TOP MANAGEMENT PROGRAMS CORPORATION, PETITIONER, VS. THE COURT OF APPEALS, JUDGE APOLONIO R. CHAVEZ, JR. IN HIS CAPACITY AS JUDGE OF THE REGIONAL TRIAL COURT OF THE NATIONAL CAP…

On November 28, 1991, the Court of Appeals dismissed a petition
for annulment of three orders issued by the Regional Trial Court of Pasig,
Branch 164.^[1]
The court held that there existed no extrinsic fraud which would justify the
annulment of the questioned orders. This petition for certiorari was brought to Our attention to
review the said decision.

Private respondents Tomas Trinidad and Luis Fajardo filed Civil
Case No. 35305 before the Regional Trial Court of Pasig, Branch 164 to enforce
an Agreement whereby they were entitled to receive a large tract of land upon
the success of the appeal of the Heirs of Gregorio against Jose Velasquez.^[2]

The late Emilio Gregorio, predecessor of the Heirs of Gregorio,
entered into an agreement with Tomas Trinidad and Luis Fajardo entitled
“Kasunduan na may Pambihirang Kapangyarihan.” The subject of the
agreement is the appeal taken by Emilio Gregorio from a decision whereby two
lots adjudicated to him (in LRC Case
No. 5053) were in fact the same lots adjudicated to applicant Jose
Velasquez in another land registration case (LRC Case No. 5416).^[3]
By virtue of this agreement, Fajardo would finance the cost of the litigation
and in return would be entitled to one half of the subject property after
deducting twenty per cent of the total land area as attorney’s fee for Trinidad
if the appeal is successful.^[4]

Judgment in Civil Case No. 35305 was rendered in favor of private
respondents Trinidad and Fajardo. The
dispositive portion of the decision reads:

“WHEREFORE, premises considered, judgment is hereby rendered
ordering herein defendants:

(1)     to convey to Atty.
Tomas Trinidad as honorarium for his services an area of 14,684 sq.m. which is
twenty percent (20%) of 72,424 sq.m. the total area of Lots 1,2,3 and 4;

(2)     to convey to Luis
Fajardo an area of 29,369 sq.m. representing fifty percent (50%) of the
remainder of the property after deducting the honorarium of Atty. Trinidad.

(3)     to pay the cost of suit and litigation expenses.

SO ORDERED.”^[5]

The appeal taken by the Heirs of Gregorio was declared abandoned and dismissed by the Court of Appeals and
by virtue of an Entry of Judgment rendered by the respondent Court dated
December 8, 1988, private respondents
Trinidad and Fajardo filed a motion for the issuance of a writ of execution of
the judgment rendered in Civil Case No. 35305.^[6]

The respondent Court also found that:

“Apparently, the writ of execution to enforce the judgment had
been duly issued, for on April 10, 1989, the Sheriff filed his Return stating
that the writ remained unsatisfied.

Thereafter, plaintiffs through counsel filed a Motion Ex-parte for
the Appointment of Sheriff of the Court to Execute the Deed of Conveyance of
property covered by final
judgment of the Court of Appeals In Accordance with Section 10, Rule 39 of the
Rules of Court.

In the order of August 14, 1989, the respondent court appointed
Deputy Sheriff Marcial Estrellado to execute the deed of conveyance in favor of
plaintiffs. (Trinidad and Fajardo)

xxx.

On October 2, 1989, the Sheriff submitted a report informing that
the deed of conveyance executed by him was duly annotated on TCT No. S-91911 of
the Register of Deeds of Las Piñas and that a subdivision plan duly approved by
the Bureau of Lands Management and Department of Environment and Natural
Resources or the Land Registration Authority was needed for the transfer.

Accordingly, the Motion Ex-Parte for Approval of the Subdivision
Plan as per Decision of the Court and To Order Issuance of Separate Titles as
per Decision was filed by the plaintiffs for the court’s consideration.

In the Order dated November 13, 1989, the respondent court gave
Deputy Sheriff Estrellado five (5) days within which to file a supplemental
report after which the court would act on the pending motion. On November 16, 1989, the Deputy Sheriff
informed the court that on August 25, 1989, the Register of Deeds of Las Piñas
wrote him a letter-reply indicating that the deed of conveyance he executed and
the Order of the court dated August 14, 1989 entered as Entry No. 6593 and 6594
in their docket book could not be pursued because the subject parcel of land
was already sold to other parties.

