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VIRRA MALL TENANTS ASSOCIATION, INC., vs, VIRRA MALL GREENHILLS ASSOCIATION, INC. G.R. No.

182902 FACTS: Ortigas & Company, Limited Partnership (Ortigas) is the owner of the Greenhills Shopping Center (GSC). On Ortigas and Virra Realty Development Corporation (Virra Realty) entered into a Contract of Lease. Thereafter, Virra Realty organized respondent Virra Mall Greenhills Association (VMGA), an association of all the tenants and leasehold right holders, who managed and operated Virra Mall. In the First Contract of Lease, VMGA assumed and was subrogated to all the rights, obligations and liabilities of Virra Realty. VMGA, through its president, William Uy (Uy), requested from Ortigas the renewal of the First Contract of Lease.VGMA secured two insurance policies to protect Virra Mall against damage by fire and other causes. Virra Mall was gutted by fire, requiring substantial repair and restoration. VMGA thus filed an insurance claim .Thereafter, the proceeds of the insurance were released to VMGA.On 3 September 2001, Ortigas entered into a Contract of Lease (Second Contract of Lease) with Uy .On 11 September 2001, the latter assigned and transferred to petitioner Virra Mall Tenants Association (VMTA) all his rights and interests over the property. Ortigas filed a Complaint for Specific Performance with Damages and Prayer for Issuance of a Writ of Preliminary Attachment against several defendants, including herein respondents. It accused them of fraud, misappropriation and conversion of substantial portions of the insurance proceeds for their own personal use unrelated to the repair and restoration of Virra Mall. VMTA filed a Complaint-in-Intervention. It claimed that as the assignee or transferee of the rights and obligations of Uy in the Second Contract of Lease, and upon the order of Ortigas, it had engaged the services of various contractors. Thus, VMTA sought the reimbursement of the expenses it had incurred in relation thereto. RTC Br. 67 admitted the Complaint-in-Intervention.he CA reversed the ruling of RTC Br. 67 and dismissed the Complaint-in-Intervention on the following grounds: (a) VMTA failed to state a cause of action; (b) VMTA has no legal interest in the matter in litigation; and (c) the Complaint-in-Intervention would cause a delay in the trial of the action, make the issues more complicated, prejudice the adjudication of the rights of the parties, stretch the issues. Issue: Whether or not VTMA may be allowed to intervene in the case Ruling: We rule in favor of VMTA. Section 1, Rule 19 of the Rules of Court provides: Who may intervene. .. In Executive Secretary v. Northeast Freight ,1[21] this Court explained intervention in this wise: Intervention is not a matter of absolute right but may be permitted by the court when the applicant shows facts which satisfy the requirements of the statute authorizing intervention. Under our Rules of Court, what qualifies a person to intervene is his possession of a 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. As regards the legal interest as qualifying factor, this Court has ruled that such interest must be of a direct and immediate character so that the intervenor will either gain or lose by the direct legal operation of the judgment. The interest must be actual and material, a concern which is more than mere curiosity, or academic or sentimental desire; it must not be indirect and contingent, indirect and remote, conjectural, consequential or collateral. However, notwithstanding the presence of a legal interest, permission to intervene is subject to the sound discretion of the court, the exercise of which is limited by considering whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties and whether or not the intervenors rights may be fully protected in a separate proceeding. Applying the foregoing points to the case at bar, VMTA may be allowed to intervene, and the ruling of RTC Br. 67 allowing intervention was wrongly reversed by the CA because such a ruling does not constitute grave abuse of discretion. It is clear from the foregoing allegations that VMTAs purported right is rooted in its claim that it is the real beneficiary of the insurance proceeds, on the grounds that it had (a) facilitated the repair and restoration of the insured infrastructure upon the orders of Ortigas, and (b) advanced the costs thereof. Corollarily, respondents have a duty to reimburse it for its expenses since the insurance proceeds had already been issued in favor of respondent VMGA, even if the latter was not rightfully entitled thereto. Finally, the imputed act or omission on the part of respondents that supposedly violated the right of VMTA was respondent VMGAs refusal, despite demand, to release the insurance proceeds it received

