[ G.R. No. 251669. December 07, 2021 ]
SPOUSES MARCELO G. FLORES AND MEDELYN FLORES, PETITIONERS, VS. SPOUSES LEOPOLDO A. ESTRELLADO AND ENRIQUETA ESTRELLADO, BEDE TABALINGCOS, ATTY. CRES DAN D. BANGOY, ATTY. RAYMOND CARAOS, AND ATTY. SOCRATES RIVERA, RESPONDENTS.
CONCURRING OPINION
CAGUIOA, J.:
I concur.
I find that petitioners were denied due process as a result of the various acts of fraud committed by their previous counsels, warranting an annulment of the judgment in Civil Case No. SP-6569(09).
I write this Concurring Opinion to stress that, as exemplified in this case, fraud committed by one's own lawyer may constitute either denial of due process or extrinsic fraud, or both, so as to warrant an annulment of judgment under Rule 47 of the Rules of Court.
I.
First, consonant with the conclusion reached by the ponencia, I find petitioners' invocation of denial of due process to be proper within the context of Rule 47 of the Rules of Court.
To stress, the Court has long recognized "extrinsic fraud, and lack of jurisdiction or denial of due process" as grounds to seek the annulment of a judgment under Rule 47 of the Rules of Court.1 As such, while denial of due process is not expressly mentioned in Rule 47 of the Rules of Court, it is well settled that denial of due process can be invoked independently of, or as an alternative to, extrinsic fraud and lack of jurisdiction in order to annul a judgment. Indeed, these grounds may even be invoked singly or in combination with each other.2 Stated differently, there is no prohibition against invoking any or all grounds in a petition for annulment of judgment, or, as in this case, invoking one ground (denial of due process) as a result of another (fraud).
On this score, I wholly agree with petitioners that a violation of their right to counsel, brought about by the fraudulent machinations of their previous counsels, is tantamount to a denial of due process within the purview of Rule 47 of the Rules of Court.3
Thus, in ruling for petitioners, the ponencia aptly cites Telan v. Court of Appeals4 (Telan), where the Court found therein petitioners to have been denied due process because they were represented by a fake lawyer, to wit:
The right to counsel in civil cases exists just as forcefully as in criminal cases, specially so when as a consequence, life, liberty, or property is subjected to restraint or in danger of loss.
In criminal cases, the right of an accused person to be assisted by a member of the bar is immutable. Otherwise, there would be a grave denial of due process. Thus, even if the judgment had become final and executory, it may still be recalled, and the accused afforded the opportunity to be heard by himself and counsel.
There is no reason why the rule in criminal cases has to be different from that in civil cases. The preeminent right to due process of law applies not only to life and liberty but also to property. There can be no fair hearing unless a party, who is in danger of losing his house in which he and his family live and in which he has established a modest means of livelihood, is given the right to be heard by himself and counsel.
Even the most experienced lawyers get tangled in the web of procedure. To demand as much from ordinary citizens whose only compelle intrare is their sense of right would turn the legal system into an intimidating monstrosity where an individual may be stripped of his property rights not because he has no right to the property but because he does not know how to establish such light.
The right to counsel is absolute and may be invoked at all times. More so, in the case of an on-going litigation, it is a right that must be exercised at every step of the way, with the lawyer faithfully keeping his client company.
x x x x
Curiously, the counsel of the private respondents, ROBERTO TELAN and spouses VICENTE and VIRGINIA, would still insist that the petitioners, spouses PEDRO and ANGELINA TELAN, had lost their right to appeal because of the negligence of their counsel, referring to "Atty. Palma."
