Lord Allan Jay Velasco vs. Hon. Speaker Belmonte, Jr., et. al., G.R. No. 211140, January 12, 2016 (mandamus)

Lord Allan Jay Q. Velasco v. Hon. Speaker Feliciano R. Belmonte, Jr., Secretary General Marilyn B. Barua-Yap and Regina Ongsiako Reyes (mandamus/quo warranto)

G.R. No. 211140

January 12, 2016

En Banc

Ponente: Leonardo-De Castro, J.

Gist:

      The difference between a ministerial and discretionary act lies in the right of the officer or tribunal to exercise his or its own judgment regarding the duty to be performed. A ministerial act is mandatory while a discretionary act is permissive.

Facts:

      Final and executory resolutions of the Supreme Court in G.R. No. 207264 affirmed the final and executory resolutions of the COMELEC in SPA No. 13-053 (DC) cancelling Reyes’s Certificate of Candidacy. SPC No. 13-010 issued by the COMELEC also declared the proclamation of Reyes as void, and proclaimed Velasco as the winning candidate for the position of Representative for the Lone District of the Province of Marinduque.

      This Petition for Mandamus filed under Rule 65 of the Rules of Court, as amended, by petitioner Velasco against respondents Belmonte, Jr., Baura-Yap and Reyes sought the issuance of a writ of mandamus against Speaker Belmonte, Jr. and Sec. Gen. Baura-Yap to administer the proper oath in favor of petitioner and to register his name in the Roll of Members of the House of Representatives, respectively, and the issuance of a temporary restraining order against Reyes to prohibit her from usurping the position of Member of the House of Representatives for the Lone District of Marinduque and to immediately vacate the said position.

Issue:

Whether the issuance of a writ of mandamus is proper to compel Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap to perform the specific acts sought by Velasco in this petition

Ruling:

The petition has merit. The Court elucidated that the petition is a special civil action for mandamus and not a quo warranto case.

A petition for quo warranto is a proceeding to determine the right of a person to the use or exercise of a franchise or office and to oust the holder from its enjoyment, if his claim is not well-founded, or if he has forfeited his right to enjoy the privilege.

When the action is filed by a private person, he must prove that he is entitled to the controverted position; otherwise, respondent has a right to the undisturbed possession of the office.

What is prayed for in the petition is merely the enforcement of clear legal duties and not to try disputed title.

Section 3, Rule 65 of the Rules of Court, as amended, provides that any person may file a verified petition for mandamus “when any tribunal, corporation, board, officer or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law.” A petition for mandamus will prosper if it is shown that the subject thereof is a ministerial act or duty, and not purely discretionary on the part of the board, officer or person, and that the petitioner had a well-defined, clear and certain right to warrant the grant thereof.

The difference between a ministerial and discretionary act has long been established. A purely ministerial act or duty is one which an officer or tribunal performs in a given state of facts, in a prescribed manner, in obedience to the mandate of a legal authority, without regards to or the exercise of his own judgment upon the propriety or impropriety of the act done. If the law imposes a duty upon a public officer and gives him the right to decide how or when the duty shall be performed, such duty is discretionary and not ministerial. The duty is ministerial only when the discharge of the same requires neither the exercise of official discretion or judgment.

Speaker Belmonte, Jr. and Sec. Gen. Barua-Yap have no discretion whether or not to administer the oath of office to Velasco and to register the latter’s name in the Roll of Members of the House of Representatives, respectively. It is already settled beyond dispute that Velasco is the proclaimed winning candidate for the Representative of the Lone District of the Province of Marinduque; hence, entitled to a writ of Mandamus.

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DISSENTING OPINION by Justice Arturo Brion

      The present petition for mandamus must be dismissed as (1) petitioner Velasco failed to comply with all the five (5) requirements for the issuance of the writ of mandamus and (2) the grant of the writ is a patent violation of the principle of the separation of powers that will disturb, not only the Court’s relations with the HOR, a co-equal branch of government, but it will also result in upsetting the established lines of jurisdiction among the COMELEC, the House of Representatives Electoral Tribunal (HRET), and the Court. The petitioner’s speedy remedy to address his situation lies with the HRET and the HOR, not with the Court. In any case, the remedy of mandamus does not lie against the HOR, a co-equal branch, under the circumstances of the case and would be an unwarranted intrusion and impermissible usurpation by the Supreme Court of the authority and functions of the HOR and of the HRET.

      Notably, petitioner Velasco is the son of Associate Justice Presbitero Velasco, who was the Chair of the HRET during the pendency of the case.

      He cited that mandamus is a command issuing from a court of law of competent jurisdiction, in the name of the state or sovereign, directed to some inferior court, tribunal, or board, or to some corporation or person, requiring the performance of a particular duty therein specified, which duty results from the official station of the party to whom the writ is directed, or from operation of law.

      In addition, the writ of mandamus will issue only if the following requirements are complied with: (1) the petitioner has a clear and unmistakable legal right to the act demanded (mandamus never issues in doubtful cases, or to enforce a right which is in substantial dispute or to which substantial doubt exists); (2) it must be the duty of the respondent to perform the act because it is mandated by law; (3) the respondent neglects the performance of the duty enjoined by law or unlawfully excludes the petitioner from the use of enjoyment of the right or office; (4) the act to be performed is ministerial, not discretionary; and (5) there is no other plain, speedy, and adequate remedy in the ordinary course of law.

