G.R. No. L-50929 July 15, 1981
INVESTORS’ FINANCE CORPORATION, doing business under the name and style “FNCB FINANCE” and DANILO REYES, Deputy Sheriff of Branch XXI, CFI of Rizal (Pasig), petitioners, vs. THE HONORABLE COURT OF APPEALS, RICHMANN TRACTORS, INC., RICARDO B. PAJARILLAGA and ELLA P. PAJARILLAGA, respondents.

FACTS

Private respondents Richmann Tractors, Inc. and the Pajarillaga spouses obtained financing from petitioner Investors’ Finance Corporation (FNCB Finance), executing a Lease Agreement and Continuing Guaranties. Upon default, FNCB filed a complaint for replevin and sum of money, docketed as Civil Case No. 29671 before Branch XXI of the Court of First Instance (CFI) of Rizal in Pasig, presided by Judge Gregorio Pineda. The parties entered into a Compromise Agreement, which Judge Pineda approved and rendered into a decision. Upon private respondents’ subsequent breach, FNCB secured a writ of execution from Branch XXI.
While the sheriff was enforcing this writ, private respondents filed a separate action, Civil Case No. Q-26754, before Branch V of the CFI of Rizal in Quezon City, presided by Judge Eduardo C. Tutaan. This new action sought to annul the decision in Civil Case No. 29671 on the ground of extrinsic fraud. Judge Tutaan issued an order enjoining the sheriff from proceeding with the execution. Petitioners challenged this order via certiorari in the Court of Appeals, which dismissed their petition. Petitioners then elevated the case to the Supreme Court.

ISSUE

Whether a branch of a court of first instance has jurisdiction to entertain an action for annulment of a final and executory judgment rendered by another branch of the same court, and to issue ancillary relief such as an injunction against the execution of that judgment.

RULING

Yes. The Supreme Court affirmed the Court of Appeals and upheld Judge Tutaan’s jurisdiction. The Court clarified that an action for annulment of judgment based on extrinsic fraud is a direct and independent attack, not a collateral one. It constitutes a separate cause of action entirely distinct from the original case. Citing Dulap v. Court of Appeals, the Court held that the statutory jurisdiction to annul judgments is vested in Courts of First Instance as entire courts, not in any specific branch exclusively. Therefore, any branch of the CFI can validly take cognizance of an annulment case, even if the judgment under attack was rendered by a co-equal branch.
The Court further ruled that jurisdiction over the main action for annulment carries with it the authority to issue necessary provisional remedies, such as the injunction to restrain execution, to preserve the subject matter and protect the parties’ interests during the pendency of the suit. The Court rejected the argument that the annulment action was premature, noting that the judgment in Civil Case No. 29671 was already final and executory and in the process of being executed, leaving no adequate remedy in the original branch. Consequently, Judge Tutaan was duty-bound to proceed with the trial of the annulment case. The petition was denied.