ST. MARTIN FUNERAL HOMES VS.

NATIONAL LABOR RELATIONS

COMMISSION AND BIENVENIDO ARCAYOS
G.R. NO. 130866
SEPTEMBER 16, 1998
 
Facts: Respondent (Arcayos) was summarily dismissed by St. Martin Funeral Homes
for misappropriating funds worth Php 38,000 which was supposed to be taxes paid to
the Bureau of Internal Revenue (BIR). Alleging that the dismissal was illegal,
respondent filed a case against St. Martin Funeral Homes in the National Labor
Relations Commission (NLRC).
Petitioner’s (St. Martin Funeral Homes) contention is that the respondent is not an
employee due to the lack of an employer-employee contract. In addition, respondent is
not listed on St. Martin’s monthly payroll.
The labor arbiter ruled in favor of petitioner, confirming that indeed, there was no
employer-employee relationship between the two and hence, there could be no illegal
dismissal in such a situation.
The respondent appealed to the secretary of NLRC who set aside the decision and
remanded the case to the labor arbiter. Petitioner filed a motion for reconsideration, but
was denied by the NLRC. Now, petitioners appealed to the Supreme Court – alleging
that the NLRC committed grave abuse of discretion.
Issue: Whether or not the petitioner’s appeal/petition for certiorari was properly filed
in the Supreme Court.
Held: No.
Historically, decisions from the NLRC were appealable to the Secretary of Labor, whose
decisions are then appealable to the Office of the President. However, the new rules do
not anymore provide provisions regarding appellate review for decisions rendered by
the NLRC.
However in this case, the Supreme Court took it upon themselves to review such
decisions from the NLRC by virtue of their role under the check and balance system
and the perceived intention of the legislative body who enacted the new rules.
“It held that there is an underlying power of the courts to scrutinize the acts of such
agencies on questions of law and jurisdiction even though no right of review is given by
statute; that the purpose of judicial review is to keep the administrative agency within
its jurisdiction and protect the substantial rights of the parties; and that it is that part of
the checks and balances which restricts the separation of powers and forestalls arbitrary
and unjust adjudications.”
The petitioners rightfully filed a motion for reconsideration, but the appeal or certiorari
should have been filed initially to the Court of Appeals – as consistent with the
principle of hierarchy of courts. As such, the Supreme Court remanded the case to the
Court of Appeals.

SALERA V A1 INVESTORS
FACTS: On August 27, 1992, Teodora Salera, mother of the petitioners, contracted a
P50,000.00 loan and issued a promissory note to respondent A-1 Investors, Inc. Salera
defaulted and A-1 filed a complaint (First Case) in the MTC, Quezon City against
Teodora and impleaded her husband, Saturnino Sr. The summons 1 Art. 5. Acts
executed against the provisions of mandatory or prohibitory laws shall be void, except
when the law itself authorizes their validity. for the said case was given by the sheriff to
the couple’s son, Samuel at the family’s residence but Samuel refused to sign receipt of
a copy thereof. Saturnino claims that he was living in Clarin, Bohol as he ran for mayor
and was elected as such in the 1995 elections. He and his wife did not receive the
summons that was sent in Cebu. Consequently, the spouses were held in default and a
decision was rendered on November 27, 1996 against the spouses. Copy of the decision
was received by a certain Joel Ariño, but Saturnino was then still residing in Bohol. The
Salera spouses did not appeal and the decision became final and executory. On April 23,
1997, Saturnino Sr.’s daughter, Sarah received a writ of execution and a notice of levy
upon Realty pursuant to writ of execution. Although Sarah was 28 years old and a
college graduate, she simply received the documents and without reading them, placed
them in her drawer without informing her parents about them, and completely forgot
about them. It was only a week after that she showed the documents to her parents The
son informed the father of the Notice to Parties of Public Auction stating that the Sheriff
will sell the Salera spouses property pursuant to a writ of execution. The property
consisted of a parcel of land covered by a TCT with an area of 405 square meters.
Saturnino filed a complaint for injunction (Second Case) with damages against A-1
investors before the RTC of Cebu city and prayed that damages be awarded in his
favor. He also prayed for a TRO and followed by a preliminary injunction (“PI”). The
RTC of Cebu granted his prayer, issuing a TRO, subsequently a PI. It gave due course to
the argument of Saturnino as he was unaware of the proceedings in the civil action; that
it was his wife who contracted the debt, not him; and that even assuming that he is
liable as well, A1 cannot levy on the family home, as it was exempt from execution.
Saturnino died and was substituted by his children. The wife waived all her inheritance
in the estate of the husband. A-1 filed a petition for certiorari and prohibition in the CA.
the Ca ruled in his favor.

Issue: Whether or not the complaint for injunction may be treated as a petition to annul
the decision in the earlier case.

RATIO: While petitioners (Salera) are correct that a complaint for injunction is a
recognized remedy to enjoin the performance of an act, which action falls within the
province of Regional Trial Courts, it must be taken into account that Saturnino, Sr.
sought to permanently enjoin the public auction of property levied pursuant to a writ of
execution issued in the First Case on the ground that he was not served with summons
and was denied due process. In doing so, Saturnino, Sr. was actually seeking the
annulment of the decision in the First Case, which was the basis of the writ of execution
pursuant to which the public auction was to be held. The proper remedy for petitioners'
predicament is therefore not an action for injunction, but for annulment of judgment. It
is thus understandable why petitioners are staunch in claiming, in hindsight, that
although the complaint filed in the RTC of Cebu was captioned "Injunction with
Damages," the allegations therein suffice to constitute an action for annulment of the
decision in the First Case for lack of due process amounting to lack of jurisdiction
and/or extrinsic fraud. The issue of whether or not the Metropolitan Trial Court of
Quezon City did not acquire jurisdiction over the person of Saturnino, Sr. in the First
Case and his exclusion from the proceedings in said case amounted to extrinsic fraud
which denied him of due process should be properly resolved in an action for
annulment of judgment Rule 47: Sec. 2. Grounds for annulment.- The annulment may
be based only on the grounds of extrinsic fraud and lack of jurisdiction. Sec. 4. Filing
and contents of petition.- The action shall be commenced by filing a verified petition
alleging therein with particularity the facts and the law relied upon for annulment, as
well as those supporting the petitioner's good and substantial cause of action or
defense, as the case may be.. . . A certified true copy of the judgment or final order or
resolution shall be attached to the original copy of the petition intended for the court
and indicated as such by the petitioner. The petitioner shall also submit together with
the petition affidavits of witnesses or documents supporting the cause of action or
defense and a sworn certification that he has not theretofore commenced any other
action involving the same issues in the Supreme Court, the Court of Appeals or
different divisions thereof, or any other tribunal or agency; if there is such other action
or proceeding, he must state the status of the same, and if he should thereafter learn
that a similar action or proceeding has been filed or is pending before the Supreme
Court, the Court of Appeals, or different divisions thereof, or any other tribunal or
agency thereof within five (5) days therefrom." It is clear from the contents of the
complaint filed by the petitioners that the action is not for annulment of the decision in
Civil Case No. 15996. It does not allege "with particularity the facts and the law relied
upon for annulment, as well as those supporting the petitioner's good and substantial
cause of action" which petitioners now claim are extrinsic fraud and lack of jurisdiction.
Neither is a certified true copy of the decision in the First Case attached to the original
copy of the petition intended for the court and indicated as such by the petitioner. Nor
were affidavits of witnesses or documents supporting the cause of action, i.e.,
annulment of judgment on the ground of lack of jurisdiction and extrinsic fraud,
submitted together with the complaint. Petitioners cannot now mislead the court into
treating the complaint for injunction as an action for annulment of judgment with the
ancillary remedy of injunction.

PIO GRANDE vs UP
YUVIENCO V. DACUYCUY (May 27, 1981)
FACTS:
Petitioners own a property in Tacloban City which they intend to sell for 6.5M. They
gave the respondents the right to purchase the property nut only until July 31, 1978.
Respondents replied that they agree to buy the property and they will negotiate for
details. Petitioner sent another telegram informing respondents that their proposal is
accepted and a contract will be prepared.

Lawyer of defendant, Mr.Gamboa, arrived bringing a contact with an altered mode of

payment which says that the balance payment should be paid withing 30 days instead
of the former 90 days. (Otiginal terms: 2M payment upon execution. 4.5M after 90 days)

ISSUE:
WON there was already a perfected contract of sale between the parties.

HELD:
There was no perfected contract of sale yet because both parties are still under
negotiation and hence, no meeting of the minds. Mr.Gamboa even went to the
respondents to negotiate for the sale. Even though there was an agreement on the terms
of payment, there was no absolute acceptance because respondents still insisted on
further details.

With regard to the alleged violation of terms of payment, there was no written
document to prove that the respondents agreed to pay not in cash but in installment. In
sale of real property, payment of installment must be in requisite of a note under the
statute of frauds.
DOCTRINE: The 90-day term for the balance of P4.5 M insisted upon by respondents
choices does not appear in any note, writing or memorandum signed by either the
petitioners or any of them, not even by Atty. Gamboa. Hence, looking at the pose of
respondents that there was a perfected agreement of purchase and sale between them
and petitioners under which they would pay in installments of P2 M down and P4.5 M
within ninety 90) days afterwards it is evident that such oral contract involving the "sale
of real property" comes squarely under the Statute of Frauds (Article 1403, No. 2(e),
Civil Code.)