A client is generally bound by the action of his counsel in the management of a litigation even by the attorny’s mistake or negligence in procedural technique. But how can there be negligence by the counsel in the case at bar when the "lawyer", "Atty. Palma," turned out to be fake? The Affidavit of the petitioner PEDRO TELAN, the sworn Petition, the Certifications of the Bar Confidant's Office and the Integrated Bar of the Philippines, and the submitted records of Criminal Case No. 389-90 more than sufficiently establish the existence of an Ernesto Palma, who misrepresented himself as a lawyer.5
Here, a perusal of petitioners' Petition easily reveals that they have consistently raised denial of due process, specifically one arising from a violation of their right to competent counsel as a ground to annul the trial court's judgment in Civil Case No. SP-6569(09).6 They rely, in particular, on the Court's ruling in Arcelona v. Court of Appeals7 (Arcelona), where the Court held that an action for annulment of judgment may be brought where the decision sought to be annulled is void "on grounds of want of jurisdiction or non-compliance with due process of law."8 Underscoring the importance of being represented by a competent member of the Bar in good standing,9 petitioners summarized how they were denied due process, as follows:
[T]he uncontroverted facts point to a similar denial of a litigant[']s right to counsel when[:] [F]irst, while the case was pending before the Trial Court, they were represented by a disbarred lawyer. Second, while the same case was pending with the Trial Court, a lawyer not of their choice and without their authority and consent, entered his appearance, and submitted numerous pleadings on their behalf including the final memorandum before the case was submitted for decision. Third, when the case was finally decided by the Trial Court, the same lawyer who entered his appearance without authority, filed a Motion for Reconsideration. Fourth, when the case was appealed to the Court of Appeals and subsequently to the Supreme Court, the same disbarred lawyer fraudulently represented them by using the name and credentials of another lawyer. And finally, it turned out that even the lawyer whose credentials were used was, at the time, suspended from the practice of law.10
Indeed, as held in Telan, the right to counsel is absolute and may be invoked at all times,11 As well, a violation of a person's right to be heard by counsel is tantamount to a violation of said person's right to due process.12 Accordingly, I find petitioners reliance on denial of due process as a ground for annulment of judgment, as in Arcelona, proper in this case.
II.
As well, it is my considered view that fraud by one's own counsel may also constitute extrinsic fraud, which may likewise be invoked as a ground for annulment of judgment by herein petitioners.
To recall, in Cosmic Lumber Corporation V. Court of Appeals13 (Cosmic Lumber), the Court had the occasion to state that the concept of fraud may assume different shapes and be committed in as many different ways, and here lies the danger of attempting to define fraud. For a man in his ingenuity and fertile imagination will always contrive new schemes to fool the unwary. The Court has ruled:
There is extrinsic fraud within the meaning of Sec. 9 par. (2), of B.P. Blg. 129, where it is one the effect of which prevents a party from hearing a trial, or real contest, or from presenting all of his case to the court, or where it operates upon matters, not pertaining to the judgment itself, but to the manner in which it was procured so that there is not a fair submission of the controversy. In other words, extrinsic fraud refers to any fraudulent act of the prevailing party in the litigation which is committed outside of the trial of the case, whereby the defeated party has been prevented from exhibiting fully his side of the case by fraud or deception practiced on him by his opponent. Fraud is extrinsic where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent, as by keeping him away from court, a false promise of a compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority connives at his defeat; these and similar cases which show that there has never been a real contest in the trial or hearing of the case are reasons for which a new suit may be sustained to set aside and annul the former judgment and open the case for a new and fair hearing.14
The Court ruled in a similar fashion in Laxamana v. Court of Appeals,15 where the Court held that there is extrinsic fraud (justifying annulment of judgment) in instances wherein a party was prevented from defending the action brought against him on account of the delinquent acts and omissions of his attorney. Thus:
Lack of due process of law and extrinsic or collateral fraud vitiate a final and executor judgment and are valid grounds for setting it aside x x x. In an adversary litigation, fundamental fairness required that as much as possible both parties should be heard so that a just and impartial verdict may be promulgated.
The extrinsic or collateral fraud which invalidates a final judgment, must be such as prevented the unsuccessful party from fully and fairly presenting his case or defense; it must be such as prevented the losing party from having an adversary trial of the issue[".] Thus, the act of the successful party in inducing the lawyer of the losing party to commit professional delinquency or infidelity constitutes extrinsic or collateral fraud x x x.
