Santiago vs. CAdocx

SANTIAGO LAND DEVELOPMENT CORPORATION vs.
CA and the
HEIRS OF NORBERTO J. QUISUMBING
[G.R. No. 106194 | January 28, 1997.]
FACTS
Norberto J. Quisumbing brought an action against the Philippine National
Bank (PNB) to enforce an alleged right to redeem certain real properties it
foreclosed. Quisumbing brought the suit as assignee of the mortgagor,
Komatsu Industries (Phils.), Incorporated.
On November 21, 1989, with notice of the pending civil action, Santiago Land
Development Corporation (SLDC) purchased one of the properties subject of
the litigation for P90 Million. On December 11, 1989, SLDC filed a motion to
intervene alleging that it was the transferee pendente lite of the property
and that any adverse ruling or decision which might be rendered against
PNB would necessarily affect it (SLDC). It raised as affirmative defenses the
trial court’s lack of jurisdiction based on the alleged failure of plaintiff
Quisumbing to pay the docket fee and Quisumbing’s alleged lack of cause of
action against the PNB due to the invalidity of the deed of assignment to him.
On February 7, 1990, Quisumbing opposed SLDC’s motion for intervention.
On March 30, 1990, the lower court granted SLDC’s motion for intervention.
The court also directed the substitution of heirs in view of Norberto J.
Quisumbing’s demise and submitted for resolution PNB’s motion to dismiss.
SLDC, as intervenor, then served interrogatories upon Quisumbing. It
wanted to know if there were documents showing that a consideration had
been paid for the assignment of the right of redemption; if so, whether
payment was made in cash or by check; and, if it was by check, in what banks
the checking accounts were kept and whether the checks were still in its
custody or possession. Quisumbing filed a motion to quash or disallow the
interrogatories, which SLDC opposed. Thus, Quisumbing filed a reply to
which SLDC responded by filing a rejoinder.
On March 21, 1991, the trial court denied Quisumbing’s motion to quash or
disallow interrogatories. Quisumbing moved for a reconsideration, it was
denied. Hence, Quisumbing filed a petition for certiorari with the CA which
rendered the decision, now the subject of this review.
ADDITIONAL INFO [discretion niyo kung isusulat niyo]
Decision of the CA to annul certain orders issued by the Regional Trial Court of
Makati, Branch 62 in Civil Case No. 10513, entitled Norberto J. Quisumbing v.
Philippine National Bank, to wit:
(1) Order, dated March 30, 1990, granting petitioner Santiago Land Development
Corporation’s motion for intervention and order admitting its answer in intervention;
(2) Order, dated March 21, 1991, denying private respondent Quisumbing’s motion to
quash or disallow interrogatories and
(3) Order, dated July 30, 1991, denying Quisumbing’s motion for reconsideration.
SLDC’s Contention
Petitioner asserts that Rule 12, Sec. 2 and Rule 3, Sec. 20 can be applied
interchangeably and that CA erred in insisting on the application of Rule 3,
solely.
Quisumbing’s Contention
SLDC’s interest in the subject property was a mere contingency or
expectancy, which was dependent on any judgment which might be rendered
for or against PNB as transferor.
ISSUE:
Whether SLDC, as transferee pendente lite of the property in litigation has a
right to intervene.
RULING:
No. The court ruled that while it may be that SLDC has a legal interest in the
subject matter of the case, its interest as transferee pendente lite is different
from that of an intervenor. Section 2 of Rule 12 refers to all other persons or
entities whose legal interests stand to be affected by a litigation, but it does
not cover a transferee pendente lite because such transferee is already
specifically governed by Section 20 of Rule 3. Indeed, there has never been a
rule, authority or decision holding that a transferee pendente lite has the
option to avail of either Rule 3, Section 20 or Rule 12, Section 2.
SLDC overlooks a substantial difference in the nature and consequences of

the two rules. The purpose of Rule 12 Sec. 2 on intervention is to enable a
stranger to an action to become a party to protect his interest and the court
incidentally to settle all conflicting claims. On the other hand, the purpose
of Rule 3 Sec. 20 is to provide for the substitution of the transferee
pendente lite precisely because he is not a stranger but a successor-in-
interest of the transferor, who is a party to the action. As such, a transferee’s
title to the property is subject to the incidents and results of the pending
litigation and is in no better position than the vendor in whose shoes he now
stands.
Thus, the transferee pendente lite simply takes the place of the transferor, he
is barred from presenting a new or different claim. Should the transferee
pendente lite choose to participate in the proceedings, it can only do so as a
substituted defendant or as a joint party-defendant. The transferee pendente
lite is a proper but not an indispensable party as it would in any event be
bound by the judgment against his predecessor-in-interest. (This would be
true even if SLDC is not formally included as a party-defendant through an
amendment of the complaint. )
The court ruled that SLDC is a transferee pendente lite with notice of the
pending litigation between Quisumbing and PNB. As such it stands
exactly in the shoes of defendant PNB and is bound by any judgment or
decree which may be rendered for or against PNB. The appellate court
therefore properly refused to pass upon petitioner’s attempt to inquire into
the consideration paid for the assignment of the right of redemption to the
late Norberto J. Quisumbing.

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SANTIAGO LAND DEVELOPMENT CORPORATION vs.

SLDC overlooks a substantial difference in the nature and consequences of

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