Diona vs. Balnague

11/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 688 11/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 688
additional ground to annul a judgment.—While under Section 2,

Rule 47 of the Rules of Court a Petition 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. In Arcelona v.
Court of Appeals, 280 SCRA 20 (1997), this Court declared that a
final and executory judgment may still be set aside if, upon mere
G.R. No. 173559. January 7, 2013.*
inspection thereof, its patent nullity can be shown for having been
LETICIA DIONA, represented by her Attorney-in-Fact,
issued without jurisdiction or for lack of due process of law.
MARCELINA DIONA, petitioner, vs. ROMEO A.
BALANGUE, SONNY A. BALANGUE, REYNALDO A. Same; Same; Courts; Courts cannot grant a relief not prayed
BALANGUE, and ESTEBAN A. BALANGUE, JR., for in the pleadings or in excess of what is being sought by the
respondents. party. They cannot also grant a relief without first ascertaining the
evidence presented in support thereof.—It is settled that courts
Remedial Law; Civil Procedure; Annulment of Judgments; A cannot grant a relief not prayed for in the pleadings or in excess of
Petition for Annulment of Judgment under Rule 47 of the Rules of what is being sought by the party. They cannot also grant a relief
Court is a remedy granted only under exceptional circumstances without first ascertaining the evidence presented in support
where a party, without fault on his part, has failed to avail of the thereof. Due process considerations require that judgments must
ordinary remedies of new trial, appeal, petition for relief or other conform to and be supported by the pleadings and evidence
appropriate remedies.—A Petition for Annulment of Judgment presented in court. In Development Bank of the Philippines v.
under Rule 47 of the Rules of Court is a remedy granted only Teston, 545 SCRA 422 (2008), this Court expounded that: Due
under exceptional circumstances where a party, without fault on process considerations justify this requirement. It is improper to
his part, has 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 alle-
* SECOND DIVISION.
24
23
24 SUPREME COURT REPORTS ANNOTATED

VOL. 688, JANUARY 7, 2013 23 Diona vs. Balangue
Diona vs. Balangue
gations of a complaint must provide the measure of recovery is to
failed to avail of the ordinary remedies of new trial, appeal, prevent surprise to the defendant.
petition for relief or other appropriate remedies. Said rule Attorneys; Legal Ethics; Ordinarily, the mistake, negligence or
explicitly provides that it is not available as a substitute for a lack of competence of counsel binds the client; A recognized
remedy which was lost due to the party’s own neglect in promptly exception to the rule is when the lawyers were grossly negligent in
availing of the same. “The underlying reason is traceable to the their duty to maintain their client’s cause and such amounted to a
notion that annulling final judgments goes against the grain of deprivation of their client’s property without due process of law.—
finality of judgment. Litigation must end and terminate sometime Ordinarily, the mistake, negligence or lack of competence of
and somewhere, and it is essential to an effective administration counsel binds the client. This is based on the rule that any act
of justice that once a judgment has become final, the issue or performed by a counsel within the scope of his general or implied
cause involved therein should be laid to rest.” authority is regarded as an act of his client. A recognized
Same; Same; Same; Due Process; While under Section 2, Rule exception to the rule is when the lawyers were grossly negligent
47 of the Rules of Court a Petition for Annulment of Judgment in their duty to maintain their client’s cause and such amounted
may be based only on the grounds of extrinsic fraud and lack of to a deprivation of their client’s property without due process of
jurisdiction, jurisprudence recognizes lack of due process as
www.central.com.ph/sfsreader/session/00000175c9f1e95bb838cafa003600fb002c009e/t/?o=False 1/19 www.central.com.ph/sfsreader/session/00000175c9f1e95bb838cafa003600fb002c009e/t/?o=False 2/19
law. In which case, the courts must step in and accord relief to a On March 2, 1991, respondents obtained a loan of
client who suffered thereby. P45,000.00 from petitioner payable in six months and
Same; Same; A lawyer owes entire devotion to the interest of secured by a Real Estate Mortgage6 over their 202-square
his client, warmth and zeal in the maintenance and defense of his meter property located in Marulas, Valenzuela and covered
rights and the exertion of his utmost learning and ability, to the by Transfer Certificate of Title (TCT) No. V-12296.7 When
end that nothing can be taken or withheld from his client except in the debt became due, respondents failed to pay
accordance with the law.—“A lawyer owes entire devotion to the notwithstanding demand.
interest of his client, 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 1 Rollo, pp. 10-26.
client except in accordance with the law.” Judging from how 2 CA Rollo, pp. 80-84; penned by Associate Justice Rebecca De Guia-
respondents’ former counsel handled the cause of his clients, there Salvador and concurred in by Associate Justices Portia Aliño-
is no doubt that he was grossly negligent in protecting their Hormachuelos and Aurora Santiago-Lagman.
rights, to the extent that they were deprived of their property 3 Id., at pp. 1-13.
without due process of law. 4 Rollo, pp. 60-62, penned by Judge Jaime L. Bautista.
5 CA Rollo, pp. 111-114.
PETITION for review on certiorari of the resolutions of the 6 Rollo, p. 193.
Court of Appeals. 7 Id., at pp. 191-192.
The facts are stated in the opinion of the Court.
Claustro & Claustro Law Office for petitioner. 26
Reynaldo A. Ruiz for respondents.
25 26 SUPREME COURT REPORTS ANNOTATED

