RULE 3 PARTIES
RA 11222 (2019): Rectification of simulated birth then they can have
administrative adoption. This law grants amnesty to people who
simulated birth. (10 years)
See Rule 3.15 on entities without juridical personality—summons on
person in charge of office or on any one of defendants
All parties have an impact on VERIFICATION, CERTIFICATION AND
SUMMONS
Sir: How you know if you are RPI? If the Court renders a judgement,
will you be affected (whether it will benefit you or make you suffer)?
If the pleading does not implead an RPI, this is a ground for
affirmative defense based on jurisprudence (that the pleading
asserting the claim states no cause of action.
LEGAL CAPACITY
A. Natural Person: Of legal age
a. A party dies while case is pending—determine first if
the ACTION SURVIVES
i. Civil case:
1. Support: does this action survive if
the one claiming support dies?
2. Collection for sum of money: If
defendant died (sec. 20—if arising
from contract ONLY; cannot be if
based on tortRule 87 if the latter);
if plaintiff dies (sec. 16)—either way
it survives.
SUBSTITUTION
*First step: What does a lawyer do? Not
file a Motion but file a Notice of Death.
*Why an heir over an administrator?
Expediency given the 30-day time
frame.
*Second step: Judge to issue order for
substitution in 30 days to require
substitute to appear
*Substitution is not a matter of
jurisdiction but a matter of due process.
Example: Mr. A (and his sons and daughters B and C) instituted an
action against Mr. D for recovery of parcels of land. If A dies and the
lawyer named a legal representative who is not B and C but the court
does not issue an order of substitution but despite inaction, the court
proceeded with the case, B and C presented their witnesses and the
court rendered a judgement. Is the judgment valid? As to B and C, it is
valid. But as to A, the judgment is null and void because he has his
own separate interest. Essence of this is due process.
Now, under sec. 20, is there substitution? None. The action survives
until the entry of judgment under the name of the deceased (estate)—
present death certificate to prove fact of death—may file Motion or
Manifestation. Then, if there is a favorable judgment, R86.
See: RULE 39, Section 7. Execution in case of death of party. — In
case of the death of a party, execution may issue or be enforced in
the following manner:
(a) In case of the death of the judgment obligee, upon the application
of his executor or administrator, or successor in interest;
(b) In case of the death of the judgment obligor, against his executor
or administrator or successor in interest, if the judgment be for the
recovery of real or personal property, or the enforcement of a lien
thereon;
(c) In case of the death of the judgment obligor, after execution is
actually levied upon any of his property, the same may be sold for the
satisfaction of the judgment obligation, and the officer making the sale
shall account to the corresponding executor or administrator for any
surplus in his hands. (7a)
*The above provision is NOT covered by SUMS OF MONEY. WHY?
Covered by SpecPro, not CivPro.
Sec. 17. Death or separation of a party who is a public officer.
Example: Jesse Robredo (DILG Secretary). If there is a case that he
appeared on in his capacity as DILG Secretary, what is the duty of the
successor after Jesse died? Tell the court whether he will adopt the
action of predecessor, notify him and give him opportunity to be
heard.
Sec. 19. Transfer of Interest—this is not automatic
Question: If the defendant are spouses, should both of them be
parties to an action? Yes, as a general rule. See exceptions from
Ingles reviewer.
SPOUSES: Note—exclusive property of wife is paraphernal or if
husband, capital. See new rule 14 on service of summons.
ii. Criminal case
See Rule 111, sec. 4—if the accused dies after the plea, the criminal
case as to the delict and the civil aspect will be extinguished. If before
plea, criminal case will be dismissed but the civil aspect can proceed
against estate of deceased—this covers case in appeal even if there
is a conviction in lower court. But what if final conviction and the
convict dies? Civil action survives because there’s already a final and
executory judgment.
What if it is the offended party who dies? The case will continue
because it is the state which is suing, the offended party is merely the
witness. This may die a natural death if the offended party is the
primary witness.
What about independent civil actions and other sources of obligation
(if the accused dies)? Look at Rule111, sec. 4, first paragraph where it
is referred to Rule 3, secs. 16 and 20.
What about a minor? Sec. 5. You sue the minor, assisted by
parent/guardian.
What about the incompetent or incapacitated? Sec. 18. The case will
continue in the name of the incapacitated by the person, assisted by a
guardian.
