Mago vs CA : 115624 : February 25, 1999 : J. Bellosillo : Second Division

SECOND DIVISION

[G.R. No. 115624. February 25, 1999]

ANTONIO MAGO and DANILO MACASINAG, petitioners, vs. COURT OF APPEALS, ROLANDO ASIS and NATIONAL HOUSING AUTHORITY, respondents.

D E C I S I O N

BELLOSILLO, J.:

This is an appeal by certiorari. Petitioners pray for reversal of the Decision of the Court of Appeals[1] affirming the Orders of the Regional Trial Court of Quezon City, Branch 83,[2] denying their Motion to Intervene and Petition for Relief from Judgment in Civil Case No. Q-52319, Rolando Asis v. National Housing Authority.

On 19 November 1987 private respondent Rolando Asis filed with the Regional Trial Court of Quezon City a Petition (for: Injunction and Prohibition with Preliminary Prohibitory Injunction and Restraining Order)[3] against public respondent National Housing Authority (NHA) to prevent it from "acting upon the recommendation for cancellation of the award" in his favor set forth in its Resolution of 3 June 1987-

x x x x it is recommended that the title which was awarded to Rolando Asis be cancelled and the lot be subdivided into two, one should be awarded to Rolando Asis and the other lot to be awarded to Antonio Mago and Danilo Macasinag as co-owners.[4]

On 20 November 1987 the trial court directed respondent NHA to maintain the status quo ante and set for hearing on 26 November 1987 the prayer for preliminary prohibitory injunctive relief.

On 3 December 1987 respondent NHA filed its Answer with Special and Affirmative Defenses containing inter alia the following -

a. Based on the Re-blocking Plan of Block 25 as presented and discussed with the residents of Bagong Barrio, Caloocan City, on November 19 and 20, 1979, which was approved on November 22, 1979, it showed the following:

(1) Structure 77-02518-04 owned by Francisco Mago was identified for relocation because it was affected by the widening of an alley, while

(2) Structure 77-02522-04 owned by the petitioner (Asis) which is located at the back of Mago’s structure was not identified for relocation.

b. It is for this reason that the lot of Mago was incorporated to the lot awarded to the petitioner (Asis) thus making it a total area of 80 square meters.

c. However, based on actual implementation of the Re-blocking Plan for Block 25, only a portion of Mago’s structure was chopped and the remaining portion is more than 36 square meters, the minimum lot size allowed by the Project; hence, Mago’s lot can be retained as an independent lot and should have not been incorporated to the lot awarded to the petitioner (Asis).

d. On May 23, 1980, or before the lot in question was awarded to the petitioner on October 30, 1980, petitioner executed a "Kasunduan ng Paghahati ng Lote" to the effect that:

(1) The petitioner is voluntarily agreeing to the division into two (2) the lot to be awarded to him.

(2) The lot mentioned is Lot No. G-12 based on the Subdivision Plan of Block 25, Barangay 146 (Bagong Barrio, Caloocan City), and

(3) The lot thus created (one half) shall belong to Antonio Mago (brother of Francisco Mago who owns Structure 77-02518-04 by virtue of a deed of conveyance dated May 7, 1980) and Danilo Macasinag (a renter with pre-emptive right to the subject structure).[5]

On 27 January 1988 the lower court granted the injunction.

On 16 February 1988 private respondent Asis filed a Motion for Judgment on the Pleadings to which the NHA filed its Comment followed by the former’s Reply.

On 8 March 1988 the trial court dismissed the petition of private respondent after taking into account the unequivocal admission and recognition by the NHA of the title of Asis.[6] However, not long after or on 30 March 1988, on motion of Asis, an amendatory order was issued modifying a portion of the Order of 8 March thus -

WHEREFORE x x x x the respondent (herein public respondent NHA) is hereby ordered to abide by its commitment to this Court that it will continue to honor the award in favor of the petitioner (herein private respondent Asis) and will not disturb his title (TCT No. C-39786) which has become indefeasible and incontrovertible in accordance with law.[7]

Private respondent’s counsel received the order of 8 March on 21 March 1988, and by counsel for the NHA on 22 March 1988. Both parties through counsel received the amendatory order on 14 April 1988. Petitioners Mago and Macasinag, on the other hand, learned of the 30 March 1988 Order on 24 May 1988.

