G.R. No. 186063 - Philippine National Bank vs. San Miguel Corporation

Petitioners Cristina de Knecht and Rene Knecht owned a parcel of land of approximately 8,102.68 square meters located at the corner of the south end of E. de los Santos Avenue (EDSA) and F.B. Harrison, Pasay City, covered by Transfer Certificate of Title (TCT) No. 9032.
The Knechts constructed eight houses thereon, leased seven, and occupied one as their residence.

From 1980 to 1982, the Knechts failed to pay real estate taxes on the property.
The City Treasurer of Pasay conducted a tax auction sale of the property on May 27, 1982, for P63,000.00, the amount of deficiency taxes.
Respondents Spouses Anastacio and Felisa Babiera, and Spouses Alejandro and Flor Sangalang were the highest bidders.
The Knechts failed to redeem the property within the one-year period allowed by law.
In August and October 1983, the Babieras and the Sangalangs filed separate petitions (LRC Cases No. 2636-P and 2652-P) before the Regional Trial Courts of Pasay City to have their names registered as co-owners pro-indiviso over the property.
The trial courts issued orders directing the Register of Deeds to cancel TCT No. 9032 and issue new titles in favor of Babiera and Sangalang.
The Register of Deeds complied, issuing TCT No. 86670 in the Babieras’ and Sangalangs’ names.

The Knechts alleged they only learned of the auction and registration orders in 1983 and filed Civil Case No. 2961-P in 1985, praying for reconveyance, annulment of the tax sale, and cancellation of Babiera and Sangalang titles, citing lack of notice.
Salem Investment Corporation (Salem) later acquired the property from Babiera and Sangalang and intervened in the case.
The court appointed Metropolitan Bank and Trust Company as receiver in September 1985 upon Salem’s petition.
The Knechts questioned this appointment through a Court of Appeals petition, which was dismissed and subsequently affirmed by the Supreme Court in G.R. No. 75609.

While proceedings were ongoing, the Knechts repeatedly sought postponements and failed to appear on September 13, 1988.
The trial court dismissed Civil Case No. 2961-P due to “apparent lack of interest of plaintiffs” after an unreasonable delay and failure to appear despite notice.
The Knechts’ motion to set aside the dismissal was denied for late filing and failure to serve other parties.
The dismissal was affirmed by the Court of Appeals, and the Supreme Court denied further relief due to procedural defects. Entry of judgment was made in February 1990.

Batasang Pambansa Blg. 340 (B.P. 340) was enacted in 1983 authorizing the government to expropriate certain properties, including the Knechts’ land, for EDSA Extension and flood control projects.
On May 15, 1990, the Republic of the Philippines filed Civil Case No. 7327 for determination of just compensation under B.P. 340 before the Regional Trial Court, Branch 111, Pasay City.
The trial court issued a writ of possession on August 29, 1990; seven of the eight Knecht houses were demolished the next day; the last house was demolished on April 6, 1991 after Salem’s unlawful detainer suit resulted in ejectment.
Partial payments of just compensation amounting to millions of pesos were ordered released to Salem and later to Mariano and Anacoreta Nocom, Salem’s buyers.
The Knechts filed a “Motion for Intervention and to Implead Additional Parties” and a “Motion to Inhibit Judge Sayo and to Consolidate Cases” in Civil Case No. 7327. These were denied or declared moot.

The Court of Appeals dismissed the Knechts’ petitions in CA-G.R. SP Nos. 27817 and 28089, ruling the Knechts had no legal interest or right to intervene as their ownership was foreclosed and Civil Case No. 2961-P was res judicata.
The Knechts’ petitions for certiorari and annulment of judgments were denied by the Supreme Court, affirming the lower court rulings.

Whether Civil Case No. 7327 is an expropriation proceeding subject to the rules on eminent domain.
Whether the Knechts had the legal right or interest to intervene in Civil Case No. 7327, given their status after the tax sale and prior dismissals.
Whether the dismissal of Civil Case No. 2961-P for failure to prosecute constitutes res judicata preventing the Knechts from asserting ownership over the property.
Whether the Knechts were deprived of due process in the tax sale and subsequent registration proceedings.
Whether the trial court erred in denying the Knechts’ motions for intervention and inhibition.