      Justice Brion ruled that petitioner Velasco failed to comply with all five requirements for the issuance of said writ. Hence, he dissents.

Republic of the Philippines vs. Mega Pacific eSolutions, Inc., Willy U. Yu, Bonnie S. Yu, Enrique T. Tansipek, Pedro O. Tan, Johnson W. Fong, Bernard I. Fong, and Lauriano A. Barrios, G.R. No. 184666, June 27, 2016 (preliminary attachment)

Republic of the Philippines vs. Mega Pacific eSolutions, Inc., Willy U. Yu, Bonnie S. Yu, Enrique T. Tansipek, Rosita Y. Tansipek, Pedro O. Tan, Johnson W. Fong, Bernard I. Fong, and Lauriano A. Barrios (preliminary attachment)

G.R. No. 184666

June 27, 2016

First Division

Ponente: Sereno, CJ

Gist:

A writ of preliminary attachment may be issued over the properties of incorporators through the doctrine of piercing the corporate veil. To successfully do so, fraud must be sufficiently established by the factual findings of the court and other pronouncements.

Facts:

-   In January 2004, Information Technology Foundation of the Philippines v. Commission on Elections was promulgated where the Supreme Court declared void the automation contract executed by respondent Mega Pacific eSolutions, Inc. (MPEI) and the Commission on Elections (COMELEC) for the supply of automated counting machines (ACMs) for the 2004 national elections.

-   In this Rule 45 Petition assailing the Amended Decision issued by the Court of Appeals, petitioner Republic of the Philippines attempts to cause the attachment of the properties owned by respondent MPEI, as well as by its incorporators and stockholders (individual respondents), in order to secure petitioner’s interest and to secure recovery of the payments it made to respondents for the invalidated automation contract.

Issues:

1.  Whether petitioner has sufficiently established fraud on the part of respondents to justify the issuance of a writ of preliminary attachment in its favor; and
2. Whether a writ of preliminary attachment may be issued against the properties of individual respondents, considering that they were not parties to the 2004 case

Ruling:

      The Petition is meritorious. A writ of preliminary attachment should issue in favor of petitioner over the properties of respondents on the following grounds: (1) fraud on the part of respondent MPEI was sufficiently established by the factual findings of this Court in its 2004 Decision and subsequent pronouncements; (2) a writ of preliminary attachment may issue over the properties of the individual respondents using the doctrine of piercing the corporate veil; (3) the factual findings of this Court that have become final cannot be modified or altered much less reversed, and are controlling in the instant case; (4) the delivery of 1,991 units of the ACM does not negate fraud on the part of respondents MPEI and Willy; (5) estoppels does not lie against the state when it acts to rectify mistakes, errors or illegal acts of its officials and agents; and (6) the findings of the Ombudsman are not controlling in the instant case.

      For brevity, only the first two findings by the Court shall be discussed in relation to the issuance of a writ of preliminary attachment.

1.  Fraud on the part of respondent MPEI was sufficiently established by the factual findings of this Court in the latter’s 2004 Decision and subsequent pronouncements

A writ of preliminary attachment is a provisional remedy issued upon the order of the court where an action is pending. Through the writ, the property of the defendant may be levied upon and held thereafter by the sheriff as security for the satisfaction of whatever judgment might be secured by the attaching creditor against the defendant.

The purpose and function of an attachment or garnishment is twofold. First, it seizes upon property of an alleged debtor in advance of final judgment and holds it subject to appropriation, thereby preventing the loss or dissipation of the property through fraud or other means. Second, it subjects the property of the debtor to the payment of a creditor’s claim, in those cases in which personal service upon the debtor cannot be obtained. This remedy is meant to secure a contingent lien on the defendant’s property until the plaintiff can, by appropriate proceedings, obtain a judgment and have the property applied to its satisfaction, or to make some provision for unsecured debts in cases in which the means of satisfaction thereof are liable to be removed beyond the jurisdiction, or improperly disposed of or concealed, or otherwise placed beyond the reach of creditors.

For a writ of preliminary attachment to issue under Section 1(d), Rule 57 of the Rules of Court, the applicant must sufficiently show the factual circumstances of the alleged fraud.

In Metro, Inc. v. Lara’s Gift and Decors, Inc., the Court explained that “the fraud must relate to the execution of the agreement and must have been the reason which induced the other party into giving consent which he would not have otherwise given.”

2.  Application of the piercing doctrine justifies the issuance of a writ of preliminary attachment over the properties of the individual respondents

Petitioner seeks the issuance of a writ of preliminary attachment over the personal assets of the individual respondents, notwithstanding the doctrine of separate juridical personality. It invokes the use of the doctrine of piercing the corporate veil.

