Ancheta vs. Cambay

A prior resort to, or the prior availability of, a petition for relief from judgment bars a petition for annulment of judgment only when the annulment is grounded on extrinsic fraud; lack of jurisdiction over the person of the defendant, including defective service of summons, remains a valid ground for annulment notwithstanding a prior, even erroneous, resort to a petition for relief, because a judgment rendered without jurisdiction is void and may be assailed at any time unless barred by laches.

Marylou R. Ancheta and her former common-law husband Ricardo Dionila were the registered owners of a parcel of land in Bayombong, Nueva Vizcaya, covered by Transfer Certificate of Title No. T-58527. Vivian Ancheta obtained loans from Mary Cambay and used that land as security by virtue of a Special Power of Attorney purportedly executed in her favor by Ancheta and Dionila. The controversy arises from the interplay of two remedies under the Rules of Court — the petition for relief from judgment under Rule 38 and the petition for annulment of judgment under Rule 47 — the latter governing the annulment by the Court of Appeals of judgments and final orders of Regional Trial Courts in civil actions 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.

Marylou R. Ancheta and her former common-law husband Ricardo Dionila were the registered owners of a parcel of land located in Bayombong, Nueva Vizcaya, covered by Transfer Certificate of Title No. T-58527. On June 12, 2003, Vivian Ancheta obtained a loan of P25,000.00 from Mary Cambay, with interest at 10% monthly, payable within two months from even date. As security for the loan, Vivian executed a Real Estate Mortgage in Cambay's favor over the Bayombong property. Because the land was registered in the names of Ancheta and Dionila, the two allegedly executed on June 10, 2003 a Special Power of Attorney in favor of Vivian authorizing her to use the land as collateral for her loan with Cambay. On June 16, 2003, Vivian obtained a second loan of P25,000.00 from Cambay, this time evidenced by a Promissory Note.

Alleging that Vivian failed to settle her obligation upon maturity despite repeated demands, Cambay filed on August 30, 2004 a Complaint for Judicial Foreclosure of Mortgage against Vivian, Ancheta, and Dionila before the Regional Trial Court. According to Ancheta, while summons was served on and received by Vivian, no summons ever reached her or Dionila. Vivian filed a Motion for Extension of Time to File Answer, which the trial court granted in its September 29, 2004 Order, but neither Vivian, Ancheta, nor Dionila filed an Answer to the Complaint. The trial court scheduled a pre-trial conference on March 16, 2005, later reset to May 18, 2005 by an Order dated March 16, 2005. A copy of that Order was not personally served on Ancheta and Dionila; a copy was supposedly received by their son, Ricmar John A. Dionila.

After trial on the merits, the trial court rendered on August 31, 2005 a Decision by default against Vivian, Ancheta, and Dionila, ordering them to pay Cambay P50,000.00 plus interest at the rate of 24% per annum starting one year after June 16, 2003 until fully paid, and directing payment within 120 days from entry of judgment, in default of which the property would be sold at public auction. The Decision became final and executory and was entered in the book of entries of judgment on September 26, 2005. The Clerk of Court and ex-officio Provincial Sheriff thereafter implemented the Decision and, by virtue of an Absolute Deed of Sale dated May 22, 2007, sold the parcel of land to Cambay. Cambay consolidated her ownership over the property, resulting in the issuance of TCT No. T-145718 in her favor by the Register of Deeds of Nueva Vizcaya and the cancellation of TCT No. T-58527 in the names of Ancheta and Dionila.

On August 14, 2006, Ancheta filed with the trial court a Petition for Relief from Judgment, claiming that she came to know of SPL Civil Action No. 64 only sometime in February 2006; that no summons was personally served on her or Dionila; and that the June 10, 2003 Special Power of Attorney was falsified and thus null and void. The trial court dismissed the petition on October 17, 2006, holding that it was filed beyond the 60-day and six-month periods prescribed by Section 3, Rule 38, that the affidavit failed to state facts constituting fraud, accident, mistake, or excusable negligence, and that the validity of a public document could not be assailed collaterally. Ancheta then filed with the Court of Appeals a Petition for Annulment of Judgment under Rule 47, grounded on lack of jurisdiction over the persons of Ancheta and Dionila.

