G.R. No. 196894, March 03, 2014 - JESUS G. CRISOLOGO AND NANETTE B. CRISOLOGO, Petitioners, v. JEWM AGRO–INDUSTRIAL CORPORATION, Respondent.
This is a petition for certiorari
under Rule 45 of the Rules of Court challenging the May 6, 2011 Decision1
of the Court of Appeals (CA), in CA–G.R. SP No. 03896–MIN, which affirmed the September 27, 2010,2
October 7, 20103
and November 9, 20104
Orders of the Regional Trial Court, Davao City, Branch 14 (RTC–Br. 14), in Civil Case No. 33,551–2010, an action for Cancellation of Lien. It is entitled “JEWM Agro–Industrial Corporation v. The Registry of Deeds for the City of Davao, Sheriff Robert Medialdea, John & Jane Does, and all persons acting under their directions
This controversy stemmed from various cases of collection for sum of money filed against So Keng Kok, the owner of various properties including two (2) parcels of land covered by TCT Nos. 292597 and 292600 (subject properties
), which were attached by various creditors including the petitioners in this case. As a result, the levies were annotated on the back of the said titles.
Petitioners Jesus G. Crisologo and Nannette B. Crisologo (Spouses Crisologo
) were the plaintiffs in two (2) collection cases before RTC, Branch 15, Davao City (RTC–Br. 15
), docketed as Civil Case Nos. 26,810–98 and 26,811–98, against Robert Limso, So Keng Koc, et al. Respondent JEWM Agro–Industrial Corporation (JEWM
) was the successor–in–interest of one Sy Sen Ben, the plaintiff in another collection case before RTC, Branch 8, Davao City (RTC–Br. 8
), docketed as Civil Case No. 26,513–98, against the same defendants.
On October 19, 1998, RTC–Br. 8 rendered its decision based on a compromise agreement, dated October 15, 1998, between the parties wherein the defendants in said case were directed to transfer the subject properties in favor of Sy Sen Ben. The latter subsequently sold the subject properties to one Nilda Lam who, in turn, sold the same to JEWM on June 1, 2000. Thereafter, TCT Nos. 325675 and 325676 were eventually issued in the name of JEWM, both of which still bearing the same annotations as well as the notice of lis pendens
in connection with the other pending cases filed against So Keng Kok.
A year thereafter, Spouses Crisologo prevailed in the separate collection case filed before RTC–Br. 15 against Robert Lim So and So Keng Koc (defendants
). Thus, on July 1, 1999, the said defendants were ordered to solidarily pay the Spouses Crisologo. When this decision attained finality, they moved for execution. On June 15, 2010, a writ was eventually issued. Acting on the same, the Branch Sheriff issued a notice of sale scheduling an auction on August 26, 2010. The notice of sale included, among others, the subject properties covered by TCT Nos. 325675 and 325676, now, in the name of JEWM.
In the same proceedings, JEWM immediately filed its Affidavit of Third Party Claim and the Urgent Motion Ad Cautelam
. It prayed for the exclusion of the subject properties from the notice of sale. In an order, dated August 26, 2010, however, the motion was denied. In turn, the Spouses Crisologo posted a bond in order to proceed with the execution.
To protect its interest, JEWM filed a separate action for cancellation of lien with prayer for the issuance of a preliminary injunction before RTC–Br. 14, docketed as Civil Case No. 33,551–2010. It prayed for the issuance of a writ of preliminary injunction to prevent the public sale of the subject properties covered in the writ of execution issued pursuant to the ruling of RTC–Br. 15; the cancellation of all the annotations on the back of the pertinent TCTs; and the issuance of a permanent injunction order after trial on the merits. “The Register of Deeds of Davao City, Sheriff Robert Medialdea, John and Jane Does and all persons acting under their direction
” were impleaded as defendants.
At the scheduled hearing before RTC–Br. 14 on September 22, 2010, Spouses Crisologo’s counsel appeared and filed in open court their Very Urgent Manifestation questioning the authority of the said court to restrain the execution proceedings in RTC–Br. 15. JEWM opposed it on the ground that Spouses Crisologo were not parties in the case.
