SECOND DIVISION
[G.R. No. 252096. October 6, 2021.]
HOME DEVELOPMENT MUTUAL FUND, petitioner,vs. PAXTON DEVELOPMENT CORPORATION, respondent.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, Second Division, issued a Resolution dated 06 October 2021 which reads as follows: HTcADC
"G.R. No. 252096 (Home Development Mutual Fund v. Paxton Development Corporation). — This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court assailing the Decision 2 dated September 10, 2019 and Resolution 3 dated February 18, 2020 of the Court of Appeals (CA) which dismissed the Petition for Certiorari and denied the Motion for Reconsideration 4 dated October 3, 2019, respectively, in CA-G.R. SP No. 149255.
The Antecedents
The case stemmed from five civil actions involving the ownership of Lot Nos. 5763 and 5765-New (subject properties) located in Salawag, Dasmariñas, Cavite. One of the cases was Civil Case No. 1124-95 filed by Paxton Development Corporation (Paxton) against Top Rate Construction and General Services, Baikal Realty Corporation (Baikal), and the Register of Deeds of Cavite for declaration of nullity of titles and damages. 5
On March 13, 1998, Branch 21, Regional Trial Court (RTC) of Imus, Cavite rendered a Joint Decision 6 declaring, among others, that Paxton was the legal owner of the subject properties pursuant to Transfer Certificate of Title (TCT) Nos. T-557274 and T-559147 issued in its name; and that TCT No. T-542567 7 held by Baikal was void. The joint decision was sustained by the Court in the resolution dated September 11, 2003 and subsequently became final and executory. 8
Meanwhile, Home Development Mutual Fund (HDMF) alleged that prior to the promulgation of the Joint Decision, Baikal entered into a joint venture with Filsing Realty Ventures Corporation to develop Viva Homes project which was situated on the subject properties. HDMF also stated that because it was not aware of any litigation involving the lands in dispute, it processed 670 accounts under the Viva Homes project. 9
To execute the Joint Decision and preserve the status quo of the affected members of HDMF, Paxton, Baikal, and HDMF entered into a Tripartite Memorandum of Agreement 10 (TMOA) and a Compromise Agreement 11 on January 18, 2007 which the RTC approved on November 14, 2008. 12
On May 18, 2015, Paxton informed HDMF of its decision to rescind the TMOA because Baikal failed to perform its obligations under the TMOA and the Compromise Agreement. 13 It also averred that HDMF already suspended the processing of all loan applications involving the Viva Homes project. 14 Thereafter, Paxton filed a Motion for Issuance of a Writ of Execution 15 of the Joint Decision 16 dated March 13, 1998. 17
On July 1, 2015, the RTC granted 18 the motion for execution. 19
According to the RTC, the joint decision had already attained finality; and that while Paxton, Baikal, and HDMF entered into a Memorandum of Agreement and TMOA, Baikal failed to comply with its obligations under the agreements as it did not submit the subdivided titles over the properties which, in turn, would serve as the basis for HDMF to process the loan applications of the prospective buyers of the lots. It added that the parties' agreements contained an "escape clause" which stated that "[a]t any point during the implementation of this agreement, [Paxton] and [HDMF] may unilaterally and individually cancel this agreement should [Baikal] fail to abide by the covenants, terms and conditions contained therein." 20
On November 9, 2015, a Writ of Execution 21 was issued in favor of Paxton. 22
On December 15, 2015, HDMF filed an Omnibus Motion for Leave of Court to Intervene with Petition-in-Intervention, Set Aside Order and Quash Writ of Execution (Omnibus Motion). 23 It argued that it was denied due process when Paxton filed a motion for a writ of execution without notifying it. It also contended that Paxton should have enforced its right under the TMOA. 24
Paxton filed an Opposition and Comment 25 on the Omnibus Motion. It alleged that HDMF sent a copy of the Omnibus Motion to Baikal on December 15, 2015 by registered mail which the latter did not receive on the same day. Considering that the hearing on the Omibus Motion was set on December 18, 2015, HDMF clearly failed to observe the three-day notice rule under Rule 15 of the Rules of Court. It further contended that HDMF's Motion to Intervene must be denied because it was filed late given that it was submitted only after the rendition of judgment. Further still, HDMF was also bound by the notice of lis pendens annotated on Paxton's title over the subject properties. 26
Ruling of the RTC
In its Order 27 dated December 29, 2015, the RTC denied the Omnibus Motion.
