Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 165770 August 9, 2010
HEIRS OF FRANCISCA MEDRANO, namely YOLANDA R. MEDRANO, ALFONSO R. MEDRANO, JR., EDITA M. ALFARO, MARITES M. PALENTINOS, and GIOVANNI MEDRANO, represented by their legal representative, Marites Medrano-Palentinos, Petitioners,
vs.
ESTANISLAO DE VERA, Respondent.
D E C I S I O N
DEL CASTILLO, J.:
In cases where the subject property is transferred by the defendant during the pendency of the litigation, the interest of the transferee pendente lite cannot be considered independent of the interest of his transferors. If the transferee files an answer while the transferor is declared in default, the case should be tried on the basis of the transferee’s answer and with the participation of the transferee.
This Petition for Review on Certiorari1 assails the June 25, 2004 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No. 80053, which contained the following dispositive portion:
WHEREFORE, premises considered, the petition is hereby GRANTED and this Court orders that the case be remanded to the court a quo for further trial.
SO ORDERED.3
Likewise assailed is the appellate court’s October 6, 2004 Resolution4 denying petitioners’ Motion for Reconsideration.
Factual Antecedents
This case concerns a 463-square meter parcel of land5 covered by Transfer Certificate of Title (TCT) No. 41860 in the name of Flaviana De Gracia (Flaviana). In 1980, Flaviana died6 intestate, leaving her half-sisters Hilaria Martin-Paguyo (Hilaria) and Elena Martin-Alvarado (Elena) as her compulsory heirs.
In September 1982, Hilaria and Elena, by virtue of a private document denominated "Tapno Maamoan ti Sangalobongan,"7 waived all their hereditary rights to Flaviana’s land in favor of Francisca Medrano (Medrano). It stated that the waiver was done in favor of Medrano in consideration of the expenses that she incurred for Flaviana’s medication, hospitalization, wake and burial. In the same year, Medrano built her concrete bungalow on the land in question without any objection from Hilaria and Elena or from their children.
When Hilaria and Elena died, some of their children affirmed the contents of the private document executed by their deceased mothers. To that end, they executed separate Deeds of Confirmation of Private Document and Renunciation of Rights in favor of Medrano.8 They likewise affirmed in said documents that Medrano had been occupying and possessing the subject property as owner since September 1982.
Due to the refusal of the other children9 to sign a similar renunciation, Medrano filed a Complaint10 on April 27, 2001 for quieting of title, reconveyance, reformation of instrument, and/or partition with damages against Pelagia M. Paguyo-Diaz (Pelagia), Faustina Paguyo-Asumio (Faustina), Jesus Paguyo (Jesus), Veneranda Paguyo-Abrenica, Emilio a.k.a. Antonio Alvarado, Francisca Alvarado-Diaz (Francisca) and Estrellita Alvarado-Cordero (Estrellita). The case was docketed as Civil Case No. U-7316 and raffled to Branch 48 of the Regional Trial Court (RTC) of Urdaneta, Pangasinan. Medrano then caused the annotation of a notice of lis pendens on TCT No. 4186011 on May 3, 2001.
Summons upon the original complaint was duly served upon Pelagia and Estrellita .12
On August 29, 2001, Medrano filed an Amended Complaint13 impleading the widow and children of Antonio Alvarado, in view of the latter’s death.14 Summons upon the amended complaint was served upon the other defendants,15 but no longer served upon Pelagia and Estrellita.
On April 2, 2002, respondent Estanislao D. De Vera (De Vera) filed an Answer with Counterclaim.16 De Vera presented himself as the real party-in-interest on the ground that some of the named defendants (Faustina, Pelagia, Francisca, Elena Kongco-Alvarado, Jesus, and Estrellita) had executed a Deed of Renunciation of Rights17 in his favor on March 23, 2002. He maintained that the "Tapno Maamoan ti Sangalobongan" that was executed by the defendants’ predecessors in favor of Medrano was null and void for want of consideration. Thus, while some children affirmed the renunciation of their deceased mothers’ rights in the lot in favor of Medrano, the other children renounced their hereditary rights in favor of De Vera.
