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Republic of the Philippines

SUPREME COURT
Manila

G.R. No. 94005. April 6, 1993.


LUISA LYON NUAL, herein represented by ALBERT NUAL, and ANITA NUAL HORMIGOS, petitioners,
vs.
THE COURT OF APPEALS and EMMA LYON DE LEON in her behalf and as guardian ad litem of the minors
HELEN SABARRE and KENNY SABARRE, EDUARDO GUZMAN, MERCEDEZ LYON TAUPAN, WILFREDO
GUZMAN, MALLY LYON ENCARNACION and DORA LYON DELAS PEAS, respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; ONCE IT BECOMES FINAL, MAY NO LONGER BE
MODIFIED IN ANY RESPECT; EXCEPTIONS. In the case of Manning International Corporation v. NLRC,
(195 SCRA 155, 161 [1991]) We held that ". . ., nothing is more settled in the law than that when a final
judgment becomes executory, it thereby becomes immutable and unalterable. The judgment may no longer be
modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous
conclusion of fact or law, and regardless of whether the modification is attempted to be made by the Court
rendering it or by the highest Court of land. The only recognized exceptions are the correction of clerical
errors or the making of so-called nunc pro tunc entries which cause no prejudice to any party, and, of course,
where the judgment is void." Furthermore, "(a)ny amendment or alteration which substantially affects a final
and executory judgment is null and void for lack of jurisdiction, including the entire proceedings held for that
purpose."
2. ID.; ID.; ID.; ID.; REMEDY OF AGGRIEVED PARTY. In the case at bar, the decision of the trial court in
Civil Case No. 872 has become final and executory. Thus, upon its finality, the trial judge lost his jurisdiction
over the case. Consequently, any modification that he would make, as in this case, the inclusion of Mary Lyon
Martin would be in excess of his authority. The remedy of Mary Lyon Martin is to file an independent suit
against the parties in Civil Case No. 872 and all other heirs for her share in the subject property, in order that
all the parties in interest can prove their respective claims.
DECISION
CAMPOS, JR., J p:
This is a petition for review on certiorari of the decision ** dated February 22, 1990 of the Court of Appeals in
CA-G.R. CV No. 14889 entitled "Emma Lyon de Leon, et al., plaintiffs-appellees versus Luisa Lyon Nual, now
deceased herein represented by Albert Nual, et al., defendants appellants," dismissing petitioners' appeal
and affirming the trial court's order *** dated January 9, 1987 for the inclusion of Mary Lyon Martin as one of
the heirs who shall benefit from the partition.
The facts as culled from the records of the case are as follows.
This case originated from a suit docketed as Civil Case No. 872 filed by Emma Lyon de Leon in her behalf and
as guardian ad litem of the minors Helen Sabarre and Kenny Sabarre, Eduardo Guzman, Mercedes Lyon
Taupan, Wilfredo Guzman, Mally Lyon Encarnacion and Dona Lyon de las Peas, (herein private respondents)
against Luisa Lyon Nual, now deceased and herein represented by her heirs, Albert Nual and Anita Nual
Hormigos (herein petitioners), for partition and accounting of a parcel of land located in Isabela, Basilan City.

Subject parcel of land was formerly owned by Frank C. Lyon and May Ekstrom Lyon, deceased parents of
Helen, Dona, Luisa, Mary, Frank and William James. Private respondents claimed that said parcel of land,
formerly covered by Transfer Certificate of Title No. 3141 in the name of Frank C. Lyon, has been in
possession of petitioner Luisa Lyon Nual since 1946 and that she made no accounting of the income derived
therefrom, despite demands made by private respondents for the partition and delivery of their shares.
On December 17, 1974, after trial and hearing, the then Court of First Instance (now Regional Trial court)
rendered its judgment in favor of private respondents and ordered the partition of the property but dismissing
private respondents' complaint for accounting. The dispositive portion of the judgment reads as follows:
"WHEREFORE, judgment is hereby rendered ordering the partition of the land covered by Transfer Certificate
of Title No. 3141 among the plaintiffs and defendant. The parties shall make partition among themselves by
proper instruments of conveyance, subject to the Court's confirmation, should the parties be unable to agree
on the partition, the court shall appoint commissioners to make the partition, commanding them to set off to
such party in interest such part and proportion of the property as the Court shall direct. Defendant is further
ordered to pay plaintiffs attorney's fees in the sum of P2,000.00." 1
On July 30, 1982, the order of partition was affirmed in toto by the Court of Appeals in CA-G.R. No. 57265-R.
The case was remanded to the court of origin for the ordered partition. 2
On May 17, 1984, an order for the issuance of the writ of execution was issued by the court a quo. 3
On July 17, 1984, Mary Lyon Martin, daughter of the late Frank C. Lyon and Mary Ekstrom Lyon, assisted by
her counsel filed a motion to quash the order of execution with preliminary injunction. In her motion, she
contends that not being a party to the above-entitled case her rights, interests, ownership and participation
over the land should not be affected by a judgment in the said case; that the order of execution is
unenforceable insofar as her share, right, ownership and participation is concerned, said share not having
been brought within the Jurisdiction of the court a quo. She further invokes Section 12, Rule 69 of the Rules
of Court. 4
On June 26, 1985, the trial court issued an order revoking the appointment of the three commissioners and
in lieu thereof, ordered the issuance of a writ of execution. 5
On February 4, 1986, the said court issued an order appointing a Board of Commissioners to effect the
partition of the contested property. 6
On May 28, 1986, the trial court dismissed the motion to quash order of execution with preliminary
injunction filed by Mary Lyon Martin and directed the partition of the property among the original party
plaintiffs and defendants. 7
On September 24, 1986, the Commissioners manifested to the trial court that in view of the fact that the
name of Mary Lyon Martin also appears in the Transfer Certificate of Title, she could therefore be construed
as one of the heirs. A ruling from the trial court was then sought. 8
On September 29, 1986, the lower court issued an order directing the counsel of Emma Lyon de Leon to
furnish the court within five days from receipt thereof all the names the of heirs entitled to share in the
partition of the subject property. 9
On October 1, 1986, the petitioners filed a manifestation praying that the court issue an order directing the
partition of the property in consonance the decision dated December 17, 1974 of the trial court the order of
said court dated May 28, 1986. 10

