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of powers and attributes which are compendiously described as “legal

Iron and Steel Authority vs. Court of Appeals personality.”

GR No. 102976, October 25, 1995


When the statutory term of a non-incorporated agency
expires, the powers, duties and functions as well as the assets and
FACTS: liabilities of that agency revert back to, and are re-assumed by, the
Republic of the Philippines, in the absence of special provisions of law
The Iron and Steel Authority (ISA) was created by PD No. 272, in specifying some other disposition thereof such as e.g. devolution or
order, generally, to develop and promote the iron and steel industry transmission of such powers, duties, functions, etc. to some other
in the Philippines. Initially, it was created for a term of 5 years but identified successor agency or instrumentality of the Republic of the
when its original term expired, its term was extended for another 10 Philippines. When the expiring agency is an incorporated one, the
years by EO No. 555. The National Steel Corporation (NSC) then a consequences of such expiry must be looked for, in the first instance,
wholly owned subsidiary of the National Development Corporation in the charter of that agency and, by way of supplementation in the
which is an entity wholly owned by the National Government provisions of the Corporation Code. Since ISA is a non-incorporated
embarked on an expansion program which includes the construction agency or instrumentality of the Republic, its powers, duties,
of a steel mill in Iligan City. Proclamation No. 2239 was issued by the functions, assets and liabilities are properly regarded as folded back
President withdrawing from sale or settlement a tract of land in Iligan into the Government of the Philippines and hence assumed once
City to be used by the NSC. However, certain portions of the public again by the Republic, no special statutory provision having been
land under Proclamation 2239 were occupied by Maria Cristina shown to have mandated succession thereto by some other entity or
Fertilizer Co. (MCFC). LOI No. 1277 was issued directing NSC to agency of the Republic.
negotiate with the owners of MCFC for and on behalf of the
Government for the compensation of MCFC’s present occupancy It follows that the Republic of the Philippines is entitled to be
rights on the subject land. The LOI directed that ISA may exercise the substituted in the expropriation proceedings as party-plaintiff in lieu
power of eminent domain should the negotiations fail. The of ISA, the statutory term of ISA having expired. The expiration of ISA’s
negotiations failed and ISA commenced expropriation proceedings statutory did not by itself require or justify the dismissal of the
against MCFC. While trial was on-going the statutory existence of ISA eminent domain proceedings. Further, no new legislative act is
had expired prompting MCFC to file the dismissal of the case since necessary should the Republic decide, upon being substituted for ISA,
ISA has ceased to be a juridical person. The trial court granted MCFC’s in fact to continue to prosecute the expropriation proceedings.
motion to dismiss anchoring on the Rules of Court that “only natural
or juridical persons or entities authorized by law may be parties to a
civil case.” ISA moved for a reconsideration contending that despite G.R. No. 78646 July 23, 1991
the expiration of its term, its juridicial existence continued until the
PABLO RALLA, substituted by his wife and co-defendant CARMEN
winding up of its affairs could be completed. In the alternative ISA
MUÑOZ-RALLA, and his legal heirs, HILDA RALLA-ALMINE, BELISTA,
urged that the Rep. of the Philippines should be allowed to be
RENE RALLA-BELISTA and GERARDO M. RALLA, petitioners,
substituted in its place. The RTC denied its motion for reconsideration.
vs.
This was affirmed by the CA.
PEDRO RALLA, substituted by his legal heirs, LEONI, PETER, and
MARINELA all surnamed RALLA, and COURT OF APPEALS, respondents.
ISSUE: Whether or not the Republic of the Philippines is entitled to be CRUZ, J.:
substituted for ISA in view of the expiration of ISA’s term.
(MAIN TOPIC: REAL-PARTY-IN-INTEREST)
Rosendo Ralla had two sons, Pablo and Pedro. The father apparently
HELD: loved the former but not the latter, Pablo and his family lived with
Rosendo, who took care of all the household expenses. Pablo
administered part of the family properties and received a monthly
There is no provision in PD No. 272 recognizing ISA as possessing
salary of P250.00 plus part of the produce of the land. Pedro lived
general or comprehensive juridical personality separate and distinct
with his mother, Paz Escarella, in another town. He was not on good
from that of the Government. ISA in fact appears to be a non-
terms with his father.
incorporated agency or instrumentality of the Government of the
Republic of the Philippines. It is common knowledge that other Paz Escarella died in 1957 and the two brothers partitioned 63 parcels
agencies or instrumentalities of the Government of the Republic are of land she left as her paraphernalia property. The partition was
case in corporate form, that is to say, are incorporated agencies or sustained by this Court in G.R. Nos. 63253-54 on April 27,
instrumentalities, sometimes with and other times without capital 1989.1 Meanwhile, on December 22, 1958, Rosendo executed a will
stock, and accordingly vested with a juridical personality distinct from disinheriting Pedro and leaving everything he owned to Pablo, to
the personality of the Republic. The term “Authority” has been used whom he said he had earlier sold a part of his property for
to designate both incorporated and non-incorporated agencies or P10,000.00. Rosendo himself filed for the probate of the will
instrumentalities of the Government. but pendente lite died on October 1, 1960.
On November 3, 1966, the probate judge converted SP 564 into an
intestate proceeding. On February 28, 1978, a creditor of the
The Court considers that ISA is properly regarded as an
deceased filed a petition for the probate of Rosendo's will in SP 1106,
agent or delegate of the Republic of the Philippines. The Republic
itself is a body corporate and juridical person vested with full panoply
which was heard jointly with SP 564. On August 3, 1979, the order of set aside by the respondent court, which reinstated the original
November 3, 1966, was set aside. decision invalidating the deed of sale.
The last will and testament of Rosendo Ralla was allowed on June 7, It is indeed intriguing that the trial judge should, in resolving the
19822 but on October 20, 1982, the disinheritance of Pedro was motion for reconsideration, make a complete turnabout on the basis
disapproved.3 This order was elevated to the Court of Appeals in AC- of the same evidence and jurisprudence that he considered in
G.R. Nos. 00472, 00489. rendering the original decision. It is no less noteworthy that the
In a decision dated July 25, 1986, the Court of Appeals4 reversed the respondent court, after studying the two conclusions reached by him,
trial court and reinstated the disinheritance clause after finding that saw fit to sustain his original findings as the correct appreciation of
the requisites of a valid disinheritance had been complied with in the the evidence and the applicable law.
will. The appellate court noted that Pedro had threatened to kill his But we find that, regardless of these curious resolutions, the petition
