Philippine Supreme Court Resolutions > Year 2012 > June 2012 Resolutions > [G.R. No. 188778 : June 27, 2012] ANTONIO HERMANO v. OCTAVIO ALVAREZ, JR., LEONORA CASTRO-BATAC, GILBERTO C. CASTRO, JR., MANUEL C. CASTRO, CONSUELO CASTRO-CASTRO, JAKE CASTRO, MA. ELISA CASTRO-VILLANUEVA AND ROSELINO CASTRO :

Please take notice that the Court, Second Division, issued a Resolution dated 25 June 2012 which reads as follows:cralaw

G.R. No. 188778 (Antonio Hermano v. Octavio Alvarez, Jr., Leonora Castro-Batac, Gilberto C. Castro, Jr., Manuel C. Castro, Consuelo Castro-Castro, Jake Castro, Ma. Elisa Castro-Villanueva and Roselino Castro). � This is a petition for review under Rule 45 of the Rules of Court filed by herein petitioner Antonio Hermano (Hermano) against respondents Octavio Alvarez, Jr. (Alvarez), Leonora Castro-Batac (Leonora), Gilberto C. Castro, Jr. (Gilberto), Manuel C. Castro (Manuel), Consuelo Castro-Castro (Consuelo), Jake Castro (Jake), Ma. Elisa Castro-Villanueva (Ma. Elisa) and Rocelino Castro (Rocelino). The petitioner seeks the reversal of the Decision dated March 4, 2009 of the Court of Appeals (CA) dismissing his petition for annulment of judgment on alleged grounds of extrinsic fraud and lack of jurisdiction; and the Resolution dated July 6, 2009 denying the motion for reconsideration thereof.

The antecedent facts are as follows:

On March 21, 1996, Hermano and Alvarez entered into a real estate mortgage covering three parcels of land under TCT No. TP-3, TCT No. TP-4, and TCT No. N-7039 to secure Alvarez' loan amounting to P1,000,000.00. Upon the maturity of the loan, Alvarez defaulted in his payment. A petition for judicial foreclosure was filed by Hermano which was granted by the court in a judgment rendered on August 6, 2001.^[1] Subsequently, Hermano acquired the mortgaged properties; the titles of the properties were cancelled and new certificates of title of the subject properties were issued in his name, to wit: TCT No. TP-103 and TCT No. TP-104. Hermano avers that since then he has been exercising his right of ownership and has been in continuous possession and control of the subject properties.

Prior to the aforesaid mortgage transaction or on October 11, 1995, respondents Leonora, Gilberto, Manuel, Consuelo, Jake, Ma. Elisa and Rocelino filed a civil action for cancellation/reconstitution of patent titles/transfer certificates of titles with the Regional Trial Court (RTC), Branch 226 of Quezon City against respondent Alvarez. This was docketed as Civil Case No. Q-95-25285. An Amended Complaint was filed on July 11, 1996.^[2]

On November 30, 2005, the RTC rendered a decision, ruling that TCT Nos. TP-3 and TP-4 were void since they were transfers of null and void titles.^[3] The RTC, therefore, ordered the cancellation of TCT Nos. TP-3 and TP-4 in the name of Alvarez, and the issuance of certificates of title in the names of respondents Leonora, Gilberto, Manuel, Consuelo, Jake, Ma. Elisa and Rocelino. A writ of execution dated May 18, 2007 was issued.

It was only in December 2007 when the petitioner learned about the Decision dated November 30, 2005 of the RTC in Civil Case No. Q-95-25285 which prompted him to file the petition for annulment of judgment dated January 8, 2008. As earlier stated, the petition was dismissed. The motion for reconsideration was, likewise, denied.

Dissatisfied, the petitioner filed this present petition, arguing that:

1) The parties in Civil Case No. Q-95-25285 committed extrinsic fraud considering that no notice of lis pendens was annotated on the certificates of title of the subject properties. Since the petitioner was never notified of the pendency of Civil Case. No. Q-95-25285, he and his properties subject of said case, cannot be affected by the decision of the RTC.

2) There being no notice of lis pendens, the petitioner is deemed to be a buyer in good faith. He validly acquired title over the subject properties which are indefeasible as against the whole world. He should have been impleaded as an indispensable party in the civil case.

The main issue is whether or not the CA erred in dismissing the petition for annulment of judgment.

The petition is denied.

Under Rule 47 of the Rules of Court, a final judgment may be annulled on the ground of extrinsic and not merely on intrinsic fraud. This recourse requires that the fraudulent act should be one done outside of the trial of the case, such that, the party was prevented from participating in the case. On the other hand, intrinsic fraud refers to acts of a party at a trial which prevented a fair and just determination of the case and which could have been litigated and determined at the trial or adjudication of the case.^[4]

In the instant case, the CA correctly ruled that the mere failure to cause a notice of lis pendens does not constitute extrinsic fraud. Lis pendens means a pending suit; the doctrine of which has been defined as the jurisdiction, power or control which the court acquires over a property involved in a suit.^[5] The lack of notice of pending litigation will not prevent the party to intervene or participate in the proceedings as soon as knowledge thereof is acquired by him. As the CA emphasized, the overriding consideration in a petition for annulment of judgment is that the fraudulent scheme of the prevailing litigant must be one that prevented a party from having his day in court, which is not present in the case at bar.^[6] 

Further, the CA found no ample basis to annul the judgment on the ground of the respondents� alleged failure to implead the petitioner as an indispensable party in Civil Case No. Q-95-25285. The civil case sought to cancel the patents and corresponding certificates of title issued by the Bureau of Lands and the petitioner, being a mere mortgagee cannot be considered an indispensable party since his interests, unregistered at that, were so far separable from the interest of the other parties.^[7] More importantly, however, there was no obligation on the part of the respondents to implead the petitioner who only became a mortgagee after the institution of the civil action.

We agree with the CA that granting this extraordinary writ under the circumstances of the case would mean going beyond the rules, as to allow the losing party to make a complete farce of a duly promulgated decision which has long become final and executory. There must be an end to litigation. Nonetheless, as stated by the CA, the petitioner is not left without any remedy in law. He may seek a more appropriate recourse, or at the very least, recover damages, if any, from the parties as a result of this controversy.cralaw

WHEREFORE, in view of the foregoing, the Court finds no reversible error with the Decision dated March 4, 2009 of the Court of Appeals. The petition is DENIED.

Very truly yours, 

(Sgd.) TERESITA AQUINO TUAZON
Deputy Division Clerk of Court

Endnotes:

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^[1] Rollo, p. 82.

^[2] Id. at 86. 

^[3] Id. at 86-116. 

^[4] Salonga v. CA, 336 Phil. 514, 525 (1997), citing Yba�ez v. CA, 323 Phil. 643, 656 (1996). 

^[5] Rollo, p. 13. 

^[6] Id. at 14. 

^[7] Id. at 15.