G.R. No. 196894 - Spouses Crisologo vs. JEWM Agro-Industrial Corp.

This petition for certiorari under Rule 45 challenges the May 6, 2011 Decision of the Court of Appeals (CA) in CA-G.R. SP No. 03896-MIN, which affirmed earlier orders rendered by the Regional Trial Court, Davao City, Branch 14 (RTC-Br. 14) in Civil Case No. 33,551-2010.
The case arises from an action for the cancellation of a lien involving annotations recorded on the back of Transfer Certificates of Title (TCT Nos. 325675 and 325676) covering subject properties previously attached by various creditors against So Keng Kok.

Petitioners: Jesus G. Crisologo and Nannette B. Crisologo (Spouses Crisologo), who were plaintiffs in separate collection cases before RTC, Branch 15.
Respondent: JEWM Agro-Industrial Corporation (JEWM), the successor-in-interest of Sy Sen Ben, originally involved in another collection case before RTC, Branch 8.
Other parties impleaded in the RTC action for cancellation included the Register of Deeds of Davao City, Sheriff Robert Medialdea, and unnamed John and Jane Does, representing persons acting under their directions.

Multiple collection cases were filed against So Keng Kok, resulting in the attachment of his properties by various creditors, including the petitioners.
The subject properties were initially transferred, annotated with levies, and later sold through a chain of transactions—from Sy Sen Ben to Nilda Lam and finally to JEWM on June 1, 2000.
Subsequent issuance of new TCTs still bore the annotations and notice of lis pendens from the earlier cases.

Spouses Crisologo prevailed in a collection case before RTC, Branch 15, and obtained an order directing defendants to solidarily pay them, which later led to the issuance of a writ for execution on June 15, 2010.
The execution proceedings included the scheduling of a public sale (auction set for August 26, 2010) that encompassed the subject properties.

JEWM filed its Affidavit of Third Party Claim and an Urgent Motion Ad Cautelam seeking the exclusion of the subject properties from the auction—all of which were denied by RTC-Br. 14 in its August 26, 2010 order.
Spouses Crisologo, despite having posted a bond to proceed with the execution, sought to be recognized as indispensable parties by filing various motions (a Very Urgent Manifestation, an Omnibus Motion, and a Very Urgent Omnibus Motion) before RTC-Br. 14.
RTC-Br. 14 issued orders on September 27, October 7, and November 9, 2010 denying Spouses Crisologo’s requests to be recognized as parties in the cancellation proceedings.

On November 19, 2010, JEWM moved to declare the defendants in default, a motion granted by the court in open court.
Spouses Crisologo then escalated the matter by filing a petition for certiorari with the CA under Rule 65, arguing that they were denied their right to be joined as indispensable parties.
After the CA denied the petition on technical grounds, primarily on the basis of failure to file a timely motion to intervene under Rule 19 and due to the prior RTC decision rendered on January 10, 2011 favoring JEWM, the petitioners elevated the matter to the Supreme Court.

The annotated TCTs, covering the subject properties, recorded the liens of Spouses Crisologo among other creditors.
The cancellation of annotations on TCTs is governed by Section 108 of P.D. No. 1529, which mandates that all parties in interest must be given notice.

The trial court (RTC-Br. 14) failed to recognize Spouses Crisologo as indispensable parties, thereby denying them due process.
The CA’s rigid application of the mandatory intervention rule (Rule 19) and its assertion that failure to file a motion to intervene precluded Spouses Crisologo from participation.
The CA’s dismissal of the petition for a temporary restraining order (TRO) or writ of preliminary injunction despite the adverse effects on the petitioners’ interests.
The contention that the orders rendered by RTC-Br. 14, lacking the joinder of all necessary parties, were thereby null and void.

Whether the RTC-Br. 14 erred in refusing to recognize Spouses Crisologo as indispensable parties by not notifying or impleading them in the cancellation proceedings.
Whether the cancellation of annotations on the certificates of title, without due notice to and involvement of all parties in interest pursuant to Section 108 of P.D. No. 1529, violates basic due process requirements.
Whether the requirement of filing a motion to intervene under Rule 19 as the sole means for a party with adverse interests to participate is an overly constrictive interpretation that undermines their right to be heard.
Whether the denial of the petitioners’ applications for a temporary restraining order or writ of preliminary injunction further contributed to a grave abuse of discretion.
Whether the CA erred in holding that the issues raised by petitioners had become moot due to the RTC-Br. 14 decision rendered on January 10, 2011.