IVOR ROBERT DAYTON GIBSON, PETITIONER, VS. HON. PEDRO A. REVILLA, IN HIS OFFICIAL CAPACITY AS PRESIDING JUDGE OF BRANCH XIII, COURT OF FIRST INSTANCE OF RIZAL, AND LEPANTO CONSO…

Gibson versus Revilla

The Case

This is a petition for review brought by Ivor Robert Dayton Gibson, a British citizen and a reinsurer at Lloyd's of London, against Judge Pedro A. Revilla of the Court of First Instance of Rizal and Lepanto Consolidated Mining Company. Gibson asks the Supreme Court to set aside the trial court's order denying his motion to intervene in the marine insurance suit between Lepanto and Malayan Insurance Company, and to compel the judge to admit him as an intervenor. The case matters because it settles the relationship between the two requirements for intervention under the old rules: the would-be intervenor's legal interest, and the court's discretion weighed against delay and prejudice to the original parties.

Procedural History

Lepanto sued Malayan before the Court of First Instance of Rizal, Branch Thirteen, presided by Judge Revilla, for an interest-free loan and for general average adjustments arising from two marine accidents. Malayan's motion to dismiss was denied, and it filed its answer. After several pre-trial conferences, Lepanto rested its case. Gibson then filed a motion to intervene as defendant, which Lepanto opposed and Malayan did not object to. The trial court denied the motion, reasoning that other reinsurers might also intervene, that the intervention would disrupt and delay the trial especially since Lepanto had already rested, and that Gibson could protect his interest in a separate action. Gibson came to the Supreme Court on a petition for review. The Court initially denied the petition due course for lack of merit, but on reconsideration it allowed the petition, treating it as a special civil action.

Facts

Malayan issued a marine open policy covering Lepanto's shipments of copper, gold and silver concentrates from Poro, San Fernando, La Union to Tacoma, Washington. Malayan then reinsured its risk abroad through a London brokerage, and the memorandum of insurance listed three groups of underwriters, with Lloyd's taking the largest share. Gibson claims to be Syndicate Number 448, the leading syndicate at Lloyd's, assuming a small percentage of the reinsured risk.

In November 1971, two cargoes of concentrates were shipped by Lepanto, one on the vessel Hermosa and another on the vessel General Aguinaldo. Both vessels encountered heavy weather and rough seas in the Northern Pacific, shifting boards broke, cargo shifted, and the vessels listed. Fearing sinking, the captains diverted to Japanese ports, unloaded the cargoes, and the cargoes were later transhipped to Tacoma. Lepanto notified Malayan and filed formal claims, which Malayan ultimately rejected on the ground that the cargoes were inherently vicious on loading.

Lepanto then sued Malayan for the interest-free loan stipulated in the policy and for general average adjustments. After Lepanto had rested its case, Gibson moved to intervene as defendant, claiming that as reinsurer he stood to be held liable should judgment be rendered against Malayan, and that intervention would avoid a multiplicity of suits. The trial court denied the motion, and Gibson elevated the matter to the Supreme Court.

Issues

• Whether or not the trial court committed reversible error in denying Gibson's motion to intervene in the suit between Lepanto and Malayan.
• Whether or not the trial court abused its discretion in denying the motion on the grounds of undue delay and the availability of a separate action.

Applicable Provisions

Section 2 of Rule 12 of the Rules of Court provides:

Section 2. Intervention. A person may, before or during a trial, be permitted by the court, in its discretion, to intervene in an action, if he has legal interest in the matter in litigation, or in the success of either of the parties or an interest against both, or when he is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof.

This paragraph supplies the qualifying requirement of legal interest that the movant must show.

Paragraph (b) of the same section provides:

Discretion of court. In allowing or disallowing a motion for intervention, the court, in the exercise of discretion, 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 intervenor's rights may be fully protected in a separate proceeding.

This is the very provision on which the trial court based its denial, and its correct application is the heart of the case.

Ruling

On the first issue, the Court held that the trial court committed no error of law. Intervention is not a matter of absolute right but may be permitted by the court when the applicant shows facts satisfying the statute. The legal interest required must be direct and immediate, so that the intervenor will either gain or lose by the direct legal operation of the judgment; it must be actual and material, not indirect and contingent, remote, conjectural, consequential or collateral.

On the second issue, the Court held that no abuse of discretion was shown. The questioned order was based strictly and squarely on paragraph (b) of Section 2 of Rule 12. The Court rejected Gibson's contention that delay should assume a secondary role to the requirement of legal interest, holding that both must concur because they are equally important, requisite and necessary. The trial court had specifically and correctly complied with the rule's mandate, and since judicial discretion was exercised, the action of the court cannot be reviewed or controlled by mandamus however erroneous it may be, except only when there is an arbitrary or capricious exercise of discretion. The Court found none here.

Doctrine

Intervention is not a matter of absolute right; it is addressed to the sound discretion of the court. Two things must concur. First, the movant must possess a legal interest in the matter in litigation, in the success of either party, or an interest against both, and that interest must be direct and immediate, actual and material, not indirect and contingent, remote, conjectural, consequential or collateral. Second, the court must consider whether the intervention will unduly delay or prejudice the adjudication of the rights of the original parties and whether the intervenor's rights may be fully protected in a separate proceeding. These two requirements are equally important and neither is subordinate to the other. Once discretion is exercised, the ruling cannot be controlled by mandamus absent an arbitrary or capricious exercise of discretion.

Disposition

The petition was dismissed and the trial court's order denying Gibson's motion to intervene was upheld.

Remember This

Memorize this line: intervention is not a matter of absolute right, and the legal interest of the movant and the considerations of delay and separate remedy under paragraph (b) of Section 2 of Rule 12 are equally important and must concur. Examiners use this case to test whether a candidate treats the delay and prejudice factors as secondary to legal interest, and to test the rule that a discretionary denial of intervention is not correctible by mandamus absent grave abuse.