G.R. No. 146845 - Spouses Mesina vs. Meer

Respondent Humberto D. Meer is the registered owner of a parcel of land located at Lot 15, Block 5, Pandacan, Manila under TCT No. 158886.
The title was cancelled and replaced by TCT No. 166074 in the name of spouses Sergio and Lerma Bunquin, who allegedly acquired the property through a deed of sale purportedly executed by respondent on June 3, 1985.

Respondent discovered the cancellation of his title in June 1993 when applying for a loan.
On January 12, 1994, respondent filed a case for cancellation of TCT No. 166074 before Metropolitan Trial Court (MeTC) of Manila, Branch 10, leading to annotation of a lis pendens on the contested title.
Despite the pending case, TCT No. 166074 was cancelled on June 15, 1994 and TCT No. 216518 was issued in the name of petitioners spouses Michaelangelo and Grace Mesina, who had purchased the property on September 28, 1993 via an Absolute Deed of Sale from Lerma Bunquin.
The delay in title transfer to petitioners was due to National Housing Authority requirements.
Petitioners actively participated in the defense after being impleaded as additional defendants; spouses Bunquin were declared in default for non-appearance.

On February 16, 1998, the MeTC ruled the sale between Meer and Bunquin fraudulent but held petitioners as buyers in good faith and entitled to possession of the property.
The trial court underscored reliance on the certificate of title and diligent verification by petitioners with NHA and legal counsel as indicators of good faith.
Defendant spouses Bunquin were ordered to compensate respondent and pay damages and attorney’s fees while petitioners’ counterclaim was denied.

Respondent filed a motion for reconsideration which was denied; he appealed to the RTC.
RTC reversed the MeTC decision, ruling petitioners were not purchasers in good faith because registration of the deed sale, not the date of sale, confers ownership.
Since petitioners’ deed was registered after the annotation of the lis pendens, RTC ordered cancellation of titles in favor of the Bunquins and petitioners and restoration of title to respondent.
RTC ordered Bunquins and petitioners to pay costs and attorney’s fees.

Petitioners appealed to the CA which affirmed the RTC’s decision on May 10, 2000.
Petitioners filed a Petition for Relief from Judgment after the reglementary period, citing:

Extrinsic fraud through collusion between respondent and Bunquins preventing presentation of petitioners’ case.
Mistake and excusable negligence causing delay in filing appeal.
Existence of good and substantial defense.

The CA denied the Petition for Relief reasoning the grievance should have been raised in the court of origin under Rule 38, and the remedy is not applicable to CA decisions issued in appellate capacity.
Petitioners’ motion for reconsideration was also denied by the CA.

Petitioners question availability of Petition for Relief under Rule 38 against judgments of the CA in its appellate jurisdiction and seek review of the adequacy of their grounds for relief.
They argue that Rule 38’s use of "any court" should include the CA and ask for equitable consideration due to their alleged extrinsic fraud and loss of their only earthly possession.

Whether a petition for relief from judgment under Rule 38 of the Rules of Court is available as a remedy against a judgment of the Court of Appeals rendered in its appellate jurisdiction.

Whether petitioners’ grounds of extrinsic fraud, mistake, excusable negligence, and good and substantial defense sufficiently justify the granting of a petition for relief from judgment under Rule 38.