More particularly, in denying the Motion to Intervene, the RTC stressed that HDMF failed to comply with the three-day notice rule; and that no pleading-in-intervention was attached to the Omnibus Motion. The RTC also pointed out that the TMOA contained an "escape clause" giving HDMF and Paxton the right to unilaterally and individually cancel it when Baikal failed to abide by its terms and conditions. The clause should have kept HDMF on guard on the possibility of rescission of the TMOA. Finally, it decreed that HDMF could not demand that it be allowed to intervene considering that intervention was not a matter of right and that HDMF was bound by the notice of lis pendens annotated on Paxton's title over the subject properties. 28
On November 23, 2016, the RTC denied the Motion for Reconsideration 29 dated January 17, 2016 filed by HDMF. 30
Undeterred, HDMF filed a petition for certiorari with the CA. 31
Ruling of the CA
On September 10, 2019, the CA dismissed 32 the petition. 33
According to the CA, the RTC did not commit grave abuse of discretion in denying the Omnibus Motion. Echoing the RTC, it ruled that HDMF did not timely file a Motion to Intervene. It emphasized that HDMF filed its Motion to Intervene way beyond the period to file which must be prior to the rendition of judgment by the RTC. 34
The CA also decreed that the notice of lis pendens in Paxton's title serves as a warning to any person who deals with the subject properties, including HDMF. Added to this, the entities engaged in the business of providing real estate loans must exercise higher degree of prudence in accepting properties as security for loans obtained from them. As a financial institution, the experience or expertise of HDMF in dealing with encumbrances on lands and the public interest which affects its business requires it to observe more care when dealing even with registered lands. 35
Finally, the CA stated that HDMF did not comply with the three-day notice rule in filing the Motion to Intervene. It stressed that as noted by the RTC, HDMF furnished Baikal a copy of its Omnibus Motion only on December 15, 2015 and by registered mail which the latter could not have received on the same day. 36
On February 18, 2020, the CA denied HDMF's Motion for Reconsideration, 37 prompting HDMF to file the present Petition for Review on Certiorari. 38
Our Ruling
The petition lacks merit.
In reviewing the assailed CA decision and resolution dismissing the Petition for Certiorari filed therewith, the Court is confronted with the issue of whether the CA properly determined that the RTC committed no grave abuse of discretion in denying HDMF's Omnibus Motion. The Court's review is limited as it centers on the legal correctness of the CA ruling that the trial court's findings and conclusion were duly supported by factual and legal bases; for otherwise, grave abuse of discretion should have been imputed against the RTC. 39
By grave abuse of discretion, we refer to such capricious and whimsical exercise of judgment tantamount to lack of jurisdiction. The abuse of discretion must be grave or exercised in an arbitrary or despotic manner and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act at all in contemplation of law. 40
Taking into account these legal precepts, the Court finds that the CA properly ruled that the RTC committed no grave abuse of discretion in denying HDMF's Omnibus Motion, particularly, its Motion to Intervene.
HDMF's Non-Observance of
Section 4, Rule 15 of the Rules of Court provides that "[e]very written motion required to be heard, and the notice of the hearing on the motion must be served to the other party in such a way as to ensure receipt by the latter at least three days prior to the hearing unless the court sets for good cause the hearing on shorter notice." Additionally, the notice of hearing on a motion must be directed to the opposing party informing him or her of the time and date of the hearing. 41 The failure to comply with the requirements renders the motion fatally defective and the motion shall be deemed a mere scrap of paper. 42
Here, HDMF furnished Baikal a copy of the Omnibus Motion and notice of hearing only on December 15, 2015 sent via registered mail. 43 This being the case, HDMF failed to comply with the three-day notice rule as it failed to ensure receipt by the opposing party of the Omnibus Motion and notice at least three days prior to the hearing on December 18, 2015. Definitely, sending a registered mail cannot be a guarantee that the notice will fall into the hands of the other party on the same day that it was sent. As a result, Baikal was unable to receive it on time.
Moreover, Section 2, Rule 19 of the Rules of Court provides for the period within which a third party-litigant may file a Motion to Intervene, viz.:
SECTION 2. Time to Intervene. — The motion to intervene may be filed at any time before rendition of judgment by the trial court. A copy of the pleading-in-intervention shall be attached to the motion and served on the original parties.
