IV. PARTIES (RULE 3) Sec. 17. Death or separation of a party who is a public officer.

1. In reading rules When a public officer is a party in an action in his official capacity and during its pendency dies,
a. Memorize sections 1, 2, 6, 7 and 8 of Rule 3. Five star! resigns, or otherwise ceases to hold office, the action may be continued and maintained by or
SECTION 1. Who may be parties; plaintiff and defendant. - Only natural or juridical persons, or entities against his successor if, within thirty (30) days after the successor takes office or such time as may
authorized by law may be parties in a civil action. The term "plaintiff" may refer to the claiming party, be granted by the court, it is satisfactorily shown to the court by any party that there is a
the counter-claimant, the cross-claimant, or the third (fourth, etc.) - party plaintiff. The term substantial need for continuing or maintaining it and that the successor adopts or continues or
"defendant" may refer to the original defending party, the defendant in a counterclaim, the cross- threatens to adopt or continue the action of his predecessor. Before a substitution is made, the
defendant, or the third (fourth, etc.) - party defendant. (1a) party or officer to be affected, unless expressly assenting thereto, shall be given reasonable notice
SECTION 2. Parties in interest. - A real party in interest is the party who stands to be benefited or of the application therefor and accorded an opportunity to be heard.
injured by the judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise Sec. 18. Incompetency or incapacity.
authorized by law or these Rules, every action must be prosecuted or defended in the name of the real If a party becomes incompetent or incapacitated, the court, upon motion with notice, may allow
party in interest. (2a) the action to be continued by or against the incompetent or incapacitated person assisted by his
SECTION 6. Permissive joinder of parties. - All persons in whom or against whom any right to relief in legal guardian or guardian ad litem.
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 GUIDE In reading cases:
plaintiffs or be joined as defendants in one complaint, where any question of law or fact common to all a. Focus on the parties to the case. Who is the plaintiff and defendant. How many
such plaintiffs or to all such defendants may arise in the action; but the court may make such orders as plaintiffs and defendants are there
may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in b. What is the relief sought by plaintiff
connection with any proceedings in which he may have no interest. (6) c. Relief granted by the trial court
SECTION 7. Compulsory joinder of indispensable parties. - Parties in interest without whom no final d. Who is alleged to be an indispensable party
determination can be had of an action shall be joined either as plaintiffs or defendants. (7) i. How was the argument regarding indispensability raised? Through Motion to
SECTION 8. Necessary party. - A necessary party is one who is not indispensable but who ought to be Dismiss, Petition for annulment
joined as a party if complete relief is to be accorded as to those already parties, or for a complete ii. Arguments in support of indispensability of the party
determination or settlement of the claim subject of the action. (8a) iii. Ruling of the SC on whether indispensable or not
b. What is a class suit? What are the requisites? e. For class suits
Sec. 12. Class suit. i. How many plaintiffs
When the subject matter of the controversy is one of common or general interest to many persons so ii. Were the requisites for class suit present
numerous that it is impracticable to join all as parties, a number of them which the court finds to be f. For death of a party
sufficiently numerous and representative as to fully protect the interests of all concerned may sue or i. Who died? Was he plaintiff or defendant
defend for the benefit of all. Any party in interest shall have the right to intervene to protect his ii. Who wanted to substitute the dead party? According to the SC, who is the proper
individual interest. person to substitute?
REQUISITES: (Banda v. Ermita, 2010) iii. How was substitution done? What pleadings were filed? What orders were issued
1) the subject matter of controversy is one of common or general interest to many persons; for the substitution.
2) the parties affected are so numerous that it is impracticable to bring them all to court; and g. For indigency: study the evolution of Rule 141
3) the parties bringing the class suit are sufficiently numerous or representative of the class h. Ignore irrelevant issues: constitutionality, and concurring opinion in Banda vs Ermita
and can fully protect the interests of all concerned.
1. Common SM 2. Sufficiently Numerous (SN) 3. So Numerous (SN)
c. What happens if a party to an action dies? FACTS:
Sec. 16. Death of party; duty of counsel. P/D
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 Relief by P
thereof, and to give the name and address of his legal representative or representatives. Failure of Relief granted by TC
counsel to comply with this duty shall be a ground for disciplinary action. Who is indispensable Party
The heirs of the deceased may be allowed to be substituted for the deceased, without requiring the Arguments? Through MTD/ Petition for Annulment
appointment of an executor or administrator and the court may appoint a guardian ad litem for the SC ruling if indispensable
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.cralaw

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.cralaw
1. Philip Go, et al. v. Distinction Properties Development, G.R. No. 194024, April 25, on a derivative cause of action on behalf of the corporation and all other
2012 stockholders similarly situated who may wish to join him in the suit. It is a
DOCTRINE: condition sine qua non that the corporation be impleaded as a party because
As it is clear that the acts being assailed are those of PHHC, this case cannot prosper for failure not only is the corporation an indispensable party, but it is also the present rule that it
to implead the proper party, PHCC. must be served with process. The judgment must be made binding upon the
corporation in order that the corporation may get the benefit of the suit and
may not bring subsequent suit against the same defendants for the same
cause of action. In other words, the corporation must be joined as party because
An INDISPENSABLE PARTY is defined as one who has such an interest in the controversy or it is its cause of action that is being litigated and because judgment must be a
subject matter that a final adjudication cannot be made, in his absence, without injuring or res adjudicata against it.
affecting that interest. In the recent case of Nagkakaisang Lakas ng Manggagawa sa Keihin
(NLMKOLALIA-KMU) v. Keihin Philippines Corporation, the Court had the occasion to state that:
Without PHCC as a party, there can be no final adjudication of the HLURB’s judgment. The CA
was, thus, correct in ordering the dismissal of the case for failure to implead an indispensable party.

Under Section 7, Rule 3 of the Rules of Court, ‘parties in interest without whom no final
determination can be had of an action shall be joined as plaintiffs or defendants.’ If
FACTS:
there is afailure to implead an indispensable party, any judgment rendered
P: Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim
would have no effectiveness. It is precisely ‘when an indispensable party is not
D: Distinction Properties Development and Construction, Inc. (DPDCI)
before the court (that) an action should be dismissed.’ The absence of an
#
indispensable party renders all subsequent actions of the court null and void
Relief by P
for want of authority to act, not only as to the absent parties but even to those
Relief granted by TC
present.’ The purpose of the rules on joinder of indispensable parties is a complete
Who is indispensable Party (IP): PHCC
determination of all issues not only between the parties themselves, but also
Arguments of P to refute: action may continue without PHCC
as regards other persons who may be affected by the judgment. A decision valid
Arguments of D: petitioners sought to address the invalidation of the corporate acts duly
on its face cannot attain real finality where there is want of indispensable parties.
entered and executed by PHCC as a corporation of which petitioners are admittedly members
Similarly, in the case of Plasabas v. Court of Appeals, the Court held that a final decree
of, and not the acts pertaining to their ownership of the units. Such being the case, PHCC
would necessarily affect the rights of indispensable parties so that the Court
should have been impleaded as a party to the complaint. Its non-inclusion as an indispensable
could not proceed without their presence. In support thereof, the Court in Plasabas
party warrants the dismissal of the case.
cited the following authorities, thus:
Through MTD/ Petition for Annulment
SC ruling if indispensable: YES
When an indispensable party is not before the court, the action should be dismissed.
1. Phoenix Heights Condominium located at H. Javier/Canley Road, Bo. Bagong Ilog, Pasig City,
The burden of procuring the presence of all indispensable parties is on the
plaintiff. The evident purpose of the rule is to prevent the multiplicity of suits by 2. DPDCI turned over the ownership to Phoenix Heights Condominium Corporation (PHCC)
requiring the person arresting a right against the defendant to include with him, either 3. Pacifico Lim filed an Application for Alteration of Plan for 22 storage units. The same 22 units were
as co-plaintiffs or as co-defendants, all persons standing in the same position, so that used to set off association dues between PHCC and DPDCI
the whole matter in dispute may be determined once and for all in one litigation.
4. filed a complaint before the HLURB against DPDCI for unsound business practices and violation of
the MDDR. Misrepresentation through flyers. Amenities not available. Breach of promise
From all indications, PHCC is an indispensable party and should have been impleaded, either as a
plaintiff or as a defendant, in the complaint filed before the HLURB as it would be directly and 5. HLURB: in favor of Petitioners. Agreement between PHCC and DPDCI is void.
adversely affected by any determination therein. To belabor the point, the causes of action, or the 6. CA for certiorari and prohibition: set aside HLURB, no jurisdiction.
acts complained of, were the acts of PHCC as a corporate body. Note that in the judgment rendered by a. Jurisdiction over PHCC was never acquired. PHCC is the IP
the HLURB, the dispositive portion in particular, DPDCI was ordered
(1) to pay P998,190.70, plus interests and surcharges, as condominium dues in arrears and turnover the
administration office to PHCC; and (2) to refund to PHCC P1,277,500.00, representing the cost of the ISSUE: WON PHCC is an IP. YES.
deep well, with interests and surcharges. Also, the HLURB declared as illegal the agreement regarding Indispensable party is defined as one who has such an interest in the controversy or subject matter
the conversion of the 22 storage units and Units GF4-A and BAS, to which agreement PHCC was a party. that a final adjudication cannot be made, in his absence, without injuring or affecting that interest.