RPI vs LOCUS STANDI
If the act of government is to be questioned, what is the legal vehicle?
CERTIORARI: Expanded Jurisdiction under Art VIII (Constitution)
which is different from a Rule 65. Under the former, you can assail
even acts of executive whereas R65 only applies to judicial and quasi-
judicial acts (R65.1).
INDISPENSABLE (final determination) vs. NECESSARY (complete
determination)
ASSIGNMENT: QUESTION TO MR. NEGRE
For recovery of possession, not everyone is indispensable.
Heirs of Ampil v. Manahan: "In sum, in suits to recover properties, all
co-owners are real parties in interest. However, pursuant to Article
487 of the Civil Code and the relevant jurisprudence, any one of them
may bring an action, any kind of action for the recovery of co-owned
properties. Therefore, only one of the co-owners, namely the co-
owner who filed the suit for the recovery of the co-owned property, is
an indispensable party thereto. The other co-owners are not
indispensable parties. They are not even necessary parties, for a
complete relief can be afforded in the suit even without their
participation, since the suit is presumed to have been filed for the
benefit of all co-owners."
For recovery of title, co-owners indispensable if suit is for claiming
sole ownership or if it is brought against a co-owner because it affects
the rights and interest of co-owners. Otherwise, NCC 487 applied
(Any one of the co-owners may bring an action in ejectment. (n))
Marmo v Anacay: where the suit is brought by a co-owner, without
repudiating the co-ownership, then the suit is presumed to be filed for
the benefit of the other co-owners and may proceed without
impleading the other co-owners. However, where the co-owner
repudiates the co-ownership by claiming sole ownership of the
property or where the suit is brought against a co-owner, his co-
owners are indispensable parties and must be impleaded as party-
defendants, as the suit affects the rights and interests of these other
co-owners. We have explained in Vencilao v. Camarenta and in
Sering v. Plazo that the term "action in ejectment" includes a suit for
forcible entry (detentacion) or unlawful detainer (desahucio). We also
noted in Sering that the term "action in ejectment" includes "also, an
accion publiciana (recovery of possession) or accion reinvidicatoria
(recovery of ownership)." Most recently in Estreller v. Ysmael, we
applied Article 487 to an accion publiciana case; in Plasabas v. Court
of Appeals we categorically stated that Article 487 applies to
reivindicatory actions.
For plaintiffs:
For defendants: you’ll have to implead all
Remember: Failure to implead indispensable party (pleading asserting
a claim states no COA) is an affirmative defense—Court can still
dismiss on this basis because under the rules, the Court needs to rule
on this expeditiously(?)
CLASS SUIT: always look at the INTEREST—if it is diverse, no longer
a class suit because they need to have a COLLECTIVE INTEREST.
What about a labor dismissal case? Can never be a class suit
because they have varying interests—position, compensation, etc.
Adequacy of representation is also important—representative should
be in proportion to number of people they wish to represent (in terms
of percentage—see Ermita v Banda(?)
CITIZEN’S SUIT: Oposa v Factoran (although this is actually a class
suit)
B. Juridical person: Incorporated so that they have separate
juridical personality
C. Entity authorized by law
D. Non-juridical entities: can be parties to an action (de facto
corporations) but for purposes of civpro, they can be parties-
defendant but they cannot be plaintiffs for as long as not
incorporated or registered, as a general rule.
a. Exceptions:
LIM V DISTINCTION PROPERTIES
Respondent DPDCI is a real estate developer who developed the
condo unit owned by petitioners who are also incorporators of DPDCI
—Pacifico was actually the President. They executed a Master Deed
and Declaration of Restrictions which was filed with RD. When PHCC
(condo) was formally incorporated, DPDCI turned over ownership and
possession of the units to PHCC and the latter approved a settlement
for the set off of association dues of DPDCI with the assignment of
title of 2 saleable commercial units to PHCC in 2004. Hence, in 2008,
petitioners, filed with HLURB a complaint against DPDCI for
UNSOUND BUSINESS PRACTICES AND VIOLATION OF MDDR for
alleged misrepresentation to the public as to the amenities of the
condo (the 2 units were converted to a common area—in violation of
Sec. 13 of MDDR). HLURB—for Lims, it was an invalid conversion.
