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VICTORINO F. VILLANUEVA, G.R. No.

155804
ROSITA M. VILLANUEVA vs.
FRANCISCO VILORIA

This petition for review under Rule 45 assails
the August 7, 2002 Decision
[1]
and October 9, 2002
Resolution
[2]
of the Court of Appeals (CA) in CA-G.R. SP
No. 70560 dismissing the petition for annulment of
judgment, under Rule 47 of the 1997 Revised Rules of
Civil Procedure, filed by petitioners for lack of merit.

The antecedents are that on February 22, 2001,
respondent Francisco Viloria, acting through his
Attorney-in-Fact Samuel P. Vera Cruz, filed a verified
petition for the issuance of a new owners duplicate
copy of Transfer Certificate of Title (TCT) No. T-16156 in
lieu of the lost one,
[3]
before the Regional Trial Court
(RTC) of Iba, Zambales, Branch 70, alleging the
following: (1) that he is the registered and absolute
owner of a certain parcel of land located in
the Poblacion of Iba, Zambales, covered by TCT No. T-
16156; (2) that respondent Viloria and his wife were
former residents of Iba, Zambales until the year 1988,
when they moved to Ilocos Sur bringing with them,
among others, important documents which they kept in
a wooden chest, including the owners duplicate copy of
TCT No. T-16156; (3) that after the death of his wife in
1995, he began to sort their personal effects, as well as
the documents kept in the wooden chest, and
thereafter found that the wooden chest was infested
and partially eaten by termites, while most of the
papers and important documents therein have been
completely destroyed, reduced to pieces and beyond
recognition; (4) that no trace of the owners duplicate
copy of TCT No. T-16156 could be found inside the
wooden chest where it was kept and he supposed that
among the important documents inside the wooden
chest, eaten and destroyed by termites, was the said
owners duplicate copy of title; (5) that the owners
duplicate copy of title is beyond recovery and
irretrievably lost; (6) that he executed an Affidavit of
Loss and registered the same with the Register of Deeds
of Zambales; and (7) that said owners duplicate copy of
title was not delivered or conveyed to any third person
or entity to satisfy or guarantee an
obligation.
[4]
Respondent Viloria prayed that the court
declare null and void the owners duplicate copy of TCT
No. T-16156, which was lost, and order the Register of
Deeds of Zambales, upon payment of fees, to issue a
new owners duplicate copy of TCT No. T-16156 in lieu
of the lost one.
[5]


After preliminary requirements and certificate
of posting were complied with, trial ensued. On March
27, 2001, the trial court issued an Order,
[6]
the
dispositive portion of which reads:

WHEREFORE, finding the
evidence submitted to be sufficiently
meritorious, pursuant to Section 109
of P.D. 1529, the Register of Deeds
of Zambales is hereby directed and
authorized, upon payment of the
corresponding fees, to issue another
owners copy of Transfer Certificate of
Title No. T-16156 under the same
terms and conditions as the one lost,
which is hereby declared cancelled,
null and void.

The new owners duplicate
issued shall in all respect be entitled to
like faith and credit as the original
duplicate and shall thereafter be
honored as such for all purposes.

SO ORDERED.
[7]



Finding that its order became final
and executory on April 11, 2001, the trial court made an
Entry of Judgment dated June 5, 2001.
[8]
Thereafter,
and pursuant to the said Order, the Registry of Deeds
of Zambales issued on June 14, 2001 a new owners
duplicate copy of TCT No. T-16156 with SN No. 057212
in the name of respondent Viloria, married
to Cresencia P. Viloria.
[9]
Respondent Viloria lost no
time in executing an Affidavit of Self-Adjudication of
Sole Heir of the late Cresencia P. Viloria, whose estate is
covered by TCT No. T-16156. The Notice of Self-
Adjudication was published in the Philippine Recorder
on January 14, 21, and 28, 2002.
[10]


On March 4, 2002, Lot 227-C, covered by TCT
No. T-16156, and with an area of 585 square meters,
was sold by respondent Viloria to Ruben M. Marty in
consideration of the sum of P350,000.
[11]
As a
consequence of the sale, TCT No. T-16156 was cancelled
and TCT No. T-54657 in the name of Ruben M. Marty
was issued on April 25, 2002 by the Registry of Deeds
of Zambales.
[12]


On May 10, 2002, petitioners filed a petition for
annulment of judgment under Rule 47 of the 1997
Revised Rules of Civil Procedure, as amended, on the
grounds of lack of jurisdiction and extrinsic fraud.

In the petition before the CA, petitioners
claimed to have learned about the petition for the
issuance of a new owners duplicate copy of TCT No. T-
16156 only sometime in March 2002, when a certain
Emmy Angeles came to their house to inform them
about the Order dated March 27, 2001, of the trial
court. They alleged that they were never given the
necessary notices and information regarding the
pendency of respondent Vilorias petition despite the
fact that they are the actual possessors and owners of
the land covered by TCT No. T-16156.

On August 7, 2002, the CA dismissed the
petition for lack of merit. As to the issue of lack of
jurisdiction, the appellate court ratiocinated that the
requirements laid down under Section 109 of
Presidential Decree No. 1529 were duly complied with;
hence, the lower court acted within its jurisdiction
when it ordered the issuance of a new owners
duplicate of TCT No. T-16156 in lieu of the lost one. The
CA held that alleged ground of extrinsic fraud failed
because the failure to disclose to the adversary, or to
the court, matters which would defeat ones own claim
or defense is not such extrinsic fraud as will justify or
require a vacation of the judgment. The appellate court
added that petitioners were not entitled to be notified
of the petition before the RTC for not being persons
whose claim, right or interest is annotated at the back
of TCT No. T-16156 under its Memorandum of
Encumbrances.

On October 9, 2002, the motion for
reconsideration filed by petitioners was denied for lack
of merit.

Hence, the present petition.

Petitioners claim that at the time that the
petition for the issuance of a new owners duplicate
copy of TCT No. T-16156 was filed by
respondent Viloria, the subject land had already been
sold to them, who are the actual possessors of the
property. They further allege that they are in
possession of TCT No. T-16156, with serial number
2136412,
[13]
which was delivered to them by the late
wife of respondent Viloria, Cresencia P. Viloria, along
with a copy of the sales contract
[14]
dated June 5,
1986. Petitioners likewise annexed in their petition for
review copies of the receipts of payment
[15]
for the sale,
duly signed by Cresencia.

The issues raised by the petitioners are:

A. WHETHER OR NOT
THE REGIONAL TRIAL COURT HAD
JURISDICTION TO ORDER THE
ISSUANCE OF A NEW OWNERS
DUPLICATE COPY OF TRANSFER
CERTIFICATE OF TITLE NO. 16156

B. WHETHER OR NOT THE
COURT OF APPEALS HAD DECIDED THE
CASE IN ACCORDANCE TO THE
APPLICABLE DECISIONS OF THE
SUPREME COURT ON THE MATTER.
[16]



Petitioners submit that the decision of the CA is
not in consonance with the Courts decision in the case
of Rexlon Realty Group Inc. v. Court of Appeals.
[17]
In
their petition, petitioners state that:
In the said case the Supreme
Court ruled in favor of the Petitioner
and GRANTED the Petition for Review
filed by the Petitioner, it reversed and
set aside the assailed Decision of the
Court of Appeals dismissing the Petition
for Annulment of Judgment and the
Decision of the Regional Trial Court
of Cavite (w)as ANNULLED; declaring
void the new owners duplicate copies
of TCT Nos. T-72537 and T-72538 in the
name of Alex L. David issued by virtue
of the said Decision of the Regional Trial
Court as well as the replacement
thereof and explained its decision as
follows:

In the case
of Strait Times, Inc. v.
Court of
Appeals, where this
Court was faced with
the same facts and
issue, therein
respondent Pealosa fil
ed a petition for the
issuance of a new
owners duplicate
certificate of title. He
alleged therein that his
copy was lost and was
not pledged or
otherwise delivered to
any person or entity to
guaranty any obligation
or for any
purpose. When the
trial court issued a new
owners duplicate title,
therein petitioner Strait
Times, Inc filed a
petition to annul
judgment based on
extrinsic fraud and lack
of jurisdiction. Strait
Times, Inc. claimed
that Pealosa misrepres
ented before the trial
court that the said
owners duplicate copy
of the title was lost
when in fact it was in
the possession of the
former pursuant to a
contract of sale
between Pealosa and
a
certain Conrado Callera.
Callera later sold the
lot represented by the
alleged lost title to
therein petitioner Strait
Times, Inc.

