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THIRD DIVISION

RITA QUIZON-ARCIGA AND G.R. No. 256612

RELIA Q. ARCIGA
Petitioners, Present:

CAGUIOA, J., Chairperson,

INTING,
GAERLAN,
- versus - DIMAAMPAO, and
SINGH, JJ.

JAYCEE P. BALUYUT, Promulgated:

Respondent. June 14, 2023
X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -~~ ~~~~~t - -------------X

DECISION

INTING, J.:

Before the Court is a Petition for Review on Certiorari' filed by Rita

Quizon-Arciga (Rita) and Relia Q. Arciga (Relia) (collectively,
petitioners) assailing the Resolutions dated February 17, 2020, 2 and May
20, 2021, 3 of the Com1 of Appeals (CA) in CA-G.R. SP No. 162463. The
CA dismissed petitioners' Petition for Annulment of Judgment 4 of the
Decision 5 dated June 27, 2016, of Branch 66, Regional Trial Court (RTC),
Capas, Tarlac in Civil Case No. CT08-830 for lack of merit and,
subsequently, denied their Motion for Reconsideration. 6

Rollo, pp. 10-37 .

Id. at 43 -47. Penned by Associate Justice Victoria lsabel A. Paredes and concurred in by Assoc iate
Justices Maritlor P. Punzalan Castillo and Walter S. Ong.
Id. at 49-52.
Id. at 148-160.
ld. at I08-1 16. Penned by Acting Presiding .Judge Anarica J. Cati I lo-Reyes.
Id. at 58-82.
Decision 2 G.R. No. 256612

The Antecedents

On June 26, 2008, Jaycee P. Baluyut (respondent) filed a

Complaint7 for Judicial Foreclosure of Mortgage against petitioners and
alleged that: ( 1) on December 5, 2002, petitioners, as heirs of Simplicio
Arciga, executed a Deed of Extra-Judicial Settlement of Estate/Partition
with Special Power of Attorney 8 (EJS-SPA) over a parcel of land covered
by Transfer Ce1iificate of Title (TCT) No. 142572 located in Concepcion,
Tarlac (property); thus, TCT No. 142572 was cancelled and a new one
was issued in the names of petitioners under TCT No. 395377; 9 (2) on
August 11, 2005, Relia took a loan from respondent in the amount of
P500,000.00 with interest at the rate of 8% per month, payable after 5
months; (3) using the same EJS-SPA, Relia secured the loan and executed
a Real Estate Mortgage (REM) 10 over the property in favor of respondent;
and (4) upon maturity of the loan and despite respondent's repeated
demands, Relia refused to pay her obligation. 11

In their Answer, 12 petitioners raised the defense of lack of authority

of Relia to act for and on behalf of her mother, Rita. According to them,
the EJS-SPA only authorized Relia to mortgage the prope1iy to a certain
"Amelia G. Pineda", and not to any other person. As such, they argued
that the mortgage was unenforceable as against Rita's share in the
property.

After trial on the merits, the RTC rendered its Decision 13 dated June
27, 2016 and granted the complaint, the dispositive portion of which
reads:

IN VIEW OF THE FOREGOING, judgment is hereby rendered

in favor of the [respondents]. Pursuant to Rule 68 , Section 2 of the
Revised Rules of Court, [t]he [petitioners] are hereby ordered to:

1. Pay the [respondent] the amount of Five Hundred Thousand

Pesos (PhpS00,000.00) with an interest of Eight Percent
(8%) per month counted from the time that the Real Estate
Mo1igage was executed by the parties up to full payment
thereof, within a period of One Hundred Twenty ( 120) days
from the entry of this judgment;

Id. at 83-85.
Id. at 101-102.
9
Id. at 99-100.
10
Id. at 97-98.
11
Id . at I 08.
12
Id. at 103-105.
'' Id. at I 08-1 16.
Decision 3 G.R. No. 256612

2. In the event that the [petitioners] fail to pay the said amount
within the given period, the subject property shall be sold at
a public auction to satisfy the judgment of this cou1i.