Villanueva vs Viloria, GR No. 155804, Mar. 14 2008, 548 SCRA 401

FACTS: Victorino Viloria claimed that he is the owner of a parcel of land in Iba,
Zambales covered by TCT 16156; that he and his wife went to and settled in Ilocos Sur
until her wife’s death in 1995. In the same year, he discovered that the duplicate copy of
the TCT was eaten by termites. He executed an Affidavit of Loss and he applied for
reconstitution which the lower court granted.
Viloria then sold the land in 2002 and a new TCT was issued to the buyer (Ruben
Marty).
On the other hand, the spouses Villanueva were the actual occupants of the said land.
They came to know of the foregoing only in 2002. They petitioned for the annulment of
the reconstitution. They claimed that they are in possession of the duplicate copy of
TCT 16156 as well as a Deed of Sale executed in their favor by the late wife of Viloria in
1986.
ISSUE: Whether or not to annul the reconstitution of the title.

HELD: Yes. If an owner’s duplicate copy of a certificate of title has not been lost but is

in fact in possession of another person, the reconstituted title is void and the court
rendering the decision has not acquired jurisdiction. Consequently, the decision may be
attacked any time.
As there is no proof to support actual loss of the said owner’s duplicate copies of said
certificates of title, the trial court did not acquire jurisdiction and the new titles issued in
replacement thereof are void.

REPUBLIC v. TECHNOLOGICAL ADVOCATES FOR AGRO-FOREST

PROGRAMS
ASSOCIATION, GR No. 165333, 2010-02-09
Facts:
On November 27, 1995, respondent Technological Advocates for Agro-Forest Programs
Association, Inc. (TAFPA) and DENR, Regional Office (RO) No. IX, represented by its
then Regional Executive Director (RED), Cipriano B. Paet, entered into a contract[2]
for... community organizing activities, social investigation, and information education
campaign at the San Isidro Tinago Reforestation Sub-Project in Sergio Osmeña, Sr.,
Zamboanga del Norte.
On December 15, 1999, respondent filed with the RTC, Zamboanga City, a special civil
action for Mandamus with Prayer for Damages, docketed as SPL. CIVIL ACTION No.
459, praying that after notice and hearing, a writ be issued commanding the RED of the
DENR to pay respondent
P802,350.64, representing the latter's unpaid claims, P50,000.00 as moral damages,
P25,000.00 by way of attorney's fees and legal interest on the principal sum demanded.
The RTC subsequently treated the case as one for specific performance rather than an
action for mandamus,... since the allegations in the complaint clearly reflected that
respondent's cause of action was based on a contract.
Meanwhile, on January 18, 2000, Atty. Vidzfar A. Julie (Atty. Julie), entered his
appearance as counsel for DENR.
On June 8, 2000, the Office of the Solicitor General (OSG) deputized Atty. Julie as
special counsel to assist the Solicitor General in the subject case.
On March 16, 2001, the RTC rendered a Decision[12] in favor of the respondent and
against the petitioner.
On May 22, 2001, petitioner, through its deputized counsel, filed a Motion for
Reconsideration,[15] but it was denied on September 18, 2001.
On February 19, 2002, the RTC made an Entry of Final Judgment[17] stating, among
other things, that the decision dated March 16, 2001 had, on January 31, 2002, become
final and executory, there being no appeal filed by any party before any appellate court.
Respondent thus filed an urgent motion for execution with the RTC which was granted
on March 14, 2002.
Subsequently, the OSG filed a Manifestation and Motion[19] asking the RTC to set aside
the March 16, 2001 Decision on the ground of lack of due process. On May 20, 2002, the
RTC issued an Order[20] denying the motion.
Undeterred, the OSG filed a Notice of Appeal[21] dated July 23, 2002, before the RTC
raising the following issues: (1) whether or not plaintiff has a cause of action against
defendant; and (2) whether or not plaintiff is entitled to be paid his money claim...
against defendant.[22]
On December 27, 2002, the RTC issued an Order[23] disapproving the motion
Aggrieved, petitioner sought recourse before the CA via a petition for Annulment of
Judgment[25] under Rule 47 of the Rules of Court, seeking the annulment of the
decision of the RTC dated March 16, 2001, based on the following grounds: (1) That
the... action lies within the jurisdiction of the [Commission on Audit] COA and not
before the courts; (2) That private respondent did not exhaust administrative remedies
against petitioner, hence, no cause of action against petitioner; and (3) Respondent is
not entitled to be paid its... money claim against petitioner.
On September 9, 2004, the CA rendered a Decision[27] denying the petition
In denying the petition, the CA opined that the RTC acquired jurisdiction over
respondent's cause of action. The CA added that the rule on due process was not
violated as petitioner was given all the opportunity to participate in the proceedings
before the RTC, which it in fact... did, and was duly notified of all court processes,
orders, and decision.
Issues:
denying the petition for Annulment of Judgment filed by the Republic of the
Philippines,... Department of Environment and Natural Resources (DENR).
Ruling:
An action to annul a final judgment is an extraordinary remedy, which is not to be
granted indiscriminately by the court. It is a recourse equitable in character and allowed
only in exceptional cases. The reason for the restriction is to prevent this extraordinary
action from... being used by a losing party to make a complete farce of a duly
promulgated decision that has long become final and executory.[29]
Under Section 2, Rule 47 of the Rules of Civil Procedure, the only grounds for
annulment of judgment are extrinsic fraud and lack of jurisdiction. Lack of jurisdiction
as a ground for annulment of judgment refers to either lack of jurisdiction over the
person of the defending... party or over the subject matter of the claim.[30] It is absence
of, or no, jurisdiction; that is, the court should not have taken cognizance of the petition
because the law does not vest it with jurisdiction over the subject matter
It should be stressed that in a petition for annulment of judgment based on lack of
jurisdiction, petitioner must show not merely an abuse of jurisdictional discretion, but
an absolute lack of jurisdiction.
he action a quo is one for mandamus and, under Section 21 of Batas Pambansa Bilang
129, as amended, the Regional Trial Court exercises original jurisdiction in the issuance
of the writs of certiorari, prohibition, mandamus, quo warranto,... habeas corpus, and
injunction which may be enforced in any part of their regions concluded that the action
is one for specific performance and proceeded to hear it as such. In doing so, the said...
court retained jurisdiction. The same law grants the Regional Trial Courts exclusive
original jurisdiction over all cases in which the subject of the litigation is incapable of
pecuniary estimation
In this recourse, petitioner is no longer questioning the jurisdiction of the RTC based on
the above arguments. Petitioner now questions the propriety of the notice sent to the
deputized counsel of the OSG, arguing that notice to its deputized counsel is not notice
to the OSG.
Hence, absent such notice, the decision of the RTC did not become final and executory.
Moreover, the failure of the RTC to serve the OSG copies of legal notices, orders, and
judicial processes constitutes lack of due process. This Court disagrees.
Verily, it was Atty. Julie who entered his appearance as counsel for DENR on January
18, 2000 and, as such, was the counsel on record. It was only later or on June 8, 2000 that
the OSG, through Assistant Solicitor General Mariano M. Martinez, informed Atty. Julie
that the latter... had been deputized to assist the Solicitor General in the case pending
before the RTC. As such, being the counsel on record, Atty. Julie had the authority to
represent the petitioner, and it was but logical that notices of court processes sent to
him were sufficient to bind... petitioner. Thus, the CA correctly concluded that
petitioner's right to due process was not violated.
Since Atty. Julie had the authority to represent the DENR before the RTC, notices of
decision, orders, and other court processes to him as counsel on record and the duly
deputized counsel of the OSG were sufficient to bind petitioner, and both the counsel
and the OSG's failure... to appeal the decision and to avail themselves of the other
remedies provided by the Rules was likewise binding upon petitioner.

