Rule 3 sec.9 - 4 (Rules of Court Jurisprudence Digest)

8/9/2019 Rule 3 sec.9 - 4 (Rules of Court Jurisprudence Digest)

1/52

Sec. 9. Non-joinder of necessary parties to be

pleaded.

Whenever in any pleading in which a claim is

asserted a necessary party is not joined, the

pleader shall set forth his name, if known, and shallstate why he is omitted. Should the court find the

reason for the omission unmeritorious, it may

order the inclusion of the omitted necessary party

if jurisdiction over his person may be obtained.

The failure to comply with the order for his

inclusion, without justifiable cause, shall be

deemed a waiver of the claim against such party.

The non-inclusion of a necessary party does not

prevent the court from proceeding in the action,

and the judgment rendered therein shall be

without prejudice to the rights of such necessary

party.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

CARANDANG VS. HEIRS OF DE GUZMAN


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 Arcadios technical expertise,hisnewly 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 theCarandangs to pay the loan plus interest,

attorneys fees, and costs of suit. The Carandangs

appealed the trial courts 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 issuedin the name of Milagros de Guzman, the

decedents 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 notwhether 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


2/52

important to take note that an indispensable party

is also a real party in interest.

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 orother 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 judgmentrendered 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 fordismissal. 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,


3/52

she need not have been impleaded in said suit,

and dismissal of the suit is not warranted by her

not being a party thereto


Sec. 10. Unwilling co-plaintiff.

If the consent of any party who should be joined as

plaintiff can not be obtained, he may be made a

defendant and the reason therefor shall be stated

in the complaint.


EMATA v. IAC


REMEDIAL LAW; ACTION; THIRDPARTY

COMPLAINT, FILING THEREOF RESTS WITH THE

SOUND DISCRETION OF THE COURT.-For purposes

of Section 14 of Rule 6, above quoted, the court

may authorize the filing of the proper third-party

complaint to implead the other parties not

included in the original complaint, in keeping with

the injunction that all pleadings shall be liberally

construed so as to do substantial justice.

ID.;ID.;ID.; CONSTRUED.A third-party complaint

is a claim that a defending party may, with leave

of court, file against a person not a party to the

action, called the third-party defendant, for

contribution, indemnity, subrogation or any other

relief in respect of his opponents claim.

ID.; ID.; PARTIES; UNAVAILING CO-PLAINTIFF MAY

BE MADE DEFENDANT; PARTY MUST BE A REAL

PARTY IN INTEREST; CASE AT BAR.Petitioner

cannot rely on the provisions of Section 10, Rule 3which envisages a party who should be joined as a

plaintiff but who does not assent to such joinder.

Obviously and necessarily, such unwilling party

must be real party in interest. In the case at bar,

Filinvests position and the evidence thereon was

that it was not a real party in interest, as it was no

longer entitled to the avails of the suit by reason of

the anterior assignment it made in favor of private

respondent. Hence, at the very least, its capacity

was in issue and it would be a case of procedural

petitio principia for the trial court to have

categorized it as an unwilling co-plaintiff, with the

procedural consequences thereof, although such

operative issue was still unresolved.

ID.; ID.; ID.; ID.; OPTION LIES WITH THE

PLAINTIFF.The option lies with the plaintiff on

whether or not to join an additional party in hiscomplaint. The original plaintiff cannot be

compelled, on the mere representations of the

defendant, to implead anyone, especially if it does

not appear that such joinder is proper or is

necessary for the complete and expeditious

adjudication of the case.

ID.;ID.; ID.;ADDITION OR DROPPING OF PARTY

ADDRESSED TO THE SOUND DISCRETION OF THE

COURT.Nor can the general rule in Section 11,

Rule 3, on the power to order the addition ordropping of a party at any stage of action, be of

solace to the petitioner. This is a power addressed

to the sound discretion of the court to be exercised

on such term as are just, and by this is meant that

it must be just to all the other parties.

ID.; COURT; CLOTHED WITH AMPLE AUTHORITY

TO RULE ON PROCEDURAL MATTERS BEFORE

THEM. Petitioner should be reminded that the

courts, as the arbiters of the rights of the parties,

stand in a better position and are clothed withample authority to rule on the procedural

measures that are proper in cases before them. If a

party believes that the order of the court is not in

accordance with law, he is not without other

alternative remedial avenues. If, on the other

hand, the order does not suffer from any legal

infirmities, the same is binding on the parties and

to this they must submit with grace. We cannot but

be displeased with petitioners unseemly

motivation and stance when he adopted an

attitude of inaction and uncompletely ignored the

order of the trial court requiring the filing of a

third-party complaint, especially in view of the

factual finding that it was he who manifested on

April 26, 1982.

FACTS:

Petitioner purchased a car on installments from

Violago Motor Sales Corporation (Violago) with a

down payment of P14, 982.00. Petitioner likewise

executed in favor of the seller a promissory note


4/52

and a chattel mortgage over the car as security for

the payment of the note.

The total amount that the petitioner was supposed

to pay was P72, 186.00, with P57, 204.00 as the

balance after deducting the down payment. Thetotal amount payable was P22, 246.00 more than

the list cash price of P49, 940.00 for said vehicle.

After the execution of said documents, Violago

endorsed the promissory note and assigned the

chattel mortgage to Filinvest upon payment by the

latter of P34, 958.00, the unpaid balance of the list

cash price of the car.

Three years later, Filinvest assigned to private

respondent Service Specialists, Inc. the remaining

installment balance due on and corresponding to

the period from February 25, 1981 to August 25,

1981.

Alleging non-payment of five (5) consecutive

installments from February 25 to June 25, 1981,

private respondent initiated the case in the trial

court for a writ of replivin to effect the seizure of

the car or, alternatively, for the payment by

petitioner of the sum of P 1,332.40, with interest

thereon of the 14% per annum from July 10, 1981

until fully paid and, additionally, for attorneys fees

and costs of suit.

Petitioners allegation:

the promissory note does not express the true

intent and agreement of the parties, the same

having been procured through fraud deceit,

trickery and misrepresentation, that the chattel

mortgage was intended to secure the payment of

P34,958.00 which was the unpaid balance of the

purchase price of the Toyota car;

that he was made to sign the note and the

mortgage in blank that he has paid, and even

overpaid, Filivest by P9, 388.22 that the

promissory note by inflating its value and charging

more than the prescribed rates in violation of the

Financing Company Act violates the Usury Law that

the note and the mortgage are null and void; and

that the demand set forth in the complaint has

been long extinguished.

Petitioner filed a Motion to Implead Filinvest

Credit Corporation on the theory that for all

legal purposes the corporation sought to be

impleaded is the real party in interest because it

retained interest over the balance of the

petitioners account in spite of its assignment toprivate respondent.

The court held in abeyance the pre-trial hearing of

the case since upon motion of Atty. Emata, said

petitioner was given a period of 15 days to file the

third-party complaint against the third party

defendant (Filinvest). Petitioner, however, did not

file any third-party complaint, hence the trial court

set the case for pre-trial on May 3, 1983, it being

understood that petitioner was no longer

interested in impleading the herein privaterespondent as a third-party defendant therein.

Petitioner filed an urgent motion to cancel the

scheduled pre-trial and the trial court reset the

same. Another motion for postponement of the

scheduled pre-trial filed by petitioner was denied

by the lower court, which consequently issued an

order declaring petitioner as in default for failure

to appear at the pre-trial.

