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, It appears that Cruz had purchased goods from UHIs affiliated companies
-versus- First Paragon Corporation (FPC) and Uniwide Sales Warehouse Club, Inc.

G.R. No. 171456 In 2002, FPC and USWCI executed Deeds of Assignment in favor of UHI
assigning all their rights and interests over Cruz’s accounts payable to them.
August 9, 2007

SUMMARY: Petitioner filed a complaint for collection of sum of money As of August 13, 2002, Cruz had outstanding obligations with UHI, FPC, and
after respondent failed to pay his obligations. The complaint states four
causes of action, one of which has an exclusive venue stipulation. RTC USWCI in the total amount of P1,358,531.89, drawing UHI to send him a
dismissed the complaint due to the said stipulation. letter of even date for the settlement thereof in five days. His receipt of the
letter notwithstanding, Cruz’s accounts remained unsettled.
DOCTRINE: Where there is a joinder of causes of action between the same
parties one of which does not arise out of the contract where the exclusive
venue was stipulated upon, the complaint may be brought before other venues Thus UHI filed a complaint for collection of sum of money before the
provided that such other cause of action falls within the jurisdiction of the court Regional Trial Court (RTC) of Paraaque against Cruz on the following causes
and the venue lies therein. of action:
Petitioner, Uniwide Holdings, Inc. (UHI) entered into a Franchise
Agreement (the agreement) granting respondent, Alexander M. Cruz 10. Being entitled to the payment of monthly service fee
(Cruz), a five-year franchise to adopt and use the Uniwide Family Store pursuant to the FA, which defendant failed to pay despite
System for the establishment and operation of a Uniwide Family Store along demand, plaintiff suffered actual damages in the amount of
Marcos Highway in Marikina City. Phil. Peso: One Million Three Hundred Twenty Seven
Thousand Six Hundred Sixty Nine & 83/100 (P1,327,669.83),
computed as of 05 April 2004, for which defendant should be
Article 10.2 of the agreement called for Cruz as franchisee to pay UHI a held liable together with legal interest thereon from the date
monthly service fee of P50,000 or three percent of gross monthly purchases, of filing of this Complaint, until fully paid.

whichever is higher, payable within five days after the end of each month
without need of formal billing or demand from UHI. In case of any delay in
the payment of the monthly service fee, Cruz would, under Article 10.3 of the
agreement, be liable to pay an interest charge of three percent per month. 11. Being the assignee of the receivable of FPC, which
receivable defendant failed to pay despite demand,
plaintiff suffered actual damages in the amount of Phil.
Peso: Sixty Four Thousand One Hundred Sixty Five & 96/100
(P64,165.96) for which defendant should be held liable ISSUE: Whether a case based on several causes of action is dismissible
together with the legal interest thereon computed from date of on the ground of improper venue where only one of the causes of action
receipt of plaintiffs demand letter, or on August 16, 2002 to arises from a contract with exclusive venue stipulation.
be exact, until fully paid.

12. Being the assignee of the receivable of USWCI, which The general rule on venue of personal actions, as in petitioners complaint for
receivable defendant failed to pay despite demand, collection of sum of money, is embodied in Section 2, Rule 4 of the Rules of
plaintiff suffered actual damages in the total amount of Phil. Court which provides:
Peso: One Million Five Hundred Seventy Nine Thousand
Sixty One & 36/100 (P1,579,061.36), computed as of 05 Sec. 2. Venue of personal actions. All other actions
April 2004, inclusive of the two and a half percent (2.5%) may be commenced and tried where the plaintiff or any of
monthly interest, as and by way of penalty, and the three (3%) the principal plaintiffs resides, or where the defendant or
annual interest on the unpaid amount, for which defendant any of the principal defendants resides, or in the case of a
should be held liable, with legal interest thereon from the date nonresident defendant, where he may be found, at the election
of filing of this Complaint, until fully paid. of the plaintiff.


The afore-quoted provision is, however, qualified by Section 4 of the same
13. By reason of defendants obstinate refusal or failure to pay
his indebtedness, plaintiff was constrained to file this rule which allows parties, before the filing of the action, to validly agree in
Complaint and in the process incur expenses by way of writing on an exclusive venue.
attorneys fees, which could be reasonably estimated to reach
at least Phil. Peso: Two Hundred Fifty Thousand The forging of a written agreement on an exclusive venue of an action does
(P250,000.00) and for which defendant should be held
not, however, preclude parties from bringing a case to other venues.
answerable for.[6] (Emphasis and underscoring supplied)

Where there is a joinder of causes of action between the same parties one
of which does not arise out of the contract where the exclusive venue was
To the complaint Cruz filed a motion to dismiss on the ground of improper stipulated upon, the complaint, as in the one at bar, may be brought before
venue, he invoking Article 27.5 of the agreement which reads: other venues provided that such other cause of action falls within the
jurisdiction of the court and the venue lies therein.
27.5 Venue Stipulation The Franchisee consents to the
exclusive jurisdiction of the courts of Quezon City, the Based on the allegations in petitioners’ complaint, the second and third
Franchisee waiving any other venue.
causes of action are based on the deeds of assignment executed in its favor
by FPC and USWCI. The deeds bear no exclusive venue stipulation with
RTC: Grants the motion to dismiss. respect to the causes of action thereunder. Hence, the general rule on venue
applies that the complaint may be filed in the place where the plaintiff or
defendant resides. The deeds of assignment cannot be subjected to the balance of P47,810.00 representing the charges for damages to the furniture,
exclusive venue stipulation embodied in the agreement. a lost key and excess guests. Thus, on 25 July 2011, petitioner sent a demand
letter to respondent for the unsettled amount. Respondent failed to pay the
amount, prompting petitioner to file a Statement of Claim for collection of
It bears emphasis that the causes of action on the assigned accounts are not
sum of money plus damages before the MeTC.
based on a breach of the agreement between UHI and Cruz. They are based on
separate, distinct and independent contracts-deeds of assignment in which UHI In her Response, respondent alleged that she is not obliged to pay the claimed
is the assignee of Cruzs obligations to the assignors FPC and USWCI. Thus, amount because petitioner billed the charges twice. Petitioner then impugned
any action arising from the deeds of assignment cannot be subjected to the the validity of the Response, stating that “it was not made in the form of an
exclusive venue stipulation embodied in the agreement. Answer as required by Section 1, Rule 11 of the Revised Rules of Court.”
The MeTC dismissed the complaint with prejudice for lack of cause of action
WHEREFORE, the petition is GRANTED. The December 12, 2005 Order of in its Decision dated 15 March 2012.
Regional Trial Court of Paraaque City, Branch 258 in Civil Case No. 04-0278 Petitioner then filed a petition for certiorari before the RTC on 25 May
is SET ASIDE. The case is REMANDED to said court which is directed to 2012. Petitioner argued that “a dismissal based on the ground that the
[c]omplaint states no cause of action cannot be deemed a dismissal with
reinstate the case to its docket and conduct further proceedings thereon with
prejudice under the Rules.” Petitioner further argued that lack of cause of
dispatch. action is not a valid ground for dismissal of case, much more a dismissal
with prejudice.
75. LOURDES SUITES (CROWN HOTEL MANAGEMENT In its 7 September 2012 Decision, the RTC ruled against petitioner, and
CORPORATION), Petitioner, v. NOEMI BINARAO,, Respondent. found that there was no grave abuse of discretion on the part of the MeTC.
Before this Court is a petition for review under Rule 45 questioning the 7 Petitioner filed a motion for reconsideration dated 3 October 2012 which was
September 2012 Decision1 of Branch 148 of the Regional Trial Court of denied by the RTC in its Order dated 16 November 2012.
Makati (RTC) dismissing the petition for certiorari, which assailed the 15
March 2012 Decision of Branch 67 of the Metropolitan Trial Court of Makati Hence, this petition.
WHEREFORE, the petition is DENIED. The Decision dated 7 September
Whether or not RTC is correct in affirming MeTCs decision dismissing
2012 of Branch 148 of the Regional Trial Court of Makati in SCA Case No.
the [c]omplaint on the ground that it states no cause of action with
12-458 is AFFIRMED.
prejudice under the Rules
Lourdes Suites (petitioner) is the owner and operator of a hotel located along
YES. RTC is correct.
Kalayaan Avenue, Makati City. It executed two (2) contracts with Noemi
Binarao (respondent) for room accommodations for two groups of students, The petition must be denied.
AQ College and Mariano Marcos University students.
The RTC correctly upheld the MTC Decision. Petitioner argues that even after
According to petitioner’s records, respondent was able to pay the total the presentation of evidence by both parties, a complaint cannot be dismissed
contract price above. However, petitioner claimed that there was an unpaid with prejudice based on lack of cause of action because: (1) this ground is not
expressly provided for under the Rules on Small Claims Cases and (2) if there Hence, public respondent did not commit grave abuse of discretion when
was a failure to prove a cause of action the only available remedy would be a it dismissed the Complaint for lack of cause of action, as he referred to the
demurrer filed by the defendant. evidence presented and not to the allegations in the Complaint.
It appears petitioner has misinterpreted our ruling in Macaslang v. Zamora, The dismissal of the complaint with prejudice is likewise not an exercise
which petitioner cited in its petition before this Court. In Macaslang, we stated of wanton or palpable discretion. It must be noted that this case is an action
that: for small claims where decisions are rendered final and unappealable, hence,
a [d]ecision dismissing the same is necessarily with prejudice.
[f]ailure to state a cause of action and lack of cause of action are really
different from each other. On the one hand, failure to state a cause of action
refers to the insufficiency of the pleading, and is a ground for dismissal
under Rule 16 of the Rules of Court. On the other hand, lack of cause [of] 76. FLORO MERCENE vs. GOVERNMENT SERVICE INSURANCE
action refers to a situation where the evidence does not prove the cause of
G.R. No. 192971
action alleged in the pleading. Justice Regalado, a recognized
commentator on remedial law, has explained the distinction: January 10, 2018

x x x What is contemplated, therefore, is a failure to state a cause of action FACTS:

which is provided in Sec. 1(g) of Rule 16. This is a matter of insufficiency of On 19 January 1965, petitioner Floro Mercene (Mercene) obtained a loan
the pleading. Sec. 5 of Rule 10, which was also included as the last mode for from respondent Government Service Insurance System (GSIS) in the
raising the issue to the court, refers to the situation where the evidence does amount of ₱29,500.00. As security, a real estate mortgage was executed over
not prove a cause of action. This is, therefore, a matter of insufficiency of Mercene's property in Quezon City, registered under Transfer Certificate of
evidence. Failure to state a cause of action is different from failure to prove Title No. 90535. The mortgage was registered and annotated on the title on 24
a cause of action. The remedy in the first is to move for dismissal of the March 1965
pleading, while the remedy in the second is to demur to the evidence, hence
reference to Sec. 5 of Rule 10 has been eliminated in this section. The On 14 May 1968, Mercene contracted another loan with GSIS for the
procedure would consequently be to require the pleading to state a cause of amount of ₱14,500.00. The loan was likewise secured by a real estate
action, by timely objection to its deficiency; or, at the trial, to file a demurrer mortgage on the same parcel of land. The following day, the loan was
to evidence, if such motion is warranted. registered and duly annotated on the title.
The remedies discussed in Macaslang are those which are available to the
On 11 June 2004, Mercene opted to file a complaint for Quieting of Title
defendant. The courts are not precluded from dismissing a case for lack of
against GSIS. He alleged that: since 1968 until the time the complaint was filed,
cause of action (i.e. insufficiency of evidence). In civil cases, courts must
GSIS never exercised its rights as a mortgagee; the real estate mortgage over
determine if the plaintiff was able to prove his case by a preponderance of
his property constituted a cloud on the title; GSIS' right to foreclose had
evidence which is defined as “x x x the probability of the truth. It is evidence
prescribed. In its answer, GSIS assailed that the complaint failed to state a
that is more convincing to the court as worthy of belief than that which is
cause of action and that prescription does not run against it because it is a
offered in opposition thereto.”
government entity.
As correctly stated by the RTC:
In its 15 September 2005 decision, the RTC granted Mercene's complaint
The basis of [the] public respondent in dismissing the complaint for lack and ordered the cancellation of the mortgages annotated on the title. It
of cause of action is the failure of petitioner to preponderantly establish ruled that the real estate mortgages annotated on the title constituted a cloud
its claim against the private respondent by clear and convincing evidence.
thereto, because the annotations appeared to be valid but was ineffective and for the first time on appeal. It is noteworthy that, in its answer, GSIS raised the
prejudicial to the title. The trial court opined that GSIS' right as a mortgagee affirmative defense that Mercene's complaint failed to state a cause of action.
had prescribed because more than ten (10) years had lapsed from the time
the cause of action had accrued. The RTC stated that prescription ran against (2) YES.
GSIS because it is a juridical person with a separate personality, and with the The Court agrees with Mercene that material averments not specifically denied
power to sue and be sued. are deemed admitted. Nonetheless, his conclusion that GSIS judicially
admitted that its right to foreclose had prescribed is erroneous. It must be
In its 30 January 2015 decision, the CA reversed the RTC decision. The remembered that conclusions of fact and law stated in the complaint are
appellate court posited that the trial court erred in declaring that GSIS' right to not deemed admitted by the failure to make a specific denial. This is true
foreclose the mortgaged properties had prescribed. It highlighted that considering that only ultimate facts must be alleged in any pleading and only
Mercene's complaint neither alleged the maturity date of the loans, nor material allegation of facts need to be specifically denied.
the fact that a demand for payment was made. The CA explained that A conclusion of law is a legal inference on a question of law made as a result
prescription commences only upon the accrual of the cause of action, and of a factual showing where no further evidence is required. The allegation of
that a cause of action in a written contract accrues only when there is an prescription in Mercene's complaint is a mere conclusion of law.
actual breach or violation. Thus, the appellate court surmised that no In the same vein, labelling-an obligation to have prescribed without specifying
prescription had set in against GSIS because it has not made a demand to the circumstances behind it is a mere conclusion of law. As would be discussed
Mercene. further, the fact that GSIS had not instituted any action within ten (10) years
after the loan had been contracted is insufficient to hold that prescription had
Mercene moved for reconsideration, but the same was denied by the CA in its set in. Thus, even if GSIS' denial would not be considered as a specific denial,
assailed 7 April 2011 resolution. only the fact that GSIS had not commenced any action, would be deemed
admitted at the most. This is true considering that the circumstances to
ISSUE: establish prescription against GSIS have not been alleged with particularity.
(1) Whether or not the CA erred in considering issues not raised before the trial
court; (3) NO.
(2) Whether or not the CA errred in disregarding the judicial admission In order for cause of action to arise, the following elements must be
allegedly made by GSIS present: (1) a right in favor of the plaintiff by whatever means and under
(3) Whether or not the CA erred in ruling that the real estate mortgages whatever law it arises or is created; (2) an obligation on the part of the
had yet to prescribe. named defendant to respect or not to violate such right; and (3) an act or
omission on the part of such defendant violative of the right of the plaintiff
HELD: or constituting a breach of obligation of the defendant to the plaintiff
(1) NO.
Mercene assails the CA decision for entertaining issues that were not addressed In University of Mindanao, Inc. v. Bangko Sentral ng Pilipinas, et al., the
by the trial court. He claims that for the first time on appeal, GSIS raised the Court clarified that prescription runs in mortgage contract from the time the
issue on whether the loans were still effective in view of his nonpayment. A cause of action arose and not from the time of its execution.
reading of the CA decision, however, reveals that the appellate court did not In Maybank Philippines, Inc. v. Spouses Tarrosa, 20 the Court explained that
dwell on the issue of nonpayment, but instead ruled that prescription had not the right to foreclose prescribes after ten (10) years from the time a
commenced because the cause of action had not yet accrued. Hence, it demand for payment is made, or when then loan becomes due and
concluded that the complaint failed to state a cause of action. The appellate demandable in cases where demand is unnecessary.
court did not focus on the question of payment precisely because it was raised
Thus, applying the pronouncements of the Court regarding prescription on the 77. Iron and Steel Authority v. CA, 249 SCRA 538 (1995)
right to foreclose mortgages, the Court finds that the CA did not err in
concluding that Mercene's complaint failed to state a cause of action. It is
undisputed that his complaint merely stated the dates when the loan was The Iron and Steel Authority (ISA) was created by PD No. 272, in order,
contracted and when the mortgages were annotated on the title of the lot generally, to develop and promote the iron and steel industry in the Philippines.
used as a security. Conspicuously lacking were allegations concerning: the Initially, it was created for a term of 5 years but when its original term expired,
maturity date of the loan contracted and whether demand was necessary under its term was extended for another 10 years by EO No. 555.
the terms and conditions of the loan.
The National Steel Corporation (NSC) then a wholly owned subsidiary of
As such, the RTC erred in ruling that GSIS' right to foreclose had the National Development Corporation which is an entity wholly owned by the
prescribed because the allegations in Mercene's complaint were National Government embarked on an expansion program which includes
insufficient to establish prescription against GSIS. The only information the construction of a steel mill in Iligan City. Proclamation No. 2239 was
the trial court had were the dates of the execution of the loan, and the issued by the President withdrawing from sale or settlement a tract of land
annotation of the mortgages on the title. As elucidated in the above-mentioned in Iligan City to be used by the NSC. However, certain portions of the public
decisions, prescription of the right to foreclose mortgages is not reckoned from land under Proclamation 2239 were occupied by Maria Cristina Fertilizer
the date of execution of the contract. Rather, prescription commences from the Co. (MCFC). LOI No. 1277 was issued directing NSC to negotiate with the
time the cause of action accrues; in other words, from the time the obligation owners of MCFC for and on behalf of the Government for the compensation
becomes due and demandable, or upon demand by the creditor/mortgagor, as of MCFC’s present occupancy rights on the subject land. The LOI
the case may be. directed that ISA may exercise the power of eminent domain should the
In addition, there was no judicial admission on the part of GSIS with regard to negotiations fail.
prescription because treating the obligation as prescribed, was merely a The negotiations failed and ISA commenced expropriation proceedings
conclusion of law. It would have been different if Mercene's complaint alleged against MCFC.
details necessary to determine when GSIS' right to foreclose arose, i.e., date of
maturity and whether demand was necessary. While trial was on-going the statutory existence of ISA had expired
prompting MCFC to file the dismissal of the case since ISA has ceased to
WHEREFORE, the petition is DENIED. The 29 April 2010 Decision and 20 be a juridical person.
July 2010 Resolution of the Court of Appeals (CA) in CAG. R. CV No. 86615
The trial court granted MCFC’s motion to dismiss anchoring on the Rules of
are AFFIRMED in toto
Court that “only natural or juridical persons or entities authorized by law may
be parties to a civil case.”
ISA moved for a reconsideration contending that despite the expiration of its
term, its juridical existence continued until the winding up of its affairs
could be completed. In the alternative ISA urged that the Rep. of the
Philippines should be allowed to be substituted in its place.
The RTC denied its motion for reconsideration. This was affirmed by the
Issue: W/N the Republic of the Philippines is entitled to be substituted for
ISA in view of the expiration of ISA’s term
G.R. No. 78646, July 23, 1991
What is involved in the present petition is the correctness of the decision of
When the statutory term of a non-incorporated agency expires, the the Court of Appeals annulling the deed of sale executed by Rosendo Ralla in
powers, duties and functions as well as the assets and liabilities of that favor of Pablo over 149 parcels of land. The original decision of the trial court
agency revert back to, and are re-assumed by, the Republic of the declared the sale null and void. In the resolution of the motion for
Philippines. reconsideration, however, Judge Jose F. Madara completely reversed himself
ISA is a non-incorporated agency or instrumentality of the Republic. Its and held the deed of sale to be valid. This order was in turn set aside by the
powers, duties, functions, assets and liabilities are properly regarded as folded Court of Appeals, which reinstated the original decision invalidating the deed
back into the Government of the Republic of the Philippines and hence of sale.
assumed once again by the Republic.
ISA instituted the expropriation proceedings in its capacity as an agent or
delegate or representative of the Republic of the Philippines. The present
Rosendo Ralla had two sons, Pablo and Pedro. The father apparently loved the
suit was brought on behalf of and for the benefit of the Republic as stated in
the complaint that: “The Government, thru plaintiff ISA, urgently needs the former but not the latter, Pablo and his family lived with Rosendo, while Pedro
subject parcels of land for the construction and installation of iron steel lived with his mother, Paz Escarella, in another town. He was not on good terms
manufacturing facilities”. with his father. Paz Escarella later on died and the two brothers partitioned 63
parcels of land she left.
As such, it follows that the Republic of the Philippines is entitled to be
substituted in the expropriation proceedings as party-plaintiff in lieu of Meanwhile, Rosendo executed a will disinheriting Pedro and leaving everything
ISA. The expiration of ISA’s statutory term did not by itself require or justify he owned to Pablo, to whom he said he had earlier sold a part of his property
the dismissal of the eminent domain proceedings. for P10,000.00. Rosendo himself filed for the probate of the will but pendente
WHEREFORE, for all the foregoing, the Decision of the Court of Appeals lite died on October 1, 1960.
dated 8 October 1991 to the extent that it affirmed the trial court's order
dismissing the expropriation proceedings, is hereby REVERSED and SET The last will and testament of Rosendo Ralla was allowed but the disinheritance
ASIDE and the case is REMANDED to the court a quo which shall allow the of Pedro was disapproved. This order was elevated to the Court of Appeals.
substitution of the Republic of the Philippines for petitioner Iron and Steel The Court of Appeals reversed the trial court and reinstated the disinheritance
Authority and for further proceedings consistent with this Decision. No clause after finding that the requisites of a valid disinheritance had been
pronouncement as to costs. complied with in the will. The decision was assailed before this Court which was
dismissed in our resolution. The motion for reconsideration was denied with
and BENEDICTO HORCA, SR., respondents
Whether Pedro Ralla has a legal personality to question the deed of sale
between Rosendo Ralla and his son Pablo. FACTS: Petitioner Tanpingco filed a complaint for payment of disturbance
compensation with damages against respondent Benedicto Horca, Sr. with the

