Heirs of Medrano v. De Vera

doctrine

In cases where the property is transferred by the defendant during the pendency of the litigation, the interest of the transferee pendente lite cannot be considered independent of the interest of his transferors. If the transferee files an answer while the transferor is declared in default, the case should be tried on the basis of the transferee’s answer and with the participation of the transferee.

facts

·          Flaviana De Gracia owns a 463-sq m of land.  When Flaviana died intestate in 1980, leaving her half-sisters Hilaria Martin-Paguyo and Elena Martin-Alvarado as her compulsory heirs.

·          Hilaria and Elena, by virtue of a private document[1] waived all their hereditary rights to Flaviana’s land in favor of Francisca Medrano in consideration of the expenses that she incurred for Flaviana’s medication, hospitalization and burial.  

·          Due to the refusal of the other children to sign a similar renunciation, Medrano filed a Complaint for quieting of title and/or partition with damages against Pelagia, Faustina, Jesus, Veneranda, Emilio a.k.a. Antonio Alvarado, Francisca and Estrellita before the RTC.

·          De Vera filed an Answer with Counterclaim, presented himself as the real party-in-interest.

o    the private document executed by the defendants’ predecessors in favor of Medrano was null and void for want of consideration.  

o    some children renounced their hereditary rights in favor of De Vera. 

·          Medrano filed a Motion to Expunge Answer with Counterclaim of De Vera and to Declare Defendants in Default. She argued that De Vera had no personality to answer the complaint since he was not authorized by the named defendants to answer in their behalf.

·          The trial court did not allow De Vera to present his evidence. TC ruled that he should have complied with the court’s order to file a pleading-in-intervention.

·          CA agreed with De Vera.  

o    trial court should ordered the substitution of the original defendants instead of requiring De Vera to file a pleading-in-intervention.  (Rule 3, Section 19)

o    A transferee pendente lite is a proper party to the case, the court can order his outright substitution for the original defendants. 

the lost trial court

·          TC disagreed with Medrano’s argument and admitted De Vera’s Answer with Counterclaim. The TC opined that De Vera did not need a special power of attorney from the defendants because he did not answer the complaint in their behalf.

·          De Vera made a voluntary appearance in the case as the transferee of the defendants’ rights to the subject property. The TC further explained that when the presence of other parties is required for granting complete relief, the court shall order them to be brought in as defendants.

·          While it was unsure whether De Vera was an indispensable party to the case, the TC opined that at the very least he was a necessary party for granting complete relief.

·          The admission of De Vera’s Answer with Counterclaim is proper in order to avoid multiplicity of suits.

·          The court declared the named defendants in default for not answering the complaint despite valid service of summons. Thus, it appears that the court a quo treated the named defendants and De Vera as distinct and separate parties.

medrano

·          With regard to the order declaring the named defendants in default, Medrano filed on Feb 13, 2003 a Motion to Set Reception of Evidence Before the Branch Clerk of Court.

·          She argued that she could present evidence ex parte against the defaulting defendants on the ground that she presented alternative causes of action against them in her complaint.

·          Her cause of action on the basis of acquisitive prescription can be raised solely against the defaulting original defendants.

·          She prayed to be allowed to present evidence ex parte with respect to her claim of acquisitive prescription against the defaulting defendants.

·          As for the order admitting De Vera’s Answer with Counterclaim, Medrano filed on a MR and asked the court to order De Vera to file a pleading-in-intervention so that he could be properly named as a defendant in the case.

·          TC resolved to grant Medrano’s Motion to Set Reception of Evidence. It ordered the conduct of ex parte presentation of evidence. Medrano presented her evidence ex parte on the set dates. The case was submitted for resolution.

·          De Vera filed a Motion to Set the Case for Preliminary Conference on March 27, 2003.

·          TC resolved pets’ and De Vera’s respective pending motions. TC granted Medrano’s set aside its Order which admitted De Vera’s Answer with Counterclaim. Citing Rule 19 of the Rules of Court, the court ordered De Vera to file a pleading-in-intervention so that he could be recognized as a party-defendant. As a necessary consequence to this ruling, the TC denied De Vera’s motion to set the case for preliminary conference for prematurity.

