G.R. No. 115624 February 25, 1999.
ANTONIO MAGO and DANILO MACASINAG, petitioners, vs. COURT OF APPEALS, ROLANDO ASIS and NATIONAL HOUSING AUTHORITY, respondents.

FACTS

On November 19, 1987, private respondent Rolando Asis filed a Petition for Injunction and Prohibition against the National Housing Authority (NHA) to prevent it from acting on a June 3, 1987 resolution recommending the cancellation of a land award in his favor and the subdivision of the lot, with one portion to be awarded to him and the other to petitioners Antonio Mago and Danilo Macasinag as co-owners. The trial court granted a preliminary injunction. In its Answer, the NHA explained that the lot originally included the area of a structure owned by Francisco Mago (later conveyed to Antonio Mago) due to a re-blocking plan, but upon implementation, Mago’s structure was only partially affected, leaving a portion over 36 square meters, which should have remained an independent lot. The NHA further stated that on May 23, 1980, before the lot was awarded to Asis on October 30, 1980, Asis executed a “Kasunduan ng Paghahati ng Lote” voluntarily agreeing to divide the lot into two, with one-half to belong to Antonio Mago and Danilo Macasinag. On March 8, 1988, the trial court dismissed Asis’s petition, noting the NHA’s admission and recognition of Asis’s title. This order was amended on March 30, 1988, ordering the NHA to honor the award and not disturb Asis’s title. Petitioners Mago and Macasinag learned of the March 30, 1988 Order on May 24, 1988. On August 2, 1988, they filed a Motion for Leave to Intervene and a Petition for Relief from Judgment/Order. The trial court denied the motion to intervene for lack of merit and deemed the petition for relief “inutile” without intervention, a decision affirmed by the Court of Appeals, which ruled that rules on reglementary periods must be strictly construed.

ISSUE

Whether the trial court and the Court of Appeals erred in denying petitioners’ Motion for Leave to Intervene and Petition for Relief from Judgment based on procedural technicalities, despite petitioners’ claim of a substantial legal interest in the subject property arising from a prior agreement with private respondent.

RULING

The Supreme Court granted the petition and reversed the decisions of the lower courts. It held that petitioners should have been allowed to intervene and seek relief from judgment to pursue their substantial rights, notwithstanding procedural lapses. The Court found that petitioners had a legal interest in the matter, as evidenced by the “Kasunduan ng Paghahati ng Lote” executed by Asis in their favor before the award, which Asis accepted in bad faith knowing of the perfected agreement. The NHA also acknowledged its mistake in awarding the entire lot to Asis. The Court emphasized that technicalities should not override substantive justice, especially where a party stands to lose property without being heard. It ruled that petitioners were indispensable parties who should have been impleaded, and their intervention was necessary for a complete adjudication of the case. The case was remanded to the trial court for further proceedings to include petitioners as intervenors.