Jurisprudence provides that fraud, as a ground for a petition for relief, refers to extrinsic or collateral fraud which, in turn, has been defined as fraud that prevented the unsuccessful party from fully and fairly presenting his case or defense and from having an adversarial trial of the issue, as when the lawyer connives to defeat or corruptly sells out his client's interest. Extrinsic fraud can be committed by a counsel against his client when the latter is prevented from presenting his case to the court.

"While the remaining issues in the petition partake of a factual nature, the Court deems it necessary to write finis to this case at this level in order to avoid remanding the case to the appellate court. It has been held that "remand is not necessary if the Court is in a position to resolve a dispute on the basis of the records before it; and if such remand would not serve the ends of justice."51 A careful perusal of the petitions filed by Dana before the trial court, the appellate court, and this Court betrays the lack of allegations sufficient to support a petition for relief from judgment under Rule 38.

Jurisprudence provides that fraud, as a ground for a petition for relief, refers to extrinsic or collateral fraud52 which, in turn, has been defined as fraud that prevented the unsuccessful party from fully and fairly presenting his case or defense and from having an adversarial trial of the issue, as when the lawyer connives to defeat or corruptly sells out his client's interest. Extrinsic fraud can be committed by a counsel against his client when the latter is prevented from presenting his case to the court.53 In Lasala v. National Food Authority,54 the Court defined extrinsic fraud in relation to parties represented by counsel, viz.:

Extrinsic fraud x x x refers to "any fraudulent act of the prevailing party in litigation committed outside of the trial of the case, where the defeated party is prevented from fully exhibiting his side by fraud or deception practiced on him by his opponent, such as by keeping him away from court, by giving him a false promise of a compromise, or where an attorney fraudulently or without authority connives at his defeat."

Because extrinsic fraud must emanate from the opposing party, extrinsic fraud concerning a party's lawyer often involves the latter's collusion with the prevailing party, such that his lawyer connives at his defeat or corruptly sells out his client's interest.

In this light, we have ruled in several cases that a lawyer's mistake or gross negligence does not amount to the extrinsic fraud that would grant a petition for annulment of judgment.

We so ruled not only because extsic fraud has to involve the opposing party, but also because the negligence of counsel, as a rule, binds his client.55 (Citations omitted)

Given this definition, the Court found the following circumstances sufficient to make out a case for extrinsic fraud:

The party in the present case, the NFA, is a government agency that could rightly rely solely on its legal officers to vigilantly protect its interests. The NFA's lawyers were not only its counsel, they were its employees tasked to advance the agency's legal interests.

Further, the NFA's lawyers acted negligently several times in handling the case that it appears deliberate on their part.

First, Atty. Mendoza caused the dismissal of the NFA's complaint against Lasala by negligently and repeatedly failing to attend the hearing for the presentation of the NFA's evidence-in-chief. Consequently, the NFA lost its chance to recover from Lasala the employee benefits that it allegedly shouldered as indirect employer.

Atty. Mendoza never bothered to provide any valid excuse for this crucial omission on his part. Parenthetically, this was not the first time Atty. Mendoza prejudiced the NFA; he did the same when he failed to file a motion for reconsideration and an appeal in a prior 1993 case where Lasala secured a judgment of P34,500,229.67 against the NFA.

For these failures, Atty. Mendoza merely explained that the NFA's copy of the adverse decision was lost and was only found after the lapse of the period for appeal. Under these circumstances, the NFA was forced to file an administrative complaint against Atty. Mendoza for his string of negligent acts.

Atty. Cahucom, Atty. Mendoza's successor in handling the case, notably did not cross-examine Lasala's witnesses, and did not present controverting evidence to disprove and counter Lasala's counterclaim. Atty. Cahucom further prejudiced the NFA when he likewise failed to file a motion for reconsideration or an appeal from the trial court's September 2, 2002 decision, where Lasala was awarded the huge amount of P52,788,970.50, without any convincing evidence to support it.

When asked to justify his failure, Atty. Cahucom, like Atty. Mendoza, merely mentioned that the NFA's copy of the decision was lost and that he only discovered it when the period for appeal had already lapsed.

The trial court's adverse decision, of course, could have been avoided or the award minimized, if Atty. Cahucom did not waive the NFA's right to present its controverting evidence against Lasala's counterclaim evidence. Strangely, when asked during hearing, Atty. Cahucom refused to refute Lasala's testimony and instead simply moved for the filing of a memorandum.

