Mangubat vs. Morga-Seva

A petition for annulment of a final order based on lack of jurisdiction fails where the trial court retained jurisdiction to enforce its final judgment; any error in enforcement is an error in the exercise of jurisdiction, not an absolute lack of jurisdiction. Such a petition is also barred by laches if filed almost four years after the order became final without explanation, and an interlocutory order implementing a final judgment is not the proper subject of annulment.

Gaudencio Mangubat and Aurelia Rellora-Mangubat were spouses, and Abner Mangubat is their son. Belen Morga-Seva was a defendant in the Mangubats' prior case involving a parcel covered by TCT No. 6337, which had been held as collateral by DBP. The present petition concerns Abner's challenge to a final order issued in the revival of the judgment in that prior case.

On March 5, 1974, Gaudencio Mangubat and his wife Aurelia Rellora-Mangubat filed with the RTC of Pili, Camarines Sur a Complaint for Specific Performance with Damages against Belen Morga-Seva and two other defendants. The case was docketed as Civil Case No. P-279 and raffled to Branch 31. On August 27, 1985, the RTC rendered a Decision ordering the defendants to reimburse the plaintiffs the total amount the latter had paid to the DBP after 1971, the year the defendants defaulted in their amortization payments, and providing that in the event of failure to reimburse, the plaintiffs could assume the rights of the old creditor DBP and take such remedial action as the situation may warrant. The Decision also declared the defendants entitled to claim and recover title or ownership over the properties held as collaterals by DBP, subject to the encumbrance in favor of the plaintiffs, who had substituted for DBP as creditors, including the parcel of land covered by TCT No. 6337 with all its improvements. Belen and her co-defendants appealed to the CA and later to the SC, but both appeals were unsuccessful, and the RTC Decision became final and executory.

On September 3, 1998, Gaudencio and his children as heirs of the deceased Aurelia filed with the same court a Complaint for Revival of the Decision in Civil Case No. P-279, docketed as Civil Case No. P-2145. They averred that the writ of execution could not be implemented because Belen and her co-defendants evaded service thereof, and that since five years had already lapsed from the date of entry, they prayed for revival of the RTC Decision. Gaudencio, assisted by Atty. Reynaldo L. Herrera, and Belen, assisted by Atty. Junnel M. Relativo, entered into a Compromise Agreement. Under its terms, the defendants admitted that they shall pay ₱33,000.00 previously paid by the plaintiffs to DBP prior to the issuance of the decision in Civil Case No. 279, plus legal interest of 12% per annum since August 1990 until the year 2000, or a total of ₱72,600.00, plus ₱5,000.00 for attorney's fee, payable on or before June 30, 2001; upon payment, the plaintiffs would transfer TCT No. 6337 to Belen; and all other claims and counterclaims were waived. The RTC approved the agreement and on February 23, 2001 rendered a Decision in accordance therewith. Upon its finality, the RTC ordered the issuance of a Writ of Execution.

On June 24, 2002, Abner, on his own behalf, moved to substitute his father Gaudencio, who died on January 31, 2002. A few months thereafter, purportedly in behalf of his co-heirs, Abner, through Atty. Haide B. Vista-Gumba, filed another motion to substitute Gaudencio exclusively for the purpose of executing the final judgment, claiming that this was necessary for the settlement of the intestate estate of his father. In an Order dated September 13, 2002, the RTC granted Abner's motion for substitution but for purposes of execution only. On December 18, 2003, Belen handed to Atty. Herrera her payment of ₱91,280.00 in accordance with the Compromise Agreement. Alleging that the heirs refused to convey to Belen the lot covered by TCT No. 6337, the RTC, upon motion of Atty. Herrera, directed (a) Abner, who was allegedly in possession of the owner's copy of the title, to surrender the same to the Clerk of Court, and (b) the Clerk of Court to execute in behalf of the heirs a deed of sale or conveyance of the lot in favor of Belen pursuant to Section 10, Rule 39 of the Rules of Court. Abner manifested that, as far as he was concerned, Belen had not yet made any payment to the heirs because he was not notified by Atty. Herrera. Atty. Herrera reported to the court that out of the ₱91,280.00 handed to him by Belen, he had turned over ₱84,480.00 to the Clerk of Court and retained ₱6,800.00 as his attorney's fee, which the RTC noted.