SO ORDERED. 14 (Emphases omitted)

On March 8, 201 7, the RTC granted respondent's motion for

execution. 15 The RTC took into account petitioners' manifestation in open
court that they no longer filed any appeal or motion for reconsideration to
the decision as they intend "to just settle the civil aspect of the case." 16

On November 28, 201 7, the RTC issued an Order 17 confirming the

public sale of the prope1iy to respondent conducted on May 19, 2017.

Thereafter, the RTC granted respondent's Motion for Issuance of a

Writ of Possession (WOP), 18 and placed respondent into possession of the
property on August 8, 2018. 19

Incidentally, in their Comment on Motion For Issuance of a

[WOP], 20 petitioners only argued that: (1) their right to redeem the
prope1iy had not yet lapsed; and (2) that the monthly interest of 8% was
void.

Five months after respondent was placed into possession or on

January 7, 2019, petitioners filed with the RTC an "Omnibus Motion for
the Nullification of the Public Auction Sale or Foreclosure Sale and the
Certfficate of Sale and for the Reinstatement of the Defendants into
Possession and Occupation of the Involved Parcel of Land," 21 and
reiterated their argument that the foreclosure of the prope1iy and its
subsequent sale was void on the ground that that the monthly interest of
8% was unconscionable and void. 22

On March 7, 2019, the R TC ruled that the decision sought to be

annulled had been fully implemented and satisfied, and consequently,
denied petitioners' Omnibus Motion for lack ofjurisdiction. 23
14
Id. i 16.
15
See Order dated March 8, 2017, id. at 202. Issued by Presiding Judge Ronald Leo T. Haban.
16 Id .
17
See Order dated November 28, 2017, id . at 124.
18
See Reso lution dated June 6, 20 I 8, id. at I 33 - 135.
19
See Return of Writ of Possession dated August 8, 20 ! 8. id . at i 38- ! 39.
10
Id. at 127- 128.
21
Id. at 140-145 .
22
Id . at 142.
23
See Order dated March 7, 20 18, id. at 146-1 ti 7. Order is erroneously dated March 7. 20 l 8 instead
of March 7, 20 I9.
Decision 4 G.R. No. 256612

Undaunted, on September 18, 2019, petitioners filed a Petition for

Annulment of Judgment24 with the CA. In support of their petition, they
merely reiterated their argument that the RTC had no jurisdiction to order
the payment of the monthly interest of 8% on the principal loan of
P500,000.00 for being excessive, exorbitant, and contrary to morals and
public policy.25

The Ruling of the CA

In its Resolution 26 dated February 17, 2020, the CA dismissed the

petition. It ruled that first, petitioners failed to show that they could not
have availed themselves of the ordinary remedies of new trial, appeal,
petition for relief, or other appropriate remedies without their fault; 27
second, the RTC's award of the monthly interest of 8% in favor of
respondent does not amount to extrinsic fraud or lack of jurisdiction,
which are the only grounds for annulment of judgment; 28 third, assuming
that the RTC had no jurisdiction, the petition was already barred by !aches
as it was filed only on September 18, 2019, or after more than 3 years
since the decision of the RTC was rendered; 29 and fourth , petitioners
failed to allege with paiiicularity the facts to support their claim of the
RTC's alleged lack of jurisdiction. 30

In their Motion for Reconsideration, 31 petitioners reiterated that

that the RTC had no jurisdiction to render the decision. Moreover, they
raised for the first time that their petition for annulment of judgment
should be granted based on the following grounds: ( 1) the gross
negligence of their previous counsel in handling their case constitutes
extrinsic fraud; and (2) a complaint for judicial foreclosure of mortgage
being a real action, respondent's failure to indicate the assessed and
market value of the prope1iy in the Complaint, as well as pay the
c01Tesponding docket fees, prevented the RTC from acquiring jurisdiction
over the subject matter. 32

24
Id. at 148-160.
25
Id. at 43 -44, 154.
26
Id . at 43-47 .
27
ld.at45.
28
Id. at 46 .
!9 Id.
30
Id. at 47.
31
ld . at58- 79.
32
Id. at 49-50 .
Decision 5 G.R. No. 256612

In its Resolution 33 dated May 20, 2021, the CA denied petitioners'

motion for reconsideration. It found that petitioners' failure to appeal the
RTC's decision was not due to the gross negligence of its counsel but
because they intended to settle the civil aspect of the case. 34 It also ruled
that a lien on the judgment award was sufficient to satisfy respondent's
alleged failure to pay the correct docket fees. Further, it ruled that
petitioners' argument of denial of due process cannot be raised for the first
time in their motion for reconsideration. 35

Hence, the present petition.

