G.R. No. 240108 - Carreon vs. Aguillon

Case Summary (G.R. No. 240108)

Factual background — underlying action and default

Respondent Aguillon filed a complaint for breach of contract, damages, and attorney’s fees against Carreon and his wife before the RTC (Civil Case No. 33,044-09). The RTC, upon Aguillon’s motion, declared the defendants in default for failing to file a responsive pleading within the reglementary period; the Return of Service indicated summons and complaint were received through the defendants’ “son” at their residence. The RTC thereafter rendered a decision on October 15, 2010 awarding Aguillon P47,410.00 plus interest and attorney’s fees.

Execution, levy, auction and issuance of title to purchaser

The RTC decision became final and, on April 12, 2011, a writ of execution issued. The sheriff levied the property described as the family home of the defendants, and the property was sold at public auction. Betty P. Lopez was the highest bidder; a Final Certificate of Sale issued in her favor.

Proceeding to cancel TCT and issuance of new title

Lopez filed a petition to cancel Transfer Certificate of Title (TCT) No. T-208860 (registered in the defendants’ names) and to have a new title issued in her name. The RTC set the petition for hearing and issued a December 12, 2013 order requiring the defendants’ appearance; the Return of Service dated January 27, 2014 did not reflect service of that order upon the defendants. The RTC nonetheless proceeded and, on February 17, 2014, issued an order granting cancellation and directing surrender of the owner’s duplicate of the TCT and issuance of a new title in Lopez’s name. Lopez subsequently moved to publish that order; despite lack of an affidavit from the process server or postman showing inability to locate the defendants, the RTC granted the motion on May 20, 2014. After publication, the February 17, 2014 order became final, the original TCT was cancelled and a new TCT (No. 146-2015001758) issued to Lopez.

Writ of possession and discovery by petitioner

Lopez sought and obtained a writ of possession, which the RTC granted on April 17, 2016. On June 22, 2017, Carreon received notice from the City Government of Davao attaching the writ of possession and thereby first learned of the proceedings and the consequent transfer of title and possession; he then secured records and filings demonstrating that prior proceedings had transpired without his knowledge.

Annulment petition filed in the Court of Appeals

On account of alleged improper and invalid service of summons (extrinsic fraud and lack of jurisdiction), Carreon filed a Petition for Annulment of Judgment under Rule 47 before the CA seeking to annul the RTC judgment and related orders.

Initial CA dismissal on procedural grounds and petitioner’s response

In a July 28, 2017 resolution, the CA dismissed the Annulment Petition on procedural grounds, identifying several defects: failure to attach the affidavit of service of the petition to the court of origin and to adverse parties (Section 13, Rule 13), failure to attach a copy of TCT No. T-208860, and failure to submit affidavits or supporting documents as required by Section 4(3), Rule 47. Petitioner filed a Motion for Reconsideration with Manifestation explaining (a) that an affidavit of service is not required for an original action in the CA, (b) that the omission of the TCT copy was not fatal and a copy was then attached, and (c) that petitioner and witnesses had executed affidavits in support.

CA reconsideration and disposition on the merits

In a February 19, 2018 resolution, the CA reconsidered and found that the procedural defects had been cured. On the merits, however, the CA held that the RTC acquired jurisdiction over the persons of the defendants because the service of summons was regular, invoking the presumption of regularity in official acts, and concluded the extrinsic fraud claim was “too unsubstantial to warrant consideration.” Accordingly, the Annulment Petition was dismissed on grounds of proper service and RTC jurisdiction.

Petitioner’s March 8, 2018 filing and CA treatment as prohibited second motion

Carreon filed a Motion for Reconsideration dated March 8, 2018 attacking the CA’s February 19, 2018 resolution. On May 4, 2018, the CA noted the motion without action, deeming it a prohibited second motion for reconsideration under Section 2, Rule 52 of the Rules of Court, and directed issuance of an Entry of Judgment. Petitioner then elevated the matter to the Supreme Court by petition for review on certiorari.

Legal issue before the Supreme Court

The Supreme Court identified two principal issues: (a) whether the CA correctly treated the March 8, 2018 filing as a second motion for reconsideration prohibited by Section 2, Rule 52; and (b) whether the CA correctly dismissed the Annulment Petition on the ground that the RTC had acquired jurisdiction over the defendants through proper service.

Supreme Court analysis — nature of the March 8, 2018 motion

The Court explained that a second motion for reconsideration under Section 2, Rule 52 is prohibited to preserve finality of judgments; such motions repeat arguments already passed upon. The CA erred in characterizing petitioner’s March 8, 2018 motion as a second motion because it did not repeat or seek reconsideration of the same resolution. The record shows two distinct CA resolutions: the July 28, 2017 resolution dismissed the petition on procedural grounds, and the February 19, 2018 resolution (the reconsidered ruling) addressed the merits and dismissed for lack of jurisdiction. The March 8, 2018 filing was a first motion for reconsideration of that new February 19, 2018 resolution and therefore not a prohibited second motion. Consequently, the CA’s noting without action deprived petitioner of a meaningful opportunity to have his arguments considered and prevented the running of appeal periods premised on finality that had not in fact occurred.

Supreme Court analysis — prima facie merit of the Annulment Petition (service and jurisdiction)

The Court examined the petition under Rule 47 standards. Defective service of summons negates a court’s jurisdiction and can support an action for annulment of judgment. Substituted service is permissible only under the conditions specified in Section 7, Rule 14; any other substituted service is ineffective. The Supreme Court found that petitioner’s allegations of defective service had at least prima facie merit based on the record showing: (a) no evidence of earnest efforts by the sheriff/process server to effect personal service within a reasonable period; (b) the Return merely recited that summons was served sometime in December 2009 and received by an unidentified “son”; (c) the Return failed to specify the residence address where service occurred; and (d) petitioner’s sworn statement that he had no son and that his only child was a daughter who also executed an affidavit denying receipt. Given these defects, the presumption of regularity in official acts cannot be invoked where the official act is irregular on its face.

