Alarcon v. Court of Appeals
REITERATIONFacts
The Antecedents: Roberto G. Alarcon filed a complaint for annulment of a deed of sale with damages against Bienvenido Juani, Edgardo Sulit, and Virginia Baluyot. Alarcon alleged that while he was working abroad, he left his father, Tomas Alarcon, with a special power of attorney to administer his properties. Upon his return, he discovered that a portion of his land, Lot 878-B-1-A, was sold by his father to the respondents for a nominal consideration. The respondents subsequently registered the sale, canceled Alarcon's title, and obtained new certificates of title in their names. Alarcon contended that the deed of sale was forged, lacked consideration, and that his father's authority to sell had been revoked prior to the transaction. He also claimed the notary public's signature was falsified. Procedural History: The Regional Trial Court (RTC), Branch 22, Malolos, Bulacan, initially rendered a Partial Decision on August 1, 1986, declaring the deed of sale and the transfer certificates of title void ab initio based on admissions of fact made by the parties during pre-trial, including the admission that the deed of sale was a forgery. The RTC later issued a pre-trial order outlining the remaining issues. Despite a motion for execution by Alarcon, the RTC issued an order on January 24, 1991, dismissing the complaint against Juani and his counterclaim, and proceeding only with respect to defendants Baluyot and Sulit. Subsequently, on August 19, 1991, the RTC issued an order granting Alarcon's motion for a writ of execution of the Partial Decision. However, the judgment could not be executed as the defendants refused to surrender their duplicate titles. On April 17, 1995, Bienvenido Juani filed a petition for annulment of the Partial Decision with the Court of Appeals (CA), alleging extrinsic fraud. The CA granted the petition, setting aside the RTC's Partial Decision and its subsequent orders, and remanding the case for further proceedings, finding that Juani, being unlettered, was deprived of his day in court due to extrinsic fraud. The Petition: Petitioner Roberto G. Alarcon filed a petition for review on certiorari under Rule 45 of the Rules of Court, assailing the decision of the Court of Appeals. The petition raises two main issues: (1) whether the petition for annulment of judgment filed before the CA was filed on time; and (2) whether there was extrinsic or collateral fraud that would justify setting aside the RTC's Partial Decision. Alarcon argues that the CA erred in finding extrinsic fraud, asserting that Juani was properly represented by counsel and was not deprived of his day in court. He further contends that the petition for annulment was filed beyond the four-year prescriptive period from the discovery of the alleged fraud, as the Partial Decision became final and executory in 1986, and the petition for annulment was filed in 1995. The Supreme Court is asked to reverse the CA's decision and reinstate the RTC's Partial Decision.
Issue(s)
Whether the petition for annulment of judgment filed before the Court of Appeals was filed on time. Whether there was extrinsic or collateral fraud attendant in the case which would justify the setting aside of the Partial Decision of the trial court.
Ruling
The Supreme Court granted the petition, reversed the decision of the Court of Appeals, and reinstated the Partial Decision rendered by the Regional Trial Court on August 1, 1986.
Ratio Decidendi
On the issue of prescription: The Supreme Court found that the petition for annulment of judgment was filed beyond the prescriptive period. Rule 47 of the New Rules on Civil Procedure requires that an action for annulment based on extrinsic fraud must be filed within four (4) years from its discovery. The Partial Decision was rendered on August 1, 1986. The petition to annul the judgment was filed on April 17, 1995, which is nine (9) years after its rendition. The Court rejected the CA's finding that the prescriptive period should be reckoned from April 10, 1995, as Juani was well-represented by competent counsel who must have apprised him of the case's developments. The defendants' refusal to surrender their TCTs indicated their awareness of the trial court's disposition. The Court concluded that the CA committed a reversible error in giving due course to the petition, as it was not based on extrinsic fraud and was barred by prescription. On the issue of extrinsic fraud: The Supreme Court held that the Court of Appeals erred in concluding that extrinsic fraud was attendant in the case. The Court emphasized that extrinsic fraud must deprive a party of their day in court. In this case, Juani was not deprived of a trial; he was represented by counsel during the pre-trial conference where admissions of fact were made. The Court reiterated the general rule that a client is bound by the actions of their counsel, unless the counsel's negligence is so gross and inexcusable as to deprive the client of their day in court, which was not attendant here. The Partial Decision itself stated that all parties and their respective counsels appeared during the pre-trial, and the transcript of stenographic notes showed that Juani's counsel was not remiss in his duties. Therefore, the claim that Juani, being unlettered, did not understand the proceedings was insufficient to establish extrinsic fraud.
Main Doctrine
A partial decision rendered by the Regional Trial Court based on a stipulation of facts, admitting that the deed of sale was a forgery, cannot be annulled by the Court of Appeals on the ground of extrinsic fraud, especially when the party claiming fraud was represented by counsel during the pre-trial and the petition for annulment was filed beyond the prescriptive period.