The Issue

The core issue in the case is whether the CA correctly dismissed

petitioners' petition for annulment of judgment.

Petitioners insist that the gross negligence of their previous counsel

constitutes extrinsic fraud; 36 and that respondent's failure to indicate the
assessed value of the property in her complaint and to pay the proper
docket fees prevented the RTC from acquiring jurisdiction over the case. 37
According to them, these are sufficient grounds to support their petition
for annulment of judgment to question the RTC's void decision. In
addition, petitioners aver that the monthly interest of 8% is void for being
iniquitous, exorbitant, unconscionable and contrary to law. 38

In his Comment, 39 respondent avers that petitioners' asse1iions of

their counsel's gross negligence, and his failure to pay the con-ect docket
fees, should not be considered for being belatedly raised only in their
motion for reconsideration before the CA. Further, respondent maintains
that the RTC's decision became final and executory because petitioners
voluntarily decided not to appeal it anymore, and not due to the existence
of any extrinsic fraud. 40

33
Id. at 49-52.
34
Id. at 50.
35
Id . at 51.
36
Id. at 16-21.
37
ld.at2l-33.
38
Id. at 33-34.
39 Id. at 189-198.
40
ld . atl97.
Decision 6 G.R. No. 256612

In their Reply, 4 1 petit10ners reiterate that the RTC has no

jurisdiction over the case. They further stress that the issue of jurisdiction
is a question that can be raised anytime even on appeal.

The Court 's Ruling

Rule 4 7 of the Rules of Cowi governs actions for annulment of

judgments or final orders and resolutions of regional trial courts in civil
cases. It is only available when the ordinary remedies of new trial, appeal ,
petition for relief or other remedies are no longer available through no
fault of the party seeking it. 42 Under Section 2, Rule 47 of the same rules,
the only grounds for annulment of judgment are: (1) extrinsic fraud; and
(2) lack of jurisdiction.

Fraud is deemed extrinsic where a party has been prevented by his

or her opponent, through fraud or deception, from fully participating in
the trial by keeping him away from court, a false promise of a
compromise; or where the defendant never had know ledge of the suit,
being kept in ignorance by the acts of the plaintiff; or where an attorney
fraudulently or without authority connives at his defeat. 43

Here, petitioners attribute their failure to appeal the RTC's decision

to the CA to their counsel and anchor their claim of extrinsic fraud on the
alleged gross negligence of their lawyer in handling their case.

To constitute extrinsic fraud, the scheme which prevented a paiiy

from having his or her day in court must have been devised by the
prevailing litigant. 44 Thus, even assuming that petitioners' counsel was
grossly negligent in handling their case, their petition for annulment of
judgment is still unavailing as the alleged fraud was committed not by
respondent but by their own lawyer. 45 Besides, record shows that it was
petitioners themselves who decided not to appeal the RTC's decision as
they originally wanted to settle the civil aspect of the case. 46

With regard to the question of the RTC ' s jurisdiction over the
subject matter of the present case, petitioners are already estopped from
questioning it.

11
' See Opposition/ Reply With Leave, id. ar 205-214.
42
Sect ion I, Rule 47, Rules of Court.
43
Cosmic Lumber Corp. v. Court ofApp eals, 33 2 Phil. 948 , 962 ( 1996).
44
Teodoro v. Court o.f Appeals, 437 Phii. 336,345 (2002).
45
See Pinausukan Seafood House, Roxas Blvd. , Inc. v. Far £,1st Bank & Trust Co ., 725 Phil. 19, 40-
41 (2014).
46
See Order dated March 8, 2017: id. at 202.
Decision 7 G.R. No. 256612

A complaint for foreclosure of REM, as in the present case, being

a real action, must be filed with the appropriate court, depending on the
assessed value of the property. 47