Pedro Ralla has no legal personality to question the deed of sale. It is alleged in the complaint that the petitioner Tanpingco is the tenant-lessee
in the respondent's parcel of agricultural riceland under a leasehold contract;
The decision of the Court of Appeals in AC-G.R. Nos. 00472, 00489 approved the that in a letter, the respondent informed him to desist from working on the
disinheritance of Pedro Ralla. That decision was appealed to this Court, but the subject land, having already donated the same; that the respondent ordered
petition for review was dismissed. The decision has long since become final. the petitioner to vacate the landholding; that the petitioner is willing to accept
Since then, Pedro Ralla no longer had the legal standing to question the validity payment of disturbance compensation in an amount computed in accordance
of the sale executed by Rosendo in favor of his other son Pablo. with law, and in the alternative, to remain as tenant-lessee of the subject
The real party-in-interest is the party who stands to be benefited or injured by
the judgment or the party entitled to the avails of the suit. "Interest" within The respondent filed instead a Motion to Dismiss alleging that the complaint
the meaning of the rule means material interest, an interest in issue and to be states no cause of action because the respondent is not the real party-in-
affected by the decree, as distinguished from mere interest in the question interest having already donated the subject land to the Ministry of Education,
involved, or a mere incidental interest. As a general rule, one having no right or Culture, and Sports, Region VIII, as a school site of the Buenavista Barangay
interest to protect cannot invoke the jurisdiction of the court as a party-plaintiff High School; and that the donation not having benefited the respondent, no
in an action. disturbance compensation is due the petitioner since, disturbance
compensation holds true only in cases whereby the lessor-owner derives
Our decision is that as a validly disinherited heir, and not claiming to be a financial benefits from the conversion of the agricultural land into non-
creditor of his deceased father, Pedro Ralla had no legal personality to question agricultural.
the deed of sale dated November 29, 1957, between Rosendo Ralla and his
son Pablo. Legally speaking, Pedro Ralla was a stranger to the transaction as RTC: granted the respondent's Motion to Dismiss and denied the petitioner's
he did not stand to benefit from its annulment. His disinheritance had Motion for Reconsideration.
rendered him hors de combat. IAC: dismissed the appeal.

ISSUE/S: Whether or not respondent Horca is still the real party-in-interest

HELD: NO. It is the Ministry of Education, Culture, and Sports, Region VIII.
Section 2, Rule 3 of the Rules of Court requires that every action must be
prosecuted in the name of the real party-in-interest. A corollary proposition to
this rule is that an action must be brought against the real party-in-interest, or We rule that the Ministry of Education, Culture and Sports as the new owner
against a party which may be bound by the judgment to be rendered therein. cannot oust the petitioner from the subject riceland and build a public high
school thereon until after there is payment of the disturbance compensation in
The real party-in-interest is one who stands to be benefited or be injured by the accordance with Section 36 (1) of R.A. No. 3844, as amended.
judgment, or the party entitled to the avails of the suit. If the suit is not brought
against the real party-in-interest, a motion to dismiss may be filed on the ground In view of the foregoing, we are of the opinion that the trial court correctly
that the complaint states no cause of action. dismissed the complaint for payment of disturbance compensation because the
private respondent is not the real party-in-interest. A person who was not
The private respondent bolsters his claim that he is not the real party-in- impleaded in the complaint could not be bound by the decision rendered
interest under Section 10 of R.A. 3844 (Code of Agrarian Reforms) which therein, for no man shall be affected by a proceeding to which he is a stranger.
provides that: The remedy then of the petitioner is to claim his disturbance compensation
from the new owner.
In the case the agricultural lessor sells, alienates or transfers the legal
possession of the landholding, the purchaser or transferee thereof shall be WHEREFORE, the petition is hereby DENIED. The decision dated 20 June 1986
subrogated to the rights and substituted to the obligation of the agricultural of the Intermediate Appellate Court is AFFIRMED. No pronouncement as to
lessor. costs. SO ORDERED.

Thus, the Ministry of Education, Culture and Sports, as donee, became the new 80.) Spouses ANTHONY and PERCITA OCO, vs. VICTOR LIMBARING,
lessor of the agricultural lessee by operation of law and is the real party-in-
Doctrine: Basic in procedural law is the rule that every action must be
interest against whom the claim for disturbance compensation should be
prosecuted or defended in the name of the real party in interest. In the present
directed. case, the respondent, who was not a party to the contracts being sued upon,
was not able to prove material interest in the litigation. For his failure to do so,
The petitioner should have impleaded the Ministry of Education, Culture and the trial court cannot be faulted for dismissing the action to rescind the
Sports as the party-defendant for a donation, as a mode of acquiring contracts. His status as trustor remained a bare allegation, as he had failed to
ownership, results in an effective transfer of title over the property from the rebut the legal presumption: that there is absence of a trust when the purchase
donor to the donee and once a donation is accepted, the donee becomes the price in a deed of sale is paid by a parent in favor of a child. Here, the prima
facie presumption is "that there is a gift in favor of the child." Any allegation
absolute owner of the property donated.
to the contrary must be proven by clear and satisfactory evidence, a burden
that was not discharged by the plaintiff.
Section 7 of R.A. No. 3844 gives the agricultural lessee the right to work on the
landholding once the leasehold relationship is established. Time and again, this FACTS:
Court has guaranteed the continuity and security of tenure of a tenant even in
cases of a mere transfer of legal possession. Also, under Section 10 of the same Petition for Review under Rule 45
Act, the law explicitly provides that the leasehold relation is not extinguished
1996 - Sabas Limbaring subdivided his Lot 2325-D, covered by Transfer
by the alienation or transfer of the legal possession of the landholding. The
Certificate of Title (TCT) No. 5268, into two lots denominated as Lot Nos.
only instances when the agricultural leasehold relationship is extinguished are 2325-D-1 and 2325-D-2. He then executed in favor of Jennifer Limbaring a
found in Section 8, 28 and 36 of the same Act. The donation of the land did Deed of Sale for Lot 2325-D-2 for P60,000; and, in favor of Sarah Jane
not terminate the tenancy relationship. However, the donation itself is valid. Limbaring, another Deed for Lot 2325-D-1 for P14,440.
Percita Oco, the daughter of Sabas Limbaring then filed a case of perjury "Sec. 2. Parties in interest. – A real party in interest is the party who stands to
and falsification of documents against respondent, her uncle who was the be benefited or injured by the judgment in the suit, or the party entitled to the
father of Jennifer and Sarah Jane. avails of the suit. Unless otherwise authorized by law or these Rules, every
action must be prosecuted or defended in the name of the real party in interest."
During the Pre-litigation conference - parties agreed that the two parcels of
land should be reconveyed to Percita, who was to pay respondent all the As applied to the present case, this provision has two requirements: 1) to
expenses that had been and would be incurred to transfer the titles to her name institute an action, the plaintiff must be the real party in interest; and 2) the
action must be prosecuted in the name of the real party in interest.
Respondent demanded P30,000 for the estimated expenses for documentation.
Percita succeeded in lowering the amount to P25,000. Pursuant to their The parties to a contract are the real parties in interest in an action upon it.
agreement, respondent facilitated the transfer of the titles to her from the names Respondent’s Complaint, entitled "Rescission of Contract & Recovery of
of his daughters. After the transfer had been effected on July 12, 1996, Possession & Ownership of Two Parcels of Land," is clearly an action on
Percita left for Puerta Princesa on July 17, 1996, without paying the a contract. The agreements sought to be rescinded clearly show that the
P25,000. Several demands were made, but she refused to pay. parties to the Deeds of Absolute Sale were Jennifer and Sarah Jane
Limbaring as vendors and Percita Oco as vendee. Clearly then, the action
Respondent filed against Spouses Anthony and Percita Oco a Complaint upon the contracts may -- as a rule -- be instituted only by Jennifer and Sarah
for the rescission of the sales contracts, with recovery of possession and Jane against Percita.
ownership of the two parcels of land.
Respondent is not a real party in interest. He was not a party to the
Spouses Oco filed a Motion to Dismiss on the ground that the plaintiff contracts and has not demonstrated any material interest in their
(herein respondent) was not the real party in interest. fulfillment.

Respondent contended that he was a trustor, whose property was being Another issue: Trust
held in trust by his daughters. He also averred that, on the assumption that
he was not the real party in interest, he was entitled to an amendment of the Respondent has presented only bare assertions that a trust was created.
Absent any clear proof that a trust was created, he cannot be deemed a real
RTC = Denied Motion to Dismiss. party in interest. That he should be deemed a trustor on the basis merely of
having paid the purchase price is plainly contradicted by the presumption
Spouses Oco filed a Demurrer to Evidence, to which he filed his Opposition. based on Article 1448 of the Civil Code "that there is a gift in favor of the
child," not a trust in favor of the parent.
RTC granted the demurrer and dismissed the Complaint and Counterclaim,
on the ground that respondent was not the real party in interest.
81.) Dante Pascual, represented by Reymel Sagario, v. Marilou Pascual
CA = held that a trust relationship was created when respondent purchased
the lots in favor of his daughters. Thus, he was a real party in interest KIND OF ACTION/ PETITION: Petition for Review on Certiorari

ISSUE: whether respondent, who was the plaintiff in the trial court, was a real FACTS:
party in interest in the suit to rescind the Deeds of Reconveyance.
Dante filed a civil case against his sister Marilou, for the annulment of a TCT,
HELD: Victor Limbaring is not a real party in interest under Section 2 Rule 3. Deed of Absolute Sale, and for the reconveyance of property with damages.
Dante is a permanent resident of the U.S., who appointed Sagario as his
attorney in fact through a SPA. Marilou filed a motion to dismiss. According To construe the express statutory requirement of actual residency as
to Marilou, there was non-compliance with requirement of the LGC that applicable to the attorney-in-fact of the party-plaintiff would abrogate the
there must have been a confrontation before the Lupon Chairman or meaning of a real party in interest as defined in Sec 2 of Rule 3.
Pangkat, before filing a claim in court. There is no showing that the dispute
was referred to barangay court before the case was filed. The RTC granted The petitioner is the real party in interest and since he is not an actual
the respondent's motion to dismiss. The court was of the opinion that the resident of the barangay where the respondent resides, the local lupon has
attorney-in-fact shall be deemed the real party in interest, he was therefore no jurisdiction over their dispute, hence, prior referral to it for conciliation is
not a pre-condition to its filing in court.
obliged to bring the case before the barangay.

Dante: argues that since he, not his attorney-in-fact Sagario, is the real party The RTC thus erred in dismissing petitioners’ complaint.
in interest, and since he actually resides abroad, the lupon would have no DISPOSITIVE PORTION:
jurisdiction to pass upon the dispute involving real property
WHEREFORE, the petition is granted. The assailed February 10, 2003 Order,
Respondent: That attorney-in-fact Sagario is a resident of the same as well as the March 24, 2003 Order denying reconsideration of the first, of
barangay as that of hers, respondent argues in any event, brings the matter Branch 23 of the Regional Trial Court of Isabela at Roxas is SET ASIDE. Said
under the jurisdiction of the lupon, for Sagario, court is accordingly directed to reinstate Civil Case No. 23-713-02 to its docket
ISSUE: Whether or not the Attorney-in-fact is a real party in interest. and take appropriate action thereon with dispatch.


The petitioner is the real party in interest. 82.) Jowett Golangco v. Jone B. Fung

Dispositive Portion: a petition for review on certiorari seeking the review of

The pertinent provisions of the Local Government Code read:
the decision dated September 12, 2002 (dismissing the petitioner’s petition
SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. The for certiorari)1 and the resolution dated April 2, 2003 (denying the
lupon of each barangay shall have authority to bring together the parties petitioner’s motion for reconsideration)
actually residing in the same city or municipality for amicable settlement of
Facts: C.A.-G.R. SP No. 66616 was a special civil action for certiorari
all disputes except:
commenced by the petitioner to assail the order issued by the Regional Trial
xxx Court (RTC), Branch 53, in Manila in Criminal Case No. 95-145703 entitled
People v. Jone B. Fung, whereby the RTC declared the Prosecution to have
SEC. 409. Venue. (a) Disputes between persons actually residing in the same terminated the presentation of further evidence and required the
barangay shall be brought for amicable settlement before the lupon of said Prosecution to file a written offer of evidence within 20 days, furnishing a
barangay . copy of the offer to the accused who in turn had to comment on the offer
within 15 days from receipt.
Criminal Case No. 95-145703, a prosecution for libel initiated by the time when the intended witness, Atty. Oscar Ramos, must appear in court to
petitioner as the complainant against the respondent, was commenced in testify.
1995.3 Allegedly, the respondent had issued an office memorandum dated
May 10, 1995 maliciously imputing against the petitioner the commission of Issue: whether the Court of Appeals correctly ruled on the petition for
bribery and had sent copies of the memorandum to the petitioner’s certiorari of the petitioner.
superiors in the Philippine Overseas Employment Administration (POEA) and Ruling:
to other public officers and personalities not connected with the POEA,
causing damage and prejudice to the petitioner. After almost 6 years, the We find no reversible error on the part of the Court of Appeals.
Prosecution had presented only two witnesses in Criminal Case No. 95-
Before dealing with the petition for review, we point out the gross
145703. On February 16, 2001, the Prosecution requested that a subpoena
procedural misstep committed by the petitioner in the Court of Appeals.
ad testificandum be issued to and served on Atty. Oscar Ramos, Resident
Ombudsman of the POEA, to compel him to testify in the criminal case on The petitioner did not join the People of the Philippines as a party in his
February 20, 2001. The hearing of February 20, 2001 was, however, reset to action for certiorari in the Court of Appeals. He thereby ignored that the
May 23, 2001 due to the unavailability of Atty. Ramos. People of the Philippines were indispensable parties due to his objective
being to set aside the trial court’s order dated May 23, 2001 that concerned
On May 23, 2001, the Prosecution still failed to present Atty. Ramos as its
the public aspect of Criminal Case No. 95-145703. The omission was fatal and
witness because no subpoena had been issued to and served on him for the
already enough cause for the summary rejection of his petition for certiorari.
purpose. Consequently, the RTC judge issued an order terminating the
Prosecution’s presentation of evidence. The petitioner did not also obtain the consent of the Office of the Solicitor
General (OSG) to his petition for certiorari. At the very least, he should have
The petitioner, by his lonesome, assailed on certiorari in the Court of
furnished a copy of the petition for certiorari to the OSG prior to the filing
Appeals the order dated May 23, 2001, claiming that the RTC judge thereby
thereof, but even that he did not do. Thereby, he violated Section 35(l),
committed grave abuse of discretion for not issuing the subpoena to require
Chapter 12, Title III of Book IV of Executive Order No. 292 (The Administrative
Atty. Ramos to appear and testify in the May 23, 2001 hearing. He contended
Code of 1987), which mandates the OSG to represent "the Government in the
that his prior request for the subpoena for the February 20, 2001 hearing
Supreme Court and the Court of Appeals in all criminal proceedings;
should have been treated as a continuing request for the subpoena
represent the Government and its officers in the Supreme Court, the Court of
considering that the Rules of Court did not require a party to apply for a
Appeals, and all other courts or tribunals in all civil actions and special
subpoena again should it not be served in the first time.
proceedings in which the Government or any officer thereof in his official
The Court of Appeals rebuffed the petitioner and dismissed the petition for capacity is a party."
certiorari. Any request for a subpoena to a witness must indicate the date
Even on the merits, the petition for review fails.
and time when the witness must appear in court to give his or her
testimony. It is on the basis of that request that the court personnel prepares The criminal case had been pending since 1995 and the petitioner as the
the subpoena indicating the title of the case, the date and time for the complainant had presented only two witnesses as of the issuance of the
appearance of the intended witness. This is where petitioner fell into error. assailed order. The trial court had not been wanting in giving warnings to the
His urgent request for subpoena (Annex "A") failed to contain the date and
Prosecution on the dire consequences should the Prosecution continue to fail Oficio Sheriff, docketed as Civil Case No. 2003-12-205 for annulment of the
to complete its evidence. The Prosecution had retained the duty to ensure AREM on the ground that the said AREM is without force and effect, the
that its witnesses would be present during the trial, for its obligation to the same having been executed without the valid consent of the wife of
mortgagor Antonio C. Tiu who at the time of the execution of the said
administration of justice had been to prove its case sans vexatious and
instrument was already suffering from advance[d] Alzheimer’s Disease and,
oppressive delays. Yet, the warnings of the trial court had gone unheeded. henceforth, incapable of giving consent, more so writing and signing her
Instead, the Prosecution would deflect the responsibility for the delays to the name. The RTC issued a temporary restraining order. Petitioner filed a
failure of the trial court to issue the subpoena to its proposed witness and to motion to dismiss on the grounds that the plaintiffs/petitioners not being
cause the subpoena to be served. Such attitude of the Prosecution, which the real parties-in-interest, their complaint states no cause of action; even
included the petitioner as the complainant, manifested a lack of the requisite if there is a cause of action, the same is already barred by the statute of
diligence required of all litigants coming to the courts to seek redress. limitations; and the present action being a personal one, the venue is
improperly laid. The RTC denied the motion to dismiss and was affirmed by
We find that the trial judge did not act capriciously, arbitrarily or the Court of Appeals. Petitioner argues, in the main, that as respondents are
whimsically in issuing the assailed order. Thus, the Court of Appeals not the real parties in interest, their complaint states no cause of action.
properly dismissed the petition for certiorari. ISSUE:
Whether the complaint filed by respondents-children of Antonio,
without impleading Matilde who must also be Antonio’s heir and who, along
83.) EQUITABLE PCI BANK, INC. (now known as BANCO DE ORO - EPCI, with Antonio, was principally obliged under the AREM sought to be annulled,
INC.) is dismissible for lack of cause of action.
ANDREW U. TIU, EDGAR U. TIU and ERWIN U. TIU, The AREM was executed by Antonio, with the marital consent of
Matilde. Since the mortgaged property is presumed conjugal, she is obliged
principally under the AREM. It is thus she, following Art. 1397 of the Civil
To secure a loan obtained by Gabriel Ching from petitioner Equitable Code vis a vis Sec. 2 of Rule 3 of the Rules of Court, who is the real party in
PCI Bank. Antonio C. Tiu executed on July 6, 1994 a Real Estate Mortgage interest, hence, the action must be prosecuted in her name as she stands to
(REM) in favor of petitioner covering a lot located in Tacloban City. Before be benefited or injured in the action.
the words "With my Marital Consent" appearing in the REM is a signature
Assuming that Matilde is indeed incapacitated, it is her legal
attributed to Antonio’s wife Matilde. On October 5, 1998, Antonio executed
guardian who should file the action on her behalf. Not only is there no
an Amendment to the Real Estate Mortgage (AREM) increasing the amount
allegation in the complaint, however, that respondents have been legally
secured by the mortgage to ₱26 Million, also bearing a signature attributed
designated as guardians to file the action on her behalf. The name of
to his wife Matilde above the words "With my Marital Consent."
Matilde, who is deemed the real party in interest, has not been included in
Antonio died on December 26, 1999. The loan obligation having the title of the case, in violation of Sec. 3 of Rule 3 of the Rules of Court.
remained unsettled, petitioner filed in November 2003 before the Regional
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals
Trial Court (RTC) of Tacloban City a "Petition for Sale" dated November 4,
dated August 30, 2006 is REVERSED and SET ASIDE. Civil Case No. 2003-12-
2003, for the extrajudicial foreclosure of the AREM and the sale at public
205 lodged before Branch 8 of the Regional Trial Court of Tacloban City is
auction of the lot covered thereby. Respondents filed a Complaint/Petition
DISMISSED for lack of cause of action.
before the RTC of Tacloban against petitioner and the Clerk of Court-Ex
84.) Stanley Fine Furniture vs. Victor Gallano of law of the labor tribunals, considering that the Labor Arbiter and the
National Labor Relations Commission had different findings.
KIND OF ACTION/PETITION: PETITION for review on certiorari of the decision
and resolution of the Court of Appeals. The Court of Appeals found that Stanley Fine failed to show any valid cause
for Victor and Enriquito’s termination and to comply with the two-notice
Facts: rule. Also, the Court of Appeals noted that Stanley Fine’s statements that it
Stanley Fine Furniture (Stanley Fine), through its owners Elena and Carlos was forced to declare them dismissed due to their absences and due to the
Wang, hired respondents Victor T. Gallano and Enriquito Siarez in 1995 as filing of an unmeritorious labor case against it by the two complainants · were
painters/carpenters. On May 26, 2005, Victor and Enriquito filed a labor admissions against interest and binding upon Stanley Fine.
complaint for underpayment/nonpayment of salaries, wages, Emergency The Court of Appeals also held that the immediate amendment of Victor and
Cost of Living Allowance (ECOLA), and 13th month pay. They indicated in the Enriquito’s complaint negated their alleged abandonment.
complaint form that they were still working for Stanley Fine.
Thereafter Stanley Fine, Elena, and Carlos Wang filed a motion for
Victor and Enriquito filed an amended complaint on May 31, 2005, for actual extension of time to file petition for review on certiorari.
illegal dismissal, underpayment/non payment of overtime pay, holiday pay,
premium for holiday pay, service incentive leave pay, 13th month pay, ECOLA, On January 21, 2010, Elena Briones filed a petition for review. Elena alleged
and Social Security System (SSS) benefit. In the amended complaint, Victor that she is the registered owner/proprietress of the business operation
and Enriquito claimed that they were dismissed on May 26, 2005. doing business under the name and style Stanley Fine Furniture. She argued
that the Court of Appeals erred in ruling that Victor and Enriquito were
Victor and Enriquito were allegedly scolded for filing a complaint for money illegally dismissed considering that she issued several memoranda to them,
claims. Later on, they were not allowed to work. Owners claimed that they but they refused to accept the memoranda and explain their absences.
asked Gallano and Siarez to explain their absences for the month of May 2005
but they refused. Thereafter, Victor and Enriquito filed their comment and argued that the
petition should be denied because Elena is neither the respondent, party-
The Labor Arbiter found that Victor and Enriquito were illegally dismissed. in-interest or representatives as parties. Elena filed her reply and posited
The admission that complainants were dismissed due to the filing of a case that she has legal standing to file the petition for review because she is the
against them by complainants is a blatant transgression of the Labor Code owner/ proprietress of Stanley Fine. In addition, she argued that Victor and
that no retaliatory measure shall be levelled against an employee by reason Enriquito knew that she, Elena, is the real party-in-interest because during
of an action commenced against an employer. the pendency of the labor case, she filed an ex parte manifestation, attaching
On appeal, the National Labor Relations Commission reversed the Labor her Department of Trade and Industry certificate of registration of business
Arbiter’s decision, ruling that the Labor Arbiter erred in considering the name, showing that the registration is under her maiden name, Elena Y.
statement, due to the filing of an unmeritorious labor case, as an admission Briones. As per the Department of Trade and Industry’s certification, Stanley
against interest. Fine is a sole proprietorship owned by Elena Briones Yam-Wang.

Victor and Enriquito filed a motion for reconsideration, which the National Issue:
Labor Relations Commission denied.
Whether Elena Briones has standing to file this petition for review on
Thus, Victor and Enriquito filed a petition for certiorari before the Court of certiorari;
Appeals. Generally, petitions for certiorari are limited to the determination Ruling:
and correction of grave abuse of discretion amounting to lack or excess of
jurisdiction. However, the Court of Appeals reviewed the findings of facts and Petitioner Elena Briones has standing to file this case.
Respondents cannot deny Elena Briones’ standing to file this petition Dispositive Portion: Wherefore, the petition is DENIED DUE COURSE,
considering that in their amended complaint filed before the Labor Arbiter, petitioner Alice Africa not being a proper party to question the Regional Trial
they wrote „Stanley Fine Furniture, Elina [sic] Briones Wang as owner and Court's Decision and Order dated 14 November 2012 and 26 March 2013,
Carlos Wan as their employers. respectively, in SCA Case No. 12-0010.
Also, respondents did not refute Elena’s allegation that Stanley Fine is a sole Principle:
Remedial Law (Civil Procedure): An agent, as party, may sue without joining
A sole proprietorship does not possess a juridical personality separate and the principal except when the contract involves things belonging to the
distinct from the personality of the owner of the enterprise. The law merely principal.
recognizes the existence of a sole proprietorship as a form of business
organization conducted for profit by a single individual and requires its Facts:
proprietor or owner to secure licenses and permits, register its business name, This case involves a parcel of land covered by TCT No. 38910-A registered
and pay taxes to the national government. The law does not vest a separate in the name of Spouses Orfinada. Such property was the subject of 4 cases
legal personality on the sole proprietorship or empower it to file or defend
related to its ownership and titling. The cases resulted in conflicting rulings.
an action in court.
Respondent ISIA filed a Special Civil Action for Mandamus under Rule 65
Thus, Stanley Fine, being a sole proprietorship, does not have a personality
of the Rules of Court against the Register of Deeds of Las Piñas City seeking
separate and distinct from its owner, Elena Briones. Elena, being the
the cancellation of TCT No. 38910A and the issuance of a new title in
proprietress of Stanley Fine, can be considered as a real party-in-interest
favour of the ISIA. ISIA alleged that it purchased from Spouses Orfinada
and has standing to file this petition for review.
the subject property as evidenced by a Deed of Sale executed 18 May 1981;
Dispositive Portion: paid the taxes and fees for the transfer; and completed the requirements for
the transfer of title. However, the Registrar of Deeds denied the
WHEREFORE, premises considered, the Court of Appeals’ decision dated July registration of the sale on the ground that another owner’s duplicate of the
28, 2009, and its resolution dated November 27, 2009, reinstating the Labor subject title is in possession of Alice Africa.
Arbiter’s decision dated August 2, 2006, are hereby AFFIRMED.
In turn, Africa filed a Vehement Opposition on the instant petition
contending that the sale between ISIA and Spouses Orfinada is tainted with
85.) ALICE G. AFRICA, Petitioner, vs. INSURANCE SAVINGS AND fraud hence not valid. Nevertheless, the RTC granted ISIA’s Petition for
INVESTMENT AGENCY, INC. (ISIA) represented by its President, Mandamus. Both Africa and RoD filed separate MRs. Both were denied.
DELIA DE BORJA; acting Register Of Deeds, Las Piñas City, ATTY.
Hence, Africa filed this Petition for Certiorari on behalf of the Spouses
Orfinada. She alleged that her contract of agency with the Spouses Orfinada
Petition: At bar is a Petition for Review on Certiorari under Rule 45 of the is coupled with interest without explicitly stating her interest therein.
Rules of Court brought directly before us by petitioner Alice G. Africa on pure Conveniently, Africa failed to mention that both the Spouses Orfinada
questions of law assailing the Decision dated 14 November 2012 and Order were already dead: Wilson in the year 2000, Lucresia in 2012.
dated 26 March 2013 of the Regional Trial Court (RTC), Branch 275, Las
ISIA forthwith filed a Comment to Africa's compliance moving for the
Pinas City in SCA Case No. 12-0010.
outright dismissal of Africa's petition considering the deaths of the Spouses
Orfinada, whose civil personalities were thereby extinguished and who can
no longer be represented in this petition by Africa.
Issue: Whether or not Africa has legal capacity to file the Petition for 86.) V-Gent Inc. v. Morning Star Travel & Tours
Certiorari in her own name. –NO G.R. No. 186305, July 22, 2015
Ruling: PETITION: Petition for Certiorari

The Court denied the Petition on the ground that Africa is not a proper party
under Rule 3, Section 3 of the Rules of Court which reads: FACTS:
Sec. 3. Representatives as parties.—Where the action is allowed to be After buying 26 two-way plane tickets from Morning Star Travel and Tours,
prosecuted or defended by a representative or someone acting in a fiduciary
Inc (respondent), V-Gent Inc (petitioner) returned 15 unused tickets worth
capacity, the beneficiary shall be included in the title of the case and shall be
deemed to be the real party in interest. A representative may be a trustee of an $8,747.50 to the respondent, which refunded only the six tickets worth
express trust, a guardian, an executor or administrator, or a party authorized $3,445.63. Despite demand, Morning Star refused to refund the nine
by law or these Rules. An agent acting in his own name and for the benefit of remaining tickets, hence V-Gent filed money claim against the respondent
an undisclosed principal may sue or be sued without joining the principal before the MeTC of Manila. Aside from countering that V-Gent is not entitled
except when the contract involves things belonging to the principal. to a refund, Morning Star questioned the personality of V-Gent to file the
Section 3 of Rule 3 of the Rules of Court is explicit on the requirement action as it is the passengers who bought the tickets who are the real parties
that an agent as party may sue without joining the principal except when in interest.
the contract involves things belonging to the principal. The herein subject
property is ostensibly owned by the Spouses Orfinada covered by TCT No. Ruling, the MeTC dismissed the complaint for lack of cause of action. While
38910-A registered in their names. This TCT No. 38910-A is one of the titles it declared V-Gent as agent of the ticket buyers, it failed to prove its case by
ISIA seeks to annul as part of its claim of ownership over vast tracts of land preponderance of evidence. On appeal to the RTC, the latter court reversed
bounded by the Pasig River in the North, by the Tunisan River in the South, the MeTC judgment, holding that V-Gent proved its case by preponderance
by Laguna de Bay in the East, and by the Manila de Bay in the West. Africa’s of evidence. Morning Star elevated the case to the Court of Appeals.
belated claim of ownership via purchase cannot make her a proper party
to this case and circumvent the requirements for establishing ownership The appellate court granted the petition for review filed by Morning Star,
over the subject property. by ruling that V-Gent is not the real party in interest because it merely acted
Pursuant to Tamondong v. Court of Appeals, it was ruled that the lack of as an agent of the passengers who bought the tickets from Morning Star with
authority of the representative from the real party-in- interest, results in the their own money. Its motion for reconsideration denied by the CA, V-Gent
complaint deemed as not filed. It does not make the representative as the actual sought recourse with the Supreme Court.
plaintiff in the case.
V-Gent argues that (1) that the issue of its legal standing to file the complaint
has already become final because Morning Star did not appeal the MeTC's
ruling on the issue; (2) that it is a real party-in-interest in filing the complaint;
and (3) that Morning Star is already estopped from questioning V-Gent's legal
standing to file the complaint.
G.R.No. 193138, Aug. 20, 2018
W/N V-Gent is a real party in interest.

RULING: PETITION: Petition for review on certiorari

No. V-Gent is NOT a real party in interest DISPOSITIVE PORTION: WHEREFORE, the petition is DENIED. Petitioner is
Every action must be prosecuted or defended in the name of the real party- hereby ordered to amend his complaint to include SAFA Law Office as plaintiff
in-interest - the party who stands to be benefited or injured by the judgment in Civil Case No. 06-678 pending before Branch 58 of the Regional Trial Court
in the suit. In suits where an agent represents a party, the principal is the of Makati City, it being the real party-in-interest. SO ORDERED.
real party-in-interest; an agent cannot file a suit in his own name on behalf
of the principal.
On June 11, 1998, SAFA Law Office entered into a Contract of Lease with
Following the provision of Rule 3, Sec. 3, an agent may sue or be sued solely PNB, whereby the latter agreed to lease the 2nd floor of the PNB Financial
in its own name and without joining the principal when the following Center Building in QC for a period of 3 years and for a monthly rental fee of
elements concur: (1) the agent acted in his own name during the transaction; P189,600.00. The rental fee is subject to a yearly escalation rate of 10%. SAFA
(2) the agent acted for the benefit of an undisclosed principal; and (3) the Law Office then occupied the leased premises and paid advance rental fees
transaction did not involve the property of the principal and agent. and security deposit in the total amount of P1,137,600.00.
In the present case, only the first element is present; the purchase order and On August 2001, the Contract of Lease expired. According to PNB, SAFA Law
the receipt were in the name of V-Gent. However, the remaining elements
Office continued to occupy the leased premises until February 2005, but
are absent because: (1) V-Gent disclosed the names of the passengers to discontinued paying its monthly rental obligations after December 2002.
Morning Star — in fact the tickets were in their names; and (2) the transaction Consequently, PNB sent 2 demand letters demanding the payment of unpaid
was paid using the passengers' money. Therefore, Rule 3, Section 3 of the
Rules of Court cannot apply.
In February 2005, SAFA Law Office vacated the leased premises. PNB sent
DISPOSITIVE: another demand letter. In response, SAFA Law Office proposed a settlement.
WHEREFORE, premises considered, we DENY the petition for lack of merit. PNB, however, declined the settlement proposal stating that it was not
amenable to the settlement's terms.
On September 1, 2006, Petitioner Aniceto Saludo, Jr, in his capacity as
managing partner of SAFA Law Office, filed an amended complaint for
accounting and/or recomputation of unpaid rentals and damages against
PNB in relation to the Contract of Lease. PNB filed a motion to include SAFA
Law Office as principal plaintiff. PNB argued that the lessee in the Contract
of Lease is not Saludo but SAFA Law Office, and that Saludo merely signed
the Contract of Lease as the managing partner of the law firm. Thus, SAFA ISSUES AND RULING:
Law Office must be joined as a plaintiff in the complaint because it is
considered an indispensable party under Section 7, Rule 3 of the Rules of 1. WoN SAFA LAW OFFICE IS A SOLE PROPRIETORSHIP.
Court. - NO, it is a partnership.
Saludo filed his motion to dismiss counterclaims arguing that SAFA Law SAFA Law Office was constituted as a partnership at the time its partners
Office is neither a legal entity nor party litigant. As it is only a relationship signed the Articles of Partnership wherein they bound themselves to
or association of lawyers in the practice of law and a single proprietorship establish a partnership for the practice of law, contribute capital and
which may only be sued through its owner or proprietor, no valid industry for the purpose, and receive compensation and benefits in the
counterclaims may be asserted against it. course of its operation. The other provisions of the Articles of Partnership
also positively identify SAFA Law Office as a partnership. It constantly used
RTC Ruling
the words "partners" and "partnership. Moreover, it provided for the cause
The RTC issued an Omnibus Order denying PNB's motion to include an and manner of dissolution of the partnership. The said provisions would not
indispensable party as plaintiff and granting Saludo's motion to dismiss have been necessary if what had been established was a sole proprietorship.
counterclaims. It held that SAFA Law Offices is a mere single proprietorship
and not a commercial and business partnership. PNB has even admitted that Since SAFA Law Office is a partnership, it acquired juridical personality by
the SAFA Law Office, being a partnership in the practice of law, is a non-legal operation of law. The perfection and validity of a contract of partnership
entity. Being a non-legal entity, it cannot be a proper party, and therefore, it brings about the creation of a juridical person separate and distinct from
the individuals comprising the partnership. It is this juridical personality that
cannot sue or be sued.
allows a partnership to enter into business transactions to fulfill its purposes.
CA Ruling

The CA held that SAFA Law office is not an indispensable party nor is it a legal
entity. A partnership for the practice of law is not a legal entity but a mere 2. WoN SAFA LAW OFFICE IS A REAL PARTY IN INTEREST.
relationship or association for a particular purpose. Thus, SAFA Law Office - YES. SAFA Law Office is the party that would be benefited or injured by the
cannot file an action in court. Nevertheless, while SAFA Law Office is not a judgment in the suit before the RTC. Particularly, it is the party interested in
legal entity, it can still be sued under Section 15,Rule 3 of the Rules of Court the accounting and/or recomputation of unpaid rentals and damages in
considering that it entered into the Contract of Lease with PNB. Furthermore, relation to the contract of lease. It is also the party that would be liable for
according to the CA, the presence of SAFA Law Office is required for the payment to PNB of overdue rentals, if that claim would be proven. This is
granting of complete relief in the determination of PNB's counterclaim. The because it is the one that entered into the contract of lease with PNB. As an
court must, therefore, order it to be brought in since jurisdiction over it can entity possessed of a juridical personality, it has concomitant rights and
be obtained pursuant to Section 12, Rule 6 of the Rules of Court. obligations with respect to the transactions it enters into. Equally important,
the general rule under Article 1816 of the Civil Code is that partnership assets
are primarily liable for the contracts entered into in the name of the
partnership and by a person authorized to act on its behalf. All partners,
including industrial ones, are only liable pro rata with all their property after 0207 for injunction with prayer for the issuance of a temporary restraining
all the partnership assets have been exhausted. Consequently, considering order (TRO), preliminary injunction and damages.
that SAFA Law Office is primarily liable under the contract of lease, it is the
real party-in-interest that should be joined as plaintiff in the RTC case. The Regional Trial Court of Parañaque City, Branch 257 (RTC Branch 257),
issued a TRO. However, upon the expiration of the TRO, Metrobank
Section 2, Rule 3 of the Rules of Court requires that every action must be scheduled another public auction on 8 November 2001. On the morning of
prosecuted or defended in the name of the real party-in-interest. Any that day, RTC Branch 257 issued an Order directing Metrobank to reschedule
decision rendered against a person who is not a real party in interest in the the intended sale to a date after the resolution of the application for
case cannot be executed. Hence, a complaint filed against such a person preliminary injunction. However, the latter allegedly received the Order
should be dismissed for failure to state a cause of action. As the one primarily only on 12 November 2001 and pushed through with the scheduled public
affected by the outcome of the suit, SAFA Law Office should have filed the auction on 8 November 2001. A Certificate of Sale was thereafter issued in
complaint with the RTC and should be made to respond to any its favor on 9 November 2001. In an Order dated 6 March 2002, the
counterclaims that may be brought in the course of the proceeding. application for preliminary injunction filed by respondents was denied by
RTC Branch 257 for mootness in view of the consummated public auction
WHEREFORE, the petition is DENIED. Petitioner is hereby ordered to amend sale. When their motion for reconsideration was denied, respondents filed a
his complaint to include SAFA Law Office as plaintiff in Civil Case No. 06-678 petition for certiorari before the CA. The appellate court reversed and set
pending before Branch 58 of the Regional Trial Court of Makati City, it being aside the Order dated 6 March 2002 issued by RTC Branch 257 and
the real party-in-interest. SO ORDERED. remanded Civil Case No. 01-0207 for further proceedings.

Upon motion of respondents, the presiding judge of RTC Branch 257

88.) CAMERON GRANVILLE 3 ASSET MANAGEMENT, INC., v. FIDEL O. CHUA inhibited from further hearing the case. The case was later re-raffled to RTC
AND FILIDEN REALTY AND DEVELOPMENT CORP. Branch 258. Meanwhile, respondents filed a Motion to Admit Amended
Complaint with attached Amended Verified Complaint for annulment of
Petition for Review on Certiorari under Rule 45 of the Rules of Court foreclosure of mortgage, declaration of nullity of certificate of sale, and
On 17 October 2007, petitioner filed a Motion for Joinder of Party and/or
In 1988, respondents obtained an initial loan of P4 million from the
Substitution. It alleged that by virtue of a Deed of Absolute Sale dated 17
Metropolitan Bank and Trust Co. (Metrobank). The loan was secured by a
September 2003, Metrobank sold to Asia Recovery Corporation (ARC) its
real estate mortgage constituted over three parcels of land located in
credit against respondents including all rights, interests, claims and causes
Parañaque City (subject property).4 For failure of respondents to pay,
of action arising out of the loan and mortgage agreements between
Metrobank sought the extrajudicial foreclosure of the real estate mortgage
Metrobank and respondents. ARC, in turn, specifically assigned the credit
over the subject property. On 4 May 2001, it sent them a Notice of Sale
to petitioner through a Deed of Assignment dated 31 March 2006. Petitioner
setting the public auction on 31 May 2001. Seeking to stop the intended
prayed that it be substituted in lieu of Metrobank in the proceedings before
public auction, respondents filed a Complaint docketed as Civil Case No. 01-
RTC Branch 258. RTC Branch 258 granted the motion and ordered petitioner
to be joined as party-defendant, but without dropping Metrobank as
defendant. CA granted the petition and annulled the Orders of RTC Branch In order not to preempt judgment or make a pronouncement as to any matter
258. other than the pertinent issue before it, this Court will simply remind the CA
and the parties that a disclosure of the consideration for the transfer of
ISSUE: Whether petitioner may be joined as party-defendant in Civil Case No. interest is not among the following requirements for a party to be joined in
01-0207. a proceeding: (1) the right to relief arises out of the same transaction or
RULING: YES. The rationale for allowing parties to join in a proceeding that series of transactions; (2) there is a question of law or fact common to all
delves on a common question of law or fact concerning them is trial the parties; and (3) the joinder is not otherwise prohibited by the rules on
convenience; i.e., to save the parties unnecessary work, trouble and expense. jurisdiction and venue.
In order to meet the requirements of justice and convenience, the rule on the In fine, we find that the CA erred in ruling that RTC Branch 258 committed
joinder of parties is construed with considerable flexibility. Hence, courts are grave abuse of discretion when the latter allowed the joinder of petitioner
given broad discretion in determining who may properly be joined in a as party-defendant in Civil Case No. 01-0207. Under the rules, the trial court
proceeding. is given wide discretion and enough leeway to determine who may be joined
The rules also provide that in case of a transfer of interest, the court, upon in a proceeding, or whether a party may properly be substituted by another
motion, may direct the person to whom the interest is transferred to be due to a transfer of interest. Within the premises, the trial court's grant of the
substituted in the action or joined with the original party. joinder cannot be seriously assailed.

Indeed, a transferee pendente lite is a proper party that stands exactly in the WHEREFORE, the petition is GRANTED. The Court of Appeals Decision dated
shoes of the transferor, the original party. Transferees are bound by the 26 August 2009 and Resolution dated 11 February 2010 in CA-G.R. SP No.
proceedings and judgment in the case, such that there is no need for them to 103809 are REVERSED and SET ASIDE.
be included or impleaded by name. We have even gone further and said that The Orders dated 28 December 2007 and 9 April 2008 issued by the Regional
the transferee is joined or substituted in the pending action by operation of Trial Court of Parañaque City, Branch 258, are REINSTATED.
law from the exact moment when the transfer of interest is perfected
between the original party and the transferee.

Nevertheless, "[w]hether or not the transferee should be substituted for, or

should be joined with, the original party is largely a matter of discretion." That
discretion is exercised in pursuance of the paramount consideration that
must be afforded for the protection of the parties' interests and right to due
process. We observe that the CA effectively ruled that the disclosure of the
consideration for the transfer of rights was a condition precedent for the
joinder of petitioner in the proceedings.
89.) DEPARTMENT OF HEALTH, THE SECRETARY OF HEALTH, and RTC: dismissed -declaring the case to be one instituted against the State, in
MA. MARGARITA M. GALON, Petitioners, which case the principle of state immunity from suit is applicable.
PHIL PHARMA WEALTH, INC., Respondent. CA: reversed RTC and ordered the remand of the case. It concluded that it
was premature for the trial court to have dismissed the Complaint. CA found
PETITION: Petition for Review on Certiorari assails the Decision of the CA. that a cause of action was sufficiently alleged – that due to defendants’
(petitioners’) acts which were beyond the scope of their authority, PPI’s
FACTS: AO No. 27 series of 1998 was issued by then DOH Secretary accreditation as a government supplier of pharmaceutical products was
Alfredo Romualdez, setting the procedure for accreditation of government suspended without the required notice and hearing. CA held that by filing a
suppliers of pharmaceutical products for sale to the public, such MD, petitioners were deemed to have hypothetically admitted the allegations
accreditation to be valid for 3 years but subject to annual review. in the Complaint – which state that petitioners were being sued in their
individual and personal capacities – thus negating their claim that the case is
Secretary Romualdez issued AO 10 series of 2000 which amended AO 27. an unauthorized suit against the State.
The accreditation period for government suppliers of pharmaceutical products
was reduced to 2 years. Moreover, such accreditation may be recalled, Petitioners submit that because PPI’s Complaint prays for the award of
suspended or revoked after due deliberation and proper notice. damages against the DOH, the case should be considered a suit against State,
for it would require the appropriation of the needed amount to satisfy
Section VII of AO 10 was later amended by AO 66 series of 2000, which PPI’s claim, should it win the case. Since State did not give its consent to
provided that the two-year accreditation period may be recalled, suspended or be sued, Civil Case No. 68200 must be dismissed.
revoked only after due deliberation, hearing and notice by the DOH
Accreditation Committee, through its Chairman. Respondent insists that Civil Case No. 68200 is a suit against the
petitioners in their personal capacity for acts committed outside the
DOH, through former Undersecretary Galon, issued Memorandum No. scope of their authority.
209 series of 2000, inviting representatives of 24 accredited drug
companies, including respondent Phil Pharmawealth, Inc. (PPI) to a ISSUE/S: W/N Civil Case No. 68200 be dismissed for being a suit against the
meeting. Undersecretary Galon handed them copies of a document issued State
by the BFAD, which detailed violations or adverse findings relative to
these accredited drug companies’ products. BFAD found that PPI’s HELD: YES. The State may not be sued without its consent. However, the
products which were being sold to the public were unfit for human State may at times be sued. The State’s consent may be given either expressly
consumption. or impliedly. Express consent may be made through a general law or a special
law. Implied consent is conceded when the State itself commences litigation,
PPI filed before the RTC Pasig City a Complaint seeking to declare null and thus opening itself to a counterclaim or when it enters into a contract. Not all
void certain DOH administrative issuances against the DOH, former contracts entered into by the government operate as a waiver of its non-
Secretary Romualdez and Undersecretary Galon. PPI filed an Amended suability; distinction must still be made between one which is executed in the
Complaint impleading DOH Secretary Dayrit. exercise of its sovereign function and another which is done in its proprietary
DOH, former Secretary Romualdez, then Secretary Dayrit, and
Undersecretary Galon sought the dismissal of the Complaint, stressing that In this case, DOH, being an unincorporated agency of the government
PPI’s accreditation was suspended because most of the drugs it was can validly invoke the defense of immunity from suit because it has not
importing and distributing/selling to the public were found by the BFAD to consented to be sued. DOH is an unincorporated agency which performs
be substandard for human consumption. functions of governmental character.

Petitioners moved for the dismissal of the case claiming that it was one It must be stressed that the doctrine of state immunity extends its
against the state. protective mantle also to complaints filed against state officials for acts
done in the discharge and performance of their duties. Public officials can
be held personally accountable for acts claimed to have been performed in
connection with official duties where they have acted ultra vires or where there which settles the accounts directly and, in turn bills the customers who possess
is showing of bad faith. Moreover, "[t]he rule is that if the judgment against the credit cards. In other words, with the possession of the credit card, the
such officials will require the state itself to perform an affirmative act to
satisfy the same, such as the appropriation of the amount needed to pay possessor could purchase on credit from any store, and he could do that
the damages awarded against them, the suit must be regarded as against because the purchases on credit are backed-up by the American Express
the state. In such a situation, the state may move to dismiss the [C]omplaint Corporation thru the credit card. This corporation pays for the purchase and
on the ground that it has been filed without its consent. the defendant has to reimburse such payment to the owner of the credit card;
It is beyond doubt that the acts imputed against Secretaries Romualdez and in this case to the plaintiff."
Dayrit, as well as Undersecretary Galon, were done while in the performance
and discharge of their official functions, and not in their personal capacities. ISSUE: Whether the appellee is the real party in interest
Thus, based on the foregoing considerations, the Complaint against
them should be dismissed for being a suit against the state which
HELD: YES. The operation of the company's credit card system was described
absolutely did not give its consent to be sued. Based on the foregoing as follows: “We appoint service establishments who accept our credit card.
considerations, and regardless of the merits of PPI’s case, this case They perform services or deliver goods to our cardholders and in turn they bill
deserves a dismissal. American Express Company for these goods and services. The American Express
Company reimburses the establishments and in turn bills the credit card holders
for whom the goods were delivered or services performed. The credit card
91.) AMERICAN EXPRESS COMPANY, INC., plaintiff-appellee, holders are sent a statement once a month supported by all original charge
vs. forms.
CIRIO H. SANTIAGO, defendant-appellant. The service establishments submit charges and summaries to the American
FACTS: The plaintiff is a foreign corporation with main office in New York City Express Company and we pay for these summaries, less the discount, once a
and a branch office in the Philippines. As part of its business, the plaintiff has week.”
adopted a credit system known as the American Express Credit Card. After the cardholder's accounts are paid to the establishments concerned by
Defendant applied for an American Express Credit Card and was issued one. plaintiff, the cardholder is obligated to pay the American Express Company
Thereafter, the defendant used it in making purchases and obtaining services upon receipt of this monthly billing.
on credit in various foreign countries. The credit charges ran up to a total of There can be no doubt, therefore, that the appellee is the creditor of the
$15,297.53. The plaintiff made demands for payment upon the defendant but appellant and as such is the proper party to file this suit for collection.
the latter refused to pay. Thus, a suit for collection was filed.
WHEREFORE, the judgment appealed from is affirmed, with modification as to
The defense raised by the defendant is that the appellee has no cause of action the principal amount to be paid by the appellant, which is reduced to US
against him because he is not the real party in interest. He alleges that the credit $14,952.31 in view of the waiver by the appellee of its claim to US $345.22,
card issued was merely to introduce the appellant to the different and the further modification that payment of the said amount should be made
establishments from which he made purchases and obtained services on in Philippine currency.
credit and that it was these establishments who should properly have brought
the suit.

The trial court, however, found that the establishments which sold goods and
services to the appellant on credit "bills the American Express Corporation
92.) RAMON P. ARON v. FRANCISCO REALON et. al. To secure the balance of the purchase price, Aron mortgaged the property
to the remaining heir. Alfredo died in 1989, while Marciano died intestate
G.R. No. 159156, 31 January 2005, SECOND DIVISION (Callejo, Sr., J.)
Engr. Ilaban, the attorney-infact of Aron, filed a case for
DOCTRINE consignation against the heirs of Realon. Trial court declared the
Presence of all indispensable parties is a condition sine qua non for consignation to be valid.
the exercise of judicial power. [P]laintiff is mandated to impead all Respondents filed a complaint for reconveyance and ownership against the
indispensable parties, and the absence of one 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. Petitioner argued that the respondents has no cause of action against
defendant absent any showing that plaintiffs are authorized to sue in a
Before us is a petition for review on certiorari of the Decision of the Court of representative capacity, there being no testate nor intestate proceedings for
Appeals (CA) in CA-G.R. CV No. 68979 which affirmed the Decision of the
the estate of the deceased whom they represent;
Regional Trial Court (RTC) of Bacoor, Cavite, Branch 89, in Civil Case No. BCV
96-29. RTC: in favor of defendants
CA: affirmed RTC. There is fraud

Roman Realon was the owner of two parcels of land both located in Cavite. ISSUE:
When he died intestate, Roman was survived by his son Alfredo and his
grandsons Marciano, Joaquino, Florentino, Felipe, Marcelo, Sesinando and Whether or not the other heirs of Alfredo are the real parties in interest.
Marciano, in his behalf and in behalf of his brothers, executed a Contract to
NO. The settled rule is that every action must be prosecuted and defended in
Sell in favor of the petitioner for the price of P186,948.00
the name of the real party in a fiduciary capacity. The beneficiary must be
Alfredo also executed a contract to sell his undivided portion of the lot to deemed as the real party in interest. Thus the presence of all the
petitioner Ramon Aron. Alfredo obliged himself to execute a deed of final indispensible party is a condition sine qua non for the exercise of judicial
sale. However, he failed to register the sale. power. The plaintiff is mandated to implead all indispensable party and in the
absence of one render all subsequent judgment voids. Failure to include the
However, the vendors failed to file a petition for the registration of the other heirs as indispensible parties in the complaint to nullify the contract
property under the Torrens System. Consequently, the petitioner, as vendee, to sell is fatal to the complaint.
refused to pay the balance of the purchase price.
The only plaintiffs impleaded in the complaint were the respondents herein,
The petitioner himself filed an application for the registration of Lot No.
namely, Francisco, Domingo and Felipe, all surnamed Realon and Emiliano
1253 under his name. He alleged therein that he was the owner of the Purificacion. The surviving signatories of the assailed deeds and the other
property based on a deed of sale executed by Alfredo and his nephews heirs of the deceased vendors were not impleaded as plaintiffs. Without the
presence of all the other heirs as plaintiffs, the trial court could not validly Facts:
render judgment and grant relief in favor of the respondents 7J Maintenance and Janitorial Services ("7J") entered into a contract with
private respondent Lotte Phil. Co., (petitioner herein) to provide manpower
The failure of the respondents to implead the said signatories and all the services to the latter. In compliance with the terms and conditions of the
other heirs as parties-plaintiffs constituted a legal obstacle to the trial court service contract, petitioners, among others, were hired and assigned to private
and the appellate courts exercise of judicial power over the said case, and respondent as repackers or sealers.
thereby rendered any orders or judgments made therein a nullity. To Private respondent dispensed with their services allegedly due to the
reiterate, the absence of an indispensable party renders all subsequent expiration/termination of the service contract by respondent with 7J.
actions of the court null and void for want of authority to act, not only as to Aggrieved, petitioners lodged a labor complaint against both private
the absent parties, but even as to those present. Thus, the RTC should have respondent Lotte and 7J. Labor Arbiter Cresencio G. Ramos, Jr., rendered
judgment5 declaring 7J as employer of respondents.6 The arbiter also found
ordered the dismissal of the complaint
7J guilty of illegal dismissal7 and ordered to reinstate
respondents, backwages, P117,000.00 as service incentive leave pay.9
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed
decision of the Court of Appeals in CA-G.R. CV No. 68979, and that of the Respondents appealed to the National Labor Relations Commission
Regional Trial Court, are SET ASIDE. No costs. (NLRC) praying that Lotte be declared as their direct employer because
7J is merely a labor-only contractor. The NLRC affirmed its ruling that
SO ORDERED. 7J is the employer of respondents and solely liable for their claims.
Respondents’ motion for reconsideration was denied by the NLRC Undaunted,
they filed a petition for certiorari in the Court of Appeals11 against the NLRC
and Lotte, insisting that their employer is Lotte and not 7J.
93.) LOTTE PHIL. CO., INC., Petitioners, Lotte, however, denied that respondents were its employees. It prayed that
vs. the petition be dismissed for failure to implead 7J who is a party interested
ERLINDA DELA CRUZ, LEONOR MAMAUAG, LOURDES in sustaining the proceedings in court, pursuant to Section 3, Rule 46 of
CAUBA, JOSEPHINE DOMANAIS, ARLENE CAGAYAT, the Revised Rules of Civil Procedure. \
AMELITA YAM, VIVIAN DOMARAIS, MARILYN ANTALAN, The Court of Appeals reversed and set aside the rulings of the Labor Arbiter
CHRISTOPHER RAMIREZ, ARNOLD SAN PEDRO, MARISSA and the NLRC. In its decision, the Court of Appeals declared Lotte as the
SAN PEDRO, LORELI JIMENEZ, JEFFREY BUENO, real employer of respondents and that 7J who engaged in labor-only
CHRISTOPHER CAGAYAT, GERARD CABILES, JOAN contracting was merely the agent of Lotte. As such, they must be accorded
ENRIQUEZ, JOSEPH DE LA CRUZ, NELLY CLERIGO, security of tenure and their services terminated only on "just" and "authorized"
Lotte asserts that 7J is an indispensable party and should have been
FERRERA, Respondents. impleaded in respondents’ petition in the Court of Appeals. It claims that
FACTS: This petition for review on certiorari the petition before the Court of Appeals was dismissible for failure to
comply with Section 3,13 Rule 46 in relation to Section 514 of Rule 65 of the
Dispositive Portion: WHEREFORE, the July 9, 2004 decision of the Court Revised Rules of Civil Procedure.
of Appeals in CA-G.R. SP No. 72732 and the November 26, 2004 resolution,
are SET ASIDE. Let the case be REMANDED to the Court of Appeals to Issue: WON 7J is an indispensable party.
include 7J Maintenance and Janitorial Services as an indispensable party
to the case for further proceedings.
Ruling: G.R. No. L-34124 April 30, 1985
An indispensable party is a party in interest without whom no final
MR. & MRS. TADEO P. DAEL, petitioners,
determination can be had of an action,15 and who shall be joined either as
plaintiffs or defendants.16 The joinder of indispensable parties is
THE HON. BERNARDO TEVES, as Presiding Judge, Court of First
mandatory.17 The presence of indispensable parties is necessary to vest the
Instance of Misamis Oriental, Branch VIII and DIONISIO EDOROT,
court with jurisdiction, which is "the authority to hear and determine a
cause, the right to act in a case".18 Thus, without the presence of
indispensable parties to a suit or proceeding, judgment of a court cannot
HERMINIGILDO EDOROT, represented by his heirs. VICTOR
attain real finality.19 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.20
Petition for Review on certiorari of the Order of the Hon. respondent Presiding
In the case at bar, 7J is an indispensable party. It is a party in interest Judge of the Court of First Instance of Misamis Oriental-Branch VIII, issued
because it will be affected by the outcome of the case. The Labor Arbiter on July 27, 1971 in Civil Case No. 3531 entitled "Mr. & Mrs. Tadeo P. Dael
and the NLRC found 7J to be solely liable as the employer of respondents. The versus Dionisio Edorot, et al", dismissing petitioners' complaint; and his
Court of Appeals however rendered Lotte jointly and severally liable with 7J Honor's order of August 12, 1971 denying petitioners' motion for
who was not impleaded by holding that the former is the real employer of reconsideration of the said order of dismissal.
respondents. Plainly, its decision directly affected 7J.
In Domingo v. Scheer,21 we held that the non-joinder of indispensable parties
is not a ground for the dismissal of an action22 and the remedy is to implead
In 1970, petitioners filed with the then Court of First Instance of Misamis
the non-party claimed to be indispensable.23 Parties may be added by order of
Oriental, a complaint for: "Ownership, Recovery of Possession &
the court on motion of the party or on its own initiative at any stage of the
Damages" against the private respondents.
action and/or such times as are just. If the petitioner refuses to implead an
indispensable party despite the order of the court, the latter may dismiss the
complaint/petition for the petitioner/plaintiff’s failure to comply therefor.24 The complaint, among others, alleged that petitioners are the true and
absolute owners in fee simple of a parcel of land in Misamis Oriental, having
Although 7J was a co-party in the case before the Labor Arbiter and the NLRC, purchased the same from the late Esteban Edorot in 1962; and that
respondents failed to include it in their petition for certiorari in the Court sometime in the month of February 1964, after the death of Esteban Edorot,
of Appeals. Hence, the Court of Appeals did not acquire jurisdiction over the private respondents, by means of force, threats and intimidation
7J. No final ruling on this matter can be had without impleading 7J, whose surreptitiously occupied the said property.
inclusion is necessary for the effective and complete resolution of the case
and in order to accord all parties with due process and fair play. Private respondents, through counsel, filed their Answer with Counterclaim
in January 1971, claiming that the property in question is owned by them pro-
indiviso by inheritance from their deceased parents.

The issue having been joined, the case was set for pre-trial on various
occasions "to give the parties more chance to arrive at an amicable
settlement." In all these pre-trial conferences, counsel for private respondents
and respondent Vidal Edorot appeared. The latter had a special power of
attorney to appear for defendants Dionisio, Diosdada, Ponciano and
Juana. The two other defendants, Petra and Herminigildo, died long before
the filing of the complaint (take note kasi dahil namatay na sila even before possessors, pro-indiviso by inheritance from their deceased parents, of the
the complaint was filed, kailangan i-implead yung heirs nila kasi yung heirs ay subject litigated parcel. Necessarily then, deceased defendants
may interest sa issue, which is hindi nagawa ng petitioners, hence, this case.). Herminigildo Edorot and Petra Edorot have an undivided interest, right
and participation adverse to that of the petitioners' in the property in
In June 1971, when the case was set for pre-trial for the first time before litigation. Since both of them are already dead (Herminigildo died on
respondent Judge Bernardo Teves, an Order reading as follows- September 29, 1969 and Petra died on April 5, 1970) even prior to the filing
of the complaint against them in the court below and their interest in the
Considering that, as manifested before the Court, two of the property in question having inured by intestacy to their heirs, the latter
defendants died before the filing of this case; the plaintiffs are (heirs) thereby became the real parties in interest who should be
hereby given until July 15, 1971 within which to file an impleaded as defendants without whom no final determination of Civil
amended complaint to include the heirs or representatives Case No. 3531 can be had. Decidedly then they are indispensable parties who
of said deceased defendants, furnishing copy thereof to Atty. should be compulsory joined as defendants in the instant case. Sections 2 and
Dumlao. 7, Rule 3 of the Rules of Court provides-

was issued by the respondent Judge. Section 2. Parties in interest. —Every action must be
prosecuted and defended in the name of the real party in
In July 1971, counsel for private respondents filed an Ex- Parte interest. All persons having an interest in the subject of the
Manifestation, praying that the case be dismissed pursuant to Section 3, Rule action and in obtaining the relief demanded shall be joined as
17 of the Rules of Court for failure of petitioners to comply with the plaintiffs. All persons who claim an interest in the
aforequoted order of the Court to file an amended complaint. controversy or the subject thereof adverse to the plaintiff, or
who are necessary to complete determination or settlement
RTC: Dismissed the complaint: of the question involved therein shall be joined as
“this case is hereby dismissed for failure of the plaintiffs to
comply with the Order of this Court dated June 29, 1971.” Section 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
(1) Whether or not the Judge acted without jurisdiction or with grave abuse of
The heirs of deceased defendants in the case at bar being clearly
discretion in ordering petitioners to file an amended complaint, to include the
indispensable parties, respondent Judge acted properly in ordering the
alleged heirs and/or representatives of respondents Petra Edorot and
amendment of the complaint so as to include the said heirs as defendants.
Herminigildo Edorot, deceased; NO.
Since the petitioners failed to comply with this Order, respondent Judge
acted within his prerogative in dismissing the complaint pursuant to
(2) Whether or not the Judge committed a legal error in issuing the order Section 3, Rule 17 of the Rules of Court which provides that—
dismissing the case. NO.
If the plaintiff fails to appear at the time of the trial, or to
RULING: prosecute his action for unreasonable length of time, or to
comply with these rules or any order of the court the action
In their complaint, petitioners (then plaintiffs) claim that they are the owners maybe dismissed upon motion of the defendant or upon
of the parcel of land in question. Private respondents, on the other hand, in the court's own motion. This dismissal shall have the effect
their Answer controvert such assertion. They also claim to be the owners and
of an adjudication upon the merits unless provided by the
court. (Emphasis supplied)
Topic: Indispensable Party – in relation to solidary creditors
Thus, it has been held that—
Where the Court orders the plaintiff to amend its complaint FRANCISCO and MANUELITA A. SALIGO, Respondents.
within a certain period of time in order to implead as party
On August 30, 1983 Nicencio Tan Quiombing and Dante Biscocho entered
defendants one who is not a party to the case but who is an
indispensable party, plaintiff's refusal to comply with such into a “Construction and Service Agreement with Francisco and Manuelita
order is a ground for the dismissal of the complaint. Saligo. For a consideration of P137, 940 Nicencio Quiombing and Dante
Biscocho jointly and severally bound themselves to construct a house for
ADDITIONAL ISSUE: Francisco and Manuelita.

