CA-G.R. No. 23849, 7th Division, Court of Appeals
(FGU v. Judge Bayhon and Spouses Gutang)
G.R. No. 102696, Supreme Court
(Looyuko Et. Al. v. Court of Appeals, FGU, Et. Al.)
G.R. No. 102716, Supreme Court
(FGU v. Court of Appeals, Spouses Gutang, Et. Al.)
On December 2, 1976, spouses Tomas and Linta Mendoza executed a mortgage over the subject property in favor of FGU Insurance Corporation. The mortgage was registered with the Register of Deeds of Pasig, Rizal on December 3, 1976.
As the spouses failed to satisfy the obligation secured by the mortgage, FGU on June 1, 1982 filed an action (Civil Case No. 82-9760) with the RTC of Manila against said spouses. The latter filed an Answer but failed to appear during the pre-trial. Consequently, the Spouses Mendoza were declared as in default and evidence were received ex-parte.
On January 22, 1988, the Manila RTC rendered a decision in favor of FGU, thus:chanrob1es virtual 1aw library
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendants, ordering the latter, jointly and severally, to pay the plaintiff the following:chanrob1es virtual 1aw library
1. The amount of P368,785.80 with interest at 12% per annum compounded monthly from May 5, 1982 until the same is fully paid;
2. The amount of P22,501.60 with interest at 12% per annum compounded monthly from December 7, 1977 until the same is fully paid;
3. P5,000.00 as attorney’s fees;
4. The costs of suit.
SO ORDERED. 3
FGU filed a motion for partial reconsideration, pointing out that the action was not for a sum of money but for foreclosure of mortgage. It prayed that in accordance with Section 2, Rule 68 of the Rules of Court, "the decision be amended by ordering the sale of the property mortgaged in case defendant should not satisfy the judgment in favor of plaintiff within ninety (90) days from notice of decision."cralaw virtua1aw library
On May 19, 1988, the RTC issued an Order granting FGU’s motion:chanrob1es virtual 1aw library
Acting on the partial motion for reconsideration of the Decision rendered by the Court on January 22, 1988 and finding the same to be meritorious, the same is hereby granted.
Accordingly, the first paragraph and the dispositive portion of said Decision are hereby ordered amended to read as follows:jgc:chanrobles.com.ph
"This is an action for foreclosure of real estate mortgage filed by plaintiff, FGU Insurance Corporation against Spouses Tomas Mendoza and Linda A. Mendoza, filed way back on June 1, 1982."cralaw virtua1aw library
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the defendants, ordering the latter, jointly and severally, to pay the plaintiff the following: 1. The amount of 368,785.80 with interest at 12% per annum compounded monthly from May 5, 1982 until the same is fully paid; 2. The amount of P22,501.60 with interest at 12% per annum compounded monthly from December 7, 1977 until the same is fully paid; 3. P5,000.00 as attorney’s fees; 4. the costs of suit. Should defendants fails to pay said amounts within 90 days from receipt of the Decision dated Jan. 22, 1988, the mortgaged property described in par. 6 of the complaint shall be sold in the manner and under the regulations governing sales of real estate under execution. The proceeds of the sale, after deducting the cost of the sale shall be applied to the judgment and any balance shall be turned over to the defendants or their agent."cralaw virtua1aw library
SO ORDERED. 4
No appeal was taken from the above Order and the same subsequently became final and executory.
On September 14, 1988, the Manila RTC issued a writ of execution. On November 24, 1988, the deputy sheriff in a public bidding sold the parcel of land covered by TCT 1702 to FGU, the higher bidder. A certificate of sale was thereafter issued in FGU’s favor, which was confirmed by the RTC on March 2, 1989. On August 23, 1989, the RTC issued an order for the cancellation of TCT No. 242 and the issuance of a new TCT in FGU’s name.chanrob1es virtua1 1aw 1ibrary
Before the new TCT could be issued, however, the Spouses Gutang filed a motion for intervention and to set aside the judgment of the RTC, alleging that they are the new registered owners of the property. In an Order dated February 9, 1990, the RTC allowed the motion for intervention, holding that the failure of FGU to implead the Spouses in the action for foreclosure deprived the latter of due process. The RTC thus set aside its Decision and all order issued subsequent and related thereto.
