Amihan Bus Lines v. Romars International Gases
REITERATIONFacts
The Antecedents: On February 20, 2005, a collision occurred between Amihan Bus Lines, Inc.'s bus and Romars International Gases Corporation's gas tanker along Quirino highway in Ragay, Camarines Sur. The gas tanker was negotiating an inclined curve when it was struck by the oncoming Amihan bus, which allegedly veered into its lane. Both vehicles sustained damage, with the gas tanker being a total loss. Respondent Romars subsequently filed a complaint for damages against petitioner Amihan Bus Lines. Procedural History: Respondent Romars filed a complaint for damages on July 22, 2005, seeking actual, exemplary, and attorney's fees. Petitioner Amihan Bus Lines filed an answer with counterclaims. The case underwent several preliminary conferences and pre-trial hearings, marked by repeated failures of petitioner's counsel to appear. Despite attempts at resetting and a motion to allow presentation of evidence, the Regional Trial Court (RTC) denied petitioner's motion and proceeded to receive evidence ex-parte. On April 17, 2007, the RTC rendered judgment in favor of Romars. Petitioner's motion for reconsideration was denied, and a writ of execution was issued. Petitioner appealed to the Court of Appeals (CA), seeking to annul the RTC's decision and subsequent orders, alleging extrinsic fraud. The CA dismissed the petition outright. The Petition: Petitioner Amihan Bus Lines, Inc. seeks review of the CA's Resolutions, arguing that the gross negligence and incompetence of its former counsel amounted to extrinsic fraud, justifying the annulment of the RTC's decision. Petitioner also contends that the RTC committed grave abuse of discretion in not reconsidering its order of August 31, 2006, and that the execution proceedings were void. The petition is filed under Rule 45 of the Rules of Court, asserting that petitioner was prevented from having a fair trial due to extrinsic fraud and that the lower courts erred in their findings and procedural rulings.
Issue(s)
Whether the gross negligence and incompetence of petitioner's former counsel constitute extrinsic fraud that would justify the annulment of the RTC's decision. Whether the respondent RTC committed grave abuse of discretion amounting to lack or excess of jurisdiction in not reconsidering its order denying petitioner's motion to present evidence. Whether the execution proceedings are null and void.
Ruling
The petition is denied for lack of merit. The Court affirmed the decision of the Court of Appeals.
Ratio Decidendi
On the issue of extrinsic fraud: The Court reiterated that extrinsic fraud, which warrants annulment of a judgment, must be a fraudulent act of the prevailing party committed outside the trial, preventing the defeated party from fully presenting its case. The petitioner's contention that its counsel's gross negligence constitutes extrinsic fraud is untenable because the cause must be traceable to a fraudulent act of the prevailing party. The CA correctly found no hint of a fraudulent scheme by the respondent that prevented the petitioner from having a fair trial. The petitioner was not prevented by the prevailing party from exhibiting its defense. The Court emphasized that the mistake or negligence of counsel, if not attended by fraud or collusion, does not constitute extrinsic fraud. The petitioner's failure to present its side was due to its own failure to observe basic procedural rules and its inaction, compounded by its counsel's failure to appear. The trial court and the respondent had extended forbearance, but the petitioner was remiss in exercising vigilance to protect its rights. The failure to appear during pre-trial and the subsequent inaction resulted in the finality of the default judgment, and the petitioner cannot blame its counsel for this fiasco while claiming denial of due process under the badge of extrinsic fraud. On the issue of grave abuse of discretion: The Court found no grave abuse of discretion on the part of the RTC. The records showed that the petitioner was notified of the re-setting of the pre-trial conference in open court but chose not to attend. Furthermore, the petitioner received a copy of the order but did not take any remedial action by filing a timely motion for reconsideration. The petitioner's "Entry of Appearance with Motion to Allow Defendant to Present Its Evidence" was filed more than three months after the order was issued, and it failed to offer a persuasive reason for the court to relax stringent rules. The RTC correctly denied the motion, finding the excuse to be "lame and not supported by the records." The petitioner's inaction and failure to comply with procedural rules led to the ex-parte presentation of evidence and the subsequent judgment. On the issue of execution proceedings: The Court found no merit in the contention that the execution proceedings were null and void. The petitioner's claim that its counsel on record was not served a copy of the decision and that execution procedures were not followed was not substantiated. The records indicated that the petitioner received a copy of the decision and had ample time to take legal action but failed to do so. The issuance of the writ of execution was a consequence of the finality of the judgment, which the petitioner failed to prevent through timely and proper legal remedies.
Main Doctrine
The gross negligence or mistake of counsel, if not attended by fraud or collusion, does not constitute extrinsic fraud that would warrant the annulment of a judgment. The failure of a party to present its case due to its own or its counsel's negligence, without any fraudulent act by the opposing party preventing a fair trial, does not amount to extrinsic fraud and does not violate due process.