Real Party in Interest

Roger Navarro vs. RTC Judge Escobido and Karen Go

G.R. No. 153788
November 27, 2009
Facts: A contract of Lease with an Option to Purchase was entered into by herein petitioner
Navarro and Glenn Go, the husband of herein private respondent Karen Go. Karen Go is the
registered owner of KARGO Enterprises which is engaged, among others, in the buy and sell of
motor vehicles. Navarro failed to comply with his obligation to pay the purchase price of the 2
motor vehicles subject of their contract, whereby his checks were dishonored because of
insufficiency of funds. After oral and written demand, herein private respondent instituted 2
complaints before the RTC for replevin/ sum of money with damages against Navarro. Navarro
alleged as affirmative defense that the complaints have no cause of action. He contends that
Karen Go is not the real party in interest because she was not the one he contracted with, but her
husband Glenn Go, as evidenced by the contract they have entered into. The RTC, at first
dismissed the complaint based on the ground instituted by Navarro, but on the motion for
reconsideration filed by the respondent, RTC set aside the former decision. When RTC denied
Navarros motion for reconsideration, he filed a petition for certiorari with the CA, which denied
the same. Hence this petition.
Issue: W/N Karen Go is a real party in interest.
Held: Yes. Rule 3, Sec. 2 provides: A real party in interest is the party who stands to be benefitted
or injured by the judgment in the suit, or that 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. As the registered owner of Kargo Enterprises, herein
respondents is the party who will directly benefit or injured by a judgment in this case, and is
legally incorrect to say that her complaint does not state a cause of action because her name did
not appear in the lease agreement. Glenn Go, who is the one who signed the contract in behalf of
Kargo Enterprises, is the husband of Karen Go. The court also ruled that as a sole proprietorship,
Kargo Enterprises is a conjugal property of Karen and Glenn. Hence, given that the FC provides
among others that the administration of conjugal partnership shall belong to both spouses jointly,
either Karen or Glenn shall have the authority to manage their conjugal property. Consent is not
even needed before one can perform acts of administration except from disposing or
encumbering their conjugal property. Hence, as co-owners both of the spouse have an equal right
to seek possession of these properties. Glenn Go is only a pro-forma party to the suit based on
Rule 3, Sec. 4. and he can also be added to the suit given by Rule 3, Sec. 11. Hence, this petition
is denied.

Indispensable Party
Rosendo Bacalso vs. Maximo Padigos
GR No. 173192 April 18 2008
Facts: Present case involves a parcel of land located in Inayawan, Cebu covered by an OTC in
the name of 13 co-owners which includes herein private respondents. Herein private respondents
filed an action for quieting of title, declaration of nullity of documents, recovery of possession and
damages against herein petitioner. Petitioners are the heirs of Alipio Bacalso Sr. who during his
lifetime secured Tax Declarations covering the title without any legal basis. That petitioners have
been leasing portions of the lot to persons who built houses thereon. Petitioners contend that
their father purchased the lot via deeds of sale the shares of 5 of the co-owners and that they
have acquired the other shares of the lot by extraordinary acquisitive prescription, through a
continuous, open, and peaceful and adverse possession of the land for more that 30 years. RTC
ruled in favor of herein respondents which issued a writ of execution ordering the demolition of
the houses constructed in the subject lot. After appeal was made to the CA, it affirmed the
decision of the RTC. Hence this petition. One of the issues raised was whether the complaint is
valid and legal even if not all indispensible parties are impleaded or joined, given that the lessees
of the houses constructed were not joined as defendants in the complaint.
Issue: W/N the complaint is valid when the complaint did not join the lessees of the houses
situated in the subject land was not joined as indispensible parties.
Held: No. Rule 3, Section 7 defines indispensable party as follows: Parties in interest without
whom no final determination can be had of an action shall be joined either as plaintiffs or
defendants. The general rule with reference to the making of parties in a civil action requires the
joinder of all necessary parties if possible, and the joinder of all indispensable parties under any
and all conditions, their presence being a 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.
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. Hence,
the absence of the lessees in the complaint as indispensable defendants, would render the
complaint defective.

Indispensable Party
Anicia Tallorin vs. Heirs of Juanito Tarona
GR No. 177429 November 24, 2009
Facts: Herein respondents filed a case before the RTC of Balanga, Bataan against herein
petitioner for the cancellation of her and two other womens tax declaration over a parcel of land.
The Taronas alleges that unknown to them, the Assessors office cancelled the tax declaration in
favor of their father based on an unsigned though notarized affidavit their father in favor of herein
petitioner and two others namely Margarita Pastelero and Dolores Valdez. In place of the
cancelled one, the Assessors office issued a new tax declaration in favor of the said three
persons. Both the RTC and CA ruled in favor of herein respondents. Petitioners then filed a
petition for certiorari before the Court, contending, among others that the RTC and CA erred in
failing to dismiss the complaint for not impleading all the indispensable parties, who are the coowners of the subject lot.
Issue: W/N the RTC and CA erred in not dismissing the complaint for the failure of the
respondent to implead indispensable parties.
Held: Yes. Rule 3, Sec. 7 provides that Parties in interest without whom no final determination
can be had of an action shall be joined either as plaintiffs or defendants. Indispensable parties
are those with such an interest in the controversy that a final decree would necessarily affect their
rights, so that the courts cannot proceed without their presence. Joining indispensable parties into
an action is mandatory, being a requirement of due process. Without whom their presence, the
judgment of the court cannot attain finality. The absence of indispensable parties renders all
subsequent actions of the court null and void. It would have no authority to act, not only as to the
absent party, but as to those present as well. It lies in the plaintiff to implead all indispensable
parties. RTC and CA had no authority to annul the tax declaration without seeing to it that all the
three persons were impleaded in the case. But the Taronas action cannot be dismissed outright.
Rule 3, Sec. 11 prohibits dismissal of a suit on the ground of non-joinder or misjoinder of parties,
wherein it allows the amendments of the complaint at any stage of the proceedings, though
motion or an order of the court on its own initiative. Only if plaintiff refuses to implead an
indispensable party, despite the order of the court, may it dismiss the action based on Rule 17,
Sec. 3. Hence, the case is remanded to the RTC with an order to implead Margarita and Dolores
as defendants.

