Ortigas vs. Court of Appeals

A judgment rendered against a person who had already been deceased at the time the action was filed is void for lack of jurisdiction and denial of due process, and may be annulled under Rule 47, as a deceased person lacks the legal capacity to be sued and no court can acquire jurisdiction over such a non-existent party regardless of service of summons by publication.

The Ortigas Heirs—Paolo Martin M. Ortigas, Denise Marie O. Ting, and Carissa Katrina O. Ko—are the successors in interest of Jocelyn M. Ortigas, who on October 29, 1999 extended a real estate mortgage over a Quezon City property owned by Spouses Cicero and Maria Luz Lumauig, securing a PHP 5,000,000.00 loan with stipulated compounded interest and penalties. The mortgage was annotated on TCT No. N-198628 on September 1, 2000. Jocelyn died on November 24, 2009 due to cardiopulmonary arrest. The mortgaged property was subsequently sold at a public auction on July 4, 2013 for delinquent real property taxes and purchased by private respondent Hesilito N. Carredo, in whose name TCT No. 004-2017014143 was issued, subject to the existing mortgage annotation.

On October 29, 1999, Spouses Cicero and Maria Luz Lumauig mortgaged their Quezon City property, covered by TCT No. N-198628, to Jocelyn M. Ortigas for a consideration of PHP 5,000,000.00. The parties stipulated that in case of default, the mortgagor would pay 5% compounded interest per month plus 1% penalty per month. On September 1, 2000, the corresponding deed of real estate mortgage was annotated on the title. Jocelyn died on November 24, 2009 due to cardiopulmonary arrest. Her heirs—Paolo Martin M. Ortigas, Denise Marie O. Ting, and Carissa Katrina O. Ko—succeeded to her estate, including all her rights to the subject property.

In the course of administering the estate, the heirs discovered the deed of real estate mortgage and found that the Spouses Lumauig had defaulted on their obligation. They demanded payment of the total amount of PHP 20,000,000.00, comprising principal plus interest, payable within ten days from notice. Demand letters, the last dated September 19, 2017, were personally served at the Spouses Lumauig's address as indicated in the mortgage agreement, but all were returned unserved because the spouses were no longer residing there. The heirs later discovered that the mortgaged property had been foreclosed and sold at public auction on July 4, 2013 for non-payment of real property taxes, and was purchased by Hesilito N. Carredo, in whose name TCT No. 004-2017014143 was issued.

On September 5, 2018, Carredo filed a petition for cancellation of encumbrance before the RTC, Branch 91, Quezon City, docketed as Civil Case No. R-QZN-18-10658-CV, impleading Jocelyn Ortigas as respondent—despite her having been dead for nearly nine years. The RTC granted Carredo's urgent motion to serve summons by publication, the sheriff having reported that Jocelyn's whereabouts were unknown despite diligent efforts. Jocelyn did not interpose any objection. By Decision dated June 17, 2020, the RTC granted the petition and ordered the Register of Deeds to cancel the encumbrance under Section 108 of P.D. 1529. On the same date, Carredo's counsel sent a letter to the Ortigas Heirs informing them of the case—marking the first time they learned of its existence.

On October 13, 2020, Carredo received a second notice of extrajudicial sale of the same property. On October 15, 2020, he filed a very urgent motion to suspend and terminate the extrajudicial foreclosure proceedings before the Quezon City Office of the Clerk of Court; the record does not show how that office acted on the motion. Meanwhile, the Ortigas Heirs had filed a petition for extrajudicial foreclosure of mortgage with the same office, seeking to enforce the mortgage in their favor. On November 3, 2020, they filed a petition for annulment of judgment before the Court of Appeals, asserting that the RTC Decision was rendered without jurisdiction and in violation of their right to due process, as Jocelyn was already deceased when the cancellation case was filed and her heirs were never impleaded.

• Lack of Jurisdiction Over the Person of the Deceased: Petitioner maintained that the trial court could not have acquired jurisdiction over Jocelyn Ortigas, as she had already been dead for nearly nine years when the petition for cancellation of encumbrance was filed in 2018, and a deceased person lacks the legal capacity to be sued.
• Denial of Due Process: Petitioner argued that the RTC Decision violated their right to due process, as it was issued without their participation as Jocelyn's heirs or successors in interest, who were never impleaded or brought within the court's jurisdiction.
• Impropriety of the Action: Petitioner asserted that a petition for cancellation of encumbrance is not a proper action to attack the real estate mortgage in question.
• Availability of Rule 65: Petitioner contended that Rule 65 certiorari was the proper remedy, as the Court of Appeals' resolutions were issued with grave abuse of discretion amounting to lack or excess of jurisdiction, and Rule 45 did not provide a plain, speedy, or adequate remedy in the ordinary course of law.
• No Forum Shopping: Petitioner asserted that they did not commit forum shopping by filing both the petition for annulment of judgment before the Court of Appeals and the petition for extrajudicial foreclosure before the RTC, as the annulment of the cancellation decision was a condition precedent to the foreclosure application.

