Tan vs. Court of Appeals

The negligence of counsel binds the client, and a party’s own failure to exercise due diligence in monitoring the progress of the case precludes relief from a final judgment. Annulment of judgment under Rule 47 is available only when the ordinary remedies of new trial, appeal, or petition for relief are no longer available through no fault of the petitioner, and only on the grounds of extrinsic fraud or lack of jurisdiction. The negligence of a party’s own counsel does not amount to extrinsic fraud.

Petitioner Antonio P. Tan was the lessee of a parcel of land on Ramon Magsaysay Boulevard, Sta. Mesa, Manila, covered by Transfer Certificate of Title (TCT) No. 165501. Private respondent DPG Development & Management Corporation purchased the property and was issued TCT No. 169146 on April 22, 1986. Tan later claimed that the certificate covered an area outside Sampaloc, Manila, and commenced an action to cancel the title.

• The Lease and the Title: Petitioner Antonio P. Tan was the lessee of a parcel of land covered by TCT No. 165501 located at No. 3658 Ramon Magsaysay Boulevard, Sta. Mesa, Manila. Private respondent DPG Development & Management Corporation purchased the land and was issued TCT No. 169146 on April 22, 1986.

• The Complaint and Initial Default Judgment: On January 24, 1990, Tan filed a complaint for cancellation/annulment of TCT No. 169146 before the Regional Trial Court of Manila, Branch 31, asserting that the certificate covered an area outside Sampaloc, Manila, where the subject property was located. DPG failed to file a responsive pleading and was declared in default. Tan presented evidence ex parte. On October 5, 1990, the trial court ordered the cancellation of TCT No. 169146 and directed that the property revert to the government for distribution to qualified applicants.

• Reversal and Remand for New Trial: DPG’s motion for new trial and motion to admit answer were denied. The Court of Appeals reversed the trial court’s decision and ordered a new trial, directing the admission of DPG’s answer and the use of the evidence taken during the first trial insofar as material. The Supreme Court affirmed the appellate court’s decision.

• The Motion to Dismiss and the Trial Court’s Order: During the new trial, DPG filed a motion to dismiss the complaint on November 6, 1992. On July 29, 1998, the trial court dismissed the complaint. Citing Bishop v. Court of Appeals and Legarda and Prieto v. Saleeby, it ruled that upon the expiration of one year from the entry of the registration, the certificate of title becomes indefeasible and not subject to collateral attack. Tan’s motion for reconsideration was denied on October 13, 1998.

• The Failed Appeal and Petition for Annulment of Judgment: Tan’s notice of appeal was filed eleven days beyond the reglementary period. The trial court denied the notice of appeal on January 6, 1999, for late filing. Tan did not learn of the dismissal of his case until approximately five months later. On January 26, 2000, he filed a petition for annulment of judgment before the Court of Appeals, seeking to set aside the July 29, 1998, October 13, 1998, and January 6, 1999 orders of the trial court.

• The Court of Appeals’ Ruling on Annulment: The Court of Appeals dismissed the petition, ruling that for annulment of judgment to prosper under Rule 47, the judgment must be void for want of jurisdiction or lack of due process, or must have been obtained by extrinsic fraud. It found no such fraud, held that the negligence of counsel binds the client, and observed that Tan himself had failed to display the requisite diligence in monitoring his case. Tan’s motion for reconsideration was denied.

• Prior Final Judgment on Preferential Right: The issue of a preferential right of first refusal under the Civil Code had been resolved with finality by the Regional Trial Court of Manila, Branch 40, in an Order dated June 5, 1987, in Civil Case No. 86-37402.

• Due Process and Negligence of Counsel: Petitioner argued that his failure to file the notice of appeal on time resulted from the patent negligence of his previous counsel who failed to inform him of the denial of the motion for reconsideration. He contended that this negligence amounted to a betrayal of confidence and a serious violation of the lawyer’s oath, which should have prompted the appellate court to take cognizance of the notice of appeal and the petition for annulment of judgment.

• Preferential Right of First Refusal: Petitioner claimed entitlement to a preferential right of first refusal under Articles 1279, 1380, 1381, 1403(2), 1479, and 1544 of the New Civil Code.

• No Extrinsic Fraud: DPG maintained that no extrinsic fraud existed to warrant relief under Rule 47. Petitioner had the opportunity to ventilate his case before the trial court, and the case was dismissed with finality solely because of his failure to perfect his appeal to the Court of Appeals.

• Due Process and Counsel Negligence: Whether petitioner is entitled to due process and relief from the final judgment when the loss of his ordinary remedy of appeal was caused by the alleged single negligence of his counsel.

• Preferential Right of First Refusal: Whether petitioner may still invoke a preferential right of first refusal under the cited provisions of the New Civil Code.

