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G.R. No. 163602. September 7, 2011.*

SPOUSES EULOGIA MANILA and RAMON MANILA,

petitioners, vs. SPOUSES EDERLINDA GALLARDO-
MANZO and DANIEL MANZO, respondents.

Actions; Judgments; Annulment of Judgments; A petition for

annulment of judgments or final orders of a Regional Trial Court in
civil actions can only be availed of where „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 of judgments or final orders of a Regional
Trial Court in civil actions can only be availed of where „the
ordinary remedies of new trial, appeal, petition for relief or other
appropriate remedies are no longer available through no fault of the
petitioner.‰ It is a remedy granted only under exceptional
circumstances and such action is never resorted to as a substitute
for a partyÊs own neglect in not promptly availing of the ordinary or
other appropriate remedies. The only grounds provided in Sec. 2,
Rule 47 are extrinsic fraud and lack of jurisdiction.
Same; Same; Same; Attorneys; When a party retains the services
of a lawyer, he is bound by his counselÊs actions and decisions
regarding the conduct of the case, and this is true especially where
he does not complain against the manner his counsel handles the
suit.·We are not persuaded by respondentsÊ asseveration. They
could have directly followed up the status of their case with the
RTC especially during the period of Atty. AtienzaÊs hospital
confinement. As party litigants, they should have constantly
monitored the progress of their case. Having completely entrusted
their case to their former counsel and believing his word that
everything is alright, they have no one to blame but themselves
when it turned out that their opportunity to appeal and other
remedies from the adverse ruling of the RTC could no longer be
availed of due to their counselÊs neglect. That respondents
continued to rely on the services of their counsel notwithstanding

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his chronic ailments that had him confined for long periods at the
hospital is unthinkable. Such negligence of counsel is binding on
the client, especially when the latter offered no plausible

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* FIRST DIVISION.

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Manila vs. Gallardo-Manzo

explanation for his own inaction. The Court has held that when a
party retains the services of a lawyer, he is bound by his counselÊs
actions and decisions regarding the conduct of the case. This is true
especially where he does not complain against the manner his
counsel handles the suit. The oft-repeated principle is that an
action for annulment of judgment cannot and is not a substitute for
the lost remedy of appeal.
Same; Same; Same; In a petition for annulment of judgment
based on lack of jurisdiction, petitioner must show not merely an
abuse of jurisdictional discretion but an absolute lack of jurisdiction
·lack of jurisdiction means absence of or no jurisdiction, that is, the
court should not have taken cognizance of the petition because the
law does not vest it with jurisdiction over the subject matter.·Lack
of jurisdiction as a ground for annulment of judgment refers to
either lack of jurisdiction over the person of the defending party or
over the subject matter of the claim. In a petition for annulment of
judgment based on lack of jurisdiction, petitioner must show not
merely an abuse of jurisdictional discretion but an absolute lack of
jurisdiction. Lack of jurisdiction means absence of or no jurisdiction,
that is, the court should not have taken cognizance of the petition
because the law does not vest it with jurisdiction over the subject
matter. Jurisdiction over the nature of the action or subject matter
is conferred by law.
Same; Same; Same; The erroneous grant of relief by the
Regional Trial Court on appeal is but an exercise of jurisdiction by
said court·the ground for annulment of the decision is absence of,
or no, jurisdiction; that is, the court should not have taken

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cognizance of the petition because the law does not vest it with
jurisdiction over the subject matter; The Regional Trial Court (RTC)
acted in excess of its jurisdiction in deciding the appeal when,
instead of simply dismissing the complaint and awarding any
counterclaim for costs due to the defendants, it ordered the lessors to
execute a deed of absolute sale in favor of the lessees, on the basis of
its own interpretation of the Contract of Lease which granted
petitioners the option to buy the leased premises within a certain
period and for a fixed price.·In this case, the RTC acted in excess
of its jurisdiction in deciding the appeal of respondents when,
instead of simply dismissing the complaint and awarding any
counterclaim for costs due to the defendants (petitioners), it ordered
the respondents-lessors to execute a deed of absolute