Diona vs. Balangue
VOL. 688, JANUARY 7, 2013 25
Thus, on September 17, 1999, petitioner filed with the RTC
Diona vs. Balangue
a Complaint8 praying that respondents be ordered:
DEL CASTILLO, J.: (a) To pay [petitioner] the principal obligation of

The grant of a relief neither sought by the party in P45,000.00, with interest thereon at the rate of 12%
whose favor it was given nor supported by the evidence per annum, from 02 March 1991until the full obligation
presented violates the opposing party’s right to due process is paid.
and may be declared void ab initio in a proper proceeding. (b) To pay [petitioner] actual damages as may be proven
This Petition for Review on Certiorari1 assails the during the trial but shall in no case be less than
November 24, 2005 Resolution2 of the Court of Appeals P10,000.00; P25,000.00 by way of attorney’s fee, plus
(CA) issued in CA-G.R. SP No. 85541 which granted the P2,000.00 per hearing as appearance fee.
Petition for Annulment of Judgment3 filed by the (c) To issue a decree of foreclosure for the sale at public
respondents seeking to nullify that portion of the October auction of the aforementioned parcel of land, and for the
17, 2000 Decision4 of the Regional Trial Court (RTC), disposition of the proceeds [thereof] in accordance with
Branch 75, Valenzuela City awarding petitioner 5% law, upon failure of the [respondents] to fully pay
monthly interest rate for the principal amount of the loan [petitioner] within the period set by law the sums set
respondents obtained from her. forth in this complaint.
This Petition likewise assails the CA’s June 26, 2006 (d) Costs of this suit.
Resolution5 denying petitioner’s Motion for Other reliefs and remedies just and equitable under the
Reconsideration. premises are likewise prayed for.9 (Emphasis supplied)
Factual Antecedents
The facts of this case are simple and undisputed. Respondents were served with summons thru
respondent Sonny A. Balangue (Sonny). On October 15,
1999, with the assistance of Atty. Arthur C. Coroza (Atty.
Coroza) of the Public Attorney’s Office, they filed a Motion because their co-respondent Sonny did not inform them
to Extend Period to Answer. Despite the requested about it. They prayed
extension, however, respondents failed to file any
responsive pleadings. Thus, upon motion of the petitioner, _______________
the RTC declared them in default and allowed petitioner to 11 Id., at pp. 60-62.
present her evidence ex parte.10 12 Id., at p. 62.
13 Id., at pp. 63-65.
_______________ 14 Id., at pp. 66-69.
8 Id., at pp. 56-59; docketed as Civil Case No. 241-V-99.
9 Id., at p. 58. 28
10 See Order dated December 29, 1999, id., at p. 198; penned by Judge
Jaime F. Bautista. 28 SUPREME COURT REPORTS ANNOTATED
27 Diona vs. Balangue
VOL. 688, JANUARY 7, 2013 27 that the RTC’s October 17, 2000 Decision be set aside and a
new trial be conducted.
Diona vs. Balangue But on March 16, 2001, the RTC ordered15 the issuance
of a Writ of Execution to implement its October 17, 2000
Ruling of the RTC sought to be annulled. Decision. However, since the writ could not be satisfied,
In a Decision11 dated October 17, 2000, the RTC granted petitioner moved for the public auction of the mortgaged
petitioner’s Complaint. The dispositive portion of said property,16 which the RTC granted.17 In an auction sale
Decision reads: conducted on November 7, 2001, petitioner was the only
bidder in the amount of P420,000.00. Thus, a Certificate of
WHEREFORE, judgment is hereby rendered in favor of Sale18 was issued in her favor and accordingly annotated at
the [petitioner], ordering the [respondents] to pay the the back of TCT No. V-12296.
[petitioner] as follows: Respondents then filed a Motion to Correct/Amend
a) the sum of FORTY FIVE THOUSAND (P45,000.00) Judgment and To Set Aside Execution Sale19 dated
PESOS, representing the unpaid principal loan December 17, 2001, claiming that the parties did not agree
obligation plus interest at 5% per month [sic] in writing on any rate of interest and that petitioner
reckoned from March 2, 1991, until the same is fully merely sought for a 12% per annum interest in her
paid; Complaint. Surprisingly, the RTC awarded 5% monthly
b) P20,000.00 as attorney’s fees plus cost of suit; interest (or 60% per annum) from March 2, 1991 until full
c) in the event the [respondents] fail to satisfy the payment. Resultantly, their indebtedness inclusive of the
aforesaid obligation, an order of foreclosure shall be exorbitant interest from March 2, 1991 to May 22, 2001
issued accordingly for the sale at public auction of the ballooned from P124,400.00 to P652,000.00.
subject property covered by Transfer Certificate of Title In an Order20 dated May 7, 2002, the RTC granted
No. V-12296 and the improvements thereon for the respondents’ motion and accordingly modified the interest
satisfaction of the [petitioner’s] claim. rate awarded from 5% monthly to 12% per annum. Then on
SO ORDERED.12 (Emphasis supplied) August 2, 2002, respondents filed a Motion for Leave To
Deposit/
Subsequently, petitioner filed a Motion for Execution,13
alleging that respondents did not interpose a timely appeal
despite receipt by their former counsel of the RTC’s _______________
Decision on November 13, 2000. Before it could be resolved, 15 See Order dated March 16, 2001, id., at p. 79.
however, respondents filed a Motion to Set Aside 16 See Manifestation, id., at pp. 84-85.
Judgment14 dated January 26, 2001, claiming that not all 17 See Order dated May 7, 2001, id., at p. 80; penned by Judge Floro P.
of them were duly served with summons. According to the Alejo.
other respondents, they had no knowledge of the case 18 Id., at p. 204.