SPS. OSCAR ARCENAS AND DOLORES ARCENAS v. QUEEN CITY

DEVELOPMENT BANK, GR No. 166819, 2010-06-16
Facts:
On January 23, 2002, the spouses Dolores and Oscar Arcenas filed with the Regional
Trial Court (RTC) of Roxas City, an Action for Declaratory Relief against respondent
Queen City Development Bank, docketed as Civil Case No. V-006-01-2002, and was
raffled off to Branch 15. The
Spouses Arcenas prayed for the declaration of their rights as lessors unde
Respondent bank filed an Answer with Affirmative Defenses and Counterclaim
contending, among others, that the action for declaratory relief was not proper, since
the contract of lease had already been violated. Respondent bank counterclaimed for
the rescission of the contract of... lease, actual damages for its relocation and attorney's
fees.
the RTC dismissed the action for declaratory relief and set the hearing on respondent
bank's counterclaim for damages. The Spouses Arcenas' motion for reconsideration was
denied on June 23, 2002. Respondent bank later presented its evidence on its...
counterclaim.
On July 25, 2002, the Spouses Arcenas filed with RTC of Roxas City, another case
against respondent bank, this time for breach of the same contract of lease, docketed as
Civil Case No. V-072-07-2002 (the case subject of this petition), and was raffled off to the
same branch... where Civil Case No. 006-01-2002 was pending. The Spouses Arcenas
filed in Civil Case No. V-006-01-2002 a motion for consolidation of the two civil cases
which the RTC denied.
Respondent bank then filed in Civil Case No. V-072-07-2002 its Answer with
Affirmative Defenses and Counterclaim. The RTC then set the case for pre-trial on April
30, 2003.
The Spouses Arcenas subsequently filed their Pre-Trial Brief[4] with the proposed
amicable settlement which provided that respondent bank would continue to pay the
agreed rentals until the time the parties could find a substitute lessee. During the...
scheduled pre-trial conference, respondent bank's counsel manifested its interest in the
proposal but wanted to know the exact amount for settlement; thus, the pre-trial was
reset.[5]
On August 18, 2003, the Spouses Arcenas filed, in Civil Case No.V-006-01-2002, a
written Proposed Settlement in the amount of P1,297,514.00. Respondent bank was
asked to comment on the proposed settlement.[6]
During the September 9, 2003 pre-trial conference in Civil Case No. V-072-07-2002,
respondent bank's counsel manifested that the parties were in the process of settling the
case amicably. In an Order[7] dated September 9, 2003, the RTC ordered the resetting...
of the pre-trial conference to November 11, 2003, without prejudice to the filing of the
compromise agreement that the parties may finally execute before the scheduled pre-
trial conference.
On November 11, 2003 the date set for the continuation of the pre-trial conference in
Civil Case No. V-072-07-2002 only respondent bank's counsel was present. On
November 10, 2003, the counsel for the Spouses Arcenas filed a Motion for
Postponement of the pre-trial conference... because of conflict of schedule. Respondent
bank's counsel objected to such postponement, as he was not furnished a copy of the
motion and the filing of such motion violated the three-day notice rule on motions;
thus, he moved that the Spouses Arcenas be declared non-suited. On... the same day,
November 11, 2003, the RTC issued an Order[11] declaring the Spouses Arcenas non-
suited and set the presentation of respondent bank's evidence on its counterclaim on
January 8, 2004. The Order was received by the secretary of the Spouses'... counsel on
November 17, 2003.
On the January 8, 2004 scheduled hearing, despite due notice, the Spouses Arcenas and
their counsel failed to appear; thus, respondent bank presented evidence on its
counterclaim, rested its case and submitted the same for decision. On the same day, the
RTC issued an Order[12] submitting the case for decision. The Order was received by
the Spouses Arcenas on January 14, 2004.
On January 14, 2004, the Spouses Arcenas filed a Manifestation with Motion[13]
alleging that their failure to file a motion to reconsider the Order dated November 11,
2003, declaring them non-suited, and their failure to attend the January 8, 2004
hearing... on respondent bank's counterclaim was due to their mistaken belief that
respondent bank was earnestly seeking a settlement on both civil cases; that honest
mistake and excusable negligence were grounds for lifting an order of non-suit; thus,
they prayed that the Orders dated November 11, 2003 and January 8, 2004 be
reconsidered On March 29, 2004, the Spouses Arcenas, as petitioners, filed with the CA
a Petition for annulment of order under Rule 47 seeking to annul the November 11, 2003
Order of non-suit issued by the RTC of Roxas City, Branch 15 in Civil Case No. V-072-
07-2002 on the ground of... extrinsic fraud.
Issues:
Whether or not the Honorable Court of Appeals erred in dismissing the petition for
annulment of order filed by therein petitioners, Spouses Oscar Arcenas and Dolores
Arcenas, on the ground that they failed to take other appropriate remedies in assailing
the... questioned final order, since their inaction was not due to fault or negligence
imputable to them.
Whether or not the Honorable Court of Appeals erred in failing to appreciate the clear
existence of extrinsic fraud committed by the adverse party through its counsel, Atty.
Manuel Miraflores.
Ruling:
Section 1, Rule 47 provides that it does not allow a direct recourse to a petition for
annulment of judgment if other appropriate remedies are available, such as a petition
for new trial, appeal or a petition for relief.[17] If petitioner fails to avail of... these
remedies without sufficient justification, she cannot resort to the action for annulment
of judgment under Rule 47, for otherwise, she would benefit from her inaction or
negligence
We found no reversible error committed by the CA in dismissing the petition for
annulment of judgment.
The Spouses Arcenas were declared non-suited for failure to appear at the pre-trial
conference of Civil Case No. 072-07-2002 on November 11, 2003, and respondent bank
was allowed to present evidence on its counterclaim on January 8, 2004. Such Order
was received by the secretary... of petitioner's counsel on November 17, 2003. Petitioner
did not move to set aside the RTC's order of non-suit. While petitioner's counsel
claimed that he only learned of such Order of non-suit on December 4, 2003, yet no
motion to lift the order of non-suit was filed. Notably,... from December 4, 2003 to the
scheduled hearing on January 8, 2004, petitioner did not take any remedial action to lift
the order of non-suit when she had the opportunity to do so. In fact, petitioner and her
counsel did not also appear on the scheduled January 8, 2004 hearing... wherein
respondent bank presented evidence on its counterclaim and submitted the case for
decision.
It was only on January 14, 2004 when petitioner and her husband filed a pleading
captioned as Manifestation and Motion, wherein they prayed for the reconsideration of
the Orders dated November 11, 2003 and January 8, 2004 and for further pre-trial
conference. The RTC denied such
Manifestation and Motion in its Order dated March 9, 2004, as the same was filed
beyond the reglementary period, and such Order was received by petitioner on March
12, 2004. Petitioner then filed with the CA a Petition for annulment of order of non-suit
under Rule 47 of the
Rules of Court on the ground of extrinsic fraud. The CA denied the petition as
petitioner failed to avail of the appropriate remedies provided by the Rules to which we
agree.
Petitioner argues that when respondent bank's counsel moved for the issuance of the
Order of non-suit against her and her husband during the November 11, 2003 hearing,
extrinsic fraud was committed on them since respondent bank's counsel concealed from
the RTC that there was a... gentleman's agreement for the settlement of the subject civil
cases.
We are not persuaded.
It bears stressing that when petitioner's counsel filed the Manifestation and Motion
asking for reconsideration of the Order declaring the Spouses Arcenas non-suited, the
reason stated was honest mistake or excusable negligence. To show such mistake, he
explained that since... there was a pending negotiation for settlement in Civil Case Nos.
V-006-01-2002 and V-072-07-2002, which were both pending in the same court, and the
parties had to come up with a settlement for the hearing of Civil Case No. V-006-01-
2002 scheduled on December 4, 2004,... petitioner's counsel then asked for the
postponement of the scheduled November 11, 2003 hearing set for the pre-trial
conference of Civil Case No. V-072-07-2002 one day before the said date, because of
conflict of schedule and since he had in mind the December 4, 2003 deadline... to submit
the settlement. Notably, petitioner's counsel admitted that the date set for the
submission of settlement in Civil Case No. V-072-07-2002 was indeed November 11,
2003; and that his failure to attend the hearings and to file a motion for reconsideration
of the... declaration of petitioner as non-suited was because of his mistaken belief that
respondent bank was earnestly seeking a settlement. There was nothing in the
Manifestation and Motion which alluded the commission of extrinsic fraud to
respondent bank's counsel.
Moreover, since petitioner claimed that there was extrinsic fraud committed by
respondent bank's counsel, she could have filed a petition for relief under Rule 38
within the period provided for by the Rules of Court, but she did not. Section 2, Rule 47
clearly states that... extrinsic fraud shall not be a valid ground for annulment of order if
it was availed of, or could have been availed of, in a motion for new trial or petition for
relief. Thus, extrinsic fraud is effectively barred if it could have been raised as a ground
in an available remedial... measure.
Petitioner tries to justify her failure to avail of the appropriate remedies on a promise of
settlement. However, such promise was not an excuse for petitioner's counsel not to lift
the order of non-suit and to file a petition for relief.
Petitioner's claim that she was present when respondent bank's counsel moved for the
issuance of the order of non-suit against her was not proven by any evidence.
There was indeed a failure to show, to our satisfaction, that petitioner could not have
availed of the ordinary and appropriate remedies under the Rules. Thus, she cannot
resort to the remedy under Rule 47 of the Rules; otherwise, she would benefit from her
inaction or... negligence.
AMIHAN BUS LINES, INC., vs. ROMARS INTERNATIONAL GASES
CORPORATION, et al

G.R. No. 180819       July 5, 2010

FACTS: On February 20, 2005, at about 2:00 p.m., an almost head-on collision occurred
between respondent Romars’ gas tanker, and petitioner’s bus, along Quirino highway
in Ragay, Camarines Sur. The gas tanker was negotiating an inclined curve along Fort
Junction Norte, Ragay, Camarines Sur when it was bumped by an oncoming Amihan
Passenger Bus which suddenly took the lane of the gas tanker. Both vehicles were
damaged, but the trailer truck was a total wreck.

On July 22, 2005, respondent Romars filed a complaint, praying that judgment be
rendered ordering petitioner to pay (1) actual damages in the following
amounts: P800,000.00 for the replacement of the tractor head, andP50,000.00 per month
in unrealized net income from the time of the incident until actual payment; (2)
exemplary damages in the sum of P50,000.00; and (3) attorney’s fees in the amount
of P50,000.00. Petitioner filed its Answer with Compulsory Counterclaims, alleging that
the company had exercised the required diligence of a good father of a family in the
selection and supervision of its employees. It prayed that the complaint be dismissed
for lack of cause of action and that it be paid the following sums of money: P47,055.00
for the repair of the bus; P210,000.00 for unrealized profits incurred by
petitioner; P50,000.00 for exemplary damages; and P50,000.00 for attorney’s fees.

On January 27, 2006, a preliminary conference was held before the Branch Clerk of
Court. Plaintiff therein, through counsel, submitted its pre-trial brief. Defendant’s
representative was present, but since its counsel was not around, a continuation of the
preliminary conference was set for February 20, 2006. After the defendant submitted its
pre-trial brief, pre-trial was set for March 20, 2006.