In the case, HDMF submitted its Motion to Intervene only after the rendition of the Joint Decision which is beyond the period indicated under Section 2, Rule 19 of the Rules of Court. The inexcusable delay is sufficient for denying the Motion to Intervene because the underlying reason for enforcing the period to file under Rule 19 is to prevent undue delay and resulting prejudice to the original parties that the intervention will cause. 44
It bears stressing that the RTC rendered the Joint Decision on March 13, 1998 and the Court affirmed the same in the Resolution dated September 11, 2003 which became final and executory. 45 To allow the intervention of HDMF, at this time, after the lapse of more than 17 years from the time the Court sustained the Joint Decision will cause undue delay to the proceedings and will prejudice Paxton which the Court had determined with finality as the legal owner of the subject properties.
HDMF insists that it should have been allowed to intervene citing the cases of Mago v. Court of Appeals (Mago)46 and Rodriguez v. Court of Appeals (Rodriguez)47 where the Court allowed intervention even after the decisions in the respective cases were rendered. 48 aScITE
The Court is unconvinced.
Let it be emphasized that in Mago, 49 the Court granted the motion to intervene because therein intervenors were the rightful awardees of the subject land, but the National Housing Authority mistakenly awarded the property to another person. The intervention was proper despite the final and executory judgment because therein intervenors were indispensable parties who were not impleaded and not accorded the right to be heard. 50
Similarly, in Rodriguez, 51 the Court determined that the CA correctly allowed intervention even after the decision in the main case became final and executory considering that therein intervenor had a title over the property in the same way that the original party also held a title over the same land. The Court agreed with the CA that therein intervenor was an indispensable party as it needed to be impleaded to resolve the issue of who the real owner is of the subject land, which is a matter subject of a quieting of title between adverse claimants. 52
In the case, HDMF failed to show that it is an indispensable party, specifically in the civil action for Declaration of Nullity of Titles and Damages, resolved in the final and executory Joint Decision 53 dated March 13, 1998. In fact, it only derived its interest from the loan applications of its members who, in turn, were prospective buyers of the lands in the Viva Homes Project. In other words, HDMF is not an indispensable party considering that a final determination of the suit for nullity of titles and damages can still be arrived at even if it is not impleaded in the case.
Indeed, litigation is not a game of technicalities. However, every case must be litigated pursuant to the prescribed rules of procedure in order to ensure a just, speedy, and orderly administration of justice. 54 Definitely, procedural rules must be observed unless there exist the most persuasive of reasons that necessitate their relaxation to prevent an injustice which is not commensurate with the degree of thoughtlessness in non-compliance with the technicalities. 55 In the case, the Court agrees with the CA that the RTC committed no grave abuse of discretion in denying the motion to intervene considering that HDMF failed to show that its circumstance fell within the exception (1) to the three-day notice rule; and (2) to the rule governing the period to file a motion to intervene.
HDMF Did Not Prove its Direct
In any event, HDMF also failed to prove the presence of the requisites for the grant of a motion to intervene as specified under Section 1, Rule 19 of the Rules of Court, as follows:
SECTION 1. Who May Intervene. — A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding.
Intervention is, thus, a remedy available to a third party, who or which is not originally impleaded in the proceeding, but becomes a litigant in the case for a particular purpose — to protect or preserve one's right or interest that may be affected by the proceedings. As discussed, intervention may be filed prior to the rendition of judgment by the trial court. It is not, however, a matter of right but is left to the sound discretion of the trial court. Also, there are two requisites that must concur for the grant of a motion to intervene, namely, the legal interest of the movant and the absence of delay and consequent prejudice to the original party that the intervention might result. 56
In Ongco v. Dalisay, 57 the Court explains that legal interest, as a qualifying factor in the grant of the intervention, pertains to the direct and immediate interest of the intended intervenor. "The interest must be actual and material, a concern which is more than mere curiosity, or academic or sentimental desire; it must not be indirect and contingent, indirect and remote, conjectural, consequential or collateral." 58
As discussed above, the interest of HDMF in the subject matter of the final and executory Joint Decision 59 of March 13, 1998 arose from the loan applications of its members who purchased parcels of land in the Viva Homes project. HDMF was acting on behalf of its affected members. Its interest in the joint decision is, thus, indirect as it was not privy to the action for declaration of nullity of titles and damages in the main case. Hence, for lack of the requisite legal interest, then its motion to intervene has no leg to stand on.
Furthermore, HDMF was bound by the notice of lis pendens annotated on Paxton's title and cannot claim that it was not duly notified of the pending litigation involving the subject properties.