CA: Pet for certiorari. Ruled that HLURB had not acquired juris over
PHCC, an indispensable party. SC ruled that the complaint filed by
petitioners alleged causes of action that apparently are not cognizable
by the HLURB considering the nature of the action and the reliefs
sought (it’s not as to subdivision owner and lot owner)
Petitioners are actually seeking to nullify and invalidate the duly
constituted acts of PHCC as a corporate body entered into by PHCC
with DPDCI and its Board Resolution proposed offsetting/settlement
of DPDCI’s indebtedness and approval of the conversion of certain
units. As it is clear that the acts being assailed are those of PHHC,
this case cannot prosper for failure to implead the proper party,
PHCC. HLURB decision null and void ab initio.
FACTS
 Philip L. Go, Pacifico Q. Lim and Andrew Q. Lim (petitioners)
are registered individual owners of condominium units in Phoenix
Heights Condominium (PHCC)
 Respondent Distinction Properties Development and
Construction, Inc. (DPDCI) is a corporation existing under the laws of
the Philippines
o It was incorporated as a real estate developer, engaged in the
development of condominium projects, among which was the Phoenix
Heights Condominium.
 Petitioner Pacifico Lim, one of the incorporators and the then
president of DPDCI, executed a Master Deed and Declaration of
Restrictions (MDDR) of Phoenix Heights Condominium, which was
filed with the Registry of Deeds
 As the developer, DPDCI undertook, among others, the
marketing aspect of the project, the sale of the units and the release
of flyers and brochures.
 Phoenix Heights Condominium Corporation (PHCC) was
formally organized and incorporated. Sometime in 2000, DPDCI
turned over to PHCC the ownership and possession of the
condominium units, except for the two saleable commercial
units/spaces
 PHCC approved a settlement offer from DPDCI for the set-off
of the latter’s association dues arrears with the assignment of title
over CCT Nos. 21030 and PT-27396/C-136-II
 CCT Nos. PT-43400 and PT-43399 were issued by the
Registrar of Deeds of Pasig City in favor of PHCC in lieu of the old
titles.
 Petitioner Lims, as condominium unit-owners, filed a
complaint before the HLURB against DPDCI for unsound business
practices and violation of the MDDR. 
o Alleged that DPDCI committed misrepresentation in their
circulated flyers and brochures as to the facilities or amenities that
would be available in the condominium and failed to perform its
obligation to comply with the MDDR.
 HLURB: in favor of Lims
o Invalid the agreement entered into between DPDCI and
PHCC, as to the alteration or conversion of the subject units into
common areas, which it previously approved, for the reason that it
was not approved by the majority of the members of PHCC
 DPDCI filed with the CA its Petition for Certiorari and
Prohibition
 CA: HLURB had no jurisdiction over the complaint filed by
petitioners as the controversy did not fall within the scope of the
administrative agency’s authority 
o Jurisdiction over PHCC, an indispensable party, was neither
acquired nor waived by estoppel. 
ISSUE/S && RATIO
WON the CA erred in finding that PHCC is an indispensable party
such as to warrant the dismissal of the case- YES. The acts of PHCC
is the question of the case.
 Petitioners: Petitioners contend that the HLURB has
jurisdiction over the subject matter of this case
 PHCC was not an indispensable party. As proof, they quoted
the dispositive portion of the HLURB decision to show that complete
relief between or among the existing parties may be obtained without
the presence of PHCC as a party to this case.
 DPDCI: HLURB has no jurisdiction over the complaint filed by
petitioners because the controversies raised therein are in the nature
of "intra-corporate disputes.
o According to DPDCI, petitioners sought to address the
invalidation of the corporate acts duly entered and executed by PHCC
as a corporation of which petitioners are admittedly members of, and
not the acts pertaining to their ownership of the units.
o PHCC should have been impleaded as a party to the
complaint. Its non-inclusion as an indispensable party warrants the
dismissal of the case
JURISDICTION:
 Generally, the extent to which an administrative agency may
exercise its powers depends largely, if not wholly, on the provisions of
the statute creating or empowering such agency
 The HLURB is given a wide latitude in characterizing or
categorizing acts which may constitute unsound business practice or
breach of contractual obligations in the real estate trade. This grant of
expansive jurisdiction to the HLURB does not mean, however, that all
cases involving subdivision lots or condominium units automatically
fall under its jurisdiction.
 The mere relationship between the parties, i.e.,  that of being
subdivision owner/developer and subdivision lot buyer, does not
automatically vest jurisdiction in the HLURB.