Veil-piercing in fraud cases requires that the legal fiction of separate juridical personality is used for fraudulent or wrongful ends. As established in the 2004 Decision, four (4) red flags of fraudulent schemes in public procurement were evident in the case, such as: (1) overly narrow specifications; (2) unjustified recommendations and unjustified winning bidders; (3) failure to meet the terms of the contract; and (4) shell or fictitious company.

Because all the individual respondents actively participated in the perpetration of the fraud against petitioner, their personal assets may be subject to a writ of preliminary attachment by piercing the corporate veil.

The main effect of disregarding the corporate fiction is that stockholders will be held personally liable for the acts and contracts of the corporation, whose existence, at least for the purpose of the particular situation involved, is ignored.

It bears stressing that the remaining individual respondents, together with respondent Willy, incorporated MPEI. As incorporators and businessmen about to embark on a new business venture involving a sizeable capital, the remaining individual respondents should have known of Willy’s scheme to perpetrate the fraud against petitioner.

It is clear to the Court that inequity would result if they do not attach personal liability to all the individual respondents. Indeed, to allow the corporate fiction to remain intact would only subvert the ends of justice.

Watercraft Venture Corporation vs. Alfred Raymond Wolfe, G.R. No. 181721, September 9, 2015 (preliminary attachment)

Watercraft Venture Corporation, represented by its Vice-President, Rosario E. Rañoa v. Alfred Raymond Wolfe (preliminary attachment)

G.R. No. 181721

September 9, 2015

Third Division

Ponente: Peralta, J.

Gist:

Failure to meet one of the requisites for the issuance of a writ of preliminary attachment (Sec. 1, ROC 57) warrants the denial of the petition. If all the requisites for the granting of the writ are not present, then the court which issues it acts in excess of its jurisdiction.

Facts:

Sometime in June 1997, petitioner Watercraft Venture Corporation (Watercraft) hired respondent Alfred Raymond Wolfe (Wolfe) as its Shipyard Manager. During his employment, Wolfe stored a sailboat within Watercraft’s boat storage facilities but never paid for the storage fees. On March 2002, Watercraft terminated the employment of Wolfe.

In June 2002, Wolfe pulled out his sailboat from Watercraft’s storage facilities after signing a Boat Pull-Out Clearance representing the unpaid boat storage fees outstanding. Despite repeated demands, he failed to pay his dues.

Three years later, Watercraft filed against Wolfe a Complaint for Collection of Sum of Money with Damages with an Application for the Issuance of a Writ of Preliminary Attachment. The RTC granted Watercraft’s ex-parte application for writ of preliminary attachment pursuant to Section 1 of Rule 57 of the Rules of Court.

Pursuant to the RTC Order, Wolfe’s two vehicles were levied while his BPI accounts were garnished.

On November 2005, Wolfe files a Motion to Discharge the Writ of Attachment, arguing that Watercraft failed to show the existence of fraud and that the mere failure to pay or perform an obligation does not amount to fraud.

The RTC denied Wolfe’s Motion to Discharge Writ of Attachment and Motion for Preliminary Hearing and the latter’s motion for reconsideration.

Meanwhile, the CA granted Wolfe’s petition upon his filing a petition for certiorari. It ruled that the act of issuing the writ of preliminary attachment ex-parte constitutes grave abuse of discretion on the part of the RTC as the said writ failed to allege the requisites prescribed for the issuance. Hence, the issuance of the writ was fatally defective.

Accordingly, although Sec. 1 of Rule 57 allows a party to invoke fraud as a ground for the issuance of a writ of attachment, the Rules require that in all averments of fraud, the circumstances constituting fraud must be states with particularity, pursuant to Rule 8, Section 5. Watercraft’s complaint merely stated, “For failing to pay the use [of] facilities and services – in the form of boat storage fees, the Defendant is clearly guilty of fraud which entitles the Plaintiff to a Writ of Preliminary Attachment upon the property of the Defendant as security for the satisfaction of any judgment herein.”

Issues:

1.  Whether the ex-parte issuance of the preliminary attachment by the trial court in favor of the petitioner is valid; and
2. Whether the allegations in the affidavit of merit concerning fraud are sufficient to warrant the issuance of a preliminary writ of attachment by the trial court in favor of the petitioner

Ruling:

The petition for review on certiorari under Rule 45 of the Rules of Court is denied.

A writ of preliminary attachment is defined as a provisional remedy issued upon order of the court where an action is pending to be levied upon the property or properties of the defendant therein, the same to be held thereafter by the sheriff as security for the satisfaction of whatever judgment that might be secured in the said action by the attaching creditor against the defendant. However, it should be resorted to only when necessary and as a last remedy because it exposes the debtor to humiliation and annoyance (Philippine Commercial International Bank v. Alejandro).

Since attachment is harsh, extraordinary, and summary in nature, the rules on the application of a writ of attachment must be strictly construed in favor of the defendant.