Batas Pambansa Blg. 129, as amended by Republic Act No. 7691,

the law providing the jurisdiction of the RTC and first level court at the
time of the commencement of the case, states:

Sec. 19. Jurisdiction in civil cases. - Regional Trial Cowis

shall exercise exclusive original jurisdiction.

xxxx

(2) In all civil actions which involve the title to, or possession
of, real property, or any interest therein, where the assessed value of
the property involved exceeds Twenty thousand pesos (P20,000,00) or,
for civil actions in Metro Manila, where such value exceeds Fifty
thousand pesos (PS0,000.00) except actions for forcible entry into and
unlawful detainer of lands or bui !dings, original jurisdiction over which
is conferred upon the Metropolitan Trial Courts, Municipal Trial
Cornis, and Municipal Circuit Trial Comis.

xxxx

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal

Trial Comis and Municipal Circuit Trial Courts in Civil Cases. -
Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Circuit Trial Courts shall exercise:

xxxx

(3) Exclusive original jurisdiction in all civil actions which

involve title to, or possession of, real property, or any interest therein
where the assessed value of the property or interest therein does not
exceed Twenty thousand pesos (P20,000.00) or, in civil actions in
Metro Manila, where such assessed value does not exceed Fifty
thousand pesos (PS0,000.00) exclusive of interest, damages of
whatever kind, attorney's fees, litigation expenses and costs: Provided,
That in cases of land not declared for taxation purposes, the value of
such property shall be determined by the assessed value of the adjacent
lots .

From the foregoing, if the assessed value of the subject prope1iy

exceeds P20,000.00, 48 it is the RTC which has jurisdiction over the
complaint; otherwise, it is cognizable by the first level court.

47
Roldan v. Sps. Barrios, 830 Phil. 583. 593(2018j.
48
Now 1'>400.000.00 purs uant to Republ ic Act No. l 1576, which amended Barns Pambansa Big. 129
and further expanded the j urisdiction of Metropolitan Trial Courts, Municipal Trial Courts in Cities,
Municipa l Tria l Courts, and Municipal Circuit Trial Courts.
Decision 8 G.R. No. 256612

In order to detennine which court has jurisdiction over an action, it

is essential to examine the allegations in the complaint and the character
of the relief sought. 49 This is because only the facts alleged in the
complaint can be the basis for determining the nature of the action, and
the court that can take cognizance of the case. 50

Here, respondent's complaint reads:

xxxx

2. That on December 5, 2002, the [petitioners] executed an

Extrajudicial Settlement of Estate/Partition with Special Power of
Attorney involving a parcel of land situated at Barangay Sta. Cruz,
Concepcion, Tarlac containing an area of 15 ,620 square meters as
described in and covered by Transfer Ce1iificate of Title No. 395377 x
Xx;

3. That then on August 11, 2005 , [petitioner] Relia Q. Arciga borrowed

from [respondent] the sum of five hundred thousand pesos
(P500,000.00), payable within the period of five (5) months from the
said date and with an agreed interest thereon at the rate of eight percent
(8%) per month;

4. That to secure the prompt and full payment of the principal and
interest, the [petitioner] made and executed on that same day, and by
virtue of an Extrajudicial Settlement/Partition with Special Power of
Attorney which was executed between the defendants, a Real Estate
Mortgage in favor of [respondent] on the parcel of land mentioned
above, xx x.

xxxx

6. That the time for payment of said loan is overdue, and the [peti tioner]
failed, and refused and still fails and refuses, to pay the principal
obligation and the interest due, notwithstanding repeated demands of
the [respondent]. 5 1

As could be gleaned from the foregoing, the complaint did not

contain any allegation on the assessed value of the subject property.
Without such allegation, it cannot be readily determined whether the RTC
or the Municipal Trial Court had exclusive original jurisdiction over
respondent's complaint. Courts are not authorized to take judicial notice
of the assessed value, or even the market value of a land subject of
litigation. 52

49
Fort Bonifacio Devz!opment Corporation v. Domingo, 599 Phil. 554, 56 1 (2009)
50
Spouses Cruz v. Spouses Cruz, 616Phil.519, 523-524 (2009).
51
Rollo, pp. 83 -84.
5
~ Quinagoran v. Court of Appeals, 557 Phi l. 650. 66 1 (2007).
Decision 9 G.R. No . 256612

On this point, the Court agrees with petitioners that the RTC had no
jurisdiction to hear and resolve respondent's complaint.

