G.R.No.173559.January7,2013.

*
LETICIA DIONA, represented by her AttorneyinFact,
MARCELINA DIONA, petitioner, vs. ROMEO A. BALANGUE,
SONNY A. BALANGUE, REYNALDO A. BALANGUE, and
ESTEBANA.BALANGUE,JR.,respondents.

Remedial Law Civil Procedure Annulment of Judgments A Petition

forAnnulmentofJudgmentunderRule47oftheRulesofCourtisaremedy
granted only under exceptional circumstances where a party, without fault
onhispart,hasfailedtoavailoftheordinaryremediesofnewtrial,appeal,
petitionforrelieforotherappropriateremedies.APetitionforAnnulment
ofJudgmentunderRule47oftheRulesofCourtisaremedygrantedonly
underexceptionalcircumstanceswhereaparty,withoutfaultonhispart,has

_______________

*SECONDDIVISION.

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VOL.688,JANUARY7,2013 23

Dionavs.Balangue

failedtoavailoftheordinaryremediesofnewtrial,appeal,petitionforrelief
or other appropriate remedies. Said rule explicitly provides that it is not
availableasasubstituteforaremedywhichwaslostduetothepartysown
neglectinpromptlyavailingofthesame.Theunderlyingreasonistraceable
tothenotionthatannullingfinaljudgmentsgoesagainstthegrainoffinality
of judgment. Litigation must end and terminate sometime and somewhere,
and it is essential to an effective administration of justice that once a
judgmenthasbecomefinal,theissueorcauseinvolvedthereinshouldbelaid
torest.
SameSameSameDueProcessWhileunderSection2,Rule47ofthe
RulesofCourtaPetitionforAnnulmentofJudgmentmaybebasedonlyon
the grounds of extrinsic fraud and lack of jurisdiction, jurisprudence
recognizeslackofdueprocessasadditionalgroundtoannulajudgment.
While under Section 2, Rule 47 of the Rules of Court a Petition for
AnnulmentofJudgmentmaybebasedonlyonthegroundsofextrinsicfraud
and lack of jurisdiction, jurisprudence recognizes lack of due process as
additionalgroundtoannulajudgment.InArcelonav.CourtofAppeals,280
SCRA 20 (1997), this Court declared that a final and executory judgment
maystillbesetasideif,uponmereinspectionthereof,itspatentnullitycan
be shown for having been issued without jurisdiction or for lack of due
processoflaw.
SameSameCourtsCourtscannotgrantareliefnotprayedforinthe
pleadingsorinexcessofwhatisbeingsoughtbytheparty.Theycannotalso
grant a relief without first ascertaining the evidence presented in support
thereof.It is settled that courts cannot grant a relief not prayed for in the
pleadingsorinexcessofwhatisbeingsoughtbytheparty.Theycannotalso
grant a relief without first ascertaining the evidence presented in support
thereof.Dueprocessconsiderationsrequirethatjudgmentsmustconformto
and be supported by the pleadings and evidence presented in court. In
DevelopmentBankofthePhilippinesv.Teston,545SCRA422(2008),this
Courtexpoundedthat:Dueprocessconsiderationsjustifythisrequirement.It
isimpropertoenteranorderwhichexceedsthescopeofreliefsoughtbythe
pleadings, absent notice which affords the opposing party an opportunity to
beheardwithrespecttotheproposedrelief.Thefundamentalpurposeofthe
requirementthatalle

24

24 SUPREMECOURTREPORTSANNOTATED

Dionavs.Balangue

gations of a complaint must provide the measure of recovery is to prevent

surprisetothedefendant.
AttorneysLegalEthicsOrdinarily,themistake,negligenceorlackof
competenceofcounselbindstheclientArecognizedexceptiontotheruleis
when the lawyers were grossly negligent in their duty to maintain their
clients cause and such amounted to a deprivation of their clients property
without due process of law.Ordinarily, the mistake, negligence or lack of
competenceofcounselbindstheclient.Thisisbasedontherulethatanyact
performedbyacounselwithinthescopeofhisgeneralorimpliedauthority
isregardedasanactofhisclient.Arecognizedexceptiontotheruleiswhen
the lawyers were grossly negligent in their duty to maintain their clients
cause and such amounted to a deprivation of their clients property without
dueprocessoflaw.Inwhichcase,thecourtsmuststepinandaccordrelief
toaclientwhosufferedthereby.
SameSameAlawyerowesentiredevotiontotheinterestofhisclient,
warmth and zeal in the maintenance and defense of his rights and the
exertion of his utmost learning and ability, to the end that nothing can be
taken or withheld from his client except in accordance with the law.A
lawyerowesentiredevotiontotheinterestofhisclient,warmthandzealin
the maintenance and defense of his rights and the exertion of his utmost
learningandability,totheendthatnothingcanbetakenorwithheldfromhis
client except in accordance with the law. Judging from how respondents
formercounselhandledthecauseofhisclients,thereisnodoubtthathewas
grossly negligent in protecting their rights, to the extent that they were
deprivedoftheirpropertywithoutdueprocessoflaw.

