Foster-Gallego vs. Galang

A person whose motion to intervene is denied is not a party to the main case and has no standing to join the appeal of an existing party to challenge the decision on the merits; the remedy is a timely, independent appeal from the disallowance of intervention. Further, an action for quieting of title cannot be used to review or annul the final judgment of a co-equal court, nor to mount a collateral attack on a Torrens title that has already been cancelled by a long-final decision.

The property subject of the dispute was a 330-square-meter parcel of land in Barrio Kaybiga, Parañaque, originally covered by Transfer Certificate of Title No. 435402 in the name of petitioner Bernabe Foster-Gallego. The property was sold at a public auction for tax delinquency in 1982, with Vive Realty Corporation (VRC) as the highest bidder. In Civil Case No. 5801, the Regional Trial Court of Makati, Branch 138 (RTC-Branch 138), cancelled petitioner’s title and ordered the issuance of a new title in VRC’s name in a decision dated 19 December 1983. That decision became final and executory. VRC subsequently sold the property to respondent Spouses Romeo and Vivien Galang in 1984. The spouses obtained TCT No. (86872) 22786, took possession, and paid real property taxes. In 1989, petitioner’s brother, Lito Gallego, built a fence around the perimeter, leading the spouses to file an action for quieting of title.

The Tax Sale and the RTC-Branch 138 Decision: VRC acquired several properties, including the 330-square-meter parcel later contested, at a public auction held by the Municipal Treasurer of Parañaque on 29 October 1982 for tax delinquency. A Final Bill of Sale was executed in VRC’s favor on 25 November 1983. VRC then filed Civil Case No. 5801 to cancel the existing titles and secure new ones. In a Decision dated 19 December 1983, RTC-Branch 138 ordered the Register of Deeds to cancel 11 transfer certificates of title, including TCT No. 435402 in petitioner’s name, and to issue new titles in VRC’s name. No appeal was taken from this decision, and it attained finality.

The Spouses Galang’s Acquisition: Respondent spouses purchased the property from VRC via a Deed of Absolute Sale on 22 June 1984. The Register of Deeds issued TCT No. (86872) 22786 in their name. They took possession, declared the property for taxation, and paid real property taxes.

The Fence and the Complaint for Quieting of Title: In March 1989, Lito Gallego, petitioner’s brother and alleged caretaker, erected a hollow-block fence along the perimeter. Spouses Galang discovered this in April 1989 when Romeo Galang returned from Saudi Arabia. Barangay conciliation failed because Lito Gallego did not appear personally. On 16 May 1989, the spouses filed a complaint for quieting of title with damages against Lito Gallego before the RTC of Makati, docketed as Civil Case No. 89-3898.

Default and Intervention: Lito Gallego answered that his brother, petitioner Bernabe Foster-Gallego, owned the property, denied tax delinquency, and claimed no notice of the auction or of the cancellation proceedings. When Lito Gallego failed to attend pre-trial and submit a brief, he was declared in default on 16 February 1990. Petitioner then moved to intervene, asserting ownership based on TCT No. 435402 and Tax Declaration No. A-022-00019, which showed his address as Washington, D.C., USA. RTC-Branch 146 granted the motion and admitted the answer-in-intervention. Petitioner later filed a third-party complaint against VRC, the Municipality, the Treasurer, and the Register of Deeds, alleging fraud and denial of due process.

The Trial Court’s Reversal and Final Orders: After several re-rafflings, RTC-Branch 148 rendered a decision on 8 July 1993 in favor of the spouses, quieting title, declaring them owners “at this time,” and ordering Lito Gallego to pay moral damages, attorney’s fees, and litigation expenses. In a separate Order dated 12 October 1993, the trial court reconsidered the admission of the answer-in-intervention and denied both the intervention and the third-party complaint, striking them from the record. Petitioner’s motion for reconsideration was denied on 26 December 1994; he received the denial order on 23 January 1995.

