Magsaysay-Labrador, et. al. vs.

Court of Appeals [GR 58168, 19 December 1989]

Facts:

On 9 February 1979, Adelaida Rodriguez-Magsaysay, widow and special administratix of the estate of
the late Senator Genaro Magsaysay, brought before the then Court of First Instance of Olongapo an
action against Artemio Panganiban, Subic Land Corporation (SUBIC), Filipinas Manufacturer's Bank
(FILMANBANK) and the Register of Deeds of Zambales, for the annulment of the Deed of Assignment
executed by the late Senator in favor of SUBIC (as a result of which TCT 3258 was cancelled and TCT
22431 issued in the name of SUBIC), for the annulment of the Deed of Mortgage executed by SUBIC in
favor of FILMANBANK (dated 28 April 1977 in the amount of P 2,700,000.00), and cancellation of TCT
22431 by the Register of Deeds, and for the latter to issue a new title in her favor. On 7 March 1979,
Concepcion Magsaysay-Labrador, Soledad Magsaysay-Cabrera, Luisa Magsaysay-Corpuz, Felicidad
Magsaysay, and Mercedes Magsaysay-Diaz, sisters of the late senator, filed a motion for intervention on
the ground that on 20 June 1978, their brother conveyed to them 1/2 of his shareholdings in SUBIC or a
total of 416,566.6 shares and as assignees of around 41 % of the 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 respect to SUBIC. On 26 July 1979, the trial court denied
the motion for intervention, and ruled that petitioners have no legal interest whatsoever in the matter
in litigation and their being alleged assignees or transferees of certain shares in SUBIC cannot legally
entitle them to intervene because SUBIC has a personality separate and distinct from its stockholders.
On appeal, the 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 Magsaysay sisters have against the
late Senator or against SUBIC for that matter can be ventilated in a separate proceeding. The motion for
reconsideration of the Magsaysay sisters was denied. Hence, the petition for review on certiorari.

Issue: Whether the Magsaysay sister, allegedly stockholders of SUBIC, are interested parties in a case
where corporate properties are in dispute.

Held:

Viewed in the light of Section 2, Rule 12 of the Revised Rules of Court, the Magsaysay sisters have no
legal interest in the subject matter in litigation so as to entitle them to intervene in the proceedings. 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 parties or an interest against both, or he must be so situated
as to be adversely affected by a distribution or other disposition of the property in the custody of the
court or an officer thereof . Here, the interest, if it exists at all, of the Magsaysay sisters 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.