In other words, there is extrinsic fraud when a party was prevented from having presented all of his case to the court as when the lawyer connives at his defeat or corruptly sells out his client's interest x x x.16
I am not unaware of the Court's ruling in Pinausukan Seafood House, Roxas Boulevard, Inc. v. Far East Bank & Trust Co.17 (Pinausukan Seafood House), where the Court seemingly held that "extrinsic fraud" as a ground to annul a judgment must arise only from a "fraudulent scheme of the prevailing litigant."18 Notably, the Court in Pinausukan Seafood House cited the foregoing quoted portion of Cosmic Lumber, but regrettably concluded that, citing the decision of the Court of Appeals (CA), "[e]ven in the presence of fraud, annulment will not lie unless the fraud is committed by the adverse party, not by one's own lawyer."19
However, a cursory review of Pinausukan Seafood House would itself reveal that the said case simply involved the negligence of the counsel of therein petitioner to keep track of the case, and his failure to apprise the latter of the developments in the case.20 The same neither involved actual fraud committed by the counsel on his client, nor at the very least gross negligence on his part in handling the case. Hence, the said statement is, at most, only an obiter, and does not definitively carve out fraud committed by a party-litigant's own counsel from the coverage of extrinsic fraud.
Rather, the concept of fraud, as held by the Court in Cosmic Lumber, should not be restricted "within too narrow limits,"21 and may thus include all other "similar cases which show that there has never been a real contest in the trial."22 This is the more appropriate rule, especially considering that Rule 47 neither defines "extrinsic fraud," nor restricts its definition only to fraudulent acts committed by the prevailing party. In this light, I submit that actual fraud committed by one's counsel which prevented a party-litigant from exhibiting fully his or her side of the case, as in the instant case, should likewise constitute extrinsic fraud.
On point is the Court's ruling in Heirs of Antonio Pael v. Destura23 (Heirs of Antonio Pael), where the Court ruled that a petition for annulment of judgment on the basis of extrinsic fraud, want of jurisdiction, or lack of due process may be granted "where the mistake of counsel is so gross, palpable and inexcusable as to result in the violation of his [or her] client's substantive rights."24
In Heirs of Antonio Pael, petitioners filed an action for the annulment of private respondents' title over the disputed property and for reconveyance. Respondents were declared in default for failure to file an answer, and thereafter, judgment was rendered based on default ordering the cancellation of the transfer certificates of title of respondents. Thereafter, Atty. Oliver O. Lozano (Atty. Lozano), counsel for respondents, filed a notice of appeal with the trial court, which was given due course. Seven days later, Atty. Lozano then filed a motion for new trial, alleging that his clients' failure to answer was due to an honest mistake. Respondents, through a new counsel, then filed an omnibus motion, alleging that their sad plight to present on time their side of the controversy was due to the negligence of their previous counsel, Atty. Lozano, whose services they had engaged to file their answer. Both motions, however, were denied by the trial court. Respondents were thus constrained to file a petition for annulment of judgment with the CA.25
The CA granted respondents' petition, and in so ruling, found the following acts of their previous counsel, apart from the apparent bias, partiality and collusion by the trial court judge, as indicative of the attendance of extrinsic fraud: (a) the enigmatic failure of respondents' former counsel to file an answer to the complaint within the period prescribed by the Rules of Court which resulted in a decision by default; (b) the immediate filing by their former counsel of their notice of appeal from the default judgment, and the filing a few days. later of a motion for new trial despite the perfection of their appeal, knowing fully well that both remedies (appeal and new trial) are utterly inconsistent with and contradictory to each other; and (c) the suspicious actuations on the part of respondents' former counsel resulting in the denial on the part of respondents of their day in court, amounting to gross and reckless negligence of their counsel, which constituted a gross violation of respondents' right to due process.26
Notably, the Court, in affirming the ruling of the CA in Heirs of Antonio Pael, found it necessary to directly pass upon the effects of the acts committed by respondents' counsel on the latter's defense. The Court noted that when Atty. Lozano filed a motion for new trial days after filing a notice of appeal, he should have known that his appeal had already been perfected, and hence, the trial court lost its jurisdiction over the case. This ultimately left respondents, through no fault or negligence of their own, "with no remedy to obtain substantive relief from the judgment rendered against them, thereby resulting in a flagrant denial of their right to due process."27 The Court in finding annulment of judgment as the proper remedy for respondents held:
x x x Petitioners in both cases maintain that respondents should be bound by the mistakes of their counsel and, thus, must suffer the consequence of the dismissal of their appeal due to the mistake of Atty. Oliver Lozano in resorting to two clearly inconsistent remedies, namely, appeal and motion for new trial. However, the rule, as correctly held by the Court of Appeals, is not a hard and fast one and admits of exceptions, such as where the mistake of counsel is so gross, palpable and inexcusable as to result in the violation of his client's substantive rights. For while it is true that the acts of a lawyer in the defense of a case, including his mistakes and negligence, are the acts of his client, this rule does not extend where such mistakes or negligence would result in serious injustice to the client. In cases of gross and palpable negligence of counsel, the courts must step in and accord relief to a client who suffered thereby.
