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Heirs of Gabriel vs.

Cebrero (2018)

Petitioners: HEIRS OF JOSEFINA GABRIEL

Respondents: SECUNDINA CEBRERO, CELSO LA VINA, and MANUEL C. CHUA

Ponente: Peralta (Third Division)

Topic: Remedial Law

SUMMARY: Caniza filed a suit on behalf of Gabriel. Caniza executed the verification and certification against
forum-shopping, without an SPA from Gabriel. The Court held that such verification and certification were not
valid.

DOCTRINE: When an SPA was constituted precisely to authorize the agent to file and prosecute suits on behalf
of the principal, then it is such agent who has actual and personal knowledge whether he or she has initiated
similar actions or proceedings before various courts on the same issue on the principal's behalf, thus, satisfying
the requirements for a valid certification against forum shopping.

FACTS:

On January 24, 1991, Segundina Cebrero, through her attorney-in-fact Remedios Muyot, executed a
real estate mortgage over the subject property located in Sampaloc, Manila covered by TCT No. 158305
registered under the name of Cebrero's late husband Virgilio Cebrero (Virgilio) as security for the payment of the
amount of P8 million, pursuant to an amicable settlement dated January 11, 1991 entered into by the parties in
the case of annulment of revocation of donation in Civil Case No. 83-21629. In the said settlement, Josefina
Gabriel recognized Cebrero's absolute ownership of the subject property and relinquished all her claims over the
property in consideration of the payment of the said P8 million.

Upon Cebrero's failure to pay the amount within the period of extension until December 31, 1991, Gabriel
filed in 1993 an action for foreclosure of the real estate mortgage docketed as Civil Case No. 92-62638. The
RTC ruled in Gabriel's favor and ordered Cebrero to pay the P8 million and interest, or the subject property shall
be sold at public auction in default of payment.

The sheriff initiated the necessary proceedings for the public auction sale when no appeal was filed and
the decision became final. On July 12, 1994, Gabriel, being the sole bidder, purchased Cebrero's undivided
share of one-half (1/2) conjugal share, plus her inheritance consisting of one-ninth (1/9) of the subject property
in the amount of P13,690,574.00. On November 16, 1995, the sheriff issued the Final Deed of Sale when Cebrero
failed to redeem the property.

However, Gabriel had not registered the Final Deed of Sale since she disputed the Bureau of Internal
Revenue's estate tax assessment on the subject property considering that she claimed only a portion thereof. It
was also during this time that she discovered the registration of a Deed of Absolute Sale dated September 27,
1994 executed by respondent Celso Lavina, Cebrero's attorney-in-fact, purportedly conveying the entire property
in favor of Progressive Trade & Services Enterprises for and in consideration of P27 million.

On November 27, 1996, Eduardo Caniza (Caniza), allegedly in behalf of Gabriel, instituted a Complaint
for declaration of nullity of sale and of the Transfer Certificate of Title (TCT) No. 225341 of the subject property
registered under Progressive, a single proprietorship represented by its President and Chairman, respondent
Manuel C. Chua (Chua).
In their Answer, respondents alleged that Gabriel has no legal capacity to sue as she was bedridden and
confined at the Makati Medical Center since 1993. The complaint should be dismissed because Caniza signed
the verification and certification of the complaint without proper authority.

On October 14, 1997, Gabriel died during the pendency of the case, thus her heirs substituted her.

The RTC ruled for the Heirs of Gabriel, but the CA reversed.

ISSUES:

 WoN respondents are estopped from raising on appeal of the main case Caniza’s authority to file the
case on behalf of Gabriel because the RTC Order denying Lavina's motion to set a preliminary hearing
on the affirmative defenses has attained finality since respondents did not appeal said Order
o NO. The RTC Order dated June 13, 2007 denying the motion to set hearing on special and
affirmative defenses is no doubt interlocutory for it did not finally dispose of the case but will
proceed with the pre-trial. As such, said Order is not appealable, but may be questioned as part
of an appeal that may eventually be taken from the final judgment rendered. Here, respondents
had consistently raised in their Answer and in the appeal before the CA the issue of Caniza's
authority to file the case on behalf of Gabriel.
 WoN the verification and certification of the complaint conforms with the rules since Caniza, as Gabriel's
attorney-in-fact, signed it
o NO. When an SPA was constituted precisely to authorize the agent to file and prosecute suits on
behalf of the principal, then it is such agent who has actual and personal knowledge whether he
or she has initiated similar actions or proceedings before various courts on the same issue on the
principal's behalf, thus, satisfying the requirements for a valid certification against forum shopping.
The rationale behind the rule that it must be the "petitioner or principal party himself” who should
sign such certification does not apply. Thus, the rule on the certification against forum shopping
has been properly complied with when it is the agent or attorney-in-fact who initiated the action
on the principal's behalf and who signed the certification against forum shopping.
o However, there was no duly executed SPA appended to the complaint to prove Caniza's
supposed authority to file and prosecute suits on behalf of Gabriel. The Court cannot
consider the mere mention in the December 15, 1993 Decision that he was Gabriel's attorney-in-
fact as evidence that he was indeed authorized and empowered to initiate the instant action
against respondents. There was also no evidence of substantial compliance with the rules or even
an attempt to submit an SPA after filing of the complaint.
 WoN the defect was cured when Caniza, being one of the heirs, substituted Gabriel when she died during
the pendency of the case before the trial court
o NO. Caniza's subsequent substitution as one of Gabriel's heirs did not cure the defect in the
complaint, i.e., when he signed the verification and certification against forum shopping without
apparent authority. To reiterate, the trial court acquires jurisdiction over the plaintiff upon the filing
of the complaint. Besides, the substitution merely ensured that Gabriel's interest would be
properly represented and that her heirs were brought to jurisdiction of the court.

NOTES: Petition DENIED.

Obiter: Lastly, the Court notes that the real estate mortgage over a portion of the property was annotated on the
transfer certificate of titles. A mortgage is a real right, which follows the property, even after subsequent transfers
by the mortgagor. "A registered mortgage lien is considered inseparable from the property inasmuch as it is a
right in rem." The sale or transfer of the mortgaged property cannot affect or release the mortgage; thus, the
purchaser or transferee is necessarily bound to acknowledge and respect the encumbrance. The implication in
buying the property, with notice that it was mortgaged, was that Progressive necessarily undertook to allow the
subject property to be sold upon failure of Gabriel to obtain payment from Cebrero once the indebtedness
matured. Thus, it cannot invoke being a buyer in good faith to exclude the property from being claimed ·by virtue
of foreclosure of the mortgage over the said property. This, however, does not mean that the Court rules in favor
of the petitioners. Considering that the complaint was filed by Caniza, who has failed to prove that he was validly
authorized to do so, the complaint does not produce any legal effect. The RTC never validly acquired jurisdiction
over the case. Thus, the instant petition must be dismissed.

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