When the case was called for pre-trial on March 20, 2006, only plaintiff’s counsel was
present. A representative of Amihan Bus Lines appeared to inform the court that the
defendant was willing to have the case amicably settled. By agreement of the parties,
pre-trial was set for March 29, 2006. On said date, only plaintiff’s counsel appeared,
prompting the court to set the case for reception of plaintiff’s evidence ex-parte on May
16, 2006. This Order was, however, reconsidered when defendant bus company
appeared with a new counsel. The latter manifested that he had recently been hired as
counsel by the bus company, and asked for a resetting. There being no objection from
the plaintiff, the court agreed to set the case anew for preliminary conference on July 3,
2006 and for pre-trial conference on July 10, 2006.On the latter date, pre-trial was reset
to August 31, 2006, where defendant’s counsel again failed to appear, prompting the
trial court to grant plaintiff’s prayer that it be allowed to present its evidence ex-parte
on October 11, 2006.
Thereafter, on December 14, 2006, defendant filed an "Entry of Appearance with Motion
to Allow Defendant to Present its Evidence," alleging that the non-appearance during
the pre-trial conference on August 31, 2006 was due to the fact that defendant was not
duly informed of the same since its counsel had withdrawn from the case.

Finding the excuse to be lame and not supported by the records, the trial court denied
the motion.

On April 17, 2007, the trial court rendered judgment in favor of the plaintiff. Based on
the evidence presented, the trial court found that defendant’s bus driver failed to take
precautionary measures, as demanded by the situation. The court said that the bus
driver decided to overtake a parked trailer along the curved lane without slowing
down, thereby hitting the oncoming tractor which was traveling on the opposite lane.

Upon motion of the plaintiff, the trial court ordered the issuance of a writ of
execution. The motion for reconsideration filed by the defendant was denied.

Recourse to the CA was made by the defendant (now petitioner), seeking to annul the
following issuances of the trial court: (1) decision dated April 17, 2007, finding
petitioner liable; (2) Order dated January 18, 2007, denying the "Entry of Appearance
with Motion to Present Evidence; and (3) Order dated June 26, 2007, granting
respondent Romars’ motion for execution. It contended that it "was prevented from
having a fair trial through extrinsic fraud."

On September 26, 2007, the CA dismissed the petition outright.

ISSUE: Whether or not the gross negligence and incompetence of petitioner’s former
counsel amount to extrinsic fraud to justify the annulment of the assailed decision of the
respondent RTC.

DECISION: The petition is devoid of merit. It is doctrinal that the fraud that will justify
annulment of a judgment is extrinsic fraud. Extrinsic fraud refers to any fraudulent act
of the prevailing party in litigation committed outside of the trial of the case, whereby
the defeated party is prevented from fully exhibiting his side of the case by fraud or
deception practiced on him by his opponent, such as by keeping him away from court,
by giving him a false promise of a compromise, or where the defendant never had the
knowledge of the suit, being kept in ignorance by the acts of the plaintiff, or where an
attorney fraudulently or without authority connives at his defeat. These instances show
that there was never a real contest in the trial or hearing of the case so that the judgment
should be annulled and the case set for a new and fair hearing.

In the instant case, none of the foregoing instances exists to justify the annulment of the
decision of the RTC. Petitioner’s contention that the failure to present its side on account
of its former counsel’s gross negligence constitutes extrinsic fraud is untenable. The
nature of extrinsic fraud necessarily requires that its cause be traceable to some
fraudulent act of the prevailing party committed outside the trial of the case. There is
extrinsic fraud when a party was prevented from having presented all of his case to the
court as when the lawyer connives at his defeat or corruptly sells out his client’s
interest.
656 Phil. 601

CARPIO MORALES, J.:

The Director of the Bureau of Lands, now Lands Management Bureau (LMB), Manila
issued on July 13, 1955 Free Patent No. V-16555 under Free Patent Application No. V-
33580 covering Lot No. 6742, Pls-296 (the lot) in the name of Marcelino Manipon
(Manipon), with an area of 5.376 hectares, located at Naujan, Oriental Mindoro.

On the basis of the free patent, the Register of Deeds of Oriental Mindoro issued on
March 5, 1957 Original Certificate of Title (OCT) No.    P-2124 in the name of Manipon.

Manipon later sold the lot to Spouses Florencio and Romelia de Castro (respondents)
who, after OCT No. P-2124 was cancelled, were issued Transfer Certificate of Title
(TCT) No. T-33730.

An investigation conducted by the representatives of LMB, Manila on the issuance of

Free Patent No. V-16555 showed that the lot is not an alienable and disposable land of
the public domain since it is within the established reservation for the exclusive use of
non-Christian tribes, now known as the Paitan Mangyan Reservation, proclaimed as
such by the Governor-General of the Philippine Islands by virtue of Proclamation No.
809 dated June 4, 1935; and that Manipon - who began occupying the lot only in 1944 as
indicated in his free patent application - and respondents had not established any right
to possess and own the lot.

Since Proclamation No. 809 has not been amended nor repealed/revoked by any
subsequent law or presidential issuance, the Republic of the Philippines (petitioner),
through the Office of the Solicitor General, [1] filed in 1998 a Complaint[2] for
"Cancellation of TCT No. T-33730 and Reversion" against Manipon and herein
respondents, as well as the Register of Deeds of Calapan, Oriental Mindoro, docketed as
Civil Case No. R-4694, which was raffled to Branch 40 of the Regional Trial Court of
Calapan City. Manipon had, at the time of the filing of the complaint, been dead for ten
years.[3]

Respondents failed to file their answer to the complaint despite receipt of summons,
hence, they were declared in default. [4]  Their "Motion To Lift Order Of Default And To
Admit Hereto Attached Answer," which alleged that their failure to answer was due to
"oversight and excusable neglect," [5] was denied for lack of merit.

Following the ex parte presentation of evidence by petitioner, the trial court rendered a

Decision[6] dated October 9, 2002 in its favor nullifying  Manipon's Free Patent No. V-
16555 and respondents' TCT No. T-33730;  ordering the reversion of the lot to the State;
and directing respondents to immediately vacate the lot and surrender their title to the
Register of Deeds of Oriental Mindoro for immediate cancellation.

No motion for reconsideration of the trial court's decision, or appeal therefrom was filed
by respondents, hence, the decision became final and executory.

On petitioner's motion, the trial court, by Order of April 29, 2004,  issued a writ of
execution on August 2, 2005.[7]  The writ was served on respondents on March 29, 2005
and implemented on July 20, 2006.[8]

On March 15, 2007, respondents filed a petition for annulment of judgment of the trial
court's decision of October 9, 2002 before the Court of Appeals (CA) on grounds that it
did not acquire jurisdiction over the person of Manipon as he had been dead when
petitioner's complaint was filed, hence,  his title to the lot - as well as respondents' title
which merely emanated from his - stays; and that the trial court's decision did not attain
finality as they did not receive a copy of its decision, hence, the execution thereof was
void.

By the now assailed Decision[9] of June 26, 2009, the appellate court denied respondents'
petition for annulment of judgment.  Finding, however, that respondents were not
served with a copy of the trial court's decision of October 9, 2002 and, therefore, it had
not yet become final and executory, the appellate court nullified the trial court's order of
April 29, 2004 granting petitioner's motion for execution, the writ of execution of
August 2, 2005, and all execution proceedings, and ordered the trial court to serve a
copy of its October 9, 2002 decision to them "so that they can avail of the appropriate
remedy under the Rules of Court."[10]

Its motion for partial reconsideration of the appellate court's decision having been
denied by Resolution[11] of September 30, 2009, petitioner filed the present petition for
review on certiorari.

Respondents maintain that they did not receive a copy of the trial court's decision of
October 9, 2002,[12] and that they came to know of it only on September 29, 2005 when
the trial court's sheriff personally served upon them a copy of the writ of execution of
the decision.[13]

Section 1, Rule 47 of the 1987 Rules of Civil Procedure provides that the remedy of
annulment of judgments or final orders/resolutions of a Regional Trial Court in civil
actions can only be availed of where "the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies are no longer available through no
fault of the petitioner."
A petition for annulment of judgment under Rule 47 is a remedy granted only under
exceptional circumstances where a party, without fault on his part, has failed to avail of
the ordinary or other appropriate remedies provided by law.  Such action is never
resorted to as a substitute for a party's own neglect in not promptly availing of the
ordinary or other appropriate remedies. [14]

Upon notice of the writ of execution on, by respondents' own information, September
29, 2005, respondents - if indeed they were completely unaware of the trial court's
decision - had available remedies to question it.  They could have promptly filed
a motion to quash the writ of execution or, in the alternative, a petition for relief from
judgment under Rule 38[15] of the 1987 Rules of Civil Procedure.  That they had ample
opportunity to do so is gathered from the fact that the writ of execution of the decision
was not immediately implemented by the sheriff as it was satisfied only on July 20,
2006.  Having failed to avail of any of the aforesaid remedies without any justification,
respondents are barred from resorting to the action for annulment of judgment under Rule
47; otherwise, they would benefit from their own inaction or negligence. So Lazaro v.
Rural Bank of Francisco Balagtas (Bulacan), Inc.[16] teaches:

Let it be stressed at the outset that before a party can avail of the reliefs provided for
by Rule 47, i.e., annulment of judgments, final orders, and resolutions, it is a
condition sine qua non that one must have failed to move for new trial in, or appeal
from, or file a petition for relief against said issuances or take other appropriate
remedies thereon, through no fault attributable to him. If he failed to avail of those
cited remedies without sufficient justification, he cannot resort to the action for
annulment provided in Rule 47, for otherwise he would benefit from his own
inaction or negligence (Republic v. Sandiganbayan, G.R. No. 140615, Feb. 19, 2001, 352
SCRA 235, 250).

