Spouses JULITA DE LA CRUZ and FELIPE DE LA CRUZ, petitioners, vs.

PEDRO
JOAQUIN, respondent.
[G.R. No. 162788. July 28, 2005]
PANGANIBAN, J.:

FACTS
The case originated from a Complaint for the recovery of possession and ownership, the cancellation
of title, and damages, filed by Pedro Joaquin against petitioners in the Regional Trial Court of Baloc, Sto.
Domingo, Nueva Ecija. Respondent alleged that he had obtained a loan from them in the amount
of P9,000 on June 29, 1974, payable after five (5) years; that is, on June 29, 1979. To secure the payment
of the obligation, he supposedly executed a Deed of Sale in favor of petitioners. The Deed was for a
parcel of land in Pinagpanaan, Talavera, Nueva Ecija. The parties also executed another document
entitled Kasunduan.
On April 23, 1990, the RTC issued a Decision in his favor. The trial court declared that the parties had
entered into a sale with a right of repurchase. Petitioners assert that the RTC’s Decision was invalid for
lack of jurisdiction claiming that respondent died during the pendency of the case and there being no
substitution by the heirs, the trial court allegedly lacked jurisdiction over the litigation..

ISSEU: whether the trial court lost jurisdiction over the case upon the death of Pedro Joaquin,

HELD
Rule on Substitution

When a party to a pending action dies and the claim is not extinguished,[ the Rules of Court
require a substitution of the deceased. The procedure is specifically governed by Section 16 of Rule
3, which reads thus:

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 rule on the substitution of parties was crafted to protect every parties right to due process. The
estate of the deceased party will continue to be properly represented in the suit through the duly appointed
legal representative. Moreover, no adjudication can be made against the successor of the deceased if the
fundamental right to a day in court is denied.
The Court has nullified not only trial proceedings conducted without the appearance of the legal
representatives of the deceased, but also the resulting judgments. In those instances, the courts acquired
no jurisdiction over the persons of the legal representatives or the heirs upon whom no judgment was
binding.
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.
This general rule notwithstanding, a formal substitution by heirs is not necessary when they
themselves voluntarily appear, participate in the case, and present evidence in defense of the
deceased. These actions negate any claim that the right to due process was violated.

Strictly speaking, the rule on the substitution by heirs is not a matter of jurisdiction, but a
requirement of due process. Thus, 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. Mere failure to substitute for a
deceased plaintiff is not a sufficient ground to nullify a trial courts decision. The alleging party
must prove that there was an undeniable violation of due process.
Considering the foregoing circumstances, the Motion for Substitution may be deemed to have been
granted; and the heirs, to have substituted for the deceased, Pedro Joaquin. There being no violation of
due process, the issue of substitution cannot be upheld as a ground to nullify the trial courts Decision.
Then the court decided that Petition is DENIED and the assailed Decision and Resolution are AFFIRMED
 ROGER V. NAVARRO vs HON. JOSE L. ESCOBIDO
[G.R. No. 153788]
BRION, J

FACTS

Respondent Karen T. Go filed two complaints before the RTC for replevin and/or sum of money with
damages against Navarro. In these complaints, Karen Go prayed that the RTC issue writs of replevin for
the seizure of two (2) motor vehicles in Navarro’s possession. In his Answers, Navarro alleged as a
special affirmative defense that the two complaints stated no cause of action, since Karen Go was not a
party to the Lease Agreements with Option to Purchase (collectively, the lease agreements) — the
actionable documents on which the complaints were based. RTC dismissed the case but set aside the
dismissal on the presumption that Glenn Go’s (husband) leasing business is a conjugal property and thus
ordered Karen Go to file a motion for the inclusion of Glenn Go as co-plaintiff as per Rule 4, Section 3 of
the Rules of Court. Navarro filed a petition for certiorari with the CA. According to Navarro, a complaint
which failed to state a cause of action could not be converted into one with a cause of action by mere
amendment or supplemental pleading. CA denied petition.

ISSUE: Whether or not Karen Go is a real party in interest.

HELD: YES.

Karen Go is the registered owner of the business name Kargo Enterprises, as the registered owner of it,
Karen Go is the party who will directly benefit from or be injured by a judgment in this case. Thus,
contrary to Navarro’s contention, Karen Go is the real party-in-interest, and it 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 that her husband signed in behalf of Kargo Enterprises.

Glenn and Karen Go are effectively co-owners of Kargo Enterprises and the properties registered under
this name; hence, both have an equal right to seek possession of these properties. Therefore, only one of
the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an
indispensable party thereto. The other co-owners are not indispensable parties. They are not even
necessary parties, for a complete relief can be accorded in the suit even without their participation, since
the suit is presumed to have been filed for the benefit of all co-owners.

We hold that since Glenn Go is not strictly an indispensable party in the action to recover possession of
the leased vehicles, he only needs to be impleaded as a pro-forma party to the suit, based on Section 4,
Rule 4 of the Rules, which states:
Section 4.Spouses as parties. — Husband and wife shall sue or be sued jointly, except as provided
by law.
Even assuming that Glenn Go is an indispensable party to the action, misjoinder or non-joinder of
indispensable parties in a complaint is not a ground for dismissal of action as per Rule 3, Section 11
of the Rules of Court.

