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Gochan v. Mancao, 709 SCRA 438 (2013) Case Doctrine

The Supreme Court ruled that the Court of Appeals erred in finding extrinsic fraud in a legal redemption case. Only the redeeming co-owner and buyer are indispensable parties in a legal redemption case, not the original seller or other third parties. Here, the respondent purchased property from individuals who acquired the land from one of the original co-owners, but was not himself a party to the original co-ownership. Thus, he had no legal standing to participate in the redemption case between the redeeming co-owners and the buyer, and his exclusion from that case did not constitute extrinsic fraud. The redemption agreement between the co-owners and buyer is valid despite the respondent not being impleaded in the case.

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108 views2 pages

Gochan v. Mancao, 709 SCRA 438 (2013) Case Doctrine

The Supreme Court ruled that the Court of Appeals erred in finding extrinsic fraud in a legal redemption case. Only the redeeming co-owner and buyer are indispensable parties in a legal redemption case, not the original seller or other third parties. Here, the respondent purchased property from individuals who acquired the land from one of the original co-owners, but was not himself a party to the original co-ownership. Thus, he had no legal standing to participate in the redemption case between the redeeming co-owners and the buyer, and his exclusion from that case did not constitute extrinsic fraud. The redemption agreement between the co-owners and buyer is valid despite the respondent not being impleaded in the case.

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Gochan v.

Mancao, 709 SCRA 438 (2013)

CASE DOCTRINE:
Only the redeeming co-owner and the buyer are the indispensable parties in an action
for legal redemption, to the exclusion of the seller/co-owner. A party who is not the co-
owner of a land subject of a compromise agreement cannot claim that he was
defrauded when the parties in the compromise agreement entered into the same. As a
third party to the agreement, he is not indispensable for the agreement to materialize.

FACTS:
Felix Gochan (Gochan), Amparo Alo (Alo), and Jose A. Cabellon were co-owners of Lot
Nos. 1028 and 1030 of Subdivision Plan Psd-21702 located in Cebu City. Petitioners
are successors-in-interest of Gochan, while respondent bought Lot Nos. 1028-D-1,
1028-D-3, 1028-D-4, and 1028-E covered by Transfer Certificate of Titles (TCT) from
the children of Angustias Velez and Eduardo Palacios, who, together with Jose, Jesus,
Carmen, and Vicente, all surnamed Velez, acquired Lot Nos. 1028-D and 1028-E from
Alo.

Sometime in 1998, petitioners, including Mae Gochan, filed a case for legal redemption
of several lots of Subdivision Plan Psd-21702. The TCTs are registered under the
names of Gochan (married to Tan Nuy), Alo (married to Patricio Beltran), and Genoveva
S. De Villalon (married to Augusto P. Villalon), who is the successor-in-interest of
Cabellon. The case was raffled before Cebu City RTC Branch 17 and was brought
against the spouses Bonifacio Paray, Jr. and Alvira Paray (sister of respondent), who
purchased the lots from the heirs of Alo. On November 20, 1998, the parties executed a
Compromise Agreement, whereby, for and in consideration of the amount of
Php650,000.00, the Spouses Paray conveyed to petitioners and Mae Gochan all their
shares, interests, and participation over the properties. On November 27, 1998, the
court approved the agreement and rendered judgment in accordance with its terms and
conditions.

Claiming that the legal redemption adversely affected Lot Nos. 1028-D-1, 1028-D-3,
1028-D-4, and 1028-E, respondent filed a suit before the CA for “Declaration of Nullity
of Final Decision and Compromise Agreement and the Registration of the Same
Documents with the Register of Deeds.” CA ruled in favor of respondent.

ISSUE:
Whether the CA erred in finding that extrinsic fraud was present when the respondent
was not impleaded in the redemption case and when petitioners entered into a
compromise agreement with Bonifacio Paray.

RULING:
Yes. The governing law with respect to redemption by co-owners in case the share of a
co-owner is sold to a third person is Article 1620 of the New Civil Code, which provides:
Art. 1620. A co-owner of a thing may exercise the right of redemption in case the shares
of all the other co-owners or of any of them, are sold to a third person. If the price of the
alienation is grossly excessive, the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only
do so in proportion to the share they may respectively have in the thing owned in
common. Article 1620 contemplates of a situation where a co-owner has alienated his
pro-indiviso shares to a third party or stranger to the coownership. Its purpose is to
provide a method for terminating the coownership and consolidating the dominion in
one sole owner.

The redeeming co-owner and the buyer are the indispensable parties in an action for
legal redemption, to the exclusion of the seller/co-owner. Thus, the mere fact that
respondent was not impleaded as a party in Civil Case No. CEB-22825 is not in itself
indicative of extrinsic fraud. If a seller/co-owner is not treated as an indispensable party,
how much more is a third person who merely alleged that his lots are affected thereby?
Truly, the exclusion of respondent (or other alleged subdivision lot owners who are
equally affected) from the legal redemption case does not entitle him to the right to ask
for the annulment of the judgment under Rule 47 of the Rules, because he does not
even have any legal standing to participate or intervene therein.

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