GR 85284; (February, 1990) (Digest)
G.R. No. 85284 February 28, 1990
REPUBLIC OF THE PHILIPPINES, petitioner, vs. SANDIGANBAYAN (Third Division), SIMPLICIO A. PALANCA, et al., respondents.
FACTS
The Presidential Commission on Good Government (PCGG) filed Civil Case No. 0025 before the Sandiganbayan against Ferdinand E. Marcos, et al., for the recovery of alleged ill-gotten wealth. The complaint included properties listed as “BREDCO LOTS” and shares of stock in Bacolod Real Estate Development Corporation (BREDCO). Private respondent Simplicio A. Palanca, on behalf of himself and other BREDCO stockholders, filed a Motion for Leave to Intervene with an attached Answer in Intervention. They alleged a legal interest in the BREDCO properties, arguing that the titles were in BREDCO’s name, not the defendants’, and that the shares were held by Marsteel Consolidated Inc. under circumstances they sought to clarify, claiming the shareholdings were transferred merely as an accommodation to secure project financing.
The Republic, through the Solicitor General, opposed the intervention and moved to dismiss the Answer in Intervention. It argued that the Sandiganbayan lacked jurisdiction over the intervenors’ claims, that they had no legal interest in the litigation, and that the intervention constituted a suit against the state without its consent. The Sandiganbayan granted the motion to intervene and admitted the Answer. The Republic’s motion for reconsideration was denied, prompting this petition for certiorari, prohibition, and mandamus.
ISSUE
Whether the Sandiganbayan committed grave abuse of discretion in granting the private respondents’ motion to intervene in Civil Case No. 0025.
RULING
The Supreme Court dismissed the petition, upholding the Sandiganbayan’s resolution. The Court clarified that the right to intervene is conferred by Section 2, Rule 12 of the Rules of Court, requiring a legal interest in the matter in litigation. The Sandiganbayan correctly found that the private respondents, as stockholders, possessed a direct legal interest in the corporate properties and shares subject of the suit, as a judgment favoring the Republic could directly affect their rights.
Crucially, the Court rejected the petitioner’s claim that the intervention was an impermissible suit against the state. The doctrine of state immunity from suit is not a bar when the state itself initiates litigation, as it is deemed to have waived immunity for purposes of a counterclaim or similar defensive pleading. The private respondents’ intervention was defensive in nature; they sought merely to exclude the BREDCO assets from the recovery case by uniting with the defendants in resisting the Republic’s claims. Their Answer in Intervention prayed for no affirmative relief against the Republic, such as damages. Therefore, their action was not a counter-suit but a legitimate defensive maneuver to protect their proprietary interests. Having resolved this central issue, the Court found it unnecessary to delve into the ancillary arguments regarding jurisdiction over claims among the defendants themselves.