Appeal to the Court of Appeals: Instead of filing his own appellant’s brief, petitioner joined Lito Gallego’s pending appeal of the main decision. The Court of Appeals found that petitioner never became a party to the case, lacked legal personality to join the appeal from the decision, and that his appeal from the denial of intervention was filed one day beyond the reglementary period. The appellate court affirmed the trial court’s main decision but deleted the monetary awards for lack of basis. Petitioner alone elevated the matter to the Supreme Court.

• Grave Abuse of Discretion in Denying Intervention: Petitioner argued that the trial court gravely erred in reconsidering the admission of the answer-in-intervention and third-party complaint, contending that the default order against Lito Gallego effectively made petitioner the main defendant and indispensable party.
• Ancillary Nature of Intervention: He maintained that the intervention was not merely ancillary but constituted a direct attack on the spouses’ title, which he claimed was void ab initio.
• Nullity of the Tax Sale and Cancellation Proceedings: Petitioner asserted that the auction notice, publication, certificate of sale, and final bill of sale were void ab initio due to lack of jurisdiction and failure to observe due process, and that the RTC-Branch 138 decision cancelling TCT No. 435402 was itself void.
• Redemption and Innocent Purchaser Doctrine: He claimed that even assuming the auction was valid, he had redeemed the property within the one-year redemption period, and that the spouses could not invoke the innocent-purchaser-for-value doctrine because VRC’s title was void.
• Appeal Validly Perfected or Tardiness Excusable: Petitioner contended that the Court of Appeals could review the orders denying intervention, that his notice of appeal was only one day late, and that such excusable technicality should not defeat his property rights.
• Alternative Remedy: He posited that even if his appeal was improper, he retained the right to file an independent action to annul the spouses’ title.

• Lack of Standing and Untimely Appeal: The respondents maintained that petitioner never became a party to the case after the intervention was stricken, had no legal personality to join the main appeal, and that his appeal from the denial of intervention was filed after the reglementary period.
• Propriety of Denying Intervention: They argued that the trial court’s discretion to disallow intervention was properly exercised, and that any remedy lay in a petition for certiorari, not in an appeal piggybacked on another party’s.
• Procedural and Jurisdictional Bars: The spouses contended that the issues of fraud, due process, and the validity of the 1983 cancellation decision could not be adjudicated in a quieting-of-title suit, as that would require one regional trial court to nullify the final judgment of a co-equal court, in violation of the doctrine of non-interference.
• Finality of Title and Torrens Protection: They invoked the rule that a Torrens title cannot be collaterally attacked and that petitioner’s cancelled title cast no cloud on their current title.

• Standing to Appeal: Whether a person whose motion to intervene has been denied has the legal personality to join the appeal of an existing party to challenge the decision on the merits of the main case.
• Timeliness of Appeal: Whether petitioner’s appeal from the orders disallowing intervention was filed within the reglementary period, and whether a one-day delay is excusable.
• Propriety of Denial of Intervention: Whether the trial court gravely abused its discretion in reconsidering the admission of the answer-in-intervention and in denying the intervention.
• Jurisdiction to Annul a Co-Equal Court’s Decision: Whether an action for quieting of title is the proper vehicle to declare void the final judgment of another regional trial court that cancelled petitioner’s title.
• Collateral Attack on Torrens Title: Whether petitioner’s challenge to the validity of TCT No. (86872) 22786 in his answer-in-intervention constitutes an impermissible collateral attack.
• Indispensable Party: Whether petitioner, as the former registered owner whose title had been cancelled, is an indispensable party to the quieting-of-title suit.

