86. SPS. MANILA VS. SPS.
MANZO jurisdiction over the person of the defending party or over the subject matter of the
G.R. No. 163602. September 7, 2011.*
SPOUSES EULOGIA MANILA and RAMON MANILA, petitioners, vs. SPOUSES
EDERLINDA GALLARDO-MANZO and DANIEL MANZO, respondents.
Actions; Judgments; Annulment of Judgments; A petition for annulment of
judgments or final orders 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 judgments or final orders 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.” It is a remedy granted only under
exceptional circumstances and 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. The only grounds provided in Sec. 2, Rule 47 are extrinsic fraud and lack
of jurisdiction.
Same; Same; Same; Attorneys; When a party retains the services of a lawyer,
he is bound by his counsel’s actions and decisions regarding the conduct of the case,
and this is true especially where he does not complain against the manner his
counsel handles the suit.—We are not persuaded by respondents’ asseveration.
They could have directly followed up the status of their case with the RTC
especially during the period of Atty. Atienza’s hospital confinement. As party
litigants, they should have constantly monitored the progress of their case. Having
completely entrusted their case to their former counsel and believing his word that
everything is alright, they have no one to blame but themselves when it turned out
that their opportunity to appeal and other remedies from the adverse ruling of the
RTC could no longer be availed of due to their counsel’s neglect. That respondents
continued to rely on the services of their counsel notwithstanding his chronic
ailments that had him confined for long periods at the hospital is unthinkable. Such
negligence of counsel is binding on the client, especially when the latter offered no
plausible
_______________
* FIRST DIVISION.
21
VOL. 657, SEPTEMBER 7, 2011 21
Manila vs. Gallardo-Manzo
explanation for his own inaction. The Court has held that when a party
retains the services of a lawyer, he is bound by his counsel’s actions and decisions
regarding the conduct of the case. This is true especially where he does not
complain against the manner his counsel handles the suit. The oft-repeated
principle is that an action for annulment of judgment cannot and is not a substitute
for the lost remedy of appeal.
Same; Same; Same; 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—lack of jurisdiction means 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.—Lack of
jurisdiction as a ground for annulment of judgment refers to either lack of
claim. 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. Lack of jurisdiction means 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.
Jurisdiction over the nature of the action or subject matter is conferred by law.
Same; Same; Same; The erroneous grant of relief by the Regional Trial Court
on appeal is but an exercise of jurisdiction by said court—the ground for annulment
of the decision 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; The Regional Trial Court (RTC) acted in excess of its
jurisdiction in deciding the appeal when, instead of simply dismissing the complaint
and awarding any counterclaim for costs due to the defendants, it ordered the lessors
to execute a deed of absolute sale in favor of the lessees, on the basis of its own
interpretation of the Contract of Lease which granted petitioners the option to buy
the leased premises within a certain period and for a fixed price.—In this case, the
RTC acted in excess of its jurisdiction in deciding the appeal of respondents when,
instead of simply dismissing the complaint and awarding any counterclaim for
costs due to the defendants (petitioners), it ordered the respondents-lessors to
execute a deed of absolute
22
22 SUPREME COURT REPORTS ANNOTATED
Manila vs. Gallardo-Manzo
sale in favor of the petitioners-lessees, on the basis of its own interpretation
of the Contract of Lease which granted petitioners the option to buy the leased
premises within a certain period (two years from date of execution) and for a fixed
price (P150,000.00). This cannot be done in an ejectment case where the only issue
for resolution is who between the parties is entitled to the physical possession of
the property. Such erroneous grant of relief to the defendants on appeal, however,
is but an exercise of jurisdiction by the RTC. Jurisdiction is not the same as the
exercise of jurisdiction. As distinguished from the exercise of jurisdiction,
jurisdiction is the authority to decide a cause, and not the decision rendered
therein. The ground for annulment of the decision 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.
