G.R. No. L-27644 November 29, 1973
ROSA CRUZ, CELEDONIA CABRERA and LEONCIA CABRERA, petitioners, vs. HON. PEDRO C. NAVARRO, Judge of the Court of First Instance of Rizal, Branch II, Pasig, ALFONSO SANDOVAL and ROSA RUIZ, respondents.

FACTS

The private respondents, spouses Alfonso Sandoval and Rosa Ruiz, applied for the registration of five parcels of land in Antipolo, Rizal. The notice of initial hearing was issued and published. Only the Director of Lands initially opposed but later withdrew the opposition. Consequently, the court rendered an ex parte decision on December 1, 1966, declaring the spouses as owners, and ordered the issuance of the corresponding decree of registration on January 3, 1967.
Subsequently, the petitioners, Rosa Cruz, Celedonia Cabrera, and Leoncia Cabrera, filed a petition for review of the decree. They alleged they were the actual owners and possessors of portions of the land, having perfected homestead rights over them long before the registration proceedings. They claimed the respondent Alfonso Sandoval committed extrinsic fraud by willfully misrepresenting himself as the absolute owner and possessor and by suppressing the truth regarding their vested interests. The respondent spouses moved to dismiss the petition, arguing the fraud alleged was not extrinsic. The respondent judge, without receiving evidence, dismissed the petition for review, a ruling later reaffirmed upon motion for reconsideration.

ISSUE

Whether the respondent judge acted with grave abuse of discretion in dismissing the petition for review without conducting a hearing to receive evidence on the petitioners’ allegations of extrinsic fraud.

RULING

Yes. The Supreme Court granted the petition, annulled the challenged orders, and remanded the case for a hearing on the merits. The legal logic is anchored on the nature of a petition for review under Section 38 of Act No. 496 (the Land Registration Act). Such a petition, based on fraud, is a separate and distinct proceeding from the original registration case. Its allowance is not a matter of discretion but of right, provided the petition is filed within one year from the entry of the decree and alleges facts constituting extrinsic or collateral fraud.
The Court clarified that the fraud alleged by the petitioners—specifically, the deliberate concealment and misrepresentation by the applicant regarding the true ownership and possession of the land, which prevented the petitioners from presenting their claim—constitutes extrinsic fraud. This type of fraud refers to acts committed outside of the trial, which prevented a party from having a fair submission of their case. The lower court’s summary dismissal, without allowing the petitioners to substantiate these serious allegations with evidence, constituted a denial of their statutory right to a hearing. The Court emphasized that the merits of the allegations of fraud must be determined based on evidence presented in a proper hearing, not on a preliminary assessment of the pleadings. The case was thus remanded for further proceedings to receive evidence and resolve the factual issues on the alleged fraud.