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In denying the petition for review, the Supreme Court held that the petitioners failed to
meet the requirements for intervention. First of all, they have no legal interest in the matter
in litigation; and there was no exigency to grant the intervention because petitioners' rights
were already protected through their extrajudicial foreclosure proceedings. The Court also
held that petitioners have violated the rule against forum shopping in the case at bar.
SYLLABUS
1.
REMEDIAL LAW; CIVIL PROCEDURE; COMPLAINT-IN-INTERVENTION; FAILED TO
STATE A CAUSE OF ACTION IN CASE AT BAR. In Republic v. De los Angeles, this Court
ruled that every complaint, including a complaint-in-intervention, must state the ultimate
facts upon which a party relies for his cause of action. A cause of action is the act or
omission by which a party violates the right of another. In the case at bar, the complaint-inintervention merely alleged that petitioners possess a mortgage lien and that petitioners
are so situated as to be adversely affected by respondents' collection case. Putting things
in perspective, petitioners' mortgage lien only gives rise to a connection between them and
the defendants the vessel M/V "Fylyppa" and Sextant Maritime, S.A. Being just a
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mortgagee, the cause of action lies with the vessel and mortgagor, and not with a coclaimant. However, as aforestated, petitioners did not intervene to make a claim against
the defendants, respondents herein, but merely to oppose their claims. Petitioners were
unable to allege what specific act or omission can be attributed to respondents, which
violated petitioners' rights. Petitioners simply made a conclusionary statement that, by
reason of their mortgage lien, they are so situated as to be adversely affected by the
collection case. The complaint-in-intervention, therefore, failed to state a cause of action.
2.
ID.; ID.; ID; REQUISITES; NOT COMPLIED WITH IN CASE AT BAR. Jurisprudence
has laid down the requirements for intervention: [a] it must be shown that the movant has
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 or not the intervenor's rights may be protected in a separate proceeding.
Petitioners failed to meet both requirements. With respect to the first requisite, it has been
explained that the interest which entitles a person to intervene in a suit between other
parties 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.
Otherwise, if persons not parties to the action were allowed to intervene, proceedings
would become unnecessarily complicated, expensive and interminable. And this would be
against the policy of the law . . . In this case, petitioners do not own the vessel, but merely
hold a mortgage lien over it. Consequently, whatever judgment is rendered in the collection
case against the vessel is not of such a direct and immediate character that the intervenor
would either gain or lose by direct legal operation and effect of the judgment. The second
requisite for intervention states that consideration must be given as to whether the
adjudication of the rights of the original parties may be delayed or prejudiced, or whether
or not the intervenor's rights may be protected in a separate proceeding. In the present
case, petitioners' rights were already protected through their extrajudicial foreclosure
proceedings. There was no exigency to grant the intervention. On the other hand,
respondents' rights have been unduly delayed or prejudiced by the intervention. The
decision of the RTC of Manila in favor of respondents, rendered in October 30, 1987, has
not attained finality through the sole efforts of petitioners, even though the actual
judgment obligors, the defendants, did not appeal from the said decision.
3.
ID.; ID.; FORUM SHOPPING; DISMISSAL OF MULTIPLE CASES, PROPER. The Court
finds further justification to dismiss the petition on the ground that petitioners have
violated the rule against forum shopping. Forum shopping consists of filing multiple suits
involving the same parties for the same cause of action, either simultaneously or
successively, for the purpose of obtaining a favorable judgment. Forum shopping is an
unethical practice that subverts justice. For this reason, rules have been promulgated
authorizing the dismissal of multiple cases. As aforementioned, the RTC of Manila issued
two rulings adverse to petitioners: (1) the October 30, 1987 decision granting the award of
claims and damages to respondents; and (2) the January 29, 1987 order granting the
execution pending appeal of the October 30, 1987 decision. Petitioners filed CA-G.R. CV
No. 21343 to nullify the October 30, 1987 decision. Petitioners also filed a separate
petition before the Court of Appeals to assail the January 29, 1988 order, which was
docketed as CA-G. R. SP No. 13874.