WHEREFORE, the motion to intervene filed by the Spouses Gutang is granted and the decision on May 19, 1988 is reconsidered set aside together with all orders subsequent and related thereto. 5
On October 11, 1990, Looyuko Et. Al. filed a motion for intervention, which the RTC granted in its Order dated October 18, 1990.
In an Order dated November 16, 1990, the RTC denied FGU’s motion for the reconsideration of the order setting aside its decision.
FGU filed a petition for certiorari, prohibition and mandamus in the Court of Appeals, arguing that the trial court committed grave abuse of discretion in granting the Spouses Gutang’s motion for intervention since the RTC decision, as amended, was already final and executory.
On March 13, 1991, the Court of Appeals received an Urgent Motion by Juan Uy, Alberto Looyuko and their counsel, Atty. Cuyos, praying for leave to file a motion for intervention. They alleged that they were attachment creditors of the spouses Tomas and Linda Mendoza whose property covered by TCT No. 1702 was attached as per entry No. 11728 duly inscribed on April 22, 1977 and subsequently carried over to TCT No. 242 in the name of the Spouses Gutang. On April 26, 1991, the court issued a resolution allowing Looyuko et al’s motion for intervention.
In a Decision dated August 12, 1991, the Court of Appeals rendered its Decision, the dispositive portion of which reads:chanrob1es virtual 1aw library
WHEREFORE, the petition for certiorari, mandamus and prohibition is hereby (1) GRANTED insofar as that portion of the Order of February 9, 1990 is concerned reconsidering and setting aside the money judgment is concerned, which judgment [is] final and executory, and in the process of satisfaction, should be maintained and remains as such; and (2) DISMISSING insofar as that portion of the same Order allowing the private respondents to intervene is concerned.
SO ORDERED. 6
The Court of Appeals ruled that the action before the RTC was not actually an action for foreclosure but one for collection of a sum of money. The court also affirmed the order of the RTC allowing intervention, thus:chanrob1es virtual 1aw library
The Court, both from the factual, procedural and substantive points, finds that respondent court had just and valid reasons to allow the private respondents to intervene in the case. Had it denied the intervention, the execution in satisfaction of the money judgment against the judgment debtors, would be violative of section 15 of Rule 30, that should be "on all the property, real and personal, . . . of the judgment debtor . . ." when, in the case, the ownership of the parcel of land, covered by TCT 45066 is claimed by private respondents as well as movants-intervenors. Finally, even if it is considered, as petitioner claims, petitioner should have impleaded in its action "all persons having or claiming an interest in the (mortgage) premises subordinate in right to that of the holder of the mortgage, all of whom shall be made defendants in the action" (sec. 1, Rule 68, Rules of Court) and without their inclusion there can be no final determination in the action. Petitioner did not include private respondents as well as movants-intervenors, both of whom hold liens on the same property. Even under this aspect, respondent court should not be faulted for allowing private respondents to intervene, considering its reason that "what (is) sought to be safeguarded (s) . . . the provision of Rule 68 of the Rules of Court." And while the time to intervene, under section 2, of Rule 12, is before or during a trial, . . ., in its discretion . . .", or even on the day when the case is submitted for decision (Falcasantos v. Falcasantos, L-4627, May 13, 1952), or at any time before the rendition of final judgment (Lichauco v. C.A., ET AL., L-23642, Mar. 13, 1975), in Director of Lands v. C.A., Et. Al. (L-45168, Sept. 25, 1979), intervention was permitted pending appeal "in order to avoid injustice" which must have impelled the respondent court to allow the intervention.
