CivilPro Cases

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Republic of the Philippines

SUPREME COURTManila

G.R. No. 94005. April 6, 1993.

LUISA LYON NUAL, herein represented by ALBERT NUAL, and ANITA NUAL HORMIGOS, petitioners,vs.THE COURT OF APPEALS and EMMA LYON DE LEON in her behalf and as guardian ad litem of the minorsHELEN SABARRE and KENNY SABARRE, EDUARDO GUZMAN, MERCEDEZ LYON TAUPAN, WILFREDOGUZMAN, MALLY LYON ENCARNACION and DORA LYON DELAS PEAS, respondents.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; ONCE IT BECOMES FINAL, MAY NO LONGER BEMODIFIED IN ANY RESPECT; EXCEPTIONS. In the case of Manning International Corporation v. NLRC(195 SCRA 155, 161 [1991]) We held that ". . ., nothing is more settled in the law than that when a final

judgment becomes executory, it thereby becomes immutable and unalterable. The judgment may no longer bemodified in any respect, even if the modification is meant to correct what is perceived to be an erroneousconclusion of fact or law, and regardless of whether the modification is attempted to be made by the Courtrendering it or by the highest Court of land. The only recognized exceptions are the correction of clericalerrors or the making of so-called nunc pro tunc entries which cause no prejudice to any party, and, of course

where the judgment is void." Furthermore, "(a)ny amendment or alteration which substantially affects a finaand executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for thatpurpose."

2. ID.; ID.; ID.; ID.; REMEDY OF AGGRIEVED PARTY. In the case at bar, the decision of the trial court inCivil Case No. 872 has become final and executory. Thus, upon its finality, the trial judge lost his jurisdiction

over the case. Consequently, any modification that he would make, as in this case, the inclusion of Mary LyonMartin would be in excess of his authority. The remedy of Mary Lyon Martin is to file an independent suitagainst the parties in Civil Case No. 872 and all other heirs for her share in the subject property, in order thatall the parties in interest can prove their respective claims.

D E C I S I O N

CAMPOS, JR., J p:

This is a petition for review on certiorari of the decision ** dated February 22, 1990 of the Court of Appeals inCA-G.R. CV No. 14889 entitled "Emma Lyon de Leon, et al., plaintiffs-appellees versus Luisa Lyon Nual, nowdeceased herein represented by Albert Nual, et al., defendants appellants," dismissing petitioners' appeal

and affirming the trial court's order *** dated January 9, 1987 for the inclusion of Mary Lyon Martin as one ofthe heirs who shall benefit from the partition.

The facts as culled from the records of the case are as follows.

This case originated from a suit docketed as Civil Case No. 872 filed by Emma Lyon de Leon in her behalf andas guardian ad litem of the minors Helen Sabarre and Kenny Sabarre, Eduardo Guzman, Mercedes Lyon

Taupan, Wilfredo Guzman, Mally Lyon Encarnacion and Dona Lyon de las Peas, (herein private respondentsagainst Luisa Lyon Nual, now deceased and herein represented by her heirs, Albert Nual and Anita NualHormigos (herein petitioners), for partition and accounting of a parcel of land located in Isabela, Basilan City


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Subject parcel of land was formerly owned by Frank C. Lyon and May Ekstrom Lyon, deceased parents ofHelen, Dona, Luisa, Mary, Frank and William James. Private respondents claimed that said parcel of landformerly covered by Transfer Certificate of Title No. 3141 in the name of Frank C. Lyon, has been inpossession of petitioner Luisa Lyon Nual since 1946 and that she made no accounting of the income derivedtherefrom, despite demands made by private respondents for the partition and delivery of their shares.

On December 17, 1974, after trial and hearing, the then Court of First Instance (now Regional Trial courtrendered its judgment in favor of private respondents and ordered the partition of the property but dismissing

private respondents' complaint for accounting. The dispositive portion of the judgment reads as follows:

"WHEREFORE, judgment is hereby rendered ordering the partition of the land covered by Transfer Certificateof Title No. 3141 among the plaintiffs and defendant. The parties shall make partition among themselves byproper instruments of conveyance, subject to the Court's confirmation, should the parties be unable to agreeon the partition, the court shall appoint commissioners to make the partition, commanding them to set off tosuch party in interest such part and proportion of the property as the Court shall direct. Defendant is furtherordered to pay plaintiffs attorney's fees in the sum of P2,000.00." 1

On July 30, 1982, the order of partition was affirmed in toto by the Court of Appeals in CA-G.R. No. 57265-RThe case was remanded to the court of origin for the ordered partition. 2

On May 17, 1984, an order for the issuance of the writ of execution was issued by the court a quo. 3

On July 17, 1984, Mary Lyon Martin, daughter of the late Frank C. Lyon and Mary Ekstrom Lyon, assisted byher counsel filed a motion to quash the order of execution with preliminary injunction. In her motion, shecontends that not being a party to the above-entitled case her rights, interests, ownership and participationover the land should not be affected by a judgment in the said case; that the order of execution isunenforceable insofar as her share, right, ownership and participation is concerned, said share not having

been brought within the Jurisdiction of the court a quo. She further invokes Section 12, Rule 69 of the Rulesof Court. 4