Same; Same; Laches; Doctrine of Stale Demands; The principle of laches or
“stale demands” ordains that the failure or neglect, for an unreasonable and
unexplained length of time, to do that which by exercising due diligence could or
should have been done earlier—negligence or omission to assert a right within a
reasonable time—warrants a presumption that the party entitled to assert it has
abandoned it or declined to assert it.—On the timeliness of the petition for
annulment of judgment filed with the CA, Section 3, Rule 47 of the Rules of Court
provides that a petition for annulment of judgment based on extrinsic fraud must
be filed within four years from its discovery; and if based on lack of jurisdiction,
before it is barred by laches or estoppel. The principle of laches or “stale demands”
ordains that the failure or neglect, for an unreasonable and unexplained length of
time, to do that which by exercising due diligence could or should have been done
earlier—negligence or omission to assert a right within a reasonable time, warrants
Page 1 of 6
a presumption that the party entitled to assert it has abandoned it or declined to
assert it. There is no absolute rule as to what constitutes laches or staleness of
demand; each case is to be determined according to its particular circumstances.
PETITION for review on certiorari of the decision and resolution of the Court of
Appeals.
The facts are stated in the opinion of the Court.
Roque & Butuyan Law Offices for petitioners.23
VOL. 657, SEPTEMBER 7, 2011 23
Manila vs. Gallardo-Manzo
Cabochan, Reyes & Capones Law Offices for respondents.
VILLARAMA, JR., J.:
This resolves the petition for review on certiorari under Rule 45 of the 1997
Rules of Civil Procedure, as amended, assailing the Decision1 dated February 27,
2004 and Resolution2 dated May 14, 2004 of the Court of Appeals (CA) in CA-G.R.
SP No. 49998 which granted the petition for annulment of judgment filed by the
respondents.
The controversy stemmed from an action for ejectment3filed by the
respondents, spouses Ederlinda Gallardo-Manzo and Daniel Manzo, against the
petitioners, spouses Ramon and Eulogia Manila, before the Metropolitan Trial
Court (MeTC) of Las Piñas City, Branch 79 (Civil Case No. 3537). The facts as
summarized by the said court are as follows:
“On June 30, 1982, Ederlinda Gallardo leased two (2) parcels of land situated
along Real St., Manuyo, Las Piñas, Metro Manila, to Eulogia Manila for a period of
ten (10) years at a monthly rental(s) of P2,000.00 for the first two years, and
thereafter an increase of ten (10) percent every after two years. They also agreed
that the lessee shall have the option to buy the property within two (2) years from
the date of execution of the contract of lease at a fair market value of One Hundred
and Fifty Thousand Pesos (P150,000.00)
The contract of lease expired on July 1, 1992 but the lessee continued in
possession of the property despite a formal demand letter dated August 8, 1992, to
vacate the same and pay the rental arrearages. In a letter reply dated August 12,
1992, herein defendant claimed that no rental fee is due because she allegedly
became the owner of the property at the time she communicated to the plaintiff her
desire to exercise the option to buy the said property.
_______________
1 Rollo, pp. 10-21. Penned by Presiding Justice Cancio C. Garcia (retired
Member of this Court) with Associate Justices Renato C. Dacudao and Danilo B.
Pine, concurring.
2 Id., at p. 22.
3 Records, pp. 8-12.
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24 SUPREME COURT REPORTS ANNOTATED
Manila vs. Gallardo-Manzo
Their disagreement was later brought to the Barangay for conciliation but the
parties failed to reach a compromise, hence the present action.”4
On July 14, 1993, the MeTC rendered its decision,5 the dispositive portion of
which reads:
“WHEREFORE, a judgment is rendered in favor of the plaintiffs ordering the
defendants:
1) To vacate the subject parcels of land and surrender possession thereof upon
the payment by the plaintiff of one-half of the value of the building
constructed by the lessee. Should the lessor refuse to reimburse the
aforesaid amount, the lessee shall have the option to exercise her right
under Article 1678 of the New Civil Code;
2) To pay rental arrearages up to July 1, 1992 in the amount of Two Hundred
Twenty Eight Thousand and Forty Four 80/100 Pesos (P228,044.80);
3) To pay, as reasonable compensation for their continued withholding of
possession of the subject lots, the sum of Three Thousand Two Hundred and
Twenty One Pesos (P3,221.00) every month, commencing July 2, 1992 up to
such time that they finally yield possession thereof to the plaintiffs, subject
to an increase of ten percent (10%) after every two (2) years from said date;
and
4) To pay plaintiffs attorney’s fees in the sum of Five Thousand Pesos
(P5,000.00)
No pronouncement as to costs.