We ruled
therein, as we now rule
in the case at bar, that
extrinsic fraud did not
attend the proceedings
before the trial court
for the reason that:

xxx It is well-settled
that the use of forged
instrument or perjured
testimonies during trial
is not an extrinsic fraud,
because such evidence
does not preclude the
participation of any
party in the
proceedings. While a
perjured testimony may
prevent a fair and just
determination of a
case, it does not bar the
adverse party from
rebutting or opposing
the use of such
evidence. Furthermore,
it should be stressed
that extrinsic fraud
pertains to an act
committed outside of
the trial. The alleged
fraud in this case was
perpetrated during the
trial.

x x x

However, in
consonance with the
Strait Times case,
respondent Davids act
of misrepresentation,
though not constituting
extrinsic fraud, is still
an evidence of absence
of jurisdiction. In
the Strait Times case
and in Demetriou v.
Court of Appeals, also
on facts analogous to
those involved in this
case, we held that if an
owners duplicate copy
of a certificate of title
has not been lost but is
in fact in possession of
another person, the
reconstituted title is
void and the court
rendering the decision
has not acquired
jurisdiction.
Consequently, the
decision may be
attacked any time. In
the case at bar, the
authenticity and
genuineness of the
owners duplicate of
TCT Nos. T-52537 and
T-52538 in the
possession of
petitioner Rexlon and
the Absolute Deed of
Sale in its favor have
not been disputed. As
there is no proof to
support actual loss of
the said owners
duplicate copies of said
certificates of title, the
trial court did not
acquire jurisdiction and
the new titles issued in
replacement thereof
are void.
[18]



The petition has merit.

The present case is on all fours with the Strait
Times case, in that the trial court could not have validly
acquired jurisdiction to reconstitute the alleged lost
owners duplicate copy of TCT No. T-16156 since the
same was not lost but was in the possession of
petitioners who had purchased the property from its
late owner.

Such being the case, the Order of the trial court
dated March 27, 2001 directing the reconstitution could
not have become final and executory, it being void for
lack of jurisdiction.

WHEREFORE, the petition is GRANTED and the
Decision and Resolution of the Court of Appeals in CA-
G.R. SP No. 70560 are REVERSED and SET ASIDE. The
Order of the Regional Trial Court
of Iba, Zambales dated March 27, 2001 is DECLARED
NULL and VOID for lack of jurisdiction.

SO ORDERED.


PEOPLE OF THE PHILIPPINES G.R. NO. 159222
- versus - AUSTRIA-MARTINEZ,

The Petition for Review on Certiorari
[1]
before this
Court assails the March 31, 2003 Decision
[2]
and July 18,
2003 Resolution
[3]
of the Court of Appeals (CA) in CA-
G.R. SP No. 68797,
[4]
which granted a Petition for
Annulment of Judgment under Rule 47 of the February
29, 2000 Decision
[5]
of the Regional Trial Court
(RTC), Branch 153,Pasig City, in Criminal Case No.
103677.

The facts are not disputed.

On the basis of a complaint lodged by Traders
Royal Bank (TRB),
[6]
an information for estafa was filed
against Rafael M. Bitanga (Bitanga) before the RTC and
docketed as Criminal Case No. 103677. Bitanga pleaded
not guilty to the offense charged. He was allowed to
post bail.

During trial on the merits,
the People presented the testimonies of three TRB
employees on how Bitanga duped the bank into
accepting three foreign checks for deposit and
encashment, which were however returned to TRB by
reason of unlocated accounts.
[7]


When it was time for the defense to present his
case, however, Bitanga and his counsel failed
to appear and adduce evidence.
[8]
Upon motion of the
public prosecutor, a warrant of arrest was issued
against respondent and his right to adduce evidence
was deemed waived.
[9]


On February 29, 2000, the RTC promulgated in
absentia a Decision finding Bitanga guilty as charged,
thus:

WHEREFORE, judgment is hereby
rendered convicting accused Rafael
M. Bitanga of the crime
of estafa defined and penalized under
Article 315, par. 2 (a) of the Revised
Penal Code and hereby sentences him
to suffer imprisonment of four (4) years
and two (2) months
of prision correccional as minimum to
twenty (20) years of reclusion temporal
as maximum with the necessary
penalties provided by law and to
indemnify private complainant Traders
Royal Bank the amount
of P742,884.00 and to pay the cost.
SO ORDERED.
[10]


On January 28, 2002, Bitanga filed with the CA a
Petition for Annulment of Judgment with Prayer for
Other Reliefs
[11]
on the ground that extrinsic fraud was
allegedly perpetuated upon him by his counsel of
record, Atty. Benjamin Razon.
[12]
He alleged that he
received copy of the February 29, 2000 RTC Decision
only on December 13, 2001.
[13]


The People filed an Answer
[14]
opposing the
Petition.

The CA granted the Petition for Annulment of
Judgment in the March 31, 2003 Decision assailed
herein, the decretal portion of which reads:

WHEREFORE, in the light of the
foregoing considerations, the petition is
hereby GRANTED. Accordingly, the
decision of the Regional Trial Court
in Muntinlupa City, Branch 153 being
tainted with circumstances constitutive
of extrinsic fraud which deprived the
petitioner herein of his day in court is
SET ASIDE. Resultantly, Criminal Case
No. 103677 is remanded to the court of
origin for further proceedings to give
herein petitioner opportunity to
present his evidence in said case and
for the trial court to render judgment in
accordance with the evidence
adduced. Corollarily, the petitioner may
be released and allowed to be on bail
unless there are other valid and legal
reasons for his continued detention.

SO ORDERED.
[15]


and denied the People's Motion for Reconsideration in
its Resolution
[16]
of July 18, 2003.


The foregoing CA Decision and Resolution are now
being questioned by the People (petitioner) on these
grounds:


I

The two previous counsels were not
negligent in defending respondent.

II

Assuming without admitting the
existence of negligence on the part of
the previous counsels, the same does
not constitute extrinsic fraud.

III

The Court of Appeals did not accord the
previous counsels their right to
procedural due process of law.

IV

Jumping bail, respondent waived his
right to present his evidence.
[17]



The Petition for Review is meritorious.


Section 1, Rule 47 of the Rules of Court, limits the
scope of the remedy of annulment of judgment to the
following:

Section 1. Coverage. This
Rule shall govern the annulment by the
Court of Appeals of judgments or final
orders and resolutions in civil actions of
Regional Trial Courts for which the
ordinary remedies of new trial, appeal,
petition for relief or other appropriate
remedies are no longer available
through no fault of the petitioner.

The remedy cannot be resorted to when the RTC
judgment being questioned was rendered in a criminal
case. The 2000 Revised Rules of
Criminal Procedure itself does not permit such
recourse, for it excluded Rule 47 from the enumeration
of the provisions of the 1997 Revised Rules of Civil
Procedure which have suppletory application to
criminal cases. Section 18, Rule 124 thereof, provides:

Sec. 18. Application of certain
rules in civil procedure to criminal
cases. The provisions of Rules 42, 44
to 46 and 48 to 56 relating to
procedure in the Court of Appeals and
in the Supreme Court in original and
appealed civil cases shall be applied to
criminal cases insofar as they are
applicable and not inconsistent with the
provisions of this Rule.
There is no basis in law or the rules, therefore, to
extend the scope of Rule 47 to criminal cases. As we
explained in Macalalag v. Ombudsman,
[18]
when there is
no law or rule providing for this remedy, recourse to it
cannot be allowed, viz.:

Parenthetically, R.A. 6770 is
silent on the remedy of annulment of
judgments or final orders and
resolutions of the Ombudsman in
administrative cases. In Tirol, Jr. v. Del
Rosario, the Court has held that since
The Ombudsman Act specifically deals
with the remedy of an aggrieved party
from orders, directives and decisions of
the Ombudsman in administrative
disciplinary cases only, the right to
appeal is not to be considered granted
to parties aggrieved by orders and
decisions of the Ombudsman in criminal
or non-administrative cases. The right
to appeal is a mere statutory privilege
and may be exercised only in the
manner prescribed by, and in
accordance with, the provisions of law.
There must then be a law expressly
granting such right. This legal axiom is
also applicable and even more true in
actions for annulment of judgments
which is an exception to the rule on
finality of judgments.
[19]


The Petition for Annulment of Judgment of
the February 29, 2000 Decision of the RTC in Criminal
Case No. 103677 was therefore an erroneous remedy. It
should not have been entertained, much less granted,
by the CA.

Even on substantive grounds, the Petition for
Annulment of Judgment does not pass muster.

A petition for annulment of judgment is a
remedy in equity so exceptional in nature that it may be
availed of only when other remedies are
wanting,
[20]
and only if the judgment sought to be
annulled was rendered by a court lacking jurisdiction or
through proceedings attended by extrinsic fraud.
[21]


When the ground invoked is extrinsic
fraud, annulment of judgment must be sought within
four years from discovery of the fraud, which fact
should be alleged and proven.
[22]
In addition, the
particular acts or omissions constituting extrinsic fraud
must be clearly established.
[23]


Extrinsic or collateral fraud is trickery practiced
by the prevailing party upon the unsuccessful party,
which prevents the latter from fully proving his case. It
affects not the judgment itself but the manner in which
said judgment is obtained.
[24]


In the present case,
respondent Bitanga complained that his own counsel
perpetrated fraud upon him by abandoning his cause.
He attributed the following acts and omissions to them:

1. Atty. Benjamin Razon failed to
inform his client of the scheduled
hearings for the receptioon of defense
evidence. This resulted in depriving
herein petitioner of a chance to prove
his innocence by presenting a valid
defense;

2. He failed to attend the scheduled
hearing for reception of petitioners'
evidence for which reason the case was
deemed submitted for decision without
his evidence;

3. He never bother to verify what
transpired at the hearing he failed to
attend, and thus, was not able to file the
necessary pleadings to lift the order
considering the case submitted for
decision without petitioners' evidence;