Without ruling on the manifestation, the lower court issued an order directing the Board of Commissioners to
immediately partition the said property. 11
On January 3, 1987, the private respondents filed motion for clarification as to whether the partition of
property is to be confined merely among the party plaintiffs and defendants, to the exclusion of Mary Lyon
Martin. 12
On January 9, 1987, the lower court issued the assailed order directing the inclusion of Mary Lyon Martin as
co-owner with a share in the partition of the property, to wit:
"After a perusal of the decision of the Court of Appeals CA-G.R. No. 57265-R, where this case was appealed by
the unsatisfied parties, there is a finding that Mary now Mary Lyon Martin is one of the legitimate children of
Frank C. Lyon and Mary Ekstrom. (Page 3 of the decision).
In view of this finding, it would be unfair and unjust if she would be left out in the partition of this property
now undertaking (sic) by the said court appointed commissioners.
WHEREFORE, premises considered, the court appointed commissioners is hereby directed to include Mary
Lyon Martin as co-owner in the said property subject of partition with the corresponding shares adjudicated
to her.
SO ORDERED." 13
Petitioners' motion for reconsideration 14 of the aforesaid order was denied by the trial court. 15
On February 22, 1990 the Court of Appeals rendered its decision dismissing petitioners' appeal, the
dispositive portion of which reads as follows:
"WHEREFORE, premises considered, there being no legal impediment to the inclusion of Mary Lyon Martin by
the court-appointed Board of Commissioners as one of the heirs who shall benefit from the partition, the
instant appeal is DISMISSED for lack of merit.
NO COSTS.
SO ORDERED." 16
Petitioners' motion for reconsideration was denied on June 6, 1990. 17
Petitioners filed this petition for review alleging that the Court of Appeals has decided questions of substance
contrary to law and the applicable decisions of this Court, for the following reasons:
"1.) BY SUSTAINING THE ORDER OF THE REGIONAL TRIAL COURT DIRECTING THE COURT APPOINTED
BOARD OF COMMISSIONERS TO INCLUDE MARY L. MARTIN TO SHARE IN THE PARTITION OF THE
PROPERTY IN LITIGATION DESPITE THE FACT, OVER WHICH THERE IS NO DISPUTE, THAT SHE HAS NOT
LITIGATED EITHER AS A PARTY PLAINTIFF OR DEFENDANT IN CIVIL CASE NO. 872, IT HAS REFUSED TO
RECOGNIZE THAT THE REGIONAL TRIAL COURT HAS NO JURISDICTION TO AMEND OR MODIFY THE
JUDGMENT IN CIVIL CASE NO. 872 AND THE REGIONAL TRIAL COURT'S ORDER DATED 28 MAY 1986
WHICH HAS BECOME FINAL AND EXECUTORY.
2.) WHEN THE COURT OF APPEALS HAS CATEGORICALLY STATED THAT MARY L. MARTIN "NEVER
LITIGATED AS ONE OF THE PLAINTIFFS IN SAID CASE," AND HER ONLY PARTICIPATION THEREIN WAS
SIMPLY CONFINED "AS A WITNESS FOR DEFENDANT-SISTER LUISA LY ON NUAL," AND TO ALLOW HER
TO SHARE IN THE PARTITION THIS LATE WITHOUT REQUIRING A PROCEEDING WHERE THE PARTIES

