G.R. No. L-12644; April 29, 1960
KOPPEL (PHILIPPINES) INC., plaintiff-appellee, vs. RUSTICO A. MAGALLANES, in his individual capacity and as Special Administrator of the Estate of Paulino Magallanes, defendant. ANTONIO MAGALLANES, present administrator-appellant.

FACTS

The case was instituted by Koppel (Philippines) Inc. against Rustico Magallanes, as special administrator of the estate of Paulino Magallanes. Plaintiff alleged that in November 1952, it sold agricultural machinery to the defendant for P14,470. A down payment of P8,700 was made, leaving a balance of P5,770 secured by a chattel mortgage on the harrow and a real estate mortgage on two parcels of land. After partial payments, a balance of P4,824 remained unpaid. Plaintiff sought judicial foreclosure of the real estate mortgage and extrajudicial foreclosure of the chattel mortgage. Defendant, in his answer, admitted the original indebtedness but contested the balance, claimed the mortgage was void and usurious, and argued the attorney’s fees were excessive. After trial, on February 24, 1955, a decision was rendered in open court based on an agreement of the parties that the defendant’s outstanding obligation was P3,873 (including attorney’s fees), and judgment was entered for this amount, ordering payment within 90 days or the sale of the mortgaged lands. The lands were subsequently sold at public auction to the plaintiff for P2,500, leaving a deficiency. Meanwhile, Antonio Magallanes replaced Rustico as special administrator. On February 12, 1957, the defendant (through Antonio Magallanes) filed a “Petition for Relief from Judgment and Order,” alleging the judgment was entered through extrinsic fraud and raising several defenses, including the invalidity of the mortgage registration, usury, and that the plaintiff could not recover a deficiency after extrajudicially foreclosing the chattel mortgage. The lower court denied this petition on March 2, 1957, prompting this appeal.

ISSUE

Whether the lower court erred in denying the defendant’s “Petition for Relief from Judgment and Order” filed under Rule 38 of the Rules of Court.

RULING

The Supreme Court affirmed the lower court’s order denying the petition for relief. The petition was filed almost two years after the judgment of February 24, 1955, which was rendered in open court upon the agreement of both parties present. Rule 38 requires such a petition to be filed within sixty days after the petitioner learns of the judgment and not more than six months after such judgment was entered. Since the petition was filed well beyond the six-month period, it was time-barred and could not be entertained. The Court rejected the argument that the petition was timely filed from the 1957 order, as that order was a necessary consequence of the 1955 judgment and no fraud, accident, mistake, or excusable negligence was claimed regarding it. The Court also held that the separate four-year period for an action to annul a judgment based on extrinsic fraud (under Section 43[3] of Act No. 190 ) did not apply, as the petition was filed in the original action, not in a separate action. Furthermore, the alleged errors or flaws in the transaction or judgment constituted, at best, intrinsic fraud, which is a ground for appeal, not for relief under Rule 38 or for annulment in a separate action. The order appealed from was affirmed.