father, who was afraid of him and had earlier sued him for slander must nevertheless be sustained albeit not on the ground that the
and grave oral defamation. deed of sale was indeed valid. The Court is inclined to support the
The decision was assailed before this Court in G.R. Nos. 76657-58, findings of the respondent court. However, we do not and cannot
which was dismissed in our resolution of August 26, 1987, reading as make any decision on this matter because of one insuperable
follows: obstacle. That obstacle is the proper party personality of Pedro Ralla
to question the transaction.
. . . Assuming that, as claimed, the petitioners' counsel
received a copy of the questioned decision only on August The decision of the Court of Appeals in AC-G.R. Nos. 00472, 00489
15, 1986 (although it should have been earlier because it approved the disinheritance of Pedro Ralla. That decision was
was mailed to him at his address of record on July 28, 1986), appealed to this Court, but the petition for review was dismissed as
they had 15 days, or until August 30, 1986, within which to above related. The decision has long since become final. Since then,
move for its reconsideration or appeal therefrom Pedro Ralla no longer had the legal standing to question the validity
by certiorari to this Court. Instead, they filed on August 28, of the sale executed by Rosendo in favor of his other son Pablo.
1986, a motion for extension of time to file a motion for The real party-in-interest is the party who stands to be benefited or
reconsideration, which was not allowed under our ruling in injured by the judgment or the party entitled to the avails of the suit.
Habaluyas Enterprises, Inc. v. Japson, 142 SCRA 208, and so "Interest" within the meaning of the rule means material interest, an
did not interrupt the running of the reglementary period. interest in issue and to be affected by the decree, as distinguished
Indeed, even if the period were to be counted from October from mere interest in the question involved, or a mere incidental
7, 1986, when notice of the denial of the motion for interest. As a general rule, one having no right or interest to protect
extension was received by the petitioners, the petition cannot invoke the jurisdiction of the court as a party-plaintiff in an
would still be 30 days late, having been filed on December action.
8, 1986. Moreover, the petitioners have not shown that the As the sole heir, Pablo Ralla had the right to inherit the totality of his
questioned decision is tainted with grave abuse of father's estate after payment of all its debts. Even if it be assumed
discretion or that it is not in accord with law and that the deed of sale was indeed invalid, the subject-matter thereof
jurisprudence. For these reasons, the Court Resolved to nevertheless devolved upon Pablo as the universal successor of his
DISMISS the petition. father Rosendo. In his wig, Rosendo claimed the 149 parcels as "part
The motion for reconsideration was denied with finality in the of my property" –– as distinguished from the conjugal estate –– which
following resolution dated October 26, 1987: he had earlier sold to Pablo. Significantly, Pedro did not deny this
. . . The Court, after deliberation, Resolved to DENY with description of the property in his Comment to the present petition,
finality the motion for reconsideration, wherein the confining himself to assailing the validity of the sale.
petitioners pray that they be relieved from the effects of our The Court must note the lackadaisical attitude of the heirs of Pedro
ruling in Habaluyas Enterprises, Inc. v. Japson, 142 SCRA Ralla, who substituted him upon his death.1âwphi1 They seem to
208, under which the petition was denied for tardiness. have lost interest in this litigation, probably because of the approval
Counsel are expected to be abreast of current of their father's disinheritance by the respondent court. When the
developments in law and jurisprudence and cannot plead parties were required to submit their respective memoranda after we
ignorance thereof as an excuse for non-compliance with the gave due course to this petition, the petitioners did but not the
same. As earlier observed, the petition was filed extremely private respondents. Although the period to do so had already
late, and, moreover, it was inadequate even on the merits, expired, the Court relaxed its rules to give the private respondents
same having failed to show that the questioned decision another opportunity to comply with the requirement. When the
was tainted with grave abuse of discretion or reversible resolution of August 22, 1990, could not be served upon the private
error. respondents' counsel, we directed that it be served on the private
What is involved in the present petition is the correctness of the respondents themselves.9 On January 18, 1991, the heirs of Pedro
decision of the respondent court annulling the deed of sale executed Ralla informed the Court that they were retaining another counsel
by Rosendo Ralla in favor of Pablo over 149 parcels of land. Pedro had and asked that they be furnished a copy of the petition and given 30
filed on May 19, 1972, a complaint to annul the transaction on the days within which to file their memorandum.10 This motion was
ground that it was simulated.5 The original decision of the trial court granted. The records show that they received a copy of the petition
declared the sale null and void.6 In the resolution of the motion for on February 26, 1991, but their memorandum was never filed. On
reconsideration, however, Judge Jose F. Madara completely reversed May 29, 1991, the Court, noting this omission, finally resolved to
himself and held the deed of sale to be valid.7 This order was in turn dispense with the memorandum and to decide this case on the basis
of the available records.
Our decision is that as a validly disinherited heir, and not claiming to WHEREFORE, finding no merit in the instant
be a creditor of his deceased father, Pedro Ralla had no legal appeal, the same is hereby DISMISSED with costs
personality to question the deed of sale dated November 29, 1957, taxed against the appellant.
between Rosendo Ralla and his son Pablo. Legally speaking, Pedro From the aforesaid decision, petitioner Esperidion Tanpingco
Ralla was a stranger to the transaction as he did not stand to benefit interposed the present petition under the following assignment of
from its annulment. His disinheritance had rendered him hors de errors.
combat.
I
WHEREFORE, the decision of the respondent court dated January 23,
1987, is set aside and another judgment is hereby rendered Was it proper for the trial court to grant the
dismissing Civil Case 194 (originally Civil Case 4624) in this Regional Motion to Dismis filed by the defendant inspite of
Trial Court of Ligao, Albay, Branch 5. explicit mandate against such action as contained
in Section 17 of P.D. No. 946?
SO ORDERED.
II
G.R. No. 76225 March 31, 1992
Was respondent Court correct in sustaining the
ESPIRIDION TANPINGCO, petitioner, validity of the conversion of the subject tenanted
vs. riceland into a school site?
INTERMEDIATE APPELLATE COURT, and BENEDICTO HORCA,
III
SR., respondents.
Was it correct in ruling that a tenant is not entitled
to payment of disturbance compensation in case
GUTIERREZ, JR., J.: his tenanted landholding is donated and
May a tenanted parcel of land be donated by the landowner so that converted into a school site?