Rule 47 procedure and reliefs required by the CA

The Court stressed tha

Case Syllabus (G.R. No. 240108)

Parties and Caption

Petitioner: Edgar T. Carreon (Carreon).
Respondents: Mario Aguillon (Aguillon) and Betty P. Lopez (Lopez).
Case source: G.R. No. 240108, Decision penned by Justice Perlas-Bernabe, Second Division, June 29, 2020; reported at 875 Phil. 598.
Relief sought before the Court of Appeals (CA) and subsequently before the Supreme Court (SC): Annulment of Judgment under Rule 47 of the Rules of Court (Annulment Petition) by Carreon.

Underlying Complaint and RTC Proceedings (Civil Case No. 33,044-09)

Aguillon filed a complaint for breach of contract, damages, and attorney’s fees against Carreon and his wife Isabel before the Regional Trial Court (RTC), Davao City, Branch 15, docketed as Civil Case No. 33,044-09.
On motion of Aguillon, the RTC declared the defendants in default in an Order dated March 10, 2010 because they allegedly failed to file a responsive pleading within the reglementary period despite receipt of summons and a copy of the complaint "through their 'son'" at their residence.
The RTC rendered a Decision dated October 15, 2010 in favor of Aguillon, ordering defendants to pay P47,410.00 as actual damages, plus interests and attorney’s fees. The Decision was penned by Judge Ridgway M. Tanjili.
The RTC Decision attained finality and a writ of execution was issued on April 12, 2011.

Execution, Levy, Public Auction and Transfer of Title

The Sheriff levied on a property belonging to the defendants, identified in the record as purportedly their family home.
The property was sold at public auction; Lopez was the highest bidder and was issued a Final Certificate of Sale in her favor.
Lopez thereafter filed a petition for cancellation of Transfer Certificate of Title (TCT) No. T-208860 and for issuance of a new one in her name, docketed as Sp. Proc. No. 12,881-2013.

RTC Proceedings on Lopez’s Petition for Cancellation of Title

Lopez filed the cancellation petition on December 5, 2013.
On December 12, 2013, the RTC issued an Order requiring the defendants to appear at the hearing of the petition.
The Return of Service dated January 27, 2014 did not reflect service upon the defendants of a copy of the December 12, 2013 Order.
Notwithstanding the absence of proof of service of that Order, the RTC proceeded to hear the petition and on February 17, 2014 issued an Order granting the petition, directing the defendants to surrender the Owner’s Duplicate Copy of TCT No. T-208860 and ordering the Register of Deeds of Davao City to cancel the same and issue a new title in Lopez’s name.

Publication, Finality and Writ of Possession

Lopez filed a Motion to Publish the RTC’s February 17, 2014 Order granting cancellation; the RTC granted the motion in an Order dated May 20, 2014 despite the absence of an affidavit from the process server or postman stating that the defendants’ address could not be located.
After publication and upon the February 17, 2014 Order becoming final, TCT No. T-208860 was cancelled and a new title, TCT No. 146-2015001758, was issued in the name of Lopez.
Lopez filed a petition for writ of possession on December 11, 2015; the RTC granted the writ on April 17, 2016.

Carreon’s Discovery and Filing of Annulment Petition in CA

Carreon only learned on June 22, 2017 that they were about to be ousted when he received a letter from the City Government of Davao with the writ of possession attached. It was at that time he discovered the intervening proceedings had transpired without their knowledge and participation.
Upon advice of counsel, Carreon secured pertinent records including subsequent RTC issuances which had already become final and executory.
Carreon filed an Annulment Petition before the Court of Appeals under Rule 47 of the Rules of Court, alleging lack of jurisdiction and extrinsic fraud premised on improper/invalid service of summons.

CA’s Initial Ruling (Resolution dated July 28, 2017)

The CA, in a Resolution dated July 28, 2017, dismissed Carreon’s Annulment Petition on procedural grounds.
The CA found Carreon failed to comply with several procedural requirements, specifically:
- (a) He did not attach the affidavit of service of the petition to the court of origin as well as the adverse parties (citing Section 13, Rule 13).
- (b) He did not attach a copy of TCT No. T-208860.
- (c) He did not submit affidavits of witnesses or documents in support of the cause of action or defense (citing Section 4(3), Rule 47).
The July 28, 2017 Resolution was authored by Associate Justice Perpetua T. Atal-Paño with Associate Justices Edgardo T. Lloren and Oscar V. Badelles concurring.

Carreon’s Motion for Reconsideration with Manifestation (to CA)

Carreon filed a Motion for Reconsideration with Manifestation explaining:
- (a) The affidavit of service is not required in a petition for annulment of judgment because the Annulment Petition is an original action before the CA and the rule on service of summons is applicable.
- (b) Failure to attach a copy of TCT No. T-208860 is not fatal; nonetheless, he attached a copy thereafter.
- (c) Carreon, his only child Malaya De Luna Carreon, and other witnesses executed affidavits in support of the Annulment Petition.

CA’s Reconsideration and Merits Ruling (Resolution dated February 19, 2018)

In a Resolution dated February 19, 2018, the CA reconsidered its original July 28, 2017 ruling and found that the procedural infirmities had been rectified.
The CA proceeded to rule on the merits and dismissed the Annulment Petition in its entirety on these principal grounds:
- It found no irregularity in the service of summons upon Carreon and his wife; thus, the RTC acquired jurisdiction over their persons.
- It characterized the extrinsic fraud allegation as "too unsubsta
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