G.R. No. 173085 ; January 19, 2011
PHILIPPINE VETERANS BANK, Petitioner, vs. BASES CONVERSION DEVELOPMENT AUTHORITY, LAND BANK OF THE PHILIPPINES, ARMANDO SIMBILLO, CHRISTIAN MARCELO, ROLANDO DAVID, RICARDO BUCUD, PABLO SANTOS, AGRIFINA ENRIQUEZ, CONRADO ESPELETA, CATGERUBE CASTRO, CARLITO MERCADO and ALFREDO SUAREZ, Respondents.

FACTS

In late 2003, respondent Bases Conversion Development Authority (BCDA) filed expropriation cases before the Regional Trial Court (RTC) of Angeles City to acquire lands for the Subic-Clark-Tarlac Expressway Project. Ten cases were raffled to Branch 58. The defendants were respondents Armando Simbillo, et al., who were registered owners of the lands acquired as agrarian reform beneficiaries, and Land Bank of the Philippines as mortgagee. Petitioner Philippine Veterans Bank (PVB) filed motions to intervene in these cases, alleging that the properties actually belonged to Belmonte Agro-Industrial Development Corp., which mortgaged them to PVB in 1976. PVB foreclosed on the mortgages and bought the lands at auction in 1982 but had been unable to consolidate ownership. Branch 58 denied PVB’s motion for intervention, ruling that it amounted to a disallowed third-party complaint in expropriation cases, would delay proceedings, and because PVB had a pending action for annulment of titles before Branch 62 of the same court. PVB’s motion for reconsideration was denied. PVB filed a petition for certiorari with the Court of Appeals (CA), which dismissed it for lack of merit and denied reconsideration. Meanwhile, Branch 58 issued decisions granting the expropriation but did not act on BCDA’s prayer to determine ownership under Section 9, Rule 67 of the Rules of Civil Procedure.

ISSUE

Whether or not the Court of Appeals erred in holding that PVB was not entitled to intervene in the expropriation cases before Branch 58 of the Angeles City RTC.

RULING

The Supreme Court DENIED the petition and AFFIRMED the CA decision. The Court held that while Section 9, Rule 67 authorizes a court in an expropriation case to hear and decide conflicting claims of ownership, this rule could not apply to PVB for two reasons. First, at the time PVB sought intervention, its conflict with the farmer-beneficiaries over the annulment of their Certificates of Land Ownership Awards (CLOAs) and Emancipation Patents (EPs) was already pending before Branch 62, a co-equal branch which Branch 58 could not pre-empt. Second, even after PVB withdrew its actions from Branch 62 (having learned from jurisprudence that jurisdiction over annulment of CLOAs and EPs lies with the Department of Agrarian Reform Adjudication Board or DARAB), Branch 58 still had no power to adjudicate the ownership issues, as such jurisdiction is vested by law in the DARAB. The Court clarified that PVB’s proper remedy was to secure an order from Branch 58 to have the expropriation proceeds deposited with the court under Section 9, Rule 67, pending the DARAB’s adjudication of the ownership questions.