19 Id., at pp. 205-212. 30

20 CA Rollo, pp. 36-38; penned by Acting Presiding Judge Dionisio C.
Sison. 30 SUPREME COURT REPORTS ANNOTATED
29 Diona vs. Balangue
challenged May 7, 2002 and September 5, 2000 orders of Public

VOL. 688, JANUARY 7, 2013 29 Respondent Court are hereby ANNULLED and SET ASIDE for
Diona vs. Balangue having been issued with grave abuse of discretion amounting to
lack or in excess of jurisdiction. No costs.
Consign Judgment Obligation21 in the total amount of SO ORDERED.25 (Emphases in the original; italics supplied.)
P126,650.00.22
Proceedings before the Court of Appeals
Displeased with the RTC’s May 7, 2002 Order, petitioner
Taking their cue from the Decision of the CA in the
elevated the matter to the CA via a Petition for Certiorari23
special civil action for certiorari, respondents filed with the
under Rule 65 of the Rules of Court. On August 5, 2003, the
same court a Petition for Annulment of Judgment and
CA rendered a Decision24 declaring that the RTC exceeded
Execution Sale with Damages.26 They contended that the
its jurisdiction in awarding the 5% monthly interest but at
portion of the RTC Decision granting petitioner 5%
the same time pronouncing that the RTC gravely abused
monthly interest rate is in gross violation of Section 3(d) of
its discretion in subsequently reducing the rate of interest
Rule 9 of the Rules of Court and of their right to due
to 12% per annum. In so ruling, the CA ratiocinated:
process. According to respondents, the loan did not carry
Indeed, We are convinced that the Trial Court exceeded its any interest as it was the verbal agreement of the parties
jurisdiction when it granted 5% monthly interest instead of the that in lieu thereof petitioner’s family can continue
12% per annum prayed for in the complaint. However, the proper occupying respondents’ residential building located in
remedy is not to amend the judgment but to declare that portion Marulas, Valenzuela for free until said loan is fully paid.
as a nullity. Void judgment for want of jurisdiction is no judgment Ruling of the Court of Appeals
at all. It cannot be the source of any right nor the creator of any Initially, the CA denied due course to the Petition.27
obligation (Leonor vs. CA, 256 SCRA 69). No legal rights can Upon respondents’ motion, however, it reinstated and
emanate from a resolution that is null and void (Fortich vs. granted the Petition. In setting aside portions of the RTC’s
Corona, 312 SCRA 751). October 17, 2000 Decision, the CA ruled that aside from
From the foregoing, the remedy of [the respondents] is to have being unconscionably excessive, the monthly interest rate
the Court declare the portion of the judgment providing for a of 5% was not agreed upon by the parties and that
higher interest than that prayed for as null and void for want of or petitioner’s Complaint clearly sought only the legal rate of
in excess of jurisdiction. A void judgment never acquire[s] finality 12% per annum. Follow-
and any action to declare its nullity does not prescribe (Heirs of
Mayor Nemencio Galvez vs. CA, 255 SCRA 672). _______________
WHEREFORE, foregoing premises considered, the Petition 25 Id., at p. 107.
having merit, is hereby GIVEN DUE COURSE. Resultantly, the 26 CA Rollo, pp. 1-3.
27 See Resolution promulgated on October 13, 2004, id., at pp. 58-60;
_______________ penned by Associate Justice Rebecca De Guia-Salvador and concurred in
21 Rollo, pp. 217-219. by Associate Justices Portia Aliño-Hormachuelos and Aurora Santiago-
22 In their Comment, id., at pp. 178-190, respondents alleged that their Motion Lagman.
for Leave To Deposit/Consign Judgment Obligation remained unresolved as the
same was overtaken by petitioner’s Petition for Certiorari filed with the CA.
31
23 Docketed as CA-G.R. SP No. 73360.