Medrano filed a Motion to Expunge Answer with Counterclaim of Estanislao D. De Vera and to Declare Defendants in Default.18 She argued that respondent De Vera had no personality to answer the complaint since he was not authorized by the named defendants to answer in their behalf.
In an Order,19 dated July 30, 2002, the trial court disagreed with Medrano’s argument and admitted De Vera’s Answer with Counterclaim. The trial court opined that De Vera did not need a special power of attorney from the defendants because he did not answer the complaint in their behalf. De Vera made a voluntary appearance in the case as the transferee of the defendants’ rights to the subject property. The trial court further explained that when the presence of other parties is required for granting complete relief, the court shall order them to be brought in as defendants. While it was unsure whether De Vera was an indispensable party to the case, the trial court opined that at the very least he was a necessary party for granting complete relief. It thus held that the admission of De Vera’s Answer with Counterclaim is proper in order to avoid multiplicity of suits.20 In the same Order, the court declared the named defendants in default for not answering the complaint despite valid service of summons. Thus, it appears that the court a quo treated the named defendants and De Vera as distinct and separate parties.
Medrano’s response to the aforesaid order was two-fold. With regard to the order declaring the named defendants in default, Medrano filed on February 13, 2003 a Motion to Set Reception of Evidence Before the Branch Clerk of Court.21 She argued that she could present evidence ex parte against the defaulting defendants on the ground that she presented alternative causes of action against them in her complaint. Her cause of action on the basis of acquisitive prescription can be raised solely against the defaulting original defendants.22 She thus prayed to be allowed to present evidence ex parte with respect to her claim of acquisitive prescription against the defaulting defendants. As for the order admitting De Vera’s Answer with Counterclaim, Medrano filed on February 21, 2003 a Motion for Reconsideration of Order dated July 30, 2002.23 She asked the court to order De Vera to file a pleading-in-intervention so that he could be properly named as a defendant in the case.
In an Order24 dated March 6, 2003, the trial court resolved to grant Medrano’s Motion to Set Reception of Evidence. It ordered the conduct of ex parte presentation of evidence on the same day and the continuation thereof to proceed on March 10, 2003. Thus, Medrano presented her evidence ex parte on the set dates. On March 10, 2003, the case was submitted for resolution.25
Given the court’s standing order which admitted De Vera’s Answer with Counterclaim, De Vera filed a Motion to Set the Case for Preliminary Conference on March 27, 2003.26
The trial court resolved petitioners’ and De Vera’s respective pending motions in its March 31, 2003 Order.27 The trial court granted Medrano’s motion and set aside its Order which admitted De Vera’s Answer with Counterclaim. Citing Rule 19 of the Rules of Court, the court ordered De Vera to file a pleading-in-intervention so that he could be recognized as a party-defendant. As a necessary consequence to this ruling, the trial court denied De Vera’s motion to set the case for preliminary conference for prematurity.
De Vera did not comply with the court’s order despite service upon his lawyer, Atty. Simplicio M. Sevilleja, on April 2, 2003.
Ruling of the Regional Trial Court
The RTC rendered its Decision28 on April 21, 2003. It ruled that ownership over the titled property has vested in petitioners by virtue of good faith possession for more than 10 years; thus, it was no longer necessary to compel the defendants - heirs of Hilaria and Elena - to execute an instrument to confirm Medrano’s rightful ownership over the land.
The trial court likewise held that the private document denominated as "Tapno Maamoan Ti Sangalobongan" sufficiently conveyed to Medrano the subject property. The court held that the conveyance was done in consideration of the various expenses that Medrano incurred for Flaviana’s benefit. While the court conceded that the parcel of land was not adequately described in the "Tapno Maamoan ti Sangalobongan," its location, metes and bounds were nonetheless confirmed by the defendants’ siblings in their respective deeds of confirmation.
The dispositive portion of the Decision reads, in toto:
WHEREFORE, judgment is hereby rendered:
(1) Declaring [Medrano], substituted by her heirs, as the rightful and lawful owner of the land covered by T.C.T. No. 41860;29
(2) Ordering the Register of Deeds of Tayug, Pangasinan to cancel T.C.T. No. 41860 and to issue another Transfer Certificate of Title in the name of [Medrano];
All other claims are hereby denied for lack of merit.
