Myline Cordial

Petition for review on certiorari.

Petitioner: Metropolitan Bank and Trust Co. (Metrobank)
Respondents: The Presiding Judge, RTC Manila Branch 39, Raycor Aircontrol System Inc., and the Court of Appeals

FACTS: Good Earth Emporium, Inc. (GEE) executed a deed of chattel mortgage in favor of Metrobank over air conditioning units installed in the GEE building. Metrobank filed a complaint for replevin against Uniwide Sales, Inc. and the BPI Investment Corporation and several other banks collectively called BPI-Consortium, which acquired the GEE building in an auction sale. Metrobank prayed for the recovery of the possession of the air-conditioning units or that the unpaid obligations on the air-conditioning units be settled as the units were installed on a loan of P4,900,000.00 it extended to GEE. The loan proceeds were used to purchase the air-conditioning equipment from Raycor Air Control System, Inc. (Raycor).

Before BPI Consortium filed their Answer, Raycor filed a motion for leave to intervene. There was no opposition to the motion and the intervention complaint was admitted by the RTC. Mertrobank filed its Answer to the Intervention Complaint.

Before the trial, Metrobank and BPI Consortium agreed to a compromise and filed a joint motion to dismiss the complaint. The lower court issued the order dismissing the complaint with prejudice.

However, Raycor 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 only received the order of dismissal. The RTC granted the motion for reconsideration filed by the intervenor and reinstated the case.

Raycor, also filed a motion to admit amended complaint which was opposed by Metrobank but the RTC issued an order admitting the amended complaint in intervention.

ISSUE: Whether or not the dismissal of the main action should warrant the dismissal of a complaint in intervention.

RULING: The Court held that the reinstatement of the case in order to try and determine the claims and rights of the intervenor is proper. The joint motion of the plaintiff and the original defendants to dismiss the case, without notice to and consent of the intervenor, has the effect of settling only the respective claims of the original parties between them 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.

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.

The intervenor in a pending case is entitled to be heard like any other party. A claim in intervention that seeks affirmative relief prevents a plaintiff from taking a voluntary dismissal of the main action. 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. 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.
NOTE:

Amendments by leave of court; Leave of court may be refused if it appears that the motion was made with intent to delay or that the cause of action is substantially altered. – 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. This liberality is greatest in the early stages of a lawsuit, 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.