Ruling of the RTC

·          ownership over the titled property has vested in Heirs of Medrano by virtue of good faith possession for more than 10 years;

·          it was no longer necessary to compel the defendants - heirs of Hilaria and Elena - to execute an instrument to confirm Medrano’s rightful ownership over the land.

·          "Tapno Maamoan Ti Sangalobongan" sufficiently conveyed to Medrano the property. The conveyance was done in consideration of the various expenses that Medrano incurred for Flaviana’s benefit.

mr at the rtc

He was an indispensable party who was not given an opportunity to present his evidence in the case.

Medrano was not the owner of the property, but a mere administratrix of the land.

decision for the mr

·          De Vera had no legal personality to file a MR because he did not file a pleading-in-intervention.

·          It would have allowed De Vera to present his evidence in the case had he complied with the court’s order to file a pleading-in-intervention.

Pet: De Vera, as a transferee pendente lite, was bound by the final judgment or decree rendered against his transferors. Even assuming that De Vera had a right to appeal, the period therefor had already lapsed on August 12, 2003.

RTC: De Vera was not a party to the suit, hence his appeal would not stay the finality and execution of judgment. The writ of execution was issued on Dec 12, 2003.

de vera arguments

·          De Vera insisted that he stepped into the shoes of the defendants with regard to the property by virtue of the quitclaim that the defendants executed in his favor. TC should have considered the defendants as properly substituted by De Vera when he filed his Answer.

·          De Vera argued that it was improper for the TC to have allowed Medrano to present her evidence ex parte because it had yet to rule on whether De Vera had personality to participate in the proceedings.

Ruling of the CA

·          CA agreed with De Vera.

·          The ex parte presentation of evidence took place on March 6 and 10, 2003; while the Motion to Expunge Answer and Require Filing of Pleading-in-Intervention was granted much later on March 31, 2003.

·          TC gravely abused its discretion by allowing Medrano to present her evidence ex parte while De Vera’s personality to participate in the case still remained unresolved. The premature ex parte presentation of evidence rendered a pleading-in-intervention moot and academic.

·          TC should have exercised its authority to order the substitution of the original defendants instead of requiring De Vera to file a pleading-in-intervention. 

·          De Vera’s failure to file the pleading-in-intervention was a technical defect that could have been easily cured. 

·          CA remanded the case to the TC to afford De Vera an opportunity to present his evidence.

Issues

Whether De Vera is bound by the judgment against his transferors

Whether it was proper for the CA to take cognizance of resp’s Petition for Certiorari and Mandamus

Our Ruling

Whether De Vera could participate without filing a motion to intervene

·          TC gravely abused its discretion in refusing to allow De Vera to participate in the case and requiring him to file a motion to intervene.

·          TC held that De Vera’s right to participate in the case was independent of the named defendants. Because of its ruling that De Vera had an "independent interest," the TC considered his interest as separate from Medrano’s claims against the named defendants, and allowed the latter to be tried separately.

·          De Vera’s interest is not independent of or severable from the interest of the named defendants. De Vera is a transferee pendente lite of the named defendants. His rights were derived from the named defendants and he would be bound by any judgment against his transferors under the rules of res judicata.  

·          What the TC should have done is to treat De Vera (as transferee pendente lite) as having been joined as a party-defendant, and to try the case on the basis of the answer De Vera had filed and with De Vera’s participation.

·          Rule 3.19 gives the TC discretion to allow or disallow the substitution or joinder by the transferee. Discretion is permitted because, in general, the transferee’s interest is deemed by law as adequately represented and protected by the participation of his transferors in the case. In legal contemplation, he is not really denied protection as his interest is one and the same as his transferors, who are already parties to the case.

·          The TC should have tried the case based on De Vera’s answer, which answer is deemed to have been adopted by the non-answering defendants.

·          Rule 3, Section 19, the substitution or joinder of the transferee is "upon motion", and De Vera did not file any motion for substitution or joinder. However, this technical flaw may be disregarded for the fact remains that the court had already admitted his answer and such answer was on record when the ex parte presentation of evidence was allowed by the court.

