Manila v. Manzo
REITERATIONFacts
The Antecedents: Respondents leased two parcels of land to petitioners for ten years with an option to buy within two years. The lease expired, but petitioners remained in possession, claiming they exercised the option to buy. Respondents demanded they vacate and pay rental arrearages. Procedural History: The Metropolitan Trial Court (MeTC) ordered petitioners to vacate, pay arrearages, and reimburse respondents for the building's value, or petitioners could exercise their right under Article 1678 of the Civil Code. Petitioners appealed to the Regional Trial Court (RTC), which reversed the MeTC, ordering respondents to execute a deed of absolute sale upon full payment of the purchase price by petitioners. The RTC's decision became final and executory after respondents' motion for reconsideration was denied for being filed out of time. The Petition: Respondents filed a petition for annulment of the RTC decision with the Court of Appeals (CA), arguing the RTC acted without jurisdiction by ordering the sale of property in an ejectment case, which is beyond its appellate jurisdiction. The CA granted the annulment, reinstating the MeTC decision. Petitioners then filed a petition for review on certiorari with the Supreme Court.
Issue(s)
Whether the Court of Appeals committed a grave error in annulling the judgment by the Regional Trial Court notwithstanding the finding that the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies were lost through the fault of the respondents. Whether the Court of Appeals committed a grave error in annulling the judgment by the Regional Trial Court on the ground of "lack of jurisdiction" when it has not been shown that the Regional Trial Court had no jurisdiction over the person of the respondents or the subject matter of the claim.
Ruling
The petition is meritorious. The Court set aside the Court of Appeals' Decision and Resolution, and dismissed the respondents' petition for annulment of judgment.
Ratio Decidendi
On the first issue (Availability of Ordinary Remedies): The Court found that the respondents' claim of losing ordinary remedies through no fault of their own was unpersuasive. The respondents completely entrusted their case to their counsel, who was ill and eventually died. However, as party litigants, they had the responsibility to monitor the progress of their case and could have followed up with the RTC, especially during their counsel's hospital confinements. Their complete reliance on their counsel's assurances, without taking proactive steps, constituted negligence. The Court reiterated that an action for annulment of judgment cannot be a substitute for a lost remedy of appeal due to the client's or counsel's own neglect. The respondents' failure to pursue available remedies for three and a half years, without a more plausible explanation than the word of a deceased counsel, constituted unreasonable delay and was barred by laches. On the second issue (Lack of Jurisdiction): The Court held that the CA erred in annulling the RTC decision on the ground of lack of jurisdiction. Lack of jurisdiction refers to an absolute absence of authority to hear and decide a case, either over the person or the subject matter. While the RTC, in its appellate capacity in an ejectment case, acted in excess of its jurisdiction by ordering the sale of the property (which is beyond the scope of an ejectment suit and should be resolved in a specific performance case), this was an erroneous exercise of jurisdiction, not an absence of it. The RTC undeniably had appellate jurisdiction over ejectment cases decided by the MeTC, as conferred by law. Therefore, its decision, though containing an error in the relief granted, was not void for want of jurisdiction. The Court cited Ybañez v. Court of Appeals to emphasize that an RTC exercising its appellate jurisdiction cannot have its decision annulled on the ground of lack of jurisdiction when it clearly had the authority to decide the appeal.
Main Doctrine
An action for annulment of judgment based on lack of jurisdiction requires an absolute absence of jurisdiction, not merely an erroneous exercise of jurisdiction. An RTC acting in excess of its appellate jurisdiction in an ejectment case by ordering a sale of the property, rather than merely resolving possession, does not amount to a lack of jurisdiction that would warrant annulment of its judgment, especially when the petition for annulment is filed beyond the period allowed by law or is barred by laches.