Calubad v. Aceron
REITERATIONFacts
The Antecedents: In April 1992, Billy M. Aceron (Aceron) and Oliver R. Soriano (Oliver) entered into an unnotarized Deed of Conditional Sale for P1.6 million over a 760-square meter parcel of land in Quezon City, covered by Transfer Certificate of Title (TCT) No. 15860, registered in the name of Spouses Francisco R. Soriano and Rosa R. Soriano, who had donated it to Oliver. The Deed stipulated that Oliver would cause the reconstitution of title and transfer of ownership to Aceron, who could take possession upon payment of P300,000.00. In October 1992, the title was reconstituted. Aceron demanded the execution of a Deed of Absolute Sale, but Oliver informed him of his intent to cancel the Deed of Conditional Sale, alleging Aceron's failure to pay the total amount. Procedural History: On October 19, 1993, Aceron filed a Complaint before the Regional Trial Court (RTC) of Quezon City, Branch 96 (Civil Case No. Q-93-18011), praying for Oliver to execute the Deed of Absolute Sale and pay damages. On December 26, 1996, the RTC ruled in favor of Aceron, ordering Oliver to execute the Deed of Absolute Sale and pay attorney's fees. Aceron's appeal to the Court of Appeals (CA) for moral and exemplary damages was denied, and the RTC's Decision became final and executory on August 5, 2003. On July 4, 2003, the trial court granted Oliver's motion for writ of execution. On August 5, 2003, TCT No. N-253373 was issued in Oliver's name. On November 5, 2003, Oliver informed Aceron of the notarial rescission of the Deed of Conditional Sale and demanded he vacate the property. On December 17, 2003, Oliver mortgaged the subject property to petitioner Arturo C. Calubad (Calubad) for a P1.6 million loan. On January 9, 2004, Aceron moved for execution of the RTC's December 26, 1996 Decision, which was granted on March 5, 2004. Aceron deposited P970,000.00 on April 1, 2004. Oliver failed to deliver the title, manifesting it was mortgaged to Calubad. Aceron moved for transfer of title free from encumbrances. On October 3, 2004, Aceron filed an Omnibus Motion, seeking delivery of TCT No. N-253373, prevention of adverse acts by Oliver and Calubad, execution of a Deed of Absolute Sale, divestment of Oliver's title, and transfer of ownership to Aceron free from liens. On December 13, 2004, the RTC granted Aceron's Omnibus Motion, divesting Oliver of ownership, directing the Register of Deeds to issue a new title to Aceron free from encumbrances, and declaring the mortgage and foreclosure sale null and void. This Resolution became final and executory on January 20, 2005. Calubad filed a Rule 65 petition before the CA (CA-G.R. SP No. 88415), assailing the RTC's December 13, 2004 Resolution for lack of jurisdiction over his person. The CA dismissed it on March 14, 2006, as an improper remedy. Calubad's motion for reconsideration was denied on March 27, 2007. His subsequent Rule 45 petition to the Supreme Court was denied on June 6, 2007, becoming final on August 1, 2007. The Petition: On August 23, 2007, Calubad filed a Petition for Annulment of Final Resolution under Rule 47 of the Rules of Court (CA-G.R. SP No. 100249) before the CA, seeking to annul the RTC's December 13, 2004 Resolution. The CA dismissed it outright on September 19, 2007, finding that Calubad had other available remedies and no extrinsic fraud was committed. Calubad's motion for reconsideration was denied on May 29, 2009. Hence, Calubad filed this Petition for Review on Certiorari under Rule 45, arguing that the RTC lacked jurisdiction to cancel his mortgage and declare him a mortgagee in bad faith as he was not a party to Civil Case No. Q-93-18011 and there was no notice of lis pendens. He contended he relied on the Torrens title and had no personality to intervene or file a petition for relief from judgment, thus Rule 47 was his proper remedy.
Issue(s)
Whether or not the appellate court has jurisdiction to: (a) cancel the annotations of the real estate mortgage and certificate of sale in favor of Calubad on TCT No. N-253373; (b) declare the real estate mortgage and foreclosure sale as null and void; and (c) declare Calubad as mortgagee in bad faith, despite the fact that Calubad is not a party to Civil Case No. Q-93-18011 and there was no notice of lis pendens on TCT No. N-253373. Whether or not the appellate court is correct in dismissing the petition for annulment and in finding that Calubad has available remedies other than a petition for annulment of judgment or final resolution under Rule 47 of the Rules of Court.
Ruling
The Petition is DENIED. The assailed September 19, 2007 Resolution and May 29, 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 100249 are hereby AFFIRMED. Costs on petitioner.
