Republic of the Philippines ...

allowed to intervene in the present action and to file the Answer in intervention hereto
SUPREME COURT attached as Annex 'A', the said stockholders having a legal interest in the matter in
Manila 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.
EN BANC
In justification, it is further respectfully alleged that.
G.R. No. 85284 February 28, 1990
1. Close examination of the Complaint, in particular par. 12 thereto under 'V. SPECIFIC
REPUBLIC OF THE PHILIPPINES, petitioner AVERMENTS OF DEFENDANTS' ILLEGAL ACTS', makes no mention at all about
vs. BREDCO being the subject of any anomalous transaction engaged in by any of the
SANDIGANBAYAN, Third Division, SIMPLICIO A. PALANCA in his own behalf as a defendants, in consequence of which the listed BREDCO lots could have been gotten
stockholder of Bacolod Real Estate Development Corporation (BREDCO), and illegally. It is to be observed, on the other hand, that the titles mentioned in aforesaid
other stockholders similarly situated, respondents. 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 Development
Corporation.
Hilado, Hagad & Hilado for private respondents.

2. Similarly, the shares of stock in Bacolod Real Estate Development Corporation

RESOLUTION
appealing under PERSONAL PROPERTY on page two of Annex A of the complaint t
are ' carried not in the names of any of the defendants, but in the name of Marsteel
Consolidated Inc. and were acquired under the circumstances averred more in detail in
the accompanying Answer in Intervention by reason of which detail shares should not
PADILLA, J.: be involved in the present action.

This is a petition for certiorari to annul and set aside the resolution of the 3. If intervention is allowed, intervenors are prepared to prove that if ever any of the
Sandiganbayan (Third Division), dated 3 June 1988, granting the private respondents' defendants through Marsteel Consolidated, Inc. and Marsteel Corporation came to have
motion to intervene in Civil Case No. 0025 and admitting their answer in intervention, as any interest in Bacolod Real Estate Development Corporation, it was only by way of
well as its resolution, dated 25 August 1988, denying the petitioner's motion for accommodation on the part of BREDCO stockholders who transferred their
reconsideration; PROHIBITION to order the respondent court to cease and desist from shareholdings aggregating 70% of the subscribed capital to enable Marsteel
proceeding with the intervention filed with it; and alternatively, mandamus to compel the Consolidated to secure adequate financing for the reclamation and port development
respondent court to dismiss the intervention case. project . 4