SO ORDERED.”6
Petitioners appealed to the Regional Trial Court (RTC) of Makati City, Branch
63 (Civil Case No. 93-3733) which reversed the MeTC. The RTC found that
petitioners have in fact exercised their option to buy the leased property but the re-
_______________
4 Id., at p. 145.
5 Id., at pp. 145-148. Penned by Judge Alfredo R. Enriquez.
6 Id., at pp. 147-148.
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VOL. 657, SEPTEMBER 7, 2011 25
Manila vs. Gallardo-Manzo
spondents refused to honor the same. It noted that respondents even informed the
petitioners about foreclosure proceedings on their property, whereupon the
petitioners tried to intervene by tendering rental payments but the respondents
advised them to withhold such payments until the appeal of respondents in the
case they filed against the Rural Bank of Bombon (Camarines Sur), Inc. (Civil Case
No. 6062) is resolved. It further noted that respondents’ intention to sell the lot to
petitioners is confirmed by the fact that the former allowed the latter to construct
a building of strong materials on the premises. The RTC thus decreed:
“IN THE LIGHT OF THE FOREGOING, judgment is hereby rendered
reversing the decision of the lower court dated July 14, 1993 and ordering as
follows:
1) That plaintiffs execute a deed of absolute sale over that parcel of land
subject of the Contract of Lease dated June 30, 1982 after full payment of
defendants of the purchase price of P150,000.00;
2) That plaintiffs pay the costs of suit.
SO ORDERED.”7
Respondents filed a motion for reconsideration on December 23, 1994. In its
Order dated March 24, 1995, the RTC denied the motion for having been filed
beyond the fifteen (15)-day period considering that respondents received a copy of
the decision on December 7, 1994.8Consequently, the November 18, 1994 decision
of the RTC became final and executory.9
Page 2 of 6
 On December 22, 1998, respondents filed a petition for annulment of the RTC
decision in the CA. Respondents assailed the RTC for ordering them to sell their
property to petitioners arguing that said court’s appellate jurisdiction in ejectment
_______________
7 Id., at p. 243.
8 Id., at p. 264.
9 Id., at p. 267.
26
26 SUPREME COURT REPORTS ANNOTATED
Manila vs. Gallardo-Manzo
cases is limited to the determination of who is entitled to the physical possession of
real property and the only judgment it can render in favor of the defendant is to
recover his costs, which judgment is conclusive only on the issue of possession and
does not affect the ownership of the land. They contended that the sale of real
property by one party to another may be ordered by the RTC only in a case for
specific performance falling under its original exclusive jurisdiction, not in the
exercise of its appellate jurisdiction in an ejectment case. Respondents also alleged
that the petition for annulment is the only remedy available to them because the
ordinary remedies of new trial, appeal, petition for relief or other appropriate
remedies are no longer available through no fault on their part.
By Decision dated February 27, 2004, the CA granted the petition, annulled the
November 18, 1994 RTC decision and reinstated the July 14, 1993 MeTC decision.
On the issue of lack of jurisdiction raised by the respondents, the CA ruled as
follows:
“It must be stressed that the main action before the Metropolitan Trial Court
is one for ejectment grounded on the expiration of the parties’ contract of lease. And
said court, finding that petitioners have a valid right to ask for the ejectment of
private respondents, ordered the latter to vacate the premises and to pay their
rentals in arrears. To Our mind, what the respondent court should have done in
the exercise of its appellate jurisdiction, was to confine itself to the issue of
whether or not petitioners have a valid cause of action for ejectment against the
private respondents.
