Case Summary (G.R. No. 227366)
Procedural Posture and Chronology (essentials)
Plaintiff filed a civil action for damages (quasi-delict) on 1 October 1993 and moved to litigate as a pauper. Alias summons were issued and served on the Cerezo spouses in April 1994. The Cerezos participated in several proceedings but did not file an answer; they were declared in default on 6 February 1995. The Regional Trial Court (Branch 56, Angeles City) rendered judgment for plaintiff on 30 May 1995, awarding actual damages, loss of earnings, moral damages, and costs against Hermana Cerezo. Petitioner filed a Rule 38 petition for relief from judgment (10 July 1995) which the trial court denied (4 March 1998). Subsequent petitions — Rule 65 certiorari to the Court of Appeals, a Rule 45 petition to the Supreme Court, and later a Rule 47 petition for annulment of judgment to the Court of Appeals — were denied. Petitioner then brought the present Rule 45 petition before the Supreme Court challenging the denial of the Rule 47 annulment petition and asserting lack of jurisdiction and indispensability of the driver Foronda.
Issues Presented to the Supreme Court
- Whether the Court of Appeals erred in dismissing the petition for annulment of judgment by treating the petition as based on extrinsic fraud rather than lack of jurisdiction. 2) Whether the trial court’s findings and judgment are void for want of due process because no summons was served on driver Foronda, whom petitioner claims to be an indispensable party. 3) Whether petitioner’s voluntary participation in the civil proceedings waived any defense based on lack of jurisdiction and whether lack of jurisdiction can be waived.
Governing Procedural Rules and Remedies
The Court reviewed the ordinary remedies available to a party declared in default: (a) motion to set aside order of default (Rule 18/Rule 9), (b) motion for new trial (Rule 37) within the period for appeal, (c) petition for relief from judgment (Rule 38) where judgment is final and executory and fraud/accident/mistake/excusable negligence are shown, (d) appeal from the judgment (Rule 41), and (e) certiorari (Rule 65) to annul order(s) of default when appropriate. Annulment of judgment under Rule 47 is an extraordinary remedy available only for extrinsic fraud or lack of jurisdiction and only when ordinary remedies are no longer available through no fault of the petitioner.
Court’s Analysis on Choice and Availability of Remedies
The Supreme Court found that petitioner had multiple ordinary remedies after receipt of the default judgment (appeal within 15 days, motion for new trial within the period for appeal, or Rule 65 certiorari within applicable periods) but instead erroneously pursued a Rule 38 petition for relief from judgment. The Court applied established authority (including Tuason v. Court of Appeals) holding that where ordinary remedies are available and the party is not prevented by fraud, accident, mistake, or excusable negligence from invoking them, a petition for relief from judgment is inappropriate. Because petitioner had timely knowledge of the judgment (admitted receipt on 25 June 1995) and failed to invoke the correct remedies in due time, the Rule 38 petition was held to be improperly used and denied with finality; having thus availed herself of an inappropriate remedy through her own fault, petitioner could no longer invoke Rule 47 annulment.
Annulment Remedy: Extrinsic Fraud vs. Lack of Jurisdiction
The Court emphasized that annulment under Rule 47 is confined to two specific grounds: extrinsic fraud and lack of jurisdiction. Extrinsic fraud must be timely raised and cannot be a reformulation of matters that could be raised in ordinary remedies. Lack of jurisdiction as a ground for annulment is barred by laches or estoppel where the party participated in the proceedings and failed to raise the objection in the proceedings or by timely proper remedies. Because petitioner had other remedies that she failed to pursue and because she actively participated in the trial court proceedings, she could not successfully invoke annulment on the basis of lack of jurisdiction.
Distinction Between Delict and Quasi‑delict and Its Consequences
The Court clarified the substantive distinction relevant to jurisdictional and party questions: actions based on delict (criminal acts) and quasi‑delict (civil negligence) have different procedural and remedial implications. Plaintiff sued under quasi‑delict (Article 2180, Civil Code), not under the criminal provisions (Article 103, RPC). Under Article 2180, an employer’s liability for the torts of an employee is primary, direct, and solidary; the employer may be sued directly without joining or first suing the employee. Therefore, the driver Foronda was not an indispensable party to plaintiff’s civil action for quasi‑delict, and the absence of service on Foronda did not render the trial court’s adjudication against the employer void for lack of jurisdiction.
Employer Liability, Solidary Obligation, and Indispensability
The Court reiterated that when liability is solidary, each debtor is liable for the entire obligation and relief can be fully obtained against one solidary debtor; consequently, only one party (such as the employer) may be indispensable while others may not be necessary parties. Employer liability under Article 2180 arises from the employer’s own civil negligence in selecting or supervising employees and is not merely subsidiary to any criminal liability of the employee. Because plaintiff elected to proceed in a civil action against the employer, there was no procedural requirement to obtain jurisdiction over the employee-driver to render a valid judgment against the employer.
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Citation and Procedural Posture
- Supreme Court decision: 469 Phil. 1020, First Division, G.R. No. 141538, March 23, 2004; opinion by Justice Carpio, J.
- Petition for review on certiorari under Rule 45 seeking to annul: (a) Court of Appeals Resolution dated 21 October 1999 in CA-G.R. SP No. 53572, and (b) Court of Appeals Resolution dated 20 January 2000 denying motion for reconsideration.
- The Court of Appeals had denied a petition for annulment of the Regional Trial Court (RTC), Angeles City, Branch 56, Decision dated 30 May 1995 in Civil Case No. 7415.
- The trial court had ordered petitioner Hermana R. Cerezo to pay respondent David Tuazon actual damages, loss of earnings, moral damages, and costs of suit.