COULD PROVE THEIR RESPECTIVE CLAIMS, IS TANTAMOUNT TO DENYING THE NUALS OF THEIR
RIGHT TO DUE PROCESS. 18
The crux of this case is whether of not the trial court may order the inclusion of Mary L. Martin as co-heir
entitled to participate in the partition of the property considering that she was neither a party plaintiff nor a
party defendant in Civil Case No. 872 for partition and accounting of the aforesaid property and that the
decision rendered in said case has long become final and executory.
Petitioners contend that the trial court's decision dated December 14, 1974 in Civil Case No. 872 ordering the
partition of the parcel of land covered by Transfer Certificate of Title No. 3141 among plaintiffs and defendants
has long become final and executory. Hence the trial court has no jurisdiction to issue the questioned Order
dated January 9, 1987 ordering the Board of Commissioners to include Mary Lyon Martin to share in the
partition of said property despite the fact that she was not a party to the said case. Said Order, therefore,
resulted in an amendment or modification of its decision rendered in Civil Case No. 872.
We find merit in the instant petition.
In the ease of Manning International Corporation v. NLRC, 19 We held that ". . ., nothing is more settled in the
law than that when a final judgment becomes executory, it thereby becomes immutable and unalterable. The
judgment may no longer be modified in any respect, even if the modification is meant to correct what is
perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is
attempted to be made by the Court rendering it or by the highest Court of land . The only recognized
exceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries which cause
no prejudice to any party, and, of course, where the judgment is void."
Furthermore, "(a)ny amendment. or alteration which substantially affects a final and executory judgment is
null and void for lack of jurisdiction, including the entire proceedings held for that purpose." 20
In the case at bar, the decision of the trial court in Civil Case No. 872 has become final and executory.
Thus, upon its finality, the trial judge lost his jurisdiction over the case. Consequently, any
modification that he would make, as in this case, the inclusion of Mary Lyon Martin would be in excess
of his authority.
The remedy of Mary Lyon Martin is to file an independent suit against the parties in Civil Case No. 872 and all
other heirs for her share in the subject property, in order that all the parties in interest can prove their
respective claims.
WHEREFORE, the petition is GRANTED. The Order dated January 9, 1987 of the trial Court as affirmed by
the Court of Appeals is hereby REVERSED and SET ASIDE. The decision of the trial court dated December
17, 1974 in Civil Case No. 872 is hereby REINSTATED.
SO ORDERED.

SECOND DIVISION
[G.R. No. 81835 : December 20, 1990.]
192 SCRA 469
ROMEO J. ORDOEZ, Petitioner, vs. THE HON. ALFREDO J. GUSTILO, in his capacity as presiding
judge of Regional Trial Court of Cavite, Branch XVI, Cavite City, Municipality of Rosario, Cavite,
former Mayor Calixto D. Enriquez of Rosario, Cavite, and Valeriano Espiritu of Mabolo, Bacoor, Cavite,
Respondents.
DECISION
PARAS, J.:
This is a petition for Certiorari which seeks to annul, on the ground of grave abuse of discretion, the (1)
Decision dated May 24, 1985; (2) Order dated May 27, 1987 and (3) Order dated December 24, 1987, all
issued in Civil Case No. N-4367 of the Regional Trial Court of Cavite, Branch XVI, Cavite City entitled
"Valeriano Espiritu v. Municipality of Rosario, Province of Cavite and Hon. Calixto D. Enriquez in his capacity
as Municipal Mayor of Rosario, Cavite.
The pertinent background facts are:
Valeriano Espiritu, herein private respondent filed on April 22, 1983, a complaint for Specific Performance
and Damages, against respondents Municipality of Rosario, Cavite and Calixto Enriquez, the latter in his
capacity as Mayor of said municipality, to enforce their agreement contained in a Reclamation Contract. In his
complaint, Espiritu prayed that the Municipality of Rosario, together with Enriquez, be ordered to convey to
him 323,996 square meters of the reclaimed portion of the foreshore land of the town. Espiritu filed the action
in his capacity as the assignee of the Salinas Development Corporation (SADECO), the entity which reclaimed
the area in question by virtue of a Reclamation Contract entered into between it and the Municipality of
Rosario, represented by Enriquez as Municipal Mayor. The case was docketed as Civil Case No. 4367 of the
Regional Trial Court of Cavite, Fourth Judicial Region, Branch XVI, Cavite City.
In its answer, defendant municipality resisted plaintiff's claim stating that it was barred by the statute of
limitation; the contract has been substantially amended, modified and supplemented; and plaintiff has not
performed his reciprocal obligation.- nad
The barangay captain of Tejeros Convention, Rosario, Cavite, herein petitioner Romeo J. Ordoez, together
with seven (7) other municipal and barangay officials intervened, and in their Answer-in-Intervention, they
alleged that no actual reclamation was done by the plaintiff and the area being claimed by the plaintiff came
about by natural accretion; the reclamation contract between the contractor and the municipality is either
void, voidable or disadvantageous to the defendant municipality.
The issues having been joined the trial court set the case for the mandatory pre-trial conference on November
15, 1984.
At this scheduled pre-trial conference, all the litigants including the intervenors, with their respective counsel,
were present. In said conference, plaintiff Espiritu and defendant municipality, manifested to the court that
having arrived at a satisfactory settlement, they would submit a compromise agreement at a latter date.
On the other hand, the intervenors asked the court that they be allowed to present their evidence to prove
their defense asserted in their answer-in-intervention. For the said purpose, hearing was held on December
13, 1984 wherein Ernesto Andico, vice-mayor testified. Another hearing was also held on January 24, 1985
where Vice-Governor Jose M. Ricafrente, Jr. of the Province of Cavite, and petitioner's counsel in the instant
case, also testified.
On May 20, 1985, the principal litigants filed with respondent trial court their promised compromise
agreement. The parties agreed that 208,664 square meters of the reclaimed area were to be alloted to the
plaintiff and 211,311 square meters thereof were to be given to defendant municipality.

