The Supreme Court held that a judgment based on a forged deed of sale cannot be annulled on grounds of extrinsic fraud if the party was duly represented by counsel and failed to file an appeal within the prescribed period. This decision underscores the importance of timely legal action and the binding nature of admissions made by counsel during pre-trial proceedings. It reinforces the principle that final judgments should be respected to maintain stability in property rights and the judicial process.

When Forged Deeds Lead to Lost Land: Can Justice Be Reversed?

The case of Roberto G. Alarcon v. Court of Appeals and Bienvenido Juani revolves around a complaint filed by Roberto Alarcon seeking to annul a deed of sale, alleging forgery, lack of consideration, and revocation of the special power of attorney granted to his father, Tomas Alarcon. Roberto claimed that his father had improperly sold a portion of his land to Bienvenido Juani, Edgardo Sulit, and Virginia Baluyot based on a forged document. The trial court rendered a Partial Decision declaring the deed of sale void ab initio due to forgery, which was admitted by all parties during the pre-trial conference. This led to the cancellation of the Transfer Certificates of Title (TCTs) issued to Juani, Sulit, and Baluyot. Years later, Juani filed a petition for annulment of the Partial Decision with the Court of Appeals, arguing extrinsic fraud, which the appellate court granted, setting aside the trial court’s decision.

The core legal question before the Supreme Court was whether the Court of Appeals erred in annulling the Partial Decision of the trial court based on extrinsic fraud, and whether the action for annulment was filed within the prescribed period. The petitioner, Roberto Alarcon, argued that there was no extrinsic fraud and that the action for annulment was filed beyond the four-year prescriptive period. The private respondent, Bienvenido Juani, contended that he was a victim of extrinsic fraud because he was not fully aware of the proceedings and the admissions made by his counsel during the pre-trial conference. The Court of Appeals sided with Juani, finding that he had been deprived of his day in court due to the actions of his counsel.

The Supreme Court reversed the Court of Appeals’ decision, holding that the petition for annulment was filed out of time and that no extrinsic fraud existed to justify setting aside the Partial Decision of the trial court. The Court emphasized the importance of adhering to procedural rules and respecting final judgments. The governing rule, Rule 47 of the Rules of Civil Procedure, provides specific grounds and periods for annulling judgments. Extrinsic fraud, one of the grounds, must be proven to have deprived a party of their day in court.

The Court cited Heirs of Manuel A. Roxas v. Court of Appeals, noting that fraud is extrinsic when it prevents a party from having a fair trial or presenting their entire case. In this instance, Juani was represented by counsel who actively participated in the pre-trial conference, made admissions, and presented evidence. Juani’s claim that he did not fully understand the proceedings was not sufficient to establish extrinsic fraud. The Supreme Court reiterated the principle that clients are generally bound by the actions of their counsel, even if those actions are mistakes, unless the negligence of counsel is so gross that it deprives the client of their day in court, as highlighted in Tenebro v. Court of Appeals and Legarda v. Court of Appeals.

Moreover, the action for annulment was filed nine years after the Partial Decision was rendered, far beyond the four-year prescriptive period from the discovery of fraud. The Court found that Juani was aware of the trial court’s disposition, as evidenced by his refusal to surrender his TCTs or re-convey the land to Alarcon. The Partial Decision was based on a stipulation of facts agreed upon during the pre-trial conference, where it was admitted that the deed of sale was a forgery. This admission was critical to the trial court’s decision, rendering the TCTs obtained by Juani, Baluyot, and Sulit null and void.

The Court examined the transcript of the stenographic notes from the pre-trial conference, which revealed that Juani’s counsel, Atty. Venancio Reyes, actively represented his client’s interests. Atty. Reyes presented documents, raised objections, and made admissions based on the available evidence. The admissions made during the pre-trial conference were conclusive upon the parties, as these stipulations are designed to expedite trial and relieve the parties and the court of the burden of proving undisputed facts, a principle established in Concrete Aggregates v. CA. The Rules of Court mandate that pre-trial conferences aim to achieve amicable settlements, explore alternative dispute resolutions, and enter into stipulations or admissions of facts and documents.

The decision emphasized that the admissions made by the parties during pre-trial, recorded in the pre-trial order, are binding. Since Juani’s counsel admitted that the deed of sale was a forgery, the subsequent judgment was a logical consequence of that admission. Therefore, Juani could not claim that he was denied his day in court. The Supreme Court concluded that the Court of Appeals committed a reversible error in giving due course to the petition, as it was not based on extrinsic fraud and was barred by prescription.

FAQs

What was the key issue in this case?	The key issue was whether the Court of Appeals erred in annulling the trial court’s Partial Decision based on a claim of extrinsic fraud and whether the petition for annulment was filed within the prescribed period.
What is extrinsic fraud?	Extrinsic fraud occurs when a party is prevented from having a fair trial or presenting their case fully due to fraudulent actions that affect the manner in which the judgment was procured, not the judgment itself.
What is the prescriptive period for filing an action for annulment of judgment based on extrinsic fraud?	The action must be filed within four years from the discovery of the fraud, according to Rule 47 of the Rules of Civil Procedure.
Are clients bound by the actions of their counsel?	Generally, yes. Clients are bound by their counsel’s decisions, unless the counsel’s negligence is so gross, reckless, and inexcusable that it deprives the client of their day in court.
What is the purpose of a pre-trial conference?	A pre-trial conference aims to facilitate amicable settlements, explore alternative dispute resolution methods, and obtain stipulations or admissions of facts and documents to expedite the trial process.
What happens when a deed of sale is found to be a forgery?	A forged deed of sale is void ab initio, meaning it is invalid from the beginning. Any titles obtained based on such a document are also null and void.
What was the basis of the trial court’s Partial Decision?	The Partial Decision was based on the admissions made by all parties during the pre-trial conference that the deed of sale was a forgery.
Why did the Supreme Court reverse the Court of Appeals’ decision?	The Supreme Court reversed the decision because there was no extrinsic fraud, and the action for annulment was filed beyond the four-year prescriptive period.

This case serves as a reminder of the importance of diligently pursuing legal remedies within the prescribed periods and understanding that clients are generally bound by the actions of their chosen counsel. It reinforces the principle that final judgments, especially those based on factual admissions during pre-trial, should be upheld to maintain the integrity and stability of the judicial system.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Roberto G. Alarcon v. Court of Appeals and Bienvenido Juani, G.R. No. 126802, January 28, 2000