Spouses Abrenica vs. Law Firm of Abrenica, Tungol and Tibayan

Annulment of judgment under Rule 47 is not available where the petitioner lost the ordinary remedy of appeal through his or her own fault, and it lies only on grounds of extrinsic fraud or lack of jurisdiction; allegations that the trial court erred in appreciating evidence are errors of judgment, not grounds for annulment.

Atty. Erlando A. Abrenica was a partner of Attys. Danilo N. Tungol and Abelardo M. Tibayan in the Law Firm of Abrenica, Tungol and Tibayan. The present case is a continuation of G.R. No. 169420, decided on 22 September 2006. The statutory backdrop includes Republic Act No. 8799, which transferred jurisdiction over intra-corporate controversies from the SEC to the courts, and A.M. No. 04-9-07-SC, which prescribes appeal by petition for review under Rule 43 from RTC decisions in cases formerly cognizable by the SEC.

Erlando A. Abrenica practiced law as a partner of Danilo N. Tungol and Abelardo M. Tibayan in the Law Firm of Abrenica, Tungol and Tibayan. In 1998, Tungol and Tibayan filed with the SEC two cases against Erlando. The first, SEC Case No. 05-98-5959, sought accounting and return and transfer of partnership funds with damages and preliminary attachment, alleging that Erlando refused to return partnership funds representing profits from the sale of a parcel of land in Lemery, Batangas. The second, SEC Case No. 10-98-6123, also sought accounting and return and transfer of partnership funds, this time to recover retainer fees Erlando received from two clients of the firm and the balance of the cash advance he obtained in 1997. The SEC initially heard the cases, but they were later transferred to RTC Quezon City, Branch 226, pursuant to Republic Act No. 8799.

On Nov. 23, 2004, RTC Quezon City, Branch 226, rendered a Consolidated Decision ordering Erlando to render full accounting and remit ₱4,524,000 plus 12% interest per annum from September 1997, ₱320,000 plus 12% interest per annum from June 1998, and ₱25,000 as balance on his cash advance plus 12% interest per annum from finality, with costs. Erlando received a copy of the decision on Dec. 17, 2004. On Dec. 21, 2004, he filed a notice of appeal under Rule 41 and paid the required appeal fees. Two days later, respondents filed a Motion for Issuance of Writ of Execution pursuant to A.M. 01-2-04-SC, which provides that decisions in intra-corporate disputes are immediately executory and not subject to appeal unless stayed by an appellate court. On Jan. 7, 2005, respondents filed an Opposition to the Notice of Appeal on the ground that it violated A.M. No. 04-9-07-SC prescribing appeal by petition for review under Rule 43. Erlando filed a Reply with Manifestation and an Opposition to the motion for execution. On May 11, 2005, the trial court issued an Order requiring Erlando to show cause why it should take cognizance of the notice of appeal in view of A.M. No. 04-9-07-SC. Erlando did not comply. Instead, on June 10, 2005, he filed with the CA a Motion for Leave of Court to Admit Attached Petition for Review under Rule 43. The CA denied the motion on June 29, 2005 and denied reconsideration on Aug. 23, 2005. In G.R. No. 169420, the SC dismissed the petition because the appeal was the wrong remedy; that decision became final and executory on April 11, 2007.

Erlando and Joena were married on May 28, 1998. The SEC cases filed on May 6, 1998 and Oct. 15, 1998 were against Erlando only; Joena joined as co-petitioner only when CA-G.R. SP No. 98679 was filed on April 24, 2007. That petition sought annulment of the RTC decision and raised errors on the evidence, the nature of the Lemery property transaction, the credibility of witnesses, the purchase price, the retainer agreement, and the failure to rule on the counterclaim. Petitioners later filed an Amended Petition on May 2, 2007.

On May 25, 2007, petitioners filed a 105-page Petition for Annulment of Judgment docketed as CA-G.R. SP No. 99719. They injected extrinsic fraud and collusion, alleging that RTC personnel colluded with respondents and that the RTC deliberately erred in its findings on the evidence, the Lemery transaction, credibility, purchase price, retainer agreement, and counterclaim. They filed a Humble Motion for Reconsideration on Aug. 28, 2007.