On June 26, 1985, the trial court issued an order revoking the appointment of the three commissioners and

in lieu thereof, ordered the issuance of a writ of execution. 5

On February 4, 1986, the said court issued an order appointing a Board of Commissioners to effect thepartition of the contested property. 6

On May 28, 1986, the trial court dismissed the motion to quash order of execution with preliminaryinjunction filed by Mary Lyon Martin and directed the partition of the property among the original partyplaintiffs and defendants. 7

On September 24, 1986, the Commissioners manifested to the trial court that in view of the fact that thename of Mary Lyon Martin also appears in the Transfer Certificate of Title, she could therefore be construed

as one of the heirs. A ruling from the trial court was then sought. 8

On September 29, 1986, the lower court issued an order directing the counsel of Emma Lyon de Leon tofurnish the court within five days from receipt thereof all the names the of heirs entitled to share in thepartition of the subject property. 9

On October 1, 1986, the petitioners filed a manifestation praying that the court issue an order directing thepartition of the property in consonance the decision dated December 17, 1974 of the trial court the order ofsaid court dated May 28, 1986. 10


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Without ruling on the manifestation, the lower court issued an order directing the Board of Commissioners toimmediately partition the said property. 11

On January 3, 1987, the private respondents filed motion for clarification as to whether the partition ofproperty is to be confined merely among the party plaintiffs and defendants, to the exclusion of Mary LyonMartin. 12

On January 9, 1987, the lower court issued the assailed order directing the inclusion of Mary Lyon Martin as

co-owner with a share in the partition of the property, to wit:

"After a perusal of the decision of the Court of Appeals CA-G.R. No. 57265-R, where this case was appealed bythe unsatisfied parties, there is a finding that Mary now Mary Lyon Martin is one of the legitimate children ofFrank C. Lyon and Mary Ekstrom. (Page 3 of the decision).

In view of this finding, it would be unfair and unjust if she would be left out in the partition of this propertynow undertaking (sic) by the said court appointed commissioners.

WHEREFORE, premises considered, the court appointed commissioners is hereby directed to include MaryLyon Martin as co-owner in the said property subject of partition with the corresponding shares adjudicated

to her.

SO ORDERED." 13

Petitioners' motion for reconsideration 14 of the aforesaid order was denied by the trial court. 15

On February 22, 1990 the Court of Appeals rendered its decision dismissing petitioners' appeal, thedispositive portion of which reads as follows:

"WHEREFORE, premises considered, there being no legal impediment to the inclusion of Mary Lyon Martin bythe court-appointed Board of Commissioners as one of the heirs who shall benefit from the partition, theinstant appeal is DISMISSED for lack of merit.

NO COSTS.

SO ORDERED." 16

Petitioners' motion for reconsideration was denied on June 6, 1990. 17

Petitioners filed this petition for review alleging that the Court of Appeals has decided questions of substancecontrary to law and the applicable decisions of this Court, for the following reasons:

"1.) BY SUSTAINING THE ORDER OF THE REGIONAL TRIAL COURT DIRECTING THE COURT APPOINTED

BOARD OF COMMISSIONERS TO INCLUDE MARY L. MARTIN TO SHARE IN THE PARTITION OF THEPROPERTY IN LITIGATION DESPITE THE FACT, OVER WHICH THERE IS NO DISPUTE, THAT SHE HAS NOTLITIGATED EITHER AS A PARTY PLAINTIFF OR DEFENDANT IN CIVIL CASE NO. 872, IT HAS REFUSED TORECOGNIZE THAT THE REGIONAL TRIAL COURT HAS NO JURISDICTION TO AMEND OR MODIFY THE

JUDGMENT IN CIVIL CASE NO. 872 AND THE REGIONAL TRIAL COURT'S ORDER DATED 28 MAY 1986WHICH HAS BECOME FINAL AND EXECUTORY.

2.) WHEN THE COURT OF APPEALS HAS CATEGORICALLY STATED THAT MARY L. MARTIN "NEVERLITIGATED AS ONE OF THE PLAINTIFFS IN SAID CASE," AND HER ONLY PARTICIPATION THEREIN WASSIMPLY CONFINED "AS A WITNESS FOR DEFENDANT-SISTER LUISA LY ON NUAL," AND TO ALLOW HER

TO SHARE IN THE PARTITION THIS LATE WITHOUT REQUIRING A PROCEEDING WHERE THE PARTIES


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COULD PROVE THEIR RESPECTIVE CLAIMS, IS TANTAMOUNT TO DENYING THE NUALS OF THEIRRIGHT TO DUE PROCESS. 18

The crux of this case iswhether of not the trial court may order the inclusion of Mary L. Martin as co-heirentitled to participate in the partition of the property considering that she was neither a party plaintiff nor aparty defendant in Civil Case No. 872 for partition and accounting of the aforesaid property and that thedecision rendered in said case has long become final and executory.

