OF THE PHILIPPINES,
G. R. No. 85284
February 28, 1990
E S O L U T I O N
SIMPLICIO A. PALANCA in His Own
Behalf as a Stockholder of BACOLOD
REAL ESTATE DEVELOPMENT CORPORATION
[BREDCO] and Other Stockholders
This is a
Petition for Certiorari to annul and
set aside the resolution of the Sandiganbayan [Third Division] dated 3
June 1988 granting the private respondents' motion to intervene in
Case No. 0025 and admitting their answer in intervention as well as its
resolution dated 25 August 1988, denying the petitioner's motion for
Prohibition to order the respondent court to cease and desist from
with the intervention filed with it; and alternatively, Mandamus to
the respondent court to dismiss the intervention case.
are as follows:
On 29 July 1987,
the Republic of the Philippines,
as Plaintiff, through its governmental instrumentality the Presidential
Commission on Good Government [PCGG] filed with the respondent
a complaint against Ferdinand E. Marcos, et al. for reconveyance,
accounting, restitution and damages, docketed therein as Civil Case No.
0025 [PCGG No. 26].
On or about 3 September 1987, before the said Civil Case No. 0025 could
be set for hearing, private respondent Simplicio A. Palanca in his own
behalf as a stockholder of Bacolod Real Estate Development Corporation
[BREDCO] and other stockholders similarly situated, filed with the
Sandiganbayan a "Motion For Leave To Intervene"
attaching thereto their "Answer in Intervention."
In their motion,
private respondents alleged that
they be allowed to intervene in the present action and to file the
in intervention hereto attached as Annex "A", the said stockholders
a legal interest in the matter in litigation and in the disposition of
the properties listed in Annex "A" of the Complaint as BREDCO lots and
shares of stock in Bacolod Real Estate Development Corporation.
In justification, it is further
1. Close examination of the Complaint, in
par. 12 thereof under 'V. SPECIFIC AVERMENTS OF DEFENDANTS' ILLEGAL
makes no mention at all about BREDCO being the subject of any anomalous
transaction engaged in by any of the defendants, in consequence of
the listed BREDCO lots could have been gotten illegally. It is to be
on the other hand, that the titles mentioned in aforesaid Annex of the
complaint covering the lots in question are not registered in the names
of any of the defendants but in the name of Bacolod Real Estate
2. Similarly, the shares of stock in
Estate Development Corporation appealing under Personal Property on
two of Annex "A" of the complaint are carried not in the names of any
the defendants, but in the name of Marsteel Consolidated Inc. and were
acquired under the circumstances averred more in detail in the
Answer in Intervention by reason of which detail shares should not be
in the present action.
3. If intervention is allowed,
prepared to prove that if ever any of the defendants through Marsteel
Inc. and Marsteel Corporation came to have any interest in Bacolod Real
Estate Development Corporation, it was only by way of accommodation on
the part of BREDCO stockholders who transferred their shareholdings
70% of the subscribed capital to enable Marsteel Consolidated to secure
adequate financing for the reclamation and port development project
allegations were further expanded and
elaborated in the private respondents' Answer in Intervention.
On 2 December
1987, petitioner filed its Reply
to Answer In Intervention, while private respondents filed a "Rejoinder
to Reply With Motion To Release BREDCO Lots
and also a "Motion To Calendar For Hearing" the motion to release
On 22 January
1988, respondent court promulgated
holding in abeyance action on the private respondents' "Rejoinder to
with Motion to Release BREDCO Lots" and set the Motion for Leave to
for hearing on 2 February 1988.cralaw
On 11 March 1988,
respondent court issued an Order
giving petitioner fifteen  days from 11 March 1988 within which to
file its opposition and/or comment on the motion to intervene and
the private respondents in turn ten  days within which to file
On 23 March 1988,
petitioner filed its Motion
to Dismiss "Answer In Intervention," on the grounds that; 
court lacks jurisdiction and  intervenors have no legal interest in
the matter in litigation,
which the private respondents opposed.