it can be the site of a public high school without securing the consent Anent the first assignment of error, the petitioner anchors his
of the tenant-lessee? Who bears the responsibility of paying contention mainly on Section 17 of Presidential Decree No. 946 which
disturbance compensation? These are the issues raised in this case. provides:
On May 10, 1985, a complaint for payment of disturbance Sec. 17. Pleading, Hearing, Limitation on
compensation with damages was filed by petitioner Espiridion Postponements. — The defendant shall file
Tanpingco against respondent Benedicto Horca, Sr. with the Regional answer to the complaint (not a motion to dismiss),
Trial Court of Palo, Leyte. within a non-extendible period of ten (10) days
It is alleged in the complaint that the petitioner is the tenant-lessee from service of
in the respondent's parcel of agricultural riceland situated at Brgy. summons . . .
Buenavista, Jaro, Leyte under a leasehold contract entered into In Sucaldito and De Guzman v. Hon. Montejo (193 SCRA 556 [1991]),
sometime in April, 1976; that in a letter dated April 9, 1985, the the Court declared that where the law speaks in clear and categorical
respondent through his representative informed him to desist from language, there is no room for interpretation. However, technicalities
working on the subject land, having already donated the same on may be disregarded in order to resolve the case on its merits. (Ruiz v.
February 3, 1985; that the respondent openly ordered the petitioner Court of Appeals, G.R. No. 93454, September 13, 1991 citing Tesoro
to vacate the landholding and is determined to oust him from the v. Mathay, 185 SCRA 124 [1990]).
premises in violation of the law; that the petitioner is willing to accept
On this point, the respondent appellate court noted that:
payment of disturbance compensation in an amount computed in
accordance with law and in the alternative to remain as tenant-lessee The rationale of the rule requiring a defendant in
of the subject riceland. an agrarian case to file an answer and not a
motion to dismiss is to expedite the proceedings.
On July 5, 1985, the case was called for pre-trial following which the
The filing of the motion to dismiss and the
trial court gave the respondent until July 9, 1985 to file his answer.
granting thereof by the lower court based upon
The respondent filed instead a Motion to Dismiss alleging principally
indubitable grounds precisely expedited the
that the complaint states no cause of action because the respondent
proceedings and conforms with the spirit and
is not the real party-in-interest having already donated the subject
intention of P.D. 946 which requires courts trying
land to the Ministry of Education, Culture, and Sports, Region VIII, as
agrarian cases to employ every reasonable means
a school site of the Buenavista Barangay High School; and that the
to ascertain the facts of every case in accordance
donation not having in anyway benefited the respondent, no
with justice and equity without regard to
disturbance compensation is due the petitioner since under Section
technicalities of law and procedure and
36 (1) of the Agrarian Reform Code as amended, disturbance
empowering the Court to adopt any appropriate
compensation holds true only in cases wherein the lessor-owner
measure or procedure in any situation or matter
derives financial benefits from the conversion of the agricultural land
not provided for or covered by the Decree
into non-agricultural purposes.
(Section 16, 3rd and 4th sentences, P.D. 946).
The trial court granted the respondent's Motion to Dismiss and
We, therefore, take exception to the literal application of Section 17
denied the petitioner's Motion for Reconsideration.
of P.D. No. 946 for as stated in Salonga v. Warner Barnes and Co.,
On June 20, 1986, the Intermediate Appellate Court rendered the Ltd. (88 Phil. 125 [1951], an action is brought for a practical purpose,
decision now assailed, the dispositive portion of which reads as nay to obtain actual and positive relief. If the party sued upon is not
follows: the proper party, any decision that may be rendered against him
would be futile, for it cannot be enforced or executed. The effort that agricultural leasehold relationship is extinguished are found in
may be employed will be wasted. Section 8, 28 and 36 of the Code of Agrarian Reforms of the
Section 2, Rule 3 of the Rules of Court requires that every action must Philippines. The donation of the land did not terminate the tenancy
be prosecuted in the name of the real party-in-interest. A corollary relationship. However, the donation itself is valid.
proposition to this rule is that an action must be brought against the Considering that the tenant in the case at bar is willing to accept
real party-in-interest, or against a party which may be bound by the payment of disturbance compensation in exchange for his right to
judgment to be rendered therein (Salonga v. Warner Barnes and Co., cultivate the landholding in question, the real issue is who should pay
Ltd. supra citing Salmon and Pacific Commercial Co., v. Tan Cuenco, the compensation. We rule that the Ministry of Education, Culture
36 Phil. 556 [1917]). The real party-in-interest is one who stands to and Sports as the new owner cannot oust the petitioner from the
be benefited or be injured by the judgment, or the party entitled to subject riceland and build a public high school thereon until after
the avails of the suit (Rebollido v. Court of Appeals, 170 SCRA 800 there is payment of the disturbance compensation in accordance
[1989] citing Samahan ng mga Nangungupahan sa Azcarraga Textile with Section 36 (1) of R.A. No. 3844, as amended.
Market, Inc., et al. v. Court of Appeals, 165 SCRA 598 [1988]). If the In view of the foregoing, we are of the opinion and so hold that the
suit is not brought against the real party-in-interest, a motion to trial court correctly dismissed the complaint for payment of
dismiss may be filed on the ground that the complaint states no cause disturbance compensation because the private respondent is not the
of action (Section 1(g), Rule 16, Rules of Court). real party-in-interest. And having arrived at this conclusion, we do not
Hence, the resolution of the dispute hinges upon the determination deem it necessary to pass upon the other errors assigned by the
of whether or not the private respondent is the real party-in-interest petitioner for as stated in Filamer Christian Institute v. Court of
against whom the suit should be brought. Appeals (190 SCRA 485 [1990]), a person who was not impleaded in
The private respondent bolsters his claim that he is not the real party- the complaint could not be bound by the decision rendered therein,
in-interest on Section 10 of Republic Act No. 3844 (Code of Agrarian for no man shall be affected by a proceeding to which he is a stranger.
Reforms of the Philippines) which provides that: The remedy then of the petitioner is to claim his disturbance
compensation from the new owner or whatever agency, local or
. . . In the case the agricultural lessor sells, national, is in a position to pay for it.
alienates or transfers the legal possession of the
landholding, the purchaser or transferee thereof WHEREFORE, the petition is hereby DENIED. The decision dated 20
shall be subrogated to the rights and substituted June 1986 of the Intermediate Appellate Court is AFFIRMED. No
to the obligation of the agricultural lessor. pronouncement as to costs.