On January 20, 2005, Abner terminated the services of Atty. Herrera. Subsequently, and purportedly in behalf of all the heirs, Abner, through Atty. Vista-Gumba, filed a Motion to Declare the Amicable Settlement Null and Void. He alleged that Gaudencio acted only on his own behalf when he entered into the compromise agreement with Belen, making the agreement null and void for want of consent and participation of the heirs, who were indispensable parties. Two of the heirs, Ruth Mangubat Parcia and Job Mangubat, filed a Manifestation with Motion to Withdraw the Heirs' Respective Shares. According to them, they were seven siblings in all and each was entitled to ₱12,068.00 from Belen's payment; they did not agree with Abner's course of action and prayed that the case be considered closed and terminated and their respective shares from Belen's payment released to them. Belen questioned Abner's capacity to assail the compromise agreement, averring that in the decision of the probate court regarding the intestate estate of Gaudencio, Abner was disinherited by his father.

In an Order dated September 8, 2005, the RTC denied Abner's motion, finding that Abner had been disinherited by final judgment in Spec. Procs. No. P-984 before RTC Branch 33; that there was no evidence he was authorized to represent the other heirs; that two heirs, Ruth Mangubat Parcia and Job Mangubat, manifested that they did not want to be involved in the proceeding; that the decision had been partially satisfied when Belen, through Atty. Herrera, deposited ₱84,480.00 with the Clerk of Court as per Receipt No. 1201439 dated April 6, 2005; and that Abner continued to retain Atty. Herrera as counsel for the plaintiffs until January 2005. Abner moved for reconsideration, which was denied in an Order dated February 27, 2006. When the denial became final, Belen filed a Motion for Execution of Specific Acts, praying that Abner be ordered to surrender to the RTC the owner's copy of TCT No. 6337 and that the Clerk of Court execute in her favor and on behalf of the heirs a deed of sale involving the lot covered by the title. The RTC granted the motion in an Order dated July 14, 2006. Abner refused to comply. The RTC then issued its Order dated September 25, 2006, divesting the plaintiffs through Abner of the ownership of the property covered by TCT No. 6337 pursuant to the February 23, 2001 Decision and vesting it in Belen, with the order to have the force and effect of a conveyance executed in due form of law pursuant to the last sentence of Section 10(a) of Rule 39. The order became final on November 19, 2006, and pursuant thereto the RTC directed the Registrar of Deeds of Camarines Sur to transfer title to the property under TCT No. 6337 to Belen.

• Late Payment / Unjust Divestment: Petitioner argued that under the Compromise Agreement, Belen was supposed to make her payment on or before June 30, 2001, but made it only on December 18, 2003, way beyond the agreed period; thus, it was unjust for the RTC to issue the September 25, 2006 Order divesting the heirs of ownership.
• Loss of Jurisdiction: Petitioner argued that since the February 23, 2001 RTC Decision approving the Compromise Agreement had long become final and executory, the RTC had already lost jurisdiction when it issued the September 25, 2006 Order; he anchored his Petition for Annulment of Final Order on lack of jurisdiction.

• Jurisdiction over Revival: Respondent argued that the RTC had jurisdiction over the Complaint for revival of judgment and that the September 25, 2006 Order was an exercise of jurisdiction pursuant to its authority to handle the case until the full satisfaction of its Decision.
• Laches: Respondent argued that Abner was guilty of laches because he questioned the September 25, 2006 Order only after almost four years from its finality.