 National Housing Authority (NHA) before and now the
HLURB, has jurisdiction over complaints aimed at compelling the
subdivision developer to comply with its contractual and statutory
obligations.
 The complaint filed by petitioners alleged causes of action
that apparently are not cognizable by the HLURB considering the
nature of the action and the reliefs sought.
 Petitioners are actually seeking to nullify and invalidate the
duly constituted acts of PHCC entered into by PHCC with DPDCI and
its Board Resolution proposed offsetting/settlement of DPDCI’s
indebtedness and approval of the conversion of certain units
 As it is clear that the acts being assailed are those of PHHC,
this case cannot prosper for failure to implead the proper party,
PHCC.
 An indispensable party is defined as one who has such an
interest in the controversy or subject matter that a final adjudication
cannot be made, in his absence, without injuring or affecting that
interest
 Under Section 7, Rule 3 of the Rules of Court, "parties in
interest without whom no final determination can be had of an action
shall be joined as plaintiffs or defendants." If there is a failure to
implead an indispensable party, any judgment rendered would have
no effectiveness. It is "precisely ‘when an indispensable party is not
before the court (that) an action should be dismissed.’ 
 The absence of an indispensable party renders all
subsequent actions of the court null and void for want of authority to
act, not only as to the absent parties but even to those present."
 The purpose of the rules on joinder of indispensable parties is
a complete determination of all issues not only between the parties
themselves, but also as regards other persons who may be affected
by the judgment. A decision valid on its face cannot attain real finality
where there is want of indispensable parties.
 "The general rule with reference to the making of parties in a
civil action requires the joinder of all indispensable parties under any
and all conditions, their presence being a sine qua non of the exercise
of judicial power
 For this reason, our Supreme Court has held that when it
appears of record that there are other persons interested in the
subject matter of the litigation, who are not made parties to the action,
it is the duty of the court to suspend the trial until such parties are
made either plaintiffs or defendants.
 The burden of procuring the presence of all indispensable
parties is on the plaintiff.  through the PNP, shall be burdened by the additional salary and
 The evident purpose of the rule is to prevent the multiplicity of
suits by requiring the person arresting a right against the defendant to
include with him, either as co-plaintiffs or as co-defendants, all
persons standing in the same position, so that the whole matter in
dispute may be determined once and for all in one litigation.  Police Senior Superintendent
 From all indications, PHCC is an indispensable party and
should have been impleaded, either as a plaintiff or as a defendant
 To belabor the point, the causes of action, or the acts
complained of, were the acts of PHCC as a corporate body
 COA: HLURB declared as illegal the agreement regarding the
conversion of the 22 storage units and Units GF4-A and BAS, to
which agreement PHCC was a party.
 Evidently, the cause of action rightfully pertains to PHCC.
 In sum, inasmuch as the HLURB has no jurisdiction over
petitioners’ complaint, the Court sustains the subject decision of the
CA that the HLURB decision is null and void ab initio. This disposition,
however, is without prejudice to any action that the parties may
rightfully file in the proper forum.
MACAWADIB V PNP
FACTS
Macawadib was a police officer who was affected by the compulsory
retirement under General Order No. 1168. He filed an application for
late registration of birth (10 years younger because of Muslim practice
not to register) with RTC which was granted. PNP filed a pet for
annulment of that judgment for failing to acquire juris over PNP, an
indispensable party. CA nullified RTC.SC affirmed. It is the integrity
and correctness of the public records in the custody of the PNP,
NAPOLCOM and CSC which are involved and which would be
affected by any decision rendered and thus, are required to be made
parties to the proceeding. They are indispensable-- the government,
benefits that would have to be given to petitioner during such
extension. RTC decision void.
 Petitioner Dimapinto was a police officer with the rank of
 Chief of Directorial Staff of the PNP issued General Order No.
1168, enumerating the names of commissioned officers who were
subject to compulsory retirement on various dates in the month of
January 2002 by virtue of their attainment of the compulsory
retirement age of 56
 Among the names included in the said Order was that of
petitioner, who was supposed to retire on January 11, 2002
o Files of the PNP Records Management Division indicate that
he was born on January 11, 1946.
 Petitioner filed an application for late registration of his birth
with the Municipal Civil Registrar's Office of Mulondo
o Swore under oath that he was born on January 11, 1956. The
application was, subsequently, approved.
