Primary Holding

A party is estopped from questioning the court's jurisdiction when they have actively participated in all stages of the case before challenging said jurisdiction, especially when they only raise the issue after failing to obtain relief.

Background

The case stemmed from a loan agreement where Relia Arciga borrowed P500,000 from Jaycee Baluyut, secured by a real estate mortgage on property she co-owned with her mother Rita. When Relia defaulted, Baluyut filed for judicial foreclosure.

Facts

• 1. December 5, 2002: Petitioners executed Deed of Extra-Judicial Settlement of Estate/Partition with SPA over land covered by TCT No. 142572
• 2. August 11, 2005: Relia borrowed P500,000 from respondent with 8% monthly interest
• 3. Relia secured loan using same EJS-SPA to execute Real Estate Mortgage
• 4. Upon maturity, Relia failed to pay despite demands
• 5. RTC ruled in favor of respondent, ordering payment within 120 days
• 6. Property was sold at public auction when petitioners failed to pay

Arguments of the Petitioners

• 1. Gross negligence of previous counsel constitutes extrinsic fraud
• 2. RTC lacked jurisdiction due to failure to indicate assessed value
• 3. Monthly interest rate of 8% was void for being unconscionable
• 4. Relia lacked authority to mortgage property on behalf of Rita

Arguments of the Respondents

• 1. Petitioners' claims were belatedly raised in motion for reconsideration
• 2. Decision became final due to petitioners' voluntary decision not to appeal
• 3. No extrinsic fraud existed

Issues

• 1. Whether the CA correctly dismissed the petition for annulment of judgment
• 2. Whether the RTC had jurisdiction over the case
• 3. Whether petitioners are estopped from questioning jurisdiction

Ruling

• 1. Petition DENIED. CA Resolutions AFFIRMED.
• 2. While RTC lacked jurisdiction due to failure to state assessed value, petitioners are estopped from questioning jurisdiction.
• 3. Petitioners actively participated in trial as witnesses.
• 4. Petitioners did not question jurisdiction when decision became final.
• 5. Petitioners only raised the jurisdictional issue after 12 years from filing of complaint.
• 6. Petitioners only raised the jurisdiction issue in their motion for reconsideration.
• 7. Gross negligence of counsel cannot be basis for extrinsic fraud.
• 8. Extrinsic fraud must be committed by the prevailing party, not by one's own counsel.
• 9. Record shows petitioners themselves decided not to appeal the case.
• 10. Petitioners explicitly manifested their intent to settle the civil aspect of the case.

Doctrines

• 1. Estoppel by laches: Party cannot question jurisdiction after actively participating in proceedings and losing
• 2. Requirements for annulment of judgment: Only available when ordinary remedies are no longer available without fault of the party
• 3. Extrinsic fraud: Must be committed by prevailing party to prevent other party from fully presenting case

Precedents Cited

• 1. Lagundi v. Bautista (G.R. No. 207269, July 26, 2021): Applied to establish that estoppel by laches bars questioning jurisdiction after active participation
• 2. Tijam v. Sibonghanoy (131 Phil. 556): Original case establishing doctrine of estoppel by laches in questioning jurisdiction

Statutory and Constitutional Provisions

• 1. Batas Pambansa Blg. 129, as amended by Republic Act No. 7691: Jurisdiction of courts
• 2. Rule 47, Rules of Court: Rules on annulment of judgment
• 3. Republic Act No. 11576: Amendment expanding jurisdiction of first level courts