In the instant case, not only did petitioner fail to avail of the ordinary and appropriate
remedies in assailing the questioned judgments of the trial court, but he also failed to
show to the satisfaction of this Court that he could not have availed of the ordinary and
appropriate remedies under the Rules.  According to petitioner, he allegedly learned
of the cases filed against him by respondent bank only when the writs of execution
were issued against him.  At the very least then, he could have moved to quash the
writs of execution.  In the alternative, he could have filed a petition for relief from
judgment under Rule 38. Instead, petitioner merely alleged that he approached Atty.
Gregorio Salazar, the bank's counsel, for clarification and assistance, which is not one of
the ordinary and appropriate remedies contemplated by the Rules. Petitioner's failure
to explain why he failed to avail of said remedies, which were still available to him at
that time, in both Civil Case No. 7355-M and Civil Case No. 2856-V-88, is fatal to his
cause.  To be sure, a petition for annulment of judgment under Rule 47 is not a
substitute for one's own neglect in not availing of the ordinary and appropriate
remedies, but a peculiar remedy granted under certain conditions to those who failed
to avail of the ordinary remedies without their fault.  Thus, in our considered view,
based on the cited reasons and circumstances, the Court of Appeals did not err when it
denied the petition for annulment of judgment. (Emphasis and underscoring supplied)

WHEREFORE, the petition for review on certiorari is GRANTED and the assailed

Court of Appeals Decision dated June 26, 2009 and Resolution dated September 30, 2009
are REVERSED and SET ASIDE, but only insofar as the Court of Appeals nullified 1)
the Order dated April 29, 2004 of the Regional Trial Court, Br, 40 of Calapan City
granting petitioner's motion for the issuance of a writ of execution, 2) the Writ of
Execution dated August 2, 2005, and all execution proceedings/actions pursuant
thereto, and 3) the trial court's order to immediately serve a copy of its Decision dated
October 9, 2002 upon respondents.

The trial court's Order dated April 29, 2004, the Writ of Execution dated August 2, 2005
and all proceedings/actions pursuant to the implementation  of  its  October 9, 2002 
Decision, are  declared in order and accordingly REINSTATED.

SO ORDERED. 

SECTION 2

BARCO VS. CA

FACTS: Private respondent Nadina Maravilla("Nadina") married Francisco

Maravilla. Later on, the spouses decided to live separately and they obtained
an ecclesiastical annulment of marriage.  Nadina gave birth to a daughter
named June Salvacio. June’s birth certificate listed Francisco Maravilla as the father but
despite of the notation of her daughter’s birth certificate, Nadina subsequently
claimed that the real father of her child was Armando Gustilo, a former
Congressman with whom she maintained a relationship. At the time of June’s birth,
Gustilo was married to Caraycong, who would later perish in the naval accident of
1981. Later, Nadina and Gustilo were married in the United States after two and a
half years of Nadina’s marriage to Francisco was alleged to have been annulled in
the Philippines. On 17 March 1983, Nadina filed in her own name a Petition for
Correction of Entries in the Certificate of Birth of her daughter June with the RTC. She
prayed that the Local Civil Registrar of Makati be directed to correct the birth
certificate of June that she will carry the surname of her alleged real father Gustilo.
Notably, Francisco affixed his signature to the Petition signifying his conformity
thereto. On 20 March 1983. Gustilo filed a "Constancia," wherein he
acknowledged June as his daughter with Nadina, and that he was posing no
objection to Nadina’s petition. On 7 September 1983, Nadina filed an
Amended Petition,12 this time impleading Francisco and Gustilo as respondents.
The Office of the Sol. Gen. filed a Motion to Dismiss the petition on the ground that the
RTC "had no jurisdiction over the subject matter”. They cited various jurisprudence
holding that only innocuous or clerical errors may be corrected under a Rule 108
petition for correction of entries. Later on Motion to dismiss was denied by the RTC
and thereafter issued an order granting the petition and ordering the
requested corrections to be effected. Gustilo died in 19 December 1986. Two
estate proceedings arose from his death. Jose Vicente Gustilo ("Jose Vicente"),
allegedly a biological child of Gustilo, he filed with the Court of Appeals a
Petition23seeking the annulment of the RTC Order of7 January 1985 which had effected
changes in the civil status of June.. After the Court of Appeals commenced
hearings on the petition, petitioner MilagrosBarco ("Barco"), on 11 January 1994, filed in
her capacity as the natural guardian and/or guardian ad litem of her daughter,
Mary Joy Ann Gustilo, a Motion for Intervention with a Complaint-in-
Intervention attached thereto. Barco alleged that Mary Joy had a legal interest in the
annulment of the RTC Order as she was likewise fathered by Gustilo. The appellate
court held that neither JoseVicente nor Barco were able to establish theexistence of lack
of jurisdiction and extrinsic fraud, the two grounds that would justify the annulment of
a final judgment.32 It ruled that while Jose Vicente and Barco had not been made
parties in the Petition for Correction, the subsequent notice and publication of the
Order setting the case for hearing served as constructive notice to all parties who might
have an interest to participate in the case. The publication of the Order conferred upon
the RTC the jurisdiction to try and decide the case Before this Court, Barco assails that
RTC Order on the ground of lack of jurisdiction.

ISSUE: 1.) W/n the court acquires jurisdiction over the parties due to the failure of
impleading Barco as a party to the petition for correction.

RULING: YES Undoubtedly, Barco is among the parties referred to in Section 3 of

Rule 108. Her interest was affected by the petition for correction, as any
judicial determination that June was the daughter of Armando would affect her
ward’s share in the estate of her father. It cannot be established whether
Nadina knew of Mary Joy’s existence at the time she filed the petition for correction.
Indeed, doubt may always be cast as to whether a petitioner under Rule 108
would know of all the parties whose interests may be affected by the granting
of a petition. For example, a petitioner cannot be presumed to be aware of
all the legitimate or illegitimate off springs of his/her spouse or paramour.
The fact that Nadina amended her petition to implead Francisco and Gustilo
indicates earnest effort on her part to comply with Section 3 as quoted above.
Yet, even though Barco was not impleaded in the petition, the Court of Appeals
correctly pointed out that the defect was cured by compliance with Section 4,
Rule 108, which requires notice by publication. The purpose precisely of Section 4,
Rule 108 is to bind the whole world to the subsequent judgment on the petition. The
sweep of the decision would cover even parties who should have been
impleaded under Section 3, Rule 108, but were inadvertently left out. Verily, a
petition for correction is an action in rem, an action against a thing and not
against aperson.46 The decision on the petition binds not only the parties
thereto47 but the whole world.48 An in rem proceeding is validated essentially
throughpublication.49 Publication is notice to the whole world that the
proceeding has for its object to bar indefinitely all who might be minded to make an
objection of any sort against the right sought to be established. It is the publication of
such notice that brings in the whole world as a party in the case and vests the court with
jurisdiction to hear and decide it.

ISSUE: 2.) W/n the court acquires jurisdiction over the nature of the action or the
subject matter.

RULING: Section 2, Rule 47 of the 1997 Rules of Civil Procedure explicitly

provides only two grounds for annulment of judgment, namely: extrinsic fraud and
lack of jurisdiction. Assuming arguendo that Nadina’s petition for correction had
prescribed and/or that the action seeking the change of name can only be filed by
the party whose name is sought to be changed, this does not alter the reality that under
the law the Makati RTC had jurisdiction over the subject matter of the petition for
correction. The Judiciary Reorganization Act of 1980, the applicable law at the time,
clearly conferred on the Makati RTC exclusive original jurisdiction in all civil
actions in which the subject of the litigation is incapable of pecuniary estimation.62 In
complementation of grant of jurisdiction, Section 1 of Rule 108 provides that the
verified petition to the cancellation or correction of any entry relating thereto should be
filed with the Court of First Instance (now Regional Trial Court) of the province where
the corresponding civil registry is located. Barco in this case posed defenses of
prescription and lack of capacity to bring action to the extent that a finding that any of
these grounds exist will be sufficient to cause the dismissal of the action. Yet, the
existence of these grounds does not oust the court from its power to decide the case.
Jurisdiction cannot be acquired through, waived, enlarged or diminished by any act or
omission of the parties. Contrariwise, lack of capacity to sue and prescriptions as
grounds for dismissal of an action may generally be rendered unavailing, if not raised
within the proper period.6It thus follows that assuming that the petition for correction
had prescribed, or that Nadina lacked the capacity to file the action which led
to the change of her daughter’s name, the fact that the RTC granted the Order
despite the existence of these two grounds only characterizes the decision as erroneous.
The RTC’s possible misappreciation of evidence( RTC erred in directing that the
name of Nadina’s daughter be changed from "June Salvacion Maravilla" to "June
Salvacion Gustilo." Following the trial court’s determination that Gustilo was thef ather
of June, but prescinding from the conclusive presumption of legitimacy for the nonce
assuming it could be done, the child would obviously be illegitimate. ) is
again at most, an error in the exercise of jurisdiction, which is different from lack
of jurisdiction. These purported errors do no textend to the competence of the
RTC to decide the matter and as such does not constitute a valid ground to
annul the final order.
SPOUSES BENATIRO vs HEIRS OF CUYOS G.R. No. 161220 July 30,
2008

