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ANTONIO CHUA vs.

TOPROS
G.R. No. 152808 September 30, 2005
FACTS:
Total Office Products and Services, Inc., lodged a
complaint for annulment of contracts of loan and real
estate mortgage against Antonio T. Chua before RTC
seeking to ANNUL a loan contract allegedly extended by
Chua to TOPROS in the amount of 10.4 million and the
accessory REM covering two parcels of land as collateral.
In the contract of loan, TOPROS
represented by its president John Charles Chang, Jr.

was

TOPROS alleged that the purported loan and


REM contracts were fictitious, since it never authorized
anybody, not even its president, to enter into said
transaction.
Petitioner Antonio Chua filed a motion to
dismiss alleging that John Charles Ang, Jr., the president
of TOPROS, who allegedly entered into the questioned
loan and REM is an indispensable party who has not
been properly impleaded.

ISSUE:
Whether or not John Charles
indispensable party in this case.

Ang

Jr.

is

an

RULING: NO.
Section 7, Rule 3 of the Revised Rules of Court provides:
SEC. 7. Compulsory joinder of indispensable
parties. Parties in interest without whom no final
determination can be had of an action shall be
joined either as plaintiffs or defendants.
The
presence
of
indispensable
parties
is
necessary to vest the court with jurisdiction. The
absence of an indispensable party renders all
subsequent actuations of the court null and void,
because of that courts want of authority to act,
not only as to the absent parties but even as to
those present.
Thus, whenever it appears to the court in the course of a
proceeding that an indispensable party has not been
joined, it is the duty of the court to stop the trial and
order the inclusion of such party.
A person is not an indispensable party, however, if his
interest in the controversy or subject matter is separable
from the interest of the other parties, so that it will not
necessarily be directly or injuriously affected by a decree
which does complete justice between them.
Is John Charles Chang, Jr., the president of TOPROS who
allegedly entered into the disputed contracts of loan and
real estate mortgage, an indispensable party in this
case?
We note that although it is Changs signature that
appears on the assailed real estate mortgage contract,
his participation is limited to being a representative of
TOPROS,
allegedly
without
authority.
The
documentwhich constitutes as the contract of real
estate mortgage clearly points to petitioner and
TOPROS as the sole parties-in-interest to the
agreement as mortgagee and mortgagor therein,
respectively. Any rights or liabilities arising from the

said contract would therefore bind only the petitioner


and TOPROS as principal parties. Chang, acting as mere
representative
of
TOPROS,
acquires
no
rights
whatsoever, nor does he incur any liabilities, arising from
the said contract between petitioner and TOPROS.
Certainly, in our view, the only indispensable parties
to the mortgage contract are petitioner and
TOPROS alone.
We thus hold that John Charles Chang, Jr., is not an
indispensable party in Civil Case No. 67736. This is
without prejudice to any separate action TOPROS may
institute against Chang, Jr., in a proper proceeding.

MARCELINO ARCELONA vs. COURT OF APPEALS


G.R. No. 102900 October 2, 1997
FACTS:
The six Arcelona siblings were co-owners of a fishpond
which they inherited from their deceased parents.
Petitioners Marcelino, Tomasa and Ruth are
naturalized Americans residing in California, U.S.A.

now

The other three siblings, hereinafter collectively referred


to as Olanday, et al., executed a contract of lease with
Cipriano Tandoc who in turn appointed respondent
Moises Farnacio as caretaker-tenant.
After the termination of the lease contract, the lessee
(Tandoc) surrendered possession of the leased premises
to the lessors, Olanday, et al.
Thereafter, Farnacio instituted an action for "peaceful
possession, maintenance of security of tenure plus
damages against Olanday, et al., before RTC praying that
he be maintained as tenant of the fishpond.
RTC ruled in favor of Farnacio.
Petitioners argued that being co-owners of the subject
property, they are "indispensable parties." Inasmuch as
they were not impleaded the questioned judgment of the
lower court is void insofar as the petitioners are
concerned for want of jurisdiction over their persons and
[for] lack of due process.
Petitioners further maintain that since "the case involves
the personal status of the private respondent, or relates
to, or the subject of which is property within the
Philippines, then the petitioners as non-residents" are
entitled to extra-territorial service, which is a "due
process requirement", they were never served with
summons.

ISSUE:
Whether or not the co-owners pro indiviso of a
real property indispensable parties.

RULING:
A court must acquire
jurisdiction over the
persons of indispensable parties before it can
validly pronounce judgments personal to said
defendants.
As a rule, if a defendant has not been summoned, the
court acquires no jurisdiction over his person, and a
personal judgment rendered against such defendant is
null and void. A decision that is null and void for want of
jurisdiction on the part of the trial court is not a decision
in the contemplation of law and, hence, it can never
become final and executory.
Indispensable
Parties.
The
absence
of
indispensable party renders all subsequent
actions of the court null and void...
Rule 3, Section 7 of the Rules of Court, defines
indispensable parties as parties-in-interest without
whom there can be no final determination of an action.
As such, they must be joined either as plaintiffs or as
defendants.

The general rule with reference to the making of parties


in a civil action requires, of course, the joinder of all
necessary parties where possible, and the joinder of all
indispensable parties under any and all conditions, their
presence being a sine qua non for the exercise of judicial
power.
It is precisely "when an indispensable party is not before
the court (that) the action should be dismissed." The
absence of an indispensable party renders all
subsequent actions of the court null and void for want of
authority to act, not only as to the absent parties but
even as to those present.
Co-ownership. A co-owner could not maintain an
action in an ejectment without joining all the
other co-owners.
Formerly, Article 487 of the old Civil Code provided that
"any one of the co-owners may bring an action in
ejectment." It was subsequently held that a co-owner
could not maintain an action in ejectment without joining
all the other co-owners.
. . . . As held by the Supreme Court, were the courts to
permit an action in ejectment to be maintained by
a person having merely an undivided interest in
any given tract of land, a judgment in favor of the
defendants would not be conclusive as against the
other co-owners not parties to the suit, and thus
the defendant in possession of the property might be
harassed by as many succeeding actions of ejectment,
as there might be co-owners of the title asserted against
him. The purpose of this provision was to prevent
multiplicity of suits by requiring the person asserting a
right against the defendant to include with him, either as
co-plaintiffs or as co-defendants, all persons standing in
the same position, so that the whole matter in dispute
may be determined once and for all in one litigation.
A tenant who fails to implead all the co-owners
cannot establish with finality his tenancy over the
entire co-owned lands. Co-owners in an action for
the security of tenure of a tenant are
encompassed
within
the
definition
of
indispensable parties,
Contrariwise, it is logical that a tenant, in an action to
establish his status as such, must implead all the proindiviso co-owners; in failing to do so, there can be no
final determination of the action. In other words, a
tenant who fails to implead all the co-owners cannot
establish with finality his tenancy over the entire coowned land.
Admittedly, in this case, the want of jurisdiction of the
trial court in rendering its decision in Civil Case No. D7240 is not patent on the face of said judgment.
However, there were glaring documentary and
testimonial pieces of evidence referred to by the trial
court in its decision which should have prompted it to
inquire further whether there were other indispensable
parties who were not impleaded. These facts and
circumstances should have forewarned the trial court
that it had not acquired jurisdiction over a number of
indispensable parties. In American jurisprudence, the
nullity of a decision arising from lack of jurisdiction may
be determined from the record of the case, not
necessarily from the face of the judgment only. We
believe that this rule should be applied to this case,
considering that in the assailed trial court's decision,
referrals were made to crucial evidence which if
scrutinized would readily reveal that there were
indispensable parties omitted.

SPS. CARANDANG vs. HEIRS OF DE GUZMAN


G.R. No. 160347 November 29, 2006
FACTS:
Sps. Carandang and deceased De Guzman were
stockholders and corporate officers of Mabuhay
Broadcasting System.
The Spouses borrowed money from De Guzman. When
the latter demanded payment, the spouses refused to
pay alleging that Arcadio Carandang and De Guzman
executed pre-incorporation agreement.
Thereafter, De Guzman filed an action for RECOVERY OF
SUM OF MONEY.
The spouses contended that Milagros De Guzman, the
wife of the deceased, should have been impleaded as an
indispensable parties since three of the four checks used
to pay for the stock subscriptions (loan) were issued in
her name. Being such, the spouses Carandang claim that
the failure to join Mrs. De Guzman as a party-plaintiff
should cause dismissal of the action because if the suit
is not brought in the name of or against the real party in
interest, a motion to dismiss may be filed on the ground
that the complaint states no cause of action.

ISSUE:
Whether or not the RTC should have dismissed the
case for failure to state a cause of action,
considering that Milagros de Guzman, allegedly
an indispensable party, was not included as a
party-plaintiff.