AICDSa
DECISION
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AZCUNA , J :
p
Before this Court is a petition for review on certiorari, under Rule 45 of the Rules of Court,
assailing the decision 1 of the Court of Appeals in CA G.R. CV No. 21343, dated October 27,
1994.
SDHAcI
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pleadings to the complaint within the time allowed under the Rules of Court. As a result,
respondents, on February 19, 1986, moved to declare these defendants in default and to
be allowed to present evidence immediately. The RTC of Manila, in an order dated February
21, 1986, declared in default M/V "Fylyppa," Sextant Maritime, S.A., P.V. Christensen Lines
and Theil Bolvinkel Shipping, A.S., and allowed respondents to present their evidence.
Respondents were able to present their evidence on February 27, 28 and March 3 and 4,
1986. Despite due notice, petitioners did not participate in the hearings to receive
evidence. Instead, petitioners filed a motion for reconsideration and/or to expunge exparte evidence on March 3, 1986. At the March 4, 1986 hearing, petitioners' counsel
appeared and manifested that he purposely did not appear at the previous hearings
because he did not want to waive petitioners' right to question the proceedings, which he
considered to be illegal. Said counsel further manifested that petitioners' motion for
reconsideration and/or to expunge ex-parte evidence remains unresolved. 1 1
On October 30, 1987, the RTC of Manila rendered a decision, the dispositive portion of
which reads: 1 2
WHEREFORE, premises considered, judgment is hereby rendered ordering
defendants M/V Fylyppa, Sextant Maritime, S.A., P.V. Christensen Lines, Theil
Bolvinkel, A.S., to pay plaintiffs jointly and severally, the following amounts:
1)
Wages, allowances, medical expenses and overtime charges of the 25
Korean crewmen US$310,369.37;
2)
To pay Shipmaster Ulstrup US$12,400.00 and Ship Superintendent Kim
Jeong Seong US$4,500.00;
3)
To plaintiff Nam Ung Marine Ltd., the amount of US$69,028.47
representing agent's fees and other expenses incurred for manning the defendant
M/V Fylyppa during its last voyage;
4)
The amount of US$12,500.00 representing repatriation expenses for the 25
Korean crewmen and US$2,000.00 each for Shipmaster Ulstrup and Ship
Superintendent Kim Jeong Seong;
5)
Moral damages for US$1,000.00 each in favor of the 25 Korean crewmen
and US$2,000.00 each for the Shipmaster Ulstrup and Ship Superintendent Kim
Jeong Seong;
6)
SAEHaC
7)
Interest at the rate of 12% per annum on all attorney's fees in favor of
plaintiffs computed from October 19, 1985 in respect to the claims of plaintiffs
crewmembers, and with respect to the claim of Shipmaster Ulstrup computed
from December 25, 1985 and on the claim of Ship Superintendent Kim Jeong
Seong computed from October 19, 1985.
The awards granted herein in favor of plaintiffs to be paid in US dollars or its
Philippine currency equivalent at the time of payment.
Further ordering the counterbond posted by the intervenors DnC Limited and
Bankers Trust Company and issued by Prudential Guarantee and Assurance, Inc.
in the amount of P10,211,361.02 which is the equivalent of plaintiffs' maritime
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Petitioners filed a notice of appeal from the aforementioned decision of the RTC of Manila
on November 10, 1987. The appeal was docketed in the Court of Appeals as CA-G.R. CV
No. 21343. On the same day, respondents filed a motion for execution pending appeal. In
an order dated January 29, 1988, the RTC of Manila granted the motion for execution
pending appeal.
To forestall the execution of the decision, petitioners instituted another action with the
Court of Appeals assailing the January 29, 1988 order. This second case was docketed as
CA-G.R. SP No. 13874. On October 11, 1988, the Court of Appeals promulgated its
decision in CA-G.R. SP No. 13874, affirming in all respects the RTC of Manila's January 29,
1988 order except the portion allowing execution pending appeal on the awards of moral
damages, attorney's fees, litigation expenses and interest. Petitioners and respondents
separately filed motions for partial reconsideration. Both motions were denied and the
decision in CA-G.R. SP No. 13874 became final and executory.
