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CARANDANG v. HEIRS OF DE GUZMAN costs of suit.

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