Associated Bank v. Pronstroller
REITERATIONFacts
The Antecedents: This case concerns a dispute over a property between Associated Bank (now United Overseas Bank [Phils.]) and Spouses Rafael and Monaliza Pronstroller. The core of the dispute revolves around two letter-agreements modifying an initial contract. The respondents requested a modification to the payment terms, which the bank's Board of Directors initially deferred action on, only to reject it later after a reorganization. The respondents relied on a second letter-agreement, purportedly signed by an authorized bank representative, which they believed addressed their request. Procedural History: The case has proceeded through lower courts, with the Court of Appeals (CA) making factual findings that were affirmed by this Court in a previous decision. Following this Court's July 14, 2008 Decision, the petitioner, Associated Bank, filed a Motion for Reconsideration, arguing that the second letter-agreement was invalid and that the respondents had failed to comply with the terms of the first agreement. Concurrently, Spouses Eduardo and Ma. Pilar Vaca filed a Motion for Leave to Intervene, claiming to be the registered owners of the subject property and asserting their right to be heard and to seek reimbursement. The Petition: The petitioner's Motion for Reconsideration, filed under Rule 45 of the Rules of Court, essentially rehashed arguments previously considered and found unmeritorious. The Court found no new issues and reiterated that the second letter-agreement validly modified the first due to apparent authority. The Motion for Leave to Intervene by Spouses Vaca was denied as it was belatedly filed and, as transferees pendente lite, they were already bound by the proceedings and judgment. Their claim for reimbursement was deemed a matter for a separate action.
Issue(s)
Whether petitioner's motion for reconsideration should be granted. Whether spouses Vaca have a right to intervene in the case.
Ruling
The Motion for Reconsideration filed by petitioner Associated Bank is denied with finality. The Motion for Leave to Intervene filed by Spouses Eduardo and Ma. Pilar Vaca is also denied. No further pleadings will be entertained.
Ratio Decidendi
On the Motion for Reconsideration: The Court reiterated that the second letter-agreement modified the first one. Petitioner, by allowing Atty. Soluta to enter into the first agreement without express board resolution, clothed him with apparent authority to modify it via the second agreement. The respondents' delay in acting on the modification request and the subsequent rejection after a year and reorganization did not absolve the bank from its apparent commitment. The Court found no merit in the argument that the first agreement was rescinded by respondents' failure to deposit payment, as the payment date was modified by the second agreement. Similarly, the second agreement was not rescinded by respondents' new offer, which was merely to demonstrate capacity to purchase. The Court affirmed the factual findings of the Court of Appeals, deeming them conclusive as they were amply supported by evidence and no error was shown in their appreciation. On the Motion for Leave to Intervene: The Court held that the motion for leave to intervene was belatedly filed, as such motions should be filed before the rendition of judgment by the trial court. Furthermore, spouses Vaca, as transferees pendente lite, are successors-in-interest of the petitioner. The law, specifically Section 19, Rule 3 of the Rules of Court, provides that in case of transfer of interest, the action may be continued by or against the original party, unless the court directs substitution or joinder. Citing Natalia Realty, Inc. v. Court of Appeals and Santiago Land Development Corporation v. Court of Appeals, the Court stated that a transferee pendente lite does not have a right to intervene because they stand exactly in the shoes of their predecessor and are bound by the proceedings and judgment. The existence of a notice of lis pendens annotated on the petitioner's title prior to the sale to spouses Vaca, and even before the cancellation of petitioner's title and issuance of a new one in the spouses' name, binds spouses Vaca to the outcome of the litigation. Their certificate of title affords them no special protection. Their claim for reimbursement, if any, must be ventilated in a separate action, as allowing intervention would unduly delay the rights of the respondents.
Main Doctrine
A transferee pendente lite does not have a right to intervene as they stand in the shoes of their predecessor-in-interest and are bound by the proceedings and judgment in the case. A notice of lis pendens binds the transferee even if they obtain a new certificate of title.