RULING: NO.
The joint account of spouses Quirino A de Guzman and
Milagros de Guzman from which the four (4) checks were
drawn is part of their conjugal property and under both
the Civil Code and the Family Code the husband alone
may institute an action for the recovery or protection of
the spouses conjugal property.
The Court of Appeals is correct. Petitioners erroneously
interchange the terms "real party in interest" and
"indispensable party."
A real party in interest is the party who stands to be
benefited or injured by the judgment of the suit, or the
party entitled to the avails of the suit. On the other
hand, an indispensable party is a party in interest
without whom no final determination can be had of an
action, in contrast to a necessary party, which is one
who is not indispensable but who ought to be joined as a
party if complete relief is to be accorded as to those
already parties, or for a complete determination or
settlement of the claim subject of the action.
Both indispensable and necessary parties are considered
as real parties in interest, since both classes of parties
stand to be benefited or injured by the judgment of the
suit.

Consequently, assuming that the four checks created a


debt for which the spouses Carandang are liable, such
credits are presumed to be conjugal property. There
being no evidence to the contrary, such presumption
subsists. As such, Quirino de Guzman, being a co-owner
of specific partnership property, is certainly a real party
in interest. Dismissal on the ground of failure to state a
cause of action, by reason that the suit was allegedly not
brought by a real party in interest, is therefore
unwarranted.
When an indispensable party is not before the court, the
action should likewise be dismissed. The absence of an
indispensable party renders all subsequent actuations of
the court void, for want of authority to act, not only as to
the absent parties but even as to those present. On the
other hand, the non-joinder of necessary parties do not
result in the dismissal of the case. Instead, Section 9,
Rule 3 of the Rules of Court provides for the
consequences of such non-joinder:
Sec. 9. Non-joinder of necessary parties to be pleaded.
Whenever in any pleading in which a claim is asserted a
necessary party is not joined, the pleader shall set forth
his name, if known, and shall state why he is omitted.
Should the court find the reason for the omission
unmeritorious, it may order the inclusion of the omitted
necessary party if jurisdiction over his person may be
obtained.
The failure to comply with the order for his inclusion,
without justifiable cause, shall be deemed a waiver of
the claim against such party.
The non-inclusion of a necessary party does not prevent
the court from proceeding in the action, and the
judgment rendered therein shall be without prejudice to
the rights of such necessary party.
Non-compliance with the order for the inclusion of a
necessary party would not warrant the dismissal of the
complaint. This is an exception to Section 3, Rule 17
which allows the dismissal of the complaint for failure to
comply with an order of the court, as Section 9, Rule 3
specifically provides for the effect of such non-inclusion:
it shall not prevent the court from proceeding in the
action, and the judgment rendered therein shall be
without prejudice to the rights of such necessary party.
Section 11, Rule 3 likewise provides that the non-joinder
of parties is not a ground for the dismissal of the action.
Other than the indispensable and necessary parties,
there is a third set of parties: the pro-forma parties,
which are those who are required to be joined as coparties in suits by or against another party as may be
provided by the applicable substantive law or procedural
rule. An example is provided by Section 4, Rule 3 of the
Rules of Court:
Sec. 4. Spouses as parties. Husband and wife shall sue
or be sued jointly, except as provided by law.
Pro-forma parties can either be indispensable, necessary
or neither indispensable nor necessary. The third case
occurs if, for example, a husband files an action to
recover a property which he claims to be part of his
exclusive property. The wife may have no legal interest
in such property, but the rules nevertheless require that
she be joined as a party.
In cases of pro-forma parties who are neither
indispensable nor necessary, the general rule under

Section 11, Rule 3 must be followed: such non-joinder is


not a ground for dismissal. Hence, in a case concerning
an action to recover a sum of money, we held that the
failure to join the spouse in that case was not a
jurisdictional defect. The non-joinder of a spouse does
not warrant dismissal as it is merely a formal
requirement which may be cured by amendment.
Conversely, in the instances that the pro-forma parties
are also indispensable or necessary parties, the rules
concerning indispensable or necessary parties, as the
case may be, should be applied. Thus, dismissal is
warranted only if the pro-forma party not joined in the
complaint is an indispensable party.
Milagros de Guzman, being presumed to be a co-owner
of the credits allegedly extended to the spouses
Carandang, seems to be either an indispensable or a
necessary party. If she is an indispensable party,
dismissal would be proper. If she is merely a necessary
party, dismissal is not warranted, whether or not there
was an order for her inclusion in the complaint pursuant
to Section 9, Rule 3.
In sum, in suits to recover properties, all coowners are real parties in interest. However,
pursuant to Article 487 of the Civil Code and relevant
jurisprudence, any one of them may bring an action, any
kind of action, for the recovery of co-owned properties.
Therefore, only one of the co-owners, namely the coowner who filed the suit for the recovery of the coowned property, is an indispensable party thereto. The
other co-owners are not indispensable parties. They are
not even necessary parties, for a complete relief can be
accorded in the suit even without their participation,
since the suit is presumed to have been filed for the
benefit of all co-owners.
We therefore hold that Milagros de Guzman is not an
indispensable party in the action for the recovery of the
allegedly loaned money to the spouses Carandang. As
such, she need not have been impleaded in said suit,
and dismissal of the suit is not warranted by her not
being a party thereto.
NOTE:
In action for ejectment, all co-owners of undivided
property must be joined as co-plaintiffs.
A tenant must implead all the co-owners to establish his
tenancy relation.
In action to recover property, any one of the co-owners
may bring an action for the recovery of co-owned
properties without the necessity of joining all the other
co-owners as co-plaintiffs because the suit is presumed
to have been filed for the benefit of his co-owners.

give the plaintiff an opportunity to amend his complaint


in order to include indispensable parties. If the plaintiff
ordered to include the indispensable party refuses to
comply with the order of the court, the complaint may
be dismissed upon motion of the defendant or upon the
court's own motion. Only upon unjustified failure or
refusal to obey the order to include or to amend is the
action dismissed.

LEONIS NAVIGATION vs. CATALINO VILLAMATER


G.R. No. 179169 March 3, 2010
FACTS:
Catalino Villamater was hired as Chief Engineer. Four
months after his deployment, he suffered intestinal
bleeding. He sought hospitalization in Germany and was
diagnosed of cancer. Thereafter, he was repatriated.
Villamater filed a complaint before LA - NLRC for
payment of disability benefits and reimbursement of
medical expenses. LA rendered judgment holding that
his illness was compensable.
NLRC affirmed in toto the decision of LA.
Petitioners filed petition for certiorari alleging that CA
erred in dismissing outright their petition on the ground
of non joinder of indispensable parties. It should be
noted that only the then deceased Villamater was
impleaded, excluding his heirs.

ISSUE:
Whether or not non joinder of indispensable
parties is a ground for dismissal.

RULING:
Rule 3, Section 7 of the Rules of Court defines
indispensable parties as those who are parties in interest
without whom there can be no final determination of an
action. They are those parties who possess such an
interest in the controversy that a final decree would
necessarily affect their rights, so that the courts cannot
proceed without their presence. A party is indispensable
if his interest in the subject matter of the suit and in the
relief sought is inextricably intertwined with the other
parties interest.
Unquestionably, Villamaters widow
indispensable party to this case.

stands

as

an

Under Rule 3, Section 11 of the Rules of Court, neither


misjoinder nor non-joinder of parties is a ground for the
dismissal of an action, thus:
Sec. 11. Misjoinder and non-joinder of parties. Neither
misjoinder nor non-joinder of parties is ground for
dismissal of an action. Parties may be dropped or added
by order of the court on motion of any party or on its
own initiative at any stage of the action and on such
terms as are just. Any claim against a misjoined party
may be severed and proceeded with separately.
The
proper
remedy
is
to
implead
the
indispensable party at any stage of the action. The
court, either motu proprio or upon the motion of a party,
may order the inclusion of the indispensable party or

the dropping of misjoined parties from the complaint


may be done motu proprio by the court, at any stage,
without need for a motion to such effect from the
adverse party. Section 11, Rule 3 indicates that the
misjoinder of parties, while erroneous, may be corrected
with ease through amendment, without further
hindrance to the prosecution of the suit.

CHRISTINE CHUA vs. JORGE TORRES AND


BELTRAN
G.R. No. 15900 August 30, 2005
FACTS:
Christine Chua filed a complaint against repondents. She
impleaded her brother Jonathan as a necessary party.
However, there was no allegation in the complaint of any
damage or injury sustained by Jonathan.
Jonathan did not sign any verification or certification
against forum shopping.
RTC dismissed the complaint on the ground that
Jonathan Chua had not executed a certificate of non
forum shopping. The RTC stressed that Section 5, Rule 7
of the Rules of Civil Procedure, the rule requiring the
certification, makes no distinction whether the plaintiff
required to execute the certification is a principal party,
a nominal party or a necessary party. Instead, the
provision requires that a plaintiff or principal party who
files a complaint or initiatory pleading execute such
certification. Jonathan Chua, being a plaintiff in this case,
was obliged to execute or sign such certification. Hence,
his failure to do so in violation of the mandatory rule
requiring the certification against forum-shopping
constituted valid cause for the dismissal of the petition.

ISSUE:
Whether or not the absence of the signature in
the required verification and certification against
forum shopping of a party misjoined as a plaintiff
is a valid ground for the dismissal of the
complaint.

