Sanchez vs. Divinagracia Vda. de Aguilar

A petition for annulment of judgment under Rule 47 of the Rules of Court is an exceptional remedy in equity that may be availed of only when other remedies are wanting, and only on grounds of lack of jurisdiction or extrinsic fraud; errors in the exercise of jurisdiction are merely errors of judgment subject to appeal, and unreasonable delay in filing such petition constitutes laches that bars the action.

Spouses Francisco and Delma Sanchez purchased a 600-square-meter portion of Lot 71, Pls 870 from Juanito Aguilar on July 11, 2000, located in Lake Sebu, South Cotabato, abutting Lake Sebu. On October 23, 2004, the heirs of Aguilar fenced the boundary between the spouses' lot and an adjacent 800-square-meter area claimed by the spouses as alluvium but asserted by the heirs as their own property. The spouses filed a forcible entry case before the MCTC, which dismissed their complaint on June 7, 2006, ruling that the heirs were in prior physical possession. The spouses failed to appeal the MCTC decision, which became final and was executed. Subsequently, the Municipality of Lake Sebu issued notices requiring the spouses to demolish their fish cages in the disputed area, prompting the spouses to file a complaint for annulment of judgment before the RTC four years after the MCTC decision.

• On July 11, 2000, Juanito Aguilar sold to Spouses Francisco and Delma Sanchez a 600-square-meter portion of his 33,600-square-meter Lot No. 71, Pls 870, located in the Municipality of Lake Sebu, South Cotabato.
• On October 23, 2004, the heirs of Juanito Aguilar (Esther Divinagracia Vda. de Aguilar and their children) fenced the boundary line between the 600-square-meter lot of the spouses and an alleged alluvium on the northwest portion of the land abutting Lake Sebu.
• The Spouses Sanchez protested the fencing before the barangay, but no settlement was reached, prompting them to file a Complaint for Forcible Entry before the Municipal Circuit Trial Court (MCTC) of Surallah-Lake Sebu.
• The spouses claimed ownership of the alluvium which enlarged their 600-square-meter lot, arguing that under the law they are the owners of any alluvium formed and that the heirs could not fence the area.
• The heirs of Aguilar refuted the existence of the alluvium, asserting that the disputed 800-square-meter area beyond the 600-square-meter lot has been in their actual possession but was merely used with their tolerance by the spouses for fish cage operations.
• On June 7, 2006, the MCTC dismissed the forcible entry complaint, holding that the spouses failed to controvert the prior actual physical possession of the heirs manifested by improvements consisting of mature mahogany, lanzones, and coconut trees.
• The MCTC ruled that since the spouses purchased the land only on July 11, 2000, they could not have been in possession ahead of the heirs, and that the land in question was not an alluvium (which requires running water) but a natural surrounding of the stagnant lake.
• On May 27, 2008, the MCTC issued a Writ of Execution, which was implemented using the national highway (58.53 meters wide per District Engineer's Office) as reference point, establishing that the edge of the 600-square-meter lot was a 20-meter wide public easement abutting Lake Sebu.
• In February and March 2009, the Municipality of Lake Sebu issued notices directing the spouses to demolish their fish cages based on its survey team's finding that the 150-square-meter lot along the lake belonged to the heirs of Aguilar.
• On June 19, 2009, the Ad Hoc Committee on Lake Sebu Water Dispute ruled that the land area in excess of the 600-square-meter property belonged to the heirs of Aguilar, giving them priority to utilize the lake waters.
• On May 22, 2010, or four years after the MCTC decision, the spouses filed a Complaint for Annulment of Judgment before the RTC, seeking to annul the June 7, 2006 MCTC Decision for lack of jurisdiction or for rendering judgment over a non-existent parcel of land.

• The MCTC lacked jurisdiction over the subject matter because there was no excess land beyond the 600-square-meter lot purchased by the spouses; since the District Engineer's Office found the national highway to be almost 60 meters wide, the 600-square-meter lot necessarily extended to the edge of Lake Sebu, leaving no room for the disputed 800-square-meter area.
• The heirs of Aguilar could not have been in "actual physical possession" of a non-existent lot, rendering the MCTC decision erroneous and without legal basis.
• The RTC correctly annulled the MCTC Decision based on the finding that the 600-square-meter lot reached the lake edge, making any alluvium part of the spouses' property.
• The appeal of the heirs of Aguilar should be denied because their counsel failed to comply with the Mandatory Continuing Legal Education (MCLE) requirements.

• The MCTC had jurisdiction over the forcible entry case under Republic Act No. 7691, which grants MCTCs exclusive original jurisdiction over ejectment suits.
• The complaint for annulment of judgment is barred by laches because it was filed four years after the MCTC decision and more than one year after the decision had been executed.
• The failure of counsel to indicate MCLE compliance in pleadings no longer results in dismissal of the case per Supreme Court En Banc Resolution dated January 14, 2014.

• Procedural Issues:
  • Whether the Court of Appeals erred in ruling that the Spouses Sanchez' complaint for annulment of judgment is barred by laches.
  • Whether the MCTC lacked jurisdiction over the forcible entry case.
  • Whether the appeal should be denied due to the alleged failure of the heirs' counsel to comply with MCLE requirements.
• Substantive Issues:
  • Whether the MCTC committed errors in its findings regarding the existence of alluvium and the boundaries of the subject property.

