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III.

RULE 1, Sections 1 to 6, ROC An action to foreclose a real estate mortgage is a


real action, but an action to compel the mortgagee
to accept payment of the mortgage debt and to
HERNANDEZ VS RURAL BANK OF LUCENA, INC. release the mortgage is a personal action. Section
G.R. No. L-29791 1978 Jan 10 (81 SCRA 75) 2(a), Rule 4 of the Rules of Court provides that
FACTS: "actions affecting title to, or for recovery
Spouses Hernandez obtained from the Rural Bank of of possession, or for partition or condemnation of, or
Lucena, Inc. a loan of P6,000, payable in a year. The foreclosure of mortgage on, real property, shall be
loan was secured by a mortgage on their two lots commenced and tried in the province where the
situated in Cubao, Quezon City.About three months property or any part thereof lies. The rule mentions
after that loan was obtained, the Lucena bank an action for foreclosure of a real estate mortgage
became a distressed bank. It then received but does not mention an action for the cancellation
directives from the Central Bank which it construed of a real mortgage. In the instant case, the action is
as a directive to suspend operations. Before the primarily to compel the mortgagee to accept
expiration of the one year term of the loan, payment of the mortgage debt and to release the
Hernandez offered to pay the loan by means of a mortgage. Hence, the venue of plaintiffs' personal
check which was drawn against the bank by a action is the place where the defendant or any of the
depositor, the San Pablo Colleges, and which was defendants resides or may be found, or where the
payable to Hernandez. The payment was never plaintiff or any of the plaintiffs resides, at the
consummated. Despite several attempts, election of theplaintiff (Sec. 2[b], Rule 4). The term
Hernandezs check was refused, Lucena bank being "resides" in section 2[b] of Rule 4 refers to the place
no longer in a position to honor withdrawals. In the of actual residence or the place of abode and not
meantime, the Monetary Board had decided to necessarily to the legal residence or domicile San
liquidate the Lucena bank. A petition was filed with Juan, Batangas might be the place where the
CFI of Manila for assistance and supervision in the plaintiffs have their domicile or legal residence but
liquidation of the Lucena bank. Hernandez made a there is no question that Chicago St., Cubao, Quezon
judicial deposit of the check with the CFI of Lipa City. City is their place of abode or the place where they
He then filed with the same courtan action to compel actually reside. So, the action in this case, which is a
the Rural Bank and Central Bank as liquidator to personal action to compel the defendants to honor
accept the check and to execute thecancellation of the check in question and to cancel the mortgage,
the real estate mortgage. should have been filed in Quezon City if the plaintiffs
ISSUE: intended to use their residence as the basis for their
WoN the venue was properly laid. choice of venue.
HELD:
Case Digest: Muoz v. Atty. Yabut and Go Chan In these two consolidated cases, Ms. Emerita Muoz
G.R. No. 142676 : June 06, 2011 assails the respective decisions of the CA which were
unfavorable to her cause. Among the prayer that she
EMERITA MUOZ, Petitioner, v. ATTY. had sought from the lower court was a Motion for
VICTORIANO R. YABUT, JR. AND SAMUEL GO an Alias Writ of Execution and Application for
CHAN, Respondent. Surrender of Owners Duplicate Copy of TCT against
BPI and spouses Chan.
The first civil case is a complaint for the annulment
G.R. NO. 146718 of deed of sale against Spouses Go. The court
said that it is an action for reconveyance, which
EMERITA MUOZ, Petitioner v. SPOUSES is an action in personam available to a person
SAMUEL GO CHAN AND AIDA C. CHAN, AND THE whose property has been wrongfully registered
BANK OF THE PHILIPPINE ISLANDS, under the Torrens system in anothers name.
Respondents At the same time, an action for declaration of
nullity of title and recovery of ownership of
LEONARDO-DE CASTRO, J.: real property, or reconveyance, is a real action
(aside from action in personam), for it binds a
particular individual only although it concerns the
right to a tangible thing. Any judgment therein is
binding only upon the parties properly impleaded.
The order in the said case cannot extend to BPI

FACTS:

The subject property is a house and lot at No. 48


Scout Madrian St., Diliman, Quezon City, formerly
owned by Yee L. Ching. Yee L. Ching is married to
Emilia M. Ching (spouses Ching), Muoz's sister. Muoz'
lived at the subject property with the spouses Ching.
As consideration for the valuable services rendered
by Muoz' to the spouses Ching's family, Yee L. Ching
agreed to have the subject property transferred to
Muoz. By virtue of a Deed of Absolute Sale,
seemingly executed by Yee L. Ching in favor of Muoz,
the latter acquired a Transfer Certificate of Title.
However, in a Deed of Absolute Sale Muoz' actual and physical possession of the subject
purportedly sold the subject property to her sister, property since January 10, 1994.Muoz prayed for the
Emilia M. Ching. As a result, TCT No. 186306 was issuance of a writ of preliminary mandatory
cancelled and TCT No. 186366 was issued in Emilia injunction directing Samuel Go Chan and Atty. Yabut
M. Ching's name. Emilia M. Ching, in a Deed of and all persons claiming right under them to vacate
Absolute Sale sold the subject property to spouses the subject property.
Go Song and Tan Sio Kien (spouses Go), hence, TCT
No. 186366 was cancelled and replaced by TCT No. The MeTC adjudged that the final judgment in Civil
258977 in the spouses Go's names. Case No. Q-28580 was already executed against the
spouses Chan and there was, indeed, a turn-over of
Muoz registered her adverse claim to the subject possession of the subject property to Muoz'.
property on TCT No. 258977 of the spouses Go. Muoz Accordingly, the MeTC granted Muoz's prayer for the
filed a complaint for the annulment of the deeds of issuance of a writ of preliminary mandatory
absolute sale and the cancellation of TCT No. 258977 injunction, restoring possession of the subject
in the spouses Go's names, and the restoration and property to Muoz.
revival of TCT No. 186306 in Muoz's name. Muoz
caused the annotation of a notice of lis pendens on According to the RTC-Branch 88, the MeTC failed to
TCT No. 258977 of the spouses Go. distinguish the issue of finality of the judgment of
the RTC-Branch 95 in Civil Case No. Q-28580 from
The spouses Go obtained a loan of P500,000.00 from the assertions of Samuel Go Chan and Atty. Yabut
BPI Family Savings Bank When the spouses Go that the spouses Chan are not covered by said final
defaulted on the payment of their loan, BPI Family judgment because they are not successors-in-
foreclosed the mortgage. BPI Family executed in interest, assigns, or privies of the spouses Go and
favor of the spouses Samuel Go Chan and Aida C. they are purchasers of the subject property in good
Chan (spouses Chan) a Deed of Absolute Sale. faith.
Consequently, TCT No. RT-54376 (370364) in the
name of BPI Family was cancelled and TCT No. 53297 The Court of Appeals held that the MeTC should have
was issued in the spouses Chan's names on January dismissed the forcible entry case on the ground of
28, 1991. "lis pendens"; that the spouses Chan were not
parties in Civil Case No. Q-28580, and impleading
them only in the execution stage of said case
Muoz' instituted before the MeTC a Complaint for vitiated their right to due process; that the order of
Forcible Entry with Prayer for Preliminary Mandatory the RTC-Branch 95 involving the spouses Chan in
Injunction against Samuel Go Chan and Atty. Yabut. Civil Case No. Q-28580 was null and void,
Muoz' alleged in her complaint that she had been in considering that they are strangers to the case, and
they are innocent purchasers for value of the subject Branch 95 that the spouses Chan could not be
property; that the notice of lis pendens was already covered by the alias writ of execution considering
cancelled from the spouses Go's certificate of title at that they were not impleaded in Civil Case No. Q-
the time they mortgaged the subject property to BPI 28580.The cancellation of TCT No. 53297 in the
Family; and that the title to the subject property was spouses Chan's names could not be done apart from
already free of any and all liens and encumbrances a separate action exclusively for that matter. The
when the spouses Chan purchased the said property spouses Chan are deemed buyers in good faith and
from BPI Family. for value as the certificate of title delivered to them
by BPI Family was free from any liens or
G.R. No. 146718 encumbrances or any mark that would have raised
the spouses Chan's suspicions.
Meanwhile, Muoz' filed before the RTC-Branch 95 in
Civil Case No. Q-28580 a Motion to Cite the Register ISSUE: Whether Muoz is the rightful owner of the
of Deeds in Contempt of Court for the failure of the subject property?
Register of Deeds to restore Muoz's TCT. The Register
of Deeds could not cancel the spouses Chan's TCT HELD: YES.
No. 53297, the subsisting certificate of title over the
subject property, absent any authority or directive CIVIL LAW: Action for reconveyance of
for him to do so. property, Forcible entry

