TOPIC: RULE ON COMPULSORY JOINDER OF INDISPENSABLE
PARTIES (CO-OWNERS OF PERSONAL PROPERTIES)
NATURE
OF THE CASE: This case reached the Supreme Court as an appeal to
the decision of the CA ruling against the spouses Carandang and denying their
motion for reconsideration. The CA affirmed the RTC’s decision that Milagros de
Guzman, the decedent’s wife, is not an indispensable party in the complaint,
hence, her non-inclusion in the case does not warrant a dismissal of the
complaint.
FACTS:
Spouses Carandang and the decedent Quirino de Guzman were stockholders
and corporate officers of Mabuhay Broadcasting System (MBS). The Carandangs
have equities at 54 % while Quirino has 46%.
When
the capital stock of MBS was increased on November 26, 1983, the Carandangs
subscribed P345,000 from it, P293,250 from the said amount was loaned by Quirino
to the Carandangs. In the subsequent increase in MBS’ capital stock on March 3,
1989, the Carandangs subscribed again to the increase in the amount of P93,750.
But, P43,125 out of the mentioned amount was again loaned by Quirino.
When
Quirino sent a demand letter to the Carandangs for the payment of the loan, the
Carandangs refused to pay. They contend that a pre-incorporation agreement was executed between Arcadio
Carandang and Quirino, whereby Quirino promised to pay for the stock subscriptions
of the Arcadio without cost, in consideration for Arcadio’s technical
expertise, his newly purchased equipment, and his skill in repairing and
upgrading radio/communication equipment therefore, there is no indebtedness on
the part of the Carandangs.
Thereafter, Quirino filed a complaint seeking
to recover the P336,375 total amount of the loan together with damages. The RTC
ruled in favor of Quirino and ordered the Carandangs to pay the loan plus
interest, attorney’s fees, and costs of suit. The Carandangs appealed the trial
court’s decision to the CA, but the CA affirmed the same. The subsequent Motion
for Reconsideration filed by the Carandangs were also denied. Hence, this
appeal to the SC.
SPOUSES
CARANDANG: Three of the four checks used to pay their stock subscriptions were
issued in the name of Milagros de Guzman, the decedent’s wife. Thus, Milagros
should be considered as an indispensable party in the complaint. Being such,
the failure to join Milagros as a party in the case should cause the dismissal
of the action by reason of a jurisprudence stating that: “(i)f a suit is not brought in the name
of or against the real party in interest, a motion to dismiss may be filed on
the ground that the complaint states no cause of action."
ISSUE:
Whether or not the
RTC should have dismissed the case for failure to state a cause of action,
considering that Milagros de Guzman, allegedly an indispensable party, was not
included as a party-plaintiff.
HELD: No. Although the spouses Carandang
were correct in invoking the aforementioned doctrine, the ground set forth
entails an examination of “whether the parties presently pleaded are
interested in the outcome of the litigation, and not whether all
persons interested in such outcome are actually pleaded.” The first query seeks
to answer the question of whether Milagros is a real party in interest, while
the latter query is asking if she is an indispensable party. Since the issue of
this case calls for the definition of an indispensable party, invoking the
abovementioned doctrine is irrelevant to the case because the doctrine talks
about a ‘real party in interest’ and not an ‘indispensable party’. Although it
is important to take note that an indispensable party is also a real party in
interest.
*Definitions:
>
Real party in interest – the party who stands to be benefited or injured by the
judgment of the suit, or the party entitled to the avails of the suit.
>
Indispensable party – a party in interest without whom no final determination
can be had of an action
>
Necessary party – one who is not indispensable but who ought to be joined as a
party if complete relief is to be accorded as to those already parties, or for
a complete determination or settlement of the claim subject of the action
>
Pro-forma parties – those who are required to be joined as co-parties in suits
by or against another party as may be provided by the applicable substantive
law or procedural rule.
An example is provided by Section 4, Rule 3 of
the Rules of Court:
Sec. 4. Spouses as parties. – Husband
and wife shall sue or be sued jointly, except as provided by law.
Pro-forma
parties can either be indispensable, necessary or neither indispensable nor
necessary. The third case occurs if, for example, a husband files an action to
recover a property which he claims to be part of his exclusive property. The
wife may have no legal interest in such property, but the rules nevertheless
require that she be joined as a party.
Quirino
and Milagros de Guzman were married before the effectivity of the Family Code
on 3 August 1988. As they did not execute any marriage settlement, the regime
of conjugal partnership of gains govern their property relations.
All
property acquired during the marriage, whether the acquisition appears to have
been made, contracted or registered in the name of one or both spouses, is
presumed to be conjugal unless the contrary is proved. Credits
are personal properties, acquired during the time the loan or other credit
transaction was executed. Therefore, credits loaned during the time of the
marriage are presumed to be conjugal property.
Assuming
that the four checks are credits, they are assumed to be conjugal properties of
Quirino and Milagros. There being no evidence to the contrary, such presumption
subsists. As such, Quirino de Guzman, being a co-owner of specific partnership
property, is certainly a real party in interest.
Now,
with regard to the discussion on the effect of non-inclusion of parties in the
complaint filed: in indispensable parties, when an indispensable party is not
before the court, the action should be dismissed. The absence of an
indispensable party renders all subsequent actuations of the court void, for
want of authority to act, not only as to the absent parties but even as to
those present. For necessary parties, the non-inclusion of a necessary party
does not prevent the court from proceeding in the action, and the judgment
rendered therein shall be without prejudice to the rights of such necessary
party. Non-compliance with the order for the inclusion of a necessary party
would not warrant the dismissal of the complaint. Lastly, for pro-forma
parties, the general rule under Section 11, Rule 3 must be followed: such
non-joinder is not a ground for dismissal. Hence, in a case concerning an
action to recover a sum of money, we held that the failure to join the spouse
in that case was not a jurisdictional defect. The non-joinder of a spouse does
not warrant dismissal as it is merely a formal requirement which may be cured
by amendment.
Conversely,
in the instances that the pro-forma parties are also indispensable or necessary
parties, the rules concerning indispensable or necessary parties, as the case
may be, should be applied. Thus, dismissal is warranted only if the pro-forma
party not joined in the complaint is an indispensable party.
Under
Art. 147 of the Civil Code which was superceded by Art. 108 of the Family Code,
the conjugal partnership shall be governed by the rules on the contract of
partnership. Thus, Milagros is a co-owner of the subject personal property in
this case – the credit incurred by spouses Carandang. Being co-owners of the
alleged credit, Quirino and Milagros de Guzman may separately bring an action
for the recovery thereof.
“In
sum, in suits to recover properties, all co-owners are real parties in
interest. However, pursuant to Article 487 of the Civil Code and relevant
jurisprudence, any one of them may bring an action, any kind of action, for the
recovery of co-owned properties. Therefore, only one of the co-owners, namely
the co-owner who filed the suit for the recovery of the co-owned property, is
an indispensable party thereto. The other co-owners are not indispensable
parties. They are not even necessary parties, for a complete relief can be
accorded in the suit even without their participation, since the suit is
presumed to have been filed for the benefit of all co-owners.”
Thus,
Milagros de Guzman is not an indispensable party in the action for the recovery
of the allegedly loaned money to the spouses Carandang. As such, she need not
have been impleaded in said suit, and dismissal of the suit is not warranted by
her not being a party thereto. (The
Civ Pro issue was not the main issue in the case.)
No comments:
Post a Comment