To stress, lis pendens means "a pending suit." In turn, a notice of lis pendens is filed to serve as a warning to all people that the title to a particular property is subject of a pending suit, and if one would purchase it, that he or she is in danger of being bound by an adverse ruling. In fine, a notice of lis pendens is intended as a warning to the whole world that any person who purchases the property does so at his or her own risk. 60
The notice of lis pendens in Paxton' s title serves as a warning to any person who deals with the subject properties, including HDMF. Added to this, as stressed by the CA, HDMF must exercise a higher degree of prudence in accepting properties as securities for loans obtained from it. Being "a government financial institution involved in mobilizing provident funds primarily for shelter finance," 61 its experience in dealing with encumbered lands and given that its business is imbued with public interest, then it should be more cautious when dealing with registered lands. 62
All told, considering that the RTC Order 63 dated December 29, 2015 is supported by overwhelming factual and legal justifications, then the Court rules that the CA properly ruled that the RTC committed no grave abuse of discretion in denying HDMF's Omnibus Motion.
WHEREFORE, the petition is DENIED. The Decision dated September 10, 2019 and Resolution dated February 18, 2020 of the Court of Appeals in CA-G.R. SP No. 149255 are hereby AFFIRMED.
SO ORDERED." (CAGUIOA, J., designated as Additional Member vice, GAERLAN, J., per Raffle dated September 22, 2021). HEITAD
By authority of the Court:
(SGD.) TERESITA AQUINO TUAZONDivision Clerk of Court
Footnotes
1.Rollo, pp. 20-78.
2.Id. at 85-93; penned by Associate Justice Germano Francisco D. Legaspi with Associate Justices Remedios A. Salazar-Fernando (now Presiding Justice) and Samuel H. Gaerlan (now a Member of the Court), concurring.
3.Id. at 94-95; penned by Associate Justice Germano Francisco D. Legaspi with Associate Justices Remedios A. Salazar-Fernando (now Presiding Justice) and Walter S. Ong, concurring.
4.Id. at 274-286.
5.Id. at 26.
6.Id. at 96-108; penned by Executive Judge Roy S. del Rosario.
7. Erroneously referred to as "TCT No. T-342367" in the CA Decision, id. at 86.
8.Id. at 26.
9.Id. at 86.
10.Id. at 109-115.
11.Id. at 139-144.
12.Id. at 86.
13.Id.
14.Id. at 145.
15.Id. at 148-154.
16.Id. at 96-108.
17.Id. at 86.
18.Id. at 156-157.
19.Id. at 86.
20.Id. at 156-157.
21.Id. at 161.
22.Id. at 199-206.
23.Id. at 165-194.
24.Id. at 179-185.
25.Id. at 198-216.
26.Id. at 199-206.
27.Id. at 240-242; penned by Executive Judge Norberto J. Quisumbing, Jr.
28.Id. at 241-242.
29.Id. at 243-260.
30.Id. at 87.
31.Id. at 38.
32.Id. at 85-93.
33.Id. at 39.
34.Id. at 90.
35.Id. at 90-91.
36.Id. at 91.
37.Id. at 41.
38.Id. at 20-78.
39.Inocentes v. R. Syjuco Construction, Inc., G.R. No. 237020, July 29, 2019.
40.Pascual v. Burgos, et al., 776 Phil. 167, 185 (2016), citing United Coconut Planters Bank v. Looyuko, 560 Phil. 581, 591-592 (2007).
41. Section 5, Rule 15 of the Rules of Court.
42.Ti v. Diño, 820 Phil. 330, 337 (2017).
43.Rollo, p. 91.
44.Ongco v. Dalisay, 691 Phil. 462, 469 (2012).
45.Rollo, p. 26.
46. 363 Phil. 225 (1999).
47. 711 Phil. 56 (2013).
48.Rollo, pp. 60-61.
49.Supra note 46.
50.Id. at 232-234.
51.Supra note 47.
52.Id. at 77-79.
53.Rollo, pp. 96-108.
54.Ti v. Diño, supra note 42, at 342, citing Rural Bank of Seven Lakes (S.P.C.), Inc. v. Belen A. Dan, 595 Phil. 1061, 1073 (2008).
55.Id. at 343, citing Pedrosa v. Spouses Hill, 327 Phil. 153, 159 (1996).
56.Ongco v. Dalisay, supra note 44, at 468-469.
57.Id.
58.Id. at 469-470, citing Hon. Executive Secretary, et al. v. Northeast Freight Forwarders, Inc., 600 Phil. 789, 799 (2009).
59.Rollo, pp. 96-108.
60.Spouses Lim v. Vera Cruz, 408 Phil. 503, 505 (2001).
61. Section 4 (h), Republic Act No. 9679, entitled "An Act Further Strengthening the Home Development Mutual Fund, and for Other Purposes," approved on July 21, 2009.
62.Rollo, p. 91.
63.Id. at 240-242.