Antonino vs. Register of Deeds of Makati City

A petition for annulment of judgment under Rule 47 may be based only on extrinsic fraud or lack of jurisdiction over the person or subject matter, and cannot prosper where the petitioner failed to avail of ordinary remedies such as appeal through her own negligence; grave abuse of discretion does not qualify as lack of jurisdiction.

Petitioner Remedios Antonino had been leasing a residential property in Makati City from private respondent Tan Tian Su since March 21, 1978, under a lease contract granting her a right of first refusal. On July 7, 2004, the parties executed an Undertaking Agreement whereby Su agreed to sell the property to Antonino for ₱39,500,000.00. The sale did not proceed due to a disagreement over who would shoulder the capital gains tax. The distinction between real and personal actions under the Rules of Court governs the proper venue for filing suit, and Rule 47 governs the extraordinary remedy of annulment of final judgments.

Since March 21, 1978, Remedios Antonino had been leasing a residential property in Makati City owned by Tan Tian Su under a lease contract that accorded her a right of first refusal in the event Su decided to sell. On July 7, 2004, the parties executed an Undertaking Agreement in which Su agreed to sell the property to Antonino for ₱39,500,000.00, with Antonino to pay a downpayment of $50,000.00 US dollars the following day. The sale did not proceed as intended because the parties disagreed over who would shoulder the capital gains tax. Su refused to accept the $50,000.00 downpayment and was about to tear up the document when Antonino prevented him from doing so. Antonino subsequently discovered that Su was already negotiating to sell the property to another Chinese national.

On July 9, 2004, Antonino filed a complaint against Su with the RTC of Makati City, Branch 149, docketed as Civil Case No. 04-802, initially seeking reimbursement of repair costs and damages. Later that same day, she filed an amended complaint to enforce the Undertaking Agreement and compel Su to sell the property to her. The RTC dismissed the amended complaint in an Order dated December 8, 2004 on two grounds: improper venue, since the action was personal in nature and neither party resided in Makati City, and non-payment of the correct docket fees, the value of the subject property not having been stated in the prayer and no docket fees paid thereon, pursuant to Manchester Development Corporation vs. Court of Appeals.

Antonino filed a Motion for Reconsideration on January 3, 2005, arguing that her complaint was a real action and that venue was proper in Makati where the property was located; alternatively, she submitted a Comelec certification stating she was a resident of Makati City. The RTC denied this motion on January 6, 2005 for non-compliance with the three-day notice rule under Sections 4 and 5 of Rule 15. Antonino then filed a second Motion for Reconsideration on January 21, 2005, pleading for liberal interpretation of the rules since Su had been notified before the hearing and was not prejudiced. In a Joint Resolution dated February 24, 2005, the RTC denied both Su's Omnibus Motion for cancellation of the notice of lis pendens and Antonino's second motion for reconsideration, maintaining that the dismissal was not on the merits and that the action was personal.

Instead of appealing any of the RTC's orders, Antonino filed a petition for annulment of judgment with the Court of Appeals on April 1, 2005, alleging that the RTC committed grave abuse of discretion amounting to lack of jurisdiction in classifying her action as personal and in depriving her of the opportunity to pay the correct docket fees. The CA dismissed the petition on May 26, 2008, holding that Antonino failed to justify her non-availment of ordinary remedies and that grave abuse of discretion does not constitute lack of jurisdiction as a ground for annulment. The CA nonetheless addressed the merits and agreed the action was personal. Antonino's motion for reconsideration was denied on December 5, 2008.

• Grave Abuse of Discretion as Ground for Annulment: Antonino argued that the RTC committed grave abuse of discretion amounting to lack of jurisdiction when it ruled that her action for enforcement of the Undertaking Agreement was personal, and when it deprived her of the opportunity to pay the correct amount of docket fees.
• Strict Application of Procedural Rules: Antonino contended that the RTC exhibited grave abuse of discretion through its strict application of the rules on motions and the summary denial of her motion for reconsideration.
• Real Action Classification: Antonino maintained that her complaint was a real action, such that the location of the subject property in Makati City was determinative of proper venue; alternatively, she submitted a Comelec certification stating she was a resident of Makati City.
• Liberal Construction: Antonino pleaded for liberal interpretation of the three-day notice rule, arguing that Su was notified of her motion before the hearing and was not in any way prejudiced.