• Forum Shopping: Respondent countered that the Ortigas Heirs committed forum shopping by pursuing both the petition for annulment of judgment and the petition for extrajudicial foreclosure.
• Procedural Defects: Respondent argued that the Ortigas Heirs violated Section 4, Rule 47 of the Rules of Court by failing to cure the procedural defects in their pleading, as the required annexes remained omitted.
• Wrong Remedy: Respondent maintained that Rule 65 should not be made available to the Ortigas Heirs, as it is a wrong remedy and cannot substitute for a lost one.
• Valid Jurisdiction Over Jocelyn: Respondent argued that the trial court validly acquired jurisdiction over the person of Jocelyn through service of summons by publication, which the trial court had allowed on his motion following the sheriff's report that personal service could not be effected despite diligent efforts.
• Fault of the Heirs: Respondent contended that the petition for annulment of judgment was pursued only because the Ortigas Heirs had already lost the other legal remedies available to them due to their own fault.

• Propriety of Rule 65 Certiorari: Whether a petition for certiorari under Rule 65 is the proper remedy to assail the Court of Appeals' dismissal of the petition for annulment of judgment, notwithstanding the availability of a petition for review on certiorari under Rule 45.
• Jurisdiction Over a Deceased Party: Whether the trial court validly acquired jurisdiction over Jocelyn Ortigas, who had been dead for nearly nine years when the petition for cancellation of encumbrance was filed against her.
• Grounds for Annulment of Judgment: Whether the requisites for annulment of judgment under Rule 47 were satisfied, specifically lack of jurisdiction and denial of due process.
• Applicability of Laches: Whether the Ortigas Heirs' petition for annulment of judgment was barred by laches or estoppel.
• Procedural Requirements Under Rule 47: Whether the Ortigas Heirs' failure to attach certain annexes and to include a specific verification statement warranted the outright dismissal of their petition for annulment of judgment.

• Propriety of Rule 65 Certiorari: Yes. Rule 65 certiorari was proper where the Court of Appeals' resolutions were issued with grave abuse of discretion amounting to lack or excess of jurisdiction and where Rule 45 did not provide a plain, speedy, or adequate remedy, the broader interest of justice requiring prompt intervention to prevent a miscarriage of justice.
• Jurisdiction Over a Deceased Party: No. The trial court could not have validly acquired jurisdiction over Jocelyn Ortigas, as she had died on November 24, 2009—nearly nine years before the petition was filed in 2018—and a deceased person does not have the capacity to be sued.
• Grounds for Annulment of Judgment: Yes. All four requisites for annulment of judgment were satisfied: the ordinary remedies were unavailable through no fault of the heirs; the grounds of lack of jurisdiction and denial of due process were established; the action was not barred by laches; and the petition sufficiently alleged the facts and law relied upon.
• Applicability of Laches: No. The Ortigas Heirs acted promptly, filing the petition within five months of the RTC Decision, and were consistently proactive and diligent in pursuing the annulment, negating any presumption of abandonment or neglect.
• Procedural Requirements Under Rule 47: No. The procedural defects cited by the Court of Appeals did not warrant dismissal where the ground was lack of jurisdiction—a question of law not involving factual issues—and the existence of that ground was uncontested; the attachment of records and the anti-harassment verification statement apply primarily to cases grounded on extrinsic fraud.

• Propriety of Rule 65 Certiorari: While Rule 45 prescribes petitions for review on certiorari as the remedy for errors of law committed by the appellate court, it does not preclude the availment of Rule 65 in cases of grave abuse of discretion amounting to lack or excess of jurisdiction or denial of due process where Rule 45 does not provide a plain, speedy, or adequate remedy. The Court cited Tanenglian vs. Lorenzo, which recognized exceptions allowing certiorari despite its being the wrong remedy: when public welfare dictates, when the broader interest of justice requires, when the writs issued are null and void, or when the questioned order amounts to an oppressive exercise of judicial authority. Here, to afford protection to the heirs' rights at the earliest possible time and prevent a miscarriage of justice, certiorari was allowed.

• Jurisdiction Over a Deceased Party: A deceased person does not have the capacity to be sued. The Court relied on Gaffney vs. Butler and Spouses Berot vs. Siapno for the rule that upon the death of a party, such party can no longer be impleaded as a respondent. Ventura vs. Militante was cited for the principle that no court can acquire jurisdiction for the purpose of trial or judgment until a party defendant who actually or legally exists and is legally capable of being sued is brought before it. Because Jocelyn had been dead for nearly nine years when the case was filed, the trial court could not have validly acquired jurisdiction over her person even though it approved service of summons by publication. As a consequence of a void petition initiated against a dead party, the entire proceedings became equally void and jurisdictionally infirm.