PETITIONforreviewoncertiorarioftheresolutionsoftheCourtof
Appeals.
ThefactsarestatedintheopinionoftheCourt.
Claustro&ClaustroLawOfficeforpetitioner.
ReynaldoA.Ruizforrespondents.

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VOL.688,JANUARY7,2013 25
Dionavs.Balangue

DELCASTILLO,J.:
Thegrantofareliefneithersoughtbythepartyinwhosefavorit
was given nor supported by the evidence presented violates the
opposingpartysrighttodueprocessandmaybedeclaredvoidab
initioinaproperproceeding.
ThisPetitionforReviewonCertiorari1assailstheNovember24,
2005Resolution2 of the Court of Appeals (CA) issued in CAG.R.
SP No. 85541 which granted the Petition for Annulment of
Judgment3filedbytherespondentsseekingtonullifythatportionof
theOctober17,2000Decision4oftheRegionalTrialCourt(RTC),
Branch75,ValenzuelaCityawardingpetitioner5%monthlyinterest
ratefortheprincipalamountoftheloanrespondentsobtainedfrom
her.
ThisPetitionlikewiseassailstheCAsJune26,2006Resolution5
denyingpetitionersMotionforReconsideration.
FactualAntecedents
Thefactsofthiscasearesimpleandundisputed.
On March 2, 1991, respondents obtained a loan of P45,000.00
frompetitionerpayableinsixmonthsandsecuredbyaRealEstate
Mortgage6overtheir202squaremeterpropertylocatedinMarulas,
Valenzuela and covered by Transfer Certificate of Title (TCT) No.
V12296.7 When the debt became due, respondents failed to pay
notwithstandingdemand.

_______________
1Rollo,pp.1026.
2CARollo,pp.8084pennedbyAssociateJusticeRebeccaDeGuiaSalvadorand
concurredinbyAssociateJusticesPortiaAlioHormachuelosandAuroraSantiago
Lagman.
3Id.,atpp.113.
4Rollo,pp.6062,pennedbyJudgeJaimeL.Bautista.
5CARollo,pp.111114.
 6Rollo,p.193.
7Id.,atpp.191192.

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26 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

Thus, on September 17, 1999, petitioner filed with the RTC a

Complaint8prayingthatrespondentsbeordered:

(a) To pay [petitioner] the principal obligation of P45,000.00, with

interestthereonat the rate of 12% per annum, from 02 March
1991untilthefullobligationispaid.
(b)Topay[petitioner]actualdamagesasmaybeprovenduringthe
trialbutshallinnocasebelessthanP10,000.00P25,000.00by
wayofattorneysfee,plusP2,000.00perhearingasappearance
fee.
(c)Toissueadecreeofforeclosureforthesaleatpublicauctionof
theaforementionedparcelofland,andforthedispositionofthe
proceeds [thereof] in accordance with law, upon failure of the
[respondents] to fully pay [petitioner] within the period set by
lawthesumssetforthinthiscomplaint.
(d)Costsofthissuit.
Otherreliefsandremediesjustandequitableunderthepremises
arelikewiseprayedfor.9(Emphasissupplied)

RespondentswereservedwithsummonsthrurespondentSonny
A. Balangue (Sonny). On October 15, 1999, with the assistance of
Atty. Arthur C. Coroza (Atty. Coroza) of the Public Attorneys
Office,theyfiledaMotiontoExtendPeriodtoAnswer.Despitethe
requested extension, however, respondents failed to file any
responsivepleadings.Thus,uponmotionofthepetitioner,theRTC
declared them in default and allowed petitioner to present her
evidenceexparte.10

_______________
8Id.,atpp.5659docketedasCivilCaseNo.241V99.
9Id.,atp.58.
10SeeOrder dated December 29, 1999, id., at p. 198 penned by Judge Jaime F.
Bautista.