RULING:
A misjoined party plaintiff has no business participating
in the case as a plaintiff in the first place, and it would
make little sense to require the misjoined party in
complying with all the requirements expected of
plaintiffs.
At the same time, Section 11, Rule 3 of the 1997 Rules of
Civil Procedure states:
Neither misjoinder nor non-joinder of parties is
ground for dismissal of an action. Parties may be
dropped or added by order of the court on motion of any
party or on its own initiative at any stage of the action
and on such terms as are just. Any claim against a
misjoined party may be severed and proceeded with
separately.
Clearly, misjoinder of parties is not fatal to the
complaint. The rule prohibits dismissal of a suit on the
ground of non-joinder or misjoinder of parties. Moreover,

It should then follow that any act or omission committed


by a misjoined party plaintiff should not be cause for
impediment to the prosecution of the case, much less for
the dismissal of the suit. After all, such party should not
have been included in the first place, and no efficacy
should be accorded to whatever act or omission of the
party. Since the misjoined party plaintiff receives no
recognition from the court as either an indispensable or
necessary party-plaintiff, it then follows that whatever
action or inaction the misjoined party may take on the
verification or certification against forum-shopping is
inconsequential. Hence, it should not have mattered to
the RTC that Jonathan Chua had failed to sign the
certification against forum-shopping, since he was
misjoined as a plaintiff in the first place. The fact that
Jonathan was misjoined is clear on the face of the
complaint itself, and the error of the RTC in dismissing
the complaint is not obviated by the fact that the
adverse party failed to raise this point. After all, the RTC
could have motu proprio dropped Jonathan as a plaintiff,
for the reasons above-stated which should have been
evident to it upon examination of the complaint.

Corollary to the issue of jurisdiction, and equally


important, is the mandatory rule on joinder of
indispensable parties set forth in Section 7, Rule 3 of the
Rules of Court, to wit:
SEC. 7. Compulsory joinder of indispensable parties.
Parties in interest without whom no final determination
can be had of an action shall be joined either as plaintiffs
or defendants.

DIONISIA LAGUNILLA vs. ANDREA VELASCO


G.R. No. 169276 June 16, 2009
FACTS:
Rev.
Fr.
Patricio (Patricio),
Magdalena Catalina
(Magdalena), Venancio, and respondent Macaria, all
surnamed Monis, as well as respondent Andrea Monis Velasco (Andrea), are siblings.
Venancio is the father of petitioners Dionisia Monis
Lagunilla and Rafael Monis.
During their lifetime, Patricio and Magdalena acquired
several properties which included several parcels of land
in the province of La Union and another one situated in
Quezon City. The Quezon City property was co-owned by
Patricio and Magdalena, together with Andrea and Pedro
Velasco.
After the death of Patricio and Magdalena , Andrea and
Macaria (to the exclusion of Venancios children)
executed a Deed of Extrajudicial Settlement with
Donation involving the Quezon City property, and
donated the same to Andreas son, Pedro Monis Velasco,
Jr.
Petitioners instituted an action for Annulment of
Documents and Damages against respondents Andrea
Monis Velasco and Macaria Monis alleging fraud on the
part of the respondents in executing the document as
the petitioners were also surviving heirs.
After they rested their case, they moved for the
amendment of the complaint to implead additional
party, Pedro as donee, since the resolution of the case
would affect his interest.
RTC denied the motion to amend the complaint and
thereby dismissed the complaint.
On appeal, CA affirmed RTC decision concluding that the
case instituted by the petitioners was intended to annul
the extra-judicial settlement. The question of validity of
the settlement is separate and distinct from the validity
of the donation. Hence, Pedro cannot be considered as
an indispensable party.
ISSUE:
Whether or not the CA erred in affirming RTC
decision in denying the motion to amend the
complaint to implead an indispensable party and
conform to the evidence presented.

RULING:

The general rule with reference to parties to a civil


action requires the joinder of all necessary parties,
where possible, and the joinder of all indispensable
parties under any and all conditions. The evident intent
of the Rules on the joinder of indispensable and
necessary parties is the complete determination of all
possible issues, not only between the parties themselves
but also as regards other persons who may be affected
by the judgment.
An indispensable party is a party who has an interest in
the controversy or subject matter that a final
adjudication cannot be made, in his absence, without
injuring or affecting that interest, a party who has not
only an interest in the subject matter of the controversy,
but also has an interest of such nature that a final
decree cannot be made without affecting his interest or
leaving the controversy in such a condition that its final
determination may be wholly inconsistent with equity
and good conscience. It has also been considered that
an indispensable party is a person in whose absence
there cannot be a determination between the parties
already before the court which is effective, complete or
equitable. Further, an indispensable party is one who
must be included in an action before it may properly go
forward.
A person is not an indispensable party, however, if his
interest in the controversy or subject matter is separable
from the interest of the other parties, so that it will not
necessarily be directly or injuriously affected by a decree
which does complete justice between them. Also, a
person is not an indispensable party if his presence
would merely permit complete relief between him and
those already parties to the action, or if he has no
interest in the subject matter of the action. It is not a
sufficient reason to declare a person to be an
indispensable party that his presence will avoid multiple
litigation.
Even without having to scrutinize the records, a mere
reading of the assailed decision readily reveals that
Pedro is an indispensable party. At the time of the filing
of the complaint, the title to the Quezon City property
was already registered in the name of Pedro, after TCT
No. 60455 (190472) in the names of Pedro Velasco,
Andrea, Magdalena and Patricio Monis was cancelled,
pursuant to the extrajudicial settlement with donation
executed by respondents. The central thrust of the
complaint was that respondents, by themselves, could
not have transferred the Quezon City property to Pedro
because petitioners, as heirs of Patricio and Magdalena,
also have rights over it. Accordingly, petitioners
specifically prayed that the extrajudicial settlement with
donation be annulled and the transfer certificate of title
and tax declarations (in the name of Pedro) issued
pursuant thereto be canceled.
If such prayer and thrust were to be denied (as held by
the trial and appellate courts), the problem would be less
obvious, as the status quo would be maintained.
However, if they were to be upheld, Pedros title to the
property would undoubtedly be directly and injuriously

affected. Even if we only resolve the validity of the


extrajudicial settlement, there would be no final
adjudication of the case without involving Pedros
interest.
Verily, Pedros interest in the subject matter of the suit
and in the relief sought are so inextricably intertwined
with that of the other parties. His legal presence as a
party to the proceedings is, therefore, an absolute
necessity. His interest in the controversy and in the
subject matter is not separable from the interest of the
other parties.
It is unfortunate that petitioners failed to implead Pedro
as defendant in their complaint. Interestingly, however,
they realized such mistake, albeit belatedly, and thus
sought the amendment of the complaint to join him as a
defendant, but the RTC refused to grant the same.
Well-settled is the rule that joinder of indispensable
parties is mandatory. It is a condition sine qua non to the
exercise of judicial power. The absence of an
indispensable party renders all subsequent actions of the
court null and void for want of authority to act, not only
as to the absent parties but even as to those present.
Without the presence of indispensable parties to the suit,
the judgment of the court cannot attain finality. One who
is not a party to a case is not bound by any decision of
the court; otherwise, he will be deprived of his right to
due process. That is why the case is generally remanded
to the court of origin for further proceedings.
In light of these premises, no final ruling can be had on
the validity of the extrajudicial settlement. While we
wish to abide by the mandate on speedy disposition of
cases, we cannot render a premature judgment on the
merits. To do so could result in a possible violation of due
process. The inclusion of Pedro is necessary for the
effective and complete resolution of the case and in
order to accord all parties the benefit of due process and
fair play.
Nevertheless, the non-joinder of indispensable parties is
not a ground for the dismissal of an action. The remedy
is to implead the non-party claimed to be indispensable.
Parties may be added by order of the court on motion of
the party or on its own initiative at any stage of the
action and/or at such times as are just. If the plaintiff
refuses to implead an indispensable party despite the
order of the court, then the court may dismiss the
complaint for the plaintiffs failure to comply with a
lawful court order.

Whether or not DMI is an indispensable party in


this case.

RULING:
Records show that when DMI secured the surety and
performance bonds from respondent in compliance with
petitioners requirement, respondent bound itself "jointly
and severally" with DMI for the damages and actual loss
that petitioner may suffer should DMI fail to perform its
obligations under the Agreement.
The term "jointly and severally" expresses a solidary
obligation granting petitioner, as creditor, the right to
proceed against its debtors, i.e., respondent or DMI.
The nature of the solidary obligation under the
surety does not make one an indispensable party.

