G.R. No. L-17084 - Dulay vs. Merrera

On February 14, 1995, Elizabeth B. Mendinueta, married to Geronimo Veneracion, executed a promissory note binding herself to pay a loan of P1,200,000.00 from Charlie Mancilla.
The note provided for payment on or before August 14, 1995, at a monthly interest rate of 5%, with interest payable within the first five days of every month and stipulated liquidated damages.
To secure the loan, Elizabeth executed a real estate mortgage over her residential lot and the house thereon, covered by Transfer Certificate of Title (TCT) No. 87140, located in Better Living Subdivision, Barangay Wawa, Parañaque City.
The title at the time indicated that Elizabeth was “single,” and the deed included a stipulation for judicial or extra-judicial foreclosure should she fail to pay.

Following Elizabeth’s failure to pay on the due date, Charlie Mancilla initiated judicial foreclosure by filing a petition with the Regional Trial Court (RTC) on October 11, 1993 (Civil Case No. C-425).
With Charlie Mancilla’s subsequent death, his heirs (Giar Cheng Linda, Caitlin, and Erica Tiffany Mancilla) were impleaded as parties-plaintiffs in substitution.
During the pre-trial hearing on October 18, 1996, both parties agreed on the facts regarding the loan, promissory note, and the mortgage secured by TCT No. 87140.
Elizabeth admitted her failure to pay, while testifying that she had secured another loan from Banco Filipino Savings Mortgage Bank and requested a reduction of the monthly interest from 5% to 3%.
On September 25, 1997, the RTC rendered judgment in favor of the Mancilla heirs ordering Elizabeth to pay the loan amount, interest at 5% per month (and compounded interest on the accrued interest), attorney’s fees at 10% of the total amount, and costs, with the property to be sold at public auction in the event of non-payment.
Elizabeth’s appeal to the Court of Appeals (CA) was dismissed on May 12, 1999 for her failure to file an appeal brief; her subsequent manifestation to reduce accrued interest was likewise dismissed.

Following the final and executory CA resolution, the trial court issued a writ of execution on November 7, 2000, and the property was levied upon by the Sheriff.
The subject property was sold at public auction on December 20, 2000, and the Certificate of Sale was executed in favor of the Mancilla heirs.
The Certificate of Sale was later annotated on the title by the Register of Deeds on April 17, 2002.
During these events, it was revealed that Elizabeth had been living with Geronimo Veneracion (with whom she had three children) even before they formalized their marriage on December 17, 1993.
Geronimo, who had been financing the property installments due to Elizabeth’s lack of income, died on May 26, 1999.

On November 15, 2002, petitioners (Mary Grace M. Veneracion and her siblings) filed a petition in the CA for the partial annulment of the RTC decision (Civil Case No. C-425).
The petition alleged that:

Their parents had been living together as common-law spouses in the early 1980s, and though the property was titled in Elizabeth’s name as “single,” it was in fact their conjugal family home.
Geronimo had financed the property through installment payments because Elizabeth had no source of income.
For the mortgage transaction, Charlie Mancilla was aware of the marital situation as he had met Geronimo during the loan negotiations.
The trial court’s decision violated Article 154 of the Family Code by allowing the sale of the family home without the necessary marital consents as required under Article 158.

The annulment of the dispositive portion of the RTC judgment as to the family home.
Monetary relief for moral damages and attorney’s fees.
Costs of suit and a temporary restraining order with a writ of preliminary injunction to prevent the further cancellation or transfer of TCT No. 87140.

The petition failed to attach duplicate original/certified true copies of key documents such as the complaint, motion for execution, and entry of judgment.
There was no explanation why the petition was not served personally nor was there an affidavit of service for the petition.

As a result, the CA dismissed the petition outright for non-compliance with Section 4, Rule 47 of the 1997 Rules of Civil Procedure.
Petitioners filed a motion for reconsideration arguing substantial compliance with the procedural requirements and that their petition was an initiatory complaint; however, the CA reiterated the mandatory nature of Sections 11 and 13 of Rule 13 and other requirements, dismissing their motion.

Petitioners subsequently filed a petition for review on certiorari with the Supreme Court, insisting that:

They had complied with the requirements of Section 4, Rule 47 by attaching the necessary certified true copy of the RTC decision.
The remedy of annulment under Rule 47 was appropriate given their exclusion from the original proceedings (as minors) and the alleged irregularity causing them the irreversible loss of their family home.
The decision of the RTC prejudiced their hereditary rights, especially after their father’s death.

The petition argued that the CA’s dismissal focusing on technical failures (procedural non-compliance) was improper as it overshadowed the merits of the case.
The Supreme Court, however, held that the petition failed to meet the required procedural and substantive standards necessary for annulment, emphasizing that annulment of judgment is an extraordinary remedy with narrow grounds.

Whether the petition before the CA complied with Section 4, Rule 47 of the 1997 Rules of Civil Procedure with respect to the attachment of requisite certified documents and supporting affidavits.
Whether the failure to attach key documents (such as the original complaint, motion for execution, and service affidavits) warranted outright dismissal.

Whether a petition for partial annulment of judgment is the proper remedial action, especially when raised on issues such as the alleged non-consent of one spouse and mischaracterization of the property as non-conjugal.
Whether the remedy provided under Rule 47 is applicable when the petition centers on substantive issues that could have been raised in the original proceedings.

Whether the petition adequately stated a cause of action for annulment of judgment based on extrinsic fraud and lack of jurisdiction.
Whether the alleged errors in the trial court’s judgment (notably, the determination of family home status and jurisdictional deficiencies) are reviewable under the extraordinary remedy of annulment in the absence of the proper evidentiary support.