Quizon-Arciga vs. Baluyut

A party is estopped by laches from challenging a lower court's lack of jurisdiction when they actively participate in all stages of the proceedings and only raise the jurisdictional issue belatedly after losing.

A judicial foreclosure of mortgage case where the core dispute initially revolved around the validity of the mortgage executed by one co-owner on behalf of the others via a Special Power of Attorney, but later shifted to a collateral attack on the RTC's jurisdiction years after the judgment became final and executory.

• Original Filing: RTC, Capas, Tarlac, Civil Case No. CT08-830 (Complaint for Judicial Foreclosure of Mortgage filed June 26, 2008)
• Lower Court Decision: June 27, 2016 — RTC granted foreclosure, ordered payment of P500,000.00 with 8% monthly interest, or property sale at public auction.
• Appeal: N/A — Petitioners manifested they would not appeal, intending to settle the civil aspect.
• CA Action: Petitioners filed a Petition for Annulment of Judgment with the CA on September 18, 2019. CA dismissed it on Feb 17, 2020, and denied MR on May 20, 2021.
• SC Action: Petition for Review on Certiorari assailing the CA Resolutions.

• The Loan and Mortgage: On August 11, 2005, Relia borrowed P500,000.00 from respondent at 8% monthly interest. Using an Extrajudicial Settlement of Estate/Partition with Special Power of Attorney (EJS-SPA), Relia executed a Real Estate Mortgage (REM) over a property in Concepcion, Tarlac to secure the loan.
• The Foreclosure Suit: Respondent filed a complaint for judicial foreclosure on June 26, 2008, after Relia defaulted.
• RTC Trial and Decision: Petitioners defended based on lack of authority under the EJS-SPA, claiming it only authorized Relia to mortgage the property to a certain "Amelia G. Pineda," not the respondent. They actively participated in trial and testified. On June 27, 2016, the RTC ruled for respondent.
• Execution and Sale: Petitioners manifested they would not appeal to settle. The RTC granted execution on March 8, 2017. The property was sold at public auction on May 19, 2017. The RTC issued a Writ of Possession (WOP), and respondent took possession on August 8, 2018.
• Belated Challenges: On January 7, 2019 (5 months after losing possession), petitioners filed an Omnibus Motion in the RTC arguing the 8% interest was void. The RTC denied it for lack of jurisdiction since the judgment was fully implemented. On September 18, 2019, petitioners filed a Petition for Annulment of Judgment with the CA. Only in their Motion for Reconsideration before the CA did they first raise the issues of extrinsic fraud (counsel negligence) and lack of jurisdiction (failure to allege assessed value/pay docket fees).

• The gross negligence of their previous counsel constitutes extrinsic fraud that prevented them from having their day in court.
• The RTC lacked jurisdiction because the complaint failed to indicate the assessed value of the property and respondent failed to pay the correct docket fees.
• The 8% monthly interest is void for being iniquitous, exorbitant, unconscionable, and contrary to law.
• Jurisdictional issues can be raised anytime, even on appeal.

• Petitioners' assertions of counsel's gross negligence and failure to pay correct docket fees should not be considered because they were belatedly raised only in the Motion for Reconsideration before the CA.
• The RTC decision became final and executory because petitioners voluntarily decided not to appeal, not due to extrinsic fraud.

• Procedural Issues: Whether petitioners are estopped from questioning the RTC's lack of jurisdiction after actively participating in the proceedings and raising the issue only 12 years after the complaint was filed.
• Substantive Issues: Whether the CA correctly dismissed the petition for annulment of judgment based on the grounds of extrinsic fraud and lack of jurisdiction.

• Procedural: The SC ruled that petitioners are estopped by laches from questioning the RTC's jurisdiction. They actively participated in the trial, presented evidence, and only raised the jurisdictional defect 12 years after the case commenced—specifically in their Motion for Reconsideration before the CA. One cannot voluntarily submit to a court's jurisdiction, fail to obtain relief, and then belatedly reject the court's authority.
• Substantive: The SC denied the petition and affirmed the CA.
• On extrinsic fraud: The SC ruled that counsel's gross negligence does not constitute extrinsic fraud. To constitute extrinsic fraud, the scheme preventing a party from having their day in court must be devised by the prevailing litigant, not the party's own lawyer. Furthermore, records show petitioners themselves chose not to appeal.
• On lack of jurisdiction: The SC agreed that the RTC technically lacked jurisdiction because the complaint failed to allege the assessed value of the property, which is essential to determine whether the RTC or MTC has jurisdiction. Courts cannot take judicial notice of a property's assessed or market value. However, because of estoppel by laches, petitioners cannot invoke this jurisdictional defect at this late stage.

• Estoppel by Laches in Jurisdictional Challenges — A party cannot belatedly challenge a court's jurisdiction after actively participating in all stages of the case and only raising the issue after losing. Estoppel sets in when a party participates in all stages before challenging jurisdiction, seeking affirmative relief first.
• Extrinsic Fraud in Annulment of Judgment — Fraud is extrinsic when a party is prevented from fully participating in the trial by the opponent's fraud or deception, or where an attorney fraudulently connives at defeat without authority. The scheme must be devised by the prevailing litigant; fraud committed by a party's own counsel does not qualify.
• Determining Jurisdiction in Real Actions — For real actions, jurisdiction is determined by the assessed value of the property. The complaint must contain an allegation of the assessed value; courts cannot take judicial notice of it.

• Rule 47, Rules of Court — Governs annulment of judgments. Available only when ordinary remedies (new trial, appeal, etc.) are no longer available through no fault of the party. Section 2 limits grounds to extrinsic fraud and lack of jurisdiction. Applied to deny petitioners' claim as they failed to prove extrinsic fraud and are estopped from claiming lack of jurisdiction.
• Batas Pambansa Blg. 129, as amended by Republic Act No. 7691 — Jurisdictional thresholds for RTCs and first-level courts in civil actions involving real property based on assessed value (P20,000 outside Metro Manila, P50,000 within Metro Manila for RTC jurisdiction at the time). Applied to show that the missing assessed value allegation made it impossible to determine proper jurisdiction initially. Note: Current threshold is P400,000 pursuant to RA 11576.