FACTS: Spouses Evaristo Cuyos and Agatona Arrogante Cuyos had nine
children, namely: Francisco, Victoria, Columba, Lope, Salud, Gloria, Patrocenia,
Numeriano, and Enrique. On August 28, 1966, Evaristo died leaving six parcels of land
located in Tapilon, Daanbantayan, Cebu. Before the CFI, after filing a petition to have
herself appointed administrator, and after filing an opposition thereto, Gloria &
Fransisco, assisted by their corresponding counsels, agreed to have Gloria
appointed as administratrix of the estate & letters of administration of the estate of the
late Evaristo Cuyos were issued in favor of Mrs. Gloria Cuyos Talian after posting a
nominal bond of P1,000.00. The Clerk of Court, Atty. Taneo was appointed
to act as Commissioner to effect the agreement of the parties and to prepare the
project of partition. In his Commissioner’s report dated July 29, 1976, Atty. Taneo stated
that he issued subpoenae supplemented by telegrams to all the heirs to cause their
appearance on February 28 and 29,1976 in Tapilon, Daanbantayan, Cebu, where the
properties are located, for a conference or meeting to arrive at an agreement; that out of
the nine heirs, only respondents Gloria, Salud and Enrique Cuyos failed to attend. He
reported that those who were present agreed not to partition the properties of the estate
but instead agreed to first sell it for the sum of P40,000.00 & divide the proceeds
equally. Columba bought the properties. The CFI appointed Lope Cuyos (Cuyos)as the
new administrator of the estate based on Gloria’s absence & change of residence.
TheCourt ordered the Administratrix to execute the deed of sale after the
payment of the sumofP36,000 which shall remain in custodia legis, then divided
among the heirs after payment of necessary taxes. Cuyos executed a Deed of
Absolute Sale over the six parcels of land in favor of Columba for a
consideration of the sum of P36,000.00. Original Certificates of Titles were
issued in favor of the latter. In Feb 1998, Gloria, Patrocenia , Numeriano, Enrique &
Salud filed with the CA a petition for annulment of the order of the CFI of Cebu,
alleging that the CFI’s order was null and void and of no effect, the same being based
on a Commissioner's Report, which was patently false and irregular; that such report
practically deprived them of due process in claiming their share of their father's estate,
clearly showing that extrinsic fraud caused them to be deprived of their property. The
CA granted the petition and declared the CFI order & the Certificates of Title issued in
the name of Columba Cuyos-Benatiro null & void, hence this petition for review on
certiorari.

ISSUE: WON extrinsic fraud existed in the case at bar serving as a sufficient ground to
annul the CFI’s order.

HELD: The Court held that the CFI;s order should be annulled not on the ground of
extrinsic fraud, as there is no sufficient evidence to hold Atty. Taneo or any of the heirs
guilty of fraud, but on the ground that the assailed order is void for lack of due process.
Section 2 of Rule 47 of the Rules of Court provides that: Grounds for annulment of
judgment.— The annulment may be based only on the grounds of extrinsic fraud and
lack of jurisdiction. However, jurisprudence recognizes denial of due process as
additional ground therefor.

The veracity of Atty. Taneo’s report was doubtful. There was no evidence showing
that the heirs indeed convened for the purpose of arriving at an agreement
regarding the estate properties, since they were not even required to sign anything to
show their attendance of the alleged meeting. The Commissioner's Report, which
embodied the alleged agreement of the heirs, did not bear the signatures of the alleged
attendees to show their consent and conformity thereto. It was imperative that all the
heirs must be present in the conference and be heard to afford them the opportunity to
protect their interests. The CFI adopted and approved the Report despite the absence of
the signatures of all the heirs showing conformity thereto. The CFI's order based on a
void Commissioner's Report, is a void judgment for lack of due process. The CFI's order
being null and void may be assailed anytime, the respondents' right to due process is
the paramount consideration in annulling the assailed order. An action to declare the
nullity of a void judgment does not prescribe. Since the CFI judgment is void, it has no
legal and binding effect, force or efficacy for any purpose. In contemplation of law, it is
non-existent. Hence, the execution of the Deed of Sale by Lope in favor of Columba
pursuant to said void judgment, the issuance of titles pursuant to said Deed of Sale, and
the subsequent transfers are void ab initio. The petition was denied.

CITY GOVERNMENT OF TAGAYTAY

VS

GUERRERO

G.R. Nos. 140743 &140745, September 17, 2009

This is a petition for review on certiorari of the decision of the CA.

FACTS:

Tagaytay-Taal Tourist Development Corporation (TTTDC) is the registered owner of

two parcels of land. It incurred real estate tax liabilities on the said properties for the tax
years 1976 to 1983. For failure of TTTDC to settle its delinquent real estate tax
obligations, the City Government of Tagaytay offered the properties for sale at a public
auction. Being the only bidder, a certificate of sale was executed in favor of the City of
Tagaytay and was correspondingly inscribed on the titles of the properties . The City of
Tagaytay filed an unnumbered petition for entry of new certificates of title in its favor
before the Regional Trial Court (RTC) of Cavite. RTC granted the petition. The TTTDC
appealed to the CA. The subject properties were later purchased by Amuerfina
Melencio-Herrera and Emiliana Melencio-Fernando (Melencios) for the amount
equivalent to the taxes and penalties due to the same. Meanwhile, during the pendency
of the case before the CA, TTTDC filed a petition for nullification of the public auction
involving the disputed properties on the ground that the properties were not within the
jurisdiction of the City of Tagaytay and thus, beyond its taxing authority. On the other
hand, the City of Tagaytay averred that based on its Charter, said properties are within
its territorial jurisdiction. The RTC denied this motion.

ISSUE:

WON the City of Tagaytay is liable for damages when it levied real estate taxes on the
subject properties

HELD:

YES. It is basic that before the City of Tagaytay may levy a certain property for sale due
to tax delinquency, the subject property should be under its jurisdiction. Nonetheless,
the failure of the city officials in this case to verify if the property is within its
jurisdiction before levying taxes on the same constitutes gross negligence. The
negligence of its officers in the performance of their official functions gives rise to a an
action ex contractu and quasi ex-delictu. Under the doctrine of respondeat superior, the
City of Tagaytay is liable for all the necessary and natural consequences of the negligent
acts of its city officials. It is liable for the tortious acts committed by its agents who sold
the properties to the Melencios despite the clear mandate of RA No 1418, separating
Barrio Birinayan from its jurisdiction and transferring the same to the Province of
Batangas. Decision affirmed with modification.

CASE DIGEST: MAXIMINA A. BULAWAN v. EMERSON B. AQUENDE. (G.R. No.

182819; June 22, 2011).

FACTS: On 1 March 1995,Bulawan filed a complaint for annulment of

title,reconveyanceand damages against Lourdes Yap (Yap) and the Register of Deeds
before the trial court docketed as Civil Case No. 9040.Bulawan claimed that she is the
owner of Lot No. 1634-B of Psd-153847 covered by Transfer Certificate of Title (TCT)
No. 13733 having bought the property from its owners, brothers Santos and
FranciscoYaptengco(Yaptengco brothers), who claimed to have inherited the property
from Yap Chin Cun. Bulawan alleged that Yap claimed ownership of the same property
and caused the issuance of TCT No. 40292 in Yaps name.

In her Answer, Yap clarified that she asserts ownership of Lot No. 1634-A of Psd-
187165, which she claimed is the controlling subdivision survey for Lot No. 1634. Yap
also mentioned that, in Civil Case No. 5064, the trial court already declared that Psd-
153847 was simulated by the Yaptengco brothers and that their claim on Lot No. 1634-B
was void. The trial court likewise adjudged Yap Chin Cunas the rightful owner of Lot
No. 1634-B. Yap also stated that Lot No. 1634-B was sold by Yap Chin Cunto the
Aquende family. On 26 November 1996, the trial court ruled in favor of Bulawan. Yap
appealed. On 20 July 2001, the Court of Appeals dismissed Yaps appeal. On 7 February
2002, the trial courts 26 November 2006 Decision became final and executory per entry
of judgment dated 20 July 2001. On 19 July 2002, the trial court issued a writ of
execution.

In a letter dated 24 July 2002, the Register of Deeds informed Aquende of the trial courts
writ of execution and required Aquende to produce TCT No. 40067 so that a
memorandum of the lien may be annotated on the title. On 25 July 2002,Aquende wrote
a letter to the Register of Deeds questioning the trial courts writ of execution against his
property. Aquende alleged that he was unaware of any litigation involving his property
having received no summons or notice thereof, nor was he aware of any adverse claim
as no notice of lis pendens was inscribed on the title.

On 2 August 2002,Aquende filed a Third Party Claim against the writ of execution
because it affected his property and, not being a party in Civil Case No. 9040, he argued
that he is not bound by the trial courts 26 November 1996 Decision. In a letter dated 5
August 2002,the Clerk of Court said that a Third Party Claim was not the proper
remedy because the sheriff did not levy upon or seize Aquende's property. Moreover,
the property was not in the sheriffs possession and it was not about to be sold by virtue
of the writ of execution.

Aquende then filed a Notice of Appearance with Third Party Motion and prayed for the
partial annulment of the trial courts 26 November 1996 Decision, specifically the portion
which ordered the cancellation of Psd-187165 as well as any other certificate of title
issued pursuant to Psd-187165.Aquende also filed a Supplemental Motion where he
reiterated that he was not a party in Civil Case No. 9040 and that since the action was in
personam or quasi in rem, only the parties in the case are bound by the decision.

In its 19 February 2003 Order, the trial court denied Aquende’s motions. According to
the trial court, it had lost jurisdiction to modify its 26 November 1996 Decision when the
Court of Appeals affirmed said decision.

Thereafter, Aquende filed a petition for annulment of judgment before the Court of
Appeals on the grounds of extrinsic fraud and lack of jurisdiction. The Court of Appeals
ruled in favor of Aquende.

ISSUE: Did the CA err in taking cognizance of the petition for annulment of judgment?

HELD: In a petition for annulment of judgment, the judgment may be annulled on the
grounds of extrinsic fraud and lack of jurisdiction. Fraud is extrinsic where it prevents a
party from having a trial or from presenting his entire case to the court, or where it
operates upon matters pertaining not to the judgment itself but to the manner in which
it is procured. The overriding consideration when extrinsic fraud is alleged is that the
fraudulent scheme of the prevailing litigant prevented a party from having his day in
court. On the other hand, lack of jurisdiction refers to either lack of jurisdiction over the
person of the defending party or over the subject matter of the claim, and in either case
the judgment or final order and resolution are void. Where the questioned judgment is
annulled, either on the ground of extrinsic fraud or lack of jurisdiction, the same shall
be set aside and considered void.