• Due Process and Counsel Negligence: The perfection of an appeal in the manner and within the period permitted by law is mandatory and jurisdictional; failure to perfect the appeal renders the judgment final and executory. No justifiable reason for extending the period was shown. Petitioner’s own negligence in failing to check the status of his case for five months despite the threatened loss of his residence and business precluded a claim of excusable negligence. Even absent petitioner’s personal neglect, the settled rule is that a client is bound by the mistakes of counsel. Because the loss of the ordinary remedy of appeal was attributable to petitioner’s own fault, the remedy of annulment of judgment under Rule 47 was unavailable—that remedy requires that ordinary remedies are no longer available through no fault of the petitioner. Furthermore, the negligence of petitioner and his counsel could not be equated to extrinsic fraud. Extrinsic fraud is a fraudulent act of the prevailing party committed outside the trial that prevents the losing party from fully presenting his case; no such fraud was proved against respondent DPG.

• Preferential Right of First Refusal: This issue had already been resolved with finality by the Regional Trial Court of Manila, Branch 40, in an Order dated June 5, 1987, in Civil Case No. 86-37402. A decision that has become final and executory can no longer be disturbed.

• Perfection of Appeal is Mandatory and Jurisdictional — The perfection of an appeal in the manner and within the period permitted by law is not only mandatory but also jurisdictional. Failure to perfect the appeal renders the judgment of the court final and executory. The right of the prevailing party to enjoy the finality of the decision is correlative to the losing party’s privilege to appeal.

• Client Bound by Counsel’s Negligence — A client is bound by the acts and mistakes of his counsel in the conduct of a case and cannot be heard to complain that the result might have been different had counsel proceeded differently. The rule rests on the principle that to hold otherwise would allow endless suits as long as new counsel could be employed who would allege prior counsel’s lack of diligence, experience, or learning.

• Duty of the Party-Litigant to Monitor the Case — A party-litigant has the duty to maintain contact with counsel from time to time and to inform himself of the progress of his case, exercising the standard of care of an ordinarily prudent man in his business affairs. The client’s failure to do so precludes relief grounded on counsel’s negligence.

• Annulment of Judgment — Grounds and Requisites — Under Rule 47, a judgment may be annulled only on the grounds of extrinsic fraud or lack of jurisdiction. The remedy is available solely when the ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies are no longer available through no fault of the petitioner. The loss of any of those remedies through the fault of the petitioner bars recourse to an annulment proceeding.

• Extrinsic Fraud Defined — Extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation committed outside the trial of the case, whereby the unsuccessful party has been prevented from exhibiting fully his case by fraud or deception practiced on him by his opponent. The fraud must be employed by the adverse party, not by the losing party’s own counsel or by the losing party himself.

• “Jurisprudence teems with pronouncements that the perfection of an appeal in the manner and within the period permitted by law is not only mandatory, but also jurisdictional. Failure to perfect the appeal renders the judgment of the court final and executory.” — This passage encapsulates the fundamental rule on appeal perfection that barred petitioner’s recourse.

• “It is the duty of a party-litigant to be in contact with this counsel from time to time in order to be informed of the progress of his case.” — The Court underscored the client’s personal responsibility to monitor the litigation.

• “It has been repeatedly enunciated that ‘a client is bound by the action of his counsel in the conduct of a case and cannot be heard to complain that the result might have been different had he proceeded differently. A client is bound by the mistakes of his lawyer. If such grounds were to be admitted as reasons for reopening cases, there would never be an end to a suit so long as new counsel could be employed who could allege and show that prior counsel had not been sufficiently diligent or experienced or learned.’” — Citing Tesoro v. Court of Appeals, the Court reaffirmed the strict rule that counsel’s negligence binds the client.

• Bishop v. Court of Appeals, G.R. No. 86787, May 8, 1992, 208 SCRA 636 — Cited by the trial court for the principle that a Torrens title becomes indefeasible after one year from the entry of registration and may not be subject to collateral attack.

• Tesoro v. Court of Appeals, No. L-36666, December 19, 1973, 54 SCRA 296 — The leading authority for the doctrine that a client is bound by the mistakes of counsel; the Court quoted its definitive formulation of the rule.

• Leonardo v. S.T. Best, Inc., G.R. No. 142066, February 6, 2004, 422 SCRA 347 — Reiterated the duty of clients to maintain contact with counsel and inform themselves of the progress of their case.

• Cuevas v. Bais Steel Corporation, G.R. No. 142689, October 17, 2002, 391 SCRA 192; Dayrit v. Philippine Bank of Communications, G.R. No. 140316, August 1, 2002, 386 SCRA 117 — Cited for the rule that the perfection of an appeal is mandatory and jurisdictional, and that failure to perfect makes the judgment final.

• Rule 47, Sections 1 and 2, 1997 Rules of Civil Procedure — Section 1 provides that annulment of judgment is available only when the ordinary remedies of new trial, appeal, petition for relief, or other appropriate remedies are no longer available through no fault of the petitioner. Section 2 limits the grounds to extrinsic fraud and lack of jurisdiction. The Court applied these provisions strictly, finding that the loss of appeal was attributable to petitioner’s fault and that no extrinsic fraud had been committed by the adverse party.

• Articles 1279, 1380, 1381, 1403(2), 1479, and 1544, New Civil Code — Invoked by petitioner in claiming a preferential right of first refusal. The Court did not apply these provisions because the issue had already been adjudicated with finality in a separate proceeding.

Carpio, Carpio Morales, Tinga, and Velasco, Jr., JJ., concur.