MARY GRACE M. VENERACION, REPRESENTING HERSELF AND MINORS DAISY M. VENERACION AND RICHARD M. VENERACION, PETITIONERS, VS. CHARLIE MANCILLA BY HIS HEIRS, NAMELY, GIAR CHENG LINDA…

Veneracion versus Mancilla

The Case

This is a petition for review on certiorari brought by Mary Grace Veneracion and her minor siblings, Daisy and Richard, all children of Elizabeth Mendinueta and the late Geronimo Veneracion, against the heirs of the late Charlie Mancilla. The children ask the Supreme Court to reverse the Court of Appeals, which had dismissed outright their petition for partial annulment of a final and executory judgment of foreclosure. The case matters because it is the Court's clean statement on the extraordinary character of the action for annulment of judgment under Rule 47 — how strictly its requirements are read, and how narrow its grounds are — and because it shows how a judgment that has long become final may not be undone through a petition that is, in substance, a disguised appeal.

Procedural History

Charlie Mancilla filed a petition for judicial foreclosure of a real estate mortgage before the Regional Trial Court, which rendered judgment in favor of the Mancilla heirs, ordering Elizabeth to pay the loan, interest, and attorney's fees, and providing that in default of payment the mortgaged property would be sold at public auction. Elizabeth appealed to the Court of Appeals, which dismissed her appeal for failure to file her appellant's brief. She then sought review before the Supreme Court, which denied her petition; the denial became final and executory, and entry of judgment was made of record. The trial court thereafter granted execution, a writ of execution issued, and the property was sold at public auction to the Mancilla heirs, with the certificate of sale annotated on the title.

The Veneracion children then filed with the Court of Appeals a petition for partial annulment of the trial court's judgment under Rule 47, impleading the Mancilla heirs, the presiding judge, the sheriff, and the Register of Deeds. The Court of Appeals dismissed the petition outright for failure to comply with Section 4 of Rule 47, and later denied their motion for reconsideration. Hence, the children came to the Supreme Court by petition for review on certiorari.

Facts

Elizabeth Mendinueta lived with Geronimo Veneracion without the benefit of marriage, and they had three children: Mary Grace, Daisy, and Richard. The family resided on a residential lot in Parañaque City, title to which was placed in Elizabeth's name, with her civil status appearing on the face of the title as single. The couple married only on December 17, 1993, when Geronimo was already seventy-one years old. Geronimo died in May 1999.

In February 1995, Elizabeth obtained a loan of 1,200,000 pesos from Charlie Mancilla, executing a promissory note with monthly interest and securing the debt with a real estate mortgage over the Parañaque property. When she failed to pay on maturity and after demand, Mancilla sought judicial foreclosure. Charlie Mancilla later died and was substituted by his heirs.

The trial court rendered judgment for the Mancilla heirs. Elizabeth's appeal was dismissed, and the Supreme Court denied her petition for review, so the judgment became final and executory. On execution, the property was levied and sold at public auction, with the Mancilla heirs as winning bidders. The children then filed their petition for partial annulment, claiming the property was the family home and conjugal property of their parents, that their father's consent to the mortgage was never obtained, and that they learned of the case only in September 2002.

Issues

• Whether or not the petition for annulment of judgment filed before the Court of Appeals complied with Section 4 of Rule 47 of the Rules of Court.
• Whether or not a petition for partial annulment of judgment or final order is the proper remedy of the petitioners.
• Whether or not the petition before the Court of Appeals states a cause of action for partial annulment of judgment under Rule 47 of the Rules of Court.

Applicable Provisions

Section 4 of Rule 47 of the Rules of Court provides:

Section 4. Filing and contents of petition. The action shall be commenced by filing a verified petition alleging therein 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, as the case may be. The petition shall be filed in seven clearly legible copies, together with sufficient copies corresponding to the number of respondents. A certified true copy of the judgment or final order or resolution shall be attached to the original copy of the petition intended for the court and indicated as such by the petitioner. The petitioner shall also submit together with the petition affidavits of witnesses or documents supporting the cause of action or defense and a sworn certification that he has not theretofore commenced any other action involving the same issues in the Supreme Court, the Court of Appeals or different divisions thereof, or any other tribunal or agency; if there is such other action or proceeding, he must state the status of the same, and if he should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or different divisions thereof, or any other tribunal or agency, he undertakes to promptly inform the aforesaid courts and other tribunal or agency thereof within five days therefrom.

This provision fixes what must accompany the petition, and the Court uses it to test whether the petition deserves even a prima facie finding of merit.

Section 2 of Rule 47 of the Rules of Court provides:

Section 2. Grounds for annulment. The annulment may be based only on the grounds of extrinsic fraud and lack of jurisdiction.

This is the provision that confines the remedy to two grounds, and it defeats the petitioners' attempt to relitigate the correctness of the foreclosure judgment.

Ruling

On the first issue, the Court agreed with the petitioners that under Section 4 of Rule 47 only a certified true copy of the assailed judgment or final order need be attached, while affidavits and supporting documents may be plain copies. But the Court stressed that the petition must still allege with particularity the facts and the law relied upon, and must append the documents supporting the cause of action, precisely to convince the appellate court of the petition's substantive merit or to allow a finding of prima facie merit. The petitioners failed to do this: they did not append the receipts showing their father paid the installments, and their claim that their mother had no source of income was belied by her having secured a 1,200,000 peso bank loan. They likewise failed to append any pleading from the foreclosure case showing the property was the family home and conjugal. The Court noted that Elizabeth never alleged in the trial court, in the Court of Appeals, or in the Supreme Court that the property was the family home and conjugal in nature.

On the second issue, the Court held that annulment of judgment is an extraordinary remedy, equitable in character and allowed only in exceptional cases, to prevent a losing party from making a farce of a decision that has long become final. It is not a substitute for appeal.

On the third issue, the Court held that the petition states no cause of action, because annulment may be based only on extrinsic fraud and lack of jurisdiction. Jurisdiction is the power and authority of the tribunal to hear, try, and decide a case, and it does not depend on the regularity of the exercise of that power or on the correctness of the decision. The alleged violation of the Family Code on the family home is an error of substantive law, not a lack of jurisdiction, and the correctness of the judgment is not in issue in an annulment proceeding.

Doctrine

Annulment of judgment under Rule 47 is an extraordinary remedy, equitable in character, allowed only in exceptional cases, and may be based only on extrinsic fraud and lack of jurisdiction. The petition must allege with particularity the facts and the law relied upon and must append the documents supporting the cause of action, to avoid outright dismissal or denial of due course. Lack of jurisdiction means lack of jurisdiction over the person of the defending party or over the subject matter; it does not arise from the court's erroneous application of substantive law, which is the proper subject of an appeal, not of annulment.

Disposition

The Supreme Court denied the petition and affirmed the dismissal of the annulment action by the Court of Appeals.

Remember This

Memorize the line: annulment of judgment lies only on the grounds of extrinsic fraud and lack of jurisdiction, and it is never a substitute for a lost appeal. Examiners use this case to test whether a student can distinguish a substantive-law error, such as a violation of the Family Code on the family home, from a true lack of jurisdiction.