G.R. No. 178842 & 195509, January 30, 2017
RENE H. IMPERIAL and NIDSLAND RESOURCES AND DEVELOPMENT CORPORATION, Petitioners, vs. HON. EDGAR L. ARMES, Presiding Judge of Branch 4, Regional Trial Court, 5th Judicial Region, Legazpi City and ALFONSO B. CRUZ, JR., Respondents. / ALFONSO B. CRUZ, Petitioner, vs. RENE IMPERIAL and NIDSLAND RESOURCES AND DEVELOPMENT CORPORATION, Respondents.

FACTS

Petitioners Rene Imperial and NIDSLAND entered into a Memorandum of Agreement with Julian Napal to form a corporation, with Napal obligated to convey certain properties, including Lot 15-C. Napal instead sold this lot to respondent Alfonso Cruz. Imperial filed a derivative suit before the Securities and Exchange Commission (SEC) and annotated a notice of lis pendens on the title. The SEC later declared the sale to Cruz void ab initio as simulated and ordered the property conveyed to NIDSLAND, which was done. Cruz, who was not formally impleaded in the SEC case but held the title, did not appeal this SEC Decision.
Subsequently, Cruz filed a separate action for annulment of the SEC judgment before the Regional Trial Court (RTC). The RTC dismissed the case, ruling it lacked jurisdiction. The Court of Appeals affirmed, holding that an action for annulment of judgment under Rule 47 cannot be used to annul a judgment of a quasi-judicial agency like the SEC. Cruz elevated the matter to the Supreme Court.

ISSUE

Whether the Regional Trial Court has jurisdiction over an action for annulment of a final and executory judgment rendered by the Securities and Exchange Commission.

RULING

No, the RTC has no jurisdiction. The Supreme Court affirmed the CA’s dismissal. An action for annulment of judgment under Rule 47 of the Rules of Court is a remedy available only against final judgments of courts in the exercise of their judicial functions. It is a statutory right confined to judgments of Regional Trial Courts. The SEC, at the time it rendered the assailed decision, was a quasi-judicial agency exercising regulatory and adjudicatory functions pursuant to its special mandate under P.D. No. 902-A. Its judgments, while final and executory, are not subject to annulment under Rule 47. The proper remedy to challenge a final SEC judgment for being void, such as on jurisdictional grounds, is a special civil action for certiorari under Rule 65 filed with the Court of Appeals, which at that time possessed exclusive appellate jurisdiction over SEC decisions. The Court emphasized that while a void judgment can be attacked at any time, the attack must be mounted through the correct procedural vehicle and before the proper forum. Cruz’s failure to avail of the correct remedy in the proper court was fatal to his cause.