24 Rollo, pp. 102-108; penned by Associate Justice Jose L. Sabio, Jr. and VOL. 688, JANUARY 7, 2013 31
concurred in by Associate Justices B. A. Adefuin-De La Cruz and Hakim S.
Diona vs. Balangue
Abdulwahid.

ing the mandate of Section 3(d) of Rule 9 of the Rules of OF THE REGIONAL TRIAL COURT OF
Court, the CA concluded that the awarded rate of interest VALENZUELA, BRANCH 75 DATED OCTOBER 17,
is void for being in excess of the relief sought in the 2000 IN CIVIL CASE NO. 241-V-99, DESPITE THE
Complaint. It ruled thus: FACT THAT SAID DECISION HAS BECOME FINAL
AND ALREADY EXECUTED CONTRARY TO THE
WHEREFORE, [respondents’] motion for reconsideration is DOCTRINE OF IMMUTABILITY OF JUDGMENT.30
GRANTED and our resolution dated October 13, 2004 is,
accordingly, REVERSED and SET ASIDE. In lieu thereof, Petitioner’s Arguments
another is entered ordering the ANNULMENT OF: Petitioner claims that the CA erred in partially
(a) public respondent’s impugned October 17, 2000 judgment, annulling the RTC’s October 17, 2000 Decision. She
insofar as it awarded 5% monthly interest in favor of [petitioner]; contends that a Petition for Annulment of Judgment may
and be availed of only when the ordinary remedies of new trial,
(b) all proceedings relative to the sale at public auction of the appeal, petition for relief or other appropriate remedies are
property titled in [respondents’] names under Transfer Certificate no longer available through no fault of the claimant. In the
of Title No. V-12296 of the Valenzuela registry. present case, however, respondents had all the opportunity
The judgment debt adjudicated in public respondent’s to question the October 17, 2000 Decision of the RTC, but
impugned October [17, 2000] judgment is, likewise, ordered because of their own inaction or negligence they failed to
RECOMPUTED at the rate of 12% per annum from March 2, avail of the remedies sanctioned by the rules. Instead, they
1991. No costs. contented themselves with the filing of a Motion to Set
SO ORDERED.28 (Emphases in the original.) Aside Judgment and then a Motion to Correct/Amend
Judgment and to Set Aside Execution Sale.
Petitioner sought reconsideration, which was denied by Petitioner likewise argues that for a Rule 47 petition to
the CA in its June 26, 2006 Resolution.29 prosper, the same must either be based on extrinsic fraud
Issues or lack of jurisdiction. However, the allegations in
Hence, this Petition anchored on the following grounds: respondents’ Rule 47 petition do not constitute extrinsic
fraud because they simply pass the blame to the negligence
I. THE HONORABLE COURT OF APPEALS
of their former counsel. In addition, it is too late for
COMMITTED GRAVE AND SERIOUS ERROR OF
respondents to pass the buck to their erstwhile counsel
LAW WHEN IT GRANTED RESPONDENTS’
considering that when they filed their Motion to
PETITION FOR ANNULMENT OF JUDGMENT AS A
Correct/Amend Judgment and To Set Aside Execution Sale
SUBSTITUTE OR ALTERNATIVE REMEDY OF A
they were already assisted by their new lawyer, Atty.
LOST APPEAL.
Reynaldo A. Ruiz, who did not also avail of the
II. THE HONORABLE COURT OF APPEALS
COMMITTED GRAVE AND SERIOUS ERROR AND
MISAP- _______________
30 Rollo, p. 10.
_______________ 33
28 Id., at p. 84.
29 Id., at pp. 111-114.
VOL. 688, JANUARY 7, 2013 33
32
Diona vs. Balangue
32 SUPREME COURT REPORTS ANNOTATED remedies of new trial, appeal, etc. As to the ground of lack
Diona vs. Balangue of jurisdiction, petitioner posits that there is no reason to
doubt that the RTC had jurisdiction over the subject matter
of the case and over the persons of the respondents.
PREHENSION OF LAW AND THE FACTS WHEN IT
While conceding that the RTC patently made a mistake
GRANTED RESPONDENTS’ PETITION FOR
in awarding 5% monthly interest, petitioner nonetheless
ANNULMENT OF JUDGMENT OF THE DECISION
invokes the doctrine of immutability of final judgment and
contends that the RTC Decision can no longer be corrected We agree with respondents that the award of 5%