On 2 August 1988 petitioner Antonio Mago and Danilo Macasinag filed a Motion for Leave to Intervene, and on the same day filed a Petition for Relief from Judgment/Order. Private respondent Rolando Asis opposed the Motion for Leave to Intervene contending that it was too late as the questioned order of 30 March 1988 had long become final as no appeal was taken therefrom.

Under Sec. 2, Rule 12, of the Rules of Court, 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.[8] As for the Petition for Relief from Judgment/Order, the same was filed sixty-nine (69) days after movants learned of the order, or beyond the reglementary period of sixty (60) days from notice of judgment, under Sec. 3, Rule 38, of the Rules of Court.[9]

On 30 January 1989 the trial court denied the motion to intervene for lack of merit. It declared at the same time that the Petition for Relief from Judgment/Order was "inutile without the movants having been allowed to intervene."[10] Petitioners' motion for reconsideration was similarly rejected.

On appeal petitioners prayed for the liberal interpretation of procedural rules contending that they were indispensable parties and that there were events and circumstances which warranted their intervention in Civil Case No. Q-52319.

In sustaining the trial court, the Court of Appeals ruled that the plea for liberal interpretation of the Rules of Court was not well taken -

True, Section 2, Rule 1 of the Rules of Court[11] provides 'these rules shall be liberally construed in order to promote their object and to assist the parties in obtaining just, speedy, and inexpensive determination of every action and proceeding,' but jurisprudence qualifies it by enunciating the principle that rules on reglementary periods must be strictly construed against the filer or pleader to prevent needless delays.[12]

The grounds cited by the lower court as affirmed by the Court of Appeals rely purely on the technicalities of procedural law. An in-depth peek into the matter, however, shows that petitioners should have been allowed to intervene and seek relief from judgment, albeit belatedly, in pursuance of their substantial rights.

Admittedly, petitioners' motion for intervention was filed on 2 August 1988 after the amended order of 30 March 1988 had already become final. Section 2, Rule 2, of the Rules of Court expressly states -

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 an officer thereof.

It must be noted however that petitioners were unaware of the proceedings in Civil Case No. Q-52319. Aside from the obvious fact that they were never impleaded, they were also lulled into believing that all was well. After all, there was a previous agreement or "Kasunduan ng Paghahati ng Lote"[13] which private respondent Asis executed in their favor on 23 May 1980 or before the disputed lot was awarded to Asis by the NHA. In that agreement private respondent voluntarily agreed to divide the awarded lot into two (2) - one-half (1/2) to be retained by him, and the other one-half (1/2) to belong to petitioners. It can be seen from this that private respondent acted in bad faith when he accepted the award erroneously made to him by NHA knowing fully well that a perfected agreement had been forged earlier between him and petitioners. As a matter of record, the NHA even acknowledged its mistake. In its Comment on private respondent's Motion for Judgment on the Pleadings, NHA admitted -

1. It is true that there appears a mistake committed by the personnel of the Bagong Barrio Project of the respondent in awarding the lot of Francisco Mago, who subsequently conveyed the same property to his brother, Antonio Mago, to herein petitioner;[14]

2. It is also true that there was a recommendation x x x for the cancellation of the aforesaid award;

3. However, for purposes of clarification, said recommendation was referred to the respondent's Legal Department x x x for appropriate action x x x x

4. To be more candid, it is hereby expressly manifested that respondent (NHA) honors and will continue to honor its award of the questioned lot to herein (Asis) and will never disturb the title of the lot issued to said petitioner for the primary reason that said title has become indefeasible and incontrovertible, it being issued in accordance with law;

5. In the light of the foregoing clear and unequivocal manifestations, it is highly improper and uncalled for to enjoin the respondent from cancelling or in any way disturbing the award in favor of the petitioner as there is nothing to enjoin inasmuch as no action to cancel the award of the subject lot in favor of herein petitioner was instituted or forthcoming;

6. Consequently, there is a strong ground of suspicion why herein petitioner keeps on barking at a wrong tree. Petitioner is apparently afraid of the 'ghost' he himself created, e.g., the 'Kasunduan ng Paghahati ng Lote' x x x which was executed by petitioner in favor of Antonio Mago and Danilo Macasinag. This instrument x x x may be used by said Antonio Mago and Danilo Macasinag as a basis of an action for specific performance against herein petitioner x x x x[15]

