MISAMIS OCCIDENTAL II COOPERATIVE, INC., Petitioner, -versus- VIRGILIO S.

DAVID,
Respondent.
G.R. NO. 129928, SECOND DIVISION
August 25, 2005

PONTENTE: TINGA, J.

DOCTRINE:
To determine the existence of a cause of action, only the statements in the complaint
may be properly considered. It is error for the court to take cognizance of external facts or hold
preliminary hearings to determine their existence.

The test of sufficiency of facts alleged in the complaint as constituting a cause of action
is whether or not admitting the facts alleged, the court could render a valid verdict in accordance
with the prayer of said complaint.

FACTS:
Private respondent Virgilio S. David (hereinafter, David), a supplier of electrical
hardware, filed a case for specific performance and damages against MOELCI II, a rural electric
cooperative in Misamis Occidental, docketed as Civil Case No. 94-69402 entitled "Virgilio David
v. Misamis
Occidental II Electric Cooperative, Inc. (MOELCI II)." The said case, which was essentially a
collection suit, pending before Judge Felixberto Olalia (hereinafter, Judge Olalia) of the
Regional Trial Court of Manila, Branch 8 (the trial court), was predicated on a document
attached as Annex
"A" to the Amended Complaint that according to David is the contract pursuant to which he sold
to MOELCI II one (1) unit of 10 MVA Transformer. MOELCI II filed its Answer to Amended
Complaint which pleaded, among others, affirmative defenses which also constitute grounds for
dismissal of the complaint. These grounds were lack of cause of action, there being allegedly no
enforceable contract between David and MOELCI II under the Statute of Frauds pursuant to
Section 1 (g) and (i), Rule 16 of the Rules of Court, and improper venue.

In accordance with Section 5, Rule 16 of the Rules of Court, (now Section 6, Rule 16 of
the 1997 Rules of Civil Procedure) MOELCI II filed with the trial court a Motion (For Preliminary
Hearing of Affirmative Defenses and Deferment of Pre-Trial Conference) (hereinafter referred to
as Motion). In said Motion, MOELCI II in essence argued that the document attached as Annex
"A" to the Amended Complaint was only a quotation letter and not a contract as alleged by
David.
Thus, it contends that David's Amended Complaint is dismissible for failure to state a cause of
action.

In his opposition to MOELCI II's Motion, David contended in the main that because a
motion to dismiss on the ground of failure to state a cause of action is required to be based only
on the allegations of the complaint, the "quotation letter," being merely an attachment to the
complaint and not part of its allegations, cannot be inquired into.

MOELCI II filed a rejoinder to the opposition. After the parties filed their respective
memoranda, Judge Olalia issued an order dated 16 November 1995 denying MOELCI II's
motion for preliminary hearing of affirmative defenses. MOELCI II's motion for reconsideration of
the said order was likewise denied in another order issued by Judge Olalia on 13 March 1996.
MOELCI II elevated this incident to the Court of Appeals by way of a special civil action for

1
certiorari, alleging grave abuse of discretion on the part of Judge Olalia in the issuance of the
two aforesaid orders.

On 14 March 1997, the Court of Appeals dismissed MOELCI II's petition holding that the
allegations in David's complaint constitute a cause of action. The appellate court further
declared that when the trial court is confronted with a motion to dismiss on the ground of lack of
cause of action, it is mandated to confine its examination for the resolution thereof to the
allegations of the complaint and is specifically enjoined from receiving evidence for that
purpose. With the denial of its Motion for Reconsideration, petitioner is now before this Court
seeking a review of the appellate court's pronouncements.

ISSUE:

Whether David's complaint constitute a cause of action?

RULING:

To determine the existence of a cause of action, only the statements in the complaint
may be properly considered. It is error for the court to take cognizance of external facts or hold
preliminary hearings to determine their existence. In The Consolidated Bank and Trust Corp. v.
Hon. Court of Appeals it held that if the allegations in a complaint furnish sufficient basis by
which the complaint can be maintained, the same should not be dismissed regardless of the
defenses that may be averred by the defendants. The test of sufficiency of facts alleged in the
complaint as constituting a cause of action is whether or not admitting the facts alleged, the
court could render a valid verdict in accordance with the prayer of said complaint.

