Korteä

Assailed in the instant petition for review on certiorari is the decision of the Court of Appeals penned in Pilipino1 [Exhibit "A," CA Rollo, pp. 14-24.] setting aside the Partial Decision rendered by the Regional Trial Court, Third Judicial Region, Malolos, Bulacan, Branch 22, in Civil Case No. 8245-M.

On June 17, 1985, herein petitioner, Roberto Alarcon, filed a complaint for the annulment of a deed of sale with damages against Bienvenido Juani, Edgardo Sulit and Virginia Baluyot as defendants.

In his complaint docketed as Civil Case No. 8245-M, petitioner alleged that sometime in 1976, before he went to Brunei in order to work, he left with his father, Tomas Alarcon, a Special Power of Attorney to administer, mortgage or sell his properties in Baliwag, Bulacan, among them Lot 878-B-1-A (LRC) psd 312453 situated in Barangay Tangos, Baliwag, Bulacan and covered by TCT No. 279065. Upon his return from Brunei, he found out that on the strength of the aforementioned special power of attorney, a portion of the land containing an area of 2,500 square meters was sold to Bienvenido Juani, Edgardo Sulit and Virginia Baluyot pursuant to a "Kasulatan ng Bilihang Tuluyan ng Bahagi ng Lupa" allegedly executed by his father, Tomas Alarcon on March 27, 1985 for a nominal consideration of P5,000.00. The defendants were able to register the sale, cancel the title of Roberto Alarcon and to have new certificates of title issued in the names of Bienvenido Juani, Edgardo Sulit and Virginia Baluyot over the respective portions sold to them.2 [TCT No. 294353, TCT No. 294354, TCT No. 294355, respectively.] Misä act

Petitioner prayed for the nullification of the sale contending that: (1) his father’s signature on the Deed of Sale was forged; (2) there was no consideration of the sale; and (3) his father had no more authority to sell the land since the special power of attorney had already been earlier revoked, specifically, on June 9, 1984.3 [Exhibit "D," CA Rollo, p. 14.] Further, it was also discovered that the signature of the notary public who allegedly attested said sale was falsified.

In their answer,4 [Exhibit "E," CA Rollo, pp. 19-23.] Bienvenido Juani and Virginia Baluyot averred that Juani had been the tiller-occupant for almost 10 years of the land covered by TCT No. 279065 with an area of 10,000 square meters owned by Roberto Alarcon for almost 10 years now. He was allegedly lured by Tomas Alarcon as the attorney-in-fact of his son to give up his right as tiller of the land in exchange of ownership of a parcel of land with an area of 2,500 square meters. After much contemplation, he acceded to the prodding of Tomas Alarcon and signed an agreement with him, denominated as "Kasunduan ng Pagbibili," where it was provided that Tomas Alarcon had a Special Power of Attorney to sell the parcel of land with an area of 2,500 square meters to Bienvenido Juani. Eventually, a Final Deed of Sale was executed on March 27, 1985 confirming said transaction. Thereafter, Juani sold 1,000 square meters of the 2,500 square meters to Virginia Baluyot and 500 sq. meters to Edgardo Sulit. They then engaged the services of Notary Public Carmen Gonzales to facilitate the transfer of titles to them. Finally, the defendants further alleged that Juani was never aware of the revocation of the Special Power of Attorney granted to Tomas Alarcon.

On July 10, 1985, Virginia Baluyot also filed a third-party complaint against Notary Public Carmen Gonzales for allegedly altering the deed of sale without her knowledge and permission for purposes of securing the TCTs in defendants' names.

On July 12, 1985, Juani filed a Third-Party Complaint5 [Exhibit "F," CA Rollo, pp. 25-29.] against Tomas Alarcon charging him of having employed a fraudulent scheme in depriving the former of possession of the land.

After all the issues were joined, the trial court set the case for pre-trial conference on June 3, 1986 which was continued on August 1, 1986.