On September 24, 2010, Spouses Crisologo filed an Omnibus Motion praying for the denial of the application for writ or preliminary injuction filed by JEWM and asking for their recognition as parties. No motion to intervene was, however, filed as the Spouses Crisologo believed that it was unnecessary since they were already the John and Jane Does named in the complaint.
In the Order, dated September 27, 2010, RTC–Br. 14 denied Spouses Crisologo’s Omnibus Motion and granted JEWM’s application for a writ of preliminary injunction.
On October 1, 2010, Spouses Crisologo filed a Very Urgent Omnibus Motion before RTC–Br. 14 praying for reconsideration and the setting aside of its September 27, 2010 Order. This was denied in the RTC Br.–14’s October 7, 2010 Order for lack of legal standing in court considering that their counsel failed to make the written formal notice of appearance. The copy of this order was received by Spouses Crisologo on October 22, 2010. It must be noted, however, that on October 27, 2010, they received another order, likewise dated October 7, 2010, giving JEWM time to comment on their Very Urgent Omnibus Motion filed on October 1, 2010. In its Order, dated November 9, 2010, however, RTC–Br. 14 again denied the Very Urgent Motion previously filed by Spouses Crisologo.
On November 12, 2010, JEWM moved to declare the “defendants” in default which was granted in an order given in open court on November 19, 2010.
Spouses Crisologo then filed their Very Urgent Manifestation, dated November 30, 2010, arguing that they could not be deemed as defaulting parties because they were not referred to in the pertinent motion and order of default.
On November 19, 2010, Spouses Crisologo filed with the CA a petition for certiorari5
under Rule 65 of the Rules of Court assailing the RTC–Br. 14 orders, dated September 27, 2010, October 7, 2010 and November 9, 2010, all of which denied their motion to be recognized as parties. They also prayed for the issuance of a Temporary Restraining Order (TRO) and/or a Writ of Preliminary Injunction.
In its Resolution, dated January 6, 2011, the CA denied the application for a TRO, but directed Spouses Crisologo to amend their petition. On January 19, 2011, the Spouses Crisologo filed their Amended Petition6
with prayers for the issuance of a TRO and/or writ of preliminary injunction, the annulment of the aforementioned orders of RTC Br. 14, and the issuance of an order dissolving the writ of preliminary injunction issued in favor of JEWM.
Pending disposition of the Amended Petition by the CA, JEWM filed a motion on December 6, 2010 before RTC–Br. 14 asking for the resolution of the case on the merits.
On January 10, 2011, RTC–Br. 14 ruled in favor of JEWM, with the dispositive portion of its Decision7
stating as follows:
WHEREFORE, in view of all the foregoing, judgment is hereby rendered in favor of the plaintiff as follows:
- the preliminary writ of injunction issued on October 5, 2010 is hereby made permanent;
- directing herein defendant Registry of Deeds of Davao City where the subject lands are located, to cancel all existing liens and encumbrances on TCT No. T–325675 and T–325676 registered in the name of the plaintiff, and pay the
- cost of suit.
Spouses Crisologo then filed their Omnibus Motion Ex Abudanti ad Cautelam
, asking RTC– Br. 14 to reconsider the above decision. Because no motion for intervention was filed prior to the rendition of the judgment, a certificate, dated March 17, 2011, was issued declaring the January 10, 2011 decision final and executory.
On May 6, 2011, the CA eventually denied the Amended Petition filed by Spouses Crisologo for lack of merit. It ruled that the writ of preliminary injunction subject of the petition was already fait accompli
and, as such, the issue of grave abuse of discretion attributed to RTC–Br. 14 in granting the relief had become moot and academic. It further held that the failure of Spouses Crisologo to file their motion to intervene under Rule 19 rendered Rule 65 inapplicable as a vehicle to ventilate their supposed right in the case.9
Hence, this petition.
- The Court of Appeals erred in holding that the action for Cancellation of Annotations may proceed even without notice to and impleading the party/ies who caused the annotations, in clear contravention of the rule on joinder of parties and basic due process.
- The Court of Appeals erred in applying a very constrictive interpretation of the rules in holding that a motion to intervene is the only way an otherwise real party in interest could participate.
- The Court of Appeals erred in denying our application for the issuance of a temporary restraining order and/or a writ of preliminary injunction.
