NELSON NUFABLE, SILMOR NUFABLE and AQUILINA NUFABLE, petitioners, vs. GENEROSA NUFABLE, VILFOR NUFABLE, MARCELO NUFABLE, and the COURT OF APPEALS, respondents.
FACTS
The late Esdras Nufable owned a parcel of land. Upon his death, his will was probated, and an order approving the settlement of his estate was issued on June 6, 1966. The will bequeathed the property to his four children: Angel Custodio, Generosa, Vilfor, and Marcelo, all surnamed Nufable. The heirs’ agreement, approved by the court, stipulated that the property would remain undivided under community ownership, respecting the conditions in the will. However, two months prior to this court approval, on March 15, 1966, Angel Custodio Nufable and his wife Aquilina mortgaged the entire property to the Development Bank of the Philippines (DBP). The mortgage was later foreclosed, and DBP acquired the property. In 1980, Nelson Nufable, son of the deceased Angel, purchased the property from DBP.
Subsequently, Generosa, Vilfor, and Marcelo filed a complaint to annul the transactions, quiet title, and recover damages against Nelson, his wife Silmor, and Aquilina. They claimed ownership over three-fourths (3/4) of the property. The petitioners (defendants below) argued that Angel was the exclusive owner and that the respondents never questioned the public mortgage and foreclosure proceedings. The trial court dismissed the complaint, but the Court of Appeals reversed this decision, declaring the respondents as co-owners entitled to 3/4 of the property.
ISSUE
The primary issues were: (1) Whether the probated will and the approved project of partition, which established co-ownership, control over the subsequent mortgage and sale; and (2) Whether the DBP was an indispensable party to the suit.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic centered on the effect of the probate proceedings and the nature of co-ownership. The Court held that the probate of the will and the subsequent court-approved settlement of the estate conclusively established the status of the property. The June 6, 1966 order created a community of co-owners among the four heirs. Therefore, when Angel Custodio mortgaged the entire property to DBP on March 15, 1966, he did so only as a co-owner. A co-owner cannot mortgage more than his ideal, undivided share. Consequently, the mortgage and the subsequent foreclosure sale to DBP could only affect Angel Custodio’s one-fourth (1/4) share in the property. DBP, and later Nelson Nufable as purchaser from DBP, only acquired rights to that 1/4 share. The respondents’ 3/4 share remained unaffected.
Regarding the second issue, DBP was not an indispensable party. An indispensable party is one without whom no final determination can be had of the action. Here, the respondents did not question the legality of the foreclosure itself against Angel’s share. Their cause of action was to recover their distinct co-ownership shares from the petitioners, who were in possession. The interest of DBP was separable, as it had already sold the property to Nelson, transferring any rights it had. A final determination of the co-ownership rights between the heirs could be made without joining DBP. The Court thus upheld the appellate court’s declaration that the respondents were rightful co-owners entitled to 3/4 of the property.
