FORECLOSURE OF REAL ESTATE MORTGAGE

UNDER RULE 68

I. Allegations of complaint for closure (Sec. 1, Rule 68)

1.1 Concept of foreclosure of mortgage
Magna Financial Services Group, Inc. v. Colarina
G.R. No. 158635, 09 December 2005

1.2 Judicial for closure; an action quasi in rem and its purpose
Ocampo v. Dimalanta, G.R. No. L-21011, 30 August 1967

1.3 Action for foreclosure of mortgage over real property prescribes

in ten years - Nunez v. GSIS Family Bank, G.R. No. 16398
17 November 2005

1.4 Remedies of secured creditor

Bachrach Motor Co., Inc. v. Icarangal, G.R. No. L-45350
29 May 1939
Sycamore Ventures Corp. v. Metropolitan Bank and Trust Co.
G.R. No; 173183, 18 November 2013

1.5 Remedy preliminary to effect foreclosure

Filinvest Credit Corp. v. CA, G.R. No. 115902, 27 September 1995

1.6 Prohibition on pactum commissorium

Article 2088, New Civil Code
DBP v. CA, G.R. No. 118342, 05 January 1998
Garcia v. Villar, G.R. No. 158891, 27 June 2012

1.7 Jurisdiction
Secs. 19(1), 19(2), 33(3) of BP 129 as amended by RA 7691

1.8 Venue
Secs. 1 and 2 , Rule 4

1.9 Application of doctrine of estoppel

Limpin, Jr. v. IAC, G.R. No. 70987, 30 January 1987

II. The judgment on foreclosure for payment or sale (Sec. 2, Rule 68)

2.1 Appeal is the remedy to assail judgment in judicial foreclosure

Sps. Agbada v. Inter-Urban Developers, Inc.,
G.R. No. 144029, 19 September 2002

2.2 Extrajudicial foreclosure and Judicial foreclosure distinguished

Prudential Bank v. Martinez, G.R. No. L-51768, 04 September 1990

2.3 Distinction between equity of redemption and right of redemption

Limpin, Jr. v. IAC, supra.
Huerta Alba Resort, Inc. v. CA, G.R. No. 128567, 01 September 2000

2.4 Reckoning point of one (1) year period of redemption under Act No. 3135
Malonzo, et al. v. Mariano, G.R. No. 53998, 31 May 1989
Bernardez V. Reyes, G.R. No. 71832, 24 September 1991

2.5 Effect of allowing redemption after the one (1) year period expired
Ramirez v. CA, G.R. No. 98147, 08 March 1993

2.6 Reckoning period of equity of redemption

Sps. Publico v. Bautista, G.R. No. 174096, 20 July 2010
2.7 Second mortgage merely takes what is called an equity
of redemption
Ramirez v. CA, supra.

2.8 Rule on period of redemption

Sec. 47, RA 8791
Goldenway Merchandising Corp. v. Equitable PCI Bank
G.R. No. 195540, 13 March 2013

2.9 Right of redemption in judicial foreclosure

Huerta Alba Resort, Inc. v. CA, supra.
Sec. 47, RA 8791
2.10 Amount to be paid as redemption price
Sec. 47, RA 8791
Sec. 28, Rule 39
Sec. 6, Act 3135 as amended

2.11 Requisites for valid redemption under Section 30, Rule 69

Rosales v. Yboa, G.R. No. L-42282, 28 February 1983

2.12 Redemption and repurchase, distinguished

Sps. Robles v. CA, G.R. No. 128053, 10 June 2004

2.13 When purchaser can enter and take possession of property

under RA 8791

a. Mortgagee is a bank, quasi-bank, trust entity - Sec. 47, RA 8791

b, Mortgagee is not a bank, quasi-bank or trust enity
par. 2, Sec. 3, Rule 68

2.14 Appealability of order denying motion to quash writ of possession

Motos v. Real Bank (A Thrift Bank), Inc.
G.R. No. 171386, 17 July 2009

2.15 Cases where the court withheld the issuance of writ possession
Cometa, et al. v. IAC, G.R. No. 69294, 30 June 1987
Sulit v. CA, G.R. No. 119247, 17 February 1997

