G.R. No. 102996 May 28, 1993
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 Capital Region, Branch 164, TOMAS TRINIDAD, LUIS FAJARDO, DEPUTY SHERIFF MARCIAL L. ESTRELLADO and THE REGISTRAR OF DEEDS OF LAS PIÑAS, METRO MANILA, respondents.

FACTS

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 (“Kasunduan na may Pambihirang Kapangyarihan”) with the late Emilio Gregorio. Under this agreement, Fajardo would finance the cost of Gregorio’s appeal in a land registration case, and in return, upon a successful appeal, Trinidad would receive 20% of the subject property as attorney’s fees, and Fajardo would receive 50% of the remainder. Judgment was rendered in favor of Trinidad and Fajardo, ordering the defendants (the heirs of Gregorio) to convey the specified areas of land to them. After the appeal was dismissed and an Entry of Judgment was issued, private respondents moved for a writ of execution. The court appointed Deputy Sheriff Marcial Estrellado to execute a deed of conveyance. The Sheriff reported that the deed was annotated on TCT No. S-91911, but a subdivision plan was needed for transfer. The Register of Deeds later informed the Sheriff that the annotation could not proceed because the land had already been sold to other parties. The trial court issued orders on December 18, 1990, May 28, 1991, and June 7, 1991, directing the Register of Deeds to annotate the deed and subsequently authorizing the subdivision and issuance of separate titles in favor of private respondents. Petitioner Top Management Programs Corporation filed a petition for annulment of these three orders before the Court of Appeals, alleging extrinsic fraud. Petitioner claimed it owned a portion of the land (Lot 1-A) covered by TCT No. T-8129, which it acquired for value and in good faith from the heirs of Emilio Gregorio on January 9, 1989, and that it was in actual possession. Petitioner argued the orders were void as the court had no jurisdiction to order execution over property titled in its name without it being impleaded or given notice. The Court of Appeals dismissed the petition, holding the trial court acted within its jurisdiction and there was no extrinsic fraud, and that petitioner’s remedy was a third-party claim or a separate independent action.

ISSUE

Whether the Court of Appeals erred in dismissing the petition for annulment; specifically, whether extrinsic fraud existed to justify annulment of the trial court’s orders dated December 18, 1990, May 28, 1991, and June 7, 1991.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that there was no extrinsic fraud. Extrinsic fraud refers to a fraudulent act committed outside the trial which prevents a party from having a fair submission of the controversy, such as being prevented from exhibiting his side of the case. The Court found that the trial court’s issuance of the orders was a legitimate exercise of its jurisdiction to execute its final and executory judgment. The fact that petitioner was not a party to the case and claimed title to the property did not constitute extrinsic fraud. The fraud alleged by petitioner pertained to the manner of execution of the judgment, not to the manner by which the judgment itself was procured. The proper remedies for petitioner, as a third-party claimant, were to file a third-party claim with the sheriff under Section 17, Rule 39 of the Rules of Court or to institute a separate independent action to vindicate its claim. The petition for annulment was not the appropriate remedy.