Republic v. G Holdings, Inc.
REITERATIONFacts
The Antecedents: The Republic of the Philippines, through the Asset Privatization Trust (APT), agreed to sell 90% of the shares of stock and company notes of Maricalum Mining Corporation (MMC) to "G" Holdings, Inc. for P673,161,280. A dispute arose regarding the commencement date of installment payments, with the Republic asserting it should begin seven months after the agreement's signing, while "G" Holdings insisted it should commence seven months after the fulfillment of closing conditions. Procedural History: "G" Holdings filed a complaint for specific performance and damages with the Regional Trial Court (RTC) of Manila. The parties submitted the case for decision based on questions of law. The RTC ruled in favor of "G" Holdings, ordering the APT to execute the transfer documents and deliver the shares and notes after "G" Holdings paid the balance. The Republic filed a notice of appeal with the Court of Appeals (CA) instead of the RTC. Subsequently, the Republic filed a petition for annulment of judgment with the CA, alleging abuse of discretion amounting to lack of jurisdiction by the RTC and extrinsic fraud due to the improper filing of the appeal. The CA dismissed the petition, finding no extrinsic fraud and holding that any error committed by the RTC was an error of judgment, not jurisdiction, which could have been corrected by a timely appeal. The Petition: This petition for review on certiorari under Rule 45 of the Rules of Court assails the CA's resolution dismissing the petition for annulment of judgment. The Republic argues that the RTC committed grave abuse of discretion amounting to lack of jurisdiction by rendering its decision before the submission of the Republic's formal offer of evidence and without ruling on the admissibility of "G" Holdings' evidence. It also contends that the Solicitor General's failure to file the notice of appeal with the proper forum constituted extrinsic fraud, preventing the Republic from appealing the case.
Issue(s)
Whether the RTC committed grave abuse of discretion amounting to lack of jurisdiction in rendering its decision. Whether the failure of the Solicitor General to file the notice of appeal with the proper forum amounted to extrinsic fraud preventing the Republic from appealing.
Ruling
The petition is denied. The December 21, 1999 resolution of the Court of Appeals in CA-G.R. SP No. 53517 is affirmed.
Ratio Decidendi
On the issue of grave abuse of discretion amounting to lack of jurisdiction: The Supreme Court held that a petition for annulment of judgment is an extraordinary remedy restricted to grounds of extrinsic fraud or lack of jurisdiction. The Republic's claim of grave abuse of discretion does not fall under lack of jurisdiction, as jurisdiction refers to the authority to decide a cause, not the correctness of the decision rendered. The RTC had jurisdiction over the parties and the subject matter; thus, any error committed was merely an error of judgment, which is correctable by appeal, not by annulment. Furthermore, the Court noted that documents attached to pleadings form part thereof and may be considered evidence even without formal introduction, especially when their authenticity is not denied. The minutes of the pre-trial also showed that exhibits were marked, offered, and admitted, and the parties agreed that the sole issue was one of law. Therefore, the RTC did not commit grave abuse of discretion. On the issue of extrinsic fraud: The Court reiterated that extrinsic fraud must be committed by the prevailing party to prevent the other party from fully presenting its case or having its day in court. In this case, the Republic failed to prove or even allege that "G" Holdings practiced deceit or employed subterfuge. The unfortunate predicament of the Republic was caused by the Solicitor General's failure to file the notice of appeal with the proper forum. The Court emphasized that fraud must be committed by the adverse party, not by one's own counsel, to warrant annulment of judgment. The failure to perfect an appeal due to the negligence of counsel does not constitute extrinsic fraud. The Court also noted that the petition was filed by individuals who lacked the authority to do so, further weakening the Republic's case.
Main Doctrine
A petition for annulment of judgment is an extraordinary remedy restricted to grounds of extrinsic fraud or lack of jurisdiction. Errors of judgment, even if constituting grave abuse of discretion, are correctable by appeal and do not warrant annulment if the court had jurisdiction over the parties and the subject matter. Failure to perfect an appeal due to the negligence of counsel does not constitute extrinsic fraud attributable to the adverse party.