For the issuance of an ex-parte issuance of the preliminary attachment to be valid, an affidavit of merit and an applicant’s bond must be filed with the court in which the action is pending. Such bond executed to the adverse party in the amount fixed by the court is subject to the conditions that the applicant will pay: (1) all costs which may be adjudged to the adverse party; and (2) all damages which such party may sustain by reason of the attachment, if the court shall finally adjudge that the applicant was not entitled thereto. As to the requisite affidavit of merit, Section 3, ROC57 of the Rules of Court states that an order of attachment shall be granted only when it appears in the affidavit of the applicant, or of some other person who personally knows the facts: (1) that a sufficient cause of action exists; (2) that the case is one of those mentioned in Section 1 hereof; (3) that there is no other sufficient security for the claim sought to be enforced by the action; and (4) that the amount due to the applicant, or the value of the property the possession of which he is entitled to recover, is as much as the sum for which the order is granted above all legal counterclaims.

The mere filing of an affidavit reciting the facts required by Section 3, Rule 57 is not enough to compel the judge to grant the writ of preliminary attachment. The sufficiency or insufficiency of an affidavit depends upon the amount of credit given it by the judge, and its acceptance of rejection, upon his sound discretion.

After a careful perusal of the foregoing allegations, the Court agrees with the CA that Watercraft failed to state with peculiarity the circumstances constituting fraud, as required by Section 5, Rule 8 of the Rules of Court, and that Wolfe’s mere failure to pay the boat storage fees does not necessarily amount to fraud, absent any showing that such failure was due to insidious machinations and intent on his part to defraud Watercraft of the amount due it.

      In Liberty Insurance Corporation v. CA, the Court explained that to constitute a ground for attachment in Section 1(d), Rule 57 of the Rules of Court, it must be shown that the debtor in contracting the debt or incurring the obligation intended to defraud the creditor. The fraud must relate to the execution of the agreement and must have been the reason which induced the other party into giving consent which he would not have otherwise given”.

      All considered, Watercraft’s Affidavit of Preliminary Attachment does not contain specific allegations of other factual circumstances to show that Wolfe, at the time of contracting the obligation, had a preconceived plan or intention not to pay. It only contained a mere conclusion of law.

      Indeed, if all the requisites for granting such writ are not present, then the court which issues it acts in excess of its jurisdiction.

Bethel Realty vs. HLURB

Bethel Realty and Development Corporation vs. Housing and Land Use Regulatory Board, and Spouses Marjorie and Nemesio Visaya

G.R. No. 184482

July 4, 2012

Second Division

Ponente: Perez, J.

Issue:

Whether or not the CA correctly applied and interpreted the provisions on the material data rule under Section 4, Rule 65 and Section 3, Rule 46 of the rules of Court (Petition for Review on Certiorari) warranting the denial of its petition before the CA

Ruling:

The petition is denied.

1.      Administrative remedies were available to petitioner to question the decision of the HLURB.

The rule is that the special civil action of certiorari under Rule 65 of the Rules of Court is available to an aggrieved party only when there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law. Otherwise, the petition will not prosper even if the alleged ground is grave abuse of discretion.

In the instant case, the petitioner failed to exhaust all other remedies available to it.

2.      Section  3, Rule 46 of the Rules of Court in relation to Section 4, Rule 65 of the same rule must be strictly observed; the petitions were filed beyond the prescribed period

The special civil action for certiorari under Rule 65 of the Rules of Court may be instituted not later than sixty (60) days from notice of the judgment, order or resolution.

To ensure compliance with the prescribed period, Section 3, Rule 46 of the Rules of Court provides that the petition shall indicate when notice of the judgment or final order or resolution was received, failure of which shall warrant the dismissal of the petition.

In the instant case, petitioner failed to mention when it was informed of the decision. As stated in the aforementioned rule, failure to indicate the material dates shall be sufficient ground for the dismissal of the petition.

The 60-day period within which to file the petition must be strictly observed. All considered, the Court concluded that both the first and second petitions were filed beyond the 60-day prescribed period.

Pinausukan Seafood House vs. Far East Bank, G.R. No. 159926, Jan. 20, 2014 (Rule 47)

Pinausukan Seafood House, Roxas Boulevard, Inc. vs. Far East Bank & Trust Company, now Bank of the Philippine Islands and Hector I. Galura

G.R. No. 159926

Jan. 20, 2014

First Division

Ponente: Bersamin, J.

Gist:

Extrinsic fraud, as a ground for the annulment of a judgment, must emanate from an act of the adverse party, and the fraud must be of such nature as to have deprived the petitioner of its day in court. The fraud is not extrinsic if the act was committed by the petitioner’s own counsel.

Facts:

Bonier de Guzman (Bonier), then the President of petitioner corporation (Pinausukan), executed four real estate mortgages (REM) involving the petitioner’s 517 sqm. parcel of land situated in Pasay City in favor of Far East Bank and Trust Company (now BPI). The parcel of land was registered under the name of Pinausukan. When the loan obligation became unpaid, the Bank commenced proceedings for the extrajudicial foreclosure of the mortgages which resulted to the Sheriff of RTC-Pasay to issue a notice of sheriff’s sale, setting the public auction at the main entrance of the Hall of Justice in Pasay City.

Upon learning of the impending sale of the mortgaged property, Pinausukan brought against the Bank and the sheriff an action for the annulment of the REM in the RTC, averring that Bonier had obtained the loans only in his personal capacity and had constituted the mortgages on the corporate assets without Pinausukan’s consent through a board resolution.