The trial court rendered judgment in favor ofplaintiff.

Petitioner raises both procedural and substantive

issues. Initially, he complains that the trial court

erred in requiring him to file a third-party

complaint against Filinvestn instead of impleading

the latter either as party plaintiff or defendant. He

insists that Filinvvest is the real party in interest in

the present case and it should be impleaded under

Rule 3 of the ROC.

Sec. 10.Unwilling co-plaintiff. -If the consent of

any party who should be joined as plaintiff cannot

be obtained, he may be made a defendant and the

reason therefor shall be stated in the complaint.

Sec. 11. Misjoinder and non-joinder of parties. -

Misjoinder of parties is not ground for dismissal of

an action. Parties may be dropped or added by

order of the court on motion of any party or on its

own initiative at any stage of the action and on

such terms as are just. Any claim against a partymay be severed and proceeded with separately


5/52

which he complements with a provision in Rule 6,

to wit:

Sec. 14. Bringing new parties. When the presence

of parties other than those to the original action is

required for the granting of complete relief in thedetermination of a counterclaim or cross-claim,

the court shall order them to be brought in as

defendants if jurisdiction over them can be

obtained.

According to petitioner, based on the above

quoted provisions, the court, may authorize the

filing of the proper third-party complaint to

implead the other parties not included in the

original complaint, in keeping with the injunction

that all pleadings shall be liberally construed so asto do substantial justice.

ISSUES:WON the petitioners allegations correct

RULING:No. The SC rejects petitioners complaint

that the order of the court a quo requiring the

filing of a third-party complaint is improper. A

third- party complaint is "a claim that a defending

party may, with leave of court, file against a

person not a party to the action, called the third-

party defendant, for contribution, indemnity,subrogation or any other relief in respect of his

opponent's claim."Obviously, a third-party

complaint against Filinvest, had petitioner filed the

same, would be a claim

in respect

of the plaintiffs

claim since the former arises from the same

transaction on which the plaintiffs claim is based,

that is, the promissory note which was eventually

assigned to private respondent.Although the

petitioner did not admit in his answer that any

amount is due from the corporation sought to be

impleaded, that is not indicative of nor does itsupport his thesis of the alleged impropriety of a

third-party complaint. Apparently, petitioner failed

to take into consideration that the remedy is also

applicable where the defendant seeks "any other

relief in respect of his opponent's claim," a

remedial grant of power broad enough to include

the relief he seeks in the case at bar.

Petitioner cannot rely on the provisions of Section

10, Rule 3 which envisages a party who should be

joined as a plaintiff but who does not assent to

such joinder. Obviously and necessarily, such

unwilling party must be a real party in interest. In

the case at bar, Filinvest's position and the

evidence thereon was that it was not a real party

in interest, as it was no longer entitled to the avails

of the suit by reason of the anterior assignment it

made in favor of private respondent. Hence, at thevery least, its capacity was in issue and it would be

a case of proceduralpetitio principii

for the trial

court to have categorized it as an unwilling co-

plaintiff, with the procedural consequences

thereof, although such operative issue was still

unresolved. Furthermore, the option lies with the

plaintiff on whether or not to join an additional

party in his complaint. The original plaintiff cannot

be compelled, on the mere representations of the

defendant, to implead anyone, especially if it does

not appear that such joinder is proper or is

necessary for the complete and expeditious

adjudication of the case.

Nor can the general rule in Section 11, Rule 3, on

the power to order the addition or dropping of a

party at any stage of action, be of solace to the

petitioner. This is a power addressed to the sound

discretion of the court to be exercised on such

terms as are just, and by this is meant that it must

be just to all the other parties.

Obviously, given the

facts of this case, the trial court wisely exercised its

discretion in refusing to give in to the unjustified

importunings of petitioner.

Petitioner should be reminded that the courts, as

the arbiters of the rights of the parties, stand in a

better position and are clothed with ample

authority to rule on the procedural measures that

are proper in cases before them. If a party believes

that the order of the court is not in accordance

with law, he is not without other alternativeremedial avenues. If, on the other hand, the order

does not suffer from any legal infirmities, the same

is binding on the parties and to this they must

submit with grace. We cannot but be displeased

with petitioner's unseemly motivation and stance

when he "adopted an attitude of inaction and

completely ignored" the order of the trial court

requiring the filing of a third-party complaint,

especially in view of the factual finding that it was

he who manifested on April 26, 1982 that he

would file said third party complaint .


6/52

-petition is Denied; the assailed decision on the CA

is affirmed


Sec. 11. Misjoinder and non-joinder of parties.

Neither misjoinder nor non-joinder of parties is

ground for dismissal of an action. Parties may be

dropped or added by order of the court on motion

of any party or on its own initiative at any stage of

the action and on such terms as are just. Any claim

against a misjoined party may be severed and

proceeded with separately.


BOSTON EQUITY vs. CA G.R. No. 173946


FACTS:

On 24 December 1997, petitioner filed a complaint

for sum of money with a prayer for the issuance of

a writ of preliminary attachment against the

spouses Manuel and Lolita Toledo. Herein

respondent filed an Answer dated 19 March 1998

but on 7 May 1998, she filed a Motion for Leave to

Admit Amended Answer in which she alleged,

among others, that her husband and co-

defendant, Manuel Toledo (Manuel), is already

dead. The death certificate of Manuel states "13

July 1995" as the date of death. As a result,

petitioner filed a motion, dated 5 August 1999, to

require respondent to disclose the heirs of

Manuel. In compliance with the verbal order of the

court during the 11 October 1999 hearing of the

case, respondent submitted the required names

and addresses of the heirs. Petitioner then filed aMotion for Substitution, dated 18 January 2000,

praying that Manuel be substituted by his children

as party-defendants. It appears that this motion

was granted by the trial court in an Order dated 9

October 2000.

On 26 May 2004, the reception of evidence for

herein respondent was cancelled upon agreement

of the parties. On 24 September 2004, counsel for

herein respondent was given a period of fifteen

days within which to file a demurrer toevidence. However, on 7 October 2004,

respondent instead filed a motion to dismiss the

complaint, citing the following as grounds: (1) that

the complaint failed to implead an indispensable

party or a real party in interest; hence, the case

must be dismissed for failure to state a cause of

action; (2) that the trial court did not acquirejurisdiction over the person of Manuel pursuant to

Section 5, Rule 86 of the Revised Rules of Court;

(3) that the trial court erred in ordering the

substitution of the deceased Manuel by his heirs;

and (4) that the court must also dismiss the case

against Lolita Toledo in accordance with Section 6,

Rule 86 of the Rules of Court.

The trial court, in an Order dated 8 November

2004, denied the motion to dismiss for having

been filed out of time, citing Section 1, Rule 16 ofthe 1997 Rules of Court which states that: "Within

the time for but before filing the answer to the

complaint or pleading asserting a claim, a motion

to dismiss may be made." Respondents motion for

reconsideration of the order of denial was likewise

denied on the ground that "defendants attack on

the jurisdiction of this Court is now barred by

estoppel by laches" since respondent failed to

raise the issue despite several chances to do so.

Aggrieved, respondent filed a petition for certiorari

with the CA and was granted on the ground that:

The court did not acquire jurisdiction over the

defendant Manuel Toledo (dead).