Be that as it may, insofar as the default judgment dated January 27, 1988, ordering the defendants spouses Mendoza, jointly and severally, to pay petitioner the judgment debt, interest, attorney’s fees and costs, and which money judgment was restated in the Order dated May 19, 1988, since that judgment had already become final and executory and in the process of execution, what cropped up in the interim — on the question of whether or not the money judgment can be enforced against the parcel of land covered by TCT 450666, it appearing that petitioner, private respondents and herein movants-intervenors are all having and claiming interest in that property, a question which has no relevance and would not affect the correctness of the money judgment, the respondent court had no reason to reconsider and set aside the judgment which had already become final and executory, can no longer be altered, amended, reconsidered, set aside. Nothing more can be tone therewith. The court which rendered it has no more authority to modify or revoke it, except for its execution, otherwise, there would be not end to the litigation. Hence, the money judgment should be maintained and set at rest as and all that remains to be done in connection therewith is to have the same properly executed against the judgment debtors. 7
On August 16, 1991, the Court of Appeals noted a motion for leave to intervene by Schubert Tanunliong.
Subsequently, FGU and Looyuko Et. Al. filed their respective motions for reconsideration. On October 31, 1991 the Court of Appeals issued a resolution denying both motions for reconsideration.chanrob1es virtua1 1aw 1ibrary
Looyuko Et. Al. thus filed a petition for certiorari, prohibition and mandamus before this Court, contending in the main that the failure of FGU to implead them as defendants in Civil Case No. 82-9760 deprived them of due process. Consequently, the entire proceedings conducted before the RTC should have been declared void. The case was docketed herein as G.R. No. 102696.
FGU, for its part, filed a petition for review on certiorari with this Court, which was docketed as G.R. No. 102716. FGU contends that the Court of Appeals erred in characterizing Civil Case No. 82-9760 as an action for a sum of money, and not one for foreclosure of mortgage, and in allowing the intervention of the Spouses Gutang and Looyuko Et. Al. in the proceedings before the trial court.
LRC Case No. R-4212, RTC Rizal
(Gutang v. Register of Deeds, Et. Al.)
LRC Case No. R-4643, RTC Rizal
(Gutang Et. Al. v. Looyuko Et. Al.)
CA-G.R. SP No. 36825, 9th Division, Court of Appeals
(Gutang v. Judge Trampe, Tanunliong)
G.R. No. 120954, Supreme Court
(Tanunliong v. Court of Appeals, Gutang)
On November 28, 1989, Antonia Gutang filed with the RTC of Rizal an Amended Petition under Section 108 of Presidential Decree No. 1539 for the cancellation of TCT No. 242 in the name of the Spouses Gutang and the issuance of a new one in the name of Antonia Gutang and her children David and Elizabeth. The cancellation of the TCT was sought on the grounds that the husband, Jose Gutang, had already died, and that the property covered by the TCT was paraphernal. The case was entitled "Antonia Gutang versus Register of Deed, Galvanizers Marketing Inc., Victoria Alcantara Cuyos, Alberto Looyuko and Juan Uy, LRC Case No. R-4212."cralaw virtua1aw library
On August 29, 1991, Schubert Tanunliong, the alleged assignee of FGU and Looyuko Et. Al., filed a motion for leave to intervene, attaching his opposition to the amended petition.
On June 1, 1992, Antonia Gutang and her children filed another petition with the Rizal RTC against Cuyos, Looyuko and Uy praying for the cancellation of certain entries annotated in TCT No. 242. The case was docketed as LRC Case No. 4643.
On July 12, 1993, the RTC ordered the setting of the cases for hearing and for compliance with jurisdictional requirements. On October 11, 1993, the court issued an order allowing the intervention of Tanunliong. The Gutangs moved for a reconsideration of both orders. On July 19, 1994, the court issued an Omnibus Order in LRC Case Nos. 4214 and 4643, the dispositive portion of which reads:jgc:chanrobles.com.ph
"WHEREFORE, in view of all the foregoing, the Petitioners two (2) Motions for reconsideration dated August 30, 1993 and October 27, 1993; and Respondents’ Motion for Reconsideration dated November 3, 1993 and the Opposition and Motion to Dismiss dated June 23, 1991, are all DENIED for lack of merit.
