FIRST DIVISION
[G.R. No. 167925. September 5, 2016.]
PHILIPPINE NATIONAL BANK, petitioner, vs. D.B. TEODORO DEVELOPMENT CORPORATION, ET AL., respondents.
[G.R. No. 169362. September 5, 2016.]
ASSET PRIVATIZATION TRUST, petitioner, vs. D.B. TEODORO DEVELOPMENT CORPORATION, ET AL., respondents.
NOTICE
Sirs/Mesdames :
Please take notice that the Court, First Division, issued a Resolution dated September 5, 2016 which reads as follows:
"G.R. No. 167925 — PHILIPPINE NATIONAL BANK, Petitioner, v. D.B. TEODORO DEVELOPMENT CORPORATION, ET AL., Respondents; G.R. No. 169362 — ASSET PRIVATIZATION TRUST, Petitioner, v. D.B. TEODORO DEVELOPMENT CORPORATION, ET AL., Respondents.
Submitted for our consideration are the Motion for Leave of Court to Admit Attached Motion for Clarification 1 and the Motion for Clarification (Re: Resolution dated 25 November 2015) 2 filed by petitioner Philippine National Bank (PNB). In said motions, PNB prays that this Court resolve the Motion for Substitution 3 it filed on July 24, 2012 wherein PNB requested for the issuance of an order substituting it with petitioner Asset Privatization Trust (APT), now renamed as Privatization Management Office (PMO), and amending the title of the instant consolidated cases to "ASSET PRIVATIZATION TRUST (APT), now PRIVATIZATION MANAGEMENT OFFICE (PMO) v. D.B. TEODORO, ET AL." PNB points out that the Court did not pass upon its Motion for Substitution in the Resolution dated July 29, 2015, which disposed of these consolidated cases, and in the Resolution dated November 25, 2015, which denied the Motions for Reconsideration of the July 29, 2015 Resolution.
PNB alleges that on February 27, 1987, while the herein controversy was pending before the lower court, the Government of the Republic of the Philippines (GRP), pursuant to the authority granted to it by Administrative Order No. 14 dated February 3, 1987, entered into a Deed of Transfer with PNB as part of the GRP's economic recovery program. Based on the said Deed of Transfer, PNB maintains that the GRP agreed to assume certain liabilities of PNB in consideration of the transfer to the GRP of certain bank assets. According to PNB, those included in the transfer of interest in favor of the GRP are the claims and obligations which are the subject of the present litigation particularly that of the loan and loan-related accounts as of June 30, 1986 of D.B. Teodoro Development Corporation, et al., who are the named respondents in these consolidated cases. PNB claims that said interests were assigned in favor of the APT, now called PMO, which was created by the GRP under Proclamation No. 50 dated December 8, 1986, as amended, and tasked to provisionally manage and dispose of non-performing assets of government financial institutions.
On the basis of the above premise, PNB argues that there had been an effective transfer pendente lite of the obligations of respondents from PNB to the GRP through APT (now PMO). Therefore, a substitution by APT (now PMO) as sole petitioner in this legal proceeding is proper in accordance with Section 19, Rule 3 of the Rules of Court, which provides: SDAaTC
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.
Realizing that the previous resolutions of this Court in these consolidated cases made no mention of the July 24, 2012 Motion for Substitution that it previously filed, PNB now seeks that the same be resolved by this Court so that it may be clarified on this matter.
The Court finds the motion for substitution unmeritorious.
An examination of the July 24, 2012 Motion for Substitution would reveal that PNB chose not to attach the alleged Deed of Transfer and the Pretrial Brief as annexes which would have served as documentary evidence to bolster PNB's assertion that a transfer pendente lite of respondents' obligations did in fact occur.
Even if the aforesaid documents were attached to the motion for substitution, this Court cannot take cognizance of them and pass judgment upon their authenticity and validity because that would involve litigious factual issues that this Court is precluded from ruling upon. Well-settled is the rule that the Supreme Court is not a trier of facts since the function of the Court in petitions for review on certiorari is limited to reviewing errors of law that may have been committed by the lower courts, save under exceptional circumstances. 4 PNB has not demonstrated that this particular matter falls under any of the recognized exceptions to this doctrine.
In any event, the wording of Section 19, Rule 3 of the Rules of Court itself indicates that the substitution of parties on account of a transfer of interest is not mandatory. As we held in the past, the rule in case of a transfer of interest pendente lite is that 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. 5 We likewise held that a transferee pendente lite need not be included or impleaded by name in order to be bound by the judgment because the action or suit may be continued for or against the original party or the transferor and still be binding on the transferee since a transferee pendente lite is a proper party in the case but it is not an indispensable party. 6
It is therefore discretionary upon this Court to continue the case in the name of the original party or direct the substitution of the transferee or to order the transferee as jointly impleaded in the case. In any which way this Court chooses to act, the transferee is still bound by the judgment even if not formally impleaded.
Thus, in the consolidated cases at bar, when this Court did not rule on the motion for substitution filed by PNB, the legal proceedings continued in the name of PNB, the original party. However, the exercise of the Court's discretion in allowing the proceedings to continue in the name of the original party cannot be construed as prejudicial or inimical to the interests of either PNB or APT (now PMO) since the latter's interest as transferee is deemed identical to the former. We explained in Heirs of Francisca Medrano v. De Vera, 7 thus: acEHCD
[Rule 3, Section 19] 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.
We stated in the same case that 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. 8
A review of the procedural history of these consolidated cases would reveal that APT (now PMO) intervened in Civil Case No. 12566 that was filed in the Regional Trial Court of Makati City, Branch 62 which was the lawsuit from which the instant consolidated cases originated. APT (now PMO) was likewise subsequently impleaded as a plaintiff-intervenor-appellant when the August 6, 1997 judgment in the aforementioned civil action was brought to the Court of Appeals. When the April 25, 2005 Decision of the Court of Appeals in CA-G.R. CV No. 57472 was handed down, APT (PMO) filed its own petition for review before this Court docketed as G.R. No. 169362 which was later consolidated with PNB's appeal that was docketed as G.R. No. 167925. Both cases were then disposed jointly in this Court's Resolution dated July 29, 2015.
It is apparent from the foregoing narration that APT (now PMO) was able to fully ventilate its legal position in these consolidated cases. Thus, the question of whether the substitution of APT (now PMO) for PNB should be granted has already been rendered moot and serves no legal purpose.
WHEREFORE, the petitioner PNB's Motion for Leave of Court to Admit Attached Motion for Clarification and the Motion for Clarification are GRANTED. The Court CLARIFIES its Resolutions dated July 29, 2015 and November 25, 2015 in that petitioner PNB's Motion for Substitution dated July 23, 2012 is deemed denied for lack of merit.
SO ORDERED." BERSAMIN, J., on official leave.
Very truly yours,
(SGD.) EDGAR O. ARICHETADivision Clerk of Court
Footnotes
1. Rollo (G.R. No. 167925), pp. 1371-1774.
2. Id. at 1375-1385.
3. Id. at 1221-1227.
4. Gepulle-Garbo v. Garabato, G.R. No. 200013, January 14, 2015, 746 SCRA 189, 197-198.
5. California Bus Lines, Inc. v. State Investment House, Inc., 463 Phil. 689, 711 (2003).
6. Heirs of Francisco Guballa, Sr. v. Court of Appeals, 250 Phil. 519, 535-536.
7. 641 Phil. 228, 242 (2010).
8. Id.