The court a quos denial of respondents motion

to dismiss was based on its finding that

respondents attack on the jurisdiction of the court

was already barred by laches as respondent failed

to raise the said ground in its amended answer and

during the pre-trial, despite her activeparticipation in the proceedings.

However, it is well-settled that issue on jurisdiction

may be raised at any stage of the proceeding, even

for the first time on appeal. By timely raising the

issue on jurisdiction in her motion to dismiss

respondent is not estopped from raising the

question on jurisdiction.

Moreover, when issue on jurisdiction was raised

by respondent, the court a quo had not yetdecided the case, hence, there is no basis for the


7/52

court a quo to invoke estoppel to justify its denial

of the motion for reconsideration;

It should be stressed that when the complaint was

filed, defendant Manuel S. Toledo was already

dead. The complaint should have impleaded theestate of Manuel S. Toledo as defendant, not only

the wife, considering that the estate of Manuel S.

Toledo is an indispensable party, which stands to

be benefited or be injured in the outcome of the

case.

Respondents motion to dismiss the complaint

should have been granted by public respondent

judge as the same was in order. Considering that

the obligation of Manuel S. Toledo is solidary with

another debtor, the claim should be filed againstthe estate of Manuel S. Toledo, in conformity with

the provision of Section 6, Rule 86 of the Rules of

Court.

The Court of Appeals denied petitioners motion

for reconsideration. Hence, this petition.

ISSUE:

1.

Whether or not Manuel Toledo is an


2.

Whether or not the inclusion of Manuel

Toledo as party-defendant is a misjoinder

of a party warranting the dismissal of the

case.

HELD:

1. No, Manuel Toledo is not an


Rule 3, Section 7 of the 1997 Rules of Court states:

SEC. 7. Compulsory joinder of indispensableparties. Parties-in-interest without whom no

final determination can be had of an action shall

be joined either as plaintiffs or defendants.

An indispensable party is one who has such an

interest in the controversy or subject matter of a

case that a final adjudication cannot be made in

his or her absence, without injuring or affecting

that interest. He or she is a party who has not only

an interest in the subject matter of the

controversy, but "an interest of such nature that afinal decree cannot be made without affecting that

interest or leaving the controversy in such a

condition that its final determination may be

wholly inconsistent with equity and good

conscience. It has also been considered that an

indispensable party is a person in whose absence

there cannot be a determination between theparties already before the court which is effective,

complete or equitable." Further, an indispensable

party is one who must be included in an action

before it may properly proceed.

On the other hand, a "person is not an

indispensable party if his interest in the

controversy or subject matter is separable from

the interest of the other parties, so that it will not

necessarily be directly or injuriously affected by a

decree which does complete justice betweenthem. Also, a person is not an indispensable party

if his presence would merely permit complete

relief between him or her and those already

parties to the action, or if he or she has no interest

in the subject matter of the action." It is not a

sufficient reason to declare a person to be an

indispensable party simply because his or her

presence will avoid multiple litigations.

Applying the foregoing pronouncements to the

case at bar, it is clear that the estate of Manuel is

not an indispensable party to the collection case,

for the simple reason that the obligation of

Manuel and his wife, respondent herein, is

solidary.

The provisions and stipulations of the contract

were then followed by the respective signatures of

respondent as "MAKER" and her husband as "CO-

MAKER." Thus, pursuant to Article 1216 of the Civil

Code, petitioner may collect the entire amount of

the obligation from respondent only. The

aforementioned provision states: "The creditor

may proceed against any one of the solidary

debtors or some or all of them simultaneously. The

demand made against one of them shall not be an

obstacle to those which may subsequently be

directed against the others, so long as the debt has

not been fully collected."

In other words, the collection case can proceed

and the demands of petitioner can be satisfied by

respondent only, even without impleading the


8/52

estate of Manuel. Consequently, the estate of

Manuel is not an indispensable party to

petitioners complaint for sum of money.

It is crystal clear that Article 1216 of the New Civil

Code is the applicable provision in this matter. Saidprovision gives the creditor the right to "proceed

against anyone of the solidary debtors or some or

all of them simultaneously." The choice is

undoubtedly left to the solidary creditor to

determine against whom he will enforce

collection. In case of the death of one of the

solidary debtors, he (the creditor) may, if he so

chooses, proceed against the surviving solidary

debtors without necessity of filing a claim in the

estate of the deceased debtors.

2.

No, the inclusion of Manuel Toledo as

party-defendant is not a misjoinder of a

party warranting dismissal of the case.

Section 11 of Rule 3 of the Rules of Court states

that "neither misjoinder nor non-joinder of parties

is ground for dismissal of an action. Parties may be





proceeded with separately."

Based on the last sentence of the afore-quoted

provision of law, a misjoined party must have the

capacity to sue or be sued in the event that the

claim by or against the misjoined party is pursued

in a separate case. In this case, therefore, the

inclusion of Manuel in the complaint cannot be

considered a misjoinder, as in fact, the action

would have proceeded against him had he been

alive at the time the collection case was filed bypetitioner. This being the case, the remedy

provided by Section 11 of Rule 3 does not obtain

here. The name of Manuel as party-defendant

cannot simply be dropped from the case.


LEONIS NAVIGATION vs. VILLAMETER


FACTS:

Private respondent Catalino U. Villamater

(Villamater) was hired as Chief Engineer for the

ship MV Nord Monaco, owned by petitioner World

Marine Panama, S.A., through the services of

petitioner Leonis Navigation Co., Inc. (Leonis), as

the latters local manning agent. Consequent tothis employment, Villamater, on June 4, 2002,

executed an employment contract,[4]

incorporating

the Standard Terms and Conditions Governing the

Employment of Filipino Seafarers on Board Ocean-

Going Vessels as prescribed by the Philippine

Overseas Employment Administration (POEA).

Prior to his deployment, Villamater underwent the

required Pre-Employment Medical Examination

(PEME). He passed the PEME and was declared

Fit to Work.[5]Thereafter, Villamater wasdeployed on June 26, 2002.

Sometime in October 2002, around four (4)

months after his deployment, Villamater suffered

intestinal bleeding and was given a blood

transfusion. Thereafter, he again felt weak, lost

considerable weight, and suffered intermittent

intestinal pain. He consulted a physician

in Hamburg, Germany, who advised hospital

confinement. Villamater was diagnosed with

Obstructive Adenocarcinoma of the Sigmoid, with

multiple liver metastases, possibly local peritoneal

carcinosis and infiltration of the bladder, possibly

lung metastasis, and anemia; Candida Esophagitis;

and Chronic Gastritis. He was advised to undergo

chemotherapy and continuous supportive

treatment, such as pain-killers and blood

transfusion.[6]

Villamater was later repatriated, under medical

escort, as soon as he was deemed fit to travel. As

soon as he arrived in the Philippines, Villamater

was referred to company-designated

physicians. The diagnosis and the recommended

treatment abroad were confirmed. He was

advised to undergo six (6) cycles of

chemotherapy. However, Dr. Kelly Siy Salvador,

one of the company-designated physicians, opined

that Villamaters condition appears to be not

work-related, but suggested a disability grading of

1.[7]
http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn4


9/52

In the course of his chemotherapy, when no

noticeable improvement occurred, Villamater filed

a complaint[8]

before the Arbitration Branch of the

National Labor Relations Commission (NLRC) for

payment of permanent and total disability benefits

in the amount of US$80,000.00, reimbursement ofmedical and hospitalization expenses in the

amount of P11,393.65, moral damages in the sum

of P1,000,000.00, exemplary damages in the

amount of P1,000,000.00, as well as attorneys

fees.

