Case Summary (G.R. No. 58168)
Key Individuals and Context
• Petitioners: Concepcion Magsaysay-Labrador, Soledad Magsaysay-Cabrera, Luisa Magsaysay-Corpuz (assisted by her husband Dr. Jose Corpuz), Felicidad P. Magsaysay, Mercedes Magsaysay-Diaz
• Respondents: Court of Appeals; Adelaida Rodriguez-Magsaysay (widow and special administratrix of Genaro F. Magsaysay’s estate)
• Corporate Entity: Subic Land Corporation (SUBIC)
• Subject Property: “Pequena Island,” covered by TCT No. 3258 (later canceled and reissued as TCT No. 22431 in SUBIC’s name)
Petitioner’s Claims and Trial Court Proceedings
On February 9, 1979, the widow of the late Senator Genaro Magsaysay filed an action to annul a 1976 Deed of Assignment and a 1977 Deed of Mortgage affecting “Pequena Island,” alleging those instruments were void for lack of marital consent, attempted fraud on the conjugal partnership, and improper annotation without the Commissioner of Land Registration’s approval. On March 7, 1979, the senator’s sisters moved to intervene, asserting that their brother had conveyed to them on June 20, 1978, 41.66% of SUBIC shares, giving them a substantial interest in the corporation’s assets. On July 26, 1979, the Court of First Instance denied intervention, holding that shareholders lack a direct legal interest in corporate property separate from the corporation itself.
Court of Appeals Decision
The Court of Appeals, in its July 13, 1981 decision, affirmed the trial court. It agreed that the petitioners’ shareholdings did not confer a direct legal interest in the litigation’s subject matter and noted that any disputes over their alleged share acquisition could be pursued in separate proceedings. A September 7, 1981 resolution denied reconsideration.
Petitioners’ Arguments on Legal Interest
Petitioners relied on PNB v. Philippine Vegetable Oil Co. (49 Phil. 857) to argue that owning 41.66% of SUBIC entitled them to intervene because they were arguably more vitally interested in preserving the property than SUBIC itself. They contended that their substantial voting power and potential economic loss warranted direct participation.
Applicable Law and Intervention Standard
• 1973 Philippine Constitution (in effect at decision)
• Rule 12, Section 2, Revised Rules of Court: intervention requires (a) a legal interest in the matter in litigation (direct and immediate), and (b) that adjudicating original parties’ rights without the intervenor would either prejudice those rights or fail to protect the intervenor’s interests in a separate proceeding.
• Corporation Code, Sec. 63: no stock transfer is valid against third persons unless recorded in the corporation’s books.
Court’s Analysis on Petitioners’ Interest
The Supreme Court held that a share of stock represents only an aliquot beneficial interest in corporate property; it does not vest title to specific assets. Petitioners’ claimed interest was indirect, contingent, and purely expectant. They could not show that the judgment in the annulment suit would directly affect their legal rights in SUBIC’s corporate assets.
Availability of Alternative Remedies
The Court emphasized that petitioners had multiple pendi
Case Syllabus (G.R. No. 58168)
Procedural History
- Petitioners filed a petition for review on certiorari under Rule 45 to reverse and set aside the Court of Appeals’ July 13, 1981 decision and its September 7, 1981 resolution denying their motion for reconsideration.
- The Court of Appeals had affirmed the Court of First Instance of Zambales and Olongapo City’s order denying petitioners’ motion to intervene in an annulment suit by private respondent.
- Petitioners contend that the denial of their motion for intervention presents a pure question of law.
Material Facts
- On February 9, 1979, Adelaida Rodriguez-Magsaysay, widow and special administratrix of the late Senator Genaro F. Magsaysay, sued Artemio Panganiban, Subic Land Corporation (SUBIC), Filipinas Manufacturer’s Bank (FILMANBANK), and the Register of Deeds of Zambales.
- She alleged that title to “Pequena Island,” originally acquired by conjugal funds in 1958 and covered by TCT No. 3258, was fraudulently annotated and subsequently transferred:
- An annotation declared the land acquired by the late Senator from his separate capital without marital consent.
- A purported Deed of Assignment (June 25, 1976) in favor of SUBIC cancelled TCT No. 3258 and issued TCT No. 22431 to SUBIC.
- A Deed of Mortgage (April 28, 1977) for ₱2,700,000 by SUBIC in favor of FILMANBANK.
- Widow-respondent prayed for annulment of the assignment and mortgage, cancellation of TCT No. 22431, and issuance of a new title in her name.
- On March 7, 1979, petitioners—sisters of the late Senator—moved to intervene claiming they received by Deed of Sale (June 20, 1978) half of his SUBIC shareholdings (416,566.6 shares, approximately 41% of outstanding capital stock).
- The trial court denied intervention: petitioners lacked legal interest in the litigation; SUBIC’s separate juridical person