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."