• Grounds for Annulment of Judgment: The Court applied the four requisites from Pinausukan Seafood House vs. Far East Bank & Trust Company. First, the ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies were unavailable through no fault of the heirs, as neither Jocelyn nor her heirs were ever made parties to the case and only learned of it when Carredo's counsel informed them of the decision; only annulment of judgment could provide speedy and full relief. Second, lack of jurisdiction was established because the trial court rendered judgment against a deceased person who lacked legal capacity to be sued. Third, denial of due process was recognized as a valid ground for annulment under Arcelona vs. Court of Appeals, as the heirs were never given their day in court. Fourth, the petition was filed within a reasonable time and was not barred by laches.

• Applicability of Laches: Laches is 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 Court found that the Ortigas Heirs were consistently proactive, filing the petition on November 3, 2020—only five months after the June 17, 2020 RTC Decision. This short period negated the application of laches. The heirs were not shown to have committed any omission amounting to estoppel. Their filing of an application for extrajudicial foreclosure did not preclude the annulment action; if anything, the annulment was a condition precedent to the foreclosure, as the cancellation of the mortgage encumbrance had to be voided first.

• Procedural Requirements Under Rule 47: The Court of Appeals dismissed the petition for failure to attach Annexes "S," "T," and "U" and for omitting a statement in the verification that the petition was not filed to harass, cause delay, or needlessly increase litigation costs. The Court held that these requirements did not apply here for two reasons. First, the Ortigas Heirs were not parties to the RTC case and no factual issues were involved, making attachment of records unnecessary. Second, the verified statement regarding harassment and delay applies only to cases where annulment is sought on the ground of fraud, not when the ground is lack of jurisdiction—a pure question of law. The Court cited Pinausukan Seafood House for the distinction: the requirement to attach affidavits of witnesses pertains to particularizing the facts constituting extrinsic fraud, which is unnecessary where the ground is lack of jurisdiction appearing on the face of the record. The Court emphasized that procedural rules must yield when their application would defeat the ends of justice.

• Capacity to Be Sued of a Deceased Person — A deceased person does not have the legal capacity to be sued, and upon death, a party can no longer be impleaded as a respondent. No court can acquire jurisdiction for the purpose of trial or judgment until a party defendant who actually or legally exists and is legally capable of being sued is brought before it. The question of the legal personality of a party defendant is a question of substance going to the jurisdiction of the court, not one of procedure. In this case, because Jocelyn had been dead for nearly nine years when the cancellation petition was filed, the trial court could not acquire jurisdiction over her, rendering the entire proceedings void.

• Annulment of Judgment as Remedy of Last Resort — Annulment of judgment is a remedy in equity viewed with reluctance, allowed only in exceptional cases as an exception to the doctrine of immutability of final judgments. It may not be invoked where the party has availed of ordinary remedies and lost, or where the party failed to avail of those remedies through their own fault or negligence. The Court applied this doctrine and found that the Ortigas Heirs satisfied all requisites: they could not have availed of ordinary remedies because they were never parties to the case and only learned of it after judgment was rendered.

• Grounds for Annulment of Judgment — Under Section 2, Rule 47, the grounds for annulment are limited to extrinsic fraud and lack of jurisdiction. The Court has additionally recognized denial of due process as a valid ground, as established in Arcelona vs. Court of Appeals. In this case, both lack of jurisdiction and denial of due process were established.

• Requisites for Annulment of Judgment — As enumerated in Pinausukan Seafood House vs. Far East Bank & Trust Company: (1) the remedy is available only when the petitioner can no longer resort to ordinary remedies through no fault of the petitioner; (2) the grounds are limited to extrinsic fraud or lack of jurisdiction; (3) the action must be filed within four years from discovery of extrinsic fraud, or before barred by laches or estoppel if based on lack of jurisdiction; and (4) the petition must be verified and allege with particularity the facts and law relied upon. The Court found all four requisites satisfied.

• Laches — Laches is 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; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has abandoned or declined to assert it. The Court found no laches, as the heirs filed the petition within five months of the adverse judgment and were consistently diligent.

• "Neither a dead person nor his estate may be a party plaintiff in a court action. A deceased person does not have such legal entity as is necessary to bring motion so much so that a motion to substitute cannot lie and should be denied by the court." — This passage, quoted from Ventura vs. Militante, articulates the fundamental principle that a deceased person lacks legal entity to be a party in court proceedings, forming the jurisdictional basis for nullifying the RTC Decision.