On May 24, 1985, the trial court approved the compromise agreement and rendered a decision in accordance
therewith. The intervenors received their copy of the decision on September 19, 1985 thru Vice-Mayor Ernesto
Andico. The decision being already final, it was duly executed to the satisfaction of the principal litigants.
On October 17, 1985 and July 2, 1987 additional hearings were held where the intervenors presented three
(3) additional witnesses.
On June 24, 1987, the intervenors filed a motion to set aside the compromise agreement dated May 15, 1985.
This was denied by the trial court, thru respondent Judge Alfredo Gustilo (the former presiding judge, Judge
Alejandro Silapan having already retired) in its Order dated November 27, 1987, the pertinent portion of
which reads as follows:
"It appears that on May 24, 1985, the former Presiding Judge of this Court approved the said Compromise
Agreement and rendered a judgment on the basis thereof. It is settled that a judgment approving a
compromise agreement is final and immediately executory. (Samonte v. Samonte, 64 SCRA 524). The motion
in question therefore cannot be granted as it has the effect of annulling the judgment of this Court which has
already become final and, according to the plaintiff, already executed.
"The Motion to Set Aside Compromise Agreement cannot even be considered as a motion for reconsideration
because the Court can no longer set aside, amend or modify its judgment which has become final. Neither can
the said motion be deemed as a petition for relief under Rule 38 of the Rules of Court, since to set aside a
judgment based upon a compromise agreement under the said Rule, the petition for relief must be filed not
later than six (6) months from the date it was rendered. (Bodiongan v. Ceniza, 102 Phil. 750). The decision of
the Court based on the Compromise Agreement was rendered on May 24, 1985. On the other hand, the
present Motion to Set Aside Compromise Agreement was filed only on June 24, 1987. Moreover, under Section
3 of Rule 38, the petition for relief from judgment should be filed within 60 days after the petitioner learns of
the judgment sought to be set aside. The intervenor in this case received a copy of the decision based on the
Compromise Agreement on September 19, 1985. If the instant motion be construed as an independent action
to annul a judgment, this Court would not have jurisdiction over it inasmuch as under Section 9 of Batas
Pambansa Blg. 129, the Judiciary Reorganization Act of 1980, an action for the annulment of a judgment of
the Regional Trial Court falls under the exclusive original jurisdiction of the Court of Appeals.
Additionally, the intervenors have not convincingly shown that defendant Mayor Enriquez was not authorized
to sign the Compromise Agreement in behalf of the Municipality of Rosario. On the contrary, the Mayor has in
his favor the presumption that official duty has been regularly performed. (Sec. 5 [m], Rule 131, Rules of
Court.) Likewise, they failed to sufficiently explain why and how the terms and conditions of the Compromise
Agreement have contravened the law, morals, good customs and public policy." (pp. 41-42, Rollo).
Meanwhile, on August 10, 1987, plaintiff Espiritu filed a manifestation and Motion praying that the
proceedings be terminated and that the case be considered closed, which motion respondent judge granted in
his Order dated December 24, 1987. The pertinent portion of the said Order reads
"In support of his motion to terminate the proceedings, the plaintiff argued that further trial in this case will
be an exercise in futility, considering that the issues raised by the intervenors have become moot and
academic in view of the decision of the Court based on the Compromise Agreement submitted by the plaintiff
and the defendants.
"This contention appears to be well taken. The decision of the Court based on the Compromise Agreement has
in effect resolved the issues raised by the intervenors, i.e., whether the reclamation contract entered into
between the town of Rosario and the Salinas Development Corporation, the predecessors-in-interest of the
plaintiff, is null and void; and whether or not there was actual reclamation done by the said entity. This is so,
for the decision of the Court based on the Compromise Agreement has impliedly recognized the validity of the
said reclamation contract and the fact that the tract of land divided between the plaintiff and the defendant
municipality of Rosario pursuant to the Compromise Agreement was the product of the reclamation efforts
undertaken by the Salinas Development Corporation, which subsequently assigned its rights to the plaintiff.
"The continuation of the trial in this case will be useless. Should the intervenors fail to adduce evidence
showing that the reclamation contract was null and void and that no actual reclamation was undertaken by

