G.R. No. 148323 - Manioso vs. Government Service Insurance System

Pedro Dulap and Dolores Amparo (petitioners) are the registered owners of a parcel of land located in Novaliches, Quezon City, covering approximately 5,000 square meters as evidenced by Transfer Certificate of Title No. 66821.
Asian Surety & Insurance Co., Inc. is the private respondent in the case.

A duplicate certificate of title for the property was obtained by Asian Surety.
Accompanying the duplicate title was a registered deed of mortgage in favor of Asian Surety, which was allegedly signed by the Dulaps and notarized.
The Dulaps unequivocally denied having obtained any loan from or having mortgaged their property to Asian Surety, thereby asserting that the deed of mortgage was a forgery.

Following the alleged default on an unspecified obligation, Asian Surety sent a letter of demand to the Dulaps at two addresses:

Maysilo, Malabon, Rizal (address shown in the deed of mortgage)
Bagumbong, Caloocan City (address indicated in the duplicate certificate of title, which the Dulaps had acknowledged receiving)

The Dulaps, while aware of the letter sent to Bagumbong, Caloocan City, did not respond; instead, they filed a criminal complaint for forgery against the party they believed deceived them.
Asian Surety then filed an action for foreclosure of the mortgage with the Court of First Instance of Manila, Branch XVII (Civil Case No. 52415).

Summons in the foreclosure suit were issued by publication.
The Dulaps failed to file an answer, resulting in their declaration in default.
An ex parte trial ensued, and on May 9, 1963, a judgment was rendered ordering the Dulaps to pay P10,000.00, alongside interest, attorney’s fees, and costs.
Following the finality of the judgment, execution was carried out via a sheriff’s sale on December 12, 1963, where Asian Surety emerged as the highest bidder with a bid of P12,500.00.
A sheriff’s certificate of sale was issued, and a motion for confirmation of the sale (and issuance of a writ of possession) was granted despite the Dulaps’ opposition.

On March 14, 1964, the Dulaps filed an action for annulment of the foreclosure judgment (Civil Case No. 56528) with Branch III of the same court.

The annulment was based on the assertion that the judgment rendered by Branch XVII was void ab initio due to lack of jurisdiction over the defendants owing to improper service of summons.
The court in Branch III annulled the earlier judgment on the ground that service by publication did not comply with the required procedure—specifically, that the summons and publication order had been sent by registered mail to an incorrect or fictitious address.

Asian Surety appealed the annulment decision to the Court of Appeals, which reversed the Branch III verdict.
The Dulaps subsequently filed a petition for review by certiorari with the Supreme Court, contesting the Court of Appeals’ reversal.

Whether Branch III of the Court of First Instance of Manila possesses the authority and jurisdiction to annul a judgment rendered by Branch XVII of the same court.
Whether the rules on venue and transfer of venue, as stipulated in Section 2, Rule 4 of the Revised Rules of Court, permit an annulment action to be filed in a branch different from that which rendered the original judgment.

Whether the requirement for proper service of summons by publication was satisfied.
Whether sending the summons and the publication order to an address (Maysilo, Malabon, Rizal) that did not correspond with the defendants’ actual or last known address (Deparo or Bagumbong, Caloocan City) constitutes a fatal defect invalidating the foreclosure proceedings.

Whether the principle of judicial stability—which restricts a court’s power to open, modify, or vacate its own judgments—should prevent an annulment action from being filed in a different branch of the same court.