Non-joinder of indispensable parties not ground to

dismiss action
 Even assuming that Glenn Go is an indispensable party to the action, we have held in a number
of cases that the misjoinder or non-joinder of indispensable parties in a complaint is not a ground for
dismissal of action. As we stated in Macababbad v. Masirag:

Rule 3, Section 11 of the Rules of Court provides that neither misjoinder nor nonjoinder of
parties is a ground for the dismissal of an action, thus:

Sec. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor

non-joinder of parties is ground for dismissal of an action. Parties may
be dropped or added by order of the court on motion of any party or on
its own initiative at any stage of the action and on such terms as are
just. Any claim against a misjoined party may be severed and
proceeded with separately.

In Domingo v. Scheer, this Court held that the proper remedy when a party is
left out is to implead the indispensable party at any stage of the action. The court,
either motu proprio or upon the motion of a party, may order the inclusion of the
indispensable party or give the plaintiff opportunity to amend his complaint in order to
include indispensable parties. If the plaintiff to whom the order to include the
indispensable party is directed refuses to comply with the order of the court, the
complaint may be dismissed upon motion of the defendant or upon the court's own
motion.Only upon unjustified failure or refusal to obey the order to include or to amend
is the action dismissed
 LAND BANK OF THE PHILIPPINES, vs. EDUARDO M. CACAYURAN,
[G.R. No. 191667, April 22, 2015]

PERLAS-BERNABE, J.

FACTS

The instant case arose from two (2) loans (Subject Loans) entered into by the Municipality with LBP in
order to finance the Redevelopment Plan of the Agoo Public Plaza (Public Plaza). Through Resolution
Nos. 68-20057 and 139-2005, the Sangguniang Bayan of the Municipality (Sangguniang Bayan)
authorized its then-Mayor Eufranio Eriguel (Mayor Eriguel) to enter into a P4,000,000.00-loan with LBP,
the proceeds of which were used to construct ten (10) kiosks at the Public Plaza. Around a year later, the
SB issued Resolution this time authorizing Mayor Eriguel to obtain a P28,000,000.00-loan from LBP for
the construction of a commercial center named "Agoo People's Center" within the premises of the Public
Plaza. In order to secure the Subject Loans, the Municipality used as collateral, among others, a 2,323.75-
square meter lot situated at the south eastern portion of the Public Plaza (Plaza Lot)

However, a group of residents, led by respondent Eduardo M. Cacayuran (Cacayuran), opposed the
redevelopment of the Public Plaza, as well as the funding therefor thru the Subject Loans, claiming that
these were "highly irregular, violative of the law, and detrimental to public interests, and will result to
wanton desecration of the [Public Plaza].
Initially, the municipal officers moved for the outright dismissal of the complaint, which was denied, thus
constraining them to file their respective answers. For its part, LBP asserted, inter alia, that Cacayuran
did not have any cause of action since he was not privy to the loan agreements entered into by LBP and
the Municipality.

ISSUE : Whether or not the Municipality should be deemed as an indispensable party to the instant cas

HELD

The Court rules in the affirmative.

Section 7, Rule 3 of the Rules of Court mandates that all indispensable parties should be joined in a suit,

SEC. 7. Compulsory joinder of indispensable parties. - Parties-in-interest without whom no final

determination can be had of an action shall be joined either as plaintiffs or defendants.

"An indispensable party is one whose interest will be affected by the court's action in the litigation, and
without whom no final determination of the case can be had. The party's interest in the subject matter of
the suit and in the relief sought are so inextricably intertwined with the other parties' that his legal
presence as a party to the proceeding is an absolute necessity. In his absence, there cannot be a resolution
of the dispute of the parties before the court which is effective, complete, or equitable."Thus, 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.

Nevertheless, it must be stressed that the failure to implead any indispensable party to a suit does not
necessarily result in the outright dismissal of the complaint. In Heirs of Mesina v. Heirs of Fian, Sr. the
Court definitively explained that in instances of non-joinder of indispensable parties, the proper remedy is
to implead them and not to dismiss the case:
The non-joinder of indispensable parties is not a ground for the dismissal of an action. At any stage
of a judicial proceeding and/or at such times as are just, parties may be added on the motion of a party or
on the initiative of the tribunal concerned. If the plaintiff refuses to implead an indispensable party despite
the order of the court, that court may dismiss the complaint for the plaintiffs failure to comply with the
order. The remedy is to implead the non-party claimed to be indispensable.40 (Emphases and
underscoring supplied)

In this case, a judicious review of the records reveals that Cacayuran's complaint against LBP and the
municipal officers primarily prays that the commercialization of the Public Plaza be enjoined and also,
that the Subject Loans be declared null and void for having been unlawfully entered into by the said
officers. However, Cacayuran failed to implead in his complaint the Municipality, a real party-in-interest
and an indispensable party that stands to be directly affected by any judicial resolution on the case,
considering that: (a) the contracting parties to the Subject Loans are LBP and the Municipality; and (b)
the Municipality owns the Public Plaza as well as the improvements constructed thereon, including the
Agoo People's Center

The Court is not precluded from taking cognizance of the Municipality's status as an indispensable party
even at this stage of the proceedings. Indeed, the presence of indispensable parties is necessary to vest the
court with jurisdictionand, corollarily, the issue on jurisdiction may be raised at any stage of the
proceedings