CEREZOvs.

DAVID TUAZON
G.R. No. 141538
March 23, 2004

*This is a petition for review on certiorari to annul the Resolutiondated 21 October 1999 of the Court of
Appeals as well as its Resolution dated 20 January 2000 denying the motion for reconsideration.

*The Court of Appeals denied the petition for annulment of the Decisiondated 30 May 1995 rendered by
the Regional Trial Court of Angeles City wherein it ordered petitioner Hermana R. Cerezo ("Mrs. Cerezo")
to pay respondent David Tuazon ("Tuazon") actual damages, loss of earnings, moral damages, and costs
of suit.

FACTS:

Around noontime of 26 June 1993, a Country Bus Lines passenger bus collided with a tricycle.
The tricycle driver Tuazon filed a complaint for damages against Mrs. Cerezo, as owner of the bus line,
her husband Atty. Cerezo, and bus driver Foronda. The complaint alleged that:At the time of the
incident, plaintiff Tuazon was in his proper lane when defendant driver Foronda did then and there
willfully, unlawfully, and feloniously operate the said motor vehicle in a negligent, careless, and
imprudent manner without due regard to traffic rules and regulations, there being a "Slow Down" sign
near the scene of the incident, and without taking the necessary precaution to prevent loss of lives or
injuries, his negligence, carelessness and imprudence resulted to severe damage to the tricycle and
serious physical injuries to plaintiff thus making him unable to walk and becoming disabled, with his
thumb and middle finger on the left hand being cut.

After considering Tuazon’s testimonial and documentary evidence, the trial court ruled in
Tuazon’s favor, made no pronouncement on Foronda’s liability because there was no service of
summons on him and did not hold Atty. Cerezo liable as Tuazon failed to show that Mrs. Cerezo’s
business benefited the family, pursuant to Article 121(3) of the Family Code. The trial court held Mrs.
Cerezo solely liable for the damages sustained by Tuazon arising from the negligence of Mrs. Cerezo’s
employee, pursuant to Article 2180 of the Civil Code.

When Mrs. Cerezoreceived a copy of the decision, she filed the following:

1. RTC:petition for relief from judgment on the grounds of "fraud, mistake or excusable negligence.
This was denied on the ground that the Cerezo spouses could have availed of the remedy of
appealinstead of resorting to a petition for relief from judgment when they received the
decision. Moreover, the Cerezo spouses not only failed to prove fraud, accident, mistake or
excusable negligence by conclusiveevidence, they also failed to prove that they had a good and
substantial defense.
2. CA - petition for certiorari under Section 1 of Rule 65 questioning whether the trial court
acquired jurisdiction over the case considering there was no service of summons on Foronda,
 whom the Cerezo spouses claimed was an indispensable party. This was denied and declared
that the Cerezo spouses’ failure to file an answer was due to their own negligence, considering
that they continued to participate in the proceedings without filing an answer. It also denied
Cerezo spouses’ motion for reconsideration for lack of merit.

3. SC- petition for review on certiorari under Rule 45. This was denied and became final and
executory.

4. CA- petition for annulment of judgment under Rule 47 with prayer for restraining order. This
was denied.

Hence, this petition.

ISSUES:

1. Whether or not the RTC acquired jurisdiction over the subject matter and the Cerezo spouses.

-YES. The RTC acquired jurisdiction over the subject matter and the Cerezo spouses

A distinction should be made between a court’s jurisdiction over a person and its jurisdiction
over the subject matter of a case. The former is acquired by the proper service of summons or by the
parties’ voluntary appearance; while the latter is conferred by law.

Section 19(1) of BP 129provides that Regional Trial Courts shall exercise exclusive original
jurisdiction in all civil actions in which the subject of the litigation is incapable of pecuniary
estimation.Thus it was proper for the lower court to decide the instant case for damages.

Furthermore, any defects in the acquisition of jurisdiction over a person (i.e., improper filing of
civil complaint or improper service of summons) may be waived by the voluntary appearance of parties.
In this case,the defendant spouses admit to having appeared in the initial hearings and in the hearing for
plaintiff’s motion to litigate as a pauper. They even mentioned conferences where attempts were made
to reach an amicable settlement with plaintiff. However, the possibility of amicable settlement is not a
good and substantial defense which will warrant the granting of said petition. Therefore, the findings
and the decision of the lower court may bind them since they have waived such right by voluntarily
appearing in the civil case for damages.

2. Whether or not the remedies of petition for relief from judgment and petition for annulment of
judgment were proper in this case.

-NO.

Rule 38 of the Rules of Civil Procedure explained that when a party has another remedy
available to him, which may either be a motion for new trial or appeal from an adverse decision of the
trial court, and he was not prevented by fraud, accident, mistake or excusable negligence from filing
such motion or taking such appeal, he cannot avail himself of petitionfor relief from judgment. Indeed,
relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss
of the remedy at law was due to his own negligence; otherwise the petition for relief can be used to
revive the right to appeal which has been lost thru inexcusable negligence. Evidently, there was no
fraud, accident, mistake, or excusable negligence that prevented Mrs. Cerezo from filing an appeal, a
motion for new trial or a petition for certiorari. It was error for her to avail of a petition for relief from
judgment.

In this case, Mrs. Cerezo admitted that she received a copy of the trial court’s decision on 25
June 1995,hence, she had at least three remedies at her disposal: an appeal, a motion for new trial, or a
petition for certiorari. She could have availed either of the following remedies:

1.Appeal under Rule 41from the default judgment within 15 days from notice of the judgment. She
could have availed of the power of the Court of Appeals to try cases and conduct hearings, receive
evidence, and perform all acts necessary to resolve factual issues raised in cases falling within its
appellate jurisdiction.