Unfortunately, in the decision herein sought to be annulled, the respondent
court went further than what is required of it as an appellate court when it ordered
the petitioners to sell their properties to the private respondents. In a very real
sense, the respondent court materially changed the nature of petitioners’
cause of action by deciding the question of ownership even as the
appealed case involves only the issue of prior physical possession which,
in every ejectment suit, is the only question to be resolved. As it were, the
respondent court converted the
27
VOL. 657, SEPTEMBER 7, 2011 27
Manila vs. Gallardo-Manzo
issue to one for specific performance which falls under its original, not appellate
jurisdiction. Sad to say, this cannot be done by the respondent court in an appealed
ejectment case because the essential criterion of appellate jurisdiction is that it
revises and corrects the proceedings in a cause already instituted and does not
create that cause (Marbury v. Madison, 1 Cranch (U.S.), 137, 172, 2 L. edition 60,
cited in 15 Corpus Juris 727).
It follows that the respondent Regional Trial Court clearly acted without
jurisdiction when it ordered the petitioners to sell their properties to the private
respondents. The order to sell can be made only by the respondent court in an action
for specific performance under its exclusive original jurisdiction, and not in the
exercise of its appellate jurisdiction in an appealed ejectment suit, as in this case.
Worse, the relief granted by the same court was not even prayed for by the private
respondents in their Answer and position paper before the MTC, whereat they only
asked for the dismissal of the complaint filed against them.”10(Emphasis supplied.)
With the denial of their motion for reconsideration, petitioners filed the present
petition raising the following issues:
A
WHETHER THE COURT OF APPEALS COMMITTED A GRAVE ERROR IN
ANNULLING THE JUDGMENT BY THE REGIONAL TRIAL COURT OF
MAKATI CITY NOTWITHSTANDING THE FINDING THAT THE ORDINARY
REMEDIES OF NEW TRIAL, APPEAL, PETITION FOR RELIEF OR OTHER
APPROPRIATE REMEDIES WERE LOST THROUGH THE FAULT OF THE
RESPONDENTS
B
WHETHER THE COURT OF APPEALS COMMITTED A GRAVE ERROR IN
ANNULLING THE JUDGMENT BY THE REGIONAL TRIAL COURT OF
MAKATI CITY ON THE GROUND OF “LACK OF JURISDICTION” WHEN IT
HAS NOT BEEN SHOWN THAT THE REGIONAL TRIAL COURT OF MAKATI
CITY HAD NO
_______________
10 Rollo, pp. 20-21.
28
28 SUPREME COURT REPORTS ANNOTATED
Manila vs. Gallardo-Manzo
JURISDICTION OVER THE PERSON OF THE RESPONDENTS OR THE
SUBJECT MATTER OF THE CLAIM11
The petition is meritorious.
A petition for annulment of judgments or final orders 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.”12 It is a remedy granted only under exceptional
circumstances and 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.13 The only grounds provided in Sec. 2, Rule 47 are extrinsic fraud and
lack of jurisdiction.
In this case, respondents alleged that the loss of remedies against the RTC
decision was attributable to their former counsel’s late filing of their motion for
reconsideration and failure to file any proper petition to set aside the said decision.
They claimed that they had been constantly following up the status of the case with
their counsel, Atty. Jose Atienza, who repeatedly assured them he was on top of
the situation and would even get angry if repeatedly asked about the case. Out of
their long and close relationship with Atty. Atienza and due regard for his poor
health due to his numerous and chronic illnesses which required frequent
prolonged confinement at the hospital, respondents likewise desisted from hiring
the services of another lawyer to assist Atty. Atienza, until the latter’s death on
Page 3 of 6
September 10, 1998. Thus, it was only on November 1998 that respondents engaged
the services of their new counsel who filed the petition for annulment of judgment
in the CA.
_______________
11 Id., at p. 38.
12 Sec. 1, Rule 47, 1997 Rules of Civil Procedure.
13 Lazaro v. Rural Bank of Francisco Balagtas (Bulacan), Inc., G.R. No.
139895, August 15, 2003, 409 SCRA 186, 192.
