Facts:

The case involves a petition for certiorari by Apex Mining, Inc., Engr. Panfilo Frias, and Engr. Rey Dionisio (the petitioners) against the Court of Appeals (respondent), Judge Pedro Casia, and private respondents Miguel Bagaipo, Alfredo Roa, Edgar Barera, Bonifacio Baruis Jr., Francisco Bello, and Leopoldo Cagatin. The complaint was initiated on December 9, 1987, alleging that in November 1987, a bulldozer owned by Apex, due to its negligence, caused damage to the private respondents' mining claim known as Tunnel T-45, halting their mining operations. Apex responded by denying the allegations, stating that the respondents had constructed the tunnel without proper authority from the mining company.

The Regional Trial Court of Davao del Norte, specifically Branch 11, presided over the case, which was docketed as Civil Case No. 2131. During the trial, the private respondents presented their evidence, while the petitioners’ counsel filed a demurrer to evidence that was subseque

...

Facts:

Background of the Case

• Petitioners: Apex Mining, Inc., Engr. Panfilo Frias, and Engr. Rey Dionisio.
• Private respondents: Miguel Bagaipo, Alfredo Roa, Edgar Barrera, Bonifacio Baruis, Jr., Francisco Bello, and Leopoldo I. Cagatin.
• Originated from a complaint for damages filed on December 9, 1987 before the Regional Trial Court (RTC) of Davao del Norte, Branch 11, Civil Case No. 2131.
• The complaint alleged that, sometime in November 1987, a bulldozer owned by Apex Mining negligently damaged a mining claim tunnel (Tunnel T-45), which halted the mining operations of the private respondents.

Proceedings in the Regional Trial Court

• Petitioners’ Answer and Denials
• The petitioners, through their retained counsel, denied the allegations in the complaint.
• They asserted that the tunnel was constructed within Apex’s mining claim area without any authority or approval from Apex.
• Presentation of Evidence
• Private respondents presented three witnesses during trial.
• Petitioners’ counsel filed a demurrer to evidence after the respondents rested – a motion that was denied by the trial court on June 23, 1992.
• Scheduled Reception of Evidence
• An order set the reception of evidence for the petitioners on February 18, 1993.
• Despite having received due notice, petitioners’ counsel did not appear on the scheduled hearing, leading the court to declare a waiver of their right to present evidence.
• Trial Court Decision
• On June 24, 1993, the RTC rendered a decision finding Apex liable for damages.
• The decision ordered Apex to pay rehabilitation expenses, daily unearned income (at P72,000 per day from November 14, 1987, until rehabilitation completion), additional expenses for complaint preparation and attorney’s fees, as well as court costs.

Appeal and Its Dismissal

• Petitioners appealed the RTC decision to the Court of Appeals (CA) under CA-G.R. CV No. UDK-7265.
• The appeal was dismissed by the CA in its Resolution dated May 13, 1994 for non-payment of docket fees within the prescribed reglementary period.
• Despite being duly notified, petitioners’ counsel failed to move for reconsideration of the dismissal, which subsequently became final with the entry of judgment on August 10, 1994.
• Following the finality of the judgment, the RTC was directed to proceed with the execution of the judgment, including an order on September 7, 1995 directing the joint venture partner, Base Metals Mineral Resources Corporation, to turn over funds and machineries due to Apex.

Petition for Annulment of Judgment

• Filing of the Petition
• On February 26, 1996, Apex (and the associated engineers) filed a Petition for Annulment of Judgment before the CA through new counsel.
• The petition was filed along with an application for the issuance of a writ of preliminary injunction and/or temporary restraining order.
• Grounds Alleged
• Petitioners contended that the negligence and gross misconduct of their former counsel amounted to extrinsic (collateral) fraud.
• Allegations included failure to attend the critical hearing for the reception of evidence, failure to notify petitioners of scheduled hearings and the adverse decision, non-payment of docket fees resulting in dismissal of their appeal, and misrepresentations regarding the status of the case.
• Proceedings on the Annulment Petition
• On February 2, 1996, the CA issued a temporary restraining order.
• A hearing on the application for a preliminary injunction was held on March 8, 1996, where the vice-president of Apex testified about the “sell-out” and gross negligence of their former counsel.
• Private respondents opposed the annulment petition, arguing that it was an improper remedy and raising issues of forum-shopping and merits of the claim.
• Decision and Motion for Reconsideration
• On April 30, 1997, the CA rendered a decision dismissing the petition for annulment on the grounds that the CA lacked jurisdiction to annul or set aside its own decision and that petitioners were bound by counsel’s negligence.
• A timely motion for reconsideration was filed but was denied by the CA on May 7, 1998, affirming that negligence of counsel generally binds the client and that allowing annulment in such cases would lead to endless litigation.

Consolidated Record Before the Supreme Court

• Petitioners reiterated the same arguments regarding the extrinsic fraud of their former counsel, emphasizing that the negligence deprived them of an opportunity to present their defense.
• They argued that their counsel’s gross negligence was sufficient to annul the adverse RTC decision and to reopen the litigation to allow proper presentation of evidence.

Issue:

• Whether the gross negligence and misconduct of petitioners’ counsel constitutes extrinsic (collateral) fraud warranting the annulment of the RTC judgment.
• Whether the failure to perfect the appeal (due to non-payment of docket fees) deprived the petitioners of the opportunity to exercise their right to be heard and thus violated due process.
• Whether the petitioners are entitled to relief that would allow them to present evidence in defense of the merits, given the counsel’s negligence not imputable to them.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)