It has been hypothetically admitted that the parties had entered into a contract sale
David bound himself to supply MOELCI II (1) unit 10 MVA Power transformer with accessories
for a total price of P5,200,000.00 plus 69 KV Line Accessories for a total price of P2,169,500.00;
that despite written and verbal demands, MOELCI II has failed to pay the price thereof plus the
custom duties and incidental expenses of P272,722.27; and that apart from the previously
stated contract of sale, David regularly delivered various electrical hardware to MOELCI II
which, despite demands, has an outstanding balance of P281,939.76. We believe all the
foregoing sufficiently lay out a cause of action. Even extending our scrutiny to Annex "A," which
is after all deemed a part of the Amended Complaint, will not result to a change in our
conclusion.

Contrary to MOELCI II's assertion, Annex "A" is not an "undisguised quotation letter."
While Annex "A" is captioned as such, the presence of the signatures of both the General
Manager and the Chairman of the Committee of Management immediately below the word
"CONFORME" appearing on the document's last page lends credulity to David's contention that
there was, or might have been, a meeting of minds on the terms embodied therein. Thus, the
appendage of Annex "A" does not entirely serve to snuff out David's claims. In fact, the
ambiguity of the import and nature of Annex "A" which necessitates a resort to its proper
interpretation, fortifies the propriety of the trial court's denial of MOELCI II's Motion. The
interpretation of a document requires introduction of evidence which is precisely disallowed in
determining whether or not a complaint states a cause of action. The Court of Appeals therefore
correctly dismissed MOELCI II's petition and upheld the trial court's ruling.

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 JUANA COMPLEX I HOMEOWNERS ASSOCIATION, Petitioner, vs. FIL-ESTATE LAND,
Respondent.
GR No. 152272, THIRD DIVISION
March 05, 2012

PONTENTE: MENDOZA, J.

The question of whether the complaint states a cause of action is determined by its
averments regarding the acts committed by the defendant. Thus, it must contain a concise
statement of the ultimate or essential facts constituting the plaintiff's cause of action. To be
taken into account are only the material allegations in the complaint; extraneous facts and
circumstances or other matters aliunde are not considered.

FACTS:

JCHA et.al. (Homeowners Association, individual residents of Juana Complex I and

neighboring subdivisions) instituted an action for damages, in its own behalf and as a class suit,
against Fil-Estate.

The complaint alleged that plaintiffs are regular commuters and motorists who constantly
travel along SLEX through a public road known as La Paz Road for more than 10 years.
However, Fil-Estate deliberately excavated, ruined, and closed said road, which made it not
passable to motorists and pedestrians. Despite complaints, Fil-Estate failed to make repairs on
the road, causing damage and inconvenience to motorists.

Fil-Estate filed a motion to dismiss, alleging that the complaint failed to state a cause of
action and that it was improperly filed as a class suit. RTC denied the motion to dismiss. CA
upheld the RTC.

While the petitioners agree with the CA that the complaint sufficiently stated a cause of
action, they disagree with the pronouncement that full-blown trial on the merits was necessary.
They claim that during the hearing on the application of the writ of injunction, they had
sufficiently proven that La Paz Road was a public road and that commuters and motorists of
their neighboring villages had used this road as their means of access to schools, churches, etc.
They also point out that La Paz Road has attained the status and character of a public road or
burdened by an apparent easement of public right of way.

On the other hand, respondents argue that JCHA, et al. failed to prove the existence of a
right of way or a right to pass over La Paz Road and that the closure of the said road constituted
an injury to such right. According to them, La Paz Road is a torrens registered private road and
there is neither a voluntary nor legal easement constituted over it.
ISSUE:

Whether or not the complaint states a cause of action?