On January 29, 1993, the Court of Appeals rendered its decision in CA-G.R. CV No. 21343
dismissing the appeal and affirming in all respects the October 30, 1987 decision of the
RTC of Manila. It is this decision that is the subject of the present petition.
In this petition for review, petitioners assign the following as errors:
I
The Court of Appeals, in affirming the decision of the RTC of Manila, totally
disregarded the principles embodied in the due process clause of the Constitution,
thus:
a.
b.
c.
The Court of Appeals erred in holding that the amount of US$501,797.84 awarded
by the RTC of Manila is "fully supported by competent proof."
III
The Court of Appeals erred in ruling that the RTC of Manila's award of attorney's
fees cannot be challenged by petitioners.
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IV
The Court of Appeals erred in awarding moral damages, there being no factual or
legal basis.
A rudimentary doctrine on appealed cases is that this Court is clothed with ample authority
to review matters, even if they are not assigned as errors on appeal, if it finds that their
consideration is necessary at arriving at a just decision of the case. Thus, the Court may
consider an unassigned error closely related to an error properly assigned or upon which
the determination of the question properly assigned is dependent, notwithstanding the
failure to assign it as error. 1 3
In examining the factual circumstances of the case at bar, the Court finds questionable the
legal interest of petitioners to intervene and, eventually, file this petition. Petitioners
entered their appearance as plaintiffs-in-intervention in the collection case, impleading
respondents as defendants-in-intervention. In the complaint-in-intervention, petitioners
alleged the following:
1)
Plaintiffs-in-intervention hold and possess a Panamanian FIRST PREFERRED SHIP
MORTGAGE dated May 29, 1981 over the vessel, M/V "Fylyppa," executed in their favor by
Sextant Maritime S.A., one of the defendants in the action.
2)
On January 29, 1986, plaintiffs-in-intervention filed with the sheriff of Manila a
verified request or petition for extrajudicial foreclosure of the aforementioned Panamanian
FIRST PREFERRED SHIP MORTGAGE over the vessel, M/V "Fylyppa."
3)
As a consequence of the extrajudicial foreclosure proceedings, plaintiffs-inintervention filed a petition for an arrest order against the vessel M/V "Fylyppa."
4)
By virtue of their unpaid mortgage lien, plaintiffs-in-intervention have a clear, direct
and substantial legal interest in the action and are so situated as to be adversely affected
by any distribution or other disposition of the property involved in this action.
5)
Their intervention is only for the purpose of opposing therein plaintiffs' unfounded
and/or grossly exaggerated claim and is entirely without prejudice to the result or
outcome of the extrajudicial foreclosure proceedings against said vessel before the
Sheriff of Manila.
A cursory reading of petitioners' complaint-in-intervention plainly shows that petitioners'
intention in intervening in the collection case was not to enforce their maritime lien against
the defendants therein, it already being enforced through extrajudicial foreclosure
proceedings, but solely to oppose the claims of respondents. The reason is obvious. The
higher the claims awarded to respondents in the collection case, which would be
recovered from the attached vessel, the lesser the amount petitioners can obtain from
their extrajudicial foreclosure proceedings given that respondents' lien is superior to
petitioners' mortgage lien. 1 4
This Court is therefore left to ponder on the question of whether a claimant or creditor
should be allowed to intervene in a collection case filed by a co-claimant/co-creditor
possessing a superior lien or preferred credit, solely for the purpose of opposing such
claims in order that the intervenor's share may not be diminished substantially, or to
prevent it from being diminished at all.
