Monday, January 30, 2012

INTESTATE ESTATE OF THE LATE NIMFA SIAN, Represented by its special administratrix, CHARITO J. SIAN-PARREÑO, vs. PHILIPPINE NATIONAL BANK, G.R. No. 168882 ,  January 31, 2007

Facts: Nimfa Sian (Nimfa) filed a petition with the RTC for cancellation of mortgage liens annotated on three titled properties against the Bacolod branch of the respondent, now Maybank, and the Register of Deeds of Negros Occidental. Resondent filed a "Motion for Substitution and Motion to Dismiss," alleging that Maybank referred the case to it "for handling inasmuch as the properties involved . . . were already transferred to [it] by virtue of a dacion en pago executed by and between the two banks." The RTC denied petitioner’s motion. Thus, petitioner filed a petition for annulment of judgment to the Court of Appeals. The CA granted the petition on the ground of denial of due process.

Issues:
(1) Can the court annul the judgment of a court a quo on the ground of denial of due process?

(2) Did respondent’s failure to avail of the remedy of appeal bar the filing of an action for annulment of judgment? 

Held:
(1) Anent the first issue, the Supreme Court ruled in the affirmative. Although Section 2 of Rule 47 of the Rules of Court provides that annulment of a final judgment or order of an RTC may be based "only on the grounds of extrinsic fraud and lack of jurisdiction," jurisprudence recognizes as additional ground therefor denial of due process. There is no question that a final judgment may be annulled. There are, however, certain requisites which must be established before a judgment can be the subject of an action for annulment. Under the present procedure, aside form the reliefs provided in these two sections (Secs. 1 & 2, Rule 38), there is no other means whereby the defeated party may procure final and executory judgment to be set aside with a view to the renewal of the litigation, unless (a) the judgment is void for want of jurisdiction or for lack of due process of law, or (b) it has been obtained by fraud.

 (2) Anent the second issue, the Court also ruled in the negative. For, since the Motion for Substitution of respondent was denied, it had no personality to assail the said order. Moreover, the trial court’s order being null and void, it may be assailed at any time either collaterally or in a direct action or by resisting the same in any action or proceeding whenever it is invoked, unless barred by laches.

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