Evidently, the cause of action rightfully pertains to PHCC. Petitioners cannot exercise the same
except through a derivative suit. In the complaint, however, there was no allegation that the action
was a derivative suit. In fact, in the petition, petitioners claim that their complaint is not a derivative suit.
In the cited case of Chua v. Court of Appeals, the Court ruled:

For a derivative suit to prosper, it is required that the minority stockholder suing
for and on behalf of the corporation must allege in his complaint that he is suing
2. Macawadib v. Philippine National Police Directorate, G.R. No. 186610, July 29, 2013
DOCTRINE:
The Court agrees with the ruling of the CA that it is the integrity and correctness of the public
records in the custody of the PNP, National Police Commission (NAPOLCOM) and Civil Service
Commission (CSC) which are involved and which would be affected by any decision rendered in
the petition for correction filed by herein petitioner.
The aforementioned government agencies are, thus, required to be made parties to the
proceeding. They are indispensable parties, without whom no final determination of the case
can be had. An indispensable party is defined as one who has such an interest in the controversy or
subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that
interest.
In the fairly recent case of Go v. Distinction Properties Development the Court had the occasion to
reiterate the principle that:
It is “precisely ‘when an indispensable party is not before the court (that) an action
should be dismissed.’ The absence of an indispensable party renders all
subsequent actions of the court null and void for want of authority to act, not
only as to the absent parties but even to those present.” The purpose of the rules
on joinder of indispensable parties is a complete determination of all issues not
only between the parties themselves, but also as regards other persons who
may be affected by the judgment. A decision valid on its face cannot attain real
finality where there is want of indispensable parties.
Citing previous authorities, the Court also held in the Go case that:
The general rule with reference to the making of parties in a civil action requires the
joinder of all indispensable parties under any and all conditions, their
presence being a sine qua non of the exercise of judicial power. For this reason,
our Supreme Court has held that when it appears of record that there are other
persons interested in the subject matter of the litigation, who are not made
parties to the action, it is the duty of the court to suspend the trial until such
parties are made either plaintiffs or defendants. Where the petition failed to join
as party defendant the person interested in sustaining the proceeding in the court, the
same should be dismissed. When an indispensable party is not before the court, the
action should be dismissed.
The burden of procuring the presence of all indispensable parties is on the plaintiff.
In the instant case, there is a necessity to implead the PNP, NAPOLCOM and CSC because they
stand to be adversely affected by petitioner’s petition which involves substantial and
controversial alterations in petitioner’s service records. Moreover, as correctly pointed out by the
Office of the Solicitor General (OSG), if petitioner’s service is extended by ten years, the
government, through the PNP, shall be burdened by the additional salary and benefits that
would have to be given to petitioner during such extension. Thus, aside from the OSG, all other
agencies which may be affected by the change should be notified or represented as the truth
is best ascertained under an adversary system of justice.
As the above-mentioned agencies were not impleaded in this case much less given notice of the
proceedings, the decision of the trial court granting petitioner’s prayer for the correction of
entries in his service records , is void. As mentioned above, the absence of an indispensable party
renders all subsequent actions of the court null and void for want of authority to act, not only as to the
absent parties but even as to those present.
NO ESTOPPEL
On the question of whether or not respondent is estopped from assailing the decision of the RTC for
failure of the OSG, as government representative, to participate in the proceedings before the trial court
or to file an opposition to petitioner’s petition for correction of entries in his service records, this Court
rules that such an apparent oversight has no bearing on the validity of the appeal which the petitioner
filed before the CA. Neither can the State, as represented by the government, be considered in
estoppel due to the petitioner’s seeming acquiescence to the judgment of the RTC when it
initially made corrections to some of petitioner’s records with the PNP.
This Court has reiterated time and again that the absence of opposition from government agencies
is of no controlling significance, because the State cannot be estopped by the omission, mistake
or error of its officials or agents. Nor is the Republic barred from assailing the decision granting the
petition for correction of entries if, on the basis of the law and the evidence on record, such petition has
no merit.
FACTS:
P: POLICE SENIOR SUPERINTENDENT DIMAPINTO MACAWADIB,
D: THE PHILIPPINE NATIONAL POLICE DIRECTORATE FOR PERSONNEL AND RECORDS MANAGEMENT
#
Relief by P
Relief granted by TC
Who is indispensable Party
a. Arguments of PNP: RTC decision is null for failure to acquire jurisdiction over the PNP, “an
unimpleaded indispensable party.”
Through MTD/ Petition for Annulment
SC ruling if indispensable: YES
2. Compulsory retirement of age 56. Records born June 11, 1946.
3. 2001, petitioner filed an application for late registration of his birth with the Municipal Civil
Registrar’s Office of Mulondo, Lanao del Sur. It should be 1956.
4. petitioner filed with the RTC of Marawi City, Branch 8, a Petition for Correction of Entry in the
Public Service Records Regarding the Birth Date.
5. RTC: awarded. Final and exec on year 2002
6. 2008 Respondent in CA filed a Petition for Annulment of Judgment with Prayer for the Issuance of a
Temporary Restraining Order and/or Writ of Preliminary Injunction.
ISSUE: WON PNP is IP. YES
Heirs of Mesina v. Heirs of Fian, G.R. No. 203775, August 05, 2014
1. Sps Faustino and Sps Mesina bought 2 lands from Sps Fian
2. The heirs of FIan refused to acknowledge the payment of the buyers. They refused to vacate the
land.
3. Heirs of Mesina filed for an action for quieting of title and damages before the Regional Trial
Court (RTC), Branch 14 in Baybay, Leyte (Naming only Theresa Fian)
4. Theresa filed a Motion to Dismiss the complaint, arguing that the complaint states no cause of
action and that the case should be dismissed for gross violation of Sections 1 and 2, Rule 3
5. LT of Theresa
She claims that the “Heirs of Mesina” could not be considered as a juridical person or entity
authorized by law to file a civil action. Neither could the “Heirs of Fian” be made as defendant, not
being a juridical person as well.
6. RTC dismissed. Same argument with Theresa
7. CA: affirmed RTC

ISSUE: WON the non-impleading of indispensable party amounts to failure to state a cause of action.
NO.

RULING:
the infirmity is not failure to state a cause of action but the non-joinder of indispensable parties.

Non-joinder means the “failure to bring a person who is a necessary party [or in this case an
indispensable party] into a lawsuit.”

Non-Joinder of Indispensable Parties; The non-joinder of indispensable parties is not a ground for the
dismissal of an action; The remedy is to implead the non-party claimed to be indispensable.
3. Rebecca Pacana, et al. v. Rovila Water, G.R. 168979, December 2, 2013
FACTS
1. PLAINTIFF (2): Petitioners Rebecca and Rosalie Pacaña are children of SPS. Pacaña
DEFENDANT (5): They filed the present case against Rovila Inc., Earl, Lilia, Dalla and Marisa for
accounting and damages.
2. Plaintiffs claimed they owned Rovila Water Supply, and the defendants tookover the business by
forming Rovina Inc to usurp the family business.
3. Plaintiffs filed the complaint in their own names instead of the names of the parents.
4. The parents died. The respondents claimed the substitution of plaintiffs from parents to children was
improper
LT of plaintiffs: We are the RP in Interest! They sued in their own right because of their substantial
interest as heirs or co-owners.
LT of defendants: They are not the RP in Interest! They failed to substitute as heir of plaintiffs.

ISSUE: WHO are the RP in Interest? The deceased parents, bec. they are indispensable parties.

