Demetriou v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioners Antonio and Harriet Demetriou alleged co-ownership of 2/3 of Lot No. 7651-A, covered by Transfer Certificate of Title (TCT) No. T-65878 in the name of Pablo Ralla, father of private respondent Hilda Ralla-Almine. Petitioners acquired their share through deeds of absolute sale executed on July 11, 1985, and ratified by court order on May 11, 1989. They deferred registering their sale and obtaining a new title until the expiration of a ten-year lease on July 15, 1991. In August 1991, upon attempting to register their sale, they discovered from the Register of Deeds that a new owner's duplicate copy of TCT No. T-65878 had been issued to private respondent by order of Judge Rhodie A. Nidea. Petitioners learned that private respondent had filed a petition (CAD Case No. T-1024) on September 20, 1990, alleging the loss of the owner's duplicate copy of TCT No. T-65878, which they claimed was false and fraudulent. They asserted that the owner's duplicate copy was delivered to them on July 11, 1985, by private respondent's brother, Gerardo Ralla. Based on this alleged false representation, Judge Nidea issued an order on December 7, 1990, declaring the lost copy of no further force and effect and ordering the issuance of a new duplicate copy to private respondent. Procedural History: Petitioners filed an action in the Court of Appeals seeking the annulment of the Regional Trial Court's decision ordering the Register of Deeds to issue a new owner's duplicate certificate of title to private respondent. The Court of Appeals denied their petition, ruling that the alleged fraud was intrinsic, not extrinsic, and thus did not justify setting aside the trial court's final decision. The Petition: Petitioners seek review of the Court of Appeals' decision, arguing that the order of Judge Nidea, issued on the basis of private respondent's fraudulent representations, is null and void and must be annulled.
Issue(s)
Whether the Court of Appeals erred in dismissing the petition for annulment of judgment on the ground that the alleged fraud was intrinsic and not extrinsic, and whether the order of Judge Rhodie A. Nidea was issued without jurisdiction due to the alleged non-loss of the original certificate of title. Whether the order of Judge Rhodie A. Nidea, issued on the basis of alleged false and fraudulent representations regarding the loss of the owner's duplicate copy of TCT No. T-65878, is null and void. Whether the filing of the petition for annulment of judgment constituted forum shopping.
Ruling
The Supreme Court reversed the decision of the Court of Appeals and remanded the case for further proceedings. The Court held that while the use of a false affidavit of loss constitutes intrinsic fraud, a judgment may also be annulled for lack of jurisdiction. In this case, if the owner's duplicate copy of the title was not lost but was in the possession of another party, the reconstituted title would be void, and the court issuing it would have lacked jurisdiction. The Court also found no basis for the allegation of forum shopping.
Ratio Decidendi
On the issue of intrinsic vs. extrinsic fraud and jurisdiction: The appellate court correctly noted that an action to annul a final judgment based on fraud generally requires extrinsic fraud. Extrinsic fraud prevents a party from presenting their case fully, while intrinsic fraud involves issues litigated during the trial, such as false documents or perjured testimony. The Court agreed that the use of a false affidavit of loss, by itself, is considered intrinsic fraud, as it did not prevent the petitioners from presenting their case. However, the Court emphasized that a judgment may also be annulled for lack of jurisdiction. Citing Serra Serra v. Court of Appeals, the Court held that if a certificate of title has not been lost but is in the possession of another person, the reconstituted title is void, and the court that rendered the decision has not acquired jurisdiction. Such a decision may be attacked at any time. Therefore, it was an error for the Court of Appeals to dismiss the petition solely on the ground that the fraud was intrinsic, as the issue of jurisdiction, stemming from the alleged non-loss of the title, was paramount. On the alleged false and fraudulent representations: The petitioners' core allegation was that private respondent falsely represented that the owner's duplicate copy of TCT No. T-65878 was lost. They claimed it was delivered to them on July 11, 1985, and was in their possession. If this were true, then the petition for reconstitution filed by private respondent would be based on a fraudulent premise. The issuance of a new owner's duplicate copy under such circumstances would mean the court acted without jurisdiction, as the original duplicate was not lost. This lack of jurisdiction renders the judgment void and subject to annulment, irrespective of whether the fraud was intrinsic or extrinsic, because the court never validly acquired the power to act on the matter. On the issue of forum shopping: The Court found no basis for the allegation of forum shopping. Petitioners' intervention in Civil Case No. T-1590, an action for recovery of possession, involved allegations about the second owner's duplicate of TCT T-65878 being obtained fraudulently and that the original was not lost. However, this intervention was made in the context of demanding a partition and recognizing private respondent's ownership of 1/3 of the land. This was distinct from their petition for annulment of judgment in the Court of Appeals, which solely sought to annul the judgment in CAD Case No. T-1024 that granted private respondent's petition for a new owner's duplicate certificate of title. The nature and purpose of the two actions were different, thus negating forum shopping.
Main Doctrine
A petition for annulment of judgment based on fraud will prosper only if the fraud is extrinsic. However, a judgment may also be annulled for lack of jurisdiction, which occurs when a reconstituted title is issued despite the owner's duplicate copy not being lost but in the possession of another party.