Cadungog v. Jung
REITERATIONFacts
The Antecedents: Vivien M. Cadungog, the developer of Sophela Tower Condominium, entered into a Contract to Sell with Sung Ha Jung for Unit 202. The agreed price was PHP 3,500,000.00, with a down payment and the balance due upon delivery of the unit. Cadungog alleged an unpaid balance of PHP 258,950.00, while Jung claimed to have paid the full amount and demanded delivery of the unit and title. This dispute led to Jung filing a complaint, resulting in an Information for violation of Presidential Decree No. 957 against Cadungog. Procedural History: The Regional Trial Court (RTC) found Cadungog not guilty of the criminal charge but ruled on the civil liability, giving Jung the option to either pay the remaining balance for the unit or be reimbursed for the amount paid with interest. Jung chose reimbursement. Cadungog's subsequent motion to set aside the judgment on civil liability, arguing the RTC lacked jurisdiction, was denied. She then filed a Petition for Annulment of Judgment with the Court of Appeals (CA), which dismissed it. The CA reasoned that the civil action was impliedly instituted with the criminal action and that an annulment of judgment was not the proper remedy. The Petition: Before the Supreme Court, Cadungog argues that the CA erred in affirming the RTC's jurisdiction over the civil aspect of the case, contending that such claims fall under the exclusive jurisdiction of the Housing and Land Use Regulatory Board (HLURB) as they arise from a contract. She also asserts that a petition for annulment of judgment is a proper remedy for challenging a judgment rendered without jurisdiction, especially when the aspect being assailed is purely civil. The petition seeks to reverse the CA's decision and declare the RTC's ruling on civil liabilities null and void for lack of jurisdiction.
Issue(s)
Whether the Court of Appeals erred in ruling that the Regional Trial Court had jurisdiction to hear and decide the civil aspect of Criminal Case No. CBU-90099. Whether the Court of Appeals erred in ruling that a petition for annulment of judgment is not the proper remedy to challenge the Regional Trial Court decision.
Ruling
The Petition for Review on Certiorari is GRANTED. The Decision dated August 20, 2019, and the Resolution dated August 28, 2020, of the Court of Appeals in CA-G.R. SP No. 06966 are REVERSED and SET ASIDE. The Decision dated September 16, 2011, of Branch 14, Regional Trial Court, Cebu City in Criminal Case No. CBU-90099, insofar as it ruled on the civil liabilities of the parties, is hereby declared as NULL and VOID for lack of jurisdiction.
Ratio Decidendi
On Issue 1: The Supreme Court found that the Regional Trial Court (RTC) lacked jurisdiction to rule on the civil aspect of Criminal Case No. CBU-90099. While Article 100 of the Revised Penal Code provides that every person criminally liable is also civilly liable, and extinction of the penal action does not necessarily extinguish the civil action, this rule has exceptions. Specifically, when the civil liability of the accused does not arise from or is not based upon the crime of which the accused was acquitted, or when the source of the obligation stems from a contract, the civil liability ex delicto rule does not apply. In this case, the RTC's ruling on civil liability clearly pertained to civil liability ex contractu, arising from the Contract to Sell between the parties, as evidenced by the options given to the respondent which involved contractual obligations and the RTC's explicit statement that the ruling was based on the parties' breach of agreement. Presidential Decree No. 957, as amended by Presidential Decree No. 1344, vests exclusive jurisdiction upon the National Housing Authority (NHA), whose functions were later transferred to the Housing and Land Use Regulatory Board (HLURB) and subsequently to the Human Settlements Adjudication Commission (HSAC), to hear and decide claims involving refunds or specific performance by subdivision or condominium unit buyers against developers. Since the civil liability adjudged by the RTC arose from a contractual breach between a buyer and a developer, it fell squarely within the exclusive jurisdiction of the HLURB, not the RTC. Therefore, the RTC rendered its judgment on the civil liability without jurisdiction over the subject matter, rendering that portion of its decision null and void. On Issue 2: The Supreme Court held that petitioner's resort to a petition for annulment of judgment was proper given the peculiar circumstances of the case. Rule 47 of the Rules of Court allows for the annulment of judgments of Regional Trial Courts in civil actions on grounds of extrinsic fraud or lack of jurisdiction, when ordinary remedies are no longer available through no fault of the petitioner. Although the case originated from a criminal action, the petition for annulment was filed solely to challenge the civil liabilities incorporated in the judgment, which the Court determined to be purely civil in nature and not deemed instituted in the criminal action. The Court emphasized that when a petition for annulment of judgment is grounded on lack of jurisdiction, the petitioner need not allege that ordinary remedies like new trial, reconsideration, or appeal are no longer available. This is because a judgment rendered without jurisdiction is null and void ab initio and can be assailed at any time, either collaterally or directly, unless barred by laches. Citing Ancheta v. Ancheta and Nazareno v. Court of Appeals, the Court reiterated that a void judgment never acquires finality and is deemed non-existent, thus any writ of execution based on it is also void. Consequently, the CA erred in dismissing the petition for annulment of judgment, as the RTC's lack of jurisdiction over the civil aspect warranted this extraordinary remedy.
Main Doctrine
The Supreme Court clarified the jurisdictional boundaries between regular courts and specialized administrative agencies concerning civil liabilities arising from contractual obligations in real estate transactions. It emphasized that while a criminal court may rule on civil liability ex delicto even upon acquittal, it lacks jurisdiction over civil liability ex contractu when such claims are specifically vested by law in administrative bodies like the Housing and Land Use Regulatory Board (HLURB), now the Human Settlements Adjudication Commission (HSAC). Consequently, any judgment rendered by a court without jurisdiction over the subject matter is null and void ab initio and can be challenged through a petition for annulment of judgment, irrespective of the availability or exhaustion of ordinary remedies.