Ratio:
1. Without the inclusion of the indispensable parties, there can be no final determination of
the case.
both the spouses Pacaña were not impleaded as parties-plaintiffs. The Court notes, however, that
they are indispensable parties
2. REMEDY: Sec. 9 Rule 3: implead the indispensable parties.
their non-inclusion is merely a technical defect. Failure to implead indispensable parties is a curable
error
The heirs should be impleaded as indispensable parties because of their hereditary rights

RP in Interest includes both indispensable parties and necessary parties. (mas malawak)
4. Metrobank v. Rural Bank of Gerona, G.R. No. 159097, July 05, 2010 (3) When, even without the knowledge of the debtor, a person interested in the
FACTS: fulfillment of the obligation pays, without prejudice to the effects of confusion as
P: MB to the latter’s share.
D: RBG
1. Metrobank is RBG’s depository bank. As discussed, Metrobank was a third party to the Central Bank-RBG agreement, had no interest
2. The Central Bank approved farmers’ loan applications and credited the money to Metrobank which except as a conduit, and was not legally answerable for the IBRD loans. Despite this, it was
credited the same to RBG. Metrobank’s demand deposit account, instead of RBG’s, which the Central Bank proceeded
3. HOWEVER, the central bank demanded reversal of loan application. Metrobank cannot debit RBG against, on the assumption perhaps that this was the most convenient means of recovering
anymore since it already released the money. the cancelled loans. That Metrobank’s payment was involuntarily made does not change the reality
4. MB: Complaint for collection of sum of money. that it was Metrobank which effectively answered for RBG’s obligations.
5. RTC ruled for MB
6. CA reversed: CENTRAL BANK should be impleaded as a necessary party
Was there express or tacit approval by RBG of the payment enforced against Metrobank? After
LT of MB: inclusion is unnecessary since RBG already admitted liability. Impleading CENTRAL BANK
would cause unnecessary delay of remanding the case. Metrobank received the Central Bank’s debit advices in November 1978, it (Metrobank) accordingly
1979 complaint; 1994 RTC; 2002 CA; 2010 SC debited the amounts it could from RBG’s special savings account without any objection from
RBG. RBG’s President and Manager, Dr. Aquiles Abellar, even wrote Metrobank, on August 14, 1979, with
ISSUE: Is CB a necessary party? NO proposals regarding possible means of settling the amounts debited by Central Bank from Metrobank’s
DOCTRINE: demand deposit account. These instances are all indicative of RBG’s approval of Metrobank’s
 Ang farmers ang principal debtors. payment of the IBRD loans. That RBG’s tacit approval came after payment had been made does not
 Ang hinabol dapat ng CB ay ang RBG at Farmers. Si MB ay 3rd Party lng sa CB-RGB completely negate the legal subrogation that had taken place.
Agreement.
 Hindi necessary party si CB, because subrogation already took place by MB. CB’s Article 1303 of the Civil Code states that subrogation transfers to the person subrogated the credit
presence is immaterial with all the rights thereto appertaining, either against the debtor or against third persons. As the
entity against which the collection was enforced, Metrobank was subrogated to the rights of
A basic first step in resolving this case is to determine who the liable parties are on the IBRD loans Central Bank and has a cause of action to recover from RBG the amounts it paid to the Central
that the Central Bank extended. The Terms and Conditions of the IBRD 4th Rural Credit Project (Project Bank, plus 14% per annum interest.
Terms and Conditions) executed by the Central Bank and the RBG shows that the farmers-borrowers
to whom credits have been extended, are primarily liable for the payment of the borrowed Under this situation, impleading the Central Bank as a party is completely unnecessary. We note
amounts. The loans were extended through the RBG which also took care of the collection and of the that the CA erroneously believed that the Central Bank’s presence is necessary “in order x x x to shed
remittance of the collection to the Central Bank. RBG, however, was not a mere conduit and collector. light on the matter of reversals made by it concerning the loan applications of the end users and to have
While the farmers-borrowers were the principal debtors, RBG assumed liability under the a complete determination or settlement of the claim.” In so far as Metrobank is concerned, however, the
Project Terms and Conditions by solidarily binding itself with the principal debtors to fulfill the Central Bank’s presence and the reasons for its reversals of the IBRD loans are immaterial
obligation. after subrogation has taken place.

Based on these arrangements, the Central Bank’s immediate recourse, therefore should have been
against the farmers-borrowers and the RBG; thus, it erred when it deducted the amounts covered by
the debit advices from Metrobank’s demand deposit account. Under the Project Terms and Conditions,
Metrobank had no responsibility over the proceeds of the
IBRD loans other than serving as a conduit for their transfer from the Central Bank to the RBG
once credit advice has been issued.

Thus, we agree with the CA’s conclusion that the agreement governed only the parties involved
— the Central Bank and the RBG. Metrobank was simply an outsider to the agreement.

Our disagreement with the CA is in its conclusion that no legal subrogation took place; the
present case, in fact, exemplifies the circumstance contemplated under paragraph 2, of Article
1302 of the Civil Code which provides:

Art. 1302. It is presumed that there is legal subrogation:

(1) When a creditor pays another creditor who is preferred, even without the debtor’s
knowledge;
(2) When a third person, not interested in the obligation, pays with the
express or tacit approval of the debtor;
 5. Constantino v. Heirs of Pedro Constantino, 706 SCRA 580 (2013)

FACTS
1. 2 plaintiffs; Heirs represented by Asuncion
3 defendants
2. COMPLAINT: Nullification of a document of Pagmamana sa Labas ng Hukuman due to fraud.
3. C-CLAIM: privies sila plaintiffs/respondents sa X-Judicial settlement with Waiver kasama si Maria
Laquindanum na parent nila
4. RTC: in favor of petitioners; applied in pari delicto doctrine; valid doc
5. CA: reversed; invalid doc

ISSUE: Valid ba ang doc? YES, privies sila plaintiffs/respondents. They are successor-in interest who
merely stepped into the shoes of Maria.
Yung X-Jud Settlement with Maria ay binding sa kanila.

DOCTRINE:
We agree with the trial court that respondents are “privies” to Maria Laquindanum. By the term
“PRIVIES” is meant those between whom an action is deemed binding although they are not
literally parties to the said action. This Court, in Correa v. Pascual, had occasion to explain that
“privity in estate denotes the privity between assignor and assignee, donor and donee, grantor
and grantee, joint tenant for life and remainderman or reversioner and their respective
assignees, vendor by deed of warranty and a remote vendee or assignee. A privy in estate is one, it
has been said, who derives his title to the property in question by purchase; one who takes by
conveyance.”

In fine, respondents, as successors-in-interest, derive their right from and are in the same
position as their predecessor in whose shoes they now stand. As such successors, respondents’
situation is analogous to that of a transferee pendente lite illustrated in Santiago Land
Development Corporation v. Court of Appeals, reiterating Fetalino v. Sanz where this Court held:

As such, he stands exactly in the shoes of his predecessor in interest, the

original defendant, and is bound by the proceedings had in the case before the
property was transferred to him. He is a proper, but not an indispensable, party
as he would, in any event, have been bound by the judgment against his predecessor.

Thus, any condition attached to the property or any agreement precipitating the execution of the
Deed of Extrajudicial Settlement with Waiver which was binding upon Maria Laquindanum is
applicable to respondents who merely succeeded Maria.
 6. Cagato v. Almonte, 707 SCRA 172 (2013)
1. PLAINTIFFS: 1. Cagatao
COMPLAINT: action for annulment of deeds of sale, cancellation of title and damages
DEFENDANTS: 7? Almonte, Aguilar, SPS Fernandez (2), Fernandez sibs (3)
Dapat isinama si Carlos: 8 sana ang Defendants
2. Cagatao received land by private written instrument given by his papa-in-law.
3. Defendants took possession because they bought it from a Reconstituted Title of Carlos.
4. Cagatao filed a complaint to annul sale between sps. Fernandez and Carlos. But he failed to
implead Carlos as an indispensable party.

ISSUE: Indispensable party ba si Carlos? `YES, she is the seller

DOCTRINE:
SUBSTANTIVE
From the arguments of Cagatao, it is clear that he is assailing the validity of the title of Carlos
over the land in question. Section 48 of P.D. No. 1529 clearly states that “a certificate of title shall
not be subject to collateral attack. It cannot be altered, modified, or cancelled except in a direct
proceeding in accordance with law.” An attack on the validity of the title is considered to be a
collateral attack when, in an action to obtain a different relief and as an incident of the said
action, an attack is made against the judgment granting the title.

Cagatao’s original complaint before the RTC was for the cancellation of TCT No. T-249437 in the
name of the Fernandez Siblings and the nullification of the deeds of sale between the Fernandez
Siblings and Spouses Fernandez, and the earlier one between the latter and Almonte and Aguilar.
Nowhere in his complaint did Cagatao mention that he sought to invalidate TCT No. 12159-A.
It was only during the course of the proceedings, when Spouses Fernandez disclosed that they had
purchased the property from Carlos, that Cagatao thought of questioning the validity of TCT No.
12159-A.

Although the CA correctly ruled that the transfer from Gatchalian to Manzulin was invalid, the existence
of a valid Torrens title in the name of Carlos which has remained unchallenged before the proper
courts has made irrelevant the issue of whether Gatchalian and his successors-in-interest
should have retained ownership over the property. This is pursuant to the principle that a Torrens
title is irrevocable and its validity can only be challenged in a direct proceeding. Hence, a Torrens
certificate of title is indefeasible and binding upon the whole world unless it is nullified by a
court of competent jurisdiction in a direct proceeding for cancellation of title.

