FACTS:

Maria Gonzales entered into a contract to buy a property from Priscilla and Jose Manio. Gonzales paid a downpayment and agreed to pay the balance within three months. However, Priscilla failed to execute the deed of sale despite repeated demands. Gonzales filed an action for specific performance, which the trial court ruled in her favor. The court ordered the defendants to execute the deed, pay damages, attorney's fees, and litigation expenses. Gonzales deposited the balance and filed for execution, but the decision was not properly served on the defendants.

After delays, the decision was finally served on Priscilla, but the writ of execution was not served as the defendants could not be located. Gonzales filed a motion for the Clerk of Court to execute a deed of conveyance and to release the cash deposit. The trial court granted both motions. Gonzales also filed a petition to nullify the Owner's Duplicate Certificate of Title and for the issuance of a new title in her name. The trial court granted the petition, resulting in the issuance of a new certificate of title to Gonzales.

However, Maria Paz Dabon and Rosalina Dabon, who claimed to have purchased the property from Aristotle Manio, filed a petition to annul the judgment and orders. They alleged lack of jurisdiction, fraudulent deprivation of due process, and sought a temporary restraining order. The Court of Appeals issued a resolution restraining the trial court from implementing its decision and subsequent orders. The Court of Appeals eventually nullified the trial court's judgment and cancelled Gonzales' new certificate of title. Gonzales filed a motion for reconsideration, which was denied. She then filed a petition questioning the decision of the Court of Appeals.

ISSUES:

1. Whether the Court of Appeals erred in declaring the sale of the land to Gonzales invalid.

2. Whether there was sufficient basis to annul the judgment of the RTC.

3. Whether the Dabons could file the action for annulment of judgment.

4. Whether there is extrinsic fraud in the case.

5. Whether there is lack of jurisdiction.

6. Whether the doctrine of double sale is applicable.

7. Whether the action for annulment of judgment is proper.

8. Whether or not petitioner Maria Gonzales was dismissed from employment.

9. Whether or not the dismissal of petitioner was valid.

RULING:

1. The Court of Appeals did not err in declaring the sale of the land to Gonzales invalid. The failure to implead Aristotle Manio, the true owner of the property, renders all proceedings, including the sale, null and void.

2. There was sufficient basis to annul the judgment of the RTC. If it can be proven that the judgment was obtained through fraud or collusion, and such would adversely affect the respondents' ownership, then the judgment can be annulled.

3. The Dabons have the right to file the action for annulment of judgment as they are parties in interest, being buyers, owners, and possessors of the contested land.

4. Yes, there is extrinsic fraud in the case. The Court found that indices of fraud attended the case before the trial court, specifically the failure to comply with the notification requirement in the petition for the cancellation of title and the deliberate exclusion of the Dabons as parties to the case. These acts amount to extrinsic fraud and are sufficient grounds to annul the order allowing the cancellation of title in the name of Gonzales.

5. Yes, there is lack of jurisdiction. The Court ruled that the judgment is void for lack of jurisdiction over the persons of the real parties in interest, namely Aristotle Manio and the Dabons.

6. The doctrine of double sale is not applicable in this case. The Court held that the issue of whether it is a case of double sale or not is outside the scope of the present petition for review. The action for annulment of judgment does not involve the merits of the final order of the trial court.

7. The action for annulment of judgment is proper in this case. Annulment of judgment is a recourse equitable in character and allowed only in exceptional cases where there is no available or other adequate remedy. In this case, where it was found that the trial court did not have jurisdiction over the real parties in interest and that notices were deliberately not given, the Court of Appeals did not err in granting the annulment of the judgment for lack of jurisdiction and extrinsic fraud.

8. Yes, the petitioner was dismissed from employment.

9. No, the dismissal of the petitioner was not valid.

PRINCIPLES:

• Extrinsic fraud is where a party has been prevented from presenting his case due to fraud or deception. It must be shown that the fraudulent scheme of the prevailing litigant prevented a party from having his day in court.

• Lack of jurisdiction refers to a judgment that is void because the court did not have jurisdiction over the persons of the real parties in interest.

• The doctrine of double sale provides that in the case of immovable property, ownership shall be transferred to the person acquiring it who in good faith first recorded it in the Registry of Property, in default thereof, to the person who in good faith was first in possession, and in default thereof, to the person who presents the oldest title, provided there is good faith.

• An action for annulment of judgment is independent of the case where the judgment sought to be annulled is rendered and is not an appeal of the judgment therein. It is a recourse equitable in character and allowed only in exceptional cases where there is no available or other adequate remedy.

• The dismissal of an employee must comply with the procedural due process requirements set forth in the Labor Code.

• To be valid, the dismissal of an employee must be based on just or authorized causes as enumerated in the Labor Code.

• An employer has the burden of proving that the dismissal of an employee is for a just and authorized cause.