 Petitioner filed with the RTC of Marawi City, Branch 8, a
Petition for Correction of Entry
 Alleging:
o 45 years old, married, Filipino citizen
o He honestly entered his birth date as January 11, 1946,
erroneously entered his birth date as January 11, 1946, which entry
are honestly based on estimation, as Muslim (sic) in the south do not
register their marriages and births before
o That he correctly entered his true and correct birth date,
January 11, 1956, in his Service Record
o Not intended to defraud anybody but to establish the true and
correct birth date of herein petitioner.
 RTC: Granted the correction. Recognized that his date of
birth was January 11, 1956
 Respondent PNP filed a Petition for Annulment of Judgment
with Prayer for the Issuance of a Temporary Restraining Order and/or
Writ of Preliminary Injunction with the CA
o Ground: Trial court failed to acquire jurisdiction over the PNP,
"an unimpleaded indispensable party
 CA: Granted. Nullified and set aside the RTC’s decision.
 Petitioner’s MR Denied.
ISSUE/S && RATIO
WON the CA erred in holding that the PNP was an indispensable
party and that the RTC has not acquired jurisdiction over it- NO
 Court agrees with the ruling of the CA that it is the integrity
and correctness of the public records in the custody of the PNP,
National Police Commission (NAPOLCOM) and Civil Service
Commission (CSC) which are involved and which would be affected
by any decision rendered in the petition for correction filed by herein
petitioner.
 The aforementioned government agencies are, thus, required
to be made parties to the proceeding. They are indispensable parties,
without whom no final determination of the case can be had.
 An indispensable party is defined as one who has such an
interest in the controversy or subject matter that a final adjudication
cannot be made, in his absence, without injuring or affecting that
interest
 Go v. Distinction Properties Development and Construction,
Inc: Under Section 7, Rule 3 of the Rules of Court, "parties in interest
without whom no final determination can be had of an action shall be
joined as plaintiffs or defendants." If there is a failure to implead an
indispensable party, any judgment rendered would have no
effectiveness.
 It is "precisely ‘when an indispensable party is not before the
court (that) an action should be dismissed.’ The absence of an
indispensable party renders all subsequent actions of the court null
and void for want of authority to act, not only as to the absent parties
but even to those present." 
 The purpose of the rules on joinder of indispensable parties is
a complete determination of all issues not only between the parties
themselves, but also as regards other persons who may be affected
by the judgment. A decision valid on its face cannot attain real finality
where there is want of indispensable parties.
 The general rule with reference to the making of parties in a
civil action requires the joinder of all indispensable parties under any
and all conditions, their presence being a sine qua non of the exercise
of judicial power. 
 For this reason, our Supreme Court has held that when it
appears of record that there are other persons interested in the
subject matter of the litigation, who are not made parties to the action,
it is the duty of the court to suspend the trial until such parties are
made either plaintiffs or defendants. 
 The burden of procuring the presence of all indispensable
parties is on the plaintiff.
 In the instant case, there is a necessity to implead the PNP,
NAPOLCOM and CSC because they stand to be adversely affected
by petitioner's petition which involves substantial and controversial
alterations in petitioner's service records.
 OSG:  if petitioner's service is extended by ten years, the
government, through the PNP, shall be burdened by the additional
salary and benefits that would have to be given to petitioner during
such extension. 
o Thus, aside from the OSG, all other agencies which may be
affected by the change should be notified or represented as the truth
is best ascertained under an adversary system of justice.
 As the above-mentioned agencies were not impleaded in this
case much less given notice of the proceedings, the decision of the
trial court granting petitioner's prayer for the correction of entries in his
service records, is void. As mentioned above, the absence of an
indispensable party renders all subsequent actions of the court null
and void for want of authority to act, not only as to the absent parties
but even as to those present
 Considering that the assailed decision of the RTC is null and
void, the same could not have attained finality. Settled is the rule that
a void judgment cannot attain finality and its execution has no basis in
law.
HERNANDEZ VS COMELEC
Hernandez and the Assoc. of Flood Victims filed a special civil action
for certiorari under R65 alleging GAD against COMELEC for issuing
Minute Reso No. 12-0859 (recomputation of party list seats) which
stemmed from the SC decision cancelling the certificate of registration
of ABC party list in 2012. SC ruled that the AFV is still in the process
of incorporation, and cannot be considered a juridical person or an
entity authorized by law, which can be a party to a civil action. An
unincorporated association, in the absence of an enabling law, has no
juridical personality and thus, cannot sue in the name of the
association. In fact, aside from Hernandez no one else from AFV
signed the petition. Authority of a party to sue or be sued in a
representative capacity or the legal existence of an organized
association of persons that is made a party, must be averred. AFV is
not even a party list.