or modified since it had long become final and executory. monthly interest violated their right to due process and,
She likewise points out that respondents received a copy of hence, the same may be set aside in a Petition for
said Decision on November 13, 2000 but did nothing to Annulment of Judgment filed under Rule 47 of the Rules of
correct the same. They did not even question the award of Court.
5% monthly interest when they filed their Motion to Set Annulment of judgment under Rule 47;
Aside Judgment which they anchored on the sole ground of an exception to the final judgment rule;
the RTC’s lack of jurisdiction over the persons of some of grounds therefor.
the respondents. A Petition for Annulment of Judgment under Rule 47 of
Respondents’ Arguments the Rules of Court is a remedy granted only under
Respondents do not contest the existence of their exceptional circumstances where a party, without fault on
obligation and the principal amount thereof. They only his part, has failed to avail of the ordinary remedies of new
seek quittance from the 5% monthly interest or 60% per trial, appeal, petition for relief or other appropriate
annum imposed by the RTC. Respondents contend that remedies. Said rule explicitly provides that it is not
Section (3)d of Rule 9 of the Rules of Court is clear that available as a substitute for a remedy which was lost due to
when the defendant is declared in default, the court cannot the party’s own neglect in promptly availing of the same.
grant a relief more than what is being prayed for in the “The underlying reason is traceable to the notion that
Complaint. A judgment which transgresses said rule, annulling final judgments goes against the grain of finality
according to the respondents, is void for having been issued of judgment. Litigation must end and terminate sometime
without jurisdiction and for being violative of due process of and somewhere, and it is essential to an effective
law. administration of justice that once a judgment
Respondents maintain 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, 31 G.R. No. 94457, March 18, 1991, 195 SCRA 418.
appeal or petition for relief from judgment were lost. They
allege that after filing a Motion to Extend Period to 35
Answer, Atty. Coroza did not file any pleading resulting to
their being declared in default. While the said lawyer filed VOL. 688, JANUARY 7, 2013 35
on their behalf a Motion to Set Aside Judgment dated
January 26, 2001, he however took Diona vs. Balangue
34
has become final, the issue or cause involved therein
should be laid to rest.”32
34 SUPREME COURT REPORTS ANNOTATED While under Section 2, Rule 4733 of the Rules of Court a
Petition for Annulment of Judgment may be based only on
Diona vs. Balangue
the grounds of extrinsic fraud and lack of jurisdiction,
jurisprudence recognizes lack of due process as additional
no steps to appeal from the Decision of the RTC, thereby ground to annul a judgment.34 In Arcelona v. Court of
allowing said judgment to lapse into finality. Citing Appeals,35 this Court declared that a final and executory
Legarda v. Court of Appeals,31 respondents aver that judgment may still be set aside if, upon mere inspection
clients are not always bound by the actions of their counsel, thereof, its patent nullity can be shown for having been
as in the present case where the clients are to lose their issued without jurisdiction or for lack of due process of law.
property due to the gross negligence of their counsel. Grant of 5% monthly interest is way
With regard to petitioner’s invocation of immutability of beyond the 12% per annum interest
judgment, respondents argue that said doctrine applies sought in the Complaint and smacks
only to valid and not to void judgments. of violation of due process.
Our Ruling It is settled that courts cannot grant a relief not prayed
The petition must fail. for in the pleadings or in excess of what is being sought by

