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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No.

169914 March 24, 2008

ASIA'S EMERGING DRAGON CORPORATION, Petitioner, vs. DEPARTMENT OF TRANSPORTATION AND COMMUNICATION, SECRETARY LEANDRO R. MENDOZA and MANILA INTERNATIONAL AIRPORT AUTHORITY, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x G.R. No. 174166 REPUBLIC OF THE PHILIPPINES, Represented by the DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and MANILA INTERNATIONAL AIRPORT AUTHORITY, Petitioner, vs. COURT OF APPEALS (Eighth Division) and SALACNIB BATERINA, Respondents. CARPIO,* AZCUNA,* NACHURA,* REYES and RESOLUTION CORONA, J.: For our resolution are the (1) "motion for leave of court to intervene and to admit the attached answerin-intervention with prayer for alternative compliance of the December 19, 2005 decision" and (2) "answer-in-intervention" of Manila Hotel Corporation (MHC) filed on February 22, 2008. MHC seeks to intervene in the consolidated cases of G.R. Nos. 169914 and 174166 alleging that it has a legal interest in the matter in litigation. It avers that it purchased 20% of PIATCOs shares from the latters two stockholders, namely, SB Airport Investments, Inc. and Sojitz Corporation on August 23, 2005 and August 24, 2005, respectively. On August 26, 2005, it also entered into an agreement with Fraport AG Frankfurt Airport Services Worldwide to purchase the latters 30% direct shareholdings and 31.44% indirect shareholdings1 in PIATCO.2 MHC claims that it has a legal interest in the issues raised in G.R. 169914 and the early and complete compliance with the December 19, 2005 decision in G.R. No. 166429 of this Court. Thus it prays that (1) AEDCs petition be dismissed; (2) its (MHCs) proposed alternative manner of implementing the December 19, 2005 decision be approved3 and (3) it be allowed to manage and operate the NAIA IPT III for 25 years.4 MHCs motion for intervention is an improper remedy.

Intervention is a remedy by which a third party, not originally impleaded in the proceedings, becomes a litigant therein to enable him, her or it to protect or preserve a right or interest which may be affected by such proceedings. The pertinent rule is Rule 19, Section 1 of the Rules of Court which states: SEC. 1. Who may intervene. A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding.
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In outline form, the following are the requisites for intervention of a non-party: 1. Legal interest (a) in the matter in controversy; or (b) in the success of either of the parties; or (c) against both parties; or (d) person is so situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof; 2. Intervention will not unduly delay or prejudice the adjudication of rights of original parties; 3. Intervenor's rights may not be fully protected in a separate proceeding.5 MHC asserts that because of its substantial stockholdings in PIATCO, it has a legal interest in the matter in litigation. However, it conveniently fails to state its legal basis for the intervention. The interest contemplated by law must be actual, substantial, material, direct and immediate, and not simply contingent or expectant. It must be of such direct and immediate character that the intervenor will either gain or lose by the direct legal operation and effect of the judgment.6 The scenario here is similar to the intervention sought in Magsaysay-Labrador v. CA.7 In that case, Rodriguez-Magsaysay filed an action against Subic Land Corporation (SLC) et al. She alleged that her husband, the late Senator Genaro Magsaysay, assigned land (which was part of their conjugal property) to SLC. She prayed that this assignment be annulled. Magsaysay-Labrador et al., the sisters of the late senator, filed a motion for intervention on the ground that their brother had already conveyed to them his shareholdings in SLC amounting to 41% of its total capital. They argued that as transferees of the shares, they had a legal interest in the matter in litigation. The Court disagreed: Here, the interest, if it exists at all, of petitioners-movants is indirect, contingent, remote, conjectural, consequential and collateral. At the very least, their interest is purely inchoate, or in sheer expectancy of a right in the management of the corporation and to share in the profits thereof and in the properties and assets thereof on dissolution, after payment of the corporate debts and obligations. While a share of stock represents a proportionate or aliquot interest in the property of the corporation, it does not vest the owner thereof with any legal right or title to any of the property, his interest in the

corporate property being equitable or beneficial in nature. Shareholders are in no legal sense the owners of corporate property, which is owned by the corporation as a distinct legal person.8 In this case, the matter in controversy is the NAIA IPT III. MHC has no connection at all to this structure. It is merely a stockholder of PIATCO, the builder of NAIA IPT III. Its interest, if any, is indirect, contingent and inchoate. PIATCO has a legal personality separate and distinct from that of its stockholders, including MHC. It has rights and obligations which pertain solely to itself, not to any of its component members (i.e., its stockholders).9 The members may change but the juridical person (in this case, PIATCO) remains the same without alteration.10 Its property is not merged with those owned by its stockholders.11 No stockholder can identify itself with the corporation.12 Nor can any stockholder claim to possess a right which properly and exclusively belongs to the corporation. Thus, it is PIATCO alone which is entitled to receive payment of just compensation. Moreover, MHC has no right to the reliefs it prays for. It wants to complete NAIA IPT III and manage it for 25 years. But on what ground? As stockholder of PIATCO, the bidder whose contracts were nullified? How can MHC derive its claim to operate NAIA IPT III from PIATCO when PIATCO itself has no legal right to operate the facility? Clearly, MHCs claim is not only baseless but also absurd. If parties with such a conjectural, collateral, consequential, expectant and remote interest were allowed to intervene, proceedings would become unnecessarily complicated, expensive and interminable.13 It will only unduly delay and prolong the adjudication of the rights of the original parties. Finally, granting but not conceding that MHC has a cause of action cognizable by the courts, its interest as a stockholder of PIATCO can well be protected in a separate proceeding. It is settled that the right to intervene is not an absolute right; it may only be permitted by the courts when the movant establishes facts which satisfy the requirements of the law authorizing it.14 As the requisites have not been met, MHC has no right whatsoever to intervene. WHEREFORE, the motion for leave to intervene of Manila Hotel Corporation is hereby DENIED for being an improper remedy. SO ORDERED.