29
VOL. 657, SEPTEMBER 7, 2011 29
Manila vs. Gallardo-Manzo
We are not persuaded by respondents’ asseveration. They could have directly
followed up the status of their case with the RTC especially during the period of
Atty. Atienza’s hospital confinement. As party litigants, they should have
constantly monitored the progress of their case. Having completely entrusted their
case to their former counsel and believing his word that everything is alright, they
have no one to blame but themselves when it turned out that their opportunity to
appeal and other remedies from the adverse ruling of the RTC could no longer be
availed of due to their counsel’s neglect. That respondents continued to rely on the
services of their counsel notwithstanding his chronic ailments that had him
confined for long periods at the hospital is unthinkable. Such negligence of counsel
is binding on the client, especially when the latter offered no plausible explanation
for his own inaction. The Court has held that when a party retains the services of
a lawyer, he is bound by his counsel’s actions and decisions regarding the conduct
of the case. This is true especially where he does not complain against the manner
his counsel handles the suit.14 The oft-repeated principle is that an action for
annulment of judgment cannot and is not a substitute for the lost remedy of
appeal.15
In any event, the petition for annulment was based not on fraudulent
assurances or negligent acts of their counsel, but on lack of jurisdiction.
Petitioners assail the CA in holding that the RTC decision is void because it
granted a relief inconsistent with the nature of an ejectment suit and not even
prayed for by the respondents in their answer. They contend that whatever maybe
questionable in the decision is a ground for assignment of errors on appeal—or in
certain cases, as ground for a special
_______________
14 Tolentino v. Leviste, G.R. No. 156118, November 19, 2004, 443 SCRA 274,
282, citing Alarcon v. Court of Appeals, G.R. No. 126802, January 28, 2000, 323
SCRA 716, 725.
15 Mercado v. Security Bank Corporation, G.R. No. 160445, February 16, 2006,
482 SCRA 501, 514.
30
30 SUPREME COURT REPORTS ANNOTATED
Manila vs. Gallardo-Manzo
civil action for certiorari under Rule 65—and not as ground for its annulment. On
the other hand, respondents assert that the CA, being a higher court, has the power
to adopt, reverse or modify the findings of the RTC in this case. They point out that
the CA in the exercise of its sound discretion found the RTC’s findings unsupported
by the evidence on record which also indicated that the loss of ordinary remedies of
appeal, new trial and petition for review was not due to the fault of the respondents.
We agree with the petitioners.
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.16 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. Lack of jurisdiction means 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.
Jurisdiction over the nature of the action or subject matter is conferred by law. 17
There is no dispute that the RTC is vested with appellate jurisdiction over
ejectment cases decided by the MeTC, MTC or MCTC. We note that petitioners’
attack on the validity of the RTC decision pertains to a relief erroneously granted
on appeal, and beyond the scope of judgment provided in Section 6 (now Section 17)
of Rule 70.18 While the court in an eject-
_______________
16 Tolentino v. Leviste, supra note 14 at p. 284.
17 Durisol Philippines, Inc. v. Court of Appeals, G.R. No. 121106, February 20,
2002, 377 SCRA 353, 358.
18 SEC. 17. Judgment.—If after trial the court finds that the allegations of
the complaint are true, it shall render judgment in favor of the plaintiff for the
restitution of the premises, the sum justly due as arrears of rent or as reasonable
compensation for the use and occupation of the premises, attorney’s fees and costs.
