.R. No.

58168 December 19, 1989 Deed of Mortgage be annulled and that the Register of Deeds be ordered to cancel TCT No.
22431 and to issue a new title in her favor.
CONCEPCION MAGSAYSAY-LABRADOR, SOLEDAD MAGSAYSAY-CABRERA, LUISA
MAGSAYSAY-CORPUZ, assisted be her husband, Dr. Jose Corpuz, FELICIDAD P. MAGSAYSAY, On March 7, 1979, herein petitioners, sisters of the late senator, filed a motion for intervention
and MERCEDES MAGSAYSAY-DIAZ, petitioners, vs. THE COURT OF APPEALS and ADELAIDA on the ground that on June 20, 1978, their brother conveyed to them one-half (1/2 ) of his
RODRIGUEZ-MAGSAYSAY, Special Administratrix of the Estate of the late Genaro F. shareholdings in SUBIC or a total of 416,566.6 shares and as assignees of around 41 % of the
Magsaysay respondents. total outstanding shares of such stocks of SUBIC, they have a substantial and legal interest in
the subject matter of litigation and that they have a legal interest in the success of the suit with
In this petition for review on certiorari, petitioners seek to reverse and set aside [1] the
respect to SUBIC.
decision of the Court of Appeals dated July l3, 1981, 1 affirming that of the Court of First
Instance of Zambales and Olongapo City which denied petitioners' motion to intervene in an On July 26, 1979, the court denied the motion for intervention, and ruled that petitioners have
annulment suit filed by herein private respondent, and [2] its resolution dated September 7, no legal interest whatsoever in the matter in litigation and their being alleged assignees or
1981, denying their motion for reconsideration. transferees of certain shares in SUBIC cannot legally entitle them to intervene because SUBIC
has a personality separate and distinct from its stockholders.
Petitioners are raising a purely legal question; whether or not respondent Court of Appeals
correctly denied their motion for intervention. On appeal, respondent Court of Appeals found no factual or legal justification to disturb the
findings of the lower court. The appellate court further stated that whatever claims the
The facts are not controverted.
petitioners have against the late Senator or against SUBIC for that matter can be ventilated in a
On February 9, 1979, Adelaida Rodriguez-Magsaysay, widow and special administratix of the separate proceeding, such that with the denial of the motion for intervention, they are not left
estate of the late Senator Genaro Magsaysay, brought before the then Court of First Instance without any remedy or judicial relief under existing law.
of Olongapo an action against Artemio Panganiban, Subic Land Corporation (SUBIC), Filipinas
Petitioners' motion for reconsideration was denied. Hence, the instant recourse.
Manufacturer's Bank (FILMANBANK) and the Register of Deeds of Zambales. In her complaint,
she alleged that in 1958, she and her husband acquired, thru conjugal funds, a parcel of land Petitioners anchor their right to intervene on the purported assignment made by the late
with improvements, known as "Pequena Island", covered by TCT No. 3258; that after the death Senator of a certain portion of his shareholdings to them as evidenced by a Deed of Sale dated
of her husband, she discovered [a] an annotation at the back of TCT No. 3258 that "the land June 20, 1978. 2 Such transfer, petitioners posit, clothes them with an interest, protected by
was acquired by her husband from his separate capital;" [b] the registration of a Deed of law, in the matter of litigation.
Assignment dated June 25, 1976 purportedly executed by the late Senator in favor of SUBIC, as
Invoking the principle enunciated in the case of PNB v. Phil. Veg. Oil Co., 49 Phil. 857,862 & 853
a result of which TCT No. 3258 was cancelled and TCT No. 22431 issued in the name of SUBIC;
(1927), 3 petitioners strongly argue that their ownership of 41.66% of the entire outstanding
and [c] the registration of Deed of Mortgage dated April 28, 1977 in the amount of P
capital stock of SUBIC entitles them to a significant vote in the corporate affairs; that they are
2,700,000.00 executed by SUBIC in favor of FILMANBANK; that the foregoing acts were void
affected by the action of the widow of their late brother for it concerns the only tangible asset
and done in an attempt to defraud the conjugal partnership considering that the land is
of the corporation and that it appears that they are more vitally interested in the outcome of
conjugal, her marital consent to the annotation on TCT No. 3258 was not obtained, the change
the case than SUBIC.