·          The purpose of intervention is to enable a stranger to an action to become a party in order for him to protect his interest and for the court to settle all conflicting claims. Intervention is allowed to avoid multiplicity of suits more than on due process considerations. The intervenor can choose not to participate in the case and he will not be bound by the judgment.

·          De Vera is not a stranger to the action but a transferee pendente lite. As mentioned, a transferee pendente lite is deemed joined in the pending action from the moment when the transfer of interest is perfected.   

·          De Vera’s failure to file a pleading-in-intervention will not change the long foregone violation of his right to due process. The ex parte presentation of evidence had already been terminated when the TC required De Vera to file his pleading-in-intervention. 

·          The TC’s judgment by default cannot bind De Vera. A void judgment cannot attain finality and its execution has no basis in law. Case should be remanded to the TC for trial based on De Vera’s answer and with his participation.

Certiorari petition before the CA proper

Ordinary appeal was not an adequate remedy under the circumstances of the case. An appeal seeks to correct errors of judgment committed by a court, which has jurisdiction over the person and the subject matter of the dispute. TC maintained that it had no jurisdiction over De Vera because it did not consider him a party to the case. An appeal would have been an illusory remedy in this situation because his notice of appeal would have certainly been denied on the ground that he is not a party to the case.

Certiorari is an extraordinary remedy for the correction of errors of jurisdiction. Given the circumstance that the final decision prejudices De Vera’s rights despite the fact that he was not recognized as a party thereto and was not allowed to assail any portion thereof, De Vera’s remedy was to annul the TC proceedings on the ground that it was conducted with GAD amounting to lack of jurisdiction. With such annulment, the TC should hear the case anew with De Vera fully participating therein.

CA affirmed.

---

[1] "Tapno Maamoan ti Sangalobongan"

Read More

Del castillo v. sabit & bitranco and al ammen [1982]

Facts

·          June 29, 1960, Mario del Castillo, a deaf-mute, son of Severo del Castillo, and a passenger of Bicol Transportation Company (Bitranco), operated by A.L. Ammen Transportation Co., Inc. (ALATCO) at Casiguran, Sorsogon, fell upon alighting and died as a result.

·          Sept 5, 1962 –Severo filed an action for the recovery of damages for Mario's death  against the driver and conductor of the bus, and the transportation companies. The Complaint alleged that Severo, a widower, was the sole heir.

·          Transportation companies traversed the complaint by stating that:

o     bus involved was owned by Bicol Transportation Co. alone;

o    two companies had always exercised due diligence in the selection and supervision of their employees;

o    proximate cause of Mario's death was his recklessness in jumping out of the bus while in motion.

·          Plaintiff was able to present his evidence and rest his case. Defendants proceeded with the presentation of their witnesses until July 9, 1966 when they filed a "Motion for Annulment of Proceedings after Feb 1, 1965", having learned that Severo had died on Feb 1, 1965, at which time plaintiff had not yet rested his case having done so only on Jan 28, 1966. The Court a quo directed plaintiff's counsel to verify the existence of heirs and whether they were willing to be substituted as parties-plaintiffs."

·          Plaintiff's counsel filed a "Motion to Admit Amended Complaint" substituting Severo's son-in-law, one Wenceslao Haloc, as party plaintiff by virtue of a "Deed of Assignment" August 13, 1960:

SEVERO … assign… unto HALOC rights he originally instituted for indemnity for the death of my son the late Mario Castillo

·          The Amended Complaint was admitted by the TC for lack of objection thereto on August 20, 1966.

·          Trial proceeded with defendants closing their evidence on Nov 25, 1966.

·          RTC: rendered judgment in defendants' favor dismissing the original and the amended Complaints:

o    Since Severo died before the conclusion of this case, this action died with him. Haloc is without personality to continue this case. He is not even an heir of Severo del Castillo.

·          Haloc appealed as a pauper directly to this Court contending that the Decision is "contrary to law."