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VOL.688,JANUARY7,2013 27
Dionavs.Balangue
RulingoftheRTCsoughttobeannulled.
In a Decision11 dated October 17, 2000, the RTC granted
petitioners Complaint. The dispositive portion of said Decision
reads:

WHEREFORE, judgment is hereby rendered in favor of the

[petitioner], ordering the [respondents] to pay the [petitioner] as
follows:
a) the sum of FORTY FIVE THOUSAND (P45,000.00) PESOS,
representingtheunpaidprincipalloanobligationplusinterestat
5%permonth[sic]reckonedfromMarch2,1991,untilthesame
isfullypaid
b)P20,000.00asattorneysfeespluscostofsuit
c) in the event the [respondents] fail to satisfy the aforesaid
obligation,anorderofforeclosureshallbeissuedaccordinglyfor
the sale at public auction of the subject property covered by
TransferCertificateofTitleNo.V12296andtheimprovements
thereonforthesatisfactionofthe[petitioners]claim.
SOORDERED.12(Emphasissupplied)

Subsequently,petitionerfiledaMotionforExecution,13 alleging
thatrespondentsdidnotinterposeatimelyappealdespitereceiptby
theirformercounseloftheRTCsDecisiononNovember13,2000.
Beforeitcouldberesolved,however,respondentsfiledaMotionto
SetAsideJudgment14datedJanuary26,2001,claimingthatnotall
of them were duly served with summons. According to the other
respondents, they had no knowledge of the case because their co
respondentSonnydidnotinformthemaboutit.Theyprayed

_______________
11Id.,atpp.6062.
12Id.,atp.62.
13Id.,atpp.6365.
14Id.,atpp.6669.

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28 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

that the RTCs October 17, 2000 Decision be set aside and a new
trialbeconducted.
ButonMarch16,2001,theRTCordered15theissuanceofaWrit
ofExecutiontoimplementitsOctober17,2000Decision.However,
sincethewritcouldnotbesatisfied,petitionermovedforthepublic
auctionofthemortgagedproperty,16whichtheRTCgranted.17Inan
auction sale conducted on November 7, 2001, petitioner was the
only bidder in the amount of P420,000.00. Thus, a Certificate of
Sale18wasissuedinherfavorandaccordinglyannotatedattheback
Sale18wasissuedinherfavorandaccordinglyannotatedattheback
ofTCTNo.V12296.
Respondents then filed a Motion to Correct/Amend Judgment
and To Set Aside Execution Sale19 dated December 17, 2001,
claiming that the parties did not agree in writing on any rate of
interest and that petitioner merely sought for a 12% per annum
interest in her Complaint. Surprisingly, the RTC awarded 5%
monthlyinterest(or60%perannum)fromMarch2,1991untilfull
payment.Resultantly,theirindebtednessinclusiveoftheexorbitant
interest from March 2, 1991 to May 22, 2001 ballooned from
P124,400.00toP652,000.00.
InanOrder20datedMay7,2002,theRTCgrantedrespondents
motionandaccordinglymodifiedtheinterestrateawardedfrom5%
monthly to 12% perannum. Then on August 2, 2002, respondents
filedaMotionforLeaveToDeposit/

_______________
15SeeOrderdatedMarch16,2001,id.,atp.79.
16SeeManifestation,id.,atpp.8485.
17SeeOrderdatedMay7,2001,id.,atp.80pennedbyJudgeFloroP.Alejo.
18Id.,atp.204.
19Id.,atpp.205212.
20CARollo,pp.3638pennedbyActingPresidingJudgeDionisioC.Sison.

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VOL.688,JANUARY7,2013 29
Dionavs.Balangue

Consign Judgment Obligation21 in the total amount of

P126,650.00.22
Displeased with the RTCs May 7, 2002 Order, petitioner
elevated the matter to the CA viaa Petition for Certiorari23 under
Rule65oftheRulesofCourt.OnAugust5,2003,theCArendered
a Decision24 declaring that the RTC exceeded its jurisdiction in
awardingthe5%monthlyinterestbutatthesametimepronouncing
thattheRTCgravelyabuseditsdiscretioninsubsequentlyreducing
the rate of interest to 12% per annum. In so ruling, the CA
ratiocinated:

Indeed, We are convinced that the Trial Court exceeded its jurisdiction
when it granted 5% monthly interest instead of the 12% perannum prayed
for in the complaint. However, the proper remedy is not to amend the
judgmentbuttodeclarethatportionasanullity.Voidjudgmentforwantof
jurisdictionisnojudgmentatall.Itcannotbethesourceofanyrightnorthe
creator of any obligation (Leonor vs. CA, 256 SCRA 69). No legal rights
canemanatefromaresolutionthatisnullandvoid(Fortichvs.Corona,312
SCRA751).
 Fromtheforegoing,theremedyof[therespondents]istohavetheCourt
declaretheportionofthejudgmentprovidingforahigherinterestthanthat
prayedforasnullandvoidforwantoforinexcessofjurisdiction.Avoid
judgment never acquire[s] finality and any action to declare its nullity does
notprescribe(HeirsofMayorNemencioGalvezvs.CA,255SCRA672).
WHEREFORE, foregoing premises considered, the Petition having
merit,isherebyGIVENDUECOURSE.Resultantly,the

_______________
21Rollo,pp.217219.
22IntheirComment,id.,atpp.178190,respondentsallegedthattheirMotionforLeave
ToDeposit/ConsignJudgmentObligationremainedunresolvedasthesamewasovertakenby
petitionersPetitionforCertiorarifiledwiththeCA.
23DocketedasCAG.R.SPNo.73360.
24Rollo,pp.102108pennedbyAssociateJusticeJoseL.Sabio,Jr.andconcurredinby
AssociateJusticesB.A.AdefuinDeLaCruzandHakimS.Abdulwahid.