LIVING @ SENSE INC. vs. MALAYAN INSURANCE


G.R. No. 193753 September 26, 2012
FACTS:
Petitioner was the main contractor of the Network
Project of Globe Telecom in Mindanao. It entered into a
Sub-Contract Agreement with Dou Mac, Inc. (DMI) to
undertake an underground open trench work.
DMI secured surety and performance bonds from
Malayan Insurance to answer for its liabilities in case it
fails to perform its obligation.
DMI commenced its excavation. However, DPWCH
ordered a work stoppage finding DMI's work
unsatisfactory. Thereafter, petitioner terminated the sub
contract agreement for failure of DMI to adopt corrective
measures.
Petitioner filed a complaint premised on respondent's
liability, seeking for indemnification of the amount of 10
million.
Seeking the dismissal of the complaint, respondent
claimed that DMI is an indispensable party that should
be impleaded and whose liability should first be
determined before respondent can be held liable.
On the other hand, petitioner asserted that respondent is
a surety who is directly and primarily liable to indemnify
petitioner, and that the bond is "callable on demand"
(subject to payment on demand) in the event DMI fails to
perform its obligations under the Agreement.
RTC dismissed the complaint without prejudice, for
failure to implead DMI as a party defendant. It ruled that
before respondent could be held liable on the surety and
performance bonds, it must first be established that DMI,
with whom petitioner had originally contracted, had
indeed violated the Agreement. DMI, therefore, is an
indispensable party that must be impleaded in the
instant suit.

ISSUE:

An indispensable party is a party-in-interest without


whom no final determination can be had of an action,
and who shall be joined mandatorily either as plaintiffs
or defendants. The presence of indispensable parties is
necessary to vest the court with jurisdiction, thus,
without their presence to a suit or proceeding, the
judgment of a court cannot attain real finality. The
absence of an indispensable party renders all
subsequent actions of the court null and void for want of
authority to act, not only as to the absent parties but
even as to those present.
In this case, DMI is not an indispensable party
because petitioner can claim indemnity directly
from respondent, having made itself jointly and
severally liable with DMI for the obligation under
the bonds. Therefore, the failure to implead DMI is
not a ground to dismiss the case, even if the same
was without prejudice.
Moreover, even on the assumption that DMI was, indeed,
an indispensable party, the RTC committed reversible
error in dismissing the complaint. Failure to implead an
indispensable party is not a ground for the dismissal of
an action, as the remedy in such case is to implead the
party claimed to be indispensable, considering that
parties may be added by order of the court, on motion of
the party or on its own initiative at any stage of the
action.
Accordingly, the Court finds that the RTC erred in holding
that DMI Is an indispensable party and, consequently, in
dismissing the complaint filed by petitioner without
prejudice.

The CA ruled that the complaint states no cause of


action because all the heirs of the Spouses Fian are
indispensable parties; hence, they should have been
impleaded in the complaint.
Failure to state a cause of action refers to the
insufficiency of the pleading. A complaint states a cause
of action if it avers the existence of the three essential
elements of a cause of action, namely:
(a) The legal right of the plaintiff;
(b) The correlative obligation of the defendant; and
(c) The act or omission of the defendant in violation of
said right.
By a simple reading of the elements of a failure to state
a cause of action, it can be readily seen that the
inclusion of Theresas co-heirs does not fall under any of
the above elements. The infirmity is, in fact, not a failure
to state a cause of action but a non-joinder of an
indispensable party.
Non-joinder means the "failure to bring a person who is a
necessary party or in this case an indispensable party
into a lawsuit." An indispensable party, on the other
hand, is a party-in-interest without whom no final
determination can be had of the action, and who shall be
joined either as plaintiff or defendant.

HEIRS OF MESINA vs. HEIRS OF FIAN


G.R. No. 201816 April 8, 2013
FACTS:
The late Spouses Mesina bought from Spouses Fian two
parcels of land on installment located in Leyte. Upon the
death of Spouses Fian, their heirs claimed ownership
over the parcels of land, took possession of them,
refused to acknowledgement payments for the lots and
denied that their late parents sold the property.
Despite repeated demands, the heirs of Fian refused to
vacate the lots. Hence, the heirs of Mesina filed an
action for quieting of title.
Theresa Fian filed a motion to dismiss arguing that the
complaint states no cause of action and for gross
violation of Section 1 and 2 of Rule 3 of Rules of Court.
(Who may be parties, real party in interest.
She claimed that Heirs of "Mesina and Fian" could not be
considered as juridical person or entity authorized by law
to be parties in a civil action.
RTC granted the motion and dismissed the complaint
finding that since the heirs not having been individually
named, they could not be the real parties in interest,
therefore, the complaint states no cause of action.
On appeal, CA affirmed the RTC decision ruling that all
the heirs of Fian are indispensable parties and should
have been impleaded in the complaint.

ISSUE:
Whether or not the CA erred in affirming RTC
decision that the complaint states no cause of
action.

RULING:

As such, this is properly a non-joinder of indispensable


party, the indispensable parties who were not included
in the complaint being the other heirs of Fian, and not a
failure of the complaint to state a cause of action.
The non-joinder of indispensable parties is not a ground
for the dismissal of an action. At any stage of a judicial
proceeding and/or at such times as are just, parties may
be added on the motion of a party or on the initiative of
the tribunal concerned. If the plaintiff refuses to implead
an indispensable party despite the order of the court,
that court may dismiss the complaint for the plaintiffs
failure to comply with the order. The remedy is to
implead the non-party claimed to be indispensable.
Thus, the dismissal of the case for failure to state a
cause of action is improper. What the trial court should
have done is to direct petitioner Norman Mesina to
implead all the heirs of Domingo Fian, Sr. as defendants
within a reasonable time from notice with a warning that
his failure to do so shall mean dismissal of the
complaint.

actually before it are sufficiently numerous and


representative so that all interests concerned are fully
protected. Any party in interest shall have a right to
intervene in protection of his individual interest.
The necessary elements for the maintenance of a class
suit are accordingly:
(1) that the subject matter of the controversy be one of
common or general interest to many persons, and
(2) that such persons be so numerous as to make it
impracticable to bring them all to the court.
An action does not become a class suit merely because
it is designated as such in the pleadings. Whether the
suit is or is not a class quit depends upon the attending
facts, and the complaint, or other pleading initiating the
class action should allege the existence of the necessary
facts, to wit, the existence of a subject matter of
common interest, and the existence of a class and the
number of persons in the alleged class, in order that the
court might be enabled to determine whether the
members of the class are so numerous as to make it
impracticable to bring them all before the court, to
contrast the number appearing on the record with the
number in the class and to determine whether claimants
on record adequately represent the class and the subject
matter of general or common interest.

ISMAEL MATHAY vs. CONSOLIDATED BANK


G.R. No. 201816 April 8, 2013
FACTS:
Samuel Mathay, et. al were former stockholders of
Consolidated Mines. They filed a CLASS SUIT against CMI
containing six causes of actions. Defendants filed a
motion to dismiss on the ground that plaintiffs had no
legal standing or capacity to institute the alleged class
suit.
The trial court granted the motion to dismiss holding
that the class suit could not be maintained because of
the absence of showing in the complaint that the
plaintiffs were sufficiently numerous and representative.
Plaintiffs contended that the propriety of a class suit
should be determined by the commonality of interest in
the subject matter and that the test in order to
determine the legal standing of a party to institute a
class suit, was not one of number but whether or not the
interest of a party was representative of the persons in
whose behalf the class suit was instituted.

ISSUE:
Whether or not the instant
maintained as a class suit.

action could

be

RULING:
The governing statutory provision for the maintenance of
a class suit is Section 12 of Rule 3 of the Rules of Court,
which reads as follows:
Sec. 12. Class suit When the subject matter of the
controversy is one of common or general interest to
many persons, and the parties are so numerous that it is
impracticable to bring them all before the court, one or
more may sue or defend for the benefit of -ill. But in
such case the court shall make sure that the parties

The complaint in the instant case explicitly declared that


the plaintiffs- appellants instituted the "present class suit
under Section 12, Rule 3, of the Rules of Court in behalf
of CMI subscribing stockholders" but did not state the
number of said CMI subscribing stockholders so that the
trial court could not infer, much less make sure as
explicitly required by the sufficiently numerous and
representative in order that all statutory provision, that
the parties actually before it were interests concerned
might be fully protected, and that it was impracticable to
bring such a large number of parties before the court.
The statute also requires, as a prerequisite to a class
suit, that the subject-matter of the controversy be of
common or general interest to numerous persons.
Although it has been remarked that the "innocent
'common or general interest' requirement is not very
helpful in determining whether or not the suit is proper",
the decided cases in our jurisdiction have more incisively
certified the matter when there is such common or
general interest in the subject matter of the controversy.
By the phrase "subject matter of the action" is meant
"the physical facts, the things real or personal, the
money, lands, chattels, and the like, in relation to which
the suit is prosecuted, and not the delict or wrong
committed by the defendant."
The interest that appellants, plaintiffs and intervenors,
and the CMI stockholders had in the subject matter of
this suit the portion of stocks offering of the Bank left
unsubscribed by CMI stockholders who failed to exercise
their right to subscribe on or before January 15, 1963
was several, not common or general in the sense
required by the statute. Each one of the appellants and
the CMI stockholders had determinable interest; each
one had a right, if any, only to his respective portion of
the stocks. No one of them had any right to, or any
interest in, the stock to which another was entitled.
The wrong suffered by each of them would constitute a
wrong separate from those suffered by the other
stockholders, and those wrongs alone would not create
that common or general interest in the subject matter of
the controversy as would entitle any one of them to
bring a class suit on behalf of the others.