·          Before this instance, it is urged that the TC erred:

issues/ruling

won the case should be dismissed by virtue of the death of Severo? no! 

This is not a case where the provisions of Section 17, Rule 3 of the Rules of Court on "death of a party" are applicable. Rather, it is a situation where plaintiff, while alive, had assigned his rights to another, in which case, the proper procedure would have been for the transferee to have been substituted for the transferor as plaintiff. 

The rights of Severo to claim damages for his son were transferable. Severo had transferred his rights as plaintiff to Wenceslao Peaches Haloc but after the assignment the case continued in Severo's name and there was no immediate and formal substitution of party plaintiff. This is but a formality, however, and the fact remains that, after the assignment, the substantial plaintiff and real party in interest became Haloc, with Severo as a sort of trustee of whatever fruits the litigation would bring.

The action did not die with him: ... where an assignable right has been transferred before action brought, the proceeding ought to be instituted in the name of the assignee; and where an assignment is effect pendente lite, it is proper to have the assignee substituted for the original plaintiff. If such substitution should not be effected and the transfer of the right of action should not be brought to the attention of the court, the original plaintiff, if successful in the litigation, would hold the fruits of the action as a sort of trustee for the use and benefit of his assignee

re: damages

Common carriers are responsible for the death of their passengers (Arts 1764 and 2206 of the Civil Code). This liability includes the loss of the earning capacity of the deceased. It appears proven that the defendant corporations failed to exercise the diligence that was their duty to observe according to Arts 1733 and 1755. The conductor was apprised of the fact that Mario del Castillo was deaf and dumb. With this knowledge the conductor should have taken extra-ordinary care for the safety of the said passenger. In this he failed.

The TC then concluded that "under the circumstances obtaining in the case, the Severo would be entitled to actual and moral damages but did not determine the amount of damages because it dismissed the case.

Technicality would require a remand of this case, for a determination of the amount of damages [the total amount of P41K (P6K for death, and P35K for loss of earning capacity), and AFs of P5K, were claimed].

But in order to put an end to the controversy, we determine the damages at P12K for the death of the victim, without interest, and P2K for AFs. Loss of earning capacity in the amount of P35K has not been proven specially considering that the victim was a deaf-mute.

dispositive

Defendants ordered to pay Wenceslao Haloc, the amount of P12K as damages for death, without interest, and P2K as attorney's fees.

Read More

Carabeo v norberto & dingco [2011]

FACTS

·          Domingo Carabeo entered into a contract "Kasunduan sa Bilihan ng Karapatan sa Lupa" with Sps Norberto and Susan Peaches Dingco whereby Caraveo agreed to sell his rights over a 648 sq m unregistered land in Orani, Bataan for P38,000. (initial payment of P10,000 upon signing of the contract, the remaining balance to be paid on Sept 1990).

·          Norberto & Dingco were later to claim that when they were about to hand in the balance of the purchase price, Carabeo requested them to keep it first as he was yet to settle an on-going "squabble" over the land.

·          Norberto & Dingco gave Carabeo small sums of money from time to time which totaled P9,100, on Carabeo’s request according to them; due to Norberto & Dingco’ inability to pay the amount of the remaining balance in full, according to Carabeo.

·          Despite the alleged problem over the land, they insisted on Carabeo’s acceptance of the remaining balance of P18,900 but Carabeo remained firm in his refusal, proffering as reason that he would register the land first.

·          Sometime in 1994, Norberto & Dingco learned that the alleged problem over the land had been settled and that Carabeo had caused its registration in his name on Dec 21, 1993. They offered to pay the balance but Carabeo declined, drawing them to file a complaint before the Katarungan Pambarangay. No settlement was reached, however, hence, N & D filed a complaint for specific performance before the RTC.

·          Carabeo:

o    sale was void for lack of object certain, the kasunduan not having specified the metes and bounds of the land.

o    if the validity of the kasunduan is upheld, N & D failure to comply with their obligation to pay the balance of the purchase price would render the action premature.

o    Carabeo maintained that they failed to pay the balance of P28,000 on Sept 1990 to thus constrain him to accept installment payments totaling P9,100.