The antecedents are as follows: The foregoing allegations were further expanded and elaborated in the private
respondents' Answer in Intervention.
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 On 2 December 1987, petitioner filed its Reply 5 to Answer In Intervention, while private
respondent Sandiganbayan a complaint against Ferdinand E. Marcos, et al. for respondents filed a "Rejoinder to Reply With Motion To Release BREDCO Lots 6 and
reconveyance, reversion, accounting, restitution and damages, docketed therein as Civil also a "Motion To Calendar For Hearing" the motion to release BREDCO lots. 7
Case No. 0025 (PCGG No. 26). 1
On 22 January 1988, respondent court promulgated a resolution 8 holding in abeyance
On or about 3 September 1987, before the said Civil Case No. 0025 could be set for action on the private respondents' "Rejoinder to Reply with Motion to Release BREDCO
hearing, private respondent Simplicio A. Palanca in his own behalf as a stockholder of lots", and set the Motion for Leave to Intervene for hearing on 2 February 1988.
Bacolod Real Estate Development Corporation (BREDCO) and other stockholders
similarly situated, filed with the respondent Sandiganbayan a "Motion For Leave To On 11 March 1988, respondent court issued an order 9 giving petitioner fifteen (1 5)
Intervene" 2 attaching thereto their "Answer in Intervention ." 3 days from 11 March 1988 within which to file its opposition and/or comment on the
motion to intervene and giving the private respondents in turn ten (10) days within which
In their motion, private respondents alleged that they be — to file their reply thereto.
On 23 March 1988, petitioner filed its Motion to Dismiss "Answer In Intervention," on the jurisdiction over the subject of the suit or the persons of the parties or any such error
grounds that; (1) respondent court lacks jurisdiction and (2) intervenors have no legal committed by the court in the exercise of its jurisdiction amounting to nothing more than
interest in the matter in litigation, 10 which the private respondents opposed. 11 an error of judgment. On the 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
On 6 June 1988, respondent court promulgated a Resolution dated 3 June jurisdiction. The writ of certiorari cannot legally be used for any other purpose. In terms
1988 12 granting the private respondents' motion to intervene and admitting their Answer of its function, the writ of certiorari serves to keep a lower court within the bounds of its
in Intervention. jurisdiction or to prevent it from committing such a grave abuse of discretion amounting
to excess of jurisdiction or to relieve parties from arbitrary acts of courts — acts which
courts have no power or authority in law to perform. 14
Petitioner moved for reconsideration but this was denied by respondent court in its
resolution of 25 August 1989.13
Hence, the main issue to be resolved in the present case, which is principally a petition
for certiorari to annul and set aside the questioned resolutions of respondent court is,
Hence, the instant petition.
whether or not the Sandiganbayan has jurisdiction over the action for intervention, or if it
has, whether respondent court acted with grave abuse of discretion amounting to lack or
The petitioner, through the Solicitor General, contends that in issuing the questioned excess of its jurisdiction in rendering the questioned resolutions.
resolutions granting the Motion to Intervene and admitting the Answer-in-Intervention,
respondent Sandiganbayan acted in contravention of a national or public policy
In the present case, petitioner merely contends that the cause of action of intervenors
embedded in Executive Order Nos. 1, 2, 4 and related issuances, or otherwise acted in
does not fall within the jurisdiction of the Sandiganbayan as expressly spelled out in
a way not in accord with law or with the applicable decisions of this Court, because:
Presidential Decree No. 1606 and Executive Order No. 14; it does not claim that
respondent court committed grave abuse of discretion amounting to lack or excess of its
(a) Petitioner, being the sovereign state, cannot be sued without its consent, and the jurisdiction in rendering the questioned resolutions.
Intervention is, in legal effect, a suit or counter- suit against the sovereign state, the
Republic of the Philippines;
The jurisdiction of the Sandiganbayan has already been settled in Presidential
Commission on Good Government vs. Hon. Emmanuel G. Penal, etc., et al. 15 where