On 6 June 1988,
respondent court promulgated a
Resolution dated 3 June 1988
granting the private respondents' motion to intervene and admitting
Answer in Intervention. Petitioner moved for reconsideration but
this was denied by respondent court in its resolution of 25 August 1989.
through the Solicitor General,
contends that in issuing the questioned resolutions granting the Motion
to Intervene and admitting the Answer-in-Intervention, respondent
acted in contravention of a national or public policy embodied in
Orders Nos. 1, 2, 4 and related issuances, or otherwise acted in a way
not in accord with law or with the applicable decisions of this Court,
[a] Petitioner, being the sovereign
cannot be sued without its consent, and the Intervention is, in legal
a suit or counter- suit against the sovereign state, the Republic of
[b] The cause of action of
not fall within the jurisdiction of the Sandiganbayan as expressly
out in P.D. No. 1606 and Executive Order No. 14;
[c] Intervenors have no legal
the matter in litigation, and the subject matter is not in custodia
of respondent court; and
[d] Intervenors' claims, as
their Motion for Intervention and Answer-in-Intervention, are claims
and/or among Ferdinand and Imelda Marcos and their cronies, i.e.,
of their immediate family close relatives, subordinates, and/or
associates, dummies, agents and nominees" and are cognizable not by
court but by the regular courts or other for a Even if there would be
litigations, as among themselves, the legal effect remains, i.e., that
there is only one case filed by the Republic against the named
in Civil Case No. 0025, grounded on causes of action entirely distinct
from any cause of action which intervenors may have against Mr. Marcos
and his cronies.
The petition is
not impressed with merit.
The Rules of
Court permit an aggrieved party,
generally, to take a cause and apply for relief with the appellate
by way of either of two distinct and dissimilar modes through the broad
process of appeal or the limited special civil action of certiorari. An
appeal brings up for review errors of judgment committed by a court of
competent jurisdiction over the subject of the suit or the persons of
parties or any such error committed by the court in the exercise of its
jurisdiction amounting to nothing more than an error of judgment. On
other hand, the writ of certiorari issues for the correction of errors
of jurisdiction only or grave abuse of discretion amounting to lack or
excess of jurisdiction. The writ of certiorari cannot legally be used
any other purpose. In terms of its function, the writ of certiorari
to keep a lower court within the bounds of its jurisdiction or to
it from committing such a grave abuse of discretion amounting to excess
of jurisdiction or to relieve parties from arbitrary acts of
acts which courts have no power or authority in law to perform.
Hence, the main
issue to be resolved in the present
case, which is principally a petition for certiorari to annul and set
the questioned resolutions of respondent court is, whether or not the
has jurisdiction over the action for intervention, or if it has,
respondent court acted with grave abuse of discretion amounting to lack
or excess of its jurisdiction in rendering the questioned resolutions.cralaw
In the present
case, petitioner merely contends
that the cause of action of intervenors does not fall within the
of the Sandiganbayan as expressly spelled out in Presidential Decree
1606 and Executive Order No. 14; it does not claim that respondent
committed grave abuse of discretion amounting to lack or excess of its
jurisdiction in rendering the questioned resolutions.cralaw
of the Sandiganbayan has already
been settled in Presidential Commission on Good Government vs. Hon.
G. Penal, etc., et al.
where the Court held that:
Under Section 2 of the President's
Order No. 14 issued on May 7, 1986, all cases of the Commission
the funds, Moneys, Assets, and Properties Illegally Acquired or I
by Former President Ferdinand Marcos, Mrs. Imelda Romualdez Marcos,
Close Relatives, Subordinates, Business Associates, Dummies, Agents, or
Nominees whether civil or criminal, are lodged within the "exclusive
original jurisdiction of the Sandiganbayan" and all incidents arising
incidental to, or related to, such cases necessarily fall likewise
the Sandiganbayan's exclusive and original jurisdiction, subject to
on certiorari exclusively by the Supreme Court. [Emphasis supplied].
the aforequoted ruling in six 
which were decided jointly, again, the Court held that:
The exclusive jurisdiction conferred on
would evidently extend not only to the principal causes of action,
the recovery of alleged ill-gotten wealth, but also to 'all incidents
from, incidental to, or related to, such cases,' such as the dispute
the sale of the shares, the propriety of the issuance of ancillary
or provisional remedies relative thereto, the sequestration thereof,
may not be made the subject of separate actions or proceedings in
not an independent action, but is
ancillary and supplemental to an existing litigation.