The actions of these lawyers, that at the very least could be equated with unreasonable disregard for the case they were handling and with obvious indifference towards the NFA's plight, lead us to the conclusion that Attys. Mendoza's and Cahucom's actions amounted to a concerted action with Lasala when the latter secured the trial court's huge and baseless counterclaim award. By this fraudulent scheme, the NFA was prevented from making a fair submission in the controversy.56


Lasala has been subsequently reiterated in Cagayan Economic Zone Authority v. Meridien Vista Gaming Corporation,57 where the Court held that:cralawred

[I]n cases of gross and palpable negligence of counsel and of extrinsic fraud, the Court must step in and accord relief to a client who suffered thereby. x x x [F]or the extrinsic fraud to justify a petition for relief from judgment, it must be that fraud which the prevailing party caused to prevent the losing party from being heard on his action or defense. Such fraud concerns not the judgment itself but the manner in which it was obtained. Guided by these pronouncements, the Court in the case of Apex Mining, Inc. vs. Court of Appeals wrote:

If the incompetence, ignorance or inexperience of counsel is so great and the error committed as a result thereof is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present his case. Similarly, when an unsuccessful party has been prevented from fully and fairly presenting his case as a result of his lawyer's professional delinquency or infidelity, the litigation may be reopened to allow the party to present his side. Where counsel is guilty of gross ignorance, negligence and dereliction of duty, which resulted in the clients being held liable for damages in a damage suit, the client is deprived of his day in court and the judgment may be set aside on such ground.58 (Citations omitted and emphases in the original)

As in Lasala, the Court found sufficient factual justification for the grant of CEZA's petition for relief, viz.:

At the inception, CEZA was already deprived of its right to present evidence during the trial of the case when Atty. Baniaga filed a joint manifestation submitting the case for decision based on the pleadings without informing CEZA. In violation of his sworn duty to protect his client's interest, Atty. Baniaga agreed to submit the case for decision without fully substantiating their defense. Worse, after he received a copy of the decision, he did not even bother to inform his client and the OGCC of the adverse judgment. He did not even take steps to protect the interests of his client by filing an appeal. Instead, he allowed the judgment to lapse into finality. Such reckless and gross negligence deprived CEZA not only of the chance to seek reconsideration thereof but also the opportunity to elevate its case to the CA.59


Turning now to the case at bar, it is clear that Dana's allegations in her petition for relief fall way short of the jurisprudential threshold for extrinsic fraud. The Court quotes the allegations Dana made in her petition for relief with the trial court:

In all candor, [Dana] wanted to present her side of the controversy and all she intended was to take the witness stand. Without her knowing it, however, her time to present her evidence passed without her being able to do so. Her previous counsel did not remind, much less advice [sic], her of the hearing dates to present her case. Particularly, she was not simply aware of the hearings held by this [h]onorable [c]ourt on February 26 and March 26, 2009. She can only surmise that somebody must have maneuvered to impress, if not mislead, the [h]onorable [c]ourt that she was not interested to present her side.

This must be so since after [Dana] confronted her counsel about the promulgation of the Decision without her being able to present evidence, her counsel nonchalantly told her that it was their mutual decision not to present any evidence. This was not what [Dana] thought and knew. In the first place, she filed her Answer to the petition and assailed all the material allegations therein. She found no reason to abandon her case.

[Dana], by these assertions does not accuse her previous counsel any wrongdoing or neglect, or any other parties probably in cahoots with her said counsel. But it certainly had caused some harm to and, in fact, defrauded this [h]onorable [c]ourt which was led into believing that [Dana] was not interested in presenting her evidence. Hence, this [h]onorable [c]ourt found that [Dana] failed to appear despite notice as already mentioned above. Had it known that she was interested on [sic] presenting her side, this [h]onorable [c]ourt certainly would not have denied her that right. Otherwise put, by the deception, this Honorable Court was not aware that [Dana] was deprived of her day in court.60 (Emphasis and underlining Ours)

Dana's petition is anchored on two main allegations: first, that her counsel failed to notify her of the hearings dated February 26 and March 26, 2009; and second, that her counsel nonchalantly told her that it was their mutual decision to not present any evidence. However, she categorically admits that she "does not accuse her previous counsel [of] any wrongdoing or neglect, or any other parties probably in cahoots with her said counsel."61 Furthermore, the petition makes no specific citation of other acts or circumstances attributable to her counsel that fraudulently deprived Dana of her opportunity to fully ventilate her claims and defenses with the trial court. The acts complained of in the petition constitute neither "gross and palpable negligence" nor corruption or collusion amounting to extrinsic fraud. The general rule, which binds the client to the negligence of her counsel, remains applicable to this case. All told, the trial court did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it dismissed her petition for relief."


DANA S. SANTOS, PETITIONER, v. LEODEGARIO R. SANTOS, RESPONDENT.

G.R. No. 214593, July 17, 2019.


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