to reimburse the former for the expenses it had incurred in relation to the restoration and repair of Virra Mall. Clearly, then, VMTA was able to establish its cause of action. NORDIC ASIA LIMITED vs. THE HONORABLE COURT OF APPEALS [G.R. No. 111159. July 13, 2004] FACTS:This is to resolve petitioners motion for reconsideration of the decision rendered by the Court on June 10, 2003.Sextant Maritime, S.A., (Sextant) borrowed US$5,300,000 from petitioners Nordic Asia Limited and Bankers Trust Company. The loan amount was used by Sextant to purchase the vessel M/V Fylyppa. As security for the loan, a First Preferred Mortgage over the vessel M/V Fylyppa was constituted in favor of petitioners. Sextant eventually defaulted on the loan, prompting petitioners to institute extrajudicial foreclosure proceedings Nam Ung Marine Co., Ltd., manning agent of the vessel, and twenty-seven (27) crew members filed a collection case before the Regional Trial Court of Manila (RTC). The object of the suit was to claim their preferred maritime liens consisting of unpaid wages, overtime pay, allowances and other benefits due to them.Upon learning of the collection case, petitioners filed with the RTC a motion for leave to intervene in the collection case. Petitioners alleged that they hold a mortgage over the vessel and that their intervention is only for the purpose of opposing the crew members unfounded and grossly exaggerated claim. After the intervention was granted, petitioners were able to discharge the attachment over vessel by putting up a counterbond. The RTC eventually rendered a decision, ordering the defendants to pay, among others, the wages of the crewmen and Nam Ung Marine Ltd.s agency fees and other expenses incurred for manning the vessel during its last voyage. It further ordered the counterbond posted by petitioners to answer for all the awards.Petitioners appealed the decision to the Court of Appeals. The appeal was docketed as CA-G.R. CV No. 21343 (the Appeal Case). Subsequently, upon motion by respondents, the RTC issued an order of execution pending appeal. In response, petitioners instituted another action with the Court of Appeals to question the execution pending appeal. This second case was docketed as CA-G.R. SP No. 13874 (the Certiorari Case).The Certiorari Case was first disposed of by the Court of Appeals. The order of execution pending appeal was affirmed in all respects, excluding the portion allowing the immediate execution on moral damages, attorneys fees, litigation expenses and interest, as they cannot be the subject of an execution pending appeal. This decision eventually became final and executory.As for the Appeal Case, the Court of Appeals affirmed the decision of the RTC in all respects and dismissed the appeal. It is this decision that was elevated to the Court through a petition for review on certiorari.The Court, in its June 10, 2003 decision, dismissed the petition based on two grounds: 1) Petitioners have no right to intervene because the complaint-in-intervention fails to state a cause of action and because the requisites for intervention are not present; and 2) Petitioners are guilty of forum shopping.The Court ruled that the allegations contained in the complaint-in-intervention failed to state a cause of action. It is required of every complaint, including a complaint-inintervention, to state the ultimate facts upon which a party relies for his cause of action.2[2] The Court found that petitioners complaint-in-intervention failed to satisfy this requirement. ISSUE: Whether or not the petitioner has the right to intervene. Ruling: The Court finds no merit in this argument.The requirements for intervention are: [a] legal interest in the matter in litigation; and [b] consideration must be given as to whether the adjudication of the rights of the original parties may be delayed or prejudiced, or whether the intervenors rights ma y be protected in a separate proceeding or not.3[3] Petitioners failed to meet both requirements. Legal interest, which entitles a person to intervene, must be in the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by direct legal operation and effect of the judgment.4[4] Petitioners, being co-creditors, are not the parties liable for the claims of the manning agent and crewmen. Also, petitioners remedies as unpaid mortgagees remain preserved as the collection case will not preclude the foreclosure of the vessel. Lastly, that petitioners would be adversely affected by the disposition of the property is contingent upon two eventualities: 1) the successful foreclosure on the vessel; and 2) the proceeds of the sale being insufficient to cover the loan amount. Clearly, the outcome of the collection case has no direct effect on petitioners. As for the second requisite for intervention, petitioners rights were already protected through their extrajudi cial foreclosure proceeding, while on the other hand, the rights of the manning agent and crewmen, who are the original plaintiffs, have been unduly delayed or prejudiced. The decision of the RTC, rendered in October 30, 1987, has not attained finality, even though the actual judgment obligors did not appeal. The only parties prolonging the case are the intervenors, in the persons of petitioners. The Court finds the two aforecited cases not applicable to the present case.

