Rule 03

PARTIES TO CIVIL ACTIONS

CLASSES OF PARTIES:

I. Real Parties in Interest

II. Representative Parties
III. Permissive Parties
IV. Indispensable Parties
V. Necessary Parties

Sec. 1. Who may be parties; plaintiff and

defendant. - Only natural or juridical persons, or
entities authorized by law may be parties in a
civil action. The term "plaintiff" may refer to
the original claiming party, the counter-claimant,
the cross-claimant, or the third (fourth, etc.)-
party plaintiff. The term "defendant" may refer to
the original defending party, the defendant in a
counterclaim, the cross-defendant, or other third
(fourth, etc.)-party defendant. (1a)

Notes:

There are two main categories of parties in a

civil action namely, the plaintiff and the
defendant.

The plaintiff is the claiming party or more

appropriately, the original claiming party and is
the one who files the complaint. The term however,
does not exclusively apply to the original
plaintiff. It may also apply to a defendant who
files a counterclaim, a cross-claim or third party
complaint. Hence Section 1 defines “plaintiff” as
the claiming party, the counter-claimant, the
cross-claimant or the third-party plaintiff, etc.

The defendant does not only refer to the original

defending party. If a counterclaim is filed against
the original plaintiff, the latter becomes a
defendant and the former, a plaintiff in the
counterclaim. Hence, in Sec. 1, the term
“defendant” refers also to a defendant in a
counterclaim, the cross-defendant or the third-
party defendant, etc.

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 Q: Who may be parties to a civil case?
A: Only the following may be parties to a civil action:
1.He nuts be either:
(a) natural or
(b) juridical persons or
(c) entities authorized by law.
2. he must have the legal capacity to sue; and
3.he must be a real party
-in-interest.
So, you cannot sue or be sued unless you are either a person or an entity
authorized by law.
A dead man cannot sue and he cannot be sued because he has no more
personality.

B sued “Rama Eatery.” So, it is “B vs. Rama Eatery.” It is wrong. Rama Eatery is
not a person nor an entity authorized by law. The correct procedure is you sue
the owner because he is the real person. But the defect is not really substantial. It
is only a formal defect that can easily be corrected.

Juridical person as parties

The juridical persons who may be parties are those enumerated in Art. 44 of the
Civil Code, namely:

1.) The State and its political subdivisions;

2.) Other corporations, institutions and entities for public interest or purpose,
created by law; and
3.) Corporations, partnerships, and associations for private interest or purpose
to which the law grants a juridical personality, separate and distinct from
that of each shareholder, partner or member.

“ENTITIES AUTHORIZED BY LAW”

The best example is Section 15 of this rule.

Section 15. Entity without juridical personality

as defendant.- When two or more persons not
organized as an entity with juridical personality
enter into a transaction, they may be sued under
the name by which they are generally or commonly
known.
In the answer of such defendant the names and
addresses of the persons composing said entity must
all be revealed.

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 Thus, if A, B, C, D and E without incorporating themselves or without
registering as a partnership, enter into transactions using the common name
“Ocean Quest Corporation”, they may be sued as such. When the defendant
“corporation” answers, the names of A, B, C, D and E and their addresses must
be revealed. Note however, that the authority to be a party under this section is
confined only to being a defendant and not as a plaintiff. This is evident from the
words, “they may be sued”.

Another example of an entity authorized by law which may not be a natural

or juridical person is a labor union or organization under the Labor Code. It is an
entity authorized by law to file a case in behalf of its members. Although it may
not have been incorporated under the Corporation Law but registered under the
Labor Code. A legitimate labor organization may sue and be sued in its
registered name (Art. 242 [e], Labor Code of the Philippines).

What are the others?

1.) An estate of a deceased person may be a party to an action. (Limjoco

v. Intestate Estate of Fragante, 8 Phil. 776; Nazareno v. CA 343 SCRA 637)
2.) The Roman Catholic Church may be a party and as to its properties,
the archbishop or diocese to which they belong may be a party. (Barlin v.
Ramirez 7 Phil 47; Verzosa v. Fernandez 49 Phil. 627)
3.) A dissolved corporation may prosecute and defend suits by or
against it provided that the suits occur within 3 years after its dissolution,
and the suits are in connection with the settlement and closure of its affairs.
(Sec. 122, Corporation Code)
4. Under Sec. 21 of the Corporation Code of the Philippines, a
corporation by estoppel is precluded from denying its existence and the
members thereof can be sued and be held liable as general partners.
5. A contract of partnership having a capital of three thousand pesos or
more but which fails to comply with the registration requirements is
nevertheless liable as a partnership to third persons(Art. 1772 in relation
to Art. 1768 Civil Code).
6. A political party incorporated under Act 1459 (now BP 68,
Corporation Code)

Remedy when a party impleaded is not authorized to be a party-

As to plaintiff:

Where the plaintiff is not a natural or a juridical person or an entity

authorized by law, a motion to dismiss may be filed on the ground that
“the plaintiff has no legal capacity to sue.” (Sec. 1[d] R 16)

When plaintiff is not the real party in interest:

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 Also, if the plaintiff has capacity to sue but he is not the ‘real party in
interest’, the ground for dismissal is a ‘failure to state a cause of action
(Aguila vs. CA 319 SCRA 246; Balagtas vs. CA 317 SCRA 69) not lack of
legal capacity to sue.’

As to defendant:

Where it is the defendant who is not any of the above, the complaint
may be dismissed on the ground that the “pleading asserting the claim
states no cause of action” or “failure to state a cause of action” (Sec. 1[g],
R 16) because there cannot be a cause of action against one who cannot
be a party to a civil action.

I. REAL PARTIES IN INTEREST

Sec 2. Parties in interest. - A real party in

interest is the party who stands to be benefited or
injured by the judgment in the suit, or the party
entitled to the avails of the suit. Unless
otherwise authorized by law or these Rules, every
action must be prosecuted or defended in the name
of the real party in interest. (2a)

Q: Who is a real party in interest?

A: A real party in interest is the party who stands to be benefited or injured
by the judgment in the suit or the party entitled to the avails of the suit. (Section
2)

That definition is taken from the leading case of SALONGA VS. WARNER
BARNES & CO. (88 Phil. 125). That is exactly how it is defined and that definition
has been repeated through the years.

To be a real party- in- interest, the interest must be “real”, which is present
substantial interest as distinguished from a mere expectancy or a future,
contingent, subordinate or consequential interest. (Rayo v. Metrobank, 539 SCRA
571; Fortich v. Corona 289 SCRA 624; Figuracion v. Libi 539 SCRA 50. It is an
interest that is material and direct, as distinguished from a mere incidental
interest in the question. (Samaniego v. Aguila 334 SCRA 438; Mayor Rhustom
Dagadag v. Tongnawa 450 SCRA 437).

The determination of who the real party-in-interest is requires going back to

the elements of a cause of action. Evidently the owner of the right violated
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stands to be the real party-in-interest as plaintiff and the person responsible
for the violation is the real party-in-interest as defendant.(Lee v. Romillo 161
SCRA 589). Thus, in a suit for violation of a contract, the parties-in-interest
would be those covered by the operation of the doctrine of relativity of contracts
under Art. 1311 of the Civil Code, namely, the parties, their assignees and heirs.
Likewise in a suit for annulment of a contract, the real parties in interest would
be those who are principally or subsidiarily bound by the contract. (Art. 1397
Civil Code)

every action must be prosecuted or defended

in the name of the real party in interest

So a complaint is dismissible if it is not made in the name of the real party in

interest.

In an action to recover ownership over or title to a piece of land , you do not

file a case against the tenant. He is not the real party in interest. You must file
the case against the owner of the land.
Neither can your boyfriend file the case.

When you are riding in a common carrier which collided and you were
injured, do not file a case against the driver for damages. Your contract is not
with the driver. Your contract is with the operator. So you file a case of culpa
contractual against the owner or operator.

GENERAL RULE: In a breach of contract, the real parties in interest are the
parties to the contract. So strangers, as a rule, have no business suing in a
contract because they are not real parties in interest.

BALIWAG TRANSIT vs. COURT OF APPEALS

169 SCRA 649 [1989 BAR]

FACTS: A student who was riding in one of the Baliwag buses met an
accident. So, an action was filed where the parents and the injured boy
were the co-plaintiffs against Baliwag Transit. While the case was going
on, the boy entered into amicable settlement with the bus company.
Based on the settlement, Baliwag moved to dismiss the case. The parents
objected, “We are objecting because we are also plaintiffs. We didn’t
know about the settlement. We were the ones who spent money, there-
fore it should not be dismissed simply because our son is withdrawing
the case.”

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 HELD: The parents are not the real party in interest. They were not
the passengers. The real parties in a contract of carriage are the parties to
the contract itself. “In the absence of any contract of carriage between
the transportation company and the parents of the injured party, the
parents are not real parties in interest in an action for breach of
contract.”

Of course, if the child is a minor the parents can file as representatives but not
as principal party.

EXCEPTION: When there is a stipulation in the contract favorable to a third

person (stipulation pour autrui – Art. 1311, NCC)

Example: Third-Party Liability (TPL) in insurance. A insured his car with B for
TPL. A bumped C. C can file a case against A and B to recover from the
insurance contract. In other words, while only A and B are the parties to the
insurance contract yet the third party liability stipulation is intended to benefit a
third party who may be damaged by A while driving his car.

Also parties who have not taken part in a contract may show that they have a
real interest affected by its performance or annulment. In other words, those who
are not principally or subsidiarily obligated in a contract, in which they had no
intervention, may show their detriment that could result from it. Thus, Article
1313 of the Civil Code provides that “creditors are protected in cases of contracts
intended to defraud them.” Further, Article 1381 of the Civil Code provides that
contracts entered into in fraud of creditors may be rescinded when the creditors
cannot in any manner collect the claims due them. Thus, a creditor who is not a
party to a contract can sue to rescind the contract to redress the fraud committed
upon him.