The records disclose that Ancheta made inconsistent claims before the trial court and the Court of Appeals as to when she acquired knowledge of the proceedings in SPL Civil Action No. 64 and of the August 31, 2005 default judgment. In her petition for relief, she stated that she came to know of the case only sometime during the last week of February 2006, while in her petition for annulment she stated that she learned for the first time that the assailed judgment by default was rendered against her sometime in April 2006. The appellate court relied on the allegation in the petition for relief — that she acquired knowledge of the case during the last week of February 2006 — in dismissing the petition for annulment.

• Scope of the Extrinsic Fraud Bar: Ancheta maintained that only the ground of extrinsic fraud, and not lack of jurisdiction, is excluded as a valid ground for a petition for annulment under Rule 47 of the Rules of Court if the same ground was availed of, or could have been availed of, in a petition for relief under Rule 38 of the same Rules.
• Erroneous Prior Remedy: Ancheta insisted that a party who has previously availed of the remedy of Petition for Relief from Judgment, albeit an erroneous remedy, is not precluded from resorting to the correct remedy of Petition for Annulment of Judgment.
• Non-Availability of the Prior Remedy: Ancheta asserted that her previous filing of a petition for relief with the trial court could not be considered an appropriate or proper remedy under Section 1 of Rule 47 because it was no longer legally and procedurally available to her at the time she acquired knowledge of the proceedings in SPL Civil Action No. 64 sometime in April 2006.

• Bar by Prior Petition for Relief: Cambay maintained that Ancheta can no longer resort to an action for annulment of judgment since she had already filed a petition for relief with the Regional Trial Court, which petition she lost.

• Annulment of a Default Judgment by a Defendant Not Served with Summons: Whether a named defendant in a judicial foreclosure case who was not served with summons may file an action for annulment of judgment which was rendered by default.
• Prior Resort to Relief from Judgment as a Bar: Whether a prior resort to a relief from judgment, albeit erroneously availed of, bars a resort to the remedy of annulment of judgment.

• Annulment of a Default Judgment by a Defendant Not Served with Summons: Yes. A named defendant in a judicial foreclosure case who was not served with summons may file a petition for annulment of judgment under Rule 47, lack of jurisdiction over the person being a ground expressly recognized by Section 2 of that Rule.
• Prior Resort to Relief from Judgment as a Bar: No. A prior resort to a petition for relief from judgment, even if erroneously availed of, does not bar a petition for annulment of judgment grounded on lack of jurisdiction; only extrinsic fraud is excluded by such prior or available resort.

• Annulment of a Default Judgment by a Defendant Not Served with Summons: Section 1, Rule 47 of the Rules of Court governs 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. Section 2 limits the grounds for annulment to extrinsic fraud and lack of jurisdiction. Lack of jurisdiction on the part of the trial court in rendering the judgment or final order is either lack of jurisdiction over the subject matter or nature of the action, or lack of jurisdiction over the person of the petitioner. Because the ground invoked by Ancheta was lack of jurisdiction over her person and that of Dionila arising from the alleged failure of personal service of summons, the petition presented a well-founded cause for annulment of judgment. If she can prove that she and Dionila were indeed not duly served with summons, the trial court never acquired jurisdiction over them, and its August 31, 2005 Judgment would be void ab initio, which the Court of Appeals would be duty-bound to strike down. The appellate court, however, instead of fully addressing the issue of lack of jurisdiction raised before it, opted to dismiss the case outright based on a mere technical, albeit erroneous, interpretation of the rules.

