Case Summary (G.R. No. 185663)
Petitioner and Respondent
Petitioner seeks enforcement of the alleged contract of sale embodied in the July 7, 2004 Undertaking Agreement and injunctive relief to prevent sale to others. Respondent Su denied enforceability and raised improper venue and other defenses; he also moved for cancellation of the lis pendens annotated on the title.
Key Dates
Lease commencement: March 21, 1978.
Undertaking Agreement executed: July 7, 2004.
Complaints filed (initial and amended): July 9, 2004.
RTC Order dismissing complaint: December 8, 2004.
Omnibus Motion by Su: December 23, 2004.
Antonino’s motions for reconsideration: January 3 and January 21, 2005.
RTC Joint Resolution denying motions: February 24, 2005.
Petition for annulment filed in CA: April 1, 2005.
Court of Appeals Decision: May 26, 2008; Resolution denying reconsideration: December 5, 2008.
Supreme Court disposition under review: June 20, 2012.
Applicable Law
1987 Philippine Constitution (applicable). Key procedural and substantive authorities invoked or relied upon: Rules of Court — Rule 45 (petition for review), Rule 47 (annulment of judgment; grounds and conditions), Section 2 Rule 5 (venue for personal actions), Rule 41 (final orders and appeals), Rule 15 Sections 4–5 (motions and three-day notice rule). Relevant precedents and doctrinal authorities cited in the decision include Ramos v. Judge Combong, Jr.; Barco v. Court of Appeals; Manchester Development Corporation v. Court of Appeals; Quelnan v. VHF Philippines, Inc.; Tolentino v. Judge Leviste; Republic v. Ga Holdings, Inc.; and others. Civil Code provisions cited: Articles 1458 and 1475 (effects of perfected contract of sale and obligations of vendor/vendee).
Nature of the Case
The matter is a Rule 45 petition challenging the Court of Appeals’ decision and resolution that denied Antonino’s petition for annulment of judgment (seeking to annul final and executory RTC orders). At stake is whether annulment of judgment was a proper remedy for Antonino’s grievances concerning dismissal of her complaint for improper venue and docket fee deficiency.
Factual Background
Antonino, a long-term lessee, claimed a right of first refusal and alleges execution of an Undertaking Agreement for sale at P39,500,000.00. After a dispute over capital gains tax and alleged attempts by Su to sell to others, Antonino filed civil actions in Makati for specific performance, reimbursement of repair costs, and damages. The RTC dismissed the amended complaint for improper venue and non-payment of the correct docket fees. Antonino filed motions for reconsideration that were denied; Su sought cancellation of lis pendens but the RTC refused cancellation because dismissal was not on the merits.
Procedural History
- RTC dismissed the amended complaint (Dec. 8, 2004) on grounds of improper venue and non-payment of docket fees.
- Antonino filed motions for reconsideration (Jan. 3 and Jan. 21, 2005); the RTC denied and held the motions did not suspend the period to appeal.
- Su moved to cancel lis pendens; the RTC denied cancellation because dismissal was without prejudice to refile in proper forum.
- Antonino filed a petition for annulment of judgment in the Court of Appeals (Apr. 1, 2005). The CA dismissed the petition (May 26, 2008) and denied reconsideration (Dec. 5, 2008).
- Supreme Court review (Rule 45) followed.
Issue Presented
Whether petitioner Antonino could properly invoke the extraordinary remedy of annulment of judgment under Rule 47 to set aside final and executory RTC orders dismissing her complaint for improper venue and docket fee deficiencies, when ordinary remedies (appeal) were available but not pursued.
Court of Appeals’ Findings (as summarized)
The CA held that Antonino’s action was fundamentally a personal action for enforcement of a contract (specific performance), not a real action affecting title. Under Section 2, Rule 5 of the Rules of Court, venue was in the place of residence of either party (Muntinlupa or Manila), not Makati. The CA also emphasized that annulment of judgment is limited to cases of extrinsic fraud or lack of jurisdiction and is not available where the petitioner failed to exhaust ordinary remedies (appeal), absent a showing of exceptional circumstances.
Supreme Court Ruling — Outcome
The Supreme Court affirmed the CA decision and denied the petition for lack of merit. The RTC orders were held to be final and executory and not subject to annulment because Antonino failed to show extrinsic fraud or absolute lack of jurisdiction and had not exhausted or preserved ordinary remedies such as appeal.
Supreme Court Reasoning — Availability and Limits of Annulment
- Annulment of judgment is an equitable, exceptional remedy governed by Rule 47 and is limited to two statutory grounds: extrinsic fraud and lack of jurisdiction. It is disfavored because it undermines the finality of judgments. Ramos and Barco were invoked to emphasize these limits.
- A petitioner seeking annulment must demonstrate (1) existence of extrinsic fraud or absolute lack of jurisdiction and (2) that ordinary remedies (appeal, motion for new trial, petition for relief) were unavailable or could not be pursued through no fault of the petitioner. Antonino failed on both counts.
- Antonino did not explain why she did not appeal the RTC’s dismissal (a final order) and instead pursued annulment; neglecting to appeal cannot be remedied by a petition for annulment. Precedents (Manipor, Lazaro, Quelnan) were cited to stress that loss of ordinary remedies due to petitioner’s own negligence precludes resort to Rule 47.
- The Court rejected Antonino’s characterization of the RTC’s ruling as “grave abuse of discretion” as a basis for annulment. Grave abuse of discretion challenges the exercise of jurisdiction, not jurisdiction itself; Rule 47’s “lack of jurisdiction” refers to absence of jurisdiction over the person or subject matter, not erroneous or harsh exercise of jurisdiction. Tolentino and related authorities were cited to distinguish lack of jurisdiction from errors in exercise.
