GR 175989; (February, 2008) (Digest)
G.R. No. 175989 ; February 4, 2008
Government Service Insurance System vs. Mariano A. Nocom
FACTS
This case involves the aftermath of consolidated Supreme Court decisions (G.R. Nos. 137448 & 141454) concerning loans and foreclosure between GSIS and Bengson Commercial Buildings, Inc. (BENGSON). The trial court, in a 1995 Order, awarded BENGSON P31 million as costs of suit. This Order became final and executory after GSIS’s counsel failed to act. To satisfy this award, the sheriff levied and auctioned GSIS’s San Miguel Corporation (SMC) shares, with BENGSON as the winning bidder. The Supreme Court, in its 2002 Decision, ultimately set aside the 1995 Order and annulled the auction sale, ordering the restoration of the SMC shares to GSIS.
Subsequently, Mariano A. Nocom filed a Motion for Intervention in the trial court proceedings, claiming that BENGSON had already assigned 2,406,666 of the levied SMC shares to him via a 1999 Memorandum of Agreement and Deed of Assignment. The trial court denied his motion. Nocom elevated the matter via certiorari to the Court of Appeals, which reversed the trial court and allowed the intervention.
ISSUE
Whether the Court of Appeals erred in allowing respondent Mariano A. Nocom to intervene in the case.
RULING
The Supreme Court denied GSIS’s petition and affirmed the Court of Appeals. The legal logic centers on the requirements for a valid intervention under Section 1, Rule 19 of the Rules of Court. Intervention is allowed when a person has a legal interest in the matter in litigation, or in the success of any party, or an interest against both, or is so situated as to be adversely affected by a disposition of property in the custody of the court.
The Court found that Nocom possessed the requisite legal interest. The subject of the litigation—the SMC shares—had been assigned to him by BENGSON during the pendency of the execution proceedings. Since the Supreme Court’s 2002 Decision ordered the restoration of these very shares to GSIS, Nocom’s rights as an assignee would be directly affected by the outcome. His interest is of such direct and immediate character that he stands to gain or lose by the legal operation of the judgment. Therefore, his intervention was proper to protect his alleged rights over the disputed shares. The appellate court committed no error in permitting it.