As the counsels of the parties did not appear in the hearings as scheduled, the RTC dismissed the case for failure to prosecute. The order of dismissal attained finality.

The sheriff then issued a notice of extrajudicial sale concerning the mortgaged property which was received by Pinausukan.

Claiming surprise over the turn of events, Pinausukan inquired from the RTC and learned that Atty. Villaflor, its counsel of record, had not informed it about the order of dismissal which attained finality.

Pinausukan then brought the petition for annulment in the CA seeking the nullification of the RTC Order which dismissed the case. Its petition stated that its counsel had been guilty of gross and palpable negligence in failing to keep track of the case he was handling, and in failing to apprise Pinausukan of the developments on the case. It further averred that the palpable negligence of its counsel to keep track of the case he was handling constituted professional misconduct amounting to extrinsic fraud.

The CA dismissed the petition for annulment, citing the failure to attach the affidavits of witnesses attesting to and describing the alleged extrinsic fraud supporting the cause of action as required by Section 4, Rule 47; and observing that the verified petition related only to the correctness of its allegations, a requirement entirely different and separate from the affidavits of witnesses required under Rule 47 of the Rules of Court. The appellate court denied Pinausukan’s motion for reconsideration.

Issue:

Pinausukan posits that the requirement for attaching the affidavits of witnesses to the petition for annulment should be relaxed; that even if Roxanne had executed the required affidavit as a witness on the extrinsic fraud, she would only repeat therein the allegations already in the petition, thereby duplicating her allegations under her oath; that the negligence of Atty. Villaflor, in whom it entirely relied upon, should not preclude it from obtaining relief, and that it needed a chance to prove in the RTC that Bonier had no right to mortgage its property.

Ruling:

The appeal lacks merit.

1. Nature and statutory requirements for an action to annul a judgment or final order

In 1981, the Legislature enacted BP 129 (Judiciary Reorganization Act of 1980) which formally established  the annulment of a judgment or final order as an action independent from the generic classification of litigations in which the subject matter was not capable of pecuniary estimation, and expressly vested the exclusive original jurisdiction over such action in the CA. The action in which the subject of the litigation was incapable of pecuniary estimation continued to be under the exclusive original jurisdiction of the RTC.

Since then, the RTC no longer had jurisdiction over an action to annul the judgment of the RTC, eliminating all concerns about judicial stability. To implement this change, the Court introduced a new procedure to govern the action to annul the judgment of the RTC in the 1997 revision of the Rules of Court under Rule 47, directing in Section 2 thereof that “the annulment may be based only on the grounds of extrinsic fraud and lack of jurisdiction”.

In Dare Adventure Farm Corporation vs. CA, the Court expounded on the nature of the remedy of annulment of judgment or final order, viz:

A petition for annulment of judgment is a remedy in equity so exceptional in nature that it may be availed of only when other remedies are wanting, and only if the judgment, final order or final resolution sought to be annulled was rendered by a court lacking jurisdiction or through extrinsic fraud. The Court has instituted safeguards by limiting the grounds for the annulment to lack of jurisdiction and extrinsic fraud, and by prescribing in Section 1 of Rule 47 of the Rules of Court, that the petitioner should show that the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of the petitioner. A petition for annulment that ignores or disregards any of the safeguards cannot prosper.

The doctrine of immutability and unalterability of judgments serves a two-fold purpose, namely: (a) to avoid delay in the administration of justice and thus, procedurally, to make orderly the discharge of judicial business; and (b) to put an end to judicial controversies, at the risk of occasional errors, which is precisely why the courts exist.

As to the first, a judgment that has acquired finality becomes immutable and unalterable and is no longer to be modified in any respect even if the modification is meant to correct an erroneous conclusion of fact or of law, and whether the modification is made by the court that rendered the decision or by the highest court of the land. As to the latter, controversies cannot drag on indefinitely because fundamental considerations of public policy and sound practice demand that the rights and obligations of every litigant must not hand in suspense for an indefinite period of time.

The objective of the remedy of annulment of judgment or final order is to undo or set aside the judgment or final order, and thereby grant to the petitioner an opportunity to prosecute his cause or to ventilate his defense.

If the ground relied upon is lack of jurisdiction, the entire proceedings are set aside without prejudice to the original action being refiled in the proper court.

If the judgment or final order or resolution is set aside on the ground of extrinsic fraud, the CA may on motion order the trial court to try the case as if a timely motion for new trial had been granted therein. The remedy is by no means an appeal whereby the correctness of the assailed judgment or final order is in issue; hence, the CA is not called upon to address each error allegedly committed by the trial court.

The following statutory requirements for the remedy as set forth in Rule 47 of the Rules of Court are discussed.

The first requirement prescribes that the remedy is available only when the petitioner can no longer resort to the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies through no fault of the petitioner. This means that the remedy is not an alternative to the ordinary remedies of new trial, appeal, and petition for relief. The petition must aver, therefore, that the petitioner failed to move for a new trial, or to appeal, or to file a petition for relief without fault on his part. But this requirement to aver is not imposed when the ground of the petition is lack of jurisdiction as the judgment or final order becomes void unless the ground of lack of jurisdiction is barred by laches.

The second requirement limits the ground for the action of annulment of judgment to either extrinsic fraud or lack of jurisdiction.

Only extrinsic fraud justifies the action of annulment of judgment. According to Cosmic Lumber Corporation vs. CA, fraud is extrinsic where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent, as by keeping him away from court, a false promise of a compromise or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff, or where an attorney fraudulently or without authority connives at his defeat.; these and similar cases which show that there has never been a real contest in the trial or hearing of the case are reasons for which a new suit may be sustained to set aside and annul the former judgment and open the case for a new and fair hearing.

The overriding consideration when extrinsic fraud is alleged is that the fraudulent scheme of the prevailing litigant prevented the petitioner from having his day in court. On the other hand, intrinsic fraud does not deprive the petitioner of his day in court because he can guard against that fraud through employment of other means.

Lack of jurisdiction on the part of the trial court in rendering the judgment or final order is either lack of jurisdiction over the subject matter or lack of jurisdiction over the person of the petitioner. A judgment or final order issued by the trial court without jurisdiction over the subject matter is always void. But the defect of lack of jurisdiction over the person may be waived by the party concerned either expressly or impliedly.

The third requirement sets the time for the filing of the action. If based on extrinsic fraud, the action must be filed within four years from the discovery of the extrinsic fraud; and if based on lack of jurisdiction, must be brought before it is barred by laches or estoppel.

Laches is the failure or neglect for an unreasonable and unexplained length of time to do that which by exercising due diligence could not should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. The existence of four elements must be shown in order to validate laches as a defense, to wit: (a) conduct on the part of the defendant, or of one under whom a claim is made, giving rise to a situation for which a complaint is filed and a remedy sought; (b) delay in asserting the rights of the complainant, who has knowledge or notice of the defendant’s conduct and has been afforded an opportunity to institute a suit; (c) lack of knowledge or notice on the part of the defendant that the complainant will assert the right on which the latter has based the suit; and (d) injury or prejudice to the defendant in the event that the complainant is granted a relief or the suit is not deemed barred.

Estoppel precludes a person who has admitted or made a representation about something as true from denying or disproving it against anyone else relying on his admission or representation. This means that whenever a part has, by his own declaration, act or omission, intentionally and deliberately led another to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration, act or omission, be permitted to falsify it.

The fourth requirement demands that the petition should be verified, and should allege with particularity the facts and the law relied upon for annulment, as well as those supporting the petitioner’s good and substantial cause of action or defense. The need for particularity cannot be dispensed with because averring the circumstances constituting either fraud or mistake with particularity is a universal requirement in the rules of pleading.

The purpose of these requirements of the sworn verification and the particularization of the allegations of the extrinsic fraud in the petition is to forthwith bring all the relevant facts to the CA’s cognizance in order to enable the CA to determine whether or not the petition has substantial merit. Should it find prima facie merit in the petition, the CA shall give the petition due course and direct the service of summons to the respondent;  otherwise, the CA has the discretion to outrightly dismiss the petition for annulment.

2. Pinausukan’s petition for annulment was substantively and procedurally defective

The procedural defect consisted in Pinausukan’s disregard of the fourth requirement mentioned earlier consisting in its failure to submit together with the petition the affidavits of witnesses or documents supporting the cause of action.

Meanwhile, the substantive defect related to the supposed neglect of Atty. Villaflor to keep track of the case, and to his failure to apprise Pinausukan of the development of the case, which the CA did not accept as constituting extrinsic fraud. The CA noted that what is involved in the case is mistake and gross negligence of petitioner’s own counsel only. Mistake and gross negligence cannot be equated to the extrinsic fraud that Rule 47 requires to be the ground for an annulment of judgment.

Lucion and Castillo vs. The Presiding Judge, RTC 16, Naval, Biliran, et. al., CA-G.R. S.P. No. 139529, March 30, 2015 (Rule 47)

Lucion and Castillo vs. The Presiding Judge, RTC 16, Naval, Biliran, et. al.

CA-G.R. S.P. No. 139529

March 30, 2015

Ponente: Librea-Leagogo, C.C., J.

Gist:

A land registration case is not a civil action. Hence, Rule 47 of the Rules is not a proper remedy to annul the former.

Facts:

A Petition for Annulment of Final Judgment under Rule 47 of the Rules of Court (with Prayer for Preliminary Mandatory Injunction) seeking to annul the Decision of the RTC Branch 16, Naval, Biliran, entitled “Application for Land Registration Under Act No. 496, as amended by PD No. 1529, Roman Uy as applicant”, the dispositive portion of which reads:

               “WHEREFORE, the Register of Deeds of the Province of Biliran is hereby ordered to issue an Original Certificate of Title in favor of the petitioner ROMAN UY over the two (2) parcels of land designated as Lot 1-A and Lot 1-C Psu-083727-002214 (Amd)-D, both situated at Barangay Burabod, Kawayan, Biliran. SO ORDERED.”

Issue:

Whether Section 1, Rule 47 of the Rules of Court is a proper remedy to annul the judgment in a land registration proceeding

Ruling:

The petition is dismissed.

Section 1, Rule 47 of the Rules of Court limits the coverage of petitions for annulment of judgment or final orders and resolutions of the RTC in civil actions, viz:

               Section 1. Coverage. This Rule shall govern the annulment by the Court of Appeals of judgments or final orders and resolutions in civil actions of the Regional Trial Courts for which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of the petitioner.

Clearly, the Decision sought to be annulled is a land registration proceeding. It is not a judgment or final order and resolution in a civil action of the RTC, as required under Section 1, Rule 47 of the Rules of Court. Thus, the filing of the instant petition under Rule 47 is clearly a wrong or improper remedy.

A civil action is different from a land registration case, which is a special proceeding. A civil action is defined as one by which a party sues another for the enforcement or protection of a right, or the prevention or redress of a wrong. On the other hand, a land registration proceeding seeks to establish the ownership by a person over a parcel of land.

A plain reading of Section 1, Rule 47 suggests that it is limited to the annulment of judgments, or final orders and resolutions of the RTC in a civil action, and its restrictive application cannot be enlarged to include within its coverage a land registration proceeding.

As an action to annul a final judgment is an extraordinary remedy which is not to be granted indiscriminately, Rule 47 cannot be availed of by petitioners as a remedy to annul the assailed decision in the land registration proceeding.

Republic vs. Sps. Benigno, G.R. No. 205492, March 11, 2015 (Sec. 1e, Rule 50)

Republic of the Philippines vs. Spouses Dante and Lolita Benigno

G.R. No. 205492

March 11, 2015

Second Division

Ponente: Del Castillo, J.

keyword: ornery case

Gist:

As a rule, the State is never estopped from questioning the irregular or erroneous acts of its officials. Hence, Sec. 1(e), Rule 50 which provides that a ground for the dismissal of an appeal is failure of the appellant to serve and file the required number of copies of his brief or memorandum within the time provided by the Rules, has no application in the instant case.

Facts:

On November 1995, spouses Dante and Lolita Benigno filed with the RTC of Calamba, Laguna an application for registration of title under Presidential Decree No. 1529 to a lot situated in Los Banos, Laguna.

After trial, the Calamba RTC issued a Decision dated December 9, 2005 granting the spouses’ application for registration.

Petitioner filed its notice of appeal on January 10, 2006. In an April 10, 2006 Order, the trial court approved the notice of appeal and directed that the entire records of the case be forwarded to the CA.

On March 2010, respondents filed a Motion to Dismiss the Appeal and Issue a Final Decree of Registration, claiming among others that petitioner has abandoned its appeal. In a July 2010 Order, the Calamba RTC denied respondent’s motions, stating that it was respondents’ failure to submit certain required documents – the Affidavit of Publication and Certificate of Posting – which caused the non-transmittal of the records of the case to the CA.

Issue:

The CA erred when it ordered the dismissal of the appeal although the delay in the filing of the appellant’s brief was caused by the trial court and the respondents

Ruling:

In Beatingo v. Gasis, the power conferred upon the CA to dismiss an appeal for failure to file an appellant’s brief is discretionary. The Court agrees with the appellate court’s application of Section 1(e), Rule 50 of the Rules. Petitioner took its liberties in the prosecution of its appeal, filing at least three motions for extension of time before finally turning in its appellant’s brief, and taking the demeanor consistent with expecting that each motion for extension of time would be granted.

As a matter of doctrine, illegal acts of government agents do not bind the State, and the Government is never stopped from questioning the acts of its officials, more so if they are erroneous, let alone irregular. This principle applies in land registration cases.

Under the Regalian doctrine, all lands of the public domain belong to the State, and the State is the source of any asserted right to ownership in land and charged with the conservation of such patrimony.

Respondents did not present any documentary evidence in the land registration case to prove that the land applied for is alienable and disposable public land. They even sought the application of the exceptional ruling in Republic v. Vega to obtain exemption from the requirement on the submission of documentary proof showing that the property applied for constitutes alienable and disposable public land.

Consequently, the December 9, 2005 Decision of the Calamba RTC is void. The trial court had no basis in fact and in law to grant respondents’ application for registration as there was no proof of alienability adduced.

A void judgment is no judgment at all. It cannot be the source of any right nor of any obligation.

In this case, respondents cannot invoke Republic v. Vega to claim substantial compliance with the requirement of proof of availability as there is complete absence of documentary evidence showing that the land applied for forms part of the alienable and disposable portion of the public domain.

Mayuga vs. Metrobank, G.R. No. 211499, June 22, 2015 (Section 8, Rule 51)

Catherine Hiponia-Mayuga vs. Metropolitan Bank and Trust Co., and its Branch Head, Thelma T. Mauricio, and Belle U. Avelino
G.R. No. 211499
June 22, 2015
Second Division
Ponente: Mendoza, J.

Gist:

As a rule, the CA cannot consider errors on appeal unless stated in the assignment of errors in the appellant’s brief. An exception is, even if a question is not raised in the assignment of errors, the same may still be adjudicated by the appellate court if the unraised issue or question is closely related or dependent to an assigned error.

Facts:

Petitioner Catherine Hiponia-Mayuga was married to the late Fernando J. Mayuga. They owned the subject parcel of land covered by TCT No. 116396 located in Paranaque City. In the course of Fernando’s business dealings, he met Belle Avelino who proposed to him to secure a loan so they could proceed with their business.

On March 1996, Fernando, with Catherine’s consent, obtained a loan from Metrobank in the amount of P 2.2M and, as security thereof, he executed a REM over the subject property.

On July 1996, the loan from Metrobank was increased to P 3.2M with Fernando executing an amendment to the REM. Catherine claimed that the proceeds of the loan went directly to Belle. She admitted, however, that on two occasions Belle gave Fernando the amount of P 100,000.00.

On November 1996, Fernando passed away. Catherine then inquired from Metrobank if the subject property could be released from the mortgage because it was covered by a mortgage redemption insurance (MRI) that paid off the obligation upon the mortgagor’s death. Metrobank, however, replied that Belle was the principal borrower.

On August 1998, Catherine instituted a complaint for the cancellation of the REM and the release of TCT No. 116396 with damages against Belle, Metrobank and Thelma Mauricio, the branch head of Metrobank who allowed the loan.

Meanwhile, Metrobank foreclosed the mortgaged property as Belle failed to pay the loan. As Metrobank was the highest bidder in the foreclosure sale, a Certificate of Sale was issued in its favor.

The RTC ruled that the mortgage contract was valid. It dismissed the complaint against Metrobank and Thelma because it was not proven that the execution of the mortgage was attended with collusion. It also ordered Belle to pay damages to Catherine. In addition, the RTC denied Catherine’s motion for partial reconsideration. On the other hand, Belle did not seasonably file an appeal.

On appeal, the CA deleted the award of damages against Belle. It explained that Fernando was an accommodation mortgagor of Belle’s loan.

Issues:

1. The CA erred in modifying the decision of the trial court by deleting the latter’s award of damages in favor of petitioner against defendant considering that said defendant did not even interpose an appeal in the first place;

2. The CA erred in upholding the trial court’s ruling that there was no connivance between defendant and respondent in the execution of the REM; and

3. The CA erred in upholding the trial court’s ruling that respondent committed no negligence despite failing to secure a mortgage redemption insurance in the person of Mayuga.

Ruling:

1. Belle did not appeal the RTC decision.

The failure of a party to perfect the appeal within the time prescribed by the Rules of Court unavoidably renders the judgment final as to preclude the appellate court from acquiring the jurisdiction to review and alter the judgment. The judgment becomes immutable and unalterable and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact and law. An appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief other than those granted in the decision of the lower court.

As far as Belle is concerned, she did not appeal the decision of the RTC. Hence, the RTC decision is final and executor. The award of damages against her, in favor of Catherine, must be upheld.

2. The issues raised by Catherine are not closely related to the damages against Belle

When an appeal is taken, an appellate court acquires jurisdiction to review the case. Section 8, Rule 51 provides:

Sec. 8. Questions that may be decided. No error which does not affect the jurisdiction over the subject matter or the validity of the judgment appealed from or the proceedings therein will be considered, unless stated in the assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save as the court may pass upon plain errors and clerical errors.

As a rule, the CA cannot consider errors on appeal unless stated in the assignment of errors in the appellant’s brief. An exception is, even if a question is not raised in the assignment of errors, the same may still be adjudicated by the appellate court if the unraised issue or question is closely related or dependent to an assigned error.

The two issues raised by Catherine in her appellant’s brief are as follows: (1) that the RTC erred in holding that there was no connivance between Belle and Thelma in the execution of the REM; and (2) that the RTC erred in holding that Metrobank was not negligent. Notably, the issue of Belle’s liability on the payment of the loan was not raised.

An appellant is required by the rules to raise as errors those issues which are sought to be passed upon by the appellate court, otherwise, the CA cannot consider other issues which the appellant failed to raise.

Reliance on Section 8, Rule 51 is misplaced. The exception provided under Section 8, Rule 51, where unraised issues may be adjudicated upon if the same are closely related to an assigned error, cannot be applied in the present case. The first issue of the alleged fraudulent acts of Belle and Thelma is separate and distinct from Belle’s failure to pay the loan. The second issue regarding the negligence of Metrobank is likewise not related to the issue of Belle’s failure to pay the loan. The liability of Metrobank is capable of being addressed separately and rests solely on its failure to secure the MRI in favor of Fernando.

In sum, the issues assigned on appeal do not require the re-examination of the RTC ruling with respect to the award of damages against Belle. These issues cannot be considered as closely related with, or dependent on each other.

3. The exceptions under Section 8, Rule 51 are only for the benefit of the appellant

As previously discussed, the CA can decided issues not assigned as errors but were closely related to or dependent on an assigned error and properly argued by appellants. In PNB vs. Rabat, the Court held that in Section 8, Rule 51, it may at once be noticed that the exceptions are for the benefit of the appellant and not for the appellee.

In the present case, the CA erroneously applied the exception to the benefit of the appellee, Belle, and to the prejudice of the appellant Catherine.