Bayog vs. Natino

An agricultural leasehold relationship between the parties divests the Municipal Circuit Trial Court of jurisdiction over an ejectment case, as the controversy constitutes an agrarian dispute within the exclusive original jurisdiction of the Department of Agrarian Reform Adjudication Board (DARAB).

On 16 June 1973, petitioner Alejandro Bayog (landowner) and private respondent Alberto Magdato (tenant) entered into an Agricultural Leasehold Contract. On 19 April 1983, a Certificate of Agricultural Leasehold was issued to Magdato. In 1990, Bayog executed a Deed of Equitable Mortgage over the land in favor of Santiago Pesayco. On 26 November 1992, Bayog and Pesayco's brother, Jorge Pesayco, Jr., filed an ejectment complaint against Magdato before the MCTC, alleging that Magdato's house obstructed cultivation by the new lessee.

• Nature of the Action: An ejectment complaint filed by landowners Bayog and Pesayco, Jr. against tenant Magdato before the MCTC, docketed as Civil Case No. 262.
• The Agricultural Leasehold: Bayog and Magdato executed an Agricultural Leasehold Contract in 1973. A Certificate of Agricultural Leasehold was issued to Magdato in 1983, enumerating his rights, including protection against ejectment without court authorization.
• The Mortgage and Demand: In 1990, Bayog mortgaged the land to Santiago Pesayco. In 1992, Bayog demanded Magdato remove his house, claiming it obstructed cultivation by the mortgagee's brother, Jorge Pesayco, Jr.
• MCTC Proceedings: Magdato's Answer, raising the defense of lack of jurisdiction due to tenancy, was filed one day late. The MCTC disregarded it, rendered judgment for ejectment, and ordered demolition before the judgment became final.
• Execution and Demolition: The MCTC issued an execution order. The Sheriff served it on 24 January 1994 and immediately ejected Magdato and demolished his house.
• Petition for Relief: Magdato filed a petition for relief with the RTC, alleging excusable neglect (illness, illiteracy, lawyer's failure to inform him of the judgment) and asserting his status as a tenant.
• RTC Order: The RTC denied motions to dismiss, set aside the MCTC judgment, and remanded the case, finding the petition for relief was not prohibited and that Magdato's tenancy defense was meritorious.
• Petitioners' New Evidence: In their Reply before the Supreme Court, petitioners presented a Deed of Mortgage of Tenancy Rights (1987) allegedly executed by Magdato, and affidavits/ receipts suggesting Magdato's tenancy rights had been transferred to a third party, Federico Valdevieso.

• Prohibition Under Summary Procedure: Petitioners argued that a petition for relief from judgment is a prohibited pleading under Section 19(d) of the Revised Rule on Summary Procedure, and the RTC thus lacked jurisdiction to entertain it.
• Defective Petition for Relief: They contended the petition was fatally defective for not being accompanied by a separate affidavit of merit as required by Rule 38, and was filed out of time, as the 60-day period should be counted from their counsel's receipt of the MCTC judgment.
• Mootness and Improper Remedy: Petitioners maintained that the partial execution of the MCTC judgment rendered the petition moot, and that the proper remedy was an action to recover the property, not relief from judgment.
• Jurisdiction of the RTC: They asserted the RTC had no jurisdiction to set aside a final and executory MCTC judgment.
• Extinguishment of Tenancy: Petitioners argued that even if a tenancy existed, it was extinguished when Magdato mortgaged his tenancy rights to a third party without the landowner's consent.

• Jurisdictional Defense: Respondent Magdato countered that the MCTC lacked jurisdiction over the ejectment case from the outset due to the agricultural leasehold relationship, a matter cognizable by the DARAB.
• Excusable Neglect and Extrinsic Fraud: He argued his late answer and failure to appeal were due to illness, illiteracy, and, crucially, the gross negligence and failure of his former counsel to inform him of the judgment, constituting extrinsic fraud.
• Sufficiency of the Petition: Magdato contended the verified petition for relief itself contained the necessary allegations of fact and could serve as the affidavit of merit, making a separate document superfluous.
• Timeliness of Filing: He argued the 60-day period began only when he personally learned of the judgment upon the demolition of his house on 24 January 1994, making his 9 February 1994 petition timely.

• Prohibited Pleading: Whether a petition for relief from judgment is a prohibited pleading under the Revised Rule on Summary Procedure when filed with the RTC in a case originating from the MCTC.
• Timeliness of Petition: Whether the petition for relief was filed within the reglementary 60-day period.
• Affidavit of Merit: Whether the absence of a separate affidavit of merit is fatal to a verified petition for relief that alleges the grounds therefor.
• Jurisdiction Over Subject Matter: Whether the MCTC had jurisdiction to try and decide the ejectment case given the alleged agricultural leasehold relationship between the parties.