Miguel vs. Montanez

GR No. 191336

January 25, 2012

Facts: Respondent Montanez secured a loan of 143,864 payable for one year from the petitioner.
Respondent gave as collateral therefor his house and lot located in Caloocan City. Due to
respondents failure to pay the loan, petitioner filed a complaint against the respondent before the
Lupong Tagapayapa of San Jose, Rodriguez, Rizal. The parties entered into a Kasunduang Pagaayos wherein the respondent agreed to pay his loan installments in the amount of 2,000 per
month, and in the even the house and lot given as collateral is sold, respondent would settle the
balance of the loan in full. Respondent still failed to pay, hence the Lupon Tagapamayapa issued
a certification to file action in court in favor of the petitioner. Petitioner filed a complaint for
collection of sum of money before the MeTC of Makati, wherein the herein petitioner answered
the defense of improper venue considering that Montanez was a resident of Caloocan and that he
lived in San Mateo, Rizal. The MeTC and the RTC, when the case was appealed to the latter,
rendered a judgment in favor of herein petitioner. The CA, on appeal, ruled in favor of therein
respondent, contending that the Kasunduang pagaayos has the force and effect of a court
judgment, which may be enforced by execution within six months from the date of settlement by
the Lupon, or by court action after the lapse of such time. Considering that more than six months
had elapsed, the CA ruled that the remedy of the petitioner was to file an acion for the execution
of the kasunduan pag-aayos in court and not for collection of sum of money.
Issue: WON a complaint for sum of money is the proper remedy for the petitioner,
notwithstanding the kasunduang pag-aayos.
Held: Because the respondent failed to comply with the terms of the Kasunduang Pag-aayos,
said agreement is deemed rescinded pursuant to Article 2041 of the New Civil Code and the
petitioner can insist on his original demand. Perforce, the complaint for collection of sum of
money is the proper remedy.
Being a by-product of mutual concessions and good faith of the parties, an amicable settlement
has the force and effect of res judicata even if not judicially approved. It transcends being a mere
contract binding only upon the parties thereto, and is akin to a judgment that is subject to
execution in accordance with the Rules.Thus, under Section 417 of the Local Government Code,
such amicable settlement or arbitration award may be enforced by execution by the Barangay
Lupon within six (6) months from the date of settlement, or by filing an action to enforce such
settlement in the appropriate city or municipal court, if beyond the six-month period.
Under the first remedy, the proceedings are covered by the Local Government Code and the
Katarungang Pambarangay Implementing Rules and Regulations. The Punong Barangay is
called upon during the hearing to determine solely the fact of non-compliance of the terms of the
settlement and to give the defaulting party another chance at voluntarily complying with his
obligation under the settlement. Under the second remedy, the proceedings are governed by the
Rules of Court, as amended. The cause of action is the amicable settlement itself, which, by
operation of law, has the force and effect of a final judgment. It must be emphasized, however,
that enforcement by execution of the amicable settlement, either under the first or the second
remedy, is only applicable if the contracting parties have not repudiated such settlement within
ten (10) days from the date thereof in accordance with Section 416 of the Local Government
Code. If the amicable settlement is repudiated by one party, either expressly or impliedly, the
other party has two options, namely, to enforce the compromise in accordance with the Local
Government Code or Rules of Court as the case may be, or to consider it rescinded and insist
upon his original demand. Consequently, Art. 2041, when contrasted with Art. 2039, denotes that
no action for rescission is required in said Article 2041, and that the party aggrieved by the
breach of a compromise agreement may, if he chooses, bring the suit contemplated or
involved in his original demand, as if there had never been any compromise agreement,
without bringing an action for rescission thereof. He need not seek a judicial declaration of
rescission, for he may "regard" the compromise agreement already "rescinded". In the

instant case, the respondent did not comply with the terms and conditions of the Kasunduang
Pag-aayos. Such non-compliance may be construed as repudiation because it denotes that the
respondent did not intend to be bound by the terms thereof, thereby negating the very purpose for
which it was executed. Perforce, the petitioner has the option either to enforce the Kasunduang
Pag-aayos, or to regard it as rescinded and insist upon his original demand, in accordance with
the provision of Article 2041 of the Civil Code. Having instituted an action for collection of sum of
money, the petitioner obviously chose to rescind the Kasunduang Pag-aayos. As such, it is error
on the part of the CA to rule that enforcement by execution of said agreement is the appropriate
remedy under the circumstances. The CA also erred in ordering that the case should be
remanded to the trial court. Hence, petition is granted.