On the other hand, movant Intervenor’s Motion for Leave to Intervene with Opposition dated August 29, 1991 is Granted.
In the meantime, let a notice of hearing be issued setting these cases for hearing in accordance with the provisions of P.D. 1529.
Let copies of the same be furnished the parties in this case, thru their counsels, the Register of Deeds of Mandaluyong, Metro Manila; the Office of the Solicitor General; and Intervenor Schubert Tanunliong, thru his counsel Atty. Nelson Ng." 8
On March 6, 1995, the court issued another order in both LRC cases, thus:chanrob1es virtual 1aw library
Accordingly, let the questioned Omnibus Order dated July 19, 1994 stand, and the Branch Clerk of Court is directed to issue the notice of initial hearing in [this] case with notice to the Office of Solicitor General, the Registry of Deed of the City of Mandaluyong, herein respondents and intervenor Ng, pursuant to Section 108 of the Presidential Decree No. 1529. 9
Yet another order was subsequently issued by the RTC in LRC Case No. 4212, the dispositive portion of which reads:chanrob1es virtual 1aw library
FURTHERMORE, let a copy of this order and the petition be furnished the Solicitor General, Makati, Metro Manila. 10
Antonia Gutang went to the Court of Appeals and questioned, among others, the allowance of the intervention by Tanunliong (CA-G.R. SP No. 36825). In a Decision dated June 30, 1995, the Court of Appeals, through the Special Ninth Division, set aside and declared void the Orders of the Land Registration Court insofar as they allowed the intervention of Tanunliong.
Tanunliong now challenges the decision of the Court of Appeals in G.R. No. 120954. He submits that the decision in LRC Case No. R-3613, which issued TCT No. 242 in the name of the Spouses Gutang is void, citing specific grounds therefor. Accordingly, intervention should have been allowed on the principle that a void judgment can be attacked either directly or collaterally.
Civil Case No. 61209, Pasig RTC
(Tanunliong v. Gutang Et. Al.)
CA-G.R. SP NO. 27972, 4th Division, Court of Appeals
(Gutang Et. Al. v. Judge Molina and Tanunliong)
G.R. No. 108257, Supreme Court
(Tanunliong v. Court of Appeals, Gutang Et. Al.)
Schubert Tanunliong claims that on December 19, 1985, the Spouses Mendoza sold the subject house and lot to him. Subsequently, on January 9, 1986, Alberto Looyuko and John Uy, the plaintiffs in Civil Case No. 82-5792, allegedly assigned to Tanunliong their rights and interests over the property. The validity of the assignment, however, is refuted by Looyuko, Et. Al. 11 On January 29, 1987, FGU, the plaintiff in Civil Case No. 82-9760 likewise assigned all its rights and interest over said property to Tanunliong. The assignment is not denied by FGU.
On August 23, 1991, Tanunliong filed before the RTC of Pasig a complaint for the cancellation of title, accounting and issuance of a writ of preliminary injunction against Antonia Gutang, David Gutang, Elizabeth Gutang Ledesma, Atty. Ramon Gonzales (the counsel for the Gutangs), and Atty. Victoria Cuyos. The case was docketed as Civil Case No. 61209. Tanunliong alleged, among others, that Antonia Gutang obtained the Order in LRC Case No. R-3613, canceling TCT No. 1702 and ordering the issuance of TCT No. 242 in favor of the Gutangs, through fraud and misrepresentation and without notice to FGU. Consequently, said Order was void.
