G.R. No. 156118 , November 19, 2004
Pablo T. Tolentino and Tempus Place Realty Management Corporation, petitioners, vs. Hon. Oscar Leviste, Presiding Judge, RTC, Quezon City, Br. 97 and Spouses Gerardo Cinco, Jr. and Pamela H. Cinco, respondents.

FACTS

Respondents Spouses Cinco filed a complaint for specific performance with damages against petitioners, alleging that despite the execution of a Deed of Absolute Sale and delivery of the condominium certificate of title for a unit in Tempus Place Condominium II, petitioners failed to deliver possession as they had leased it to a third party. Respondents further claimed petitioners refused to pay the requisite capital gains and documentary stamp taxes and to execute a board resolution, thereby preventing the transfer of title. They prayed for delivery of possession, payment of taxes, execution of the resolution, and various damages including monthly rental value, moral damages, exemplary damages, and attorney’s fees.
Petitioners failed to file an answer, leading the trial court to declare them in default. After ex parte reception of evidence, the trial court rendered a decision granting all reliefs prayed for by respondents. Petitioners’ motion for new trial, citing their former counsel’s negligence, was denied. They filed a notice of appeal, but the Court of Appeals dismissed it for failure to submit the required appeal brief, rendering the trial court’s decision final and executory.

ISSUE

Whether the Court of Appeals correctly denied the petition for annulment of the trial court’s judgment.

RULING

Yes, the Supreme Court denied the petition and affirmed the Court of Appeals. The Court held that a petition for annulment of judgment under Rule 47 of the Rules of Court is a recourse of last resort, available only on the grounds of extrinsic fraud or lack of jurisdiction, and only when the petitioner has no other available remedies such as appeal or petition for relief from judgment. Petitioners failed to establish either ground.
First, the alleged negligence of their former counsel in failing to file the appellant’s brief does not constitute extrinsic fraud. Extrinsic fraud refers to deceitful conduct outside the trial, such as preventing a party from presenting their case. Mere negligence of counsel, absent any showing of fraudulent intent or collusion, is not extrinsic fraud and binds the client. Second, the trial court possessed jurisdiction over both the subject matter and the persons of the petitioners. Jurisdiction over the subject matter is determined by the allegations in the complaint, and an action for specific performance with damages is within the jurisdiction of the Regional Trial Court. Jurisdiction over the person was acquired through proper service of summons. Petitioners’ arguments concerning errors in the award of damages or the substance of the decision pertain to the court’s exercise of jurisdiction, not a lack of it. Such errors are mere errors of judgment correctible by timely appeal, not by annulment of judgment. Having allowed their period for appeal to lapse, petitioners cannot now use annulment as a substitute for a lost appeal.