If it finds that said allegations are not true, it shall render judgment for
31
VOL. 657, SEPTEMBER 7, 2011 31
Manila vs. Gallardo-Manzo
ment case may delve on the issue of ownership or possession de jure solely for the
purpose of resolving the issue of possession de facto, it has no jurisdiction to settle
with finality the issue of ownership19 and any pronouncement made by it on the
question of ownership is provisional in nature.20 A judgment in a forcible entry or
detainer case disposes of no other issue than possession and establishes only who
has the right of possession, but by no means constitutes a bar to an action for
determination of who has the right or title of ownership. 21 We have held that
although it was proper for the RTC, on appeal in the ejectment suit, to delve on the
issue of ownership and receive evidence on possession de jure, it cannot adjudicate
with semblance of finality the ownership of the property to either party by ordering
the cancellation of the TCT.22
In this case, the RTC acted in excess of its jurisdiction in deciding the appeal of
respondents when, instead of simply dismissing the complaint and awarding any
counterclaim for
_______________
the defendant to recover his costs. If a counterclaim is established, the court
shall render judgment for the sum found in arrears from either party and award
costs as justice requires.
19 See Paz v. Reyes, G.R. No. 127439, March 9, 2000, 327 SCRA 605, 609-
610; Aznar Brothers Realty Company v. Court of Appeals, G.R. No. 128102, March
Page 4 of 6
7, 2000, 327 SCRA 359, 372-373; Carreon v. Court of Appeals, G.R. No. 112041,
June 22, 1998, 291 SCRA 78, 88.
Sec. 16, Rule 70, 1997 Rules of Civil Procedure states:
SEC. 16. Resolving defense of ownership.—When the defendant raises the
defense of ownership in his pleadings and the question of possession cannot be
resolved without deciding the issue of ownership, the issue of ownership shall be
resolved only to determine the issue of possession.
20 Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla De Leon,G.R.
No. 149570, March 12, 2004, 425 SCRA 447, 458.
21 Sec. 18, Rule 70, 1997 Rules of Civil Procedure; Custodio v. Corrado, G.R.
No. 146082, July 30, 2004, 435 SCRA 500, 509.
22 Dizon v. Court of Appeals, G.R. No. 116854, November 19, 1996, 264 SCRA
391, 396.
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32 SUPREME COURT REPORTS ANNOTATED
Manila vs. Gallardo-Manzo
costs due to the defendants (petitioners), it ordered the respondents-lessors to
execute a deed of absolute sale in favor of the petitioners-lessees, on the basis of its
own interpretation of the Contract of Lease which granted petitioners the option to
buy the leased premises within a certain period (two years from date of execution)
and for a fixed price (P150,000.00).23 This cannot be done in an ejectment case
where the only issue for resolution is who between the parties is entitled to the
physical possession of the property.
Such erroneous grant of relief to the defendants on appeal, however, is but an
exercise of jurisdiction by the RTC. Jurisdiction is not the same as the exercise of
jurisdiction. As distinguished from the exercise of jurisdiction, jurisdiction is the
authority to decide a cause, and not the decision rendered therein.24 The ground for
annulment of the decision 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.25
Thus, while respondents assailed the content of the RTC decision, they failed
to show that the RTC did not have the authority to decide the case on appeal. As
we held in Ybañez v. Court of Appeals:26
“On the first issue, we feel that respondent court acted inadvertently when it
set aside the RTC ruling relative to the validity of the substituted service of
summons over the persons of the petitioners in the MTC level. We must not lose
sight of the fact that what was filed before respondent court is an action to annul
the RTC judgment and not a petition for review. Annulment of judgment may either
be based on the ground that a judgment is void for want of
_______________
23 CA Rollo, p. 187.
24 Tolentino v. Leviste, supra note 14 at p. 285.
25 Republic v. Technological Advocates for Agro-Forest Programs Association,
Inc., G.R. No. 165333, February 9, 2010, 612 SCRA 76, 86.
26 G.R. No. 117499, February 9, 1996, 253 SCRA 540.
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Manila vs. Gallardo-Manzo
jurisdiction or that the judgment was obtained by extrinsic fraud. There is nothing
in the records that could cogently show that the RTC lacked jurisdiction. Chiefly,
Section 22 of B.P. Blg. 129, otherwise known as the Judiciary Reorganization Act
of 1980, vests upon the RTC the exercise of an “appellate jurisdiction over all cases
decided by the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts in their respective territorial jurisdictions.” Clearly
then, when the RTC took cognizance of petitioners’ appeal from the
adverse decision of the MTC in the ejectment suit, it (RTC) was
unquestionably exercising its appellate jurisdiction as mandated by law.