RULING:

3
 The Court answered in the affirmative. Section 2, Rule 2 of the Rules of Court defines a
cause of action as an act or omission by which a party violates the right of another. A complaint
states a cause of action when it contains three (3) essential elements of a cause of action,
namely:
(1) the legal right of the plaintiff,
(2) the correlative obligation of the defendant, and
(3) the act or omission of the defendant in violation of said legal right.

The question of whether the complaint states a cause of action is determined by its
averments regarding the acts committed by the defendant. Thus, it must contain a concise
statement of the ultimate or essential facts constituting the plaintiff's cause of action. To be
taken into account are only the material allegations in the complaint; extraneous facts and
circumstances or other matters aliunde are not considered.

As provided in Misamis Occidental II Cooperative, Inc. v. David, the test of sufficiency of

facts alleged in the complaint as constituting a cause of action is whether or not admitting the
facts alleged, the court could render a valid verdict in accordance with the prayer of said
complaint.

In the present case, the Court finds the allegations in the complaint sufficient to establish
a cause of action. First, JCHA, et al.'s averments in the complaint show a demandable right
over La Paz Road.

These are: (1) their right to use the road on the basis of their allegation that they had
been using the road for more than 10 years; and (2) an easement of a right of way has been
constituted over the said roads. There is no other road as wide as La Paz Road existing in the
vicinity and it is the shortest, convenient and safe route towards SLEX Halang that the
commuters and motorists may use. Second, there is an alleged violation of such right committed
by Fil-Estate, et al. when they excavated the road and prevented the commuters and motorists
from using the same. Third, JCHA, et al. consequently suffered injury and that a valid judgment
could have been rendered in
accordance with the relief sought therein. Thus, the petitions were denied by the Court.

4
 BANGKO SENTRAL NG PILIPINAS, Petitioner vs. FELICIANO P. LEGASPI, Respondent.
G.R. No. 205966, THIRD DIVISION
March 02, 2016

PONTENTE: PERALTA, J.

The Honorable Supreme Court ruled that annexes to a complaint are deemed part of,
and should be considered together with the complaint.

The Court also ruled that: “The non-inclusion on the face of the complaint of the amount
of the property, however, is not fatal because attached in the complaint is a tax declaration of
the property in question.”

FACTS:

Petitioner BSP filed a Complaint for annulment of title, revocation of certificate and
damages (with application for TRO/writ of preliminary injunction). Respondent Legaspi filed a
Motion to Dismiss alleging that the RTC failed to acquire jurisdiction over the action because the
complaint, a real action, failed to allege the assessed value of the subject property. Petitioner
BSP claimed that since the subject property contains an area of 4,838,736 square meters, it is
unthinkable that said property would have an assessed value of less than P20,000.00 which is
within the jurisdiction of the Municipal Trial Courts. Petitioner BSP further stated that a tax
declaration showing the assessed value of P28,538,900.00 and latest zonal value of
P145,162,080.00 was attached to the complaint.

RTC denied the Motion. The CA reversed and dismissed BSP’s complaint. Hence, this
Petition.

ISSUE:

Whether or not failure to allege the amount in the face of the complaint would tantamount to a
lack of a cause of action?

RULING:
No. The non-inclusion on the face of the complaint of the amount of the property is not
fatal because attached in the complaint is a tax declaration of the property in question showing
that it has an assessed value of P215,320.00. It must be emphasized that annexes to a
complaint are deemed part of, and should be considered together with the complaint. In Fluor
Daniel, Inc.-
Philippines v. E.B. Villarosa and Partners Co., Ltd., this Court ruled that in determining the
sufficiency of a cause of action, the courts should also consider the attachments to the
complaint
thus:
The Court ruled that a complaint should not be dismissed for insufficiency of cause of
action if it appears clearly from the complaint and its attachments that the plaintiff is entitled to

5
relief. The converse is also true. The complaint may be dismissed for lack of cause of action if it
is obvious from the complaint and its annexes that the plaintiff is not entitled to any relief.

