Neglect of counsel NOT extrinsic fraud to annul judgment under Rule 47

In the case of Pinausukan Seafood v. Far East Bank, the Supreme Court said: "Extrinsic fraud, as a ground for the annulment of a judgment, must emanate from an act of the adverse party, and the fraud must be of such nature as to have deprived the petitioner of its day in court. The fraud is not extrinsic if the act was committed by the petitioner’s own counsel."

In that case, the Court found that Pinausukan’s petition for annulment of judgment suffered from procedural and substantive defects.

The procedural defect consisted in Pinausukan’s failure to submit together with the petition the affidavits of witnesses or documents supporting the cause of action. Another issue was the verification which related only “to the correctness of the allegations in the petition” and was “not the same [or] equivalent to the affidavit of witnesses that the [xxx] Rule requires.” Said the Court, the true office of the verification is merely to secure an assurance that the allegations of a pleading are true and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith.Pinausukan’s failure to include the affidavits of witnesses was fatal to its petition for annulment. Worthy to reiterate is that the objective of the requirements of verification and submission of the affidavits of witnesses is to bring all the relevant facts that will enable the Court of Appeals (in a petition to annul the Regional Trial Court's decision) to immediately determine whether or not the petition has substantial merit. In that regard, however, the requirements are separate from each other, for only by the affidavits of the witnesses who had competence about the circumstances constituting the extrinsic fraud can the petitioner detail the extrinsic fraud being relied upon as the ground for its petition for annulment. This is because extrinsic fraud cannot be presumed from the recitals alone of the pleading but needs to be particularized as to the facts constitutive of it. The distinction between the verification and the affidavits is made more pronounced when an issue is based on facts not appearing of record. In that instance, the issue may be heard on affidavits or depositions presented by the respective parties, subject to the court directing that the matter be heard wholly or partly on oral testimony or depositions.

The substantive defect related to the supposed neglect of Atty. Villaflor (Pinausukan's lawyer) to keep track of the case, and to his failure to apprise Pinausukan of the developments in the case, which the CA did not accept as constituting extrinsic fraud, because, for purposes of the application of Rule 47, mistake and gross negligence cannot be equated to the extrinsic fraud that Rule 47 requires to be the ground for an annulment of judgment. By its very nature, extrinsic fraud relates to a cause that is collateral in character, i.e., it relates to any fraudulent act of the prevailing party in litigation which is committed outside of the trial of the case, where the defeated party has been prevented from presenting fully his side of the cause, by fraud or deception practiced on him by his opponent. Even in the presence of fraud, annulment will not lie unless the fraud is committed by the adverse party, not by one’s own lawyer. In the latter case, the remedy of the client is to proceed against his own lawyer and not to re-litigate the case where judgment had been rendered.

Such neglect of counsel, even if it was true, did not amount to extrinsic fraud because it did not emanate from any act of Far East Bank as the prevailing party, and did not occur outside the trial of the case. Moreover, the failure to be fully aware of the developments in the case was Pinausukan’s own responsibility. As a litigant, it should not entirely leave the case in the hands of its counsel, for it had the continuing duty to keep itself abreast of the developments if only to protect its own interest in the litigation. It could have discharged its duty by keeping in regular touch with its counsel, but it did not. Consequently, it has only itself to blame.