- The Court of Appeals erred in holding that the issues raised by petitioners before it [had] been mooted by the January 10, 2011 decision of RTC Branch 14.10
Spouses Crisologo submit as error the CA affirmation of the RTC– Br. 14 ruling that the action for cancellation may proceed without them being impleaded. They allege deprivation of their right to due process when they were not impleaded in the case before RTC–Br. 14 despite the claim that they stand, as indispensable parties, to be benefited or injured by the judgment in the action for the cancellation of annotations covering the subject properties. They cite Gonzales v. Judge Bersamin
among others, as authority. In that case, the Court ruled that pursuant to Section 108 of Presidential Decree (P.D.
) No. 1529, notice must be given to all parties in interest before the court may hear and determine the petition for the cancellation of annotations on the certificates of title.
The Spouses Crisologo also question the statement of the CA that their failure to file the motion to intervene under Rule 19 before RTC–Br. 14 barred their participation in the cancellation proceedings. They put emphasis on the court’s duty to, at the very least, suspend the proceedings before it and have such indispensable parties impleaded.
As to the ruling on the denial of their application for the issuance of a TRO or writ of preliminary injunction, Spouses Crisologo claim that their adverse interest, evinced by the annotations at the back of the certificates of title, warranted the issuance of a TRO or writ of preliminary injunction against JEWM’s attempt to cancel the said annotations in violation of their fundamental right to due process.
Lastly, Spouses Crisologo cast doubt on the CA ruling that the issues presented in their petition were mooted by the RTC–Br. 14 Decision, dated January 10, 2011. Having been rendered without impleading indispensable parties, the said decision was void and could not have mooted their petition.
In their Comment,12
JEWM asserts that Spouses Crisologo’s failure to file a motion to intervene, pleadings–in–intervention, appeal or annulment of judgment, which were plain, speedy and adequate remedies then available to them, rendered recourse to Rule 65 as improper; that Spouses Crisologo lacked the legal standing to file a Rule 65 petition since they were not impleaded in the proceedings before RTC–Br. 14; and that Spouses Crisologo were not indispensable parties since their rights over the properties had been rendered ineffective by the final and executory October 19, 1998 Decision of RTC–Br. 8 which disposed unconditionally and absolutely the subject properties in favor of its predecessor–in–interest. JEWM further argues that, on the assumption that Section 108 of P.D. No. 1529 applies, no notice to Spouses Crisologo was required because they were not real parties–in–interest in the case before RTC–Br. 14, or even if they were, their non–participation in the proceedings was because of their failure to properly intervene pursuant to Rule 19; and, lastly, that the case before RTC–Br. 14 became final and executory because Spouses Crisologos did not perfect an appeal therefrom, thus, rendering the issues in the CA petition moot and academic.
In their Reply,13
Spouses Crisologo restate the applicability of Section 108 of P.D. No. 1529 to the effect that any cancellation of annotation of certificates of title must be carried out by giving notice to all parties–in– interest. This they forward despite their recognition of the mootness of their assertion over the subject properties, to wit:
Again, we respect JAIC’s position that “the claims of subsequent attaching creditors (including petitioners’) have been rendered moot and academic, and hence the entries in favor of said creditors have no more legal basis and therefore must be cancelled.” But we likewise at least ask a modicum of respect by at least being notified and heard.14
The crux of this controversy is whether the CA correctly ruled that RTC–Br. 14 acted without grave abuse of discretion in failing to recognize Spouses Crisologo as indispensable parties in the case for cancellation of lien.
In this respect, the Court agrees with Spouses Crisologo.