SO ORDERED.30
De Vera filed a Motion for Reconsideration31 arguing that he was an indispensable party who was not given an opportunity to present his evidence in the case. He also maintained that Medrano was not the owner of the property, but a mere administratrix of the land as evidenced by the records in SP Proc. No. 137577.32
De Vera’s motion was denied33 for lack of merit on July 22, 2003. The court noted that De Vera had no legal personality to file a motion for reconsideration because he did not file a pleading-in-intervention. The trial court explained it would have allowed De Vera to present his evidence in the case had he complied with the court’s order to file a pleading-in-intervention.
On September 10, 2003, De Vera filed a Manifestation34 informing the trial court of his intention to file a petition for certiorari and mandamus before the CA, pursuant to Rule 41, Section 1, second paragraph and Rule 65 of the Rules of Court.
On October 7, 2003, petitioners filed a Motion for Entry of Judgment and Execution35 before the trial court. They also filed a Counter-Manifestation36 to De Vera’s Manifestation. Petitioners insisted that De Vera, as a transferee pendente lite, was bound by the final judgment or decree rendered against his transferors. Even assuming that De Vera had a right to appeal, the period therefor had already lapsed on August 12, 2003.
In its Order37 dated December 10, 2003, the court a quo maintained that De Vera was not a party to the suit, hence his appeal would not stay the finality and execution of judgment. Thus the trial court ordered the entry of judgment in Civil Case No. U-7316. The writ of execution was issued on December 12, 2003.
De Vera sought reconsideration38 of the above order but the same was denied39 on the basis that De Vera had no personality to assail any order, resolution, or decision of the trial court in Civil Case No. U-7316.
The Register of Deeds of Tayug, Pangasinan complied with the writ by canceling TCT No. 41860 in the name of Flaviana De Gracia and issuing TCT No. 65635 in the names of petitioners40 on April 19, 2004.
Proceedings before the Court of Appeals
De Vera argued in his Petition for Certiorari and Mandamus41 before the CA that the trial court erred in declaring the defendants in default and sought a writ compelling the trial court to try the case anew. He insisted that he stepped into the shoes of the defendants with regard to the subject property by virtue of the quitclaim that the defendants executed in his favor. Thus, the trial court should have considered the defendants as properly substituted by De Vera when he filed his Answer.
The standing order of the trial court with regard to De Vera at the time that it allowed Medrano to present her evidence was to admit De Vera’s Answer with Counterclaim. Thus, De Vera argued that it was improper for the trial court to have allowed Medrano to present her evidence ex parte because it had yet to rule on whether De Vera had personality to participate in the proceedings.
Ruling of the Court of Appeals
The appellate court agreed with De Vera. The CA noted that the ex parte presentation of evidence took place on March 6 and 10, 2003; while the Motion to Expunge Answer and Require Filing of Pleading-in-Intervention was granted much later on March 31, 2003. The CA held that the trial court gravely abused its discretion by allowing Medrano to present her evidence ex parte while De Vera’s personality to participate in the case still remained unresolved. The premature ex parte presentation of evidence rendered a pleading-in-intervention moot and academic.
The CA pointed out that the trial court should have exercised its authority to order the substitution of the original defendants instead of requiring De Vera to file a pleading-in-intervention. This is allowed under Rule 3, Section 19 of the Rules of Court. Since a transferee pendente lite is a proper party42 to the case, the court can order his outright substitution for the original defendants.
The CA further held that De Vera’s failure to file the necessary pleading-in-intervention was a technical defect that could have been easily cured. The trial court could have settled the controversy completely on its merits had it admitted De Vera’s Answer with Counterclaim. Not affording De Vera his right to adduce evidence is not only a manifest grave abuse of discretion amounting to lack or excess of jurisdiction but also runs counter to the avowed policy of avoiding multiplicity of suits.
The appellate court then ordered the case remanded to the trial court to afford De Vera an opportunity to present his evidence.