• Prohibited Pleading: While a petition for relief from judgment is generally prohibited under the Revised Rule on Summary Procedure to achieve an expeditious disposition, the extraordinary circumstances of this case—particularly the grave injustice and extrinsic fraud perpetrated by Magdato's counsel—warranted treating the petition pro hac vice as an exception.
• Timeliness of Petition: The petition was timely filed. The 60-day period commenced not from the counsel's receipt of the judgment, but from Magdato's personal knowledge thereof upon the demolition of his house, as the counsel's gross negligence in failing to notify his client could not be considered notice to the client under the doctrine in People's Homesite and Housing Corp. v. Tiongco.
• Affidavit of Merit: The absence of a separate affidavit of merit was not fatal. The verified petition itself, which recited the facts constituting the grounds for relief, satisfied the requirement, as the oath elevated the petition to the same category as an affidavit.
• Jurisdiction Over Subject Matter: The MCTC was devoid of jurisdiction. The existence of an Agricultural Leasehold Contract and a Certificate of Agricultural Leasehold established an agricultural leasehold relationship, making the dispute an agrarian controversy within the exclusive jurisdiction of the DARAB. The petitioners' evidence of an alleged transfer of tenancy rights did not negate the existence of the tenancy relationship at the time of the filing of the ejectment case but merely raised a factual issue that did not affect the jurisdictional defect.

• Prohibition of Petitions for Relief Under Summary Procedure — Section 19(d) of the Revised Rule on Summary Procedure prohibits petitions for relief from judgment in cases covered by the rule. This prohibition is consistent with the rule's objective of inexpensive and expeditious determination of cases.
• Exception for Extrinsic Fraud and Gross Negligence of Counsel — The general rule that notice to counsel is notice to a party does not apply when the counsel's negligence is so gross, reckless, and inexcusable that it effectively deprives the client of due process. Such negligence may constitute extrinsic fraud, which is a ground for relief from judgment.
• Exclusive Jurisdiction of DARAB Over Agrarian Disputes — An ejectment case where the defendant invokes a tenancy relationship is an agrarian dispute. Regular courts, like the MCTC, have no jurisdiction over such disputes; exclusive original jurisdiction is vested in the Department of Agrarian Reform Adjudication Board (DARAB) under R.A. No. 6657.

• "Under this circumstance, one should not insist that a notice to such irresponsible lawyer is also a notice to his clients." — This passage, citing People's Homesite and Housing Corp. v. Tiongco, articulates the exception to the rule that notice to counsel is notice to the client, applicable when the counsel's conduct is unconscionably irresponsible.
• "The MCTC should have met and ruled squarely on the issue of jurisdiction, instead of simply adopting a strange theory that it could not take cognizance of the answer belatedly filed without exceeding its jurisdiction under Section 36 of B.P. Blg. 129." — This criticizes the MCTC's procedural error and underscores the duty of a court to determine its own jurisdiction based on the allegations and evidence before it, regardless of a pleading's timeliness.

• Jakihaca v. Aquino, 181 SCRA 67 (1990) — Cited by the RTC for the proposition that the Revised Rule on Summary Procedure does not apply to Regional Trial Courts. The Supreme Court disagreed with the RTC's reliance on this case to allow the petition for relief.
• People's Homesite and Housing Corp. v. Tiongco, 12 SCRA 471 (1964) — Controlling precedent applied to establish that notice to a grossly negligent lawyer is not notice to the client, allowing the petition for relief to be considered timely.
• Banco Español-Filipino v. Palanca, 37 Phil. 921 (1918) — Cited by petitioners for the proposition that the proper remedy after execution of a judgment is an action to recover property, not relief from judgment. The Court distinguished the present case due to the finding of extrinsic fraud.

• Section 19, Revised Rule on Summary Procedure — Lists prohibited pleadings, including petitions for relief from judgment [19(d)] and motions to dismiss except on the ground of lack of jurisdiction [19(a)]. The Court held the prohibition applies to filings with the RTC in cases originating under the rule.
• Section 3, Rule 38, Rules of Court — Provides the requirements and periods for filing a petition for relief from judgment (within 60 days from learning of the judgment and not more than 6 months after its entry). The Court interpreted the 60-day period in light of the extrinsic fraud committed by counsel.
• Sections 50 and 53, R.A. No. 6657 (Comprehensive Agrarian Reform Law) — Vest in the DAR exclusive jurisdiction over agrarian disputes, including ejectment cases involving agricultural lessees. The Court relied on these provisions to find the MCTC without jurisdiction.

• Chief Justice Andres R. Narvasa
• Justice Jose A.R. Melo
• Justice Justo P. Francisco, Jr.
• Justice Artemio V. Panganiban