On December 14, 1989, an Order was issued by the respondent court directing the Register of Deeds of Las
Piñas, Metro Manila to undertake a comprehensive study and submit an official
report to the Court why he could not annotate the deed of conveyance dated
August 15, 1989 pursuant to the Order of August 14, 1989.

On February 5, 1990, the Register of Deeds submitted his report.

On May 11, 1990, the respondent court issued an Order, withdrawing
its Order of August 14, 1989 designating its Deputy Sheriff to execute the deed
of conveyance in favor of the plaintiffs; denying the motion ex-parte for
approval of subdivision plan, etc., without prejudice for the plaintiffs to
file a separate civil action against all parties concerned for the enforcement
of their rights and similar to that as contemplated in Section 6 of Rule 39 of
the Rules of Court inasmuch as the execution over the property cannot be
satisfied.

Upon motion of the plaintiffs for reconsideration of the aforesaid
order, on December 18, 1990, considering the testimony of the Register
of Deeds of Las Piñas, Metro Manila, to the effect that TCT No. 91911 is still
existing and that there is no order from any court cancelling it, the
respondent court granted the motion for reconsideration. It withdrew its Order dated May 11, 1990 and
reinstated the Order of August 14, 1989 designating Deputy Sheriff Marcial
Estrellado to execute the deed of conveyance in favor of the plaintiffs.

Acting upon the motion for reconsideration, on May 28, 1991,
the respondent court directed the Register of Deeds of Las Piñas, Metro Manila,
to annotate the Deed of Conveyance prepared by Deputy Sheriff Marcial
Estrellado, at the back of TCT 91911 in the name of the defendants (sic, herein
private respondents Trinidad and Fajardo)^[7]
within 24 hours from receipt of said order.

On June 7, 1991, the respondent court reiterated its order
on the Register of Deeds of Las Piñas to implement and/or or comply with the
order of May 28, 1991.^[8]

On June 26, 1991, the
lower court authorized the subdivision of Lot 1, Psu-204787 and directed
the Register of Deeds of Las Piñas to issue separate titles in favor of private
respondents.^[9]

On September 24, 1991,
Petitioner Corporation filed a petition for annulment of the orders of
the lower court dated December 18, 1990, May 28, 1991 and June 7, 1991, on the
ground of extrinsic fraud.^[10]
Petitioner claims that it holds TCT No. 8129, the title over the same parcel of land over which execution is being levied.

Petitioner alleged that
it owns a parcel of land located at Las Piñas consisting of 20,000 square meters,
more or less, identified as Lot 1-A Psd-293076, being a portion of Lot 1,
Pau-203785, LRC Rec. No. N-­27523 covered by TCT No. T-8129 of the Registry of
Deeds of Las Piñas, Metro Manila; that it acquired the same for value and in
good faith from the heirs of Emilio Gregorio on January 9,1989; and that from
that date up to the present is in actual possession of the property.^[11]

Petitioner further alleged that the Orders^[12]
in question are void on the ground that the judge of the lower court did not
have any jurisdiction to order the Sheriff to levy on execution and, as a
consequence thereof, convey unto private respondents the property owned by and
titled in the name of the petitioner.^[13]

On November 28, 1991, the Court of Appeals rendered the
questioned decision dismissing the petition for annulment. The respondent Court held:

“We hold that respondent court has acted within its
jurisdiction to issue the orders being assailed in this proceeding. Such exercise of jurisdiction cannot be
characterized as extrinsic fraud by the petitioner. Verily, the instant petition deserves no other fate than
dismissal.

The fact that petitioner claims that Lot 1-A, a subdivision of Lot
1, Psu-204785, LRC Rec. No. N-27523, belongs to it and is now covered by TCT
No. T-8129 of the Registry of Deeds of Las Piñas, Metro Manila, did not divest the respondent court of its
jurisdiction to issue the assailed orders to carry out the implementation of
its decision. Petitioner’s claim of
title to said Lot 1-A should be served as third-party claim on the Deputy
Sheriff who executed the Deed of Conveyance and caused the registration of the
same, or vindicate, its claim to the property through a separate independent
action (Sec. 17, Rule 39, Rules of Court. See Manila Herald Publishing Co., Inc. v. Ramos 88 Phils. 94,99).”