The RTC-Branch 95 denied all of Muoz's motions. The


RTC-Branch 95 was of the view that Samuel Go G.R. No. 146718
Chan's title should be litigated in another forum, not
in Civil Case No. Q-28580 where the judgment had Civil Case No. Q-28580 is an action for
already become final and executory.The RTC-Branch reconveyance of real property. An action for
95 also stressed that since the judgment in Civil declaration of nullity of title and recovery of
Case No. Q-28580 had long become final and ownership of real property, or re-conveyance,
executory, it could no longer be changed or is a real action but it is an ACTION IN
amended except for clerical error or mistake. PERSONAM, for it binds a particular individual
only although it concerns the right to a
Attributing grave abuse of discretion on the part of tangible thing. Any judgment therein is
the RTC-Branch 95 in issuing its Orders Muoz' filed binding only upon the parties properly
before this Court a Petition for Certiorari and impleaded.
Mandamus, which was remanded to the Court of
Appeals. The Court of Appeals agreed with the RTC- Since they were not impleaded as parties and given
the opportunity to participate in Civil Case No. Q- Muoz's legal remedy is to directly assail in a
28580, the final judgment in said case cannot bind separate action the validity of the certificates of title
BPI Family and the spouses Chan. The effect of the of BPI Family and the spouses Chan.
said judgment cannot be extended to BPI Family and
the spouses Chan by simply issuing an alias writ of
execution against them. No man shall be affected by There is forcible entry or desahucio when one is
any proceeding to which he is a stranger, and deprived of physical possession of land or building
strangers to a case are not bound by any judgment by means of force, intimidation, threat, strategy or
rendered by the court. In the same manner, a writ of stealth. In such cases, the possession is illegal from
execution can be issued only against a party and not the beginning and the basic inquiry centers on who
against one who did not have his day in court. Only has the prior possession de facto.
real parties in interest in an action are bound by the
judgment therein and by writs of execution issued In filing forcible entry cases, the law tells us that
pursuant thereto. two allegations are mandatory for the municipal
court to acquire jurisdiction: first, the plaintiff must
Although the RTC-Branch 95 had declared with allege prior physical possession of the property, and
finality in Civil Case No. Q-28580 that the titles of second, he must also allege that he was deprived of
Emilia M. Ching and the spouses Go were null and his possession by any of the means provided for in
void, there is yet no similar determination on the Section 1, Rule 70 of the Rules of Court, i.e., by
titles of BPI Family and the spouses Chan. The force, intimidation, threat, strategy, or stealth. It is
question of whether or not the titles to the subject also settled that in the resolution thereof, what is
property of BPI Family and the spouses Chan are null important is determining who is entitled to the
and void, since they are merely the successors-in- physical possession of the property. Indeed, any of
interest, assigns, or privies of Emilia M. Ching and the parties who can prove prior possession de facto
the spouses Go, ultimately depends on the issue of may recover such possession even from the owner
whether or not BPI Family and the spouses Chan himself since such cases proceed independently of
obtained their titles to the subject property in bad any claim of ownership and the plaintiff needs
faith, i.e., with notice of Muoz's adverse claim and merely to prove prior possession de facto and undue
knowledge of the pendency of Civil Case No. Q- deprivation thereof.
28580.The latter is a factual issue on which we
cannot rule in the present petition, not only because Based on the foregoing, we find that the RTC-Branch
we are not a trier of facts, but more importantly, 88 erred in ordering the dismissal of Civil Case No.
because it was not among the issues raised and tried 8286 even before completion of the proceedings
in Civil Case No. Q-28580. before the MeTC. At the time said case was ordered
dismissed by RTC-Branch 88, the MeTC had only
gone so far as holding a hearing on and eventually
granting Muoz's prayer for the issuance of a writ of JIMMY T. GO, petitioner, vs. UNITED COCONUT
preliminary mandatory injunction. PLANTERS BANK, ANGELO V. MANAHAN,
FRANCISCO C. ZARATE, PERLITA A. URBANO
Nonetheless, even though the peculiar and ATTY. EDWARD MARTIN, respondents.
circumstances extant herein do not justify the Doctrine: The cancellation of the real estate
dismissal of Civil Case No. 8286, they do require mortgage is a real action, considering that a real
limiting pro hac vice the reliefs the MeTC may accord estate mortgage is a real right and a real
to Muoz' in the event that she is able to successfully property by itself; and an action for cancellation of
prove forcible entry by Samuel Go Chan and Atty. real estate mortgage is necessarily an action
Yabut into the subject property (i.e., that the sheriff affecting the title to the property.
actually turned-over to Muoz' the possession of the
subject property on January 10, 1994, and that she Facts:
was deprived of such possession by Samuel Go Chan
and Atty. Yabut on February 2, 1994 by means of Petitioner Go and Looyuko are co-owners of Noahs
force, intimidation, threat, strategy, and stealth). Ark International, Noahs Ark Sugar Carriers, etc.
Taking into account our ruling in G.R. No. 146718 - Their application for an Omnibus Line
that the final judgment in Civil Case No. Q-28580 accommodation with respondent United Coconut
does not extend to the spouses Chan, who were not Planters Bank (UCPB) in the amount of P900, 000,
impleaded as parties to the said case - the MeTC is 000 was approved.
precluded from granting to Muoz' relief, whether
preliminary or final, that will give her possession of - The transaction was secured by Real Estate
the subject property. Otherwise, we will be Mortgages over parcels of land located at
perpetuating the wrongful execution of the final Mandaluyong City and registered in the name of
judgment in Civil Case No. Q-28580. Based on the Mr. Looyuko; and another property also located at
same reason, Muoz' can no longer insist on the Mandaluyong City, registered in the name of Noahs
reinstatement of the MeTC Order dated May 16, Ark Sugar Refinery.
1994 granting a preliminary mandatory injunction
that puts her in possession of the subject property - UCPB subsequently cancelled the approved
during the course of the trial. Muoz' though may Omnibus Line accommodation; so, Go demanded
recover damages if she is able to prove wrongful from UCPB the return of the two TCTS (No. 64070
deprivation of possession of the subject property and No. 3325) covered by Real Estate Mortgages.
from February 2, 1994 until the finality of this UCPB however refused to return the same and
decision in G.R. No. 146718. proceeded to have the two (2) pre-signed Real
Estate Mortgages notarized and caused the
registration thereof before the Registry of Deeds of Petitioner argues: that a case for cancellation of
Mandaluyong City. mortgage is a personal action and since he resides
at Pasig City, venue was properly laid therein. He
- UCPB filed the with the Office of the Clerk of Court tries to make a point by alluding to the case of
and Ex-Officio Sheriff of Mandaluyong City an Francisco S. Hernandez v. Rural Bank of Lucena.
extrajudicial foreclosure of the mortgaged
land that was registered in the name of Looyuko , Issue: WON petitioners complaint for cancellation
for nonpayment of the obligation secured by said of real estate mortgage is a personal or real action
mortgage. Public auction sale was set. Hence, Go for the purpose of determining venue. [It is a real
filed a complaint for Cancellation of Real action which should be commenced and tried in
Estate Mortgage and damages, with prayer for Mandaluyong City, the place where the subject
temporary restraining order and/or writ of property lies.]
preliminary injunction, against respondent bank and
its officers with the Regional Trial Court of Pasig Held/Ratio: In a real action, the plaintiff seeks the
City. The complaint was later amended. recovery of real property, or as provided for in
Section 1, Rule 4, a real action is an action
- Respondent bank, instead of filing an answer, filed affecting title to or possession of real
a motion to dismiss based on the several grounds. property, or interest therein. These include
Among which is that the complaint was filed in the partition or condemnation of, or foreclosure of
wrong venue. mortgage on, real property. The venue for real
actions is the same for regional trial courts
Trial Court: issued an order granting petitioners and municipal trial courts -- the court which
application for a writ of preliminary injunction. has territorial jurisdiction over the area where
Correspondingly, the auction sale was enjoined. The the real property or any part thereof lies.
trial court denied respondent banks motion to Personal action is one brought for the recovery of
dismiss. A motion for reconsideration was likewise personal property, for the enforcement of some
denied. UCPB filed a petition for certiorari. contract or recovery of damages for its breach, or for
the recovery of damages for the commission of an
CA: set aside orders issued by the trial court and injury to the person or property. The venue for
directed the trial court to dismiss case on the ground personal actions is likewise the same for the
of improper venue. A motion for reconsideration was regional and municipal trial courts -- the court of the
filed by petitioner, which was denied. Hence, this place where the plaintiff or any of the principal
petition for review on certiorari. plaintiffs resides, or where the defendant or
any of the principal defendants resides, at the
election of the plaintiff, as indicated in Section 2
of Rule 4. It is quite clear then that the controlling Here, bank had already initiated extrajudicial
factor in determining venue for cases of the foreclosure proceedings, and were it not for the
above nature is the primary objective for which timely issuance of a restraining order secured by
said cases are filed. petitioner Go in the lower court, the same would
have already been sold at a public auction. In a
In a long line of cases, the Court held that annulment relatively recent case, Asset Privatization Trust v.
of foreclosure sale is a real action. Particularly in Court of Appeals. It was succinctly stated that the
Carandang v. Court of Appeals, the Court held that prayer for the nullification of the mortgage is a
an action for nullification of the mortgage prayer affecting real property, hence, is a real
documents and foreclosure of the mortgaged action.
property is a real action that affects the title
to the property. Petitioners reliance in the case of
Francisco S. Hernandez v. Rural Bank of Lucena is IV. RULE 2, Sections 1 to 6
misplaced. Firstly, said case was primarily an action III. Commencement of Actions to Trial
to compel the mortgagee bank to accept A. ACTIONS
payment of the mortgage debt and to release the An ordinary suit in a court of justice by which one
mortgage. That action, which is not expressly party prosecutes another for the enforcement or
included in the enumeration found in Section 1, Rule protection of a right or the prevention or redress of a
4 of the 1997 Rules of Civil Procedure, does not wrong [Potente v. Saulog Transit, G.R. No. L-12300
involve titles to the mortgaged lots. It is a personal (1959)]
action and not a real action. Hence, the venue of the
plaintiffs personal action is the place where the
defendant or any of the defendants resides or may An action is the legal and formal demand of ones
be found, or where the plaintiff or any of the right from another person made and insisted upon in
plaintiffs resides, at the election of the plaintiff. In a court of justice. The determinative operative act,
the case at bar, the action for cancellation of real which converts a claim into an action, is its filing
estate mortgage filed by herein petitioner was with a court of justice. [Riano]
primarily an action to compel private
respondent bank to return to him the This is distinguished from the cause of action, which
properties over which the bank had already is the fact or combination of facts which affords a
initiated foreclosure proceedings . The prime party a right to judicial interference in his behalf
objective is to recover said real properties. [Into v. Valle, G.R. No. 145379 (2005)] and which is
Secondly, Carandang distinctly articulated that the the basis of ordinary civil actions. [Sec. 1, Rule 2]
ruling in Hernandez does not apply where the
mortgaged property had already been foreclosed. B. CAUSE OF ACTION
CAUSE OF ACTION (2) A judgment upon the merits in any of the
The act or omission by which a party violates a right complaints is available as ground for dismissal of the
of another. [Sec. 2, Rule 2] others based on res judicata [Sec. 1(f), Rule 16]
Every ordinary civil action must be based on a cause A party may not institute more than one suit for a
of action [Sec. 1, Rule 2] single cause of action. [Sec. 3, Rule 2]
A cause of action stems from the sources of
obligations under Art. 1156 of the Civil Code: Rationale
(1) Law, (1) To prevent repeated litigation between the same
(2) Contract, parties in regard to the same subject or controversy;
(3) Quasi-contract, (2) To protect the defendant from unnecessary
(4) Acts and omissions punishable by law and vexation. Nemo debet vexare pro una et eadem
(5) Quasi-delict. [Sagrada Orden etc v. causa (No man shall be twice vexed for one and the
NACOCO, G.R. No. L-3756 (1952)] same cause);
(3) To avoid the costs and expenses incident to
B.3 SPLITTING A SINGLE CAUSE OF ACTION; EFFECTS numerous suits.
SPLITTING A CAUSE OF ACTION
The act of instituting two or more suits on the basis B.4 JOINDER AND MISJOINDER OF CAUSES OF
of the same cause of action. [Sec. 4, Rule 2] ACTION
JOINDER OF CAUSES OF ACTION
Splitting a single cause of action is the act of The assertion of as many causes of action as a party
dividing a single or indivisible cause of action into may have against another in one pleading alone.
several parts or claims and instituting two or more [Sec. 5, Rule 2]
actions upon them. A single cause of action or entire It is also the process of uniting two or more demands
claim or demand cannot be split up or divided in or rights of action in one action. [Riano]
order to be made the subject of two or more
different actions. Ratio: To avoid a multiplicity of suits and to expedite
disposition of litigation at minimum cost [Ada v.
EFFECTS: Baylon, G.R. No. (2012)]
The filing of one or a judgment upon the merits in
any one is available as a ground for the dismissal of The rule however is purely permissive as there is no
the others. [Sec. 4, Rule 2]. The remedy is for the positive provision of law or any rule of jurisprudence
defendant to file a Motion to Dismiss under Rule 16. which compels a party to join all his causes of action
(1) Filing of the first complaint may be pleaded in and bring them at one and the same time. [Nabus v.
abatement of the second complaint, on the ground CA, G.R. No. 91670 (1991)]
of litis pendentia [Sec. 1(e), Rule 16]; or
There is no sanction against non-joinder of separate
causes of action since a plaintiff needs only a single If the court has no jurisdiction to try the misjoined
cause of action to maintain an action [Regalado]. action, then it must be severed. Otherwise,
adjudication rendered by the court with respect to it
Requisites [Sec. 5, Rule 2] would be a nullity
(1) The party joining the causes of action shall
comply with the rules on joinder of parties; China Banking Corporation, Inc. v CA and Heirs
(2) The joinder shall not include special civil actions of Avelina Vda. De Piero and Emmanuel Piero
or actions governed by special rules; GR 155299 ; 24 July 2007 ; J. Austria-Martinez [Pretz
(3) Where causes of action are between the same V.]
parties but pertain to different venues or The above provision presupposes that the different
jurisdictions, the joinder may be allowed in the RTC causes of action which are joined accrue in favor of
provided one of the causes of action are within that the same plaintiff/s and against the same
courts jurisdiction and venue lies therein; defendant/s and that no misjoinder of parties is
(4) Where the claims in all the causes of action are involved. The issue of whether respondents' claims
principally for recovery of money, the aggregate shall be lumped together is determined by
amount claimed shall be the test of jurisdiction paragraph (d) of the above provision. This paragraph
(totality rule) embodies the "totality rule" as exemplified by
Section 33 (1) of B.P. Blg. 129 which states, among
MISJOINDER OF CAUSES OF ACTION others, that "where there are several claims or
Misjoinder is not a ground for dismissal of an action causes of action between the same or different
[Sec. 6, Rule 2] parties, embodied in the same complaint, the
amount of the demand shall be the totality of the
An erroneously joined cause of action may, on claims in all the causes of action, irrespective of
motion of a party or on the initiative of the court, be whether the causes of action arose out of the same
severed and proceeded with separately. [Sec. 6, Rule or different transactions."
2] NATURE: Rule 45 Review of CA decision

If there is no objection to the improper joinder or the China Banking Corp v CA, Heirs of Avelina
court did not motu proprio direct a severance, then Pinero and Emmanuel Pinero 2007 | Austria-
there exists no bar in the simultaneous adjudication Martinez, J.
of all the erroneously joined causes of action, as long This case originated from an action for
as the court trying the case has jurisdiction over all Annulment of Real Estate Mortgage, Foreclosure of
of the causes of action therein notwithstanding the Mortgage, Notice of Auction Sale and Damages filed
misjoinder. [Ada v. Baylon, G.R. No. (2012)]. by respondents.
Avelina (respondents predecessor in interest) owned Petitioner, on its part, contends that upon
2 adjoining pacels of land with improvements in execution of the documents, Avelina was furnished
Mandaluyong City. with copies thereof and she freely and voluntarily
Aug 27, 1991, one Alfonso Kipte obtained a 1.2 signed the documents. Though physically weak at
million peso loan from petitioner secured by a the time of execution, she was mentally sound in
promissory note and real estate mortgage signed by complete possession of her faculties and she
Avelina over her properties. The mortgage was understood the nature of the transaction, and that
annotated to the titles. The loan was also secured by she appeared before the notary.
a surety agreement signed by Kipte as principal and 1996, Avelina died and so was substituted by
Avelina as surety. Kipte defaulted so the mortgaged the heirs.
properties were foreclosed (auction sale scheduled RTC for China Banking. CA reversed. It said:
Aug 17, 1992). that Avelina was an old widow, 80 years old and
Avelina and respondent Emmanuel filed a blind even before she purportedly signed the Real
complaint with RTC. She denied having signed the Estate Mortgage and Surety Agreement (1991).
documents. Her daughter testified that in 1985, her mother
She alleged that sometime in September 1992, she became totally blined, not physically fit and suffered
was surprised to receive a foreclosure notice from an eye disease or glaucoma.
the notary public, stating that her properties would Avelina testified that she was persuaded to sign only
be sold at public auction at the instance of as a witness and that Ludivina guided her when she
petitioner. Avelina learned that she allegedly signed the documents. She did not receive any
executed the documents above to secure the loan of consideration from Kipte as consideration for the
Kipte, a person she doesnt know. mortgage, thus this attests to her credible theory
Also, the foreclosure is void since she never that she was only a witness.
voluntarily executed the mortgage or surety Her deportment in court and that the fact that she
agreement, never appeared before the notary public, had to be guided to take the witness stand
never received any proceeds from the loan and was constituted the strongest proof of blindness.
never a bsiness associate of Kipte. The notary remembered Avelina to b an old lady with
That sometime in 1990, Emmanuels common white complexion and white hair and who had to be
law wife Ludivina Rinnoces asked Avelina to sign assisted and accompanied to his table to sign the
some documents allegedly pertaining to a loan from documents; he noticed that she could hardly see and
one Cerila de Leon. Avelina signed the documents it was unusual for her, a very old woman, to be so
without reading because she is blind and without willing to act as surety to a promissory note of the
knowing the contents thereof. This happened again Kipte, a complete stranger, which involved a very
in 1991. large sum (1.2M).
W/N Avelina signed the real estate mortgage and have easily submitted a medical certificate attesting
surety agreement knowingly and voluntarily, with full to the supposed blindness of Avelina or made an
knowledge of its contents. No. ophthalmologist take the witness stand; they did
neither
Petitioner: respondents admitted that Avelina indeed - SC: No.
signed the mortgage and surety agreements; - The rule of evidence requiring the opinion of
- SC: No. expert witnesses applies only to such matters
- Counsel for respondents stipulated to admit clearly within the domain of medical science,
the authenticity of Avelinas signature, which and not to matters that are within the common
was done during the trial; knowledge of mankind which may be testified
- The admission of this fact does not by itself to by anyone familiar with the facts;
prove petitioners case, since at bottom, the - Thus, to prove whether one is blind, it is not
issue is not whether Avelina affixed her necessary to submit a medical certificate
signature on the agreements in question, but, attesting to the blindness or to require an
ultimately, whether she gave her consent to expert witness, such as an ophthalmologist, to
be bound as surety. testify to such fact, since the fact of blindness
can be determined through common
Petitioner: that as notarial documents they are knowledge and by anyone with sufficient
clothed with prima facie presumption of regularity familiarity of such fact;
and due execution - At case, , Avelina, then alive during the trial of
- SC: No. the case, categorically testified and attested to
- Notarization per se is not a guarantee of the her own blindness, a fact which even the trial
validity of the contents of a document; court noted;
- Generally, a notarized document carries the - Also established, Avelina already blind she was
evidentiary weight conferred upon it with manipulated into signing the documents by
respect to its due execution and has in its Ludivina who did not explain the contents
favor the presumption of regularity. However, thereof; that she needed to be guided; that
such presumption is not absolute. It may be she made to understand she was to sign only
rebutted by clear and convincing evidence to as a witness; the Kipte was a stranger and so it
the contrary is implausible that she agreed to be his surety;
- In fact, it was only after Avelina received the
Petitioner: Avelina was duly informed of the nature notices of foreclosure that she learned that
and purpose of these agreements by petitioners there was a mortgage document among the
branch manager and the notary public before she papers she signed;
affixed her signature; and that the respondents could
- Avelinas blindness was further confirmed by accommodation obtained and those that
her childrens testimonies; that she did not may be obtained.
know the contents and that she did not know Under the terms and conditions of the real
in which capacity she was signing; estate mortgage, in the event of failure to pay
- Evidence presented by respondents are clear the mortgage obligation or any portion thereof,
and convincing, sufficient to overturn the the entire principal, interest, penalties, and
presumption of regularity of the subject other charges shall be immediately due; and Far
documents. East mat foreclose the same extra judicially.
For failure to settle outstanding obligation on
DENIED. the maturity dates, Far East sent a final demand
letter to respondent demanding payment.
Since respondent failed to settle her obligation,
Far East filed a petition for the extrajudicial
foreclosure of the mortgaged property, but only
only for 31 of the promissory notes.
During pendency of said case, Far East filed a
complaint for collection of money representing
BPI FAMILY SAVINGS BANK v. VDA. DE the amounts for the 36 other promissory notes.
COSCOLLUELA In respondents answer, she alleged that the
G.R. No. 167724 / June 27, 2006 / Callejo, Sr., J. /
complaint was barred by litis pendentia for the
Splitting / KJMSTA.ANA
pending petition for the extrajudicial foreclosure
NATURE Petition for Review under Rule 45
of the REM.
PETITIONERS BPI Family Savings Bank
Petitioner presented a loan officer as sole
RESPONDENTS Margarita Vda. De Cosculluela
witness, who testified that respondent were
FACTS. granted a loan, which was a single loan
account.
Respondent and her late husband Oscar
Respondent filed a Demurrer to Evidence
obtained an agricultural sugar crop loan from
Far East Bank & Trust Co. (later merged with BPI) contending that the loan officers admission,
for crop years 1997 and 1998. In the book of Far that there is only one loan account secured by
East, the loan account was treated as a single the REM thus barred the personal action for
account, and evidenced by 67 promissory notes. collection. She insisted that the filing of said
complaint should be dismissed.
Sps. Coscolluela executed a real estate
mortgage in favor of FEBTC over their parcel of
land as security of loans on credit
Petitioner opposed the demurrer, stating that of the REM, the real estate of respondent
each promissory note constituted a separate served as a continuing security liable for
contract. obligations already obtainer and obligations obtained
The trial court denied the demurrer on the thereafter. In this case, the action of petitioner
ground that each note covered a loan distinct is anchored on one and the same cause: the
from the others. nonpayment of respondent. Though the debt may
Respondent filed MR but denied, prompting her be covered by several promissory notes and is
to file a certiorari petition under Rule 65 with covered by a real estate mortgage, the latter is
CA. subsidiary to the former and both refer to one and
CA granted the petitioner, stating that the the same obligation. A mortgage creditor may
institute two alternative remedies against the
remedies sought are alternative and not
debtor, either to collect debt or to foreclose
cumulative. Thus, in denying the demurrer, RTC
mortgage, but not both.
committed grave abuse of discretion.
Petitioner filed MR but it was denied. Hence, this
DECISION.
petition. WHEREFORE instant petition is dismissed for lack of
merit.
ISSUES & RATIO.
1. WON collection suit should be dismissed YES
Samson v. Gabor NO digest
Section 3, Rule 2 of the 1997 Rules of Civil Procedure
provides that a party may not institute one suit for a
single cause of action, and, if two or more suits are
instituted on the basis of the same cause of action,
the filing of one on a judgment upon the merits in
any one is available as a ground for the dismissal of
others. The law does not permit the owner of a
single of entire cause of action or an entire or
indivisible demand to divide and split the cause to
make it the subject of several actions.