In Republic v. De los Angeles, 1 5 this Court ruled that every complaint, including a
complaint-in-intervention, must state the ultimate facts upon which a party relies for his
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cause of action. A cause of action is the act or omission by which a party violates the right
of another. 1 6
In the case at bar, the complaint-in-intervention merely alleged that petitioners possess a
mortgage lien and that petitioners are so situated as to be adversely affected by
respondents' collection case. Putting things in perspective, petitioners' mortgage lien only
gives rise to a connection between them and the defendants, the vessel M/V "Fylyppa" and
Sextant Maritime, S.A. Being just a mortgagee, the cause of action lies with the vessel and
mortgagor, and not with a co-claimant. However, as aforestated, petitioners did not
intervene to make a claim against the defendants, respondents herein, but merely to
oppose their claims. Petitioners were unable to allege what specific act or omission can
be attributed to respondents, which violated petitioners' rights. Petitioners simply made a
conclusionary statement that, by reason of their mortgage lien, they are so situated as to
be adversely affected by the collection case. The complaint-in-intervention, therefore,
failed to state a cause of action.
Furthermore, jurisprudence has laid down the requirements for intervention: [a] it must be
shown that the movant has 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 or not the intervenor's rights may be protected in a
separate proceeding. 1 7 Petitioners failed to meet both requirements.
With respect to the first requisite, it has been explained that the interest which entitles a
person to intervene in a suit between other parties 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. Otherwise, if persons not parties to the action
were allowed to intervene, proceedings would become unnecessarily complicated,
expensive and interminable. And this would be against the policy of the law. The words "an
interest in the subject" mean a direct interest in the cause of action as pleaded, one that
would put the intervenor in a legal position to litigate a fact alleged in the complaint
without the establishment of which plaintiff could not recover. 1 8
Petitioners do not own the vessel, but merely hold a mortgage lien over it. Consequently,
whatever judgment is rendered in the collection case against the vessel is not of such a
direct and immediate character that the intervenor would either gain or lose by direct legal
operation and effect of the judgment.
aDcHIC
Assuming judgment is rendered against the vessel, petitioners are not precluded from
proceeding with their foreclosure of the vessel. While there is a chance that petitioners
would not be able fully to satisfy their claims due to respondents' preferred claims, the
effect is merely indirect as it is contingent upon two eventualities: 1) petitioners' being
able successfully to foreclose on the vessel; and 2) the proceeds of the sale being
insufficient to cover the loan amount. It would have been different if petitioners were the
owners of the vessel, for then petitioners may be said to have a direct interest in the cause
of action pleaded, as the execution of the judgment would be implemented on their
property.
The second requisite for intervention states that consideration must be given as to
whether the adjudication of the rights of the original parties may be delayed or prejudiced,
or whether or not the intervenor's rights may be protected in a separate proceeding. In the
present case, petitioners' rights were already protected through their extrajudicial
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foreclosure proceedings. There was no exigency to grant the intervention. On the other
hand, respondents' rights have been unduly delayed or prejudiced by the intervention. The
decision of the RTC of Manila in favor of respondents, rendered on October 30, 1987, has
not attained finality through the sole efforts of petitioners, even though the actual
judgment obligors, the defendants, did not appeal from the said decision.
The purpose of intervention is not to obstruct nor unnecessarily delay the placid operation
of the machinery of trial, but merely to afford one not an original party, yet having a certain
right or interest in the pending case, the opportunity to appear and be joined so he could
assert or protect such right or interest. 1 9 Before this Court is a striking example of the
disastrous results incident to an improper intervention. By being admitted as intervenors,
petitioners were able to elevate the collection case all the way to this Court to contest the
award of damages that was not directed against them but against the main defendants
who did not appeal from the judgment.
In effect, petitioners' intervention is a device to defeat the order of preference of claims
enumerated in P.D. 1521. If petitioners' tactics were allowed, it would virtually pave the
way for any creditor with a secondary lien or junior mortgage to block the claims of a
preferred creditor or claimant by simply intervening to oppose such credits or claims. This
would inevitably delay and prejudice the rights of the original parties, unnecessarily
complicate the case, and result in expensive and interminable litigation.
It is apt to mention Nordic Asia Limited v. Agton, 2 0 wherein a similar procedure wrought
havoc on the other claimants against the vessel.