(b) The cause of action of intervenors does not fall within the jurisdiction of the the Court held that —
Sandiganbayan as expressly spelled out in P.D. No. 1606 and Executive Order No. 14;
... Under Section 2 of the President's Executive Order No. 14 issued on May 7, 1986, all
(c) Intervenors have no legal interest in the matter in litigation, and the subject matter is cases of the Commission regarding 'the funds, Moneys, Assets, and Properties Illegally
not in custodia legis of respondent court; and Acquired or I Misappropriated by Former President Ferdinand Marcos, Mrs. Imelda
Romualdez Marcos, their Close Relatives, Subordinates, Business Associates,
(d) Intervenors' claims, as contained in their Motion for Intervention and Dummies, Agents, or Nominees whether civil or criminal, are lodged within the
Answer-in-Intervention, are claims between and/or among Ferdinand and Imelda 'exclusive and original jurisdiction of the Sandiganbayan' and all incidents arising from,
Marcos and their cronies, i.e., "members of their immediate family close relatives, incidental to, or related to, such cases necessarily fall likewise under the
subordinates, and/or business associates, dummies, agents and nominees" and are Sandiganbayan's exclusive and original jurisdiction, subject to review on certiorari
cognizable not by respondent court but by the regular courts or other for a Even if there exclusively by the Supreme Court. (emphasis supplied)
would be multiple litigations, as among themselves, the legal effect remains, i.e., that
there is only one case filed by the Republic against the named defendants in Civil Case In reiterating the aforequoted ruling in six (6) subsequent cases 16 which were decided
No. 0025, grounded on causes of action entirely distinct from any cause of action which jointly, again, the Court held that-
intervenors may have against Mr. Marcos and his cronies.
... the exclusive jurisdiction conferred on the Sandiganbayan would evidently extend not
The petition is not impressed with merit. only to the principal causes of action, i.e., the recovery of alleged ill-gotten wealth, but
also to 'all incidents arising from, incidental to, or related to, such cases,' such as the
The Rules of Court permit an aggrieved party, generally, to take a cause and apply for dispute over the sale of the shares, the propriety of the issuance of ancillary writs or
relief with the appellate courts by way of either of two distinct and dissimilar modes provisional remedies relative thereto, the sequestration thereof, which may not be made
through the broad process of appeal or the limited special civil action of certiorari. An the subject of separate actions or proceedings in another forum.
appeal brings up for review errors of judgment committed by a court of competent
Intervention is not an independent action, but is ancillary and supplemental to an the excess of all revenues over all disbursements. Accordingly, BREDCO conveyed to
existing litigation. 17 Hence, the private respondents' action for intervention in Civil Case MARSTEEL 65% of each lot already reclaimed and that to be reclaimed.
No. 0025, not being an independent action, is merely incidental to, or related to, the said
civil case. Since the respondent Sandiganbayan has the exclusive and original In 1977, MARSTEEL assigned to MCI, which owned 100% of its capital stock, all its
jurisdiction over Civil Case No. 0025, it has likewise original and exclusive jurisdiction rights, interests, obligations, and undertakings in the project. To enable MCI to expand
over the private respondents' action for intervention therein. its base of negotiation for loans needed in the reclamation and port development the
BREDCO stockholders transferred to MCI their respective shares of stock amounting to
Now, considering that respondent Sandiganbayan has jurisdiction not only over Civil 70% of the capital stock of BREDCO. In return, they 'shall be entitled to a share of 35%
Case No. 0025 but also over the private respondents' action for intervention, any error in excess of all revenues over all disbursements of the projects,' it being understood that
or irregularity that it may have committed in rendering its questioned resolutions, in the payment of the corresponding share shall be due to BREDCO stockholders as owners
exercise of its jurisdiction, amounts to an error of judgment, which is not correctable in of existing interests in the project, regardless of the fact that by implementation of this
the present petition for certiorari but by appeal. AGREEMENT, they ceased to be stockholders of BREDCO.