Petitioner now seeks a reversal of the decision of the Court of
Appeals. It claims that the questioned
orders of the respondent Judge were affected by extrinsic fraud because these
were issued without notice to and without impleading petitioner as a party in
Civil Case No. 35305.^[14]
Having been tainted with extrinsic fraud, petitioner can thus question them by
filing the petition for annulment before the Court of Appeals and not only by
filing a third party claim or a separate and independent action as held by the
respondent Court.^[15]

The principal question before Us is whether there was extrinsic
fraud, as alleged by the petitioner, to justify the annulment of the questioned
orders. The other issue raised refers
to the statement of the Court of Appeals that “(p)etitioner’s claim of
title to said Lot 1-A should be served as a third-party claim on the Deputy
Sheriff who executed the Deed of Conveyance and caused the registration of the
same, or vindicate its claim to the property through a separate independent
action. xxx.”

We have held that although a person need not be a party to the
judgment sought to be annulled; it is still
essential that he prove his allegation that the judgment was obtained by the
use of fraud and collusion and he would be adversely affected thereby.^[16]

For fraud to serve as a basis of annulment of judgment, it must
be extrinsic or collateral.^[17] In Macabingkil v. People’s Homesite and Housing
Corporation,^[18] extrinsic or collateral fraud has
been explained to mean:

“‘where it is one the effect of which prevents a party from having
a trial, or real contest, or from presenting all of his case to the court, or
where it operates upon matters pertaining, not to the judgment itself, but of
the manner in which it was procured so that there is not a fair submission of
the controversy.’ In other words, extrinsic fraud refers to any fraudulent act
of the prevailing party in the litigation which is committed outside of the
trial of the case, whereby the defeated party has been prevented from
exhibiting fully his side of the case, by fraud or deception practiced on him
by his opponent.” (Emphasis in the original).^[19]

Relief is granted on the theory that by reason of the extrinsic
or collateral fraud preventing a party from having a trial or from fully trying
his case, there has never been a real contest before the court of the subject
matter of the action.^[20]

Petitioner alleges, in support of its claim that extrinsic fraud
affected the three orders in question, that the honorable judge had no
jurisdiction to order the sheriff to levy on execution for he had full
knowledge that the petitioner and not the judgment debtors owned the subject
property;^[21]
that although the judgment had become final and executory a writ against the
property of the petitioner was not justified because it was not a party to the case;^[22]
and that the honorable judge reinstated his earlier order for conveyance of the
property subject of execution without notifying the petitioner.^[23]

These allegations do not constitute
extrinsic fraud.

The orders questioned by petitioner were issued to implement the
execution of the judgment rendered in Civil Case No. 35305. The respondent Court already found that the
orders were issued within the jurisdiction of the lower court and after a
logical consideration of the evidence presented. When the respondent judge issued the order of December 18, 1990,
reinstating its August 14, 1989 order designating Deputy Sheriff Estrellado to
execute the deed of conveyance in favor of plaintiffs (herein private
respondents), he already had the benefit of reviewing the report^[24]
and testimony of the Register of Deeds.^[25]

Petitioner has not pointed to any act of the prevailing party
preventing it from fully ventilating its case. If ever there was any failure in the presentation of its case, the same
is caused not by private respondents but by its own inaction. Petitioner was not a party to the case
before the lower court, and it did nothing to bring to the court’s attention
its problem. Hence, the lower court was
not obligated to notify the petitioner of its orders.

Having been unable to prove that extrinsic fraud vitiated the
orders in question, there lies no cause of action for annulment of said orders.

Respondent Court committed no error when it upheld the orders of
the respondent judge and ruled:

“It will be recalled that the judgment in Civil Case No.
35305, which has become final and executory, ordered the defendants therein
(Heirs of Emilio Gregorio, et. al.) to convey to Atty. Tomas Trinidad as
honorarium for his services an area of 14,684 square meters, which is 20% of
72,424 square meters the total area of Lots 1,2,3 and 4; and to convey to Luis
Fajardo an area of 29, 360 square meters representing 50% of the remainder of
said property after deducting the honorarium of Atty. Trinidad.

The defendants Heirs of Emilio Gregorio not having complied with
the judgment, in conformity with Section 10, Rule 39 of the Rules of Court, the
respondent court directed its Deputy Sheriff to execute the deed of conveyance
of the land as ordained in said judgment. Complying with said directive, the Deputy Sheriff in the person of
Marcial L. Estrelado executed the Deed of Conveyance (xxx) of the adjudged
areas in favor of Atty. Tomas Trinidad and Luis Fajardo of the land covered and
embraced by TCT No. S-91911 (11278) of the Register of Deeds of Makati, Metro Manila and/or Pasay City, and/or Las Piñas
Metro Manila, the description of said land having been reproduced hereinabove.