These matters should have been taken into account by the courts a quo for being of utmost importance in ruling on petitioners' motion for intervention. The permissive tenor of the provision on intervention shows the intention of the Rules to give to the court the full measure of discretion in permitting or disallowing the same. But needless to say, this discretion should be exercised judiciously and only after consideration of all the circumstances obtaining in the case.[16]

But it is apparent that the courts a quo only considered the technicalities of the rules on intervention and of the petition for relief from judgment. The denial of their motion to intervene arising from the strict application of the rule was an injustice to petitioners whose substantial interest in the subject property cannot be disputed. It must be stressed that the trial court granted private respondent's petition for prohibition with injunction without petitioners being impleaded, in total disregard of their right to be heard, when on the face of the resolution of the Community Relations and Information Office (CRIO) sought to be enjoined, petitioners were the ones directly to be affected. We need not belabor the point that petitioners are indeed indispensable parties with such an interest in the controversy or subject matter that a final adjudication cannot be made in their absence without affecting, nay injuring, such interest.

In Director of Lands v. Court of Appeals[17] where the motions for intervention were filed when the case had already reached this Court, it was declared:

It is quite clear and patent that the motions for intervention filed by the movants at this stage of the proceedings where trial had already been concluded x x x and on appeal x x x the same was affirmed by the Court of Appeals and the instant petition for certiorari to review said judgment is already submitted for decision by the Supreme Court, are obviously and manifestly late, beyond the period prescribed under x x x Section 2, Rule 12 of the Rules of Court.

But Rule 12 of the Rules of Court, like all other Rules therein promulgated, is simply a rule of procedure, the whole purpose and object of which is to make the powers of the Court fully and completely available for justice. The purpose of procedure is not to thwart justice. Its proper aim is to facilitate the application of justice to the rival claims of contending parties. It was created not to hinder and delay but to facilitate and promote the administration of justice. It does not constitute the thing itself which courts are always striving to secure to litigants. It is designed as the means best adopted to obtain that thing. In other words, it is a means to an end.

In Tahanan Development Corp. v. Court of Appeals[18] this Court allowed intervention almost at the end of the proceedings. Accordingly, there should be no quibbling, much less hesitation or circumvention, on the part of subordinate and inferior courts to abide and conform to the rule enunciated by the Supreme Court.

As for the Petition for Relief from Judgment, the Rules of Court provides for its time frame -

A petition provided for in either of the preceding sections of this rule must be verified, filed within sixty (60) days after the petitioner learns of the judgment or order, or other proceeding to be set aside, and not more than six (6) months after such judgment or order was entered, or such proceedings was taken; and must be accompanied with affidavits showing the fraud, accident, mistake, or excusable negligence relied upon, and the facts constituting the petitioner’s good and substantial cause of action or defense, as the case may be.

The Court of Appeals ruled that the time of filing of the petition must satisfy both periods as indicated in the Rule – within sixty (60) days after knowledge of order and not more than six (6) months after entry. However, a few days in excess of the 60-day requirement is not fatal as long as it is filed within six (6) months from issuance of the order.[19] In this case, the petition was filed nine (9) days after the 60-day period but it was still well within the 6-month period. As to the issue of failure to demonstrate the presence of fraud, mistake, accident or excusable negligence in the affidavits of merit, the Court of Appeals failed to consider that even the absence of an affidavit of merit in itself is not a fatal defect to warrant denial of the petition so long as the facts required to be set out also appear in the verified petition.[20] Furthermore, a petition for relief without a separate affidavit of merit is sufficient where facts constituting petitioner’s substantial cause of action or defense, as the case may be, are alleged. The oath elevates the petition to the same category as a separate affidavit.[21] In this case, the allegations of accident and excusable negligence, although not expounded on the affidavits of merit, were nevertheless substantiated on the verified petition.[22] Therefore, there was substantial compliance.