the Salinas Development Corporation, the correctness and propriety of the decision of the Court based on the
Compromise Agreement would be strengthened. Even if they would succeed in proving that the reclamation
contract was null and void and that the area in question came into being through the natural action of the
sea and not through the reclamation done by the Salinas Development Corporation, still the said decision
could no longer be set aside, inasmuch as it has already become final and, according to the plaintiff, already
executed. The continuation of the reception of the evidence for the intervenors clearly appears to serve no
purpose at all.
xxx
"WHEREFORE, the Manifestation and Motion dated August 6, 1987, filed by the plaintiff, is granted,
and the trial of this case is declared terminated and this case is considered closed.
"This order modifies the pre-trial order dated November 15, 1984 of this Court, insofar as the said
order has allowed the intervenors to adduce evidence in support of their contention that the land in
question was not reclaimed by the plaintiff or his predecessor-in-interest but the product of accretion,
and that the reclamation contract between the defendants and the Salinas Development Corporation
was null and void.: rd
"SO ORDERED." (pp. 45-47, Rollo)
In assailing the aforementioned Decision and Orders of the trial court, petitioner Romeo Ordoez (one of the
intervenors, the other seven intervenors did not join him in this petition) raises the following issues, to wit:
1. Whether or not the lower court erred in stopping/preventing the intervenors from further presenting their
evidence in support of their Answer-in-Intervention.
2. Whether or not the lower court erred in approving the compromise agreement of May 20, 1985 and
rendering a decision based thereon dated May 24, 1985, inspite of the clear lack of authority on the part of
respondent Calixto D. Enriquez to bind the Municipality of Rosario because of the absence of an enabling
ordinance from the Sangguniang Bayan of Rosario, Cavite empowering him to enter into said compromise
agreement.
We answer both issues in the negative.
Intervention is defined as a "proceeding in a suit or action by which a third person is permitted by the court
to make himself a party, either joining plaintiff in claiming what is sought by the complaint, or uniting with
defendant in resisting the claims of plaintiff, or demanding something adversely to both of them; the act or
proceeding by which a third person becomes a party in a suit pending between others; the admission, by leave
of court, of a person not an original party to pending legal proceedings, by which such person becomes a
party thereto for the protection of some right or interest alleged by him to be affected by such proceedings."
(Metropolitan Bank & Trust Co. v. the Presiding Judge, RTC Manila, Branch 39, et al., G.R. No. 89909,
September 21, 1990)
An intervention has been regarded as "merely collateral or accessory or ancillary to the principal action and
not an independent proceeding; an interlocutory proceeding dependent on or subsidiary to, the case between
the original parties." (Francisco, Rules of Court, Vol. 1) The main action having ceased to exist, there is no
pending proceeding whereon the intervention may be based. (Barangay Matictic v. Elbinias, 148 SCRA 83, 89).
As we recently ruled in Camacho v. Hon. Court of Appeals, et al., G.R. No. 79564, December 24, 1989
"There is no question that intervention is only collateral or ancillary to the main action. Hence, it was
previously ruled that the final dismissal of the principal action results in the dismissal of said
ancillary action." (Emphasis supplied)
A judgment approving a compromise agreement is final and immediately executory. (Samonte v. Samonte, 64
SCRA 524) All pending issues will become moot and academic once a compromise submitted by the parties is
approved by the trial court. (Berenguer v. Arcangel, 149 SCRA 164)
In the case at bar, the compromise agreement submitted by the plaintiff and the defendants and the decision
approving the same recognized the validity of the Reclamation Contract and the fact that the tract of land