After the submission of the required position

papers, the Labor Arbiter rendered a

decision[9]

dated July 28, 2003 in favor of

Villamater, holding that his illness was

compensable, but denying his claim for moral andexemplary damages.

On February 4, 2004, the NLRC issued its

resolution,[11]

dismissing the respective appeals of

both parties and affirming in totothe decision of

the Labor Arbiter.

Petitioners filed their motion for reconsideration

of the February 4, 2004 resolution, but the NLRC

denied the same in its resolution dated June 15,

2004.

Aggrieved, petitioners filed a petition

for certiorariunder Rule 65 of the Rules of Court

before the CA. After the filing of the required

memoranda, the CA rendered its assailed May 3,

2007 Decision, dismissing the petition. The

appellate court, likewise, denied petitioners

motion for reconsideration in its July 23, 2007

Resolution.

ISSUE:

Whether or not the Court of Appeals erred in

holding that non-joinder of indispensable parties

warrant the outright dismissal of the Petition for

Review on Certiorari?

HELD:

The answer is in the Negative.

Villamaters widow stands as an indispensable

party to this case.

Under Rule 3, Section 11 of the Rules of Court,

neither misjoinder nor non-joinder of parties is a

ground for the dismissal of an action, thus:

Sec. 11. Misjoinder and non-joinder of parties.

Neither misjoinder nor non-joinder of parties isground for dismissal of an action. Parties may be





proceeded with separately.

The proper remedy is to implead the indispensable

party at any stage of the action. The court,

either motu proprioor upon the motion of a party,

may order the inclusion of the indispensable partyor give the plaintiff an opportunity to amend his

complaint in order to include indispensable

parties. If the plaintiff ordered to include

the indispensable party refuses to comply with the

order of the court, the complaint may be

dismissed upon motion of the defendant or upon

the court's own motion. Only upon unjustified

failure or refusal to obey the order to include or to

amend is the action dismissed.[30]

By reason of Villamaters entitlement to total andpermanent disability benefits, he (or in this case

his widow Sonia) is also entitled to the award of

attorneys fees, not under Article 2208(2) of the

Civil Code, *w+hen the defendants act or

omission has compelled the plaintiff to litigate

with third persons or to incur expenses to protect

his interest, but under Article 2208(8) of the same

Code, involving actions for indemnity under

workmens compensation and employers liability

laws.


Heirs of Mesina v. Heirs of Fian, G.R. No. 201816

April 8, 2013


Facts:

The late spouses Faustino and Genoveva Mesina

(spouses Mesina), during their lifetime, bought

from the spouses Domingo Fian Sr. and Maria Fian

(spouses Fian) two parcels of land on installment.
http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn30http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2010/march2010/179169.htm#_ftn8


10/52

Both of these spouses eventually died. Upon the

death of the spouses Fian and Mesinas, the heir of

the formerwhose names do not appear on the

records, claiming ownership of the parcels of land

and taking possession of themrefused to

acknowledge the payments for the lots and deniedthat their late parents sold the property to the

spouses Mesina.

This prompted Norman S. Mesina as attorney-in-

fact of his siblings, filed an action for quieting of

title and damages before the Regional Trial Court

(RTC), Branch 14 in Baybay, Leyte against the Heirs

of Fian. Theresa filed a Motion to Dismiss the

complaint, arguing that the complaint states no

cause of action and that the case should be

dismissed for gross violation of

Sections 1 and 2, Rule 3 of the Rules of Court. The

RTC granted the motion and dismissed the

complaint. Motion for reconsideration was also

denied.

Petitioner appealed to CA which affirmed the

lower courts decision and denied the motion for

reconsideration. Thus, the petitioner brought the

case to Supreme Court.

Issue:

The (CA) court erred in affirming the order and the

resolution of RTC dismissing the case on the

ground that the complaint states no cause of

action.

Ruling:

Petition is meritorious and SC reversed CAs

decision.

The dismissal of the case for failure to state a

cause of action is improper. This is not a case

where there is a failure of the complaint to state

cause of action, rather this is properly a non-

joinder of indispensable party (that is, the

indispensable parties who were not included in the

complaint being the other heirs of Fian).

What the trial court should have done is to direct

petitioner Norman Mesina to implead all the heirs

of Domingo Fian, Sr. as defendants within a

reasonable time from notice with a warning that

his failure to do so shall mean dismissal of the

complaint.

By a simple reading of the 3 elements of a failure

to state a cause of action, it can be readily seen

that the inclusion of Theresas co-heirs does not

fall under any of the above elements. The infirmity

is, in fact, not a failure to state a cause of action

but a non-joinder of an indispensable party.

A complaint states a cause of action if it

avers the existence of the 3 essential

elements of a cause of action, namely:

(a) The legal right of the plaintiff;

(b) The correlative obligation of the

defendant; and

(c) The act or omission of the defendant

in violation of said right.

WHEREFORE, premises considered, the petition is

GRANTED. The assailed April 29, 2011 Decision and

April 12, 2012 Resolution of the CA in CA-G.R. CV

No. 01366, and the November 22, 2005 Order and

February 29,2006 Resolution of the RTC, Branch 14

in Baybay, Leyte, dismissing the complaint in Civil

Case No. 8-05-08-20, are hereby REVERSED and

SET ASIDE.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXSec. 12. Class suit.

When the subject matter of the controversy is one

of common or general interest to many persons so

numerous that it is impracticable to join all as

parties, a number of them which the court finds to

be sufficiently numerous and representative as to

fully protect the interests of all concerned may sue

or defend for the benefit of all. Any party in

interest shall have the right to intervene to protect

his individual interest.


Juana Complex v. Fil-Estate Land,

G.R. No. 152272, March 5, 2012


Facts:

Juana Complex I Homeowners

Association, Inc. (JCHA), together with individual

residents of Juana Complex I and other

neighboring subdivisions (collectively referred as

JCHA, et. al.), instituted a complaint for damages,


11/52

in its own behalf and as a class suit representing

the regular commuters and motorists of Juana

Complex I and neighboring subdivisions who were

deprived of the use of La Paz Road, against Fil-

Estate Land, Inc. (Fil-Estate), Fil-estate Ecocentrum

Corporation (FEEC), La Paz Housing &

Development Corporation (La Paz), and WarbirdSecurity Agency and their respective officers.

The complaint alleged that JCHA, et al.

were regular commuters and motorists who

constantly travelled towards the direction of

Manila and Calamba; that they used the entry and

exit toll gates of South Luzon Expressway (SLEX)by

passing through right-of-way public road known as

La Paz Road; that they had been using La Paz Road

for more than ten (10) years; that in August 1998,

Fil-estate excavated, broke and deliberately ruined

La Paz Road that led to SLEX so JCHA, et al. wouldnot be able to pass through the said road; that La

Paz Road was restored by the residents to make it

passable but Fil-estate excavated the road again;

that JCHA reported the matter to the Municipal

Government and the Office of the Municipal

Engineer but the latter failed to repair the road to

make it passable and safe to motorists and

pedestrians; that the act of Fil-estate in excavating

La Paz Road caused damage, prejudice,

inconvenience, annoyance, and loss of precious

hours to them, to the commuters and motorists

because traffic was re-routed to narrow streetsthat caused terrible traffic congestion and hazard;

and that its permanent closure would not only

prejudice their right to free and unhampered use

of the property but would also cause great damage

and irreparable injury.