4. He withdrew his appearance as
counsel for the petitioner without
getting the express conformity of his
client. Thus, the court appointed a
counsel de officio from the Public
Attorneys Office;

5. The counsel de officio, however,
exerted no effort in contacting the
petitioner to prepare him for defense
evidence. He simply submitted the case
for decision and waived the
presentation of Defenseevidence;

6. After receiving the court a quo's
adverse decision, convicting herein
petitioner, he did not notify or inform
his clients, herein petitioners; and

7. He did not appeal the case to the
Court of Appeals; or avail themselves of
other remedies under the law.
[25]



The CA equated the foregoing
behavior of said counsels to extrinsic fraud in that it
impaired Bitanga's right to due process and rendered
the proceedings in Criminal Case No. 103677 a farce.
Citing a ruling of the appellate court in Sps. Carlos
and Erlinda Ong v. Nieves Jacinto, et al.,
[26]
the CA held:

While it is true that neglect
or failure of counsel to inform his client
of an adverse judgment resulting in the
loss of his right to appeal will not justify
setting aside a judgment that is valid
and regular on its face, this rule is not
unbending and admits of exceptions as
where reckless or gross negligence of
counsel deprives the client of due
process. This Court believes, and so
holds, that the enumerated deplorable
acts and omissions of petitioner's
counsel on record, finding no
abatement either later from his court-
appointed lawyer, taken together, more
than suffice to paint a clear picture of
delinquency, gross negligence and
recklessness constitutive of extrinsic
fraud.
[27]


Bitanga defends the foregoing view of the CA as
consistent with a basic rule in criminal procedure that
every leeway must be given an accused person to
defend himself, lest he be wrongfully deprived of
liberty.
[28]


Disagreeing with the CA, the People maintain
that the acts and omissions imputed to said counsels
amounted to mere professional negligence which
cannot be equated with extrinsic fraud in the absence
of allegation and evidence of malice.
[29]
The People
point out that it was Bitanga's own act of jumping bail
which did him in, for had he showed up in court when
summoned, he would not have lost the right to present
his defense.
[30]


The People's arguments are tenable.

Extrinsic fraud is that perpetrated by the
prevailing party, not by the unsuccessful party's own
counsel.
[31]
As a general rule, counsels ineptitude
is not a ground to annul judgment, for the latter's
management of the case binds his client.
[32]
The
rationale behind this rule is that, once
retained, counsel holds the implied authority to do all
acts which are necessary or, at least, incidental to the
prosecution and management of the suit in behalf of his
client, and any act performed by said counsel within the
scope of such authority is, in the eyes of the law,
regarded as the act of the client himself.
[33]


There is an exception to the foregoing rule, and
that is when the negligence of counsel had been so
egregious that it prejudiced his clients interest and
denied him his day in court.
[34]
For this exception to
apply, however, the gross negligence of counsel should
not be accompanied by his clients own negligence or
malice.
[35]
Clients have the duty to be vigilant of their
interests by keeping themselves up to date on the
status of their case.
[36]
Failing in this duty, they suffer
whatever adverse judgment is rendered against them.
As we held in Tan v. Court of Appeals:
[37]


Moreover, annulment of
judgment may either be based on the
ground that the judgment is void for
want of jurisdiction or that the
judgment was obtained by extrinsic
fraud.

By no stretch of the imagination
can we equate the negligence of the
petitioner and his former counsel to
extrinsic fraud as contemplated in the
cited rules. Extrinsic fraud refers to any
fraudulent act of the prevailing party in
the litigation which is committed
outside of the trial of the case, whereby
the unsuccessful party has been
prevented from exhibiting fully his case,
by fraud or deception practiced on him
by his opponent. The fraud or deceit
cannot be of the losing partys own
doing, nor must it contribute to it. The
extrinsic fraud must be employed
against it by the adverse party, who,
because of some trick, artifice, or
device, naturally prevails in the suit.
This Court notes that no such fraud or
deceit was properly proved against the
private respondent. Indeed, the
petitioner has no reason to protest his
own negligence.
[38]
(Emphasis supplied)


In the present case, the acts and omissions
attributed to counsel amounted to negligence only,
which cannot be considered extrinsic fraud. Moreover,
said counsels negligence was caused by Bitanga's act
of jumping bail.

There appears to be no issue about how
Atty. Razon represented Bitanga during the
presentation of the evidence of the prosecution. The CA
itself noted that during said period,
Atty. Razon conducted the cross-examination and re-
cross-examination of the witnesses for the
prosecution.
[39]


Problems arose only when it was Bitangas turn
to present his defense. As noted by the CA,
Atty. Razon failed to attend the hearings scheduled
on December 10, 1998,February 18, 1999, April 20,
1999, and May 25, 1999.
[40]
His absences, however,
appear to be justified. When he was required by the
RTC to submit an explanation for his
absences, Atty. Razon clarified:

2. That on May 25, 1999 from
7:00AM to 9:30AM counsel waited for
the accused to pick him up at his
residence in order both counsel and
accused can go to court together, it
being the defense evidence of the
accused, counsel was not even feeling
well that morning on account of his
swollen leg;

3. That the accused never showed
up putting counsel in a quandary
whether he has been relieved as
counsel for the accused or not. The
accused likewise never contacted
counsel nor showed up in person
x x x counsel in his residence or office or
called up by telephone x x x counsel
made inquiry at the accused place of
business but was informed that the
accused had already vacated the
premises leaving no forwarding
address where he can be located or
contacted. It is now June and still
accused never contacted counsel so
that counsel is left without alternative
but to withdraw from the
case.
[41]
(Emphasis added)


The RTC accepted the foregoing explanation of
Atty. Razon and allowed him to withdraw his
appearance as counsel even without the conformity
of Bitanga whose whereabouts could not be
traced.
[42]
Moreover, the RTC ordered the arrest
of Bitanga and the forfeiture of his cash bond because
of his continued non-appearance. The RTC also
considered his right to present evidence waived.
[43]


It is apparent that Bitanga left Atty. Razon in the
dark. While said counsel exerted effort to
contact Bitanga, the latter made himself completely
scarce: he vacated his old business address without
leaving a forwarding address or informing
Atty. Razon about the change; worse, after moving to a
different address, Bitanga did not bother to resume
communication with Atty. Razon. Even if said counsel
could have appeared in court without his client, his
presence would not have salvaged the case for he had
no witness to present or evidence to submit.

There was therefore no factual or legal basis to
the conclusion of the CA that extrinsic fraud prejudiced
the right of Bitanga to present his defense. He has only
himself to blame for jumping bail and leaving his case in
disarray.

WHEREFORE, the petition is GRANTED.
The March 31, 2003 Decision

and July 18, 2003
Resolution

of the Court of Appeals
are ANNULLED and SET ASIDE.

Upon finality of herein Decision, let the Regional
Trial Court, Branch 153, Pasig City be furnished a copy
hereof for execution of its final Decision dated February
29, 2000in Criminal Case No. 103677.

SO ORDERED.

G.R. No. 184023 March 4, 2013
LORNA CASTIGADOR, Petitioner,
vs.
DANILO M. NICOLAS, Respondent.
Petitioner Lorna Castigador (petitioner) assails the Court
of Appeals (CA) Resolutions in CA-G.R. SP No. 99725
dated July 31, 2007
1
and July 29, 2008,
2
dismissing her
petition for annulment of judgment.
3

Petitioner was the previous registered owner of a 522-
square meter property in Tagaytay under Transfer
Certificate of Title (TCT) No. T -41069. In 2004, the City
Treasurer of Tagaytay sold the property at public
auction for non-payment of real estate taxes. According
to petitioner, she did not receive any notice of
assessment, notice of delinquency, warrant of levy and
notice of public auction.
4
Respondent Danilo M. Nicolas
(respondent) was thereafter declared the highest
bidder. The certificate of sale issued to respondent was
then annotated at the back of petitioners title.
Petitioner further alleged that she was not given a
notice of the auction sale or registration of the
certificate of sale.
5

In 2006, respondent sought the issuance of a new title
due to petitioners failure to redeem the property.
Petitioner, again, alleged that she did not receive a copy
of the petition or any subsequent notices as her address
indicated therein was wrong. Consequently, the
Regional Trial Court (RTC) of Tagaytay City rendered on
May 31, 2006 its decision granting respondents
petition
6
and ordering the issuance of TCT No. T-65220
in respondents name.
7

When finally apprised of these events, petitioner filed a
notice of adverse claim on respondents TCT but it was
denied by the Register of Deeds of Tagaytay City on the
ground that there was no privity between petitioner
and respondent.
Thus, petitioner filed the petition for annulment of
judgment with the CA on July 17, 2007. On July 31,
2007, the CA rendered the assailed Resolution
dismissing the petition on the grounds that: (1) the
petition is defective for failure to comply with Rule 7,
Section 4 of the 1997 Rules of Civil Procedure, as
amended; and (2) there is no allegation in the petition
that it is based on extrinsic fraud and lack of
jurisdiction, in violation of Rule 47, Section 2 of the
Rules.
8
Petitioner filed a Motion for Reconsideration
with Motion for Leave to Admit Amended Petition,
which was denied by the CA in the assailed Resolution
dated July 29, 2008. The CA simply stated that "the
arguments posed by the petitioner in support of the
grounds cited for the allowance of the petition are
bereft of merit, as they do not constitute extrinsic fraud
to annul the questioned decision."
9

