G.R. No. L-28486 - Magno vs. Court of Appeals

The case originated as a family action for partition of war damage payments received from the United States Government.
The petitioners – members of the Magno and Vasquez families – instituted the action before the Bulacan Court of First Instance in Civil Case No. 3198-M.
A default judgment was rendered on September 9, 1966, in favor of the petitioners (plaintiffs) and against private respondent Donato M. Vergara and his father-in-law, Meliton Magno, jointly and severally.
Following the finality of the judgment, a Writ of Execution was issued, resulting in the levy upon the properties of the private respondent, which were subsequently scheduled for public auction.

Private respondent, contesting the default judgment and the ensuing execution, commenced an annulment suit before the Court of First Instance of Nueva Ecija in Civil Case No. 275.
The principal contention in the annulment suit was that the judgment in the Bulacan Case had been procured through extrinsic fraud.
Specifically, private respondent alleged that petitioner Francisco Magno made assurances during a confrontation that he intended to exclude the private respondent from the suit. Relying on these assurances, the private respondent refrained from taking action.
Subsequently, when the judgment was rendered and execution ordered against him, the private respondent contended that he had been misled and deprived of the opportunity to defend his interests.

Alongside the annulment suit, the private respondent sought a Writ of Preliminary Injunction to restrain both the enforcement of the judgment and the execution of the Writ.
Petitioners moved to dismiss the annulment suit on the ground that the Nueva Ecija Court had no jurisdiction to annul the final judgment of the Bulacan Court, which was rendered by a Tribunal of concurrent and coordinate jurisdiction.
In deferring the resolution of the motion, the trial judge in Nueva Ecija ruled that the issues raised by the complaint—particularly the allegations of extrinsic fraud—were essentially evidentiary. The judge maintained that these issues could be resolved after both parties had the opportunity to adduce relevant evidence.
The Injunction was granted upon the filing of a bond of P1,000.00.

There was no necessity to present additional evidence to prove extrinsic fraud since the allegations already assumed, arguendo, that the Nueva Ecija Court lacked jurisdiction over the matter.
There was an inherent error in allowing the Nueva Ecija Court to interfere with the final, executory decision of the Bulacan Court.

The petitioners’ position was undermined by their own admissions in the Motion to Dismiss wherein they acknowledged that the extrinsic fraud allegations—the assurances by Francisco Magno to the private respondent regarding his non-involvement—were true.
These admissions indicated that the private respondent, having been misled, did not follow developments in the case, which contributed to the rendering of the default judgment.

The Court of Appeals had upheld the jurisdiction of the Nueva Ecija Court on the ground that the complaint for annulment alleged ultimate facts which, if proven, could amount to extrinsic fraud.
The CA’s decision referenced previous cases and commentaries (e.g., Dulap et al. vs. Court of Appeals, Gianan vs. Imperial, Francisco vs. Aquino) to establish that a Court of First Instance could annul a final decision where extrinsic fraud was alleged.
The factual allegations in the complaint included:

Misrepresentations regarding the location of residence and other pertinent details.
Assertions that petitioner Francisco Magno assured the private respondent—and his wife—that his inclusion as a party was accidental and would be corrected.
Contentions that the private respondent was not informed of the pre-trial, thereby depriving him of the opportunity to present his defense.

Whether the Court of First Instance of Nueva Ecija possesses jurisdiction to entertain an annulment suit to set aside a final and executory judgment rendered by the Court of First Instance of Bulacan.
Whether the venue for the annulment suit need necessarily follow the venue of the original action for partition.

Whether the alleged extrinsic fraud—constituted by the assurances of petitioner Francisco Magno and the subsequent omission in notifying the private respondent—was sufficient to justify the annulment of the default judgment.
Whether a hearing on the merits was necessary to determine the authenticity of the extrinsic fraud allegations.

Whether, by admitting in their Motion to Dismiss that Francisco Magno had assured the private respondent of his exclusion from the suit, the petitioners effectively conceded the occurrence of extrinsic fraud.
The implications of such admissions regarding the subsequent determination and necessity of a full hearing to prove extrinsic fraud.