2.16 Bond to enjoin or restrain foreclosure proceedings under RA 8791

Sec. 47, RA 8791

2.17 Requisites for a valid redemption

Heirs of Quisumbing v. PNB, G.R. No. 178242, 20 January 2009

2.18 Person who can exercise the right to redeem

Sec. 27, Rule 39
Sec. 6, Act No. 3135
De Castro v. IAC, G.R. No. 73859, 26 September 1988

2.19 Rule on back rentals during the period of redemption

Bernardez V. Reyes, supra.

2.20 Appraisal value of mortgaged properties not material

to foreclosure validity
Sycamore Ventures Corp. v. Metropolitan Bank and Trust Co., supra.

2.21 Constitutionality of RA 8791

Goldenway Merchandising Corp. v. Equitable PCI Bank, supra.

2.22 Exemption of family home on forced sale and right of redemption

Sps. Fortaleza v. Sps. Lapitan, G.R. No. 178288, 15 August 2012
III. Sale of mortgaged property; effect –Sec. 3, Rule 68

3.1 Notice and hearing required for judicial confirmation of foreclosure

sale
Rural Bank of Oroquieta v. CA, G.R. No. L-53466, 10 November 1980

3.2 Rule on issuance of writ of possession

Sps. Fortaleza v. Sps. Lapitan, supra.

3.3 Prescription of the right to a writ of possession

Sps. Edralin v. Philippine Veterans Bank
G.R. No. 168523, 09 March 2011

3.4 Right of a mortgagee who is in possession of the mortgaged property

Diego v. Fernando, G.R. No. L-15128, 25 August 1960
Enriquez v. PNB, G.R. No. L-33584, 15 December 1930
Gardner v. CA, G.R. No. L-31340

3.5 Foreclosure of equitable mortgage governed by Section 2 and 3

of Rule 68
Sps. Rosales v. Sps. Alfonso, G.R. No. 137792, 12 August 2003

3.6 Right of redemption not recognized in a judicial foreclosure

Huerta Alba Resort, Inc. v. CA, supra.

IV. Disposition proceeds of sale – Sec. 4, Rule 68

4.1 Summary of distribution of proceeds of sale

a. cost of sale
b. claim of foreclosing person
c. claims of junior encumbrances
d. balance, if any, paid to mortgagor

4.2 Mortgagee’s duty to return any surplus in the sellingprice to the mortgagor
Sulit v. CA, G.R. No. 119247, 17 February 1997

V. How sale to proceed in case the debt is not all due - Sec. 5, Rule 68

VI. Deficiency judgment - Sec. 6, Rule 68

6.1 Deficiency judgment, defined

Phil. Bank of Commerce v. de Vera, G.R. No. L-18816
29 December 1962
Prudential Bank v. Martinez, G.R. No. 51768, 14 September 1990

6.2 Prescription of an action to recover deficiency

Quirino Gonzales Logging Concessionaire v. CA
G.R. No. 126568, 30 April 2003

6.3 Stipulation of upset price or ”tipo” –null and void

6.4 When no deficiency allowed

Article 1484, New Civil Code
Sec. 7, Rule 86

6.5 Rule on deficiency in foreclosure of mortgage out of a settlement of

Estate
PNB v. CA, G.R. No. 121597, 29 June 2001

6.6 Right to recover deficiency from debtor under Act No.3135

Prudential Bank v. Martinez, supra.
 6.7 Proof of deficiency claim necessary
PNB v. Sps. Rocamora, G.R. No. 164549, 18 September 2009

