Hofer v. Yu
REITERATIONFacts
The Antecedents: On February 28, 1995, respondent Nelson Yu filed a Complaint for Sum of Money and Damages with preliminary attachment against petitioners Spouses Atty. Tomas Hofer and Dr. Bernardita R. Hofer before the RTC of General Santos City, Branch 22 (Civil Case No. 5550), claiming P1,500,000 based on an unauthorized check. On March 6, 1995, the RTC issued a Writ of Preliminary Attachment, levying six conjugal parcels of land in General Santos City covered by TCT Nos. T-48484 (Lot 3 Blk 4, 185 sqm), T-48447 (Lot 8 Blk 1, 200 sqm), T-48402 (Lot 1 Blk 10, 298 sqm), T-48386 (Lot 1 Blk 6, 248 sqm), T-60285 (Lot 30, 4076 sqm), and T-19829 (Lot 24-B, 5000 sqm). Petitioners answered denying liability, alleging the check was issued without authority. Before trial, on August 18, 1995, assisted by counsel, parties executed a Compromise Agreement admitting petitioners' P1,500,000 obligation, conveying in dacion en pago their Talamban, Cebu Lot 102 (792 sqm, Tax Dec. 94GR-02-019-15613, valued P1,600,000), with Yu paying P100,000 excess; Yu to bear transfer taxes; mutual withdrawal of claims/counterclaims. RTC approved it via Decision on August 22, 1995, which became final/executory, effectively extinguishing obligation and releasing attachments. Procedural History: Nearly eight years later, on May 29, 2003, Yu and Bernardita alone executed an Amended Compromise Agreement (without Tomas' knowledge/participation), relieving Yu of accepting Talamban property and obliging petitioners to hold P1,500,000 in trust from proceeds of sale of the originally attached properties (listing TCTs T-19829, T-60285, T-48484, T-48425 [note discrepancy], T-48447, T-48421 [discrepancy], T-48386, T-48402 [as T-484024]), with Yu lifting levies pre-sale by Dec 30, 2004 (extendable 6 months). RTC directed counsels' manifestation; petitioners' counsel Atty. Matunog disavowed assistance. RTC approved via Amended Decision on February 23, 2004 (not contrary to law per NCC Art. 6), amending 1995 Decision; Matunog received copy same day. On August 25, 2005, Yu moved for execution; RTC ordered writ September 12, 2005 (received by counsel Sept 21); properties auctioned October 20, 2005 (Yu highest bidder); Sheriff's Certificate of Sale issued December 28, 2006, registered January 4, 2007. March 10, 2008, Yu moved to annotate certificates, issue final sale certificates, surrender duplicates, cancel TCTs (T-19829, T-48421, etc., plus T-93361 of third party Victor Joy G. Cabading), issue new TCTs to Yu, and writ of possession/demolition. On March 16, 2009, petitioners commented moving to set aside Amended Decision, execution, auction, certificate (Tomas denied due process; Bernardita inveigled sans counsel). RTC Order September 17, 2009 partly granted Yu's motions (except premature cancellation), directing annotations, final certificates, surrender, possession except cancellation. The Petition: Petitioners filed CA Petition for Annulment of Judgment (Rule 47) November 11, 2009, claiming RTC lacked jurisdiction to amend final 1995 compromise judgment; Amended Compromise invalid sans Tomas' consent, binding no conjugal property. CA TRO November 17, 2009; later preliminary injunction. Yu answered alleging jurisdiction by estoppel, laches, voluntary execution. CA Decision October 27, 2016 dismissed: ordinary remedies unavailable (no), but laches barred (constructive notice via June 9, 2005 annotation Entry 520249 on T-48386; inaction post-2004 Decision till 2009); Resolution February 17, 2017 denied MR. Petitioners petition SC: no laches (void judgment; actual knowledge March 2009; good faith); due process violation; no jurisdiction to amend final judgment; no Tomas consent vitiates Amended Compromise over conjugal property. Yu countered: voluntary; estoppel (receipt of notices); unexecuted original allows amendment.