FACTS
 2012, the Supreme Court affirmed COMELEC Resolution
SPP 10-013, dated 11 October 2011, cancelling the certificate of
registration of the Alliance of Barangay Concerns (ABC) Party-List
which won in the party-list elections in the 2010 national elections
 disqualification of the ABC Party-List resulted in the re-
computation of the party-list allocations in the House of
Representatives, in which the COMELEC followed the formula
outlined in the case of Barangay Association V COMELEC
 COMELEC then issued Minute Resolution No. 12-0859. –
GRANTING, NOTING, DENYING, PROCLAIMING, DECLARING
DIFFERENT PARTY LISTS
 Petitioners Association of Flood Victims and Jaime Aguilar
Hernandez (Hernandez) filed with this Court a special civil action for
certiorari and/or mandamus under Rule 65
 It alleged rave abuse of discretion when it issued Minute
Resolution No. 12-0859. Furthermore, petitioners pray for the
issuance of a writ of mandamus to compel publication of the
COMELEC Minute Resolution No. 12-0859.
ISSUE/S && RATIO
The issues raised in this case are: (1) whether the COMELEC
committed grave abuse of discretion in issuing Minute Resolution No.
12-0859, and (2) whether the COMELEC may be compelled through
mandamus to publish Minute Resolution No. 12-0859.
CASE DISMISSED. PETITIONERS LACK THE LEGAL CAPACITY
TO SUE
 SECTION 1. Who may be parties; plaintiff and defendant. –
Only natural or juridical persons, or entities authorized by law may be
parties in a civil action.
 SECTION 2. Parties in interest. – A real party in interest is the
party who stands to be benefited or injured by the judgment in the
suit, or the party entitled to the avails of the suit.  the petition.
 Under Sections 1 and 2 of Rule 3, only natural or juridical
persons, or entities authorized by law may be parties in a civil action,
which must be prosecuted or defended in the name of the real party in
interest. Article 44 of the Civil Code lists the juridical persons with
capacity to sue, thus:
 Section 4, Rule 8 of the Rules of Court mandates that "[f]acts
showing the capacity of a party to sue or be sued or the authority of a
party to sue or be sued in a representative capacity or the legal
existence of an organized association of persons that is made a party,
must be averred."
 In their petition, it is stated that petitioner Association of Flood
Victims "is a non-profit and non-partisan organization in the process of
formal incorporation, the primary purpose of which is for the benefit of
the common or general interest of many flood victims  
 Clearly, petitioner Association of Flood Victims, which is still
in the process of incorporation, cannot be considered a juridical
person or an entity authorized by law, which can be a party to a civil
action.
 Petitioner Association of Flood Victims is an unincorporated
association not endowed with a distinct personality of its own. An
unincorporated association, in the absence of an enabling law, has no
juridical personality and thus, cannot sue in the name of the
association.  capacity to sue, petitioner Hernandez, who is filing this petition as a
 Such unincorporated association is not a legal entity distinct
from its members. If an association, like petitioner Association of
Flood Victims, has no juridical personality, then all members of the
association must be made parties in the civil action.
 In this case, other than his bare allegation that he is the lead
convenor of the Association of Flood Victims, petitioner Hernandez
showed no proof that he was authorized by said association. Aside
from petitioner Hernandez, no other member was made signatory to
 Only petitioner Hernandez signed the Verification and Sworn
Certification Against Forum Shopping, stating that he caused the
preparation of the petition. There was no accompanying document
showing that the other members of the Association of Flood Victims
authorized petitioner Hernandez to represent them and the
association in the petition.
 Dueñas v. Santos Subdivision Homeowners Association, 8 the
Court held that the Santos Subdivision Homeowners Association
(SSHA), which was an unincorporated association, lacks capacity to
sue in its own name, and that the members of the association cannot
represent the association without valid authority, 
 The members cannot represent their association in any suit
without valid and legal authority. Neither can their signatures confer
on the association any legal capacity to sue
Neither was it shown that the federation was authorized to
represent SSHA. Facts showing the capacity of a party to sue or be
sued or the authority of a party to sue or be sued in a representative
capacity or the legal existence of an organized association of persons
that is made a party, must be averred. Hence, for failing to show that it
is a juridical entity, endowed by law with capacity to bring suits in its
own name, SSHA is devoid of any legal capacity, whatsoever, to
institute any action.