• Improper Venue: Su forthwith raised improper venue as an affirmative defense, sustaining the position that the action was personal and should have been filed in either Muntinlupa City or Manila, where the parties respectively reside.
• Cancellation of Lis Pendens: Su alleged the propriety of cancelling the notice of lis pendens in view of the dismissal of the complaint and Antonino's failure to appeal therefrom, and prayed for issuance of a summary judgment on his counterclaims.

• Propriety of Annulment of Judgment: Whether Antonino's recourse to a petition for annulment of judgment was proper given her failure to appeal the RTC's final and executory orders.
• Classification of the Action: Whether Antonino's complaint for enforcement of the Undertaking Agreement constituted a real action or a personal action for purposes of venue.
• Grave Abuse of Discretion as Ground for Annulment: Whether grave abuse of discretion alleged by Antonino qualifies as lack of jurisdiction sufficient to support a petition for annulment of judgment.

• Propriety of Annulment of Judgment: No. Annulment of judgment cannot serve as a substitute for the lost remedy of appeal; Antonino failed to avail of ordinary remedies through her own negligence.
• Classification of the Action: The action is personal. Antonino's complaint sought enforcement of a contract of sale, not recovery of ownership or possession of real property, and she tacitly acknowledged Su's title by asking for consummation of the sale.
• Grave Abuse of Discretion as Ground for Annulment: No. Grave abuse of discretion is not among the grounds for annulment under Rule 47; "lack of jurisdiction" pertains to jurisdiction over the person or subject matter, not errors in the exercise of jurisdiction.

• Propriety of Annulment of Judgment: Annulment of judgment under Rule 47 is an equitable remedy allowed only in exceptional cases where no other adequate remedy is available, and is limited to two grounds: extrinsic fraud and lack of jurisdiction. A condition sine qua non is that the petitioner must have failed to avail of ordinary remedies such as appeal through no fault attributable to her. Antonino did not proffer any explanation for her failure to appeal the RTC's Order dated December 8, 2004, which was a final order appealable under Sections 2, 3, and 5 of Rule 41. While a motion for reconsideration was permissible to give the RTC an opportunity to reverse itself, appeal was the prescribed remedy from the denial of such motion, not a second motion for reconsideration. Citing Quelnan vs. VHF Philippines, Inc., the Court clarified that the denial of a motion for reconsideration of an order of dismissal is a final order, therefore appealable; a second motion for reconsideration from a final order is prohibited and cannot interrupt the period to perfect an appeal. Even applying liberality and counting the appeal period from Antonino's receipt of the January 6, 2005 Order, she allowed the period to lapse without filing an appeal, erroneously believing a second motion for reconsideration was proper. Even counting from receipt of the February 24, 2005 Joint Resolution, she filed a petition for annulment on April 1, 2005 instead of an appeal, constituting a categorical admission that the RTC orders had become final and executory.

• Classification of the Action: A personal action is one founded on privity of contracts, where the plaintiff usually seeks recovery of personal property, enforcement of a contract, or recovery of damages. A real action is one anchored on privity of real estate, where the plaintiff seeks recovery of ownership or possession of real property or an interest in it. Antonino's amended complaint sought to enforce the Undertaking Agreement and compel Su to sell the property, which is an action for the enforcement or consummation of a contract — a personal action. By claiming the existence of a perfected contract of sale, Antonino did not acquire title to the property; she tacitly acknowledged Su's title by asking for consummation of the sale. Ownership is transferred only upon actual or constructive delivery, and the existence of a private document evidencing the sale does not confer title. After perfection of a contract of sale, the right to reciprocally demand performance arises — the vendee may require the vendor to transfer title, and the vendor may require payment of the price — but such an action does not involve an adverse claim of ownership. The object of the sale being real property does not make the action real in the absence of a contrary claim of title.