Perforce, its decision may not be annulled on the basis of lack of
jurisdiction as it has, beyond cavil, jurisdiction to decide the
appeal.”27 (Emphasis supplied.)
The CA therefore erred in annulling the November 18, 1994 RTC decision on
the ground of lack of jurisdiction as said court had jurisdiction to take cognizance
of petitioners’ appeal.
On the timeliness of the petition for annulment of judgment filed with the CA,
Section 3, Rule 47 of the Rules of Court provides that a petition for annulment of
judgment based on extrinsic fraud must be filed within four years from its
discovery; and if based on lack of jurisdiction, before it is barred by laches or
estoppel. The principle of laches or “stale demands” ordains that the failure or
neglect, for an unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier—negligence or
omission to assert a right within a reasonable time, warrants a presumption that
the party entitled to assert it has abandoned it or declined to assert it. 28 There is
no absolute rule as to what constitutes laches or staleness of
_______________
27 Id., at p. 548.
28 Galicia v. Manliquez Vda. de Mindo, G.R. No. 155785, April 13, 2007, 521
SCRA 85, 96, citing Chua v. Court of Appeals, G.R. No. 125837, October 6, 2004,
440 SCRA 121, 135.
34
34 SUPREME COURT REPORTS ANNOTATED
Manila vs. Gallardo-Manzo
demand; each case is to be determined according to its particular circumstances. 29
Here, respondents’ failure to assail the RTC ruling in a petition for review
on certiorari before the CA, rendered the same final and executory. Having lost
these remedies due to their lethargy for three and a half years, they cannot now be
permitted to assail anew the said ruling rendered by the RTC in the exercise of its
appellate jurisdiction. Their inaction and neglect to pursue available remedies to
set aside the RTC decision for such length of time, without any acceptable
explanation other than the word of a former counsel who already passed away,
constitutes unreasonable delay warranting the presumption that they have
declined to assert their right over the leased premises which continued to be in the
possession of the petitioners. Clearly, respondents’ petition to annul the final RTC
decision is barred under the equitable doctrine of laches.
WHEREFORE, the petition for review on certiorari is GRANTED. The Decision
dated February 27, 2004 and Resolution dated May 14, 2004 of the Court of Appeals
in CA-G.R. SP No. 49998 are SET ASIDE. The petition for annulment of judgment
filed by herein respondents is DISMISSED.
Page 5 of 6
 No costs.
SO ORDERED.
Corona (C.J., Chairperson), Leonardo-De Castro, Bersamin and Del Castillo,
JJ., concur.
Petition granted, judgment and resolution set aside.
Notes.—The doctrine of stale demands would apply only where by reason of
the lapse of time, it would be inequitable
_______________
29 Id., citing Far East Bank and Trust Company v. Querimit, 424 Phil. 721,
732; 373 SCRA 665, 673 (2002).
35
VOL. 657, SEPTEMBER 7, 2011 35
Manila vs. Gallardo-Manzo
to allow a party to enforce his legal rights. (Tsai vs. Court of Appeals, 366 SCRA
324 [2001])
Rule 47 of the Rules of Civil Procedure applies only to a petition to annul a
judgment or final order and resolution in civil actions—it does not apply to an
action to annul the levy and sale at public auction or the certificate of sale executed
by the deputy sheriff over said properties, and neither does it apply to an action to
nullify a writ of execution. The remedy to nullify the levy and sale of the properties
at public auction in violation of Sections 15 and 21, Rule 39 of the Rules of Court is
a motion for that purpose before the trial court, and not in the Court of Appeals,
and thereafter the remedy from an adverse resolution of the trial court would be a
petition for certiorari under Rule 65, if the trial court committed a grave abuse of
discretion amounting to excess or lack of jurisdiction. (Guiang vs. Co, 435 SCRA
556 [2004])
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