GR 137857; (September, 2000) (Digest)
G.R. No. 137857; September 11, 2000
Republic of the Philippines, represented by Asset Privatization Trust, petitioner, vs. The Heirs of Sancho Magdato, represented by Nelson M. Ferriol, respondents.
FACTS
The heirs of Sancho Magdato filed an action for quieting of title, recovery of possession, ownership, and damages against Filipinas Marble Corporation (FILMARCO) and Imperial Marble & Exploration Corporation (IMEC) concerning Lot No. 898. FILMARCO had leased the land, placed equipment and improvements thereon, and subsequently mortgaged those chattels to the Development Bank of the Philippines (DBP). DBP’s claim was later transferred to the Asset Privatization Trust (APT). The defendants were declared in default, and the trial court rendered a decision in favor of the Magdato heirs, which became final and executory. APT, which was not impleaded in the suit, learned of the judgment only upon service of a writ of execution on its caretakers at the premises. APT then filed a petition with the Court of Appeals for annulment of the RTC decision, which the CA dismissed.
ISSUE
The primary issues are whether the RTC decision should be annulled on the ground of extrinsic fraud due to APT’s non-joinder, and whether the Magdato heirs sufficiently proved their ownership.
RULING
The Supreme Court denied the petition and affirmed the CA. On the first issue, the Court ruled that annulment of judgment under Rule 47 is based solely on extrinsic fraud or lack of jurisdiction. Extrinsic fraud exists when a party is prevented from presenting its case through deception, such as concealment of the suit. Here, APT was not an indispensable party to the action for recovery of the land. The suit was directed at the lessees (FILMARCO and IMEC) for possession and ownership of the real property. APT’s interest was merely that of a chattel mortgagee over the equipment and improvements on the land, not an owner or possessor of the land itself. Its non-joinder did not constitute extrinsic fraud. On the second issue, the Court held that a petition for annulment of judgment is not a substitute for appeal; it does not address the correctness of the trial court’s factual findings or the alleged insufficiency of evidence on ownership. Since the ground raised did not involve extrinsic fraud or lack of jurisdiction, the RTC decision stands.