G.R. No. 102900 October 2, 1997.
MARCELINO ARCELONA, TOMASA ARCELONA-CHIANG and RUTH ARCELONA, represented by their attorney-in-fact, ERLINDA PILE, petitioners, vs. COURT OF APPEALS, REGIONAL TRIAL COURT OF DAGUPAN CITY, Branch XL, and MOISES FARNACIO, respondents.

FACTS

Petitioners Marcelino Arcelona, Tomasa Arcelona-Chiang, and Ruth Arcelona are natural-born Filipinos, now naturalized Americans residing in California, USA. They, together with their three sisters (Pacita Arcelona-Olanday, Maria Arcelona-Arellano, and Natividad Arcelona-Cruz, collectively referred to as Olanday, et al.), are co-owners pro indiviso of a fishpond inherited from their parents, as evidenced by Transfer Certificate of Title No. 34341. On March 4, 1978, a contract of lease over the fishpond was executed between Cipriano Tandoc and Olanday, et al. Private Respondent Moises Farnacio was appointed by Tandoc as caretaker-tenant. After the lease terminated on February 2, 1984, and possession was surrendered to Olanday, et al., Farnacio filed Civil Case No. D-7240 on February 7, 1984, against Olanday, et al., before the Regional Trial Court of Dagupan City, Branch 40, to maintain his tenancy. The trial court ruled in favor of Farnacio, a decision affirmed by the Intermediate Appellate Court and subsequently by the Supreme Court in G.R. No. 71217. After remand, Farnacio was placed in possession of the entire property. Petitioners, who were not impleaded in the original case, filed a petition for annulment of judgment with the Court of Appeals, which was denied. Hence, this petition.

ISSUE

1. May a final judgment be annulled on the ground of lack of jurisdiction (over the subject matter and/or over the person of indispensable parties) and denial of due process, aside from extrinsic fraud?
2. May extraneous matters, not found in the records of the original case, be used in voiding or defending the validity of such final judgment?
3. Procedurally, will an independent action for annulment of the decision of the regional trial court (which was affirmed both by the Court of Appeals and the Supreme Court) filed before the Court of Appeals prosper, or is intervention before the court of origin the only remedy?

RULING

1. Yes. The Court of Appeals erred in ruling that extrinsic fraud is the sole ground for annulment of judgment. A final and executory judgment may be attacked on the grounds of (a) lack of jurisdiction over the subject matter, (b) lack of jurisdiction over the persons of indispensable parties, and (c) lack of due process. Petitioners, as co-owners pro indiviso of the fishpond, are indispensable parties in an action affecting the property. Their non-inclusion in Civil Case No. D-7240 rendered the judgment void as to them for lack of jurisdiction over their persons and a denial of due process.
2. No. In an action for annulment of judgment, the grounds must be based solely on the records of the case whose judgment is sought to be annulled. Extraneous matters cannot be used to void or defend the validity of such final judgment.
3. Yes, an independent action for annulment of judgment filed before the Court of Appeals can prosper. Intervention in the court of origin is not the exclusive remedy. Petitioners, who were not parties to the original case, could not have intervened therein. Their proper recourse was an independent action for annulment of judgment, which they timely filed. The Court found that petitioners were not estopped by laches, as they promptly sought relief upon learning of the judgment’s enforcement against their property.
The petition was granted. The Decision of the Court of Appeals was reversed and set aside. The Decision in Civil Case No. D-7240 was declared null and void as to the petitioners, and the writ of execution issued against them was annulled.