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 JURISDICTION OVER THE PERSON OF THE RESPONDENTS OR THE SUBJECT MATTER OF THE CLAIM[11]
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 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.
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 civil action for certiorari underRule 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 ejectment 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 ownership[19] 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 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 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 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 or 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.
x x x."
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