In effect, the private respondent is of the view that the Ministry of SO ORDERED.
Education, Culture and Sports, as donee, became the new lessor of Sps Oco v Limbaring GR. 161298, Jan. 31, 2006
the agricultural lessee by operation of law and is therefore the real
party-in-interest against whom the claim for disturbance
compensation should be directed. Sabas Limbaring transferred his lot to his two nieces- Jennifer and
Sarah Jane. His daughter, Oco, filed a case of perjury and falsification
We agree with the contentions of the private respondent. The
against her uncle, Victor, his 2 daughters. They agreed to return the
petitioner should have impleaded the Ministry of Education, Culture
lots with Oco paying necessary expenses of 25k (30k at first but
and Sports as the party-defendant for as stated in Roman Catholic
renegotiated to 25k).
Archbishop of Manila v. Court of Appeals (198 SCRA 300 [1991]), a
donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee and Oco was able to transfer the lot to her name. Respondent, however,
once a donation is accepted, the donee becomes the absolute owner filed a case against Sps Oco fo for the rescission of the sales contracts,
of the property donated. with recovery of possession and ownership of the two parcels of land.
Under Article 428 of the New Civil Code, the owner has the right to Oco filed a MTD on the ground that respondent was not a real party
dispose of a thing without other limitations than those established by in interest. In his Opposition to the Motion to Dismiss, respondent
law. As an incident of ownership therefore, there is nothing to contended that he was a trustor, whose property was being held in
prevent a landowner from donating his naked title to the land. trust by his daughters.
However, the new owner must respect the rights of the tenant.
Section 7 of R.A. No. 3844, as amended (Code of Agrarian Reforms of
the Philippines) gives the agricultural lessee the right to work on the Oco filed an Answer with Counterclaim, alleging in the mainly: 1) that
landholding once the leasehold relationship is established. It also respondent had tried to secure a DAR clearance and to have a
entitles him to security of tenure on his landholding. He can only be certificate of title issued in his name, but failed because Republic Act
ejected by the court for cause. Time and again, this Court has (RA) 6657 prohibited the acquisition of more than five hectares of
guaranteed the continuity and security of tenure of a tenant even in agricultural land; 2) that through deceit and manipulation,
cases of a mere transfer of legal possession. As elucidated in the case respondent was able to convince Sabas Limbaring to execute the two
Deeds of Sale, notwithstanding the lack of any consideration.
of Bernardo v. Court of Appeals (168 SCRA 439 [1988]), security of
tenure is a legal concession to agricultural lessees which they value
as life itself and deprivation of their landholdings is tantamount to RTC granted the demurrer and dismissed the Complaint and
deprivation of their only means of livelihood. Also, under Section 10 Counterclaim, on the ground that respondent was not the real party
of the same Act, the law explicitly provides that the leasehold relation in interest.
is not extinguished by the alienation or transfer of the legal
possession of the landholding. The only instances when the
CA held that a trust relationship was created and reversed the RTC property is located, regardless of the residence of the
decision. parties.
 Ordinarily non-compliance with the condition precedent
Issue: Is Respondent a real party-in-interest? NO. could affect the sufficiency of the cause of action and allow
the complaint to be vulnerable to a motion to dismiss on
the ground of lack of cause of action or prematurity.
Rule on real parties in interest Petitioner's motion for reconsideration was denied.
 The court was of the opinion that the attorney-in-fact shall
GR: only contracting parties, the parties bound by it, are the ones who be deemed the real party in interest, he was therefore
can violate and benefit from it. Thus, one who is not a party to a obliged to bring the case before the barangay.
contract, and for whose benefit it was not expressly made, cannot SC:
maintain an action on it. One cannot do so, even if the contract
performed by the contracting parties would incidentally inure to Dante elevated the case straight to the SC, questioning the "palpable
one’s benefit. legal errors' of the RTC.
 Petitioner argues that, he, not his attorney in fact is the real
party in interest, since he resides abroad, the lupon would
Except: those who are not principally or subsidiarily obligated in a
have no jurisdiction.
contract, in which they had no intervention, may show their
detriment that could result from it. Ruling:
Eg. Contracts pour autrui The pertinent provisions of the Local Government Code read:
SEC. 408. Subject Matter for Amicable Settlement; Exception
Thereto.—The lupon of each barangay shall have authority to bring
Respondent’s Complaint, entitled "Rescission of Contract & Recovery
together the parties actually residing in the same city or municipality
of Possession & Ownership of Two Parcels of Land," is clearly an
for amicable settlement of all disputes except:
action on a contract. The agreements sought to be rescinded clearly
show that the parties to the Deeds of Absolute Sale were Jennifer and (f) Disputes involving parties who actually reside in barangays of
Sarah Jane Limbaring as vendors and Percita Oco as vendee. Clearly different cities or municipalities, except where such barangay units
then, the action upon the contracts may -- as a rule -- be instituted adjoin each other and the parties thereto agree to submit their
only by Jennifer and Sarah Jane against Percita. differences to amicable settlement by an appropriate lupon;
No trust relationship was created. One who alleges a trust In the 1982 case of Tavora v. Veloso, this Court held that where the
relationship has the burden of proof. Respondent has presented only parties are not actual residents in the same city or municipality or
bare assertions that a trust was created. adjoining barangays, there is no requirement for them to submit their
dispute to the lupon as provided for in Section 6 vis-a-vis Sections 2
and 3 of P.D. 1508
By express statutory inclusion and exclusion, the Lupon shall have no
jurisdiction over disputes where the parties are not actual residents
of the same city or municipality, except where the barangays in which
they actually reside adjoin each other.
G.R. No. 157830. November 17, 2005.*
To construe the express statutory requirement of actual residency as
DANTE M. PASCUAL, represented by REYMEL R. SAGARIO, petitioner, applicable to the attorney-in-fact of the party-plaintiff, as contended
vs. MARILOU M. PASCUAL, respondent. by respondent, would abrogate the meaning of a “real party in
Facts: interest” as defined in Section 2 of Rule 314 of the 1997 Rules of
Court vis-a-vis Section 3 of the same Rule which was earlier quoted
RTC:
but misread and misunderstood by respondent.
Dante filed a civil case against his sister Marilou, for the annulment of
In fine, since the plaintiff-herein petitioner, the real party in interest,
a TCT, Deed of Absolute Sale, and for the reconveyance of property
is not an actual resident of the barangay where the defendant-herein
with damages.
respondent resides, the local lupon has no jurisdiction over their
 Dante is a permanent resident of the U.S., who appointed dispute, hence, prior referral to it for conciliation is not a pre-
Sagario as his attorney-in-fact through an SPA. condition to its filing in court.
Marilou filed a motion to dismiss. The RTC thus erred in dismissing petitioner’s complaint.
 There was non-compliance with requirement of the LGC GOLANGCO vs. FUNG
that there must have been a confrontation before the
Lupon Chairman or Pangkat, before filing a claim in court. G.R. No. 157952; September 8, 2009