Hence, this petition.
To begin with, under Section 5, Rule 47 of the Rules of
Court, it is incumbent that when a court finds no
substantial merit in a petition for annulment of
judgment, it may dismiss the petition outright but the
"specific reasons for such dismissal" shall be clearly set
out. In this case, the Court is at sea on the tenor of the
assailed resolutions. Was the petition dismissed
because it does not contain any allegation of extrinsic
fraud or lack of jurisdiction (procedural)? Or was it
dismissed because the petition failed to make out a
case for annulment of judgment based on extrinsic
fraud or lack of jurisdiction (substantial)? Unfortunately,
the CA brushed aside any discussion on these points
and failed to state with clarity the reasons for the
dismissal. Thus, the difficult, but not impossible, task on
the part of the Court to make a definitive determination
as to whether the CA committed a reversible error in
dismissing the petition.
On the assumption that the CAs dismissal was based on
a procedural defect, the Court finds a reversible error
committed by the CA on this score.
The petition filed with the CA contained the following
allegations, among others: (1) "the auction sale of the
land is null and void for lack of actual and personal
notice to herein petitioner"; (2) the RTC did not comply
with the procedure prescribed in Section 71,
Presidential Decree No. 1529 requiring notice by the
Register of Deeds to the registered owner as to the
issuance of a certificate of sale; and (3) petitioner was
not afforded due process when she was not notified of
the proceedings instituted by respondent for the
cancellation of her title.
10
The petition need not
categorically state the exact words extrinsic fraud;
rather, the allegations in the petition should be so
crafted to easily point out the ground on which it was
based. The allegations in the petition filed with the CA
sufficiently identify the ground upon which the petition
was based extrinsic fraud. Fraud is extrinsic where it
prevents a party from having a trial or from presenting
his entire case to the court, or where it operates upon
matters pertaining not to the judgment itself but to the
manner in which it is procured. The overriding
consideration when extrinsic fraud is alleged is that the
fraudulent scheme of the prevailing litigant prevented a
party from having his day in court.
11
The allegations
clearly charged the RTC and respondent with depriving
petitioner of the opportunity to oppose the auction sale
and the cancellation of her title and ventilate her side.
This allegation, if true, constitutes extrinsic fraud.
On the assumption, on the other hand, that the CAs
disposition of the petition was based on its substantial
merits, the Court still finds a reversible error committed
by the CA.1wphi1
As previously stressed, the grounds relied upon by the
petitioner in support of its prayer for the annulment of
judgment is lack of notice, from the assessment of the
property for real estate tax purposes up to the time the
title over the property passed on to respondent. These
are serious charges and could very well affect the
validity of the issuance of the new title to respondent.
Nevertheless, the Court is not in the proper position to
determine the veracity and validity of petitioner's
allegations as these entail a factual assessment of the
records. Moreover, records show that the proceedings
before the CA did not even reach the comment stage as
the petition was summarily dismissed. Therefore, this
case should be remanded to the CA for further
proceedings on the petition for annulment of judgment.
WHEREFORE, the petition for review is GRANTED. Let
this case be remanded to the Court of Appeals for
further proceedings in CA-G.R. SP No. 99725 in
accordance with Rule 4 7 of the Rules of Court.
SO ORDERED.
G.R. No. 173559 January 7, 2013
LETICIA DIONA, represented by her Attorney-in-Fact,
MARCELINA DIONA, Petitioner,
vs.
ROMEO A. BALANGUE, SONNY A. BALANGUE,
REYNALDO A. BALANGUE, and ESTEBAN A. BALANGUE,
JR.,Respondents.
The great of a relief neither sought by the party in
whose favor it was given not supported by the evidence
presented violates the opposing partys right to due
process and may be declared void ab initio in a proper
proceeding.
This Petition for Review on Certiorari
1
assails the
November 24, 2005 Resolution
2
of the Court of Appeals
(CA) issued in G.R. SP No. 85541 which granted the
Petition for Annulment of Judgment
3
filed by the
respondents seeking to nullify that portion of the
October 17, 2000 Decision
4
of the Regional Trial Court
(RTC), Branch 75, Valenzuela City awarding petitioner
5% monthly interest rate for the principal amount of the
loan respondent obtained from her.
This Petition likewise assails the CAs June 26, 2006
Resolution
5
denying petitioners Motion for
Reconsideration.
Factual Antecedents
The facts of this case are simple and undisputed.
On March 2, 1991, respondents obtained a loan
of P45,000.00 from petitioner payable in six months and
secured by a Real Estate Mortgage
6
over their 202-
square meter property located in Marulas, Valenzuela
and covered by Transfer Certificate of Title (TCT) No. V-
12296.
7
When the debt became due, respondents failed
to pay notwithstanding demand. Thus, on September
17, 1999, petitioner filed with the RTC a
Complaint
8
praying that respondents be ordered:
(a) To pay petitioner the principal obligation
of P45,000.00, with interest thereon at the rate
of 12% per annum, from 02 March 1991 until
the full obligation is paid.
(b) To pay petitioner actual damages as may be
proven during the trial but shall in no case be
less than P10,000.00;P25,000.00 by way of
attorneys fee, plus P2,000.00 per hearing as
appearance fee.
(c) To issue a decree of foreclosure for the sale
at public auction of the aforementioned parcel
of land, and for the disposition of the proceeds
thereof in accordance with law, upon failure of
the respondents to fully pay petitioner within
the period set by law the sums set forth in this
complaint.
(d) Costs of this suit.
Other reliefs and remedies just and equitable under the
premises are likewise prayed for.
9
(Emphasis supplied)
Respondents were served with summons thru
respondent Sonny A. Balangue (Sonny). On October 15,
1999, with the assistance of Atty. Arthur C. Coroza
(Atty. Coroza) of the Public Attorneys Office, they filed
a Motion to Extend Period to Answer. Despite the
requested extension, however, respondents failed to
file any responsive pleadings. Thus, upon motion of the
petitioner, the RTC declared them in default and
allowed petitioner to present her evidence ex parte.
10

Ruling of the RTC sought to be annulled.
In a Decision
11
dated October 17, 2000, the RTC granted
petitioners Complaint. The dispositive portion of said
Decision reads:
WHEREFORE, judgment is hereby rendered in favor of
the petitioner, ordering the respondents to pay the
petitioner as follows:
a) the sum of FORTY FIVE THOUSAND
(P45,000.00) PESOS, representing the unpaid
principal loan obligation plus interest at 5% per
month [sic] reckoned from March 2, 1991, until
the same is fully paid;
b) P20,000.00 as attorneys fees plus cost of
suit;
c) in the event the [respondents] fail to satisfy
the aforesaid obligation, an order of foreclosure
shall be issued accordingly for the sale at public
auction of the subject property covered by
Transfer Certificate of Title No. V-12296 and the
improvements thereon for the satisfaction of
the petitioners claim.
SO ORDERED.
12
(Emphasis supplied)
Subsequently, petitioner filed a Motion for
Execution,
13
alleging that respondents did not interpose
a timely appeal despite receipt by their former counsel
of the RTCs Decision on November 13, 2000. Before it
could be resolved, however, respondents filed a Motion
to Set Aside Judgment
14
dated January 26, 2001,
claiming that not all of them were duly served with
summons. According to the other respondents, they
had no knowledge of the case because their co-
respondent Sonny did not inform them about it. They
prayed that the RTCs October 17, 2000 Decision be set
aside and a new trial be conducted.
But on March 16, 2001, the RTC ordered
15
the issuance
of a Writ of Execution to implement its October 17,
2000 Decision. However, since the writ could not be
satisfied, petitioner moved for the public auction of the
mortgaged property,
16
which the RTC granted.
17
In an
auction sale conducted on November 7, 2001,
petitioner was the only bidder in the amount
of P420,000.00. Thus, a Certificate of Sale
18
was issued
in her favor and accordingly annotated at the back of
TCT No. V-12296.
Respondents then filed a Motion to Correct/Amend
Judgment and To Set Aside Execution Sale
19
dated
December 17, 2001, claiming that the parties did not
agree in writing on any rate of interest and that
petitioner merely sought for a 12% per annum interest
in her Complaint. Surprisingly, the RTC awarded 5%
monthly interest (or 60% per annum) from March 2,
1991 until full payment. Resultantly, their indebtedness
inclusive of the exorbitant interest from March 2, 1991
to May 22, 2001 ballooned from P124,400.00
to P652,000.00.
In an Order
20
dated May 7, 2002, the RTC granted
respondents motion and accordingly modified the
interest rate awarded from 5% monthly to 12% per
annum. Then on August 2, 2002, respondents filed a
Motion for Leave To Deposit/Consign Judgment
Obligation
21
in the total amount of P126,650.00.
22

