CARANDANG v. HEIRS OF DE GUZMAN Necessary and indispensable parties | November 29, 2006 | Chico-Nazario, J
Nature of Case: Petition for review on certiorari Digest maker: Niq Polido SUMMARY: The Spouses Carandang and the decedent Quirino de Guzman were stockholders and corporate officers of Mabuhay Broadcasting System (MBS). The Carandangs have equities at 54 % while Quirino has 46%. When the capital stock of MBS was increased, the Carandang borrowed money from Quirino. When Quirino sent a demand letter to the Carandangs for the payment of the loan, the Carandangs refused to pay. Thereafter, Quirino filed a complaint seeking to recover the P336,375 total amount of the loan together with damages . The RTC ruled in favor of Quirino and ordered the Carandangs to pay the loan plus interest, attorney’s fees, and costs of suit. Carandangs argued that three of the four checks used to pay their stock subscriptions were issued in the name of Milagros de Guzman, the decedent’s wife. Thus, Milagros should be considered as an indispensable party in the complaint . Being such, the failure to join Milagros as a party in the case should cause the dismissal of the action. DOCTRINE: In suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article 487 of the Civil Code and relevant jurisprudence, any one of them may bring an action, any kind of action, for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto . The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be accorded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners FACTS: •
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The Spouses Carandang and the decedent Quirino de Guzman were stockholders and corporate officers of Mabuhay Broadcasting System (MBS). The Carandangs have equities at 54 % while Quirino has 46%. When the capital stock of MBS was increased, the Carandangs subscribed P345,000 from it, P293,250 from the said amount was loaned by Quirino to the Carandangs. In the subsequent increase in MBS’ capital stock, the Carandangs subscribed again to the increase in the amount of P93,750. But, P43,125 out of the mentioned amount was again loaned by Quirino. When Quirino sent a demand letter to the Carandangs for the payment of the loan, the Carandangs refused to pay. They contend that a pre-incorporation agreement was executed between Arcadio Carandang and Quirino , whereby Quirino promised to pay for the stock subscriptions of the Arcadio without cost, in consideration for Arcadio’s technical expertise , his newly purchased equipment, and his skill in repairing and upgrading radio/communication equipment therefore, there is no indebtedness on the part of the Carandangs. Thereafter, Quirino filed a complaint seeking to recover the P336,375 total amount of the loan together with damages . The RTC ruled in favor of Quirino and ordered the Carandangs to pay the loan plus interest, attorney’s fees, and
costs of suit. The Carandangs appealed the trial court’s decision to the CA, but the CA affirmed the same . The subsequent Motion for Reconsideration filed by the Carandangs were also denied. Hence, this appeal to the SC. •
SPOUSES CARANDANG: Three of the four checks used to pay their stock subscriptions were issued in the name of Milagros de Guzman, the decedent’s wife. Thus, Milagros should be considered as an indispensable party in the complaint. Being such, the failure to join Milagros as a party in the case should cause the dismissal of the action by reason of a jurisprudence stating that: “(i)f a suit is not brought in the name of or against the real party in interest, a motion to dismiss may be filed on the ground that the complaint states no cause of action."
ISSUE/S & RATIO: 1. WON the RTC should have dismissed the case for failure to state a cause of action, considering that Milagros de Guzman, allegedly an indispensable party, was not included as a party-plaintiff – NO a. Although the spouses Carandang were correct in invoking the aforementioned doctrine, the ground set forth entails an examination of “whether the parties presently pleaded are interested in the outcome of the litigation, and not whether all persons interested in such outcome are actually pleaded.” The first query seeks to answer the question of whether Milagros is a real party in interest, while the latter query is asking if she is an indispensable party. Since the issue of this case calls for the definition of an indispensable party, invoking the abovementioned doctrine is irrelevant to the case because the doctrine talks about a ‘real party in interest’ and not an ‘indispensable party’. Although it is important to take note that an indispensable party is also a real party in interest. b. Definitions: i. Real party in interest – the party who stands to be benefited or injured by the judgment of the suit, or the party entitled to the avails of the suit. ii. Indispensable party – a party in interest without whom no final determination can be had of an action iii. Necessary party – one who is not indispensable but who ought to be joined as a party if complete relief is to be accorded as to those already parties, or for a complete determination or settlement of the claim subject of the action iv. Pro-forma parties – those who are required to be joined as coparties in suits by or against another party as may be provided by the applicable substantive law or procedural rule. Proforma parties can either be indispensable, necessary or neither indispensable nor necessary. The third case occurs if, for example, a husband files an action to recover a property which he claims to be part of his exclusive property. The wife may have no legal interest in such property, but the rules nevertheless require that she be joined as a party. c. All property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is
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proved. Credits are personal properties, acquired during the time the loan or other credit transaction was executed. Therefore, credits loaned during the time of the marriage are presumed to be conjugal property. i. Assuming that the four checks are credits, they are assumed to be conjugal properties of Quirino and Milagros. There being no evidence to the contrary, such presumption subsists. As such, Quirino de Guzman, being a co-owner of specific partnership property, is certainly a real party in interest . Being co-owners of the alleged credit, Quirino and Milagros de Guzman may separately bring an action for the recovery thereof. “In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article 487 of the Civil Code and relevant jurisprudence, any one of them may bring an action, any kind of action, for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be accorded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners.”
RULING: Quirino de Guzman, being a co-owner of specific partnership property, is certainly a real party in interest. Being co-owners of the alleged credit, Quirino and Milagros de Guzman may separately bring an action for the recovery thereof.