Petitioners filed a Motion for Reconsideration,43 which motion was denied44 for lack of merit on October 6, 2004.
Issues
I
Whether De Vera could participate in Civil Case No. U-7316
without filing a motion to intervene
II
Whether De Vera is bound by the judgment against his transferors
III
Whether it was proper for the CA to take cognizance of respondent’s Petition for Certiorari and Mandamus
Our Ruling
We sustain the CA’s ruling that the trial court gravely abused its discretion in refusing to allow De Vera to participate in the case and requiring him to file a motion to intervene.
The trial court misjudged De Vera’s interest in Civil Case No. U-7316. It held that De Vera’s right to participate in the case was independent of the named defendants. Because of its ruling that De Vera had an "independent interest," the trial court considered his interest as separate from Medrano’s claims against the named defendants, and allowed the latter to be tried separately. Thus, it admitted De Vera’s Answer with Counterclaim but declared the named defendants in default and allowed the ex parte presentation of evidence by Medrano against the named defendants.
The trial court’s approach is seriously flawed because De Vera’s interest is not independent of or severable from the interest of the named defendants. De Vera is a transferee pendente lite of the named defendants (by virtue of the Deed of Renunciation of Rights that was executed in his favor during the pendency of Civil Case No. U-7316). His rights were derived from the named defendants and, as transferee pendente lite, he would be bound by any judgment against his transferors under the rules of res judicata.45 Thus, De Vera’s interest cannot be considered and tried separately from the interest of the named defendants.
It was therefore wrong for the trial court to have tried Medrano’s case against the named defendants (by allowing Medrano to present evidence ex parte against them) after it had already admitted De Vera’s answer. What the trial court should have done is to treat De Vera (as transferee pendente lite) as having been joined as a party-defendant, and to try the case on the basis of the answer De Vera had filed and with De Vera’s participation. As transferee pendente lite, De Vera may be allowed to join the original defendants under Rule 3, Section 19:
SEC. 19. Transfer of interest. – In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party. (Emphasis supplied)
The above provision gives the trial court discretion to allow or disallow the substitution or joinder by the transferee. Discretion is permitted because, in general, the transferee’s interest is deemed by law as adequately represented and protected by the participation of his transferors in the case. There may be no need for the transferee pendente lite to be substituted or joined in the case because, in legal contemplation, he is not really denied protection as his interest is one and the same as his transferors, who are already parties to the case.46
While the rule allows for discretion, the paramount consideration for the exercise thereof should be the protection of the parties’ interests and their rights to due process. In the instant case, the circumstances demanded that the trial court exercise its discretion in favor of allowing De Vera to join in the action and participate in the trial. It will be remembered that the trial court had already admitted De Vera’s answer when it declared the original defendants in default. As there was a transferee pendente lite whose answer had already been admitted, the trial court should have tried the case on the basis of that answer, based on Rule 9, Section 3(c):
Effect of partial default. – When a pleading asserting a claim states a common cause of action against several defending parties, some of whom answer and the others fail to do so, the court shall try the case against all upon the answers thus filed and render judgment upon the evidence presented.
Thus, the default of the original defendants should not result in the ex parte presentation of evidence because De Vera (a transferee pendente lite who may thus be joined as defendant under Rule 3, Section 19) filed an answer. The trial court should have tried the case based on De Vera’s answer, which answer is deemed to have been adopted by the non-answering defendants.47
To proceed with the ex parte presentation of evidence against the named defendants after De Vera’s answer had been admitted would not only be a violation of Rule 9, Section 3(c), but would also be a gross disregard of De Vera’s right to due process. This is because the ex parte presentation of evidence would result in a default judgment which would bind not just the defaulting defendants, but also De Vera, precisely because he is a transferee pendente lite.48 This would result in an anomaly wherein De Vera would be bound by a default judgment even if he had filed an answer and expressed a desire to participate in the case.
We note that under Rule 3, Section 19, the substitution or joinder of the transferee is "upon motion", and De Vera did not file any motion for substitution or joinder. However, this technical flaw may be disregarded for the fact remains that the court had already admitted his answer and such answer was on record when the ex parte presentation of evidence was allowed by the court. Because De Vera’s answer had already been admitted, the court should not have allowed the ex parte presentation of evidence.
