G.R. No. 256612 . June 14, 2023.
Rita Quizon-Arciga and Relia Q. Arciga, Petitioners, vs. Jaycee P. Baluyut, Respondent.

FACTS

Respondent Jaycee P. Baluyut filed a Complaint for Judicial Foreclosure of Mortgage against petitioners Rita Quizon-Arciga and Relia Q. Arciga. Respondent alleged that petitioners, as heirs, executed a Deed of Extra-Judicial Settlement of Estate/Partition with Special Power of Attorney (EJS-SPA) over a property, and that on August 11, 2005, Relia obtained a loan of P500,000.00 from respondent with 8% monthly interest, secured by a Real Estate Mortgage (REM) on the property using the same EJS-SPA. Petitioners, in their Answer, argued that the EJS-SPA only authorized Relia to mortgage the property to a specific person, “Amelia G. Pineda,” and thus the mortgage was unenforceable against Rita’s share. The Regional Trial Court (RTC) rendered a Decision on June 27, 2016, ordering petitioners to pay the loan with 8% monthly interest and, in case of non-payment, for the property to be sold at public auction. Petitioners manifested they would not appeal, intending to settle. The RTC granted execution, confirmed the public sale to respondent, and issued a Writ of Possession. Petitioners later filed an Omnibus Motion to nullify the sale, arguing the 8% monthly interest was void. The RTC denied this, stating the decision had been fully implemented. Petitioners then filed a Petition for Annulment of Judgment with the Court of Appeals (CA), reiterating the interest rate was excessive and deprived the RTC of jurisdiction. The CA dismissed the petition, ruling petitioners failed to show unavailability of ordinary remedies, the interest award did not constitute extrinsic fraud or lack of jurisdiction, the petition was barred by laches, and petitioners failed to allege jurisdictional lack with particularity. In their Motion for Reconsideration, petitioners raised new grounds: gross negligence of their former counsel as extrinsic fraud, and respondent’s failure to indicate the property’s assessed value and pay correct docket fees, which allegedly deprived the RTC of jurisdiction. The CA denied the motion, finding the failure to appeal was due to petitioners’ own intent to settle, not counsel’s negligence, and that a lien on the judgment award satisfied docket fee requirements.

ISSUE

Whether the Court of Appeals correctly dismissed petitioners’ Petition for Annulment of Judgment.

RULING

Yes, the Court of Appeals correctly dismissed the petition. An action for annulment of judgment under Rule 47 of the Rules of Court is only available when ordinary remedies are no longer available through no fault of the petitioner, and only on grounds of extrinsic fraud or lack of jurisdiction. First, extrinsic fraud requires a scheme by the prevailing litigant that prevented the other party from having their day in court. Petitioners’ claim of extrinsic fraud based on their own counsel’s alleged gross negligence fails because the fraud must be committed by the opponent, not one’s own lawyer. Record shows petitioners themselves decided not to appeal to pursue a settlement. Second, on lack of jurisdiction, petitioners are estopped from questioning it. A complaint for judicial foreclosure of mortgage is a real action, and jurisdiction depends on the assessed value of the property. While respondent’s Complaint did not state the assessed value, petitioners actively participated in all stages of the case before the RTC without raising this jurisdictional issue, thereby acquiescing to its jurisdiction. Estoppel bars a party from challenging jurisdiction after such participation. Furthermore, the alleged failure to pay correct docket fees does not automatically deprive the court of jurisdiction if a lien on the judgment award is imposed. Lastly, the claim that the 8% monthly interest is unconscionable is a substantive issue that does not affect the court’s jurisdiction and should have been raised in a timely appeal, not in an annulment petition. Therefore, the Petition for Review on Certiorari is denied, and the CA Resolutions are affirmed.