The true rule which determined whether a party has


only a single and entire cause of action is whether
the entire amount arises from one and the same act
or contract or the several parts arise from distinct
and different acts. As gleaned from the plain terms
AGUSTIN vs. BACALAN Thereafter, with the aid of new counsel, the plaintiff-
G.R. No. L-46000 appellant filed a complaint with Branch V, Court of
March 18, 1985 First Instance of Cebu, against the defendant and the
135 SCRA 340 Deputy Sheriff of Cebu for the declaration of the
GUTIERREZ, JR. , J.: nullity of the above-cited decision of Branch III, Court
Facts: of First Instance of Cebu in the ejectment case on
The precursor of this case was a complaint for the ground that the exercise of its appellate
ejectment with damages filed by plaintiff-appellant jurisdiction was null and void. The court sustained
Agustin, as adininistrator of the Intestate Estate of the defendant.
Susana Agustin, against defendant-appellee Bacalan,
before the City Court of Cebu. Bacalan is a lessee of Issues:
a one-door ground floor space in a building owned by I. Whether or not the present action for the
the late Susana Agustin. Due to nonpayment of annulment of the judgment in the ejectment case is
rentals despite repeated demands an action to eject the proper remedy after it has become final and
him was filed wherein the City Court of Cebu executory
rendered judgment dismissing the counterclaim and
ordering the defendant to vacate the premises in II. Whether or not the Court of First Instance may, in
question and to pay the plaintiff unpaid back rentals. an appeal, award the defendant-appellee's
From this decision, the defendant filed an appeal counterclaim in an amount exceeding or beyond the
with Branch Ill of the Court of First Instance of Cebu jurisdiction of the court of origin
which rendered judgment reversing that of the City
Court. No appeal was taken by the plaintiff-appellant Held:
hence the decision lapsed into finality and became I. To this procedural dilemma, the solution lies
executory. in the determination of the validity of the judgment
sought to be annulled, for against a void judgment,
A writ of execution was issued by virtue of which a plaintiff-appellant's recourse would be proper. There
notice to sell at public auction real properties is no question as to the validity of the court's
belonging to the estate of Susana Agustin was decision with respect to the issue of physical
issued by the Deputy Sheriff to satisfy judgment in possession of property, the defendant-appellee's
the case. Plaintiff's counsel filed a motion for right to the same having been upheld. However, the
reconsideration, confessing his fault and giving the plaintiff-appellant assails the money judgment
reason why he failed to perfect the appeal on time. handed down by the court which granted damages
The motion was denied. to the defendant-appellee. By reason thereof, he
seeks the declaration of the nullity of the entire
judgment. Plaintiff-appellant loses sight of the fact
that the money judgment was awarded the cases for decision to the Court of Appeals in
defendant-appellee in the concept of a counterclaim. expectation of favorable judgment, but with intent of
A defending party may set up a claim for money or attacking its jurisdiction should the decision be
any other relief which he may have against the unfavorable.
opposing party in a counterclaim (Section 6, Rule 6,
Revised Rules of Court). And the court may, if The rule is that a counterclaim not presented in
warranted, grant actual, moral, or exemplary the inferior court cannot be entertained in the Court
damages as prayed for. The grant of moral damages, of First Instance on appeal. The amount of judgment,
in the case at bar, as a counterclaim, and not as therefore, obtained by the defendant-appellee on
damages for the unlawful detention of property must appeal, cannot exceed the jurisdiction of the court in
be upheld. However, the amount thereof is another which the action began. Since the trial court did not
matter. acquire jurisdiction over the defendant's
counterclaim in excess of the jurisdictional amount,
II. It is well-settled that a court has no jurisdiction to the appellate court, likewise, acquired no jurisdiction
hear and determine a set-off or counterclaim in over the same by its decisions or otherwise.
excess of its jurisdiction (Section 5, Rule 5, Revised Appellate jurisdiction being not only a continuation
Rules of Court; Ago v. Buslon, 10 SCRA 202). A of the exercise of the same judicial power which has
counterclaim beyond the court's jurisdiction may been executed in the court of original jurisdiction,
only be pleaded by way of defense, the purpose of also presupposes that the original and appellate
which, however, is only to defeat or weaken courts are capable of participating in the exercise of
plaintiff's claim, but not to obtain affirmative relief the same judicial power.
(Section 5, Rule 5, Revised Rules of Court). Flores v. Mallare-Philipps
Nevertheless, the defendant-appellee, in the case at Nature: Appeal by Certiorari under Rule 45.
bar, set up his claim in excess of the jurisdiction of FACTS:
the city court as a compulsory counterclaim. As Flores sued the respsondents for the collection of
a consequence, the doctrine enunciated under the sum of money with the RTC
case of One HeartClub, Inc. vs. Court of Appeals, an
appellant who files his brief and submits his case to The first cause of action alleged in the complaint was
the Court of Appeals for decision, without against Ignacio Binongcal for refusing to pay the
questioning the latter's jurisdiction until decision is amount of P11,643 representing cost of truck
rendered therein, should be considered as having tires which he purchased on credit from Flores on
voluntarily waives so much of his claim as would various occasions from August to October, 1981;
exceed the jurisdiction of said Appellate Court; for The second cause of action was against
the reason that a contrary rule would encourage the resp Fernando Calion for allegedly refusing to pay
undesirable practice of appellants submitting their the amount of P10,212 representing cost of truck
tires which he purchased on credit from pet on claims in all the causes of action, irrespective of
several occasions from March, 1981 to January, whether the causes of action arose out of the
1982. same or different transactions. ...
Binongcal filed a MTD on the ground of lack of
jurisdiction since the amount of the demand Section 11 of the Interim Rules
against said resp was only P11,643.00, and Application of the totality rule. In actions where the
under Section 19(8) of BP129 the RTC shall exercise jurisdiction of the court is dependent on the
exclusive original jurisdiction if the amount of amount involved, the test of jurisdiction shall be
the demand is more than P20K. the aggregate sum of all the money demands,
Although another person, Fernando Calion, was exclusive only of interest and costs, irrespective of
allegedly indebted to pet in the amount of WON the separate claims are owned by or due
P10,212.00, his obligation was separate and to different parties. If any demand is for damages
distinct from that of the other resp. in a civil action, the amount thereof must be
specifically alleged.
Calion joined in moving for the dismissal of the
complaint. Former rule under Section 88 of the Judiciary Act of
1948
RTC dismissed the complaint. Where there are several claims or causes of
ISSUE action between the same parties embodied in
WON the trial court correctly ruled on the application the same complaint, the amount of the demand
of the permissive joinder of parties shall be the totality of the demand in all the
causes of action, irrespective of whether the
causes of action arose out of the same or different
transactions; but where the claims or causes of
action joined in a single complaint are
Ruling separately owned by or due to different
The lower court has jurisdiction over the case parties, each separate claim shall furnish the
following the "novel" totality rule introduced in jurisdictional test. ...
Section 33(l) of BP129 and Section 11 of the Interim
Rules.
Section 33(l) of BP129
That where there are several claims or causes of
action between the same or different parties,
embodied in the same complaint, the amount of comparison of former and present rules
the demand shall be the totality of the
Present Rules Former Rules
Where a Totality of the claims in all the Totality of the claims in all the causes
plaintiff sues causes of action irrespective of of action irrespective of whether the
a defendant whether the COA arose out of the COA arose out of the same or diff
on two or same or diff transactions. If the transactions. If the total demand
more total demand exceeds P20K RTC exceeds P20K RTC has jurisdiction
separate has jurisdiction
causes of If the causes of action are separate and
action If the causes of action are separate independent, their joinder in one
and independent, their joinder in complaint is permissive and not
one complaint is permissive and mandatory, and any cause of action
not mandatory, and any cause of where the amount of the demand is
action where the amount of the 20K or less may be the subject of a
demand is 20K or less may be the separate complaint filed with a
subject of a separate complaint metropolitan or MTC.
filed with a metropolitan or MTC.
Two or Where the claims or causes of action The causes of action in favor of
more plaintiffsjoined in a
having a single complaint are separately owned
separate by or two or more plaintiffs or against
due to different parties, each the two or more defendants
causes ofseparate
should
action against claim shall furnish the jurisdictional
a defendanttest arise out of the same
join in a single The former rule applied only to cases of
transaction or
complaint permissive joinder of parties plaintiff.
However, it was also applicable to series of transactions and there
cases of should be a common question of
permissive joinder of parties defendant. law or fact, as provided in
Section 6
of Rule 3.
joinder of parties plaintiff under Section 6 of
Brillo vs. Buklatan (former rule): Rule 3.
Separate claims against several defendants of
different amounts each of which is not more Under the present law, the two cases would
than P2,000 and falls under the jurisdiction of the be under the jurisdiction of the RTC.
justice of the peace court. The several claims do not Similarly, Brillo vs. Buklatan and Gacula vs. Martinez,
arise from the same transaction or series of if the separate claims against the several defendants
transactions and there seem to beno questions arose out of the same transaction or series of
of law or of fact common to all the defendants transactions and there is a common question of law
as may warrant their joinder under Rule 3, or fact, they would now be under the jurisdiction
section 6. of the RTC.
In cases of permissive joinder of parties, whether as
The difference between the former and present rules plaintiffs or as defendants, under Section 6 of
in cases of permissive joinder of parties may be Rule 3, the total of all the claims shall now
illustrated by the two cases which were cited in the furnish the jurisdictional test. Needless to state
case of Vda. de Rosario vs. Justice of the also, if instead of joining or being joined in one
Peace as exceptions to the totality rule. complaint separate actions are filed by or against
Soriano y Cia vs. Jose 29 dismissed the parties, the amount demanded in each complaint
employees joined in a complaint against the shall furnish the jurisdictional test.
defendant to collect their respective claims, each of The lower court correctly held that the jurisdictional
which was within the jurisdiction of the municipal test is subject to the rules on joinder of parties
court although the total exceeded the pursuant to Section 5 of Rule 2 and Section 6 of Rule
jurisdictional amount, this Court held that 3 of the Rules of Court and that, after a careful
under the law then the municipal court had scrutiny of the complaint, it appears that there is a
jurisdiction. Although the plaintiffs' demands were misjoinder of parties for the reason that the claims
separate, distinct and independent of one another, against resps Binongcal and Calion are separate and
their joint suit was authorized under Section 6 distinct and neither of which falls within its
of Rule 3 and each separate claim furnished jurisdiction.
the jurisdictional test.
International Colleges, Inc. vs. Argonza, 25
dismissed teachers jointly sued for unpaid salaries,
the MC had jurisdiction because the amount of each PANTRANCO North Express, Inc., and Alexander
claim was within, although the total exceeded, Buncan, versus Standard Insurance Company, Inc.,
its jurisdiction and it was a case of permissive and Martina Gicale, G.R. No. 140746, March 16,
2005.
bus company and the driver refused. Thus, Standard
PANTRANCO North Express, Inc., and and Martina were prompted to file a complaint for
Alexander Buncan, versus sum of money with the RTC of Manila.
Standard Insurance Company, Inc., and Pantranco and Buncan denied the allegations
Martina Gicale, of the complaint and asserted that it is the MeTC
G.R. No. 140746, March 16, 2005. which has jurisdiction over the case.

NATURE OF THE CASE: The case was elevated to RTC: The trial court ruled in favor of Standard and
the SC by Pantranco and Buncan by reason of the Martina, and ordered Pantranco and Buncan to pay
ruling of the CA against them and the denial of the the former reimbursements with interests due
appellate court of their motion for reconsideration. thereon plus attorney's fees, and litigation expenses.
The CA ruled that there was no misjoinder of parties
in the complaint filed by Standard and Gicale against Pantranco and Buncan: The RTC has no jurisdiction
them, and that they are to be held accountable to over the complaint.
the money claims of the respondents. 1) Martina Gicale was claiming P13,415,
while Standard was claiming P8,000. Their individual
FACTS: Crispin Gicale was driving the passenger claims are below P20,000. Thus, the case falls under
jeepney owned by his mother Martina Gicale. the exclusive jurisdiction of the MTC.
Alexander Buncan, on the other hand, was driving a 2) There was a misjoinder of parties.
bus owned by Pantranco North Express Inc. Both
drivers were travelling along the National Highway of CA: The appellate court affirmed the decision of the
Talavera, Nueva Ecija in a rainy afternoon. Buncan RTC.
was driving the bus northbound while Cripin was 1) Under the Totality Rule provided for under
trailing behind. When the two vehicles were Sec. 19 of BP 129, it is the sum of the two claims
negotiating a curve along the highway, the that determines the jurisdictional amount. At the
passenger bus overtook the jeepney. In so doing, time this case was heard, cases involving money
thhe passenger bus hit the left rear side of the claims that amounts to more than P20,000 falls
jeepney and sped away. under the exclusive jurisdiction of the RTC.
Crispin reported the incident to the police 2) Even assuming that there was a
and to the insurer of their jeepney, Standard misjoinder of parties, it does not affect the
Insurance Co. The total cost of the repair amounted jurisdiction of the court nor is it a ground to dismiss
to P21, 415. Standard only paid P8,000 while Martina the complaint. The claims of Gicale and Standard
Gicale shouldered the remaining P13,415. arose from the same vehicular accident involving
Thereafter, Standard and Martina demanded Pantranco's bus and Gicale's jeepney. Thus, there
reimbursements from Pantranco and Buncan, but the was a question of fact common to all parties.
would have been sufficient to authorize a recovery in
Pantranco and Buncan's motion for the first. Here, had respondents filed separate suits
reconsideration was denied by the CA. against petitioners, the same evidence would have
been presented to sustain the same cause of
Gicale and Standard: There was no misjoinder of action. Thus, the filing by both respondents of the
parties. Their individual claims arose from the same complaint with the court below is in order. Such
vehicular accident and involve a common question joinder of parties avoids multiplicity of suit and
of fact and law. Thus, the RTC has jurisdiction over ensures the convenient, speedy and orderly
the case. administration of justice.

ISSUE: WON there was a misjoinder of parties in the There is NO MISJOINDER OF PARTIES if the money
case. sought to be claimed is in favor of the same
plaintiff/s and against the same defendant/s.
HELD: No. Sec. 6, Rule 3 of the Revised Rules of
Court provides the following requirements for a On the issue of lumping together the claims of Gicale
permissive joinder of parties: (a) the right to relief and Standard, Section 5(d), Rule 2 of the same Rules
arises out of the same transaction or series of provides:
transactions; (b) there is a question of law or fact Sec. 5. Joinder of causes of action. A party may in
common to all the plaintiffs or defendants; and (c) one pleading assert, in the alternative or otherwise,
such joinder is not otherwise proscribed by the as many causes of action as he may have against an
provisions of the Rules on jurisdiction and opposing party, subject to the following conditions:
venue. x x x (d) Where the claims in all the causes of action
are principally for recovery of money the aggregate
In this case, there is a single transaction common to amount claimed shall be the test of jurisdiction.
all, that is, Pantrancos bus hitting the rear side of
the jeepney. There is also a common question of Further, the Court reiterates the Totality
fact, that is, whether petitioners are rule exemplified by Sec. 33 (1) of BP 129: where
negligent. There being a single transaction there are several claims or causes of action between
common to both respondents, consequently, they the same or different parties, embodied in the same
have the same cause of action against complaint, the amount of the demand shall be the
petitioners. totality of the claims in all the causes of action,
irrespective of whether the causes of action arose
To determine identity of cause of action, it must be out of the same or different transactions.
ascertained whether the same evidence which is
necessary to sustain the second cause of action Hence, PETITION IS DENIED.
Held: NO.The action of the petitioners for the
Spouses Decena vs. Spouses Piquero [G.R. No. rescission of the MOA on account of the
155736. March 31, 2005] respondents' breach thereof and the latter's failure
Post under case digests, Remedial Law at Sunday, to return the premises subject of the complaint to
March 04, 2012 Posted by Schizophrenic Mind the petitioners, and the
Facts: On September 7, 1997, Spouses Danilo and respondents' eviction therefrom is a real action. As
Cristina Decena executed a Memorandum of such, the action should have been filed in the
Agreement (MOA) with Spouses Pedro and Valeria proper court where the property is located, namely,
Piquero for the sale of their titled property in in Pararaque City, conformably with Section 1, Rule 4
Paranaque, costing P6,900,000.00, for the price of of the Rules of Court
P940,250.00 only, payable in six (6) installments via
postdated checks. The MOA stipulated that the that The action of the petitioners for the rescission of the
the petitioners obliged themselves to transfer the MOA on account of the respondents' breach thereof
property to the respondents upon the execution of and the latter's failure to return the premises subject
the MOA with the condition that if two of the of the complaint to the petitioners, and the
postdated checks would be dishonored by the respondents' eviction therefrom is a real action. As
drawee bank, the latter would be obliged to such, the action should have been filed in the
reconvey the property to the petitioners. The proper court where the property is located, namely,
vendees forthwith took possession of the property. in Pararaque City, conformably with Section 1, Rule 4
of the Rules of Court which reads:
The first two checks issued by the respondents were
dishonored by the drawee bank and were not SECTION 1. Venue of real actions. ' Actions affecting
replaced with cash despite demands by the title to or possession of real property, or interest
petitioners who on May 17, 1999 filed a complaint, therein, shall be commenced and tried in the
before the RTC of Malolos, Bulacan where they proper court which has jurisdiction over the area
reside, against the respondents for the annulment of wherein the real property involved, or a portion
the sale/MOA, recovery of possession and damages, thereof, is situated.
alleging that they did not transfer the property to
and in the names of the respondents as a result of Since the petitioners, who were residents of Malolos,
the dishonored checks. Bulacan, filed their complaint in the said
RTC, venue was improperly laid; hence, the
Issue: Whether or not the RTC of Malolos Bulacan trial court acted conformably with Section 1(c), Rule
gained jurisdiction over the case and should be 16 of the Rules of Court when it ordered the
the venue of litigation. dismissal of the complaint.
three percent per month. Cruz thereafter purchased
goods from UHI's affiliated companies First Paragon
Corporation (FPC) and Uniwide Sales Warehouse
Club, Inc. (USWCI).

UNIWIDE HOLDINGS INC vs CRUZ Case Digest FPC and USWCI subsequently executed Deeds of
Assignment in favor of UHI assigning all their rights
and interests over Cruzs accounts payable to them.
UNIWIDE HOLDINGS, INC., v. ALEXANDER M. Cruz had outstanding obligations with UHI, FPC and
CRUZ USWCI in the amount of P1, 358, 531.89.00. UHI sent
529 SCRA 664 (2007), SECOND DIVISION a letter demanding for the payment of such amount
(Carpio Morales, J.) but it was not settled.

Where there is a joinder of causes of action Thus, UHI filed a complaint for collection of sum of
between the same parties one of which does money before the Regional Trial Court of Paraaque
not arise out of the contract where the against Cruz praying for payment of service fee,
exclusive venue was stipulated upon, the accounts payable to FPC and USWCI and attorneys
complain may be brought before other fees and litigation expenses.
venues.
Cruz filed a Motion to Dismiss on the ground of
FACTS: Uniwide Holdings, Inc. entered into a improper venue. He invokes Article 27.5 of the
franchise agreement with Alexander M. Cruz agreement which provides that exclusive jurisdiction
granting the latter a five-year franchise to adopt and is vested with the courts f Quezon City. The trial
use the Uniwide Family Store System for the court granted the Motion to Dismiss.
establishment and operation of a Uniwide Family
Store in Marikina City. ISSUE: Whether or not a case based on several
causes of action is dismissible on the ground of
The contract stipulated that Cruz will pay a monthly improper venue where only one of the causes of
service fee of P50,000.00 or three percent of gross action arises from a contract with exclusive venue
monthly purchases, whichever is higher to UHI, stipulation
payable within five days after the end of each month
without need of formal billing or demand from UHI. HELD: In this case, UHI contended that nowhere in
In case of any delay in the payment of the monthly the agreement is there a mention of FPC and USWCI,
service fee, Cruz would, under Article 10.3 of the and neither are the two parties thereto, hence, they
agreement, be liable to pay an interest charge of
cannot be bound to the stipulation on exclusive Facts:
venue. The Court found merit in this contention. Lourdes Suites filed before the MeTC a small-claims
complaint against Binaro for nonpayment of penalty
The Supreme Court cited Section 2, Rule 4 of the charges on its rented rooms. Binaro responded with
Rules of Court which provides that all other actions a counterclaim. Lourdes Suites impugned the validity
may be commenced and tried where the plaintiff or of Binaros pleading stating that it did not comply
any of the principal plaintiffs resides, or where the with the form of an Answer as required in Rule 11,
defendant or any of the principal defendants resides, Sec 1 of the Rules of Court.
or in the case of a nonresident defendant, where he The MeTC, after evaluating the evidence, dismissed
may be found, at the election of the plaintiff. the complaint with prejudice for lack of cause of
action. Lourdes Suites filed a certiorari before the
The forging of a written agreement on an exclusive RTC arguing that lack of cause of action is not a valid
venue of an action does not, however, exclude ground for dismissal of cases, much more a dismissal
parties from bringing a case to other venues. with prejudice. It contends that a complaint even
after the presentation of evidence cannot be
Where there is a joinder of causes of action between dismissed on ground of lack of cause of action
the same parties one of which does not arise out of because it is not expressly provided for under the
the contract where the exclusive venue was Rules on Small Claims Cases and the Rules of Civil
stipulated upon, the complaint, as in the one at bar, Procedure, and that if there was a failure to prove a
may be brought before other venues provided that cause of action the only available remedy would be a
such other cause of action falls within the jurisdiction demurrer filed by the defendant.
of the court and the venue lies therein. The RTC ruled that there was no grave of abuse of
discretion on the part of the MeTC. The MR was also
It bears emphasis that the causes of action on the denied. Hence, Lourdes Suites brought the issue to
assigned accounts are not based on a breach of the the SC via petition for review under Rule 45.
agreement between UHI and Cruz. They are based Issue: W/N dismissal on the ground of lack of cause
on separate, distinct and independent contracts- of action is proper under the Rules of Court
deeds of assignment in which UHI is the assignee of Yes. The courts are not precluded from dismissing a
Cruzs obligations to the assignors FPC and USWCI. case for lack of cause of action such as insufficiency
Thus, any action arising from the deeds of of evidence. In civil cases, courts must determine if
assignment cannot be subjected to the exclusive the plaintiff was able to prove his case by a
venue stipulation embodied in the agreement. preponderance of evidence.
The basis of the MeTC in dismissing the complaint for
lack of cause of action is the failure of plaintiff to
Lordes v Binaro preponderantly establish its claim by clear and
convincing evidence. Hence, MeTC did not commit
grave abuse of discretion when it dismissed the Who may be Parties [Sec. 1, Rule 3]
Complaint for lack of cause of action, as it referred to (1) Natural persons;
the evidence presented and not to the allegations in (2) Juridical persons [Art. 44, Civil Code];
the Complaint. (a) The State and its political subdivisions;
The dismissal of the complaint with prejudice is (b) Other corporations, institutions and entities for
likewise not an exercise of wanton or palpable public interest or public purpose, created by law; and
discretion. This case is an action for small claims (c) Corporations, partnerships, and associations for
where decisions are rendered final and private interest or purpose to which the law grants a
unappealable; hence, a decision dismissing it is judicial personality, separate and distinct from that
necessarily with prejudice. of each shareholder, partner, or member.
(3) Entities authorized by law. [Riano]

V. Rule 3 Sections 1 to 3: Parties to a Civil C.1 REAL PARTY-IN-INTEREST


Action REAL PARTY-IN-INTEREST
The party who stands to be benefited or injured by
C. PARTIES the judgment in the suit, or the party entitled to the
PLAINTIFF avails of the suit. [Sec. 2, Rule 3] Interest means
One having an interest in the matter of the action or material interest or an interest in issue to be
in obtaining the relief demanded. The term may affected by the decree or judgment of the case, as
either refer to the claiming party, counter-claimant, distinguished from mere curiosity about the question
cross-claimant, or third-party plaintiff. [Sec. 1, Rule involved. [Ang v. Sps. Ang, G.R. No. 186993 (2012)]
3] The interest must be real, which a present and
substantial interest as distinguished from a mere
DEFENDANT One claiming an interest in the expectancy or a future, contingent, subordinate, or
controversy or the subject thereof adverse to the consequential interest. [Rayo v. Metrobank, G.R. No.
plaintiff. 165142]

Term may refer to the original defending party, the It should be material and direct, as distinguished
defendant in a counterclaim, the cross-defendant, or from a mere incidental interest.[Mayor Rhustam
the third (fourth, etc.)- party defendant. [Sec. 1, Rule Dagadag v. Tongnawa, G.R.
3] It also includes an unwilling co-plaintiff, or one No. 161166-67 (2005)]
who should be joined as plaintiff but refuses to give
his consent thereto. [Sec. 10, Rule 3]
Unless authorized by law or the Rules, every action
must be prosecuted or defended in thename of the Failure to Name a Real Party-in- Interest
real party in interest. [Sec. 2, Rule 3] If the suit is not brought in the name of or against
Husband and wife shall sue and be sued jointly, the real party-in-interest, a Motion to Dismiss may be
except as provided by law. [Sec. 4, Rule 3] filed on the ground that the complaint states no
cause of action. [Balagtas v. CA, G.R. No. 109073
Exceptions: (1999)]]
(1) Judicial separation of property
(2) Abandonment Remedies:
(3) Exclusive property of spouses (1) Amendment of pleadings [Alonso v. Villamor, G.R.
(4) Suits with respect to the practice of profession No. L-2352 (1910)]; or
(2) Complaint may be deemed amended to include
REPRESENTATIVES AS PARTIES the real party-in-interest [Balquidra v. CFI Capiz, G.R.
A representative is one acting in fiduciary capacity, No. L-40490 (1977)]
such as a trustee of an express trust, a guardian, an
executor or administrator, or a party authorized by As an exception, the real litigant may be held bound
law or the Rules of Court. [Sec. 3, Rule 3] as a party even if not formally impleaded provided
he had his day in court.
Where the action is allowed to be prosecuted or
defended by a representative party, the beneficiary [Albert v. University Publishing Co., G.R. No. L- 9300
shall be included in the title of the case and shall be (1958)]
deemed to be the real party in interest. An agent
acting in his own name and for the benefit of an C.2. INDISPENSABLE AND NECESSARY PARTIES
undisclosed principal may sue or be sued without INDISPENSABLE PARTY
joining the principal, except if the contract involves
things belonging to the principal. A real party-in-interest without whom no final
determination can be had of an action.
A minor or a person alleged to be incompetent may [Sec. 7, Rule 3]
sue or be sued, with the assistance of his father, NECESSARY PARTY
mother, guardian, or if he has none, a guardian ad Not an indispensable party but ought to be joined as
litem. [Sec. 5, Rule 3] a party if complete relief is to be accorded as to
Minors (represented by their parents) are real parties those already parties, or for a complete
in interest under the principle of intergenerational determination or settlement of the claim subject of
responsibility. [Oposa v. Factoran, G.R. No. 101083 the action [Sec. 8, Rule 3]Although joinder of parties
(1993)] is generally permissive [Sec. 6, Rule 3] the joinder of
a party becomes compulsory when the oneinvolved may exercise the power of eminent domain should
is an indispensable party. [Sec. 7, Rule 3] the negotiations fail. The negotiations failed and ISA
A person is not an indispensable party if his interest commencedexpropriation proceedings against MCFC.
in the controversy or subject matter is separable While trial was on-going the statutory existence of
from the interest of the other parties, so that it will ISA had expired promptingMCFC to file the dismissal
not necessarily be directly or injuriously affected by of the case since ISA has ceased to be a juridical
a decree which does not complete justice between person.
them. [Riano] The trial court granted
MCFCs motion
Iron and Steel Authority vs. Court to dismiss anchoring on the Rules of Cour
of AppealsGR No. 102976, October 25, 1995 t that only natural or juridical persons or entities
authorized by law may be parties to a civil case.
FACTS:The Iron and Steel Authority (ISA) was created ISA moved for a reconsideration contending that
by PD No. 272, in order, generally, despite the expiration of its term, its
to develop and promote theiron and steel industry juridicialexistence continued until the winding up of
in the Philippines. Initially, it was created for a term its affairs could be completed. In the alternative ISA
of 5 years but when its original term expired,its term urged that the Rep. ofthe Philippines should be
was extended for another 10 years by EO No. 555. allowed to be substituted in its place. The RTC
The National Steel Corporation (NSC) then a wholly denied its motion for reconsideration. This
ownedsubsidiary of the National Development wasaffirmed by the CA.
Corporation which is an entity wholly owned by the
National Governmentembarked on an expansion ISSUE:Whether or not the Republic of the Philippines
program which includes the construction of a steel is entitled to be substituted for ISA in view of the
mill in Iligan City. Proclamation No. 2239was issued expiration of
by the President withdrawing from sale or settlement ISAs term.
a tract of land in Iligan City to be used by the
NSC.However, certain portions of the public land HELD:There is no provision in PD No. 272 recognizing
under Proclamation 2239 were occupied by Maria ISA as possessing general or comprehensive juridical
Cristina Fertilizer Co.(MCFC). LOI No. 1277 was personalityseparate and distinct from that of the
issued directing NSC to negotiate with the owners of Government. ISA in fact appears to be a non-
MCFC for and on behalf of the incorporated agency orinstrumentality of the
Government for the compensation of MCFCs present Government of the Republic of the Philippines.
occupancy rights on the subject land. The LOI It is common knowledge that other agencies
directed that ISA orinstrumentalities of the Government of the
Republic are case in corporate form, that is to say,
are incorporated agenciesor instrumentalities, Republic, no special statutory provision having been
sometimes with and other times without capital shown to have mandated succession thereto by
stock, and accordingly vested with a some otherentity or agency of the Republic.
juridical personality distinct from the personality of t It follows that the Republic of the Philippines is
he Republic. entitled to be substituted in the expropriation
The term Authority has been used t proceedings as party-
o designate bothincorporated and non-incorporated plaintiff in lieu of ISA, the statutory term of ISA
agencies or instrumentalities of the Government. having expired. The expiration of ISAs statutory
The Court considers that ISA is properly regarded as did not by itself
an agent or delegate of the Republic of the require or justify the dismissal of the eminent
Philippines. domain proceedings. Further, no new legislative act
TheRepublic itself is a body corporate and juridical is necessary should theRepublic decide, upon being
person vested with full panoply of powers and substituted for ISA, in fact to continue to prosecute
attributes which are the expropriation proceedings
compendiously described as legal personality.
When the statutory term of a non-incorporated RALA V RALA, TAMPINGCO no digest
agency expires, the powers, duties and functions as
well as theassets and liabilities of that agency revert
back to, and are re-assumed by, the Republic of the
Philippines, in the absenceof special provisions of
law specifying some other disposition thereof
such as e.g. devolution or transmission of
such powers, duties, functions, etc. to some other id
entified successor agency or instrumentality of the R
epublic of thePhilippines. When the expiring agency
is an incorporated one, the consequences of such
expiry must be looked for, in the first instance, in the
charter of that agency and, by way
of supplementation in the provisions of the
Corporation Code.
Since ISA is a non-incorporated agency or
instrumentality of the Republic, its powers, duties,
functions, assets andliabilities are properly regarded
as folded back into the Government of the
Philippines and hence assumed once again bythe
in interest.49 That he should be deemed a trustor on
FACTS: Sometime in 1996, Sabas Limbaring the basis merely of having paid the purchase price is
subdivided his Lot 2325-D, covered by Transfer plainly contradicted by the presumption based on
Certificate of Title (TCT) No. 5268, into two lots Article 1448 of the Civil Code "that there is a gift in
denominated as Lot Nos. 2325-D-1 and 2325-D-2. He favor of the child," not with parent.
then executed in favor of Jennifer Limbaring a Deed
of Sale for Lot 2325-D-2 for P60,000; and, in favor of
Sarah Jane Limbaring, another Deed for Lot 2325-D-1 Pascual vs. Pascual [G.R. No. 84240. March 25, 1992]
for P14,440. Accordingly, TCT No. 5268 was 15AUG
cancelled and TCT Nos. T-21921 and T-21920 were Ponente: PARAS, J.
issued in the names of Jennifer and Sarah Jane, FACTS:
respectively. Sensing some irregularities in the Don Andres Pascual died intestate (on October 12,
transaction, Percita Oco, the daughter of Sabas 1973) without any issue, legitimate, acknowledged
Limbaring, left Puerto Princesa City and went to natural, adopted or spurious children. Petitioners
Ozamis City. She then filed a case of perjury and Olivia and Hermes both surnamed Pascual are the
falsification of documents against respondent, her acknowledged natural children of the late Eligio
uncle who was the father of Jennifer and Sarah Jane. Pascual, the latter being the full blood brother of the
During the pre-litigation conference called by City decedent Don Andres Pascual. Petitioners filed their
Prosecutor Luzminda Uy on July 1, 1996, the parties Motion to Reiterate Hereditary Rights and the
agreed that the two parcels of land should be Memorandum in Support of Motion to reiterate
reconveyed to Percita, who was to pay respondent Hereditary Rights. the Regional Trial Court, presided
all the expenses that had been and would be over by Judge Manuel S. Padolina issued an order,
incurred to transfer the titles to her name. the dispositive portion of which resolved to deny this
motion reiterating their hereditary rights. Their
ISSUE: Was there a trust created between Limbaring motion for reconsideration was also denied.
when he purchased the properties in favor of his Petitioners appealed their case to the Court of
daughter. Appeals, but like the ruling of CA, their motion for
reconsideration was also dismissed. In this petition
RULING: No, Under the last sentence of Article 1448, for review on certiorari, petitioners contend that they
respondent's alleged acts paying the price of the do not fall squarely within the purview of Article 992
subject properties and, in the titles, naming his of the Civil Code of the Philippines, can be
children as owners -- raise the presumption that a interpreted to exclude recognized (and
gift was effected in their favor. Respondent failed to acknowledged) natural children as their illegitimacy
rebut this presumption. Absent any clear proof that a is not due to the subsistence of a prior marriage
trust was created, he cannot be deemed a real party when such children were under conception.
ISSUE: Golangco,(1995) as a complainant initiated a
Whether or not Article 992 of the Civil Code of the prosecution for libel against the respondent Fung in
Philippines, can be interpreted to exclude recognized RTC. Allegedly, the respondent had issued an office
natural children from the inheritance of the memorandum dated May 10, 1995 maliciously
deceased. imputing against the petitioner the commission of
HELD: bribery and had sent copies of the memorandum to
NO. Petition is devoid of merit. the petitioners superiors in the POEA and to other
RATIO: public officers and personalities not connected with
The issue in the case at bar, had already been laid to the POEA, causing damage and prejudice to the
rest in Diaz v. IAC, where this Court ruled that petitioner.
under Art.992 of the Civil Code, there exists a barrier
or iron curtain in that it prohibits absolutely a On Hearing day the Prosecution still failed to present
succession ab intestado between the illegitimate Atty. Ramos as its witness because no subpoena had
child and the legitimate children and relatives of the been issued to and served on him for the purpose.
father or mother of said legitimate child. RTC judge issued an order terminating the
[T]he interpretation of the law desired by the Prosecutions presentation of evidence
petitioner may be more humane but it is also an
elementary rule in statutory construction that when Pet. went to CA on certiorari to assail the order and
the words and phrases of the statute are clear and claimed that the RTC judge committed grave abuse
unequivocal, their meaning must be determined of discretion for not issuing the subpoena to require
from the language employed and the statute must Atty. Ramos to appear and testify in the May 23,
be taken to mean exactly what is says. 2001 hearing. He contended that his prior request
Eligio Pascual is a legitimate child but petitioners are for the subpoena for the February 20, 2001 hearing
his illegitimate children and the term illegitimate should have been treated as a continuing request for
refers to both natural and spurious. It may be said the subpoena considering that the Rules of Court did
that the law may be harsh but that is the law (DURA not require a party to apply for a subpoena again
LEX SED LEX) should it not be served in the first time.

Court of Appeals rejected the petitioner and


JOWETT K. GOLANGCO, Petitioner, vs. JONE B. dismissed the petition for certiorari
FUNG, Respondent. Hence , a Petition for review on certiorari was filed in
G.R. No. 157952 September 8, 2009 SC.
BERSAMIN, J.:
FACTS: ISSUE:
Whether the Court of Appeals correctly ruled on the
petition for certiorari of the petitioner?YES Equitable PCI Bank, Inc. (now known as Banco
De Oro-EPCI, Inc.) vs. Heirs of Antonio
RULING: Tiu,namely: Arlene T. Fu, Michael U. Tiu,
The gross procedural misstep committed by the Andrew U. Tiu, Edgar U. Tiu and Erwin U. Tiu
petitioner in the Court of Appeals G.R. No.178529, September 4, 2009 // Carpio
The petitioner did not join the People of the Morales, J:
Philippines as a party in his action for certiorari in Provision on parties in interest of the Rules
the Court of Appeals. He ignored that the People of Court
of the Philippines were indispensable parties
due to his objective being to set aside the trial FACTS
courts order dated May 23, 2001 that concerned the :In 1994, Antonio Tiu (deceased), father of herein
public aspect of Criminal Case The omission was respondents, executed a REAL ESTATE MORTGAGEin
fatal and already enough cause for the summary favor of petitioner covering a lot (registered in his
rejection of his petition for certiorari. name) located in Tacloban City in order to securethe
indebtedness of one Gabriel Ching. 4 years
The petitioner did not also obtain the consent of the thereafter, Antonio executed an
Office of the Solicitor General (OSG) to his petition Amendment to the RealEstate Mortgage
for certiorari. At the very least, he should have (AREM) increasing the amount secured by the
furnished a copy of the petition for certiorari to the mortgage. Said mortgage as well as its amendment
OSG prior to the filing. Pet. violated Administrative bore the signature of Antonios wife, Matilde, above
Code which mandates the OSG to represent the the words With my Marital Consent.
Government in the Supreme Court and the Since the loan obligation remained unsettled,
Court of Appeals in all criminal proceedings; petitioner (Equitable PCI Bank, now known as Banco
represent the Government and its officers in deOro-EPCI, Inc.) filed before the Regional Trial Court
the Supreme Court, the Court of Appeals, and (RTC) of Tacloban City
all other courts or tribunals in all civil actions a
and special proceedings in which the Petition for Sale
Government or any officer thereof in his official for
capacity is a party. the extrajudicial foreclosure of the AREM and the
sale at public auction of the lot
Therefore, the trial judge did not act capriciously, covered thereby. Thesame was granted by the RTC
arbitrarily or whimsically in issuing the assailed Clerk of Court. However, the public auction sale did
order. Thus, the Court of Appeals properly dismissed not push through asscheduled because of the TRO
the petition for certiorari. issued by the RTC after the respondents (children of
Antonio) filed aComplaint for the annulment of the by the SC. The Court held that it is Matilde,
AREM with a prayer for the issuance of a TRO and Antonios wife, and
writ of preliminary injunction and damages. They NOT HER CHILDREN
alleged, among others, that the AREM is null and , who should have filed the instant suit.Settled is the
void becauseit did not bear the signature of their rule that every action must be prosecuted or
mother, who, according to them, was then already defended in the name of the real party ininterest
suffering from Alzheimers disease. (Sec. 2, Rule 3 of the Rules of Court). In annulment of
In response to said Complaint, the petitioner filed a contracts, Art. 1397 of the Civil Code provides that
MOTION TO DISMISS the suit may be instituted by all who are
, arguing among others that thereby obliged principally or subsidiarily xxx.In the
1) the complaint states case at bar, the AREM was executed by Antonio, with
no cause of action the marital consent of Matilde. Since themortgaged
because respondents are property is presumed conjugal, she is the
not the real parties in interest one obliged principally under the AREM. It is thusshe,
; 2) thecause of action has already following Art. 1397 of the Civil Code vis a vis Sec. 2
prescribed of Rule 3 of the Rules of Court, who is the real
; 3) the venue is improperly laid
. The RTC, however, denied themotion, stating that
respondents are real parties in interest because t
hey stand to be benefited or injuredby the party in interest, hence, the action must be
action as their inheritance prosecuted in her name as she stands to be
(as heirs of the deceased) is at stake. Hence, the benefited or injuredin the action.Assuming that
petitioner filed a petition for certiorari, Matilde is indeed incapacitated, it is her legal
prohibition and mandamus before the CA which was guardian who should file the action on
again denied. Hence, this petition. her behalf. Not only is there no allegation in the
ISSUE complaint, that respondents have been legally
: Whether or not the complaint for the annulment of designated asguardians to file the action on her
the AREM filed by respondents-children ofAntonio behalf, the name of Matilde (who is deemed the real
states a cause of action notwithstanding the fact party in interest)was likewise not included in the title
that their mother, Matilde (who was of the case, in violation of Sec. 3 of Rule 3 of the
principallyobliged under the AREM) was Rules of Court.
not impleaded.
HELD
: The petition for certiorari was
GRANTED V-GENT no digest
that PPI products which were being sold to the public
Cameron Granville Asset Mgt. vs. Chua no digest were unfit for human consumption.

Case Digest: DOH v. Phil Pharmawealth During the October 27, 2000 meeting, the 24 drug
G.R. No. 182358 : February 20, 2013 companies were directed to submit within 10 days,
or until November 6, 2000, their respective
DEPARTMENT OF HEALTH, THE SECRETARY OF explanations on the adverse findings covering their
HEALTH, and MA. MARGARITA M. GALON, respective products contained in the Report on
Petitioners, v .PHIL PHARMAWEALTH, INC., Violative Products.
Respondent.
Instead of submitting its written explanation within
DEL CASTILLO, J.: the 10-day period as required, PPI belatedly sent a
letter dated November 13, 2000 addressed to
FACTS: Undersecretary Galon, informing her that PPI has
referred the Report on Violative Products to its
On August 28, 2000, the DOH issued Memorandum lawyers with instructions to prepare the
No. 171-C which provided for a list and category of corresponding reply. However, PPI did not indicate
sanctions to be imposed on accredited government when its reply would be submitted; nor did it seek an
suppliers of pharmaceutical products in case of extension of the 10-day period, which had previously
adverse findings regarding their products (e.g. expired on November 6, 2000, much less offer any
substandard, fake, or misbranded) or violations explanation for its failure to timely submit its reply.
committed by them during their accreditation.
In a letter-reply dated November 23, 2000
In line with Memorandum No. 171-C, the DOH, Undersecretary Galon found "untenable" PPI
through former Undersecretary Ma. Margarita M. November 13, 2000 letter and therein informed PPI
Galon(Galon), issued Memorandum No. 209 series of that, effective immediately, its accreditation has
2000,inviting representatives of 24 accredited drug been suspended for two years pursuant to AO 10
companies, including herein respondent Phil and Memorandum No. 171-C.
Pharmawealth, Inc. (PPI) to a meeting on October 27,
2000. During the meeting, Undersecretary Galon In another December 14, 2000 letter addressed to
handed them copies of a document entitled "Report Undersecretary Galon, PPI through counsel
on Violative Products"issued by the Bureau of Food questioned the suspension of its accreditation,
and Drugs (BFAD), which detailed violations or saying that the same was made pursuant to Section
adverse findings relative to these accredited drug VII of AO 10 which it claimed was patently illegal and
companies products. Specifically, the BFAD found null and void because it arrogated unto the DOH
Accreditation Committee powers and functions which granted PPI prayer for a temporary restraining order,
were granted to the BFAD under Republic Act (RA) but only covering PPI products which were not
No. 3720 and Executive Order (EO) No. 175. PPI included in the list of violative products or drugs as
added that its accreditation was suspended without found by the BFAD.
the benefit of notice and hearing, in violation of its
right to substantive and administrative due process. In a Manifestation and Motion dated July 8, 2003,
It thus demanded that the DOH desist from petitioners moved for the dismissal of Civil Case No.
implementing the suspension of its accreditation, 68200, claiming that the case was one against the
under pain of legal redress. State; that the Complaint was improperly verified;
and lack of authority of the corporate officer to
On December 28, 2000, PPI filed before the Regional commence the suit, as the requisite resolution of PPI
Trial Court of Pasig City a Complaint seeking to board of directors granting to the commencing
declare null and void certain DOH administrative officer PPI Vice President for Legal and
issuances, with prayer for damages and injunction Administrative Affairs, Alan Alambra, the authority to
against the DOH, former Secretary Romualdez and file Civil Case No. 68200 was lacking. The trial court
DOH Undersecretary Galon. dismissed Civil Case No. 68200, declaring the case
to be one instituted against the State, in which case
In their Amended Answer,the DOH, former Secretary the principle of state immunity from suit is
Romualdez, then Secretary Dayrit, and applicable.
Undersecretary Galon sought the dismissal of the
Complaint, stressing that PPI accreditation was On appeal, the CA, in the herein assailed Decision,
suspended because most of the drugs it was reversed the trial court ruling and ordered the
importing and distributing/selling to the public were remand of the case for the conduct of further
found by the BFAD to be substandard for human proceedings. The CA concluded that it was
consumption. They added that the DOH is primarily premature for the trial court to have dismissed the
responsible for the formulation, planning, Complaint. The CA further held that instead of
implementation, and coordination of policies and dismissing the case, the trial court should have
programs in the field of health; it is vested with the deferred the hearing and resolution of the motion to
comprehensive power to make essential health dismiss and proceeded to trial. It added that it was
services and goods available to the people, including apparent from the Complaint that petitioners were
accreditation of drug suppliers and regulation of being sued in their private and personal capacities
importation and distribution of basic medicines for for acts done beyond the scope of their official
the public. functions. Thus, the issue of whether the suit is
against the State could best be threshed out during
In a January 8, 2001 Order, the trial court partially trial on the merits, rather than in proceedings
covering a motion to dismiss. principle is to be abandoned and the availability of
judicial remedy is not to be accordingly restricted.
ISSUE: Whether or not Civil Case No. 68200 should
be dismissed for being a suit against the State? The rule, in any case, is not really absolute for it
does not say that the state may not be sued under
HELD: Civil Case No. 68200 should be any circumstance. On the contrary, as correctly
dismissed. phrased, the doctrine only conveys, the state may
not be sued without its consent; it's clear import
The doctrine of non-suability - This Court in then is that the State may at times be sued. The
Department of Agriculture v. National Labor State consent may be given either expressly or
Relations Commission discussed: impliedly. Express consent may be made through a
general law or a special law. x xx Implied consent, on
The basic postulate enshrined in the constitution the other hand, is conceded when the State itself
that the State may not be sued without its consent, commences litigation, thus opening itself to a
reflects nothing less than a recognition of the counterclaim or when it enters into a contract. In this
sovereign character of the State and an express situation, the government is deemed to have
affirmation of the unwritten rule effectively descended to the level of the other contracting party
insulating it from the jurisdiction of courts. It is and to have divested itself of its sovereign immunity.
based on the very essence of sovereignty. x x x [A] This rule, x x x is not, however, without qualification.
sovereign is exempt from suit, not because of any Not all contracts entered into by the government
formal conception or obsolete theory, but on the operate as a waiver of its non-suability; distinction
logical and practical ground that there can be no must still be made between one which is executed in
legal right as against the authority that makes the the exercise of its sovereign function and another
law on which the right depends. True, the doctrine, which is done in its proprietary capacity.
not too infrequently, is derisively called the royal
prerogative of dishonesty because it grants the state As a general rule, a state may not be sued. However,
the prerogative to defeat any legitimate claim if it consents, either expressly or impliedly, then it
against it by simply invoking its nonsuability. We may be the subject of a suit. There is express
have had occasion to explain in its defense, consent when a law, either special or general, so
however, that a continued adherence to the doctrine provides. On the other hand, there is implied consent
of non-suability cannot be deplored, for the loss of when the state "enters into a contract or it itself
governmental efficiency and the obstacle to the commences litigation." However, it must be clarified
performance of its multifarious functions would be that when a state enters into a contract, it does not
far greater in severity than the inconvenience that automatically mean that it has waived its non-
may be caused private parties, if such fundamental suability. The State "will be deemed to have
impliedly waived its non-suability [only] if it has Secretaries Romualdez and Dayrit, as well as
entered into a contract in its proprietary or private Undersecretary Galon, were done while in the
capacity. [However,] when the contract involves its performance and discharge of their official functions
sovereign or governmental capacity[,] x x x no such or in their official capacities, and not in their
waiver may be implied.""Statutory provisions personal or individual capacities. Secretaries
waiving [s]tate immunity are construed in strictissimi Romualdez and Dayrit were being charged with the
juris. For, waiver of immunity is in derogation of issuance of the assailed orders. On the other hand,
sovereignty." Undersecretary Galon was being charged with
implementing the assailed issuances. By no stretch
The DOH can validly invoke state immunity. of imagination could the same be categorized as
The DOH is an unincorporated agency which ultra vires simply because the said acts are well
performs sovereign or governmental functions within the scope of their authority. Section 4 of RA
because it has not consented, either expressly 3720 specifically provides that the BFAD is an office
or impliedly, to be sued. Significantly, the DOH under the Office of the Health Secretary. Also, the
is an unincorporated agency which performs Health Secretary is authorized to issue rules and
functions of governmental character. regulations as may be necessary to effectively
enforce the provisions of RA 3720. As regards
As regards the other petitioners, to wit, Secretaries Undersecretary Galon, she is authorized by law to
Romualdez and Dayrit, and Undersecretary Galon, it supervise the offices under the DOH authority, such
must be stressed that the doctrine of state immunity as the BFAD. Moreover, there was also no showing of
extends its protective mantle also to complaints filed bad faith on their part. The assailed issuances were
against state officials for acts done in the discharge not directed only against PPI. The suspension of PPI
and performance of their duties. "The suability of a accreditation only came about after it failed to
government official depends on whether the official submit its comment as directed by Undersecretary
concerned was acting within his official or Galon. It is also beyond dispute that if found
jurisdictional capacity, and whether the acts done in wanting, a financial charge will be imposed upon
the performance of official functions will result in a them which will require an appropriation from the
charge or financial liability against the government." state of the needed amount. Thus, based on the
Otherwise stated, "public officials can be held foregoing considerations, the Complaint against
personally accountable for acts claimed to have them should likewise be dismissed for being a suit
been performed in connection with official duties against the state which absolutely did not give its
where they have acted ultra vires or where there is consent to be sued. Based on the foregoing
showing of bad faith." considerations, and regardless of the merits of PPI
case, this case deserves a dismissal. Evidently, the
It is beyond doubt that the acts imputed against
very foundation of Civil Case No. 68200 has
crumbled at this initial juncture. Ruling/s

SC dismissed the petition for lack of merit.