30

30 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

challengedMay7,2002andSeptember5,2000ordersofPublicRespondent
Court are hereby ANNULLED and SET ASIDE for having been issued
withgraveabuseofdiscretionamountingtolackorinexcessofjurisdiction.
Nocosts.
SOORDERED.25(Emphasesintheoriginalitalicssupplied.)

ProceedingsbeforetheCourtofAppeals
TakingtheircuefromtheDecisionoftheCAinthespecialcivil
actionforcertiorari,respondentsfiledwiththesamecourtaPetition
for Annulment of Judgment and Execution Sale with Damages.26
They contended that the portion of the RTC Decision granting
petitioner 5% monthly interest rate is in gross violation of Section
3(d)ofRule9oftheRulesofCourtandoftheirrighttodueprocess.
According to respondents, the loan did not carry any interest as it
was the verbal agreement of the parties that in lieu thereof
petitioners family can continue occupying respondents residential
building located in Marulas, Valenzuela for free until said loan is
fullypaid.
RulingoftheCourtofAppeals
Initially, the CA denied due course to the Petition.27 Upon
respondentsmotion,however,itreinstatedandgrantedthePetition.
In setting aside portions of the RTCs October 17, 2000 Decision,
the CA ruled that aside from being unconscionably excessive, the
monthlyinterestrateof5%wasnotagreeduponbythepartiesand
thatpetitionersComplaintclearlysoughtonlythelegalrateof12%
perannum.Follow
_______________
25Id.,atp.107.
26CARollo,pp.13.
27SeeResolutionpromulgated on October 13, 2004, id., at pp. 5860 penned by
AssociateJusticeRebeccaDeGuiaSalvadorandconcurredinbyAssociateJustices
PortiaAlioHormachuelosandAuroraSantiagoLagman.

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VOL.688,JANUARY7,2013 31
Dionavs.Balangue

ingthemandateofSection3(d)ofRule9oftheRulesofCourt,the
CAconcludedthattheawardedrateofinterestisvoidforbeingin
excessofthereliefsoughtintheComplaint.Itruledthus:

WHEREFORE, [respondents] motion for reconsideration is

GRANTED and our resolution dated October 13, 2004 is, accordingly,
REVERSEDandSETASIDE.Inlieuthereof,anotherisenteredordering
theANNULMENTOF:
(a)public respondents impugned October 17, 2000 judgment, insofar
asitawarded5%monthlyinterestinfavorof[petitioner]and
(b)allproceedingsrelativetothesaleatpublicauctionoftheproperty
titled in [respondents] names under Transfer Certificate of Title No. V
12296oftheValenzuelaregistry.
Thejudgment debt adjudicated in public respondents impugned October
[17, 2000] judgment is, likewise, ordered RECOMPUTED at the rate of
12%perannumfromMarch2,1991.Nocosts.
SOORDERED.28(Emphasesintheoriginal.)

Petitionersoughtreconsideration,whichwasdeniedbytheCAin
itsJune26,2006Resolution.29
Issues
Hence,thisPetitionanchoredonthefollowinggrounds:

I. THE HONORABLE COURT OF APPEALS COMMITTED

GRAVE AND SERIOUS ERROR OF LAW WHEN IT
GRANTEDRESPONDENTSPETITIONFORANNULMENT
OF JUDGMENT AS A SUBSTITUTE OR ALTERNATIVE
REMEDYOFALOSTAPPEAL.
II. THE HONORABLE COURT OF APPEALS COMMITTED
GRAVEANDSERIOUSERRORANDMISAP

_______________
28Id.,atp.84.
29Id.,atpp.111114.

32
32 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

PREHENSIONOFLAWANDTHEFACTSWHENITGRANTED
RESPONDENTS PETITION FOR ANNULMENT OF
JUDGMENTOFTHEDECISIONOFTHEREGIONALTRIAL
COURTOFVALENZUELA,BRANCH75DATEDOCTOBER
17,2000INCIVILCASENO.241V99,DESPITETHEFACT
THAT SAID DECISION HAS BECOME FINAL AND
ALREADY EXECUTED CONTRARY TO THE DOCTRINE
OFIMMUTABILITYOFJUDGMENT.30