6.8 Prescriptive period for filing deficiency of extrajudicial foreclosure

Articles 1142 and 1144, New Civil Code

VII. Registration - Sec. 7, Rule 68

VIII. Applicability of Sections 31, 32, and 34 of Rule 39 – Sec. 8, Rule 68

IX. Act No. 3135

1. Extrajudicial foreclosure when proper

1.1 Extrajudicial foreclosure sales are proper provided under a special

Power
Sec. 1, Act 3135
Paguyo v. Gatbunton, A.M. No. P-06-2135, 28 March 2007

1.2 Foreclosure of real estate mortgage

DBP v. Zaragosa, G.R. No. L-23493, 23 August 1978
Landrito, Jr. v. CA, G.R. No. 133079, 09 Auguat 2005

1.3 Three types of sale arising from failure to pay mortgage debt
The Abaca Corp. of the Philippines v. Garcia and CA
G.R. No. 118408, 14 May 1997

1.4 Levy requirement not mandated by Act No. 3135 but by Rule 39
The Abaca Corp. of the Philippines v. Garcia and CA, supra.

1.5 Power to foreclose extrajudicially survives the death of the

mortgagor
Perez v. PNB, G.R. No. L-21813, 30 July 1966

2. Where sale must be made – Sec. 2, Act 3135

2.1 Effect of stipulation that lacks exclusivity

Heirs of the late Sps. Maglasang v. Manila banking Corp.
G.R. No. 171206, 23 September 2013

3. Notice and publication requirement – Sec. 3, Act 3135

a. In general
b. If property worth more than P400

3.1 Sheriffs duty to cause publication of the Notice of sheriff’s sale

Paguyo v. Gatbunton, supra.

3.2 Republication of Notice of Sheriffs sale of a postponed extrajudicial sale

DBP v. CA, G.R. No. 125838, 10 June 2003

3.3 Form of notice of Extrajudicial Sale under Sec. 4, Circular No. 7-2002

3.4 Notice for real estate mortgages covering loans not exceeding
P 100, 000.00
Par. 2, Sec. 4 (b), OCA Circular No. 7-2002

3.5 Notice of foreclosure of a chattel mortgage

Par. 2, Sec. 4 (b), OCA Circular No. 7-2002
3.6 Section 3 of Act No. 3135 does not require notice to mortgagors
Cruz v. CA, G.R. No. 90369, 31 October 1990

3.7 Parties to mortgage contract can agree on personal notice to

the mortgagor
Metropolitan Bank and Trust Co. v. Wong, G.R. No. 120859
26 June 2001

3.8 Burden of proving non-compliance with publication on party alleging

the same
Philippine Savings Bank v. Sps. Geronimo, G.R. No. 170241
19 April 2010

3.9 Statutory requirements governing publication must be strictly

complied with
Tambunting v. CA, G.R. No. L-48278, 08 November 1988

3.10 Parties cannot waive posting and publication requirements

of Act No.3135
Ouano v. CA, G.R. No. 129279, 04 March 2003

3.11 Notice and publication requirement under PD 1079, Act 3135,

as amended
Fortune Motors v. Metropolitan Bank and Trust Co.
G.R. No. 115068, 28 November 1996

3.12 Certificate of posting is not indispensable for validity of a

foreclosure sale
DBP v. CA, G.R. No. 125838, supra.

3.13 Purpose of notice and publication

Ouano v. CA, supra.
Olizon v. CA, G.R. No. 107075, 01 September 1994

4. Time of sale of public auction –Sec. 4, Act 3135

4.1 Sale at anytime between 9:00 am and 4:00 pm regardless

of duration is valid
PNB v. Cabtingan, G.R. No. 167058, 09 July 2008

4.2 Procedure of extrajudicial sale under OCA Circular No. 7-2002

in relation to Act 3135 and Act No. 1508 – Secs. 5- 10, OCA Circular
7-2002

4.3 Consequences of non-payment of full amount as highest bidder

Sulit v. CA, supra.

4.4 Gross inadequacy of price will not nullify the sale

The Abaca Corp. of the Philippines v. Garcia and CA, supra.