The defendants filed a motion to dismiss Tanunliong’s complaint on the ground that the RTC had no jurisdiction over the case, the complaint in reality being an action for the annulment of the Order of the Pasig RTC in LRC Case No. R-3613. The RTC denied said motion but the Court of Appeals, upon a petition for certiorari and prohibition by the Gutangs and Gonzales, ruled otherwise. The appellate court held that Tanunliong’s action, though denominated as one for cancellation of title, accounting and for issuance of preliminary injunction is, in truth, a case for annulment of judgment. The dispositive portion of the Decision, dated December 16, 1992, reads:chanrob1es virtual 1aw library
WHEREFORE, the Petition for Certiorari and Prohibition, with Temporary Restraining Order, is hereby GRANTED. The Order of the RTC-Pasig, Branch 152, dated May 14, 1992, in Civil Case No. 61209, is SET ASIDE, for being null and void. The RTC-Pasig, Branch 152, is ENJOINED from proceeding with Civil Case No. 61209 and is ORDERED to dismiss said case, for lack of jurisdiction.chanrob1es virtua1 1aw 1ibrary
IT IS SO ORDERED. 12
Tanunliong thus assails the ruling of the Court of Appeals in G.R. No. 108257, maintaining, in essence, that the action for cancellation of title, accounting and issuance of a writ of preliminary injunction is proper.
The Court finds the principal issue raised in G.R. Nos. 102696 and 102716 dispositive of the consolidated petitions. Was the motion for intervention filed by the Spouses Gutang and Looyuko Et. Al. in Civil Case No. 82-9760 proper considering that the case was already final and executory?
We do not deem it necessary to address the issue of whether the complaint filed by FGU against the Spouses Mendoza was an action for foreclosure of mortgage or one for a sum of money. Clearly, if it were the latter, the Gutangs and Looyuko Et. Al. would have no right to intervene therein since the action for sum of money, i.e., damages, would have arisen from the contract secured by mortgage, to which they are not parties. Then Section 2, Rule 12 of the Rules of Court, the law prevailing at the time, read as follows:chanrob1es virtual 1aw library
Intervention. — A person may, before or during a trial be permitted by the court, in its discretion, to intervene in an action, if he has legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof. [Emphasis supplied.]
None of the grounds underscored above are present to warrant their intervention. Accordingly, we assume for purposes of discussion that the action was indeed for the foreclosure of the mortgage over the subject property.
The rule stated above also requires that a motion for intervention should be made "before or during a trial" Because of varying interpretations of the phrase, the present Rules have clarified that the motion should be filed "any time before rendition of judgment. 13
1. The former rule as to when intervention may be allowed was expressed in Sec. 2, Rule 12 as "before or during a trial," and this ambiguity also gave rise to indecisive doctrines. Thus, inceptively it was held that a motion for leave to intervene may be filed "before or during a trial" even on the day when the case is submitted for decision (Falcasantos v. Falcasantos, L-4627, May 13, 1952) as long as it will not unduly delay the disposition of the case. The term "trial" was used in its restricted sense, i.e., the period for the introduction for intervention was filed after the case had already been submitted for decision, the denial thereof is proper (Vigan Electric Light Co., Inc. v. Arciaga, L-29207 and L-29222, July 31, 1974). However, it has also been held that intervention may be allowed at any time before the rendition of final judgment (Linchauco v. CA, Et Al., L-23842, Mar. 13, 1975). Further, in the exceptional case of Director of Lands v. CA, Et. Al. (L-45168, Sept. 25, 1979), the Supreme Court permitted intervention in a case pending before it on appeal in order to avoid injustice and in consideration of the number of parties who may be affected by the dispute involving overlapping of numerous land titles.
2. The uncertainty in these ruling has been eliminated by the present Sec. 2 of this amended Rule which permits the filing of the motion to intervene at any time before the rendition of the judgment in the case, in line with the doctrine in Lichauco above cited. The justification advanced for this is that before judgment is rendered, the court, for good cause shown, may still allow the introduction of additional evidence and that is still within a liberal interpretation of the period for trial. Also, since no judgment has yet been rendered, the matter subject of the intervention may still be readily resolved and integrated in the judgment disposing of all claims in the case, and would not require an overall reassessment of said claims as would be the case if the judgment had already been rendered. 14
In the present case, the motions for intervention were filed after judgment had already been rendered, indeed when the case was already final and executory. Certainly, intervention can no longer be allowed in a case already terminated by final judgment. 15
Intervention is merely collateral or accessory or ancillary to the principal action, and not an independent proceeding; it is an interlocutory proceeding dependent on or subsidiary to the case between the original parties. 16 Where the main action ceases to exist, there is no pending proceeding wherein the intervention may be based. 17 Here, there is no more pending principal action wherein the Spouses Gutang and Looyuko Et. Al. may intervene.