- Final disposition by the Supreme Court: petition denied; Court of Appeals resolutions affirmed with modification on interest (6% per annum from 30 May 1995; upon finality, interest at 12% per annum until full payment).
Antecedent Facts — Accident, Complaint, and Parties
- Around noontime of 26 June 1993, a Country Bus Lines passenger bus, plate NYA 241, collided with a tricycle, plate TC RV 126, along Captain M. Palo Street, Sta. Ines, Mabalacat, Pampanga.
- On 1 October 1993, tricycle driver David Tuazon filed a complaint for damages against: Hermana R. Cerezo (owner of the bus line), Juan Cerezo (her husband, Attorney Juan Cerezo), and bus driver Danilo A. Foronda.
- Complaint allegation (verbatim substance): plaintiff was in his proper lane when defendant-driver Foronda unlawfully and negligently operated the bus despite a “Slow Down” sign, causing severe damage to the tricycle and serious physical injuries to plaintiff rendering him unable to walk and disabled, with left-hand thumb and middle finger cut.
- Tuazon filed a motion to litigate as a pauper on 1 October 1993.
- Initial summons against the Cerezo spouses at Makati address were returned unserved on 10 November 1993 because they no longer held office or resided there.
- Alias summons issued 18 April 1994 at Barangay Sta. Maria, Camiling, Tarlac; alias summons and complaint served on 20 April 1994 at Atty. Cerezo’s office (then Tarlac Provincial Prosecutor).
- Atty. Cerezo allegedly reacted angrily on learning of service, uttering an expletive and asserting territorial control (quoted in the record).
- The Cerezo spouses participated in proceedings: filing comment with motion for bill of particulars (29 April 1994) and a reply to opposition to comment with motion (13 June 1994).
- Atty. Elpidio B. Valera appeared for the Cerezo spouses and filed an urgent ex-parte motion (29 August 1994) to resolve plaintiff’s pauper motion and for issuance of new summons; the trial court, on 30 August 1994, resolved the pauper motion in favor of plaintiff and denied the request for new summons, finding any infirmity in service cured by that order.
- The trial court ordered the Cerezo spouses to file their answer (14 November 1994); they did not file an answer.
- On 27 January 1995 plaintiff moved to declare the Cerezo spouses in default; on 6 February 1995 the trial court declared them in default and authorized plaintiff to present evidence.
- Trial court did not adjudicate Foronda’s liability (no summons served on him).
- Trial court held Mrs. Cerezo liable under Article 2180 of the Civil Code for damages caused by her employee and rendered judgment on 30 May 1995 in favor of Tuazon with detailed award amounts (see “Judgment and Award” section).
- Mrs. Cerezo received a copy of the decision on 25 June 1995; on 10 July 1995 she filed a petition for relief from judgment (alleging fraud, mistake or excusable negligence).
- Testimony before trial court: Mrs. Cerezo and Atty. Valera denied receipt of notices of hearings and orders; Atty. Valera claimed engagement in election activities (8 May 1995) and that he read the decision only after Mrs. Cerezo sent him a copy.
- Trial court denied the petition for relief from judgment on 4 March 1998 (Judge Lourdes F. Gatbalite), concluding the Cerezo spouses should have appealed and failed to prove fraud, accident, mistake or excusable negligence or a good and substantial defense; noted reliance on expected settlement.
- Cerezo spouses filed certiorari in Court of Appeals (CA-G.R. SP No. 48132) challenging jurisdiction over the case for lack of service on Foronda; Court of Appeals denied certiorari by resolution dated 21 January 1999 and denied motion for reconsideration (24 February 1999).
- Petition for review to the Supreme Court (G.R. No. 137593) was denied on procedural grounds (failure to attach affidavit of service) and on merits if considered; resolution became final and executory on 28 June 1999.
- On 6 July 1999, the Cerezo spouses filed an annulment of judgment under Rule 47 in the Court of Appeals (CA-G.R. SP No. 53572) with prayer for restraining order; the petition sought annulment of the 30 May 1995 decision and preliminary injunction against execution.
- Court of Appeals dismissed the petition for annulment on 21 October 1999; denied motion for reconsideration on 20 January 2000.
- Mrs. Cerezo then filed the present petition for review (Rule 45) on 7 February 2000, with Atty. Dionisio S. Daga representing her alone.
Trial Court Judgment and Award (Dispositive Portion)
- Trial court (30 May 1995) ordered defendant Hermana Cerezo to pay plaintiff David Tuazon:
- Actual damages:
- Expenses for operation and medical treatment: P69,485.35
- Cost of repair of the tricycle: P39,921.00
- Loss of earnings: P43,300.00
- Moral damages: P20,000.00
- Costs of suit (docket fees and other expenses to be lien on judgment in favor of plaintiff)
- Actual damages:
- Trial court made no pronouncement on Foronda’s liability for lack of service of summons on him.
- Trial court did not hold Atty. Cerezo (Juan Cerezo) liable because plaintiff failed to show that Mrs. Cerezo’s business benefited the family pursuant to Article 121(3) of the Family Code.
Issues Presented by Petitioner
- Whether the Court of Appeals erred in dismissing the petition for annulment by assuming the grounds were extrinsic fraud related to the denied petition for relief, notwithstanding that petitioner’s grounds involved questions of lack of jurisdiction.
- Whether the trial court’s findings of negligence against driver Danilo Foronda (who was not summoned) and the consequent adjudication of employer liability against petitioner are null and void for want of due process.
- Whether Danilo Foronda was an indispensable party whose absence deprived the trial court of jurisdiction to render judgment.
- Whether petitioner