G.R. No. 179516 , March 17, 2009
HON. EXECUTIVE SECRETARY, COMMISSIONER OF CUSTOMS, and the DISTRICT COLLECTOR OF CUSTOMS OF THE PORT OF SUBIC, Petitioners, vs. NORTHEAST FREIGHT FORWARDERS, INC., Respondent.

FACTS

On April 4, 2005, President Gloria Macapagal-Arroyo issued Executive Order No. 418, which imposed an additional specific duty of ₱500,000.00 for used motor vehicles imported into the country. Seven enterprises at the Subic Bay Freeport Zone filed a Petition for declaratory relief (Civil Case No. 179-0-05) before the Regional Trial Court (RTC) of Olongapo City, challenging the constitutionality and legality of Executive Order No. 418. The RTC granted their application for a writ of preliminary injunction enjoining the implementation of the Executive Order. Respondent Northeast Freight Forwarders, Inc., claiming to be engaged in the importation or trade of all types of motor vehicles inside the Subic Bay Freeport Zone and that it would be adversely affected by the Executive Order, filed a Motion for Leave to Intervene and Admit Petition in Intervention in the civil case. Petitioners opposed the motion, arguing that respondent’s Certificate of Registration and Tax Exemption showed it was prohibited from importing or trading used motor vehicles. The RTC, in an Order dated March 22, 2006, granted the intervention, finding that respondent had shown sufficient legal interest as it was in the business of importing motor vehicles inside the Subic Bay Freeport Zone and stood to be substantially and adversely affected by the implementation of Executive Order No. 418. The Court of Appeals affirmed the RTC Order. Hence, this Petition.

ISSUE

Whether the Court of Appeals erred in affirming the Order of the RTC allowing the intervention of respondent, on the ground that respondent has no legal interest in the matter in litigation.

RULING

The Supreme Court denied the Petition and affirmed the assailed Court of Appeals Decision and Resolution. The Court held that respondent possesses the requisite legal interest to intervene. Under Section 1, Rule 19 of the 1997 Rules of Civil Procedure, intervention requires a legal interest in the matter in litigation, which must be of a direct and immediate character so that the intervenor will either gain or lose by the direct legal operation of the judgment. The Court found that respondent, authorized to import or export all types of motor vehicles (excluding used motor vehicles under E.O. No. 156) within the Subic Bay Freeport Zone, would be directly injured by the enforcement of Executive Order No. 418, which imposes an additional duty on used motor vehicles. The Court noted that Executive Order No. 156’s prohibition applied only to the customs territory outside the Subic Bay Freeport Zone, and thus used motor vehicles imported via the Zone were subject to the additional duty under Executive Order No. 418. Since respondent’s principal activity was the importation of used motor vehicles, comprising 98% of its income, it would sustain a direct injury from the Executive Order’s enforcement. The Court also ruled that the RTC did not commit grave abuse of discretion in allowing the intervention, as it would not unduly delay or prejudice the adjudication of the rights of the original parties and would avoid multiplicity of suits.