In the International Banking Corp. case, intervention was allowed because the intervenor had a superior right of preference over the subject property and he had sought to enforce his own claims against the defendant and to foreclose on the said subject property. Petitioners herein prayed that they be allowed to intervene, on the basis of their secondary right as unpaid mortgagees, merely to oppose the claims of respondents and not for the purpose of enforcing their own claims. In the Joaquin case, the plaintiff sought to compel the local officials of Caloocan to issue a cockpit license to him. A third party intervened to oppose the plaintiffs application and to assert his own right by asking that the cockpit license be issued to him instead. In this case, petitioners wanted only to oppose the claims of respondents without asserting their unpaid mortgage. FBDC vs. YLLAS LENDING CORP G.R. No. 158997 FACTS: FORT BONIFACIO DEVELOPMENT CORP. ( FBDC) executed a lease contract in favor of Tirreno, Inc. over a unit at the Bonifacio Global City in Taguig, Metro Manila. The parties had the lease contract notarized on the day of its execution. Tirreno used the leased premises for Savoia Ristorante and La Strega Bar. Due to Tirrenos alleged failure to settle its outstanding obligations, FBDC entered a nd occupied the leased premises. FBDC also appropriated the equipment and properties left by Tirreno pursuant to Section 22 of their Contract of Lease as partial payment for Tirrenos outstanding obligations. In 2002, Yllas Lending Corporation caused the sheriff of the trial court to serve an alias writ of seizure against FBDC. FBDC found out that in 2001, respondents filed a complaint for Foreclosure of Chattel Mortgage with Replevin, against Tirreno, et al. In their complaint, Yllas alleged that they lent a sum of money to Tirreno et al and in 2000 executed a Deed of Chattel Mortgage in favor of Yllas as security for the loan. The Chattel Mortgage covered properties of the Tirrenos restaurant and bar. On the same day, FBDC served on the sheriff an affidavit of title and third party claim. Despite FBDCs service upon him of an affidavit of title and third party claim, the sheriff proceeded with the seizure of certain items from FBDCs premises. The sheriff delivered the seized properties to Yllas. FBDC questioned the propriety of the seizure and delivery of the properties to respondents without an indemnity bond before the trial court, which decided against FBDC. It stated that: 1. Section 22 of the lease contract between FBDC and Tirreno is void under Article 2088 of the Civil Code. 2. FBDC should have filed a separate complaint against respondents instead of filing a motion to intervene. (The trial court quoted Bayer Phils. v. Agana ) FBDC filed a MR, which was denied. Hence this petition to review pure questions of law. ISSUE: WON the proper remedy of FBDC as third party claimant over the subject properties is to file a separate action HELD: NO. The Bayer ruling is inapplicable to the present case. The third party in Bayer filed his claim during execution; in the present case, FBDC filed for intervention during the trial. The timing of the filing of the third party claim is important because the timing determines the remedies that a third party is allowed to file. A third party claimant under Section 16 of Rule 39 (Execution, Satisfaction and Effect of Judgments)17 of the 1997 Rules of Civil Procedure may vindicate his claim to the property in a separate action, because intervention is no longer allowed as judgment has already been rendered. We allow FBDCs intervention in the present case because FBDC satisfied the requirements of Section 1, Rule 19 (Intervention) of the 1997 Rules of Civil Procedure, which reads as follows: Section 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or 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 may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenors rights may be fully protected in a separate proceeding. Although intervention is not mandatory, nothing in the Rules proscribes intervention. HYATT INDUSTRIAL MANUFACTURING CORP. vs. LEY CONSTRUCTION AND DEVELOPMENT CORP. (G.R. No. 147143; March 10, 2006) Facts:

Ley Construction and Development Corporation (LCDC) filed a complaint for specific performance and damages with the RTC of Makati against Hyatt Industrial Manufacturing Corporation (Hyatt) claiming that Hyatt reneged in its obligation to transfer 40% of the pro indiviso share of a real property in Makati in favor of LCDC despite LCDCs full payment of the purchase price of P2,634,000.00; and that Hyatt failed to develop the said pr operty in a joint venture, despite LCDCs payment of 40% of the pre-construction cost. LCDC filed amended complaints impleading Princeton Development Corporation (Princeton) and Yu He Ching (Yu) President of Hyatt as additional defendants claiming that Hyatt sold the subject property to Princeton in fraud of LCDC and alleging that LCDC paid the purchase price of P2, 634,000.00 to Hyatt through Yu. LCDC filed notices to take the depositions of Yu; Pacita Tan Go, Account Officer of Rizal Commercial Banking Corporation (RCBC); and Elena Sy, Finance Officer of Hyatt. Hyatt also filed notice to take deposition of Manuel Ley, President of LCDC, while Princeton filed notice to take the depositions of Manuel and Janet Ley. The RTC ordered the deposition-taking to proceed. However, at the scheduled deposition of Elena Sy, Hyatt and Yu prayed that all settings for depositions be disregarded and pre-trial be set instead, contending that the taking of depositions only delay the resolution of the case. The RTC agreed and on the same day ordered all depositions cancelled and pre-trial to take place. LCDC moved for reconsideration which the RTC denied due to the following reasons 1) said depositions will only delay the early termination of the case; 2) had the Court set the case for pre-trial conference and trial thereafter, the case would have been terminated earlier; 3) what the parties would like to elicit from their deponents would probably be elicited at the pre-trial conference; 4) no substantial rights of the parties would be prejudiced, if pre-trial conference is held, instead of deposition. On the scheduled date of the pre-trial, LCDC filed an Urgent Motion to Suspend Proceedings Due to Pendency of Petition for Certiorari in the Court of Appeals (12 th Division), which sought to annul the order regarding the cancellation of the deposition-taking. RTC denied plaintiffs motion to suspend proceedings and gave LCDC two (2) options: enter into a pre trial conference, advising plaintiff that what it would like to obtain at the deposition may be obtained at the pre-trial conference; and, terminate the pre-trial conference and apply for deposition later on. The pre-trial proceeded as scheduled and with the refusal of LCDC to enter into pre-trial, Hyatt, Yu and Princeton moved to declare LCDC non-suited which the RTC granted. For LCDCs failure to enter into pre -trial conference without any valid reason the complaint and the counterclaims were dismissed by the RTC. LCDC filed a motion for reconsideration which was also denied compelling it file an appeal with CA (7th Division). CAs 12th Division denied LCDCs petition for certiorari declaring that the granting of the petition and setting aside of the RTC Orders are manifestly pointless considering that the complaint itself had already been dismissed. Meanwhile CAs 7th Division finds the appeal meritorious and remanded the case to the RTC for further hearing and to proceed with the deposition taking. Hyatt and Princeton filed their respective motions for reconsideration which the CA denied. Hence, this petition for review on certiorari. Issues: Whether or not the CA erred in remanding the case to the trial court and order the deposition-taking to proceed. Ruling: No. A deposition should be allowed; absent any showing that taking it would prejudice any party. It is accorded a broad and liberal treatment and the liberty of a party to make discovery is well-nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of law. It is allowed as a departure from the accepted and usual judicial proceedings of examining witnesses in open court where their demeanor could be observed by the trial judge, consistent with the principle of promoting just, speedy and inexpensive disposition of every action and proceeding; and provided it is taken in accordance with the provisions of the Rules of Court, i.e., with leave of court if summons have been served, and without such leave if an answer has been submitted; and provided further that a circumstance for its admissibility exists (Section 4, Rule 23, Rules of Court). The rules on discovery should not be unduly restricted; otherwise, the advantage of a liberal discovery procedure in ascertaining the truth and expediting the disposal of litigation would be defeated. Sec. 1, Rule 23 of the 1997 Rules of Court which provides as follows:. LCDC complied with the above quoted provision as it made its notice to take depositions after the answers of the defendants have been served, thus, erred in canceling the previously scheduled depositions. While it is true that depositions may be disallowed by trial courts if the examination is conducted in bad faith; or in such a manner as to annoy, embarrass, or oppress the person who is the subject of the inquiry, or when the inquiry touches upon the irrelevant or encroaches upon the recognized domains of privilege, such circumstances, however are absent in the case at bar. x x x Under the concept adopted by the new Rules, the deposition serves the double function of a method of discovery with use on trial not necessarily contemplated - and a method of presenting testimony. Accordingly, no limitations other than relevancy and privilege have been placed on the taking of depositions, while the use at the trial is subject to circumscriptions looking toward the use of oral testimony wherever practicable.

The trial court erred in forcing LCDC to choose only from the options given by the trial court and in dismissing the complaint upon LCDCs refusal to choose either of the two. The information LCDC seeks to obtain through the depositions, may not be obtained at the pre-trial conference, as the said deponents are not parties to the pre-trial conference. As also pointed out by the CA: x x x To unduly restrict the modes of discovery during trial, would defeat the very purpose for which it is intended, as a pretrial device. By then, the issues would have been confined only on matters defined during pre-trial. The importance of the modes of discovery cannot be gainsaid in this case in view of the nature of the controversy involved and the conflicting interest claimed by the parties. Deposition is chiefly a mode of discovery, the primary function of which is to supplement the pleadings for the purpose of disclosing the real matters of dispute between the parties and affording an adequate factual basis during the preparation for trial. In this case, the information sought to be obtained through the depositions of Elena and Pacita are necessary to fully equip LCDC in determining what issues will be defined at the pre-trial. Without such information before pre-trial, LCDC will be forced to prosecute its case in the dark --- the very situation which the rules of discovery seek to prevent. Indeed, the rules on discovery seek to make trial less a game of blind mans bluff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent. Petition is denied for lack of merit.

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