• "Verily, the trial court could not have validly acquired jurisdiction over the person of the decedent named Jocelyn Ortigas even though it approved a supposed service of summons by publication, received evidence ex-parte for Carredo, and rendered judgment in his favor. For as a consequence of a void petition initiated against a dead party, the entire proceedings become equally void and jurisdictionally infirm." — This is the ratio decidendi: service of summons by publication cannot cure the jurisdictional defect of impleading a deceased person, and the void initiation renders all subsequent proceedings void.

• "The purpose of these requirements of the sworn verification and the particularization of the allegations of the extrinsic fraud in the petition, of the submission of the certified true copy of the judgment or final order or resolution, and of the attachment of the affidavits of witnesses and documents supporting the cause of action or defense is to forthwith bring all the relevant facts to the CA's cognizance in order to enable the CA to determine whether or not the petition has substantial merit." — This passage defines the objective of the documentary requirements under Rule 47 and explains why those requirements are relaxed when the ground is lack of jurisdiction rather than extrinsic fraud.

• Tanenglian vs. Lorenzo, 573 Phil. 472 (2008) — Cited for the exceptions allowing a petition for certiorari under Rule 65 despite its being the wrong remedy: public welfare, broader interest of justice, null and void writs, or oppressive exercise of judicial authority. Applied to justify the availment of Rule 65 in this case.
• Sarol vs. Spouses Diao, 892 Phil. 435 (2020) — Cited for the principle that a decision rendered in violation of due process, such as one issued despite improper service of summons, suffers a jurisdictional defect.
• Arcelona vs. Court of Appeals, 345 Phil. 250 (1997) — Cited as the case establishing denial of due process as a valid ground for annulment of judgment, and for the rule that annulment is available when the patent nullity of the ruling can be proven. Applied to the facts where indispensable parties were never impleaded.
• Pinausukan Seafood House vs. Far East Bank & Trust Company, 725 Phil. 19 (2014) — Cited for the four requisites a petitioner must comply with before a petition for annulment of judgment may proceed, and for the distinction between the verification requirement and the affidavit requirement depending on whether the ground is extrinsic fraud or lack of jurisdiction. Applied to evaluate and ultimately excuse the heirs' procedural omissions.
• Gaffney vs. Butler, 820 Phil. 789 (2017) — Cited for the rule that a deceased person does not have the capacity to be sued.
• Spouses Berot vs. Siapno, 738 Phil. 673 (2014) — Cited for the rule that upon the death of a party, such party can no longer be impleaded as a respondent.
• Ventura vs. Militante, 374 Phil. 562 (1999) — Cited extensively for the principle that no court can acquire jurisdiction until a party defendant who actually or legally exists and is legally capable of being sued is brought before it, and that the legal personality of a party defendant is a question of substance going to jurisdiction.
• De Pedro vs. Romasan Development Corporation, 748 Phil. 706 (2014) — Cited for the principle that a defect in jurisdiction exists when there is a violation of one's right to due process.
• Chico vs. Ciudadano, G.R. No. 249815, July 4, 2022 — Cited for the rule that a final and executory judgment may be set aside if its patent nullity is shown for having been issued without jurisdiction or for lack of due process, and that if a defendant has not been summoned, the court acquires no jurisdiction over his person.
• Amoguis vs. Ballado, 839 Phil. 1 (2018) — Cited for the principle that estoppel by laches bars a claimant who has unreasonably delayed asserting a right, with the caveat that the heirs here were not guilty of such delay.

• Section 1, Rule 47, Rules of Court — Defines the coverage of annulment of judgment, providing that it governs the annulment by the Court of Appeals of judgments or final orders in civil actions of Regional Trial Courts for which ordinary remedies are no longer available through no fault of the petitioner. Applied to establish that annulment is a remedy of last resort.
• Section 2, Rule 47, Rules of Court — Limits the grounds for annulment to extrinsic fraud and lack of jurisdiction. Applied to confirm that lack of jurisdiction was a proper ground, with the Court additionally recognizing denial of due process through jurisprudence.
• Section 4, Rule 47, Rules of Court — Prescribes the contents and verification requirements for a petition for annulment of judgment, including attachment of certified true copies, affidavits of witnesses, and sworn certification against forum shopping. Applied but distinguished, as the Court held these requirements are relaxed when the ground is lack of jurisdiction rather than extrinsic fraud.
• Section 108, Presidential Decree No. 1529 (Property Registration Decree) — The provision under which the RTC ordered cancellation of the encumbrance on TCT No. 004-2017014143. The trial court found all requirements complied with, but the Supreme Court declared the entire proceedings void for lack of jurisdiction.

Leonen, SAJ. (Chairperson), M. Lopez, J. Lopez, and Kho, Jr., JJ., concurred.