• Prior Resort to Relief from Judgment as a Bar: The bar under Section 2, Rule 47 applies only to extrinsic fraud, which shall not be a valid ground for annulment if it was availed of, or could have been availed of, in a motion for new trial or petition for relief. Jose vs. Intra Strata Assurance Corporation held that it is only extrinsic fraud, not lack of jurisdiction, which is excluded as a valid ground for annulment if it was availed of, or could have been availed of, in a motion for new trial or petition for relief. The reason is that a judgment rendered without jurisdiction by the trial court is fundamentally void or non-existent and therefore can be assailed at any time, either collaterally or by direct action, or by resisting such judgment or final order in any action or proceeding whenever it is invoked. Pinausukan Seafood House, Roxas Boulevard, Inc. vs. Far East Bank & Trust Co. instructs that the requirement for the petition to aver that the petitioner failed to move for a new trial, to appeal, or to file a petition for relief without fault on his part is not imposed when the ground for the petition is lack of jurisdiction, whether alleged singly or in combination with extrinsic fraud, simply because the judgment or final order, being void, may be assailed at any time, unless the ground of lack of jurisdiction is meanwhile barred by laches. Coombs vs. Castañeda is to the same effect: when a petition for annulment of judgment is grounded on lack of jurisdiction, the petitioner need not allege that the ordinary remedy of new trial or reconsideration of the judgment sought to be annulled is no longer available through no fault of her own, because a judgment rendered without jurisdiction is fundamentally void and may be questioned any time unless laches has already set in. Accordingly, considering that the ground relied upon in the petition for annulment was lack of jurisdiction over the persons of Ancheta and Dionila, it was neither necessary nor essential for the Court of Appeals to establish first, before it could have ruled on the merits of the petition for annulment, whether the remedy of petition for relief was earlier availed of by Ancheta. This is all the more so where the issue of lack of jurisdiction was not even categorically ruled upon by the trial court. At most, Ancheta may have been barred from raising the defense of fraud in her petition for annulment, but this should not have prevented the appellate court from ruling on the merits of the petition and definitively resolving the issue of lack of jurisdiction raised therein. While Ancheta had previously availed of the remedy of a petition for relief with the trial court, she is not precluded from filing with the Court of Appeals a petition for annulment of judgment essentially anchored on the ground of lack of jurisdiction.

• Annulment of Judgment under Rule 47 — A remedy available in the Court of Appeals for the annulment of judgments, final orders, and resolutions of Regional Trial Courts in civil actions 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. It is regarded as a "last remedy" and is not an alternative to the ordinary remedies of new trial, appeal, or petition for relief. In this case, the Court held that the appellate court erred in dismissing the petition outright on a technical ground instead of ruling on the merits of the lack-of-jurisdiction ground raised.

• Grounds for Annulment: Extrinsic Fraud and Lack of Jurisdiction — Section 2, Rule 47 limits the grounds for annulment to extrinsic fraud and lack of jurisdiction. Lack of jurisdiction on the part of the trial court in rendering the judgment or final order is either lack of jurisdiction over the subject matter or nature of the action, or lack of jurisdiction over the person of the petitioner. Extrinsic fraud, on the other hand, is present when the fraudulent scheme of the prevailing litigant prevented the petitioner from having his day in court. The Court applied this doctrine by recognizing that Ancheta's petition, grounded on lack of jurisdiction over her person arising from defective service of summons, stated a valid cause for annulment.

• Extrinsic Fraud Bar Rule Does Not Extend to Lack of Jurisdiction — Extrinsic fraud shall not be a valid ground for annulment of judgment if it was availed of, or could have been availed of, in a motion for new trial or petition for relief. This statutory exclusion applies only to extrinsic fraud and not to lack of jurisdiction. The Court applied this doctrine in holding that Ancheta's prior filing of a petition for relief, even if erroneously availed of, did not preclude her from subsequently filing a petition for annulment of judgment anchored on lack of jurisdiction.

• Void Judgment May Be Assailed at Any Time — A judgment rendered without jurisdiction by the trial court is fundamentally void or non-existent and may be assailed at any time, either collaterally or by direct action, or by resisting such judgment or final order in any action or proceeding whenever it is invoked. The Court applied this doctrine in holding that if Ancheta and Dionila were indeed not duly served with summons, the trial court never acquired jurisdiction over them and its August 31, 2005 Judgment would be void ab initio.

• Laches as the Only Bar to Annulment on the Ground of Lack of Jurisdiction — When the ground for the petition is lack of jurisdiction, whether alleged singly or in combination with extrinsic fraud, the petitioner need not aver that the ordinary remedies of new trial, appeal, or petition for relief are no longer available through no fault of his own, unless the ground of lack of jurisdiction is meanwhile barred by laches. The Court applied this doctrine in ruling that the Court of Appeals should have proceeded to resolve the merits of the petition for annulment rather than dismissing it on the ground of a prior resort to a petition for relief.

