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ASSOCIATED BANK V. SPOUSES PRONSTROLLER, G.R. NO.

148444,
SEPTEMBER 3, 2009
FACTS:
The controversy stems from the Motion for Leave to Intervene filed by Spouses Eduardo
and Ma. Pilar Vaca who owned a foreclosed property and the bidding of which was
subsequently won by the Associated Bank. The latter then sold the property to spouses
Rafael and Monaliza Pronstroller for P7.5M with 10% as downpayment. Associated Bank,
through Atty Soluta then executed a letter-agreement setting forth the terms and
conditions of the sale.
Prior to the expiration of the 90-day period within which to make the escrow deposit, in
view of the pendency of the case filed by spouses Vaca who commenced an action for
the nullification of the real estate mortgage and the foreclosure sale, the
Pronstrollers requested that the balance be payable upon service on them of a final
decision affirming Associated's right to possess the property. Respondents proposal was
referred to petitioners Asset Recovery and Remedial Management Committee (ARRMC).
Because the Board of Directors deferred action on the respondents request, a month
after the request was made and after the payment deadline had lapsed, respondents and
Atty. Soluta, acting for the petitioner, executed another Letter-Agreement allowing the
former to pay the balance of the purchase price upon receipt of a final order. However,
after one year and after the banks reorganization, the board rejected respondents
request and respondents were asked to submit their new proposal if they were still
interested. The Pronstrollers showed the letter-agreement which granted them an
extension but they were informed that Atty. Soluta was not authorized to give such
extension. The proposal that the Pronstrollers also submitted was disapproved by the
Asssociated Banks President. After the Associated Banks right to posses the subject
property was upheld by the court in the case commenced by the spouses Vaca, the
Pronstrollers filed a Complaint for Specific Performance before the RTC and they likewise
caused the annotation of a notice of lis pendens in the petitioners title. While the case
was pending, the Associated Bank sold the subject property back to the spouses Vaca.
Both the RTC and the CA ruled in favor of the Pronstrollers. Hence, this petition for
Reconsideration by the Associated Bank and Motion for Leave to Intervene by the
spouses Vaca who alleged that they are the registered owners of the subject property
and are thus real parties-in-interest.
ISSUE:
Whether or not the spouses Vaca be allowed to intervene.
HELD:
No, because to allow the intervention would unduly delay and prejudice the rights
especially of respondents who have been deprived of the subject property for so long.
Furthermore, the motion for leave to intervene before this Court was belatedly filed in
view of Section 2, Rule 19 of the Rules of Court which provides;

SEC. 2. Time to intervene. The motion to intervene may be filed at any time
before rendition of judgment by the trial court. A copy of the pleading-inintervention shall be attached to the motion and served on the original parties.
The court also stressed that the purpose of intervention is to enable a stranger to an
action to become a party to protect his interest, and the court, incidentally, to settle all
conflicting claims. The spouses Vaca are not strangers to the action. Their legal interest
in the litigation springs from the sale of the subject property by petitioner in their favor
during the pendency of this case. As transferee pendente lite, the spouses Vaca are the
successors-in-interest of the transferor, the petitioner, who is already a party to the
action. Thus, the applicable provision is Section 19, Rule 3 of the Rules of Court,
governing transfers of interest pendente lite. It provides:
SEC. 19. Transfer of interest. In case of any transfer of interest, the
action may be continued by or against the original party, unless the court
upon motion directs the person to whom the interest is transferred to be
substituted in the action or joined with the original party.
The SC then reiterated the ruling in Santiago Land Development Corporation v. Court of
Appeals, as cited in Natalia Realty, Inc. v. Court of Appeals case which ruled that:
A transferee pendente lite of the property in litigation does not have
a right to intervene. We held that a transferee stands exactly in the shoes
of his predecessor-in-interest, bound by the proceedings and judgment in the
case before the rights were assigned to him. It is not legally tenable for a
transferee pendente lite to still intervene. Essentially, the law already
considers the transferee joined or substituted in the pending action,
commencing at the exact moment when the transfer of interest is perfected
between the original party-transferor and the transferee pendente lite.
Lastly, it is noteworthy that a notice of lis pendens was timely annotated on petitioners
title. This was done prior to the sale of the property to the spouses Vaca, the cancellation
of petitioners title, and the issuance of the new Transfer Certificate of Title in the name
of the spouses. By virtue of the notice of lis pendens, the spouses Vaca are bound by the
outcome of the litigation subject of the lis pendens. Their interest is subject to the
incidents or results of the pending suit, and their Certificate of Title will afford them no
special protection
With regards to the MR, it was denied and the court affirmed the factual findings of the
CA because they were amply supported by the evidence on record. Well-established is
the rule that if there is no showing of error in the appreciation of facts by the CA, the
Supreme Court treats them as conclusive.