Hence, being an annex to BSP's complaint, the tax declaration showing the assessed
value of the property is deemed a part of the complaint and should be considered together with
it in determining that the RTC has exclusive original jurisdiction.

GOODLAND COMPANY, Petitioner, vs, ASIA UNITED BANK, Respondent.

GR No. 195546, FIRST DIVISION
March 14, 2012,

PONTENTE: VILLARAMA, JR., J.

DOCTRINE:
The essence of forum shopping is the filing of multiple suits involving the same parties
for the same cause of action, either simultaneously or successively, for the purpose of obtaining
a favorable judgment, through means other than by appeal or certiorari.

FACTS:

Respondent Goodland Company, Inc. (Goodland) executed a Third Party Real Estate
Mortgage (REM) over two parcels of land in favor of petitioner Asia United Bank (AUB). The
mortgage secured the obligation amounting to ₱250 million of Radiomarine Network, Inc.
(RMNI). Goodland then filed a Complaint before the Regional Trial Court for the annulment of
the REM on the ground that the same was falsified and done in contravention of the parties’
verbal agreement (Annulment Case).

While the Annulment Case was pending, RMNI defaulted in the payment of its obligation
to AUB, prompting the latter to exercise its right under the REM to extrajudicially foreclose the
mortgage. It filed its Application for Extrajudicial Foreclosure of Real Estate Mortgage with the
Office of the Executive Judge. The mortgaged properties were sold in public auction to AUB as
the highest bidder. It was issued a Certificate of Sale, which was registered with the Registry of
Deeds of Calamba. Before AUB could consolidate its title, Goodland filed another Complaint
before the RTC against AUB. This Complaint sought to annul the foreclosure sale and to enjoin
the consolidation of title in favor of AUB (Injunction Case).

Respondents moved to dismiss the case. They brought to the trial court’s attention
Goodland’s forum shopping given the pendency of the Annulment Case. They argued that the
two cases both rely on the alleged falsification of the real estate mortgage as basis for the
reliefs sought.

The trial court acted favorably on the said motion and dismissed the Injunction Case with
prejudice on the grounds of forum shopping and litis pendentia.

Goodland appealed the same to the CA which ruled in favor of Goodland and ordered
the reinstatement of the Injunction Case in the trial court. Hence, the instant petition.

ISSUE:

Whether or not the petitioner was guilty of forum shopping?

6
RULING:

Yes, there is forum shopping “when a party repetitively avails of several judicial
remedies in different courts, simultaneously or successively, all substantially founded on the
same transactions and the same essential facts and circumstances, and all raising substantially
the same issues either pending in or already resolved adversely by some other court.”

Forum shopping can be committed in three ways: (1) filing multiple cases based on the
same cause of action and with the same prayer, the previous case not having been resolved yet
(where the ground for dismissal is litis pendentia); (2) filing multiple cases based on the same
cause of action and the same prayer, the previous case having been finally resolved (where the
ground for dismissal is res judicata); and (3) filing multiple cases based on the same cause of
action, but with different prayers (splitting causes of action, where the ground for dismissal is
also either litis pendentia or res judicata).

While the main relief sought in the Annulment Case (nullification of the REM) is
ostensibly different from the main relief sought in the Injunction Case (nullification of the
extrajudicial foreclosure and injunction against consolidation of title), the cause of action which
serves as the basis for the said reliefs remains the same — the alleged nullity of the REM.
Thus, what is involved here is the third way of committing forum shopping, i.e., filing multiple
cases based on the same cause of action, but with different prayers. As previously held by the
Court, there is still forum shopping even if the reliefs prayed for in the two cases are different, so
long as both cases raise substantially the same issues.

7
 PHILIPPINE NATIONAL BANK, Petitioner,
vs. GATEWAY PROPERTY HOLDINGS, INC., Respondent.
G.R. No. 181485, FIRST DIVISION
February 15, 2012

PONTENTE: LEONARDO-DE CASTRO, J.

