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September 26, 2016

Nordic Asia vs. CA

Facts:
  • This case involves two cases.
  • The first case was an extrajudicial foreclosure of property instituted by Nordic Asia against Sextant Maritime for the latter’s failure in paying a loan.
  • The second case was a collection case filed by Nam Ung Maritime and 27 crew members against Sextant Maritime for recovery of unpaid wages, overtime pay and other benefits. The crew members here were able to cause the attachment of the vessel.
  • Upon learning of the collection case, Nordic Asia thereafter filed a motion for leave to intervene in the said case. 
  • It alleged that they hold a mortgage over the vessel and that their intervention is only for the purpose of opposing the crew members' unfounded and grossly exaggerated claim. 
  • RTC granted the said motion. (NOTE: the attachment of the vessel was discharged after Nordic put up a counterbound)
  • The lower court ruled Nordic Asia has no right to intervene because its complaint-in-intervention failed to state a cause of action and that the requisites for intervention are not present.


Issue: WON the complaint-in-intervention filed by Nordic Asia was proper. NO

Ruling: 

The Supreme Court ruled in the negative. It enumerated the two requirements for intervention; namely:
[a] legal interest in the matter in litigation; and 
[b]consideration must be given as to whether the adjudication of the rights of the original parties may be delayed or prejudiced, or whether the intervenor's rights may be protected in a separate proceeding or not.

In this case, Nordic Asia failed to meet the requirements.

As to the first requirement, the SC said that: Legal interest, which entitles a person to intervene, must be in the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by direct legal operation and effect of the judgment.

Nordic Asia, being co-creditors, are not the parties liable for the claims of Nam Ung and the crew members. Also, their remedies as unpaid mortgagees remain preserved as the collection case will not preclude the foreclosure of the vessel. Therefore, the collection case has no “direct” effect on the petitioners.

As to the second requisite, Nordic Asis’a rights were already protected through the extrajudicial foreclosure proceeding while on the other hand, the rights of Nam Ung and crew members have been unduly delayed or prejudiced. It was noted by the SC that the decision of the RTC in favor of Nam Ung and crew members never attained finality even if the actual judgment obligors (Sextant) neverf filed an appeal. Clearly, the only parties prolonging the collection case are the intervenors or Nordic Asia.

Re: intervention pro interesse suo *citing Int’l. Banking Corp vs. Corrales case (a lien or statutory right of preference clothed the intervenor with an interest in the subject-matter in litigation) and Joaquin Herrera (intervention pro interesse suo is a mode of intervention wherein a stranger desires to intervene for the purpose of asserting a property right which is the subject matter of litigation without becoming a formal plaintiff or defendant)

As to the argument of Nordic Asia that its intervention was in the nature of an intervention pro interesse suo, the SC said that:
In the International Banking Corp. case, intervention was allowed because the intervenor had a superior right of preference over the subject property and he had sought to enforce his own claims against the defendant and to foreclose on the said subject property. 
o Nordic prayed in this casethat they be allowed to intervene, on the basis of their secondary right as unpaid mortgagees, merely to oppose the claims of respondents and not for the purpose of enforcing their own claims.
In the Joaquin case, the plaintiff sought to compel the local officials of Caloocan to issue a cockpit license to him. A third party intervened to oppose the plaintiff's application and to assert his own right by asking that the cockpit license be issued to him instead. 
o In this case, Nordic wanted only to oppose the claims of respondents without asserting their unpaid mortgage.

NOTE: 
o Legal interest, which entitles a person to intervene, must be in the matter in litigation and of such direct and immediate character that the intervenor will either gain or lose by direct legal operation and effect of the judgment.
o Mortgagee – Nordic Asia
o Mortagagor – Sextant Maritime

Citation:
  • G.R. No. 111159             
  • July 13, 2004
  • NORDIC ASIA LIMITED (now known as DnC Limited) and BANKERS TRUST COMPANY, petitioners, vs.THE HONORABLE COURT OF APPEALS, NAM UNG MARINE CO., LTD., KIM JEONG SEONG, P. U. ULSTRUP, BAK JEONG RANG, SIN SUK NO, HWANG IN CHAN, O JEONG SUK, LEE MYUNG UNG, CHAE DOO EUP, SEOK HAEONG JO, KIM YONG JIN, KIM BU YUL, JEONG DONG SONG, LEE ON CHUN, GYEONG GI GIM, MUN KU HAN, SEUNG HO AN, BYANG YEOL YANG, SEOG MAN HAN, KIM JUNG GON, LEE DONG HWA, LEE MOON HYEONG, SEONG MUG JANG, HAN IL IM, SANG MYEONG GIM, WOO JEONG SUL, GIL HUN GIM, CHAE DONG CHONG, respondents.

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