Title
Supreme Court
Cua vs. Vargas
Case
G.R. No. 156536
Decision Date
Oct 31, 2006
Heirs contested an extrajudicial settlement and sale of inherited land, claiming lack of notice and participation. SC upheld their right to redeem, ruling written notice mandatory, voiding settlements, and denying petitioner's claims of good faith.

Case Summary (G.R. No. 156536)

Redemption Attempt and Lower-Court Proceedings

Respondents sent a 15-day written redemption notice and later consigned the sale price when redemption was refused. They filed for annulment of the extrajudicial settlements and exercise of redemption rights in the Municipal Trial Court (MTC). Co-heirs of an earlier alleged owner intervened. The MTC and, on appeal, the Regional Trial Court (RTC) upheld the validity of the settlements and sale, ruling that actual knowledge and timely consignation cured notice defects and that petitioner acted in good faith.

Court of Appeals Reversal

The Court of Appeals held that:
• Under Rule 74, Sec. 1, extrajudicial settlements bind only those who participated or had notice before execution; publication after execution does not suffice.
• Article 1088 requires written notice of actual sale to trigger the one-month redemption period; respondents’ actual knowledge by demolition notice was insufficient.

Issue 1 – Binding Effect of Published Settlement

The Court reaffirmed that an extrajudicial settlement “shall not be binding upon any person who has not participated therein or had no notice thereof.” Publication after execution protects creditors, not late-joining heirs. Because respondents never received prior notice or participated, both settlements are void as to them.

Issue 2 – Written Notice for Redemption

Article 1088 mandates a written notice by vendor-heir to co-heirs of the actual sale before the one-month redemption period commences. The form and method are exclusive; alternate proof of actual knowledge cannot replace written notice. In absence of this mandatory notice, respondents retained their redemption right.

Good-Faith Possession

Good faith requires an honest belief that one’s title is defect-free. Petitioner’s deed itself disclosed non-participation by certain heirs and an unpartitioned estate, yet he built improvements. This knowledge negated any claim of good faith.

Jurisdiction and Estoppel

Although MTC jurisdiction over non-pecuniary claims might be questioned, petitioner’s full participation in the proceedings and failure to timely object estopped him from raising jurisdictional defects on appeal.

Non-Joinder of Indispensable Parties

An indispensable party is one without whom a final, equitable resolution is impossible. Respondents sought redemption from petit

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