DOCTRINE:

The test often used in determining whether causes of action are identical is to ascertain
whether the same evidence which is necessary to sustain the second action would have been
sufficient to authorize a recovery in the first, even if the forms or nature of the two actions be
different. If the same facts or evidence would sustain both actions, the two actions are
considered the same within the rule that the judgment in the former is a bar to the subsequent
action; otherwise, it is not.

FACTS:
Respondent GPHI was a subsidiary company of Gateway Electronics Company (GEC).
GEC obtained long term loans from the Land Bank of the Philippines (LBP) in the amount of
P600 million and the loans were secured by mortgages executed by GEC over its properties.

LBP invited other banks to lend money to GEC. It is alleged that LBP agreed to submit
the mortgaged properties to it by GEC as part of the latters assets that will be covered by a
Mortgage Trust Indenture (MTI), ensuring that all participating banks in the loan syndicate will
have equal security position. LBP and a consortium of banks entered into a Memorandum of
Understanding (MOU), whereby LBP agreed to release the mortgaged properties to the
consortium of banks on the basis of an MTI. The participating banks released funds in favor of
GEC. Petitioner PNB became part of this consortium of creditor banks.

GEC then requested PNB to convert its long-term loans into a Convertible Omnibus
Credit Line due to its difficulty in paying its obligation. PNB approved such a conversion subject
to certain conditions- GPHI was made a co-borrower in the agreement and was obligated to
execute in favor of PNB a real estate mortgage over two parcels of land.

GEC filed a complaint for specific performance against LBP due to the latter’s refusal to
share the mortgaged properties with the consortium of creditor banks.

PNB demanded payment from GEC and when the latter discovered the former’s intent to
foreclose the REM, it prayed that a (TRO) be issued to enjoin PNB from foreclosing on the
properties of GPHI and judgment be issued declaring that the real estate mortgage involving the
properties of GPHI and executed in favor of PNB is null and void. GPHI contended that the
understanding between GEC and PNB is that the GPHI properties would stand merely as a
temporary security pending the outcome of case filed by GEC against LBP.

8
 Since no TRO was issued by the Court, PNB was able to foreclosed the mortgaged
properties.

Thereafter, GPHI filed a Petition for Annulment of Foreclosure of Mortgage. GPHI

argued that, in conducting the foreclosure proceedings, the sheriff failed to observe the
requirement of Section 4 of Act No. 3135 that the sale shall be made at public auction.

The contention of PNB is that there was another action pending between the same
parties for the same cause of action. PNB argued that GPHI resorted to a splitting of a cause of
action by first filing a complaint for the annulment of the contract of real estate mortgage and
then filing a petition for the annulment of the subsequent foreclosure of the mortgage. PNB
further alleged that the subsequent petition of GPHI failed to state a cause of action.

RTC dismissed the case and ruled that both the civil cases involved the same parties,
substantially identical causes of action and reliefs prayed for, the reliefs being founded on the
same facts. Where a single cause of action has been split and pursuant to Rule 16, Section 1(e)
of the 1997 Rules on Civil Procedure, the Motion to Dismiss filed by PNB, on the ground that
there is another action pending between the same parties for the same cause, or litis pendentia
is proper.

On appeal, the CA set aside the decision of the RTC and ruled that the third requisite of
litis pendentia (the identity in the two cases should be such that the judgment that may be
rendered in one would, regardless of which party is successful, amount to res adjudicata to the
other) is not present. Hence, the petition.

ISSUES:

Whether there is an identity of causes of action in the 2 subject cases?

RULING:

Yes. As such, the Court granted the petition of PNB.

Section 2, Rule 2 of the Rules of Court defines a cause of action as "the act or omission
by which a party violates a right of another." Section 3 of Rule 2 provides that [a] party may not
institute more than one suit for a single cause of action." Anent the act of splitting a single cause
of action, Section 4 of Rule 2 explicitly states that "[i]f two or more suits are instituted on the
basis of the same cause of action, the filing of one or a judgment upon the merits in any one is
available as a ground for the dismissal of the others."