Carabeo passed away after the case was submitted for decision or on Jan 31, 2001, Records do not show that Carabeo’s counsel informed the RTC  where the complaint was lodged, of his death and that proper substitution was effected in accordance with Section 16, Rule 3, Rules of Court.

Lower courts

·          RTC Ordered defendant to sell his right over 648 sq m of land pursuant to the contract dated July 10, 1990 by executing a Deed of Sale thereof after the payment of P18,900 by the plaintiffs;

·          CA affirmed.

issues/ruling

object certain of the contract

That the kasunduan did not specify the technical boundaries of the property did not render the sale a nullity. The requirement that a sale must have for its object a determinate thing is satisfied as long as, at the time the contract is entered into, the object of the sale is capable of being made determinate without the necessity of a new or further agreement between the parties.

lack of spousal consent

This was raised only on appeal, hence, will not be considered, in the present case, in the interest of fair play, justice and due process.

carabeo’s death

Carabeo’s son: death of Carabeo causes the dismissal of the action filed by N & D; resp’ cause of action being an action in personam. 

Bonilla v. Barcena: The question as to whether an action survives or not depends on the nature of the action and the damage sued for. In the causes of action which survive, the wrong complained [of] affects primarily and principally property and property rights, the injuries to the person being merely incidental, while in the causes of action which do not survive, the injury complained of is to the person, the property and rights of property affected being incidental. 

Assuming arguendo, that the kasunduan is deemed void, there is a corollary obligation of Carabeo to return the money paid by Norberto & Dingco, and since the action involves property rights, it survives.

Trial on the merits was already concluded before Carabeo died. Since the TC was not informed of Carabeo’s death, it may not be faulted for proceeding to render judgment without ordering his substitution. Its judgment is thus valid and binding upon Carabeo’s legal representatives or successors-in-interest, insofar as his interest in the property subject of the action is concerned.

The death of a client immediately divests the counsel of authority. Thus, in filing a Notice of Appeal, Carabeo’s counsel of record had no personality to act on behalf of the already deceased client who, it bears reiteration, had not been substituted as a party after his death. The TC’s decision had thereby become final and executory, no appeal having been perfected.

Petition Denied.

Read More

YHT Realty Corporation, Lainez & Payam v. CA [2005]

FACTS

·          Maurice Peaches McLoughlin is an Australian businessman-philanthropist who used to stay at the Sheraton Hotel during his trips to the Philippines prior to 1984. He met Brunhilda Mata-Tan who befriended him and showed him around. Tan convinced Mcloughlin to transfer to the Tropicana from the Sheraton where afterwards he stayed during his trips from Dec 1984 to Sept 1987.

·          On 30 Oct 1987, McLoughlin arrived from Australia and registered with Tropicana. He rented a safety deposit box as his usual practice. The box required two keys, the guest had one and one from the management.  He placed US $10,000 in one envelope and US$5,000 in another , AU$10,000 in another envelope and other envelopes with his passport and credit cards. On 12 Dec 1987, he took from the box the envelope with US$5,000 and the one with AU$10,000 to go to Hong Kong for a  short visit, because he was not checking out. When he arrived in HK, the envelope with US$5,000 only contained US$3,000, but because he had no idea if the safety deposit box has been tampered, he thought it was just bad accounting.

·          After returning to Manila, he checked out of the Tropicana on 18 Dec 1987 and left for Australia. When he arrived he discovered that the envelope with US$10,000 was short of US$5,000. He also noticed that the jewelry he bought in Hong Kong which he stored in the safety deposit box upon his return to Tropicana was likewise missing, except for a diamond bracelet.

·          He went back to the PH on 4 Apr 1988 and asked Lainez (who had custody of the management key) if some money was missing or returned to her, to which the latter answered there was not. He again registered at the Tropicana and rented a safety deposit box. He placed an envelope containing US$15,000, another of AU$10,000. On 16 Apr, he opened his safety deposit box and noticed that US$2,000 and AU$4,500 was missing from the envelopes.