During the pre-trial conference, the parties represented by their counsel made some admissions of facts. On the basis thereof, on August 1, 1986, the trial judge rendered a partial decision which reads: Sâ djad

On August 8, 1990 petitioner moved for the execution of the Partial Decision considering that no motion for reconsideration or appeal was filed therefrom. At the same time, for the purpose of ending litigation of the case, petitioner offered to drop his claim for damages against the defendants if they were also willing to waive their claims against him and his father. Upon the opposition of defendant Baluyot, the trial court denied petitioner’s motion. CÓ alrsc

On January 24, 1991, the trial court issued an Order, dismissing the complaint as against Juani and the latter's counterclaim against the plaintiff (herein petitioner), the pertinent portion of which reads:

On August 19, 1991, the trial court issued an order granting petitioner’s motion for a writ of execution of the Partial Decision.

For failure of the defendants to interpose an appeal from the Partial Decision, the same became final and executory. However, the judgment could not be executed because the defendants allegedly refused to surrender their respective Owner's Duplicate of Transfer Certificates of Title issued to them by the Register of Deeds.

On April 17, 1995, herein private respondent Bienvenido Juani filed with the Court of Appeals a petition for the annulment of the Partial Decision rendered by the trial court

After hearing the case, the Court of Appeals on October 16, 1996 handed down a decision10 [CA Rollo, pp. 36-47.] granting the petition and setting aside the Partial Decision of the regional trial court, as well as its Order, dated January 24, 1991, dismissing the "counterclaim" and the Order, dated August 19, 1991 granting the Motion for Execution of the said Partial Decision. Its decision was anchored on its finding that the Partial Decision was vitiated by extrinsic fraud. Respondent court directed that the case be remanded to the court of origin for further proceedings. The dispositive portion of the decision states:

The Court of Appeals found that extrinsic fraud was attendant in the instant case. It considered the fact that Juani, being unlettered, was not apprised of the proceedings held in the trial court. While it is true that he had lawyers representing him in court, the appellate court opined that he did not understand the proceedings in the trial court, much less the admissions made in the pre-trial conference that the Deed of Sale which was made as the basis for the issuance of titles in favor of Juani, Baluyot and Sulit was a forgery. Under such circumstances, he was allegedly deprived of the parcel of land which he was in possession prior to the controversy.

Anent the issue of prescription, the Court of Appeals justified its ruling by citing the instance where Juani’s counsel agreed to dismiss his counterclaim when there was really no counterclaim to speak of since what was actually filed was a third-party complaint against Tomas Alarcon, the father of herein petitioner. The dismissal of the "counterclaim"12 [Which should be a Third-Party Complaint.] was granted in an Order, dated January 24, 1991. Since Juani was allegedly deprived of his day in court, the respondent court considered the reckoning point of counting the prescriptive period to be April 10, 1995, when Juani's wife personally received a copy of said order, and not February 5, 1991,13 [Rollo, p. 40.] which is the date of receipt of Juani's counsel of record. Thus, according to the Court of Appeals, the petition to annul the Partial Decision instituted on April 17, 1995 was filed within the four-year period from the discovery of fraud as prescribed by law.

We find for petitioner.

The governing rule in the case at bar is Rule 47 of the New Rules on Civil Procedure which provides:

Fraud is extrinsic when it is employed to deprive a party of his day in court, thereby preventing him from asserting his right to property. Fraud is regarded as extrinsic where it prevents a party from having a trial or from presenting his entire case to the court, or where it operates upon matters pertaining not to the judgment itself but to the manner in which it is procurred.14 [See Heirs of Manuel A. Roxas v. Court of Appeals, 270 SCRA 309 (1997)] In the case at bar, it cannot be argued that there was extrinsic fraud since Juani was not deprived from having a trial.

Expectedly, ordinary laymen may not be knowledgeable about the intricacies of the law which is the reason why lawyers are retained to make the battle in court fair and square. And when a party retains the services of a lawyer, he is bound by his counsel’s decisions regarding the conduct of the case. This is true especially where he does not complain against the manner his counsel handles the case.15 [Tenebro v. Court of Appeals, 275 SCRA 81 (1997)] The general rule is that the client is bound by the mistakes of his counsel, save when the negligence of counsel is so gross, reckless and inexcusable that the client is deprived of his day in court.16 [Legarda v. Court of Appeals, 280 SCRA 642 (1997)] This was not particularly attendant in the case at bar.