2. File under Rule 37 a motion for new trial within the period for taking an appeal. If the trial court grants
a new trial, the original judgment is vacated, and the action will stand for trial de novo. The recorded
evidence taken in the former trial, as far as the same is material and competent to establish the issues,
shall be used at the new trial without retaking the same.

3. File under Rule 65 a petition for certiorari assailing the order of default within 60 days from notice of
the judgment. An order of default is interlocutory, and an aggrieved party may file an appropriate
special civil action under Rule 65. In a petition for certiorari, the appellate court may declare void both
the order of default and the judgment of default.

Clearly, Mrs. Cerezo had every opportunity to avail of these remedies within the reglementary
periods provided under the Rules of Court.

The petition for annulment of judgment is also not proper since a party may avail of the remedy
of annulment of judgment under Rule 47 only if the ordinary remedies of new trial, appeal, petition for
relief from judgment, or other appropriate remedies are no longer available through no fault of the
party. Mrs. Cerezo could have availed of a new trial or appeal but through her own fault she erroneously
availed of the remedy of a petition for relief, which was denied with finality. Thus, Mrs. Cerezo may no
longer avail of the remedy of annulment.

3. Whether or not Tuazon needs to reserve the filing of a separate civil action.

-NO.Mrs. Cerezo’s contention proceeds from the point of view of criminal law and not of civil
law, while the basis of the present action of Tuazon is quasi-delict under the Civil Code, not delict under
the Revised Penal Code.
 The same negligent act may produce civil liability arising from a delict under Article 103 of the
Revised Penal Code, or may give rise to an action for a quasi-delict under Article 2180 of the Civil
Codestates in part:Employers shall be liable for the damages caused by their employees and household
helpers acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry.

An aggrieved party may choose between the two remedies. An action based on a quasi-delict
may proceed independently from the criminal action. There is, however, a distinction between civil
liability arising from a delict and civil liability arising from a quasi-delict. The choice of remedy, whether
to sue for a delict or a quasi-delict, affects the procedural and jurisdictional issues of the action.

In this case, Tuazon chose to file an action for damages based on a quasi-delict. In his complaint,
Tuazon alleged that Mrs. Cerezo, "without exercising due care and diligence in the supervision and
management of her employees and buses," hired Foronda as her driver. Tuazon became disabled
because of Foronda’s "recklessness, gross negligence and imprudence," aggravated by Mrs. Cerezo’s
"lack of due care and diligence in the selection and supervision of her employees, particularly Foronda."

Therefore, Mrs. Cerezo is liable under Article 2180 of the Civil Code since there was no need for
Tuazon to reserve the filing of a separate civil actionbecause he opted to file a civil action for damages
against Mrs. Cerezo who is primarily and directly liable for her own civil negligence.

4. Whether or not Foronda is an indispensable party to the case.

-NO.

An indispensable party is one whose interest is affected by the court’s action in the litigation,
and without whom no final resolution of the case is possible.

In this case, Mrs. Cerezo’s liability as an employer in an action for a quasi-delict is not only
solidary, it is also primary and direct. (Where the obligation of the parties is solidary, either of the
parties is indispensable, and the other is not even a necessary party because complete relief is available
from either.)

Therefore, Foronda is not an indispensable party to the final resolution of Tuazon’s action for
damages against Mrs. Cerezo.

NOTES:

**Remedies available to a party declared in default:

a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion
under oath to set aside the order of default on the ground that his failure to answer was due to fraud,
accident, mistake or excusable negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now
Sec. 3(b), Rule 9]);

b) If the judgment has already been rendered when the defendant discovered the default, but before
the same has become final and executory, he may file a motion for new trial under Section 1 (a) of Rule
37;

c) If the defendant discovered the default after the judgment has become final and executory, he may
file a petition for relief under Section 2 [now Section 1] of Rule 38; and

d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the
law, even if no petition to set aside the order of default has been presented by him (Sec. 2, Rule 41)

Moreover, a petition for certiorari to declare the nullity of a judgment by default is also available
if the trial court improperly declared a party in default, or even if the trial court properly declared a
party in default, if grave abuse of discretion attended such declaration.

**Annulmentis available only on the grounds of extrinsic fraud and lack of jurisdiction. If based
onextrinsic fraud, a party must file the petition within four years from its discovery, and if based on lack
of jurisdiction, before laches or estoppel bars the petition. Extrinsic fraud is not a valid ground if such
fraud was used as a ground, or could have been used as a ground, in a motion for new trial or petition
for relief from judgment.

**Estoppel or laches may also bar lack of jurisdiction as a ground for nullity especially if raised for the
first time on appeal by a party who participated in the proceedings before the trial court.

**The extraordinary action to annul a final judgment is restricted to the grounds specified in the
rules.The reason for the restriction is to prevent this 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. There would be no end to litigation if parties who have unsuccessfully availed of any of the
appropriate remedies or lost them through their fault could still bring an action for annulment of
judgment.

**Employer’s liability based on a quasi-delict VS. Employer’s liability based on a delict

 An employer’s liability based on a quasi-delict is primary and direct (the remedy provided by law
for enforcing the obligation rather than to the character and limits of the obligation), while the
employer’s liability based on a delict is merely subsidiary .
 An action based on a quasi-delict ,the aggrieved party may sue the employer directly. When an
employee causes damage, the law presumes that the employer has himself committed an act of
negligence in not preventing or avoiding the damage.The action can be brought directly against
the person responsible (for another), without including the author of the act.
 In contrast, an action based on a delict seeks to enforce the subsidiary liability of the
employer for the criminal negligence of the employee as provided in Article 103 of the Revised
Penal Code. To hold the employer liable in a subsidiary capacity under a delict, the aggrieved
party must initiate a criminal action where the employee’s delict and corresponding primary
liability are established.