In an action for the cancellation of memorandum annotated at the back of a certificate of title, the persons considered as indispensable include those whose liens appear as annotations pursuant to Section 108 of P.D. No. 1529,15
Section 108. Amendment and alteration of certificates. –No erasure, alteration or amendment shall be made upon the registration book after the entry of a certificate of title or of a memorandum thereon and the attestation of the same by the Register of Deeds, except by order of the proper Court of First Instance. A registered owner or other person having an interest in registered property, or, in proper cases, the Register of Deeds with the approval of the Commissioner of Land Registration, may apply by petition to the court upon the ground that the registered interests of any description, whether vested, contingent, expectant inchoate appearing on the certificate, have terminated and ceased; or that new interest not appearing upon the certificates have arisen or been created; or that an omission or error was made in entering a certificate or memorandum thereon, or on any duplicate certificate; x x x or upon any other reasonable ground; and the court may hear and determine the petition after notice to all parties in interest, and may order the entry or cancellation of a new certificate, the entry or cancellation of a memorandum upon a certificate, or grant any other relief upon such terms and conditions, requiring security or bond if necessary, as it may consider proper.
In Southwestern University v. Laurente
the Court held that the cancellation of the annotation of an encumbrance cannot be ordered without giving notice to the parties annotated in the certificate of title itself. It would, thus, be an error for a judge to contend that no notice is required to be given to all the persons whose liens were annotated at the back of a certificate of title.
Here, undisputed is the fact that Spouses Crisologo’s liens were indeed annotated at the back of TCT Nos. 325675 and 325676. Thus, as persons with their liens annotated, they stand to be benefited or injured by any order relative to the cancellation of annotations in the pertinent TCTs. In other words, they are as indispensable as JEWM itself in the final disposition of the case for cancellation, being one of the many lien holders.
As indispensable parties, Spouses Crisologo should have been joined as defendants in the case pursuant to Section 7, Rule 3 of the Rules of Court, to wit:
SEC. 7. Compulsory joinder of indispensable parties. – Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. 17
The reason behind this compulsory joinder of indispensable parties is the complete determination of all possible issues, not only between the parties themselves but also as regards other persons who may be affected by the judgment.18
In this case, RTC–Br. 14, despite repeated pleas by Spouses Crisologo to be recognized as indispensable parties, failed to implement the mandatory import of the aforecited rule.
In fact, in Sps. Crisologo v. Judge George E. Omelio
a related administrative case, the Court found the trial judge guilty of gross ignorance of the law when it disregarded the claims of Spouses Crisologo to participate. In part, the Court stated:
This is not the first time Judge Omelio has rendered a decision affecting third parties’ interests, without even notifying the indispensable parties. In the first disputed case, JEWM Agro–Industrial Corporation v. Register of Deeds, Sheriff Medialdea, John & Jane Does and all persons acting under their directions, Judge Omelio failed to cause the service of proper summons upon the John and Jane Does impleaded in the complaint. Even when Sps. Crisologo voluntarily appeared in court to be recognized as the John and Jane Does, Judge Omelio refused to acknowledge their appearance and ordered the striking out of Sps. Crisologos' pleadings. For this reason, the Investigating Justice recommended admonishing Judge Omelio for failing to recognize the Sps.Crisologo as indispensable parties in that case.
x x x x x x x x x
Clearly, the cancellation of the annotation of the sale without notifying the buyers, Sps. Crisologo, is a violation of the latter’s right to due process. Since this is the second time that Judge Omelio has issued an order which fails to notify or summon the indispensable parties, we find Judge Omelio guilty of gross ignorance of the law, with a warning that repetition of the same or similar act will merit a stiffer penalty in the future.
x x x
WHEREFORE, … We find Judge George E. Omelio GUILTY of four counts of the serious charge of gross ignorance of the law for the following acts: (a) refusing to recognize Spouses Jesus G. Crisologo and Nannette B. Crisologo as indispensable parties; … in violation of the latter’s right to due process. Accordingly, we impose upon Judge George E. Omelio the penalty of fine of Forty Thousand Pesos (?40,000.00), with a warning that repetition of the same or similar acts will be dealt with more severely.
The trial court should have exercised prudence in denying Spouses Crisologo’s pleas to be recognized as indispensable parties. In the words of the Court, “Judge Omelio should be penalized for failing to recognize Sps. Crisologo as indispensable parties and for requiring them to file a motion to intervene, considering that a simple perusal of the certificates of title would show Sps. Crisologo’s adverse rights because their liens are annotated at the back of the titles.”21
This manifest disregard of the basic rules and procedures constitutes a grave abuse of discretion.