While the motion was pending, on Sept. 13, 2007, Erlando filed an Urgent Omnibus Motion with Branch 226 alleging that the sheriff had levied properties belonging to his children and Joena and that the RTC still had to determine the manner of distribution and the value of the levied properties. On the same day, Joena filed an Affidavit of Third Party Claim claiming ownership of personal properties, half of two motor vehicles, and the house and lot covered by TCT No. 216818 as part of the absolute community, and invoking exemption of the family home and necessary furniture and utensils. The RTC scheduled a hearing, but on Oct. 17, 2007, Erlando moved to withdraw his motion on account of negotiations; he and respondent Tibayan, witnessed by Sheriff Nardo de Guzman, Jr., executed an agreement to postpone the auction of TCT No. 216818. Joena no longer pursued her third-party claim. On Jan. 3, 2008, a Sheriff’s Certificate of Sale was issued in favor of the law firm for ₱5 million for the property covered by TCT No. 216818.

On March 18, 2009, while this case was pending, petitioners filed a Complaint with RTC Marikina City, docketed as Civil Case No. 09-1323-MK and raffled to Branch 273, against respondents and Sheriff de Guzman to nullify the sheriff’s sale and recover damages, alleging irregular and unlawful execution and violation of due process. On July 2, 2009, the RTC issued a Writ of Preliminary Injunction enjoining consolidation of TCT No. 216818. Respondents moved before the SC to cite petitioners and their counsel for contempt for forum shopping. Meanwhile, on Sept. 22, 2009, respondents filed an Ex Parte Motion for Issuance of Writ of Possession with Branch 226; it was granted on Nov. 10, 2011, and petitioners filed CA-G.R. SP No. 123164. On March 6, 2012, after a Notice to Vacate, petitioners filed an Urgent Motion for TRO; the CA had not resolved it as of the Decision. The records also showed that Erlando was first married to Ma. Aline Lovejoy Padua on Oct. 13, 1983, with children Patrik Erlando, born April 14, 1985; Maria Monica Erline, born Sept. 9, 1986; and Patrik Randel, born April 12, 1990. After the dissolution of that marriage, Erlando and Joena married on May 28, 1998. In her Affidavit, Joena claimed to represent her stepchildren and said the levied piano with chair, computer equipment, and computer table were owned by them; two stepchildren were already of legal age when she filed the Affidavit, and no special power of attorney authorized her to represent Erlando’s children.

• Pending Issue in the RTC: Petitioners insisted that there was still a pending issue unresolved by the RTC, arising from its Order requiring Erlando to explain why it should take cognizance of the Notice of Appeal when the proper remedy was a petition for review under Rule 43.
• Blame for Dismissal of Appeal: Petitioners blamed the trial and appellate courts for the dismissal of their appeal despite the SC’s explanation in G.R. No. 169420 that the appeal was the wrong remedy and was correctly dismissed; instead of complying with the show-cause Order, they went directly to the CA and insisted that their remedy was correct.
• Extrinsic Fraud: Petitioners contended that extrinsic fraud attended the appreciation of the merits of the case, raising the grounds cited in their three Petitions for Annulment of Judgment, including the Amended Petition.
• Due Process: Petitioners asserted that Joena’s right to due process was violated when she was not made a party-in-interest in the lower court proceedings even if her half of the absolute community of property was included in the execution of the RTC judgment.
• Timeliness of Motion for Reconsideration: Petitioners insisted that their Humble Motion for Reconsideration was filed on time because 27 August 2007 was a holiday, giving them until 28 August 2007 to file it.

• Forum Shopping: Respondents claimed that petitioners and their counsel, Atty. Antonio R. Bautista, were guilty of forum shopping when they filed Civil Case No. 09-1323-MK with the RTC of Marikina City while the present case was still pending before the SC.

• Annulment of Judgment: Whether the CA correctly dismissed the second Petition for Annulment of Judgment where the RTC decision had already become final through petitioners’ own filing of the wrong appeal, and the grounds raised were errors of judgment rather than extrinsic fraud or lack of jurisdiction.
• Due Process: Whether petitioner Joena was denied due process when she was not made a party-in-interest in the lower court proceedings despite her claim that her share in the absolute community of property was included in the execution.
• Timeliness of Motion for Reconsideration: Whether the CA correctly denied petitioners’ Humble Motion for Reconsideration as filed out of time on the claim that 27 August 2007 was a holiday.
• Forum Shopping: Whether petitioners and their counsel are guilty of forum shopping for filing Civil Case No. 09-1323-MK while the present case was pending.

