G.R. No. 126777 - DOMINGO LAO AND ERNESTO T. LAO, VS. ESTRELLA VILLONES-LAO, SPS. MANUEL AND ANGELITA MALAN, SPS. CARLOS AND SOCORRO VILLENA. D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, in view of the foregoing, the court hereby declares null and void the following: The special power of attorney; Deed of real estate mortgage; The foreclosure proceedings; Transfer Certificate of Title No. 290029 in the name of the Villena spouses, and orders the Register of Deeds of Quezon City to cancel the said title and issue a new one in favor of Domingo Lao, Ernesto Lao, and Estrella Villones-Lao with the same participation as appearing in TCT No. T-268732 of the Registry of Deeds of Quyezon City, namely: Estrella Villones-Lao, 50%; Domingo Lao, 30%; and Ernesto Lao, 20%." "The Court further orders the defendants Estrella Villones-Lao, spouses Manuel and Angelita Malana and the spouses Carlos and Socorro Patenia Villena to pay the plaintiff, jointly and severally, the sum of P15,000.00 as moral damages, P10,000.00 as attorney's fees, P10,000.00 as reasonable litigation expenses and to pay the costs. Defendant Villenas are ordered to pay the sum of P840,000.00 as unearned rentals computed at P7,000.00 a month from September 1982 to September 1992 plus interest at 12% per annum until fully paid. "Considering that a special characteristic of a real estate mortgage is its indivisibility (Art 2089 of the Civil Code) even through the debt secured may be divided among the debtors or creditors or other successors in interest, the deed of real estate mortgage executed by Estrella Villones-Lao with respect to her undivided not share in property. The nullity notwithstanding, Villena can recover the indebtedness of Estrella Villones-Lao through an ordinary suit. [6] A motion to modify the judgment was filed by petitioners Domingo and Ernesto Lao, on October 12, 1992 [7] , which was granted by the lower court and a modified judgement was issued on February 11, 1993. [8] The modified judgment further orders the spouses Carlos and Socorro Villena and their representatives and assigns to immediately vacate the premises located at Cubao, Quezon City and that a new Certificate of Title be issued in favor of spouses Domingo and Estrella Lao with the 20% share of Ernesto Lao annotated at the back.. [9] On February 23, 1993 respondent spouses Villena filed their notice of appeal. On February 19, 1993 the spouses Malana filed their notice of appeal. After due proceedings, on July 11, 1996, the Court of Appeals rendered decision on July 11, 1996, reversing the lower court's decision, the dispositive portion of which reads as follows: WHEREFORE, the trial court's decision is REVERSED and SET ASIDE, and in lieu thereof, a new decision is hereby rendered declaring the Deed of Real Estate Mortgage dated June 17, 1980 and the foreclosure sale valid, upholding the validity of the villenas' title to TCT No. 290029, and ordering that the property be transferred in Villenas' name. [10] On August 14, 1996 petitioner filed a motion for reconsideration. However the Court of Appeals denied the motion. Hence, this petition. In this appeal, petitioner imputes the foll