involved was the result of the reclamation done by SADECO. In their answer-in-intervention, petitioner alleges
that there was no reclamation undertaken by SADECO, that the land in question was the result of accretion
from the sea and that the Reclamation Contract is null and void. Clearly then, the compromise agreement and
the decision had in effect resolved the aforementioned issues raised by the intervenors. As aptly observed by
the trial court, the continuation of the reception of the intervenors' evidence would serve no purpose at all.
Should intervenors fail to prove that the Reclamation Contract is null and void and that no actual reclamation
was made, the correctness and propriety of the decision based on the compromise agreement would be
strengthened. Upon the other hand, should they succeed in proving that the contract is null and void, and
that the area in question came into being through the natural action of the sea, still the decision of the lower
court could no longer be set aside, inasmuch as it has already become final and executed.:-cralaw
There is, therefore, no merit to the claim of petitioner that the lower court "unceremoniously terminated the
proceedings" even "without the intervenors completing their evidence." (Memorandum for Petitioner, p. 140,
143, Rollo) Precisely, the court a quo gave credence and weight to the compromise agreement and denied the
claims of the intervenors which were controverting the theories of the plaintiff and the defendants. In other
words, due process had been accorded the intervenors. It would have been different had the court not taken
into consideration the claims of the intervenors.
The petitioner cannot claim ignorance of the filing of the compromise agreement. As can be gleaned from the
pre-trial order, the intervenors were represented during the pre-trial conferences, where the plaintiff and the
defendants intimated that they would submit a compromise agreement. The intervenors did not interpose any
opposition to the manifestation of the plaintiff and defendants that they would be amicably settling their
dispute. The compromise agreement was filed in court on May 20, 1985. It was approved by the lower court
on May 24, 1986. Before its approval no opposition had been filed questioning its legality. The intervenors
received their copy of the decision on September 19, 1985. They did not file any motion for reconsideration to
suspend its finality. It was only on June 24, 1987, or after the lapse of almost two (2) years when they filed a
motion to set aside the compromise agreement. It should be emphasized at this juncture that the decision
based on the compromise agreement had long been executed.
Anent the other issue raised whether or not respondent mayor needed another authority from the
Sangguniang Bayan to sign the compromise agreement, suffice it to state that the mayor need not secure
another authority from the Sandiganbayan under Section 141 (c) and (i) of the Local Government Code, which
state that
"Section 141. (1) The Mayor shall be the Chief Executive of the municipal government and shall
exercise such powers, duties and functions as provided in this code and other laws. (2) He shall:
xxx
'(c) Represent the municipality in its business transactions and sign on its behalf all contracts,
obligations and official documents made in accordance with law or ordinance.: rd
'(i) Direct the formulation of municipal development plans and programs, and once approved by
the Sangunian Bayan, supervise and direct the execution and implementation thereof.'" (p.
115, Rollo)
because the execution of the Compromise Agreement is but an act implementing the reclamation contract
duly approved by the Sangguniang Bayan.
Further, the terms and conditions of the compromise agreement are beneficial to the municipality because
the share of Espiritu has been reduced considerably from the 80% agreed upon in the reclamation contract.
WHEREFORE, for lack of merit, the petition is DISMISSED. Costs against petitioner.
SO ORDERED.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 89909 September 21, 1990


METROPOLITAN BANK AND TRUST COMPANY, petitioner,
vs.
THE PRESIDING JUDGE, REGIONAL TRIAL COURT, Manila Branch 39, RAYCOR AIRCONTROL SYSTEM,
INC. and COURT OF APPEALS,* respondent.
Balane, Barican, Cruz, Alampay Law Office for petitioner.
Bito, Lozada, Ortega & Castillo for private respondent.

REGALADO, J.:
Before the Court for review on certiorari is the decision of respondent Court of Appeals in CA-G.R. SP No.
17341, dated July 19, 1989,

dismissing petitioner's original action for certiorari and mandamus which seeks

to set aside the order of the trial court dated June 2, 1988, allowing the intervention suit therein to proceed,
and its order of January 11, 1989, admitting the amended complaint in intervention.
The proceedings in the court below from which this appeal arose, as found by respondent Court of Appeals,
are as follows:
Petitioner Metropolitan Bank and Trust Co. (Metropolitan) in whose favor a deed of chattel
mortgage was executed by Good Earth Emporium, Inc. (GEE) over certain air conditioning
units installed in the GEE building, filed a complaint for replevin against Uniwide Sales, Inc.
(Uniwide, for brevity) and the BPI Investment Corporation and several other banks collectively
called BPI-Consortium, for the recovery of the possession of the air-conditioning units or in the
event they may not be recovered, for the defendants which acquired the GEE building in an
auction sale, (to) be required, jointly and severally, to pay the plaintiff the unpaid obligations on
the units.
Per paragraph 3.11.3 of its complaint, plaintiff Metrobank alleged that the air-conditioning
units were installed on a loan of P4,900,000.00 it extended to Good Earth Emporium &
Supermarket, Inc. in its building located at Rizal Avenue, Sta. Cruz, Manila, after the land and
building had been foreclosed and purchased on June 3, 1983 at public auction by the
defendants, except Uniwide, and in order to secure repayment of the loan, a deed of chattel
mortgage was constituted over the personal properties listed in the deed which included the
airconditioning units.