In his petition for annulment of judgment, Aquende alleged that there was extrinsic
fraud because he was prevented from protecting his title when Bulawan and the trial
court failed to implead him as a party. Bulawan also maintained that the trial court did
not acquire jurisdiction over his person and, therefore, its 26 November 1996 Decision is
not binding on him. In its 26 November 2007 Decision, the Court of Appeals found
merit in Aquende's petition and declared that the trial court did not acquire jurisdiction
over Aquende, who was adversely affected by its 26 November 1996 Decision. We find
no error in the findings of the Court of Appeals.

Moreover, annulment of judgment is a remedy in law independent of the case where

the judgment sought to be annulled was rendered. Consequently, an action for
annulment of judgment may be availed of even if the judgment to be annulled had
already been fully executed or implemented.

Therefore, the Court of Appeals did not err when it took cognizance of Aquende's
petition for annulment of judgment and overturned the trial courts 26 November 1996
Decision even if another division of the Court of Appeals had already affirmed it and it
had already been executed. DENIED.

RULE 51, SECTION 5

[G.R. No. 143686.  January 15, 2002]

PHILIPPINE AIRLINES, INC., petitioner, vs. AIRLINE PILOTS ASSOCIATION OF
THE PHILIPPINES, respondent.

FACTS

Petitioner PAL unilaterally retired airline pilot Captain Albino Collantes under Section
2, Article VII, of the 1967 PAL-ALPAP Retirement Plan. Contending that the retirement
of Captain Collantes constituted illegal dismissal and union busting, ALPAP filed a
Notice of Strike with the Department of Labor and Employment (DOLE).  Pursuant to
Article 263 (g) of the Labor Code, the Secretary of the DOLE assumed jurisdiction over
the labor dispute. On June 13, 1998, the Secretary issued the assailed order upholding
PAL’s action of unilaterally retiring Captain Collantes and recognizing the same as a
valid exercise of its option under Section 2, Article VII, of the 1967 PAL-ALPAP
Retirement Plan.  The Secretary further ordered that the basis of the computation of
Captain Collantes’ retirement benefits should be Article 287 of the Labor Code (as
amended by Republic Act No. 7641) and not Section 2, Article VII, of the PAL-ALPAP
Retirement Plan.  The Secretary added that in the exercise of its option to retire pilots,
PAL should first consult the pilot concerned before implementing his retirement.
ISSUE
1. Whether or not the Article 287 of the Labor Code should be the basis of the
computation of Capt. Collantes’ retirement benefits.
2. Whether or not the Secretary can compel the company to consult the pilot
concerned before retirement is implemented.

HELD IN #1

The SC held that it is the PAL-ALPAP Retirement Plan that should be the basis of the
computation of retirement benefits.

The pertinent provision of the 1967 PAL-ALPAP Retirement Plan states:

SECTION 1.  Normal Retirement.  (a) Any member who completed twenty (20) years of
service as a pilot for PAL or has flown 20,000 hours for PAL shall be eligible for normal
retirement.  The normal retirement date is the date on which he completes twenty (20)
years of service, or on which he logs his 20,000 hours as a pilot for PAL.  The member
who retires on his normal retirement shall be entitled to either (a) a lump sum payment
of P100,000.00 or  (b) to such termination pay benefits to which he may be entitled to
under existing laws, whichever is the greater amount.

SECTION 2. Late Retirement.  Any member who remains in the service of the Company
after his normal retirement date may retire either at his option or at the option of the
Company and when so retired he shall be entitled either (a) to a lump sum payment of
P5,000.00 for each completed year of service rendered as a pilot, or (b) to such
termination pay benefits to which he may be entitled under existing laws, whichever is
the greater amount.

A pilot who retires after twenty years of service or after flying 20,000 hours would still
be in the prime of his life and at the peak of his career, compared to one who retires at
the age of 60 years old.  Based on this peculiar circumstance that PAL pilots are in, the
parties provided for a special scheme of retirement different from that contemplated in
the Labor Code.  Conversely, the provisions of Article 287 of the Labor Code could not
have contemplated the situation of PAL’s pilots.  Rather, it was intended for those who
have no more plans of employment after retirement, and are thus in need of financial
assistance and reward for the years that they have rendered service.

In any event, petitioner contends that its pilots who retire below the retirement age of
60 years not only receive the benefits under the 1967 PAL-ALPAP Retirement Plan but
also an equity of the retirement fund under the PAL Pilots’ Retirement Benefit Plan,
entered into between petitioner and respondent on May 30, 1972.
The PAL Pilots’ Retirement Benefit Plan is a retirement fund raised from contributions
exclusively from petitioner of amounts equivalent to 20% of each pilot’s gross monthly
pay.  Upon retirement, each pilot stands to receive the full amount of the contribution. 
In sum, therefore, the pilot gets an amount equivalent to 240% of his gross monthly
income for every year of service he rendered to petitioner.  This is in addition to the
amount of not less than P100,000.00 that he shall receive under the 1967 Retirement
Plan.
On the other hand, Article 287 of the Labor Code only mandates the employers, in the
absence of a retirement plan to pay retirement pay equivalent to at least one-half (1/2)
month salary for every year of service, a fraction of at least six (6) months being
considered as one whole year.

In short, the retirement benefits that a pilot would get under the provisions of the
above-quoted Article 287 of the Labor Code are less than those that he would get under
the applicable retirement plans of petitioner.

HELD IN #2

The SC held that such additional requirement would constitute as amendment to the
PAL-ALPAP Retirement Plan. The option of an employer to retire its employees is
recognized as valid.

Retirement of an employee may be done upon initiative and option of the management.
And where there are cases of voluntary retirement, the same is effective only upon the
approval of management.  There should be no unfair labor practice committed by
management if the retirement of private respondents were made in accord with the
agreed option. 

Surely, the requirement to consult the pilots prior to their retirement defeats the
exercise by management of its option to retire the said employees.  It gives the pilot
concerned an undue prerogative to assail the decision of management.  Due process
only requires that notice be given to the pilot of petitioner’s decision to retire him. 
Hence, the Secretary of Labor overstepped the boundaries of reason and fairness when
he imposed on petitioner the additional requirement of consulting each pilot prior to
retiring him.

Petition is granted.

So vs FoodFest, G.R. 183268, April 7, 2010

Applicable Provision of the Civil Code: Article 1181

CARPIO MORALES, J.

 Facts: Food Fest Land Inc. (Food Fest) entered into a Contract of Lease with Daniel T.
So (So) over a commercial space in San Antonio Village, Makati City for a period of
three years on which Food Fest intended to operate a Kentucky Fried Chicken carry out
branch. The parties entered into a preliminary agreement, the pertinent portion of
which stated:
The lease shall not become binding upon us unless and until the government agencies
concerned shall authorize, permit or license us to open and maintain our business at the
proposed Lease Premise. In such case, the agreement may be canceled and all rights and
obligations hereunder shall cease.

While Food Fest was able to secure the necessary licenses and permits for the first
year(1999), it failed to commence business operations. For the year 2000, Food Fest’s
application for renewal of barangay business clearance was held in abeyance. Food Fest
communicated its intent to terminate the lease contract to So who, however, did not
accede and instead offered to help Food Fest secure authorization from the barangay. In
August 2000, Food Fest, for the second time, purportedly informed So of its intent to
terminate the lease, and it in fact stopped paying rent. So reiterated his offer to help it
secure clearance from the barangay. Food Fest demurred to the offer. So demanded
payment of rentals from Food Fest from September 2000 to March 2001. Food Fest
denied any liability, however, and started to remove its fixtures and equipment from
the premises. On April 2, 2001, So sent Food Fest a Final Notice of Termination with
demand to pay and to vacate

On April 26, 2001, So filed a complaint for ejectment and damages against Food Fest
before the (MeTC) ofMakatiCity.

Ruling of the Court: MeTC rendered judgment in favor of So.

On appeal, the Regional Trial Court (RTC) reversed the MeTC Decision.

On petition for review, the Court of Appeals declared that Food Fest’s
obligation to pay rent was not extinguished upon its failure to secure
permits to operate.

Issue: Whether or not the acquisition of subsequent business permits etc. is a suspensive
condition to the lease contract making the obligation not binding to the parties upon not
acquiring such documents?

Held: Food Fest claims that its failure to secure the necessary business permits and
licenses rendered the impossibility and non-materialization of its purpose in entering
into the contract of lease, in support of which it cites the earlier-quoted portion of the
preliminary agreement of the parties. It is clear that the condition set forth in the
preliminary agreement pertains to the initial application of Food Fest for the permits,
licenses and authority to operate. It should not be construed to apply to Food Fest’s
subsequent applications.

The cause or essential purpose in a contract of lease is the use or enjoyment of a thing. A
party’s motive or particular purpose in entering into a contract does not affect the
validity or existence of the contract; an exception is when the realization of such motive
or particular purpose has been made a condition upon which the contract is made to
depend. The exception does not apply here. 

Food Fest was able to secure the permits, licenses and authority to operate when the
lease contract was executed. Its failure to renew these permits, licenses and authority
for the succeeding year, does not, however, suffice to declare the lease functus officio, nor
can it be construed as an unforeseen event to warrant the application of Article 1267.

 Contracts, once perfected, are binding between the contracting parties. Obligations
arising therefrom have the force of law and should be complied with in good faith.
Food Fest cannot renege from the obligations it has freely assumed when it signed the
lease contract.

G.R. No. 179675 June 8, 2011

SPOUSES JUANITO MAHUSAY and FRANCISCA MAHUSAY, Petitioners,
vs.
B.E. SAN DIEGO, INC., Respondent.

