Conde vs. Intermediate Appellate Court

The use of fabricated documents or perjured testimony during trial constitutes intrinsic fraud, not extrinsic fraud, and cannot serve as a ground for annulment of judgment, as extrinsic fraud requires a fraudulent act of the prevailing party that prevents the defeated party from having a trial or presenting the entirety of his case to the court.

The petitioners — Braulio Conde, Rufina Conde, Gerardo Conde, Conchita C. Lundang, and Alfredo Ventura — were the defendants in an original action for recovery of possession filed by private respondent Marcelo Gutierrez before the Court of First Instance of Tarlac in 1950. Gutierrez claimed ownership of a parcel of land by virtue of succession, asserting filiation as the son of Esteban Gutierrez and Fermina Ramos. The petitioners contested this claim. The dispute traversed multiple levels of the judiciary, culminating in a Court of Appeals decision adverse to the petitioners, which they sought to annul on the ground of fraud. The jurisdictional framework governing annulment of judgments was governed by Section 9 of the Judiciary Reorganization Act of 1980 (B.P. No. 129), which vested exclusive jurisdiction over annulment of RTC judgments in the Intermediate Appellate Court.

In February 1950, Marcelo Gutierrez filed an original complaint for recovery of possession of a parcel of land before the Court of First Instance of Tarlac, which was subsequently amended on March 19, 1951. Gutierrez claimed ownership by succession, asserting that he was the son of Esteban Gutierrez and Fermina Ramos. The petitioners — Braulio Conde, Rufina Conde, Gerardo Conde, Conchita C. Lundang, and Alfredo Ventura — were the defendants in that action and contested Gutierrez's claim of filiation and consequent right to inherit the disputed property. After a full-blown trial, the Regional Trial Court, Branch 64, of Tarlac rendered a decision on May 20, 1976, dismissing the complaint and ordering Gutierrez to pay the costs of the suit, with no pronouncement as to damages for want of proof.

Gutierrez appealed to the Court of Appeals. On September 23, 1981, the appellate court reversed the RTC decision and ordered the petitioners and/or their successors-in-interest to deliver immediately the ownership and possession of the property to Gutierrez. That decision became final and executory on December 20, 1982. Thereafter, on January 16, 1984, the petitioners filed an action to annul the Court of Appeals' judgment before the Regional Trial Court, Branch 56, in Capas, Tarlac. In their complaint, the petitioners alleged that through fraud, Gutierrez was able to make it appear that he was the son of Esteban Gutierrez and Fermina Ramos and, as a necessary consequence of such filiation, was the absolute owner by succession of the property in question. The RTC dismissed the complaint on February 27, 1984, on the ground that it had no jurisdiction to annul a judgment of the Court of Appeals. The petitioners' motion for reconsideration was denied on March 19, 1984.

The petitioners then filed a petition for certiorari, mandamus, and a writ of injunction before the Intermediate Appellate Court, which dismissed the petition on the ground that only the Supreme Court could annul a Court of Appeals judgment. The Supreme Court, by resolution dated August 22, 1984, remanded the case to the Intermediate Appellate Court for decision on the merits, citing Section 9 of B.P. No. 129 as vesting exclusive jurisdiction over annulment of RTC judgments in the appellate court and noting that the Supreme Court had no original jurisdiction to look into allegations of fraud underlying an annulment complaint. On January 29, 1985, the appellate court rendered a decision dismissing the petition both for lack of jurisdiction — reasoning that it could not annul its own decision absent an express statutory grant — and for lack of merit, finding that the fraud relied upon by the petitioners was only intrinsic in nature. The appellate court found that the fraud consisted of documents allegedly manufactured by Gutierrez to make it appear he was the rightful heir of the disputed property, which constituted acts during the trial that did not prevent the petitioners from presenting their case but merely prevented a fair and just determination of the merits. The petitioners elevated this decision to the Supreme Court, which required the respondents to comment on June 5, 1985; no comment was filed notwithstanding proof of service on respondents' counsel.

• Extrinsic Fraud: Petitioner argued that extrinsic fraud was employed by the respondent, specifically that Gutierrez had manufactured documents to make it appear that he was the rightful heir of the disputed property, thereby procuring the Court of Appeals' judgment through fraud.
• Jurisdiction of the Appellate Court: Petitioner contended that the Intermediate Appellate Court should decide the annulment case on the merits, as the Supreme Court had already remanded the case for that purpose.

• Jurisdiction to Annul: Whether the Intermediate Appellate Court has jurisdiction to annul its own judgment, or whether such power resides exclusively in the Supreme Court.
• Nature of Fraud: Whether the fraud alleged by the petitioners — the manufacturing of documents to establish false filiation — constitutes extrinsic fraud sufficient to ground an action for annulment of judgment.

• Jurisdiction to Annul: The jurisdictional question was rendered moot by the Supreme Court's prior remand for decision on the merits. The appellate court should have limited itself to the merits after the Supreme Court had already spoken, rather than re-examining its own jurisdiction.
• Nature of Fraud: No. The fraud alleged is intrinsic, not extrinsic. The manufacturing of documents and use of false testimony during trial did not prevent the petitioners from presenting their case but merely prevented a fair determination of the merits, which is insufficient to support an annulment of judgment.