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sale in favor of the petitioners-lessees, on the basis of its own

interpretation of the Contract of Lease which granted petitioners
the option to buy the leased premises within a certain period (two
years from date of execution) and for a fixed price (P150,000.00).
This cannot be done in an ejectment case where the only issue for
resolution is who between the parties is entitled to the physical
possession of the property. Such erroneous grant of relief to the
defendants on appeal, however, is but an exercise of jurisdiction by
the RTC. Jurisdiction is not the same as the exercise of jurisdiction.
As distinguished from the exercise of jurisdiction, jurisdiction is the
authority to decide a cause, and not the decision rendered therein.
The ground for annulment of the decision is absence of, or no,
jurisdiction; that is, the court should not have taken cognizance of
the petition because the law does not vest it with jurisdiction over
the subject matter.
Same; Same; Laches; Doctrine of Stale Demands; The principle
of laches or „stale demands‰ ordains that the failure or neglect, for
an unreasonable and unexplained length of time, to do that which by
exercising due diligence could or should have been done earlier·
negligence or omission to assert a right within a reasonable time·
warrants a presumption that the party entitled to assert it has

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abandoned it or declined to assert it.·On the timeliness of the

petition for annulment of judgment filed with the CA, Section 3,
Rule 47 of the Rules of Court provides that a petition for annulment
of judgment based on extrinsic fraud must be filed within four years
from its discovery; and if based on lack of jurisdiction, before it is
barred by laches or estoppel. The principle of laches or „stale
demands‰ ordains that the failure or neglect, for an unreasonable
and unexplained length of time, to do that which by exercising due
diligence could or should have been done earlier·negligence or
omission to assert a right within a reasonable time, warrants a
presumption that the party entitled to assert it has abandoned it or
declined to assert it. There is no absolute rule as to what constitutes
laches or staleness of demand; each case is to be determined
according to its particular circumstances.

PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
The facts are stated in the opinion of the Court.
Roque & Butuyan Law Offices for petitioners.

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Manila vs. Gallardo-Manzo

Cabochan, Reyes & Capones Law Offices for

respondents.

VILLARAMA, JR., J.:
This resolves the petition for review on certiorari under
Rule 45 of the 1997 Rules of Civil Procedure, as amended,
assailing the Decision1 dated February 27, 2004 and
Resolution2 dated May 14, 2004 of the Court of Appeals
(CA) in CA-G.R. SP No. 49998 which granted the petition
for annulment of judgment filed by the respondents.
The controversy stemmed from an action for ejectment3
filed by the respondents, spouses Ederlinda Gallardo-
Manzo and Daniel Manzo, against the petitioners, spouses
Ramon and Eulogia Manila, before the Metropolitan Trial
Court (MeTC) of Las Piñas City, Branch 79 (Civil Case No.
3537). The facts as summarized by the said court are as
follows:

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„On June 30, 1982, Ederlinda Gallardo leased two (2) parcels of
land situated along Real St., Manuyo, Las Piñas, Metro Manila, to
Eulogia Manila for a period of ten (10) years at a monthly rental(s)
of P2,000.00 for the first two years, and thereafter an increase of
ten (10) percent every after two years. They also agreed that the
lessee shall have the option to buy the property within two (2) years
from the date of execution of the contract of lease at a fair market
value of One Hundred and Fifty Thousand Pesos (P150,000.00)
The contract of lease expired on July 1, 1992 but the lessee
continued in possession of the property despite a formal demand
letter dated August 8, 1992, to vacate the same and pay the rental
arrearages. In a letter reply dated August 12, 1992, herein
defendant claimed that no rental fee is due because she allegedly
became the owner of the property at the time she communicated to
the plaintiff her desire to exercise the option to buy the said
property.

_______________
1 Rollo, pp. 10-21. Penned by Presiding Justice Cancio C. Garcia (retired
Member of this Court) with Associate Justices Renato C. Dacudao and Danilo
B. Pine, concurring.
2 Id., at p. 22.
3 Records, pp. 8-12.