Facts:
Petitioner spouses Juanito and Francisca Mahusay purchased several lots in Aurora
Subdivision, Malabon, Metro Manila, owned by respondent B.E. San Diego, Inc. The
transactions were covered by two contracts: Contract to Sell No. 8312 executed on May
14, 1973, for the total price of ₱33,000.00; and Contract to Sell No. 8743 dated August 1,
1975, for the price of ₱197,040.00, plus interest of 12% per annum, payable in monthly
installments.
Due to petitioners’ nonpayment of the monthly amortizations, respondent was
constrained to file a case for cancellation of contracts. The case was dismissed by the
trial court for lack of jurisdiction. Thereafter, a Compromise Agreement was entered
into by the parties that petitioner will pay respondent the remaining balance of the
purchase price of all the lots, however, petitioner failed to comply, thus, a Complaint
for Specific Performance at RTC was filed and ruled ordering petitioners to comply
with the provisions of the Compromise Agreement, and to pay the amounts of
₱1,000,000.00 as actual damages and ₱50,000.00 as attorney’s fees.
Petitioners appealed the decision to the CA on two grounds:
(1) it was the Housing and Land Use Regulatory Board and not the RTC which had
jurisdiction over the subject matter of the action; and
(2) the Compromise Agreement was unenforceable because it was only Francisca
Mahusay who signed the Agreement on October 13, 1989, without the consent of her
husband Juanito Mahusay.
CA upheld the jurisdiction of the RTC that the action was one for Specific Performance
with Damage which should be litigated in the regular court. Besides, petitioners were
estopped from questioning the court’s jurisdiction since, by the act of filing an answer
and other pleadings, they were deemed to have submitted themselves to the
jurisdiction of the court.
The CA, however, saw merit in the contention that the Compromise Agreement dated
October 13, 1989 was not valid considering that it was entered into by petitioner
Francisca Mahusay alone. Since the Agreement involved the conjugal properties of
petitioners, Francisca could not bind her husband, who never gave his consent to the
Agreement.
Respondent filed a Motion for Clarification of the CA Decision re inclusion of the
penalties and interest in the computation of unpaid amortizations which CA issued a
Resolution that includes the payment of all penalties and interest due on the unpaid
amortizations, under the two Contract to Sell.
Petitioners filed a Motion to Delete and Withdraw the Resolution for the Amendment
and Modification of Original Decision because the Motion for Clarification was not
intended to clarify but to amend the Decision to include the 12% interest/penalty per
annum in the amortizations. That the inclusion of 12% interest per annum is a very
serious and material amendment, because under the original Decision, petitioners
would only required to pay P352,992.00, for the unpaid amortizations for the said lots;
while in the Amended Decision, they would be liable for ₱5,175,688.59. CA denied
petitioners Motion for lack of merit because it only clarified the Resolution filed by
respondent.

Issue:
Whether or not CA Resolution unduly expanded and amended its final and
executory Decision in gross violation.

Ruling:
No. Settled rule is that a judgment which has acquired finality becomes immutable and
unalterable; hence, it may no longer be modified in any respect except only to correct
clerical errors or mistakes. Clarification after final judgment is, however, allowed when
what is involved is a clerical error, or not a correction of an erroneous judgment, or
dispositive portion of the Decision. Where there is an ambiguity caused by an omission
or mistake in the dispositive portion, the court may clarify such ambiguity, mistake, or
omission by an amendment; and in so doing, it may resort to the pleadings filed by the
parties, the court’s findings of facts and conclusions of law as expressed in the body of
the decision.
In the case at bar, there is no dispute that, in 1973 and 1975, petitioners entered into two
Contracts to Sell with respondent, respectively for the purchase of several lots.
Petitioners’ obligation to pay the purchase price for the lots was never denied.
Accordingly, the contractual stipulation that petitioners shall pay the monthly
amortizations is binding and enforceable. It is the law between the parties.
Respondent’s Motion for Clarification did not really partake of the nature of a motion
for reconsideration, as to amend the December 20, 2001 Decision. There was nothing
substantial to vary, considering that the issues between the parties were deemed
resolved and laid to rest. It is unmistakably clear that petitioners do not deny the
execution of the Contracts to Sell and, in fact, admit their liability for the unpaid
amortizations of the lots purchased. The persistent violations of the contracts and the
continuous delay in petitioners’ payments cannot simply be overlooked. There was a
compelling reason for the CA to clarify its original Decision to include the payment of
all penalties and interest due on the unpaid amortizations, as provided in the contracts.
Considering that the validity of the contracts was never put in question, and there is
nothing on record to suggest that the same may be contrary to law, morals, public
order, or public policy, there is nothing unlawful in the stipulation requiring the
payment of interest/penalty at the rate agreed upon in the contract of the parties.
The Court further noted that petitioners are in actual/physical possession of the
properties and enjoying the beneficial use thereof, despite the payment of only
₱133,872.76, as of January 30, 1979. It would be grossly unfair for respondent to be
deprived of the amount it would have received from the sale of their properties, while
petitioners benefited from the use and continued possession of the properties even if no
payments were made by them since October 1978. It is a basic rule in law that no one
shall unjustly enrich oneself at the expense of another. Indeed, to allow petitioners to
keep the properties without paying for them in full amounts to unjust enrichment on
their part. The fair market value of the land has tremendously increased over the past
years. It is, therefore, just, fair, and equitable that petitioners be made to pay
interest/penalty for the delay in their payments.
Undeniably, the instant case is a sale of real property where the purchase price is not
paid in full. The unpaid seller’s remedy is either an action to collect the balance or to
rescind the contract within the time allowed by law. Since rescission is no longer an
option considering that petitioners have been in possession of the properties for a
considerable period of time, substantial justice dictates that respondent be entitled to
receive the unpaid balance of the purchase price, plus legal interest thereon.

SECTION 8
13. Multi Realty Development Corp v Makati Tuscany Condominium Corp
G.R. No. 146726
June 16, 2006
By: Danielle Casipit
_____________________________________________________________________
Topic: Acquisitive prescription; tacking; extinctive prescription
Petitioner: Multi Realty Devt Corp
Respondent: Makati Tuscany
_____________________________________________________________________
 RECIT-READY:

Doctrine: When there is no special provision which ordains otherwise, the time for
prescription of all actions shall be counted from the day they may be brought.

Facts:
 Petitioner is a real estate developer and constructed the Makati Tuscany
Condominium
 Respondent is a corporation established to manage the condominium units
 270 parking slots were made, 164 allotted
 98 units were left retained by petitioner to be put on sale to unit owners who
would want more parking
 The Master Deed and Declaration of Restrictions did not reflect or specify the
ownership of the 98 parking slots. Nevertheless, petitioner sold 26 of them to
unit buyers in 1977-1986
 SEC. 5. Accessories to Units. To be considered as part of each unit and reserved
for the exclusive use of its owner are the balconies adjacent thereto and the
parking lot or lots which are to be assigned to each unit. 
SEC. 7. The Common Areas. The common elements or areas of the Makati
Tuscany shall comprise of all the parts of the project other than the units,
including without limitation the following: 
(d) All driveways, playgrounds, garden areas and PARKING AREAS OTHER
THAN THOSE ASSIGNED TO EACH UNIT UNDER SEC. 5 ABOVE 
 Respondent did not object, and Certificates of Title were issued
 In September 1989, Multi-Realty, through its President, Henry Sy, who was also a
member of the Board of Directors of MATUSCO, requested that two Multi-Realty
executives be allowed to park their cars in two of Makati Tuscanys remaining 72
unallocated parking slots 
 In a letter, through its counsel, MATUSCO denied the request, asserting, for the
first time, that the remaining unallocated parking slots were common areas
owned by it
 On April 26, 1990, Multi-Realty filed a complaint against MATUSCO for
Damages and/or Reformation of Instrument with prayer for temporary
restraining order and/or preliminary injunction 
 Petitioner alleged they had retained ownership of the 98 parking lots, however
was not specified in Sec 7 (d)
 In its Answer, respondent alleged that petitioner had no COA against it for
reformation of their contract. By its own admission, petitioner had sold various
parking slots to third parties despite its knowledge that the parking areas, other
than those mentioned in Sec. 5 of the Master Deed belonged to respondent
 Trial Court dismissed, on the ground that petitioner failed to prove any ground
for the reformation of its agreement with respondent relative to the ownership of
 the common areas. There is no evidence on record to prove that the respondent
had acted fraudulently.
 CA Dismissed on ground of prescription

Issue: W/N CA erred in dismissing petitioner’s appeal on ground of prescription

Held: YES
 Petitioner asserts that under the New Civil Code, its action for reformation of the
Master Deed accrued only in 1989, when respondent, by overt acts, made known
its intention not to abide by their true agreement; since the complaint below was
filed in 1990, the action was filed within the prescriptive period therefor
 In this case, petitioner executed the Master Deed in 1975. However, petitioner
had no doubt about its ownership of the unassigned parking lots, and even sold
some of them.
 Respondent did not even object to these sales, and even offered to buy some of
the parking slots.
 Respondent assailed petitioner’s ownership only in 1989 and claimed ownership
of the unassigned parking slots, and it was then that petitioner discovered the
error in the Master Deed; the dispute over the ownership of the parking slots
thereafter ensued.
 It was only then that petitioner’s cause of action for a reformation for a
reformation of the Master Deed accrued. Since petitioner filed its complaint in
1990, the prescriptive period had not yet elapsed.
 Article 1150 of the NCC provides that the time for prescription of all actions,
when there is no special provision which ordains otherwise, shall be counted
from the day they may be brought. It is the legal possibility of bringing the action
that determines the starting point for the computation of the period of
prescription.