It also alleged in par. 3.11.2 of the complaint, that '(T)he loan proceeds were used by GEE to
finance the acquisition of airconditioning equipment from Reycor (sic) Air Control System, Inc.
(amounting to P4,250,000.00 and installation costs of P650,000.00) under an Agreement of
Sale dated 29 June 1984' (Annex A, Petition, Id., pp. 23-24).
The defendants filed their Answer, Uniwide on July 25, 1986 (Annex B, Petition, Id., pp. 32-48)
and the defendants (presumably the rest of the defendants), on July 14, 1986 (Annex C,
Petition, Id., pp. 3949).
On July 17, 1986, Raycor Air Control Systems, Inc. filed a motion for leave to intervene alleging'
it has a direct and immediate interest on the subject matter of the litigation such that it will
either gain or lose by the direct legal operation and effect of the judgment' and attached the
'Intervention Complaint'(Annex D, Petition, Id., pp. 49-52). There was no opposition to the
motion and the intervention complaint was admitted by the lower court per its order dated
August 8, 1986. Metrobank on November 19, 1986, filed its Answer To The Intervention
Complaint (Annex E, Petition,Id., pp. 53-59).
On August 3, 1987, the lower court set the case for trial on the merits on September 15, 1987
but before the date of the trial, on September 7, 1987, plaintiff Metrobank and the defendants
Uniwide and BPI Consortium, filed a motion for postponement of the scheduled hearing on
September 15, 1987 and asked for thirty (30) days from September 15 within which to submit a
compromise agreement. On March 15, 1988, plaintiff Metrobank and defendants BPI
Consortium filed a joint motion to dismiss the complaint and on March 18, 1988, the lower
court issued the order dismissing the complaint with prejudice (Annex D to Comment of Raycor
Air Control System, Inc., Rollo, p. 108).
On April 19, 1988, private respondent 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 received the order of dismissal only on April 4, 1988. On June 2, 1988,
the respondent court issued the order granting the motion for reconsideration filed by the
intervenor (Annex I, Petition, Id., p. 67) which order is now subject of present petition for
certiorari.
On August 2, 1988, private respondent filed a motion to admit amended complaint (Annex F,
Intervenor's Comment, Id., p. 110) and attached the Amended Intervention Complaint (Annex
J, Petition, Id., pp. 68-73) to the motion. To this motion, plaintiff Metrobank filed an opposition
(Annex K, Petition, Id., pp. 71-76) and after the intervenor had filed their Reply (Annex L,
Petition, Id., pp. 77-81) and the plaintiff a Rejoinder (Annex M, Petition, Id., pp. 82-87), on
January 11, 1989, the respondent court issued the order admitting the amended complaint in
intervention (Annex N, Petition, Id., p. 88). This is the other order which is subject of the
petition for certiorari.
On February 9, 1989, plaintiff Metrobank filed a motion for extension for 15 days or until
February 24, 1988 within which to file its answer to the amended complaint in intervention
and the intervenor on February 17, 1989 filed an opposition to Metrobank's motion and at the
same time moved that Metrobank be declared in default on the amended complaint in

intervention. The respondent court granted Metrobank's motion and on February 18, 1989,
2

Metrobank filed its Answer to the Amended Complaint in Intervention with Counterclaim.

On April 14, 1989, petitioner filed a petition for certiorari and mandamus with respondent Court of Appeals
contending that the lower court committed a grave abuse of discretion amounting to lack of jurisdiction in
allowing, per its order of June 2, 1988, the intervention suit to survive despite the dismissal of the main
action and also in admitting, per its order of January 11, 1989, the amended complaint in intervention.

As earlier stated, the Court of Appeals found no merit in the petition and dismissed the same on July 19,
1989. Petitioner is now before us raising the same issues and arguments. We agree with the Court of Appeals
that the lower court was innocent of any grave abuse of discretion in issuing the orders complained of.
The contention of petitioner that the order of the lower court, dated June 2, 1988, has the effect of allowing
the intervention suit to prosper despite the dismissal of the main action obviously cannot be upheld.
There is here no final dismissal of the main case. The aforementioned order of the lower court has the effect
not only of allowing the intervention suit to proceed but also of vacating its previous order of dismissal. The
reinstatement of the case in order to try and determine the claims and rights of the intervenor is proper. The
joint motion of therein plaintiff and the original defendants to dismiss the case, without notice to and consent
of the intervenor, has the effect of putting to rest only the respective claims of the said original parties inter
se 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. A resume of pertinent rulings on the matter would be
in order.
Intervention is defined as "a proceeding in a suit or action by which a third person is permitted by the court
to make himself a party, either joining plaintiff in claiming what is sought by the complaint, or uniting with
defendant in resisting the claims of plaintiff, or demanding something adversely to both of them; the act or
proceeding by which a third person becomes a party in a suit pending between others; the admission, by leave
of court, of a person not an original party to pending legal proceedings, by which such person becomes a
party thereto for the protection of some right of interest alleged by him to be affected by such proceedings."

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.

By the very definition of "intervention," the intervenor is a party to the action as the original parties and to
make his right effectual he must necessarily have the same power as the original parties, subject to the
authority of the court reasonably to control the proceedings in the case. 6
Having been permitted to become a party in order to better protect his interests, an intervenor is entitled to
have the issues raised between him and the original parties tried and determined. 7 He had submitted himself
and his cause of action to the jurisdiction of the court and was entitled to relief as though he were himself a
party in the action. 8

After the intervenor has appeared in the action, the plaintiff has no absolute right to put the intervenor out of
court by the dismissal of the action. The parties to the original suit have no power to waive or otherwise annul
the substantial rights of the intervenor. When an intervening petition has been filed, a plaintiff may not
dismiss the action in any respect to the prejudice of the intervenor. 9
It has even been held that the simple fact that the trial court properly dismissed plaintiff s action does not
require dismissal of the action of the intervenor.