We are not persuaded by petitioners’ insistence that De Vera could not have participated in the case because he did not file a motion to intervene. The purpose of intervention is to enable a stranger to an action to become a party in order for him to protect his interest and for the court to settle all conflicting claims. Intervention is allowed to avoid multiplicity of suits more than on due process considerations. The intervenor can choose not to participate in the case and he will not be bound by the judgment.
In this case, De Vera is not a stranger to the action but a transferee pendente lite. As mentioned, a transferee pendente lite is deemed joined in the pending action from the moment when the transfer of interest is perfected.49 His participation in the case should have been allowed by due process considerations.50
We likewise adopt with approval the appellate court’s observation that De Vera’s failure to file a pleading-in-intervention will not change the long foregone violation of his right to due process. The ex parte presentation of evidence had already been terminated when the trial court required De Vera to file his pleading-in-intervention. Even if he complied with the order to file a pleading-in-intervention, the damage had already been done. The precipitate course of action taken by the trial court rendered compliance with its order moot.
Given the Court’s finding that the ex parte presentation of evidence constituted a violation of due process rights, the trial court’s judgment by default cannot bind De Vera. A void judgment cannot attain finality and its execution has no basis in law. The case should be remanded to the trial court for trial based on De Vera’s answer and with his participation.
Certiorari petition before the CA proper
Petitioners point out that De Vera admitted receiving the trial court’s Order denying his motion for reconsideration on July 28, 2003. Thus he only had until August 12, 2003 to file an appeal of the decision. Having lost his right to appeal by allowing the period therefor to lapse, respondent has also lost his right to file a petition for certiorari before the CA. A special civil action for certiorari is not a substitute for the lost remedy of appeal.
Respondent argues that a Rule 65 certiorari petition before the CA is proper because an ordinary appeal would not have been speedy and adequate remedy to properly relieve him from the injurious effects of the trial court’s orders.
We agree with respondent that ordinary appeal was not an adequate remedy under the circumstances of the case. An appeal seeks to correct errors of judgment committed by a court, which has jurisdiction over the person and the subject matter of the dispute. In the instant case, the trial court maintained that it had no jurisdiction over De Vera because it did not consider him a party to the case. Its stance is that De Vera, as a non-party to the case, could not participate therein, much less assail any of the orders, resolutions, or judgments of the trial court. An appeal would have been an illusory remedy in this situation because his notice of appeal would have certainly been denied on the ground that he is not a party to the case.
On the other hand, certiorari is an extraordinary remedy for the correction of errors of jurisdiction. It is proper if the court acted without or in grave abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal or any plain, speedy, and adequate remedy in law. Given the circumstance that the final decision in Civil Case No. U-7316 prejudices De Vera’s rights despite the fact that he was not recognized as a party thereto and was not allowed to assail any portion thereof, De Vera’s remedy was to annul the trial court proceedings on the ground that it was conducted with grave abuse of discretion amounting to lack of jurisdiction. With such annulment, the trial court should hear the case anew with De Vera fully participating therein.
WHEREFORE, the petition is DENIED. The June 25, 2004 Decision of the Court of Appeals in CA-G.R. SP No. 80053 and its October 6, 2004 Resolution are AFFIRMED.
Costs against petitioners.
SO ORDERED.
MARIANO C. DEL CASTILLO
Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO
Associate Justice |
LUCAS P. BERSAMIN*
Associate Justice |
JOSE PORTUGAL PEREZ
Associate Justice
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
RENATO C. CORONA
Chief Justice
Footnotes
* In lieu of Associate Justice Presbitero J. Velasco, Jr., per Special Order No. 876 dated August 2, 2010.
1 Rollo, pp. 14-56.
2 CA rollo, pp. 152-160; penned by Associate Justice Eugenio S. Labitoria and concurred in by Associate Justices Jose L. Sabio, Jr. and Jose C. Mendoza (now a Member of this Court).