 There is no showing that the dispute was referred to


barangay court before the case was filed. Facts: In 1995, petitioner Golangco, as complainant,
initiated a prosecution for libel against the respondent Fung
RTC granted the respondent's motion to dismiss.
in the Regional Trial Court. Allegedly, the respondent had
 Where real property or interest therein is involved, the issued an office memorandum maliciously imputing against
dispute shall be filed before the barangay where the the petitioner the commission of bribery and had sent
copies of the mrmorandum to the petitioner’s superiors in FACTS:
the POEA and to other public officers and personalities not In 1994, Antonio Tiu (deceased), father of herein respondents,
connecter with the POEA, causing damage and prejudice to executed a REAL ESTATE MORTGAGE in favor of petitioner covering a
the petitioner. On hearing day, the prosecution still failed to lot (registered in his name) located in Tacloban City in order to secure
present its witness because no subpoena had been issued the indebtedness of one Gabriel Ching. 4 years thereafter, Antonio
to and served on him for the purpose. The RTC judge issued executed an Amendment to the Real Estate Mortgage (AREM)
an order terminating the prosecution’s presentation of increasing the amount secured by the mortgage. Said mortgage as
evidence. well as its amendment bore the signature of Antonio’s wife, Matilde,
above the words “With my Marital Consent.”
Petitioner went to the Court of Appeals on Since the loan obligation remained unsettled, petitioner (Equitable
certiorari to assail the order and claimed that the RTC judge PCI Bank, now known as Banco de Oro-EPCI, Inc.) filed before the
committed grave buse of discretion for not issuing the Regional Trial Court (RTC) of Tacloban City a “Petition for Sale” for the
subpoena to require the witness to appear and testify in the extrajudicial foreclosure of the AREM and the sale at public auction
hearing. He contended that his prior request for the of the lot covered thereby. The same was granted by the RTC Clerk
subpoena for an earlier hearing date should have been of Court. However, the public auction sale did not push through as
treated as a continuing request for the subpoena scheduled because of the TRO issued by the RTC after the
considering that the Rules of Court did not require a party respondents (children of Antonio) filed a Complaint for the
to apply for a subpoena again should it not be served in the annulment of the AREM with a prayer for the issuance of a TRO and
first time. The Court of Appeals dismissed the petition for writ of preliminary injunction and damages. They alleged, among
certiorari. others, that the AREM is null and void because it did not bear the
signature of their mother, who, according to them, was then already
suffering from Alzheimer’s disease.
Issue: Whether or not the Court of Appeals correctly
ruled on the petition for certiorari of the petitioner. In response to said Complaint, the petitioner filed a MOTION TO
DISMISS, arguing among others that 1) the complaint states no cause
of action because respondents are not the real parties in interest; 2)
Ruling: Yes, the Court of Appeals correctly ruled when it dismissed the cause of action has already prescribed; 3) the venue is improperly
the petition for certiorari laid. The RTC, however, denied the motion, stating that respondents
are real parties in interest because they stand to be benefited or
injured by the action as their inheritance (as heirs of the deceased) is
The petitioner did not join the People of the at stake. Hence, the petitioner filed a petition for certiorari,
Philippines as a party in his action for certiorari in the Court prohibition and mandamus before the CA which was again denied.
of Appeals. He thereby ignored that the People of the Hence, this petition.
Philippines were indispensable parties due to his objective
being to set aside the trial court’s order. The omission was ISSUE: Whether or not the complaint for the annulment of the AREM
fatal and already enough cause for the summary rejection filed by respondents-children of Antonio states a cause of action
of his petition for certiorari. The petitioner did not also notwithstanding the fact that their mother, Matilde (who was
obtain the consent of the Office of the Solicitor General principally obliged under the AREM) was not impleaded.
(OSG) to his petition for certiorari. At the very least, he HELD: The petition for certiorari was GRANTED by the SC. The Court
should ave furnished a copy of the petition for certiorari to held that it is Matilde, Antonio’s wife, and NOT HER CHILDREN, who
the OSG prior to the filing thereof, but even that he did not should have filed the instant suit.
do. Settled is the rule that every action must be prosecuted or defended
in the name of the real party in interest (Sec. 2, Rule 3 of the Rules of
The petitioner now needs to be reminded that Court). In annulment of contracts, Art. 1397 of the Civil Code provides
certiorari is an extraordinary remedy to correct a grave that the suit may be instituted by all who are thereby obliged
abuse of discretion amounting to lack or excess of principally or subsidiarily xxx.
jurisdiction when an appeal, or any plain, speedy and In the case at bar, the AREM was executed by Antonio, with the
adequate remedy in the ordinary course of law is not marital consent of Matilde. Since the mortgaged property is
available. In this regard, grave abuse of discretion implies a presumed conjugal, she is the one obliged principally under the
capricious and whimsical exercise of judgment that is AREM. It is thus she, following Art. 1397 of the Civil Code vis a vis Sec.
equivalent to lack of jurisdiction whenever the power is 2 of Rule 3 of the Rules of Court, who is the real party in interest,
exercised in an arbitrary or despotic manner by reason of hence, the action must be prosecuted in her name as she stands to
