Ybañez v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Petitioners, spouses Victor Warlito V. Ybañez and Virginia A. Ybañez, sold a parcel of land to private respondents, spouses Avelino P. Ifurung and Virginia F. Ifurung, via a Deed of Sale With Assumption of Mortgage and With Right of Purchase. The agreement stipulated that private respondents would pay P118,000.00 and assume the mortgage with the Development Bank of the Philippines (DBP), while petitioners retained a three-month right to repurchase the property. Failure to repurchase within this period would result in the unconditional transfer of the property to private respondents, requiring petitioners to vacate. 2. Procedural History: After petitioners failed to repurchase the property and subsequently refused to vacate, private respondents filed an ejectment suit in 1992 before the Metropolitan Trial Court (MTC). Due to petitioners' failure to file an answer, the MTC rendered a default judgment in favor of private respondents. Petitioners appealed to the Regional Trial Court (RTC), arguing improper substituted service of summons, but the RTC affirmed the MTC decision with modifications to the rental amounts. The RTC denied petitioners' subsequent motion for new trial and issued a writ of execution. Petitioners then filed an action for cancellation of the deed of sale with another RTC branch, which was dismissed and is now pending appeal. Subsequently, petitioners filed a petition for annulment of judgment with the Court of Appeals, challenging the MTC and RTC decisions. 3. The Petition: Petitioners filed a petition for certiorari under Rules 65 and 45 of the Rules of Court with the Supreme Court, seeking to annul the Court of Appeals' decision. They argued that the substituted service of summons in the MTC ejectment case was invalid, that the RTC lacked jurisdiction to modify the MTC decision, and that the judgments were obtained through extrinsic fraud. The Supreme Court noted the improper mode of appeal and the failure to file a motion for reconsideration. The Court found that the RTC had appellate jurisdiction and that the issue of substituted service of summons had become final and could not be relitigated. The Court also agreed with the Court of Appeals that no extrinsic fraud was committed, as any alleged misrepresentation regarding the mortgage assumption occurred within the litigation process and constituted intrinsic fraud, which could have been litigated at trial.
Issue(s)
Whether the substituted service of summons over the persons of the petitioners in the ejectment case was valid to vest the MTC with jurisdiction over their persons. Whether the judgments of the MTC and RTC were obtained by means of extrinsic fraud to warrant their nullification.
Ruling
The Supreme Court dismissed the petition. While acknowledging that the Court of Appeals erred in reversing the RTC's ruling on the validity of substituted service of summons, the Court found that the RTC's decision on this matter had long attained finality. The Court also agreed with the Court of Appeals that the MTC judgment was not obtained by extrinsic fraud.
Ratio Decidendi
On the validity of substituted service of summons: The Court found that the Court of Appeals acted inadvertently in reversing the RTC's ruling on the validity of the substituted service of summons. The RTC, in taking cognizance of the appeal from the MTC, was exercising its appellate jurisdiction as mandated by law, and thus had jurisdiction to decide the appeal. It was inappropriate for the CA to reverse the RTC's finding that substituted service was proper and valid, as this issue was already settled in the RTC and had attained finality. Raising this settled issue in an annulment case was deemed a device to acquire a fresh opportunity to assail a ruling that petitioners had already lost the chance to question due to their failure to file a timely petition for review. The principle of immutability of final and executory judgments was invoked, stating that such judgments may no longer be modified except for clerical errors. The Court emphasized that parties should not be permitted to relitigate issues that have already been laid to rest. On the issue of extrinsic fraud: The Court agreed with the Court of Appeals' disposition that the MTC judgment was not obtained by extrinsic fraud. Extrinsic fraud refers to acts that prevent a party from having a trial or presenting their case, as opposed to intrinsic fraud which occurs during the trial and could have been litigated. The alleged omission by private respondents of not informing the court that they had not assumed the mortgage was considered an act within the trial process, constituting intrinsic fraud if proven, and thus not a ground for annulment. The Court found no act or conduct on the part of private respondents that prevented petitioners from presenting their case to the court, and the record was bereft of evidence to show otherwise. Therefore, the RTC decision was not attended by extrinsic fraud.
Main Doctrine
A party cannot, by varying the form of action or adopting a different method of presenting his case, escape the effect of a valid judgment that has become final and executory. Issues that have been settled and have acquired finality in a prior case are precluded from relitigation.