A mere agent, who is not an assignee of the principal cannot bring suit under
a deed of sale entered into in behalf of his principal because it is the principal,
not the agent who is the real party in interest (Uy vs. CA 314 SCRA 69). In case
the action is brought against the agent, the action must be brought against an
agent acting in his own name and for the benefit of an undisclosed principal
without joining the principal, except when the contract involves things belonging
to the principal. The real party-in-interest is the party who would be benefited or
injured by the judgment or is the party entitled to the avails of the suit. An
attorney-in-fact is not a real party-in-interest and that there is no law permitting
an action to be brought by and against an attorney-in-fact (Carillo vs. CA 503
SCRA 66).

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 SALONGA vs. WARNER BARNES
88 Phil. 125 [Bar Problem]

FACTS: A decided to go abroad but she has properties in the

Philippines. So she executed a special power of attorney in favor of K
giving the latter “full power to administer, to collect all my money; to
withdraw my money in the bank; with full power to sue these people who owe
me; with the authority to hire a lawyer; and enter into a contract. Practically,
you are my alter ego.” And then A went abroad.
K started to manage the property. One of the tenants failed to pay
rentals. So in accordance with the authority, he hired a lawyer. In
preparation of the complaint, it was stated in the caption, “K, plaintiff
vs. L, defendant.”

ISSUE: Is the action properly filed?

HELD: NO. The real property in interest is the principal, the owner of
the property. K is only an attorney-in-fact. An attorney-in-fact cannot
use in his own name because he is not the real party in interest. K is
given the authority to sue, to manage, hire a lawyer but not as the
plaintiff because the real party in interest is A. The complaint should be
captioned as “A, plaintiff vs. L, defendant.”

Q: Suppose the caption will read: “K, as attorney-in-fact of A, plaintiff vs. L,

defendant” is the complaint properly filed?
A: NO. This is even worse because K is admitting that he is only an
attorney-in-fact so it becomes more obvious that he is not the real party in
interest. If K wants to include his name, it should read: “A, plaintiff, represented
by K, his attorney-in-fact vs. L, defendant.”

Q: Does the law require A to come here to file the case?

A: NO. Take note that the law does not require the principal (A) to come back
to file the case because the plaintiff can invoke the jurisdiction of the court by
filing the complaint and paying the docket fee.

Should a lawful possessor be disturbed in his possession, it is the possessor,

not necessarily the owner of the property, who can bring the action to recover the
possession. The argument that the complaint states no cause of action because
the suit was filed by a mere possessor and not by the owner is not correct (Phil.
Trust Company vs. CA 320 SCRA 719).

Suits for corporations:

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 When the corporate offices have been illegally searched, the corporate officer
is not the real party in interest to question the search. The right to contest the
transgression belongs to the corporation alone which has a personality of its own
separate and distinct from that of an officer or a stockholder. The objection to an
unlawful search and seizure is purely personal and cannot be availed of by third
persons (Stonehill vs. Diokno 20 SCRA 383).

Derivative suit:

However, even if the cause of action belongs to the corporation, if the board
refuses to sue despite demand by the stockholders to sue and protect or vindicate
corporate rights, a stockholder is allowed by law to file a derivative suit in the
corporate name. In such a suit, the real party-in-interest is actually the
corporation and the stockholder filing the action is a mere nominal party (Asset
Privatization Trust vs. CA 300 SCRA 579)

Partnerships:

Under Art. 1768 of the Civil Code a partnership has a juridical personality
separate and distinct from that of each of the partners. Hence, if the contract was
entered into by the partnership in its name, it is the partnership, not its officers or
agents which should be impleaded in any litigation involving property
registered in its name. A violation of this rule will result in dismissal of the
complaint for failure to state a cause of action (Aguila vs. CA 319 SCRA 345).

Failure to include the name of a party in the pleading

The mere failure to include the name of a party in the title of the complaint is
not fatal because the Rules of Court requires the courts to pierce the form and go
into the substance and not be misled by a false or wrong name in the pleadings.
The averments are controlling and not the title. Hence, if the body indicates the
defendant as a party to the action, his omission in the title is not fatal (Vlasons
Enterprises vs. CA 310 SCRA 26).

Rule on ‘standing’ as distinguished from the concept or ‘real party-in-interest’

Locus standi is defined as a right of appearance in a court of justice on a given

question. IN private suits, standing is governed by the ‘real party-in-interest’
rule found in Section 2 Rule 3 of the Rules of Court which provides that ‘every
action must be prosecuted or defended in the name of the real party-in-
interest’(Baltazar vs. Ombudsman GR No. 136433 December 6, 2006)

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 However, the concept of ‘standing’ because of its constitutional underpinnings
is very different from questions relating to whether or not a particular party is a
real party-in-interest. Although both are directed towards ensuring that only
certain parties can maintain an action, the concept of standing requires an
analysis of broader policy concerns. The question as to who the real party-in-
interest is involves only a question on whether a person would be benefitted or
injured by the judgment or whether or not he is entitled to the avails of the suit
(Kilosbayan Inc. vs. Morato 246 SCRA 540).

II. REPRESENTATIVE PARTY

Sec. 3. Representatives as parties. - Where the

action is allowed to be prosecuted or defended by a
representative or someone acting in a fiduciary
capacity, the beneficiary shall be included in the
title of the case and shall be deemed to be the
real party in interest. A representative may be a
trustee of an express trust, a guardian, an
executor or administrator, or a party authorized by
law or these Rules. An agent acting in his own
name and for the benefit of an undisclosed
principal may sue or be sued without joining the
principal except when the contract involves things
belonging to the principal. (3a)

Section 3 is consistent with Section 2 because under Section 2, you cannot sue
and be sued if you are not the real party in interest. Section 3 allows one who is
not a real party in interest to sue and be sued in behalf of somebody else but
requires the beneficiary to be named in the Complaint being the real party in
interest.

Example: GUARDIAN. Suppose J, a minor was injured, a case for damages

can be filed in behalf of the minor. A minor cannot sue and be sued but she is the
real party in interest. The law allows the parents to come in and also be the
plaintiff. The parents are what we the representative party. The law still requires
for the minor to be included in the case. The law states that “the beneficiary shall
be included in the title of the case and shall be deemed to be the real party in
interest.”
In Oposa vs. Factoran GR No. 101083, 1993, minors represented by their
parents were held as real parties in interest to file an action to annul timber
license agreements issued by the state under the following principles:
1. inter-generational responsibility;
2. inter-generational justice;
3. the right of the Filipinos to a balnced and healthful ecology; and
4. minors repersent themselves and the generation to come.

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 Example: TRUSTEE; EXECUTOR; ADMINISTRATOR. Another example is a
trustee of an express trust, or executor or administrator of the estate of a
deceased person. When a person dies, what survives after him is his estate which
represents everything that is left behind. This later on will be given to his heirs.
But for the meantime under the law on succession, the executor or administrator
will take charge of his property.
Q: If the estate of the deceased has some collectibles, who will file the case?
A: The administrator or executor as the representative party. If you want to
sue the estate, you should sue the estate through the administrator or executor.

CHING vs. COURT OF APPEALS

181 SCRA 9

FACTS: A wanted to sue D, who owes her a sum of money. The

problem is, she cannot locate D’s whereabouts. Also, A is not certain
whether D is dead or alive. So, to play it safe, what A did was to file a
case against the “defendant and/or the estate of defendant.” A obtained
a judgment against the ‘defendant and/or the estate of defendant.’
Later on when the judgment was enforced, it turned out that D was
already dead but he has properties left behind. So, they started to take
hold of his properties. Now, the heirs of D challenged the decision.

ISSUE: Whether or not there was a valid judgment against the

‘defendant/or the estate of the defendant.”

HELD: The decision is void. “The decision of the lower court insofar
as the deceased is concerned, is void for lack of jurisdiction over his
person. He was not, and he could not have been validly served with
summons. He had no more civil personality. His juridical personality,
that is fitness to be subject of legal relations, was lost through death
(Arts. 37 and 42 Civil Code).”
“The same conclusion would still inevitably be reached
notwithstanding joinder of B’s estate as co-defendant. It is a well-settled
rule that an estate can sue or be sued through an executor or
administrator in his representative capacity.”

So, the Court cited Section 3. In order to bind the estate, you should sue the
executor or the administrator of his estate. So, either way, the case cannot
prosper.

The last sentence of Section 3:

An agent acting in his own name and for the

benefit of an undisclosed principal may sue or be
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 sued without joining the principal except when the
contract involves things belonging to the
principal.

The agent cannot sue because the principal is the real party in interest. But
when an agent acts in his own name and for the benefit of an undisclosed
principal, he may sue and be sued, EXCEPT when the contract involves things
belonging to the principal. Under the exception, the principal has really to be
included. The agent cannot file a case where the principal will lose his property
without being named as part to the case.

Sec 4. Spouses as parties. - Husband and wife

shall sue or be sued jointly, except as provided by
law. (4a)

Normally, the husband and the wife should sue and be sued together. Even if
the wife borrowed money alone and you want to sue the woman, still the
husband should be included. Why? In the property relationship between the
husband and wife, they are governed by absolute community or conjugal
partnership. Whether you like it or not, the implication of the wife is also the
implication of the husband because of the property relationship.

In the same manner, if the wife wants to collect, even if the husband does not
know anything about it, the husband should still be named as party plaintiff, on
the ground again that the income that she can get redounds to the benefit of the
conjugal partnership.