A decision was already rendered therein and no appeal having been taken therefrom, the judgment in that main case is now final and executory. Intervention is legally possible only "before or during a trial," hence a motion for intervention filed after trial — and, a fortiori, when the case has already been submitted, when judgment has been rendered, or worse, when judgment is already final and executory — should be denied. 18
In exceptional cases, the Court has allowed intervention notwithstanding the rendition of judgment by the trial court. In Director of Lands v. Court of Appeals, 19 intervention was allowed even when the petition for review of the assailed judgment was already submitted for decision in the Supreme Court. Recently in Mago v. Court of Appeals, 20 the Court granted intervention despite the case having become final and executory.
Admittedly, petitioners’ motion for intervention was filed on 2 August 1988 after the amended order of 30 March 1988 had already become final.
Endnotes:
* This case was transferred to the ponente pursuant to the resolution in AM No. 00-9-03-SC.-Re: Creation of Special Committee on Case Backlog dated February 27, 2001.
1. Jose Gutang died on April 17, 1987.
2. The titles of the cases are not their formal designations but are merely stated for easy reference.
3. Rollo, G.R. No. 102696, pp. 41-42.
4. Rollo, G.R. No. 102696, p. 44. Underscoring in the original.
5. Rollo, G.R. No. 102696, p. 52.
6. Rollo, G.R. No. 102696, p. 53. Underscoring in the original.
7. Rollo, G.R. No. 102696, pp. 52-53. Underscoring in the original.
8. Rollo, G.R. No. 120954, pp. 55-56.
9. Id., at 56.
10. Ibid.
11. Rollo, G.R. No. 102696, pp. 73, 89-90, 131, 137-138; Rollo, G.R. No. 102716, pp. 305-306.
12. Rollo, G.R. No. 108257, p. 41.
13. RULES OF COURT, RULE 19 SECTION 2.
14. II REGALADO, REMEDIAL LAW COMPENDIUM 292-293 6th ED. (1997).
15. Seveses v. Court of Appeals, 316 SCRA 605 (1999), citing Chavez v. Presidential Commission on Good Government, 307 SCRA 394 (1999); Rabino v. Cruz, 222 SCRA 493 (1993); People of Paombong, Bulacan v. Court of Appeals, 218 SCRA 423 (1993); Felismino v. Gloria, 47 Phil. 967 (1924). See also Oliva v. Court of Appeals, 166 SCRA 632 (1988) and cases in Note 15 therein.
16. Big Country Ranch Corp. v. Court of Appeals, 227 SCRA 161 (1993); Barangay Matiatic v. Elvirias, 148 SCRA 83 (1987).
17. Ibid.
18. Ibid; Oliva v. Court of Appeals, supra.
19. 93 SCRA 238 (1979).
20. 303 SCRA 600 (1999).
21. See Oliva v. Court of Appeals, supra.
22. Somes v. Government of the Philippines, 62 Phil. 432.
23. Sun Life Assurance Co. of Canada v. Gonzales Diez, 52 Phil. 271 (1928); Government of the Philippines v. Cajigas, 55 Phil. 667 (1931); Gregorio de la Paz, and Guadalupe Santiesteban v. Macondray & Co., Inc., 66 Phil. 402 (1938), applying the rule to purchaser of the mortgaged real estate.
24. Sun Life Assurance Co. of Canada v. Gonzales Diez, 52 Phil. 271 (1928). See also Ramirez v. Court of Appeals, 219 SCRA 598 (1993).
25. 142 SCRA 467 (1986).
26. Tan de Jua v. Po Paoco, 54 Phil. 354 (1930).
27. Gregorio de la Paz, and Guadalupe Santiesteban v. Macondray & Co., Inc. supra.
28. Santiago v. Dionisio, 92 Phil. 495 (1953).