Accordingly, this case may be dismissed outright without the Court having to pass upon In September 1986, the Presidential Commission on Good Government (PCGG)
the other issues raised in the petition. However, considering that the litigation below is of sequestered all assets, properties, records and documents' of MARSTEEL, MCI, and
great public interest and involves a matter of public policy, the Court has decided to BREDCO'. In July 1987, the complaint at bar was filed and expanded in March 1988.
review the other errors allegedly committed by respondent court in rendering its The pleadings, original and expanded, allege that the defendants, acting singly or
questioned resolutions. collectively, amassed ill-gotten 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
In this jurisdiction, the law on "intervention" is found in the Rules of Court. 18 Thus, a the plaintiff, plus damages. Significantly, however, the bodies of the complaints do not
person may, before or during a trial, be permitted by the court, in its discretion, to mention anything about BREDCO, its project, lots, and stocks, nor about MCI.
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 Under these alleged facts, Palanca has established a proper case for intervention.
adversely affected by a distribution or other disposition of property in the custody of the Firstly, he and his co-stockholders have a legal interest in the matter in litigation, namely,
court or of an officer thereof. 19 their 70% of the capital stock of BREDCO, which they transferred to MCI by way of
alleged accommodation, or its equivalent of 35% of the excess of all revenues over all
The Court is not impressed with the contention of petitioner that the intervenors have no disbursements, to which they are entitled 'as owners of existing interests in the project.'
legal interest in the matter in litigation. In this connection, it would suffice to quote what Section 2, Rule 12, Revised Rules of Court, provides that a person may be permitted 'to
the respondent court said in holding that the intervenors have a legal interest in the intervene in an action, if he has legal interest in the matter in litigation.'
matter in litigation. Thus —
As a general rule the right to intervene exists in favor of one who claims to be the owner
Has Palanca shown a proper case for intervention by him and his co-stockholders who or to have some interest in the property which is the subject of litigation, and this without
are similarly situated as he is? particular regard to the value of the property or the right claimed therein. A third party
may intervene in a sequestration suit involving title to personal property, and have his
claims to the possession of the property vindicated therein So, in an action for
A narration of the pertinent facts alleged by Palanca and the plaintiff indicates the
possession of real or personal property, an intervenor may be admitted on the ground
answer.
that he is an owner thereof, 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, Parties,
In 1961, BREDCO was awarded by Bacolod City a contract to undertake the Sec. 152, p. 585,
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
Secondly, the same Section 2, Rule 12, further provides that intervention by a person
BREDCO's name.
may be permitted 'when he 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.' On this
In that year, BREDCO engaged MARSTEEL as a contractor to complete the project with point, the Supreme Court observed:
power to negotiate in its name or jointly and/or severally with BREDCO for loans to
finance the reclamation and port development, and to mortgage all reclaimed lots and
other assets of the project as security. For its services, MARSTEEL shall receive 65% of
We shall now speak of the case where the stranger desires to intervene for the purpose intervention may be made in the form of an answer to the complaint. In order words, a
of asserting a property right in the res, or thing, which is the subject-matter of the third person who makes himself a party to an existing litigation, may either join the
ligitation, without becoming a formal plaintiff or defendant, and without acquiring the plaintiff in claiming what is sought in the filing a complaint in intervention, or by uniting
control over the course of a litigation, which is conceded to the main actions (sic) therein. with the defendant in resisting the claims of the plaintiff, by filing an answer in
The mode of intervention to which reference is now made is denominated in equity intervention.
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 In Froilan v. Pan Oriental Shipping Co., 22 the plaintiff therein Fernando A. Froilan filed a
gets into the clutches of a court, in a controversy between others, to go into court and to complaint against the defendant, Pan Oriental Shipping Co. The Republic of the
procure it or its proceeds to be surrendered to him. It often happens that a person who Philippines intervened by filing a complaint in intervention. Thereafter, the defendant
really owns property, or has a superior lien or other interest in it, sees a litigation spring filed its answer to the complaint in intervention, and set up a counterclaim against the
up between others who assert rights in or concerning it. If the court takes possession of Republic of the Philippines. The trial court dismissed the defendants counterclaim
the res, or otherwise gets jurisdiction over it in such a controversy, the real owner is not against the Republic on the ground, among others, that the state is immune from suit.
compelled to stand Idly by and see the property disposed of without asserting his rights. On appeal, this Court held that the dismissal of the counterclaim was untenable,
Though it be granted that the litigation would not be technically binding on him, because because by filing its complaint in intervention the Government in effect waived its right to
of his not being a party, yet it might well happen that complications would ensue non-suability.
whereby his rights would be materially prejudiced. For instance, the subject-matter of
the litigation might consist of a fund to he distributed, and the conditions might be such
In another case, Lim vs. Brownell, Jr. and Kagawa, 23 the plaintiff Benito E. Lim, as
that if it were turned over to the particular litigant who should appear to have the better