Separate wrongs to separate persons, although


committed by similar means and even pursuant to a
single plan, do not alone create a 'common' or 'general'
interest in those who are wronged so as to entitle them
to maintain a representative action.
It may be granted that the claims of all the appellants
involved the same question of law. But this alone, as said
above, did not constitute the common interest over the
subject matter indispensable in a class suit. The right to
purchase or subscribe to the shares of the proposed
Bank, claimed by appellants herein, is analogous to the
right of preemption that stockholders have when their
corporation increases its capital. The right to
preemption, it has been said, is personal to each
stockholder, 16 and while a stockholder may maintain a
suit to compel the issuance of his proportionate share of
stock, it has been ruled, nevertheless, that he may not
maintain a representative action on behalf of other
stockholders who are similarly situated. By analogy, the
right of each of the appellants to subscribe to the waived
stocks was personal, and no one of them could maintain
on behalf of others similarly situated a representative
suit.
By analogy, the right of each of the appellants to
subscribe to the waived stocks was personal, and no one
of them could maintain on behalf of others similarly
situated a representative suit.
Appellants, furthermore, insisted that insufficiency of
number in a class suit was not a ground for dismissal of
one action. This Court has, however, said that where it
appeared that no sufficient representative parties had
been joined, the dismissal by the trial court of the action,
despite the contention by plaintiffs that it was a class
suit, was correct. Moreover, insofar as the instant case is
concerned, even if it be granted for the sake of
argument, that the suit could not be dismissed on that
ground, it could have been dismissed, nevertheless, on
the ground of lack of cause of action which will be
presently discussed.

LLANA'S SUPERMARKET vs. NLRC


FACTS:
Llana employed several people who were members of
National Labor Union.
The employees alleged that they were underpaid,
required to work more than 8 hours a day without
overtime pay, deprived of legal holiday pay and monthly
emergency allowance.
The Union in behalf of its members filed a complaint
against the officials of Llana's Supermarket before the
Labor Arbiter. The Union manifested through its
authorized representative that it was intended as a
CLASS suit.
Labor Arbiter ruled in favor of the employees which was
affirmed by NLRC.
Petitioner alleged that the cases do not fall under the
term "class suit" as defined in Section 12, Rule 3, of the
Rules of Court because the parties are not so numerous
that it would be impracticable to bring them all before
the court.

ISSUE:
Whether or not the suit is a class suit or a
representative suit.

RULING:
The case filed by the Union is a representative suit.
To make a case for a class suit, there must only be one
right or cause of action pertaining or belonging in
common to many persons, not separately or severally to
distinct individuals. The object of the suit is to obtain
relief for or against numerous persons as a group or as
an integral entity, and not as separate, distinct
individuals whose rights or liabilities are separate from
and independent of those affecting the others.
In a REPRESENTATIVE SUIT, there are different causes of
action pertaining to different persons.
In the present case, there are multiple rights or causes
of action pertaining separately to several, distinct
employees who are members of respondent Union.
Therefore, the applicable rule is that provided in Rule 3
on Representative Parties.
Nonetheless, as provided for in the Labor Code, a LLO
has the right to sue and be sued in its registered name.
This authorizes a union to file a representative suit for
the benefit of its members in the interest of avoiding an
otherwise cumbersome procedure of joining all union
members in the complaint, even if they are numbered by
the hundreds.
There is a class suit when the subject matter of
controversy is one of common or general interest to
many people and parties are so numerous that it is
impossible to bring them all in court.
A representative party is when a trustee of an express
trust, a guardian, executor, or administrator, or a party
authorized by Statute, may sue or be sued without
joining the party for whose benefits the action is
presented or defended.
A class suit is akin to a representative suit in the sense
that one or more may sue or be sued without joining the
party for whose benefit the action is presented or
defended.

It is a doctrine well-established and obtains both at law


and in equity that a corporation is a distinct legal entity
to be considered as separate and apart from the
individual stockholders or members who compose it, and
is not affected by the personal rights, obligations and
transactions of its stockholders or members. The
property of the corporation is its property and not that of
the stockholders, as owners, although they have equities
in it. Properties registered in the name of the corporation
are owned by it as an entity separate and distinct from
its members. Conversely, a corporation ordinarily has no
interest in the individual property of its stockholders
unless transferred to the corporation, "even in the case
of a one-man corporation.
It has not been claimed that the members have assigned
or transferred whatever rights they may have on the
land in question to the plaintiff corporation. Absent any
showing of interest, therefore, a corporation, like
plaintiff-appellant herein, has no personality to bring an
action for and in behalf of its stockholders or members
for the purpose of recovering property which belongs to
said stockholders or members in their personal
capacities.
It is fundamental that there cannot be a cause of action
'without an antecedent primary legal right conferred' by
law upon a person. Evidently, there can be no wrong
without a corresponding right, and no breach of duty by
one person without a corresponding right belonging to
some other person.
Thus, the essential elements of a cause of action are
legal right of the plaintiff, correlative obligation of the
defendant, an act or omission of the defendant in
violation of the aforesaid legal right. Clearly, no right of
action exists in favor of plaintiff corporation, for as
shown heretofore it does not have any interest in the
subject matter of the case which is material and, direct
so as to entitle it to file the suit as a real party in
interest.

SULO NG BAYAN vs. ARANETA, INC.


G.R. No. L-31061 August 17, 1976
FACTS:
Sulo ng Bayan, a non stock corporation, filed an action
against Gregorio Araneta Inc. to recover ownership and
possession of a large tract of land in Bulacan.
Araneta filed a motion to dismiss alleging that the
complaint states no cause of action.
The trial court dismissed the complaint holding that the
plaintiff lacked personality to file the instant action it
appearing clearly that the action has not been filed by
the real parties in interest, the members of the
corporation, hence, should be dismissed on the ground
of lack of cause of action.

ISSUE:
Whether or not plaintiff corporation may institute
an action in behalf of its individual members for
the recovery of certain parcels of land allegedly
owned by said members.

RULING:

In order that a class suit may prosper, the following


requisites must be present: (1) that the subject matter of
the controversy is one of common or general interest to
many persons; and (2) that the parties are so numerous
that it is impracticable to bring them all before the court.
Under the first requisite, the person who sues must have
an interest in the controversy, common with those for
whom he sues, and there must be that unity of interest
between him and all such other persons which would
entitle them to maintain the action if suit was brought by
them jointly.
Here, there is only one party plaintiff, and the plaintiff
corporation does not even have an interest in the
subject matter of the controversy, and cannot, therefore,
represent its members or stockholders who claim to own
in their individual capacities ownership of the said
property. Moreover, as correctly stated by the appellees,
a class suit does not lie in actions for the recovery of
property where several persons claim Partnership of
their respective portions of the property, as each one
could alleged and prove his respective right in a different
way for each portion of the land, so that they cannot all
be held to have Identical title through acquisition
prescription.
Having shown that no cause of action in favor of the
plaintiff exists and that the action in the lower court
cannot be considered as a class suit, it would be
unnecessary and an Idle exercise for this Court to

resolve the remaining issue of whether or not the


plaintiffs action for reconveyance of real property based
upon constructive or implied trust had already
prescribed.

They alleged that they have a clear and constitutional


right to a balanced and healthful ecology and are
entitled to protection by the State in its capacity as
parens patriae. Furthermore, they claim that the act of
the defendant in allowing TLA holders to cut and
deforest
the
remaining
forests
constitutes
a
misappropriation and/or impairment of the natural
resources property he holds in trust for the benefit of the
plaintiff minors and succeeding generations.
The defendant filed a motion to dismiss the complaint on
the ground that the plaintiffs have no cause of action
against him.

ISSUE:
Do the petitioner-minors have a cause of action in
filing
a
class
suit
to
prevent
the
misappropriation or impairment of Philippine
rainforests?

RULING:
Petitioners instituted Civil Case No. 90-777 as a class
suit. The original defendant and the present respondents
did not take issue with this matter.
Nevertheless, We hereby rule that the said civil case is
indeed a class suit. The subject matter of the complaint
is of common and general interest not just to several,
but to all citizens of the Philippines. Consequently, since
the parties are so numerous, it becomes impracticable, if
not totally impossible, to bring all of them before the
court. We likewise declare that the plaintiffs therein are
numerous and representative enough to ensure the full
protection of all concerned interests. Hence, all the
requisites for the filing of a valid class suit under Section
12, Rule 3 of the Revised Rules of Court are present both
in the said civil case and in the instant petition, the latter
being
but
an
incident
to
the
former.

OPOSA, et. al. vs. FACTORAN


G.R. No. 101083 July 30, 1993
FACTS:
A class suit was filed by minors Juan Antonio Oposa, et
al., representing their generation and generations yet
unborn, and represented by their parents against
Fulgencio Factoran Jr., Secretary of DENR. They prayed
that judgment be rendered ordering the defendant, his
agents, representatives and other persons acting in his
behalf to:
1. Cancel all existing Timber Licensing
Agreements (TLA) in the country;
2.Cease and desist from receiving, accepting,
processing, renewing, or appraising new TLAs;
and granting the plaintiffs such other reliefs just and
equitable under the premises.

This case, however, has a special and novel element.


Petitioners minors assert that they represent their
generation as well as generations yet unborn. We find no
difficulty in ruling that they can, for themselves, for
others of their generation and for the succeeding
generations, file a class suit. Their personality to sue in
behalf of the succeeding generations can only be based
on the concept of intergenerational responsibility
insofar as the right to a balanced and healthful ecology
is concerned. Such a right, as hereinafter expounded,
considers the "rhythm and harmony of nature." Nature
means the created world in its entirety. 9 Such rhythm
and harmony indispensably include, inter alia, the
judicious disposition, utilization, management, renewal
and conservation of the countrys forest, mineral, land,
waters, fisheries, wildlife, off-shore areas and other
natural resources to the end that their exploration,
development and utilization be equitably accessible to
the present as well as future generations. 10 Needless to
say, every generation has a responsibility to the next to
preserve that rhythm and harmony for the full
enjoyment of a balanced and healthful ecology. Put a
little differently, the minors assertion of their right to a
sound environment constitutes, at the same time, the
performance of their obligation to ensure the protection
of that right for the generations to come.
The locus standi of the petitioners having thus been
addressed, We shall now proceed to the merits of the
petition.

A writ of execution was issued in favor of herein


petitioners. However, upon motion by the respondent, it
was declared null and void.
Petitioners contend that respondent judge erred in ruling
that Rpersonal in character and therefore cannot, upon
Olimpio's death, be inherited by his heirs.
Private respondent argued that the non-substitution of
Olimpio Bonifacio by his heirs rendered the proceedings
taken after his death null and void.

ISSUE:
Whether or not, the favorable judgment obtained
by the
Decedent is inherited by the compulsory heirs,
thereby vesting to the latter, all the rights
conferred by the judgment to the Decedent.

RULING:
The general rule is that an ejectment case survives the
death of a party.
Whether used in reference to the agricultural lessor or
lessee, the term "personal cultivation" cannot be given a
restricted connotation to mean a right personal and
exclusive to either lessor or lessee. In either case, the
right extends to the members of the lessor's or lessee's
immediate family members.
Petitioners are not only the heirs and successors-ininterest, but the immediate family members of the
deceased landowner-lessor as well. The right to cultivate
the landholding asserted in the ejectment case not being
a purely personal right of the deceased landownerlessor, the same was transmitted to petitioners as heirs
and successors-in-interest. Petitioners are entitled to the
enforcement of the judgment in the case.
Rules of procedure make it the duty of the attorney to
inform the court promptly of his client's death,
incapacity or incompetency during the pendency of the
action and to give the name and residence of his
executor, administrator, guardian or other legal
representative. In case of a party's death, the court, if
the action survives, shall then order upon proper notice
the legal representatives of the deceased to appear and
to be substituted for the deceased within a period of 30
days or within such time as may be granted.

ROSALINA BONIFACIO vs. HON. NATIVIDAD


DIZON
G.R. No. 79416 September 5, 1989
FACTS:
Olimpio Bonifacio filed an ejectment case against
respondent Pastora San Miguel. After trial on the merits,
judgment was rendered granting Bonifacio to eject San
Miguel from the landholding.
This prompted San Miguel to file this petition. During the
pendency, Bonifacio died. As no notice of his death was
given to the Court, no order for substitution of his heirs
was made.

In the case at bar, Olimpio Bonifacio's death during the


pendency of private respondent's petition was not
communicated to the Court. As ruled by this Court in the
case of Florendo, Jr. vs. Coloma, supra, involving
substantially the same facts and issue:
. . . The petitioners challenge the proceeding in
the Court of Appeals after the death of the
plaintiff-appellant Adela Salindon. They are of
the opinion that since there was no legal
representative substituted for Salindon after
her death, the appellate court lost its
jurisdiction over the case and consequently,
the proceedings in the said court are null and
void. This argument is without merit.
There is no dispute that an ejectment case
survives the death of a party.
The
supervening death of plaintiff-appellant
Salindon did not extinguish her civil
personality.

In the case at bar, Salindon's counsel after her death on


December 11, 1976 failed to inform the court of
Salindon's death. The appellate court could not be
expected to know or take judicial notice of the death of
Salindon without the proper manifestation from
Salindon's counsel.
In such a case and considering that the
supervening death of appellant did not extinguish
her civil personality, the appellate court was well
within its jurisdiction to proceed as it did with the
case. There is no showing that the appellate
court's proceedings in the case were tainted with
irregularities.
Private respondent's challenge against the proceedings
held after Olimpio Bonifacio's death cannot therefore be
heeded.
*Ejectment case survives the death of a party. Hence,
court did not lose its jurisdiction after death because
death did not extinguish civil personality.

The RTC ruled in favor of respondent ordering herein


petitioners to reconvey the property upon his payment.
Petitioners assert that the RTCs Decision was invalid for
lack of jurisdiction claiming that respondent died during
the pendency of the case and there being no
substitution by the heirs, the trial court allegedly lacked
jurisdiction over the litigation.

ISSUE:
WON the trial court lost jurisdiction over the case
upon the death of Pedro Joaquin.

RULING:
When a party to a pending action dies and the claim is
not extinguished, the Rules of Court require a
substitution of the deceased. The procedure is
specifically governed by Section 16 of Rule 3, which
reads thus:
Section 16. Death of a party; duty of
counsel. Whenever a party to a pending
action dies, and the claim is not thereby
extinguished, it shall be the duty of his
counsel to inform the court within thirty (30)
days after such death of the fact thereof,
and to give the name and address of his
legal representative or representatives.
Failure of counsel to comply with this duty
shall be a ground for disciplinary action.
The heirs of the deceased may be allowed to
be substituted for the deceased, without
requiring the appointment of an executor or
administrator and the court may appoint a
guardian ad litem for the minor heirs.
The court shall forthwith order said legal
representative or representatives to appear
and be substituted within a period of thirty
(30) days from notice.
"If no legal representative is named by the
counsel for the deceased party, or if the one
so named shall fail to appear within the
specified period, the court may order the
opposing party, within a specified time, to
procure the appointment of an executor or
administrator for the estate of the deceased,
and the latter shall immediately appear for
and on behalf of the deceased. The court
charges in procuring such appointment, if
defrayed by the opposing party, may be
recovered as costs."

SPS. DELA CRUZ vs. PEDRO JOAQUIN


G.R. No. 162788 July 28, 2005
FACTS:
The case originated from a Complaint for the recovery of
possession and ownership, the cancellation of title, and
damages, filed by Pedro Joaquin against petitioners in
the RTC.

The rule on the substitution of parties was crafted to


protect every partys right to due process. The estate of
the deceased party will continue to be properly
represented in the suit through the duly appointed legal
representative. Moreover, no adjudication can be made
against the successor of the deceased if the
fundamental right to a day in court is denied.
The Court has nullified not only trial proceedings
conducted without the appearance of the legal
representatives of the deceased, but also the resulting
judgments. In those instances, the courts acquired no
jurisdiction over the persons of the legal representatives
or the heirs upon whom no judgment was binding.

This general rule notwithstanding, a formal substitution


by heirs is not necessary when they themselves
voluntarily appear, participate in the case, and present
evidence in defense of the deceased. These actions
negate any claim that the right to due process was
violated.
The Court is not unaware of Chittick v. Court of Appeals,
in which the failure of the heirs to substitute for the
original plaintiff upon her death led to the nullification of
the trial courts Decision. The latter had sought to
recover support in arrears and her share in the conjugal
partnership. The children who allegedly substituted for
her refused to continue the case against their father and
vehemently objected to their inclusion as parties.
Moreover, because he died during the pendency of the
case, they were bound to substitute for the defendant
also. The substitution effectively merged the persons of
the plaintiff and the defendant and thus extinguished the
obligation being sued upon.
Clearly, the present case is not similar, much less
identical, to the factual milieu of Chittick.
Strictly speaking, the rule on the substitution by heirs is
not a matter of jurisdiction, but a requirement of due
process. Thus, when due process is not violated, as when
the right of the representative or heir is recognized and
protected, noncompliance or belated formal compliance
with the Rules cannot affect the validity of a
promulgated decision. Mere failure to substitute for a
deceased plaintiff is not a sufficient ground to nullify a
trial courts decision. The alleging party must prove that
there was an undeniable violation of due process.
Substitution in the Instant Case
The records of the present case contain a "Motion for
Substitution of Party Plaintiff" dated February 15, 2002,
filed before the CA. The prayer states as follows:
"WHEREFORE, it is respectfully prayed that the Heirs of
the deceased plaintiff-appellee as represented by his
daughter Lourdes dela Cruz be substituted as partyplaintiff for the said Pedro Joaquin.
"It is further prayed that henceforth the undersigned
counsel for the heirs of Pedro Joaquin be furnished with
copies of notices, orders, resolutions and other pleadings
at its address below."
Evidently, the heirs of Pedro Joaquin voluntary appeared
and participated in the case. We stress that the
appellate court had ordered his legal representatives to
appear and substitute for him. The substitution even on
appeal had been ordered correctly. In all proceedings,
the legal representatives must appear to protect the
interests of the deceased. After the rendition of
judgment, further proceedings may be held, such as a
motion for reconsideration or a new trial, an appeal, or
an execution.
Considering the foregoing circumstances, the Motion for
Substitution may be deemed to have been granted; and
the heirs, to have substituted for the deceased, Pedro
Joaquin.
There being no violation of due process, the issue of
substitution cannot be upheld as a ground to nullify the
trial courts Decision.