And there were decided cases in the past where even if for example, a wife
sues without the husband, the defect is not fatal but merely formal. The
complaint should not be dismissed. All that is to be done is to amend the
complaint impleading the husband. (Cuyugan vs. Dizon, 76 Phil. 80)

Q: Give an exception to that general rule that husband and wife shall sue or be
sued jointly.
A: The EXCEPTIONS are:
1. in case of Complete Separation of Property (Article 145, Family Code), and
2. under Article 111, Family Code:

Art. 111. A spouse of age may mortgage, alienate,

encumber or otherwise dispose of his or her
exclusive property without the consent of the other
spouse and appear alone in court to litigate with
regard to the same. (Family Code)

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 3. Another is when a spouse without just cause
abandons the other or fails to comply with his or
her obligations to the family with respect to the
marital, parental or property relations.

Sec 5. Minor or incompetent persons. - A minor or

a person alleged to be incompetent, may sue or be
sued, with the assistance of his father, mother,
guardian, or if he has none, a guardian ad litem.
(5a)

Section 5 is related to Section 3. The minor or incompetent person must be

assisted by the parents and considered as representative party. Incompetent
persons include insane people or mentally retarded people. They are supposed
to be under the custody of other persons, the guardians. If no guardian, the court
has to appoint a guardian called the guardian ad litem.

A person need not be judicially declared incompetent it

being sufficient that his incompetency be alleged in the
corresponding pleading.

III. PERMISSIVE PARTY

Sec 6. Permissive joinder of parties. - All

persons in whom or against whom any right to relief
in respect to or arising out of the same
transaction or series of transactions is alleged to
exist, whether jointly, severally, or in the
alternative, may, except as otherwise provided in
these Rules, join as plaintiffs or be joined as
defendants in one complaint, where any question of
law or fact common to all such plaintiffs or to all
such defendants may arise in the action; but the
court may make such orders as may be just to
prevent any plaintiff or defendant from being
embarrassed or put to expense in connection with
any proceedings in which he may have no interest.
(6)

Section 6 is known as permissive joinder of parties. This is related to Section 5

[a] of Rule 2 on joinder of causes of action.

Q: May two or more persons join in one complaint as plaintiffs? Or can two or
more persons be joined together as defendants?
A: YES, under two conditions, to wit:

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 1.) There is a right to relief in favor of or against the parties joined in
respect to or arising out of the same transaction or series of transactions;
and

2.) There is a question of law or fact common to the parties joined in the
action.

An additional condition is that the such joinder is not otherwise proscribed by

the provision of the rules on jurisdiction and venue.

Series of Transactions
This pertains to transactions connected with the same subject matter of the
suit.

PROBLEM: Suppose some passengers riding a particular common carrier are

injured because of an accident. All of them want to sue the operator of the carrier
for damages arising out of the breach of contract of carriage. Under the Law on
Transportation, it is possible for each passenger to file his own case because their
causes of action are different from each other. But can they be joined together in
one complaint against the common carrier?
A: YES because there is a common question of law or fact in the causes of
actions of the injured passengers: the evidence is identical; the issues whether the
carrier is at fault are the came; the witnesses for both parties will be the same; the
report will be the same; the defense of the operator against one party will be
the same defense as against the other passenger. So, since there is a common
denominator on their causes of action, they can be joined.

It would be different if the passengers were riding on different buses

belonging to the same company, and all of them met an accident. What
happened to Passenger No. 1 does not concern Passenger No. 2. The evidence
will not be the same. So, there is no common denominator – no common question
of fact. Therefore, they cannot be joined.

PROBLEM: Suppose a story appeared in the Inquirer where 5 people were

called as jueteng kings. They were allegedly involved in jueteng. Now, the five of
them want to sue the Inquirer for damages arising from libel. Is it possible for the
five (5) people named in the article to file only one complaint against the editor
and publisher of the Inquirer?
A: YES because it is of the same story. Their names appeared in the same
story. It is not a different issue. So there is a common question of fact and law in
their cause of action.

PROBLEM: M, while driving a car, bumped another vehicle, injuring the

driver and causing injury to other passengers. So, there are three offended
parties : the owner of the vehicle, the driver of the vehicle , and the passenger.
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There are three(3) causes of action. Can they join in one complaint against Myra,
the owner of the car which bumped them?
A: YES because there is a common question of fact and law. There is only one
accident.

Q: But suppose the three of them will file 3 separate cases against M, can it be
done?
A: yes, because it is a permissive joinder of parties, not mandatory.

Q: Why does the law encourage joinder of parties?

A: The following are the reasons:

1.) to promote convenience in trial;

2.) to prevent multiplicity of suits;
3.) to expedite the termination of the litigation; and
4.) to attain economy of procedure under which several demands arising
out of the same occurrence may be tried together thus avoiding the
repetition of evidence relating to facts common to the general demands.

Now, take note that when there is joinder of parties, there is automatically a
joinder of causes of action. That is why one of the conditions or limitations in
joinder of causes of action is you must observe the rule on joinder of parties. If
joinder of parties is improper under Rule 3, the joinder of causes of action is also
proper under Rule 2, Section 5

Principle: WHEN THERE IS JOINDER OF PARTIES, THERE IS ALSO A

JOINDER OF CAUSES OF ACTION. BUT THERE CAN BE A JOINDER OF
CAUSES OF ACTION WITHOUT A JOINDER OF PARTIES.

EXAMPLE: When there is only one plaintiff and one defendant: Suppose
Melissa will secure three (3) loans from me.
Q: How many causes of action do I have if M will not pay me?
A: Three

Q: Now, can I join them in one complaint?

A: Yes.

Q: Is there joinder of causes of action?

A: Yes.

Q: Is there joinder of parties?

A: NONE, because there is only one plaintiff and one defendant.

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 So, there can be joinder of causes of action without joinder of parties because
there is only one plaintiff and one defendant. But if you join parties in Rule 3,
automatically, there is joinder of causes of action. This is the relationship of these
two provisions.

Finally, the last two types of parties to the action are the so-called
indispensable parties and necessary parties. (Section 7 and Section 8,
respectively)

INDISPENSABLE PARTY and NECESSARY PARTIES

Sec. 7. Compulsory joinder of indispensable

parties. Parties in interest without whom no final
determination can be had of an action shall be
joined either as plaintiffs or defendants. (7)

Sec. 8. Necessary party. A necessary party is one

who is not indispensable but who ought to be joined
as a party if complete relief is to be accorded as
to those already parties, or for a complete
determination or settlement of the claim subject of
the action. (8a)

Notes:

An indispensable party is a real party in

interest without whom no final determination can be
had of an action. (Sec. 7) Without the presence of
this party, the judgment cannot attain real
finality. (Servicewide Specialists, Inc. v. CA 318
SCRA 493; De Castro v. CA 384 SCRA 607)

(See also Lucman vs. Malawi GR No. 159794 December 19, 2006)

A person is not an indispensable party, however, if his interest in the

controversy or subject matter is separable from the interest of the other parties,
so that it will not necessarily be directly or injuriously affected by a decree which
does complete justice between them. Also, a person is not an indispensable party
if his presence would merely permit complete relief between him and those
already parties to the action, or if he has no interest in the subject matter of the
action. It is not a sufficient reason to declare a person to be an indispensable
party that his presence will avoid multiple litigation. In a joint obligation for
instance, the interest of one debtor is separate and distinct from that of his co-
debtor and a suit against one debtor does not make the other an indispensable
party to the suit.

JBD 88
 Compulsory joinder of indispensable parties

Although normally, a joinder of parties is permissive (Sec. 6 Rule 3), the

joinder of a party becomes compulsory when the one involved is an
indispensable party. Clearly, the rule directs a compulsory joinder of
indispensable parties (Sec. 7, Rule 3).

The presence of all indispensable parties is a condition sine qua non for the
existence of judicial power. It is precisely when an indispensable party is not
before the court that the action should be dismissed. Thus, the plaintiff is
mandated to implead all the indispensable parties considering that the absence
of one such party renders all subsequent actions of the court null and void for
want of authority to act, not only as to their absent parties but even as to those
present. One who is not a party to a case is not bound by the decision of the
court; otherwise, he will be deprived of his right to due process (Sepulveda, Sr.
vs. Pelaez 450 SCRA 302).

Dismissal for failure to implead an indispensable party

It has been ruled on various occasions that since the joinder of indispensable
parties is compulsory, the action should be dismissed when indispensable parties
are not impleaded or are not before the court. The absence of indispensable
parties renders all subsequent actions of the trial court null and void for want
of authority to act, not only as to the absent parties but even as to those present
(MWSS vs. CA 297 SCRA 287).

Need of an order to implead an indispensable party

It is noteworthy that the Court in its rulings did not hold that the failure to
join an indispensable party results in the outright dismissal of the action. An
outright dismissal is not the immediate remedy authorized by the Rules
because under the Rules a non-joinder (or misjoinder) of parties is not a
ground for dismissal of an action. Instead, parties may be dropped or added by
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 (Sec. 11 Rule 3). It is when the order of the
court to implead an indispensable party goes unheeded may the case be
dismissed. The court is fully clothed with the authority to dismiss a complaint
due to the fault of the plaintiff as when, among others, he does not comply
with any order of the court (Sec. 3 Rule 17; Plasabas vs. CA GR No. 166519,
March 31, 2009). (See also Pamplona Plantation Co. vs. Tinghil 450 SCRA 421).

Effect of absence of indispensable party

In a relatively recent case, the Court held that whenever it appears to the
court in the course of a proceeding that an indispensable party has not been
joined, it is the duty of the court to stop the trial and to order the inclusion of
JBD 89
such party. The absence of an indispensable party renders all subsequent
actuations of the court null and void, for want of authority to act not only as to
the absent parties, but even as to those present. Accordingly, the responsibility
of impleading all the indispensable parties rests on the plaintiff. The
defendant does not have the right to compel the plaintiff to prosecute the action
against a party if he does not wish to do so, but the plaintiff will have to suffer
the consequences of any error he might commit in exercising his option (Uy vs.
CA 494 SCRA 535).