Displeased with the RTCs May 7, 2002 Order, petitioner
elevated the matter to the CA via a Petition for
Certiorari
23
under Rule 65 of the Rules of Court. On
August 5, 2003, the CA rendered a Decision
24
declaring
that the RTC exceeded its jurisdiction in awarding the
5% monthly interest but at the same time pronouncing
that the RTC gravely abused its discretion in
subsequently reducing the rate of interest to 12% per
annum. In so ruling, the CA ratiocinated:
Indeed, We are convinced that the Trial Court exceeded
its jurisdiction when it granted 5% monthly interest
instead of the 12% per annum prayed for in the
complaint. However, the proper remedy is not to
amend the judgment but to declare that portion as a
nullity. Void judgment for want of jurisdiction is no
judgment at all. It cannot be the source of any right nor
the creator of any obligation (Leonor vs. CA, 256 SCRA
69). No legal rights can emanate from a resolution that
is null and void (Fortich vs. Corona, 312 SCRA 751).
From the foregoing, the remedy of the respondents is
to have the Court declare the portion of the judgment
providing for a higher interest than that prayed for as
null and void for want of or in excess of jurisdiction. A
void judgment never acquire[s] finality and any action
to declare its nullity does not prescribe (Heirs of Mayor
Nemencio Galvez vs. CA, 255 SCRA 672).
WHEREFORE, foregoing premises considered, the
Petition having merit, is hereby GIVEN DUE COURSE.
Resultantly, the challenged May 7, 2002 and September
5, 2000 orders of Public Respondent Court are hereby
ANNULLED and SET ASIDE for having been issued with
grave abuse of discretion amounting to lack or in excess
of jurisdiction. No costs.
SO ORDERED.
25
(Emphases in the original; italics
supplied.)
Proceedings before the Court of Appeals
Taking their cue from the Decision of the CA in the
special civil action for certiorari, respondents filed with
the same court a Petition for Annulment of Judgment
and Execution Sale with Damages.
26
They contended
that the portion of the RTC Decision granting petitioner
5% monthly interest rate is in gross violation of Section
3(d) of Rule 9 of the Rules of Court and of their right to
due process. According to respondents, the loan did not
carry any interest as it was the verbal agreement of the
parties that in lieu thereof petitioners family can
continue occupying respondents residential building
located in Marulas, Valenzuela for free until said loan is
fully paid.
Ruling of the Court of Appeals
Initially, the CA denied due course to the
Petition.
27
Upon respondents motion, however, it
reinstated and granted the Petition. In setting aside
portions of the RTCs October 17, 2000 Decision, the CA
ruled that aside from being unconscionably excessive,
the monthly interest rate of 5% was not agreed upon by
the parties and that petitioners Complaint clearly
sought only the legal rate of 12% per annum. Following
the mandate of Section 3(d) of Rule 9 of the Rules of
Court, the CA concluded that the awarded rate of
interest is void for being in excess of the relief sought in
the Complaint. It ruled thus:
WHEREFORE, respondents motion for reconsideration
is GRANTED and our resolution dated October 13, 2004
is, accordingly, REVERSED and SET ASIDE. In lieu
thereof, another is entered ordering the ANNULMENT
OF:
(a) public respondents impugned October 17,
2000 judgment, insofar as it awarded 5%
monthly interest in favor of petitioner; and
(b) all proceedings relative to the sale at public
auction of the property titled in respondents
names under Transfer Certificate of Title No. V-
12296 of the Valenzuela registry.
The judgment debt adjudicated in public respondents
impugned October 17, 2000 judgment is, likewise,
ordered RECOMPUTED at the rate of 12% per annum
from March 2, 1991. No costs.
SO ORDERED.
28
(Emphases in the original.)
Petitioner sought reconsideration, which was denied by
the CA in its June 26, 2006 Resolution.
29

Issues
Hence, this Petition anchored on the following grounds:
I. THE HONORABLE COURT OF APPEALS
COMMITTED GRAVE AND SERIOUS ERROR OF
LAW WHEN IT GRANTED RESPONDENTS
PETITION FOR ANNULMENT OF JUDGMENT AS
A SUBSTITUTE OR ALTERNATIVE REMEDY OF A
LOST APPEAL.
II. THE HONORABLE COURT OF APPEALS
COMMITTED GRAVE AND SERIOUS ERROR AND
MISAPPREHENSION OF LAW AND THE FACTS
WHEN IT GRANTED RESPONDENTS PETITION
FOR ANNULMENT OF JUDGMENT OF THE
DECISION OF THE REGIONAL TRIAL COURT OF
VALENZUELA, BRANCH 75 DATED OCTOBER 17,
2000 IN CIVIL CASE NO. 241-V-99, DESPITE THE
FACT THAT SAID DECISION HAS BECOME FINAL
AND ALREADY EXECUTED CONTRARY TO THE
DOCTRINE OF IMMUTABILITY OF JUDGMENT.
30

Petitioners Arguments
Petitioner claims that the CA erred in partially annulling
the RTCs October 17, 2000 Decision. She contends that
a Petition for Annulment of Judgment may be availed of
only when the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies are no
longer available through no fault of the claimant. In the
present case, however, respondents had all the
opportunity to question the October 17, 2000 Decision
of the RTC, but because of their own inaction or
negligence they failed to avail of the remedies
sanctioned by the rules. Instead, they contented
themselves with the filing of a Motion to Set Aside
Judgment and then a Motion to Correct/Amend
Judgment and to Set Aside Execution Sale.
Petitioner likewise argues that for a Rule 47 petition to
prosper, the same must either be based on extrinsic
fraud or lack of jurisdiction. However, the allegations in
respondents Rule 47 petition do not constitute
extrinsic fraud because they simply pass the blame to
the negligence of their former counsel. In addition, it is
too late for respondents to pass the buck to their
erstwhile counsel considering that when they filed their
Motion to Correct/Amend Judgment and To Set Aside
Execution Sale they were already assisted by their new
lawyer, Atty. Reynaldo A. Ruiz, who did not also avail of
the remedies of new trial, appeal, etc. As to the ground
of lack of jurisdiction, petitioner posits that there is no
reason to doubt that the RTC had jurisdiction over the
subject matter of the case and over the persons of the
respondents.
While conceding that the RTC patently made a mistake
in awarding 5% monthly interest, petitioner nonetheless
invokes the doctrine of immutability of final judgment
and contends that the RTC Decision can no longer be
corrected or modified since it had long become final
and executory. She likewise points out that respondents
received a copy of said Decision on November 13, 2000
but did nothing to correct the same. They did not even
question the award of 5% monthly interest when they
filed their Motion to Set Aside Judgment which they
anchored on the sole ground of the RTCs lack of
jurisdiction over the persons of some of the
respondents.
Respondents Arguments
Respondents do not contest the existence of their
obligation and the principal amount thereof. They only
seek quittance from the 5% monthly interest or 60% per
annum imposed by the RTC. Respondents contend that
Section (3)d of Rule 9 of the Rules of Court is clear that
when the defendant is declared in default, the court
cannot grant a relief more than what is being prayed for
in the Complaint. A judgment which transgresses said
rule, according to the respondents, is void for having
been issued without jurisdiction and for being violative
of due process of law.
Respondents maintain that it was through no fault of
their own, but through the gross negligence of their
former counsel, Atty. Coroza, that the remedies of new
trial, appeal or petition for relief from judgment were
lost. They allege that after filing a Motion to Extend
Period to Answer, Atty. Coroza did not file any pleading
resulting to their being declared in default. While the
said lawyer filed on their behalf a Motion to Set Aside
Judgment dated January 26, 2001, he however took no
steps to appeal from the Decision of the RTC, thereby
allowing said judgment to lapse into finality. Citing
Legarda v. Court of Appeals,
31
respondents aver that
clients are not always bound by the actions of their
counsel, as in the present case where the clients are to
lose their property due to the gross negligence of their
counsel.
With regard to petitioners invocation of immutability of
judgment, respondents argue that said doctrine applies
only to valid and not to void judgments.
Our Ruling
The petition must fail.
We agree with respondents that the award of 5%
monthly interest violated their right to due process and,
hence, the same may be set aside in a Petition for
Annulment of Judgment filed under Rule 47 of the Rules
of Court.
Annulment of judgment under Rule 47; an exception to
the final judgment rule; grounds therefor.
A Petition for Annulment of Judgment under Rule 47 of
the Rules of Court is a remedy granted only under
exceptional circumstances where a party, without fault
on his part, has failed to avail of the ordinary remedies
of new trial, appeal, petition for relief or other
appropriate remedies. Said rule explicitly provides that
it is not available as a substitute for a remedy which was
lost due to the partys own neglect in promptly availing
of the same. "The underlying reason is traceable to the
notion that annulling final judgments goes against the
grain of finality of judgment. Litigation must end and
terminate sometime and somewhere, and it is essential
to an effective administration of justice that once a
judgment has become final, the issue or cause involved
therein should be laid to rest."
32