passion, prejudice or personal aversion amounting to an be benefited or injured in the action.
evasion of a positive duty or to a virtual refusal to perform Assuming that Matilde is indeed incapacitated, it is her legal guardian
the duty enjoined, or to act at all in contemplation of law. who should file the action on her behalf. Not only is there no
Equitable PCI Bank, Inc. (now known as Banco De Oro-EPCI, Inc.) vs. allegation in the complaint, that respondents have been legally
Heirs of Antonio Tiu, namely: Arlene T. Fu, Michael U. Tiu, Andrew U. designated as guardians to file the action on her behalf, the name of
Tiu, Edgar U. Tiu and Erwin U. Tiu Matilde (who is deemed the real party in interest) was likewise not
included in the title of the case, in violation of Sec. 3 of Rule 3 of the
G.R. No.178529, September 4, 2009 // Carpio Morales, J: Rules of Court.
Provision on “parties in interest” of the Rules of Court
complainants" — were admissions against interest and
binding upon Stanley Fine.
STANLEY FINE FURNITURE, ELENAAND CARLOS WANG, Petitioners,
 An admission against interest is the best evidence which
vs.
affords the greatest certainty of the facts in dispute since
VICTOR T. GALLANO AND ENRIQUITO SIAREZ, Respondents.
no man would declare anything against himself unless such
G.R. No.190486 November 26, 2014
declaration is true. Thus, an admission against interest
binds the person who makes the same, and absent any
FACTS: showing that this was made thru palpable mistake, no
To terminate the employment of workers simply because they amount of rationalization can offset it.
asserted their legal rights by filing a complaint is illegal. It violates  Reinstated LA’s Decision
their right to security of tenure an'd should not be tolerated.  MR by owners- Denied
 Stanley Fine with its owners Briones & Wang , hired Gallano Petiton for Review
& Siarez as painters/carpenters.  Elena claims that CA erred in ruling that Victor and Enriquito
 Gallano & Siarez filed while still working for Stanley Fine, a were illegally dismissed considering that she issued several
labor complaint against owners underpayment/non- memoranda to them, but they refused to accept the
payment of salaries, wages, Emergency Cost of Living memoranda and explain their absences.
Allowance (ECOLA), and 13th month pay.  That to the statement, "due to the filing of an
 They then filed amended complaint for actual illegal unmeritorious labor case,"36 it was error on the part of her
dismissal, underpayment/non-payment of overtime pay, former counsel which should not bind her.
holiday pay, premium for holiday pay, service incentive
leave pay, 13th month pay, ECOLA, and Social Security ISSUE:
System (SSS) benefit. WON CA erred when it agreed with the Labor Arbiter that the
 Later on, they were not allowed to work and claimed there statement, "filing of an unmeritorious labor case," is an
were dismissed and was allegedly scolded for filing a admission against interest and binding against Stanley Fine
complaint for money claims. Furniture.
 Owners claimed they asked Gallano & Siarez to explain their
absences for the month of May 2005, but they refused. HELD:
Labor Arbiter Decision: An admission against interest is the best evidence which affords the
 Gallano & Siarez illegally dismissed. greatest certainty of the facts in dispute since no man would declare
 They hinged their decision the following contradictory anything against himself unless such declaration is true. Thus, an
statements inStanley Fine’s position paper “Stanley Fine admission against interest binds the person who makes the same,
was forced todeclare them dismissed due to their failure to and absent any showing that this was made thru palpable mistake, no
report back to work for a considerable length of time and amount of rationalization can offset it.82
also, due to the filing of an unmeritorious labor case against The general rule is that errors of counsel bind the client. The reason
it by the two complainants” behind this rule was discussed in Building Care Corporation v.
 the admission that complainants were dismissed due to the Macaraeg:83
filing of a case against them by complainants is a blatant It is however, an oft-repeated ruling that the negligence and mistakes
transgression of the Labor Code that no retaliatory measure of counsel bind the client.1âwphi1 A departure from this rule would
shall be levelled against an employee by reason of an action bring about never-ending suits, so long as lawyers could allege their
commenced against an employer. own fault or negligence to support the client’scase and obtain
 Reinstate + backwages from date of dismissal until actual remedies and reliefs already lost by operation of law. The only
reinstatement. exception would be, where the lawyer’s gross negligence would
NLRC Decision: result in the grave injustice of depriving his client of the due process
of law.84 (Citations omitted)
 Reversed LA’s decision.
 Labor Arbiter erred in considering the statement, "due to There is not an iota of proof that the lawyer committed gross
the filing ofan unmeritorious labor case," as an admission negligence in this case. That counsel did not reflect his client’s true
against interest. intentions is a bare allegation. It is not a mere afterthought meant to
 Owner’s allegations in paragraph 5 of their position paper is escape liability for such illegal act. Elena’s counsel reflected the true
not an admission that they dismissed complainants- reason for dismissing respondents. Both position papers state that
appellees moreso [sic], in retaliation for complainants- Elena dismissed respondents because of the filing of a labor
appellees’ filing a complaint against them. complaint. Thus, the Court of Appeals did not err in affirming the
 Reinstate but without backwages Labor Arbiter’s ruling that the statement, "unmeritorious labor
 MR by Gallano & Siarez - denied complaint," is an admission against interest.