Q: Distinguish indispensable from necessary party.

A: An INDISPENSABLE PARTY must be joined under any and all

conditions, his presence being a sine qua non of the exercise of judicial power,
for without him, no final determination can be had of the action. (Borlasa vs.
Polistico, 47 Phil. 345) Stated otherwise, an indispensable party must be joined
because the court cannot proceed without him. Hence, his presence is
mandatory.
A NECESSARY PARTY ought to be joined whenever possible in order to
adjudicate the whole controversy and avoid multiplicity of suits, but if for
some reason or another he cannot be joined, the court may proceed without him
and the judgment shall not prejudice his rights. (Ibid.) His presence is not
mandatory because his interest is separable from that of the indispensable party.
He has to be joined whenever possible to afford complete relief to those who are
already parties.

Q: Give examples of indispensable party.

A: In an action for partition of land, all the co-owners thereof are
indispensable parties. (De Lara vs. De Lara, 2 Phil. 294) In an action for
annulment of partition, all of the heirs must be made parties. (Caram vs. CA, 101
Phil. 315) In an action for recovery of ownership of land, the person who claims
to be the owner of the land is the indispensable party defendant and not the one
in possession as tenant. (Sanidad vs. Cabotaje, 5 Phil. 204; Manza vs. Santiago, 96
Phil. 938)

Joint debtor
He is an indispensable party in a suit against him but a necessary party in a
suit against his co-debtor.

Solidary debtor
In a suit brought by a creditor against one solidary debtor, the other solidary
debtor is neither indispensable nor a necessary party.

Q: Give examples of necessary party.

A: In an action for collection of debt instituted by the creditor against the
surety, the principal debtor is merely a necessary party. (Vaño vs. Alo, 95 Phil.
JBD 90
495) In an action for recovery of debt instituted by the creditor against the debtor,
the guarantor or surety is merely a necessary property. (Ibid.) In an action for
foreclosure of a real estate mortgage instituted by the first mortgagee, the second
mortgagee is merely a necessary party. (Somes vs. Gov’t of Phil., 62 Phil. 432)

REVIEW: What is the difference between a surety and a guarantor? The

liability of guarantor to the creditor is only secondary. Meaning, the guarantor is
only liable to the creditor if the principal debtor cannot pay like when the debtor
is insolvent. On the other hand, a surety is principally liable to the creditor
whether or not the debtor can pay.

PROBLEM: In credit transactions, there is a creditor, debtor and surety.

Debtor borrowed money from the creditor, then another acted as the surety.
Now, suppose the debtor will not pay, the creditor files now a case against the
surety without the debtor. The debtor was not included in the case.
Q: Can the case proceed even without the debtor being sued?
A: YES, the case may proceed.

Now, the surety may be ordered to pay who can sue the principal debtor for
reimbursement. Meaning, there is still a future case. Thus, there could be no
complete relief between those who are parties. So, the debtor is a necessary
party, and not indispensable. But it is advisable to join the debtor in one case, so
that when the creditor claims from the surety, the latter can automatically claim
from the debtor. Multiplicity of suits is then, avoided.

A and B are the signatories in a PN which reads: “We promise to pay to the
order of C P1M on February 27, 2009. On due date the debtors failed to pay.

(a) May C sue A alone?

Yes. The cause of action against A is separate and distinct from the cause of
action against B. The tenor of the note discloses merely a joint obligation. In
a joint obligation the credit or debt shall be divided into as many equal
shares as there are creditors and debtors, the credits or debts being
considered distinct from each other. (Art. 1208 CC). Being debtors in a joint
obligation, the debtors then are liable separately for P500,000.00 each.

(b) Is A in a suit against him by C a necessary or an indispensable party? He is

an indispensable party. Without him being impleaded as defendant, C
cannot collect the P500,000.00 share of A. Without A there cannot be a final
determination of the case against him.
(c) In the suit by C against A is B a necessary or an indispensable party? B is
not an indispensable party. C can collect from A P500,000.00 without
impleading B. He is only a necessary party. Without B being made a party
to the action, C cannot have a complete relief, i.e., he cannot collect his

JBD 91
 entire credit of P1M. If he desires a complete recovery, B must be
impleaded.

(3) In the above example, assuming that the debtors bound themselves to pay the
P1M solidarily, would B an indispensable or necessary party to a suit by C
against A? He would not be a necessary party. Complete relief could be had by C
without joining B because the obligation is solidary. A could be ordered to pay
the entire obligation of P1M. Neither is B an indispensable party. There could be
a complete and final determination of the action for a sum of money without B
being joined.

Solidarity does not make a solidary debtor an indispensable party in a suit filed
by the creditor against another solidary debtor. (Republic v. Sandiganbayan 173
SCRA 72; Operators Inc. v. American Biscuit Company 154 SCRA 738)

(4) B Bought a car from S on an installment basis. A chattel mortgage was

executed on the car in favor of S to secure the obligation. Before the payment was
completed, B sold the car to D. It was agreed between B and D that D would be
responsible for the monthly installments. D failed to pay three installments.

May S sue D alone in the foreclosure or replevin suit? He cannot. B must be

made defendant. B is an indispensable party in relation to S. The foreclosure or
replevin is premised on the default of B, the debtor. S would have no right to
foreclose the mortgage or repossess the car without establishing the default of
B unless the obligation of B to S was assigned to D with the consent of S
thereby novating the obligation.

PROBLEM: K borrowed money from D. A is the guarantor. D filed a case

against K. She did not include the guarantor.
Q: Can the case proceed even without the guarantor?
Q: YES because the guarantor is merely a necessary party. And if the debtor
turns out to be insolvent, the creditor will now file another case against the
guarantor.

REVIEW: What is the difference between joint debtors and solidary debtors?
In solidary, the creditor can collect the whole obligation from any of the debtors
without prejudice to the right of the latter for reimbursement of his share in the
obligation from his co-debtors. On the other hand, in joint obligation, the creditor
can only get from a debtor the latter’s share in the whole obligation. Meaning,
the creditor cannot compel the debtor to pay the share of his co-debtor. Kanya-
kanya tayo.

PROBLEM: M and C are JOINT debtors of P100,000 (50-50 sharing). D is the

creditor. Both did not pay D.
Q: If D files a case against M only, can the case proceed without C?
JBD 92
 A: YES but D can only collect from M up to P50,000 because of their joint
obligation. C is only necessary insofar as M’s share is concern. But M is
indispensable party insofar as his share is concern.

Q: But if D wants to collect the entire P100,000, what should she do?
A: She should file a case against both M and C.

PROBLEM: M and C are SOLIDARY debtors of P100,000 (50-50 sharing). D is

the creditor. Both did not pay D.
Q: If D files a case against M only, can the case proceed without C?
A: YES and M is required to pay D the whole amount of the debt because of
solidary obligation. Then M can proceed against C for reimbursement. Be is
merely necessary party.

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

pleaded. Whenever in any pleading in which a claim
is asserted a necessary party is not joined, the
pleader shall set forth his name, if known, and
shall state why he is omitted. Should the court
find the reason for the omission unmeritorious, it
may order the inclusion of the omitted necessary
party if jurisdiction over his person may be
obtained.
The failure to comply with the order for his
inclusion, without justifiable cause, shall be
deemed a waiver of the claim against such party.
The non-inclusion of a necessary party does not
prevent the court from proceeding in the action,
and the judgment rendered therein shall be without
prejudice to the rights of such necessary party.
(8a, 9a)

Duty of Pleader When a Necessary Party is not joined

While a necessary party is not indispensable to the final determination of the

action, said party ought to be joined whenever possible. If a pleader has no intent
to implead a necessary party, the pleader is under obligation to: (a) set forth the
name of said necessary party, if known, and (b) state the reason why the
necessary party is omitted. A reason justifying the non-joinder of a necessary
party is when said party is outside the jurisdiction of the court.

Effect of justified failure to implead a necessary party

JBD 93
 Assuming that a necessary party cannot be impleaded, his non-inclusion does
not prevent the court from proceeding with the action. The judgment rendered
shall be without prejudice to the rights of such necessary party.

When court may order joinder of a necessary party and effect of failure to
comply

However, if the court finds no valid reason for not impleading a party, the
court may order the inclusion of the necessary party under Section 9. And take
note that under the new rules, the failure to comply with the order of inclusion
without justifiable cause shall be deemed a waiver of the claim against such
(necessary) party.

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.
(10)

This is particularly true with INDISPENSABLE parties because the case

cannot proceed without him/her/.

EXAMPLE : There are 4 brothers and 1 sister. They have to file a case against
somebody to recover property which they believe was owned by their parents.
Then, brother 4 say to sister 1, “Let us file a case.” But sabi ni sister 1, “Pilitin mo
muna ako.” Then she says, “Ayoko nga, hindi mo ako pinilit eh!” Meaning, all of
them will suffer because ayaw ni sister 1 mag-file ng kaso.

Q: Now, what is the remedy of the 4 brothers?

A: Under Section 10, include the one who refused as one of the defendants. If
there is unwilling plaintiff, name him as defendant whether he likes it or not.

MISJOINDER AND NON-JOINDER OF PARTIES

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. (11a)

JBD 94
 This is similar to Section 6 of Rule 2 – misjoinder of causes of action is not a
ground for dismissal of an action. Misjoinder or non-joinder at parties is not a
ground for a motion to dismiss because at any stage of the case, the court can
order a misjoined party to be removed or a party not joined to be included.

Q: Do you know what ‘MISJOINDER of parties’ mean?

A: It means that two or more parties should not be joined but they are
improperly joined. A good example is, if there is no common question of fact or
law. Meaning, you do not have any business to be here but you are joined or
misjoined. That is what we call misjoinder of parties. It is also known as
“spurious class suit.”

Well, ‘NON-JOINDER’ is different. A party who should be joined was not

joined such as a necessary party.

Q: What happens if a party is misjoined or if there is a non-joinder, should the

case be dismissed?
A: No, that is not a ground for dismissal.

Q: So what is the remedy then?

A: The remedy is to order the removal of the party who is misjoined, or to
order the inclusion of the party who should be joined. And that is not a
defect which should cause the dismissal of the case because the court can always
issue an order ordering the removal of a misjoined party or the inclusion of
joinder of a party who should be included.

Effect of failure to obey order of the court to add or drop a party

Even if neither misjoinder nor non-joinder is a ground of dismissal of the
action, the failure to obey the order of the court to drop or add a party is a
ground for the dismissal of the complaint under Sec. 3, R 17.

Q: Does it mean to say therefore, that the plaintiff has the license to include
anybody in an action? Like for example, I have a case against somebody in the
class, the trouble is in the meantime, I cannot identify who among you who did
the wrong to me. So I will file a case against all of you. Anyway later on, I can
dump you. Now, is this allowed?
A: NO. That is not a license. What the law contemplates, according to the SC,
the party was joined in good faith believing that he was a defendant but actually
it turned out to be wrong. So, you have no right to sue anybody just like that.
That is not an excuse for suing any party left and right. In the case of

REPUBLIC vs. SANDIGANBAYAN

173 SCRA 72 [1989]

JBD 95
 HELD: Section 11 of Rule 3 “does not comprehend whimsical and
irrational dropping or adding of parties in a complaint. What it really
contemplates is erroneous or mistaken non-joinder and misjoinder of
parties. No one is free to join anybody in a complaint in court only to
drop him unceremoniously later at the pleasure of the plaintiff. The rule
presupposes that the original inclusion had been made in the honest
conviction that it was proper and the subsequent dropping is requested
because it turned out that such inclusion was a mistake. And this is the
reason why the rule ordains that the dropping is ‘on such terms as are
just’” (also Lim Tan Hu vs. Ramolete 66 SCRA 425).

Note that objections to defects in parties should be made at the earliest

opportunity, i.e. the moment such defet becomes apparent, by a Motion to Strike
the Names of the Parties impleaded. Objections to misjoinder cannot be raised
for the first time on appeal.

CLASS SUIT

SEC. 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. (12a)

As a GENERAL RULE, if there are several real parties in interest, they shall be
included in the case whether indispensable or necessary. Example: There are 30
of us. The general rule is that all parties in interest, indispensable or necessary
shall be included because under Sec. 2 “every action must be prosecuted or
defended in the name of the real party-in-interest.”

EXCEPTION to the General Rule: Class Suit.

A class suit is an action where one or more may sue for the benefit of all
implying that the parties are so numerous and it is impracticble to bring them all
to court.
The requisites for said class action must also be complied with.
Meaning, some of you will sue to represent the rest. That is also known as the
“doctrine of virtual representation.” The concept of a class suit was first
enunciated in the old case of

BORLAZA vs. POLISTICO

47 Phil. 345
JBD 96
 FACTS: This case has something to do with raffle. A group of people
decided to form an association which they called “Turnuhang Polistico.”
You become a member of this association by contributing a certain sum
of money. And then every Sunday after mass, half of the collection will
go to the treasurer of the association. The other half will be raffled off.
This has been going on for months and years. The time came when the
funds of the association became very big. Some of the members, in
behalf of all the members, decided to file a case against the officers to
render an accounting of all the amounts. The real parties in interest
would be the members.

ISSUE: Is the suit filed by some members in behalf of some members

proper?

HELD: YES, because if We will require all the members to appear, it

will be quite impossible. Therefore, some members must be made to sue
but only in behalf of all the members who are not around and it is
impracticable to bring them all to the court. A number of them may sue
for the benefit of all.

An action does not become a class suit merely because it is

designated as such in the pleadings. Whether the suit is or is not a class
suit depends upon the attendant facts. (Mathay v. Consolidatred Bank &
Trust Company, 58 SCRA 559; Borlasa v. Polistico 47 Phil. 345)

Q: What are the CONDITIONS FOR A VALID CLASS SUIT ?

A: Under Section 12, the following are the conditions of a valid class suit:

1. The subject matter of the controversy is one of common or general

interest to many persons (such as the funds of the association in the
case of POLISTICO); and
2. The parties are so numerous that it is impracticable to bring them all
before the court;
3. The parties actually before the court are sufficiently numerous and
representatives as to fully protect the interests of all concerned; and
4. The representatives sue or defend for the benefit of all. Berses v.
Villanueva 25 Phil. 473; Sulo ng Bayan, Inc. v. Araneta 72 SCRA 347)

A class suit does not require a commonality of interest in the questions

involved in the suit. What is required by the Rules is a common or
general interest in the subject matter of the litigation. The ‘subject
matter’ of the action is meant the physical, the things real or personal,
the money, lands, chattels, and the like, in relation to the suit which is
prosecuted and not the delict or wrong committed by the defendant. It
JBD 97
 is not also a common question of law that sustains a class suit but a
common interest in the subject matter of the controversy. (Mathay v.
Consolidated & Trust Bank 58 SCRA 559)

There is no class suit in an action filed by 400 residents initiated through

a former mayor, to recover damages sustained due to their exposure to
toxic wastes and fumes emitted by the cooking gas plant of a
corporation located in the town. Each of the plaintiffs has a separate and
distinct injury not shared by other members of the class. Each supposed
plaintiff has to prove his own injury. There is no common or general
interest in the injuries allegedly suffered by the members of the class.

There is no class suit in an action for damages filed by the relatives of

the fatalities in a plane crash. There is no common or general interest in
the injuries or death of all passengers in the plane. Each has a distinct
and separate interest which must be proven individually.

Example is a taxpayer’s suit – filed in behalf of all the taxpayers in the

Philippines. And there is no specific number of persons that is provided by law.
Another example is a stckholder's derivative suit, though both are subject to
the other requisites of the corresponding governing law especially on the issue of
locus standi. (Regalado, p. 97)

Now, we will go to some interesting cases on class suit decided by the

Supreme Court:

SULO NG BAYAN vs. ARANETA, INC.

72 SCRA 347 [1976]

FACTS: This concerns the big property of the Araneta’s in Quezon

City. It has been the subject matter of litigation for the past years – 3 or 4
decades. It is a big track of land in Quezon City occupied by so many
people who want to acquire it. They are questioning the title of the
Araneta’s
So, Sulo (torch) ng Bayan is the association of squatters. Since the
properties of the Araneta is very big, they subdivided it. Then a case
was filed by Sulo ng Bayan Association against Araneta to annul the
title of the latter.

ISSUE #1: Whether or not the action was filed in the name of the real
in interest.
HELD: Sulo ng Bayan is not the real party in interest. It violates
Section 2 – “the action must be prosecuted and defended in the name of
the real parties in interest.” The members occupying the land are the

JBD 98
 plaintiffs. The association is not the one occupying the lot. So, the first
question is, who should be the plaintiff? It should be the members.

ISSUE #2: Whether or not the action was properly pleaded as a class
suit
HELD: NO. This is the more important reason why they cannot
qualify as a class suit: In a class suit, the subject matter is of common
interest to all.
To illustrate:
You are Occupant No. 1, and occupies a particular lot over which
he/she has interest in but he/she does not have interest over the other
lots which he/she does not occupy. If that is so, then the subject matter
is not of common interest. The interest of one occupant is only on the lot
he occupies.

What should be done is for all of them to sue together to cover the entire
property, for each one has a lot. So, in that case, Section 6 should be applied –
permissive joinder of parties because there is a common question of fact. This is
more of permissive joinder of Parties rather than a class suit. That’s why you can
confuse Section 6 with Section 12. But the permissive joinder of parties requires
that all should be impleaded. Unlike in a class suit, the subject matter is of
interest to everybody and we cannot all be joined because we are so numerous.

BULIG-BULIG KITA KAMAGANAK ASSOCIATION, ET AL vs.

SULPICIO LINES
May 19, 1989

RE: Doña Paz Tragedy

FACTS: There we so many relatives who filed a case against Sulpicio
Lines and there was an attempt to file a class suit in behalf of everyone
who were drowned including those who were not identified.

HELD: That cannot be. The survivors have no interest in the death of
other passengers. The interest in this case is individual. What would
have been proper is permissive joinder of parties because of common
question of tact or law, but not class suit.

OPOSA vs. FACTORAN

224 SCRA 12 [1993]

FACTS: Oposa et al were all minors. Some were small boys duly
represented by their parents. They filed a case against then DENR
JBD 99
 Secretary Factoran. The prayer in the case is to order the DENR to cancel
all existing Timber License Agreements (TLA’s), to cease and desist
from proceeding, accepting, processing, renewing all accruing new
TLA’s. So, in effect, it prays for a total log ban in the country to preserve
the remaining forest all over the Philippines.
These young boys sue with their parents. They are suing in their
behalf, in behalf of the other citizens who are of their age because they
stand to suffer if the environment will be deteriorated. They say that
they are entitled to the full benefit, use and enjoyment of the natural
resources of our country’s rich tropical rainforests. They say, the case
was filed for themselves and others for the preservation of our rainforest
and we are so numerous that it is impracticable to bring all plaintiffs to
court. They say that they represent their generations and generations yet
unborn.

HELD: The civil case is indeed a class suit. The case however has a
special and novel element. The personality of the minors to sue for the
succeeding generations is based on the concept of inter-generational
responsibility insofar as a balanced and healthful ecology is concerned.
Every generation has a responsibility to preserve the ecology. The
minors’ right to a healthful environment constitute at the same time the
performance of the obligation to ensure the protection of the rights or
the generations to come.

Q: In case of doubt, should a class suit be allowed?

A: NO. When the issue is not so clear, a class suit should not be allowed
because class suit is an exception to the general rule that all parties should be
included.

CADALIN vs. POEA ADMINISTRATOR

238 SCRA 721 [1995]

HELD: While it is true that class suit is allowed, it should be allowed

with caution because the fact that you represent others is only a fiction
of law. For all you know, those others may not want to be represented.
That is why the court is extra- cautious in allowing class suits because
they are the exceptions to the condition sine qua non requiring joinder
of all indispensable parties.
In an improperly instituted class suit, there would be no problem it
the decision secured is favorable to the plaintiffs. The problem arises
where the decision is adverse to them. In which case, the parties who are
impleaded through their self-appointed representatives would surely
plead denial of due process.

JBD 100
Q: Distinguish a representative suit from a class suit.
A: In the case of

LIANA’S SUPERMARKET vs. NLRC

257 SCRA 186 [May 31, 1996]

FACTS: A labor union filed a case against the employer in behalf of

hundreds of employees. Is this a representative suit or a class suit?

HELD: “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 or belonging in common to many persons, not separately or
severally to distinct individuals. The object of the suit is to obtain relief
for or against numerous persons as a group or as an integral entity, and
not as separate, distinct individuals whose rights or liabilities are
separate from and independent of those affecting the others.”
In a representative suit, there are different causes of action
pertaining different persons.
“In the present case, there are multiple rights or causes of action
pertaining separately to several, distinct employees who are members of
respondent Union. Therefore, the applicable rule is that provided in
Rule 3 on Representative Parties. Nonetheless, as provided for in the
Labor Code, a legitimate labor organization has the right to sue and be
sued in its registered name. This authorizes a union to file a
representative suit for the benefit of its members in the interest of
avoiding an otherwise cumbersome procedure of joining all union
members in the complaint, even if they number by the hundreds.” For
convenience, the Labor Code allows a union to file a representative suit.

It is important to note the following:

1. CLASS SUIT
2. REPRESENTATIVE SUIT
3. DERIVATIVE SUIT – only peculiar to the corporation law where the
minority files a suit in behalf of the entire corporation because an
intra-corporate remedy is useless or because of the failure of the
board of directors, deliberate or otherwise, to act in protection of the
corporation (Black’s 5th Ed. 399; Lim vs. Lim-Yu 352 SCRA 216).

In a derivative, suit, the cause of action belongs to the corporation

and not to the stockholder who initiates the suit. In a class suit, the
cause of action belongs to the members of the class.

Class suit and permissive joinder of parties

JBD 101
 In a class suit there is one single cause of action pertaining to
numerous persons while in permissive joinder there are multiple
causes of action separately belonging to several persons.

ALTERNATIVE DEFENDANTS

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. (13a)

Alternative defendants is also related to alternative causes of action – even if

your right against one is inconsistent with your right to relief against the other
party, you may file a suit against the alternative defendant. (c.f. Rule 2, Section 5
– Joinder of Causes of Action)

You filed a case against the operators of two vehicles. In effect, your cause of
action is either culpa aquiliana or culpa contractual. Is that not inconsistent? The
law says, “although a right to relief against one may be inconsistent with a right
against the other.” In other words, even if the two causes of action are
inconsistent with each other, it is allowed.

As a matter of fact, this is the best policy because the plaintiff is a sure winner.
The only question is, who among the two will be held liable.

Although the law is silent, if there is such a thing as “alternative defendants,”

there is no reason why the grounds for “alternative plaintiffs” should not be
allowed.

Q: May plaintiffs join in the alternative?

A: YES, plaintiffs may join in the alternative under the same principle as
alternative joinder of defendants. When several persons are uncertain as to who
among them is entitled to relief from a certain defendant, they may join as
plaintiffs in the alternative. This is also sanctioned by the rule on permissive
joinder of parties (Pajota vs. Jante, L-6014, Feb. 8, 1955). Thus, the principal and
his agent may join as plaintiffs in the alternative against a defendant. If the
agency is proved, the relief is awarded to the principal. If not, award is then
made to the agent.

Just as the rule allows a suit against defendants in the alternative, the rule also
allows alternative causes of action and alternative defenses (Sec. 2 Rule 8;
Sec.5[b] Rule 6; Sec. 20, Rule 14)
JBD 102
 Assume that X, a pedestrian, was injured in the collision of two vehicles. He
suffered injuries but does not know with certainty which vehicle caused the
mishap. What should X do if he wants to sue?

He should sue the vehicle drivers/owners in the alternative.

P sent some goods to D pursuant to a contract. The goods were delivered to E,

the known agent of D. D did not pay P. D contends that he has not received the
goods. P claims otherwise and insists that D had received the goods. Should P
sue D or should he sue E? P should sue both but in the alternative.

Plaintiff may sue the shipping company and the arrastre operator
alternatively for the recovery of damages to goods shipped through a maritime
vessel (Rizal Surety & Insurance Company vs. Manila 70 SCRA 187).

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 or true name is
discovered, the pleading must be amended
accordingly. (14)

Requisites:
1. there is a defendant;
2. his/her identity is unknown;
3.fictitious name may be used because of ignorance of defendant's true name
and said ignorance is alleged in the complaint;
4.identifying description may be used; sued as unknown owner, heir, deviseee
or other designation;
5.amendment to the pleading when true name is discovered; and
6. defendant is the defendant being sued, not a mere additional defendant.

Serive of summons upon a defendant whose identity is unknown may be

made by publication in a newspaper of general circulation in accordance with
Sec. 14 of Rule 14.

Q: Can you sue somebody who is unknown?

A: YES, under Section 14.

BAR PROBLEM: While L was walking on the street. He was bumped by a car,
say a Toyota Altis, 2001 model, color blue. Now, so far, he could not determine
who is the owner. If you are the lawyer of L, how would you sue the defendant?

JBD 103
 A: Under Section, I will sue the owner of that car as an unknown defendant. I
can place in my complaint, “L’, plaintiff, vs. the registered owner of Honda motor
vehicle with plate number so and so.” And later if you discover the true identity
of the owner, we can amend the complaint to place the name of the defendant.

Section 14 is similar with Rule 110 in Criminal Procedure – a case may be filed
against an unknown accused.

RULE 110, SEC. 7. Name of the accused. – The

complaint or information must state the name and
surname of the accused or any appellation or
nickname by which he has been or is known. If his
name cannot be ascertained, he must be described
under a fictitious name with a statement that his
true name is unknown.
If the true name of the accused is thereafter
disclosed by him or appears in some other manner to
the court, such true name shall be inserted in the
complaint or information and record. (7a)

ENTITY WITHOUT JURIDICAL PERSONALITY AS DEFENDANT

Sec. 15. Entity without juridical personality as

defendant. When two or more persons not organized
as an entity with juridical personality enter into
a transaction, they may be sued under the name by
which they are generally or commonly known.
In the answer of such defendant, the names and
addresses of the persons composing said entity must
all be revealed.

Reqisites:
1. there are two or more persons not organized as a juridical entity;
2. they enter into a transaction;
3.a wrong or delict is committed against a third person in the course of such
transactions.

Rule 1, Section 1 provides that only natural of juridical persons may be sued.

Entity without juridical personality as defendant. Under the old law, this was
known as suing two or more persons involved in a business under a common
name. When two or more persons transact in a business under a common name,
they may be sued under their common name.

Q: Who are really the defendants here? A: The persons involved.

JBD 104
 Now, it is worded in this manner: “When two or more persons not organized
as an entity with juridical personality,” instead of a ‘common name.’ You cannot
sue the entity because it has no juridical personality. But you do not also know
the members of that entity, so the law allows you to file a case against the entity.

Under the second paragraph of Section 15, when the defendants file an
answer, they must file under their names as they are really the real parties in
interest. When the lawyer answers the complaint, he is duty-bound to provide
the names of all the defendants.

Q: How do you summon this kind of defendant?

A: Rule 14, Section 8:

RULE 14, Sec. 8. Service upon entity without

juridical personality. When persons associated in
an entity without juridical personality are sued
under the name by which they are generally or
commonly known, service may be effected upon all
the defendants by serving upon any one of them, or
upon the person in charge of the office or place of
business maintained in such name. But such service
shall not bind individually any person whose
connection with the entity has, upon due notice,
been severed before the action was brought. (9a)

Correlate this with Rule 36, Section 6:

Sec. 6. Judgment against entity without juridical

personality. When judgment is rendered against two
or more persons sued as an entity without juridical
personality, the judgment shall set out their
individual or proper names, if known. (6a)

GENERAL RULE: actions must be filed against real parties in interest.

EXCEPTIONS: (When may an action be filed without naming all the parties in
involved?)

1. Class suit (Section 12, Rule 3);

2. Entity without juridical personality (Section 15, Rule 3);
3. Any co--owner may bring an action for ejectment (Article 487, New
Civil Code)

Instances where substitution of parties is proper

JBD 105
 EFFECT OF DEATH OF A PARTY

Sec. 16. Death of party; duty of counsel.

Whenever a party to a pending action dies, and the
claim is not thereby extinguished, it shall be the
duty of his counsel to inform the court within
thirty (30) days after such death of the fact
thereof, and to give the name and address of his
legal representative or representatives. Failure of
counsel to comply with this duty shall be a ground
for disciplinary action.
The heirs of the deceased may be allowed to be
substituted for the deceased, without requiring the
appointment of an executor or administrator and the
court may appoint a guardian ad litem for the minor
heirs.
The court shall forthwith order said legal
representative or representatives to appear and be
substituted within a period of thirty (30) days
from notice.
If no legal representative is named by the
counsel for the deceased party, or if the one so
named shall fail to appear within the specified
period, the court may order the opposing party,
within a specified time, to procure the appointment
of an executor or administrator for the estate of
the deceased and the latter shall immediately
appear for and on behalf of the deceased. The court
charges in procuring such appointment, if defrayed
by the opposing party, may be recovered as costs.
(16, 17a)

First of all, there are cases when a party to a pending action dies and the claim
is not thereby extinguished (this is what they called an action which survives as
we will explain later) and there are certain actions where if a party dies, the claim
is automatically extinguished. Meaning, the death of a party causes death of the
action. But these are very few. In majority of cases when the party dies, the case
or the cause of action continues.