the party. They cannot also grant a relief without first from that prayed for nor award unliquidated damages.
ascertaining the evidence presented in support thereof.
Due process considerations require that judgments must The raison d’être in limiting the extent of relief that may be
conform to and granted 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 that the plaintiff will be accorded
_______________
a relief greater than or different in kind from that sought
32 Ramos v. Judge Combong, Jr., 510 Phil. 277, 281-282; 473 SCRA
in the Complaint.38 No doubt, the reason behind Section
499, 504 (2005).
3(d), Rule 9 of the Rules of Court is to safeguard
33 Section 2. Grounds for annulment.—The annulment may be based
defendant’s right to due
only on the grounds of extrinsic fraud and lack of jurisdiction.
xxxx
34 See Intestate Estate of the Late Nimfa Sian v. Philippine National _______________
36 G.R. No. 174966, February 14, 2008, 545 SCRA 422, 429.
Bank, G.R. No. 168882, January 31, 2007, 513 SCRA 662, 667-668.
37 See Section 5, Rule 10 of the Rules of Court.
35 345 Phil. 250, 264; 280 SCRA 20, 34 (1997), citing Santiago v.
38 Herrera, Oscar M., Remedial Law, Vol. I, 2007 Edition, pp. 821-822,
Ceniza, 115 Phil. 493, 495-496; 5 SCRA 494, 496 (1962); Mercado v. Ubay,
citing Lim Toco v. Go Fay, 80 Phil. 166, 169-170 (1948).
G.R. No. 35830, July 24, 1990, 187 SCRA 719, 725; and Regidor v. Court of
Appeals, G.R. No. 78115, March 5, 1993, 219 SCRA 530, 534. 37
36
VOL. 688, JANUARY 7, 2013 37
36 SUPREME COURT REPORTS ANNOTATED Diona vs. Balangue
Diona vs. Balangue
process against unforeseen and arbitrarily issued
judgment. This, to the mind of this Court, is akin to the
be supported by the pleadings and evidence presented in
very essence of due process. It embodies “the sporting idea
court. In Development Bank of the Philippines v. Teston,36
of fair play”39 and forbids the grant of relief on matters
this Court expounded that:
where the defendant was not given the opportunity to be
Due process considerations justify this requirement. It is heard thereon.
improper to enter an order which exceeds the scope of relief In the case at bench, the award of 5% monthly interest
sought by the pleadings, absent notice which affords the opposing rate is not supported both by the allegations in the
party an opportunity to be heard with respect to the proposed pleadings and the evidence on record. The Real Estate
relief. The fundamental purpose of the requirement that Mortgage40 executed by the parties does not include any
allegations of a complaint must provide the measure of recovery is provision on interest. When petitioner filed her Complaint
to prevent surprise to the defendant. before the RTC, she alleged that respondents borrowed
from her “the sum of FORTY-FIVE THOUSAND PESOS
Notably, the Rules is even more strict in safeguarding (P45,000.00), with interest thereon at the rate of 12% per
the right to due process of a defendant who was declared in annum”41 and sought payment thereof. She did not allege
default than of a defendant who participated in trial. For or pray for the disputed 5% monthly interest. Neither did
instance, amendment to conform to the evidence presented she present evidence nor testified thereon. Clearly, the
during trial is allowed the parties under the Rules.37 But RTC’s award of 5% monthly interest or 60% per annum
the same is not feasible when the defendant is declared in lacks basis and disregards due process. It violated the due
default because Section 3(d), Rule 9 of the Rules of Court process requirement because respondents were not
comes into play and limits the relief that may be granted informed of the possibility that the RTC may award 5%
by the courts to what has been prayed for in the Complaint. monthly interest. They were deprived of reasonable
It provides: opportunity to refute and present controverting evidence as
they were made to believe that the complainant [petitioner]
(d) Extent of relief to be awarded.—A judgment rendered against a
was seeking for what she merely stated in her Complaint.
party in default shall not exceed the amount or be different in kind

