ABNER MANGUBAT, PETITIONER, VS. BELEN MORGA-SEVA, RESPONDENT.

Mangubat versus Morga-Seva

The Case

This is the case of Abner Mangubat versus Belen Morga-Seva, a petition for review on certiorari decided by the Supreme Court in November 2015. Abner Mangubat asked the Court to reverse the Court of Appeals, which had dismissed his petition for annulment of a final order of the Regional Trial Court of Pili, Camarines Sur. That order divested the heirs of Gaudencio Mangubat of ownership of a parcel of land covered by Transfer Certificate of Title Number 6337 and vested the same in Belen Morga-Seva, pursuant to a compromise agreement approved by the trial court. The case matters because it is the cleanest teaching vehicle on the extraordinary remedy of annulment of judgment: the only grounds are extrinsic fraud and lack of jurisdiction; the petitioner must show an absolute lack of jurisdiction, not mere error in its exercise; the action is barred by laches; and the remedy does not lie against an interlocutory order.

Procedural History

The story begins in the Regional Trial Court of Pili, Camarines Sur, Branch 31, in a complaint for specific performance with damages filed by Gaudencio Mangubat and his wife Aurelia Rellora-Mangubat against Belen Morga-Seva and two other defendants. The trial court rendered a decision in August 1985. Belen appealed to the Court of Appeals and then to the Supreme Court, but both appeals failed, and the decision became final and executory.

Because the writ of execution could not be implemented, Gaudencio and the heirs filed a complaint for revival of the judgment. In that revived case, Gaudencio and Belen entered into a compromise agreement, which the trial court approved and embodied in a decision rendered in February 2001. That decision became final, and a writ of execution issued.

Gaudencio died in January 2002. Abner moved to substitute his father, and the trial court granted the substitution for purposes of execution only. Belen paid 91,280 pesos in December 2003. When the heirs refused to convey the lot, the trial court directed Abner to surrender the owner's copy of the title and the clerk of court to execute the deed of sale in Belen's favor. Abner refused to comply, so in September 2006 the trial court issued an order divesting the plaintiffs of ownership and vesting the same in Belen, with the force and effect of a conveyance. That order became final in November 2006.

In September 2010, Abner filed with the Court of Appeals a petition for annulment of the final order. The Court of Appeals dismissed the petition for lack of merit in July 2011 and denied reconsideration in June 2012. Abner then elevated the matter to the Supreme Court by petition for review on certiorari.

Facts

In March 1974, Gaudencio Mangubat and his wife Aurelia Rellora-Mangubat sued Belen Morga-Seva and two others for specific performance with damages before the Regional Trial Court of Pili, Camarines Sur. In August 1985, the trial court rendered judgment ordering the defendants to reimburse the plaintiffs the amounts the latter had paid to the Development Bank of the Philippines after 1971, and providing that upon such reimbursement the defendants could recover title to the properties held as collaterals, subject to an encumbrance in favor of the plaintiffs. Belen's appeals to the Court of Appeals and to the Supreme Court both failed, and the decision became final.

Because execution could not be carried out, Gaudencio and the heirs filed a complaint for revival of the judgment in September 1998. In that case, Gaudencio and Belen entered into a compromise agreement: Belen would pay 33,000 pesos previously paid by the plaintiffs to the bank, plus legal interest of twelve percent per annum since August 1990 until the year 2000, or a total of 72,600 pesos, plus 5,000 pesos as attorney's fees, payable on or before June 30, 2001; upon payment, the plaintiffs would transfer the title to Belen; and all other claims and counterclaims were waived. The trial court approved the agreement and rendered a decision in February 2001 in accordance therewith.

Gaudencio died in January 2002, and Abner moved to substitute him, which the trial court granted for purposes of execution only. Belen paid 91,280 pesos in December 2003, and the counsel for the heirs turned over 84,480 pesos to the clerk of court, retaining 6,800 pesos as attorney's fees. When the heirs refused to convey the lot, the trial court ordered Abner to surrender the owner's copy of the title and the clerk of court to execute the deed of sale. Abner refused. The trial court then issued the September 2006 order divesting the plaintiffs of ownership and vesting it in Belen, which became final in November 2006. Only in September 2010 did Abner file his petition for annulment of that final order.