In that case, plaintiffs JIBSEN Trading Corp. and JIBFAIR Shipping Corp. filed a collection
case against P.V. Christensen Lines, THEILSHIP and SEXTANT Maritime S.A. before the
RTC of Davao. In the course of the proceedings, the same vessel M/V "Fylyppa" was
attached. At this point, Nordic Asia Limited and Bankers Trust Company, the same
petitioners herein, intervened, citing again their rights as unpaid mortgagees. Petitioners
moved to lift the order of attachment by offering to post a counterbond. The counterbond
was denied by the RTC of Davao as they were not the owners of the vessel nor were they
appearing on behalf of its owners. The order of denial was appealed to this Court in G.R.
No. 74694.
As aforestated, petitioners in the meantime succeeded in lifting the arrest order on the
same vessel issued by the RTC of Manila in the collection case herein involved through the
filing of the counterbond in the amount of US$567,297.84. As a result, petitioners were
able to sell the vessel through public auction on May 29, 1986 and, thereafter, the vessel
sailed out of Philippine territory, despite the writ of attachment issued by the RTC of
Davao. This development effectively rendered moot G.R. No. 74694, causing its dismissal.
The claimants in the RTC of Davao had lost their security.
In addition to petitioners' lack of legal interest, this Court finds further justification to
dismiss the petition on the ground that petitioners have violated the rule against forum
shopping.
Forum shopping consists of filing multiple suits involving the same parties for the same
cause of action, either simultaneously or successively, for the purpose of obtaining a
favorable judgment. 2 1 Forum shopping is an unethical practice that subverts justice. For
this reason, rules have been promulgated authorizing the dismissal of multiple cases. 2 2
As aforementioned, the RTC of Manila issued two rulings adverse to petitioners: (1) the
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October 30, 1987 decision granting the award of claims and damages to respondents; and
(2) the January 29, 1987 order granting the execution pending appeal of the October 30,
1987 decision. Petitioners filed CA-G.R. CV No. 21343 to nullify the October 30, 1987
decision. Petitioners also filed a separate petition before the Court of Appeals to assail the
January 29, 1988 order, which was docketed as CA-G.R. SP No. 13874.
However, in CA-G.R. SP No. 13874, petitioners did not limit itself to questioning the
January 29, 1988 order, but also sought to overturn the October 30, 1987 decision. 2 3 In
fact, in petitioners' second and third prayers for relief contained in the petition, they
specifically prayed:
xxx xxx xxx
2.
3.
It did not escape this Court's attention that when petitioners filed their appellants' brief in
CA-G.R. CV No. 21343, the Court of Appeals had rendered a decision in CA-G.R. SP No.
13874, partially affirming the RTC of Manila's order of execution pending appeal. In an
apparent attempt to overturn the decision in CA-G.R. SP No. 13874, petitioners included in
their appellants' brief in CA-G.R. CV No. 21343 a prayer for: "b. Setting aside the execution
pending appeal of said decision." 2 5
It is quite apparent that when petitioners initiated the two actions before the Court of
Appeals, purportedly seeking separately to reverse the two rulings, petitioners deliberately
prayed for the reversal of both rulings in each of the cases. This is a precise instance of
forum-shopping wherein petitioners have filed multiple cases hoping that one or the other
case will be a favorable disposition. Petitioners are therefore guilty of forum shopping.
WHEREFORE, the petition is DENIED, and the assailed decision of the Court of Appeals is
hereby AFFIRMED. Costs against petitioners.
aITDAE
SO ORDERED.
1.
Rollo, p. 46.
2.
Id., p. 11.
3.
Rollo, pp. 95102, Annex "D" of Petition; Civil Case No. 3699P.
4.
5.
6.
7.
8.
9.
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10.
Rollo, p. 49.
11.
12.
13.
Roman Catholic Archbishop of Manila, et al. v. Court of Appeals, 198 SCRA 300 (1991).
14.
Under section 17 (b) of P.D. 1521, crew's wages have priority over a preferred mortgage
lien.
15.
16.
17.
18.
19.
20.
21.
22.
New Sampaguita Builders Construction, Inc., et al. v. The Estate of Fermina Canoso, et
al., G.R. No. 151447, February 14, 2003.
23.
Rollo, p. 58.
24.
25.
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