Majestic Finance v. Tito
REITERATIONFacts
The Antecedents: Petitioner Majestic Finance and Investment Co., Inc. (Majestic) was the judgment obligee in a rescission case. To satisfy the judgment, the sheriff levied upon and sold the property of the judgment obligor, Thomas D. Cort, at public auction. The property was eventually acquired by Paulina Cruz, who then sold it to Cornelio Mendoza. Respondent Jose D. Tito filed a petition to nullify the proceedings and the decision in the rescission case, claiming ownership of the property through inheritance from Cort, who had passed away prior to the rescission case filing. Tito later transferred his interest in the property to spouses Jose and Rosita Nazal, who were allowed to intervene in the annulment case. Procedural History: Jose D. Tito filed a petition to annul the rescission case proceedings, alleging lack of jurisdiction over the person of his predecessor-in-interest, Thomas D. Cort. Tito claimed ownership of the subject property via devise under Cort's will. Spouses Jose and Rosita Nazal, having acquired Tito's interest, intervened in the annulment case. The Regional Trial Court (RTC) initially dismissed the annulment case for failure to prosecute, but later set aside the dismissal. However, the RTC subsequently reinstated the dismissal, ruling that the intervention was ancillary to the main case and that the dismissal of the principal action also dismissed the intervention. The Court of Appeals (CA) reversed the RTC's order, allowing the Nazals to proceed with their claim. Majestic's motion for reconsideration was denied by the CA. The Petition: This petition for review on certiorari seeks to reverse the Court of Appeals' decision, which allowed spouses Jose and Rosita Nazal to prosecute their claim against Majestic. The core issue is whether the CA erred in permitting the Nazals, as intervenors, to continue prosecuting their claim after the main action was dismissed for failure to prosecute. The Supreme Court is asked to determine if the dismissal of the principal case, due to the plaintiff's failure to prosecute for an unreasonable length of time, also extinguishes the intervenors' right to proceed, especially when the intervenors were effectively the real parties in interest.
Issue(s)
Whether the Court of Appeals erred in allowing Sps. Nazal to prosecute their claim against Majestic despite the dismissal of the main action for failure to prosecute. Whether Sps. Nazal, as intervenors who effectively became the plaintiffs, can continue prosecuting the annulment case after the dismissal of the principal action filed by Jose D. Tito, considering their obligation to diligently prosecute the case.
Ruling
The petition is meritorious. The Decision dated October 30, 2008 and the Resolution dated June 22, 2011 of the Court of Appeals in CA-G.R. CV. No. 81814 are REVERSED and SET ASIDE. A new judgment is entered DISMISSING Civil Case No. 27958.
Ratio Decidendi
On the issue of whether Sps. Nazal can prosecute their claim despite the dismissal of the main action: The Supreme Court ruled that Sps. Nazal had lost their right to participate in the proceedings due to the dismissal of the main action, which was decreed pursuant to Section 3, Rule 17 of the Rules of Court, stemming from the failure of the putative plaintiff, Tito, to diligently and expeditiously prosecute the same for an unjustified and unreasonable length of time. Intervention is never an independent action but is merely ancillary and supplemental to the existing litigation. Its purpose is not to obstruct or delay the proceedings but to afford a party claiming a right or interest the opportunity to appear and be joined to assert or protect such right or interest. Therefore, the right of an intervenor should only be in aid of the right of the original party. Consequently, where the right of the latter has ceased to exist, there is nothing to aid or fight for, and the right of intervention ceases. The Court noted that while Sps. Nazal were allowed to intervene, their right to do so was contingent upon the continuation of the main action. The dismissal of the principal action, therefore, extinguished their right to intervene. On the status of Sps. Nazal as intervenors and their obligation to prosecute the case: The Court pointed out that despite being joined as intervenors, Sps. Nazal should have been deemed as the actual plaintiffs since Tito had already transferred his interest over the property to them prior to the institution of the proceedings. Where a transfer of interest is effected before the commencement of a suit, the transferee must necessarily be the plaintiff, as it is they who stand to be benefited or injured by the judgment. Thus, Sps. Nazal bore the obligation to diligently and expeditiously prosecute the action. The RTC found that Sps. Nazal failed in this regard, having taken no further action after moving to set the case for pre-trial in 1987, and only moved for the setting of the case for hearing almost eleven years later, apparently compelled by the threat of dispossession due to the unlawful detainer case filed by Sps. Lim. The Court emphasized that while the clerk of court has a duty to set cases for pre-trial, this does not relieve the plaintiff of their own duty to prosecute the case diligently. The expeditious disposition of cases is as much the duty of the plaintiff as it is of the court. The Court found no sufficient justification for Sps. Nazal's inordinately long inaction, as they failed to offer any explanation for waiting more than a decade to proceed with the case, which was filed by Tito as early as November 21, 1977. Therefore, whether treated as mere intervenors or as actual plaintiffs, Sps. Nazal were precluded from prosecuting their claim against Majestic due to their failure to prosecute the case diligently.
Main Doctrine
The dismissal of the main action due to the plaintiff's failure to prosecute necessarily carries with it the dismissal of the petition-in-intervention, as intervention is merely ancillary and supplemental to the main action, and the intervenor's right ceases to exist when the right of the original party ceases.