·          He immediately confronted Lainez and Payam who admitted that Tan opened the safety deposit box with the key assigned to McLoughlin. McLoughlin went up to his room where Tan was staying and confronted her.  Tan admitted that she had stolen McLoughlin’s key and was able to open the safety deposit box with the assistance of Lopez, Payam and Lainez. Lopez also told McLoughlin that Tan stole the key assigned to McLoughlin while the latter was asleep.

·          McLoughlin requested the management for an investigation of the incident.  Lopez got in touch with Tan and arranged for a meeting with the police and McLoughlin.  When the police did not arrive, Lopez and Tan went to the room of McLoughlin at Tropicana and thereat, Lopez wrote on a piece of paper a promissory note.

·          He made Lopez and Tan sign a promissory note for him for the loss. However, Lopez refused liability on behalf of the hotel, reasoning that McLoughlin signed an "Undertaking for the Use of Safety Deposit Box" which disclaims any liability of the hotel for things put inside the box.

·          On 17 May 1988 McLoughlin went back to AU and consulted his lawyers. They wrote a letter addressed to Pres. Cory Aquino which was pushed back to the DOJ and the Western Police District. He went back from the PH to AU several times more to attend business and follow up but the matter was only filed on 3 Dec 1990 since he was not there to personally follow up.

·          McLoughlin filed an action against YHT Realty Corporation, Lopez, Lainez, Payam and Tan.

·          The RTC rendered judgment in favor of McLoughlin. The CA modified only the amount of damages awarded.

·          Tan and Lopez, however, were not served with summons, and trial proceeded with only Lainez, Payam and YHT Realty Corporation as defendants.

(a) whether the loss of money and jewelry is supported by the evidence. YES. 

Where the credibility of a witness is an issue, the established rule is that great respect is accorded to the evaluation of the credibility of witnesses by the trial court. The trial court is in the best position to assess the credibility of witnesses and their testimonies because of its unique opportunity to observe the witnesses firsthand and note their demeanor, conduct and attitude under grilling examination.

(b) whether there was gross negligence on the part of the innkeepers  

Payam and Lainez, who were employees of Tropicana, had custody of the master key of the management when the loss took place.  They even admitted that they assisted Tan on three separate occasions in opening McLoughlin’s safety deposit box.

The management contends that McLoughlin made its employees believe that Tan was his spouse for she was always with him most of the time.  The evidence on record is bereft of any showing that McLoughlin introduced Tan to the management as his wife.  Mere close companionship and intimacy are not enough to warrant such conclusion. They should have confronted him as to his relationship with Tan considering that the latter had been observed opening McLoughlin’s safety deposit box a number of times at the early hours of the morning.   

Art 2180, par (4) of the same Code provides that the owners and managers of an establishment or enterprise are likewise responsible for damages caused by their employees in the service of the branches in which the latter are employed or on the occasion of their functions.  Given the fact that the loss of McLoughlin’s money was consummated through the negligence of Tropicana’s employees both the employees and YHT, as owner of Tropicana, should be held solidarily liable pursuant to Art 2193.

WON the "Undertaking for the Use of the Safety Deposit Box" is null and void.

Yes, it is null and void. Art. 2003^[1] is controlling. This is an expression of public policy that the hotel business like common carriers are imbued with public interest. This responsibility cannot be waived away by any contrary stipulation in so-called "undertakings" that ordinarily appear in prepared forms imposed by hotel keepers on guests for their signature.

The CA (former case) even ruled before that hotelkeepers are liable even though the effects are not delivered to them or their employees, but it is enough that the effects are within the hotel or inn.

Pars. 2 and 4 of the undertaking manifestly contravene Art. 2003 of the NCC. Meanwhile, the defense that Art. 2002 exempts the hotel-keeper from liability if the loss is due to the acts of the guest, family or visitors falls because the hotel is guilty of negligence as well. This provision presupposes that the hotel-keeper is not guilty of concurrent negligence or has not contributed in any degree to the occurrence of the loss.

dispositive

·          Damages awarded by the lower court sustained

·          US$2,000.00 and AUS$4,500.00 or their peso equivalent at the time of payment;

·          Air fares for a total of 11 trips + transpo expense

·          Hotel payments

·          Moral 50K

·          ED 10K

·          AF 200K

---

[1] Art. 2003. The hotel-keeper cannot free himself from responsibility by posting notices to the effect that he is not liable for the Arts brought by the guest. Any stipulation between the hotel-keeper and the guest whereby the responsibility of the former as set forth in Arts 1998 to 2001^[37] is suppressed or diminished shall be void.