Venue and Nature of the Action
- The Supreme Court agreed with the RTC and CA that Antonino’s cause of action, seeking enforcement/consummation of a purported contract (Undertaking Agreement) and damages, is a personal action founded on privity of contract. As such, Section 2, Rule 5 prescribes venue in the residence of either party. The filing in Makati was therefore improper and subject to dismissal when venue was timely raised by Su.
- The Court explained that an action to cause consummation of a sale does not, by itself, challenge the owner’s title; recognition of vendor’s title in such actions confirms their personal character. Civil Code Artic
Case Syllabus (G.R. No. 185663)
Nature of the Case
- Petition for review under Rule 45 of the Rules of Court challenging the Court of Appeals (CA) Decision dated May 26, 2008 and Resolution dated December 5, 2008 in CA-G.R. SP No. 89145.
- Relief sought: annulment of RTC orders dismissing petitioner’s complaint and denying motions for reconsideration; petitioner contends grave abuse of discretion and deprivation of opportunity to pay correct docket fees.
Parties
- Petitioner: Remedios Antonino (Antonino), longtime lessee of the subject residential property.
- Private respondent: Tan Tian Su (Su), owner of the subject residential property located in Makati City.
- Named respondent in caption: The Register of Deeds of Makati City (mentioned in the case caption).
Factual Antecedents
- Antonino had been leasing the subject residential property in Makati City from Su since March 21, 1978.
- The lease contract granted Antonino a right of first refusal if Su decided to sell the property.
- On July 7, 2004, parties executed a document labeled "Undertaking Agreement" under which Su allegedly agreed to sell the property to Antonino for P39,500,000.00.
- The intended sale did not proceed because the parties disagreed over who would shoulder the capital gains tax.
Undertaking Agreement / Alleged Contract
- The July 7, 2004 document (Undertaking Agreement) is alleged by Antonino to evidence an agreement to sell the property and to have been the basis for her claim of a perfected contract of sale.
- Antonino alleges she paid a downpayment of USD 50,000.00 the following day (July 8, 2004) and that Su later refused to accept the downpayment and attempted to tear up the document.
- Antonino alleges Su negotiated to sell the property to another party, prompting her claims for enforcement of the Undertaking Agreement and damages.
RTC Proceedings — Initial Complaints and Docketing
- July 9, 2004: Antonino filed a complaint in the Regional Trial Court (RTC) of Makati City for reimbursement of repairs and damages; case raffled to Branch 149, docketed Civil Case No. 04-802.
- Later on July 9, 2004: Antonino filed an amended complaint seeking enforcement of the Undertaking Agreement and to compel Su to sell the property to her.
RTC Order of December 8, 2004 — Dismissal (Venue and Docket Fees)
- RTC dismissed Antonino’s complaint on December 8, 2004 on two grounds:
- Improper venue: RTC characterized the action as one for specific performance with damages — a personal action — which, under Section 2, Rule 5 of the Rules of Court, must be filed where a principal plaintiff or defendant resides. Records showed Antonino resided in Muntinlupa and Su in Manila; thus Makati City was not proper venue. The agreements did not stipulate venue.
- Non-payment of appropriate docket fees: RTC held it did not acquire jurisdiction because Antonino failed to pay correct docket fees for an action that included specific performance (citing Manchester Development Corporation v. Court of Appeals, G.R. No. 75919, May 7, 1987).
RTC Post-Dismissal Motions and Omnibus Motion of Su
- December 23, 2004: Su filed an Omnibus Motion seeking cancellation of the notice of lis pendens Antonino had placed on the property title and requesting summary judgment on his counterclaims; he asserted cancellation of lis pendens was proper given dismissal and Antonino’s failure to appeal.
- January 3, 2005: Antonino filed a Motion for Reconsideration asserting (a) the complaint was a real action and venue is determined by location of the property, and (b) alternatively submitted a Commission on Elections certification asserting residency in Makati City; she prayed for reinstatement and for clerk of court to assess proper docket fees.
- January 6, 2005: RTC denied Antonino’s January 3 motion for reconsideration, holding non-compliance with Sections 4 and 5 of Rule 15 of the Rules of Court (three-day notice requirement).
Antonino’s Further Motion for Reconsideration and RTC Joint Resolution
- January 21, 2005: Antonino filed another Motion for Reconsideration asserting due observance of motion rules, that her motion had been set for hearing January 7, 2005, and that Su received a copy on January 6, 2005; she requested liberal construction of the procedural rules and reiterated merits.
- February 24, 2005: RTC issued a Joint Resolution denying Su’s Omnibus Motion and Antonino’s January 21, 2005 motion.
- RTC refused to cancel the notice of lis pendens because dismissal was on grounds of improper venue and non-payment of docket fees, i.e., dismissal did not resolve merits and cause remained unresolved for re-filing in proper court.
- RTC held Antonino’s first motion for reconsideration was pro-forma and did not suspend the running of the appeal period.
- RTC reiterated the complaint was a personal action and venue properly lay in Manila or Muntinlupa.
Petition for Annulment of Judgment filed with the Court of Appeals
- April 1, 2005: Antonino filed with the CA a petition for annulment of judgment seeking nullification of:
- RTC Order dated December 8, 2004 (dismissing complaint),
- RTC Order dated January 6, 2005 (denying first motion for reconsideration), and
- RTC Joint Resolution dated February 24, 2005 (denying second motion for reconsideration).
- Grounds alleged by Antonino: RTC committed grave abuse of discretion amounting to lack of jurisdiction by ruling the action personal, depriving her of opportunity to pay correct docket fees, and strict application of rules on motions resulting in summary denial.