In State Prosecutors II Comilang and Lagman v. Judge Medel Belen
the Court held as inexcusable abuse of authority the trial judge’s “obstinate disregard of basic and established rule of law or procedure.” Such level of ignorance is not a mere error of judgment. It amounts to “evasion of a positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law,”23
or in essence, grave abuse of discretion amounting to lack of jurisdiction.
Needless to say, judges are expected to exhibit more than just a cursory acquaintance with statutes and procedural laws. They must know the laws and apply them properly in good faith as judicial competence requires no less. 24
Despite the clear existence of grave abuse of discretion on the part of RTC–Br. 14, JEWM asserts technical grounds on why the CA did not err in dismissing the petition via Rule 65. It states that:
The Crisologos could have used other available remedies such as intervention under Rule 19, an appeal of the judgment, or even an annulment of judgment, which are, by all means, plain, speedy and adequate remedies in the ordinary course of law;
The Crisologos lack legal standing to file the Rule 65 petition since they were not impleaded in the Branch 14 case.
The rule is that a petition for certiorari
under Rule 65 is proper only if there is no appeal, or any plain speedy, and adequate remedy in the ordinary course of law.
In this case, no adequate recourse, at that time, was available to Spouses Crisologo, except resorting to Rule 65.
Although Intervention under Rule 19 could have been availed of, failing to use this remedy should not prejudice Spouses Crisologo. It is the duty of RTC–Br. 14, following the rule on joinder of indispensable parties, to simply recognize them, with or without any motion to intervene. Through a cursory reading of the titles, the Court would have noticed the adverse rights of Spouses Crisologo over the cancellation of any annotations in the subject TCTs.
Neither will appeal prove adequate as a remedy since only the original parties to an action can appeal.25
Here, Spouses Crisologo were never impleaded. Hence, they could not have utilized appeal as they never possessed the required legal standing in the first place.
And even if the Court assumes the existence of the legal standing to appeal, it must be remembered that the questioned orders were interlocutory in character and, as such, Spouses Crisologo would have to wait, for the review by appeal, until the rendition of the judgment on the merits, which at that time may not be coming as speedy as practicable. While waiting, Spouses Crisologo would have to endure the denial of their right, as indispensable parties, to participate in a proceeding in which their indispensability was obvious. Indeed, appeal cannot constitute an adequate, speedy and plain remedy.
The same is also true if recourse to Annulment of Judgment under Rule 47 is made since this remedy presupposes a final judgment already rendered by a trial court.
At any rate, the remedy against an interlocutory order, not subject of an appeal, is an appropriate special civil action under Rule 65, provided that the interlocutory order is rendered without or in excess of jurisdiction or with grave abuse of discretion. Only then is certiorari
under Rule 65 allowed to be resorted to.26
This takes particular relevance in this case where, as previously discussed, RTC–Br. 14 acted with grave abuse of discretion in not recognizing Spouses Crisologo as indispensable parties to the pertinent action.
Based on the above, recourse to the CA via Rule 65 would have already been proper, except for one last issue, that is, Spouses Crisologo’s legal standing to file the same. JEWM
cites DBP v. COA27
where the Court held:
The petition for certiorari under Rule 65, however, is not available to any person who feels injured by the decision of a tribunal, board or officer exercising judicial or quasi judicial functions. The ‘person aggrieved’ under Section 1 of Rule 65 who can avail of the special civil action of certiorari pertains only to one who was a party in the proceedings before the court a quo, or in this case before the COA. To hold otherwise would open the courts to numerous and endless litigations.
Under normal circumstances, JEWM would be correct in their averment that the lack of legal standing on the part of Spouses Crisologo in the case before RTC–Br. 14 prevents the latter’s recourse via Rule 65.
