G.R. No. 133913 October 12, 1999
JOSE MANUEL STILIANOPULOS, petitioner, vs. THE CITY OF LEGASPI, respondent.

FACTS

On September 16, 1964, the trial court ordered the reconstitution of Original Certificates of Title (OCT), including OCT No. 665, over certain parcels of land in favor of the City of Legaspi. The City later filed a Complaint for quieting of title over Lot 1 (covered by OCT No. 665) against Carlos V. Stilianopulos and others. After Carlos’s death, TCT No. 13448 was issued in the name of his son, petitioner Jose Manuel Stilianopulos, on July 12, 1974. On February 29, 1984, the trial court upheld the validity of petitioner’s TCT No. 13448. On appeal, the Court of Appeals reversed this decision on October 16, 1987, ruling in favor of the City. The Supreme Court dismissed petitioner’s recourse on August 17, 1988. Petitioner subsequently filed an action for cancellation of OCT No. 665, which was dismissed on August 15, 1989 on the ground of res judicata, a dismissal affirmed by the CA. On June 13, 1994, petitioner filed a new action before the CA for annulment of the September 16, 1964 Order, alleging: (1) the City procured OCT No. 665 fraudulently; (2) the original certificate of title judicially reconstituted was non-existent; and (3) the court which ordered the reconstitution lacked jurisdiction. Petitioner specifically alleged the City omitted his predecessor-in-interest’s name and address from its Petition for Reconstitution and failed to notify him, despite the City’s prior knowledge that his predecessor was the registered owner and possessor of Lot 1, which was a derived lot from a 1953 consolidation and subdivision. The CA dismissed the petition, ruling the prescriptive period for extrinsic fraud had lapsed, petitioner was guilty of laches, and the action was barred by res judicata.

ISSUE

1. Whether the prescriptive period for annulment based on extrinsic fraud had lapsed.
2. Whether the reconstitution court lacked jurisdiction and whether petitioner is guilty of laches.
3. Whether the action is barred by res judicata.

RULING

The Petition has no merit.
1. On Prescriptive Period for Annulment Based on Extrinsic Fraud: The Court found that the City’s deliberate failure to notify petitioner’s predecessor-in-interest, a party entitled to notice under Section 12(e) of Republic Act No. 26 , constituted extrinsic fraud. However, an action for annulment of judgment based on extrinsic fraud must be filed within four years from its discovery. The reconstitution order became final in 1964. Petitioner alleged he discovered the fraud only on October 16, 1987, when the CA rendered its decision in the quieting of title case. Even reckoning from this date, petitioner filed his annulment action only on June 13, 1994, which was beyond the four-year prescriptive period. The Court rejected petitioner’s argument that the period should run from the Supreme Court’s denial of his motion for reconsideration on October 26, 1988, as the fraud was discoverable from the 1987 CA decision.
2. On Lack of Jurisdiction and Laches: The Court held that while a judgment rendered by a court without jurisdiction is void and may be attacked anytime, the right to assail it can be barred by laches. Petitioner actively participated in the quieting of title case from 1970 until its final resolution in 1988 but never raised the issue of the reconstitution court’s lack of jurisdiction. He filed the annulment action only in 1994. His inaction for an unreasonable length of time, despite opportunity to challenge the jurisdiction, constituted laches, which barred his right to question the 1964 Order.
3. On Res Judicata: The Court found the CA correctly applied the principle of res judicata. The earlier quieting of title case and the present annulment action involved the same parties (petitioner and the City) and the same cause of action (ownership and possession of Lot 1 covered by OCT No. 665). The 1987 CA Decision, which became final in 1988, conclusively settled the issue of the validity of OCT No. 665 and its superiority over petitioner’s title. This controlling legal principle established by final judgment could no longer be relitigated by the same parties.