Ratio Decidendi
On Issue 1: The Supreme Court held that the Regional Trial Court (RTC) acted within its jurisdiction when it resolved the motion for execution filed by Aceron and consequently issued the Resolution dated December 13, 2004. This Resolution divested Oliver R. Soriano (Oliver) of his ownership over the subject property and directed the Register of Deeds to issue a new title in the name of Billy M. Aceron (Aceron), further declaring Arturo C. Calubad's (Calubad) real estate mortgage and foreclosure sale as null and void. The Court clarified that jurisdiction refers to the authority to decide a case, not the decision rendered therein, and the RTC clearly acquired jurisdiction over the subject matter and the persons of Oliver and Aceron in the original Civil Case No. Q-93-18011. The case had already become final and executory, justifying the RTC's subsequent issuance of orders to put the judgment into effect. Calubad failed to demonstrate an absolute lack of authority on the part of the RTC, which is required for annulment based on lack of jurisdiction, rather than merely an abuse of jurisdictional discretion. Applying Dare Adventure Farm Corp. v. Court of Appeals, the Court reiterated that a judgment that has become final is immutable and unalterable, and fundamental considerations of public policy demand an end to judicial controversies. While Calubad was not a party to the original case, Section 47(b), Rule 39 of the Rules of Court explicitly provides that a judgment is conclusive and binding upon parties and their successors-in-interest by title subsequent to the commencement of the action. Calubad, having acquired his interest as a mortgagee from Oliver after the finality of Civil Case No. Q-93-18011, is considered a successor-in-interest and thus bound by the judgment, as affirmed in Vda. De Medina v. Cruz and Church Assistance Program, Inc. v. Sibulo. His claim is not adverse to Oliver's, as he derived his interest from Oliver, and therefore cannot enforce it against Aceron, the adjudged owner, nor claim good faith reliance on a Torrens title to exempt himself from the execution of the final judgment. The absence of a notice of lis pendens does not alter this, as the final judgment itself binds successors-in-interest. The argument that Calubad could rely on Lim v. Chuatoco was implicitly rejected as the Court's finding of Calubad as a successor-in-interest bound by a prior final judgment overrides the general principle of reliance on a clean title in this specific context. The Court found no extrinsic fraud, as Oliver admittedly mortgaged the property after the ownership issue was settled in Aceron's favor, meaning the issue of ownership was already resolved when Calubad acquired his interest. Therefore, the RTC's actions were within its jurisdiction and consistent with the binding effect of final judgments. On Issue 2: The Supreme Court affirmed the Court of Appeals' (CA) dismissal of Calubad's petition for annulment of judgment under Rule 47 of the Rules of Court. The Court reiterated that annulment of judgment is an equitable recourse, available only in exceptional cases where there is no available or other adequate remedy, and only on the grounds of extrinsic fraud or lack of jurisdiction, as established in Heirs of So v. Obliosca. In this case, neither of these grounds was found to be present. Furthermore, the Court emphasized that Rule 47 extends only to a party in whose favor the remedies of new trial, reconsideration, appeal, and petition for relief from judgment are no longer available through no fault of said party. As a non-party in Civil Case No. Q-93-18011, Calubad could not bring an action for annulment of judgment because the ordinary remedies of new trial, reconsideration, appeal, or setting the judgment aside through a petition for relief under Rule 38 were not available to him in the first instance. The Court clarified that a petition for relief from judgment under Rule 38 is available only to a party to the case. Even assuming Calubad could avail of Rule 47, such an action would not finally determine his rights over the subject property as against the competing rights of the original parties, as annulment of judgment is an independent action focused on the nullity of the judgment itself, not an appeal of its merits. The issues of whether the subsequent mortgage and the indefeasibility of a Torrens title gave Calubad a superior right were deemed outside the scope of a petition for annulment of judgment, which does not involve the merits of the final order of the trial court. Therefore, the CA correctly dismissed the petition for annulment, as Calubad failed to satisfy the strict requirements for this extraordinary remedy. The Court concluded that Calubad's resort to Rule 47 was unnecessary and improper given the circumstances and the nature of the remedy.
Main Doctrine
The primary legal doctrine established and applied in this case is that a petition for annulment of judgment, order, or resolution under Rule 47 of the Rules of Court is an extraordinary remedy available only on the grounds of extrinsic fraud or lack of jurisdiction, and only when ordinary remedies are no longer available through no fault of the petitioner. This doctrine reinforces the principle of immutability of final judgments, which dictates that once a judgment becomes final and executory, it can no longer be modified or altered. Furthermore, the case clarifies that a final judgment is binding not only on the parties to the case but also on their successors-in-interest who acquire title subsequent to the commencement of the action, thereby ensuring the effective enforcement of judicial pronouncements and preventing endless litigation.