PetitionersArguments
Petitioner claims that the CA erred in partially annulling the
RTCsOctober17, 2000 Decision. She contends that a Petition for
AnnulmentofJudgmentmaybeavailedofonlywhentheordinary
remediesofnewtrial,appeal,petitionforrelieforotherappropriate
remediesarenolongeravailablethroughnofaultoftheclaimant.In
the present case, however, respondents had all the opportunity to
questiontheOctober17,2000DecisionoftheRTC,butbecauseof
theirowninactionornegligencetheyfailedtoavailoftheremedies
sanctionedbytherules.Instead,theycontentedthemselveswiththe
filing of a Motion to Set Aside Judgment and then a Motion to
Correct/AmendJudgmentandtoSetAsideExecutionSale.
PetitionerlikewisearguesthatforaRule47petitiontoprosper,
the same must either be based on extrinsic fraud or lack of
jurisdiction. However, the allegations in respondents Rule 47
petition do not constitute extrinsic fraud because they simply pass
theblametothenegligenceoftheirformercounsel.Inaddition,itis
too late for respondents to pass the buck to their erstwhile counsel
considering that when they filed their Motion to Correct/Amend
Judgment and To Set Aside Execution Sale they were already
assisted by their new lawyer, Atty. Reynaldo A. Ruiz, who did not
alsoavailofthe

_______________
30Rollo,p.10.

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VOL.688,JANUARY7,2013 33
Dionavs.Balangue

remedies of new trial, appeal, etc. As to the ground of lack of

jurisdiction,petitionerpositsthatthereisnoreasontodoubtthatthe
RTChadjurisdictionoverthesubjectmatterofthecaseandoverthe
personsoftherespondents.
 While conceding that the RTC patently made a mistake in
awarding 5% monthly interest, petitioner nonetheless invokes the
doctrine of immutability of final judgment and contends that the
RTC Decision can no longer be corrected or modified since it had
long become final and executory. She likewise points out that
respondentsreceivedacopyofsaidDecisiononNovember13,2000
butdidnothingtocorrectthesame.Theydidnotevenquestionthe
award of 5% monthly interest when they filed their Motion to Set
Aside Judgment which they anchored on the sole ground of the
RTCs lack of jurisdiction over the persons of some of the
respondents.
RespondentsArguments
Respondentsdonotcontesttheexistenceoftheirobligationand
theprincipalamountthereof.Theyonlyseekquittancefromthe5%
monthly interest or 60% per annum imposed by the RTC.
Respondents contend that Section (3)d of Rule 9 of the Rules of
Court is clear that when the defendant is declared in default, the
courtcannotgrantareliefmorethanwhatisbeingprayedforinthe
Complaint. A judgment which transgresses said rule, according to
therespondents,isvoidforhavingbeenissuedwithoutjurisdiction
andforbeingviolativeofdueprocessoflaw.
Respondentsmaintain that it was through no fault of their own,
but through the gross negligence of their former counsel, Atty.
Coroza, that the remedies of new trial, appeal or petition for relief
from judgment were lost. They allege that after filing a Motion to
Extend Period to Answer, Atty. Coroza did not file any pleading
resulting to their being declared in default. While the said lawyer
filedontheirbehalfaMotiontoSetAsideJudgmentdatedJanuary
26,2001,hehowevertook

34

34 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

nostepstoappealfromtheDecisionoftheRTC,therebyallowing
said judgment to lapse into finality. Citing Legarda v. Court of
Appeals,31respondentsaverthatclientsarenotalwaysboundbythe
actionsoftheircounsel,asinthepresentcasewheretheclientsare
tolosetheirpropertyduetothegrossnegligenceoftheircounsel.
With regard to petitioners invocation of immutability of
judgment,respondentsarguethatsaiddoctrineappliesonlytovalid
andnottovoidjudgments.
OurRuling
Thepetitionmustfail.
Weagreewithrespondentsthattheawardof5%monthlyinterest
violatedtheirrighttodueprocessand,hence,thesamemaybeset
asideinaPetitionforAnnulmentofJudgmentfiledunderRule47of
theRulesofCourt.
AnnulmentofjudgmentunderRule47
anexceptiontothefinaljudgmentrule
groundstherefor.
A Petition for Annulment of Judgment under Rule 47 of the
Rules of Court is a remedy granted only under exceptional
circumstanceswhereaparty,withoutfaultonhispart,hasfailedto
availoftheordinaryremediesofnewtrial,appeal,petitionforrelief
orotherappropriateremedies.Saidruleexplicitlyprovidesthatitis
notavailableasasubstituteforaremedywhichwaslostduetothe
partys own neglect in promptly availing of the same. The
underlying reason is traceable to the notion that annulling final
judgmentsgoesagainstthegrainoffinalityofjudgment.Litigation
mustendandterminatesometimeandsomewhere,anditisessential
toaneffectiveadministrationofjusticethatonceajudgment