Accordingly, JCHA, et al. also prayed for the

immediate issuance of a Temporary Restraining

Order (TRO)or a writ of preliminary

injunction (WPI)to enjoin Fil-Estate, et al. from

stopping and intimidating them in their use of La

Paz Road. On February 10, 1999, a TRO was issuedordering Fil-Estate, et al, for a period of twenty

(20) days, to stop preventing, coercing,

intimidating or harassing the commuters and

motorists from using the La Paz Road.

Subsequently, the RTC conducted several hearings

to determine the propriety of the issuance of a

WPI. On February 26, 1999, Fil-Estate, et al. filed a

motion to dismiss arguing that the complaint failed

to state a cause of action and that it was

improperly filed as a class suit. On March 5, 1999,

JCHA, et al. filed their comment on the motion to

dismiss to which respondents filed a reply. Fil-

Estate, et al. filed a petition for certiorari and

prohibition before the CA to annul (1) the Order

dated March 3, 1999 and (2) the Omnibus Order

dated June 16, 2000. They contended that the

complaint failed to state a cause of action and that

it was improperly filed as a class suit. With regard

to the issuance of the WPI, the defendants averred

that JCHA, et al. failed to show that they had a

clear and unmistakable right to the use of La PazRoad; and further claimed that La Paz Road was a

torrens registered private road and there was

neither a voluntary nor legal easement constituted

over it.

The CA ruled that the complaint sufficiently stated

a cause of action when JCHA, et al. alleged in their

complaint that they had been using La Paz Road

for more than ten (10) years and that their right

was violated when Fil-Estate closed and excavated

the road. It sustained the RTC ruling that the

complaint was properly filed as a class suit as itwas shown that the case was of common interest

and that the individuals sought to be represented

were so numerous that it was impractical to

include all of them as parties. The CA, however,

annulled the WPI for failure of JCHA, et al. to prove

their clear and present right over La Paz Road. The

CA ordered the remand of the case to the RTC for

a full-blown trial on the merits.

Issues:

(1) whether or not the complaint states a cause of

action;(2) whether the complaint has been properly filed

as a class suit;

(2) whether or not a WPI is warranted.

Ruling:

1. The question of whether the complaint states a

cause of action is determined by its averments

regarding the acts committed by the

defendant. Thus, it must contain a concise

statement of the ultimate or essential facts

constituting the plaintiffs cause of action. Tobe taken into account are only the material

allegations in the complaint; extraneous facts

and circumstances or other matters aliundeare

not considered.

The test of sufficiency of facts alleged in

the complaint as constituting a cause of action

is whether or not admitting the facts alleged,

the court could render a valid verdict in

accordance with the prayer of said complaint.

In the present case, the Court finds the

allegations in the complaint sufficient to

establish a cause of action. First,JCHA, et al.s

averments in the complaint show a

demandable right over La Paz Road. These are:


12/52

(1) their right to use the road on the basis of

their allegation that they had been using the

road for more than 10 years; and (2) an

easement of a right of way has been

constituted over the said roads. There is no

other road as wide as La Paz Road existing in

the vicinity and it is the shortest, convenientand safe route towards SLEX Halang that the

commuters and motorists may use. Second,

there is an alleged violation of such right

committed by Fil-Estate, et al. when they

excavated the road and prevented the

commuters and motorists from using the

same. Third,JCHA, et al. consequently suffered

injury and that a valid judgment could have

been rendered in accordance with the relief

sought therein.

2. The necessary elements for the maintenance ofa class suit are: 1) the subject matter of

controversy is one of common or general

interest to many persons; 2) the parties

affected are so numerous that it is

impracticable to bring them all to court; and 3)

the parties bringing the class suit are

sufficiently numerous or representative of the

class and can fully protect the interests of all

concerned.

In this case, the suit is clearly one that

benefits all commuters and motorists who

use La Paz Road.

3. A writ of preliminary injunction is available to

prevent a threatened or continuous irremediable

injury to parties before their claims can be

thoroughly studied and adjudicated. The requisites

for its issuance are: (1) the existence of a clear and

unmistakable right that must be protected; and (2)

an urgent and paramount necessity for the writ to

prevent serious damage. For the writ to issue, the

right sought to be protected must be a present

right, a legal right which must be shown to be clear

and positive. This means that the personsapplying for the writ must show that they

have an ostensible right to the final relief

prayed for in their complaint.

In the case at bench, JCHA, et al. failed to

establish aprima facie proof of violation of their

right to justify the issuance of a WPI. Their right to

the use of La Paz Road is disputable since they have

no clear legal right therein.


NEWSWEEK, INC., petitioner,

vs.THE INTERMEDIATE APPELLATE COURT, and

NATIONAL FEDERATION OF SUGARCANE

PLANTERS INC., BINALBAGAN-ISABELA PLANTERS

ASSOCIATION, INC., ASOCIACION DE

AGRICULTORES DE LA CARLOTA, LA CASTELLANA

y PONTEVEDRA, INC., DONEDCO PLANTERS

ASSOCIATION INC., ARMANDO GUSTILO,ENRIQUE ROJAS, ALFREDO MONTELIBANO, JR.,

PABLO SOLA, JOSE MONTALVO, VICENTE

GUSTILO, JOSEPH MARANON, ROBERTO CUENCA,

JOSE SICANGCO, FLORENCIO ALONSO, MIGUEL

GATUSLAO, PEDRO YULO, MARINO RUBIN and

BENJAMIN BAUTISTA, respondents.


FACTS:

Petitioner, Newsweek, Inc., a foreign corporation

licensed to do business in the Philippines, in this

special action for certiorari, prohibition with

preliminary injunction, seeks to annul the decision

of the Intermediate Appellate Court dated

December 17, 1982 sustaining the Order of the

then Court of First Instance of Bacolod City which

denied petitioner's Motion to Dismiss the

complaint for libel filed by private respondents

(Civil Case No. 15812), and the Resolution dated

March 10, 1983 which denied its Motion for

Reconsideration.

On March 5, 1981, private respondents,

incorporated associations of sugarcane planters in

Negros Occidental claiming to have 8,500

members and several individual sugar planters,

filed Civil case in their own behalf and/or as a class

suit in behalf of all sugarcane planters in the

province of Negros Occidental, against petitioner

and non-resident reporters Fred Bruning and Barry

Came. The complaint alleged that petitioner and

other defendants committed libel against them by

publication of the article An Island of Fear in theFebruary 23, 1981 of petitioners weekly issue.

The article supposedly portrayed the island

province of Negros Occidental as a place

dominated by big landowners or sugarcane

planters who not only exploited the impoverished

and underpaid sugarcane workers/laborers, but

also brutalized and killed them with imprunity.

Complainants denied what is written in the article

because it would expose them to public ridicule

and humiliation. They prayed for damages of P1M

as actual and compensatory damages, and such

amounts for moral, exemplary and correctivedamages as the court may determine, plus


13/52

expenses of litigation, attorneys fees and costs of

suit.

On Nov. 5, 1981, petitioner filed a motion to

dismiss and pointed out that the article is not

libelous and consequently the failure of the

complaint to state a cause of action. However, the

court denied the motion to dismiss as well as

petitioners motion for reconsideration.