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Their disagreement was later brought to the Barangay for

conciliation but the parties failed to reach a compromise, hence the
present action.‰4

On July 14, 1993, the MeTC rendered its decision,5 the

dispositive portion of which reads:

„WHEREFORE, a judgment is rendered in favor of the plaintiffs

ordering the defendants:
1) To vacate the subject parcels of land and surrender possession
thereof upon the payment by the plaintiff of one-half of the value
of the building constructed by the lessee. Should the lessor refuse
to reimburse the aforesaid amount, the lessee shall have the
option to exercise her right under Article 1678 of the New Civil

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Code;
2) To pay rental arrearages up to July 1, 1992 in the amount of Two
Hundred Twenty Eight Thousand and Forty Four 80/100 Pesos
(P228,044.80);
3) To pay, as reasonable compensation for their continued
withholding of possession of the subject lots, the sum of Three
Thousand Two Hundred and Twenty One Pesos (P3,221.00) every
month, commencing July 2, 1992 up to such time that they finally
yield possession thereof to the plaintiffs, subject to an increase of
ten percent (10%) after every two (2) years from said date; and
4) To pay plaintiffs attorneyÊs fees in the sum of Five Thousand
Pesos (P5,000.00)
No pronouncement as to costs.
SO ORDERED.‰6

Petitioners appealed to the Regional Trial Court (RTC)

of Makati City, Branch 63 (Civil Case No. 93-3733) which
reversed the MeTC. The RTC found that petitioners have
in fact exercised their option to buy the leased property but
the re-

_______________
4 Id., at p. 145.
5 Id., at pp. 145-148. Penned by Judge Alfredo R. Enriquez.
6 Id., at pp. 147-148.

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Manila vs. Gallardo-Manzo

spondents refused to honor the same. It noted that

respondents even informed the petitioners about
foreclosure proceedings on their property, whereupon the
petitioners tried to intervene by tendering rental payments
but the respondents advised them to withhold such
payments until the appeal of respondents in the case they
filed against the Rural Bank of Bombon (Camarines Sur),
Inc. (Civil Case No. 6062) is resolved. It further noted that
respondentsÊ intention to sell the lot to petitioners is
confirmed by the fact that the former allowed the latter to
construct a building of strong materials on the premises.
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The RTC thus decreed:

„IN THE LIGHT OF THE FOREGOING, judgment is hereby

rendered reversing the decision of the lower court dated July 14, 1993
and ordering as follows:
1) That plaintiffs execute a deed of absolute sale over that parcel of
land subject of the Contract of Lease dated June 30, 1982 after full
payment of defendants of the purchase price of P150,000.00;
2) That plaintiffs pay the costs of suit.
SO ORDERED.‰7

Respondents filed a motion for reconsideration on

December 23, 1994. In its Order dated March 24, 1995, the
RTC denied the motion for having been filed beyond the
fifteen (15)-day period considering that respondents
received a copy of the decision on December 7, 1994.8
Consequently, the November 18, 1994 decision of the RTC
became final and executory.9
On December 22, 1998, respondents filed a petition for
annulment of the RTC decision in the CA. Respondents
assailed the RTC for ordering them to sell their property to
petitioners arguing that said courtÊs appellate jurisdiction
in ejectment

_______________
7 Id., at p. 243.
8 Id., at p. 264.
9 Id., at p. 267.

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cases is limited to the determination of who is entitled to

the physical possession of real property and the only
judgment it can render in favor of the defendant is to
recover his costs, which judgment is conclusive only on the
issue of possession and does not affect the ownership of the
land. They contended that the sale of real property by one
party to another may be ordered by the RTC only in a case
for specific performance falling under its original exclusive

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jurisdiction, not in the exercise of its appellate jurisdiction

in an ejectment case. Respondents also alleged that the
petition for annulment is the only remedy available to
them because the ordinary remedies of new trial, appeal,
petition for relief or other appropriate remedies are no
longer available through no fault on their part.
By Decision dated February 27, 2004, the CA granted
the petition, annulled the November 18, 1994 RTC decision
and reinstated the July 14, 1993 MeTC decision. On the
issue of lack of jurisdiction raised by the respondents, the
CA ruled as follows:

„It must be stressed that the main action before the Metropolitan
Trial Court is one for ejectment grounded on the expiration of the
partiesÊ contract of lease. And said court, finding that petitioners
have a valid right to ask for the ejectment of private respondents,
ordered the latter to vacate the premises and to pay their rentals in
arrears. To Our mind, what the respondent court should have done
in the exercise of its appellate jurisdiction, was to confine
itself to the issue of whether or not petitioners have a valid cause of
action for ejectment against the private respondents.
Unfortunately, in the decision herein sought to be annulled, the
respondent court went further than what is required of it as an
appellate court when it ordered the petitioners to sell their
properties to the private respondents. In a very real sense, the
respondent court materially changed the nature of
petitionersÊ cause of action by deciding the question of
ownership even as the appealed case involves only the issue
of prior physical possession which, in every ejectment suit,
is the only question to be resolved. As it were, the respondent
court converted the

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Manila vs. Gallardo-Manzo

issue to one for specific performance which falls under its original,
not appellate jurisdiction. Sad to say, this cannot be done by the
respondent court in an appealed ejectment case because the
essential criterion of appellate jurisdiction is that it revises and
corrects the proceedings in a cause already instituted and does not

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create that cause (Marbury v. Madison, 1 Cranch (U.S.), 137, 172, 2

L. edition 60, cited in 15 Corpus Juris 727).
It follows that the respondent Regional Trial Court clearly acted
without jurisdiction when it ordered the petitioners to sell their
properties to the private respondents. The order to sell can be made
only by the respondent court in an action for specific perfor​mance
under its exclusive original jurisdiction, and not in the exercise of
its appellate jurisdiction in an appealed ejectment suit, as in this
case. Worse, the relief granted by the same court was not even
prayed for by the private respondents in their Answer and position
paper before the MTC, whereat they only asked for the dismissal of
the complaint filed against them.‰10 (Emphasis supplied.)

With the denial of their motion for reconsideration,

petitioners filed the present petition raising the following
issues:

A
WHETHER THE COURT OF APPEALS COMMITTED A GRAVE
ERROR IN ANNULLING THE JUDGMENT BY THE REGIONAL
TRIAL COURT OF MAKATI CITY NOTWITHSTANDING THE
FINDING THAT THE ORDINARY REMEDIES OF NEW TRIAL,
APPEAL, PETITION FOR RELIEF OR OTHER APPROPRIATE
REMEDIES WERE LOST THROUGH THE FAULT OF THE
RESPONDENTS
B
WHETHER THE COURT OF APPEALS COMMITTED A GRAVE
ERROR IN ANNULLING THE JUDGMENT BY THE REGIONAL
TRIAL COURT OF MAKATI CITY ON THE GROUND OF „LACK
OF JURISDICTION‰ WHEN IT HAS NOT BEEN SHOWN THAT
THE REGIONAL TRIAL COURT OF MAKATI CITY HAD NO

_______________
10 Rollo, pp. 20-21.

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JURISDICTION OVER THE PERSON OF THE RESPONDENTS

OR THE SUBJECT MATTER OF THE CLAIM11

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The petition is meritorious.

A petition for annulment of judgments or final orders of
a Regional Trial Court in civil actions can only be availed of
where „the ordinary remedies of new trial, appeal, petition
for relief or other appropriate remedies are no longer
available through no fault of the petitioner.‰12 It is a
remedy granted only under exceptional circumstances and
such action is never resorted to as a substitute for a partyÊs
own neglect in not promptly availing of the ordinary or
other appropriate remedies.13 The only grounds provided in
Sec. 2, Rule 47 are extrinsic fraud and lack of jurisdiction.
In this case, respondents alleged that the loss of
remedies against the RTC decision was attributable to
their former counselÊs late filing of their motion for
reconsideration and failure to file any proper petition to set
aside the said decision. They claimed that they had been
constantly following up the status of the case with their
counsel, Atty. Jose Atienza, who repeatedly assured them
he was on top of the situation and would even get angry if
repeatedly asked about the case. Out of their long and close
relationship with Atty. Atienza and due regard for his poor
health due to his numerous and chronic illnesses which
required frequent prolonged confinement at the hospital,
respondents likewise desisted from hiring the services of
another lawyer to assist Atty. Atienza, until the latterÊs
death on September 10, 1998. Thus, it was only on
November 1998 that respondents engaged the services of
their new counsel who filed the petition for annulment of
judgment in the CA.

_______________
11 Id., at p. 38.
12 Sec. 1, Rule 47, 1997 Rules of Civil Procedure.
13 Lazaro v. Rural Bank of Francisco Balagtas (Bulacan), Inc., G.R.
No. 139895, August 15, 2003, 409 SCRA 186, 192.

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We are not persuaded by respondentsÊ asseveration.

They could have directly followed up the status of their
case with the RTC especially during the period of Atty.
AtienzaÊs hospital confinement. As party litigants, they
should have constantly monitored the progress of their
case. Having completely entrusted their case to their
former counsel and believing his word that everything is
alright, they have no one to blame but themselves when it
turned out that their opportunity to appeal and other
remedies from the adverse ruling of the RTC could no
longer be availed of due to their counselÊs neglect. That
respondents continued to rely on the services of their
counsel notwithstanding his chronic ailments that had him
confined for long periods at the hospital is unthinkable.
Such negligence of counsel is binding on the client,
especially when the latter offered no plausible explanation
for his own inaction. The Court has held that when a party
retains the services of a lawyer, he is bound by his counselÊs
actions and decisions regarding the conduct of the case.
This is true especially where he does not complain against
the manner his counsel handles the suit.14 The oft-repeated
principle is that an action for annulment of judgment
cannot and is not a substitute for the lost remedy of
appeal.15
In any event, the petition for annulment was based not
on fraudulent assurances or negligent acts of their counsel,
but on lack of jurisdiction.
Petitioners assail the CA in holding that the RTC
decision is void because it granted a relief inconsistent with
the nature of an ejectment suit and not even prayed for by
the respondents in their answer. They contend that
whatever maybe questionable in the decision is a ground
for assignment of errors on appeal·or in certain cases, as
ground for a special

_______________
14 Tolentino v. Leviste, G.R. No. 156118, November 19, 2004, 443
SCRA 274, 282, citing Alarcon v. Court of Appeals, G.R. No. 126802,
January 28, 2000, 323 SCRA 716, 725.
15 Mercado v. Security Bank Corporation, G.R. No. 160445, February
16, 2006, 482 SCRA 501, 514.

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civil action for certiorari under Rule 65·and not as ground

for its annulment. On the other hand, respondents assert
that the CA, being a higher court, has the power to adopt,
reverse or modify the findings of the RTC in this case. They
point out that the CA in the exercise of its sound discretion
found the RTCÊs findings unsupported by the evidence on
record which also indicated that the loss of ordinary
remedies of appeal, new trial and petition for review was
not due to the fault of the respondents.
We agree with the petitioners.
Lack of jurisdiction as a ground for annulment of
judgment refers to either lack of jurisdiction over the
person of the defending party or over the subject matter of
the claim.16 In a petition for annulment of judgment based
on lack of jurisdiction, petitioner must show not merely an
abuse of jurisdictional discretion but an absolute lack of
jurisdiction. Lack of jurisdiction means absence of or no
jurisdiction, that is, the court should not have taken
cognizance of the petition because the law does not vest it
with jurisdiction over the subject matter. Jurisdiction over
the nature of the action or subject matter is conferred by
law.17
There is no dispute that the RTC is vested with
appellate jurisdiction over ejectment cases decided by the
MeTC, MTC or MCTC. We note that petitionersÊ attack on
the validity of the RTC decision pertains to a relief
erroneously granted on appeal, and beyond the scope of
judgment provided in Section 6 (now Section 17) of Rule
70.18 While the court in an eject-

_______________
16 Tolentino v. Leviste, supra note 14 at p. 284.
17 Durisol Philippines, Inc. v. Court of Appeals, G.R. No. 121106,
February 20, 2002, 377 SCRA 353, 358.
18 SEC. 17. Judgment.·If after trial the court finds that the
allegations of the complaint are true, it shall render judgment in favor of

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the plaintiff for the restitution of the premises, the sum justly due as
arrears of rent or as reasonable compensation for the use and occupation
of the premises, attorneyÊs fees and costs. If it finds that said allegations
are not true, it shall render judgment for