• Jurisdiction over the Revival and Enforcement: Whether the RTC lacked jurisdiction to issue the September 25, 2006 Order after its February 23, 2001 Decision had become final and executory.
• Laches: Whether Abner's Petition for Annulment of Final Order was barred by laches.
• Proper Remedy / Interlocutory Order: Whether a Petition for Annulment of Final Order was the proper remedy to nullify the September 25, 2006 Order.

• Jurisdiction over the Revival and Enforcement: No. The RTC retained jurisdiction to enforce its final and executory judgment; any error in enforcing it was an error in the exercise of jurisdiction, not an absolute lack of jurisdiction.
• Laches: Yes. Abner filed the petition almost four years after the September 25, 2006 Order became final without explaining the delay, warranting the presumption that he abandoned the right.
• Proper Remedy / Interlocutory Order: No. The September 25, 2006 Order was interlocutory, merely implementing the final February 23, 2001 Decision; annulment of judgment or final order was not the proper remedy.

• Jurisdiction over the Revival and Enforcement: The SC held that the remedy of annulment of judgment is available only on the grounds of extrinsic fraud and lack of jurisdiction, because it is adverse to the immutability of final judgments. Lack of jurisdiction means either lack of jurisdiction over the subject matter or nature of the action, or lack of jurisdiction over the person of the petitioner; it must be an absolute lack of jurisdiction, not merely an abuse of jurisdictional discretion. The RTC acquired jurisdiction over Abner's person because he asked for affirmative relief from it several times. The RTC also had jurisdiction over the revival of judgment, which may be filed in the same court where the judgment was rendered or in the place where the plaintiff or defendant resides, or in any other place designated by the statutes on venue; here, the Complaint for revival was filed in the same RTC Branch 31 that rendered the August 27, 1985 Decision in Civil Case No. P-279. Once jurisdiction is acquired, it is not lost until the court disposes of the case in its entirety. Abner confused lack of jurisdiction with error in the exercise of jurisdiction; errors committed in the exercise of jurisdiction are errors of judgment correctable by appeal, not grounds for annulment.
• Laches: The SC held that even assuming the claim of lack of jurisdiction was well-grounded, the Petition for Annulment of Final Order was barred by laches. An action for annulment of judgment or final order based on lack of jurisdiction must be brought before it is barred by laches. Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; such negligence or omission to assert a right within a reasonable time warrants a presumption that the party entitled to assert it has abandoned it or declined to assert it. Abner filed the action only after almost four years from the finality of the September 25, 2006 Order and did not provide any justification for his inaction. The unreasonable delay warranted the presumption that he had declined to assert his right to the property covered by TCT No. 6337, and permitting him to assert it then would be unfair and inequitable.
• Proper Remedy / Interlocutory Order: The SC held that the Petition for Annulment of Final Order was not the proper remedy to nullify the September 25, 2006 Order because the order was interlocutory. An interlocutory order is a ruling respecting some point or matter between the commencement and end of the suit, but is not a final adjudication of the claims and liabilities of the parties in dispute. The September 25, 2006 Order merely dealt with the incidental matter of causing the transfer of title to the property covered by TCT No. 6337 to Belen in accordance with the final and executory February 23, 2001 RTC Decision after Abner refused to comply with the directive to deliver the owner's copy of the title. No further settlement of any claim or imposition of any further liability was made in the order.