Court of Appeals Decision: Assuming that the statement, "filing of an unmeritorious labor case,"
is not an admission against interest, still, the Court of Appeals did not
 Stanley Fine’s statements — that it was "forced to declare err in reinstating the Labor Arbiter’s decision. Elena admitted that no
them dismissed" due to their absences and "due to the filing notices of dismissal were issued.
of an unmeritorious labor case against it by the two
Elena pointed out that there is no evidence showing that at the time
she sent the memoranda, she already knew of the complaint for
money claims filed by respondents. The allegation that she told The Court denied the Petition on the ground that Africa is not a
respondents "Nag complain pa kayo sa Labor ha, sige tanggal na proper party under Rule 3, Section 3 of the Rules of Court which
kayo" is hearsay and inadmissible. reads:
G.R. No. 206540 April 20, 2015
ALICE G. AFRICA, Petitioner, vs. INSURANCE SAVINGS AND Sec. 3. Representatives as parties.—Where the action is allowed to
INVESTMENT AGENCY, INC. (ISIA) represented by its President, DELIA be prosecuted or defended by a representative or someone acting in
DE BORJA; acting Register Of Deeds, Las Piñas City, ATTY. ABRAHAM a fiduciary capacity, the beneficiary shall be included in the title of the
N. VERMUDEZ, Respondents. 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
PEREZ, J.: 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.
Principle:

Section 3 of Rule 3 of the Rules of Court is explicit on the requirement


Remedial Law (Civil Procedure): An agent, as party, may sue without that an agent as party may sue without joining the principal except
joining the principal except when the contract involves things
when the contract involves things belonging to the principal. The
belonging to the principal. herein subject property is ostensibly owned by the Spouses Orfinada
covered by TCT No. 38910-A registered in their names. This TCT No.
Facts: 38910-A is one of the titles ISIA seeks to annul as part of its claim of
ownership over vast tracts of land bounded by the Pasig River in the
North, by the Tunisan River in the South, by Laguna de Bay in the East,
This case involves a parcel of land covered by TCT No. 38910-A and by the Manila de Bay in the West. xx Africa’s belated claim of
registered in the name of Spouses Orfinada. Such property was the ownership via purchase cannot make her a proper party to this case
subject of 4 cases related to its ownership and titling. The cases and circumvent the requirements for establishing ownership over the
resulted in conflicting rulings. subject property.

Respondent ISIA filed a Special Civil Action for Mandamus under Rule [Pursuant to] Tamondong v. Court of Appeals, xx [it was] ruled that
65 of the Rules of Court against the Register of Deeds of Las Piñas City the lack of authority of the representative from the real party-in-
seeking the cancellation of TCT No. 38910A and the issuance of a new interest, results in the complaint deemed as not filed. It does not
title in favour of the ISIA. ISIA alleged that it purchased from Spouses make the representative as the actual plaintiff in the case.
Orfinada the subject property as evidenced by a Deed of Sale
executed 18 May 1981; paid the taxes and fees for the transfer; and
completed the requirements for the transfer of title. However, the
Registrar of Deeds denied the registration of the sale on the ground 42. V-Gent Inc. v. Morning Star Travel & Tours, G.R. No. 186305, July
that another owner’s duplicate of the subject title is in possession of 22, 2015
Alice Africa.

