#4 THIRD DIVISION

G.R. No. 141241 November 22, 2005

REPUBLIC OF THE PHILIPPINES, through its trustee, the
ASSET PRIVATIZATION TRUST, Petitioner,
vs.
G HOLDINGS, INC., Respondent.
PONENTE: CORONA, J.:

Facts:
On 2 October 1992, the Republic, through the APT, agreed
with G Holdings to sell 90% of government-owned Maricalum
Mining Corporation shares of stock for P673M, down payment
of which is P98.7M and the balance payable in installment for
10 years. However, the Republic wanted that installment
payment should commence on the 7th month from the signing
of agreement, but G Holdings insisted that it should begin
seven months after the fulfillment of the closing conditions.

Unable to settle the issue, G Holdings filed a complaint for

specific performance with RTC Manila against the Republic to
compel it to close the sale in accordance with the agreement.
On 11 June 1996, the RTC granted the petition. On 28 June
1996, the OSG filed a notice of appeal, but not with said RTC.
It was filed in CA. When no other judicial remedy was resorted
to, the Republic, through APT, filed on 2 July 1999 a petition
for annulment of judgment with CA on the ground of RTCs
abuse of discretion amounting to lack of jurisdiction.

Republic alleged that RTC rendered judgment prior to RTCs

receipt of its formal offer of evidence, and without ruling on
the respondents admissibility of the evidence. On 21
December 1999, the CA dismissed the petition holding that: (1)
RTC had jurisdiction over the case subject matter, as well as,
over the person of parties; and (2) no grave abuse of RTCs
discretion since both parties evidence were already in the
possession and considered by RTC before it was decided.
Hence, any error committed by RTC in the exercise of its
jurisdiction was merely an error of judgment, not an error of
jurisdiction. Hence, this petition for review on certiorari under
Rule 45.

Issue:
Whether or not RTC committed grave abuse of discretion
amounting to lack of jurisdiction, which would warrant as
ground for the annulment of judgment.

Ruling:

NO. Petition is Denied. CA Decision is Affirmed.

Before anything else, we note that the instant petition suffers

from a basic infirmity for lack of the requisite imprimatur from
the Office of the Solicitor General, hence, it is dismissible on
that ground.[5] The general rule is that only the Solicitor
General can bring or defend actions on behalf of the Republic
of the Philippines and that actions filed in the name of the
Republic, or its agencies and instrumentalities for that matter,
if not initiated by the Solicitor General, should be summarily
dismissed.[6] As an exception to the general rule, the Solicitor
General is empowered to deputize legal officers of government
departments, bureaus, agencies and offices to assist the
Solicitor General and appear or represent the Government in
cases involving their respective offices, brought before the
courts and exercise supervision and control over such legal
officers with respect to such cases.[7]

Here, the petition was signed and filed on behalf of the

Republic by Atty. Raul B. Villanueva, the executive officer of
the legal department of the APT, and Atty. Rhoel Z.
Mabazza.[8] However, they did not present any proof that they
had been duly deputized by the Solicitor General to initiate
and litigate this action. Thus, this petition can be dismissed on
that ground.
In the interest of justice, however, we shall proceed to discuss
the issues propounded by the Republic.

A petition for annulment of judgment is an extraordinary

action.[9] By virtue of its exceptional character, the action is
restricted exclusively to the grounds specified in the
rules,[10] namely, (1) extrinsic fraud and (2) lack of
jurisdiction.[11] The rationale for the restriction is to prevent
the extraordinary action from being used by a losing party to
make a complete farce of a duly promulgated decision that has
long become final and executory.[12] The remedy may not be
invoked where the party has availed himself of the remedy of
new trial, appeal, petition for relief or other appropriate
remedy and lost, or where he has failed to avail himself of
those remedies through his own fault or negligence.[13]

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.[14] Where the court has jurisdiction over the defendant
and over the subject matter of the case, its decision will not be
voided on the ground of absence of jurisdiction.

The Republic does not deny that the trial court had jurisdiction
over it as well as over the subject matter of the case. What the
Republic questions is the grave abuse of discretion allegedly
committed by the court a quo in rendering the decision.

We cannot agree with the Republic.

First, the interpretation of the Republic contravenes the very

rationale of the restrictive application of annulment of
judgment. By seeking to include acts committed with grave
abuse of discretion, it tends to enlarge the concept of lack of
jurisdiction as a ground for the availment of the remedy.
In a petition for annulment of judgment based on lack of
jurisdiction, the petitioner must show not merely an abuse of
jurisdictional discretion but an absolute lack of
jurisdiction.[15]
Thus, the concept of lack of jurisdiction as a
ground to annul a judgment does not embrace abuse of
discretion.

Second, by claiming grave abuse of discretion on the part of

the trial court, the Republic actually concedes and
presupposes the jurisdiction of the court to take cognizance of
the case. Hence, the Republic effectively admits that the two
grounds for which lack of jurisdiction may be validly invoked to
seek the annulment of a judgment want of jurisdiction over
the parties and want of jurisdiction over the subject matter do
not exist. It only assails the manner in which the trial court
formulated its judgment in the exercise of its jurisdiction.

Jurisdiction is distinct from the exercise thereof. We amply

explained the distinction between the two in Tolentino v.
Leviste,[16] thus:

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. Where there is
jurisdiction over the person and the subject matter, the
decision on all other questions arising in the case is but an
exercise of the jurisdiction. And the errors which the court
may commit in the exercise of jurisdiction are merely errors
of judgment which are the proper subject of an appeal.

Finally, no grave abuse of discretion can be imputed to the

trial court when it rendered the decision. The pieces of
evidence considered by the court a quo to arrive at its decision
were documents attached as annexes to the various pleadings
filed by the parties. It is well-settled that documents attached
to the pleadings form part thereof and may be considered as
evidence even if not formally introduced as evidence.[17] The
court may and should consider as evidence documents
attached to the pleadings filed by the parties and made a part
thereof, without necessity of introducing them expressly as
evidence when their authenticity and due execution have not
been denied under oath.[18]

Moreover, the minutes of the pre-trial conference[19] on May

27, 1996 show that the exhibits presented by both parties
were marked, offered and admitted during the pre-trial. This
fact coupled with the manifestation of the parties during the
pre-trial that the sole issue to be resolved was one of law the
interpretation of the provisions of the purchase and sale
agreement which was adopted by the parties as their common
exhibit show that the trial court did not commit an abuse of
discretion.

The conclusion that there was no abuse of discretion on the

part of the trial court would be the same even if it were to be
assumed that a procedural mistake was committed when it
decided the case before the parties could formally offer their
evidence. We have held that where the court has jurisdiction
and, having all the facts necessary for a judgment, it renders
a decision without holding any trial or hearing (where the
parties are allowed to present their respective evidence in
support of their cause of action and defense), such judgment
cannot be assailed as having been rendered without or in
excess of jurisdiction nor rendered with grave abuse of
discretion.[20]

In the matter of extrinsic fraud, the circumstances of this case

do not establish its existence.

Extrinsic fraud refers to any fraudulent act of the prevailing

party in the litigation which is committed outside of the trial of
the case, whereby the unsuccessful party is prevented from
fully proving his case, by fraud or deception practiced on him
by his opponent.[21] Fraud is regarded as extrinsic where it
prevents a party from having a trial or from presenting his
entire case to the court, or where it operates upon matters
pertaining not to the judgment itself but to the manner in
which it is procured.[22] The overriding consideration when
extrinsic fraud is alleged is that the fraudulent scheme of the
prevailing litigant prevented a party from having his day in
court.[23]

The Republic has not proven, or even alleged, that G Holdings

practiced deceit or employed subterfuge on it, precluding it
from fully and completely presenting its case to the court.
Since the prevailing party did not commit or participate in the
commission of fraud which prevented the other party from
having his day in court, there was no reason for the appellate
court to annul the decision of the trial court.

The unfortunate predicament of the Republic was caused by

the Solicitor General, its own counsel. We have consistently
ruled that, to render a judgment void, the fraud must be
committed by the adverse party and not by ones own
counsel.[24]

While the Republic or the government is usually not estopped

by the mistake or error on the part of its officials or
agents,[25] the Republic cannot now take refuge in the rule as
it does not afford a blanket or absolute immunity. Our
pronouncement in Republic v. Court of Appeals[26] is
instructive: the Solicitor General may not be excused from its
shortcomings by invoking the doctrine as if it were some
magic incantation that could benignly, if arbitrarily, condone
and erase its errors.

Here, no fault had been ascribed to G Holdings and the

proceedings in the trial court were proper. The judgment has
already attained finality as a result of the fault and inaction of
the Solicitor General. This was aggravated by the fact that this
petition was filed by those who had no authority to do so.
Litigation should end and terminate sometime and
somewhere.[27] It is essential to an effective and efficient
administration of justice that, once a judgment has become
final, the winning party should not be deprived of the fruits of
the verdict.[28] Courts must therefore guard against any
scheme calculated to bring about that undesirable
result.[29] Thus, it is only proper for this Court to now
write finis to this decade-old controversy.

- Digested [17 November 2016, 8:13]

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