• Annulment of Judgment: No. Annulment was unavailable because the RTC decision had become final through petitioners’ own fault, and Rule 47 allows annulment only on extrinsic fraud or lack of jurisdiction, not errors in the appreciation of evidence.
• Due Process: No. Joena’s failure to pursue her third-party claim and Erlando’s withdrawal of the omnibus motion showed that it was through her own fault that her claim was not ventilated; her claims over the properties also failed absent authority and under Article 92(3) of the Family Code.
• Timeliness of Motion for Reconsideration: No. The CA correctly denied the motion for reconsideration as filed out of time because the last day was 27 August 2007 and the motion was filed on 28 August 2007; its grounds were also recycled.
• Forum Shopping: No. The Marikina complaint questioned execution proceedings while the present case questioned the merits of the RTC decision, so the causes of action differed and forum shopping was not clearly established.

• Annulment of Judgment: Rule 47 allows annulment of judgment only when the ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies are no longer available through no fault of the petitioner, and only on grounds of extrinsic fraud or lack of jurisdiction. Petitioners had already filed a Rule 41 appeal, which the CA and the SC in G.R. No. 169420 dismissed because the correct mode was a petition for review under Rule 43. The RTC decision became final and executory on January 3, 2005, and G.R. No. 169420 became final on April 11, 2007. The finality was caused by Erlando’s own actions: he filed an appeal under Rule 41 instead of Rule 43 and filed a Petition for Review directly with the CA without waiting for the RTC to resolve the issues pending before it. Under Enriquez vs. Court of Appeals, appeal is a purely statutory right and a party must strictly comply with the Rules. The grounds in the annulment petitions—erroneous appreciation of evidence, credibility, purchase price, nature of the transaction, and failure to rule on a counterclaim—were errors of judgment, not extrinsic fraud or lack of jurisdiction. The CA also correctly noted that the trial court had jurisdiction over the subject matter and the persons, and that any error in the exercise of jurisdiction was subject to appeal. The second annulment merely recycled the same issues with an extrinsic fraud label, and the CA dismissed it as insufficient in form and substance.
• Due Process: Joena’s claim that she was denied due process fails because she had the opportunity to ventilate her claim but did not pursue it. After Erlando filed his Urgent Omnibus Motion raising the same issues as her third-party claim, he withdrew the motion twice, and Joena did not pursue her Affidavit of Third Party Claim or any other remedy. Her failure to act showed that she was no longer interested, and it was through her own fault that her claim was not heard. Her claim to represent her stepchildren also fails: two were already of legal age when she filed the Affidavit, parental authority over Patrik Randel belonged to his parents, and no special power of attorney authorized her to represent Erlando’s children. As to the two motor vehicles purchased in 1992 and 1997 and the house and lot under TCT No. 216818, Article 92, paragraph (3) of the Family Code excludes from the community property property acquired before the marriage of a spouse who has legitimate descendants by a former marriage, and the fruits and income of that property; neither the vehicles nor the house and lot belonged to the second marriage.
• Timeliness of Motion for Reconsideration: The CA denied the Humble Motion for Reconsideration because the last day for filing was 27 August 2007 and the motion was filed on 28 August 2007. It also found that the grounds stated in the motion were merely recycled and rehashed propositions already dispensed with. The SC affirmed the CA’s denial.
• Forum Shopping: Respondents moved to cite petitioners and their counsel for contempt on the ground of forum shopping. Under Executive Secretary vs. Gordon, forum shopping consists of filing multiple suits involving the same parties for the same cause of action, simultaneously or successively, to obtain a favorable judgment. It includes seeking a favorable decision in another forum after an adverse decision, filing another petition before the CA after filing one before the SC, or attempting to obtain a preliminary injunction in another court after failing in the original court. Civil Case No. 09-1323-MK questioned the sheriff’s execution proceedings in Civil Case Nos. Q01-42948 and Q01-42959, while the present case questioned the merits of the decision in those cases. The causes of action were different, so petitioners were not clearly guilty of forum shopping.

• Annulment of Judgment under Rule 47 — An equitable and exceptional remedy available only when the ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies are no longer available through no fault of the petitioner; the only grounds are extrinsic fraud and lack of jurisdiction. The SC applied it to deny the second annulment because petitioners’ own wrong appeal caused finality and their grounds were errors of judgment.
• Appeal as a Statutory Right — The right to appeal is purely statutory, and a party must strictly comply with the requisites laid down in the Rules; an incorrect appeal may be dismissed even if timely filed. The SC applied it to Erlando’s Rule 41 appeal, which was the wrong remedy for an intra-corporate case.
• Extrinsic Fraud vs. Errors of Judgment — Extrinsic fraud is a ground for annulment; errors in the appreciation of evidence, credibility, or legal conclusions are errors of judgment correctible by appeal, not annulment. The SC applied it to the allegations of deliberate error and collusion, which were substantially the same merits issues.
• Due Process and Third-Party Claim — A party who is given the opportunity to pursue a third-party claim but fails to do so, or withdraws the motion raising the same issues, cannot later claim denial of due process; the failure is attributable to the party. The SC applied it to Joena.
• Absolute Community Property Exclusion under Article 92(3), Family Code — Property acquired before the marriage of a spouse who has legitimate descendants by a former marriage, and the fruits and income of that property, are excluded from the absolute community. The SC applied it to the vehicles purchased in 1992 and 1997 and the house and lot under TCT No. 216818, which did not belong to the second marriage.
• Forum Shopping — Forum shopping is the filing of multiple suits involving the same parties for the same cause of action, simultaneously or successively, to obtain a favorable judgment. The SC applied it and found no forum shopping because the Marikina complaint questioned execution while the present case questioned the merits.
• Representation of Stepchildren — A stepmother cannot represent her stepchildren without a special power of attorney; parental authority over a minor belongs to the parents. The SC applied it to Joena’s Affidavit of Third Party Claim.

