
respondents. Concomitantly, it cannot issue a writ of possession pursuant to the said extrajudicial partition.
An action for partition, which is typically brought by a person claiming to be the owner of a specified property against a
defendant or defendants whom the plaintiff recognizes to be his co-owners, may readily be seen to simultaneously
present two principal issues. Firstly, there is the issue of whether the plaintiff is indeed a co-owner of the property sought
to be partitioned. Secondly, assuming that the plaintiff successfully hurdles the first issue, there is the secondary issue of
how the property is to be divided between the plaintiff and the defendants, that is, what portion should go to which coowner. 20
After a judgment is rendered in an action for partition declaring that the property in question shall be divided among the
parties thereto, the procedure provided by law thereafter is that, if the parties can agree among themselves, then the
partition can be made by them through the proper instruments of conveyance which shall be submitted for approval of the
court, and such partition with the court order confirming the same shall be recorded in the office of the proper registry of
deeds. But, if the parties are unable to agree upon the partition, the court shall by order appoint not more than three (3)
competent and disinterested persons as commissioners to make the partition, commanding them to set off to the plaintiff
and to each party in interest such part and proportion of the property as the court in such order shall direct. 21
The decision in Civil Case No. B-1942 merely declares that partition is proper and forthwith specified therein the
respective aliquot shares of the parties to the real estate and to the proceeds of the funeral business. Withal, it did not
specifically state, by metes and bounds and by adequate description, the particular portion of the real estate to be
assigned to each party. Actual partition is, therefore, necessary. Since the parties, however, cannot agree on the actual
division and allocation of the property held in common, the trial court should order the appointment of commissioners to
carry out the partition, as provided by Section 3 of Rule 69.
WHEREFORE, the assailed resolution of respondent Court of Appeals is hereby MODIFIED and the questioned orders of
the trial court dated October 14, 1992 and November 25, 1992 are hereby SET ASIDE. The court a quois directed to
immediately appoint and constitute the necessary number of commissioners who shall expeditiously effect the partition of
the subject property in accordance with Rule 69 of the Rules of Court.
SO ORDERED.