Mago vs. Court of Appeals

Procedural rules on intervention and relief from judgment must be liberally construed where their strict application would defeat the substantial rights of indispensable parties who were not impleaded and were unaware of the proceedings; a petition for relief filed nine days beyond the 60-day period but within the six-month period, and supported by a verified petition alleging the required facts, substantially complies with the Rules.

Antonio Mago and Danilo Macasinag claimed rights over a lot in Bagong Barrio, Caloocan City, within an urban land reform and Zonal Improvement Program area administered by the National Housing Authority under Presidential Decree No. 1315 and Presidential Decree No. 1517. Antonio Mago acquired the rights over a structure from his brother Francisco Mago, while Macasinag was a tenant with a pre-emptive right; private respondent Rolando Asis occupied a southern portion of the land by tolerance. The dispute concerned the NHA's award of the lot and the parties' competing claims to it.

Before Presidential Decree No. 1315, Francisco Mago, brother of petitioner Antonio Mago, was in continuous and actual possession and occupation of the disputed land consisting of about eighty (80) square meters, having purchased the right over the lot and the structure thereon sometime in September 1976. The Mago brothers constructed a three-door apartment and leased it to several tenants, among whom was petitioner Danilo Macasinag. Private respondent Rolando Asis occupied the southern portion of the land by mere tolerance, constructing a shanty thereon covering approximately eighteen (18) square meters.

On 11 June 1977, Letters of Instruction Nos. 555 and 557 declared as national policy that slum improvement, otherwise known as upgrading of sites and services, was an acceptable approach to meeting the housing needs of the country and the primary strategy for dealing with slums, squatter areas, and other blighted communities in urban areas. On 21 July 1977, Executive Order No. 6-77 adopted a Zonal Improvement Program (ZIP) for Metro Manila. On 26 March 1978, Presidential Decree No. 1315 designated the National Housing Authority as Administrator of the Urban Land Reform in behalf of the National Government, and on 11 June 1978, Presidential Decree No. 1517 declared the entire Metro Manila an Urban Land Reform Zone. A census of occupants and tagging of structures were conducted in Bagong Barrio to determine qualified beneficiaries and bona fide residents; the structures owned by Francisco Mago and the shanty occupied by Asis were among those given ZIP Tag Numbers.

On 7 May 1980, Francisco Mago executed a Deed of Conveyance in favor of Antonio Mago, transferring all his rights, interests, and participation over the structure. A reblocking plan for Bagong Barrio was made by the NHA, and the area occupied by Francisco Mago's structure, later conveyed to Antonio Mago, was marked; the area occupied by Asis was also included. The lot was identified as Lot No. G-12 based on the Subdivision Plan of Block 25, Barangay 146, Bagong Barrio, Caloocan City. Unknown to Mago and Macasinag, the awarding of lots to qualified structure owners started in 1980, and the NHA, by mistake, awarded the whole lot to Asis.

Upon discovery of the erroneous award, Francisco Mago complained to the NHA Bagong Barrio, which readily acknowledged its mistake. The NHA later admitted that, based on actual implementation of the reblocking plan, only a portion of Mago's structure was chopped and the remaining portion exceeded the 36-square-meter minimum lot size allowed by the project, so Mago's lot could have been retained as an independent lot and should not have been incorporated into the lot awarded to Asis. This led to the Kasunduan ng Paghahati ng Lote, drawn and signed by Asis on 23 May 1980, before the lot was awarded to him on 30 October 1980, agreeing to divide the lot equally between him and petitioners. Despite this agreement, on 30 October 1980 the NHA-Main Office in Quezon City executed a Deed of Sale with Mortgage of the entire lot in favor of Asis and issued TCT No. C-39786 on 27 November 1980. On 15 October 1981, Antonio Mago filed a complaint before the NHA assailing the transaction, while Asis filed a complaint in the Regional Trial Court of Kalookan against Antonio Mago and Danilo Macasinag for recovery of possession, damages, and preliminary injunction despite the pendency of the NHA action.

On 3 June 1987, the Community Relations and Information Office of the NHA Bagong Barrio Project Office issued a resolution recommending that the title awarded to Asis be cancelled and the lot subdivided into two, one to be awarded to Asis and the other to Antonio Mago and Danilo Macasinag as co-owners. On 19 November 1987, Asis filed with the Regional Trial Court of Quezon City a Petition for Injunction and Prohibition against the NHA to prevent it from acting on that recommendation. Petitioners were not impleaded in the case and learned of the 30 March 1988 Order only on 24 May 1988; on 2 August 1988 they filed a Motion for Leave to Intervene and a Petition for Relief from Judgment/Order. The NHA had acknowledged its mistake, and Asis had signed the Kasunduan before accepting the award.

• Liberal Interpretation of Procedural Rules: Petitioners prayed for the liberal interpretation of procedural rules, contending that they were indispensable parties and that there were events and circumstances warranting their intervention in Civil Case No. Q-52319.
• Substantial Rights: Petitioners sought relief from judgment, albeit belatedly, in pursuance of their substantial rights over the disputed lot.

• Finality of the 30 March 1988 Order: Respondent Asis opposed the Motion for Leave to Intervene, contending that it was too late because the questioned order of 30 March 1988 had long become final and no appeal was taken therefrom.

• Intervention: Whether petitioners should be permitted to intervene in Civil Case No. Q-52319 despite filing after the 30 March 1988 Order had become final, given that they were indispensable parties who were not impleaded and were unaware of the proceedings.
• Petition for Relief from Judgment: Whether the Petition for Relief from Judgment/Order should be entertained despite being filed nine days beyond the 60-day period but within six months from issuance of the order, and despite the absence of a separate affidavit of merit.
• Liberal Construction of Procedural Rules: Whether the rules on intervention and petition for relief should be liberally construed to protect the substantial rights of petitioners rather than applied strictly on technical grounds.

• Intervention: Yes. The motion to intervene should have been granted; petitioners were indispensable parties with a substantial interest in the disputed lot, were not impleaded, and were unaware of the proceedings, so the trial court's discretion should have been exercised judiciously in their favor.
• Petition for Relief from Judgment: Yes. The petition should be heard; filing nine days beyond the 60-day period but within six months is not fatal, and the absence of a separate affidavit of merit is not fatal where the verified petition alleges the required facts.
• Liberal Construction of Procedural Rules: Yes. Procedural rules are means to an end and must be liberally construed to serve substantial justice; strict technical application was improper.

• Intervention: Section 2, Rule 12, of the Rules of Court, now Section 2, Rule 19, of the 1997 Rules of Civil Procedure, allows a person with legal interest in the matter in litigation, or in the success of either party, or against both, or who may be adversely affected by a distribution or other disposition of property in the custody of the court or an officer thereof, to intervene before or during trial. The provision is permissive; the court has discretion, but that discretion must be exercised judiciously and only after consideration of all the circumstances. Petitioners had a substantial interest in the disputed lot. They were never impleaded in Civil Case No. Q-52319 and were unaware of the proceedings. They were lulled into believing that all was well because Asis had executed the Kasunduan ng Paghahati ng Lote on 23 May 1980, before the lot was awarded to him, voluntarily agreeing to divide the lot equally. Asis accepted the award despite this perfected agreement, and the NHA itself acknowledged its mistake in awarding the lot to Asis. The trial court granted Asis's petition for prohibition with injunction without impleading petitioners, even though the CRIO resolution sought to be enjoined directly affected them. They were indispensable parties whose interest could not be adjudicated without them. The Court cited Director of Lands vs. Court of Appeals, which held that although intervention at a late stage is ordinarily too late under Rule 12, procedure is a means to an end and should not thwart justice, and Tahanan Development Corp. vs. Court of Appeals, where intervention was allowed almost at the end of the proceedings. Thus, the denial of intervention based solely on technicality was an injustice.

• Petition for Relief from Judgment: Section 3, Rule 38, requires a verified petition filed within 60 days after the petitioner learns of the judgment or order and not more than six months after entry, accompanied by affidavits showing fraud, accident, mistake, or excusable negligence and the facts constituting a good and substantial cause of action or defense. The Court of Appeals ruled that both periods must be satisfied. The ruling was that a few days in excess of the 60-day requirement is not fatal as long as the petition is filed within six months from issuance of the order, citing Balite vs. Cabangon. Here, the petition was filed nine days after the 60-day period but still well within the six-month period. On the absence of a separate affidavit of merit, it was held that this is not a fatal defect if the facts required to be set out also appear in the verified petition, citing Fabar, Inc. vs. Rodelas and Consul vs. Consul. The oath in the verified petition elevates it to the same category as a separate affidavit. The allegations of accident and excusable negligence, though not expounded in affidavits of merit, were substantiated in the verified petition. There was substantial compliance.

• Liberal Construction of Procedural Rules: The trial court and the Court of Appeals confined themselves to timeliness and ignored the substantial rights of petitioners, who were never impleaded. The Court emphasized that the rules of procedure are not to thwart justice but to facilitate its application to rival claims. The purpose of procedure is not to hinder or delay but to promote the administration of justice; it is a means to an end. The Court cited Director of Lands vs. Court of Appeals and Tahanan Development Corp. vs. Court of Appeals. Given the backdrop—Francisco Mago's prior possession, the conveyance to Antonio Mago, Macasinag's tenancy, Asis's occupancy by tolerance, the NHA's mistaken award, and the Kasunduan—the courts should have applied the rules less stringently. The exercise of discretion is odious, but where necessary, a judge must not shirk from the responsibility. Relaxing the rules serves equity and justice based on substance and merit.

• Liberal Construction of Procedural Rules — Rules of procedure are means to an end; their purpose is to facilitate, not thwart, justice. They may be relaxed where strict application would defeat substantial rights. Applied because petitioners were indispensable parties not impleaded and unaware of the proceedings.
• Intervention of Indispensable Parties — A court may allow intervention before or during trial by a person with legal interest in the matter in litigation or who may be adversely affected by the disposition of property in custodia legis. The court's discretion is permissive but must be exercised judiciously. Applied to allow intervention despite late filing.
• Indispensable Party — One with such an interest in the controversy or subject matter that a final adjudication cannot be made in his absence without affecting or injuring that interest. Applied to petitioners, who were directly affected by the CRIO resolution and the award.
• Petition for Relief from Judgment — Periods — The petition must be filed within 60 days after learning of the judgment or order and not more than six months after entry. A few days beyond the 60-day period is not fatal if filed within six months. Applied: nine days late but within six months.
• Affidavit of Merit — Substantial Compliance — A petition for relief without a separate affidavit of merit is sufficient where the facts constituting the petitioner's substantial cause of action or defense are alleged in the verified petition; the oath elevates the petition to the same category as a separate affidavit. Applied.

• "The permissive tenor of the provision on intervention shows the intention of the Rules to give to the court the full measure of discretion in permitting or disallowing the same. But needless to say, this discretion should be exercised judiciously and only after consideration of all the circumstances obtaining in the case." — States the standard governing intervention: the court has discretion, but it must be exercised judiciously after considering all circumstances.
• "The purpose of procedure is not to thwart justice. Its proper aim is to facilitate the application of justice to the rival claims of contending parties." — Articulates the rationale for liberal construction of procedural rules, which the Court used to justify relaxing the rules on intervention and relief.
• "However, a few days in excess of the 60-day requirement is not fatal as long as it is filed within six (6) months from issuance of the order." — States the controlling rule on the period for a petition for relief from judgment, applied to the nine-day delay in this case.
• "Furthermore, a petition for relief without a separate affidavit of merit is sufficient where facts constituting petitioner's substantial cause of action or defense, as the case may be, are alleged. The oath elevates the petition to the same category as a separate affidavit." — Defines the substantial-compliance rule for the affidavit-of-merit requirement, applied to uphold petitioners' verified petition.

• Director of Lands vs. Court of Appeals, No. L-45168, 25 September 1979, 93 SCRA 239, 245-246 — Cited for the rule that while intervention at a late stage is ordinarily too late under Rule 12, procedure is a means to an end and should not thwart justice; relied upon to justify liberal construction.
• Tahanan Development Corp. vs. Court of Appeals, G.R. No. 155771, 15 November 1982, 118 SCRA 273 — Cited as a precedent where the Court allowed intervention almost at the end of the proceedings; relied upon to support granting intervention despite late filing.
• Balite vs. Cabangon, 126 Phil. 450 (1967) — Cited for the rule that a few days in excess of the 60-day requirement is not fatal as long as the petition for relief is filed within six months from issuance of the order.
• Fabar, Inc. vs. Rodelas, No. L-46394, October 26, 1977, 79 SCRA 638 — Cited for the rule that the absence of an affidavit of merit is not a fatal defect where the facts required are set out in the verified petition.
• Consul vs. Consul, No. L-22713, July 26, 1966, 79 SCRA 667 — Cited for the rule that a petition for relief without a separate affidavit of merit is sufficient where the facts constituting the petitioner's cause of action or defense are alleged, the oath elevating the petition to the same category as a separate affidavit.

• Section 2, Rule 12, Rules of Court (now Section 2, Rule 19, 1997 Rules of Civil Procedure) — Governs intervention; allows a person with legal interest to intervene before or during trial. Applied to permit petitioners, as indispensable parties, to intervene despite late filing.
• Section 3, Rule 38, Rules of Court — Governs petition for relief from judgment; requires filing within 60 days after knowledge and not more than six months after entry, with affidavits of merit. Applied to hold that the nine-day delay and absence of a separate affidavit were not fatal.
• Section 2, Rule 1, Rules of Court (now Section 6, Rule 1, 1997 Rules of Civil Procedure) — Provides that the rules shall be liberally construed to promote a just, speedy, and inexpensive determination of every action. Applied to justify relaxation of procedural rules.
• Presidential Decree No. 1315 — Designated the National Housing Authority as Administrator of Urban Land Reform and empowered it to take possession, control, and disposition of Bagong Barrio. Provided the statutory backdrop for the NHA award.
• Presidential Decree No. 1517 — Declared the entire Metro Manila as an Urban Land Reform Zone. Provided the regulatory context for the Bagong Barrio project.
• Letters of Instruction Nos. 555 and 557 — Declared the national policy on slum improvement and upgrading of sites and services. Provided the policy context for the Zonal Improvement Program.
• Executive Order No. 6-77 — Adopted the Zonal Improvement Program for Metro Manila. Provided the programmatic context for the NHA's actions.

Puno, Mendoza, Quisumbing, and Buena, JJ., concurred.