administrator of the intestate estate of Arsenia Enriquez, filed a complaint in the Court of
right in the original action, the person really having a superior title might be left without
First Instance of Manila against the Alien Property Administrator (later substituted by the
redress. Accordingly provision is made whereby persons who have not been joined as
Attorney General of the United States) for the recovery of four (4) parcels of land (which
parties in the original proceedings may intervene and assert a right antagonistic or
were subsequently transferred to the Republic of the Philippines) with a prayer for the
superior to that of one or both of the parties. (Bosworth vs. Terminal etc. Assoc. of St.
payment of back rentals. The Republic of the Philippines intervened in the case. The
Louis, 174 U.S. 182,187, 43 L. ed., 941, 943). As regards the right to intervene in this
defendant Attorney General of the United States and the defendant- intervenor Republic
manner, it may be stated that if the party desiring to intervene shows a legitimate and
of the Philippines each filed an answer, alleging by way of affirmative defense, among
proper interest in the fund or property in question, the motion to intervene should be
others, that the lower court had no jurisdiction over the claim for rentals since the action
granted, especially if such interest cannot be otherwise properly protected. (Joaquin v.
in that regard constituted a suit against the Republic to which it had not given its consent.
Herrera, 37 Phil. 705, 722-724)
The trial court dismissed the complaint for lack of jurisdiction. On appeal, this Court
affirmed, with the following reasons:
Here, the BREDCO lots and stocks were sequestered and are now in custodia legis
(Bernas, The Constitution of the Republic of the Philippines, An Annotated Text, 1987
The claim for damages for the use of the property against the intervenor defendant
ed., p. 129, footnote 42). From the facts averred by Palanca and the plaintiff, it is easy to
Republic of the Philippines to which it was transferred, likewise, cannot be maintained
see that in the event We decide to order the reconveyance of those assets to the plaintiff,
because of the immunity of the state from suit. The claim obviously constitutes a charge
Palanca and his co-stockholders in BREDCO stand to be adversely affected.
against, or financial liability to, the Government and consequently cannot be entertained
by the courts except with the consent of said government. (Syquia vs. Almeda Lopez, 84
And thirdly, the legal interest of Palanca and his co-stockholders in the matter in Phil. 312; 47 Off. Gaz., 665; Compania General de Tabacos vs. Govt. of the PI 45 Phil.,
litigation and the possibility of a judgment ordering reconveyance in favor of the plaintiff, 663). Plaintiff argues that by its intervention, the Republic of the Philippines, in effect,
invest them with legal interest in the success of the defendants, at least insofar as the waived its right of non-suability, but it will be remembered that the Republic intervened in
BREDCO lots and shares are concerned. Section 2, Rule 12, also permits intervention the case merely to unite with the defendant Attorney General of the United States in
by a person who has legal interest in the success of either of the parties. 20 resisting plaintiffs claims, and for that reason asked no affirmative relief against any
party in the answer in intervention. x x x. Clearly, this is not a case where the State takes
The petitioner's contention that the State cannot be sued without its consent and that the initiative in an action against a private party by filing a complaint in intervention,
private respondents' action for intervention is, in legal effect, a suit or counter-suit thereby surrendering its privileged position and coming down to the level of the
against the sovereign is also untenable. defendants what happened in 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 defendants
The Rules of Court 21 provide that the intervention shall be made by complaint filed and merely resisted a claim against it precisely on the ground, among others, of its privileged
served in regular form, and may be answered as if it where an original complaint; but position which exempts it from suit. (emphasis supplied).
where the intervenor unites with the defendant in resisting the claims of the plaintiff, the
In the present case, the private respondents intervened in Civil Case No. 0025 merely to
unite with the defendants therein in resisting the claims of petitioner, as plaintiff, and for
that reason asked for no affirmative relief against any party in their answer in
intervention. In other words, this is not a case where the private respondents take the
initiative in an action against petitioner by filing a complaint in intervention or a complaint.
As observed by respondent Sandiganbayan:

In intervening, Palanca and his co-stockholders have for their purpose to exclude the
BREDCO lots and stocks or, at least, their 35% interest in the BREDCO project from
any possible judgment directing reconveyance of the alleged ill-gotten wealth to the
plaintiff. They do not pray for damages against the latter. In effect, they occupy a
defensive position as regards those shares of stock or interest. The fact that they
interjected themselves into his litigation at their own initiative does not alter the essential
nature of their intervention." 24

Private respondents' action for intervention in Civil Case No. 0025 is not, therefore, a
suit or counter-suit against petitioner Republic of the Philippines.

Having arrived at the above conclusions, the Court finds no need to further discuss the
petitioner's pretense that the private respondents' claims are claims as between and/or
among Ferdinand and Imelda Marcos, et al., and that the same is not cognizable by
respondent Sandiganbayan but by the regular courts. It suffices to state that, as already
stated, in intervening in Civil Case No. 0025, private respondents merely joined the
defendants therein in resisting the claims of petitioner, as plaintiff, and that they asked
no affirmative relief against any party in their answer in intervention. They do not appear
to have any controversy with the defendants, Ferdinand and Imelda Marcos, et al.

ACCORDINGLY, the petition in the present case is hereby DISMISSED.

SO ORDERED.