However, while the issue on jurisdiction over the subject matter

may generally be raised at any time in the proceedings, even on appeal,
petitioners are already estopped from questioning the RTC ' s lack of
jurisdiction.

In the case of Lagundi v. Bautista 53 (Lagundi), the Comi, reiterating

Tijam v. Sibonghanoy, 54 has ruled that estoppel by !aches may bar a party
from invoking lack of jurisdiction when the issue is raised only after the
party raising the argument has actively pmiicipated during trial and lost.

Estoppel sets in when "a party participates in all stages of a case

before challenging the jurisdiction of the lower court. One cannot
belatedly reject or repudiate its decision after voluntarily submitting to its
jurisdiction, just to secure affinnative relief against one's opponent or
after failing to obtain such relief. " 55

To recall, in the proceedings before the RTC, petitioners only

assailed the validity of the REM on the ground that the EJS-SPA executed
by Rita in favor of her daughter, Relia, only authorized the latter to
mortgage the property in favor of a certain Amelia Pineda. 56 It bears
stressing that they actively pmiicipated in the trial and presented
themselves as witnesses. In fact, when the RTC's decision became final
and executory, petitioners still did not question the RTC's jurisdiction.
They only opposed the issuance of the WOP in favor of respondent and
argued that: ( 1) their right to redeem the property had not yet lapsed; and
(2) that the monthly interest of 8% was void. 57

It is also worth mentioning that when petitioners filed their petition

for annulment of judgment with the CA, they simply reiterated their point
that the imposition of the monthly interest of 8% is void for being
unconscionable, exorbitant, and contrary to law, morals, and public
policy. 58

53
G.R. No. 207269, Ju ly 26, 202 i .
54
131 Phii. 556 ( 1968).
5" Bernardo v. Heirs v_fEuseb io Villegas, 629 ()i1i l. 450, 459 (20 I 0).
56
Rollo , pp. I 03-104.
57
Id. at 127.
58
Id. at 43 , I 54.
Decision G.R. No . 256612

In Lagundi, petitioner was found estopped from questioning the

jurisdiction of the RTC. There, the assessed values of the real properties
involved were not alleged in the complaint as to determine the appropriate
court which has jurisdiction over the case. Yet, petitioner never raised the
issue of jurisdiction during trial before the RTC or even on appeal before
the CA. It was only during the execution stage of the judgment that
petitioners challenged the RTC's jurisdiction. By then, twelve (12) years
had already lapsed since the filing of the complaint. 59

Here, as in Lagundi, it took petitioners twelve (12) years since the

filing of the complaint in 2008 before they raised the issue of lack of
jurisdiction. More, they only raised it for the first time in their motion for
reconsideration after the CA dismissed their petition for annulment of
judgment through its Resolution dated February 17, 2020.

Verily, it is already too late for petitioners to challenge the RTC's

jurisdiction on the ground that the complaint failed to allege the assessed
value of the subject property. For participating in all stages of the case
before the lower court, petitioners are indubitably barred by estoppel from
challenging the lower court's jurisdiction.

WHEREFORE, the Petition for Review on Certiorari is DENIED.

The Resolutions dated February 17, 2020 and May 20, 2021, of the Court
of Appeals (CA) in CA-G.R. SP No. 162463 are AFFIRMED.

SO ORDERED.

HEN . INTING

59
Lagundi v. Bautista, supra note 53.

fl/
Decision 11 G.R. No. 256612

WE CONCUR:

s~u:::~Associate Justice Associate Justice

Associate Justice

ATTESTATION

I attest that the conclusions in the abov had been reached

in consultation before the case was assig cl r ter of the opinion
of the Co mi's Division.

ALF _ S. CAGUIOA
tice
Chairpe, , . ivision
Decision 12 G.R. No. 256612

CERTIFICATION

Pmsuant to Section 13, Article VIII of the Constitution, and the Division
Chaitperson's Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court's Division.

Acting ChiefJustice
Per Special Order No. 2977 dated Jtme 1, 2023