_______________
31G.R.No.94457,March18,1991,195SCRA418.

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VOL.688,JANUARY7,2013 35
Dionavs.Balangue

hasbecomefinal,theissueorcauseinvolvedthereinshouldbelaid
torest.32
WhileunderSection2,Rule4733oftheRulesofCourtaPetition
for Annulment of Judgment may be based only on the grounds of
extrinsic fraud and lack of jurisdiction, jurisprudence recognizes
lack of due process as additional ground to annul a judgment.34 In
Arcelonav.CourtofAppeals,35thisCourtdeclaredthatafinaland
executory judgment may still be set aside if, upon mere inspection
thereof, its patent nullity can be shown for having been issued
withoutjurisdictionorforlackofdueprocessoflaw.
Grantof5%monthlyinterestisway
beyondthe12%perannuminterest
soughtintheComplaintandsmacks
ofviolationofdueprocess.
Itissettledthatcourtscannotgrantareliefnotprayedforinthe
pleadings or in excess of what is being sought by the party. They
cannot also grant a relief without first ascertaining the evidence
presentedinsupportthereof.Dueprocessconsiderationsrequirethat
judgmentsmustconformtoand

_______________
 32 Ramos v. Judge Combong, Jr., 510 Phil. 277, 281282 473 SCRA 499, 504
(2005).
33Section2.Groundsforannulment.Theannulmentmaybebasedonlyonthe
groundsofextrinsicfraudandlackofjurisdiction.
xxxx
34SeeIntestateEstateoftheLateNimfaSianv.PhilippineNationalBank,G.R.
No.168882,January31,2007,513SCRA662,667668.
35345Phil.250,264280SCRA20,34(1997),citingSantiagov.Ceniza,115Phil.
493, 495496 5 SCRA 494, 496 (1962) Mercado v. Ubay, G.R. No. 35830, July 24,
1990,187SCRA719,725andRegidorv.CourtofAppeals,G.R.No.78115,March5,
1993,219SCRA530,534.

36

36 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

besupportedbythepleadingsandevidencepresentedincourt.In
Development Bank of the Philippines v. Teston,36 this Court
expoundedthat:

Due process considerations justify this requirement. It is improper to

enter an order which exceeds the scope of relief sought by the pleadings,
absent notice which affords the opposing party an opportunity to be heard
with respect to the proposed relief. The fundamental purpose of the
requirement that allegations of a complaint must provide the measure of
recoveryistopreventsurprisetothedefendant.

Notably,theRulesisevenmorestrictinsafeguardingtherightto
due process of a defendant who was declared in default than of a
defendant who participated in trial. For instance, amendment to
conformtotheevidencepresentedduringtrialisallowedtheparties
undertheRules.37Butthesameisnotfeasiblewhenthedefendantis
declared in default because Section 3(d), Rule 9 of the Rules of
Court comes into play and limits the relief that may be granted by
thecourtstowhathasbeenprayedforintheComplaint.Itprovides:

(d)Extent of relief to be awarded.A judgment rendered against a party in

defaultshallnotexceedtheamountorbedifferentinkindfromthatprayed
fornorawardunliquidateddamages.

Theraisondtreinlimitingtheextentofreliefthatmaybegranted
is that it cannot be presumed that the defendant would not file an
Answer and allow himself to be declared in default had be known
thattheplaintiffwillbeaccordedareliefgreaterthanordifferentin
kind from that sought in the Complaint.38 No doubt, the reason
behind Section 3(d), Rule 9 of the Rules of Court is to safeguard
defendantsrighttodue
_______________
36G.R.No.174966,February14,2008,545SCRA422,429.
37SeeSection5,Rule10oftheRulesofCourt.
38Herrera,OscarM.,RemedialLaw,Vol.I,2007Edition,pp.821822,citingLim
Tocov.GoFay,80Phil.166,169170(1948).

