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TORRES, NICOLE

Article III, Section 1. Procedural Due Process Appeals .

DIONA V BALANGUE

G.R. No. 173559

January 7, 2013

FACTS:

On March 2, 1991, respondents obtained a P45 000 loan from petitioner payable in six months and secured

by a Real Mortgage over their 202-square meter property located in Marulas, Valenzuela. Respondents failed to

comply with the obligation when it became due and demandable. As a result, petitioners filed a Complaint with the

RTC on September 17, 1999 for the payment of the principal debt of the respondents plus interest at 12% per

annum, from March 2, 1991 until obligation is paid, payment of actual damages, issuance of a decree of foreclosure

for sale at a public auction the mortgaged property of the respondents, costs of the suit, and other reliefs and

remedies just and equitable under the premises are likewise prayed for. Several Motions in Court were filed

between the parties. Among these was the Motion for Execution by the petitioners when respondents allegedly did

not interpose a timely appeal despite receipt by their former counsel Atty. Sonny Balangue of the October 17, 2001

RTC Decision which judgment was rendered in favor of petitioner, which ordered the respondents to pay the

principal loan obligation plus interest at 5% per month reckoned from March 1991. Respondents claimed as

well that they did not receive their summons because their counsel Balangue did not inform them about the same.Petitioner later on moved for a public auction for the mortgaged property and won as the only bidder in the amount

of P420, 000. Respondents further filed for a Motion to Correct/Amend Judgment and to Set Aside Execution Sale,

claiming that the parties did not agree on any interest rate and that the petitioner only sought for a 12% interest rate

per annum, hence a violation of their right to due process. When the RTC surprisingly awarded the 5% per month

(or 60% per annum) interest rate, respondents indebtedness ballooned from P124,000 to P652,000. As the

petitioners elevated the case to the Court of Appeals, the CA held that the RTC exceeded in its jurisdiction in

awarding the 5% monthly interest and later on reducing the same to 12% per annum. It also opined that the properremedy was to not amend the judgment (when the RTC reduced the interest rate after awarding the 5% monthly

interest rate), but to declare that portion as a nullity. The petitioners are assailing the CAs decision with the claim

that the October 2001 RTC Decision has been final and already executed as per the doctrine of the immutability of

judgment.

ISSUES:

1. Whether or not the doctrine of immutability of judgment can be applied in this case

2. Whether or not the respondents were denied due process of law

HELD:

The Court dismissed the petition, affirmed the assailed decision of the Court of Appeals and held that:

1. 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 an additional ground to annul a judgment.Hence, the doctrine of immutability of judgment, cannot

apply in this case.

2. The respondents were denied due process, hence the same can give ground to annul the judgment. There

was lack of due process because: 1. The grant of 5% monthly interest by the RTC was way beyond the

12% interest per annum originally sought by the petitioners. It is settled that Courts cannot grant a

relief not prayed for in the pleadings or in excess of what is being sought for by the party. The law protectsthose with obligations who are in default as an embodiment of the sporting idea of fair play and in this

case, the law protects the respondents when they were not informed of the possibility that the RTC may

award the exorbitant and unconscionable 5% monthly interest. They were deprived of the opportunity torefute and present controverting evidence because they believed that what can be filed against them is

based solely on what the petitioners originally sought for (12% interest rate per annum); 2. The respondents

former counsel, Atty. Sonny Balangue was grossly negligent in handling the case of the respondents. He

did not even mind seeking the proper action when the RTC rendered the judgment which awarded

petitioners the 5% monthly interest rate to protect his clients. The Court must step in to afford clients

protection in the face of their grossly negligent counsels.