Santiago Land Development Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Norberto J. Quisumbing filed an action against Philippine National Bank (PNB) to enforce his right to redeem foreclosed real properties, as assignee of the mortgagor, Komatsu Industries (Phils.), Incorporated. While the case was pending, Santiago Land Development Corporation (SLDC) purchased one of the subject properties from PNB for P90 Million. Procedural History: SLDC filed a motion to intervene, alleging it was the transferee pendente lite and would be adversely affected by any ruling. SLDC adopted PNB's answer and raised affirmative defenses. Quisumbing opposed the intervention, arguing SLDC's interest was contingent and would complicate the proceedings. The Regional Trial Court (RTC) granted SLDC's motion to intervene and admitted its answer. Subsequently, SLDC served interrogatories and moved for production of documents. Quisumbing moved to quash the interrogatories, which the RTC denied, granting SLDC's motion for production. Quisumbing moved for reconsideration, which was denied. Quisumbing then filed a petition for certiorari with the Court of Appeals (CA). The Petition: The CA rendered a decision setting aside the RTC's orders granting intervention, denying the motion to quash interrogatories, and denying the motion for reconsideration. SLDC filed a petition for review on certiorari with the Supreme Court, assailing the CA's decision.
Issue(s)
Whether the Court of Appeals gravely abused its discretion in taking cognizance of the petition when the issue of intervention was not raised before the trial court, and whether the Court of Appeals gravely abused its discretion in taking cognizance of the petition when no jurisdictional error was raised. Whether the Court of Appeals erred in barring the trial court from allowing SLDC to intervene despite its legal interest as transferee pendente lite. Whether the Court of Appeals denied SLDC the right to effectively defend itself, and whether private respondents failed to object to the interrogatories in the manner prescribed by the Rules of Court, and whether the trial court correctly denied private respondents' motion to quash petitioner's interrogatories.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals. The Court held that SLDC, as a transferee pendente lite, cannot intervene under Rule 12, Section 2, but is instead governed by Rule 3, Section 20, which mandates substitution or joinder. Consequently, SLDC's right to file interrogatories and seek production of documents was also denied.
Ratio Decidendi
On the Court of Appeals' cognizance of the petition: The Court found SLDC's contention that the issue of intervention was not raised before the trial court to be without basis, as Quisumbing had opposed SLDC's motion for intervention. Furthermore, SLDC was estopped from questioning the appellate court's ruling on this issue as it did not object to its consideration. The Court also clarified that the petition for certiorari did raise a jurisdictional question by charging the RTC with grave abuse of discretion in issuing its questioned orders, including the grant of intervention and denial of the motion to quash interrogatories. On the propriety of intervention for a transferee pendente lite: The Court held that a transferee pendente lite is specifically governed by Rule 3, Section 20 of the Rules of Court, not Rule 12, Section 2 on intervention. Rule 3, Section 20 provides that in case of transfer of interest pendente lite, the action may be continued by or against the original party, unless the court directs the transferee to be substituted or joined. This rule is distinct from intervention, which allows a stranger to an action to become a party to protect their interest. The Court emphasized that a transferee pendente lite stands in exactly the same position as its predecessor-in-interest and is bound by the pending litigation, unlike an intervenor who can choose not to be concluded by the judgment. On the right to defend and file interrogatories, and the failure to object to interrogatories: Because SLDC was not a proper intervenor, it did not possess the right to file interrogatories or seek the production of documents from the private respondents. The Court reiterated that a transferee pendente lite is bound by the proceedings had before the transfer and cannot present new or different claims. Therefore, SLDC's attempt to inquire into the consideration paid for the assignment of the right of redemption and its claim regarding the invalidity of the assignment under Article 1491(5) of the Civil Code were correctly disallowed by the appellate court. The Court found that since SLDC did not have the right to intervene, it consequently did not have the right to file interrogatories or seek the production of documents. This rendered the arguments regarding the procedural objections to the interrogatories moot and academic.
Main Doctrine
A transferee pendente lite is governed by Rule 3, Section 20 of the Rules of Court, which provides for substitution or joinder, and cannot opt to intervene under Rule 12, Section 2, as intervention is for strangers to the action, whereas a transferee pendente lite stands in the shoes of the original party and is bound by the litigation.