Hence, the private respondents' action for intervention in Civil Case
0025, not being an independent action, is merely incidental to, or
to, the said civil case. Since the respondent Sandiganbayan has the
and original jurisdiction over Civil Case No. 0025, it has likewise
and exclusive jurisdiction over the private respondents' action for
that respondent Sandiganbayan
has jurisdiction not only over Civil Case No. 0025 but also over the
respondents' action for intervention, any error or irregularity that it
may have committed in rendering its questioned resolutions, in the
of its jurisdiction, amounts to an error of judgment, which is not
in the present petition for certiorari but by appeal.
this case may be dismissed outright without the Court having to pass
the other issues raised in the petition. However, considering that the
litigation below is of great public interest and involves a matter of
policy, the Court has decided to review the other errors allegedly
by respondent court in rendering its questioned resolutions.cralaw
jurisdiction, the law on "intervention"
is found in the Rules of Court.
Thus, a person may, before or during a trial, be permitted by the
in its discretion, to intervene in an action, if he has legal interest
in the matter in litigation, or in the success of either of the parties
or an interest against both, or when he is so situated as to be
affected by a distribution or other disposition of property in the
of the court or of an officer thereof.
The Court is not
impressed with the contention
of petitioner that the intervenors have no legal interest in the matter
in litigation. In this connection, it would suffice to quote what the
court said in holding that the intervenors have a legal interest in the
matter in litigation. Thus:
Has Palanca shown a proper case for
by him and his co-stockholders who are similarly situated as he is?
A narration of
the pertinent facts alleged by Palanca
and the plaintiff indicates the answer.
In 1961, BREDCO
was awarded by Bacolod City, a
contract to undertake the reclamation and port development of the city.
As of 1975, a sizeable portion of land had already been reclaimed from
the sea and corresponding torrens titles issued in BREDCO's name. In
year, BREDCO engaged MARSTEEL as a contractor to complete the project
power to negotiate in its name or jointly and/or severally with BREDCO
for loans to finance the reclamation and port development, and to
all reclaimed lots and other assets of the project as security. For its
services, MARSTEEL shall receive 65% of the excess of all revenues over
all disbursements. Accordingly, BREDCO conveyed to MARSTEEL 65% of each
lot already reclaimed and that to be reclaimed.cralaw
In 1977, MARSTEEL
assigned to MCI, which owned
100% of its capital stock, all its rights, interests, obligations, and
undertakings in the project. To enable MCI to expand its base of
for loans needed in the reclamation and port development the BREDCO
transferred to MCI their respective shares of stock amounting to 70% of
the capital stock of BREDCO. In return, they 'shall be entitled to a
of 35% in excess of all revenues over all disbursements of the
it being understood that payment of the corresponding share shall be
to BREDCO stockholders as owners of existing interests in the project,
regardless of the fact that by implementation of this AGREEMENT, they
to be stockholders of BREDCO.cralaw
1986, the Presidential Commission
on Good Government (PCGG) sequestered all assets, properties, records
documents' of MARSTEEL, MCI, and BREDCO'. In July 1987, the complaint
bar was filed and expanded in March 1988. The pleadings, original and
allege that the defendants, acting singly or collectively, amassed
wealth listed in Annex 'A' thereof, among which are the BREDCO lots and
shares of stock, and pray that the ill-gotten wealth be reconveyed to
plaintiff, plus damages. Significantly, however, the bodies of the
do not mention anything about BREDCO, its project, lots, and stocks,
alleged facts, Palanca has established
a proper case for intervention. Firstly, he and his co-stockholders
a legal interest in the matter in litigation, namely, their 70% of the
capital stock of BREDCO, which they transferred to MCI by way of
accommodation, or its equivalent of 35% of the excess of all revenues
all disbursements, to which they are entitled "as owners of existing
in the project." Section 2, Rule 12, Revised Rules of Court, provides
a person may be permitted "to intervene in an action, if he has legal
in the matter in litigation."
