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- RTC: Court hereby renders judgment in favor of plaintiff and against Lee vs Romillo

defendants, ordering the latter, jointly and severally, to deliver to the former Petitioner: Walter Lee, Espiritu Tan, Benito Chiongban and Henry
the amount of P859,981.53 representing the unspent amounts for salaries Chiongban
and for rentals for handling equipment after deducting the actual and Respondents: Hon. Manuel v. Romillo, Jr., CFI Judge of Rizal, City
legitimate expenses for both items, with interests Sheriff of Pasay City and Leoncio C. Mendioro
- CA: dismissed petition for lack of merit
ISSUE - Mendioro filed a complaint for accounting with damages entitled "Leoncio C.
1. W/N the parties in the case at bar are the real parties-in-interest. Mendioro, doing business under the name and style "Leoncio C. Mendioro
Services' v. Walter Ascona Lee, Espiritu Tan and Benito Chiongbian." The
RULING & RATIO Court of First Instance of Rizal at Pasay City based on a contract for
- YES arrastre services at Pier 14, North Harbor, Manila executed between
On the first issue, the petitioners maintain that the parties in the case respondent Mendioro and William Lines, Inc., represented by Benito
before us are not the real parties-in-interest considering that on the one
hand, as early as August 15,1973, Mendioro ceased to be a real party-in- Chiongbian as evidenced by the Memorandum Agreement
interest as he transferred and assigned all assets and liabilities of - That plaintiff Mendioro conducted arrastre operations at Pier 14 as per
Leoncio C. Mendioro Services to P-14 Arrastre Services while on the arrastre contract with William Lines, Inc.; (2) All the income from the
other hand, petitioners Lee, Tan and Benito Chiongbian acted only in arrastre operations during the said period were received and held in trust
representation of P-14 Arrastre Services which is the real party- in- for Mendioro by defendants Lee, Tan and Chiongbian who were also tasked
with the disbursement of the said income for operational expenses; (3)
Rule 3, Section 2 of the Revised Rules of Court mandates that: Parties in
Defendants Lee, Tan and Chiongbian were duty-bound to turn over to
interest. Every action must be prosecuted and defended in the name
plaintiff Mendioro the income they held in trust for him; and (4) They failed
of the real party in interest. . .By "real party in interest" is meant such
party who would be benefited or injured by the judgment or entitled to the to do so despite Mendioro's repeated demands.
avails of the suit (Subido v. City of Manila, et al., 108 Phil., 462 and - At the pre-trial stage of the proceedings, the parties filed a partial stipulation
Subido v. Sarmiento, et al., 108 Phil. 150, citing Salonga v. Warner, of facts wherein they stated, among others, that: (1) plaintiff Mendioro
Barnes & Co., Ltd., 88 Phil. 125). A real party in interest-plaintiff is one operated the arrastre services from August 1, 1973 to November 30,1973 at
who has a legal right while a real party in interest- defendant is one who
has a correlative legal obligation whose act or omission violates the legal Pier 14 under a contract which he had with Wilham Lines, Inc. (Exhibit A);
right of the former. (2) from said operations, a total gross income of P l,620,985.47 was derived
A careful examination of the records of the case at bar shows that private and realized (Exhibit B); (3) defendants Lee, Tan and Benito Chiongbian
respondent Mendioro is a real party in interest-plaintiff in Civil Case No. were in-charge of collecting said income; (4) after November 30,1973, P-14
4343-P with respect to the amounts actually received by the petitioners Arrastre Services, Inc., a corporation registered on August 15, 1973 of
and held in trust for him in relation to the arrastre services he rendered at which Mendioro was one of its incorporators, took over the operations at
Pier 14 for William Lines, Inc., from August 1, 1973 up to November 30,
1973. His interest arose from his ownership of the amounts paid by Pier 14, and (5) Mendioro assigned his shareholdings in P-14 Arrastre
persons and firms for his arrastre services during the stipulated period. Services, Inc., to defendant Henry Chiongbian on December 20, 1974.
Likewise, petitioners Lee, Tan and Benito Chiongbian are real parties in
have only one contractor per shipping company so the contractors of interest- defendants inasmuch as by their act of receiving the income
William Lines, Inc., agreed to merge and form a corporation under the from the arrastre operations at Pier 14 where Mendioro contracted to
name P-14 Arrastre Services, Inc. However, pending the formation and conduct arrastre services for William Lines, Inc., they were obliged to
operation of the new corporation, the arrastre contract was given to turn over the said income to Mendioro or to account therefor in case
Mendioro alone by virtue of the Memorandum Agreement (Exhibit A). certain amounts were used for operational expenses.
Even though the Articles of Incorporation of P-14 Arrastre Services were The claim of the petitioners that P-14 Arrastre Services should have been
duly registered on August 15, 1973 with the Securities and Exchange the real party in interest-defendant since it absorbed the assets and
Commission (Annex D-1 of Petitioners (Memorandum), said corporation liabilities of Leoncio C. Mendioro Services is without merit. It is borne by
commenced its operations only on December 1, 1973 as manifested by the records that before August 1, 1973, William Lines, Inc., had three
petitioners' counsel during the hearing before us regarding this petition separate arrastre contracts, one with Mendioro and the two others with
(TSN., September 12, 1984, p. 12). one Cesar Almario. It became the policy of the government thereafter to