Petitioners now claim that their failure to amend the complaint was due to On October 10, 1984, Nicencio and Manuelita entered into a second written
the fact that private respondents' counsel failed to inform the Court of the agreement under which Manuelita acknowledged the completion of the
names of the heirs and/or representatives of the deceased defendants house and undertook to pay the balance of the contract price. On November
(Herminigildo and Petra Edorot) pursuant to Section 16, Rule 3, New Rules of 19, 1984, Manuelita Saligo signed a promissory note for P125,363.50
Court which provides- representing the amount still due from her and her husband, payable on or
before December 31, 1984, to Nicencio Tan Quiombing.
Section 16. Duty of attorney upon death incapacity or
incompetency of party.—Whenever a party to a pending Unable to collect the promissory note despite repeated demands, Nicencio
case dies, becomes incapacitated, or incompetent, it shall be filed a complaint for recovery. Francisco and Manuelita filed a motion to
the duty of his attorney to inform the court promptly of such dismiss contending that Dante Biscocho was an indispensable party.
death, incapacity or incompetency and to give the name and
residence of his executor, administrator, guardian or other The trial court initially denied the motion to dismiss but subsequently
legal representative (Emphasis supplied) reconsidered and granted it. The complaint was dismissed, but without
prejudice to the filing of an amended complaint to include the other solidary
We find petitioners' reliance on the aforequoted provision as misplaced. Rule
creditor as a co-plaintiff. Nicencio Quiombing , instead of filing an amended
3, Section 16 of the Rules applies to a situation where a party (whether
plaintiff or defendant) dies after the filing of the complaint and during the complaint, appealed the dismissal arguing that as a solidary creditor he
pendency of the case. This is not the situation in the case at bar since the two could act by himself alone in the enforcement of his claim against the
defendants, whose heirs are to be impleaded died even before the filing of the Saligos. Moreover, the amounts due were payable only to him under the
complaint. second agreement, where Biscocho was not mentioned at all. The CA,
however sustained the lower court.
Upon the foregoing facts, We find that respondent Judge committed no error
in dismissing the complaint. However, to avoid injustice, such dismissal Issue:
should not operate as an adjudication on the merits.
WON one of the two solidary creditors could sue by himself alone for the
WHEREFORE, the lower court's Order of dismissal, which should be recovery of amounts due to both of them without joining the other creditor
understood to be without prejudice, is AFFIRMED. Cost against petitioners. as a co-plaintiff?
WON the second solidary creditor is an indispensable party We hold that, although he signed the original Construction and Service
Agreement, Biscocho need not be included as a co-plaintiff in the complaint
filed by the petitioner against the private respondents. Quiombing as
Yes, one of the two solidary creditors could sue by himself solidary creditor can by himself alone enforce payment of the construction
costs by the private respondents and as a solidary debtor may by himself
The essence of active solidarity consists in the authority of each creditor to alone be held liable for any possible breach of contract that may be proved
claim and enforce the rights of all, with the resulting obligation of paying by the private respondents. In either case, the participation of Biscocho is
every one what belongs to him; there is no merger, much less a renunciation not at all necessary, much less indispensable.
of rights, but only mutual representation.

It would follow from these observations that the question of who should sue
Saligos was a personal issue between Quiombing and Biscocho in which the 98.) CHRISTINE CHUA V. JORGE TORRES and ANTONIO BELTRAN
spouses Saligo had no right to interfere. It did not matter who as between
them filed the complaint because the Saligos were liable to either of the two
as a solidary creditor for the full amount of the debt. Full satisfaction of a PETITION: Petition for Review under Rule 45
judgment obtained against them by Quiombing would discharge their
obligation to Biscocho, and vice versa; hence, it was not necessary for both
Quiombing and Biscocho to file the complaint. Inclusion of Biscocho as a co- “WHEREFORE, the Petition is GRANTED. The Orders dated 3 December 2001
plaintiff, when Quiombing was competent to sue by himself alone, would be and 15 January 2002 of the Regional Trial Court of Caloocan City, Branch 126,
a useless formality. in Civil Case No. C-19863 are SET ASIDE, and the Complaint in the
aforementioned case is REINSTATED. The lower court is ENJOINED to hear
and decide the case with deliberate dispatch. No pronouncement as to costs.
The second solidary debtor is not an indispensable party “

Indispensable parties are those with such an interest in the controversy that FACTS:
a final decree would necessarily affect their rights, so that the court cannot
Christine Chua filed a complaint for damages before the RTC Caloocan
proceed without their presence. Necessary parties are those whose presence
impleading her brother Jonathan Chua as a necessary co-plaintiff.
is necessary to adjudicate the whole controversy, but whose interests are so
far separable that a final decree can be made in their absence without Torres and Beltran were the owner and employee, respectively of the Caltex
affecting them. Service Center.
According to Justice Jose Y. Feria, "where the obligation of the parties is The complaint alleged that on 3 April 2000, Jonathan Chua issued in favor of
solidary, either one of the parties is indispensable, and the other is not even the Caltex Service Center his personal Rizal Commercial Banking
necessary (now proper) because complete relief may be obtained from Corporation (RCBC) Check No. 0412802 in the amount of P9,849.20 in
either." payment for purchases of diesel oil.
However, the check was dishonored so Beltran sent petitioner Chua a
demand letter. Petitioner ignored the demand letter on the ground that she
The subject complaint does not allege any rights of Jonathan Chua violated
was not the one who issued the said check.
by respondents, present any rights of his to be enforced, or seek in his
Without bothering to ascertain who had actually issued the check, Beltran behalf any rights to the avails of suit. In short, Jonathan claims nothing, and
instituted against petitioner a criminal action for violation of Batas for nothing, in the subject complaint. If he alone filed the complaint, it would
Pambansa Bilang 22 (B.P. 22). A warrant of arrest was issued against have been dismissed on the ground that the complaint states no cause of
petitioner. She claims that because of the arrest cause by Beltran’s action, instituted as it was by a person who was not a real party in interest.
negligence she was humiliated, thus her claim for damages.
It is not even necessary for Christine to implead Jonathan as a co-plaintiff.
Significantly, while Jonathan Chua was named as a plaintiff to the suit, it was He’s only connection in the complaint is that he is the one who drew the
explicitly qualified in the second paragraph of the complaint that he was check. He does not stand to be affected should the RTC rule either favorably
being impleaded here-in as a necessary party-plaintiff. or unfavorably of the complaint. This is due to the nature of the cause of
action of the complaint, which alleges an injury personal to petitioner, and
There’s no allegation in the complaint of any damage or injury sustained by
the relief prayed for, which is to be adjudicated solely to petitioner
Jonathan, neither did Jonathan Chua sign any verification or certification
against forum-shopping, although petitioner did sign an attestation, Section 8, Rule 7 of the Rules of Civil Procedure defines a necessary party as
wherein she identified herself as the principal plaintiff. 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
RTC ordered the dismissal of the complaint on the ground that Jonathan
determination or settlement of the claim subject of the action
Chua had not executed a certification against 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 2. W/N the absence of the signature of the person misjoined as a party-
required to execute the certification is a principal party, a nominal party or plaintiff in either the verification page or certification against forum-shopping
a necessary party. is ground for the dismissal of the action.—NO

The matter was elevated directly to the Supreme Court by way of petition for The rule prohibits dismissal of a suit on the ground of non-joinder or
review under Rule 45. misjoinder of parties. Moreover, 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.
1. W/N Jonathan is a necessary party--NO
It should then follow that any act or omission committed by a misjoined party
It is elementary that it is only in the name of a real party in interest that a civil plaintiff should not be cause for impediment to the prosecution of the case,
suit may be prosecuted. Under Section 2, Rule 3 of the Rules of Civil much less for the dismissal of the suit.
Procedure, a real party in interest is the party who stands to be benefited or
Since the misjoined party plaintiff receives no recognition from the court as
injured by the judgment in the suit, or the party entitled to the avails of the
either an indispensable or necessary party-plaintiff, it then follows that
suit. One having no right or interest to protect cannot invoke the jurisdiction
whatever action or inaction the misjoined party may take on the verification
of the court as a party plaintiff in an action.
or certification against forum-shopping is inconsequential. Hence, it should
not have mattered to the RTC that Jonathan Chua had failed to sign the flagrant breach of trust and of their fiduciary obligations as public officers,
certification against forum-shopping, since he was misjoined as a plaintiff in with grave abuse of right and power and in brazen violation of the Constitution
the first place. and laws of the Republic of the Philippines', including the misappropriation
and theft of public funds, plunder of the nations wealth, extortion, blackmail,
EMERGENCY RECIT: bribery, embezzlement and other acts of corruption, betrayal of public trust
and brazen abuse of power, as more fully described in the Complaint thus
Christine filed a complaint for damages against respondents impleading her
'resulting in their unjust enrichment during defendant Ferdinand E. Marcos' 20
brother Jonathan Chua as a necessary co-plaintiff. Jonathan did not sign the
years of rule.
certificate against forum-shopping so the RTC dismissed the case on that
ground. Defendant Jose D, Campos, Jr., having been served with summons
on August 5, 1987, filed with the respondent Court an undated
SC: RTC erred in dismissing the case. Jonathan does not stand to be affected 'Manifestation and Motion to Dismiss Complaint with Respect to Jose D.
should the RTC rule either favorably or unfavorably of the complaint, thus he Campos' praying that he be removed as party defendant from the
is not a necessary party. There is a misjoinder since he is impleaded yet he is complaint on the grounds that he had 'voluntarily surrendered or turned
not a necessary party. It then follows that his signing of the certification is over [any share in his name on any of the corporations referred to, aside from
immaterial. The RTC should not dismiss the case, in fact it can motu proprio claiming any interest, ownership or right thereon] to the Government of the
drop a misjoined party. Republic of the Philippines' and that he was 'entitled to the immunity granted
by the PCGG pursuant to Executive Order No. 14.
Petitioner, Republic, filed with the respondent Court a 'Motion'
99.) REPUBLIC OF THE PHILIPPINES, petitioner, JOSE D. CAMPOS, seeking to drop defendant Jose D. Campos, Jr. from the Complaint on the
JR., petitioner-intervenor, ground that the PCGG had, in a Resolution, granted immunity to Mr.
vs. Jose Y. Campos and his family, which immunity necessarily extends to
defendant Jose D. Campos, Jr. who is the son of said Mr. Jose Y. Campos.
THE HONORABLE SANDIGANBAYAN, FIRST DIVISION, The private respondents opposed petitioner's motion.
PACIENCIA, JESUS TUPALAR SEVERINO DELA CRUZ, and FE Respondent Court issued a Resolution which denied petitioner's
CORTEZO, respondents. and Jose D. Campos, Jr.'s motions to drop him from the complaint. The
Solicitor General asserts that the name of Jose D. Campos, Jr. was included as
G.R. No. 84895 May 4, 1989 defendant in the complaint through mistake or oversight and that pursuant to
Section 11, Rule 3 of the Revised Rules of Court it has a right to drop him as
defendant without prior consent of any party. The Solicitor General also
Facts: maintains that although the defendants in the case were charged solidarily,
Campos, Jr. was not an indispensable party since Article 1216 of the Civil
Petitioner filed with Sandiganbayan (respondent court) a complaint Code allows the petitioner as solidary creditor to choose among the solidary
for reconveyance, reversion, accounting, restitution and damages against debtors against whom it win enforce collection. Jose Campos, Jr. adds that the
Alfredo T. Romualdez, Ferdinand E. Marcos, Imelda R. Marcos, Jose D. petitioner's motion to drop him as defendant should be considered as one filed
Campos, Jr. and forty five (45) other defendants including the above-named under section 1, Rule 17 of the Revised Rules of Court thus giving it the
private respondents seeking to 'recover from them ill-gotten wealth absolute right to dismiss the action by mere notice of dismissal. Furthermore,
consisting of funds and other property which they [acting singly or collectively petitioner-intervenor Campos, Jr. states that the Sandiganbayan has no
and] in unlawful concert with one another, had acquired and accumulated in
jurisdiction to determine the validity of the grant of immunity and release from Even from the viewpoint of procedure, the PCGG was right when it filed a
civil liability to the intervenor as there is no dispute between him and the motion to drop Jose Campos, Jr. as defendant in the civil case. The PCGG's
PCGG. motion to drop Campos, Jr. as defendant in Civil Case No. 0010 has legal basis
under Executive Order No. 14. The fact that Campos, Jr. and all the other
defendants were charged solidarily in the complaint does not make him
Whether or not the Sandiganbayan has jurisdiction to look into the an indispensable party.
validity of the immunity granted by the PCGG to Jose Y. Campos which was
extended to his son, petitioner-intervenor herein, Jose Campos, Jr.
100.) Nieves Plasabas and Marcos Malazarte
vs Court of Appeals, Dominador Lumen and Aurora Aunzo
Executive Order No. 14 defines "the jurisdiction over cases involving
the ill-gotten wealth of former President Ferdinand E. Marcos, Mrs. Imelda R. Facts:
Marcos, members of their immediate family, close relatives, subordinates,
close and/or business associates, dummies, agents and nominees." Section 2 In 1074, Plasabas and Malazarte filed a complaint for recovery of title to
thereof provides that the PCGG shall file all such cases, whether civil or property with damages before CFI Maasin, Leyte. The subject property was a
criminal, with the Sandiganbayan, which shall have exclusive and original parcel of coconut land declared in the name of Plasabas. They pray for their
jurisdiction thereof ". The powers of the PCGG are not unlimited. Its rights over the land be confirmed and for Lumen and Aunzo to vacate the
jurisdiction over cases involving ill-gotten wealth must be within the land.
parameters stated in Executive Order No. 14. Necessarily, the jurisdiction of
the Sandiganbayan which is tasked to handle the ill-gotten wealth cases must Aunzo and Lumen interposed that they inherited the land from their common
include the jurisdiction to determine whether or not the PCGG exceeded ancestor, Francisco Plasabas. In the course of trial, it was found out that
its power to grant immunity pursuant to the provisions of Executive Nieves was not the absolute owner of the land.
Order No. 14.
Aunzo and Lumen then raised the argument that the case should have been
In exchange for the voluntary surrender of the ill-gotten properties terminated at inception for petitioner's failure to implead indispensable
acquired by the then President Ferdinand E. Marcos and his family which were parties (Jose, Victor and Victoria).
in Jose Campos' control, the latter and his family were given full immunity in
both civil and criminal prosecutions. In the absence of an express prohibition, CFI dismissed the case. The instant case should have been dismissed without
the rule on amicable settlements and/or compromises on civil cases under the prejudice a long time ago for lack of cause of action as the plaintiffs spouses
Civil Code is applicable to PCGG cases. Since petitioner-intervenor Jose Marcos Malazarte and Nieves Plasabas Malazarte have no complete legal
Campos, Jr. is a legitimate son of Jose Y. Campos, the full immunity personality to sue by themselves alone without joining the brothers and
granted to the latter and his family must also extend to the former sisters of Nieves who are as INDISPENSABLE as the latter in the final
pursuant to the May 28, 1986 resolution of the PCGG. determination of the case. Not impleading them, any judgment would have
no effectiveness.
It is immaterial whether or not Campos, Jr. was given specific or
individual immunity from his liabilities as regards the Marcos/Romualdez Petitioners then elevated the case to the CA. CA affirmed the ruling of the CFI.
corporations, the subject matter of Civil Case No. 0010. The grant of full CA declared that the non-joinder of the indispensable parties would violate
immunity to Campos, Senior and his family covers all of Campos, Jr.'s the principle of due process, and that Article 487 of the Civil Code could not
liabilities, criminal or civil, arising from association with the Marcoses
including transactions with the corporations involved in the said civil case.
be applied considering that the complaint was not for ejectment, but for FACTS: Quirino de Guzman and Spouses Carandang are stockholders as
recovery of title or a reivindicatory action. well as corporate officers of Mabuhay Broadcasting System (MBS). Capital
stock of MBS was increased, from ₱500,000 to P1.5 million. ₱345,000 of
Held: the increase was subscribed by the spouses Carandang. Thereafter, MBS
With a motion to reconsider, SC grants the petition and remands the case to again increased its capital stock, spouses Carandang yet again subscribed
the CFI for disposition on the merits, citing Article 487 that provides any one to the increase.
of the co-owners may bring an action for ejectment. De Guzman claims that part of the payment for these subscriptions were
In any event, the trial and appellate courts committed reversible error when paid by him. Thus, de Guzman sent a demand letter to the spouses
they summarily dismissed the case, after both parties had rested their cases Carandang for the payment of said total amount.
following a protracted trial commencing in 1974, on the sole ground of failure
The spouses Carandang refused to pay, contending that a pre-
to implead indispensable parties. The rule is settled that the non-joinder of incorporation agreement was executed between Arcadio Carandang and
indispensable parties is not a ground for the dismissal of an action. The De Guzman, whereby the latter promised to pay for the stock
remedy is to implead the non-party claimed to be indispensable. subscriptions of the former without cost, in consideration for Arcadio
The suit is deemed to be instituted for the benefit of all co-owners. Carandang’s technical expertise, and skill in repairing communication

De Guzman filed a complaint, seeking to recover the ₱336,375 together

TOPIC: RULE 3, SECTIONS 7 TO 12 (PARTIES with damages.
G.R. No. 160347 November 29, 2006 RTC: rendered judgment in favor of de Guzman. Spouses Carandang are
ordered to pay de Guzman.
CARANDANG, Petitioners, CA: affirmed the RTC Decision.
MILAGROS DE GUZMAN, VICTOR DE ISSUE/S: Whether or not the Milagros de Guzman is an indispensable
GUZMAN, REYNALDO DE GUZMAN, party and non-inclusion as a party-plaintiff warrants the dismissal of the
GUZMAN, JR., Respondents.

HELD: NO. Milagros de Guzman is not an indispensable party.