The Case:
In turn, Africa filed a Vehement Opposition on the instant petition
contending that the sale between ISIA and Spouses Orfinada is
tainted with fraud hence not valid. Nevertheless, the RTC granted After buying 26 two-way plane tickets from Morning Star Travel and
ISIA’s Petition for Mandamus. Both Africa and RoD filed separate Tours, Inc (respondent), V-Gent Inc (petitioner) returned 15 unused
MRs. Both were denied. tickets worth $8,747.50 to the respondent, which refunded only the
six tickets worth $3,445.63. Despite demand, Morning Star refused
to refund the nine remaining tickets, hence it filed money claim
Hence, Africa filed this Petition for Certiorari on behalf of the Spouses against the respondent before the MeTC of Manila. Aside from
Orfinada. She alleged that her contract of agency with the Spouses countering that V-Gent is not entitled to a refund, Morning Star
Orfinada is coupled with interest without explicitly stating her questioned the personality of V-Gent to file the action as it is the
interest therein. passengers who bought the tickets who are the real parties in
interest. Ruling, the MeTC dismissed the complaint for lack of cause
of action. While it declared V-Gent as agent of the ticket buyers, it
Issue: Whether or not Africa has legal capacity to file the Petition for
failed to prove its case by preponderance of evidence. On appeal to
Certiorari in her own name. –NO
the RTC, the latter court reversed the MeTC judgment, holding that
V-Gent proved its case by preponderance of evidence. Morning Star
Ruling: elevated the case to the Court of Appeals. The appellate court
granted the petition for review filed by Morning Star, by ruling that
V-Gent is not the real party in interest because it merely acted as an
agent of the passengers who bought the tickets from Morning Star
with their own money. Its motion for reconsideration denied by the
CA, V-Gent sought recourse with the Supreme Court. It argues that
since Morning Star did not appeal this specific finding with the RTC, Rule 3, Section 3 of the Rules of Court provides the exception when
then the MeTC’s ruling on this point had already become final and an agent may sue or be sued without joining the principal.
conclusive; therefore, Morning Star can no longer revive the issue
before the CA.
Section 3. Representatives as parties. – Where the action is allowed
to be prosecuted and defended by a representative or someone
The Issue: acting in a fiduciary capacity, the beneficiary shall be included in the
Whether or not V-Gent is a real party in interest in the case. 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
The Ruling: Rules. An agent acting in his own name and for the benefit of an
We disagree with V-Gent. undisclosed principal may sue or be sued without joining the
principal except when the contract involves things belonging to the
principal. (Emphasis supplied.)
The MeTC dismissed V-Gent’s complaint against Morning Starrer for
failure to prove its claim. This dismissal meant that the plaintiff did
not prove a violation of its right for which the defendant should be Thus an agent may sue or be sued solely in its own name and without
held liable. This ruling was plainly a judgment in Morning Star’s favor joining the principal when the following elements concur: (1) the
and one that it had no cause to question. Indeed, it would be legally agent acted in his own name during the transaction; (2) the agent
illogical for Morning Star to file an appeal to question a ruling of acted for the benefit of an undisclosed principal; and (3) the
dismissal in its favor. transaction did not involve the property of the principal.
V-Gent also argues that it is a real party-in-interest with legal standing
to institute the complaint against Morning Star. In the present When these elements are present, the agent becomes bound as if the
petition, it states: transaction were its own. This rule is consistent with Article 1883 of
the Civil Code which says:
1. The Court of Appeals chose to ignore the fact that while the
plane tickets bore the names of the individual passengers, the Art. 1883. If an agent acts in his own name, the principal has no right
respondent admitted that it was the petitioner that transacted of action against the persons with whom the agent has contracted;
business with it concerning the purchase of these plane tickets. neither have such persons against the principal.
Both the purchase order and receipt of payments were under
the name of the petitioner. Thus, since it was the petitioner who In such case, the agent is the one directly bound in favor of the person
purchased these plane tickets on behalf of the passengers, the with whom he has contracted, as if the transaction were his own,
respondent voluntarily refunded to the former the value of six except when the contract involves things belonging to the principal.
(6) unused return tickets in the total amount of US$3,445.62.
Though, for reasons it did not reveal to petitioner, it refused to The provisions of this article shall be understood to be without
refund the rest.⁠1 (Emphasis supplied.) prejudice to the actions between the principal and agent.

V-Gent admits that it purchased the plane tickets on behalf of the In the present case, only the first element is present; the purchase
passengers as the latter’s agent.⁠2 The tickets were issued in the order and the receipt were in the name of V-Gent. However, the
name of the passengers and paid for with the passengers’ money. No remaining elements are absent because: (1) V-Gent disclosed the
dispute or conclusion in the lower courts’ minds on this point; hence, names of the passengers to Morning Star — in fact the tickets were
both the MeTC⁠3 and the CA⁠4 commonly found that V-Gent acted as in their names; and (2) the transaction was paid using the passengers’
an agent of the passengers when it purchased the passengers’ plane money. Therefore, Rule 3, Section 3 of the Rules of Court cannot
tickets. apply.

However, while the MeTC held that V-Gent could sue as an agent To define the actual factual situation, V-Gent, the agent, is suing to
acting in his own name on behalf of an undisclosed principal, the CA recover the money of its principals — the passengers — who are the
held that it could not because the requirements for such a suit by the real parties-in-interest because they stand to be injured or benefited
agent had not been satisfied. in case Morning Star refuses or agrees to grant the refund because
the money belongs to them. From this perspective, V-Gent evidently
We agree with the Court of Appeals. does not have a legal standing to file the complaint.

Every action must be prosecuted or defended in the name of the real Finally, V-Gent argues that by making a partial refund, Morning Star
party-in-interest – the party who stands to be benefited or injured by was already estopped from refusing to make a full refund on the
the judgment in the suit⁠5. In suits where an agent represents a party, ground that V-Gent is not the real party-in-interest to demand
the principal is the real party-in-interest; an agent cannot file a suit in reimbursement.⁠6
his own name on behalf of the principal.
We find no merit in this argument.

The power to collect and receive payments on behalf of the principal


is an ordinary act of administration covered by the general powers of
an agent.⁠7 On the other hand, the filing of suits is an act of strict
dominion.

Under Article 1878 (15) of the Civil Code, a duly appointed agent has
no power to exercise any act of strict dominion on behalf of the
principal unless authorized by a special power of attorney. An agent’s
authority to file suit cannot be inferred from his authority to collect
or receive payments; the grant of special powers cannot be
presumed from the grant of general powers. Moreover, the authority
to exercise special powers must be duly established by evidence,
even though it need not be in writing.⁠8

By granting the initial refund, Morning Star recognized V-Gent’s


authority to buy the tickets and collect refunds on behalf of the
passengers. However, Morning Star’s recognition of V-Gent’s
authority to collect a refund for the passengers is not equivalent to
recognition of V-Gent’s authority to initiate a suit on behalf of the
passengers. Morning Star therefore, is not estopped from
questioning V-Gent’s legal standing to initiate the suit.

WHEREFORE, premises considered, we DENY the petition for lack of


merit.
SO ORDERED.

BRION, J.: