Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=81088:gr-173559-2013&catid=1566&Itemid=566
Timestamp: 2019-04-19 10:58:52+00:00

Document:
G.R. No. 173559 - Leticia Diona, rep. by her attorney-in-fact, Marcelina Diona v. Romeo A. Balangue, Sonny A. Balangue, Reynaldo A. Balangue, and Esteban A. Balangue, Jr.
LETICIA DIONA, represented by her Attorney-in-Fact, MARCELINA DIONA, Petitioner, v.ROMEO A. BALANGUE, SONNY A. BALANGUE, REYNALDO A. BALANGUE, and ESTEBAN A. BALANGUE, JR., Respondent.
The great of a relief neither sought by the party in whose favor it was given not supported by the evidence presented violates the opposing partys right to due process and may be declared void ab initio in a proper proceeding.
This Petition for Review on Certiorari1 assails the November 24, 2005 Resolution2 of the Court of Appeals (CA) issued in G.R. SP No. 85541 which granted the Petition for Annulment of Judgment3 filed by the respondents seeking to nullify that portion of the October 17, 2000 Decision4 of the Regional Trial Court (RTC), Branch 75, Valenzuela City awarding petitioner 5% monthly interest rate for the principal amount of the loan respondent obtained from her.
This Petition likewise assails the CAs June 26, 2006 Resolution5 denying petitioners Motion for Reconsideration.
The facts of this case are simple and undisputed.
(a) To pay petitioner the principal obligation of P45,000.00, with interest thereon at the rate of 12% per annum, from 02 March 1991 until the full obligation is paid.
(b) To pay petitioner actual damages as may be proven during the trial but shall in no case be less than P10,000.00; P25,000.00 by way of attorneys fee, plus P2,000.00 per hearing as appearance fee.
(c) To issue a decree of foreclosure for the sale at public auction of the aforementioned parcel of land, and for the disposition of the proceeds thereof in accordance with law, upon failure of the respondents to fully pay petitioner within the period set by law the sums set forth in this complaint.
Ruling of the RTC sought to be annulled.
Subsequently, petitioner filed a Motion for Execution,13 alleging that respondents did not interpose a timely appeal despite receipt by their former counsel of the RTCs Decision on November 13, 2000. Before it could be resolved, however, respondents filed a Motion to Set Aside Judgment14 dated January 26, 2001, claiming that not all of them were duly served with summons. According to the other respondents, they had no knowledge of the case because their co-respondent Sonny did not inform them about it. They prayed that the RTCs October 17, 2000 Decision be set aside and a new trial be conducted.
But on March 16, 2001, the RTC ordered15 the issuance of a Writ of Execution to implement its October 17, 2000 Decision. However, since the writ could not be satisfied, petitioner moved for the public auction of the mortgaged property,16 which the RTC granted.17 In an auction sale conducted on November 7, 2001, petitioner was the only bidder in the amount of P420,000.00. Thus, a Certificate of Sale18 was issued in her favor and accordingly annotated at the back of TCT No. V-12296.
Respondents then filed a Motion to Correct/Amend Judgment and To Set Aside Execution Sale19 dated December 17, 2001, claiming that the parties did not agree in writing on any rate of interest and that petitioner merely sought for a 12% per annum interest in her Complaint. Surprisingly, the RTC awarded 5% monthly interest (or 60% per annum) from March 2, 1991 until full payment. Resultantly, their indebtedness inclusive of the exorbitant interest from March 2, 1991 to May 22, 2001 ballooned from P124,400.00 to P652,000.00.
Indeed, We are convinced that the Trial Court exceeded its jurisdiction when it granted 5% monthly interest instead of the 12% per annum prayed for in the complaint. However, the proper remedy is not to amend the judgment but to declare that portion as a nullity. Void judgment for want of jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any obligation (Leonor v. CA, 256 SCRA 69). No legal rights can emanate from a resolution that is null and void (Fortich v. Corona, 312 SCRA 751).