CAPITOLINO NAPERE vs. AMANDO BARBARONA


G.R. No. 160426 January 31, 2008
FACTS:
Jose Barabarona co-owns a property in Leyte. Juan
Napere who owns the adjoining lot planted coconut trees
not only on his lot but also on the lot of Barbarona.
Barbarona filed a case for quieting of title and recovery
of possession of property against Napere. While the case
was pending, Juan Napere died.
His counsel informed the court of such fact. He also gave
the names of the heirs of Napere. However, the Court
failed to furnish order of substitution.
On the merits, the RTC ruled in favor of Barbarona.
Petitioner alleges that the trial court did not acquire
jurisdiction over the persons of the heirs because of its
failure to order their substitution pursuant to Section 17,
Rule 3 of the Rule of Court; hence, the proceedings
conducted and the decision rendered by the trial court
are null and void.

ISSUE:
Whether or not mere failure to substitute a
deceased party is sufficient to nullify the RTC
decision.

RULING:
When a party to a pending case dies and the claim is not
extinguished by such death, the Rules require the
substitution of the deceased party by his legal
representative or heirs. In such case, counsel is obliged
to inform the court of the death of his client and give the
name and address of the latters legal representative.
The complaint for recovery of possession, quieting of
title and damages is an action that survives the death of
the defendant. Notably, the counsel of Juan Napere
complied with his duty to inform the court of his clients
death and the names and addresses of the heirs. The
trial court, however, failed to order the substitution of
the heirs. Nonetheless, despite this oversight, we hold
that the proceedings conducted and the judgment
rendered by the trial court are valid.
The Court has repeatedly declared that failure of the
counsel to comply with his duty to inform the court of
the death of his client, such that no substitution is
effected, will not invalidate the proceedings and the
judgment rendered thereon if the action survives the
death of such party. The trial courts jurisdiction over the
case subsists despite the death of the party.
Mere failure to substitute a deceased party is not
sufficient ground to nullify a trial courts decision. The
party alleging nullity must prove that there was an
undeniable violation of due process.
Strictly speaking, the rule on substitution by heirs is not
a matter of jurisdiction, but a requirement of due
process. The rule on substitution was crafted to protect
every partys right to due process. It was designed to
ensure that the deceased party would continue to be
properly represented in the suit through his heirs or the
duly appointed legal representative of his estate.
Moreover, non-compliance with the Rules results in the
denial of the right to due process for the heirs who,
though not duly notified of the proceedings, would be

substantially affected by the decision rendered therein.


Thus, it is only when there is a denial of due process, as
when the deceased is not represented by any legal
representative or heir, that the court nullifies the trial
proceedings and the resulting judgment therein.
Formal substitution by heirs is not necessary when they
themselves voluntarily appear, participate in the case,
and present evidence in defense of the deceased. In
such case, there is really no violation of the right to due
process. The essence of due process is the reasonable
opportunity to be heard and to submit any evidence
available in support of ones defense.
When due process is not violated, as when the right of
the representative or heir is recognized and protected,
noncompliance or belated formal compliance with the
Rules cannot affect the validity of a promulgated
decision.
In light of these pronouncements, we cannot nullify the
proceedings before the trial court and the judgment
rendered therein because the petitioner, who was, in
fact, a co-defendant of the deceased, actively
participated in the case. The records show that the
counsel of Juan Napere and petitioner continued to
represent them even after Juans death. Hence, through
counsel, petitioner was able to adequately defend
herself and the deceased in the proceedings below. Due
process simply demands an opportunity to be heard and
this opportunity was not denied petitioner.
Finally, the alleged denial of due process as would nullify
the proceedings and the judgment thereon can be
invoked only by the heirs whose rights have been
violated. Violation of due process is a personal defense
that can only be asserted by the persons whose rights
have been allegedly violated. Petitioner, who had every
opportunity and who took advantage of such
opportunity, through counsel, to participate in the trial
court proceedings, cannot claim denial of due process.

SPS. CARANDANG vs. HEIRS OF DE GUZMAN


G.R. No. 160347 November 29, 2006
FACTS:
Sps. Carandang and deceased De Guzman were
stockholders and corporate officers of Mabuhay
Broadcasting System.
The Spouses borrowed money from De Guzman. When
the latter demanded payment, the spouses refused to
pay alleging that Arcadio Carandang and De Guzman
executed pre-incorporation agreement.
Thereafter, De Guzman filed an action for RECOVERY OF
SUM OF MONEY.
The spouses contended that Milagros De Guzman, the
wife of the deceased, should have been impleaded as an
indispensable parties since three of the four checks used
to pay for the stock subscriptions (loan) were issued in
her name. Being such, the spouses Carandang claim that
the failure to join Mrs. De Guzman as a party-plaintiff
should cause dismissal of the action because if the suit
is not brought in the name of or against the real party in
interest, a motion to dismiss may be filed on the ground
that the complaint states no cause of action.

ISSUE:
RULING:
In the present case, there had been no court order for
the legal representative of the deceased to appear, nor
had any such legal representative appeared in court to
be substituted for the deceased; neither had the
complainant ever procured the appointment of such
legal representative of the deceased, including
appellant, ever asked to be substituted for the deceased.
As a result, no valid substitution was effected,
consequently, the court never acquired jurisdiction over
appellant for the purpose of making her a party to the
case and making the decision binding upon her, either
personally or as a representative of the estate of her
deceased mother.
However, unlike jurisdiction over the subject matter
which is conferred by law and is not subject to the
discretion of the parties, jurisdiction over the person of
the parties to the case may be waived either expressly
or impliedly. Implied waiver comes in the form of either
voluntary appearance or a failure to object.
In the cases cited by the spouses Carandang, we held
that there had been no valid substitution by the heirs of
the deceased party, and therefore the judgment cannot
be made binding upon them. In the case at bar, not only
do the heirs of de Guzman interpose no objection to the
jurisdiction of the court over their persons; they are
actually claiming and embracing such jurisdiction. In
doing so, their waiver is not even merely implied (by
their participation in the appeal of said Decision), but
express (by their explicit espousal of such view in both
the Court of Appeals and in this Court). The heirs of de
Guzman had no objection to being bound by the
Decision of the RTC.

Thus, lack of jurisdiction over the person, being subject


to waiver, is a personal defense which can only be
asserted by the party who can thereby waive it by
silence.
It also pays to look into the spirit behind the general rule
requiring a formal substitution of heirs. The underlying
principle therefor is not really because substitution of
heirs is a jurisdictional requirement, but because noncompliance therewith results in the undeniable violation
of the right to due process of those who, though not duly
notified of the proceedings, are substantially affected by
the decision rendered therein. Such violation of due
process can only be asserted by the persons whose
rights are claimed to have been violated, namely the
heirs to whom the adverse judgment is sought to be
enforced.
Care should, however, be taken in applying the foregoing
conclusions. In People v. Florendo, where we likewise
held that the proceedings that took place after the death
of the party are void, we gave another reason for such
nullity: "the attorneys for the offended party ceased to
be the attorneys for the deceased upon the death of the
latter, the principal x x x." Nevertheless, the case at bar
had already been submitted for decision before the RTC
on 4 June 1998, several months before the passing away
of de Guzman on 19 February 1999. Hence, no further
proceedings requiring the appearance of de Guzmans
counsel were conducted before the promulgation of the
RTC Decision. Consequently, de Guzmans counsel
cannot be said to have no authority to appear in trial, as
trial had already ceased upon the death of de Guzman.
In sum, the RTC Decision is valid despite the failure to
comply with Section 16, Rule 3 of the Rules of Court,
because of the express waiver of the heirs to the
jurisdiction over their persons, and because there had
been, before the promulgation of the RTC Decision, no
further proceedings requiring the appearance of de
Guzmans counsel.

PURITA ALIPIO vs. RAMON JARING


G.R. No. 134100 September 29, 2000
FACTS:
Romeo Jaring subleased a fishpond to spouses Alipio and
spouses Bienvenido and Remedios Manuel for P485,600
payable in two installments. The first installment was
paid, but the second was only partly paid. Despite due
demand, the balance remain unpaid. Jaring filed a case
to collect the balance from the spouses Alipio and
spouses Manuel with a prayer for the alternative of
rescission.
Purita Alipio moved to dismiss the case because her
husband died and thus, dissolving their conjugal
partnership. Alipio contended that the proper action for
Jaring is to file a claim in the settlement of the estate.
The trial court denied Alipio's motion on the ground that
since she was herself a party to the sublease contract,
she could be independently impleaded in the suit
together with spouses Manuel and that the death of her
husband merely resulted in his exclusion from the case.
On appeal, the court applied the ruling on Climaco vs.
Siy Uy finding the surviving spouse solidary liable.