The States immunity from suit does not extend to


the petitioner (ATO) because it is an agency of the
Case Title: Air Transportation Office (ATO) State engaged in an enterprise that is far from being
v. Sps. David and Elisea Ramos the States exclusive prerogative. The CA thereby
G.R. no and Date: G.R. No. 159402 correctly appreciated the juridical character of the
February 23, 2011 ATO as an agency of the Government not performing
Ponente: Justice Bersamin a purely governmental or sovereign function, but
was instead involved in the management and
Facts maintenance of the Loakan Airport, an activity that
was not the exclusive prerogative of the State in its
Sps. Ramos discovered that a portion of their land sovereign capacity. Hence, the ATO had no claim to
(somewhere in Baguio) was being used as part of the the States immunity from suit. The SC further
runway and running shoulder of the Loakan Airport observes that the doctrine of sovereign immunity
which is operated by ATO. Sometime in 1995, cannot be successfully invoked to defeat a valid
respondents agreed to convey the subject portion by claim for compensation arising from the taking
deed of sale to ATO in consideration of the amount without just compensation and without the proper
of Php778,150.00. However, ATO failed to pay expropriation proceedings being first resorted to of
despite repeated verbal and written demands. Thus, the plaintiffs property.
an action for collection against ATO was filed by the
respondents before the RTC. ATOs primary Lastly, the issue of whether or not the ATO could be
contention was that the deed of sale was entered sued without the States consent has been rendered
into the performance of governmental functions. RTC moot by the passage of Republic Act No. 9497,
ruled in favor of the respondents. CA affirmed RTC. otherwise known as the Civil Aviation Authority Act
Hence, the petition. of 2008. R.A. No. 9497 abolished the ATO and under
its Transitory Provisions, R.A. No. 9497 established in
Issue/s place of the ATO the Civil Aviation Authority of the
Philippines (CAAP), which thereby assumed all of the
Whether ATO could be sued without the States ATOs powers, duties and rights, assets, real and
consent. personal properties, funds, and revenues. Section 23
of R.A. No. 9497 enumerates the corporate powers
vested in the CAAP, including the power to sue and In September 1961 AmEX made demands for
be sued, to enter into contracts of every class, kind payment upon Santiago, the latter refused to
and description, to construct, acquire, own, hold, pay.
operate, maintain, administer and lease personal The AmEx filed the presented suit for
and real properties, and to settle, under such terms collection.
and conditions most advantageous to it, any claim Santiago, in his answer to the complaint,
by or against it. With the CAAP having legally alleged that the AmEx has no cause of action
succeeded the ATO pursuant to R.A. No. 9497, the against him, not being the real party in
obligations that the ATO had incurred by virtue of the interest, the credit card issued by AmEx was
deed of sale with the Ramos spouses might now be merely to introduce the appellant to the
enforced against the CAAP. different establishments from which he made
purchases and obtained services on credit and
that it was these establishments who should
39. AMERICAN EXPRESS plaintiff-appellee, vs. properly have brought the suit.
CIRIO H. SANTIAGO defendant-appellant The lower court, held that the stores or
establishments which sold goods and services
This case is on appeal directly to this Court by the to the appellant on credit "bills the American
defendant from the decision of the Court of First Express Corporation which settles the accounts
Instance of Manila in its Civil Case No. 48318, directly and, in turn bills the customers who
sentencing him to pay the plaintiff the amount of possess the credit cards, in other words, with
$15,297.53, plus interest at the legal rate from the the possession of the credit card, the
date the complaint was filed and 25% of the amount possessor could purchase on credit from any
due by way of attorneys fees. store, and he could do that because the
purchases on credit are backed-up by the
FACTS: American Express Corporation thru the credit
Defendant, Santiago applied for a credit card card. This corporation pays for the purchase
to the plaintiff at the latter's office in New York and AmEx has to reimburse such payment to
City and upon such application the the owner of the credit card."
corresponding American Express Credit Card Santiago presented no evidence in his behalf.
(AmEx) was issued to him. On the other hand AmEx presented as
He used it in making purchases and obtaining evidence not only the application signed by
services on credit in various foreign countries. the appellant for the issuance of the credit
The credit charges he obtained ran up to a card, manifesting conformity to the condition
total of $15,297.53. therein stated but also the testimony, in the
form of deposition upon written
interrogatories, of its employee, George R. de Foreign Affairs, the latter advised the
Salvio, undersigned that it received the sealed
The other points raised by Santiago in his brief envelope from the consulate on October 20,
have to do with certain objections mostly on 1965 and turned it over on October 25, 1965,
technical grounds, such as, for example, that to its record section, which until November 19,
the matter sought to be elicited from the 1965, had done nothing towards transmitting
witness had already been admitted in the the deposition to the court. This prompted the
stipulation of facts, or that it was irrelevant Department of Foreign Affairs to request the
and immaterial; that the question was leading, undersigned to take care of having the
or vague, or sought to obtain from the witness deposition filed with the court, which the
a conclusion. undersigned consented to do, and did by
Santiago also objected to the admission of the means of their letter to the Clerk of Court
deposition as a whole on the ground that the dated November 19, 1965 (Exh. G-1) only to
procedure prescribed in Section 20 of Rule 24 expedite filing of the deposition and "to
was not followed, particularly that portion accommodate the Department of Foreign
which states that the officer who took the Affairs." The undersigned received the
deposition shall "promptly file it with the sealed envelope from the Department of
court in which the action is pending or Foreign Affairs and delivered it in exactly
send it by registered mail to the Clerk of the same condition to the Clerk of Court.
Court thereof for filing." The non- ISSUE: w/n AmEx is a real party in interest. (YES)
compliance with this rule, according to
Santiago, consists in the fact that it was the HELD:
AmEx counsel who picked up the deposition SC - We do not believe that the manner, in which the
from the Department of Foreign Affairs and deposition was delivered to the Clerk of Court, so
delivered it to the Clerk of Court instead of its affected its integrity as to render it inadmissible.
being filed directly with the latter. After all there is no pretense here that Santiago did
AmEx explained that: not contract the indebtedness for the collection of
... . The Philippine Consulate in New York by which he is being sued or that the same has been
letter dated October 8, 1965 notified the paid, the only important issue posed in this appeal
undersigned of the transmission on said date being whether or not AmEx is the real party in
of the deposition "through the Department of interest. On this score the finding of the lower court,
Foreign Affairs to the Clerk of Court; yet, it was supported as it is by the evidence before it, is
verified from the Clerk of Court that as of conclusive.
November 19, 1965 the deposition was not yet
received. Upon inquiry with the Department of
V. Rule 3 Sections 1 to 3: Parties to a Civil presence of all the indispensible party is a condition
Action sine qua non for the exercise of judicial power. The
ARON vs. Heirs of Alfredo REALON plaintiff is mandated to implead all indispensable
PETITION for review on certiorari of a decision of the party and in the absence of one render all
Court of Appeals. subsequent judgment voids. Failure to include the
FACTS: other heirs as indispensible parties in the complaint
Roman Realon was the owner of two parcels of land to nullify the contract to sell is fatal to the complaint.
which was inherited by Alfredo Realon and his
siblings. Sometime in 1979, Alfredo executed a Actions; Pleadings and
contract to sell his undivided portion of the lot to Practice; Parties; Capacity; The party bringing suit
petitioner. He also obliged himself to execute a deed has the burden of proving the sufficiency of the
of final sale. However Alfredo failed to register the representative character that he claimsThe settled
sale. To secure the balance of the purchase price rule is that every action must be prosecuted or
Aaron, mortgaged the property to the remaining heir. defended in the name of the real party-in-interest.
Alfredo Realon died and his successors were Where the action is allowed to be prosecuted or
unaware about the sale. Engr. Ilaban filed, the defended by a representative acting in a fiduciary
attorney-in-fact of Aron, filed a case for consignation capacity, the beneficiary must be included in the
against the heirs of Realon. The Realons countered title of the case and shall be deemed to be the real
by contending that undue influence was present at party-in-interest. The name of such beneficiaries
the execution of the sale and that the balance of the shall, likewise, be included in the complaint. Section
price due in the contract to sell was not paid. Aaron 4, Rule 8 of the Rules of Court further provides that
contended that the contract to sell was superseded facts showing the capacity of a party to sue or be
by the deeds of the sale with mortgage. In respond sued, or the authority of a party to sue or be sued in
the Realons contended that even the other heirs did a representative capacity must be averred in the
not receive the proceeds from the contract to sell complaint. In order to maintain an action in a court
allegedly executed by Alfredo. The Regional Trial of justice, the plaintiff must have an actual legal
Court held that there was fraud present. existence, that is, he or she or it must be a person in
ISSUE: law and possessed of a legal entity as either a
Whether or not the other heirs of Alfredo are the real natural or an artificial person, and no suit can
parties in interest. lawfully be prosecuted in the name of that person.
HELD The party bringing suit has the burden of proving the
The settled rule is that every action must be sufficiency of the representative character that he
prosecuted and defended in the name of the real claims. If a complaint is filed by one who claims to
party in a fiduciary capacity. The beneficiary must be represent a party as plaintiff but who, in fact, is not
deemed as the real party in interest. Thus the authorized to do so, such complaint is not deemed
filed and the court does not acquire jurisdiction over of the respondents to implead the said signatories
the complaint. It must be stressed that an and all the other heirs as parties-plaintiffs
unauthorized complaint does not produce any legal constituted a legal obstacle to the trial court and the
effect. Corollary, the defendant can assail the facts appellate courts exercise of judicial power over the
alleged therein through a motion to dismiss on the said case, and thereby rendered any orders or
ground that the plaintiff has no capacity to sue judgments made therein a nullity. To reiterate, the
under Section 1(d) of Rule 16 of the Rules of Court, absence of an indispensable party renders all
that is, that he does not have the representative he subsequent actions of the court null and void for
claims. want of authority to act, not only as to the absent
Indispensable Parties; It is precisely when an parties, but even as to those present. Thus, the RTC
indispensable party is not before the court that the should have ordered the dismissal of the complaint.
action should be dismissed.The presence of all
indispensable parties is a condition sine qua non for Lotte Phils. v. Dela Cruz (2005)
the exercise of judicial power. It is precisely when an PETITION for review on certiorari of the decision and
indispensable party is not before the court that the resolution of the Court of Appeals.
action should be dismissed. The plaintiff is mandated
to implead all indispensable parties, and the Lotte Philippines is a domestic corporation who hired
absence of one renders all subsequent actions of the 7J Maintenance and Janitorial Services to provide
court null and void for want of authority to act, not manpower for maintenance. The respondents were
only as to the absent parties, but even as to those hired as repackers or sealers. Lotte eventually
present. One who is not a party to a case is not dispensed with the respondents' services allegedly
bound by any decision of the court; otherwise, he because of the expiration/termination of its contract.
will be deprived of his right to due process. Respondents filed for illegal dismissal. The labor
Without the presence of all the other heirs as arbiter declared that 7J was the employer of the
plaintiffs, the trial court cannot validly render respondents. He found 7J guilty.
judgment and grant relief in favor of the 7J should be impleaded. The joiner of indispensable
respondents.The surviving signatories of the parties is mandatory. Indispensable parties are
assailed deeds and the other heirs of the deceased necessary to vest the court with jurisdiction. If they
vendors were not impleaded as plaintiffs. Without are not present in a suit or proceeding, judgment of
the presence of all the other heirs as plaintiffs, the a court cannot attain finality. The CA's ruling (that
trial court could not validly render judgment and Lotte was the respondents' real employer) made the
grant relief in favor of the respondents; it could, candy company jointly and severally liable with 7J,
likewise, not rule in favor of the petitioner for the who was not impleaded. Since the outcome of the
refund of his payments made to the respondents as decision directly affected 7J (in terms of liability), it is
the successors-in-interest of the vendors. The failure an indispensable party in interest. Non-joinder of
indispensable parties is not the ground for the The non-joinder of indispensable parties is not a
dismissal of an action. The remedy is to implead the ground for the dismissal of an action and the
non-party claimed to be indispensable. The remedy remedy is to implead the non-party claimed to be
may be effected through order of the court on indispensable.In Domingo v. Scheer, we held that
motion of the party, or through the court's own the non-joinder of indispensable parties is not a
initiative at any stage of the action and/or whenever ground for the dismissal of an action and the remedy
it is just. If a petitioner refuses to implead an is to implead the non-party claimed to be
indispensable party despite a court order, the court indispensable. Parties may be added by order of the
may dismiss the complaint/petition for failure to court on motion of the party or on its own initiative
comply. at any stage of the action and/or such times as are
just. If the petitioner refuses to implead an
Remedial Law; Parties; Pleadings and Practice; An indispensable party despite the order of the court,
indispensable party is a party in interest without the latter may dismiss the complaint/petition for the
whom no final determination can be had of an petitioner/plaintiffs failure to comply therefor.
action, and who shall be joined either as plaintiffs or
defendants; The joinder of indispensable parties is
mandatory; The absence of an indispensable party Dael v. Teves (1985)
renders all subsequent actions of the court null and PETITION for certiorari to review the order of
void for want of authority to act, not only as to the the Court of First Instance of Misamis Oriental,
absent parties but even as to those present.An Br. VIII. Teves, J.
indispensable party is a party in interest without Spouses Dael filed a Complaint for Ownership,
whom no final determination can be had of an Recovery of Possession against the Edorots claiming
action, and who shall be joined either as plaintiffs or that they are the owners of a parcel of land and that
defendants. The joinder of indispensable parties is the Edorots by means of force, threats and
mandatory. The presence of indispensable parties is intimidation occupied it. Defendants claim that they
necessary to vest the court with jurisdiction, which is inherited it from their deceased parents. The two
the authority to hear and determine a cause, the other defendants, Petra and Herminigildo, died
right to act in a case. Thus, without the presence of before the filing of the complaint. Judge Teves issued
indispensable parties to a suit or proceeding, an Order for the Daels to file an amended complaint
judgment of a court cannot attain real finality. The to include the heirs or representatives of deceased
absence of an indispensable party renders all defendants. After the 15-day period, defendants
subsequent actions of the court null and void for moved that the case be dismissed for the Daels
want of authority to act, not only as to the absent failure to comply. Judge Teves then dismissed the
parties but even as to those present. complaint.
The judge did not err when he ordered the Daels to party (whether plaintiff or defendant) dies after the
file an amended complaint. Deceased Herminigildo filing of the complaint and during the pendency of
and Petra also have an undivided interest in the the case. This is not the situation in the case at bar
property and should be impleaded. Since both of since the two defendants, whose heirs are to be
them are already dead, the heirs became the real impleaded died even before the filing of the
parties in interest who should be impleaded as complaint.
defendants for there to be a final determination of Respondents manifestation informing the court
the civil case (Sec 7, Rule 3). that petitioners have not complied with a court order
to amend the complaint, not being a litigated or
Remedial Law; Civil contentious motion, may be acted upon without
Procedure; Pleadings; Amendment of proof of service on the adverse party; Power of court
complaint; Indispensable Parties; Where plaintiffs to motu proprio dismiss a case for failure to comply
failed to comply with a court order ordering with its order; Case at bar.Finally, anent the
amendment of the complaint to include heirs of contention of petitioners that private respondents
deceased defendants who are indispensable parties, ex-parte manifestation did not comply with the
order of dismissal of complaint proper.The heirs of required notice of motions pursuant to Sections 4, 5
deceased defendants in the case at bar being clearly and 6 of Rule 15 of the Rules of Court, suffice it to
indispensable parties, respondent Judge acted state that the said manifestation informing the
properly in ordering the amendment of the Court that petitioners have not complied with the
complaint so as to include the said heirs as order to amend the complaint, is not a litigated or
defendants. Since the petitioners failed to comply contentious motion and may be acted upon even
with this Order, respondent Judge acted within his without proof of service on the adverse party. In fact,
prerogative in dismissing the complaint pursuant to under Section 3 of Rule 17, quoted earlier, the Court
Section 3, Rule 17 of the Rules of Court. can motu proprio or on its own motion, dismiss the
Duty of attorney to inform the court promptly of case for failure to comply with its order.
the death, incapacity or incompetency of his client, Dismissal of complaint by trial court for failure of
and to give the name and residence of his legal plaintiffs-petitioners to comply with its order should
representative under Rule 3, Sec. 16 of the Rules of not operate as an adjudication on the merits to
Court, applies where a party dies after the filing of avoid injustice.Upon the foregoing facts, We find
the complaint and during the pendency of the case, that respondent Judge committed no error in
but not where the defendants whose heirs are dismissing the complaint. However, to avoid
sought to be implemented died even before the injustice, such dismissal should not operate as an
filing of the complaint.We find petitioners reliance adjudication on the merits.
on the aforequoted provision as misplaced. Rule 3,
Section 16 of the Rules applies to a situation where a Seno v. Mangubat (1987)
APPEAL from the order of the Court of First However, being parties to the instrument sought to
Instance of Rizal, Br. I. be reformed, their presence is necessary in order to
settle all the possible issues of tile controversy.
Crisanta Seno approached Marcos Mangubat to
negotiate a mortgage over a parcel of land so she Remedial Law; Parties; Secs. 7 and 8, Rule 3 of Rules
can pay off a previous indebtedness. They agreed on of Court; Indispensable and Necessary Parties,
a mortgage and that, as long as the interest is being definedUnder Section 7, indispensable parties
paid, the mortgage over the property would not be must always be joined either as plaintiffs or
foreclosed. Seno agreed to the execution of a Deed defendants, for the court cannot proceed without
of Absolute Sale in his favor. Mangubat was then them. Necessary parties must be joined, under
able to obtain a title in his name and two others who Section 8, in order 'to adjudicate the whole
sold their shares to him. When Crisanta was unable controversy and avoid multiplicity of suits.
to pay she was sued for ejectment by Mangubat. In Indispensable parties are those with such an interest
January 1969, Seno learned that defendant Marcos in the controversy that a final decree would
Mangubat sold the subject property. Allegedly, the necessarily affect their rights, so that the courts
buyers bought it in bad faith. Buyers filed an cannot proceed without their presence. Necessary
ejectment case against Crisanta for alleged non- parties are those whose presence is necessary to
payment of rentals. On motion of Luzame and adjudicate the whole controversy, but whose
Penaflor, the TC ordered the inclusion as defendants interests are so far separable that a final decree can
of Andres Evangelista and Bienvenido Mangubat (the be made in their absence without affecting them.
two who sold their shares) as they are indispensable Defendants, being parties to the instrument
parties. sought to be reformed, their presence is necessary
Andres Evangelista and Bienvenido Mangubat are in order to settle all the possible issues of
not indispensable parties but only proper parties. controversy. In the present case, there are no
Sections 7 and 8, Rule 3: Indispensable parties must rights of defendants Andres Evangelista and
always be joined either as plaintiffs or defendants, Bienvenido Mangubat to be safeguarded if the sale
for the court cannot proceed without them. should be held to be in fact an absolute sale nor if
Necessary parties must be joined, in order to the sale is held to be an equitable mortgage.
adjudicate the whole controversy and avoid Defendants, being proper parties, their joinder as
multiplicity of suits and a final decree can be made parties-defendants was correctly ordered under Sec.
in their absence without affecting them. Said 8 of Rule 8.In fact the plaintiffs were not after
defendants no longer have any interest in the defendants Andres Evangelista and Bienvenido
subject property. Mangubat as shown by their noninclusion in the
complaint and their opposition to the motion to
include said defendants in the complaint as
indispensable parties. It was only because they were One of the two solidary creditors may sue by himself
ordered by the court a quo that they included the alone for the recovery of amounts due to both of
said defendants in the complaint. The lower court them without joining the other creditor as a co-
erroneously held that the said defendants are plaintiff. Where the obligation of the parties is
indispensable parties. Notwithstanding, defendants solidary, either one of the parties is indispensable,
Andres Evangelista and Bienvenido Mangubat not and the other is not even necessary (now proper)
being indispensable parties but only proper parties, because complete relief may be obtained from
their joinder as parties defendants was correctly either."
ordered being in accordance with Sec. 8 of Rule 3.
Prescription; Case at bar; Defendants were only Summary: Spouses Saligo (D) contended that the
impleaded in the amended complaint of Dec. 29, other solidary creditor must be included as co-
1971 from July 17, 1961, the date of execution of plaintiff being an indispensable party to the claim.
the Deed of Absolute Sale, clearly more than 10
years prescriptive period.ln the instant case, Rule of Law: Either one of the solidary creditors my
defendants Andres Evangelista and Bienvenido file a claim against the debtor.
Mangubat were only impleaded in the amended
complaint of December 29, 1971 or ten (10) years, Facts: Spouses Saligo (D) contracted Quiombing (P)
five (5) months and twelve (12) days from July 17, and his co-creditor Bischoco to construct a house for
1961 the date of execution of the subject Deed of them. The Construction and Service Agreement
Absolute Sale, clearly more than the ten (10) year between the parties stated that the creditors
prescriptive period. Quiombing (P) and Bischoco "jointly and severally"
bound themselves to construct a house for the
debtors. Upon completion, Quiombing (P) was paid
partially, but was unable to collect the balance after
Quiombing v. CA (1990) repeated demands. Quiombing (P) alone filed for
PETITION to review the decision of the Court of recovery of the balance plus charges and interests.
Appeals.
Quiombing and Biscocho entered a "Construction Issues: (1) May one of the two solidary creditors
and Service Agreement" with the Saligos for the sue by himself alone for the recovery of amounts
construction of the Saligos house. Manuelita Saligo due to both of them without joining the other
signed a promissory note for the balance. Quiombing creditor as a co-plaintiff?
filed a complaint for recovery of the balance.
Defendants filed a motion to dismiss and contend (2) In such a case, is the defendant entitled to the
that Biscocho was an indispensable party. dismissal of the complaint on the ground of non-
joinder of the second creditor as an indispensable
part? (3) More to the point, is the second solidary debt, and each creditor is entitled only to a
creditor an indispensable party? proportionate part of the credit.

