G.R. No. 191170 . September 14, 2016
CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC., PETITIONER, VS. FIDEL O. CHUA AND FILIDEN REALTY AND DEVELOPMENT CORP., RESPONDENTS.

FACTS

Respondents Fidel O. Chua and Filiden Realty obtained loans from Metropolitan Bank and Trust Co. (Metrobank), secured by a real estate mortgage. After failing to pay, Metrobank initiated extrajudicial foreclosure. Respondents filed a complaint for injunction (Civil Case No. 01-0207) to stop the auction. The foreclosure sale proceeded, and a Certificate of Sale was issued to Metrobank. The trial court initially denied the application for a preliminary injunction, deeming it moot, but the Court of Appeals reversed and remanded the case for further proceedings. The case was re-raffled to RTC Branch 258, where respondents filed an amended complaint seeking annulment of the foreclosure and certificate of sale.
Meanwhile, Metrobank sold its credit, including the rights from the loan and mortgage agreements with respondents, to Asia Recovery Corporation (ARC) under the Special Purpose Vehicle Act. ARC subsequently assigned this credit to petitioner Cameron Granville 3 Asset Management, Inc. Petitioner filed a Motion for Joinder of Party and/or Substitution in the pending civil case, seeking to be joined or to substitute for Metrobank. Metrobank consented, stating it had no objection as it had divested its interest. Respondents opposed, arguing they were entitled to disclosure of the sale details for their redemption rights.

ISSUE

Whether the Regional Trial Court committed grave abuse of discretion in granting petitioner’s motion to be joined as a party-defendant in Civil Case No. 01-0207.

RULING

The Supreme Court granted the petition, reversing the Court of Appeals and reinstating the RTC Orders. The Court held that the RTC did not commit grave abuse of discretion in allowing the joinder. The core legal principle is that every action must be prosecuted or defended in the name of the real party in interest. A transferee of a credit, such as petitioner, steps into the shoes of the original creditor and acquires the right to enforce the obligation. Petitioner, as the assignee of the credit, clearly has a legal interest in the outcome of the case for annulment of foreclosure, which directly affects its rights under the assigned credit and mortgage.
The Court of Appeals erred in annulling the RTC Orders. The appellate court incorrectly focused on the form of the relief (questioning whether substitution or joinder was proper) and demanded disclosure of the purchase price as a precondition. The Supreme Court clarified that the consideration paid for the assignment is irrelevant to the determination of whether a party has a legal interest in the subject of the litigation. Petitioner’s interest is derived from the Deed of Assignment, which is sufficient to establish its standing. The RTC correctly applied the rules on permissive joinder under Section 6, Rule 3 of the Rules of Court, as petitioner’s claim arose from the same transaction—the loan and mortgage—and there were common questions of law and fact. Joinder, without dropping Metrobank, was a prudent measure to ensure a complete adjudication of all rights and liabilities, preventing multiplicity of suits. The RTC’s decision was within its sound discretion to ensure that all necessary parties were before the court for a just resolution.