Yu vs. Miranda

Intervention is not permissible in a case that has already been decided by final judgment, and the non-inclusion of necessary parties does not prevent a court from proceeding in the action where the judgment rendered shall be without prejudice to the rights of such necessary party.

Respondent David Miranda filed an action for sum of money with prayer for preliminary attachment against respondent Morning Star Homes Christian Association and the Gabriels to recover unpaid obligations for backfilling materials supplied to the latter's housing project. The Regional Trial Court of Biñan City granted the prayer and issued a writ of preliminary attachment over several parcels of land registered in the name of Morning Star. Petitioners Severino, Ramon, and Lorenzo Yu subsequently sought to intervene, alleging that they were the real owners of the attached properties and that Morning Star was merely a nominal owner holding title to facilitate a loan application under the Home Development Mutual Fund's Group Land Acquisition and Development program.

• The Principal Action: On March 8, 2012, respondent David Miranda filed a Complaint for Sum of Money with Prayer for Issuance of Preliminary Attachment against respondents Morning Star Homes Christian Association, Timmy Richard T. Gabriel, and Lilibeth Gabriel before the Regional Trial Court (RTC) of Biñan City, Laguna, Branch 24 (Civil Case No. B-8623). Miranda alleged that Morning Star defaulted on payment for backfilling materials supplied for its housing project, with the total obligation ballooning to P4,100,009.30 including agreed interests of 5% per month.
• The Attachment: On March 12, 2012, the RTC issued an Order granting the prayer for preliminary attachment, followed by a Writ of Preliminary Attachment. The Notice of Attachment covered properties registered under Transfer Certificate of Title (TCT) Nos. T-788493 to T-788751 in the name of respondent Morning Star located in Calamba, Laguna.
• Attempted Intervention: In March 2013, petitioners Yu became aware of the case. On April 29, 2013, they filed a Motion for Leave to Intervene, claiming they were the real owners of the attached properties and that Morning Star was merely a nominal owner holding title to facilitate a loan with the Home Development Mutual Fund under the Group Land Acquisition and Development (GLAD) program. They alleged that the Deed of Absolute Sale in favor of Morning Star was void ab initio for lack of consideration.
• RTC Decision and Denial of Intervention: On May 19, 2013, the RTC rendered a Decision granting Miranda's complaint, which subsequently became final and executory. In an Order dated July 29, 2013, the RTC denied the Motion for Leave to Intervene, ruling that petitioners were not registered owners and that their rights could be protected in a separate proceeding.
• Certiorari Proceedings: On October 25, 2013, petitioners Yu filed a Petition for Certiorari under Rule 65 before the Court of Appeals (CA-G.R. SP No. 132394). The CA initially granted a Temporary Restraining Order on June 18, 2014 and subsequently a Preliminary Injunction on July 21, 2014 to stay execution of the RTC Decision.
• Assailed CA Ruling: In its Decision dated April 22, 2016, the CA dismissed the Rule 65 Petition as moot and academic, noting that the RTC Decision had become final and executory and that the principle of immutability of judgments barred modification. The CA denied the Motion for Partial Reconsideration in its Resolution dated July 13, 2016, prompting the instant Petition for Review on Certiorari.

• Right to Intervene: Petitioners maintained that the CA erred in failing to set aside the RTC Order denying their Motion for Leave to Intervene and in not allowing them to participate in Civil Case No. B-8623. They argued that they had a legal interest in the subject properties as the real owners and that the RTC should have allowed intervention to prevent complicated and interminable proceedings.
• Nullification of RTC Decision: Petitioners alleged that the CA was mistaken in not nullifying and setting aside the RTC Decision that was rendered during the pendency of their Rule 65 Petition.
• Availability of Remedy: Petitioners bemoaned that no other remedy was available to protect their interests over the subject properties, citing Navarro v. Ermita to suggest that intervention should be allowed even after finality in exceptional circumstances involving grave constitutional violations.

• Mootness: Respondent Miranda countered that the petitioners' failure to file a motion for reconsideration of the RTC Order dated July 29, 2013 was fatal. He noted that petitioners had already filed a separate complaint for nullification of the Deed of Sale (Civil Case No. B-9126), rendering the certiorari petition unnecessary.
• Finality of Judgment: Respondents argued that once the RTC Decision became final and executory, the principle of immutability of judgments barred any further modification or intervention, and the CA correctly dismissed the petition as moot and academic.

• Permissibility of Intervention: Whether the petitioners Yu may still be allowed to intervene in Civil Case No. B-8623 despite the unassailable fact that the said case has already been decided upon with finality.

• Intervention in Terminated Cases: Intervention could no longer be allowed because Civil Case No. B-8623 had already been decided with finality; the RTC's Decision dated May 19, 2013 was already final and executory when the petitioners sought relief. Jurisprudence establishes that intervention is not permissible in a case already terminated by final judgment.
• Nature of Petitioners' Interest: The petitioners Yu had no participation in the transaction between Miranda and Morning Star; their only involvement was the incidental claim over the attached properties to question their inclusion in the preliminary attachment. They were not indispensable parties (without whom no final determination could be had) but at most necessary parties.
• Effect of Non-Inclusion: Under Rule 3, Section 9 of the Rules of Court, the non-inclusion of necessary parties does not prevent the court from proceeding in the action, and the judgment rendered shall be without prejudice to the rights of such necessary party. A judgment cannot bind persons who are not parties to the action.
• Adequacy of Alternative Remedy: The petitioners were already pursuing Civil Case No. B-9126 (action for specific performance, rescission, annulment of deed of sale, cancellation of titles, reconveyance and damages) to recover the subject properties. If successful in that action, the properties could not be levied in favor of Miranda, as held in Miranda v. Sps. Mallari: if the judgment obligor no longer has any right, title or interest in the property levied upon, no lien may be created in favor of the judgment obligee.
• Ancillary Nature of Attachment: Preliminary attachment is merely an ancillary remedy that cannot exist independently of the principal action. With the cessation of Civil Case No. B-8623, the attachment legally ceased to exist.
• Third-Party Claim Procedure: Under Rule 57, Section 14, a third-party claimant could have filed an affidavit of title with the sheriff while the latter had possession of the attached property, but petitioners failed to avail of this remedy.

• Intervention in Terminated Cases — Intervention is a remedy available only in pending cases. Once a judgment becomes final and executory, the principle of immutability of judgments operates to bar any modification, and intervention can no longer be allowed even if the intervenor claims a legal interest in the subject matter.
• Indispensable vs. Necessary Parties — Indispensable parties are those with such an interest in the controversy that a final decree cannot be made without affecting their rights or leaving the controversy in a condition whereby the final determination thereof would be inconsistent with equity and good conscience. Necessary parties are those who ought to be joined if complete relief is to be accorded as to those already parties, or for a complete determination of the claim, but whose non-inclusion does not prevent the court from proceeding. The non-inclusion of necessary parties renders the judgment without prejudice to their rights.
• Ancillary Nature of Preliminary Attachment — A writ of preliminary attachment is a provisional remedy that is adjunct to the main suit and cannot have independent existence apart from the principal proceeding. Any relief against attachment must be disposed of in the same case, and the attachment ceases to exist upon termination of the principal action.
• Third-Party Claims in Attachment — Under Rule 57, Section 14, a third person claiming ownership of attached property may file an affidavit of title with the sheriff serving the writ, upon which the sheriff shall not be bound to keep the property under attachment unless the attaching party files a bond to indemnify the claimant.

• "Intervention can no longer be allowed in a case already terminated by final judgment." — Articulating the fundamental rule that intervention is only available in pending cases.
• "The petitioners Yu are not parties in interest without whom no final determination of the recovery of sum of money case can be had - they are not indispensable parties." — Distinguishing the petitioners' status from that of indispensable parties.
• "At most, the petitioners Yu may only be considered necessary parties as they are not indispensable, but who ought to be joined as a party if complete relief is to be accorded as to those already parties, or for a complete determination or settlement of the claim subject of the action." — Defining the petitioners' procedural status.
• "Attachment is only adjunct to the main suit. Therefore, it can have no independent existence apart from a suit on a claim of the plaintiff against the defendant." — Establishing the dependent nature of preliminary attachment.
• "If the judgment obligor no longer has any right, title or interest in the property levied upon, then there can be no lien that may be created in favor of the judgment obligee by reason of the levy." — Providing the remedy available to third-party claimants who succeed in separate actions to recover property.

• Chavez v. Presidential Commission on Good Government, 366 Phil. 863 (1999) — Controlling precedent establishing that intervention cannot be allowed in a case already terminated by final judgment.
• Rabino v. Cruz, 294 Phil. 480 (1993) — Cited for the definition of indispensable parties and the principle that a judgment cannot bind non-parties.
• Adlawan v. Tomol, 262 Phil. 893 (1990) — Controlling precedent establishing that attachment is ancillary to the principal action and cannot exist independently.
• Navarro v. Ermita, 626 Phil. 23 (2010) — Distinguished; the Court noted that the exceptional circumstances allowing intervention after finality (grave constitutional violation) were absent in this case.
• Miranda v. Sps. Mallari, G.R. No. 218343, November 28, 2018 — Controlling precedent for the rule that if the judgment obligor has no right or interest in the levied property, no lien is created in favor of the judgment obligee.

• Rule 45, Rules of Court — Governs Petitions for Review on Certiorari to the Supreme Court from decisions of the Court of Appeals.
• Rule 3, Sections 7, 8, and 9, Rules of Court — Define indispensable parties, necessary parties, and the effect of non-joinder of necessary parties, respectively.
• Rule 19, Rules of Court — Governs Intervention in civil actions.
• Rule 57, Section 14, Rules of Court — Provides the procedure for third-party claims in attachment proceedings, allowing a claimant to file an affidavit of title to contest the attachment.

Carpio (Chairperson), Perlas-Bernabe, J. Reyes, Jr., and Lazaro-Javier, JJ.