While under Section 2, Rule 47
33
of the Rules of Court a
Petition for Annulment of Judgment may be based only
on the grounds of extrinsic fraud and lack of
jurisdiction, jurisprudence recognizes lack of due
process as additional ground to annul a judgment.
34
In
Arcelona v. Court of Appeals,
35
this Court declared that
a final and executory judgment may still be set aside if,
upon mere inspection thereof, its patent nullity can be
shown for having been issued without jurisdiction or for
lack of due process of law.
Grant of 5% monthly interest is way beyond the 12%
per annum interest sought in the Complaint and smacks
of violation of due process.
It is settled that courts cannot grant a relief not prayed
for in the pleadings or in excess of what is being sought
by the party. They cannot also grant a relief without
first ascertaining the evidence presented in support
thereof. Due process considerations require that
judgments must conform to and be supported by the
pleadings and evidence presented in court. In
Development Bank of the Philippines v. Teston,
36
this
Court expounded that:
Due process considerations justify this requirement. It is
improper to enter an order which exceeds the scope of
relief sought by the pleadings, absent notice which
affords the opposing party an opportunity to be heard
with respect to the proposed relief. The fundamental
purpose of the requirement that allegations of a
complaint must provide the measure of recovery is to
prevent surprise to the defendant.
Notably, the Rules is even more strict in safeguarding
the right to due process of a defendant who was
declared in default than of a defendant who
participated in trial. For instance, amendment to
conform to the evidence presented during trial is
allowed the parties under the Rules.
37
But the same is
not feasible when the defendant is declared in default
because Section 3(d), Rule 9 of the Rules of Court comes
into play and limits the relief that may be granted by
the courts to what has been prayed for in the
Complaint. It provides:
(d) Extent of relief to be awarded. A judgment
rendered against a party in default shall not exceed the
amount or be different in kind from that prayed for nor
award unliquidated damages.
The raison dtre in limiting the extent of relief that may
be granted is that it cannot be presumed that the
defendant would not file an Answer and allow himself
to be declared in default had he known that the plaintiff
will be accorded a relief greater than or different in kind
from that sought in the Complaint.
38
No doubt, the
reason behind Section 3(d), Rule 9 of the Rules of Court
is to safeguard defendants right to due process against
unforeseen and arbitrarily issued judgment. This, to the
mind of this Court, is akin to the very essence of due
process. It embodies "the sporting idea of fair
play"
39
and forbids the grant of relief on matters where
the defendant was not given the opportunity to be
heard thereon.
In the case at bench, the award of 5% monthly interest
rate is not supported both by the allegations in the
pleadings and the evidence on record. The Real Estate
Mortgage
40
executed by the parties does not include
any provision on interest. When petitioner filed her
Complaint before the RTC, she alleged that respondents
borrowed from her "the sum of FORTY-FIVE THOUSAND
PESOS (P45,000.00), with interest thereon at the rate of
12% per annum"
41
and sought payment thereof. She did
not allege or pray for the disputed 5% monthly interest.
Neither did she present evidence nor testified thereon.
Clearly, the RTCs award of 5% monthly interest or 60%
per annum lacks basis and disregards due process. It
violated the due process requirement because
respondents were not informed of the possibility that
the RTC may award 5% monthly interest. They were
deprived of reasonable opportunity to refute and
present controverting evidence as they were made to
believe that the complainant petitioner was seeking for
what she merely stated in her Complaint.
Neither can the grant of the 5% monthly interest be
considered subsumed by petitioners general prayer for
"other reliefs and remedies just and equitable under the
premises x x x."
42
To repeat, the courts grant of relief is
limited only to what has been prayed for in the
Complaint or related thereto, supported by evidence,
and covered by the partys cause of action.
43
Besides,
even assuming that the awarded 5% monthly or 60%
per annum interest was properly alleged and proven
during trial, the same remains unconscionably excessive
and ought to be equitably reduced in accordance with
applicable jurisprudence. In Bulos, Jr. v. Yasuma,
44
this
Court held:
In the case of Ruiz v. Court of Appeals, citing the cases
of Medel v. Court of Appeals, Garcia v. Court of Appeals,
Spouses Bautista v. Pilar Development Corporation and
the recent case of Spouses Solangon v. Salazar, this
Court considered the 3% interest per month or 36%
interest per annum as excessive and unconscionable.
Thereby, the Court, in the said case, equitably reduced
the rate of interest to 1% interest per month or 12%
interest per annum. (Citations omitted)
It is understandable for the respondents not to contest
the default order for, as alleged in their Comment, "it is
not their intention to impugn or run away from their
just and valid obligation."
45
Nonetheless, their waiver to
present evidence should never be construed as waiver
to contest patently erroneous award which already
transgresses their right to due process, as well as
applicable jurisprudence.
Respondents former counsel was grossly negligent in
handling the case of his clients; respondents did not
lose ordinary remedies of new trial, petition for relief,
etc. through their own fault.
Ordinarily, the mistake, negligence or lack of
competence of counsel binds the client.1wphi1 This is
based on the rule that any act performed by a counsel
within the scope of his general or implied authority is
regarded as an act of his client. A recognized exception
to the rule is when the lawyers were grossly negligent in
their duty to maintain their clients cause and such
amounted to a deprivation of their clients property
without due process of law.
46
In which case, the courts
must step in and accord relief to a client who suffered
thereby.
47

The manifest indifference of respondents former
counsel in handling the cause of his client was already
present even from the beginning. It should be recalled
that after filing in behalf of his clients a Motion to
Extend Period to Answer, said counsel allowed the
requested extension to pass without filing an Answer,
which resulted to respondents being declared in
default. His negligence was aggravated by the fact that
he did not question the awarded 5% monthly interest
despite receipt of the RTC Decision on November 13,
2000.
48
A simple reading of the dispositive portion of
the RTC Decision readily reveals that it awarded
exorbitant and unconscionable rate of interest. Its
difference from what is being prayed for by the
petitioner in her Complaint is so blatant and very
patent. It also defies elementary jurisprudence on legal
rate of interests. Had the counsel carefully read the
judgment it would have caught his attention and
compelled him to take the necessary steps to protect
the interest of his client. But he did not. Instead, he filed
in behalf of his clients a Motion to Set Aside
Judgment
49
dated January 26, 2001 based on the sole
ground of lack of jurisdiction, oblivious to the fact that
the erroneous award of 5% monthly interest would
result to his clients deprivation of property without due
process of law. Worse, he even allowed the RTC
Decision to become final by not perfecting an appeal.
Neither did he file a petition for relief therefrom. It was
only a year later that the patently erroneous award of
5% monthly interest was brought to the attention of the
RTC when respondents, thru their new counsel, filed a
Motion to Correct/Amend Judgment and To Set Aside
Execution Sale. Even the RTC candidly admitted that it
"made a glaring mistake in directing the defendants to
pay interest on the principal loan at 5% per month
which is very different from what was prayed for by the
plaintiff."
50

"A lawyer owes entire devotion to the interest of his
client, warmth and zeal in the maintenance and defense
of his rights and the exertion of his utmost learning and
ability, to the end that nothing can be taken or withheld
from his client except in accordance with the
law."
51
Judging from how respondents former counsel
handled the cause of his clients, there is no doubt that
he was grossly negligent in protecting their rights, to
the extent that they were deprived of their property
without due process of law.
In fine, respondents did not lose the remedies of new
trial, appeal, petition for relief and other remedies
through their own fault. It can only be attributed to the
gross negligence of their erstwhile counsel which
prevented them from pursuing such remedies. We
cannot also blame respondents for relying too much on
their former counsel. Clients have reasonable
expectations that their lawyer would amply protect
their interest during the trial of the case.
52
Here,
"respondents are plain and ordinary people x x x who
are totally ignorant of the intricacies and technicalities
of law and legal procedures. Being so, they completely
relied upon and trusted their former counsel to
appropriately act as their interest may lawfully warrant
and require."
53

As a final word, it is worth noting that respondents
principal obligation was only P45,000.00. Due to their
former counsels gross negligence in handling their
cause, coupled with the RTCs erroneous, baseless, and
illegal award of 5% monthly interest, they now stand to
lose their property and still owe petitioner a large
amount of money. As aptly observed by the CA:
x x x If the impugned judgment is not, therefore,
rightfully nullified, petitioners will not only end up
losing their property but will additionally owe private
respondent the sum of P232,000.00 plus the legal
interest said balance had, in the meantime, earned. As a
court of justice and equity, we cannot, in good
conscience, allow this unconscionable situation to
prevail.
54

Indeed, this Court is appalled by petitioners invocation
of the doctrine of immutability of judgment. Petitioner
does not contest as she even admits that the RTC made
a glaring mistake in awarding 5% monthly
interest.
55
Amazingly, she wants to benefit from such
erroneous award. This Court cannot allow this injustice
to happen.
WHEREFORE, the instant Petition is hereby DENIED and
the assailed November 24, 2005 and June 26, 2006
Resolution of the Court of Appeals in CA-G.R. SP No.
85541 are AFFIRMED.
SO ORDERED.
G.R. No. 176123 March 10, 2010
JOSE CABARAL TIU, Petitioner,
vs.
FIRST PLYWOOD CORPORATION, Respondent.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 185265
JOSE CABARAL TIU, Petitioner,
vs.
TIMBER EXPORTS, INC., ANGEL DOMINGO, COUNTRY
BANKERS INSURANCE CORPORATION, PERFECTO
MONDARTE, JR. and CESAR DACAL, Respondents.
D E C I S I O N
CARPIO MORALES, J.:
The following facts spawned the filing of these two
consolidated cases:
On January 14, 1990, petitioner Jose Cabral Tiu
(petitioner) and First Plywood Corporation (FPC)
entered into an Agreement
1
whereby as a settlement of
FPCs indebtedness to petitioner in the amount
of P335,513.70, FPC authorized him to cut and haul
958.61 cubic meters of logs within its timber concession
areas in Titay, Zamboanga del Sur and Labason,
Zamboanga del Norte. Petitioner was to sell the logs in
the name of FPC and keep the proceeds thereof.
Alleging that FPC, through its general manager Edmund
Tansengco (Tansengco), prohibited him from entering
its timber concession areas in contravention of the
aforesaid Agreement, petitioner filed on February 23,
1990 with the Regional Trial Court (RTC) of Pagadian
City (Pagadian RTC) a complaint against FPC and
Tansengco for specific performance with preliminary
mandatory injunction and damages.
2
The complaint was
raffled to Branch 19 and docketed as Civil Case No. 3059
(Pagadian case).
On the basis of a March 22, 1990 Compromise
Agreement
3
forged by petitioner with FPC, represented
by Tansengco, the Pagadian RTC, by Decision of March
26, 1990,
4
rendered a judgment based on the
Compromise Agreement, and subsequently issued a
writ of execution upon motion of petitioner.
5

