Complaint filed against who is not a real party in interest should be dismissed for failure to state cause of action

G.R. No. 191128 Guizano v. Veneracion

Brion, J.

Action for reconveyance filed against petitioner by respondent. SC rules that the case must be dismissed for failure to
state a cause of action because respondent impleaded petitioner, and not the registered owner of the subject property
who was the real party-in-interest.

DOCTRINE
Any decision rendered against a person who is not a real party-in-interest in the case cannot be executed. Hence, a
complaint filed against such a person should be dismissed for failure to state a cause of action.

IMPORTANT PEOPLE
Carmencita Guizano petitioner
Reynaldo Veneracion respondent

FACTS
1. This case involves two parcels of land in Brgy. Kapihan, San Bernardino, Bulacan, inherited by siblings Lucia and
Nicasio Bernardino.
Nicasio: sold his entire share (6,445 sqm) to the Guizano spouses (petitioner)
Lucia: sold a 645 sqm portion of her share to Reynaldo Veneracion (respondent)
2. Nicasios share sold to petitioner was then registered under a TCT in the name of Emmanuel Guizano
(petitioners son).
3. Lucia didnt have any documentary proof of ownership over her share, so respondents father hired a geodetic
engineer to segregate the land sold to respondent from the land sold to petitioner.
Petitioner was there during the survey and pointed out the boundaries of the property sold to her. She also
affixed her signature to the sketch plan drew up by the geodetic engineer.
As an additional precaution, Lucia and the respondent had petitioner affix her signature on the deed of sale
over Lucias share to signify that she had no objections.
4. Petitioner later discovered that Lucias share sold to respondent was actually part of the property sold to her by
Nicasio. She placed the word HOLD on the subdivision plan signed by the geodetic engineer.
5. Respondent then filed a complaint against petitioner and Lucia, praying that petitioner reconvey the parcel of
land in his favor.
6. In her Answer, petitioner claimed that the complaint was without merit since the property subject of the sale
between respondent and Lucia was part of the property sold to her, which is registered in the name of her son
Emmanuel. Thus, respondent had no cause of action against her.
7. RTC Malolos dismissed the complaint, observing that Lucia had no evidence to support her ownership of her share
she never had the property surveyed, never paid real estate taxes, and never declared it for tax purposes.
It also found respondent guilty of laches for filing the action 14 years after Emmanuel Guizanos title over it
was issued, which already attained the status of indefeasibility.
8. The CA reversed the RTC decision and ordered petitioner to convey the property to respondent. It found that
petitioner believed the property sold to respondent belonged to Lucia (see bullet points under Fact #2) and is thus
estopped from claiming ownership over the same.
9. Petitioner died during the pendency of the case, so her heirs filed a Rule 45 petition before the SC, averring that:
Emmanuels title had already attained indefeasibility, thus it is no longer open for review by the CA;
Reconveyance is not available to respondents because of laches;
The action should be dismissed because it was directed against petitioner, who is not the real party in
interest as she was not the registered owner of the property (it was Emmanuel, who was not even
impleaded).

ISSUE with HOLDING

1. W/N respondents complaint should be dismissed for not being filed against the real party-in-interest Yes.
Both the RTC and the CA grievously erred when they overlooked a basic but fundamental issue that petitioner
timely raised in her Answer that the complaint states no cause of action against her.

1
 An action for reconveyance is an action available to a person whose property has been wrongfully registered
under the Torrens system in anothers name. While it is a real action, it is an action in personam, for it binds a
particular individual only, although it concerns the right to an intangible thing.
o Being an action in personam, any judgment in this action is binding only upon the parties
properly impleaded. This is in keeping with the principle that every action must be prosecuted or
defended in the name of the real party-in-interest, i.e., 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, as embodied in Sec. 2, Rule 3
of the Rules of Court:
Parties in interest. 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. Unless otherwise authorized
by law or these Rules, every action must be prosecuted or defended in the name of the real party
in interest.
o Any decision rendered against a person who is not a real party-in-interest in the case cannot be
executed. Hence, a complaint filed against such a person should be dismissed for failure to state a
cause of action.
Respondent filed the complaint to compel petitioner to execute a Deed of Reconveyance over the subject
property in his favor, even though he knew that the property was registered in Emmanuels name and not
petitioners.
o Respondent alleged that he filed the complaint against petitioner and not Emmanuel because
Emmanuel was only a nominal owner of the property, and petitioner was the actual owner.
o The SC rules that the Torrens certificate is the best evidence of ownership over registered land, and
absent any evidence to the contrary, Emmanuel is the real party-in-interest and respondent
should have filed the action against him.
What makes respondents error even more inexcusable is the fact that petitioner repeatedly raised this issue
(of not being the real party-in-interest) before the lower court in her Answer and Pre-Trial Brief. Respondent
was already made aware of this defect in his complaint and had opportunities to correct it, so his failure to
implead Emmanuel is untenable.
Respondent filed the complaint against petitioner either as owner or as attorney-in-fact of Emmanuel.
However, Emmanuel never authorized petitioner to be his attorney-in-fact.
o Even if she was authorized in a power of attorney executed by Emmanuel, an attorney-in-fact is still
not a party-in-interest and Emmanuel must still be impleaded, according to Sec. 3, Rule 3, ROC:
Representatives as parties.- Where the action is allowed to be prosecuted or defended by a
representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the
title of the case and shall be deemed to be the real party in interest. A representative may be a
trustee of an express trust, a guardian, an executor or administrator, or a party authorized by law
or these Rules. An agent acting in his own name and for the benefit of an undisclosed principal
may sue or be sued without joining the principal except when the contract involves things
belonging to the principal.

DISPOSITIVE PORTION
Petition granted. CA decision reversed.

DIGESTER: Cristelle Elaine Collera