Issues

• Whether or not the Regional Trial Court had jurisdiction to issue the September 25, 2006 order after its February 23, 2001 decision had become final and executory.
• Whether or not the petition for annulment of the final order was the proper remedy to nullify the September 25, 2006 order.
• Whether or not the petition for annulment of the final order was barred by laches.

Applicable Provisions

Section 10 of Rule 39 of the Rules of Court, on the enforcement of judgments for specific acts, provides:

If a judgment directs a party to execute a conveyance of land or personal property, or to deliver deeds or other documents, or to perform any other specific act in connection therewith, and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party by some other person appointed by the court and the act when so done shall have like effect as if done by the party.

This is the provision the trial court invoked when it divested the heirs of ownership and vested the same in Belen after Abner refused to surrender the owner's copy of the title.

Section 9 of Batas Pambansa Blg. 129, on the jurisdiction of the Court of Appeals, provides:

The Court of Appeals shall exercise original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction.

This is the provision the trial court pointed to when it said that the remedy of an aggrieved party against a final judgment is to file a petition for annulment of judgment before the Court of Appeals.

Ruling

On the first issue, the Court held that the trial court did not lack jurisdiction. The remedy of annulment of judgment is available only on two grounds: extrinsic fraud and lack of jurisdiction. Abner anchored his petition on lack of jurisdiction, but the Court held that lack of jurisdiction means an absolute lack of authority to hear and decide the case, not an error in the exercise of jurisdiction. The trial court had acquired jurisdiction over the person of Abner, who had asked for affirmative relief several times, and over the subject matter, since the complaint for revival of judgment was filed in the very court that rendered the original decision. The Court quoted the Court of Appeals with approval:

Jurisdiction is not the same as the exercise of jurisdiction. As distinguished from the exercise of jurisdiction, jurisdiction is the authority to decide a case, and not the decision rendered therein. Where there is jurisdiction over the person and the subject matter, the decision on all other questions arising in the case is but an exercise of such jurisdiction.

On the second issue, the Court held that the petition for annulment was not the proper remedy because the September 25, 2006 order was an interlocutory order. It merely dealt with the incidental matter of causing the transfer of the title in Belen's name in accordance with the final and executory February 2001 decision, after Abner refused to deliver the owner's copy of the title. No further settlement of any claim or imposition of any further liability was made in that order.

On the third issue, the Court held that even assuming the claim of lack of jurisdiction was well grounded, the petition was barred by laches. Abner filed the action almost four years after the finality of the September 25, 2006 order, without offering any justification for his inaction. The Court quoted the principle of laches:

The principle of laches or stale demands ordains that the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier, negligence or omission to assert a right within a reasonable time, warrants a presumption that the party entitled to assert it has abandoned it or declined to assert it.

Doctrine

A Bar candidate must retain these rules. First, the remedy of annulment of judgment is available only on two grounds: extrinsic fraud and lack of jurisdiction. Second, in a petition for annulment of judgment based on lack of jurisdiction, the petitioner must show not merely an abuse of jurisdictional discretion but an absolute lack of jurisdiction, meaning the court should not have taken cognizance of the case because the law does not vest it with jurisdiction over the subject matter. Third, jurisdiction is not the same as the exercise of jurisdiction; errors committed in the exercise of jurisdiction are errors of judgment, the proper subject of an appeal. Fourth, an action for annulment of judgment or final order based on lack of jurisdiction must be brought before it is barred by laches. Fifth, the remedy of annulment of judgment does not lie against an interlocutory order, which is a ruling respecting some point or matter between the commencement and end of the suit but is not a final adjudication of the claims and liabilities of the parties.

Disposition

The Supreme Court denied the petition and affirmed the resolutions of the Court of Appeals dated July 13, 2011 and June 13, 2012. Belen Morga-Seva prevailed.

Remember This

The single line worth memorizing: annulment of judgment lies only on the grounds of extrinsic fraud and lack of jurisdiction, and lack of jurisdiction means an absolute lack of authority to hear and decide the case, not an error in the exercise of jurisdiction. Examiners like to use this case to test the distinction between lack of jurisdiction and error in the exercise of jurisdiction, the bar of laches against annulment of judgment, and the rule that annulment of judgment does not lie against an interlocutory order.