SPS. VICENTE YU & DEMETRIA LEE- YU vs. PHILIPPINE COMMERCIAL INTERNATIONAL BANK G.R. No.

147902, March 17, 2006

PETITION FOR REVIEW ON CERTIORARI FACTS 1. On April, 1995, Spouses Vicente Yu & Demetria Lee- Yu, among others mortgaged their title, interest & participation over several parcels of land located in Dagupan City in favor of the respondent, Philippine Commercial International Bank, as security for the payment of loan; 2. As the petitioners failed to pay the loan, interests & penalties due thereon, respondent filed a Petition for Extra- Judicial Foreclosure of Real Estate on Dagupan City properties before the RTC, Dagupan City; 3. Auction sale of the said properties was scheduled on September 10, 1998 where respondent emerged as the highest bidder; 4. On September 14, 1998, a Certificate of Sale was issued in favor of the respondent; 5. On October 1, 1998, the sale was registered with the Registry of Deeds, Dagupan City; 6. On August 20, 1998, about 2 months before the expiration of the redemption period, respondent filed an Ex-Parte Petition for Writ of Possession before the RTC, Dagupan City, docketed as Special Proceeding No. 99-00988-D & raffled to Branch 43; 7. On September 14, 1999, a hearing was conducted where the respondent presented its evidence ex-parte by the testimony of Rodante Manuel; 8. On September 30, 1999, petitioners filed a Motion to Dismiss & to Strike Out testimony of Rodante Manuel stating that the Certificate of Sale dated Sept. 14, 1998, is void because respondent violated Article 2089 of the Civil Code in the indivisibility of the mortgaged by conducting 2 separate foreclosure proceedings on the mortgaged properties in Dagupan City & Quezon City. Likewise the petitioners filed a Complaint for Annulment for a Certificate of Sale before the RTC of Dagupan City, docketed as Civil Case No. 99-03169-D & raffled to RTC Branch 44; 9. On Feb. 14, 2000, RTC Branch 43 denied petitioners Motion to Dismiss to Strike Out Testimony of Rodante Manuel; 10. On February 24, 2000, petitioners filed a Motion of Reconsideration further arguing that the pendency of Civil Law No. 99-03169-D in RTC Branch 44 is a prejudicial issue to Special proclamation No. 99-00988-D in RTC Branch 43, but was denied because the pending case before RTC Branch 44 is also is civil case & not a criminal case; 11. On June 1,2000, petitioners filed a Petition for Certiorari with the CA but dismissed by the CA. 12. Petitioners filed a Motion for Reconsideration but was denied by the CA on April 26, 2001. 13. Hence, the present Petition for Review on Certiorari. ISSUES 1. Whether or not a real estate mortgage over several properties located in different locality ( sic ) can be separately foreclosed in different places? 2. Whether or not the pendency of a prejudicial issue renders the issues in Special Proceedings No. 99-00988-D ( sic ) moot & academic? RATIONALE 1. As to the first issue, the court finds that petitioners have mistaken a notion that the indivisibility of a real estate mortgage relates to the venue of extra judicial foreclosure proceedings. The rule

on indivisibility of a real estate mortgage is provided for in Article 2089 of the Civil Code which provides. Article 2089: A pledge or mortgage is indivisible even though the debt may be divided among the successors in interest of the debtor or the creditor. Indivisibility means that the mortgage obligation cannot be divided among the different lots, that is each & every parcel under mortgage answers for the totality of the debt. The indivisibility of the real estate mortgage by conducting 2 separate foreclosure proceedings on mortgaged properties located in different provinces as long as each parcel of land is answerable for the entire debt. 2. As to the second issue, civil Case No. 999-01369-D & Special Proclamation no. 99-00988-D are both civil in nature. The issue in the civil case No. 99-01369-D is whether the extrajudicial foreclosure of the real estate mortgage executive by the petitioners in favor of the respondent & the sale of their properties at public auction are null & void, whereas, the issue in Special Proclamation No. 99-00988-D is whether the respondent is entitled to a Writ of Possession of the foreclosed properties. Clearly, no prejudicial question can arise from the existence of the 2 actions. The rationale behind the principle of prejudicial question is to avoid 2 conflicting decisions.Two cases can proceed separately & take over their own direction independently of each other. HELD/RULING The court holds that the rule on indivisibility of the real estate mortgage cannot be equated with the venue of foreclosure proceedings on mortgaged properties located in different provinces since these are 2 unrelated concepts. Also, no prejudicial question can arise from the existence of a civil case for annulment of a Certificate of Sale & a Petition for the Issuance of Writ of Possession in a special proceeding since the 2 cases are both civil in nature which can proceed separately & take their own direction independently of each other. The petition is DENIED.