Then Deputy Sheriff Julio G. Tarongoy (Tarongoy)
thereupon issued a Notice of Levy and Sale of Personal
Properties dated May 18, 1990, levying upon the
personal properties of FPC and Tansengco consisting
mainly of motor vehicles, and publishing notice of the
sale thereof at public auction on May 23, 1990.
6

Meanwhile, by Omnibus Motion dated May 7, 1990,
FPC prayed for an Order
a. [D]eclaring that there was no valid service of
summons upon complainant FPC, and allowing
it to file an Answer to the Complaint within the
reglementary period;
b. [N]ullifying and setting aside the Compromise
Agreement dated March 26, 1990 (sic), as well
as the Decisiondated March 26, 1990 issued in
approval thereof;
c. [N]ullifying and setting aside the Writ of
Execution dated April 17, 1990; and
d. [O]rdering the Sheriff to desist from
enforcing the [W]rit of [E]xecution pending the
resolution of the motion.
7
(underscoring
supplied)
The auction sale pushed through just the same, as
scheduled on May 23, 1990 following which, petitioner,
who was the highest bidder thereat, was issued a
Certificate of Sale.
8

The Pagadian RTC later denied FPCs Omnibus Motion
by Order of June 11, 1990.
9

G.R. No. 176123
FPC thereupon filed on November 26, 1991 with the
Regional Trial Court of Manila (Manila RTC) a complaint
against petitioner and sheriff Tarongoy for annulment
of execution sale with damages, praying for the
nullification of the Pagadian case execution sale, the
return of the personal properties purchased by
petitioner, and for damages.
10

FPC argued mainly that the execution sale was held
without complying with then Section 18
11
(now Section
15), Rule 39 of the Rules of Court requiring a minimum
of five days prior notice. The complaint was raffled to
Branch 32 and docketed as Civil Case No. 91-59404.
Petitioner and Tarongoy
12
alleged, in their Answer, that
FPC had in fact attempted to prevent the Pagadian case
execution sale by causing its counsel to file a third-party
claim on behalf of respondent Timber Exports, Inc. (TEI)
at the originally scheduled sale on May 18, 1990,
implying that FPC was, contrary to its claim, properly
notified.
By Decision of July 16, 2001, the Manila RTC ruled in
favor of FPC, disposing thus:
WHEREFORE, JUDGMENT is hereby rendered in favor of
the plaintiff corporation, FIRST PLYWOOD
CORPORATION, ORDERING defendants JULIO G.
TARONGOY and JOSE CABARAL TIU jointly and severally:
1. But first, annulling and nullifying the
Execution Sale conducted on May 23, 1990
described in the Certificate of Sale issued May
23, 1990 (Exhibit C);
2. Ordering defendant JOSE CABARAL TIU
to return to the plaintiff corporation the
equipment and items, mostly vehicles and
trucks acquired by him by virtue and in
consequence of the aforesaid sale or to pay to
plaintiff company, jointly and solidarily, the
value of the motor vehicles, trucks, crankshaft,
and propeller shaft described and listed in par.
8 (Complaint);
3. Ordering defendants, jointly and solidarily,
to indemnify plaintiff as damages for having
deprived (sic) of the possession and use of the
aforedescribed properties, equipment and
items, in the amounts for each as averred in
par. 2 (a), (b), (c) and (d) of Complaint;
4. Ordering defendants, jointly and solidarily,
to pay plaintiff P150,000 by way of attorneys
fees, and costs.
13
(underscoring supplied)
In finding for FPC, the Manila RTC held that no notice of
sale of personal property on execution was posted in
three public places not less than five days prior to the
Pagadian case execution sale held on May 23, 1990,
resulting in its nullity.
14

On FPCs motion, the Manila RTC issued a writ of
execution on May 22, 2006,
15
prompting Sheriff
Salvador Dacumos to issue a notice of levy on execution
on May 25, 2006
16
upon the real properties of
petitioner located in Pagadian City.
Petitioner challenged the Manila RTC Decision via
a petition for annulment of judgment
17
before the Court
of Appeals in Cagayan de Oro City which forwarded the
same to the Court of Appeals, Manila for appropriate
action.
18

The appellate court dismissed the petition outright by
Resolution of August 23, 2006,
19
holding that petitioner
was not able to establish his claim of extrinsic or
collateral fraud, which refers to any fraudulent act of
the prevailing party committed outside of the trial
whereby the unsuccessful party has been prevented
from exhibiting his case fully;
20
and that having
participated in the proceedings before the Manila RTC
in which he claimed the amount of P73,739
representing the remaining balance (which was not
realized from the Pagadian case execution sale),
attorneys fees of P50,000 and expenses of litigation,
petitioner was estopped from assailing the jurisdiction
of the Manila RTC.
21

His motion for reconsideration having been denied by
Resolution dated December 5, 2006,
22
petitioner comes
before this Court through the present Petition for
Review on Certiorari
23
bearing G.R. No. 176123.
Petitioner argues that, among other things, estoppel
does not lie against him as the issue of lack of
jurisdiction was raised in the Manila RTC through his
pleading styled as a Comment on the Pleadings Relative
to the Other Civil Cases Filed by Plaintiff Before Other
Courts.
FPC maintains, on the other hand,
24
that a separate
action to annul an execution sale which did not comply
with the notice requirements is allowed; and that
petitioners petition for annulment of judgment filed
with the appellate court was fatally defective, it not
having explained how the ordinary remedies of new
trial, appeal and petition for relief from judgment were
no longer available through no fault of his.
G.R. No. 185265
In the meantime, in January 1991, respondents TEI and
Angel Domingo (Domingo), claiming to be the owners of
some of the personal properties purchased by
petitioner at the Pagadian case execution sale, filed a
complaint for annulment of execution sale with
damages against petitioner, Sheriff Tarongoy and
Country Bankers Insurance Corporation (CBIC) with the
RTC of Antipolo City (Antipolo RTC). The complaint was
later amended to implead as plaintiffs William Tiosic,
Francisco Tansengco, Rafael Tansengco, Guillermo
Tansengco, Ma. Angeli Tansengco, Reuben Asuncion,
Ma. Teresa San Agustin and Alvin Sebastian, alleged
stockholders of TEI.
25

The plaintiffs in the Antipolo RTC case prayed for the
nullification of the sale at the Pagadian case execution
sale of the properties which they claimed to belong to
them, and the return to them of those properties. The
complaint was raffled to Branch 74 and docketed as
Civil Case No. 90-1867.
CBIC was impleaded as a defendant allegedly on
account of its issuance of the bond filed by petitioner in
favor of TEI and Domingo who had filed third-party
claims on the properties sold at the Pagadian case
execution sale.
26

For their part, petitioner and Tarongoy contended that
TEI and its alleged successors-in-interest/co-plaintiffs
had no legal capacity to sue as TEIs corporate existence
had expired; and that the properties in dispute
belonged to FPC at the time of the levy.
27

CBIC, on the other hand, denied having issued the
alleged bond, claiming that the same was not even in
the prescribed legal form.
28
It also filed a cross-claim
against petitioner and a third-party complaint against
Perfecto Mondarte, Jr. (Mondarte) and Cesar Dacal
(Dacal), petitioners co-signers in an indemnity
agreement wherein they made a joint and several
undertaking to reimburse it for whatever amount it may
be held liable to pay pursuant to the bond.
29