Issue(s)
Whether the CA erred in ruling petitioners' annulment action barred by laches. Whether grounds exist to annul the RTC Amended Decision and Order.
Ruling
Petition granted; CA Decision and Resolution reversed/set aside; RTC Amended Decision (Feb 23, 2004) and Order (Sept 17, 2009) annulled/set aside.
Ratio Decidendi
On Issue 1 (No Laches): Annulment under Rule 47 requires: (1) no ordinary remedies available sans petitioner's fault; (2) extrinsic fraud/lack of jurisdiction (incl. due process denial per Baclaran v. Nieva); (3) timely filing (4 yrs from fraud discovery; pre-laches/estoppel for jurisdiction). Laches (unreasonable delay presuming abandonment) is equitable, case-specific, not absolute; courts avoid strict application causing manifest injustice (Insurance of the Phils. v. Sps. Gregorio). Here, Tomas lacked actual knowledge of Amended Compromise/Decision (no evidence; good faith belief case ended 1995); learned March 2009 via sale registration, immediately moved to set aside (March 16, 2009), petitioned CA (Nov 11, 2009)—prompt. Constructive notice (title annotation June 2005) insufficient sans proof Tomas saw it; counsel's receipt not imputed as disavowed assistance. Silence not estoppel: reliance on final 1995 dacion en pago extinguishing obligation (PNB v. Tan Dee). Equity demands relief; no laches. On Issue 2 (Grounds for Annulment - Lack of Jurisdiction/Due Process): 1995 Decision on compromise (judgment on merits, res judicata, final/executory per Gadrinab v. Salamanca) retained execution jurisdiction but lost amendment power post-finality (Riano, Fundamentals of Civil Procedure). Original: dacion en pago of Talamban property (P1.6M) for P1.5M debt + P100K excess, mutual releases—obligation extinguished. Amended Compromise (2003, Bernardita/Yu only) invalid: no Tomas consent/participation (due process denial = jurisdictional defect, voiding judgment per Arrieta v. Arrieta). Post-judgment compromises allowed if unexecuted, voluntary, contract-compliant (Magbanua v. Uy: waiver possible with knowledge, not contra public policy)—but requires ALL parties' consent. Tomas indispensable; no authority proven for Bernardita. Conjugal property: NCC Art. 172 bars wife binding partnership sans husband consent (Abalos v. Macatangay: mutual requirement); FC Art. 124 voids unilateral disposition/encumbrance (Hapitan v. Sps. Blacer), even pre-liquidation share. RTC erred approving void amendment converting extinguished debt to trust on attached properties; violates immutability, due process. Annulment warranted.
Main Doctrine
A petition for annulment of judgment under Rule 47 of the Rules of Court is an extraordinary equitable remedy available only when ordinary remedies are no longer viable through no fault of the petitioner, grounded exclusively on extrinsic fraud or lack of jurisdiction (including denial of due process), and must be filed within four years from discovery of fraud or before laches/estoppel bars actions based on jurisdiction. A judgment based on a compromise agreement is a judgment on the merits, immediately final and executory with res judicata effect, retaining court jurisdiction only for execution, not amendment or modification post-finality. Parties may enter a new or amended compromise post-final judgment if the original remains unexecuted, provided it is voluntary, freely executed with full knowledge, and complies with contract elements (consent of all parties, certain object, lawful cause), but lacks validity without consent of indispensable parties like both spouses for conjugal property. Under Article 172 of the New Civil Code and Article 124 of the Family Code, disposition or encumbrance of conjugal property requires the written consent of both spouses; unilateral acts by one spouse are void, even for their presumptive share pre-liquidation. Denial of due process, such as approving an amended compromise without notifying or obtaining one spouse's participation, renders the judgment void for lack of jurisdiction, unbarred by laches if promptly assailed upon actual discovery and good faith reliance on the original final judgment exists.