Petitioners contend that the trial court's decision dated December 14, 1974 in Civil Case No. 872 ordering thepartition of the parcel of land covered by Transfer Certificate of Title No. 3141 among plaintiffs and defendantshas long become final and executory. Hence the trial court has no jurisdiction to issue the questioned Orderdated January 9, 1987 ordering the Board of Commissioners to include Mary Lyon Martin to share in thepartition of said property despite the fact that she was not a party to the said case. Said Order, thereforeresulted in an amendment or modification of its decision rendered in Civil Case No. 872.

We find merit in the instant petition.

In the ease of Manning International Corporation v. NLRC, 19 We held that ". . .,nothing is more settled in thelaw than that when a final judgment becomes executory, it thereby becomes immutable and unalterable. The

judgment may no longer be modified in any respect,even if the modification is meant to correct what isperceived to be an erroneous conclusion of fact or law, and regardless of whether the modification isattempted to be made by the Court rendering it or by the highest Court of land. The only recognizedexceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries which causeno prejudice to any party, and, of course, where the judgment is void."

Furthermore, "(a)ny amendment. or alteration which substantially affects a final and executory judgment isnull and void for lack of jurisdiction, including the entire proceedings held for that purpose." 20

In the case at bar, the decision of the trial court in Civil Case No. 872has become final and executory

Thus, upon its finality, the trial judge lost his jurisdiction over the case. Consequently, any

modification that he would make, as in this case, the inclusion of Mary Lyon Martin would be in excess

of his authority.

Theremedy of Mary Lyon Martin is to file an independent suit against the parties in Civil Case No. 872 and alother heirs for her share in the subject property, in order that all the parties in interest can prove theirrespective claims.

WHEREFORE, the petition is GRANTED. The Order dated January 9, 1987 of the trial Court as affirmed bythe Court of Appeals is hereby REVERSED and SET ASIDE. The decision of the trial court dated December17, 1974 in Civil Case No. 872 is hereby REINSTATED.

SO ORDERED.


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SECOND DIVISION

[G.R. No. 81835 : December 20, 1990.]

192 SCRA 469

ROMEO J. ORDOEZ, Petitioner, vs.THE HON. ALFREDO J. GUSTILO, in his capacity as presiding

judge of Regional Trial Court of Cavite, Branch XVI, Cavite City, Municipality of Rosario, Cavite,

former Mayor Calixto D. Enriquez of Rosario, Cavite, and Valeriano Espiritu of Mabolo, Bacoor, Cavite,

Respondents.

D E C I S I O N

PARAS,J.:

This is a petition forCertiorariwhich seeks to annul, on the ground of grave abuse of discretion, the (1)Decision dated May 24, 1985; (2) Order dated May 27, 1987 and (3) Order dated December 24, 1987, allissued in Civil Case No. N-4367 of the Regional Trial Court of Cavite, Branch XVI, Cavite City entitled"Valeriano Espiritu v. Municipality of Rosario, Province of Cavite and Hon. Calixto D. Enriquez in his capacityas Municipal Mayor of Rosario, Cavite.

The pertinent background facts are:

Valeriano Espiritu, herein private respondent filed on April 22, 1983, a complaint for Specific Performanceand Damages, against respondents Municipality of Rosario, Cavite and Calixto Enriquez, the latter in hiscapacity as Mayor of said municipality, to enforce their agreement contained in a Reclamation Contract. In hiscomplaint, Espiritu prayed that the Municipality of Rosario, together with Enriquez, be ordered to convey tohim 323,996 square meters of the reclaimed portion of the foreshore land of the town. Espiritu filed the actionin his capacity as the assignee of the Salinas Development Corporation (SADECO), the entity which reclaimedthe area in question by virtue of a Reclamation Contract entered into between it and the Municipality ofRosario, represented by Enriquez as Municipal Mayor. The case was docketed as Civil Case No. 4367 of theRegional Trial Court of Cavite, Fourth Judicial Region, Branch XVI, Cavite City.

In its answer, defendant municipality resisted plaintiff's claim stating that it was barred by the statute of

limitation; the contract has been substantially amended, modified and supplemented; and plaintiff has notperformed his reciprocal obligation.- nad

The barangay captain of Tejeros Convention, Rosario, Cavite, herein petitioner Romeo J. Ordoez, togetherwith seven (7) other municipal and barangay officials intervened, and in their Answer-in-Intervention, theyalleged that no actual reclamation was done by the plaintiff and the area being claimed by the plaintiff cameabout by natural accretion; the reclamation contract between the contractor and the municipality is either

void, voidable or disadvantageous to the defendant municipality.

The issues having been joined the trial court set the case for the mandatory pre-trial conference on November15, 1984.

At this scheduled pre-trial conference, all the litigants including the intervenors, with their respective counsel

were present. In said conference, plaintiff Espiritu and defendant municipality, manifested to the court thathaving arrived at a satisfactory settlement, they would submit a compromise agreement at a latter date.