37

VOL.688,JANUARY7,2013 37
Dionavs.Balangue

processagainstunforeseenandarbitrarilyissuedjudgment.This,to
themindofthisCourt,isakintotheveryessenceofdueprocess.It
embodiesthesportingideaoffairplay39andforbidsthegrantof
reliefonmatterswherethedefendantwasnotgiventheopportunity
tobeheardthereon.
Inthecaseatbench,theawardof5%monthlyinterestrateisnot
supportedbothbytheallegationsinthepleadingsandtheevidence
onrecord.TheRealEstateMortgage40executedbythepartiesdoes
not include any provision on interest. When petitioner filed her
Complaint before the RTC, she alleged that respondents borrowed
from her the sum of FORTYFIVE THOUSAND PESOS
(P45,000.00),withinterestthereonattherateof12%perannum41
and sought payment thereof. She did not allege or pray for the
disputed5%monthlyinterest.Neitherdidshepresentevidencenor
testifiedthereon.Clearly,theRTCsawardof5%monthlyinterestor
60% per annum lacks basis and disregards due process. It violated
thedueprocessrequirementbecauserespondentswerenotinformed
of the possibility that the RTC may award 5% monthly interest.
Theyweredeprivedofreasonableopportunitytorefuteandpresent
controverting evidence as they were made to believe that the
complainant [petitioner] was seeking for what she merely stated in
herComplaint.
Neither can the grant of the 5% monthly interest be considered
subsumed by petitioners general prayer for [o]ther reliefs and
remediesjustandequitableunderthepremisesxxx.42Torepeat,
thecourtsgrantofreliefislimitedonlytowhathasbeenprayedfor
in the Complaint or related thereto, supported by evidence, and
coveredbythepartyscauseof

_______________
39Frankfurter,Mr.JusticeHolmesandtheSupremeCourt,pp.3233,citedinCruz,
IsaganiA.,ConstitutionalLaw,2007Edition,
p.100.
40Supra,note6.
41Rollo,p.56.
42Id.,atp.58.
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38 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

action.43 Besides, even assuming that the awarded 5% monthly or

60% per annum interest was properly alleged and proven during
trial, the same remains unconscionably excessive and ought to be
equitably reduced in accordance with applicable jurisprudence. In
Bulos,Jr.v.Yasuma,44thisCourtheld:

In the case of Ruiz v. Court of Appeals, citing the cases of Medel v.

Court of Appeals, Garcia v. Court of Appeals, Spouses Bautista v. Pilar
Development Corporation and the recent case of Spouses Solangon v.
Salazar,thisCourtconsideredthe3%interestpermonthor36%interestper
annum as excessive and unconscionable. Thereby, the Court, in the said
case,equitablyreducedtherateofinterestto1%interestpermonthor12%
interestperannum.(Citationsomitted)

Itisunderstandablefortherespondentsnottocontestthedefault
order for, as alleged in their Comment, it is not their intention to
impugn or run away from their just and valid obligation.45
Nonetheless, their waiver to present evidence should never be
construed as waiver to contest patently erroneous award which
alreadytransgressestheirrighttodueprocess,aswellasapplicable
jurisprudence.
Respondentsformercounselwas
grosslynegligentinhandlingthecase
ofhisclientsrespondentsdidnotlose
ordinaryremediesofnewtrial,petition
forrelief,etc.throughtheirownfault.
Ordinarily, the mistake, negligence or lack of competence of
counsel binds the client. This is based on the rule that any act
performedbyacounselwithinthescopeofhisgeneralor

_______________
43PhilippineCharterInsuranceCorporationv.PhilippineNationalConstruction
Corporation,G.R.No.185066,October2,2009,602SCRA723,736.
44G.R.No.164159,July17,2007,527SCRA727,742.
45Rollo,p.183.

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VOL.688,JANUARY7,2013 39
Dionavs.Balangue
implied authority is regarded as an act of his client. A recognized
exceptiontotheruleiswhenthelawyersweregrosslynegligentin
their duty to maintain their clients cause and such amounted to a
deprivationoftheirclientspropertywithoutdueprocessoflaw.46In
whichcase,thecourtsmuststepinandaccordrelieftoaclientwho
sufferedthereby.47
The manifest indifference of respondents former counsel in
handling the cause of his client was already present even from the
beginning. It should be recalled that after filing in behalf of his
clientsaMotiontoExtendPeriodtoAnswer,saidcounselallowed
the requested extension to pass without filing an Answer, which
resulted to respondents being declared in default. His negligence
wasaggravatedbythefactthathedidnotquestiontheawarded5%
monthlyinterestdespitereceiptoftheRTCDecisiononNovember
13,2000.48AsimplereadingofthedispositiveportionoftheRTC
Decision readily reveals that it awarded exorbitant and
unconscionable rate of interest. Its difference from what is being
prayedforbythepetitionerinherComplaintissoblatantandvery
patent. It also defies elementary jurisprudence on legal rate of
interests.Hadthecounselcarefullyreadthejudgmentitwouldhave
caughthisattentionandcompelledhimtotakethenecessarystepsto
protecttheinterestofhisclient.Buthedidnot.Instead,hefiledin
behalfofhisclientsaMotiontoSetAsideJudgment49datedJanuary
26,2001basedonthesolegroundoflackofjurisdiction,oblivious
to the fact that the erroneous award of 5% monthly interest would
resulttohisclientsdeprivationofpropertywithoutdueprocessof
law.Worse,heevenallowedtheRTCDecisiontobecomefinalby
notperfectinganappeal.Neitherdidhefileapetitionfor

_______________
46Legardav.CourtofAppeals,supranote31atpp.426427TrustInternational
PaperCorporationv.Pelaez,531Phil.150,160161499SCRA552,563(2006).
47Legardav.CourtofAppeals,supranote31atp.428.
48Perpetitionersallegation.
49Supranote14.

