Morales v. Subic Shipyard
REITERATIONFacts
1. The Antecedents: On August 7, 1979, President Ferdinand E. Marcos issued a directive for the expropriation of lands in Cabangan, Subic, Zambales, for the construction of a ship repair facility by the Philippine Shipyard & Engineering Corporation (PHILSECO), a subsidiary of a government-owned entity. The Republic of the Philippines subsequently filed an eminent domain complaint on October 1, 1979, impleading, among others, Spouses Eulogio and Rosalia Morales, who owned several lots in the area. The spouses Morales moved to dismiss the complaint, raising issues of cause of action, public use, equal protection, and just compensation. The trial court denied their motion and ordered the Republic to take possession of the properties. 2. Procedural History: The trial court denied the spouses Morales' motion for reconsideration and allowed the Republic to take possession of the land after depositing the assessed compensation. While the parties stipulated that the sole issue was just compensation, the Supreme Court's ruling in Export Processing Zone Authority v. Dulay established that determining just compensation is a judicial function. Despite attempts to reach an agreement on compensation, the spouses Morales filed a new motion to dismiss on March 19, 1993, arguing that PHILSECO had been privatized. On August 31, 1995, the trial court granted this motion, dismissing the complaint. An Entry of Judgment was issued on October 5, 1995. Subsequently, PHILSECO, renamed Subic Shipyard & Engineering, Inc. (SSEI), filed a petition for annulment of the trial court's dismissal order with the Court of Appeals, arguing the trial court lacked jurisdiction to dismiss the case after the propriety of expropriation had been resolved. The Court of Appeals granted the annulment petition on February 22, 2001, directing the trial court to determine just compensation. The spouses Morales' motion for reconsideration was denied. 3. The Petition: The Spouses Morales filed a Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, seeking to reverse the Court of Appeals' Decision. They contend that the Court of Appeals erred in annulling the trial court's Resolution of August 31, 1995, which dismissed the eminent domain complaint. The core argument is that the trial court retained jurisdiction over the case until its final disposition, and therefore, the Court of Appeals should not have granted the annulment of judgment on the ground of lack of jurisdiction.
Issue(s)
Whether the Court of Appeals erred in annulling the trial court’s Resolution dated August 31, 1995 dismissing the respondent’s complaint for eminent domain on the ground of lack of jurisdiction. Whether the trial court retained jurisdiction over the case until its final disposition.
Ruling
The petition is GRANTED. The assailed Decision of the Court of Appeals is REVERSED.
Ratio Decidendi
On the issue of whether the Court of Appeals erred in annulling the trial court’s Resolution dated August 31, 1995 dismissing the respondent’s complaint for eminent domain on the ground of lack of jurisdiction: The Supreme Court held that on August 31, 1995, when the trial court issued its challenged Resolution dismissing the complaint, it still had jurisdiction over the case. Consequently, such Resolution could not be annulled by the Court of Appeals. A petition for annulment of judgment is an extraordinary action restricted to grounds of extrinsic fraud and lack of jurisdiction. The Court emphasized that lack of jurisdiction refers to either lack of jurisdiction over the person of the defending party or over the subject matter of the claim. In this case, there was no dispute that the trial court possessed jurisdiction over the eminent domain case from its inception. On the issue of whether the trial court retained jurisdiction over the case until its final disposition: The Supreme Court reiterated the settled principle that once jurisdiction has been acquired, it is not lost until the court shall have disposed of the case in its entirety. The trial court issued an Entry of Judgment on October 5, 1995, regarding its Resolution of August 31, 1995, which had attained finality. Therefore, from the commencement of Civil Case No. 2737-O until October 5, 1995, the trial court retained its jurisdiction. The Court concluded that when the questioned Resolution was issued on August 31, 1995, the trial court acted with jurisdiction. The Court stressed that litigation must end, and once a judgment has become final, the winning party should not be deprived of its fruits, guarding against schemes that would lead to undesirable results. This 28-year-old controversy was thus brought to a close.
Main Doctrine
Once a court acquires jurisdiction over a case, it is not lost until the case is disposed of in its entirety. A resolution dismissing a complaint that has become final and executory cannot be annulled on the ground of lack of jurisdiction if the court indeed had jurisdiction at the time the resolution was issued.