5. Bidders - Sec. 5, Act 3135

6. Those who can redeem and period to redeem - Sec. 6, Act 3135

6.1 The law of redemption of mortgage property

Landrito v. CA, G.R. No. 133079, 09 August 2005
Unionbank v. CA, G.R. No. 134068, 25 June 2001

6.2 One (1) year period reckoned from registration of certificate

of sale
DBP v. Gagarani, G.R. No. 172248, 17 September 2008
 6.3 Period of right of redemption of juridical persons in extrajudicial
foreclosure
Goldenway Merchandising Corp. v. Equitable PCI Bank, supra.

7. When to take possession and how – Sec. 7, Act 3135

8. Setting aside of sale and writ of possession – Sec. 8, Act 3135

8.1 Sec. 8 of Act No. 3135 finds no application when redemption period
expired
PNB v. Sanao Marketing Corp., G.R. No. 153951, 29 August 2005
680 Home Appliances, Inc. v. CA, G.R. No. 206599
29 September 2014

9. Redemption after possession given to purchaser – Sec. 9, Act 3135

PARTITION UNDER RULE 69

I. Complaint in action of partition of real estate -Sec. 1, Rule 69

1.1 Partition and its two phases
Dela Cruz v. Dela Cruz, G.R. No. 192383, 04 December 2013

1.2 Substantive law on partition

Arts. 494-496, 498, New Civil Code
Arts. 1083-1084, New Civil Code

1.3 Jurisdiction
Secs. 19(1), 19(2), 33(3) BP 129 , as amended by RA 7691

1.4 Venue
Secs. 1-2, Rule 4

1.5 Effect when partition is incidental to the main action that is incapable
of pecuniary estimation
Russell v. Vestil, G.R. No. 119347, 17 March 1999
Genesis Investment Inc. v. Heirs of Ebarasabal, G.R. No. 181622
20 November 2013

II. Order for partition and partition by agreement thereunder – Sec. 2, Rule 69

2.1 Two ways by which partition can take place under Rule 69
Figuracion-Gerilla v.vda. de Figuracion, G.R. No. 154322
22 August 2006

III. Commissioners to make partition when parties fail to agree –Sec. 3, Rule 69

3.1 The two stages in every action for partition under Rule 69
Dadizon v. Bernadas, G.R. No. 172367, 05 June 2009

IV. Oath and duties of commissioners – Sec. 4, Rule 69

4.1 Interpretation of notice under Section 4, Rule 69

Heirs of Cesar MarasigAN v. Marasigan, G.R. No. 156078
14 March 2008

V. Assignment or sale real state by commissioners – Sec. 5, Rule 69

5.1 Interpretation of Section 5, Rule 69 in relation to Arts. 494,495

And 498 of the Civil Code
Heirs of Cesar Marasigan v. Marasigan, supra.
VI. Report of commissioners; proceedings not binding until confirmed - Sec. 6, Rule 69

VII. Action of the court upon commissioner’s report – Sec. 7, Rule 69

7.1 Nature of judgment in partition

De Mesa v. CA, G.R. No. 109387, 25 April 1994

VIII. Accounting for rent and profits in action for partition -Sec. 8, Rule 69

IX. Power of guardian in such proceedings – Sec. 9, Rule 69

9.1 Related provisions under the Family Code

Arts. 220, 222, 225, Family Code

X. Costs and expenses to be taxed and collected - Sec. 10, Rule 69

XI. The judgment and its effect; copy to be recorded in registry of deeds
Sec. 11, Rule 69

11.1 Period to file appeal and multiple appeal in partition

Municipality of Binan v. Garcia, G.R. No. 69260, 22 December 1989

XII Neither paramount rights nor amicable partition affected by Rule 69

Sec. 12, Rule 69

12.1 Substantive law – Art. 499, New Civil Code

XIII. Partition of personal property –Sec. 13, Rule 69