Neither can the grant of the 5% monthly interest be ordinary remedies of new trial, petition
considered subsumed by petitioner’s general prayer for for relief, etc. through their own fault.
“[o]ther reliefs and remedies just and equitable under the Ordinarily, the mistake, negligence or lack of
premises x x x.”42 To repeat, the court’s grant of relief is competence of counsel binds the client. This is based on the
limited only to what has been prayed for in the Complaint rule that any act performed by a counsel within the scope
or related thereto, supported by evidence, and covered by of his general or
the party’s cause of
_______________
_______________ 43 Philippine Charter Insurance Corporation v. Philippine National
39 Frankfurter, Mr. Justice Holmes and the Supreme Court, pp. 32-33, Construction Corporation, G.R. No. 185066, October 2, 2009, 602 SCRA
cited in Cruz, Isagani A., Constitutional Law, 2007 Edition, 723, 736.
p. 100. 44 G.R. No. 164159, July 17, 2007, 527 SCRA 727, 742.
40 Supra, note 6. 45 Rollo, p. 183.
41 Rollo, p. 56.
39
42 Id., at p. 58.
38
VOL. 688, JANUARY 7, 2013 39
Diona vs. Balangue
Diona vs. Balangue implied authority is regarded as an act of his client. A
recognized exception to the rule is when the lawyers were
action.43 Besides, even assuming that the awarded 5% grossly negligent in their duty to maintain their client’s
monthly or 60% per annum interest was properly alleged cause and such amounted to a deprivation of their client’s
and proven during trial, the same remains unconscionably property without due process of law.46 In which case, the
excessive and ought to be equitably reduced in accordance courts must step in and accord relief to a client who
with applicable jurisprudence. In Bulos, Jr. v. Yasuma,44 suffered thereby.47
this Court held: The manifest indifference of respondents’ former counsel
in handling the cause of his client was already present even
In the case of Ruiz v. Court of Appeals, citing the cases of from the beginning. It should be recalled that after filing in
Medel v. Court of Appeals, Garcia v. Court of Appeals, Spouses behalf of his clients a Motion to Extend Period to Answer,
Bautista v. Pilar Development Corporation and the recent case of said counsel allowed the requested extension to pass
Spouses Solangon v. Salazar, this Court considered the 3% without filing an Answer, which resulted to respondents
interest per month or 36% interest per annum as excessive and being declared in default. His negligence was aggravated
unconscionable. Thereby, the Court, in the said case, equitably by the fact that he did not question the awarded 5%
reduced the rate of interest to 1% interest per month or 12% monthly interest despite receipt of the RTC Decision on
interest per annum. (Citations omitted) November 13, 2000.48 A simple reading of the dispositive
portion of the RTC Decision readily reveals that it awarded
It is understandable for the respondents not to contest
exorbitant and unconscionable rate of interest. Its
the default order for, as alleged in their Comment, “it is not
difference from what is being prayed for by the petitioner
their intention to impugn or run away from their just and
in her Complaint is so blatant and very patent. It also
valid obligation.”45 Nonetheless, their waiver to present
defies elementary jurisprudence on legal rate of interests.
evidence should never be construed as waiver to contest
Had the counsel carefully read the judgment it would have
patently erroneous award which already transgresses their
caught his attention and compelled him to take the
right to due process, as well as applicable jurisprudence.
necessary steps to protect the interest of his client. But he
Respondents’ former counsel was
did not. Instead, he filed in behalf of his clients a Motion to
grossly negligent in handling the case
Set Aside Judgment49 dated January 26, 2001 based on the
of his clients; respondents did not lose
sole ground of lack of jurisdiction, oblivious to the fact that