CHICO-NAZARIO, J.: Thus, the dismissal of the suit is not warranted by her not being a
party thereto.
PETITION: A Petition for Review on Certiorari assailing the CA
Decision and Resolution. Spouses Carandang claim that, since 3 of the 4 checks used to pay their
stock subscriptions were issued in the name of Milagros de Guzman, the
latter should be considered an indispensable party. Being such, the failure as may be provided by the applicable substantive law or procedural rule.
to join Mrs. de Guzman as a party-plaintiff should cause the dismissal of An example is provided by Section 4, Rule 3 of the Rules of Court:
the action.
Sec. 4. Spouses as parties. – Husband and wife shall sue or be sued
We disagree. When an indispensable party is not before the court, the jointly, except as provided by law.
action should likewise be dismissed. The absence of an indispensable party
renders all subsequent actuations of the court void, for want of authority Pro-forma parties can either be indispensable, necessary or neither
to act, not only as to the absent parties but even as to those present. On indispensable nor necessary. In cases of pro-forma parties who are neither
the other hand, the non-joinder of necessary parties does not result in the indispensable nor necessary, the general rule under Section 11, Rule 3 must
dismissal of the case. Instead, Section 9, Rule 3 provides for the be followed: such non-joinder is not a ground for dismissal.
consequences of such non-joinder:
Hence, in a case concerning an action to recover a sum of money, we held
Sec. 9. Non-joinder of necessary parties to be pleaded. – Whenever that the failure to join the spouse in that case was not a jurisdictional
in any pleading in which a claim is asserted a necessary party is not defect. The non-joinder of a spouse does not warrant dismissal as it is
joined, the pleader shall set forth his name, if known, and shall state merely a formal requirement which may be cured by amendment. Thus,
why he is omitted. Should the court find the reason for the dismissal is warranted only if the pro-forma party not joined in the
omission unmeritorious, it may order the inclusion of the omitted complaint is an indispensable party.
necessary party if jurisdiction over his person may be obtained.
In sum, in suits to recover properties, all co-owners are real parties in
The failure to comply with the order for his inclusion, without interest. However, pursuant to Article 487 of the Civil Code, any one of
justifiable cause, shall be deemed a waiver of the claim against such them may bring an action for the recovery of co-owned properties.
party. Therefore, only one of the co-owners, namely the co-owner who filed the
suit for the recovery, is an indispensable party thereto. The other co-
The non-inclusion of a necessary party does not prevent the court owners are not indispensable parties. They are not even necessary parties,
from proceeding in the action, and the judgment rendered therein for a complete relief can be accorded in the suit even without their
shall be without prejudice to the rights of such necessary party. participation, since the suit is presumed to have been filed for the benefit
of all co-owners.
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 We hold that Milagros de Guzman is not an indispensable party in
Section 3, Rule 17 which allows the dismissal of the complaint for failure the action for the recovery of the allegedly loaned money to the
to comply with an order of the court, as Section 9, Rule 3 specifically spouses Carandang. As such, she need not have been impleaded in
provides for the effect of such non-inclusion: it shall not prevent the court said suit, and dismissal of the suit is not warranted by her not being
from proceeding in the action, and the judgment rendered therein shall be a party thereto.
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 Spouses Carandang were married before the effectivity of the Family Code,
dismissal of the action. hence their property regime is conjugal partnership under the Civil Code.
Under such regime, an obligation entered into by the husband and wife is
There is a third set of parties: the pro-forma parties, which are those who chargeable against their conjugal partnership and it is the partnership,
are required to be joined as co-parties in suits by or against another party which is primarily bound for its repayment. Thus, when the spouses are
sued for the enforcement of the obligation entered into by them, they are
being impleaded in their capacity as representatives of the conjugal interests over the subject land to Santiago (Deed of Extrajudicial
partnership and not as independent debtors, such that the concept of joint Settlement or Adjudication with Deed of Sale). The deed was not signed
and solidary liability, as between them, does not apply. by the other heirs who did not sell their respective shares, namely,
Ceruleo, Celedonio, and Maude.
CA is correct insofar as it held that when the spouses are sued for the
enforcement of the obligation entered into by them, they are being The parties executed a Supplemental Contract - vendors-heirs and
Santiago agreed that out of the aforesaid consideration, only 109,807.93
impleaded in their capacity as representatives of the conjugal
will be paid up front, Santiago will only pay the remaining balance of
partnership and not as independent debtors. Hence, either of them 337,887.73 upon the partition of the subject land.
may be sued for the whole amount, similar to that of a solidary
liability, although the amount is chargeable against their conjugal Santiago was not able to have TCT No. T-12255 cancelled and the
partnership property. subject document registered because of Ceruleo, Celedonio, and
Maude’s refusal to surrender the said title. Ceruleo, Celedono and Maude
FIRST DIVISION failed to partition the subject land. Santiago filed a Complaint for judicial
partition and for receivership.
March 11, 2015
RTC = ordered, among others, the partition of the subject land between
103.) MA. ELENA R. DIVINAGRACIA, as Administratrix of the Santiago on the one hand, and Ceruleo, Celedonio, Maude, and the heirs
ESTATE OF THE LATE SANTIAGO C. DIVINAGRACIA, Petitioner, of Mateo, Sr. (i.e., Felcon, et al.) on the other hand and, consequently,
vs. the cancellation of TCT No. T- 12255 and the issuance of a new owner’s
CORONACION PARILLA, CELESTIAL NOBLEZA, CECILIA LELINA, duplicate certificate in favor of Santiago and the group of Ceruleo,
CELEDONIO NOBLEZA, MAUDE NOBLEZA, Respondents. Celedonio, Maude, and the heirs of Mateo, Sr;

DECISION  through the subject document, Santiago became a co-owner of

the subject land and, as such, has the right to demand the
PERLAS-BERNABE, J.: partition of the same
 RTC held that Santiago did not validly acquire Mateo, Sr.’s share
FACTS: over the subject land, considering that Felcon admitted the lack of
authority to bind his siblings with regard to Mateo, Sr.’s share
Conrado Nobleza Sr. married
CA = set aside the RTC Rulings and, consequently, dismissed Santiago’s
complaint for judicial partition; Felcon’s siblings, as well as Maude’s
1. Lolita Palermo (2 children: Cresencio and Conrado, Jr.)
children, are indispensable parties to the judicial partition of the subject
2. Eusela Niangar (7 children: Mateo, Sr., Coronacion, Cecilia,
land and, thus, their non-inclusion as defendants in Santiago’s complaint
Celestial, Celedonio, Ceruleo,7 and Cebeleo, Sr.)
would necessarily result in its dismissal
3. With 3 children: Eduardo, Rogelio, Ricardo.
SC =
Conrado Sr. owned a 313 squared meters parcel of land located at Cor.
Fuentes – Delgado Streets, Iloilo City.
Indispensable party - one whose interest will be affected by the
court’s action in the litigation, and without whom no final
Upon Conrado, Sr.’s death, Cresencio, Conrado, Jr., Felcon (in
determination of the case can be had. The party’s interest in the
representation of his father, Mateo, Sr., and his siblings), Coronacion,
subject matter of the suit and in the relief sought are so inextricably
Celestial, Cecilia, Rogelio, Eduardo, and Ricardo sold their respective
intertwined with the other parties’ that his legal presence as a party to the
proceeding is an absolute necessity. In his absence, there cannot be a interest over the subject land is merely derived from that of the vendors-
resolution of the dispute of the parties before the court which is effective, heirs, the latter should first be determined as co-owners thereof, thus
complete, or equitable. Thus, the absence of an indispensable party necessitating the joinder of all those who have vested interests in such
renders all subsequent actions of the court null and void, for want of land, i.e., the aforesaid heirs of Conrado, Sr., in Santiago’s complaint.
authority to act, not only as to the absent parties but even as to those
present CA erred in ordering the dismissal - Court definitively explained that in
instances of non-joinder of indispensable parties, the proper remedy is to
Actions for partition, Section 1, Rule 69 of the Rules of Court - all implead them and not to dismiss the case:
persons interested in the property shall be joined as defendants:
The non-joinder of indispensable parties is not a ground for the
SEC. 1. Complaint in action for partition of real estate. – A person having dismissal of an action. At any stage of a judicial proceeding and/or at
the right to compel the partition of real estate may do so as provided in such times as are just, parties may be added on the motion of a party or
this Rule, setting forth in his complaint the nature and extent of his title on the initiative of the tribunal concerned. If the plaintiff refuses to
and an adequate description of the real estate of which partition is implead an indispensable party despite the order of the court, that
demanded and joining as defendants all other persons interested in the court may dismiss the complaint for the plaintiff’s failure to comply
property. (Emphasis and underscoring supplied) with the order.

Thus, all the co-heirs and persons having an interest in the property are The remedy is to implead the non-party claimed to be indispensable
indispensable parties; as such, an action for partition will not lie without
the joinder of the said parties. 104.)
The aforementioned heirs – whether in their own capacity or in CASE NAME: NATIONAL POWER CORPORATION, Petitioner, vs.
representation of their direct ascendant – have vested rights over the PROVINCIAL GOVERNMENT OF BATAAN, SANGGUNIANG
subject land and, as such, should be impleaded as indispensable parties PANLALAWIGAN OF BATAAN, PASTOR B. VICHUACO (IN HIS
in an action for partition thereof. However, a reading of Santiago’s OFFICIAL CAPACITY AS PROVINCIAL TREASURER OF BATAAN) and
complaint shows that as regards Mateo, Sr.’s interest, only Felcon was THE REGISTER OF DEEDS OF THE PROVINCE OF
impleaded, excluding therefrom his siblings and co-representatives. BATAAN, Respondents.
Similarly, with regard to Cebeleo, Sr.’s interest over the subject land, the
complaint impleaded his wife, Maude, when pursuant to Article 972 of the TOPIC: Rule 3, Sections 7 to 12 (Parties to a Civil Action)
Civil Code, the proper representatives to his interest should have been PETITION: Not mentioned.
his children, Cebeleo, Jr. and Neobel. Verily, Santiago’s omission of the
aforesaid heirs renders his complaint for partition defective.

In actions for partition, the court cannot properly issue an order to FACTS: On March 28, 2003 National Power Corporation (NPC) received a
divide the property, unless it first makes a determination as to the notice of franchise tax delinquency from the Provincial Government of Bataan
existence of co- ownership. The court must initially settle the issue of (the Province) for ₱45.9 million covering the years 2001, 2002, and 2003.
ownership, which is the first stage in an action for partition. Until and Instead of paying the tax or rejecting it, the NPC chose to reserve its right to
unless this issue of co-ownership is definitely and finally resolved, it contest the computation pending the decision of the Supreme Court in National
would be premature to effect a partition of the disputed properties. Power Corporation v. City of Cabanatuan, a case where the issue of the NPC’s
exemption from the payment of local franchise tax was then pending.
While it is conceded that Santiago bought the interests of majority of the Eventually, the Court held NPC liable for the payment of local franchise tax in
heirs of Conrado, Sr. as evidenced by the subject document, as a said case. This prompted the Province to send another notices of tax due to
vendee, he merely steps into the shoes of the vendors-heirs. Since his the NPC. The NPC replied, however, that it had ceased to be liable for the
payment of that tax after Congress enacted (R.A.) 9136, also known as the HELD:
Electric Power Industry Reform Act (EPIRA) that took effect on June 26, 2001.
The new law relieved the NPC of the function of generating and supplying NPC is no longer liable by virtue of the EPIRA which took effect on June
electricity beginning that year. Consequently, the Province has no right to 26, 2001.
further assess it for the 2001, 2002, and 2003 local franchise tax. Nonetheless,
the Province issued a "Warrant of Levy" on 14 real properties that it used to
own in Limay, Bataan. Said properties were sold at a public auction with the No need to rule on the issue of ownership
Province as the winning bidder.
Proving these things (whether NPC no longer owned or operated the
business in Bataan) did not require the presentation of evidence in this case
since these events took place by operation of law, particularly the EPIRA.
The NPC filed with the RTC of Mariveles, Bataan, a petition for declaration of Section 8 of the EPIRA created the TRANSCO and transferred to it the NPC’s
nullity of the foreclosure sale with prayer for preliminary mandatory injunction. electrical transmission function with effect on June 26, 2001. The NPC,
One of its contention is that NPC had ceased by operation of the EPIRA in therefore, ceased to operate that business in Bataan by operation of law.
2001 to engage in power transmission, given that all its facilities for this Since the local franchise tax is imposed on the privilege of operating a
function, including its nationwide franchise, had been transferred to the franchise, not a tax on the ownership of the transmission facilities, it is
National Transmission Corporation (TRANSCO). clear that such tax is not a liability of the NPC.

The RTC dismissed the NPC’s petition. PSALM Corp and TRANSCO are indispensable parties to the case

The NPC appealed to the Court of Appeals (CA) but the Province filed a motion Section 49 of the EPIRA created the Power Sector Assets and Liabilities
to dismiss on the ground of lack of jurisdiction over the subject matter since Management Corporation (PSALM Corp.) which shall take ownership of all
the case was essentially a local tax case. Therefore the case must be lodged existing NPC generation assets, liabilities, IPP contracts, real estate and all
before the Court of Tax Appeals (CTA). other disposable assets. All outstanding obligations of the NPC arising
from loans, issuances of bonds, securities and other instruments of
indebtedness shall be transferred to and assumed by the PSALM Corp.
The CA granted the motion to dismiss.

Clearly, the NPC had ceased running its former power transmission and
ISSUE: Whether or not the CA erred in failing to rule that the NPC no longer distribution business in Bataan by operation of law from June 26, 2001. It is,
owned or operated the business subject to local franchise tax and that the therefore, not the proper party subject to the local franchise tax for
Province cannot execute on former NPC properties that had been taken from operating that business. Parenthetically, Section 49 also transferred "all
it and transferred to other government corporations. existing xx x liabilities" of the NPC to PSALM Corp., presumably including its
unpaid liability for local franchise tax from January 1 to June 25, 2001.
Consequently, such tax is collectible solely from PSALM Corp.

An indispensable party is one who has an interest in the controversy or subject

matter and in whose absence there cannot be a determination between the
parties already before the court which is effective, complete or equitable.Here,
since the subject properties belong to PSALM Corp. and TRANSCO, they prayed for because they do not own the subject properties. Respondent and
are certainly indispensable parties to the case that must be necessarily Marivalles further insisted that they acted in good faith in denying petitioners
included before it may properly go forward. For this reason, the proceedings
and their agents access to the subject properties as they were merely
below that held the NPC liable for the local franchise tax is a nullity. It did
not matter where the RTC Decision was appealed, whether before the CA or
complying with a contractual obligation. Moreover, they claimed that the
the CTA. signatures appearing on the Deeds of Sale, which were the source of
petitioners' titles, were forged and, in fact, a petition for cancellation of
WHEREFORE, the Court GRANTS the petition of the National Power
petitioners' titles was filed by Jose Bermudo, one of the original holders of
Corporation and SETS ASIDE the Resolution of the Court of Appeals in CA-
G.R. CV 87218 dated November 27, 2007. It further REMANDS the case to the emancipation patent over three (3) parcels of land in the subject
the Regional Trial Court so that the Power Sector Assets and Liabilities properties, which was still pending before another court. Respondent and
Management Corporation and the National Transmission Corporation may be Marivalles subsequently filed their Answer21 where they added that
impleaded as proper parties. petitioners did not suffer any injury as no wrongful act was committed against