• Grave Abuse of Discretion as Ground for Annulment: A petition for annulment of judgment can be based only on extrinsic fraud and lack of jurisdiction. By anchoring her petition on grave abuse of discretion, Antonino was effectively enlarging the concept of lack of jurisdiction. As clarified in Republic of the Philippines vs. "G" Holdings, Inc., "lack of jurisdiction" as a ground for annulment pertains to lack of jurisdiction over the person of the defending party or over the subject matter of the claim, and does not contemplate grave abuse of discretion, since jurisdiction is different from the exercise thereof. Citing Tolentino vs. Judge Leviste, the Court distinguished jurisdiction as the authority to decide a cause from the decision rendered; where there is jurisdiction over the person and subject matter, errors committed in the exercise of jurisdiction are merely errors of judgment properly subject of an appeal. The RTC did not gravely abuse its discretion: it correctly classified the action as personal and held it was instituted in the wrong venue. Since the RTC had jurisdiction and no extrinsic fraud was alleged or proved, the final and executory orders will not be disturbed.

• Annulment of Judgment Under Rule 47 — The remedy of annulment of judgment is equitable in character, allowed only in exceptional cases where no other adequate remedy is available. Section 2 of Rule 47 explicitly provides only two grounds: extrinsic fraud and lack of jurisdiction. The remedy requires that the petitioner demonstrate the existence of either ground and that ordinary remedies such as appeal are no longer available through causes not attributable to the petitioner. A petition for annulment cannot serve as a substitute for a lost appeal.

• Distinction Between Jurisdiction and Exercise of Jurisdiction — Jurisdiction is the authority to decide a cause, not the decision rendered. Where there is jurisdiction over the person and the subject matter, errors committed in the exercise of jurisdiction are merely errors of judgment, which are the proper subject of an appeal. "Lack of jurisdiction" as a ground for annulment pertains to lack of jurisdiction over the person or subject matter, not to grave abuse of discretion in the exercise of jurisdiction.

• Real Action vs. Personal Action — A personal action is one founded on privity of contracts, where the plaintiff seeks recovery of personal property, enforcement of a contract, or recovery of damages. A real action is one anchored on privity of real estate, where the plaintiff seeks recovery of ownership or possession of real property or an interest in it. An action to enforce or consummate a contract of sale over real property is a personal action where the plaintiff does not claim title but merely asks the vendor to perform the act of transferring title.

• Finality of Judgments — Litigation must end and terminate sometime and somewhere; the basic rule of finality of judgment is grounded on public policy and sound practice that, at the risk of occasional error, judgments must become final at some definite date fixed by law. Once a judgment has become final, the winning party should not be deprived of the fruits of the verdict.

• "A petition for annulment of judgment cannot serve as a substitute for the lost remedy of an appeal." — This passage encapsulates the Court's central holding, articulating the principle that annulment of judgment is not a remedy available to a party who negligently failed to perfect an appeal.

• "Jurisdiction is not the same as the exercise of jurisdiction. As distinguished from the exercise of jurisdiction, jurisdiction is the authority to decide a cause, and not the decision rendered therein. Where there is jurisdiction over the person and the subject matter, the decision on all other questions arising in the case is but an exercise of the jurisdiction." — This quotation, drawn from Tolentino vs. Judge Leviste, defines the canonical distinction between jurisdiction and its exercise, explaining why grave abuse of discretion cannot ground an annulment of judgment.

• "The action to cause the consummation of a sale does not involve an adverse claim of ownership as the vendor's title is recognized and the vendor is simply being asked to perform an act, specifically, the transfer of such title by any of the recognized modes of delivery." — This passage articulates the ratio for classifying an action for specific performance of a sale of real property as a personal action, distinguishing it from a real action involving adverse claims of ownership.