 Since petitioner Association of Flood Victims has no legal
representative of the Association of Flood Victims, is likewise devoid
of legal personality to bring an action in court. Neither can petitioner
Hernandez sue as a taxpayer because he failed to show that there
was illegal expenditure of money raised by taxation 10 or that public
funds are wasted through the enforcement of an invalid or
unconstitutional law.
 Petitioners have no locus standi or legal standing.  action. At any stage of a judicial proceeding and/or at such times as
 personal and substantial interest in the case such that the
party has sustained or will sustain a direct injury as a result of the
governmental act that is being challenged. The term "interest" means
a material interest, an. interest in issue affected by the decree, as
distinguished from mere interest in the question involved, or a mere
incidental interest.
 In this case, petitioners failed to allege personal or substantial
interest . in the questioned governmental act which is the issuance of
COMELEC Minute Resolution No. 12-0859, which confirmed the re-
computation of the allocation of seats of the Party-List System of
Representation in the House of Representatives in the 10 May 2010
Automated National and Local Elections. Petitioner Association of
Flood Victims is not even a party-list candidate in the 10 May 2010
elections, and thus, could not have been directly affected by
COMELEC Minute Resolution No. 12-0859.
MESINA V DOMINGO
Sps. Mesina bught lots from Sps. Fian on installments but the latter’s
heairs refused to acknowledge the payments made. Heirs of Sps.
Fian refused to vacate the premises so heirs of Mesina filed an action
for quieting of title and damages before the RTC. An MTD was filed
by one heir (Theresa), arguing that the complaint states no cause of
action and should be dismissed for gross violation of Sections 1 and
2, Rule 3 of the Rules—"Heirs of Mesina" could not be considered as
a juridical person or entity authorized by law to file a civil action.
Neither could the "Heirs of Fian" be made as defendant, not being a
juridical person as well. Since the names of all the heirs of the late
spouses Mesina and spouses Fian were not individually named, the
complaint is infirmed, warranting its dismissal. RTC granted. CA
affirmed. SC ruled that the infirmity is, in fact, not a failure to state a
cause of action but a non-joinder of an indispensable party. The non-
joinder of indispensable parties is not a ground for the dismissal of an
are just, parties may be added on the motion of a party or on the
initiative of the tribunal concerned. If the plaintiff refuses to implead an
indispensable party despite the order of the court, that court may
dismiss the complaint for the plaintiff’s failure to comply with the
order.
FACTS
 The late spouses Faustino and Genoveva Mesina (spouses
Mesina), during their lifetime, bought from the spouses Domingo Fian
Sr. and MariaFian (spouses Fian) two parcels of land on installment.
 Upon the death of the spouses Fian, their heirs––whose
names do not appear on the records, claiming ownership of the
parcels of land and taking possession of them––refused to
acknowledge the payments for the lots and denied that their late
parents sold the property to the spouses Mesina
 Meanwhile, the spouses Mesina passed away
 Notwithstanding repeated demands, the Heirs of Fian refused
to vacate the lots and to turn possession over to the 4 heirs of the
spouses Mesina
 Norman, as attorney-in-fact of his siblings Victor, Maria and
Lorna (heirs of Mesina), filed an action for quieting of title and
damages before the Regional Trial Court (RTC), Branch 14 in
Baybay, Leyte against the Heirs of Fian
 Naming only Theresa Fian Yray (Theresa) as the
representative of the Heirs of Fian
 September 5, 2005, respondent Theresa filed a Motion to
Dismiss the complaint, arguing that the complaint states no cause of
action and that the case should be dismissed for gross violation of
Sections 1 and 2, Rule 3 of the Rules of Court
 She claims that the "Heirs of Mesina" could not be considered
as a juridical person or entity authorized by law to file a civil action.
Neither could the "Heirs of Fian" be made as defendant, not being a
juridical person as well. She added that since the names of all the
heirs of the late spouses Mesina and spouses Fian were not
individually named, the complaint is infirmed, warranting its dismissal.
 RTC Granted the MTD
 Faurstino s. