SOLEDAD CHANLIONGCO RAMOS, FRANCISCO D. CHANLIONGCO, ADELBERTO D. CHANLIONGCO, ARMANDO D. CHANLIONGCO AND FLORENCIO D. CHANLIONGCO, PETITIONERS, VS. TERESITA D. RAMOS, SPOUSES T…

Ramos versus Ramos

The Case

This is the case of Ramos versus Ramos, decided by the Supreme Court in March 2003. The petitioners are the children of the late Paulino Chanliongco Jr., and the respondents are the buyers of a parcel of land in Tondo, Manila that their father had co-owned. The petitioners ask the Supreme Court to set aside a final and executory judgment of the Court of Appeals, insisting that it is void because they were never impleaded and never served summons. The case matters because it draws the line between a judgment that is merely wrong and a judgment that is void, and because it reminds us that finality of judgment is the rule and that only a void judgment escapes it.

Procedural History

The respondents filed a complaint for interpleader before the Regional Trial Court of Manila to settle the conflicting claims over the land. The trial court upheld the sale only as to the share of Narcisa, holding that Adoracion had no authority to sell the shares of the other co-owners. On appeal, the Court of Appeals modified the ruling. It held that although no special power of attorney had been executed in favor of Adoracion, the sale was nonetheless valid because her mother had authorized her to act as sub-agent. That decision was not appealed. It became final and was entered in favor of the respondents in August 1996.

In April 1999, the petitioners filed with the Court of Appeals a motion to set aside that decision, claiming they had never been served a copy of the complaint or of the summons and had never been impleaded in the trial court. The Court of Appeals denied the motion on the grounds raised in the respondents' opposition: the motion was not the proper remedy, the decision had long become final and executory, the movants had no legal standing, and the motion was dilatory. The petitioners then came to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

Lot No. 2-G of Subdivision Plan SWO No. 7308, situated in Tondo, Manila, was co-owned by four siblings: Paulino Chanliongco Jr., the petitioners' father, together with his sister Narcisa and his brothers Mario and Antonio. By virtue of a special power of attorney executed by the co-owners in favor of Narcisa, her daughter Adoracion C. Mendoza sold the lot to the respondents on different days in September 1986.

Because the heirs of the co-owners quarreled over the validity of that sale, the respondents filed a complaint for interpleader in the Regional Trial Court to resolve the various ownership claims. The trial court upheld the sale only insofar as Narcisa's share was concerned, ruling that Adoracion had no authority to sell the shares of the other co-owners because the special power of attorney had been executed in favor only of her mother.

The Court of Appeals reversed that point. It held that while there was no special power of attorney in favor of Adoracion, the sale was still valid because her mother had authorized her to be the latter's sub-agent, so no separate special power of attorney was needed. That decision became final and was entered in August 1996. Years later, the petitioners moved to set it aside, and it is that denial which the Supreme Court now reviews.

Issues

• Whether or not the Court of Appeals erred in denying the petitioners' motion and in allowing its final decision to take its course, despite the claim that the trial court never acquired jurisdiction over their persons and that their property was passed to the respondents without due process of law.
• Whether or not the failure to implead the petitioners and to serve summons upon them rendered the judgment void, so as to fall within the exception to the rule on immutability of final judgments.

Applicable Provisions

Section 3 of Rule 3 of the old Rules of Court, which governed when the complaint was filed, provides:

Section 3. Representative Parties. A trustee of an express trust, a guardian, executor or administrator, or a party authorized by statute, may sue or be sued without joining the party for whose benefit the action is presented or defended; but the court may, at any stage of the proceedings, order such beneficiary to be made a party. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal.

This provision bears on the case because it allowed the estate of the deceased father to be sued alone, without joining the petitioners as beneficiaries, so that no summons upon them was required.

Ruling

On the first issue, the Court held that the petition has no merit. A decision that has acquired finality becomes immutable and unalterable. It may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions of fact or law, and whether it will be made by the court that rendered it or by the highest court in the land. The Court restated the only exceptions to this rule: the correction of clerical errors, the so-called nunc pro tunc entries which cause no prejudice to any party, and void judgments.

On the second issue, the Court asked whether the judgment was void for want of jurisdiction over the persons of the petitioners, and to answer that it first classified the action. An action in personam is lodged against a person based on personal liability; an action in rem is directed against the thing itself instead of the person; and an action quasi in rem names a person as defendant, but its object is to subject that person's interest in a property to a corresponding lien or obligation. The complaint here was an interpleader to determine the ownership of the land. It forced the persons claiming an interest to settle the dispute among themselves. It sought to resolve ownership and was not directed against the personal liability of any particular person. It was therefore a real action, because it affected title to or possession of real property, and it was brought against the deceased registered co-owners as represented by their respective estates.

The Court then held that the petitioners were not the registered owners but held merely an inchoate interest as heirs of Paulino. They had no standing in court with respect to actions over property of the estate, because the estate was represented by an executor or administrator. There was thus no need to implead them, since the estates of the deceased co-owners had already been made parties. The Court added that at the time the complaint was filed the old Rules were in effect, and under those Rules an executor or administrator may sue or be sued without joining the party for whose benefit the action is prosecuted or defended. It was the estate of their father that was included as defendant and served summons. Not being parties, the petitioners were not entitled to be served summons.

As to petitioner Florencio, who was impleaded but not served, the Court held that service upon the estate of his deceased father was sufficient, because the estate appeared for and on behalf of all the beneficiaries and heirs, including him. The Court also noted that the petitioners' counsel was a partner of the law firm that represented the estate, so service upon the law firm could reasonably be expected to be sufficient notice to all the beneficiaries.

Doctrine

A final judgment is immutable and unalterable. It may not be modified in any respect, even to correct erroneous conclusions of fact or law, whether by the court that rendered it or by the highest court of the land. The only exceptions are the correction of clerical errors, nunc pro tunc entries that cause no prejudice to any party, and void judgments.

Whether summons must be served on a person depends on the nature of the action. An action in personam is based on personal liability; an action in rem is directed against the thing itself; an action quasi in rem subjects a person's interest in property to a lien or obligation. An interpleader to settle ownership of land is a real action, brought against the registered owners or their estates.

Heirs hold only an inchoate interest in the property of the estate. They have no standing in actions over estate property, which is represented by the executor or administrator. Under Section 3 of Rule 3 of the old Rules, an executor or administrator may sue or be sued without joining the beneficiary, so no summons upon the heirs is required, and absent parties are not entitled to summons.

Disposition

The Supreme Court denied the petition and affirmed the resolution of the Court of Appeals, with costs against the petitioners.

Remember This

Memorize the three exceptions to immutability of judgment: clerical errors, nunc pro tunc entries causing no prejudice, and void judgments. Examiners use this case to test whether a final judgment may be disturbed for lack of summons, and the answer turns on classifying the action and on the rule that an estate may be sued without joining the heirs.