• Manchester Development Corporation vs. Court of Appeals, 233 Phil. 579 (1987) — Cited by the RTC for the rule that the court acquires jurisdiction over a case only upon payment of the prescribed docket fee; the value of the subject property not having been stated in the prayer and no docket fees paid, the complaint was properly dismissed.

• Ramos vs. Judge Combong, Jr., 510 Phil. 277 (2005) — Cited for the doctrine that annulment of judgment is an equitable recourse allowed only in exceptional cases, grounded on the notion that annulling final judgments goes against the grain of finality of judgment.

• Barco vs. Court of Appeals, 465 Phil. 39 (2004) — Cited for the principle that only void judgments, by reason of extrinsic fraud or lack of jurisdiction, are susceptible to annulment; annulment enables a party to be discharged from a judgment that is an absolute nullity.

• Quelnan vs. VHF Philippines, Inc., G.R. No. 145911, July 7, 2004, 433 SCRA 631 — Cited for the clarification that the denial of a motion for reconsideration of an order of dismissal is a final order and therefore appealable, distinguishing it from the denial of a motion for reconsideration of an interlocutory order.

• Republic of the Philippines vs. "G" Holdings, Inc., 512 Phil. 253 (2005) — Cited for the rule that "lack of jurisdiction" as a ground for annulment of judgments pertains to lack of jurisdiction over the person or subject matter, not to grave abuse of discretion.

• Tolentino vs. Judge Leviste, 485 Phil. 661 (2004) — Cited for the canonical distinction between jurisdiction and the exercise of jurisdiction, establishing that errors in the exercise of jurisdiction are errors of judgment proper for appeal, not annulment.

• Tomawis vs. Balindong, G.R. No. 182434, March 5, 2010, 614 SCRA 354 — Cited for the definitions of personal action and real action, which the Court applied to classify Antonino's complaint.

• Section 2, Rule 47, Rules of Court — Provides that annulment of judgments or final orders and resolutions may be based only on extrinsic fraud or lack of jurisdiction. Applied to hold that Antonino's petition, anchored on grave abuse of discretion, failed to state a proper ground for annulment.

• Section 1, Rule 47, Rules of Court — Requires that a party seeking annulment must show that ordinary and other appropriate remedies, such as appeal, are no longer available for causes not attributable to the petitioner. Applied to deny annulment because Antonino failed to appeal through her own negligence.

• Section 2, Rule 5, Rules of Court — Governs venue of personal actions, providing that they may be commenced where the plaintiff or defendant resides. Applied to hold that the complaint should have been filed in Muntinlupa City or Manila, not Makati City.

• Sections 2, 3, and 5, Rule 41, Rules of Court — Enumerate appealable orders, including orders of dismissal. Applied to establish that the RTC's December 8, 2004 Order was a final order subject to appeal, and that appeal — not a second motion for reconsideration — was the proper remedy from its denial.

• Sections 4 and 5, Rule 15, Rules of Court — Govern the three-day notice rule for motions. The RTC applied these provisions to deny Antonino's motion for reconsideration; the Supreme Court noted the RTC may have been overly strict but held that even liberality could not cure Antonino's negligence in failing to appeal.

• Article 1475, Civil Code of the Philippines — Provides that after a contract of sale is perfected, the parties have the reciprocal right to demand performance. Applied to explain that Antonino's action sought consummation of the sale, not recovery of ownership.

• Article 1458, Civil Code of the Philippines — Defines the obligation of the vendor to transfer ownership and deliver the thing sold. Applied to show that the vendor may require payment of the purchase price, and the vendee may require transfer of title.

Senior Associate Justice Antonio T. Carpio (Chairperson, Second Division), Associate Justice Arturo D. Brion, Associate Justice Jose Portugal Perez, and Associate Justice Maria Lourdes P. A. Sereno concurred.