• "Extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed of, in a motion for new trial or petition for relief." — This is the exact text of Section 2, Rule 47 of the Rules of Court as quoted in the decision. It states the statutory bar whose scope the Court construed, holding that it excludes only extrinsic fraud and not lack of jurisdiction as a ground for annulment of judgment.
• "it is only extrinsic fraud, not lack of jurisdiction, which is excluded as a valid ground for annulment if it was availed of, or could not have been availed of, in a motion for new trial or petition for relief." — Quoted from Jose vs. Intra Strata Assurance Corporation, this passage supplies the ratio decidendi of the case: the bar arising from a prior or available petition for relief operates only against extrinsic fraud, leaving lack of jurisdiction available as a ground for annulment.
• "But this requirement to aver is not imposed when the ground for the petition is lack of jurisdiction (whether alleged singly or in combination with extrinsic fraud), simply because the judgment or final order, being void, may be assailed at any time either collaterally or by direct action or by resisting such judgment or final order in any action or proceeding whenever it is invoked, unless the ground of lack of jurisdiction is meanwhile barred by laches." — Quoted from Pinausukan Seafood House, Roxas Boulevard, Inc. vs. Far East Bank & Trust Co., this passage defines the exception to the requirement that the petition aver the unavailability of ordinary remedies, and identifies laches as the only bar to an annulment grounded on lack of jurisdiction.
• "when a petition for annulment of judgment is grounded on lack of jurisdiction, the petitioner need not allege that the ordinary remedy of new trial or reconsideration of the judgment sought to be annulled are no longer available through no fault of her own. This is because a judgment rendered without jurisdiction is fundamentally void. Thus, it may be questioned any time unless laches has already set in." — Quoted from Coombs vs. Castañeda, this passage reinforces the rule that a void judgment may be questioned at any time, and was cited by the Court to justify remanding the case for resolution on the merits.

• Jose vs. Intra Strata Assurance Corporation, 502 Phil. 737, 747 (2005) — Controlling precedent. Held that only extrinsic fraud, not lack of jurisdiction, is excluded as a valid ground for annulment if it was availed of, or could have been availed of, in a motion for new trial or petition for relief; cited by the Court as the direct basis for rejecting the appellate court's dismissal.
• Pinausukan Seafood House, Roxas Boulevard, Inc. vs. Far East Bank & Trust Co., 725 Phil. 19 (2014) — Instructive precedent. Held that the requirement to aver the unavailability of ordinary remedies is not imposed when the ground for the petition is lack of jurisdiction, since a void judgment may be assailed at any time unless barred by laches; also cited for the definition of lack of jurisdiction and of extrinsic fraud.
• Coombs vs. Castañeda, 807 Phil. 383 (2017) — Followed. Held that when annulment is grounded on lack of jurisdiction, the petitioner need not allege that the ordinary remedies are no longer available through no fault of her own, because a judgment rendered without jurisdiction is fundamentally void and may be questioned any time unless laches has set in.
• Almelor vs. Regional Trial Court of Las Piñas City, 585 Phil. 439, 448 (2008) — Cited for the characterization of annulment of judgment as a "last remedy" under Rule 47.
• Dare Adventure Farm Corp. vs. Court of Appeals, 695 Phil. 681, 688-689 (2012) — Cited for the rule that the petition for annulment must show or allege that the ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies are no longer available through no fault of the petitioner.

• Section 1, Rule 47, Rules of Court — Provides that the Rule governs 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 Court cited this provision to frame the coverage of the remedy invoked by Ancheta and to note that the petition for relief she earlier filed was no longer legally and procedurally available to her at the time she acquired knowledge of the proceedings.
• Section 2, Rule 47, Rules of Court — Limits the grounds for annulment to extrinsic fraud and lack of jurisdiction, and provides that extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed of, in a motion for new trial or petition for relief. The Court construed this provision as excluding only extrinsic fraud from the bar, thereby allowing Ancheta's petition grounded on lack of jurisdiction to proceed.
• Section 3, Rule 38, Rules of Court — Prescribes the reglementary period for filing a petition for relief from judgment. The Regional Trial Court relied on this provision in dismissing Ancheta's petition for relief as filed beyond the 60-day and six-month periods.
• Section 2, Rule 68, Rules of Court — Governs judgment by default in foreclosure of mortgage actions. The Regional Trial Court invoked this provision as the basis for rendering judgment by default in favor of Cambay.
• Section 4, Rule 45, Rules of Court — Pursuant to this provision, the Register of Deeds of Nueva Vizcaya, the Presiding Judge of the Regional Trial Court, Branch 14 of Lagawe, Ifugao, and the Clerk of Court and ex-officio Provincial Sheriff were dropped as party-respondents.

Leonen (Chairperson), Inting, and Delos Santos, JJ., concur. Rosario, J., on official leave.