10

An intervenor has the right to claim the benefit of the

original suit and to prosecute it to judgment. The right cannot be defeated by dismissal of the suit by the
plaintiff after the filing of the petition and notice thereof to the other parties. A person who has an interest in
the subject matter of the action has the right, on his own motion, to intervene and become a party to the suit,
and even after the complaint has been dismissed, may proceed to have any actual controversy established by
the pleadings determined in such action. The trial court's dismissal of plaintiffs action does not require
dismissal of the action of the intervenor.

11

The intervenor in a pending case is entitled to be heard like any other party.

12

A claim in intervention that

seeks affirmative relief prevents a plaintiff from taking a voluntary dismissal of the main action.

13

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.

14

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.

15

As we ruled in Camacho vs. Hon. Court of Appeals, et al.,

16

the rationale whereof is clearly applicable to the

present controversyThere is no question that intervention is only collateral or ancillary to the main action. Hence,
it was previously ruled that the final dismissal of the principal action results in the dismissal
of said ancillary action. The main action having ceased to exist, there is no pending proceeding
whereon the intervention may be based. In the case at bar, however, there was no such final or
complete dismissal but rather an approval of a compromise agreement which was embodied in
what was specifically designated as a 'Partial Decision' affecting only the interests of herein
petitioner and the defendant in said case but not those of her co-plaintiff municipality and the
intervenor. The clear intent of the court below in making the partial decision is to make a
reservation to determine the rights of the intervenor and, presumably, the plaintiff
municipality. There may be nothing much left to be done with respect to the main case but as
far as the proceedings in the trial court are concerned, the controversy therein has not been
fully settled and the disposition of the case is definitely incomplete.
Moreover, to require private respondent to refile another case for the settlement of its claim will result in
unnecessary delay and expenses and will entail multiplicity of suits and, therefore, defeat the very purpose of
intervention which is to hear and determine at the same time all conflicting claims which may be made on the
subject matter in litigation, and to expedite litigation and settle in one action and by a single judgment the
whole controversy among the persons involved.

17

On the propriety of the order dated January 11, 1988, admitting private respondent's amended complaint in
intervention, we sustain respondent Court of Appeals in upholding the same. Incidentally, it will be recalled

that petitioner was granted the opportunity to file, as it did file, its answer to the amended complaint in
intervention and it even interposed a counterclaim in the process.
Now, the granting of leave to file an amended pleading is a matter particularly addressed to the sound
discretion of the trial court and that discretion is broad, subject only to the limitations that the amendments
should not substantially change the cause of action or alter the theory of the case or that it was made to delay
the action.

18

Once exercised, that discretion will not be disturbed on appeal, except in case of abuse thereof.

19

In the case at bar, a reading of the amended complaint in intervention shows that it merely supplements an
incomplete allegation of the cause of action stated in the original complaint so as to submit the real matter in
dispute. Contrary to petitioner's contention, it does not substantially change intervenor's cause of action or
alter the theory of the case, hence its allowance is in order.
As aptly stated by the Court of Appeals:
In both the Intervention Complaint and the Amended Complaint in Intervention, the private
respondent seeks the payment to it of the amount of P150,000.00 which should have been paid
to it from out of the P650,000.00 which the petitioner as plaintiff in CC 86-3618 had referred
to in pars. 3.11.2 and 3.11.3 of its complaint as cost of installation of the airconditioning units
under the agreement of sale (between plaintiff Metrobank and GEE Inc). dated June 29, 1984
and so basically, the Amended Complaint In Intervention did not really detract or depart from
that basic claim.

20

In determining whether a different cause of action is introduced by amendments to the complaint, what is to
be ascertained is whether the defendant shall be required to answer for a liability or legal obligation wholly
different from that which was stated in the original complaint. An amendment will not be considered as
stating a new cause of action if the facts alleged in the amended complaint show substantially the same
wrong with respect to the same transaction, or if what are alleged refer to the same matter but are more fully
and differently stated, or where averments which were implied are made in expressed terms, and the subject
of the controversy or the liability sought to be enforced remains the same.

21

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.

22

This liberality is greatest in the early stages of a lawsuit,

23

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.
On the issue regarding the propriety of the intervention, suffice it to state that petitioner's failure to interpose
a timely objection when the motion for leave to intervene was filed by private respondent bars the former from
belatedly questioning the validity of the same on appeal. In any event, the trial court duly considered the
circumstances and granted the motion, which order was not seasonably questioned by petitioner thus
evincing its approval of the court's action.
WHEREFORE, finding no reversible error, the petition is DENIED and the judgment of respondent Court of
Appeals is hereby AFFIRMED.
SO ORDERED.