As a general
rule, the right to intervene exists
in favor of one who claims to be the owner or to have some interest in
the property which is the subject of litigation, and this without
regard to the value of the property or the right claimed therein. A
party may intervene in a sequestration suit involving title to personal
property, and have his claims to the possession of the property
therein. So, in an action for possession of real or personal
an intervenor may be admitted on the ground that he is an owner
either to assist in the defense, or to claim the property for himself,
or to obtain some other relief germane to the action. [59 Am Jur 2d,
Sec. 152, p. 585].cralaw
same Section 2, Rule 12 further
provides that intervention by a person may be permitted "when he is so
situated as to be adversely affected by a distribution or other
of property in the custody of the court or of an officer thereof." On
point, the Supreme Court observed:
We shall now speak of the case where the
desires to intervene for the purpose of asserting a property right in
res, or thing, which is the subject-matter of the ligitation, without
a formal plaintiff or defendant, and without acquiring the control over
the course of a litigation, which is conceded to the main actions (sic)
therein. The mode of intervention to which reference is now made is
in equity procedure the intervention pro interesse suo and is somewhat
analogous to the trial of a right of property in an action of law, its
purpose being to enable a person whose property gets into the clutches
of a court, in a controversy between others, to go into court and to
it or its proceeds to be surrendered to him. It often happens that a
who really owns property, or has a superior lien or other interest in
sees a litigation spring up between others who assert rights in or
it. If the court takes possession of the res, or otherwise gets
over it in such a controversy, the real owner is not compelled to stand
Idly by and see the property disposed of without asserting his rights.
Though it be granted that the litigation would not be technically
on him because of his not being a party, yet it might well happen that
complications would ensue whereby his rights would be materially
For instance, the subject matter of the litigation might consist of a
to he distributed, and the conditions might be such that if it were
over to the particular litigant who should appear to have the better
in the original action, the person really having a superior title might
be left without redress. Accordingly, provision is made whereby persons
who have not been joined as parties in the original proceedings, may
and assert a right antagonistic or superior to that of one or both of
parties. [Bosworth vs. Terminal etc. Assoc. of St. Louis, 174 U.S.
43 L. ed., 941, 943]. As regards the right to intervene in this manner,
it may be stated that if the party desiring to intervene shows a
and proper interest in the fund or property in question, the motion to
intervene should be granted, especially if such interest cannot be
properly protected. [Joaquin v. Herrera, 37 Phil. 705, 722-724].
BREDCO lots and stocks were sequestered
and are now in custodia legis [Bernas, The Constitution of the
of the Philippines, An Annotated Text, 1987 Ed., p. 129, Footnote 42].
From the facts averred by Palanca and the plaintiff, it is easy to see
that in the event We decide to order the reconveyance of those assets
the plaintiff, Palanca and his co-stockholders in BREDCO stand to be
And thirdly, the
legal interest of Palanca and
his co-stockholders in the matter in litigation and the possibility of
a judgment ordering reconveyance in favor of the plaintiff, invest them
with legal interest in the success of the defendants, at least insofar
as the BREDCO lots and shares are concerned. Section 2, Rule 12, also
intervention by a person who has legal interest in the success of
of the parties.
contention that the State cannot
be sued without its consent and that private respondents' action for
is, in legal effect, a suit or counter-suit against the sovereign is
untenable. The Rules of Court
provide that the intervention shall be made by complaint filed and
in regular form and may be answered as if it were an original
but where the intervenor unites with the defendant in resisting the
of the plaintiff, the intervention may be made in the form of an answer
to the complaint. In order words, a third person who makes himself a
to an existing litigation may either join the plaintiff in claiming
is sought in the filing a complaint in intervention, or by uniting with
the defendant in resisting the claims of the plaintiff, by filing an
In Froilan v. Pan
Oriental Shipping Co.,
the plaintiff therein, Fernando A. Froilan, filed a complaint against
defendant, Pan Oriental Shipping Co. The Republic of the Philippines
by filing a complaint in intervention. Thereafter, the defendant filed
its answer to the complaint in intervention and set up a counterclaim
the Republic of the Philippines. The trial court dismissed the
counterclaim against the Republic on the ground, among others, that the
state is immune from suit. On appeal, this Court held that the
of the counterclaim was untenable, because by filing its complaint in
the Government in effect waived its right to non-suability.cralaw
In another case,
Lim vs. Brownell, Jr. and Kagawa,
the plaintiff Benito E. Lim, as administrator of the intestate estate
Arsenia Enriquez, filed a complaint in the Court of First Instance of
against the Alien Property Administrator [later substituted by the
General of the United States] for the recovery of four  parcels of
[which were subsequently transferred to the Republic of the
with a prayer for the payment of back rentals. The Republic of the
intervened in the case. The defendant Attorney General of the United
and the defendant-intervenor Republic of the Philippines each filed an
answer, alleging by way of affirmative defense, among others, that the
lower court had no jurisdiction over the claim for rentals since the
in that regard constituted a suit against the Republic to which it had
not given its consent. The trial court dismissed the complaint for lack
of jurisdiction. On appeal, this Court affirmed, with the following
The claim for
damages for the use of the property
against the intervenor defendant Republic of the Philippines to which
was transferred, likewise, cannot be maintained because of the immunity
of the state from suit. The claim obviously constitutes a charge
or financial liability to, the Government and consequently cannot be
by the courts except with the consent of said government. [Syquia vs.