3 Id. at 160.
4 Id. at 205-206.
5 Located at Roxas St., cor. Cerezo St, Barangay Guiset Norte, San Manuel, Pangasinan.
6 Flaviana De Gracia died on February 14, 1980 per Certificate of Death, records, p. 10.
7 Exhibit "C," Folder of Exhibits.
8 Two of Hilaria’s children, Victorio and Miguel Paguyo, executed the Deed of Confirmation on September 23, 1998, Exhibit "D," Folder of Exhibits; while four of Elena’s children, Elet, Francisco, Dolores, and Felipe, executed their own Deed of Confirmation on January 26, 2000, Exhibit "E," Folder of Exhibits.
9 Pelagia Diaz, Faustina Asumio, Jesus Paguyo, Veneranda Abrenica, Emilio a.ka. Antonio Alvarado, Francisca Diaz, and Estrellita Cordero.
10 Records, pp. 2-8 with Annexes.
11 Entry No. 196296, rollo, p. 103.
12 Records, p. 32.
13 Id. at 136-146.
14 Ex-Parte Notice of Death and Motion to Amend Complaint, id. at 134-135.
15 Id. at 170 and 197.
16 Id. at188-194.
17 Id. at 192-193.
18 Id. at 206-208. Dated July 1, 2002 and filed on July 9, 2002.
19 Id. at 225-226; penned by Judge Alicia B. Gonzales-Decano.
20 Id. at 226.
21 Id. at 230-231.
22 Id. at 231.
23 Id. at 233-234.
24 Id. at 237.
25 Id. at 239. Meanwhile, Francisca Medrano died and her daughter Edith M. Alfaro was entered as her legal representative (Id. at 248).
26 Id. at 247.
27 Id. at 249-250.
28 Id. at 254-262.
29 See Order dated December 11, 2003, id. at 390.
30 Id. at 262.
31 Id. at 269-271.
32 Id. at 275-276.
33 Id. at 285-286.
34 Id. at 289.
35 Id. at 297-299.
36 Id. at 306-307.
37 Id. at 386-387.
38 Id. at 397-399.
39 Order dated May 13, 2004; id. at 415.
40 Id. at 428-429.
41 Filed on October 23, 2003. Entitled Pelagia M. Paguyo-Diaz, Jesus M. Paguyo, Faustina M. Paguyo-Asumio, Franscisca M. Alvarado-Diaz, Elena Kongco-Alvarado, and Estrellita M. Alvarado-Cordero, substituted by Estanislao de Vera v. Regional Trial Court, First Judicial Region, Branch 48, Urdaneta City, Pangasinan, Heirs of Francisca R. Medrano, namely: Alfonso Medrano, Jr., Editha M. Alfaro, Marites M. Palentinos, and Giovani Medrano, represented by their legal representative, Editha M. Alfaro. CA rollo, pp. 10-27.
42 Heirs of Francisco Guballa, Sr. v. Court of Appeals, G.R. Nos. L-78223 and L-79403, December 19, 1988, 168 SCRA 518, 534.
43 CA rollo, pp. 165-184.
44 Id. at 205-206.
45 Rules of Court, Rule 39, Section 47(b).
46 Santiago Land Development Corporation v. Court of Appeals, 334 Phil. 741, 748 (1997), and its Resolution in 342 Phil. 643, 649 (1997).
47 See Heirs of Mamerto Manguiat v. Court of Appeals, G.R. Nos. 150768 and 160176, August 20, 2008, 562, SCRA 422, 432-433. See also Grageda v. Gomez, G.R. No. 169536, September 21, 2007, 533 SCRA 677, 692-693.
48 Rules of Court, Rule 39, Section 47(b).
49 Santiago Land Development Corporation v. Court of Appeals, supra note 46 at 748.
50 See also Dela Cruz v. Joaquin, G.R. No. 162788, July 28, 2005, 464 SCRA 576, 584, which states: "The rule on the substitution of parties was crafted to protect every party’s right to due process. x x x [N]o adjudication can be made against the successor of the deceased if the fundamental right to a day in court is denied. The Court has nullified not only trial proceedings conducted without the appearance of the legal representatives of the deceased, but also the resulting judgments."
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