Santiago v. CA Digest

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3D- CIVPRO Substantial difference between a party intervener (Rule 12, Sec.

2) and transferee
pendente lite (Rule 3, Sec.20)
CASE TITLE: Santiago Land G.R. No. 106194
Development Corporation v. Court of Date: January 28,1997
Appeals Ponente: Justice Mendoza
PETITIONER/S: Santiago Land RESPONDENT/S:The Heirs of Norberto J. Quisumbing
Development Corporation
CASE DOCTRINE: The purpose of Rule 3, 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 and is barred from presenting new or different claim.
FACTS
Norberto Quisumbing, as an assignee of Komatsu Industries Inc, brought an action against the
Philippine National Bank (PNB) with the RTC of Makati to enforce a right to redeem certain real
properties foreclosed by the PNB.

On November 21, 1989, Santiago Land Development Corporation (SLDC) purchased from PNB
one of the properties subject of the litigation. 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 which might
be rendered against PNB would affect it.

Quisumbing opposed SLDC's motion for intervention arguing that 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.

The lower court issued an order granting petitioner's motion for intervention and admitting its answer
in intervention. The court also directed the substitution of heirs in view of Quisumbing's demise and
submitted for resolution PNB's motion to dismiss.

SLDC then served interrogatories upon private respondents and moved for the production, inspection
and copying of certain documents. SLDC wanted to know whether there were documents to show that
a consideration had been paid for the assignment of the right of redemption. Private respondents filed a
motion to quash or disallow the interrogatories.

The trial court denied private respondents' motion to quash or disallow interrogatories and instead
granted petitioner SLDC's motion for the production, inspection and copying of certain documents.

Private respondents filed a petition for certiorari with the Court of Appeals which rendered a decision
setting aside the orders of the trial court.

According to the Court of Appeals while it may be that SLDC has a legal interest in the subject matter
of the litigation, 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. 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. As such the
transferee pendente lite is bound by the proceedings already had in the case before the property was
transferred to it.
ISSUE/S:
Whether SLDC, as transferee pendente lite of the property in litigation has a right to intervene.

HELD:
Petitioner asserts that Rule 12, 2 and Rule 3, 20 can be applied interchangeably and that the Court of
Appeals is in error in its insistence on the application of Rule 3, 20 solely.

The Supreme Court upheld the decision of the Court of Appeals.

Rule 12, 2 provides that:


Sec. 2. Intervention. A person may, before or during a trial be permitted by the court, 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 adversely affected by a
distribution or other disposition of property in the custody of the court or of an officer thereof.

Rule 3, 20: Sec. 20. 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.

The purpose of Rule 12, 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, 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.

As held in Fetalino v. Sanz: he stands exactly in the shoes of his predecessor in interest, the
original defendant, and is bound by the proceedings had in the case before the property was
transferred to him. He is a proper, but not an indispensable, party as he would, in any event, have
been bound by the judgment against his predecessor.

Because the transferee pendente lite simply takes the place of the transferor, he is barred from
presenting a new or different claim. 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, as well as petitioner's claim that the transfer of interest to
Quisumbing was made in violation of Art. 1491(5) of the Civil Code, prohibiting attorneys from
acquiring property or interest which is the object of the litigation in which they take part as such. This
matter was never alleged by PNB in its answer to Quisumbing's complaint.

But petitioner could not be allowed to intervene for the reason already stated that the conditions under
which one may be allowed to intervene are significantly far different from the conditions under which a
transferee pendente lite is substituted in place of the original party.

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