The Antipolo RTC dismissed respondents TEI and
Domingos complaint as well as the counterclaim, cross-
claim and third-party complaint by Decision of
September 19, 2005.
30
It found that while the therein
plaintiffs had satisfactorily proven ownership of the
questioned properties, TEI and FPC were essentially one
and the same entity, it appearing that a majority of the
directors and officers of TEI were also directors and
officers of FPC; that the plaintiffs witness, Tansengco,
admitted being the Chairman of the Board and Chief
Executive Officer of both TEI and FPC; and that FPC
cannot be allowed to hide behind TEI to defraud its
creditors and work an injustice.
Respondents TEI and Domingo
31
appealed to the CA.
By Decision of November 16, 2007,
32
the appellate court
reversed the Antipolo RTC Decision, finding that the
doctrine of piercing the veil of corporate fiction was
incorrectly applied, there being no showing that TEI and
Domingo had control over FPC and used it to commit
fraud or any dishonest and unjust act; and that as found
by the Antipolo RTC, TEI and Domingo sufficiently
proved their ownership of the questioned properties.
The appellate court thus ordered herein petitioner to
pay TEI and Domingo temperate damages for the
questioned properties with legal interest; held CBIC
solidarily liable with petitioner to the extent of the
amount indicated in the surety bond which was
determined to have been regularly issued; and declared
petitioner, Mondarte and Dacal solidarily liable to
reimburse CBIC pursuant to the indemnity agreement
they co-signed, without prejudice to Mondarte and
Dacals right of reimbursement against petitioner.
Petitioners Motion for Reconsideration having been
denied by Resolution dated November 6, 2008,
33
he
filed the Petition for Review on Certiorari
34
docketed as
G.R. No. 185265.
Petitioner posits that, among other things, TEI had no
personality to file the complaint with the Antipolo RTC,
its corporate life having expired before such filing; that
neither did TEIs supposed stockholders have any
personality to file the amended complaint as there was
no prior conveyance to them of the properties being
claimed by TEI; that the invoices and bills of lading
presented by TEI and Domingo as evidence were devoid
of any particulars to prove that the properties referred
to therein were the same ones levied upon in the
Pagadian case; and that the appellate courts
pronouncements on indemnity in favor of CBIC and
right of reimbursement in favor of Mondarte and Dacal
were erroneous since they did not appeal from the
Antipolo RTC Decision.
TEI and Domingo, in their Comment,
35
contend that the
factual questions raised by petitioner cannot be the
subject of a petition for review; that the stockholders of
TEI had the personality to file the complaint with the
Antipolo RTC as successors-in-interest and beneficial
owners of TEIs assets, without need for any deed of
conveyance; that the doctrine of piercing the corporate
veil does not apply as there was no wrongdoing for
which the veil was used as a shield; and that they have
sufficiently proven their ownership of the questioned
properties as found by the trial court and affirmed by
the appellate court.
CBIC, in turn, avers that the grant of its cross-claim
against petitioner and third-party complaint against
Mondarte and Dacal was proper as it was impleaded as
an appellee before the appellate court.
36

On petitioners motion, the Court, by Resolution of
March 11, 2009,
37
consolidated G.R. No. 185265 with
G.R. No. 176123 since both petitions sprang from the
Pagadian case and essentially involve the same issue of
validity of the execution sale.
Both petitions are meritorious.
The key to resolving the petitions lies in the validity of
the Pagadian case execution sale.
The presumption of regularity in the performance of
official function here applies. Conformably, any party
alleging irregularities vitiating an auction sale must
come forward with clear and convincing proof.
38

In G.R. No. 176123, FPC has not discharged its burden of
proof. Apart from its bare allegations, it has not come
forward with any evidence, let alone a clear and
convincing one, of non-compliance with the
requirement of a minimum of five days prior notice of
sale of property on execution. Hence, in the absence of
contrary evidence, the presumption prevails that the
sheriff performed his official duty of posting the notices
of sale within the reglementary period.
39
In finding
otherwise, the Manila RTC placed the burden of proof
on the sheriff without jurisprudential basis.
The Court finds that petitioner properly availed of the
remedy of a petition for annulment of judgment in
challenging the Manila RTC Decision. In his petition with
the appellate court, he did not limit his ground to
extrinsic fraud, as he invoked as well the Manila RTCs
lack of jurisdiction to annul the proceedings in the
Pagadian RTC which is a court of co-equal and
coordinate jurisdiction.
Since petitioners petition raised lack of jurisdiction, he
did not have to allege that the ordinary remedies of
new trial, reconsideration or appeal were no longer
available through no fault of his. This is so because a
judgment rendered or final order issued by the RTC
without jurisdiction is null and void and may be assailed
any time either collaterally or in a direct action, or by
resisting such judgment or final order in any action or
proceeding whenever it is invoked.
40
1avvphi1
Verily, the Manila RTC lacked jurisdiction over the
nature of the action filed by FPC. The Pagadian RTC
which rendered the decision and ordered the execution
sale should settle the whole controversy.
41
Pursuant to
the principle of judicial stability, the judgment or order
of a court of competent jurisdiction, Pagadian RTC in
this case, may not be interfered with by any court of
concurrent jurisdiction (i.e., another RTC), for the
simple reason that the power to open, modify or vacate
the said judgment or order is not only possessed by but
is restricted to the court in which the judgment or order
is rendered or issued.
42

Resultantly, the Manila RTC Decision of July 16, 2001 is
void for lack of jurisdiction. As such, it, as well as all
subsequent orders proceeding therefrom, should have
been annulled by the appellate court.
A judgment rendered by a court without jurisdiction is
null and void and may be attacked anytime. It creates
no rights and produces no effect. It remains a basic fact
in law that the choice of the proper forum is crucial, as
the decision of a court or tribunal without jurisdiction is
a total nullity. A void judgment for want of jurisdiction is
no judgment at all. All acts performed pursuant to it and
all claims emanating from it have no legal effect.
43

Respecting G.R. No. 185265, the Court finds that the
action lodged with the Antipolo RTC was essentially the
same as that filed with the Manila RTC. The relief
sought was also the annulment of the Pagadian case
execution sale. Hence, the Antipolo RTC was similarly
bereft of jurisdiction over the nature of the action. This
should have been its basis for dismissing the complaint.
The various branches of the RTC, having as they do have
the same or equal authority and exercising as they do
concurrent and coordinate jurisdiction, should not,
cannot and are not permitted to intervene with their
respective cases, much less with their orders or
judgments.
44
A contrary rule would lead to confusion
and seriously hamper the administration of justice.
45

The Court sees through the ruse being peddled by FPC.
More than a year after it failed to obtain a reversal of
the judgment based on compromise agreement in the
Pagadian case, and long after the conclusion of the
execution sale pursuant thereto, FPC sought to alter the
adverse results of the Pagadian RTC final and executory
Decision by filing a complaint for annulment of the
Pagadian execution sale with damages with the Manila
RTC a court of concurrent and coordinate jurisdiction.
FPC had also previously caused a defunct sister
company, TEI, and its so-called "stockholders" to lodge
another complaint for annulment of the same Pagadian
case execution sale with damages with the Antipolo RTC
another court of concurrent and coordinate
jurisdiction as the Pagadian RTC.
This Court would be the last to sanction such a brazen
abuse of remedies and disrespect of judicial stability.
What is clear is that FPC is feebly attempting to disturb
the effects of a judgment that, by its failure to appeal,
had long become final and been the subject of
execution. This cannot be allowed without running
afoul of the settled doctrine of finality of judgment.
Once a judgment attains finality, it becomes immutable
and unalterable. A final and executory judgment may no
longer be modified in any respect, even if the
modification is meant to correct what is perceived to be
an erroneous conclusion of fact or law, and regardless
of whether the modification is attempted to be made
by the court rendering it or by the highest court of the
land.
46

Litigation must end and terminate sometime and
somewhere, and it is essential to an effective
administration of justice that once a judgment has
become final, the issue or cause involved therein should
be laid to rest.
47
Utmost respect and adherence to this
principle must always be maintained by those who
wield the power of adjudication. Any act which violates
it must be struck down.
48

WHEREFORE, the petitions are GRANTED.
In G.R. No. 176123, the challenged August 23, 2006
Resolution of the Court of Appeals dismissing
petitioners petition is SET ASIDE. The Manila RTC
Decision of July 16, 2001 in Civil Case No. 91-59404 is
DECLARED null and void.
In G.R. No. 185265, the November 16, 2007 Decision of
the Court of Appeals which reversed the decision of the
Antipolo RTC is SET ASIDE. The September 19, 2005
Decision of the Antipolo RTC in Civil Case No. 90-1867
dismissing the complaint is REINSTATED but on a
different ground lack of jurisdiction.
SO ORDERED.
Civil Procedure
Annulment of Judgment; exception to final judgment
rule; lack of due process as additional ground. A petition
for Annulment of Judgment under Rule 47 of the Rules
of Court is a remedy granted only under exceptional
circumstances where a party, without fault on his part,
has failed to avail of the ordinary remedies of new trial,
appeal, petition for relief or other appropriate
remedies. Said rule explicitly provides that it is not
available as a substitute for a remedy which was lost
due to the partys own neglect in promptly availing of
the same. The underlying reason is traceable to the
notion that annulling final judgments goes against the
grain of finality of judgment, litigation must end and
terminate sometime and somewhere, and it is essential
to an affective administration of justice that once a
judgment has become final, the issue or cause involved
therein should be laid to rest.
While under Section 2, Rule 47 of the Rules of Court a
Petition for Annulment of Judgment may be based only
on the grounds of extrinsic fraud and lack of
jurisdiction, jurisprudence recognizes lack of due
process as additional ground to annul a judgment.
In Arcelona v. Court of Appeals, this Court declared that
a final and executory judgment may still be set aside if,
upon mere inspection thereof, its patent nullity can be
shown for having been issued without jurisdiction or for
lack of due process of law. Leticia Diona, represented by
her Attorney-in-fact, Marcelina Diona v. Romeo
Balangue, Sonny Balangue, Reynaldo Balangue, and
Esteban Balangue, Jr.; G.R. No. 173559. January 7, 2013