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Manila vs. Gallardo-Manzo

ment case may delve on the issue of ownership or

possession de jure solely for the purpose of resolving the
issue of possession de facto, it has no jurisdiction to settle
with finality the issue of ownership19 and any
pronouncement made by it on the question of ownership is
provisional in nature.20 A judgment in a forcible entry or
detainer case disposes of no other issue than possession
and establishes only who has the right of possession, but by
no means constitutes a bar to an action for determination
of who has the right or title of ownership.21 We have held
that although it was proper for the RTC, on appeal in the
ejectment suit, to delve on the issue of ownership and
receive evidence on possession de jure, it cannot adjudicate
with semblance of finality the ownership of the property to
either party by ordering the cancellation of the TCT.22
In this case, the RTC acted in excess of its jurisdiction in
deciding the appeal of respondents when, instead of simply
dismissing the complaint and awarding any counterclaim
for

_______________
the defendant to recover his costs. If a counterclaim is established, the
court shall render judgment for the sum found in arrears from either
party and award costs as justice requires.
19 See Paz v. Reyes, G.R. No. 127439, March 9, 2000, 327 SCRA 605,
609-610; Aznar Brothers Realty Company v. Court of Appeals, G.R. No.
128102, March 7, 2000, 327 SCRA 359, 372-373; Carreon v. Court of
Appeals, G.R. No. 112041, June 22, 1998, 291 SCRA 78, 88.
Sec. 16, Rule 70, 1997 Rules of Civil Procedure states:
SEC. 16. Resolving defense of ownership.·When the defendant
raises the defense of ownership in his pleadings and the question of

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possession cannot be resolved without deciding the issue of ownership,

the issue of ownership shall be resolved only to determine the issue of
possession.
20 Heirs of Rosendo Sevilla Florencio v. Heirs of Teresa Sevilla De
Leon, G.R. No. 149570, March 12, 2004, 425 SCRA 447, 458.
21 Sec. 18, Rule 70, 1997 Rules of Civil Procedure; Custodio v.
Corrado, G.R. No. 146082, July 30, 2004, 435 SCRA 500, 509.
22 Dizon v. Court of Appeals, G.R. No. 116854, November 19, 1996,
264 SCRA 391, 396.

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costs due to the defendants (petitioners), it ordered the

respondents-lessors to execute a deed of absolute sale in
favor of the petitioners-lessees, on the basis of its own
interpretation of the Contract of Lease which granted
petitioners the option to buy the leased premises within a
certain period (two years from date of execution) and for a
fixed price (P150,000.00).23 This cannot be done in an
ejectment case where the only issue for resolution is who
between the parties is entitled to the physical possession of
the property.
Such erroneous grant of relief to the defendants on
appeal, however, is but an exercise of jurisdiction by the
RTC. Jurisdiction is not the same as the exercise of
jurisdiction. As distinguished from the exercise of
jurisdiction, jurisdiction is the authority to decide a cause,
and not the decision rendered therein.24 The ground for
annulment of the decision is absence of, or no, jurisdiction;
that is, the court should not have taken cognizance of the
petition because the law does not vest it with jurisdiction
over the subject matter.25
Thus, while respondents assailed the content of the RTC
decision, they failed to show that the RTC did not have the
authority to decide the case on appeal. As we held in
Ybañez v. Court of Appeals:26

„On the first issue, we feel that respondent court acted

inadvertently when it set aside the RTC ruling relative to the

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validity of the substituted service of summons over the persons of

the petitioners in the MTC level. We must not lose sight of the fact
that what was filed before respondent court is an action to annul
the RTC judgment and not a petition for review. Annulment of
judgment may either be based on the ground that a judgment is
void for want of

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23 CA Rollo, p. 187.
24 Tolentino v. Leviste, supra note 14 at p. 285.
25 Republic v. Technological Advocates for Agro-Forest Programs
Association, Inc., G.R. No. 165333, February 9, 2010, 612 SCRA 76, 86.
26 G.R. No. 117499, February 9, 1996, 253 SCRA 540.

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Manila vs. Gallardo-Manzo

jurisdiction or that the judgment was obtained by extrinsic fraud.