Further, As a ground for a motion to dismiss a complaint or any other pleading asserting
a claim, litis pendentia is provided for under Section 1(e), Rule 16 of the Rules of Court, which
reads:

Section 1. Grounds. - Within the time for but before filing the answer to the complaint or
pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:
xxxx
(e) That there is another action pending between the same parties for the same cause.

9
 Carlet v. Court of Appeals states that as regards identity of causes of action, the test
often used in determining whether causes of action are identical is to ascertain whether the
same evidence which is necessary to sustain the second action would have been sufficient to
authorize a recovery in the first, even if the forms or nature of the two actions be different. If the
same facts or evidence would sustain both actions, the two actions are considered the same
within the rule that the judgment in the former is a bar to the subsequent action; otherwise, it is
not.

In the case at hand, a perusal of the allegations in Civil Case Nos. TM-1022 (Annulment
of the Real Estate Mortgage) and TM-1108 (Annulment of the Foreclosure Sale) reveal that the
said cases invoke the same fundamental issue, i.e., the temporary nature of the security that
was to be provided by the mortgaged properties of GPHI.

In the original complaint in Civil Case No.TM-1022 (Annulment of the Real Estate
Mortgage), GPHI's main argument was that the agreement between GEC and PNB was that the
mortgaged properties of GPHI would merely stand as temporary securities pending the outcome
of Civil Case No. 98-782, the case filed by GEC against LBP. The mortgaged properties were
never contemplated to stand as bona fide collateral for the loan obligations of GEC to PNB.
Also, GPHI claimed that the execution of the real estate mortgage over the properties of GPHI
did not reflect the true intention of GEC and PNB. As such, GPHI concluded that PNB had no
legal right to pursue the remedy of foreclosure of the mortgaged properties in light of the inability
of GEC to pay its loan obligations to PNB.

On the other hand, in its petition in Civil Case No. TM-1108 (Annulment of the
Foreclosure Sale), GPHI asserted that PNB knew that the mortgaged properties were "never
intended to be used as permanent collateral for GEC, but one which was simply used as an
unregistered security until [GPHI] incurs in default if sold and the proceeds of which should be
used in payment for the
obligation of GEC."

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JOVITO R. SALONGA, plaintiff-appellee, vs. WARNER, BARNES, & CO., defendant-appellant.
G.R. No. L-2246, EN BANC
January 31, 1951

PONENTE: BAUTISTA ANGELO, J.

DOCTRINE:

An action must be brought against the real party in interest, or against a party which may
be bound by the judgment to be rendered therein. The real party in interest is the party who
would be benefited or injured by the judgment, or the "party entitled to the avails of the suit"

FACTS:

Westchester Fire Insurance Company of New York entered into a contract with Tina J.
Gamboa for the shipment of one case of rayon yardage. Upon arrival, it was discovered that
there was a shortage of 1,723.12 pesos on the shipment from San Francisco, California, on
steamer Clovis Victory, to Manila.

Consignee, Jovito Salonga, demanded from American President Lines agents of the
ship Clovis Victory, demanding settlement, and when apparently no action was taken on this
claim, plaintiff demanded payment thereof from Warner, Barnes and Co., Ltd., as agent of the
insurance company in the Philippines to pay him the excess amount.

In the meantime, American President Lines agreed to pay to the plaintiff the amount
under its liability in the bill of lading, and when this offer was rejected, the claim was finally
settled. As a result, the amount claimed in the complaint as the ultimate liability of the defendant
under the insurance contract was reduced to P717.82 only. The trial court held that defendant,
as agent of Westchester Fire Insurance is responsible upon the insurance claim subject to the
suit. The motion for reconsideration filed by the defendant having been denied, the case was
appealed to this court.

ISSUE:

Whether or not the defendant is the real party in interest?

HELD:
The Court held in the negative.

11
 Counsel contends that Warner, Barnes and Co., Ltd., is not the real party in interest
against whom the suit should be brought. It is claimed that this action should have been filed
against its principal, the Westchester Fire Insurance Company of New York. This point is also
well taken. Section 2, Rule 3 of the Rules of Court requires that "every action must be
prosecuted in the name of the real party in interest."

A corollary proposition to this rule is that an action must be brought against the real party
in interest, or against a party which may be bound by the judgment to be rendered therein
(Salmon & Pacific Commercial Co. vs. Tan Cueco, 36 Phil., 556). The real party in interest is the
party who
would be benefited or injured by the judgment, or the "party entitled to the avails of the suit" (1
Sutherland, Court Pleading Practice & Fornts, p. 11).
And in the case at bar, the defendant issued upon in its capacity as agent of
Westchester Fire Insurance Company of New York in spite of the fact that the insurance
contract has not been signed by it. The defendant did not assume any obligation thereunder
either as agent or as a principal. It cannot, therefore, be made liable under said contract, and
hence it can be said that this case was filed against one who is not the real party in interest.

12
 CARLOS O. FORTICH, Petitioners, vs. RENATO C. CORONA, Respondent.
G.R. No. 131457, SECOND DIVISION
April 24, 1998

PONTENTE: YNARES-SANTIAGO, J.

Movants in case at bar are not real parties in interest. The rule in this jurisdiction is that a
real party in interest is a party who would be benefited or injured by the judgment or is the party
entitled to the avails of the suit.
Real interest means a present substantial interest, as distinguished from a mere
expectancy or a future, contingent, subordinate or consequential interest. Undoubtedly,
movants' interest over the land in question is a mere expectancy. Ergo, they are not real parties
in interest

FACTS:

On March 29, 1996, strikers went on protest concerning the decision of the Office of the
President issued through the executive secretary Ruben Torres which approved the conversion
of a 144 hectare of agricultural land to an agro-industrial (institutional) area. That event led to
the issuance of the so-called “win-win” resolution made by the Office of the President on
November 7, 1997 through then Deputy Executive Secretary, Renato Corona, which
substantially modified its earlier decision after it had become final and executory. The said
resolution modified the approval of the land conversion to agro-industrial area only to the extent
of 44 hectares and has ordered that the remainder of 100 hectares to be distributed to the
qualified farmer-beneficiaries.

On December 12, 1997, a Motion For Leave To Intervene was filed by alleged farmer-
beneficiaries, through counsel, claiming that they are real parties in interest as they were
previously identified by respondent DAR as agrarian reform beneficiaries on the 144-hectare
property subject of this case. The motion was vehemently opposed by the petitioners.

ISSUE:

Whether or not the movants are real parties in interest?

RULING:

The Court ruled in the negative.

13
 In their motion, movants contend that they are the farmer-beneficiaries of the land in
question, hence, are real parties in interest. To prove this, they attached as Annex "I" in their
motion a Master List of Farmer-Beneficiaries. Apparently, the alleged master list was made
pursuant to the directive in the dispositive portion of the assailed "Win-Win" Resolution which
directs the DAR "to carefully and meticulously determine who among the claimants are qualified
farmer-beneficiaries."

However, a perusal of the said document reveals that movants are those purportedly
"Found Qualified and Recommended for Approval." In other words, movants are merely
recommendee farmer-beneficiaries.

In Garcia vs. David, the Court stated that the rule in this jurisdiction is that a real party in
interest is a party who would be benefited or injured by the judgment or is the party entitled to
the avails of the suit. Real interest means a present substantial interest, as distinguished from a
mere
expectancy or a future, contingent, subordinate or consequential interest.

Undoubtedly, movants' interest over the land in question is a mere expectancy. Ergo,
they are not real parties in interest. Furthermore, the challenged resolution upon which movants
based their motion is, as intimated earlier, null and void. Hence, their motion for intervention has
no leg to stand on.

14