Examples of actions which survive the death of a party

 Actions and obligations arising from delicts survive (Aguas v. Llamas 5

SCRA 959)
 Actions based on the tortious conduct of the defendant survive the death of
the latter. (Melgar v. Benviaje 179 SCRA 196)

JBD 106
  Actions to recover real and personal property, actions to enforce a lien
thereon, and actions to recover damages for an injury to person or property
and suits based on the alleged tortious acts of the defendant survive.
(Board of Liquidators v. Kalaw 20 SCRA 987). An action for quieting of title
with damages is an action involving real property. It survives and the
claim is not extinguished by the death of a party. (Saligumba v. Calanog
GRT+ 143365 Dec. 4, 2008)
 An action of ejectment survives the death of a party. It continues until
judgment because the issue concerning the illegality of the defendant’s
possession is still alive, and upon its resolution depends the corollary issue
of whether and how much damages may be recovered. (Tanhueco v.
Aguilar 33 SCRA 236; Vda de Salazar v. CA; Florendo jr. v.Coloma 129
SCERA 304)
+ Actions for the recovery of money, arising from a contract express or
implied are not extinguished by the death of the defendant. (Sec. 20 R 3)

Duty of lawyer of the deceased

It is the duty of the lawyer of the deceased to inform the court within 30
days after the death of the party thereof. He must inform the court and give the
name and address of his legal representative/s (e.g. administrator or executor of
the estate)

In legal ethics, the lawyer- client relationship is automatically terminated by the

death of the client because the lawyer-client relationship is personal. Neither
does he become the counsel of the heirs of the deceased unless his services are
engaged by said heirs (Lawas vs. CA 146 SCRA 173). But procedurally, he must
tell the court and give the name of the legal representative. The latter may re-hire
the lawyer but under a new contract.

The purpose there is for substitution so that the legal representative will be
ordered substituted. And there is a new provision under the new rules. That is,
failure of the counsel to comply with his duty shall be a ground for disciplinary
action. That is not found in the prior rule. So, the lawyer can be subjected to
disciplinary action.

Upon receipt of the notice of death, the court shall determine whether or
not the claim is extinguished by such death. If the claim survives, the court
shall order the legal representative or representatives of the deceased to appear
and be substituted for the deceased within 30 days from notice (Sec. 16 Rule 3).
The substitution of the deceased would not be ordered by the court in cases
where the death of the party would extinguish the action because substitution is
proper only when the action survives (Aguas vs. Llamas 5 SCRA 959)

So the provision continues, “the heirs of the deceased may be allowed to be

substituted for the deceased without requiring the appointment of an executor or
JBD 107
administrator. And the court may appoint a guardian ad litem for the minor
heirs.

So, other than the legal representative, which refers to the executor or
administrator, the alternative will be to substitute the heirs, such as the
surviving children, wife or spouse.

Although there was a case decided by the SC way back in 1986 in the case of

LAWAS vs. COURT OF APPEALS

146 SCRA 173

HELD: “The priority of substitution would be the executor or

administrator not the heirs. The heirs would only be allowed to be
substituted if there is an (1) unreasonable delay in the appointment of
administrator or executor, or (2) when the heirs resort to extrajudicial
partition. But outside of those two reason, the law always gives priority
to the administrator or executor.”

Under the rule, priority is given to the legal representative of the deceased.
That is, the executor or the administrator of his estate. Many courts do not
enforce it strictly. Normally, patay na, “O! Ito ang heirs o!” “OK! Substitute!”
Actually, that is wrong based on LAWAS case. The priority is given to the admin-
istrator or executor. It is only when there is unreasonable delay in the
appointment, or when the heirs resort to extrajudicial partition because there is
no more administrator or executor in extrajudicial settlement.

Lawas ruling is no longer applicable

Under the second paragraph of Sec. 16 of Rule 3 states: “ … The heirs of the
deceased may be allowed to be substituted for the deceased, without requiring
the appointment of an executor or administrator…”

The second paragraph of the rule is plain and explicit. The heirs may be
allowed to be substituted for the deceased without requiring the appointment of
an administrator or executor. However, if within the specified period a legal
representative fails to appear, the court may order the opposing counsel, within a
specified period, to process the appointment of an administrator or executor who
shall immediately appear for the estate of the deceased. The previous
pronouncement of the Court in Lawas v. CA xxxxx is no longer true. Thus, the
heirs do not need to first secure the appointment of an administrator of the estate
of the deceased because the very moment of death, they stepped into the shoes of
the deceased and acquired the rights as devisee/legatee. Said heirs may
designate one or some of them as their representative before the trial court. (San
Juan v. Cruz GR No. 167321, July 31, 2006)
JBD 108
 Purpose and Importance of substitution of the deceased

The purpose behind the rule on substitution of parties is the protection of

the right of every party to due process. It is to ensure that the deceased would
continue to be properly represented in the suit through the duly appointed
legal representative of the estate. (Torres v. CA 278 SCRA 793; Vda de Salazar
v. CA 250 SCRA 305)

Non-compliance with the rules on substitution of a deceased party renders the

proceedings of the trial court infirm because the court acquired no jurisdiction
over the person of the legal representative of heirs of the deceased (Brioso v. Rili-
Mariano 396 SCRA 549) because no man should be affected by a proceeding to
which he is a stranger. A party to be affected by a personal judgment must have
a day in court and an opportunity to be heard. (Vda. De Haberer v. CA 104
SCRA 534; Fereira v. Vda de Gonzales 104 Phil. 143; Torres v. CA 278 SCRA 793)

Note this portion in the case of:

VDA. DE SALAZAR vs. COURT OF APPEALS

250 SCRA 303 [November 23, 1995]

FACTS: This is an ejectment case. The defendant died while the case
is going on. What is the procedure? There should be substitution. But
there was no substitution in the case for ten years, until it was decided.
The court was not informed of the death of the defendant. Until finally,
there was a decision.

ISSUE: When there is failure to effectuate the substitution of heirs

before the rendition of judgment, is the judgment jurisdictionally
detective?
HELD: NO, “the judgment is valid where the heirs themselves
appeared before the trial court and participated in the proceedings.
Therein, they presented evidence in defense of the deceased defendant.
It is undeniably evident that the heirs themselves sought their day in
court and exercised their right to due process.”

In other words, when there was a defect the heirs however cannot use that
because they themselves appeared and continued the case. So, in effect, there
was estoppel.

No requirement for service of summons

Service of summons is not required to effect a substitution. Nothing in Sec. 16

of this Rule mandates service of summons. Instead of service of summons the
JBD 109
court shall, under the authority of the same provision, order the legal
representative of the deceased to appear and be substituted for the said
deceased within 30 days from notice.

By virtue of the same rule, it is significant to know that it is not the

amendment of the pleading, but the order of substitution and its service that
effects the substitution of the deceased by his representative or heir.

Note: If the action does not survive (like the purely personal actions of
support, annulment of marriage, and legal separation), the court shall
simply dismiss the case. It follows then that substitution will not be
required.

EFFECT OF DEATH OF A PARTY ON MONEY CLAIMS

Now, one of the radical changes again introduced by the new rules is the
effect of the death of the defendant in a money claim – action to collect a sum of
money.

Sec. 20. Action on contractual money claims. When

the action is for recovery of money arising from
contract, express or implied, and the defendant
dies before entry of final judgment in the court in
which the action was pending at the time of such
death, it shall not be dismissed but shall instead
be allowed to continue until entry of final
judgment. A favorable judgment obtained by the
plaintiff therein shall be enforced in the manner
especially provided in these Rules for prosecuting
claims against the estate of a deceased person.
(21a)

Requisites:
1. the action must primarily be for recovery of money, debt, or interest therein;
2.the claim, subject of the action, arose from contract, express of implied; and
3.defendant dies before the entry of final judgment of the court in which the
action was pending.

Under this section, the death of the defendant will not result in the dismissal
of the action. The deceased shall be substituted by his legal representatives in the
manner provided for in Sec. 16 of this Rule 3 and the action continues until the
entry of final judgment.

JBD 110
 However, execution shall not issue in favor of the winning party. The final
judgment should be filed as a claim against the estate of the decedent without
need of proving the claim.

The best example here is an action to collect an unpaid loan. And while the
case is pending the defendant died. What will happen to the case? The law says:
If the defendant dies before the entry of the final judgment in the court at the
time of death, it shall not be dismissed but it shall instead be allowed to continue
until entry of final judgment.

Under the OLD RULES, the case shall be dismissed. So, the civil case is not
suspended but it will be dismissed and the creditor can file a case against the
estate of the deceased under the Rules on Special Proceedings. But definitely the
civil case dies when the defendant dies.

Now, under the NEW RULE, the case will not be dismissed but rather, the
case will now continue until entry of final judgment. Meaning, until it becomes
final and executory.

Q: But of course, if the judgment is favorable to you (the plaintiff), can you
move to execute? Can you move to execute the decision against the property of
the defendant?
A: NO, because the law provides, “xxx a favorable judgment obtained by the
plaintiff therein shall be enforced in the manner specially provided in these Rules
for prosecuting claims against the estate of a deceased person.”

Q: And what is that procedure?

A: YOU FILE A CLAIM against the estate under Section 5, Rule 86 of the
Rules of Court, but there will be no execution.

[Note: SEE OUTLINE AT THE LAST PART OF THIS RULE.]