From the foregoing, the remedy of the respondents is to have the Court declare the portion of the judgment providing for a higher interest than that prayed for as null and void for want of or in excess of jurisdiction. A void judgment never acquire[s] finality and any action to declare its nullity does not prescribe (Heirs of Mayor Nemencio Galvez v. CA, 255 SCRA 672).
WHEREFORE, foregoing premises considered, the Petition having merit, is hereby GIVEN DUE COURSE. Resultantly, the challenged May 7, 2002 and September 5, 2000 orders of Public Respondent Court are hereby ANNULLED and SET ASIDE for having been issued with grave abuse of discretion amounting to lack or in excess of jurisdiction. No costs.
Taking their cue from the Decision of the CA in the special civil action for certiorari, respondents filed with the same court a Petition for Annulment of Judgment and Execution Sale with Damages.26 They contended that the portion of the RTC Decision granting petitioner 5% monthly interest rate is in gross violation of Section 3(d) of Rule 9 of the Rules of Court and of their right to due process. According to respondents, the loan did not carry any interest as it was the verbal agreement of the parties that in lieu thereof petitioners family can continue occupying respondents residential building located in Marulas, Valenzuela for free until said loan is fully paid.
The judgment debt adjudicated in public respondents impugned October 17, 2000 judgment is, likewise, ordered RECOMPUTED at the rate of 12% per annum from March 2, 1991. No costs.
I. THE HONORABLE COURT OF APPEALS COMMITTED GRAVE AND SERIOUS ERROR OF LAW WHEN IT GRANTED RESPONDENTS PETITION FOR ANNULMENT OF JUDGMENT AS A SUBSTITUTE OR ALTERNATIVE REMEDY OF A LOST APPEAL.
Petitioner claims that the CA erred in partially annulling the RTCs October 17, 2000 Decision. She contends that a Petition for Annulment of Judgment may be availed of only when the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of the claimant. In the present case, however, respondents had all the opportunity to question the October 17, 2000 Decision of the RTC, but because of their own inaction or negligence they failed to avail of the remedies sanctioned by the rules. Instead, they contented themselves with the filing of a Motion to Set Aside Judgment and then a Motion to Correct/Amend Judgment and to Set Aside Execution Sale.
Petitioner likewise argues that for a Rule 47 petition to prosper, the same must either be based on extrinsic fraud or lack of jurisdiction. However, the allegations in respondents Rule 47 petition do not constitute extrinsic fraud because they simply pass the blame to the negligence of their former counsel. In addition, it is too late for respondents to pass the buck to their erstwhile counsel considering that when they filed their Motion to Correct/Amend Judgment and To Set Aside Execution Sale they were already assisted by their new lawyer, Atty. Reynaldo A. Ruiz, who did not also avail of the remedies of new trial, appeal, etc. As to the ground of lack of jurisdiction, petitioner posits that there is no reason to doubt that the RTC had jurisdiction over the subject matter of the case and over the persons of the respondents.
While conceding that the RTC patently made a mistake in awarding 5% monthly interest, petitioner nonetheless invokes the doctrine of immutability of final judgment and contends that the RTC Decision can no longer be corrected or modified since it had long become final and executory. She likewise points out that respondents received a copy of said Decision on November 13, 2000 but did nothing to correct the same. They did not even question the award of 5% monthly interest when they filed their Motion to Set Aside Judgment which they anchored on the sole ground of the RTCs lack of jurisdiction over the persons of some of the respondents.
Respondents do not contest the existence of their obligation and the principal amount thereof. They only seek quittance from the 5% monthly interest or 60% per annum imposed by the RTC. Respondents contend that Section (3)d of Rule 9 of the Rules of Court is clear that when the defendant is declared in default, the court cannot grant a relief more than what is being prayed for in the Complaint. A judgment which transgresses said rule, according to the respondents, is void for having been issued without jurisdiction and for being violative of due process of law.
Respondents maintain that it was through no fault of their own, but through the gross negligence of their former counsel, Atty. Coroza, that the remedies of new trial, appeal or petition for relief from judgment were lost. They allege that after filing a Motion to Extend Period to Answer, Atty. Coroza did not file any pleading resulting to their being declared in default. While the said lawyer filed on their behalf a Motion to Set Aside Judgment dated January 26, 2001, he however took no steps to appeal from the Decision of the RTC, thereby allowing said judgment to lapse into finality. Citing Legarda v. Court of Appeals,31 respondents aver that clients are not always bound by the actions of their counsel, as in the present case where the clients are to lose their property due to the gross negligence of their counsel.
With regard to petitioners invocation of immutability of judgment, respondents argue that said doctrine applies only to valid and not to void judgments.
We agree with respondents that the award of 5% monthly interest violated their right to due process and, hence, the same may be set aside in a Petition for Annulment of Judgment filed under Rule 47 of the Rules of Court.
Annulment of judgment under Rule 47; an exception to the final judgment rule; grounds therefor.
While under Section 2, Rule 4733 of the Rules of Court a Petition for Annulment of Judgment may be based only on the grounds of extrinsic fraud and lack of jurisdiction, jurisprudence recognizes lack of due process as additional ground to annul a judgment.34 In Arcelona v. Court of Appeals,35 this Court declared that a final and executory judgment may still be set aside if, upon mere inspection thereof, its patent nullity can be shown for having been issued without jurisdiction or for lack of due process of law.
Grant of 5% monthly interest is way beyond the 12% per annum interest sought in the Complaint and smacks of violation of due process.
Due process considerations justify this requirement. It is improper to enter an order which exceeds the scope of relief sought by the pleadings, absent notice which affords the opposing party an opportunity to be heard with respect to the proposed relief. The fundamental purpose of the requirement that allegations of a complaint must provide the measure of recovery is to prevent surprise to the defendant.
(d) Extent of relief to be awarded. A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages.
The raison dêtre in limiting the extent of relief that may be granted is that it cannot be presumed that the defendant would not file an Answer and allow himself to be declared in default had he known that the plaintiff will be accorded a relief greater than or different in kind from that sought in the Complaint.38 No doubt, the reason behind Section 3(d), Rule 9 of the Rules of Court is to safeguard defendants right to due process against unforeseen and arbitrarily issued judgment. This, to the mind of this Court, is akin to the very essence of due process. It embodies "the sporting idea of fair play"39 and forbids the grant of relief on matters where the defendant was not given the opportunity to be heard thereon.
In the case at bench, the award of 5% monthly interest rate is not supported both by the allegations in the pleadings and the evidence on record. The Real Estate Mortgage40 executed by the parties does not include any provision on interest. When petitioner filed her Complaint before the RTC, she alleged that respondents borrowed from her "the sum of FORTY-FIVE THOUSAND PESOS (P45,000.00), with interest thereon at the rate of 12% per annum"41 and sought payment thereof. She did not allege or pray for the disputed 5% monthly interest. Neither did she present evidence nor testified thereon. Clearly, the RTCs award of 5% monthly interest or 60% per annum lacks basis and disregards due process. It violated the due process requirement because respondents were not informed of the possibility that the RTC may award 5% monthly interest. They were deprived of reasonable opportunity to refute and present controverting evidence as they were made to believe that the complainant petitioner was seeking for what she merely stated in her Complaint.
It is understandable for the respondents not to contest the default order for, as alleged in their Comment, "it is not their intention to impugn or run away from their just and valid obligation."45 Nonetheless, their waiver to present evidence should never be construed as waiver to contest patently erroneous award which already transgresses their right to due process, as well as applicable jurisprudence.
Respondents former counsel was grossly negligent in handling the case of his clients; respondents did not lose ordinary remedies of new trial, petition for relief, etc. through their own fault.
"A lawyer owes entire devotion to the interest of his client, warmth and zeal in the maintenance and defense of his rights and the exertion of his utmost learning and ability, to the end that nothing can be taken or withheld from his client except in accordance with the law."51 Judging from how respondents former counsel handled the cause of his clients, there is no doubt that he was grossly negligent in protecting their rights, to the extent that they were deprived of their property without due process of law.
Indeed, this Court is appalled by petitioners invocation of the doctrine of immutability of judgment. Petitioner does not contest as she even admits that the RTC made a glaring mistake in awarding 5% monthly interest.55 Amazingly, she wants to benefit from such erroneous award. This Court cannot allow this injustice to happen.