This case, however, is an exception. In many instances, the Court has ruled that technical rules of procedures should be used to promote, not frustrate the cause of justice. Rules of procedure are tools designed not to thwart but to facilitate the attainment of justice; thus, their strict and rigid application may, for good and deserving reasons, have to give way to, and be subordinated by, the need to aptly dispense substantial justice in the normal cause. 28
Be it noted that the effect of their non–participation as indispensable parties is to preclude the judgment, orders and the proceedings from attaining finality. Time and again, the Court has ruled that the absence of an indispensable party renders all subsequent actions of the court null and void for want of authority to act, not only as to the absent parties but even to those present. Consequently, the proceedings before RTC–Br. 14 were null and void including the assailed orders, which may be “ignored wherever and whenever it exhibits its head
To turn a blind eye to the said nullity and, in turn, rule as improper the recourse to Rule 65 by the lack of legal standing is to prolong the denial of due process to the persons whose interests are indispensible to the final disposition of the case. It will only result in a protracted litigation as Spouses Crisologo will be forced to rely on a petition for the annulment of judgment before the CA (as the last remaining remedy), which may again reach this Court. To prevent multiplicity of suits and to expedite the swift administration of justice, the CA should have applied liberality by striking down the assailed orders despite the lack of legal standing on the part of Spouses Crisologo to file the Rule 65 petition before it. Besides, this lacking requirement, of which Spouses Crisologo were not even at fault, is precisely the reason why this controversy arose.
All told, the CA erred in dismissing the amended petition filed before it and in not finding grave abuse of discretion on the part of RTC–Br. 14.WHEREFORE
, the petition is GRANTED
. The May 6, 2011 Decision of the Court of Appeals is NULLIFIED
and SET ASIDE
. The September 27, 2010, October 7, 2010 and November 9, 2010 Orders of the Regional Trial Court, Branch 14, Davao City, are likewise NULLIFIED
and SET ASID
E. Civil Case No. 33,551–2010 is hereby REMANDED
to the trial court for further proceedings. The respondent is ordered to implead all parties whose annotations appear at the back of Transfer Certificate of Title Nos. 325675 and 325676.SO ORDERED.Velasco, Jr., (Chairperson), Peralta, Bersamin
and Leonen, JJ.
* Designated Acting Member in lieu of Associate Justice Roberto A. Abad, per Special Order No. 1640 dated February 19, 2014.
1Rollo, pp. 26–36. Penned by Associate Justice Rodrigo F. Lim, Jr., with Associate Justice Pamela Ann Abella Maxino and Associate Justice Zenaida T. Galapate–Laguilles, concurring.
2 Id. at 133–137.
3 Id. at 141.
4 Id. at 142–143.
5 Dated November 15, 2010.
6Rollo, pp. 146–159.
7 Id. at 175–177. Penned by Judge George E. Omelio.
8 Id. at 177.
9 Id. at 36.
10 Id. at 11.
11 325 Phil. 120 (1996).
12Rollo, pp. 241–262.
13 Id. at 335–340.
14 Id. at 338.
15 Entitled as “Amending and Codifying the Laws relative to Registration of Property and for other purposes.”
16 135 Phil. 44 (1968).
17 Rule 3, Rules of Court.
18Moldes v. Villanueva, 505 Phil. 767 (2005).
19 A.M. No. RTJ–12–2321, October 3, 2012, 682 SCRA 154.
20 A.M. No. RTJ–12–2321, October 3, 2012, 682 SCRA 192–193.
21Crisologo v. Omelio, supra note 19, at 182.
22 A.M. No. RTJ–10–2216, June 26, 2012,674 SCRA 477.
23Nationwide Security and Allied Services, Inc. v. Court of Appeals, 580 Phil. 135, 140 (2008).
24Enriquez v. Judge Caminade, 519 Phil. 781 (2006), citing Abbariao v. Beltran, 505 Phil. 510 (2005).
25Spouses Leynes v. Former Tenth Division of the Court of Appeals, et. al., G.R. No. 154462, January 19, 2011,640 SCRA 25, 40.
26Pahila–Garrido v. Tortogo, G.R. No. 156358, August 17, 2011, 655 SCRA 553, 567–568, citing 1F Regalado, Remedial Law Compendium 540 (8th revised ed.).
27 467 Phil. 62 (2004).
28Santos v. Litton Mills, Incorporated, G.R. No. 170646, June 22, 2011, 652 SCRA 510. citing Fiel v. Kris Security Systems, Inc., 448 Phil.657, 662 (2003).
29Buena v. Sapnay, 116 Phil. 1023 (1962), citing Banco Español–Filipino v. Palanca, 37 Phil. 921(1918); Lipana v. Court of First Instance of Cavite, 74 Phil. 18 (1942)