• Standing to Appeal: A would-be intervenor whose motion is denied does not become a party to the case and has no standing to appeal the main decision. The right to appeal extends only to the order disallowing intervention. By merely joining Lito Gallego’s appeal instead of filing his own, petitioner improperly challenged a judgment that did not bind him and on which he had no personality to be heard.
• Timeliness of Appeal: Petitioner’s appeal was out of time. The order denying intervention was received on 21 October 1993; he had until 5 November 1993 to appeal. Filing a motion for reconsideration on 3 November 1993 (the 13th day) suspended the remaining two-day period. Upon receipt of the denial on 23 January 1995, he had only until 25 January 1995 to perfect an appeal. The notice of appeal filed on 26 January 1995 was one day late. The perfection of an appeal within the statutory period is mandatory and jurisdictional; the one-day delay was not excused absent any valid justification.
• Propriety of Denial of Intervention: The trial court did not act arbitrarily or capriciously. Intervention is not a matter of right; it is addressed to the court’s sound discretion and ordinarily not permitted when the intervenor’s rights can be fully protected in a separate proceeding. As the subsequent discussion demonstrates, petitioner’s intervention would have been futile because the reliefs he sought could not be granted in a quieting-of-title suit.
• Jurisdiction to Annul a Co-Equal Court’s Decision: The trial court could not, in a quieting-of-title case, declare void the RTC-Branch 138 decision that cancelled petitioner’s title. Under the doctrine of non-interference, a court has no authority to interfere with the proceedings of a co-equal court, much less to annul a final judgment of equal jurisdiction. The exclusive original jurisdiction to annul a regional trial court’s judgment lies with the Court of Appeals. Thus, questions of fraud and denial of due process in the tax sale and cancellation proceedings were beyond the scope of the suit to quiet title.
• Collateral Attack on Torrens Title: Petitioner’s challenge to the spouses’ title was an impermissible collateral attack. Section 48 of Presidential Decree No. 1529 mandates that a certificate of title cannot be altered, modified, or cancelled except in a direct proceeding. The alleged nullity of the spouses’ title was raised merely as a defense in a quieting-of-title action; this indirect challenge is barred. The exception in Ferrer v. Bautista — where a title based on a free patent issued without jurisdiction over private land is void ab initio — did not apply because the alleged nullity here stemmed from claimed procedural defects, not from a fundamental lack of jurisdiction over the subject matter, and because a co-equal court had already adjudicated the matter with finality.
• Indispensable Party: Petitioner was not an indispensable party. An indispensable party is one whose interest is such that a final decree cannot be made without affecting that interest. Petitioner’s title had been cancelled by RTC-Branch 138; the quieting-of-title decision declaring the spouses owners “at this time” did not adversely affect his already-cancelled interest and, more importantly, could not bind him because he was not a party to the action. The rules on quieting of title expressly provide that no declaration shall prejudice the rights of persons not parties to the action.

• Intervention — Appeal by Denied Intervenor — A person whose motion to intervene is denied does not become a party to the case. The right to appeal is limited to the order of disallowance; the intervenor has no standing to appeal the decision on the merits.
• Perfection of Appeal — Jurisdictional Nature — The perfection of an appeal within the statutory or reglementary period is both mandatory and jurisdictional. Failure to file a timely appeal renders the assailed decision or order final and executory and deprives the appellate court of jurisdiction. The filing of a motion for reconsideration merely suspends the remaining period; upon denial, the appellant must file the appeal within the balance of the original period.
• Doctrine of Non-Interference — A trial court has no authority to interfere with the proceedings of a court of equal jurisdiction, and certainly not to annul the final judgment of a co-equal court. The jurisdiction to annul judgments of regional trial courts lies exclusively with the Court of Appeals.
• Collateral Attack on Torrens Title — Prohibition — Section 48 of Presidential Decree No. 1529 prohibits any collateral attack on a certificate of title. A title can be altered, modified, or cancelled only in a direct proceeding instituted for that purpose. Raising the nullity of a Torrens title as a defense in an action for quieting of title constitutes a prohibited collateral attack.
• Action for Quieting of Title — Scope — The sole issue in an action to quiet title is whether a cloud exists on the title to real property by reason of an instrument, record, claim, encumbrance, or proceeding that is apparently valid but in truth invalid. It is not the proper remedy to review or set aside decisions of co-equal courts or to resolve allegations of fraud and due process violations in prior proceedings.
• Indispensable Party — Definition — A person is not an indispensable party if the interest in the controversy is separable from that of the other parties and a complete adjudication can be made without injuriously affecting that interest; nor is he indispensable if his presence would merely avoid a multiplicity of suits.
• Finality of Judgment — Non-Reviewability — Once a judgment becomes final and executory, it can no longer be reviewed, directly or indirectly, even by the Supreme Court.