Ruling: Yes. The question of who should sue the A solidary obligation is one in which each debtor is
private respondents was a personal issue between liable for the entire obligation, and each creditor is
creditors Quiombing and Biscocho. It did not matter entitled to demand the whole obligation.
who as between them filed the complaint because
the private respondents were liable to either of the Hence, in the former, each creditor can recover only
two as a solidary creditor for the full amount of the his share of the obligation, and each debtor can be
debt. Full satisfaction of a judgment obtained against made to pay only his part; whereas, in the latter,
them by Quiombing would discharge their obligation each creditor may enforce the entire obligation, and
to Biscocho, and vice versa; hence, it was not each debtor may be obliged to pay it in full.
necessary for both creditors Quiombing and
Biscocho to file the complaint. Inclusion of Biscocho Tolentino, Civil Code of the Philippines, Vol. IV.
as a co-plaintiff when Quiombing was competent to 1985, p. 218.
sue by himself alone, would be a useless formality. Civil Law; Obligations; Joint obligation distinguished
from solidary obligation; Concept of active solidarity.
Distinguishing it from the joint obligation, Tolentino
Necessary parties are those whose presence is makes the following observations in his distinguished
necessary to adjudicate the whole controversy, but work on the Civil Code: A joint obligation is one in
whose interests are so far separable that a final which each of the debtors is liable only for a
decree can be made in their absence without proportionate part of the debt, and each creditor is
affecting them. (Necessary parties are now entitled only to a proportionate part of the credit.
called proper parties.) A solidary obligation is one in which each debtor is
Wyoga Gas and Oil Corp. v. Schrack, I Fed. Rules liable for the entire obligation, and each creditor is
Service, 292. entitled to demand the whole obligation. Hence, in
the former, each creditor can recover only his share
of the obligation, and each debtor can be made to
Where the obligation of the parties is solidary, either pay only his part; whereas, in the latter, each
one of the parties is indispensable, and the other is creditor may enforce the entire obligation, and each
not even necessary (now proper) because complete debtor may be obliged to pay it in full. The same
relief may be obtained from either. work describes the concept of active solidarity thus:
Feria, Civil Procedure, 1969, p. 153. The essence of active solidarity consists in the
A joint obligation is one in which each of the authority of each creditor to claim and enforce the
debtors is liable only for a proportionate part of the rights of all, with the resulting obligation of paying
every one what belongs to him; there is no merger, against him. BOC still failed to resolve the MR. BID
much less a renunciation of rights, but only mutual agents apprehended the respondent in his
representation. residence. Petitioner maintains that the respondents
Parties; Necessary parties distinguished from petition for certiorari, prohibition and mandamus
Indispensable parties; Where the obligation is before the Court of Appeals should have been
solidary, either one of the parties is indispensable dismissed because he failed to implead BOC as
and the other is not necessary; Reason. the real party-in-interest.
Indispensable parties are those with such an interest
in the controversy that a final decree would The case should not have been dismissed for the
necessarily affect their rights, so that the court failure of the respondent to implead the BOD. The
cannot proceed without their presence. Necessary court agrees that BOC was an indispensable party to
parties are those whose presence is necessary to the respondents petition in the Court of Appeals.
adjudicate the whole controversy, but whose However, the non-joinder of indispensable
interests are so far separable that a final decree can parties is not a ground for the dismissal of an
be made in their absence without affecting them. action. Parties may be added by order of the court
(Necessary parties are now called proper parties on motion of the party or on its own initiative at any
under the 1964 amendments of the Rules of Court.) stage of the action and/or such times as are just. If
According to Justice Jose Y. Feria, where the the petitioner/plaintiff refuses to implead an
obligation of the parties is solidary, either one of the indispensable party despite the order of the
parties is indispensable, and the other is not even court, the latter may dismiss the
necessary (now proper) because complete relief may complaint/petition for the petitioner/plaintiffs
be obtained from either. failure to comply therefor.