There is nothing in the records that could cogently show that the
RTC lacked jurisdiction. Chiefly, Section 22 of B.P. Blg. 129,
otherwise known as the Judiciary Reorganization Act of 1980, vests
upon the RTC the exercise of an „appellate jurisdiction over all
cases decided by the Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts in their respective
territorial jurisdictions.‰ Clearly then, when the RTC took
cognizance of petitionersÊ appeal from the adverse decision
of the MTC in the ejectment suit, it (RTC) was
unquestionably exercising its appellate jurisdiction as
mandated by law. Perforce, its decision may not be annulled
on the basis of lack of jurisdiction as it has, beyond cavil,
jurisdiction to decide the appeal.‰27 (Emphasis supplied.)

The CA therefore erred in annulling the November 18,

1994 RTC decision on the ground of lack of jurisdiction as
said court had jurisdiction to take cognizance of petitionersÊ
appeal.
On the timeliness of the petition for annulment of
judgment filed with the CA, Section 3, Rule 47 of the Rules
of Court provides that a petition for annulment of judgment
based on extrinsic fraud must be filed within four years

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from its discovery; and if based on lack of jurisdiction,

before it is barred by laches or estoppel. The principle of
laches or „stale demands‰ ordains that the failure or
neglect, for an unreasonable and unexplained length of
time, to do that which by exercising due diligence could or
should have been done earlier·negligence or omission to
assert a right within a reasonable time, warrants a
presumption that the party entitled to assert it has
abandoned it or declined to assert it.28 There is no absolute
rule as to what constitutes laches or staleness of

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27 Id., at p. 548.
28 Galicia v. Manliquez Vda. de Mindo, G.R. No. 155785, April 13,
2007, 521 SCRA 85, 96, citing Chua v. Court of Appeals, G.R. No. 125837,
October 6, 2004, 440 SCRA 121, 135.

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Manila vs. Gallardo-Manzo

demand; each case is to be determined according to its

particular circumstances.29
Here, respondentsÊ failure to assail the RTC ruling in a
petition for review on certiorari before the CA, rendered the
same final and executory. Having lost these remedies due
to their lethargy for three and a half years, they cannot
now be permitted to assail anew the said ruling rendered
by the RTC in the exercise of its appellate jurisdiction.
Their inaction and neglect to pursue available remedies to
set aside the RTC decision for such length of time, without
any acceptable explanation other than the word of a former
counsel who already passed away, constitutes unreasonable
delay warranting the presumption that they have declined
to assert their right over the leased premises which
continued to be in the possession of the petitioners. Clearly,
respondentsÊ petition to annul the final RTC decision is
barred under the equitable doctrine of laches.
WHEREFORE, the petition for review on certiorari is
GRANTED. The Decision dated February 27, 2004 and

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Resolution dated May 14, 2004 of the Court of Appeals in

CA-G.R. SP No. 49998 are SET ASIDE. The petition for
annulment of judgment filed by herein respondents is
DISMISSED.
No costs.
SO ORDERED.

Corona (C.J., Chairperson), Leonardo-De Castro,

Bersamin and Del Castillo, JJ., concur.

Petition granted, judgment and resolution set aside.

Notes.·The doctrine of stale demands would apply only

where by reason of the lapse of time, it would be
inequitable

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29 Id., citing Far East Bank and Trust Company v. Querimit, 424 Phil.
721, 732; 373 SCRA 665, 673 (2002).

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Manila vs. Gallardo-Manzo

to allow a party to enforce his legal rights. (Tsai vs. Court of

Appeals, 366 SCRA 324 [2001])
Rule 47 of the Rules of Civil Procedure applies only to a
petition to annul a judgment or final order and resolution
in civil actions·it does not apply to an action to annul the
levy and sale at public auction or the certificate of sale
executed by the deputy sheriff over said properties, and
neither does it apply to an action to nullify a writ of
execution. The remedy to nullify the levy and sale of the
properties at public auction in violation of Sections 15 and
21, Rule 39 of the Rules of Court is a motion for that
purpose before the trial court, and not in the Court of
Appeals, and thereafter the remedy from an adverse
resolution of the trial court would be a petition for
certiorari under Rule 65, if the trial court committed a
grave abuse of discretion amounting to excess or lack of
jurisdiction. (Guiang vs. Co, 435 SCRA 556 [2004])

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