Title
Arcelona vs. Court of Appeals
Case
G.R. No. 102900
Decision Date
Oct 2, 1997
Co-owners excluded from tenancy suit over inherited fishpond; final judgment annulled due to lack of jurisdiction and due process violations.

Case Summary (G.R. No. 93177)

Petitioners, Respondents and Forums

Petitioners sought review of a Court of Appeals decision and resolution denying their petition to annul a final Regional Trial Court judgment in Civil Case No. D-7240 and related appellate proceedings; private respondent is the party who obtained the trial court judgment declaring him tenant-caretaker and securing the writ of execution implementing possession.

Key Dates and Procedural History

Lease executed between Cipriano Tandoc and Olanday, et al. on March 4, 1978 (renewed to February 2, 1984). Farnacio filed Civil Case D-7240 on February 7, 1984. Trial court rendered judgment for Farnacio on October 31, 1984; the then IAC affirmed (May 31, 1985); the Supreme Court earlier sustained the IAC in G.R. No. 71217 (decision noted in the record). After remand, Farnacio was put in possession on May 25, 1991. Petitioners filed annulment proceedings in the Court of Appeals (CA G.R. SP No. 24846); CA denied relief and found estoppel/laches; petitioners sought review before the Supreme Court, which ultimately issued the decision under analysis.

Applicable Law and Constitutional Basis

The 1987 Constitution provides the due process framework applicable to judicial proceedings. Relevant procedural and substantive rules include the Rules of Court (as cited: Rule 3 on joinder and indispensable parties; Rule 38 and related provisions concerning relief from judgment), doctrines under Torrens registration and ownership, and established jurisprudence distinguishing extrinsic fraud, intrinsic fraud, lack of jurisdiction (subject-matter and personal), and the standards for estoppel and laches.

Facts Relevant to Jurisdictional and Due Process Questions

The trial court’s decision described the fishpond by reference to Lot No. 3312 and cited the transfer certificate naming all six co-owners and indicating some resided abroad. Only three co-owners (the sisters residing in the Philippines) were impleaded as defendants in Civil Case D-7240; petitioners, named on the TCT and residing in the United States, were not impleaded nor served. Farnacio instituted a suit to establish tenancy and secure possession; the court adjudged his tenancy and ordered possession and release of deposits. Documentary and testimonial material in the trial record referred to other co-owners and to alleged authorizations, creating a record context in which the existence of unimpleaded co-owners appeared.

Issues Presented

The court distilled the petition into three primary questions: (1) whether a final judgment may be annulled on grounds other than extrinsic fraud—specifically for lack of jurisdiction over subject matter or persons and for denial of due process; (2) whether extraneous matters (evidence outside the original case record) may be used to void a final judgment; and (3) whether an independent action for annulment in the Court of Appeals is procedurally permissible when intervention before the court of origin during execution was available.

Trial and Appellate Disposition Challenged

The trial court declared Farnacio tenant-caretaker and ordered his peaceful possession. The Intermediate Appellate Court affirmed (with slight modification), and this Court earlier sustained the IAC decision. After remand and issuance of writ of execution, petitioners sought annulment in the Court of Appeals, which denied relief and also found estoppel and laches against petitioners; the Supreme Court then reviewed that CA ruling.

Supreme Court’s General Ruling on Grounds to Annul Final Judgment

The Court rejected the CA’s categorical statement that extrinsic fraud is the sole ground for annulment. It reiterated established doctrine—drawing on Macabingkil and other authorities—that there are three procedural avenues to set aside a final and executory judgment: (a) a Rule 38 petition for relief from judgment for fraud, accident, mistake or excusable negligence (strict time limits apply); (b) a direct action to annul and enjoin enforcement where the judgment is not void on its face but was procured by extrinsic fraud; and (c) a direct or collateral attack to annul a judgment that is void on its face or plainly null by virtue of its recitals (including want of jurisdiction). The Court emphasized that judgments void for lack of jurisdiction or due process may be attacked at any time.

Jurisdiction over Persons and the Doctrine of Indispensable Parties

The Court held that co-owners pro indiviso of the property are indispensable parties in an action that purports to adjudicate tenancy and possession over the entire co-owned land. Under Rule 3 (secs. 2 and 7), all persons having an interest in the subject and needed for a final determination must be joined. Absent joinder of indispensable co-owners, the court acquires no jurisdiction to render a personal judgment affecting their interests; such a judgment is null and void insofar as it affects omitted parties. Because the fishpond remained undivided, it was impossible to determine which portion corresponded to the impleaded defendants’ shares; thus adjudication affecting the whole without joining all co-owners prevented a final, binding determination. The Court found that the existence of the TCT and other references in the record putting all co-owners on notice showed the trial court should have inquired into joinder, and responsibility to implead rested on the plaintiff (Farnacio) and the trial judge under Rule 3, Section 11.

Nullity May Be Demonstrated from the Record; Extraneous Evidence Generally Excluded

The Court clarified that, while the nullity of a judgment for want of jurisdiction must generally appear from the record, this includes documentary and testimonial evidence contained within the case record (not evidence dehors the record). Extraneous matters outside the record cannot be relied upon to impeach a judgment’s validity for lack of jurisdiction or due process. The Court nevertheless allowed that, when annulment is grounded on extrinsic fraud, extraneous evidence may be admissible to prove that fraud. Here, the Court emphasized that the trial record itself contained indications (TCT recitals, testimony excerpts) that indispensable parties existed and were not impleaded; accordingly nullity could be shown from the record.

Rejection of Estoppel and Laches Based on Extraneous Matters

The CA’s reliance on alleged knowledge by petitioners of the lease and on testimony from a separate criminal case to find estoppel and laches was rejected. The Supreme Court held that extraneous facts not found in the civil case record could not be used to defeat a petition to declare a judgment void for want of jurisdiction. The requisites of estoppel (lack of knowledge, reliance on representations, and change of position to one’s detriment) were not satisfied: there was no proof petitioners knew of the particular civil suit, and their absence from the country and lack of service rebutted any presumption of knowledge. Moreover, laches does not bar relief where a judgment is void for want of jurisdiction.

Procedural Remedy: Intervention Is Not the Exclusive Avenue

The Court held that intervention in the execution or enforcement proceedings before the court of

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