G.R. Nos. L-45705-45707; May 23, 1939
TEODORA DOMINGO and MARIANO SANTOS, as judicial administrator of the estate of the deceased ANTONIO MANUEL, petitioners, vs. MARGARITA DAVID, respondent.

FACTS

Petitioners Teodora Domingo and Mariano Santos (as judicial administrator of the estate of Antonio Manuel) filed a petition for certiorari seeking to reverse a decision of the Court of Appeals. The Court of Appeals had reversed the trial court’s judgments in two related cases. In the first case (No. 43654), the trial court held valid a judgment foreclosing a mortgage and ordering petitioners to pay P4,000. In the second case (No. 46982), the trial court nullified that foreclosure judgment. The Court of Appeals, however, reversed both trial court decisions, upholding the foreclosure judgment and ordering petitioners to pay the debt.

The cases were initially assigned to the First Division of the Court of Appeals, which heard oral arguments but did not decide them. Subsequently, the Court of Appeals reorganized its divisions, and the cases were transferred to the Second Division. The Second Division, composed mostly of justices who had not heard the oral arguments, then decided the cases. Petitioners moved for reconsideration, arguing this violated due process, but the motion was denied.

Petitioners also contended that the foreclosure judgment was obtained by fraud, as the mortgage deeds were allegedly fictitious. They had previously filed a motion to set aside the judgment on the same ground of fraud, which was denied.

ISSUE

1. Whether the decision promulgated by the Second Division of the Court of Appeals is null and void for violating due process, as most justices deciding the case did not hear the oral arguments.
2. Whether the action to annul the foreclosure judgment based on alleged fraud is barred, either by the denial of a previous motion to set aside the judgment on the same ground or by res judicata.

RULING

1. No, the decision is valid and did not violate due process. The Supreme Court held that under its Rule 31, adopted by the Court of Appeals, all matters submitted are deemed submitted for consideration by all justices of the court at the time of adjudication, regardless of whether they were members or present at the oral argument. The rule provides that only those present at oral argument must participate if a party requests so in writing. Since petitioners made no such written request, the Second Division’s consideration and decision by justices who did not hear the oral arguments was proper. The hearing required in appellate courts is based on the record, briefs, and oral argument if requested; it is not a trial de novo.

2. Yes, the action for annulment is barred. The Supreme Court affirmed the Court of Appeals’ application of res judicata. The alleged fraud—the falsity of the mortgage deeds—was the very issue raised, contested, and decided in the original foreclosure case. An action to annul a judgment based on fraud requires that the fraud be extrinsic or collateral, and that the facts constituting it were not controverted or decided in the original case. Here, the fraud was intrinsic, as it pertained to matters directly adjudicated. Furthermore, petitioners’ prior motion to set aside the judgment on the same ground of fraud constituted a bar by prior judgment. The Court also found that the newly discovered evidence presented would not alter the result.

The petition for certiorari was denied.