In disposing of petitioners' motion to intervene, both the trial court and the appellate court confined themselves to the discussion of timeliness (which was not even disputed) and chose to ignore the bigger, far more important picture, i.e., the substantial rights of petitioners which were never passed upon for the simple reason that they were not impleaded by private respondent in his petition for prohibition. Consider the following backdrop: Prior to PD No. 1315,[23] Francisco Mago, the brother of petitioner Antonio Mago, was in continuous and actual possession and occupation of the disputed land consisting of eighty (80) square meters, more or less, having purchased the right over the lot and the structure thereon sometime in September 1976. Subsequently, the Mago brothers constructed a 3-door apartment and leased it to several tenants among whom was petitioner Danilo Macasinag. Respondent Rolando Asis, on the other hand, occupied the southern portion thereof by mere tolerance, constructing a shanty thereon covering an area of approximately eighteen (18) square meters.

Subsequently, on 11 June 1977 Letters of Instruction Nos. 555 and 557 were issued by the President declaring as a national policy that slum improvement, otherwise known as upgrading of sites and services, is an acceptable approach to meeting the housing needs of the country and the primary strategy for dealing with slums, squatter areas and other blighted communities in urban areas. On 21 July 1977 Executive Order No. 6-77 was also issued by the Governor of Metro Manila adopting a Zonal Improvement Program (ZIP) which addressed the problem of all 415 identified slums and other blighted communities in Metro Manila. On 26 March 1978[24] the President further issued PD No. 1315 designating the National Housing Authority as Administrator of the Urban Land Reform in behalf of the National Government. On 11 June 1978 the President promulgated PD No. 1517 declaring the entire Metro Manila as an Urban Land Reform Zone.[25] A "census of occupants" was conducted along with a “tagging of structures” in the entire Bagong Barrio to determine the qualified beneficiaries and bona fide residents within the Project. The structures owned by Francisco Mago and the shanty occupied by Asis on the land owned by Mago were among those given ZIP Tag Numbers.

On 7 May 1980 Francisco Mago executed in favor of his brother, petitioner Antonio Mago, a Deed of Conveyance[26] transferring all his rights, interests and participation over the structure.[27]

A reblocking plan was made by the NHA for Bagong Barrio and the area occupied by the structure of Francisco Mago, later conveyed to Antonio Mago, was marked.[28] This also included the area occupied by private respondent Asis. But unknown to Mago and Macasinag, the awarding of lots to qualified structure owners started in 1980 and the NHA, by mistake, awarded the whole lot to private respondent.

Upon discovery of the erroneous award, Francisco Mago complained to the NHA Bagong Barrio which readily acknowledged its mistake.[29] This was how the "Kasunduan ng Paghahati ng Lote"[30] came about, which was drawn and signed by private respondent Asis agreeing to the division of the lot equally between him and petitioners. Ironically, on 30 October 1980 the NHA-Main Office in Quezon City executed a Deed of Sale with Mortgage of the entire lot in favor of Asis and issued TCT No. C-39786 on 27 November 1980.

On 15 October 1981 Antonio Mago filed a complaint before the NHA assailing this transaction. On the other hand, the Regional Trial Court of Kalookan received a complaint from private respondent Asis captioned "Rolando Asis v. Antonio Mago and Danilo Macasinag" for recovery of possession, damages and preliminary injunction despite the pendency of the action before the NHA.

These facts should have convinced the trial court and the Court of Appeals that a less stringent application of the Rules of Court was the more prudent recourse. Indeed, the exercise of discretion has often been characterized as odious; but where the necessity exists for its exercise, a judge is bound not to shirk from the responsibility devolving in him.[31] For it is in relaxing the rules that we ultimately serve the ends of equity and justice based not on folly grounds but on substance and merit.

WHEREFORE, the petition is GRANTED. The questioned Decision of respondent Court of Appeals dated 23 July 1993 affirming the Orders of the Regional Trial Court, Branch 83, Quezon City dated 30 January 1989 and 6 June 1989 is REVERSED and SET ASIDE. The Regional Trial Court a quo is ordered to GRANT the motion to intervene of petitioners Antonio Mago and Danilo Macasinag and proceed to hear with dispatch their Petition for Relief from Judgment/Order in Civil Case No. Q-52319.

SO ORDERED.

Puno, Mendoza, Quisumbing, and Buena, JJ., concur.