• "Time and again, this Court has upheld dismissals of incorrect appeals, even if these were timely filed." — From the prior SC decision in G.R. No. 169420, quoted in the present Decision; it supports the dismissal of Erlando’s wrong appeal despite timeliness.
• "Annulment of judgment is a recourse equitable in character, allowed only in exceptional cases as where there is no available or other adequate remedy" — From the CA Resolution quoted by the SC; it defines the exceptional nature of Rule 47 annulment.
• "Under Section 2 of Rule 47 of the Revised Rules of Court, the only grounds for an annulment of judgment are extrinsic fraud and lack of jurisdiction" — From the CA Resolution quoted by the SC; it limits the grounds for annulment and explains why the merits-based allegations failed.
• "Forum-shopping consists of filing multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment." — From Executive Secretary vs. Gordon, quoted by the SC; it is the definition applied to find no forum shopping because the causes of action differed.

• Abrenica vs. Law Firm of Abrenica, Tungol & Tibayan, 534 Phil. 34 (2006) — Prior decision in G.R. No. 169420; the present case is a continuation, and it held that the appeal was the wrong remedy and the RTC decision had become final.
• Lanzaderas vs. Amethyst Security and General Services, Inc. — Cited in the prior Abrenica decision, which the SC quoted, to support dismissal of an incorrect appeal even if timely filed.
• Enriquez vs. Court of Appeals, 444 Phil. 419 (2003) — Relied on for the rule that appeal is a purely statutory right and an appellant must strictly comply with the Rules.
• Executive Secretary vs. Gordon, 359 Phil. 266 (1998) — Relied on for the definition and examples of forum shopping; applied to find no forum shopping because the causes of action differed.
• Espinosa vs. Court of Appeals, 430 SCRA 96 (2004) — Cited in the CA Resolution quoted by the SC for the rule that annulment of judgment is equitable and available only in exceptional cases where there is no available or adequate remedy.
• Cerezo vs. Tuazon, 426 SCRA 167 (2004) — Cited in the CA Resolution quoted by the SC for the rule that the only grounds for annulment are extrinsic fraud and lack of jurisdiction.

• Rule 47, Sections 1 and 2, Rules of Court — Annulment of judgment is available only when the ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies are no longer available through no fault of the petitioner; the grounds are extrinsic fraud and lack of jurisdiction. Applied to deny the second annulment because finality was due to petitioners’ own wrong appeal and the grounds were errors of judgment.
• Rule 41, Rules of Court — Governs notice of appeal; Erlando used it, but it was the wrong mode for the intra-corporate case, causing the RTC decision to become final.
• Rule 43, Rules of Court — Petition for review; the correct mode of appeal under A.M. No. 04-9-07-SC for decisions in cases formerly cognizable by the SEC. Erlando failed to use it.
• A.M. No. 04-9-07-SC — Prescribes appeal by petition for review under Rule 43 from RTC decisions in cases formerly cognizable by the SEC, within 15 days from notice. Applied to hold that the Rule 41 appeal was wrong.
• A.M. No. 01-2-04-SC — Provides that decisions in intra-corporate disputes are immediately executory and not subject to appeal unless stayed by an appellate court. Respondents invoked it in moving for execution.
• Republic Act No. 8799 — Transferred jurisdiction over intra-corporate controversies from the SEC to the courts. Applied when the SEC cases were transferred to RTC Quezon City, Branch 226.
• Article 92, paragraph (3), Family Code — Excludes from the absolute community property acquired before the marriage of a spouse who has legitimate descendants by a former marriage, and the fruits and income of that property. Applied to Joena’s claims over the vehicles and TCT No. 216818.