Domingo v. Scheer (2004) Actions; Pleadings and


PETITION for review on certiorari of the Court of Practice; Parties; Indispensable Parties; The absence
Appeals. of an indispensable party renders all subsequent
Vice Consul Jutta Hippelein informed the Philippine actions of the court null and void.Section 7, Rule 3
ambassador to Germany that the respondent who of the Rules of Court, as amended, requires
was granted resident status here had police records indispensable parties to be joined as plaintiffs or
and financial liabilities in Germany. The Board of defendants. The joinder of indispensable parties is
Commissioners (BOC) issued a Summary Deportation mandatory. Without the presence of indispensable
Order. MR was not acted upon by the BOC. Neither parties to the suit, the judgment of the court cannot
was he arrested nor deported. Respondent informed attain real finality. Strangers to a case are not bound
the BOC that his passport has been renewed by the by the judgment rendered by the court. The absence
German embassy upon the dismissal of the case of an indispensable party renders all subsequent
actions of the court null and void. Lack of authority and delay, but to facilitate and promote, the
to act not only of the absent party but also as to administration of justice. They do not constitute the
those present. The responsibility of impleading all thing itself, which courts are always striving to
the indispensable parties rests on the secure to litigants. They are designed as the means
petitioner/plaintiff. best adapted to obtain that thing. In other words,
Non-Joinder; The non-joinder of indispensable they are a means to an end. When they lose the
parties is not a ground for the dismissal of an action. character of the one and become the other, the
However, the non-joinder of indispensable parties administration of justice is at fault and courts are
is not a ground for the dismissal of an action. Parties correspondingly remiss in the performance of their
may be added by order of the court on motion of the obvious duty.
party or on its own initiative at any stage of the
action and/or such times as are just. If the Chua v. Torres (2005)
petitioner/plaintiff refuses to implead an PETITION for review on certiorari of the orders
indispensable party despite the order of the court, of the Regional Trial Court of Caloocan City, Br.
the latter may dismiss the complaint/petition for the 126.
petitioner/plaintiffs failure to comply therefor. The
remedy is to implead the non-party claimed to be Christine Chua filed a complaint for damages against
indispensable. In this case, the CA did not require Jorge Torres and Antonio Beltran. The complaint
the respondent (petitioner therein) to implead the alleged that Jonathan Chua issued a RCBC Check in
BOC as respondent, but merely relied on the rulings favor of. However, the check was dishonored. Beltran
of the Court in Vivo v. Arca and Vivo v. Cloribel. The sent a demand letter informing Christine Chua
CAs reliance on the said rulings is, however, informing her. Petitioner ignored the demand letter.
misplaced. The acts subject of the petition in the two Without ascertaining who actually issued the check,
cases were those of the Immigration Commissioner Beltran instituted a criminal action against petitioner
and not those of the BOC; hence, the BOC was not a for violation of BP 22. Jonathan Chua was
necessary nor even an indispensable party in the impleaded as a necessary party-plaintiff. RTC
aforecited cases. ordered dismissal of complaint on ground that
Purpose; There is nothing sacred about processes Jonathan had not executed a certification against
or pleadings, their forms or contentstheir sole forum-shopping.
purpose is to facilitate the application of justice to
the rival claims of contending parties.There is The absence of the signature in the required
nothing sacred about processes or pleadings, their verification of a party misjoined as a plaintiff is not a
forms or contents. Their sole purpose is to facilitate ground for the dismissal. Jonathan Chua was
the application of justice to the rival claims of misjoined as a party plaintiff in this case. Jonathan
contending parties. They were created, not to hinder does not stand to be affected should the RTC rule
either favorably or unfavorably on the complaint. pleading is filed in good faith. The absence of a
Absence of signature of misjoined party is not a proper verification is cause to treat the pleading as
ground for dismissal of action. A misjoined party unsigned and dismissible. It would be as well that
plaintiff has no business participating in the case as the Court discuss whether under the circumstances,
a plaintiff in the first place, and it would make little Jonathan Chua is also required to execute a
sense to require the misjoined party in complying verification in respect to petitioners complaint.
with all the requirements expected of plaintiffs.
Civil Procedure; Parties; It is elementary that it is
certification requirement.It bears noting that only in the name of a real party in interest that a
Jonathan Chua did not sign as well any verification to civil suit may be prosecuted. Under Section 2, Rule 3
the complaint, ostensibly in violation of Section 7, of the Rules of Civil Procedure, a real party in
Rule 4 of the Rules of Civil Procedure. The RTC failed interest is the party who stands to be benefited or
to mention such fact, as does petitioner in her injured by the judgment in the suit, or the party
present petition. In their arguments before this entitled to the avails of the suit.It is elementary
Court, respondents do refer in passing to the that it is only in the name of a real party in interest
verification requirement, but do not place any that a civil suit may be prosecuted. Under Section 2,
particular focus thereto. The verification requirement Rule 3 of the Rules of Civil Procedure, a real party in
is separate from the certification requirement. It is interest is the party who stands to be benefited or
noted that as a matter of practice, the verification is injured by the judgment in the suit, or the party
usually accomplished at the same time as the entitled to the avails of the suit. Interest within the
certification against forum-shopping; hence the meaning of the rule means material interest, an
customary nomenclature, Verification and interest in issue and to be affected by the decree, as
Certification of Non Forum-Shopping or its variants. distinguished from mere interest in the question
For this reason, it is quite possible that the RTC involved, or a mere incidental interest. One having
meant to assail as well the failure of Jonathan Chua no right or interest to protect cannot invoke the
to verify the complaint. jurisdiction of the court as a party plaintiff in an
The verification is significant, as it is intended to action. To qualify a person to be a real party in
secure an assurance that the allegations in the interest in whose name an action must be
pleading are true and correct and not the product of prosecuted, he must appear to be the present real
the imagination or a matter of speculation, and that owner of the right sought to enforced.
the pleading is filed in good faith.The verification Necessary parties are those whose presence is
requirement is significant, as it is intended to secure necessary to adjudicate the whole controversy, but
an assurance that the allegations in the pleading are whose interests are so far separable that a final
true and correct and not the product of the decree can be made in their absence without
imagination or a matter of speculation, and that the affecting them.Section 8, Rule 7 of the Rules of
Civil Procedure defines a necessary party as one by virtue of the sale to him of the shares of the
who is not indispensable but who ought to be joined aforementioned defendants in the property. Said
as a party if complete relief is to be accorded as to defendants no longer have any interest in the
those already parties, or for a complete subject property. However, being parties to the
determination or settlement of the claim subject of instrument sought to be reformed, their presence is
the action. Necessary parties are those whose necessary in order to settle all the possible issues of
presence is necessary to adjudicate the whole the controversy. Whether the disputed sale be
controversy, but whose interests are so far declared an absolute sale or an equitable mortgage,
separable that a final decree can be made in their the rights of all the defendants will have been amply
absence without affecting them. protected. Defendants-spouses Luzame in any event
Said defendants no longer have any interest in the may enforce their rights against defendant Marcos
subject property. However, being parties to the Mangubat.
instrument sought to be reformed, their presence is Forum Shopping; Absence of the signature of the
necessary in order to settle all the possible issues of person misjoined as a party-plaintiff in either the
the controversy.An example of a necessary party verification page or certification against forum
may be found in Seno v. Mangubat. Petitioner shopping is not a ground for the dismissal of the
therein sold her property through a deed of sale to action.What the Court may rule upon is whether
three vendees. Two of the vendees then sold their the absence of the signature of the person misjoined
shares to the third buyer, who then sold the property as a party-plaintiff in either the verification page or
to another set of persons. Thereafter, petitioner, who certification against forum-shopping is ground for
claimed that the true intent of the first sale was an the dismissal of the action. We rule that it is not so,
equitable mortgage, filed a complaint seeking the and that the RTC erred in dismissing the instant
reformation of the deed of sale and the annulment complaint. There is no judicial precedent affirming or
of the second sale. The question arose whether the rejecting such a view, but we are comfortable with
two vendees who had since disposed of their shares making such a pronouncement. A misjoined party
should be considered as indispensable parties or plaintiff has no business participating in the case as
necessary parties. In concluding that they were only a plaintiff in the first place, and it would make little
necessary parties, the Court reasoned: In the sense to require the misjoined party in complying
present with all the requirements expected of plaintiffs.
case, there are no rights of defendants Andres Section 11, Rule 3 of the 1997 Rules of Civil
Evangelista and Bienvenido Mangubat to be Procedure prohibits the dismissal of a suit on the
safeguarded if the sale should be held to be in fact ground of non-joinder or misjoinder of parties.
an absolute sale nor if the sale is held to be an Section 11, Rule 3 of the 1997 Rules of Civil
equitable mortgage. Defendant Marcos Mangubat Procedure states: Neither misjoinder nor non-joinder
became the absolute owner of the subject property of parties is ground for dismissal of an action.
Parties may be dropped or added by order of the first place. The fact that Jonathan was misjoined is
court on motion of any party or on its own initiative clear on the face of the complaint itself, and the
at any stage of the action and on such terms as are error of the RTC in dismissing the complaint is not
just. Any claim against a misjoined party may be obviated by the fact that the adverse party failed to
severed and proceeded with separately. Clearly, raise this point. After all, the RTC could have motu
misjoinder of parties is not fatal to the complaint. proprio dropped Jonathan as a plaintiff, for the
The rule prohibits dismissal of a suit on the ground of reasons above-stated which should have been
non-joinder or misjoinder of parties. Moreover, the evident to it upon examination of the complaint.
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 Republic v. Campos (1989)
the adverse party. Section 11, Rule 3 indicates that PETITION to review the resolutions of the
the misjoinder of parties, while erroneous, may be Sandiganbayan.
corrected with ease through amendment, without
further hindrance to the prosecution of the suit. The Republic of the Philippines filed with t the
Courts; Jurisdictions; It should then follow that any Sandiganbayan a complaint against Jose D. Campos
act or omission committed by a misjoined party and 48 others to recover from them ill-gotten wealth
plaintiff should not be cause for impediment to the which they illegally acquired when they were in
prosecution of the case, much less for the dismissal office. Summonses were issued by the
of the suit.It should then follow that any act or Sandiganbayan against Romualdez et. al. Campos Jr.,
omission committed by a misjoined party plaintiff prayed that he be removed as party defendant from
should not be cause for impediment to the the complaint that he had voluntarily surrendered or
prosecution of the case, much less for the dismissal turned over any share in his name on any of the
of the suit. After all, such party should not have been corporations referred to to the RP government and
included in the first place, and no efficacy should be that he was entitled to the immunity granted by the
accorded to whatever act or omission of the party. PCGG. Private respondents opposed petitioners
Since the misjoined party plaintiff receives no motion. RPs contentions: Jose D. Campos, Jr. was
recognition from the court as either an indispensable included as defendant in the complaint through
or necessary party-plaintiff, it then follows that mistake that pursuant to Section 11, Rule 3 of the
whatever action or inaction the misjoined party may Revised Rules of Court it has a right to drop him as
take on the verification or certification against defendant without prior consent of any party.
forum-shopping is inconsequential. Hence, it should Dropping Campos Jr. as defendant in the civil case
not have mattered to the RTC that Jonathan Chua does not violate Sec. 11, Rule 3. Section 11, Rule 3
had failed to sign the certification against forum- of the Rules of Court really contemplates erroneous
shopping, since he was misjoined as a plaintiff in the or mistaken non-joinder and misjoinder of parties.
The rule presupposes that the original inclusion had [1987]) we said: It should also by now be
been made in the honest conviction that it was reasonably evident from what has thus far been said
proper and the subsequent dropping is requested that the PCGG is not, and was never intended to act
because it turned out that such inclusion was a as, a judge. Its general function is to conduct
mistake. investigations in order to collect
evidence establishing instances of ill-gotten
Courts; Sandiganbayan; Administrative wealth; issue sequestration, and such orders as may
Law; Executive Order No. 14; PCGG; The PCGG does be warranted by the evidence thus collected and as
not try and decide, or hear and determine, or may be necessary to preserve and conserve the
adjudicate with finality cases involving the issue of assets of which it takes custody and control and
whether or not property should be forfeited and prevent their disappearance, loss or dissipation; and
transferred to the State because the same is ill- eventually file and prosecute in the proper court of
gotten; this function is reserved to the competent jurisdiction all cases investigated by it as
___
Sandiganbayan. Executive Order No. 14 defines may be warranted by its findings. It does not try and
the jurisdiction over cases involving the ill-gotten decide, or hear and determine, or adjudicate with
wealth of former President Ferdinand E. Marcos, Mrs. any character of finality or compulsion, cases
Imelda R. Marcos, members of their immediate involving the essential issue of whether or not
family, close relatives, subordinates, close and/or property should be forfeited and transferred to the
business associates, dummies, agents and State because ill-gotten within the meaning of the
nominees. Section 2 thereof provides that the PCGG Constitution and the executive orders. This function
shall file all such cases, whether civil or criminal, is reserved to the designated court, in this case, the
with the Sandiganbayan, which shall have exclusive Sandiganbayan. (Ex. Ord. No. 14)
and original jurisdiction thereof. In the case Powers of the PCGG; The powers of the PCGG are
ofPresidential Commission on Good Government v. not unlimited; the Sandiganbayan has jurisdiction to
Pea (159 SCRA 556 [1988]), the court interpreted determine whether or not the PCGG exceeded its
the Sandiganbayans jurisdiction under this statute power. ___ The powers of the PCGG are not unlimited.
to extend to all cases of the commission x x x, and Its jurisdiction over cases involving ill-gotten wealth
all incidents arising from, incidental to, or related to must be within the parameters stated in Executive
(them), such cases necessarily fall likewise under Order No. 14. Necessarily, the jurisdiction of the
the Sandiganbayans exclusive and original Sandiganbayan which is tasked to handle the ill-
jurisdiction subject to review on certiorari gotten wealth cases must include the jurisdiction to
exclusively by the Supreme Court. (pp. 561-562; determine whether or not the PCGG exceeded its
Italics supplied). Likewise, in the case of Bataan power to grant immunity pursuant to the provisions
Shipyard & Engineering Co., Inc. v. Presidential of Executive Order No. 14.
Commission on Good Government, (150 SCRA 181
The PCGG is authorized to file both criminal and Y. Campos on the other. Hence, in exchange for the
civil cases against persons suspected of having voluntary surrender of the ill-gotten properties
acquired ill-gotten wealth. ___ A cursory reading of acquired by the then President Ferdinand E. Marcos
Executive Order No. 14 shows that the PCGG is and his family which were in Jose Campos control,
authorized to file both criminal and c ivil cases the latter and his family were given full immunity in
against persons suspected of having acquired ill- both civil and criminal prosecutions. In the absence
gotten wealth. Section 3 thereof provides: Section of an express prohibition, the rule on amicable
3. Civil suits for restitution, reparation of damages, settlements and/or compromises on civil cases under
or indemnification for consequential damages, the Civil Code is applicable to PCGG cases.
forfeiture proceedings provided for under Republic Remedial Law; Civil Procedure; Parties; Misjoinder
Act No. 1379, or any other civil actions under the and Non-Joinder of Parties; PCGGs motion to drop
Civil Code or other existing laws, in connection with Campos, Jr. in the civil case has legal basis under
Executive Order No. 1 dated February 28, 1986 and Sec. 11, Rule 3 of the Rules of Court. ___Even from the
Executive Order No. 2 dated March 12, 1986, may be viewpoint of procedure, the PCGG was right when it
filed separately from and proceed independently of filed a motion to drop Jose Campos, Jr. as defendant
any criminal proceedings and may be proved by a in the civil case. Section 11, Rule 3 of the Rules of
preponderance of evidence. Court states: SECTION 11, RULE 3. Misjoinder and
Civil Immunity; Compromise Agreements; In the non-joinder of parties. ___ Misjoinder of parties is not
absence of an express prohibition, the rule on ground for dismissal of an action. Parties may be
amicable settlements in civil cases under the Civil dropped or added by order of the court on motion of
Code is applicable to PCGG cases. ___ The well-settled any party or of its own initiative at any stage of the
doctrine is that amicable settlements and/or action and on such terms as are just. x x x (Italics
compromises are not only allowed but actually supplied) We interpreted this rule in the case of Lim
encouraged in civil cases. Article 2028 of the Civil Tanhu v. Ramolete, 66 SCRA 425 (1975): x x x the
Code categorically states: A compromise is a latter rule does not comprehend whimsical and
contract whereby the parties, by making reciprocal irrational dropping or adding of parties in a
concessions, avoid a litigation or put an end to one complaint. What it really contemplates is erroneous
already commenced. On the other hand, there is no or mistaken non-joinder and misjoinder of parties. No
similar general rule in criminal prosecutions. one is free to join anybody in a complaint in court
Immunity must be specifically granted. In the instant only to drop him unceremoniously later at the
case, the PCGG issued a resolution dated May 28, pleasure of the plaintiff. The rule presupposes that
1986, granting immunity from both civil and criminal the original inclusion had been made in the honest
prosecutions to Jose Y. Campos and his family. conviction that it was proper and the subsequent
Undoubtedly, this resolution embodies a compromise dropping is requested because it turned out that
agreement between the PCGG on one hand and Jose such inclusion was a mistake. And this is the reason
why the rule ordains that the dropping be on such common ancestor, Francisco Plasabas. In the course
terms as are just ___ just to all the other parties. of the trial was that petitioner was not the sole and
There is nothing whimsical or capricious in dropping absolute owner of the land. After resting their case,
the petitioner-intervenor from the complaint. Quite respondents raised the argument that the case
the contrary, it is based on sound and salutary should have been terminated at inception for
reasons. petitioners failure to implead indispensable parties,
Indispensable Parties; Effect of Solidarity; Solidarity the other co-owners Jose, Victor and Victoria.
does not make a solidary obligor an indispensable The failure to implead petitioners siblings in the
party in a suit filed by a creditor. ___ As discussed case before the RTC is not cause for its dismissal. A
earlier, the PCGGs motion to drop Campos, Jr. as co-owner may file suit without necessarily joining all
defendant in Civil Case 0010 has legal basis under the other co-owners as co-plaintiffs because the suit
Executive Order No. 14. The fact that Campos, Jr. is deemed to be instituted for the benefit of all and
and all the other defendants were charged solidarily any judgment of the court in favor of the plaintiff will
in the complaint does not make him an benefit the other co-owners, but if the judgment is
indispensable party. We have ruled in the case of adverse, the same cannot prejudice the rights of the
Operators Incorporated v. American Biscuit Co., Inc., unimpleaded co-owners. The only exception to this
[154 SCRA 738 (1987)] that Solidarity does not rule is when the action is for the benefit of the
make a solidary obligor an indispensable party in a plaintiff alone who claims to be the sole owner and
suit filed by the creditor. Article 1216 of the Civil is, thus, entitled to the possession thereof. In such a
Code says that the creditor may proceed against case, the action will not prosper unless the plaintiff
anyone of the solidary debtors or some or all of them impleads the other co-owners who are indispensable
simultaneously. parties.
Marmo v. Anacay (2009)
Malagarte v. CA (2009) Moises Anacay filed a case for annulment of sale and
Assailed in this petition for review on certiorari under recovery of title, stating that the respondent and his
Rule 45 of the Rules of Court are the May 12, 2004 wife are co-owners of a house and lot i which they
Decision1of the Court of Appeals (CA) in CA-G.R. CV authorized Josephine Marmo to sell. Josephine sold
No. 43085 and the December 1, 2004 the property to petitioner but Danilo defaulted in his
Resolution2 denying reconsideration of the installment payments. Moises then discovered that
challenged decision. the original TCT had been cancelled earlier and one
was issued in Josephines name by virtue of a
Malazarte spouses filed a complaint for recovery of falsified Deed of Absolute Sale and that a
title to property regarding a parcel of coconut land subsequent TCT was issued in Danilos
declared under in the name of petitioner Nieves. name.Petitioners filed a Motion to Dismiss the case
Respondents claim they inheritted the land from a
for the respondents failure to include his children as other co-owners. Respondent never disputed the
indispensable parties existence of a co-ownership. The issue is
The respondents children are not indispensable falsification, an issue that does not require the
parties. A487 of the Civil Code: When the participation of the respondents co-owners at trial.
controversy involves a property held in common, any They are not parties to the assailed document, as
one of the co-owners may bring an action in their Their co-owner and father adequately protect
ejectment. THUS, where the suit is brought by a co- their rights and interests as co-owners.
owner without repudiating the ownership, the suit is
presumed to be filed for the benefit of the other co-
owners and may proceed without impleading the