Q: We are talking of death of a party in a pending civil action. While there is a

case and a party dies, what will happen to the case?
A: I will distinguish Is that an ACTION WHICH DOES NOT SURVIVE or an
ACTION WHICH SURVIVES?

1.) ACTION WHICH DOES NOT SURVIVE

An action which does not survive is an action which is abated upon the death
of a party. The case cannot go on once a party dies. And normally, that refers
to actions which are purely personal in character like an action for annulment
of marriages, an action for declaration of the nullity of marriage or, an action
for legal separation, or an action for support. These are the cases arising from
the Family Code.

JBD 111
 Example: The husband files a case against the wife for annulment
of marriage or legal separation. One of them dies. When one of the
parties dies, the marriage is dissolved. There is nothing to annul
because the marriage is already dissolved. So, these are the actions
which are purely personal .

Q: So, what is the effect of the death of the party in actions which
does not survived?
A: The case is dismissed!

2.) ACTIONS WHICH SURVIVE –

2a.) CONTRACTUAL MONEY CLAIMS:

2a1.) If it is the plaintiff who dies, the case will continue. The heirs or
legal representatives will proceed. So, there is substitution.

2a2.) If it is the defendant who dies, the question is when did he die?
Before entry of final judgment or after entry? This is where Section 20 will
come in.

2a2a.) If the defendant died before entry of final judgment, you

apply Section 20 of Rule 3. Meaning, the case shall not be dismissed but
shall be allowed to continue until entry of final judgment. And the
favorable judgment obtained by the plaintiff therein shall be enforced in
the manner especially provided in these Rules for prosecuting claims
against the estate of a deceased person, and that is Section 5 of Rule 86.

2a2b.) If the defendant died after the entry of the final judgment but
before execution (after the judgment became final but before there
could be levy or execution) you cannot move to execute. Again, you
apply Section 5 of Rule 86 which is the governing rule – you file your
judgment as a claim against the estate of the deceased defendant.
[Section 5, Rule 86] The purpose there is, so that the creditor will share
with the other creditors pro-rata in the distribution of the estate.

2a2c) If the defendant died after levy or execution but before the
auction sale, we will now apply Section 7[c] of Rule 39:

Rule 39, Sec. 7. Execution in case of death of

party. In case of the death of party, execution
may issue or be enforced in the following manner:
x x x x x x
(c) In case of the death of the judgment
obligor, after execution is actually levied upon
any of his property, the same may be sold for the
JBD 112
 satisfaction of the judgment obligation, and the
officer making the sale shall account to the
corresponding executor or administrator for any
surplus in his hands. (7a)

Meaning, if death occurs after the levy, auction sale proceeds as

scheduled. And if there is an excess, the excess shall be delivered to the
administrator or executor.

2b.) NON-CONTRACTUAL MONEY CLAIMS:

EXAMPLE: an action for recovery of property, real or personal
like replevin, forcible entry, unlawful detainer, action publiciana,
action reinvidicatoria, or action for damages, (damages that is not
the same for transaction of money because damages arising from
culpa aquiliana is one not arising from contract.)

If a party dies in an action which survives which is a non-

contractual money claim, obviously, there is substitution of parties.
So, what are these non-contractual money claims which survive?
These are those mentioned in Section 7 of Rule 86 and Section 1 of
Rule 87. That is in the study of Special Proceedings on settlement of
the estate of a deceased person.

Note: What Section 20 says is that: before the case can be decided and the
defendant dies (in actions involving money claims) the case shall not be
dismissed but shall instead be allowed to continue until entry of final judgment.
BUT CONTINUE AGAINST WHOM? Against the deceased? Now, to my mind,
you correlate this with Section 16 --- there should still be substitution.

But assuming, there was no substitution and the heirs fought in the case; there
is waiver because the defect is procedural. Just like what happened in the case of
VDA. DE SALAZAR vs CA 250 SCRA 305). Actually, what Section 20 emphasized
is that, the action shall not be dismissed but shall continue – to emphasize that it
is now different compared with the prior RULE. But obviously, there will always
be a substitution

Sec. 17. Death or separation of a party who is a

public officer. When a public officer is a party in
an action in his official capacity and during its
pendency dies, resigns, or otherwise ceases to hold
office, the action may be continued and maintained
by or against his successor if, within thirty (30)
days after the successor takes office or such time
as may be granted by the court, it is
JBD 113
 satisfactorily shown to the court by any party that
there is a substantial need for continuing or
maintaining it and that the successor adopts or
continues or threatens to adopt or continue the
action of his predecessor. Before a substitution is
made, the party or officer to be affected, unless
expressly assenting thereto, shall be given
reasonable notice of the application therefor and
accorded an opportunity to be heard. (18a)

Requisites:
1. public officer is a party to an action in his official capacity;
2.during the pendency of the action he either dies, resigns, or other wise
ceases to hold office;
3.it is satisfactorily shown to the court by any party, within 30 days after the
successor takes office, that there is a substantial need for continuing or
maintaining the action;
4.that the successor adopts or continues or threatens to adopt or continue the
action of his predecessor; and
5.the party or officer affected has been given reasonable notice of the
application therefor and accorded an opportunity to be heard.

Q: What will happen to the case?

A: The following:

1.) If the successor intends to continue with the policy.

EXAMPLE: Mayor Pascua threatened to demolish the building of
Mr. Nuere as a hazard. If Mayor Pascua dies, Vice-Mayor Angeles
becomes the mayor. If Vice-Mayor Angeles who is now the mayor
says that he will continue with the demolition, he will be substituted
and he is given 30 days to comment.

2.) If the successor does not adopt the policy, the case will be dismissed.

Sec. 18. Incompetency or incapacity. If a party

becomes incompetent or incapacitated, the court,
upon motion with notice, may allow the action to be
continued by or against the incompetent or
incapacitated person assisted by his legal guardian
or guardian ad litem. (19a)

EXAMPLE: F files a case against K. While the case is pending, K becomes

insane. The case will continue but K has to be assisted by his guardian ad litem.

JBD 114
 This is related to Rule 3, Section 3 on representative party but in Section 3, K
should be already insane before the case is filed.

Sec. 19. Transfer of interest. In case of any

transfer of interest, the action may be continued
by or against the original party, unless the court
upon motion directs the person to whom the interest
is transferred to be substituted in the action or
joined with the original party. (20)

General rule:
The rule does not consider the transferee an indispensable party. Hence, the
action may proceed without the need to imp lead him.

Exception:
When the substitution by or joinder of the transferee is ordered by the court.

A transferee pendent lite:

1. stands in exactly the same position as its predecessor-in-interest, th original
defendant; and
2. bound by the proceedings had in the case before the property was
transferred to it, even if not formally included as defendant. (Herrera, vol. 1 p.
405)

The case will be dismissed if the interest of plaintiff is transferred to defendant

unless there are several plaintiffs, in which case, the remaining plaintiffs can
proceed with their own cause of action.

EXAMPLE: R files a case against L to recover a piece of land. While the case is
pending, L sold the land to E. E now assumes the risk and takes the property
subject to the outcome of the case.
Q: Can the case continue against L?
A: YES.
1.) If L loses and cannot pay, E is subsidiarily liable;
2.) L can be removed and E will be substituted; or
3.) L can stay and E will be added.

In all 3 cases, E will be bound by the judgment.

Sec. 21. Indigent party. A party may be

authorized to litigate his action, claim or defense
as an indigent if the court, upon an ex parte
application and hearing, is satisfied that the
party is one who has no money or property
JBD 115
 sufficient and available for food, shelter and
basic necessities for himself and his family.
Such authority shall include an exemption from
payment of docket and other lawful fees, and of
transcripts of stenographic notes which the court
may order to be furnished him. The amount of the
docket and other lawful fees which the indigent was
exempted from paying shall be a lien on any
judgment rendered in the case favorable to the
indigent, unless the court otherwise provides.
Any adverse party may contest the grant of such
authority at any time before judgment is rendered
by the trial court. If the court should determine
after hearing that the party declared as an
indigent is in fact a person with sufficient income
or property, the proper docket and other lawful
fees shall be assessed and collected by the clerk
of court. If payment is not made within the time
fixed by the court, execution shall issue for the
payment thereof, without prejudice to such other
sanctions as the court may impose. (22a)

In criminal cases, the court assigns a counsel de officio. Under the

Constitution on Bill of Rights, no person shall be denied access to courts by
reason of poverty.

In civil cases, a plaintiff need not pay docket fee if he is an indigent if he files
an application (ex-parte application) to allow him to litigate as an indigent
litigant. But if the indigent wins, he has to pay the fees – file now, pay later) – the
amount shall be a lien on any favorable judgment.

The third paragraph is new. The other party may contest the claim of the
indigent if he is really an indigent or not.

Sec. 22. Notice to the Solicitor General. In any

action involving the validity of any treaty, law,
ordinance, executive order, presidential decree,
rules or regulations, the court, in its discretion,
may require the appearance of the Solicitor General
who may be heard in person or through a
representative duly designated by him. (23a)

The rule is that only the Solicitor General can bring and defend actions on
behalf of the Republic of the Philippines and that actions filed in the name of the
Republic of the Philippines or its agencies and instrumentalities, if not initiated
by the Solicitor General will be summarily dismissed. The authority of the
Solicitor General is embodied in Sec. 35(1) Chapter 12, Title III and Book IV of the

JBD 116
Administrative Code of 1987 (Cooperative Development Authority vs. Dolefil
Agrarian Reform Beneficiaries Cooperative 382 SCRA 552).

EXAMPLE: M files a case against K for declaration of nullity on the ground of

psychological incapacity. K alleges that Article 38 of the Family Code is
unconstitutional. So the court will rule on the validity of the law in which case,
the Solicitor General has to be involved in the case to defend the validity of the
law.

REASON: The Solicitor General is the legal counsel of the Republic of the
Philippines whose duty is to defend all the official acts of the Government.

JBD 117