CONRADO, ERNESTO, GENEROSO, PURIFICACION, RESURRECCION, RICARDO, TERESITA AND TOMAS, ALL SURNAMED DIZON, PETITIONERS, VS. HON. HONORIO ROMERO, IN HIS CAPACITY AS JUDGE OF THE CO…

Dizon versus Romero

The Case

This is a petition for review on certiorari of a decision of the Court of Appeals, in a case that began as a petition for certiorari and mandamus filed by the eight Dizon children against Judge Honorio Romero of the Court of First Instance of Pampanga and the Philippine National Bank. The children sought to annul the judge's orders denying their motion to intervene in a foreclosure suit against their mother's estate, and to compel him to admit their answer in intervention. The case matters because it is the classic teaching vehicle on the limits of judicial discretion over a motion to intervene: discretion there certainly is, but it is not unlimited, and its grave abuse is correctible by mandamus when appeal is not an adequate and speedy remedy.

Procedural History

The Bank opened a special proceeding in the Court of First Instance of Pampanga for the settlement of the intestate estate of the deceased mother, and on the Bank's own recommendation the Deputy Clerk of Court was appointed administratrix. The Bank then sued Jesus Dizon, his wife, and the administratrix in a civil case to collect on promissory notes and to foreclose the mortgages securing them. The defendants filed nothing. The Dizon children moved to intervene, and the trial court, presided over by Judge Romero, denied the motion; it denied their motion for reconsideration as well.

The children then went up to the Court of Appeals on certiorari and mandamus with preliminary injunction. The Court of Appeals issued the writ of preliminary injunction, but in due course dismissed the petition and dissolved the writ, holding that the grant or refusal of intervention is a matter of judicial discretion which mandamus cannot control. Hence the petition for review on certiorari before the Supreme Court.

Facts

On the fourth of May, 1949, Paula Sanchez Vda. de Dizon executed a general power of attorney in favor of her son Jesus Dizon, authorizing him, among other things, to borrow money upon such terms and conditions as he may approve. Purporting to act under that authority, Jesus obtained several crop loans from the Philippine National Bank between 1952 and 1956. He signed the corresponding promissory notes and secured them with chattel mortgages on standing crops and real estate mortgages on several parcels of land, one of them covered by a transfer certificate of title in his mother's name.

The mother died intestate in May 1960, survived by nine children: the eight petitioners, all surnamed Dizon, and Jesus Dizon himself. In June 1964 the Bank instituted the special proceeding for the appointment of an administrator of her estate, and upon the Bank's recommendation the Deputy Clerk of Court was appointed administratrix. The Bank then commenced the civil case against Jesus, his wife, and the administratrix to recover on the notes and foreclose the mortgages, amending its complaint before summons could be served.

The defendants took no step to resist the action. Learning of it, the petitioners asked the administratrix on the thirtieth of June, 1965, either to file her answer or to let their counsel represent her. She replied that she would first consult the Bank. Three days later the Bank moved to declare the defendants in default. On the sixth of July the petitioners filed a motion to intervene, with an answer in intervention attached. The next day the defendants were declared in default, and in August the trial court denied the motion to intervene; reconsideration met the same fate in November.

Issues

• Whether or not the Court of Appeals erred in holding that the granting or refusal of a motion to intervene is a matter of judicial discretion that cannot be reviewed or controlled by mandamus.
• Whether or not respondent Judge gravely abused his discretion in denying the petitioners' motion to intervene in the foreclosure case.
• Whether or not an appeal from the decision in the main case would be a speedy and adequate remedy for the petitioners.

Applicable Provisions

Article 1878 of the Civil Code of the Philippines provides:

Special powers of attorney are necessary in the following cases: x x x To create or convey real rights over immovable property.

The petitioners invoked this article to attack the real estate mortgages Jesus constituted over their mother's properties under a mere general power of attorney, and the Court used it to show that their defenses had a reasonable semblance of validity.

Article 777 of the Civil Code of the Philippines provides:

The rights to the succession are transmitted from the moment of the death of the decedent.

This answered the objection that the petitioners' interest was merely inchoate or in expectancy: as children and forced heirs, their successional rights vested at the moment of their mother's death.

Ruling

On the first issue, the Court held that while the allowance of a motion to intervene rests in the sound discretion of the court, that discretion is not unlimited. The Rules require the court to consider whether 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. If those considerations weigh in favor of the intervenor, a denial may amount to an arbitrary or capricious exercise of discretion correctible by mandamus, if ordinary appeal would not be an adequate and speedy remedy. The Court distinguished the Tavera-Luna case relied upon by the Court of Appeals, where the question of ownership was foreign to the sole issue of possession in an unlawful detainer case, and noted that in Otto Gmur, Zaide, and Balane the writ was in fact granted.

On the second issue, the Court found a grave abuse of discretion, for four reasons. First, the administratrix was plainly not inclined to contest the foreclosure suit: she filed no answer, said she would consult the very Bank she was supposed to fight, and owed her appointment to that Bank. Second, the motion to intervene was filed before the defendants were declared in default, hence before the issues were joined, so intervention would not have caused undue delay. Third, the answer in intervention set up defenses with a reasonable semblance of validity, including the lack of a special power of attorney under Article 1878 and the prescription of the action, which was commenced in 1965, more than ten years after some of the notes and mortgages were executed. Fourth, the petitioners had a direct and immediate interest, because successional rights are transmitted from the moment of the decedent's death.

On the third issue, the Court held that an appeal from the decision in the main case would not be a speedy and adequate remedy; it would unduly delay the termination of the case, requiring a remand for retrial with the possibility of another appeal.

Doctrine

First, the granting or refusal of a motion to intervene is addressed to the sound discretion of the court, but that discretion is not unlimited; it must be exercised with regard to whether 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. Second, where those considerations weigh in favor of the intervenor, a denial of intervention may amount to an arbitrary or capricious exercise of discretion, and mandamus will lie if ordinary appeal is not an adequate and speedy remedy. Third, under Article 777 of the Civil Code, the rights to the succession are transmitted from the moment of the death of the decedent, so a forced heir's interest is actual and direct, not merely inchoate or in expectancy. Fourth, under Article 1878 of the Civil Code, a special power of attorney is necessary to create or convey real rights over immovable property, and a general power of attorney will not suffice for mortgages executed after the Civil Code took effect.

Disposition

The Court reversed the decision of the Court of Appeals and directed respondent Judge to grant the petitioners' motion to intervene, to admit their answer in intervention, and to allow them to participate in the proceedings as intervenors, with costs against the Philippine National Bank.

Remember This

Memorize the line that intervention rests in sound judicial discretion, but a denial that ignores the Rules' own considerations, where appeal is not an adequate and speedy remedy, is a grave abuse correctible by mandamus. Examiners use this case to test the limits of discretionary power over intervention, and to pair Article 1878 on special powers of attorney with Article 777 on the transmission of successional rights.