PROCEDURAL
Moreover, Carlos, as the registered owner of the lot whose title Cagatao seeks to nullify, should have
been impleaded as an INDISPENSABLE PARTY. It is clear in this case that Cagatao failed to
include Carlos in his action for the annulment of TCT No. 12159-A. Basic is the rule in procedural
law that no man can be affected by any proceeding to which he is a stranger and strangers to
a case cannot be bound by a judgment rendered by the court.

It would be the height of injustice to entertain an action for the annulment of Carlos’ title
without giving her the opportunity to present evidence to support her claim of ownership
through title. In addition, it is without question a violation of the constitutional guarantee that no person
shall be deprived of property without due process of law.

Thus, should Cagatao wish to question the ownership of the subject lot of Carlos and Spouses Fernandez,
he should institute a direct action before the proper courts for the cancellation or modification
of the titles in the name of the latter two. He cannot do so now because it is tantamount to a
collateral attack on Carlos’ title, which is expressly prohibited by law and jurisprudence.
 7. Legaspi Towers 300 v. Amelia Muer, et al., G.R. No. 170783, June 18, 2012
FACTS
1. Petitioners 5: Legaspi + Plaintiffs 4 incumbent directos of Legaspi
Respondents/defendants: 8
2. Annual stockholders meeting. Wala quorum so petitioners want to adjourn. Respondents pushed
through so sila nagging Directors.
3. Petitioners filed for Complaint for the Declaration of Nullity of Elections with Prayers for the
lssuance of Temporary Restraining Orders and Writ of Preliminary Injunction and Damages
4. Petitioners then filed amendment. Then Motion to Admit Second Amended Complaint para
maging Plaintiff si LEGASPI represented by Petitioners.
ISSUE: okay lng ba ung Second Amended Complaint? NO, because it is treated as a derivative suit. As
such dapat the relief sought is for the benefit of the corp. In this case the party who stands to be
benefitted ay ang petitioners.
NULLFICATION OF ELECTION is a DIRECT ACTION.
1. Individual suit – for stockholder, wrong done personally
2. Class suit – for group of stockholders, wrong done as a group
3. Derivative suit – for the corp, through mismanagement of BOD
DOCTRINE:
The Court notes that in the Amended Complaint, PETITIONERS as plaintiffs stated that they are the
incumbent reconstituted Board of Directors of Legaspi Towers 300, Inc., and that defendants, herein
RESPONDENTS, are the newly-elected members of the Board of Directors; while in the Second
Amended Complaint, the PLAINTIFF is Legaspi Towers 300, Inc., represented by petitioners as the
allegedly incumbent reconstituted Board of Directors of Legaspi Towers 300, Inc.
The Second Amended Complaint states who the plaintiffs are, thus:
That the plaintiffs are: LEGASPI TOWERS 300, INC., non-stock corporation xxx duly represented by the
incumbent reconstituted Board of Directors of Legaspi Towers 300, Inc., namely: ELIADORA FE
BOTE VERA xxx, as President; BRUNO C. HAMAN xxx, as Director; LILY MARQUINEZ PALANCA
xxx, as
Secretary; ROSANNA DAVID IMAI xxx, as Treasurer; and members of the Board of Directors, namely:
ELIZABETH GUERRERO xxx, GLORIA DOMINGO xxx, and RAY VINCENT.
The Court agrees with the Court of Appeals that the Second Amended Complaint is meant to be a
derivative suit filed by petitioners in behalf of the corporation.
INDIVIDUAL SUIT V. CLASS SUIT V. DERIVATIVE SUIT
Cua, Jr. v. Tan differentiates a derivative suit and an individual/class suit as follows:
A derivative suit must be differentiated from individual and representative or class suits, thus:
Suits by stockholders or members of a corporation based on wrongful or
fraudulent acts of directors or other persons may be classified into individual
suits, class suits, and derivative suits. Where a stockholder or member is denied
the right of inspection, his suit would be individual because the wrong is done to
him personally and not to the other stockholders or the corporation. Where the wrong
is done to a group of stockholders, as where preferred stockholders’ rights are
violated, a class or representative suit will be proper for the protection of all
stockholders belonging to the same group. But where the acts complained of
constitute a wrong to the corporation itself, the cause of action belongs to the
corporation and not to the individual stockholder or member . Although in most
every case of wrong to the corporation, each stockholder is necessarily affected because
the value of his interest therein would be impaired, this fact of itself is not sufficient to
give him an individual cause of action since the corporation is a person distinct and
separate from him, and can and should itself sue the wrongdoer. Otherwise, not only
would the theory of separate entity be violated, but there would be multiplicity
of suits as well as a violation of the priority rights of creditors. Furthermore,
there is the difficulty of determining the amount of damages that should be paid to each
individual stockholder.
However, in cases of mismanagement where the wrongful acts are committed by
the directors or trustees themselves, a stockholder or member may find that he
has no redress because the former are vested by law with the right to decide
whether or not the corporation should sue, and they will never be willing to
sue themselves. The corporation would thus be helpless to seek remedy. Because of
the frequent occurrence of such a situation, the common law gradually recognized
the right of a stockholder to sue on behalf of a corporation in what eventually
became known as a “derivative suit.” It has been proven to be an effective remedy
of the minority against the abuses of management. Thus, an individual stockholder
is permitted to institute a derivative suit on behalf of the corporation wherein
he holds stock in order to protect or vindicate corporate rights, whenever
officials of the corporation refuse to sue or are the ones to be sued or hold the
control of the corporation. In such actions, the suing stockholder is regarded as
the nominal party, with the corporation as the party-in-interest.
RELIEFS IN A DERIVATIVE SUIT MUST PERTAIN TO THE CORPORATION
Since it is the corporation that is the real party-in-interest in a derivative suit, then the reliefs
prayed for must be for the benefit or interest of the corporation. When the reliefs prayed for do
not pertain to the corporation, then it is an improper derivative suit.
REQUISITES OF DERIVATIVE SUIT
The requisites for a derivative suit are as follows:
(1) the party bringing suit should be a shareholder as of the time of the act or transaction
complained of, the number of his shares not being material;
(2) he has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board
of directors for the appropriate relief but the latter has failed or refused to heed his plea;
and
(3) the cause of action actually devolves on the corporation, the wrongdoing or harm having
been, or being caused to the corporation and not to the particular stockholder bringing
the suit. In this case, petitioners, as members of the Board of Directors of the condominium
corporation before the election in question, filed a complaint against the newly-elected
members of the Board of Directors for the years 2004-2005, questioning the validity of the
election held on April 2, 2004, as it was allegedly marred by lack of quorum, and praying
for the nullification of the said election.
As stated by the Court of Appeals, petitioners’ complaint seek to nullify the said election, and to
protect and enforce their individual right to vote. Petitioners seek the nullification of the election of
the Board of Directors for the years 2004-2005, composed of herein respondents, who pushed through
with the election even if petitioners had adjourned the meeting allegedly due to lack of quorum.
Petitioners are the injured party, whose rights to vote and to be voted upon were directly
affected by the election of the new set of board of directors.

The party-in-interest are the petitioners as stockholders, who wield such right to vote. The cause
of action devolves on petitioners, not the condominium corporation, which did not have the right
to vote. Hence, the complaint for nullification of the election is a DIRECT ACTION by petitioners,
who were the members of the Board of Directors of the corporation before the election, against
respondents, who are the newly-elected Board of Directors. Under the circumstances, the derivative
suit filed by petitioners in behalf of the condominium corporation in the Second Amended
Complaint is improper.

The stockholder’s right to file a derivative suit is not based on any express provision of The
Corporation Code, but is impliedly recognized when the law makes corporate directors or officers
liable for damages suffered by the corporation and its stockholders for violation of their fiduciary
duties, which is not the issue in this case.
 Republic is not a Real Party in Interest – private property; not disposable public land
8. Republic of the Philippines v. Agunoy, G.R. No. 155394. February 17, 2005.
FACTS: SC: the real party in interest are the heirs of perez and valeriano espiritu
1. Agunoy filed for a land free patent. It was registered. Nueva Ecija
2. Perez filed for protest.
3. B. of Lands found the patent was fraudulently issued.
4. Agunoy died. Heirs executed x-jud partition. The land was divided and was subsequently sold,
others mortgaged.
5. Director of lands instituted cancellation of Free patent, oct and subsequent tct.
6. PLAINTIFF: rep
Defendants: Agunoy, Sr. his children, Sps. Dee and Rural Bank of Gapan

ISSUE: RP in interest ba ang republic? NO. Because land is no longer disposable.

