The remedy of annulment of judgment has been long authorized and sanctioned in the Philippines. In Banco Español-Filipino v. Palanca,14 of 1918 vintage, the Court, through Justice Street, recognized that there were only two remedies available under the rules of procedure in force at the time to a party aggrieved by a decision of the Court of First Instance (CFI) that had already attained finality, namely: that under Sec. 113, Code of Civil Procedure, which was akin to the petition for relief from judgment under Rule 38, Rules of Court; and that under Sec. 513, Code of Civil Procedure, which stipulated that the party aggrieved under a judgment rendered by the CFI "upon default" and who had been "deprived of a hearing by fraud, accident, mistake or excusable negligence" and the CFI had "finally adjourned so that no adequate remedy exists in that court" could "present his petition to the Supreme Court within sixty days after he first learns of the rendition of such judgment, and not thereafter, setting forth the facts and praying to have judgment set aside."15 It categorically ruled out a mere motion filed for that purpose in the same action as a proper remedy.
The jurisdiction over the action for the annulment of judgment had been lodged in the CFI as a court of general jurisdiction on the basis that the subject matter of the action was not capable of pecuniary estimation. Section 56, paragraph 1, of Act No. 136 (An Act providing for the Organization of Courts in the Philippine Islands), effective on June 11, 1901, vested original jurisdiction in the CFI over "all civil actions in which the subject of litigations is not capable of pecuniary estimation." The CFI retained its jurisdiction under Section 44(a) of Republic Act No. 296 (The Judiciary Act of 1948), effective on June 17, 1948, which contained a similar provision vesting original jurisdiction in the CFI over "all civil actions in which the subject of the litigation is not capable of pecuniary estimation."
In the period under the regimes of Act No. 136 and Republic Act No. 296, the issues centered on which CFI, or branch thereof, had the jurisdiction over the action for the annulment of judgment. It was held in Mas v. Dumara-og16that "the power to open, modify or vacate a judgment is not only possessed by, but is restricted to the court in which the judgment was rendered." In J.M. Tuason & Co., Inc. v. Torres,17 the Court declared that "the jurisdiction to annul a judgment of a branch of the Court of First Instance belongs solely to the very same branch which rendered the judgment." In Sterling Investment Corporation v. Ruiz,18 the Court enjoined a branch of the CFI of Rizal from taking cognizance of an action filed with it to annul the judgment of another branch of the same court.
In Dulap v. Court of Appeals,19 the Court observed that the philosophy underlying the pronouncements in these cases was the policy of judicial stability, as expressed in Dumara-og, to the end that the judgment of a court of competent jurisdiction could not be interfered with by any court of concurrent jurisdiction. Seeing that the pronouncements in Dumara-og, J.M. Tuason & Co., Inc. and Sterling Investment confining the jurisdiction to annul a judgment to the court or its branch rendering the judgment would "practically amount to judicial legislation," the Court found the occasion to re-examine the pronouncements. Observing that the plaintiff’s cause of action in an action to annul the judgment of a court "springs from the alleged nullity of the judgment based on one ground or another, particularly fraud, which fact affords the plaintiff a right to judicial interference in his behalf," and that that the two cases were distinct and separate from each other because "the cause of action (to annul judgment) is entirely different from that in the action which gave rise to the judgment sought to be annulled, for a direct attack against a final and executory judgment is not incidental to, but is the main object of, the proceeding," the Court concluded that "there is no plausible reason why the venue of the action to annul the judgment should necessarily follow the venue of the previous action" if the outcome was not only to violate the existing rule on venue for personal actions but also to limit the opportunity for the application of such rule on venue for personal actions.20 The Court observed that the doctrine under Dumara-og, J.M. Tuason & Co., Inc. and Sterling Investment could then very well "result in the difficulties precisely sought to be avoided by the rules; for it could be that at the time of the filing of the second action for annulment, neither the plaintiff nor the defendant resides in the same place where either or both of them did when the first action was commenced and tried," thus unduly depriving the parties of the right expressly given them by the Rules of Court "to change or transfer venue from one province to another by written agreement – a right conferred upon them for their own convenience and to minimize their expenses in the litigation – and renders innocuous the provision on waiver of improper venue in Section 4 (of Rule 4 of the Revised Rules of Court)."21 The Court eventually ruled:
Our conclusion must therefore be that a court of first instance or a branch thereof has the authority and jurisdiction to take cognizance of, and to act in, a suit to annul a final and executory judgment or order rendered by another court of first instance or by another branch of the same court. The policy of judicial stability, which underlies the doctrine laid down in the cases of Dumara-og, J.M. Tuason & Co., Inc. and Sterling Investment Corporation, et al., supra, should be held subordinate to an orderly administration of justice based on the existing rules of procedure and the law.22 x x x
In 1981, the Legislature enacted Batas Pambansa Blg. 129 (Judiciary Reorganization Act of 1980).23 Among several innovations of this legislative enactment was the formal establishment of the annulment of a judgment or final order as an action independent from the generic classification of litigations in which the subject matter was not capable of pecuniary estimation, and expressly vested the exclusive original jurisdiction over such action in the CA.24 The action in which the subject of the litigation was incapable of pecuniary estimation continued to be under the exclusive original jurisdiction of the RTC, which replaced the CFI as the court of general jurisdiction.25 Since then, the RTC no longer had jurisdiction over an action to annul the judgment of the RTC, eliminating all concerns about judicial stability. To implement this change, the Court introduced a new procedure to govern the action to annul the judgment of the RTC in the 1997 revision of the Rules of Court under Rule 47, directing in Section 2 thereof that "[t]he annulment may be based only on the grounds of extrinsic fraud and lack of jurisdiction."26
The Court has expounded on the nature of the remedy of annulment of judgment or final order in Dare Adventure Farm Corporation v. Court of Appeals,27 viz:
A petition for annulment of judgment is a remedy in equity so exceptional in nature that it may be availed of only when other remedies are wanting, and only if the judgment, final order or final resolution sought to be annulled was rendered by a court lacking jurisdiction or through extrinsic fraud. Yet, the remedy, being exceptional in character, is not allowed to be so easily and readily abused by parties aggrieved by the final judgments, orders or resolutions. The Court has thus instituted safeguards by limiting the grounds for the annulment to lack of jurisdiction and extrinsic fraud, and by prescribing in Section 1 of Rule 47 of the Rules of Court that the petitioner should show that the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no fault of the petitioner. A petition for annulment that ignores or disregards any of the safeguards cannot prosper.
The attitude of judicial reluctance towards the annulment of a judgment, final order or final resolution is understandable, for the remedy disregards the time-honored doctrine of immutability and unalterability of final judgments, a solid corner stone in the dispensation of justice by the courts. The doctrine of immutability and unalterability serves a two-fold purpose, namely: (a) to avoid delay in the administration of justice and thus, procedurally, to make orderly the discharge of judicial business; and (b) to put an end to judicial controversies, at the risk of occasional errors, which is precisely why the courts exist. As to the first, a judgment that has acquired finality becomes immutable and unalterable and is no longer to be modified in any respect even if the modification is meant to correct an erroneous conclusion of fact or of law, and whether the modification is made by the court that rendered the decision or by the highest court of the land. As to the latter, controversies cannot drag on indefinitely because fundamental considerations of public policy and sound practice demand that the rights and obligations of every litigant must not hang in suspense for an indefinite period of time.
The objective of the remedy of annulment of judgment or final order is to undo or set aside the judgment or final order, and thereby grant to the petitioner an opportunity to prosecute his cause or to ventilate his defense. If the ground relied upon is lack of jurisdiction, the entire proceedings are set aside without prejudice to the original action being refiled in the proper court.28 If the judgment or final order or resolution is set aside on the ground of extrinsic fraud, the CA may on motion order the trial court to try the case as if a timely motion for new trial had been granted therein.29 The remedy is by no means an appeal whereby the correctness of the assailed judgment or final order is in issue; hence, the CA is not called upon to address each error allegedly committed by the trial court.30 (Pinausukan Seafood House vs. Far East Bank, G.R. No. 159926, 20 Jan. 2014)
Read: Original SC Decision