The Register of Deeds of Las Piñas having shown reluctance or
unwillingness to annotate said Deed of Conveyance on TCT No. S-91911, the
respondent court has the authority and
was acting within its jurisdiction to compel the Register of Deeds of Las Piñas to annotate the same on said TCT S-91911, which is still subsisting and has not been
cancelled.”^[26]

The respondent Court also held:

“xxx. Petitioner’s
claim of title to said Lot 1-A should be served
as third-party claim on the Deputy Sheriff who executed the Deed
of Conveyance and caused the registration of the same, or vindicate its claim
to the property through a separate independent action. (Sec. 17, Rule 39, Rules of Court; See
Manila Herald Publishing Co. Inc. v.
Ramos, 88 Phil 94,99)” (Italics supplied).^[27]

The petitioner has raised the correctness of this statement by
the respondent Court as another issue. However, since its resolution is inconsequential and would in no way
alter the outcome of this petition, no further discussion on the matter shall
be made.

WHEREFORE, the petition is dismissed for lack of merit.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, and Regalado, JJ., concur.

^[1]
Top Management Programs Corporation v.
Hon. Apolonio R. Chavez and Tomas Trinidad, et. al., CA G.R. SP 26100; Penned by
Justices Celso L. Magsino, Serafin E. Camilon, and Artemon D. Luna.

^[2]
Comment, p. 2; Rollo, p. 31.

^[3]
The Court of First Instance of Rizal, Branch II, acting on an application for
registration of title (LRC Case No. 5053), awarded Lots 1,2,3 and 4 of
PSU-204785 to Emilio Gregorio on January 31, 1966.

The same court, in LRC Case No.
5416, rendered judgment declaring Jose T. Velasquez as absolute owner of Lots
1,7,9 and 11 of plan Ap-11315 (Psu-56007- Amd) and Lots 7 and 9 of plan-5538
(Psu-50886) on March 30, 1966.

On September 16, 1966, the Land
Registration Commission informed the court a quo that a
portion of the land covered by plan Ap-11315 of Velasquez, or Lots 1, 7 and 11
of Plan AP-11315 (PSU-56007) is identical to Lots 1 to 4, Psu-204785 of Emilio
Gregorio.

On November 23, 1966, the court
awarded the lots in question to Velasquez and OCT 5678 to 5680 were issued in
his favor.

Emilio Gregorio appealed this
decision on January 7, 1967. Sometime
after this, he entered into an agreement with the private respondents Tomas
Trinidad and Luis Fajardo. (see text)

The land which is presently the
subject matter of the instant case has a long and complicated history. The other details relating to it are not
relevant for the instant petition and will not be given further attention.

Private Respondent’s Memorandum, pp. 1-2; Rollo, pp. 81-82.

^[4]
Private Respondents Comment, p. 2; Rollo, p. 31.

^[5]
Decision of the Court of Appeals, pp.
1-2; Rollo, pp. 21-22.

^[6]
Ibid.

^[7]
Private Respondent’s Memorandum, p. 8; Rollo, p. 88.

^[8]
Decision of CA, p. 3; Rollo, p.
23.

^[9]
Rollo, p. 88.

^[10]
CA-G.R. SP No. 26100; CA Records, p. 3.

^[11]
Decision of CA, p. 5; Rollo, p. 25.

^[12]
Dated December 18, 1990, May 28, 1991
and June 7, 1991.

^[13]
Supra, note 20.

^[14]
“Tomas Trinidad v. The
Heirs of Emilio Gregorio.”

^[15]
Petition, p. 6; Rollo, p. 7.

^[16]
Islamic Da’Wah Council of the Phils. v.
CA, 178 SCRA 178, 186 (1989).

^[17]
Id.; Sanchez v. Tupas,
158 SCRA 459 (1988)

^[18]
72 SCRA 326 (1976).

^[19]
Id., pp. 343-344; cited in
Canlas v. CA, 164 SCRA 170 (1988) and Gerardo v. De la Peña, 192
SCRA 691 (1990).

^[20]
37 Am. Jur. 2d, p. 25; Ruiz v.
CA, 201 SCRA 583 (1991) citing Asian Security and Insurance Corp. v.
Island Steel Inc., 118 SCRA 233 (1982).

^[21]
Petition, pp. 7-9; Rollo, pp. 8-10.

^[22]
Id., p. 10; Rollo, p. 11.

^[23]
Id., p. 11; Rollo, p. 12.

^[24]
Submitted February 5, 1990.

^[25]
Decision of CA, p. 6; Rollo, p. 26; Order dated
December 18, 1990; CA Records, p. 32.

^[26]
Id., pp. 5-6; Rollo, pp. 25-26.

^[27]
Id., p. 6.