Lopez, 84 Phil. 312; 47 Off. Gaz., 665; Compania General de Tabacos vs.
Govt. of the P.I., 45 Phil., 663]. Plaintiff argues that by its
the Republic of the Philippines, in effect, waived its right of
but it will be remembered that the Republic intervened in the case
to unite with the defendant Attorney General of the United States in
plaintiffs claims, and for that reason asked no affirmative relief
any party in the answer in intervention. Clearly, this is not a case
the State takes the initiative in an action against a private party by
filing a complaint in intervention, thereby surrendering its privileged
position and coming down to the level of the defendants what happened
the case of Froilan vs. Pan Oriental Shipping Co., et al.-95 Phil. 905
cited by the plaintiff but one where the State, as one of the
merely resisted a claim against it precisely on the ground, among
of its privileged position which exempts it from suit. [Emphasis
In the present
case, the private respondents intervened
in Civil Case No. 0025 merely to unite with the defendants therein in
the claims of petitioner, as plaintiff, and for that reason asked for
affirmative relief against any party in their answer in intervention.
other words, this is not a case where the private respondents take the
initiative in an action against petitioner by filing a complaint in
or a complaint. As observed by respondent Sandiganbayan:
Palanca and his co-stockholders
have for their purpose to exclude the BREDCO lots and stocks or, at
their 35% interest in the BREDCO project from any possible judgment
reconveyance of the alleged ill-gotten wealth to the plaintiff. They do
not pray for damages against the latter. In effect, they occupy a
position as regards those shares of stock or interest. The fact that
interjected themselves into his litigation at their own initiative does
not alter the essential nature of their intervention."
respondents' action for intervention in
Civil Case No. 0025 is not, therefore, a suit or counter-suit against
Republic of the Philippines. Having arrived at the above
the Court finds no need to further discuss the petitioner's pretense
the private respondents' claims are claims as between and/or among
and Imelda Marcos, et al., and that the same is not cognizable by
Sandiganbayan but by the regular courts. It suffices to state that, as
already stated, in intervening in Civil Case No. 0025, private
merely joined the defendants therein in resisting the claims of
as plaintiff, and that they asked no affirmative relief against any
in their answer in intervention. They do not appear to have any
with the defendants, Ferdinand and Imelda Marcos, et al.cralaw
petition in the present case
is hereby dismissed.cralaw
Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Bidin, Sarmiento,
Griño-Aquino, Medialdea and Regalado, JJ., concur.cralaw
Rollo, p. 81.
Rollo, p. 108.
Rollo, p. 111.
Rollo pp. 108-109.
Rollo, p. 142.
Rollo, p. 146.
Rollo, p. 145.
Rollo, p. 150.
Rollo, p. 152.
Rollo, p. 153.
Rollo, p. 164.
Rollo, p. 61.
Rollo, p. 74.
Silverio vs. Hon. Court of Appeals, et al. G. R. No. L-39861, 17 March
1986,141 SCRA 527 and cases therein cited.
G. R. No. 77663,12 April 1988,159 SCRA 556.
Soriano III vs. Yuzon, 164 SCRA 226.
Garcia vs. David, 67 Phil. 279, 282,
Rule 12, Rules of Court.
Section 2, Rule 12, Rules of Court.
Rollo, pp 63-66.
Section 2[c] Rule 12, Rules of Court.
95 Phil. 905.
107 Phil. 344.
Rollo, p. 66.