Crisostomo v SEC
FACTS: Good Earth Emporium, Inc. (GEE) executed a deed of chattel
mortgage in favor of Metrobank over air conditioning units installed in
the GEE building. Metrobank filed a complaint for replevin against
Uniwide Sales, Inc. and the BPI Investment Corporation and several
other banks collectively called BPI-Consortium, which acquired the GEE
building in an auction sale. Metrobank prayed for the recovery of the
possession of the air-conditioning units or that the unpaid obligations
on the air-conditioning units be settled as the units were installed on a
loan of P4,900,000.00 it extended to GEE. The loan proceeds were used
to purchase the air-conditioning equipment from Raycor Air Control
System, Inc. (Raycor).
Before BPI Consortium filed their Answer, Raycor filed a motion for
leave to intervene. There was no opposition to the motion and the
intervention complaint was admitted by the RTC. Mertrobank filed its
Answer to the Intervention Complaint.
Before the trial, Metrobank and BPI Consortium agreed to a
compromise and filed a joint motion to dismiss the complaint. The
lower court issued the order dismissing the complaint with prejudice.
However, Raycor filed a motion for reconsideration of the order
dismissing the complaint with prejudice, claiming it was not furnished
with copy of the joint motion for dismissal and that it only received the
order of dismissal. The RTC granted the motion for reconsideration
filed by the intervenor and reinstated the case.
Raycor, also filed a motion to admit amended complaint which was
opposed by Metrobank but the RTC issued an order admitting the
amended complaint in intervention.
ISSUE: Whether or not the dismissal of the main action should warrant
the dismissal of a complaint in intervention.
RULING: The Court held that the reinstatement of the case in order to
try and determine the claims and rights of the intervenor is proper. The
joint motion of the plaintiff and the original defendants to dismiss the
case, without notice to and consent of the intervenor, has the effect of
settling only the respective claims of the original parties between them
but the same cannot in any way affect the claim of private respondent
which was allowed by the court to intervene without opposition from
the original parties.
Any person who has or claims an interest in the matter in litigation, in
the success of either of the parties to an action, or against both, may
intervene in such action, and when he has become a party thereto it is
error for the court to dismiss the action, including the intervention suit
on the basis of an agreement between the original parties to the action.
Any settlement made by the plaintiff and the defendant is necessarily
ineffective unless the intervenor is a party to it.
The intervenor in a pending case is entitled to be heard like any other
party. A claim in intervention that seeks affirmative relief prevents a
plaintiff from taking a voluntary dismissal of the main action. Where a
complaint in intervention was filed before plaintiff’s action had been
expressly dismissed, the intervenor’s complaint was not subject to
dismissal on the ground that no action was pending, since dismissal of
plaintiffs action did not affect the rights of the intervenor or affect the
dismissal of intervenor’s complaint. An intervenor’s petition showing it
to be entitled to affirmative relief will be preserved and heard
regardless of the disposition of the principal action.
NOTE:
Amendments by leave of court; Leave of court may be refused if it appears that the
motion was made with intent to delay or that the cause of action is substantially altered.
– The courts should be liberal in allowing amendments to pleadings to
avoid multiplicity of suits and in order that the real controversies
between the parties are presented, their rights determined and the
case decided on the merits without unnecessary delay. This liberality is
greatest in the early stages of a lawsuit, especially in this case where
the amendment to the complaint in intervention was made before trial
of the case thereby giving petitioner all the time allowed by law to
answer and to prepare for trial.