• Jurisdiction to Annul: The Supreme Court had already issued a resolution on August 22, 1984, remanding the case to the Intermediate Appellate Court for decision on the merits, expressly holding that the appellate court had exclusive jurisdiction over annulment of RTC judgments under Section 9 of B.P. No. 129 and that the Supreme Court itself had no original jurisdiction to look into allegations of fraud. The appellate court's re-examination of the jurisdictional question after the Supreme Court had already spoken was improper. Citing Tugade vs. Court of Appeals and Barrera vs. Barrera, the Court emphasized that once the Supreme Court has spoken, lower courts must obey; there is only one Supreme Court from whose decisions all other courts should take their bearings. The appellate court should have confined itself to the merits, as the Supreme Court's jurisdiction is limited to questions of law and it is not the function of the Supreme Court to analyze or weigh evidence anew.

• Nature of Fraud: The fraud alleged by the petitioners consisted of documents allegedly manufactured by Gutierrez to make it appear that he was the rightful heir of the disputed property. Applying the distinction between extrinsic and intrinsic fraud as articulated in Ilacad vs. Court of Appeals, extrinsic or collateral fraud is a fraudulent scheme of the prevailing litigant which prevents a party from having his day in court, from presenting his case, or which operates upon matters pertaining not to the judgment itself but to the manner by which it was procured, such that there is no fair submission of the controversy. Intrinsic fraud, by contrast, takes the form of acts of a party during the trial — such as the use of forged instruments or perjured testimony — which did not affect the presentation of the case but did prevent a fair and just determination. The fraud here was in the nature of fabricated documents and false testimony introduced during the trial, which is intrinsic. Because intrinsic fraud is not sufficient to attack a judgment, the petition must fail on the merits even assuming arguendo that the appellate court had jurisdiction.

• Extrinsic vs. Intrinsic Fraud in Annulment of Judgments — Extrinsic or collateral fraud is a fraudulent act of the prevailing litigant committed outside the trial, which prevents the defeated party from having a trial, from presenting all of his case to the court, or which operates upon matters pertaining not to the judgment itself but to the manner by which it was procured, so that there is no fair submission of the controversy. Intrinsic fraud consists of acts of a party during the trial — such as the use of forged instruments or perjured testimony — which did not affect the presentation of the case but did prevent a fair and just determination of the case. Only extrinsic fraud may serve as a ground for annulment of judgment; intrinsic fraud is not sufficient to attack a judgment. In this case, the manufacturing of documents to establish false filiation was intrinsic fraud because it occurred during the trial and did not prevent the petitioners from presenting their side.

• Supreme Court as Final Arbiter; Duty of Lower Courts to Defer — The Supreme Court, by tradition and in the Philippine system of judicial administration, has the last word on what the law is and is the final arbiter of any justifiable controversy. There is only one Supreme Court from whose decisions all other courts should take their bearings. Once the Supreme Court has spoken on a legal question, lower courts must obey; they have to defer and submit. In this case, the Intermediate Appellate Court should not have re-examined the jurisdictional question after the Supreme Court had already remanded the case for decision on the merits.

• "Fraud has been regarded as extrinsic or collateral, within the meaning of the rule 'where it is one of the effect of which prevents a party from having a trial, or real contests, or from presenting all of his case to the court, or where it operates upon matters pertaining not to the judgment itself, but to the manner by which it was procured so that there is not a fair submission of the controversy." — This passage, quoted from Ilacad vs. Court of Appeals, sets forth the canonical definition of extrinsic fraud and is the controlling standard for determining whether a fraud allegation can support an action for annulment of judgment.

• "The resort to fraud in introducing fabricated evidence is definitely an intrinsic fraud, hence false testimony being a matter of evidence is definitely intrinsic and not extrinsic." — This statement delineates the boundary between intrinsic and extrinsic fraud, establishing that the use of fabricated evidence or perjured testimony during trial is intrinsic and cannot ground an annulment of judgment.

• "In the case at bar, the fraud was in the nature of documents allegedly manufactured by Marcelo Gutierrez to make it appear that he was the rightful heir of the disputed property, Hence, the Intermediate Appellate Court is correct in finding the fraud to be intrinsic in nature." — This is the Court's application of the intrinsic-fraud doctrine to the specific facts, confirming that the manufacturing of documents to establish false filiation does not constitute extrinsic fraud.

• Ilacad vs. Court of Appeals — Cited for the definition of extrinsic fraud as a fraudulent scheme that prevents a party from having his day in court or presenting his case; followed as the controlling formulation.
• Libudan vs. Palma — Cited for the definition of intrinsic fraud as acts of a party during trial, such as the use of forged instruments or perjured testimony, which did not affect the presentation of the case but prevented a fair and just determination; followed.
• Asian Surety and Insurance Co. vs. Island Steel, Inc. — Cited for the proposition that fraud is regarded as extrinsic or collateral where it has prevented a party from having a trial or from presenting all of his case to the court; followed.
• Tugade vs. Court of Appeals — Cited for the principle that once the Supreme Court has spoken on a legal question, lower courts must obey and cannot rule otherwise; applied to criticize the appellate court's re-examination of jurisdiction after remand.
• Barrera vs. Barrera — Cited for the doctrine that the Supreme Court is the final arbiter and its pronouncements are definitive and authoritative, binding on lower courts; applied to reinforce the duty of the appellate court to defer.
• Baniqued vs. Court of Appeals — Cited for the rule that the Supreme Court decides appeals involving only questions of law and does not analyze or weigh evidence anew; applied to explain why the appellate court should have decided the merits.

• Section 9, Judiciary Reorganization Act of 1980 (B.P. No. 129) — Vests the Intermediate Appellate Court with exclusive jurisdiction over actions for annulment of judgments of regional trial courts. The Supreme Court relied on this provision in its August 22, 1984 resolution remanding the case to the appellate court for decision on the merits, and noted that the Supreme Court itself has no original jurisdiction to look into allegations of fraud underlying an annulment complaint.

Feria (Chairman), Fernan, Alampay, and Paras, JJ., concur.