Read More

Arcelona v. Farancio

Facts

Marcelino Arcelona, Tomasa Arcelona-Chiang and Ruth Arcelona are natural-born Filipinos who are now naturalized Americans residing in California, U.S.A.

Together with their three sisters — Pacita Arcelona-Olanday, Maria Peaches Arcelona-Arellano and Natividad Arcelona-Cruz (Olanday, et al) — pets are co-owners pro-indiviso of a fishpond which they inherited from their deceased parents.  The six Arcelonas are named as co-owners over the fishpond.

A contract of lease over the fishpond was executed between Cipriano Tandoc and Olanday, et al. The lease contract was for a period of 3 years but was renewed up to February 2, 1984. 

Moises Farnacio was appointed in turn by Tandoc as caretaker-tenant of the same fishpond, effective on the date the contract of lease was executed. After the termination of the lease contract, the lessee (Tandoc) surrendered possession of the leased premises to the lessors, Olanday, et al.

Farnacio filed a civil case for "peaceful possession, maintenance of security of tenure plus damages, with motion for the issuance of an interlocutory order" against Olanday, et al., (exluding the Arcelonas in US) before RTC. The case was intended to maintain Farancio as tenant of the fishpond. 

lower courts

RTC: Recognized Farnacio as tenant-caretaker over the fishpond at Lomboy District, Dagupan City; Ordered the defendants to maintain plaintiff in the peaceful possession and cultivation of said fishpond

CA affirmed with modification the decision of the trial court.

SC sustained the CA decision. After remand of the case, resp was placed in possession of the property.

Pets then filed with CA a petition for annulment of the judgment against Farancio and the sheriff.  CA directed pets "to implead as defendant the RTC."  CA promulgated the assailed Decision and Resolution.

Dissatisfied, Olandays lodged this petition for review.

Ruling

What are the remedies and the grounds to invalidate a final and executory judgment?

There are really three ways by which a final judgment may be attacked: 

1.        Petition for relief from judgment under Rule 38 (old rules), when judgment has been taken against the party through fraud, accident, mistake or excusable negligence (petition must be filed within 60 days after the pet learns of the judgment, but not more than 6 months after judgment was entered.

2.        Direct action to annul and enjoin the enforcement of the judgment. This remedy presupposes that the challenged judgment is not void upon its face, but is entirely regular in form, and the alleged defect is one which is not apparent upon its face or from the recitals contained in the judgment.

3.        Either a direct action, as certiorari, or by a collateral attack against the challenged judgment (which is) void upon its face, or that the nullity of the judgment is apparent by virtue of its own recitals. Justice Malcolm in his dissent in Banco Español-Filipino v. Peaches Palanca,  "A judgment which is void upon its face, and which requires only an inspection of the judgment roll to demonstrate its want of vitality is a dead limb upon the judicial tree, which should be lopped off, if the power so to do exists."

CC No. Q-5866 is not void upon its face, it may only be annulled by direct action on the ground of fraud.

It is only extrinsic or collateral fraud, as distinguished from intrinsic fraud, however, that can serve as a basis for the annulment of judgment. Fraud has been regarded as extrinsic or collateral "where it is one the effect of which prevents a party from having a trial, or real contest, or from presenting all of his case to the court, or where it operates upon matters pertaining, not to the judgment itself, but to the manner in which it was procured so that there is not a fair submission of the controversy."

Extrinsic fraud is the ground to annul a voidable final judgment.

Declaration of nullity of a patently void final judgment is based on grounds other than extrinsic fraud.

Are all the co-owners pro indiviso of a real property indispensable parties?  Does the non-inclusion of some of such co-owners in a suit involving tenancy over said property constitute sufficient ground to nullify the final decision rendered in such case?