• “A prospective intervenor’s right to appeal applies only to the denial of his intervention. Not being a party to the case, a person whose intervention the court denied has no standing to question the decision of the court.”
• “The only issue in an action to quiet title is whether there is a cloud on a title to real property because of any instrument, record, claim, encumbrance or proceeding that has a prima facie appearance of validity.”
• “Under the doctrine of non-interference, a trial court has no authority to interfere with the proceedings of a court of equal jurisdiction, much less to annul the final judgment of a co-equal court.”
• “Section 48 of the Property Registration Decree required no less than a direct action for reconveyance filed within the period provided by law.”
• “A judgment becomes final upon the lapse of the reglementary period to appeal if no appeal is perfected. Being final, the RTC-Branch 138 Decision is no longer subject to review by appeal.”

• Saw v. Court of Appeals, 195 SCRA 740 (1991) — Recognized that an order denying intervention is appealable and that a denied intervenor has no standing to question the decision in the main case. Followed.
• Metropolitan Bank & Trust Co. v. Alejo, 417 Phil. 303 (2001) — Held that an action for quieting of title is not the proper remedy where it would require the court to modify or interfere with the judgment of a co-equal court; also defined an indispensable party. Followed.
• Villanueva v. Court of Appeals, 351 SCRA 12 (2001) — Applied the rule against collateral attack on a Torrens title and required a direct action for reconveyance. Followed.
• Ferrer v. Bautista, 231 SCRA 257 (1994) — Declared that a void title based on a free patent issued without jurisdiction over alluvial land is subject to direct and collateral attack. Distinguished; the patent nullity there arose from lack of jurisdiction, not from alleged fraud or procedural defects, and no co-equal court had previously adjudicated the issue with finality.
• Nery v. Leyson, 339 SCRA 232 (2000) — Affirmed that the jurisdiction to annul a judgment of a regional trial court lies with the Court of Appeals. Followed.

• Section 2, Rule 12, Rules of Court (prevailing rule at the time) — Intervention is addressed to the sound discretion of the court. The trial court’s denial was sustained.
• Section 48, Presidential Decree No. 1529 (Property Registration Decree) — A certificate of title shall not be subject to collateral attack and may be altered, modified, or cancelled only in a direct proceeding. Applied to bar petitioner’s challenge in the quieting-of-title suit.
• Article 476, Civil Code — Defines the scope of an action to quiet title as confined to removing a cloud caused by an instrument, record, claim, encumbrance, or proceeding that is apparently valid but in truth invalid. The reliefs sought by petitioner exceeded this scope.
• Section 39, Batas Pambansa Blg. 129 — Governs the period to appeal from a final order or judgment. Applied to determine that petitioner’s appeal was untimely.
• Section 19(a), Resolution of the Court En Banc dated 11 January 1983 — Implements the 15-day reglementary period for ordinary appeals. Applied.
• Section 3, Rule 41, Rules of Court — Governs the remaining period to appeal after a motion for reconsideration is denied. The period was correctly computed.
• Section 2, Rule 64, Rules of Court (now Rule 63, Section 2, 1997 Rules) — No declaration in a suit to quiet title shall prejudice the rights of persons not parties to the action. Reinforced the ruling that petitioner was not bound.

Davide, Jr., C.J. (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concurred.