On the other hand, the intervenors asked the court that they be allowed to present their evidence to provetheir defense asserted in their answer-in-intervention. For the said purpose, hearing was held on December13, 1984 wherein Ernesto Andico, vice-mayor testified. Another hearing was also held on January 24, 1985

where Vice-Governor Jose M. Ricafrente, Jr. of the Province of Cavite, and petitioner's counsel in the instantcase, also testified.

On May 20, 1985, the principal litigants filed with respondent trial court their promised compromiseagreement. The parties agreed that 208,664 square meters of the reclaimed area were to be alloted to theplaintiff and 211,311 square meters thereof were to be given to defendant municipality.


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On May 24, 1985, the trial court approved the compromise agreement and rendered a decision in accordancetherewith. The intervenors received their copy of the decision on September 19, 1985 thru Vice-Mayor Ernesto

Andico. The decision being already final, it was duly executed to the satisfaction of the principal litigants.

On October 17, 1985 and July 2, 1987 additional hearings were held where the intervenors presented three(3) additional witnesses.

On June 24, 1987, the intervenors filed a motion to set aside the compromise agreement dated May 15, 1985This was denied by the trial court, thru respondent Judge Alfredo Gustilo (the former presiding judge, Judge

Alejandro Silapan having already retired) in its Order dated November 27, 1987, the pertinent portion ofwhich reads as follows:

"It appears that on May 24, 1985, the former Presiding Judge of this Court approved the said CompromiseAgreement and rendered a judgment on the basis thereof. It is settled that a judgment approving acompromise agreement is final and immediately executory. (Samonte v. Samonte, 64 SCRA 524). The motionin question therefore cannot be granted as it has the effect of annulling the judgment of this Court which hasalready become final and, according to the plaintiff, already executed.

"The Motion to Set Aside Compromise Agreement cannot even be considered as a motion for reconsiderationbecause the Court can no longer set aside, amend or modify its judgment which has become final. Neither canthe said motion be deemed as a petition for relief under Rule 38 of the Rules of Court, since to set aside a

judgment based upon a compromise agreement under the said Rule,the petition for relief must be filed not

later than six (6) months from the date it was rendered.(Bodiongan v. Ceniza, 102 Phil. 750). The decision ofthe Court based on the Compromise Agreement was rendered on May 24, 1985. On the other hand, thepresent Motion to Set Aside Compromise Agreement was filed only on June 24, 1987. Moreover, under Section3 of Rule 38,the petition for relief from judgment should be filed within 60 days after the petitioner learns ofthe judgment sought to be set aside. The intervenor in this case received a copy of the decision based on theCompromise Agreement on September 19, 1985. If the instant motion be construed as an independent actionto annul a judgment, this Court would not have jurisdiction over it inasmuch as under Section 9 of BatasPambansa Blg. 129, the Judiciary Reorganization Act of 1980, an action for the annulment of a judgment ofthe Regional Trial Court falls under the exclusive original jurisdiction of the Court of Appeals.

Additionally, the intervenors have not convincingly shown that defendant Mayor Enriquez was not authorizedto sign the Compromise Agreement in behalf of the Municipality of Rosario. On the contrary, the Mayor has in

his favor the presumption that official duty has been regularly performed. (Sec. 5 [m], Rule 131, Rules ofCourt.) Likewise, they failed to sufficiently explain why and how the terms and conditions of the Compromise

Agreement have contravened the law, morals, good customs and public policy." (pp. 41-42, Rollo).

Meanwhile, on August 10, 1987, plaintiff Espiritu filed a manifestation and Motion praying that theproceedings be terminated and that the case be considered closed, which motion respondent judge granted inhis Order dated December 24, 1987. The pertinent portion of the said Order reads

"In support of his motion to terminate the proceedings, the plaintiff argued that further trial in this case willbe an exercise in futility, considering that the issues raised by the intervenors have become moot andacademic in view of the decision of the Court based on the Compromise Agreement submitted by the plaintiffand the defendants.

"This contention appears to be well taken. The decision of the Court based on the Compromise Agreement hasin effect resolved the issues raised by the intervenors, i.e., whether the reclamation contract entered into

between the town of Rosario and the Salinas Development Corporation, the predecessors-in-interest of theplaintiff, is null and void; and whether or not there was actual reclamation done by the said entity. This is so,for the decision of the Court based on the Compromise Agreement has impliedly recognized the validity of thesaid reclamation contract and the fact that the tract of land divided between the plaintiff and the defendantmunicipality of Rosario pursuant to the Compromise Agreement was the product of the reclamation effortsundertaken by the Salinas Development Corporation, which subsequently assigned its rights to the plaintiff.

"The continuation of the trial in this case will be useless. Should the intervenors fail to adduce evidenceshowing that the reclamation contract was null and void and that no actual reclamation was undertaken by


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the Salinas Development Corporation, the correctness and propriety of the decision of the Court based on theCompromise Agreement would be strengthened. Even if they would succeed in proving that the reclamationcontract was null and void and that the area in question came into being through the natural action of thesea and not through the reclamation done by the Salinas Development Corporation, still the said decisioncould no longer be set aside, inasmuch as it has already become final and, according to the plaintiff, alreadyexecuted. The continuation of the reception of the evidence for the intervenors clearly appears to serve nopurpose at all.

x x x

"WHEREFORE, the Manifestation and Motion dated August 6, 1987, filed by the plaintiff, is grantedand the trial of this case is declared terminated and this case is considered closed.

