Title
Ancheta vs. Cambay
Case
G.R. No. 204272
Decision Date
Jan 18, 2021
Vivian secured loans using a mortgaged property under Ancheta and Dionila's name. Default judgment was issued without proper summons. Ancheta sought annulment, citing lack of jurisdiction; SC ruled in her favor, remanding the case to CA.
denial of relief
loan
foreclosure
A

Case Summary (G.R. No. 204272)

Factual Background

On June 12, 2003, Vivian Ancheta obtained a loan of P25,000.00 from Mary Cambay with ten percent monthly interest and executed a Real Estate Mortgage in favor of Cambay over a parcel of land in Bayombong, Nueva Vizcaya. The land, however, stood of record in the names of Marylou R. Ancheta and her former common-law husband Ricardo Dionila under Transfer Certificate of Title No. T-58527. Allegedly to permit the mortgage, Ancheta and Dionila executed a Special Power of Attorney dated June 10, 2003 in favor of Vivian authorizing her to use the land as collateral. On June 16, 2003, Vivian secured another P25,000.00 loan from Cambay evidenced by a promissory note.

Proceedings in the Regional Trial Court

Alleging default, Cambay filed on August 30, 2004 a Complaint for Judicial Foreclosure of Mortgage against Vivian, Ancheta, and Dionila before the RTC. Summons was served on and received by Vivian, but Ancheta and Dionila averred that they were not personally served. No answer was filed by any defendant. The RTC conducted a trial on the merits and on August 31, 2005 rendered a decision by default finding plaintiff’s claim due in the amount of P50,000.00 with interest at twenty-four percent per annum from one year after June 16, 2003, and directing payment or public sale in default. The August 31, 2005 Decision became final and executory and was entered in the book of entries of judgment on September 26, 2005. The Clerk of Court and ex-officio Provincial Sheriff implemented the judgment and, by an Absolute Deed of Sale dated May 22, 2007, sold the property to Cambay. The Register of Deeds subsequently issued TCT No. T-145718 in favor of Cambay and canceled TCT No. T-58527.

Petition for Relief from Judgment in the RTC

On August 14, 2006, Ancheta filed a Petition for Relief from Judgment with the RTC, contending that she learned of the action and the default judgment only in early 2006, that she and Dionila were never personally served, and that the June 10, 2003 Special Power of Attorney was forged and therefore void. The RTC, however, dismissed the petition in an October 17, 2006 Order. The court reasoned that the petition was filed years after the judgment in violation of the reglementary periods and that the affidavit accompanying the petition failed to show facts constituting fraud, accident, mistake, or excusable negligence. The RTC further held that allegations attacking the validity of the Special Power of Attorney were collateral matters requiring a separate action to annul the public document.

Petition for Annulment of Judgment in the Court of Appeals

Dissatisfied with the RTC order, Ancheta filed on February 29, 2008 a Petition for Annulment of Judgment under Rule 47 of the Rules of Court in the Court of Appeals, anchoring her claim on lack of jurisdiction over her person and that of Dionila due to defective service. The CA, however, rendered a Decision dated March 16, 2012 dismissing the petition on the ground that Ancheta had already availed herself of a petition for relief from judgment and lost; the CA concluded that one who has resorted to a petition for relief could no longer invoke a petition for annulment. Ancheta filed a Motion for Reconsideration, which the CA denied in its October 18, 2012 Resolution.

Issues Presented to the Supreme Court

The Supreme Court identified the controlling issues as follows: (A) whether a named defendant in a judicial foreclosure case who was not served with summons may file an action for annulment of judgment that was rendered by default; and (B) whether a prior resort to a petition for relief from judgment, albeit erroneously availed of, bars a resort to the remedy of annulment of judgment.

Supreme Court’s Analysis and Legal Reasoning

The Supreme Court first noted inconsistencies in Ancheta’s averments as to when she learned of the RTC proceedings and judgment, but declined to revisit the RTC’s October 17, 2006 Order, which had long attained finality. The Court accepted as an established fact that Ancheta had previously filed a petition for relief that the RTC dismissed. The Court then examined Section 2, Rule 47 of the Rules of Court, which confines annulment to the grounds of extrinsic fraud and lack of jurisdiction, and which specifically provides that extrinsic fraud shall not be a valid ground if it was availed of, or could have been availed of, in a motion for new trial or petition for relief. The Court reiterated controlling precedent that when extrinsic fraud is alleged the overriding consideration is whether a fraudulent scheme prevented the petitioner from having a day in court, and that extrinsic fraud is excluded as a ground for annulment if it was or could have been raised in ordinary remedies. The Court then surveyed precedent, including Jose v. Intra Strata Assurance Corporation, Pinausukan Seafood House, Roxas Boulevard, Inc. v. Far East Bank & Trust Co., and Coombs v. Castaneda, and underscored the settled rule that it is only extrinsic fraud, not lack of jurisdiction, which is excluded as a valid ground for annulment when the same ground was availed of, or could have been availed of, in a motion for new trial or petition for relief. The Court explained that a judgment rendered without jurisdiction is fundamentally void and may be assailed at any time either collaterally or by direct action, unless barred by laches. Consequently, when a petition for annulment is grounded on lack of jurisdiction, the petitioner need not first aver that the ordinary remedies are no longer available through no fault of the petitioner. Applying those principles, the Court held that because Ancheta’s petition for annulment was essentially anchored on lack of jurisdiction over her person and Dionila due to asserted defective service of summons, she was not precluded from pursuing annulment even though she had earlier filed and lost a petition for relief. The Court found that the CA erred in dismissing the petition on the ground that Ancheta had already sought relief in the RTC and

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