• Annulment of judgment/final order — The remedy is exceptional and is allowed only on two grounds: extrinsic fraud and lack of jurisdiction. It is adverse to the concept of immutability of final judgments. In this case, Abner's petition failed because he showed no absolute lack of jurisdiction and because the challenged order was interlocutory.
• Lack of jurisdiction vs. error in the exercise of jurisdiction — Lack of jurisdiction means either lack of jurisdiction over the subject matter or nature of the action, or lack of jurisdiction over the person of the petitioner; it must be an absolute lack of authority, not merely an abuse of jurisdictional discretion. Errors in the exercise of jurisdiction are errors of judgment correctable by appeal. The RTC had jurisdiction over the revival and over Abner's person; its September 25, 2006 Order was an exercise of that jurisdiction.
• Laches — Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; the negligence or omission to assert a right within a reasonable time warrants a presumption that the party entitled to assert it has abandoned it or declined to assert it. Abner's filing almost four years after the order became final, without explanation, barred his petition.
• Interlocutory order — An interlocutory order is a ruling respecting some point or matter between the commencement and end of the suit, but is not a final adjudication of the claims and liabilities of the parties in dispute. The September 25, 2006 Order merely implemented the final February 23, 2001 Decision and did not settle any further claim or impose any further liability.
• Revival of judgment — An action for revival of judgment may be filed in the same court where the judgment was rendered or in the place where the plaintiff or defendant resides, or in any other place designated by the statutes on venue. The RTC that rendered the 1985 Decision had jurisdiction over the revival complaint.
• Immutability of final judgments — Final judgments are immutable; annulment of judgment is adverse to this principle and is therefore available only in exceptional circumstances and on the limited grounds of extrinsic fraud and lack of jurisdiction.

• "It must be stressed that the remedy of annulment of judgment is only available under certain exceptional circumstances as this is adverse to the concept of immutability of final judgments." — The SC opened its ruling by limiting the annulment remedy, which framed its rejection of Abner's petition.
• "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." — The SC used this definition to test Abner's claim that the RTC lacked jurisdiction.
• "It is settled that once jurisdiction has been acquired, it is not lost until the court shall have disposed of the case in its entirety." — The SC adopted this rule to reject Abner's argument that the RTC lost jurisdiction after the compromise judgment became final.
• "An interlocutory order refers to a ruling respecting some point or matter between the commencement and end of the suit, but is not a final adjudication of the claims and liabilities of the parties that are in dispute in that suit." — The SC used this definition to hold that the September 25, 2006 Order was interlocutory and not the proper subject of annulment.

• Antonino vs. The Register of Deeds of Makati City, 688 Phil. 527, 536 (2012) — Relied on for the rule that annulment of judgment is exceptional and available only on extrinsic fraud and lack of jurisdiction.
• Pinausukan Seafood House, Roxas Boulevard, Inc. vs. Far East Bank & Trust Company, now Bank of the Philippine Islands, G.R. No. 159926, January 20, 2014, 714 SCRA 226, 244 — Relied on for the definition of lack of jurisdiction and for the rule that annulment based on lack of jurisdiction must be brought before it is barred by laches.
• Miranda vs. Tuliao, 520 Phil. 907, 920 (2006) — Relied on for jurisdiction over the person where the petitioner sought affirmative relief from the court.
• Spouses Manila vs. Spouses Mamo, 672 Phil. 460, 473 (2011) — Relied on for the requirement of an absolute lack of jurisdiction in annulment cases.
• Heirs of Numeriano Miranda, Sr. vs. Miranda, G.R. No. 179638, July 8, 2013, 700 SCRA 746, 757 — Relied on for the rule that an action for revival of judgment may be filed in the same court where the judgment was rendered.
• Heirs and/or Estate of Atty. Rolando P. Siapian vs. Intestate Estate of the late Eufrocina G. Mackay, 644 Phil. 207, 214 (2010) — Relied on for the definition of an interlocutory order.

• Section 10(a), Rule 39, Rules of Court — The RTC's September 25, 2006 Order was issued under this provision and given the force and effect of a conveyance; the SC treated it as merely implementing the final February 23, 2001 Decision after Abner refused to comply.
• Section 9, B.P. 129 — The RTC identified annulment of judgment before the CA as a remedy; the SC denied the petition because no lack of jurisdiction was shown and laches barred it.
• Rule 3, Section 2, Rules of Court — The RTC held Abner not a real party in interest because he had been disinherited and was not authorized to represent the other heirs; this was part of the ruling denying his motion to nullify the compromise.