"This order modifies the pre-trial order dated November 15, 1984 of this Court, insofar as the saidorder has allowed the intervenors to adduce evidence in support of their contention that the land inquestion was not reclaimed by the plaintiff or his predecessor-in-interest but the product of accretionand that the reclamation contract between the defendants and the Salinas Development Corporation

was null and void.: rd

"SO ORDERED." (pp. 45-47, Rollo)

In assailing the aforementioned Decision and Orders of the trial court, petitioner Romeo Ordoez (one of the

intervenors, the other seven intervenors did not join him in this petition) raises the following issues, to wit:1. Whether or not the lower court erred in stopping/preventing the intervenors from further presenting theirevidence in support of their Answer-in-Intervention.

2. Whether or not the lower court erred in approving the compromise agreement of May 20, 1985 andrendering a decision based thereon dated May 24, 1985, inspite of the clear lack of authority on the part ofrespondent Calixto D. Enriquez to bind the Municipality of Rosario because of the absence of an enablingordinance from the Sangguniang Bayan of Rosario, Cavite empowering him to enter into said compromiseagreement.

We answer both issues in the negative.

Intervention is defined as a "proceeding in a suit or action by which a third person is permitted by the court

to make himself a party, either joining plaintiff in claiming what is sought by the complaint, or uniting withdefendant in resisting the claims of plaintiff, or demanding something adversely to both of them; the act orproceeding by which a third person becomes a party in a suit pending between others; the admission, by leaveof court, of a person not an original party to pending legal proceedings, by which such person becomes aparty thereto for the protection of some right or interest alleged by him to be affected by such proceedings."(Metropolitan Bank & Trust Co. v. the Presiding Judge, RTC Manila, Branch 39, et al., G.R. No. 89909,September 21, 1990)

An intervention has been regarded as "merely collateral or accessory or ancillary to the principal action andnot an independent proceeding; an interlocutory proceeding dependent on or subsidiary to, the case betweenthe original parties." (Francisco, Rules of Court, Vol. 1) The main action having ceased to exist, there is nopending proceeding whereon the intervention may be based. (Barangay Matictic v. Elbinias, 148 SCRA 83, 89)

As we recently ruled in Camacho v. Hon. Court of Appeals, et al., G.R. No. 79564, December 24, 1989

"There is no question that intervention is only collateral or ancillary to the main action. Hence, it waspreviously ruled that the final dismissal of the principal action results in the dismissal of saidancillary action." (Emphasis supplied)

A judgment approving a compromise agreement is final and immediately executory. (Samonte v. Samonte, 64SCRA 524) All pending issues will become moot and academic once a compromise submitted by the parties isapproved by the trial court. (Berenguer v. Arcangel, 149 SCRA 164)

In the case at bar, the compromise agreement submitted by the plaintiff and the defendants and the decisionapproving the same recognized the validity of the Reclamation Contract and the fact that the tract of land


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involved was the result of the reclamation done by SADECO. In their answer-in-intervention, petitioner allegesthat there was no reclamation undertaken by SADECO, that the land in question was the result of accretionfrom the sea and that the Reclamation Contract is null and void. Clearly then, the compromise agreement andthe decision had in effect resolved the aforementioned issues raised by the intervenors. As aptly observed bythe trial court, the continuation of the reception of the intervenors' evidence would serve no purpose at allShould intervenors fail to prove that the Reclamation Contract is null and void and that no actual reclamation

was made, the correctness and propriety of the decision based on the compromise agreement would bestrengthened. Upon the other hand, should they succeed in proving that the contract is null and void, and

that the area in question came into being through the natural action of the sea, still the decision of the lowercourt could no longer be set aside, inasmuch as it has already become final and executed.:-cralaw

There is, therefore, no merit to the claim of petitioner that the lower court "unceremoniously terminated theproceedings" even "without the intervenors completing their evidence." (Memorandum for Petitioner, p. 140143, Rollo) Precisely, the court a quo gave credence and weight to the compromise agreement and denied theclaims of the intervenors which were controverting the theories of the plaintiff and the defendants. In other

words, due process had been accorded the intervenors. It would have been different had the court not takeninto consideration the claims of the intervenors.

The petitioner cannot claim ignorance of the filing of the compromise agreement. As can be gleaned from thepre-trial order, the intervenors were represented during the pre-trial conferences, where the plaintiff and thedefendants intimated that they would submit a compromise agreement. The intervenors did not interpose any

opposition to the manifestation of the plaintiff and defendants that they would be amicably settling theirdispute. The compromise agreement was filed in court on May 20, 1985. It was approved by the lower courton May 24, 1986. Before its approval no opposition had been filed questioning its legality. The intervenorsreceived their copy of the decision on September 19, 1985. They did not file any motion for reconsideration tosuspend its finality. It was only on June 24, 1987, or after the lapse of almost two (2) years when they filed amotion to set aside the compromise agreement. It should be emphasized at this juncture that the decision

based on the compromise agreement had long been executed.

