G.R. No. 137566 . February 28, 2001.
ROBERTO G. ROSALES, as successor-in-interest of NAPOLEON S. ROSALES and LUIS BUSTILLO, petitioners, vs. THE HON. COURT OF APPEALS and NATIONAL DEVELOPMENT CORPORATION, as substituted plaintiff and the successor-in-interest of CONTINENTAL BANK, respondents.

FACTS

Continental Bank filed a complaint for sum of money and judicial foreclosure against Atlas Timber Company, Napoleon Rosales, and Luis Bustillo over a P1,000,000 promissory note secured by real estate mortgages. Defendants admitted the loan but claimed it was an Industrial Guaranty Loan Fund (IGLF) facility. They alleged the bank delivered only P424,000 and retained P576,000, preventing completion of their veneer plant and rendering them unable to pay. The trial court ruled for the bank, ordering payment and, in default, foreclosure. A writ of execution was issued, and the properties were sold at auction to the bank in 1975. The sale was confirmed in 1976.
Decades later, in 1996, petitioner Roberto Rosales, as successor-in-interest, filed a petition to annul the 1976 confirmation order, alleging it was void for lack of notice. He argued the order was issued without serving notice to defendants or their lead counsel, violating due process. The Court of Appeals dismissed the petition, ruling it was filed far beyond the reglementary period and that the order had long become final and executory.

ISSUE

Whether the Court of Appeals erred in dismissing the petition for annulment of the 1976 confirmation order.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals. The legal logic is anchored on the finality of judgments and the extraordinary nature of annulment petitions. A judgment that has become final and executory can no longer be disturbed except for exceptionally meritorious grounds, such as extrinsic fraud or lack of jurisdiction. Petitioners failed to prove the trial court lacked jurisdiction. Jurisdiction over the subject matter and parties was established from the commencement of the action.
The alleged denial of due process due to lack of notice on the confirmation hearing does not negate jurisdiction but constitutes an error in the exercise of jurisdiction, which should have been challenged via timely appeal. The proper remedy from the 1976 confirmation order was an ordinary appeal, not a collateral attack decades later. Petitioners slept on their rights for twenty years, allowing the judgment to attain immutable finality. The Court emphasized that public policy and the orderly administration of justice demand an end to litigation. The belated attempt to nullify a long-concluded proceeding, based on a claim of procedural irregularity that could and should have been raised earlier, cannot be countenanced.