In this connection, it may be stressed, contrary to the Court of Appeals' assertion, that Juani was properly represented by counsel.17 [Exhibit "H," Records, p. 31.] The Partial Decision itself states that: "x x x (d)uring the pre-trial of the case conducted on June 3, 1986 and August 1, 1986, all the parties and their respective counsels appeared. x x x." Also, the transcript of the stenographic notes of the hearing conducted on June 3, 1986 would show that Juani, together with defendant Baluyot, was represented by counsel, Atty. Venancio Reyes. A reading of the TSN of the pre-trial would also reveal that Atty. Reyes was not in any way remiss of his duties in protecting the interests of his clients. Documents/evidence were presented, objections/denials for lack of knowledge were interposed and admissions were properly made. In all of the scheduled hearings before the trial court, Juani was always represented by counsel.

Thus, it was error for the respondent court to conclude that extrinsic fraud was attendant in the instant case as to deprive private respondent his day in court.

Moreover, an action based on fraud must be filed within four (4) years from discovery thereof. In the present case, the partial decision which is sought to be annulled was rendered on August 1, 1986. The petition to annul the judgment was filed on April 17, 1995 or nine (9) years after its rendition.

It must be noted that what was filed before the Court of Appeals was an action to annul a judgment and not an action or motion questioning the order of the trial court. Said judgment (which was rendered in 1986) had long become final and executory before the petition for the annulment was instituted as no appeal or motion for reconsideration was filed. It is not correct to conclude that the alleged extrinsic fraud referred to by the respondent court was discovered only in 1995 considering that Juani was very well represented by a competent lawyer who must have certainly apprised him of the developments of the case. In fact, the defendants were very much aware of the trial court’s disposition which was the reason why they constantly refused to surrender their TCTs or re-convey the land to petitioner. Miä sedp

The bare fact is that the Partial Decision was rendered after the parties and their counsels entered into a stipulation of facts. Here, it was admitted that the document or the deed of sale which was made the basis for the issuance of titles in the names of Bienvenido Juani, Virginia Baluyot and Edgardo Sulit was falsified. The deed of sale executed by Tomas Alarcon was a forgery considering that: (a) the signature of Tomas Alarcon was false; (b) the monetary consideration was unconscionably low; and (c) the signature of the notary public attesting to the sale was also forged. The TSN reads:

From the foregoing, the admissions were clearly made during the pre-trial conference and, therefore, conclusive upon the parties making it. The purpose of entering into a stipulation of facts or admissions of facts is to expedite trial and to relieve the parties and the court, as well, of the costs of proving facts which will not be disputed on trial and the truth of which can be ascertained by reasonable inquiry.19 [Concrete Agregates v. CA, 266 SCRA 88 (1987)]

The rules have made mandatory that a pre-trial should first be conducted before hearing any case. The parties themselves are required to attend or their representative with written authority from them in order to arrive at a possible amicable settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of facts and documents.20 [Section 4, Rule 18, RULES OF COURT.] All of the matters taken up during the pre-trial, including the stipulation of facts and the admissions made by the parties are required to be recorded in a pre-trial order.21 [Section 7, supra.]

On the basis of the clear admissions made by the parties in the case, the Partial Decision was rendered. Juani cannot now claim that he was denied his day in court when judgment was rendered on the basis of their (Juani, Baluyot and Sulit) counsels’ admissions. Since it was patent that the deed of sale was a forgery, no parcel of land was transferred to the vendees. Thus, the TCTs which Juani, Baluyot and Sulit obtained pursuant to said deed of sale were null and void. Respondent court, therefore, committed a reversible error in giving due course to the petition filed before it, the same not being based on extrinsic fraud and, moreover, it was barred by prescription.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is REVERSED and the Partial Decision rendered by the Regional Trial Court on August 1, 1986 is REINSTATED.