made by the Register of Deeds of the titleholders was effected without the approval of the
Commissioner of Land Registration and that the late Senator did not execute the purported Viewed in the light of Section 2, Rule 12 of the Revised Rules of Court, this Court affirms the
Deed of Assignment or his consent thereto, if obtained, was secured by mistake, violence and respondent court's holding that petitioners herein have no legal interest in the subject matter
intimidation. She further alleged that the assignment in favor of SUBIC was without in litigation so as to entitle them to intervene in the proceedings below. In the case of Batama
consideration and consequently null and void. She prayed that the Deed of Assignment and the Farmers' Cooperative Marketing Association, Inc. v. Rosal, 4 we held: "As clearly stated in
Section 2 of Rule 12 of the Rules of Court, to be permitted to intervene in a pending action, the
party must have a legal interest in the matter in litigation, or in the success of either of the No. 122122 before the CFI of Manila, Branch XXII, entitled "Concepcion Magsaysay-Labrador,
parties or an interest against both, or he must be so situated as to be adversely affected by a et al. v. Subic Land Corp., et al.", involving the validity of the transfer by the late Genaro
distribution or other disposition of the property in the custody of the court or an officer Magsaysay of one-half of his shareholdings in Subic Land Corporation; [2] Civil Case No. 2577-0
thereof ." before the CFI of Zambales, Branch III, "Adelaida Rodriguez-Magsaysay v. Panganiban, etc.;
Concepcion Labrador, et al. Intervenors", seeking to annul the purported Deed of Assignment
To allow intervention, [a] it must be shown that the movant has legal interest in the matter in
in favor of SUBIC and its annotation at the back of TCT No. 3258 in the name of respondent's
litigation, or otherwise qualified; and [b] consideration must be given as to whether the
deceased husband; [3] SEC Case No. 001770, filed by respondent praying, among other things
adjudication of the rights of the original parties may be delayed or prejudiced, or whether the
that she be declared in her capacity as the surviving spouse and administratrix of the estate of
intervenor's rights may be protected in a separate proceeding or not. Both requirements must
Genaro Magsaysay as the sole subscriber and stockholder of SUBIC. There, petitioners, by
concur as the first is not more important than the second. 5
motion, sought to intervene. Their motion to reconsider the denial of their motion to intervene
The interest which entitles a person to intervene in a suit between other parties must be in the was granted; [4] SP No. Q-26739 before the CFI of Rizal, Branch IV, petitioners herein filing a
matter in litigation and of such direct and immediate character that the intervenor will either contingent claim pursuant to Section 5, Rule 86, Revised Rules of Court. 9 Petitioners' interests
gain or lose by the direct legal operation and effect of the judgment. Otherwise, if persons not are no doubt amply protected in these cases.
parties of the action could be allowed to intervene, proceedings will become unnecessarily
Neither do we lend credence to petitioners' argument that they are more interested in the
complicated, expensive and interminable. And this is not the policy of the law. 6
outcome of the case than the corporation-assignee, owing to the fact that the latter is willing
The words "an interest in the subject" mean a direct interest in the cause of action as pleaded, to compromise with widow-respondent and since a compromise involves the giving of
and which would put the intervenor in a legal position to litigate a fact alleged in the reciprocal concessions, the only conceivable concession the corporation may give is a total or
complaint, without the establishment of which plaintiff could not recover. 7 partial relinquishment of the corporate assets. 10

Here, the interest, if it exists at all, of petitioners-movants is indirect, contingent, remote, Such claim all the more bolsters the contingent nature of petitioners' interest in the subject of
conjectural, consequential and collateral. At the very least, their interest is purely inchoate, or litigation.
in sheer expectancy of a right in the management of the corporation and to share in the profits
The factual findings of the trial court are clear on this point. The petitioners cannot claim the
thereof and in the properties and assets thereof on dissolution, after payment of the corporate
right to intervene on the strength of the transfer of shares allegedly executed by the late
debts and obligations.
Senator. The corporation did not keep books and records. 11 Perforce, no transfer was ever
While a share of stock represents a proportionate or aliquot interest in the property of the recorded, much less effected as to prejudice third parties. The transfer must be registered in
corporation, it does not vest the owner thereof with any legal right or title to any of the the books of the corporation to affect third persons. The law on corporations is explicit. Section
property, his interest in the corporate property being equitable or beneficial in nature. 63 of the Corporation Code provides, thus: "No transfer, however, shall be valid, except as
Shareholders are in no legal sense the owners of corporate property, which is owned by the between the parties, until the transfer is recorded in the books of the corporation showing the
corporation as a distinct legal person. 8 names of the parties to the transaction, the date of the transfer, the number of the certificate
or certificates and the number of shares transferred."
Petitioners further contend that the availability of other remedies, as declared by the Court of
appeals, is totally immaterial to the availability of the remedy of intervention. And even assuming arguendo that there was a valid transfer, petitioners are nonetheless
barred from intervening inasmuch as their rights can be ventilated and amply protected in
We cannot give credit to such averment. As earlier stated, that the movant's interest may be another proceeding.
protected in a separate proceeding is a factor to be considered in allowing or disallowing a
motion for intervention. It is significant to note at this juncture that as per records, there are WHEREFORE, the instant petition is hereby DENIED. Costs against petitioners. SO ORDERED.
four pending cases involving the parties herein, enumerated as follows: [1] Special Proceedings