ISSUE:
Is the surviving spouse a solidary debtor for a
lease she and her late husband entered into?

RULING:
The petition is meritorious. We hold that a creditor
cannot sue the surviving spouse of a decedent in an
ordinary proceeding for the collection of a sum of money
chargeable against the conjugal partnership and that the
proper remedy is for him to file a claim in the settlement
of estate of the decedent.
When petitioner's husband died, their conjugal
partnership was automatically dissolved and debts
chargeable against it are to be paid in the settlement of
estate proceedings in accordance with Rule 73, Section 2
which states:
Where estate settled upon dissolution of marriage. When
the marriage is dissolved by the death of the husband or
wife, the community property shall be inventoried,
administered, and liquidated, and the debts thereof paid,
in the testate or intestate proceedings of the deceased
spouse. If both spouses have died, the conjugal
partnership shall be liquidated in the testate or intestate
proceedings of either.
As held in Calma v. Taedo, after the death of either of
the spouses, no complaint for the collection of
indebtedness
chargeable
against
the
conjugal
partnership can be brought against the surviving spouse.
Instead, the claim must be made in the proceedings for

the liquidation and settlement of the conjugal property.


The reason for this is that upon the death of one spouse,
the powers of administration of the surviving spouse
ceases and is passed to the administrator appointed by
the court having jurisdiction over the settlement of
estate proceedings. Indeed, the surviving spouse is not
even a de facto administrator such that conveyances
made by him of any property belonging to the
partnership prior to the liquidation of the mass of
conjugal partnership property is void.
It must be noted that for marriages governed by the
rules of conjugal partnership of gains, an obligation
entered into by the husband and wife is chargeable
against their conjugal partnership and it is the
partnership which is primarily bound for its repayment.
Thus, when the spouses are sued for the enforcement of
an obligation entered into by them, they are being
impleaded in their capacity as representatives of the
conjugal partnership and not as independent debtors
such that the concept of joint or solidary liability, as
between them, does not apply. But even assuming the
contrary to be true, the nature of the obligation involved
in this case, as will be discussed later, is not solidary but
rather merely joint, making Imperial still inapplicable to
this case.
From the foregoing, it is clear that private respondent
cannot maintain the present suit against petitioner.
Rather, his remedy is to file a claim against the Alipios in
the proceeding for the settlement of the estate of
petitioner's husband or, if none has been commenced,
he can file a petition either for the issuance of letters of
administration or for the allowance of will, depending on
whether petitioner's husband died intestate or testate.
Private respondent cannot short-circuit this procedure by
lumping his claim against the Alipios with those against
the Manuels considering that, aside from petitioner's
lack of authority to represent their conjugal estate, the
inventory of the Alipios' conjugal property is necessary
before any claim chargeable against it can be paid.
Needless to say, such power exclusively pertains to the
court having jurisdiction over the settlement of the
decedent's estate and not to any other court.

HEIRS OF MEDRANO vs. ESTANISLAO DE VERA


G.R. No. 165770 August 9, 2010
FACTS:
This case concerns a parcel of land owned by Flaviana.
Upon her death, her intestate heirs half-sisters Hilaria
and Elena waived all their rights to Flavianas land in
favor of Francisca Medrano.
When Hilaria and Elena died, some of their heirs affirmed
transfer of property while others did not. This prompted
Medrano to file a case against such heirs.
Respondent Estanislao De Vera filed an Answer with
Counterclaim alleging that some of the defendants
transferred their interest over the properties to him.
Thereafter, he made a voluntary appearance in the case
as the transferee of the defendant's rights to the subject
property.
Medrano presented evidence ex parte. The case was
decided in her favor.
De Vera filed a motion for reconsideration arguing that
he was an indispensable party who was not given an
opportunity to present his evidence.

RULING:
We sustain the CAs ruling that the trial court gravely
abused its discretion in refusing to allow De Vera to
participate in the case and requiring him to file a
motion to intervene.
The trial court misjudged De Veras interest in Civil
Case No. U-7316. It held that De Veras right to
participate in the case was independent of the
named defendants. Because of its ruling that De Vera
had an "independent interest," the trial court
considered his interest as separate from Medranos
claims against the named defendants, and allowed
the latter to be tried separately. Thus, it admitted De
Veras Answer with Counterclaim but declared the
named defendants in default and allowed the ex
parte presentation of evidence by Medrano against
the named defendants.
The trial courts approach is seriously flawed because
De Veras interest is not independent of or severable
from the interest of the named defendants. De Vera
is a transferee pendente lite of the named
defendants (by virtue of the Deed of Renunciation of
Rights that was executed in his favor during the
pendency of Civil Case No. U-7316). His rights were
derived from the named defendants and, as

transferee pendente lite, he would be bound by any


judgment against his transferors under the rules of
res judicata. Thus, De Veras interest cannot be
considered and tried separately from the interest of
the named defendants.
It was therefore wrong for the trial court to have tried
Medranos case against the named defendants (by
allowing Medrano to present evidence ex parte
against them) after it had already admitted De Veras
answer. What the trial court should have done is to
treat De Vera (as transferee pendente lite) as having
been joined as a party-defendant, and to try the case
on the basis of the answer De Vera had filed and with
De Veras participation. As transferee pendente lite,
De Vera may be allowed to join the original
defendants under Rule 3, Section 19:
SEC. 19. Transfer of interest. In case of any transfer
of interest, the action may be continued by or
against the original party, unless the court upon
motion directs the person to whom the interest is
transferred to be substituted in the action or joined
with the original party. (Emphasis supplied)
The above provision gives the trial court discretion to
allow or disallow the substitution or joinder by the
transferee. Discretion is permitted because, in
general, the transferees interest is deemed by law
as adequately represented and protected by the
participation of his transferors in the case.
There may be no need for the transferee pendente
lite to be substituted or joined in the case because, in
legal contemplation, he is not really denied
protection as his interest is one and the same as his
transferors, who are already parties to the case.
While the rule allows for discretion, the paramount
consideration for the exercise thereof should be the
protection of the parties interests and their rights to
due process. In the instant case, the circumstances
demanded that the trial court exercise its discretion
in favor of allowing De Vera to join in the action and
participate in the trial. It will be remembered that the
trial court had already admitted De Veras answer
when it declared the original defendants in default.
As there was a transferee pendente lite whose
answer had already been admitted, the trial court
should have tried the case on the basis of that
answer, based on
Rule 9, Section 3(c):
Effect of partial default. When a pleading asserting
a claim states a common cause of action against
several defending parties, some of whom answer and
the others fail to do so, the court shall try the case
against all upon the answers thus filed and render
judgment upon the evidence presented.
Thus, the default of the original defendants should
not result in the ex parte presentation of evidence
because De Vera (a transferee pendente lite who
may thus be joined as defendant under Rule 3,
Section 19) filed an answer. The trial court should
have tried the case based on De Veras answer,
which answer is deemed to have been adopted by
the non-answering defendants.

To proceed with the ex parte presentation of


evidence against the named defendants after De
Veras answer had been admitted would not only be
a violation of Rule 9, Section 3(c), but would also be
a gross disregard of De Veras right to due process.
This is because the ex parte presentation of evidence
would result in a default judgment which would bind
not just the defaulting defendants, but also De Vera,
precisely because he is a transferee pendente lite.
This would result in an anomaly wherein De Vera
would be bound by a default judgment even if he had
filed an answer and expressed a desire to participate
in the case.
We note that under Rule 3, Section 19, the
substitution or joinder of the transferee is "upon
motion", and De Vera did not file any motion for
substitution or joinder. However, this technical flaw
may be disregarded for the fact remains that the
court had already admitted his answer and such
answer was on record when the ex parte
presentation of evidence was allowed by the court.
Because De Veras answer had already been
admitted, the court should not have allowed the ex
parte presentation of evidence.
We are not persuaded by petitioners insistence that
De Vera could not have participated in the case
because he did not file a motion to intervene. The
purpose of intervention is to enable a stranger to an
action to become a party in order for him to protect
his interest and for the court to settle all conflicting
claims. Intervention is allowed to avoid multiplicity of
suits more than on due process considerations. The
intervenor can choose not to participate in the case
and he will not be bound by the judgment.
In this case, De Vera is not a stranger to the action
but a transferee pendente lite. As mentioned, a
transferee pendente lite is deemed joined in the
pending action from the moment when the transfer
of interest is perfected. His participation in the case
should have been allowed by due process
considerations.
We likewise adopt with approval the appellate courts
observation that De Veras failure to file a pleadingin-intervention will not change the long foregone
violation of his right to due process. The ex parte
presentation of evidence had already been
terminated when the trial court required De Vera to
file his pleading-in-intervention. Even if he complied
with the order to file a pleading-in-intervention, the
damage had already been done. The precipitate
course of action taken by the trial court rendered
compliance with its order moot.
Given the Courts finding that the ex parte
presentation of evidence constituted a violation of
due process rights, the trial courts judgment by
default cannot bind De Vera. A void judgment cannot
attain finality and its execution has no basis in law.
The case should be remanded to the trial court for
trial based on De Veras answer and with his
participation.