On June 18, 1982, petitioner filed a petition for

certiorari with the Intermediate Appellate Court

seeking the annulment of the trial courts order for

having been issued with grave abuse of discretion

amounting to lack of jurisdiction and praying for

the dismissal of the complaint for failure to state a

cause of action. But the court affirmed the

decision of the Trial Court and also petitioners

motion for reconsideration.

Issue/s:

1.

Whether or not the private respondents'

complaint failed to state a cause of

action; and

2. Whether or not the case at bar is a class

suit in representation of all the 8,500sugarcane planters of Negros Occidental.

Held:

1. Yes, private respondents complaint failed

to state a cause of action.

In the case of Corpus vs. Cuaderno, Sr. (16

SCRA 807) this Court ruled that "in order

to maintain a libel suit, it is essential that

the victim be identifiable (People vs.

Monton, L-16772, November 30, 1962),although it is not necessary that he be

named (19 A.L.R. 116)." In an earlier case,

this Court declared that" ... defamatory

matter which does not reveal the Identity

of the person upon whom the imputation

is cast, affords no ground of action unless

it be shown that the readers of the libel

could have Identified the personality of

the individual defamed." (Kunkle vs.

Cablenews-American and Lyons 42 Phil.

760).

This principle has been recognized to be

of vital importance, especially where a

group or class of persons, as in the case at

bar, claim to have been defamed, for it is

evident that the larger the collectivity, the

more difficult it is for the individual

member to prove that the defamatoryremarks apply to him.

In the case of Uy Tioco vs. Yang Shu Wen

,32 Phil. 624, this Court held as follows:

Defamatory remarks directed at a class or

group of persons in general language

only, are not actionable by individuals

composing the class or group unless the

statements are sweeping; and it is very

probable that even then no action would

lie where the body is composed of so

large a number of persons that common

sense would tell those to whom the

publication was made that there was

room for persons connected with the

body to pursue an upright and law abiding

course and that it would be unreasonable

and absurd to condemn all because of the

actions of a part.

It is evident from the above ruling that where the

defamation is alleged to have been directed at a

group or class, it is essential that the statement

must be so sweeping or all-embracing as to apply

to every individual in that group or class, or

sufficiently specific so that each individual in the

class or group can prove that the defamatory

statement specifically pointed to him, so that he

can bring the action separately, if need be.

We note that private respondents filed a "class

suit" in representation of all the 8,500 sugarcane

planters of Negros Occidental. Petitioner disagrees

and argues that the absence of any actionable

basis in the complaint cannot be cured by the filingof a class suit on behalf of the aforesaid sugar

planters.

2. No, the case at bar is not a class suit.

It is not a case where one or more may

sue for the benefit of all (Mathay vs.

Consolidated Bank and Trust Company, 58

SCRA 559) or where the representation of

class interest affected by the judgment or

decree is indispensable to make each

member of the class an actual party

(Borlaza vs. Polistico, 47 Phil. 348). We


14/52

have here a case where each of the

plaintiffs has a separate and distinct

reputation in the community. They do not

have a common or general interest in the

subject matter of the controversy.

The disputed portion of the article which

refers to plaintiff Sola and which was

claimed to be libelous never singled out

plaintiff Sola as a sugar planter. The news

report merely stated that the victim had

been arrested by members of a special

police unit brought into the area by Pablo

Sola, the mayor of Kabankalan. Hence,

the report, referring as it does to an

official act performed by an elective

public official, is within the realm of

privilege and protected by the

constitutional guarantees of free speechand press.


MATHAY VS CONSOLIDATED BANK


FACTS:

The complaint in this case, filed on December 24,1963 as a class suit, under Section 12, Rule 3, of

the Rules of Court, contained six causes of action.

first cause action was that plaintiffs-appellants

alleged that they were, on or before March 28,

1962, stockholders in the Consolidated Mines, Inc.

(CMI), a corporation duly organized and existing

under Philippine laws; that the stockholders of the

CMI, including the plaintiffs-appellants, passed, at

a regular stockholders' meeting, a Resolution

providing:

(a)

that the CMI be organized with an authorizedcapital of P20,000,000.00;

(b) that the organization be undertaken by a Board

of Organizers composed of the President and

Members of the Board of Directors of the CMI;

(c) that all stockholders of the CMI, who were

legally qualified to become stockholders, would be

entitled to subscribe to the capital stock of the

proposed Bank "at par value to the same extent

and in the same amount as said stockholders'

respective share holdings in the CMI," as shown inits stock books on a date to be fixed by the Board

of Directors [which date was subsequently fixed as

January 15, 1963], provided that the right to

subscribe should be exercised within thirty days

from the date so fixed, and "that if such right to

subscription be not so exercised then the

stockholders concerned shall be deemed to have

thereby waived and released ipso factotheir rightto such subscription in favor of the Interim Board

of Organizers of the Defendant Bank or their

assignees;" and

(d) that the Board of Directors of the CMI be

authorized to declare a "special dividend" in an

amount it would fix, which the subscribing

stockholders might authorize to be paid directly to

the treasurer of the proposed Bank in payment of

the subscriptions; On February 7, 1964

defendants-appellees, , filed a motion to dismiss

on the grounds that (a) plaintiffs-appellants had nolegal standing or capacity to institute the alleged

class suit; (b) that the complaint did not state a

sufficient and valid cause of action.

Second cause of action that on or about August 28,

1963, defendants-appellees "falsely certified to the

calling of a special stockholders' meeting allegedly

pursuant to due notice and call of Defendant

Bank" although plaintiffs-appellants and other CMI

stockholders were not notified thereof, and

amended the Articles of Incorporation increasing

the number of Directors from 6 to 7, and had theillegally created Position of Director filled up by

defendant-appellee Alfonso Juan Olondriz, who

was not competent or qualified to hold such

position.

On March 21, 1964, the trial court granted the

motion to dismiss, holding, among other things,

that the class suit could not be maintained

because of the absence of a showing in the

complaint that the plaintiffs-appellants were

sufficiently numerous and representative, and that

the complaint failed to state a cause of action.Appellants, plaintiffs interposed this appeal to this

court.

ISSUES:

1.Whether the instant action could be maintained

as a class suit.

2. Whether the complaint stated a cause of action.

RULING:


15/52

1. The necessary elementsfor the maintenance of

a class suit are accordingly: (1) that the subject

matter of the controversy be one of common or

general interest to many persons, and (2) that

such persons be so numerous as to make it

impracticable to bring them all to the court. The

statute also requires, as a prerequisite to a classsuit, (3) thatthe subject-matter of the

controversy be of common or general interest to

numerous persons.

In the instant case. The interest that appellants,

plaintiffs and intervenors, and the CMI

stockholders had in the subject matter of this suit

the portion of stocks offering of the Bank left

unsubscribed by CMI stockholders who failed to

exercise their right to subscribe on or before

January 15, 1963 was several, not common or

generalin the sense required by the statute. Eachone of the appellants and the CMI stockholders

had determinable interest;each one had a right, if

any, only to his respective portion of the stocks.

No one of them had any right to, or any interest in,

the stock to which another was entitled.

2. A cause of action is an act or omission of one

party in violation of the legal right of the other. Its

essential elements are, namely: (1) the existence

of a legal right in the plaintiff, (2) a correlative

legal duty in the defendant, and (3) an act or

omission of the defendant in violation ofplaintiff's right with consequential injury or

damage to the plaintiff for which he may

maintain an action for the recovery of damages

or other appropriate relief. On the other hand,

Section 3 of Rule 6 of the Rules of Court provides

that the complaint must state the ultimate facts

constituting the plaintiff's cause of action. Hence,

where the complaint states ultimate facts that

constitute the three essential elements of a cause

of action, the complaint states a cause of

action;28

otherwise, the complaint must succumb

to a motion to dismiss on that ground.