x x x x
x x x In cases such as the one at bar, the courts have the legal and moral duty to provide judicial aid to parties who are deprived of their rights. Indeed, respondents were then in no position to analyze the legal niceties of the remedies resorted to by their counsel and to realize the deleterious effects of the latter's tactical errors and the invalid acts of the trial judge on their cause. x x x28
As such, fraud by one's own counsel, or even the latter's "gross, palpable and inexcusable [negligence],"29 may itself constitute extrinsic fraud, as long as it results in a denial of a party-litigant's day in court.
III.
In the instant case, I emphasize the systematic way by which petitioners, both of whom were advanced in age,30 were defrauded by their so called "counsels:" (i) they engaged Atty. Bede Tabalingcos (Tabalingcos) as their counsel to represent them in Civil Case No. SP-6569(09) for the annulment of loan documents and foreclosure proceedings from its commencement in 2009;31 (ii) unknown to them, Tabalingcos had been disbarred by the Court in its Order in A.C. No. 6622 dated July 10, 2012, but Tabalingcos continued to represent them in the case, which was submitted for decision only on October 23, 2013;32 (iii) likewise unknown to petitioners, Tabalingcos withdrew as their counsel and caused the entry of appearance of another lawyer, Atty. Cres Dan D. Bangoy (Bangoy), who was allegedly Tabalingcos' law office partner;33 (iv) although unauthorized by petitioners, and despite not knowing anything about Bangoy, the latter nevertheless filed pleadings which were material to their case, namely their Comments on Defendant's Formal Offer of Documentary Exhibits dated January 17, 2013 and a Manifestation dated March 8, 2013; (v) Bangoy and Tabalingcos could not have been partners in the same law firm, considering that Tabalingcos was already disbarred at that time;34 (vi) it was only later that petitioners realized that Tabalingcos "may have used the credentials of Bangoy" to continue representing them in the case, "knowing that he can no longer do so in his own name because he has been disbarred;"35 (vii) meanwhile, another lawyer unknown to petitioners, Raymond Caraos (Caraos), filed on their behalf their Memorandum in Civil Case No. SP-6569(09) before the trial court;36 (viii) after the trial court dismissed their complaint, petitioners then discovered that a motion for reconsideration was filed on their behalf signed by yet another lawyer unknown to them as well, Atty. Socrates R. Rivera (Rivera), whom Tabalingcos thereafter revealed to them to be one of his associates;37 (ix) upon Tabalingcos' reassurance that the matter can still be rectified through an appeal, a notice of appeal was filed on their behalf, again signed by Rivera;38 (x) unfortunately, their appeal was dismissed by the CA via Resolution dated February 12, 2015 in CA-G.R. CV. No. 102852 for failure to file their appellant's brief;39 (xi) a petition for review was then filed before the Supreme Court on their behalf, again signed by Rivera, but was dismissed via Resolution40 dated April 18, 2016 in G.R. No. 222917 due to, among others, failure to state the material dates and to submit a soft copy of the petition as required under the Efficient Use of Paper Rule; (xii) no longer satisfied with Tabalingcos' excuses, they confronted Rivera, but Rivera denied having prepared, signed and submitted any of their pleadings, and denied that he was an associate attorney for Tabalingcos;41 (xiii) reeling from Tabalingcos' betrayal, they looked to Rivera to rectify the situation, who emphatically agreed;42 (xiv) Rivera thereafter allegedly filed with the Supreme Court a Compliance Cum Manifestation,43 wherein he stated that his signatures in all previous pleadings were forged; (xv) Rivera thereafter reported that he filed a "complaint" with the CA, and later on furnished them with a spurious "order” from the CA granting the said "complaint;"44 (xvi) upon checking with the Judicial Records Division of the CA, they found out that no such pleadings have been filed on their behalf with the CA;45 and (xvii) finally, on December 7, 2018 to their surprise, they received a Writ of Execution.46
Clearly, petitioners were deprived of their day in court by their "pseudo-legal counsels."47 Here, Tabalingcos fraudulently continued to represent them (before the trial court and on appeal) after already being disbarred,48 misrepresenting that Bangoy and Rivera were his law office partner and associate, respectively, in order to use the latter's credentials to continue representing them.49 In fact, Rivera later on expressly denied having any part in the pleadings previously filed on their behalf, and denied that he was Tabalingcos' associate. Moreover, as sufficiently alleged by petitioners, they actually confronted Tabalingcos regarding Bangoy and Rivera, but the latter fraudulently assured them that they were his law firm partner and associate, respectively — where in fact, they were not. In fact, as mentioned, Rivera later on denied having any involvement with Tabalingcos, and even allegedly filed a so-called Compliance Cum Manifestation before the Court expressly repudiating his signatures in the pleadings signed by him previously.