105.) Laus v. Optimum Security Services On the other hand, TIPCO denied preventing petitioners from entering the
subject properties. It pointed out that it did not claim ownership or
Dispositive Portion: Petition for review on certiorari assailing the Decision possession thereof, and, as such, did not hire the armed security guards who
dated March 25, 2013 and the Resolution dated July 22, 2013 of the Court of prevented petitioners from entering the subject properties.
Appeals (CA) in CA-G.R. SP No. 122258, which lifted the writ of preliminary
injunction (WPI) issued by the Regional Trial Court of Angeles City, Branch 62 RTC Ruling
(RTC) in Civil Case No. 12307 in favor of petitioners Spouses Ceferino C. Laus R TC granted the application for WPI based on its finding that petitioners had
and Monina P. Laus, and Spouses Antonio 0. Koh and Elisa T. Koh (petitioners), presented sufficient evidence to establish that they are the registered owners
and dismissed their complaint for damages against respondent Optimum of the subject properties and thereby, have the right to possess the same.
Security Services, Inc. (respondent).
CA Ruling
Facts: Petitioners filed a complaint, denominated as one for "Damages with
Application for a Temporary Restraining Order [(TRO)] and [WPI]," docketed The CA reversed the RTC ruling and thereby, lifted the WPI and ordered the
as Civil Case No. 12307, against respondent several security guards employed dismissal of petitioners' complaint. That the WPI was intended to oust
by it. Petitioners alleged that on three (3) separate -·occasions in August 2005, respondent and the other defendants from the subject properties, which,
they were prevented by armed security guards .. :.working for respondent under prevailing jurisprudence, is not allowed where the claimant's title has
and TIPCO Estate Corporation (TIPCO) from entering the eight parcels of land not been clearly established by law, as in this case where petitioners' titles
in Mabalacat, Pampanga belonging to them. Thus, petitioners prayed that: (a) are under contest and they have failed to establish their prior possession of
moral, exemplary, and liquidated damages be awarded to them; ( b) a TRO the subject properties.
and WPI be issued directing the respondent and the other defendants to
The CA held that respondent was not a real party in interest as it was merely
refrain from interfering with the exercise of their rights as owners of the
contracted to secure the subject properties under the Security Service
subject properties; and (c) after trial, the injunction be made permanent.
Contract, which had since lapsed without being renewed. 33 In this relation,
Opposing petitioners' application for TRO and WPI, respondent and it opined that the alleged real owners of the subject properties are the real
Marivalles countered 15 that petitioners are not entitled to the TRO and WPI parties in interest, without whom there can be no final determination of the
issues involved.
Issue: Whether or not the respondents were the real party in interest in this action for "damages' in the complaint's caption, 53 the action, as may be
case. gleaned from the pleading's allegations, 54 is really one for injunction as it
ultimately seeks to permanently enjoin respondent and the other defendants,
Ruling: While the CA was correct in lifting the WPI, it, however, erred in
from restricting petitioners' access to the subject properties.55 The crux of
ordering the dismissal of the complaint. The error springs from the CA's
the main case, therefore, is whether or not respondent and said defendants
misconception that the alleged real owners of the subject properties, while
were justified in preventing petitioners from conducting the relocation survey
real parties in interest, are indispensable parties to the case. The distinction
on the subject properties. Damages are also sought as ancillary relief for the
between the two and the operational parameters as to each are well-settled
acts complained of. These issues can be resolved independent of the
in jurisprudence. that: As held in Carandang v. Heirs of de Guzman, the Court
participation of the alleged real owners of the subject properties. Hence, they
clarified A real party in interest is the party who stands to be benefited or
are not indispensable parties, without whom no final determination can be
injured by the judgment of the suit, or the party entitled to the avails of the
had. In any event, even on the assumption that they are indispensable parties,
suit. On the other hand, an indispensable party is a party in interest without
the non-joinder of indispensable parties is, as above-discussed, still not a
whom no final determination can be had of an action, in contrast to a
ground for the dismissal of the suit. The proper course of action is for the
necessary party, which is one who is not indispensable but who ought to be
court to order that they be impleaded. Only upon refusal of or noncompliance
joined as a party if complete relief is to be accorded as to those already
with such directive, may the complaint be dismissed. In view of the nature of
parties, or for a complete determination or settlement of the claim subject of
the case as above-explained, respondent and the other defendants are real
the action. x x x "[I]f a suit is not brought in the name of or against the real
parties in interest. Clearly, they stand to be directly injured by an adverse
party in interest, a motion to dismiss may be filed on the ground that the
judgment. They are the parties against whom the prayed for injunction is
complaint states no cause of action." However, [the dismissal on this ground
directed and are also alleged to be liable for the resultant damage.
entails] an examination of whether the parties presently pleaded are
interested in the outcome of the litigation, and not whether all persons
interested in such outcome are actually pleaded. The latter query is relevant
in discussions concerning indispensable and necessary parties, but not in
PADILLA, Petitioners, v. MARIAM K. KAIRUZ, Respondent.
discussions concerning real parties in interest. Both indispensable and G.R. No. 198124, September 12, 2018
necessary parties are considered as real parties in interest, since both classes PETITION: Petition for review on certiorari1 seeking to set aside the
of parties stand to be benefited or injured by the judgment of the suit. Decision2 dated December 21, 2010 and Resolution3 dated July 22, 2011 of
Meanwhile, in Plasabas v. CA, it was held that "the non-joinder of the Court of Appeals (CA)
indispensable parties is not a ground for the dismissal of an action. The FACTS:
remedy is to implead the non-party claimed to be indispensable. Parties may In her complaint for ejectment filed before the MCTC, respondent
be added by order of the court on motion of the party or on its own initiative Mariam K. Kairuz (Mariam) alleged that she had been in actual and physical
at any stage of the action and/or at such times as are just. If petitioner refuses possession of a 5.2-hectare property located at Tadiangan, Tuba, Benguet
to implead an indispensable party despite the order of the court, the latter (property) until May 28, 2007. She alleged that in the afternoon of May 28,
may dismiss the complaint/petition for the plaintiff's/petitioner's failure to 2007, petitioners John Cary Tumagan (John), Alam Halil (Alam), and Bot
Padilla (Bot) conspired with each other and took possession of the property
comply therewith." In this case, while the alleged real owners of the subject
by means of force, intimidation, strategy, threat, and stealth with the aid of
properties may be considered as real parties in interest for the reason that
armed men. After forcibly gaining entry into the property, petitioners then
their supposed rights over these properties stand to be prejudiced, they are
padlocked its three gates, posted armed men, and excluded Mariam from the
not indispensable parties to the instant suit. Despite its denomination as an property.
In their answer, petitioners averred that Mariam could not bring the The CA granted the petition and reversed the RTC Decision. It ruled
present action for forcible entry because she was never the sole owner or that the MCTC and the RTC should have limited the issue to who had prior
possessor of the property.8 They alleged that Mariam is the spouse of the physical possession of the disputed land. It ruled that the MCTC erred in
late Laurence Ramzy Kairuz (Laurence), who co-owned the property with his dismissing Mariam's complaint because of a technical rule of failure to
sisters, Vivien Kairuz (Vivien) and Elizabeth D' Alessandri (Elizabeth). implead an indispensable party, BIRI. It pointed out that Rule 3, Section 11 of
Petitioners claimed that the property is a good source of potable water and the Rules of Court provides that neither misjoinder nor non-joinder of parties
is publicly known as Kairuz Spring. During his lifetime, Laurence, in his own is a ground for the dismissal of an action. The remedy is to implead the non-
capacity and as attorney-in-fact for his sisters, entered into a Memorandum party claimed to be indispensable either by order of the court on motion of
of Agreement9 (MOA) with Balibago Waterworks System Incorporated (BWSI) the party or on its own initiative at any stage of the action.
and its affiliate company, PASUDECO, to establish a new corporation, Bali ISSUES:
Irisan Resources, Inc. (BIRI). As stipulated in the MOA, Laurence and his two W/N the CA gravely erred in: (1) reversing the Decisions of the MCTC
sisters will sell the property containing Kairuz Spring and other improvements and the RTC dismissing the complaint for failure to implead BIRI, an
to BIRI for P115,000,000.00. BIRI took full possession over the property and indispensable party; (2) agreeing with Mariam's baseless claim of possession;
caused new certificates of title10 to be issued. BIRI is 30% owned by the and (3) not finding that the issues are intra-corporate in nature which should
Kairuz family and 70% owned by BWSI and its allied company, PASUDECO. be best resolved before the RTC in Angeles City.
Petitioners also asserted that under the MOA, the Kairuz family HELD:
assigned their Baguio Spring Mineral Water Corporation (BSMWC) shares and The Petition is meritorious.
water rights through the BSMWC water permit. The MOA also stipulated the Here, as correctly held by the MCTC and the RTC, it is indisputable
continued operation of the truck water business by the Kairuzes and this was that BIRI is an indispensable party, being the registered owner of the property
honored by BIRI. However, this privilege enjoyed by the Kairuzes is contingent and at whose behest the petitioner-employees acted.26 Thus, without the
on their compliance with their own obligations and conditions as set forth in participation of BIRI, there could be no full determination of the issues in this
the MOA. Unfortunately, upon Mariam's assumption of the truck water case considering that it was sufficiently established that petitioners did not
business as well as Lexber Subdivision water service, she started to commit take possession of the property for their own use but for that of BIRI's.
actions in conflict with the best interest of BIRI. Contrary to the CA's opinion, the joinder of indispensable parties is not a
Furthermore, petitioners claimed that contrary to Mariam's mere technicality. We have ruled that the joinder of indispensable parties is
allegations, on May 28, 2007, BIRI, as a corporation and owner of the spring mandatory and the responsibility of impleading all the indispensable parties
property, merely exercised its legal right to prevent unauthorized persons rests on the plaintiff. The absence of an indispensable party renders all
from entering its property. The deployment of licensed security guards was subsequent actions of the court null and void for want of authority to act not
intended to secure its property and prevent forcible entry into the area. only as to the absent party but even as to those present.
Petitioners claim that the MCTC has no jurisdiction over the action filed by In this case, while the CA correctly pointed out that under Rule 3,
Mariam because the same is an intra-corporate dispute which falls under the Section 11 of the Rules of Court, failure to implead an indispensable party is
jurisdiction of the appropriate RTC. not a ground for the dismissal of an action, it failed to take into account that
The MCTC dismissed the case due to Mariam's failure to implead BIRI, it remains essential that any indispensable party be impleaded in the
an indispensable party.18 It ruled that the joinder of all indispensable parties proceedings before the court renders judgment.30 Here, the CA simply
must be made under any and all conditions, their presence being sine qua proceeded to discuss the merits of the case and rule in Mariam's favor,
non to the exercise of judicial power. recognizing her prior physical possession of the subject property. This is not
The RTC upheld the MCTC's dismissal of the case. It ruled that since correct. The Decision and Resolution of the CA in this case is, therefore, null
petitioners were able to establish that they acted as mere employees or and void for want of jurisdiction, having been rendered in the absence of an
agents of BIRI, the issue of possession cannot be resolved without the court indispensable party, BIRI.
first acquiring jurisdiction over BIRI.
Nonetheless, while a remand of the case to the MCTC for the contractors in their individual capacities, the true nature of the controversy
inclusion of BIRI, the non-party claimed to be indispensable, seems to be a is an intra-corporate dispute between BIRI and its shareholder, Mariam,
possible solution, a review of the records reveals that the remand to the regarding the management of, and access to, the corporate property subject
MCTC is not warranted considering that the MCTC itself did not acquire of the MOA. We therefore find that the MCTC never acquired jurisdiction over
jurisdiction over Mariam's complaint for forcible entry. the ejectment case filed by Mariam.
In order that the SEC (now the RTC)36 can take cognizance of a case, WHEREFORE, the petition is GRANTED. The Decision dated December
the controversy must pertain to any of the following relationships: (a) 21, 2010 and Resolution dated July 22, 2011 of the Court of Appeals in CA-
between the corporation, partnership, or association and the public; (b) G.R. SP No. 112613 are REVERSED and SET ASIDE. The complaint for
between the corporation, partnership, or association and its stockholders, ejectment in Civil Case No. 272 filed before the 5th Municipal Circuit Trial
partners, members, or officers; (c) between the corporation, partnership, or Court, Tuba-Sablan, Benguet, is DISMISSED for lack of jurisdiction.
association and the State as far as its franchise, permit, or license to operate
is concerned; and (d) among the stockholders, partners, or associates
themselves. However, not every conflict between a corporation and its 107.) CHIANG KAI SHEK SCHOOL, petitioner, vs.COURT OF
stockholders involves corporate matters. Concurrent factors, such as the APPEALS and FAUSTINA FRANCO OH, respondents.
status or relationship of the parties, or the nature of the question that is the
subject of their controversy, must be considered in determining whether the Petition for Review on Certiorari under Rule 45
SEC (now the RTC) has jurisdiction over the controversy.
As discussed earlier, the parties involved in the controversy are Dispositive Portion: WHEREFORE, the petition is DENIED. The
respondent Mariam (a shareholder of BIRI and successor to her late appealed decision is AFFIRMED except for the award of
husband's position on the ManCom), petitioner John (then the branch separation pay, which is reduced to P2,880.00. All the other
manager, shareholder, and part of the BIRI ManCom), and petitioners Bot and awards are approved. Costs against the petitioner.
Alam (licensed geodetic engineers engaged by BIRI for a contract to survey
the property subject of the dispute). The controversy also involves BIRI itself,
the corporation of which Mariam is a shareholder, and which through Board
Resolutions No. 2006-0001,39 2007-000440 and 2007-000541 authorized
John, its branch manager, to do all acts fit and necessary to enforce its
corporate rights against the Kairuz family, including the posting of guards to
Respondent Fausta Oh was allegedly dismissed for no apparent
secure the property. The controversy is thus one between corporation and
one of its shareholders.
reason after having taught at the Chiang Kai Shek School for 33
While Mariam insists that the case is one for forcible entry where the years. She demanded separation pay, social security benefits,
only issue is the physical possession and not ownership of the property, her salary differentials, maternity benefits and moral and exemplary
prior physical possession has not been established in the courts below. In fact, damages.
the MCTC found that prior to the events of May 28, 2007, both petitioners
and respondent were in actual possession of the property: petitioners, on The school a motion to dismiss on the ground that it could not
behalf of BIRI as the owner of the property, and respondent Mariam, by virtue be sued as it has not been incorporated, so the complaint was
of the accommodation granted to her by BIRI under the MOA allowing her to amended to include certain officials of the school were also
continue her water reloading business on the property even after the transfer impleaded to make them solidarily liable.
of its ownership to BIRI.
Thus, we agree with petitioners that while the case purports to be The Court of First Instance of Sorsogon dismissed the
one for forcible entry filed by Mariam against BIRI's employees and complaint.
On appeal, the Court of Appeals reversed the trial court, holding
the school suable and liable while absolving the other
Vda. De Salazar v. CA
G.R. No. 190486| November 26, 2014 | Justice Leonen
The motion for reconsideration having been denied, the school
then came to this Court in this petition for review on certiorari.
TOPIC: RULE 3, SECTIONS 13 TO 19: Parties to a Civil Action

1. Whether or not a school that has not been incorporated may KIND OF ACTION/PETITION: (not mentioned)
be sued by reason alone of its long continued existence and
recognition by the government
2. Whether or not a complaint filed against persons associated
under a common name will justify a judgment against the
association itself and not its individual members. On July 23, 1970, both private respondents Primitive Nepomuceno
and Emerenciana Nepomuceno filed separate complaints with the then Court
HELD: of Agrarian Relations of Malolos, Bulacan, for ejectment on the ground of
personal cultivation and conversion of land for useful non-agricultural purposes
1. Yes. Rule 3, Section 1, of the Rules of Court provides that against petitioner's deceased husband, Benjamin Salazar.
"only natural or juridical persons may be parties in a civil action."

However, the petitioner is mandated under Act No. 2706 to The trial court rendered its joint decision in favor of private respondents.
incorporate under the Corporation Law within 90 days. It cannot An appeal therefrom was interposed in the name of petitioner's deceased
now invoke its own non-compliance with the law to immunize it husband on the ground that private respondents herein failed to satisfy the
from the private respondent's complaint. requirements pertaining to personal cultivation and conversion of the
landholdings into non agricultural uses. The Court of Appeals rejected such
The school having contracted with the private respondent for 32 contention upon finding that the record was replete with evidence justifying
years and having represented itself as possessed of juridical private respondents' assertion of their right of cultivation and conversion of
personality to do so, the petitioner is now estopped from their landholdings.
denying such personality to defeat her claim against it.

2. As the school itself may be sued in its own name, even A year later, petitioner assailed the decision of the trial court before the
despite non-incorporation, there is no need to apply Rule 3, CA by way of petition for annulment of judgment. That it did not have
Section 15, under which the persons joined in an association jurisdiction over her and the other heirs of her husband that said husband had
without any juridical personality may be sued with such already died on October 3, 1991 which the trial still proceeded and rendered its
association. Besides, the individual members of the board of decision on August 23 1993, without affecting the substitution under Rule 3
trustees are not liable, having been appointed only after the Section 17 Rules of court. CA ruled in favor of the validity of the challenged
private respondent's dismissal. decision
Issue: 3. This petition for annulment of judgment was filed only after the appeal was
decided against the defendant on April 3, 1995, more than one and a half year
after the decision was rendered.
Whether or not CA erred in its decision that formal substitution of heirs
is not necessary.
4. The Supreme Court has already established that there is such a thing as
jurisdiction by estoppel. This principle was established even in cases where
jurisdiction over the subject matter was being questioned. In the instant case,
NO. only jurisdiction over the person of the heirs is in issue. Jurisdiction over the
person may be acquired by the court more easily than jurisdiction over the
subject matter. Jurisdiction over the person may be acquired by the simple
As expounded by CA: Jurisprudential rule is that failure to make the appearance of the
substitution is a jurisdictional defect, purpose of this procedural rule is to comply person in court as did herein petitioner appear.
with due process requirements. For the case to continue, the real party in interest
must be substituted for the deceased.
Consequently, it undeniably being evident that the heirs themselves
sought their day in court and exercise their right to due process. The ejectment
The real party in interest is the one who would be affected by the being an action involving recovery of real property, is a real action which is not
judgment. It could be the administrator or executor or the heirs. In the instant extinguished by death. And that a judgment in an ejectment case is conclusive
case, the heirs are the proper substitutes. Substitution gives them the opportunity between the parties and their successors in interest by title subsequent to the
to continue the defense for the deceased. Substitution is important because such commencement of the action.
opportunity to defend is a requirement to comply with due process.

The following are the active participation of the heirs in the defense after
the death of Salazar:
WHEREFORE, the instant petition is dismissed for lack of merit. Costs against
1. The original lawyer did not stop representing the deceased which lasted for
about two more years, counsel was allowed by the petitioner who was well aware
of the instant litigation to continue appearing as counsel until August 23, 1993
when the challenged decision was rendered.

2. After the death of the defendant, the wife testified in court and declared that
her husband is already deceased. She new therefore that there was a litigation
against her husband, which her and her children interest were involve.