The alleged specific facts did not evenshow that

appellants were entitled to subscribe to the

capital stock of the proposed Bank, for said right

depended on a condition precedent, which was,

that they were qualified under the law to become

stockholders of the Bank, and there was no direct

averment in the complaint of the facts that

qualified them to become stockholders of the

Bank. The allegation of the fact that they

subscribed to the stock did not, by necessary

implication, show that they were possessed of the

necessary qualifications to become stockholders of

the proposed Bank.

Even if it be assumed arguendo that defendants-

appellees had the duty to have the waived stocks

subscribed to by the CMI stockholders, this duty

was not owed to all the CMI stockholders, but only

to such CMI stockholders as were qualified to

become stockholders of the proposed Bank.

In the second cause of action that the calling of a

special meeting was "falsely certified", that the

seventh position of Director was "illegally created"

and that defendant Alfonso Juan Olondriz was "not

competent or qualified" to be a director are mere

conclusions of law, the same not being necessarily

inferable from the ultimate facts stated in the first

and second causes of action. It has been held in

this connection that:

An averment that ... an act was 'unlawful' or

'wrongful' is a mere legal conclusion or opinion of

the pleader. The same is true of allegations that an

instrument was 'illegally' certified or ... that an act

was arbitrarily done ..."

The third, fourth, fifth and sixth causes of action

depended on the first cause of action, which, as

has been shown, did not state ultimate facts

sufficient to constitute a cause of action. It stands

to reason,therefore, that said causes of action

would also be fatally defective.

The instant appeal is dismissed.

Sec. 12. Class suit When the subject matter of

the controversy is one of common or general

interest to many persons, and the parties are so

numerous that it is impracticable to bring them all

before the court, one or more may sue or defend

for the benefit of -ill. But in such case the court

shall make sure that the parties actually before itare sufficiently numerous and representative so

that all interests concerned are fully protected.

Any party in interest shall have a right to intervene

in protection of his individual interest.

Three types of class suits: 1. True 2. Hybrid 3.

Spurious.

These three had only one feature in common, that

is, in each the persons constituting the class must

be so numerous as to make it impracticable to

bring them all before the court.


16/52

spurious class action (Rule 23 (a) (3) which

involves a right sought to be enforced, which is

several, and there is a common question of law or

fact affecting the several rights and a common

relief is sought.


VICTORIANO BORLASAS, ET AL., plaintiffs-

appellants, vs. VICENTE POLISTICO, ET AL.,

defendants-appellees.1925 Jan 282nd

DivisionG.R. No. 22909


Facts:

This action was instituted in the Court ofFirst Instance of Laguna on July 25, 1917, by

Victoriano Borlasa and others against Vicente

Polistico and others, chiefly for the purpose of

securing the dissolution of a voluntary association

named Turnuhan Polistico & Co., and to compel

the defendants to account for and surrender the

money and property of the association in order

that its affairs may be liquidated and its assets

applied according to law. The trial judge having

sustained a demurrer for defect of parties and the

plaintiffs electing not to amend, the cause was

dismissed, and from this order an appeal wastaken by the plaintiffs to this court.

In an amended answer the defendants

raised the question of lack of parties and set out a

list of some hundreds of persons whom they

alleged should be brought in as parties defendant

on the ground, among others, that they were in

default in the payment of their dues to the

association.

On November 28, 1922, the court made

an order requiring the plaintiffs to amend their

complaint within a stated period so as to include

all of the members of the Turnuhan Polistico & Co.

either as plaintiffs or defendants. The plaintiffs

excepted to this order, but acquiesced to the

extent of amending their complaint by adding as

additional parties plaintiff some hundreds of

persons, residents of Lilio, said to be members of

the association and desirous of being joined as

plaintiffs.

The defendants demurred to the

amended complaint on the ground that it showed

on its face a lack of necessary parties and this

demurrer was sustained, with the ultimate result

of the dismissal of the action, as stated in the first

paragraph of this opinion.

Issue:

Whether or not the trial judge erred in

sustaining the demurrer to the amended

complaint which resulted to the dismissal of the

action.

Held:

Yes. The trial judge is incorrect in

sustaining the demurrer to the amended

complaint.

This trial judge appears to have supposed

that all the members of the Turnuhan Polistico &

Co. should be brought in either plaintiffs or

defendants. This notion is entirely mistaken.

The situation involved is precisely the one

contemplated in section 118 of the Code of Civil

Procedure, where one or more may sue for the

benefit of all. It is evident from the showing madein the complaint, and from the proceedings in the

court below, that it would be impossible to make

all of the persons in interest parties to the case

and to require all of the members of the

association to be joined as parties would be

tantamount to a denial of justice.

The general rule with reference to the making of

parties in a civil action requires, of course, the

joinder of all necessary parties wherever possible,

and the joinder of all indispensable parties underany and all conditions, the presence of those

latter being a sine qua non of the exercise of

judicial power. The class suit contemplates an

exceptional situation where there are numerous

persons all in the same plight and all together

constituting a constituency whose presence in the

litigation is absolutely indispensable to the

administration of justice. Here the strict

application of the rule as to indispensable parties

would require that each and every individual in

the class is sufficiently represented to enable the

court to deal properly and justly with thatinterest and with all other interests involved in

the suit. In the class suit, then, representation of


17/52

a class interest which will be affected by the

judgment is indispensable; but it is not

indispensable to make each member of the class

an actual party.

A common illustration in American procedure of

the situation justifying a class suit is thatpresented by the creditors' bill, which is filed by

one party interested in the estate of an insolvent,

to secure the distribution of the assets

distributable among all the creditors. In such

cases the common practice is for one creditor to

sue as plaintiff in behalf of himself and other

creditors. (Johnson vs. Waters, 111 U.S. S., 640;

28 Law. ed., 547.) Another illustration is found in

the case of Smith vs. Swormstedt (16 How., 288;

14 Law. ed., 942), where a limited number of

individuals interested in a trust for the benefit of

superannuated preachers were permitted tomaintain an action in their own names and as

representatives of all other persons in the same

right.

The addition of some hundreds of persons to the

number of the plaintiffs, made in the amendment

to the complaint of December 13, 1922, was

unnecessary, and as the presence of so many

parties is bound to prove embarrassing to the

litigation from death or removal, it is suggested

that upon the return of this record to the lower

court for further proceedings, the plaintiff shallagain amended their complaint by dismissing as

to unnecessary parties plaintiffs, but retaining a

sufficient number of responsible persons to

secure liability for costs and fairly to represent all

the members of the association.

There is another feature of the complaint which

makes a slight amendment desirable, which is,

that the complaint should be made to show on its

face that the action is intended to be litigated as

a class suit. We accordingly recommend that the

plaintiffs further amend by adding after thenames of the parties plaintiffs the words, "in their

own behalf and in behalf of other members of

Turnuhan Polistico & Co."


Ibanez vs. Roman Catholic Church


The case stemmed from a controversy between

the Roman CatholicChurch on one side and the

Independent Filipino Church on the other. That it is

the purpose of the plaintiffs, ifthey secure

possession of the image, to place it in the chapel of

the Independent Church.