DOCTRINE:
To begin with, we agree with the Court of Appeals that petitioner Republic is not the real party-in-
interest in this case. Basic it is in the law of procedure that every action must be prosecuted or
defended in the name of the real party-in-interest, meaning “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,” a procedural rule
reechoed in a long line of cases decided by this Court. For sure, not too long ago, in
Shipside, Inc. vs. Court of Appeals, citing earlier cases, we wrote:

Consequently, the Republic is not a real party in interest and it may not institute the
instant action. Nor may it raise the defense of imprescriptibility, the same being
applicable only in cases where the government is a party in interest. Under Section 2
of Rule 3 of the 1997 Rules of Civil Procedure, “every action must be prosecuted or
defended in the name of the real party in interest.” To qualify a person to be a real
party in interest in whose name an action must be prosecuted, he must appear
to be the present real owner of the right sought to enforced. 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. And by REAL INTEREST is meant a
present substantial interest, as distinguished from a mere expectancy, or a
future, contingent, subordinate or consequential interest.

The very complaint in this case, filed by petitioner Republic before the trial court unmistakably alleges
that at the time Free Patent No. 31445 and its corresponding Original Certificate of Title No. P-45222
were issued to Gregorio Agunoy, Sr., “the property in question was already adjudicated as private
property of the heirs of Eusebio Perez and Valeriano Espiritu,” and that at that time, “the property
in question was no longer a disposable public land.”

With the very admissions by the petitioner itself in its basic pleading that Lots No. 1341 and 1342 are
already private properties of the heirs of Eusebio Perez and Valeriano Espiritu, and are, therefore, “no
longer disposable public land” over which the then Bureau of Lands, now Lands Management Bureau,
“no longer had any jurisdiction and control,” we are simply at a loss to understand how petitioner
Republic can still profess to be the real party-in-interest in this case, and insists that the
disputed properties are still part of the public domain. If ever, the real party-in-interest could be
none other than the heirs of Eusebio Perez and Valeriano Espiritu, but certainly not the petitioner.
 9. Juana Complex I Homeowners Association v. Fil-Estate Land, Inc. G.R. No.
152272, March 05, 2012
Facts:
1. The HOA instituted a COMPLAINT for DAMAGES, a class suit against Defendants
PLAINTIFF: HOA
DEFENDANTS: Fil-Estate, FEEC, La Paz and Warbird Security and officers
2. HOA wants to use La Paz Road.

ISSUE: was the case properly instituted as a class suit. YES, the case was of common interest.
Individual representation would be numerous and impractical
Common interest: usage of road

DOCTRINE:
With respect to the issue that the case was improperly instituted as a class suit, the Court finds the
opposition without merit. Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:

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.

The necessary elements for the maintenance of a class suit are:

(1) the subject matter of controversy is one of common or general interest to many
persons;
(2) the parties affected are so numerous that it is impracticable to bring them all to court;
and
(3) the parties bringing the class suit are sufficiently numerous or representative of the
class and can fully protect the interests of all concerned.

In this case, the suit is clearly one that benefits all commuters and motorists who use La Paz
Road. As succinctly stated by the CA:

The subject matter of the instant case, i.e., the closure and excavation of the La Paz
Road, is initially shown to be of common or general interest to many persons.
The records reveal that numerous individuals have filed manifestations with the
lower court, conveying their intention to join private respondents in the suit and
claiming that they are similarly situated with private respondents for they were also
prejudiced by the acts of petitioners in closing and excavating the La Paz Road.
Moreover, the individuals sought to be represented by private respondents in
the suit are so numerous that it is impracticable to join them all as parties and
be named individually as plaintiffs in the complaint. These individuals claim to be
residents of various barangays in Biñan, Laguna and other barangays in San Pedro,
Laguna.
 10. Sylvia Banda v. Eduardo R. Ermita G.R. No. 166620, April 20, 2010
 Plaintiff: employees of national printing office Here, the petition failed to state the number of NPO employees who would be affected by the
Defendant: exec sec, director general of Phil Info Agency, Natl Treasurer assailed Executive Order and who were allegedly represented by petitioners. It was the Solicitor General,
 Petition for certiorari and prohibition as counsel for respondents, who pointed out that there were about 549 employees in the NPO. The 67
 Eo 378 constitutionality remove jurisdiction of npo over other printing services violates security of petitioners undeniably comprised a small fraction of the NPO employees whom they claimed to
tenure represent. Subsequently, 32 of the original petitioners executed an Affidavit of Desistance, while
one signed a letter denying ever signing the petition, ostensibly reducing the number of petitioners to
ISSUE: Is this case qualified as a class suit? NO, petitioner failed to state the number of employees 34.
affected. Only 67 out of 549 employees.
32 signed affidavit of desistance
Still, even if we were to disregard the affidavit of desistance filed by some of the petitioners, it is
67 signed the CNFS
highly doubtful that a sufficient, representative number of NPO employees have instituted this
Only 20 is in the jurat
purported class suit. A perusal of the petition itself would show that of the 67 petitioners who signed
the Verification/Certification of Non-Forum Shopping, only 20 petitioners were in fact mentioned in
DOCTRINE:
the jurat as having duly subscribed the petition before the notary public. Inother words, only 20
Since petitioners instituted this case as a class suit, the Court, thus, must first determine if the petition
petitioners effectively instituted the present case.
indeed qualifies as one. In Board of Optometry v. Colet, we held that “[c]ourts must exercise utmost
caution before allowing a class suit , which is the exception to the requirement of joinder of all
indispensable parties. For while no difficulty may arise if the decision secured is favorable to the ADEQUACY OF REPRESENTATION
plaintiffs, a quandary would result if the decision were otherwise as those who were deemed impleaded Indeed, in MVRS Publications, Inc. v. Islamic Da’wah Council of the Philippines, Inc., we observed that
by their self-appointed representatives would certainly claim denial of due process.” an element of a class suit or representative suit is the adequacy of representation. In determining the
question of fair and adequate representation of members of a class, the court must consider
Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:
(1) whether the interest of the named party is coextensive with the interest of the other
members of the class;
Sec. 12. Class suit . — When the subject matter of the controversy is one of common
(2) the proportion of those made a party, as it so bears, to the total membership of the
or general interest to many persons so numerous that it is impracticable to join all as
class; and
parties, a number of them which the court finds to be sufficiently numerous and
(3) any other factor bearing on the ability of the named party to speak for the rest of the
representative as to fully protect the interests of all concerned may sue or defend for
class.
the benefit of all. Any party in interest shall have the right to intervene to protect his
individual interest.
OPPOSING INTERESTS BETWEEN PLAINTIFFS AND MEMBERS OF THE CLASS
Previously, we held in Ibañes v. Roman Catholic Church that where the interests of the plaintiffs and
From the foregoing definition, the requisites of a class suit are:
the other members of the class they seek to represent are diametrically opposed, the class suit
will not prosper.
(1) the subject matter of controversy is one of common or general interest to many
persons;
It is worth mentioning that a Manifestation of Desistance, to which the previously mentioned Affidavit
(2) the parties affected are so numerous that it is impracticable to bring them all to court;
of Desistance was attached, was filed by the President of the National Printing Office Workers
and
Association (NAPOWA). The said manifestation expressed NAPOWA’s opposition to the filing of
(3) the parties bringing the class suit are sufficiently numerous or representative of the
the instant petition in any court. Even if we take into account the contention of petitioners’ counsel
class and can fully protect the interests of all concerned.
that the NAPOWA President had no legal standing to file such manifestation, the said pleading is a clear
indication that there is a divergence of opinions and views among the members of the class
sought to be represented, and not all are in favor of filing the present suit. There is here an apparent
In Mathay v. The Consolidated Bank and Trust Company, the Court held that:
conflict between petitioners’ interests and those of the persons whom they claim to represent.

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
attending facts, and the complaint, or other pleading initiating the class action should
allege the existence of the necessary facts, to wit, the existence of a subject
matter of common interest, and the existence of a class and the number of
persons in the alleged class, in order that the court might be enabled to
determine whether the members of the class are so numerous as to make it
impracticable to bring them all before the court, to contrast the number appearing
on the record with the number in the class and to determine whether claimants on
record adequately represent the class and the subject matter of general or common
interest.
 11. Napere v. Barbarona, G.R. No. 160426, January 31, 2008.
DEATH OF A PARTY
1. Respondents/Plaintiffs: Sps Barbarona (2) are the owners of lot in leyte.
2. Defendant: Napere
3. Sued Juan Napere for its encroachment. The complaint for recovery of possession, quieting
of title and damages
4. Juan Napere died. Counsel informed court of his death and submitted heirs’ names and
addresses. BUT RTC FAILED TO ORDER SUBSITUTION
LT of Napere: TC has no jurisdiction over the heirs who were not ordered substituted as party-
defendants for the deceased. Rule 3 Sec 17
Issue: may jurisdiction ba ang RTC? Yes, kahit RTC failed to order the substitution.
 It is a mere oversight. Basta nacomply ni counsel ang informing the court.
 Mere failure to substitute is no sufficient to nullify RTC decision. But non-compliance of this rule
amounts to violation of due process.
 Rule on substitution is not a matter of jurisdiction, but a requirement of due process.
 Requirement ng substitution: pending action survives
Formal substitution by heirs is not necessary when they themselves voluntarily appear,
participate in the case, and present evidence in defense of the deceased. In such case, there is really
no violation of the right to due process. The essence of due process is the reasonable opportunity to be
heard and to submit any evidence available in support of one’s defense. When due process is not
violated, as when the right of the representative or heir is recognized and protected, noncompliance
or belated formal compliance with the Rules cannot affect the validity of a promulgated
decision.
In light of these pronouncements, we cannot nullify the proceedings before the trial court and the
judgment rendered therein because the petitioner, who was, in fact, a codefendant of the deceased,
actively participated in the case. The records show that the counsel of Juan Napere and petitioner
continued to represent them even after Juan’s death. Hence, through counsel, petitioner was
able to adequately defend herself and the deceased in the proceedings below. Due process
simply demands an opportunity to be heard and this opportunity was not denied petitioner.

DOCTRINE:
When a party to a pending case dies and the claim is not extinguished by such death, the Rules
require the substitution of the deceased party by his legal representative or heirs. In such case,
counsel is obliged to inform the court of the death of his client and give the name and address
of the latter’s legal representative.

The complaint for recovery of possession, quieting of title and damages is an action that survives
the death of the defendant. Notably, the counsel of Juan Napere complied with his duty to inform
the court of his client’s death and the names and addresses of the heirs. The trial court, however,
failed to order the substitution of the heirs. Nonetheless, despite this oversight, we hold that the
proceedings conducted and the judgment rendered by the trial court are valid.

The Court has repeatedly declared that failure of the counsel to comply with his duty to inform the
court of the death of his client, such that no substitution is effected, will not invalidate the
proceedings and the judgment rendered thereon if the action survives the death of such party. The trial
court’s jurisdiction over the case subsists despite the death of the party.

Mere failure to substitute a deceased party is not sufficient ground to nullify a trial court’s
decision. The party alleging nullity must prove that there was an undeniable violation of due
process.

Strictly speaking, the rule on substitution by heirs is not a matter of jurisdiction, but a requirement
of due process. The rule on substitution was crafted to protect every party’s right to due process. It was
designed to ensure that the deceased party would continue to be properly represented in the
suit through his heirs or the duly appointed legal representative of his estate.

Moreover, non-compliance with the Rules results in the denial of the right to due process for
the heirs who, though not duly notified of the proceedings, would be substantially affected by the
decision rendered therein. Thus, it is only when there is a denial of due process, as when the
deceased is not represented by any legal representative or heir, that the court nullifies the trial
proceedings and the resulting judgment therein.
 12. Judge Sumaljap v. Spouses Literato, G.R. No. 149787, June 18, 2008
QUICKIE FACTS: LEYTE
1. Josefa Maglasang filed a complaint for the Nullity of a Deed of Sale of Real Property executed
between her as vendor and the Sps. Literato as vendee in the RTC.
2. Literato filed a Counterclaim alleging that Sumaljag occupied said land at the instance of Maglasang
without authority.
3. However, RTC dismissed the Counterclaim.
4. After dismissing the Counterclaim, Literato declared a Complaint for Declaration of the
Inexistence of Lease Contract,
5. Recovery of Possession of Land and Damages against Sumaljag and Maglasang.
6. Pending trial, Maglasang died. Atty. Suray, common counsel of Sumaljag and Maglasang,
filed a notice of death and substitution praying that Maglasang be substituted by Sumaljag.
7. RTC denied the Motion for Substitution. MR denied. CA affirmed.
ISSUE: okay ba ung substitution? NO, because the substitute is not one of those mentioned in Rule 3
Sec 16 because Judge Sumaljap is a counterclaim co defendant of josefa
 the pending action survived the death of Josefa maglasang: involves property and property rights
 the report of counsel was late pero okay pa din
DOCTRINE:
The rule on substitution in case of death of a party is governed by Section 16, Rule 3 of the 1997 Rules
of Civil Procedure, as amended, which provides:
Section 16. Death of a 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 purpose behind this rule is the protection of the right to due process of every party to the
litigation who may be affected by the intervening death. The deceased litigant is herself or himself
protected as he/she continues to be properly represented in the suit through the duly appointed legal
representative of his estate.
DETERMINING WHETHER OR NOT PENDING ACTION SURVIVES
A question preliminary to the application of the above provision is whether Civil Case Nos. B-1239
and B-1281 are actions that survive the death of Josefa. We said in Gonzalez v. Pagcor:
The criteria for determining whether an action survives the death of a plaintiff or
petitioner was elucidated upon in Bonilla v. Barcena as follows:
The question as to whether an action survives or not depends on the nature of the
action and the damage sued for. In the causes of action which SURVIVE, the wrong
complained [of] affects PRIMARILY and PRINCIPALLY property and property
rights , the injuries to the person being merely incidental, while in the causes of
action which DO NOT SURVIVE, the injury complained of is to the person, the
property and rights of property affected being incidental.
Since the question involved in these cases relate to property and property rights, then we are dealing
with actions that survive so that Section 16, Rule 3 must necessarily apply.
DUTY OF COUNSEL; TIMELINESS NOT AN ISSUE
The duty of counsel under the aforecited provision is to inform the court within thirty (30) days after
the death of his client of the fact of death, and to give the name and address of the deceased’s
legal representative or representatives. Incidentally, this is the only representation that counsel can
undertake after the death of a client as the fact of death terminated any further lawyer-client
relationship.
In the present case, it is undisputed that the counsel for Josefa did in fact notify the lower court,
although belatedly, of the fact of her death. However, he did as well inform the lower court that —
2. That before she died she executed a QUITCLAIM DEED in favor of REMISMUNDO D.
MAGLASANG over the land in question (Lot No. 1220-D of Benolho, Albuera, Leyte),
evidenced by a
QUITCLAIM DEED, copy of which is hereto attached as Annex ‘B’ who in turn sold it in
favor of JUDGE ANTONIO SUMALJAG, evidenced by a DEED OF ABSOLUTE SALE, copy
of which is hereto attached as Annex ‘C.’
Further, counsel asked that “the deceased Josefa Maglasang in her capacity as plaintiff and as Third Party
Counterclaim Defendant be substituted in the case at bar by JUDGE ANTONIO SUMALJAG whose
address is 38 Osmeña Street, Ormoc City” pursuant to “Section 16, Rule 3 of the 1997 Rules of Civil
Procedure.
This notification, although filed late, effectively informed the lower court of the death of litigant
Josefa Maglasang so as to free her counsel of any liability for failure to make a report of death
under Section 16, Rule 3 of the Rules of Court. In our view, counsel satisfactorily explained to the
lower court the circumstances of the late reporting, and the latter in fact granted counsel an extended
period. The timeliness of the report is therefore a non-issue.
LEGAL REPRESENTATIVE IMPROPER
The “legal representatives” that the provision speaks of, refer to those authorized by law — the
administrator, executor or guardian who, under the rule on settlement of estate of deceased persons,
is constituted to take over the estate of the deceased. Section 16, Rule 3 likewise expressly provides
that “the heirs of the deceased may be allowed to be substituted for the deceased, without requiring
the appointment of an executor or administrator.”
Significantly, the person — now the present petitioner — that counsel gave as substitute was not
one of those mentioned under Section 16, Rule 3. Rather, he is a COUNTERCLAIM CO-DEFENDANT
of the deceased whose proferred justification for the requested substitution is the transfer to him of the
interests of the deceased in the litigation prior to her death.Under the circumstances, both the lower
court and the CA were legally correct in not giving effect to counsel’s suggested substitute.
HEIRS AS LEGAL REPRESENTATIVES
The CA correctly harked back to the plain terms of Section 16, Rule 3 in determining who the appropriate
legal representative/s should be in the absence of an executor or administrator. The second paragraph
of the Section 16, Rule 3 of the 1997 Rules of Court, as amended, is clear — the heirs of the deceased
may be allowed to be substituted for the deceased, without requiring the appointment of an executor or
administrator. Our decisions on this matter have been clear and unequivocal. In San Juan, Jr. v. Cruz,
this Court held:
 The pronouncement of this Court in Lawas v. Court of Appeals that priority is given
to the legal representative of the deceased (the executor or administrator) and
that it is only in case of unreasonable delay in the appointment of an executor or
administrator, or in cases where the heirs resort to an extrajudicial settlement of the
estate that the court may adopt the alternative of allowing the heirs of the deceased
to be substituted for the deceased, is no longer true.

We likewise said in Gochan v. Young:

For the protection of the interests of the decedent, this Court has in previous instances
recognized the heirs as proper representatives of the decedent, even when
there is already an administrator appointed by the court. When no administrator
has been appointed, as in this case, there is all the more reason to recognize the heirs
as the proper representatives of the deceased.
 13. Memoracion Cruz v. Oswaldo Z. Cruz, G.R. No. 173292, September 01, 2010
QUICKIE FACTS: What the RTC could have done was to require Edgardo Cruz to appear in court and substitute
1. Memoracion filed a Complaint for Annulment of Sale, Reconveyance, and Damages in the RTC Memoracion as party to the pending case, pursuant to Section 16, Rule 3 of the 1997 Revised Rules
of Manila against her son Oswaldo. of Civil Procedure, and established jurisprudence. Consistent with our ruling in Heirs of Haberer v. Court
2. Allegedly, the Deed of Sale was executed through fraud. of Appeals, we consider such Manifestation, signed by Memoracion’s heir, Edgardo Cruz, and retaining
3. After presenting evidence, Memoracion died. Atty. Neri’s services as counsel, a formal substitution of deceased Memoracion by her heir, Edgardo
4. Her lawyer notified the court and informed the same that her son Edgardo would substitute her. Cruz.
5. Oswaldo moved to dismiss on the ground that the Action for Reconveyance is a personal action which
does not survive the death of Memoracion.
6. RTC dismissed the case. CA upheld.
It also needs mention that Oswaldo Cruz (respondent), although also an heir of Memoracion,
should be excluded as a legal representative in the case for being an adverse party therein.
ISSUE: okay ba ang substitution? Yes, the action survived the death
It is attached to property and property rights

DI: Recoveyance ba ay personal action?

DOCTRINE:
PETITION FOR ANNULMENT OF SALE, RECONVEYANCE AND DAMAGES SURVIVED THE DEATH OF
PETITIONER
The criterion for determining whether an action survives the death of a petitioner was elucidated in
Bonilla v. Barcena, to wit:

The question as to whether an action survives or not depends on the nature of the
action and the damage sued for. In the causes of ACTION WHICH SURVIVE, the
wrong complained [of] affects primarily and principally property and property
rights, the injuries to the person being merely incidental, while in the causes of action
which DO NOT SURVIVE, the injury complained of is to the person, the property
and rights of property affected being incidental.

If the case affects primarily and principally property and property rights, then it survives the death of the
plaintiff or petitioner. In Sumaljag v. Literato, we held that a Petition for Declaration of Nullity of Deed of
Sale of Real Property is one relating to property and property rights, and therefore, survives the death
of the petitioner. Accordingly, the instant case for annulment of sale of real property merits
survival despite the death of petitioner Memoracion Z. Cruz.

DUTY OF COUNSEL IN CASE OF SURVIVAL OF PENDING CASE

If the action survives despite death of a party, it is the duty of the deceased’s counsel to inform the
court of such death, and to give the names and addresses of the deceased’s legal
representatives. The deceased may be substituted by his heirs in the pending action.

If NO LEGAL REPRESENTATIVE is named by the counsel of the deceased, or the legal representative
FAILS TO APPEAR within a specified period, it is the duty of the court where the case is pending
to order the OPPOSING PARTY to procure the appointment of an executor or administrator for
the estate of the deceased. The reason for this rule is to protect all concerned who may be
affected by the intervening death, particularly the deceased and his estate.

IMPROPER TO DISMISS THE INSTANT CASE; IMPROPER TO SUBSTITUTE HEIR WHO IS AN ADVERSE
PARTY
It was error for the RTC to dismiss the case. As mentioned earlier, the petition for annulment of deed of
sale involves property and property rights, and hence, survives the death of petitioner Memoracion.
The RTC was informed, albeit belatedly, of the death of Memoracion, and was supplied with the
name and address of her legal representative, Edgardo Cruz.
 14. Algura v. LGU of the City of Naga, G.R. No. 150135, October 30, 2006
QUICKIE FACTS:
1. Sps Algura filed a Complaint for Damages against Naga City for the illegal demolition of their
residence and boarding house.
2. Also, Algura filed an Ex Parte Motion to Litigate as Indigents.
3. They claim that they have a gross monthly income of 10K and a net pay of 3K.
4. They also showed that they had no property.
5. In Naga’s Motion to Disqualify Plaintiffs for Nonpayment of Filing Fees, it was shown that the Sps
Algura exceeded the gross income requirement.
6. Thus they were disqualified as indigent litigants.
ISSUE: qualified indigent litigant ba si Algura? yes, dahil sa rule 3 sec 21
 Property requirement was met.
 Income requirement was not satisfied, mataas ng 1500/mo sa threshold
 Kung di na meet ang one of the requirement, eto ang last test: “one who has no money or
property sufficient and available for food, shelter and basic necessities for himself and his
family.” (pasado cla)
The Court rules that Rule 3, Section 21 and Rule 141, Section 16 (later amended as Rule 141, Section
18 on March 1, 2000 and subsequently amended by Rule 141, Section 19 on August 16, 2003, which
is now the present rule) are still valid and enforceable rules on indigent litigants. Instead of
declaring that Rule 3, Section 21 has been superseded and impliedly amended by Section 18 and later
Section 19 of Rule 141, the Court finds that the two rules can and should be harmonized.
The Court opts to reconcile Rule 3, Section 21 and Rule 141, Section 19 because it is a settled principle
that when conflicts are seen between two provisions, all efforts must be made to harmonize them.
APPLICATION OF THE RULES ON INDIGENT LITIGANTS
When an application to litigate as an indigent litigant is filed, the court shall scrutinize the affidavits and
supporting documents submitted by the applicant to determine if the applicant complies with the
income and property standards prescribed in the present Section 19 of Rule 141 — that is, the
applicant’s gross income and that of the applicant’s immediate family do not exceed an amount double
the monthly minimum wage of an employee; and the applicant does not own real property with a fair
market value of more than PhP 300,000.00. If the trial court finds that the applicant meets the
income and property requirements, the authority to litigate as indigent litigant is automatically
granted and the grant is a MATTER OF RIGHT.

DOCTRINE:
In the case at bar, petitioners Alguras submitted the Affidavits of petitioner Lorencita Algura and neighbor
Erlinda Bangate, the pay slip of petitioner Antonio F. Algura showing a gross monthly income of PhP
10,474.00, and a Certification of the Naga City assessor stating that petitioners do not have property
declared in their names for taxation. Undoubtedly, petitioners do not own real property as shown by
the Certification of the Naga City assessor and so the property requirement is met.
However with respect to the income requirement, it is clear that the gross monthly income of
PhP 10,474.00 of petitioner Antonio F. Algura and the PhP 3,000.00 income of Lorencita Algura
when combined, were above the PhP 1,500.00 monthly income threshold prescribed by then
Rule 141, Section 16 and therefore, the income requirement was not satisfied.
However, if the trial court finds that one or both requirements have not been met, then it would
set a hearing to enable the applicant to prove that the applicant has “no money or property
sufficient and available for food, shelter and basic necessities for himself and his family.” In
that hearing, the adverse party may adduce countervailing evidence to disprove the evidence presented
by the applicant; after which the trial court will rule on the application depending on the evidence
adduced. In addition, Section 21 of Rule 3 also provides that the adverse party may later still contest
the grant of such authority at any time before judgment is rendered by the trial court, possibly
based on newly discovered evidence not obtained at the time the application was heard. If the
court determines 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 or the payment
of prescribed fees shall be made, without prejudice to such other sanctions as the court may impose.

The trial court was therefore correct in disqualifying petitioners Alguras as indigent litigants
although the court should have applied Rule 141, Section 16 which was in effect at the time of the filing
of the application on September 1, 1999. Even if Rule 141, Section 18 (which superseded Rule 141,
Section 16 on March 1, 2000) were applied, still the application could not have been granted as the
combined PhP 13,474.00 income of petitioners was beyond the PhP 3,000.00 monthly income
threshold.
Recapitulating the rules on indigent litigants, therefore, if the applicant for exemption meets the
salary and property requirements under Section 19 of Rule 141, then the grant of the application is
mandatory. On the other hand, when the application does not satisfy one or both requirements, then the
application should not be denied outright; instead, the court should apply the “indigency test” under
Section 21 of Rule 3 and use its sound discretion in determining the merits of the prayer for an exemption.

RULE 141 § 19 & RULE 3 § 21 ON INDIGENT LITIGANTS CAN BE APPLIED TOGETHER

Unrelenting, petitioners however argue in their Motion for Reconsideration of the April 14, 2000
Order disqualifying them as indigent litigants that the rules have been relaxed by relying on Rule 3,
Section 21 of the 1997 Rules of Civil procedure which authorizes parties to litigate their action as
indigents if the court is satisfied that the party is “one who has no money or property sufficient
and available for food, shelter and basic necessities for himself and his family.” The trial court did
not give credence to this view of petitioners and simply applied Rule 141 but ignored Rule 3, Section 21
on Indigent Party.