Indeed, petitioners may not be faulted for trusting their (then) counsels' representations. After all, the client-lawyer relationship is one based on trust and confidence, and imposes on the lawyer a fiduciary duty in favor of his or her client.50 Furthermore, as similarly held in Heirs of Antonio Pael, petitioners ''were then in no position to analyze the legal niceties of the remedies resorted to by their counsel and to realize the deleterious effects of the latter's tactical errors."51 More so, in this case, where the acts of their counsels were tainted not only with gross negligence, but with actual fraud committed at the expense of petitioners.
I submit that petitioners were indeed denied proper representation, as they were represented "either by a disbarred lawyer, or by a lawyer who appeared without [p]etitioners' consent and authority."52 This resulted in a flagrant violation of petitioners' right to be heard by counsel, and ultimately, deprived them of due process. This, as well, constituted extrinsic fraud which effectively "prevented [petitioners] from fully and fairly presenting [their] case or defense."53
IV.
Finally, a perusal of the record also reveals that in Civil Case No. SP- 6569(09), petitioners expressly put in issue the validity of the interest rate of three point five percent (3.5%) interest per month, or forty-two percent (42%) per annum,54 which iniquitous interest rate ultimately resulted in the foreclosure of their family home.55 Despite the foregoing however, the trial court, in its Decision56 in Civil Case No. SP-6569(09) and Civil Case No. SP-6586(09) dated December 16, 2013, nevertheless upheld the validity of the interest rate stipulation simply because petitioners acceded to it and that they ultimately "benefited" from the transaction.
It bears stressing however that as early as 2003, the Court in Ruiz v. Court of Appeals,57 has already considered a stipulated three percent (3%) interest rate per month, or thirty-six percent (36%) interest per annum — an interest rate even lower than the one in the instant case — - as excessive and unconscionable.58 Moreover, in Castro v. Tan,59 the Court has reiterated the long-accepted rule that:
The imposition of an unconscionable rate of interest on a money debt, even if knowingly and voluntarily assumed, is immoral and unjust. It is tantamount to a repugnant spoliation and an iniquitous deprivation of property, repulsive to the common sense of man. It has no support in law, in principles of justice, or in the human conscience nor is there any reason whatsoever which may justify such imposition as righteous and as one that may be sustained within the sphere of public or private morals.60
It is without dispute that the trial court's ruling on this point was erroneous. Indeed, had petitioners been properly represented by counsel, they could have validly raised this issue at the proper venue, even on appeal. Unfortunately for petitioners, they were not.
A final word. I echo the Court's ruling in Heirs of Antonio Pael, that in cases such as the one at bar, we, as the final arbiter, "have the legal and moral duty to provide judicial aid to parties who are deprived of their rights."61 To my mind, the totality of the facts of this case warrants a re-trial, in order to finally give petitioners a fair chance of litigating their case, and in addition, to rectify the evidently incorrect judgment of the trial court which upheld the unconscionable monthly interest rate of three point five percent (3.5%), resulting in petitioners losing their family home.