There are no other allegations in the complaint as

to the right of the plaintiffs to represent theinhabitants of Ternate, nor is there any proof

whatever in the case upon this point. The claim of

the plaintiffs is that the persons who were at the

time of the presentation of the complaint the

inhabitants of Ternate were the owners in

common of the image considered as a piece of

personal property. There is no evidence to show

that the present plaintiffs, or any one of the

present inhabitants of Ternate, were the heirs or

in any way related to any of the two hundred

Mardicaswho came to the Philippines nearly twohundred and fifty years ago. The claim of the

plaintiffs is apparently not rested upon the

proposition that they are entitled to relief because

they are such heirs, but because they live in the

pueblo. Their view seems to be that the heirs of

the Mardicasliving in other pueblos have no

interest in the image.

Passing the question as to whether the Roman

Catholic Church is not the owner of the image, the

question may be asked, whether under thesecircumstances it can be said that any one has a

proprietary right in this image who is not a Roman

Catholic? If among the Mardicaswho first came

here there had been on who did not profess that

religion, would he have any participation therein?

Are the Chinese who now live in Ternate part

owners of the image? These are questions which

we do not feel called upon to decide, for the case

must be resolved upon the point made by the

defendant at the very commencement of the

action, to wit, that the thirteen persons named as

plaintiffs have no right to maintain it.

The plaintiffs rely upon article 118 of the Code of

Civil Procedure, which is as follows:

When the subject-matter of the controversy is one

of common or general interest to many persons,

and the parties are so numerous that it is

impracticable to bring them all before the court,

one or more may sue or defend for the benefit of

all. But in such case any party in interest shall have

a right to intervene in protection of his individual

interests, and the court shall make sure that the


18/52

parties actually before it are sufficiently numerous

and representative so that all interests concerned

are fully protected.

Issue/s:

Whether or not the plaintiffs can validly represent

the others so that it could amount to a class suit.

Held:

No, the plaintiffs in the case at bar can not validly

represent the others.

It is a well entrenched rule that there is no class

suit if interest of those who filed the action

conflicts with those sought to be represented.

The court is quite emphatic upon citing the case of

In Macon and Birmingham Railroad vs. Gibson,

where it said:

It is true that as only two of the citizens

have become parties, it is rather a small

representation of thewhole community;

but considering the publicity of the case

and of the interest involved in it, and the

factthat the suit is located in Upson

County and will be tried (if tried at all) at

the county town, which is thetown whosecitizens are interested, there can be no

cause to apprehend that the two plaintiffs

on theface of the petition will be

disposed, or if so disposed, allowed to

misrepresent the community in

whosebehalf they have brought this suit.

No doubt it is somewhat discretionary

with a court of equity as tohow many

representatives of a class will, or ought to

be, regarded as a fair representation of

the wholeclass in the given instance.

What number of the inhabitants of the town

(2,460 according to the census) are members of

the RomanCatholic Church and what part are

members of the Independent Filipino Church does

not appear. But it is veryapparent that many of the

inhabitants are opposed to the transfer of the

image from the Roman CatholicChurch. Under the

circumstances, the thirteen plaintiffs do not fairly

represent all of the inhabitants of thetown. Their

interest and the interests of some of the others

are diametrically opposed. For this reason

thisaction can not be maintained.itc-alf

The judgment of the court below is reversed, and

the defendants are acquitted of the complaint,


Lianas Supermarket vs National Labor Relations

Commission

GR No. 111014 . May 31, 1996.


FACTSOF THE CASE: Lianas Supermarket, herein

petitioner, employed as sales ladies, cooks

packers, cashiers, electricians, warehousemen,

etc., members of private respondent National

Labor Union. However, in the course of their

employment they were allegedly underpaid and

required to work more than 8 hours a day without

OT pay and deprived of legal holiday pay and

monthly emergency allowance. The employees

aired their grievances to Peter Sy, the

supermarkets Gen. Manager and Rosa Sy,

Consultant, but were only scolded and threatened

with outright dismissal. Consequently, they formed

a labor union and affiliated it with respondent

National Labor Union.

Petitioner entered into a 3-year contract with

Warner Laputt, owner of BAVSPIA Intl Services, to

supply the former with laborers.

Subsequently, Rosa Sy met with the employees

and urged them to quit their membership with the

union and required them to accomplish

information sheets and/or application forms with

BAVSPIA otherwise they be terminated. When

they refused, many were dismissed without any

charges and others were given memo onconcocted offenses and violations.

Respondent Union on behalf of its members filed a

complaint against petitioner and BAVSPIA and

Warner Laputt before the Labor Arbiter fir

underpayment of wages, nonpayment of OT pay,

monthly emergency allowance, legal holiday pay,

SIL and 13th

month pay.

The complaint was amended since respondent

manifested through its authorized rep. that it wasintended as a class suit.


19/52

ISSUE:WON this case falls under the term class

suit.

SUPREME COURT DECISION: NO. This is a

representative suit as distinguished from class

suit.

Sec. 12 Class Suit. --- When the

subject matter of the

controversy is one of common or

general interest to many

persons, and the parties are so

numerous that is impracticable

to bring them all before the

court, one or more may sue or

defend for the benefit of all. But

in such case the court shall makesure that the parties actually

before it are sufficiently

numerous and representative so

that all interests concerned are

fully protected. Any party in

interest shall have a right to

intervene in protection of his

individual interests.

SC has cited In re: Request of the Heirs of the

Passengers of Dona Paz to Set Aside the OrderDated Jan 4, 1988, the Court had occasion to

explain class suit; ---

What is contemplated, as will be noted, is that

(a)

The subject matter in controversy is of

common or general interest to many

persons, and

(b)

Those persons are so numerous as to

make it impracticable to bring them all

before the court.

What makes the situation a proper case for a class

suit is the circumstance that there is only one right

or cause of action pertaining to or belonging in

common to many persons, not separately or

severally to distinct individuals. The object of the

suit is to obtain relief for or against numerous

persons as a group or as an integral entity, and not

as separate, distinct individuals whose rights or

liabilities are separate from and independent of

those of others. The other factor that serves to

distinguish the rule on class suits is the

numerousness of parties involved.

The rule is that for a class suit to be allowed, it is

needful inter aliathat the parties to so numerous

that it would be impracticable to bring them allbefore the court.

In the present case, there are multiple rights or

causes of action pertaining separately to several,

distinct employees who are members of

respondent Union. Therefore, the applicable rule is

that provided in Sec. 3, Rule #, of the ROC on

representative parties ---

Sec. 3. Representative Parties.

A trustee of an express trust, a

guardian, executor or

administrator, or a party

authorized by statute, may sue

or be sued without joining the

party for whose benefit the

action is presented or defended;

but the court may, at any stage

of the proceedings, order such

beneficiary to be made party.


Sec. 13. Alternative defendants.

Where the plaintiff is uncertain against who of

several persons he is entitled to relief, he may join

any or all of them as defendants in the alternative,

although a right to relief against one may be

inconsistent with a right of relief against the other.


Insurance Company vs. US Lines


Sec. 14. Unknown identity or name of defendant.

Whenever the identity or name of a defendant is

unknown, he may be sued as the unknown owner,

heir, devisee, or by such other designation as the

case may require; when his identity

Documents

Rule 3 sec.9 - 4 (Rules of Court Jurisprudence Digest)