WHEREFORE, the instant Petition is hereby DENIED and the assailed November 24, 2005 and June 26, 2006 Resolution of the Court of Appeals in CA-G.R. SP No. 85541 are AFFIRMED.
2 CA rollo, pp. 80-84; penned by Associate Justice Rebecca De Guia-Salvador and concurred in by Associate Justices Portia Aliño-Hermachuelos and Aurora Santiago-Lagman.
4 Rollo, pp. 60-62; penned by Judge Jaime L. Bautista.
5 CA rollo, pp. 111-114.
8 Id. at 56-59; docketed as Civil Case No. 241-V-99.
10 See Order dated December 29, 1999, id. at 198; penned by Judge Jaime F. Bautista.
15 See Order dated March 16, 2001, id. at 79.
16 See Manifestation, id. at 84-85.
17 See Order dated May 7, 2001, id. at 80; penned by Judge Floro P. Alejo.
20 CA rollo, pp. 36-38; penned by Acting Presiding Judge Dionisio C. Sison.
22 In their Comment, id. at 178-190, respondents alleged that their Motion for Leave To Deposit/Consign Judgment Obligation remained unresolved as the same was overtaken by petitioners Petition for Certiorari filed with the CA.
23 Docketed as CA-G.R. SP No. 73360.
24 Rollo, pp. 102-108; penned by Associate Justice Jose L. Sabio, Jr. and concurred in by Associate Justices B. A. Adefuin-De La Cruz and Hakim S. Abdulwahid.
26 CA rollo, pp. 1-3.
27 See Resolution promulgated on October 13, 2004, id. at 58-60; penned by Associate Justice Rebecca De Guia-Salvador and concurred in by Associate Justices Portia Aliño-Hormachuelos and Aurora Santiago-Lagman.
31 G.R. No. 94457, March 18, 1991, 195 SCRA 418.
32 Ramos v. Judge Combong, Jr., 510 Phil. 277, 281-282 (2005).
33 Section 2. Grounds for annulment. The annulment may be based only on the grounds of extrinsic fraud and lack of jurisdiction.
34 See Intestate Estate of the Late Nimfa Sian v. Philippine National Bank, G.R. No. 168882, January 31, 2007, 513 SCRA 662, 667-668.
35 345 Phil. 250, 264 (1997), citing Santiago v. Ceniza, 115 Phil. 493, 495-496 (1962); Mercado v. Ubay, G.R. No. 35830, July 24, 1990, 187 SCRA 719, 725; and Regidor v. Court of Appeals, G.R. No. 78115, March 5, 1993, 219 SCRA 530, 534.
36 G.R. No. 174966, February 14, 2008, 545 SCRA 422, 429.
37 See Section 5, Rule 10 of the Rules of Court.
38 Herrera, Oscar M., Remedial Law, Vol. I, 2007 Edition, pp. 821-822, citing Lim Toco v. Go Fay, 80 Phil. 166, 169-170 (1948).
39 Frankfurter, Mr. Justice Holmes and the Supreme Court, pp. 32-33, cited in Cruz, Isagani A., Constitutional Law, 2007 Edition, p. 100.
43 Philippine Charter Insurance Corporation v. Philippine National Construction Corporation, G.R. No. 185066, October 2, 2009, 602 SCRA 723, 736.
44 G.R. No. 164159, July 17, 2007, 527 SCRA 727, 742.
46 Legarda v. Court of Appeals, supra note 31 at 426-427; Trust International Paper Corporation v. Pelaez, 531 Phil. 150, 160-161 (2006).
47 Legarda v. Court of Appeals, supra note 31 at 428.
50 CA rollo, p. 37.
51 Legarda v. Court of Appeals, supra note 31 at 425.
52 APEX Mining, Inc. v. Court of Appeals, 377 Phil. 482, 494 (1999).
53 See respondents Memorandum, rollo, p. 266.
54 CA rollo, p. 83.
55 See paragraph 54 of her Petition, rollo, p. 22.

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