• Procedural:
  • The Supreme Court held that the complaint for annulment of judgment is barred by laches. The spouses failed to file an appeal or the annulment complaint for an unreasonable and unexplained length of four years despite receiving notice of the MCTC decision, constituting negligence or omission to assert their right within a reasonable time.
  • The Court ruled that the MCTC had jurisdiction over the subject matter. Under Republic Act No. 7691, MCTCs have exclusive original jurisdiction over ejectment cases, including forcible entry. The MCTC also acquired jurisdiction over the persons of the parties as the spouses voluntarily filed the suit before it.
  • The Court rejected the contention regarding MCLE non-compliance, citing the Supreme Court En Banc Resolution dated January 14, 2014, which provides that failure to indicate MCLE compliance no longer results in dismissal of the case but subjects the lawyer to disciplinary action.
• Substantive:
  • The Court declined to rule on the substantive issues regarding the existence of alluvium and property boundaries, holding that these were errors of judgment, not errors of jurisdiction. The distinction between jurisdiction and exercise of jurisdiction was emphasized: jurisdiction is the authority to decide, while the decision rendered is merely an exercise of that jurisdiction. Errors committed in the exercise of jurisdiction are proper subjects of appeal, not annulment of judgment. Since the spouses failed to appeal the MCTC decision and instead allowed it to attain finality, they cannot now collaterally attack the decision through annulment.

• Annulment of Judgment as an Exceptional Remedy — Defined as a remedy in equity so exceptional in nature that it may be availed of only when other remedies are wanting, and only if the judgment was rendered by a court lacking jurisdiction or through extrinsic fraud. The Court applied this to bar the spouses' petition because they failed to show that ordinary remedies were unavailable and because the grounds asserted were errors of judgment, not lack of jurisdiction.
• Jurisdiction versus Exercise of Jurisdiction — Jurisdiction is the authority to decide a cause, distinct from the decision rendered therein. Where there is jurisdiction over the person and subject matter, errors in the exercise of jurisdiction are merely errors of judgment subject to appeal, not annulment. The Court applied this to hold that the MCTC's factual findings regarding possession and alluvium were errors of judgment, not jurisdictional defects.
• Laches — Defined as 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 Court applied this doctrine to bar the annulment action due to the four-year delay in filing.
• Immutability and Unalterability of Final Judgments — A judgment that has acquired finality becomes immutable and unalterable and is no longer to be modified in any respect. The Court invoked this principle to emphasize that annulment of judgment disregards this doctrine and must therefore be strictly construed and sparingly granted.
• Exclusive Original Jurisdiction of MCTC over Ejectment Cases — Under Republic Act No. 7691, MCTCs have exclusive original jurisdiction over ejectment suits, including forcible entry and unlawful detainer, regardless of the amount of damages or unpaid rentals sought.

• "Time and again, the Court has ruled that a petition for annulment of judgment is a remedy in equity so exceptional in nature that it may be availed of only when other remedies are wanting, and only if the judgment, final order or final resolution sought to be annulled was rendered by a court lacking jurisdiction or through extrinsic fraud."
• "Jurisdiction is not the same as the exercise of jurisdiction. As distinguished from the exercise of jurisdiction, jurisdiction is the authority to decide a cause, and not the decision rendered therein. Where there is jurisdiction over the person and the subject matter, the decision on all other questions arising in the case is but an exercise of the jurisdiction. And the errors which the court may commit in the exercise of jurisdiction are merely errors of judgment which are the proper subject of an appeal."
• "The attitude of judicial reluctance towards the annulment of a judgment, final order or final resolution is understandable, for the remedy disregards the time-honored doctrine of immutability and unalterability of final judgments, a solid cornerstone in the dispensation of justice by the courts."
• "Laches is the failure or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence could nor 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 either has abandoned it or declined to assert it."

• Pinasukan Seafood House, Roxas Blvd., Inc. v. Far East Bank & Trust Company (now Bank of the Philippine Islands), et al. — Cited as controlling precedent on the nature of annulment of judgment as an exceptional remedy limited to lack of jurisdiction and extrinsic fraud, and on the definition of laches.
• Veneracion v. Mancilla, et al. — Cited for the definition of jurisdiction as the power and authority of the tribunal to hear, try and decide a case.
• Antonino v. Register of Deeds of Makati City — Cited for the distinction between jurisdiction and exercise of jurisdiction.
• Tolentino v. Judge Leviste — Cited in support of the principle that errors in the exercise of jurisdiction are subject to appeal.
• Regalado v. De La Pena, et al. — Cited for the rule that MCTCs have exclusive original jurisdiction over ejectment cases under Republic Act No. 7691.
• Quijano v. Atty. Amante — Cited for the principle that ejectment cases are summary proceedings designed to provide expeditious means to protect actual possession.

• Rule 45 of the Rules of Court — Governs petitions for review on certiorari, the remedy availed of by the Spouses Sanchez to challenge the Court of Appeals decision.
• Rule 47 of the Rules of Court, Section 1 — Prescribes that annulment of judgment may be based only on lack of jurisdiction or extrinsic fraud, and requires the petitioner to show that ordinary remedies are no longer available through no fault of the petitioner.
• Republic Act No. 7691 — Expands the jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts, granting them exclusive original jurisdiction over ejectment cases.
• Section 5(g) of the Zoning Ordinance of the Municipality of Lake Sebu — Cited in the factual background regarding priority rights to utilize municipal waters, providing that privilege shall be given first priority to the legal owner of the land alongside the lake.