Anent the other issue raised whether or not respondent mayor needed another authority from theSangguniang Bayan to sign the compromise agreement, suffice it to state that the mayor need not secureanother authority from the Sandiganbayan under Section 141 (c) and (i) of the Local Government Code, whichstate that

"Section 141. (1) The Mayor shall be the Chief Executive of the municipal government and shalexercise such powers, duties and functions as provided in this code and other laws. (2) He shall:

x x x

'(c) Represent the municipality in its business transactions and sign on its behalf all contractsobligations and official documents made in accordance with law or ordinance.: rd

'(i) Direct the formulation of municipal development plans and programs, and once approved bythe Sangunian Bayan, supervise and direct the execution and implementation thereof.'" (p.115, Rollo)

because the execution of the Compromise Agreement is but an act implementing the reclamation contract

duly approved by the Sangguniang Bayan.

Further, the terms and conditions of the compromise agreement are beneficial to the municipality becausethe share of Espiritu has been reduced considerably from the 80% agreed upon in the reclamation contract.

WHEREFORE, for lack of merit, the petition is DISMISSED. Costs against petitioner.

SO ORDERED.


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Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 89909 September 21, 1990

METROPOLITAN BANK AND TRUST COMPANY,petitioner,

vs.

THE PRESIDING JUDGE, REGIONAL TRIAL COURT, Manila Branch 39, RAYCOR AIRCONTROL SYSTEM,

INC. and COURT OF APPEALS,*respondent.

Balane, Barican, Cruz, Alampay Law Office for petitioner.

Bito, Lozada, Ortega & Castillo for private respondent.

REGALADO,J.:

Before the Court for review on certiorari is the decision of respondent Court of Appeals in CA-G.R. SP No.

17341, dated July 19, 1989,1dismissing petitioner's original action for certiorari and mandamus which seeks

to set aside the order of the trial court dated June 2, 1988, allowing the intervention suit therein to proceed,

and its order of January 11, 1989, admitting the amended complaint in intervention.

The proceedings in the court below from which this appeal arose, as found by respondent Court of Appeals,

are as follows:

Petitioner Metropolitan Bank and Trust Co. (Metropolitan) in whose favor a deed of chattel

mortgage was executed by Good Earth Emporium, Inc. (GEE) over certain air conditioning

units installed in the GEE building, filed a complaint for replevin against Uniwide Sales, Inc.

(Uniwide, for brevity) and the BPI Investment Corporation and several other banks collectively

called BPI-Consortium, for the recovery of the possession of the air-conditioning units or in the

event they may not be recovered, for the defendants which acquired the GEE building in an

auction sale, (to) be required, jointly and severally, to pay the plaintiff the unpaid obligations onthe units.

Per paragraph 3.11.3 of its complaint, plaintiff Metrobank alleged that the air-conditioning

units were installed on a loan of P4,900,000.00 it extended to Good Earth Emporium &

Supermarket, Inc. in its building located at Rizal Avenue, Sta. Cruz, Manila, after the land and

building had been foreclosed and purchased on June 3, 1983 at public auction by the

defendants, except Uniwide, and in order to secure repayment of the loan, a deed of chattel

mortgage was constituted over the personal properties listed in the deed which included the

airconditioning units.


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It also alleged in par. 3.11.2 of the complaint, that '(T)he loan proceeds were used by GEE to

finance the acquisition of airconditioning equipment from Reycor (sic) Air Control System, Inc.

(amounting to P4,250,000.00 and installation costs of P650,000.00) under an Agreement of

Sale dated 29 June 1984' (Annex A, Petition,Id., pp. 23-24).

The defendants filed their Answer, Uniwide on July 25, 1986 (Annex B, Petition,Id., pp. 32-48)

and the defendants (presumably the rest of the defendants), on July 14, 1986 (Annex C,

Petition,Id., pp. 3949).

On July 17, 1986, Raycor Air Control Systems, Inc. filed a motion for leave to intervene alleging

it has a direct and immediate interest on the subject matter of the litigation such that it will

either gain or lose by the direct legal operation and effect of the judgment' and attached the

'Intervention Complaint'(Annex D, Petition, Id., pp. 49-52). There was no opposition to the

motion and the intervention complaint was admitted by the lower court per its order dated

August 8, 1986. Metrobank on November 19, 1986, filed its Answer To The Intervention

Complaint (Annex E, Petition,Id., pp. 53-59).

On August 3, 1987, the lower court set the case for trial on the merits on September 15, 1987but before the date of the trial, on September 7, 1987, plaintiff Metrobank and the defendants

Uniwide and BPI Consortium, filed a motion for postponement of the scheduled hearing on

September 15, 1987 and asked for thirty (30) days from September 15 within which to submit a

compromise agreement. On March 15, 1988, plaintiff Metrobank and defendants BPI

Consortium filed a joint motion to dismiss the complaint and on March 18, 1988, the lower

court issued the order dismissing the complaint with prejudice (Annex D to Comment of Raycor

Air Control System, Inc., Rollo, p. 108).

On April 19, 1988, private respondent filed a motion for reconsideration of the order dismissing

the complaint with prejudice, claiming it was not furnished with copy of the joint motion fordismissal and that it received the order of dismissal only on April 4, 1988. On June 2, 1988,

the respondent court issued the order granting the motion for reconsideration filed by the

intervenor (Annex I, Petition,Id., p. 67) which order is now subject of present petition for

certiorari.

On August 2, 1988, private respondent filed a motion to admit amended complaint (Annex F,

Intervenor's Comment,Id., p. 110) and attached the Amended Intervention Complaint (Annex

J, Petition,Id., pp. 68-73) to the motion. To this motion, plaintiff Metrobank filed an opposition

(Annex K, Petition,Id., pp. 71-76) and after the intervenor had filed their Reply (Annex L,

Petition,Id., pp. 77-81) and the plaintiff a Rejoinder (Annex M, Petition,Id., pp. 82-87), onJanuary 11, 1989, the respondent court issued the order admitting the amended complaint in

intervention (Annex N, Petition,Id., p. 88). This is the other order which is subject of the

petition for certiorari.

On February 9, 1989, plaintiff Metrobank filed a motion for extension for 15 days or until

February 24, 1988 within which to file its answer to the amended complaint in intervention

and the intervenor on February 17, 1989 filed an opposition to Metrobank's motion and at the

same time moved that Metrobank be declared in default on the amended complaint in


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intervention. The respondent court granted Metrobank's motion and on February 18, 1989,

Metrobank filed its Answer to the Amended Complaint in Intervention with Counterclaim.2

On April 14, 1989, petitioner filed a petition for certiorari and mandamus with respondent Court of Appeals

contending that the lower court committed a grave abuse of discretion amounting to lack of jurisdiction in

allowing, per its order of June 2, 1988, the intervention suit to survive despite the dismissal of the main

action and also in admitting, per its order of January 11, 1989, the amended complaint in intervention.3

As earlier stated, the Court of Appeals found no merit in the petition and dismissed the same on July 19,

1989. Petitioner is now before us raising the same issues and arguments. We agree with the Court of Appeals

that the lower court was innocent of any grave abuse of discretion in issuing the orders complained of.

The contention of petitioner that the order of the lower court, dated June 2, 1988, has the effect of allowing

the intervention suit to prosper despite the dismissal of the main action obviously cannot be upheld.

There is here no final dismissal of the main case. The aforementioned order of the lower court has the effect

not only of allowing the intervention suit to proceed but also of vacating its previous order of dismissal. The

reinstatement of the case in order to try and determine the claims and rights of the intervenor is proper. Thejoint motion of therein plaintiff and the original defendants to dismiss the case, without notice to and consent

of the intervenor, has the effect of putting to rest only the respective claims of the said original partiesinter

sebut the same cannot in any way affect the claim of private respondent which was allowed by the court to

intervene without opposition from the original parties. A resume of pertinent rulings on the matter would be

in order.

Intervention is defined as "a proceeding in a suit or action by which a third person is permitted by the court

to make himself a party, either joining plaintiff in claiming what is sought by the complaint, or uniting with

defendant in resisting the claims of plaintiff, or demanding something adversely to both of them; the act or

proceeding by which a third person becomes a party in a suit pending between others; the admission, by leaveof court, of a person not an original party to pending legal proceedings, by which such person becomes a

party thereto for the protection of some right of interest alleged by him to be affected by such proceedings."4

Any person who has or claims an interest in the matter in litigation, in the success of either of the parties to

an action, or against both, may intervene in such action, and when he has become a party thereto it is error

for the court to dismiss the action, including the intervention suit on the basis of an agreement between the

original parties to the action. Any settlement made by the plaintiff and the defendant is necessarily ineffective

unless the intervenor is a party to it.5

By the very definition of "intervention," the intervenor is a party to the action as the original parties and tomake his right effectual he must necessarily have the same power as the original parties, subject to the

authority of the court reasonably to control the proceedings in the case.6

Having been permitted to become a party in order to better protect his interests, an intervenor is entitled to

have the issues raised between him and the original parties tried and determined.7He had submitted himself

and his cause of action to the jurisdiction of the court and was entitled to relief as though he were himself a

party in the action.8


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After the intervenor has appeared in the action, the plaintiff has no absolute right to put the intervenor out of

court by the dismissal of the action. The parties to the original suit have no power to waive or otherwise annul

the substantial rights of the intervenor. When an intervening petition has been filed, a plaintiff may not

dismiss the action in any respect to the prejudice of the intervenor.9

It has even been held that the simple fact that the trial court properly dismissed plaintiff s action does not

require dismissal of the action of the intervenor.10An intervenor has the right to claim the benefit of the

original suit and to prosecute it to judgment. The right cannot be defeated by dismissal of the suit by theplaintiff after the filing of the petition and notice thereof to the other parties. A person who has an interest in

the subject matter of the action has the right, on his own motion, to intervene and become a party to the suit,

and even after the complaint has been dismissed, may proceed to have any actual controversy established by

the pleadings determined in such action. The trial court's dismissal of plaintiffs action does not require

dismissal of the action of the intervenor.11

The intervenor in a pending case is entitled to be heard like any other party.12A claim in intervention that

seeks affirmative relief prevents a plaintiff from taking a voluntary dismissal of the main action.13Where a

complaint in intervention was filed before plaintiff's action had been expressly dismissed, the intervenor's

complaint was not subject to dismissal on the ground that no action was pending, since dismissal of plaintiffs

action did not affect the rights of the intervenor or affect the dismissal of intervenor's complaint.14An

intervenor's petition showing it to be entitled to affirmative relief will be preserved and heard regardless of the

disposition of the principal action.15

As we ruled inCamacho vs. Hon. Court of Appeals, et al.,16the rationale whereof is clearly applicable to the

present controversy-

There is no question that intervention is only collateral or ancillary to the main action. Hence,

it was previously ruled that the final dismissal of the principal action results in the dismissal

of said ancillary action. The main action having ceased to exist, there is no pending proceeding

whereon the intervention may be based. In the case at bar, however, there was no such final or

complete dismissal but rather an approval of a compromise agreement which was embodied in

what was specifically designated as a 'Partial Decision' affecting only the interests of herein

petitioner and the defendant in said case but not those of her co-plaintiff municipality and the

intervenor. The clear intent of the court below in making the partial decision is to make a

reservation to determine the rights of the intervenor and, presumably, the plaintiff

municipality. There may be nothing much left to be done with respect to the main case but as

far as the proceedings in the trial court are concerned, the controversy therein has not been

fully settled and the disposition of the case is definitely incomplete.

Moreover, to require private respondent to refile another case for the settlement of its claim will result in

unnecessary delay and expenses and will entail multiplicity of suits and, therefore, defeat the very purpose of

intervention which is to hear and determine at the same time all conflicting claims which may be made on the

subject matter in litigation, and to expedite litigation and settle in one action and by a single judgment the

whole controversy among the persons involved.17

On the propriety of the order dated January 11, 1988, admitting private respondent's amended complaint in

intervention, we sustain respondent Court of Appeals in upholding the same. Incidentally, it will be recalled


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that petitioner was granted the opportunity to file, as it did file, its answer to the amended complaint in

intervention and it even interposed a counterclaim in the process.

Now, the granting of leave to file an amended pleading is a matter particularly addressed to the sound

discretion of the trial court and that discretion is broad, subject only to the limitations that the amendments

should not substantially change the cause of action or alter the theory of the case or that it was made to delay

the action.18Once exercised, that discretion will not be disturbed on appeal, except in case of abuse thereof.19

In the case at bar, a reading of the amended complaint in intervention shows that it merely supplements an

incomplete allegation of the cause of action stated in the original complaint so as to submit the real matter in

dispute. Contrary to petitioner's contention, it does not substantially change intervenor's cause of action or

alter the theory of the case, hence its allowance is in order.

As aptly stated by the Court of Appeals:

In both the Intervention Complaint and the Amended Complaint in Intervention, the private

respondent seeks the payment to it of the amount of P150,000.00 which should have been paid

to it from out of the P650,000.00 which the petitioner as plaintiff in CC 86-3618 had referredto in pars. 3.11.2 and 3.11.3 of its complaint as cost of installation of the airconditioning units

under the agreement of sale (between plaintiff Metrobank and GEE Inc). dated June 29, 1984

and so basically, the Amended Complaint In Intervention did not really detract or depart from

that basic claim.20

In determining whether a different cause of action is introduced by amendments to the complaint, what is to

be ascertained is whether the defendant shall be required to answer for a liability or legal obligation wholly

different from that which was stated in the original complaint. An amendment will not be considered as

stating a new cause of action if the facts alleged in the amended complaint show substantially the same

wrong with respect to the same transaction, or if what are alleged refer to the same matter but are more fullyand differently stated, or where averments which were implied are made in expressed terms, and the subject

of the controversy or the liability sought to be enforced remains the same.21

The courts should be liberal in allowing amendments to pleadings to avoid multiplicity of suits and in order

that the real controversies between the parties are presented, their rights determined and the case decided on

the merits without unnecessary delay.22This liberality is greatest in the early stages of a lawsuit,23especially

in this case where the amendment to the complaint in intervention was made before trial of the case thereby

giving petitioner all the time allowed by law to answer and to prepare for trial.

On the issue regarding the propriety of the intervention, suffice it to state that petitioner's failure to interposea timely objection when the motion for leave to intervene was filed by private respondent bars the former from

belatedly questioning the validity of the same on appeal. In any event, the trial court duly considered the

circumstances and granted the motion, which order was not seasonably questioned by petitioner thus

evincing its approval of the court's action.

WHEREFORE, finding no reversible error, the petition is DENIED and the judgment of respondent Court of

Appeals is hereby AFFIRMED.

SO ORDERED.


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