Rule 3, Section 7 of the Rules of Court, defines indispensable parties as parties-in-interest without whom there can be no final determination of an action. They must be joined either as plaintiffs or as defendants. Their presence being a sine qua non for the exercise of judicial power.

The absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even as to those present. 

Servicewide Specialists, Incorporated vs. CA

An indispensable party is one whose interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties that his legal presence as a party to the proceeding is an absolute necessity. In his absence there cannot be a resolution of the dispute of the parties before the court which is effective, complete, or equitable.

Art 487 of the OCC "any one of the co-owners may bring an action in ejectment." A co-owner could not maintain an action in ejectment without joining all the other co-owners. Chief Justice Moran:

were the courts to permit an action in ejectment to be maintained by a person having merely an undivided interest in any given tract of land, a judgment in favor of the defendants would not be conclusive as against the other co-owners not parties to the suit, and thus the defendant in possession of the property might be harassed by as many succeeding actions of ejectment, as there might be co-owners of the title asserted against him.  

A tenant who fails to implead all the co-owners cannot establish with finality his tenancy over the entire co-owned land. Co-owners in an action for the security of tenure of a tenant are encompassed within the definition of indispensable parties; thus, all of them must be impleaded

CC D-7240 cannot bind pets and cannot adjudicate the entire co-owned property, not even that portion belonging to Olanday et al., ownership of the property being still pro-indiviso. The failure to implead pets barred the lower court from making a final adjudication. Without the presence of indispensable parties to a suit or proceeding, a judgment therein cannot attain finality. 

The want of jurisdiction of the trial court is not patent on the face of said judgment.  

The responsibility for impleading all the indispensable parties undeniably rested on him.

Even pets had authorized Olanday, et al. to enter into a lease contract, this fact did not authorize the latter to represent pets in the civil case he brought.

The nullity of a judgment grounded on lack of jurisdiction may be shown not only by what patently appears on the face of such decision but also by documentary and testimonial evidence found in the records of the case and upon which such judgment is based.

May extraneous matters, not found in the records of the original case, be used to void such final judgment? NO!

The nullity of the judgment due to lack of jurisdiction may be proved at most by the evidence on record but never by extraneous evidence.  

The doctrine that the question of jurisdiction is to be determined by the record alone, thereby excluding extraneous proof seems to be the natural unavoidable result of that stamp of authenticity which, from the earliest times, was placed upon the "record," and which gave it such "uncontrollable credit and verity that no plea, proof, or averment could be heard to the contrary."

An action for annulment of judgment is grounded on extrinsic fraud, extraneous evidence is admitted.  

The finding of estoppel and laches by CA is not supported by the evidence on record. The silence of pets can easily be explained by the fact that they were not in the country during the pendency of the subject civil case.  

Alabang Development Corporation vs. Valenzuela: no laches attach when the judgment is null and void for want of jurisdiction:

Estoppel is a principle that, as a rule, can be invoked only in highly exceptional and legitimate cases. 

 (a) lack of knowledge and of the means of knowledge of the truth as the facts in question;

(b) reliance, in good faith, upon the conduct or statements of the party to be estopped; and

(c) action or inaction based thereon of such character as to change the position or status of the party claiming the estoppel, to his injury, detriment, or prejudice.

Pets' receipt of lease rentals cannot be used as proof of recognition of private resp as a caretaker-tenant.  

Intervention as a Remedy of Pets

Procedurally, may an independent action for annulment of a decision filed in the CA prosper in the face of a claim that the remedy of intervention could have been availed of in the RTC during the original proceedings?

Jurisprudence upholds the soundness of an independent action to declare as null and void a judgment rendered without jurisdiction as in this case. Leonor Peaches vs. CA:

A void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any obligation. All acts performed pursuant to it and all claims emanating from it have no legal effect. Hence, it can never become final and any writ of execution based on it is void: ". . . it may be said to be a lawless thing which can be treated as an outlaw and slain at sight, or ignored wherever and whenever it exhibits its head." 

Read More