For the foregoing reasons, I vote to GRANT the Petition.
Footnotes
1 City of Taguig v. City of Makati, G.R. No. 208393, June 15, 2016, 793 SCRA 527; Genato Investments, Inc. v. Barrientos, G.R. No. 207443, July 23, 2014, 731 SCRA 35; Alaban v. Court of Appeals, G.R. No. 156021, September 23, 2005, 470 SCRA 697; and Heirs of Lorilla v. Court of Appeals, G.R. No. 118655 April 12, 2000, 330 SCRA 429.
2 Pinausukan Seafood House, Roxas Boulevard, Inc. v. Far East Bank & Trust Co., G.R. No. 159926, January 20, 2014, 714 SCRA 226, 242.
3 Rollo, p. 43.
4 G.R. No. 95026, October 4, 1991, 212 SCRA 534.
5 Id. at 540-542; citations omitted.
6 Rollo, pp. 4-6, 31-44, & 201.
7 G.R. No. 102900, October 2, 1997, 280 SCRA 20.
8 Id. at 34, citing Macabingkil v. People's Homesite and Housing Corporation, No. L-29080, August 17, 1976, 72 SCRA 326.
9 Rollo, pp. 33-36. The Petition cites People v. Holgado, 85 Phil. 752, 757-(1950): "[T]he right to be assisted by counsel is deemed so important that it has become a constitutional right; Telan v. Court of Appeals, supra note 4, where the Supreme Court reversed the decision of the lower court on the ground that petitioners were denied their right to counsel because they were represented by a fake lawyer; and Inacay v. People, G.R. No. 223506, November 28, 2016, 810 SCRA 610, wherein the Court remanded the case for re-trial because petitioner was represented by a non-lawyer.
10 Id. at 36; emphasis, italics and underscoring in the original.
11 Telan v. Court of Appeals, supra note 4, at 541.
12 Id.
13 G.R. No. 114311, November 29, 1996, 265 SCRA 168.
14 Id. at 179-180, emphasis supplied, citations omitted.
15 No. L-37317, November 24, 1978, 87 SCRA 48.
16 Id. at 56; citations omitted.
17 Supra note 2.
18 Id. at 243.
19 Id. at 249.
20 Id.
21 Cosmic Lumber Corporation v. Court of Appeals, supra note 13, at 179.
22 Id. at 180.
23 G.R. Nos. 133547 & 133843, February 10, 2000, 325 SCRA 341.
24 Id. at 361; emphasis supplied.
25 Id. at 347.
26 Id. at 359-360.
27 Id. at 363; emphasis supplied.
28 Id. at 361-363; emphasis and underscoring supplied, citations omitted.
29 Id. at 361.
30 Rollo, p. 58.
31 Id. at 108 & 203.
32 Id. at 16 & 208.
33 Id. at 16, 118 & 208.
34 Id. at 209.
35 Id.
36 Id.
37 Id. at 210.
38 Id. at 149-150 & 210.
39 Id. at 211.
40 Id. at 160-161.
41 Id. at 212.
42 Id. at 212-213.
43 Id. at 162-165.
44 Id. at 213.
45 Id. at 215.
46 Id. at 213-214.
47 Id. at 47 & 218.
48 Id. at 215-216.
49 Id.
50 Regala v. Sandiganbayan, First Division, G.R. No. 105938, September 20, 1996, 262 SCRA 122.
51 Heirs of Antonio Pael v. Court of Appeals, supra note 23, at 363.
52 Rollo, p. 209.
53 Laxamana v. Court of Appeals, supra note 15, at 56.
54 Rollo, p. 11.
55 Id. at 10.
56 Id. at 72-89.
57 G.R. No. 146942, April 22, 2003, 401 SCRA 410.
58 Id. at 420-422.
59 G.R. No. 168940, November 24, 2009, 605 SCRA 231.
60 Id. at 232-233, citing Ibarra v. Abeyro, 37 Phil. 273, 282 (1917); emphasis and underscoring supplied.
61 Heirs of Antonio Pael v. Court of Appeals, supra note 23, at 363; emphasis supplied.
The Lawphil Project - Arellano Law Foundation