the erroneous award of 5% monthly interest would result to technicalities of law and legal procedures. Being so, they
his clients’ deprivation of property without due process of completely relied upon and trusted their former counsel to
law. Worse, he even allowed the RTC Decision to become appropriately act as their interest may lawfully warrant
final by not perfecting an appeal. Neither did he file a and require.”53
petition for
_______________
_______________ 50 CA Rollo, p. 37.
46 Legarda v. Court of Appeals, supra note 31 at pp. 426-427; Trust 51 Legarda v. Court of Appeals, supra note 31 at p. 425.
International Paper Corporation v. Pelaez, 531 Phil. 150, 160-161; 499 52 APEX Mining, Inc. v. Court of Appeals, 377 Phil. 482, 494; 319
SCRA 552, 563 (2006). SCRA 456, 467 (1999).
47 Legarda v. Court of Appeals, supra note 31 at p. 428. 53 See respondents’ Memorandum, Rollo, p. 266.
48 Per petitioner’s allegation.
41
49 Supra note 14.
40
VOL. 688, JANUARY 7, 2013 41
Diona vs. Balangue
Diona vs. Balangue As a final word, it is worth noting that respondents’
principal obligation was only P45,000.00. Due to their
relief therefrom. It was only a year later that the patently former counsel’s gross negligence in handling their cause,
erroneous award of 5% monthly interest was brought to the coupled with the RTC’s erroneous, baseless, and illegal
attention of the RTC when respondents, thru their new award of 5% monthly interest, they now stand to lose their
counsel, filed a Motion to Correct/Amend Judgment and To property and still owe petitioner a large amount of money.
Set Aside Execution Sale. Even the RTC candidly admitted As aptly observed by the CA:
that it “made a glaring mistake in directing the defendants
to pay interest on the principal loan at 5% per month which
is very different from what was prayed for by the x x x If the impugned judgment is not, therefore, rightfully
plaintiff.”50 nullified, petitioners will not only end up losing their
“A lawyer owes entire devotion to the interest of his property but will additionally owe private respondent the
client, warmth and zeal in the maintenance and defense of sum of P232,000.00 plus the legal interest said balance had,
his rights and the exertion of his utmost learning and in the meantime, earned. As a court of justice and equity,
ability, to the end that nothing can be taken or withheld we cannot, in good conscience, allow this unconscionable
from his client except in accordance with the law.”51 situation to prevail.54
Judging from how respondents’ former counsel handled the
Indeed, this Court is appalled by petitioner’s invocation
cause of his clients, there is no doubt that he was grossly
of the doctrine of immutability of judgment. Petitioner does
negligent in protecting their rights, to the extent that they
not contest as she even admits that the RTC made a
were deprived of their property without due process of law.
glaring mistake in awarding 5% monthly interest.55
In fine, respondents did not lose the remedies of new
Amazingly, she wants to benefit from such erroneous
trial, appeal, petition for relief and other remedies through
award. This Court cannot allow this injustice to happen.
their own fault. It can only be attributed to the gross
WHEREFORE, the instant Petition is hereby DENIED
negligence of their erstwhile counsel which prevented them
and the assailed November 24, 2005 and June 26, 2006
from pursuing such remedies. We cannot also blame
Resolutions of the Court of Appeals in CA-G.R. SP No.
respondents for relying too much on their former counsel.
85541 are AFFIRMED.
Clients have reasonable expectations that their lawyer
SO ORDERED.
would amply protect their interest during the trial of the
case.52 Here, “[r]espondents are plain and ordinary people x Carpio (Chairperson), Brion, Perez and Perlas-Bernabe,
x x who are totally ignorant of the intricacies and JJ., concur.
11/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 688
Petition denied, resolutions affirmed.
_______________
54 CA Rollo, p. 83.
55 See paragraph 54 of her Petition, Rollo, p. 22.
42

Diona vs. Balangue
Notes.—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 has been prevented from exhibiting fully his case, by
fraud or deception practiced on him by his opponent.
(Philippine Tourism Authority vs. Philippine Golf
Development & Equipment, Inc., 668 SCRA 406 [2012])
The remedy of annulment of judgment is only available
under certain exceptional circumstances as this is adverse
to the concept of immutability of final judgments.
(Antonino vs. The Register of Deeds of Makati City, 674
SCRA 227 [2012])
——o0o——
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11/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 688 11/15/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 688

additional ground to annul a judgment.—While under Section 2,

24 SUPREME COURT REPORTS ANNOTATED

25 26 SUPREME COURT REPORTS ANNOTATED

DEL CASTILLO, J.: (a) To pay [petitioner] the principal obligation of

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19 Id., at pp. 205-212. 30

29 Diona vs. Balangue

challenged May 7, 2002 and September 5, 2000 orders of Public

23 Docketed as CA-G.R. SP No. 73360.

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Petition denied, resolutions affirmed.

42 SUPREME COURT REPORTS ANNOTATED

Notes.—Extrinsic fraud refers to any fraudulent act of

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