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MARCELINO ARCELONA v. CA

FACTS:

Petitioners Marcelino Arcelona, Tomasa Arcelona-Chiang, and Ruth Arcelona, all natural-born Filipinos who are now naturalized Americans residing in California, together with their three sisters—Pacita Arcelona-Olanday, Maria Arcelona-Arellano, and Natividad Arcelona-Cruz—are co-owners of a fishpond they inherited from their deceased parents. On March 4, 1978, a lease contract over the fishpond was signed between Cipriano Tandoc and Olanday, et al., which lasted three years and was renewed until February 2, 1984. Upon the lease's termination, Tandoc surrendered possession to the lessors. However, Private Respondent Moises Farnacio, who was appointed by Tandoc as caretaker-tenant, filed Civil Case D-7240 on February 7, 1984, seeking peaceful possession and security of tenure over the fishpond. The Regional Trial Court of Dagupan City, Branch 40, ruled in favor of Farnacio on October 31, 1984, declaring him a tenant-caretaker. The Intermediate Appellate Court (IAC), later affirmed with slight modifications, and the Supreme Court upheld this decision. Upon remand, Farnacio was placed in possession of the fishpond. Dissatisfied, petitioners filed with the Court of Appeals for annulment of the judgment, which was denied. They then sought a petition for review before the Supreme Court, arguing that, as indispensable parties who were not impleaded in the original suit, they were denied due process.

ISSUES:

  1. May a final judgment be annulled on the ground of lack of jurisdiction (over the subject matter and/or over the person of indispensable parties) and denial of due process, aside from extrinsic fraud?

  2. May extraneous matters, not found in the records of the original case, be used in voiding or defending the validity of such final judgment?

  3. Procedurally, will an independent action for annulment of the decision of the regional trial court (which was affirmed both by the Court of Appeals and the Supreme Court) filed before the Court of Appeals prosper, or is intervention before the court of origin the only remedy?

RULING:

  1. Yes, a final judgment may be annulled on the grounds of lack of jurisdiction over the subject matter and/or over the person of indispensable parties, as well as denial of due process, aside from extrinsic fraud.

  2. No, extraneous matters, not found in the records of the original case, may not be used to void or defend the validity of such final judgment.

  3. Yes, an independent action for annulment of the decision of the regional trial court filed before the Court of Appeals will prosper, and intervention before the court of origin is not the only remedy.

PRINCIPLES:

  • Grounds for Annulment of Judgment: Lack of jurisdiction over the subject matter or the person of indispensable parties, and denial of due process are valid grounds for annulling a judgment, aside from extrinsic fraud.

  • Jurisdictional Requirements: Courts must have jurisdiction over both the subject matter and the persons of indispensable parties before they can issue valid judgments.

  • Records and Extraneous Evidence: The validity of a judgment must be determined from the evidence on record, not from extraneous matters.

  • Independent Action for Annulment: An independent action challenging a void judgment is recognized as a legitimate remedy and is not limited to intervention in the original proceedings.

  • Procedural Doctrine: A void judgment is a nullity and cannot serve as the basis for any legal obligation, nor can it become final.