The position of petitioners on the need to use Rule 3, Section 21 on their application to litigate as indigent
litigants brings to the fore the issue on whether a trial court has to apply both Rule 141, Section
16 and Rule 3, Section 21 on such applications or should the court apply only Rule 141, Section 16
and discard Rule 3, Section 21 as having been superseded by Rule 141, Section 16 on Legal Fees.
ADDITIONAL CASES
Heritage Park Management v. CIAC, G.R. No. 148133, October 8, 2008
QUICKIE FACTS:
In developing into a memorial park a piece of land in Fort Bonifacio, PEA engaged the services of EDC
(Elpidio Uy) under a Lanscaping and Construction Agreement wherein EDC would undertake to develop
and do landscaping works on 105 hectare
Heritage Park. However, due to PEA’s inability to evict the squatters, it was delayed. Aggrieved, EDC filed
a complaint befCore the Construction Industry Arbitration Commission seeking to collect damages from
PEA. Thereafter, PEA executed a Dead of Assignment in favor of Heritage Park Management Corporation
which assigns all of PEAs rights and contracts to the Hertige. As a result, Heritage, as assignee, filed a
Petition for Prohibition and Injunction in the CA to enjoin the CIAC from ruling on the complaint. Heritage
claims that CIAC has no jurisdiction because it was not impleaded as an indispensible party.
DOCTRINE:
Petitioner (Heritage) claims that it is an indispensable party to the proceedings before the CIAC as the
assignee of the PEA of the latter’s rights, interests, and obligations in the Heritage Park Project. Thus, its
non-inclusion in the proceedings before the CIAC deprived the latter of jurisdiction over the case. Heritage
argues that it is in possession and control over the funds of the Heritage Park Project which EDC is
targeting with its complaint before the CIAC.
Such contention is bereft of merit. It must be remembered that when the case was originally filed
by EDC before the CIAC on January 12, 2000, PEA had not yet transferred its rights and
obligations over the Project to Heritage, as evidenced by the Deed of Assignment dated March 2000.
Thus, by impleading PEA as respondent, the CIAC had jurisdiction over the case at that time.
Heritage, however, claims that when PEA transferred its rights and obligations over the Project to
Heritage, the CIAC lost its jurisdiction. In other words, Heritage alleges that a court may lose jurisdiction
over a case based on the subsequent actions of the parties. This is unacceptable.
The settled rule is that jurisdiction once acquired is not lost upon the instance of the parties but
continues until the case is terminated. Certainly, it would be the height of injustice to allow parties
that disagree with the decision of a judicial tribunal to annul the same through the expedient of
transferring their interests or rights involved in the case.
HERITAGE NOT AN INDISPENSIBLE PARTY; TRANSFEREE PENDENTE LITE
Moreover, Heritage is mistaken when it claims that it is an indispensible party to the case and that it was
not included in the case before the CIAC. Being a transferee of the interests of PEA over the Project
during the pendency of the case before the CIAC, it is bound by the proceedings in like manner
as PEA. In Jocson v. Court of Appeals, this Court held the Bank of the Philippine Islands is bound by
the decision of the trial court being the transferee pendent lite of the original defendant
therein, despite the fact that it had not been substituted for the original defendant and had not
been notified of the proceedings against it.
CASE IS BINDING UPON THE TRANSFEREE PENDENTE LITE
Rule 3 of Section 20 (now Section 19, Rule 3) of the Rules of Court provides:
SEC. 20. 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.
This Court has declared in a number of decisions that a transferee pendente lite stands in exactly
the same position as its predecessor-in-interest, the original defendant, and is bound by the
proceedings had in the case before the property was transferred to it. It is a proper but not an
indispensible party as it would in any event be bound by the judgment against his predecessor. This
would follow even if it is not formally included as a defendant through an amendment of the
complaint.
Verily, the non-inclusion of Heritage in the proceedings before the CIAC is of no moment as the
Rules of Court specifically allows the proceedings to proceed with the original parties while
binding the transferee.
William Genato v. Benjamin Bayhon, G.R. No. 171035, August 24, 2009
QUICKIE FACTS:
Bayhon contracted a loan with Genato. Thereafter, Bayhon et al filed an Action for the Declaration of
Nullity of a Dacion en Pago executed by Bayhon in favor of Genato. Likewise, Genato filed an Action for
Specific Performance against Bayhon compelling the latter to pay the loan and execute a dacion en pago
in his favor. Upon consolidation of the 2 cases, RTC ruled in favor of Genato and held Bayhon liable for
the loan. During Bayhon’s appeal, he died. CA reversed the RTC and ruled that Bayhon’s liability was
extinguished by his death.
DOCTRINE:
As a general rule, obligations derived from a contract are transmissible. In Estate of Hemady v.
Luzon Surety Co., Inc., the
Court, through Justice JBL Reyes, held:
While in our successional system the responsibility of the heirs for the debts of their
decedent cannot exceed the value of the inheritance they receive from him, the
principle remains intact that these heirs succeed not only to the rights of the
deceased but also to his obligations.
The Court proceeded further to state the GENERAL RULE: “Under our law, therefore, the general rule is
that a party’s contractual rights and obligations are transmissible to the successors.
The loan in this case was contracted by Bayhon. He died while the case was pending before the
Court of Appeals. While he may no longer be compelled to pay the loan, the debt subsists
against his estate. No property or portion of the inheritance may be transmitted to his heirs
UNLESS the debt has first been satisfied.
The procedure in VINDICATING MONETARY CLAIMS involving a DEFENDANT WHO DIES BEFORE
FINAL JUDGMENT is governed by Rule 3, Section 20 of the Rules of Civil Procedure, to wit:
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.
Pursuant to this provision, petitioner’s remedy lies in filing a claim against the estate of the deceased
respondent.
Responsible farmer leaders shall be allowed to represent themselves, their fellow
farmers or their organizations in any proceedings before the DAR: Provided, however,
that when there are two or more representatives for any individual or group, the
representatives should choose only one among themselves to represent such party or
group before any DAR proceedings.

Clearly, the respective leaders of the Supervisory Group and AMBALA are contextually real
parties-in-interest allowed by law to file a petition before the DAR or PARC. This is not necessarily to
say, however, that Galang represents AMBALA, for as records show and as HLI aptly noted, his
“petisyon” filed with DAR did not carry the usual authorization of the individuals in whose behalf it was
supposed to have been instituted. To date, such authorization document, which would logically include
a list of the names of the authorizing FWBs, has yet to be submitted to be part of the records.

Hacienda Luisita Incorporated v. Presidential Agrarian Reform Council, G.R. No. 171101, July
05, 2011
DOCTRINE:
HLI would deny real party-in-interest status to the purported leaders of the Supervisory Group and
AMBALA, i.e., Julio Suniga, Windsor Andaya, and Rene Galang, who filed the revocatory petitions before
the DAR. As HLI would have it, Galang, the self-styled head of AMBALA, gained HLI employment in June
1990 and, thus, could not have been a party to the SDOA executed a year earlier. As regards the
Supervisory Group, HLI alleges that supervisors are not regular farmworkers, but the company
nonetheless considered them FWBs under the SDOA as a mere concession to enable them to enjoy the
same benefits given qualified regular farmworkers. However, if the SDOA would be canceled and land
distribution effected, so HLI claims, citing Fortich v. Corona, the supervisors would be excluded from
receiving lands as farmworkers other than the regular farmworkers who are merely entitled to the “fruits
of the land.”
The SDOA no less identifies “the SDP qualified beneficiaries” as “the farmworkers who appear in
the annual payroll, inclusive of the permanent and seasonal employees, who are regularly or
periodically employed by [HLI].” Galang, per HLI’s own admission, is employed by HLI , and is, thus,
a qualified beneficiary of the SDP; he comes within the definition of a real party-in-interest
under Sec. 2, Rule 3 of the Rules of Court, meaning, one who stands to be benefited or injured
by the judgment in the suit or is the party entitled to the avails of the suit.

The same holds true with respect to the Supervisory Group whose members were admittedly
employed by HLI and whose names and signatures even appeared in the annex of the SDOA.
Being qualified beneficiaries of the SDP, Suniga and the other 61 supervisors are certainly parties
who would benefit or be prejudiced by the judgment recalling the SDP or replacing it with
some other modality to comply with RA 6657.

Even assuming that members of the Supervisory Group are not regular farmworkers , but are
in the category of “other farmworkers” mentioned in Sec. 4, Article XIII of the Constitution, thus only
entitled to a share of the fruits of the land, as indeed Fortich teaches, this does not detract from the
fact that they are still identified as being among the “SDP qualified beneficiaries.” As such, they
are, thus, entitled to bring an action upon the SDP.

Further, under Sec. 50, paragraph 4 of RA 6657, farmer -leaders are expressly allowed to represent
themselves, their fellow farmers or their organizations in any proceedings before the DAR.
Specifically:

SEC. 50. Quasi-Judicial Powers of the DAR.—