40

40 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

relieftherefrom.Itwasonlyayearlaterthatthepatentlyerroneous
award of 5% monthly interest was brought to the attention of the
RTC when respondents, thru their new counsel, filed a Motion to
Correct/Amend Judgment and To Set Aside Execution Sale. Even
the RTC candidly admitted that it made a glaring mistake in
directingthedefendantstopayinterestontheprincipalloanat5%
permonthwhichisverydifferentfromwhatwasprayedforbythe
plaintiff.50
A lawyer owes entire devotion to the interest of his client,
warmthandzealinthemaintenanceanddefenseofhisrightsandthe
exertion of his utmost learning and ability, to the end that nothing
canbetakenorwithheldfromhisclientexceptinaccordancewith
thelaw.51Judgingfromhowrespondentsformercounselhandled
the cause of his clients, there is no doubt that he was grossly
negligent in protecting their rights, to the extent that they were
deprivedoftheirpropertywithoutdueprocessoflaw.
In fine, respondents did not lose the remedies of new trial,
appeal,petitionforreliefandotherremediesthroughtheirownfault.
It can only be attributed to the gross negligence of their erstwhile
counsel which prevented them from pursuing such remedies. We
cannotalsoblamerespondentsforrelyingtoomuchontheirformer
counsel. Clients have reasonable expectations that their lawyer
would amply protect their interest during the trial of the case.52
Here, [r]espondents are plain and ordinary people x x x who are
totallyignorantoftheintricaciesandtechnicalitiesoflawandlegal
procedures.Beingso,theycompletelyrelieduponandtrustedtheir
former counsel to appropriately act as their interest may lawfully
warrantandrequire.53

_______________
50CARollo,p.37.
51Legardav.CourtofAppeals,supranote31atp.425.
52APEXMining,Inc.v.CourtofAppeals,377Phil.482,494319SCRA456,467
(1999).
53SeerespondentsMemorandum,Rollo,p.266.

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VOL.688,JANUARY7,2013 41
Dionavs.Balangue

As a final word, it is worth noting that respondents principal

obligationwasonlyP45,000.00.Duetotheirformercounselsgross
negligence in handling their cause, coupled with the RTCs
erroneous,baseless,andillegalawardof5%monthlyinterest,they
now stand to lose their property and still owe petitioner a large
amountofmoney.AsaptlyobservedbytheCA:

xxxIftheimpugnedjudgmentisnot,therefore,rightfullynullified,
petitioners will not only end up losing their property but will
additionallyoweprivaterespondentthesumofP232,000.00plusthe
legalinterestsaidbalancehad,inthemeantime,earned.Asacourtof
 justice and equity, we cannot, in good conscience, allow this
unconscionablesituationtoprevail.54

Indeed, this Court is appalled by petitioners invocation of the

doctrineofimmutabilityofjudgment.Petitionerdoesnotcontestas
she even admits that the RTC made a glaring mistake in awarding
5% monthly interest.55 Amazingly, she wants to benefit from such
erroneousaward.ThisCourtcannotallowthisinjusticetohappen.
WHEREFORE, the instant Petition is hereby DENIED and the
assailed November 24, 2005 and June 26, 2006 Resolutions of the
CourtofAppealsinCAG.R.SPNo.85541areAFFIRMED.
SOORDERED.

Carpio (Chairperson), Brion, Perez and PerlasBernabe, JJ.,

concur.

Petitiondenied,resolutionsaffirmed.

_______________
54CARollo,p.83.
55Seeparagraph54ofherPetition,Rollo,p.22.

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42 SUPREMECOURTREPORTSANNOTATED
Dionavs.Balangue

Notes.Extrinsic fraud refers to any fraudulent act of the

prevailing party in the litigation which is committed outside of the
trialofthecase,wherebytheunsuccessfulpartyhasbeenprevented
from exhibiting fully his case, by fraud or deception practiced on
him by his opponent. (Philippine Tourism Authority vs. Philippine
GolfDevelopment&Equipment,Inc.,668SCRA406[2012])
The remedy of annulment of judgment is only available under
certainexceptionalcircumstancesasthisisadversetotheconceptof
immutability of final judgments. (Antonino vs. The Register of
DeedsofMakatiCity,674SCRA227[2012])
o0o

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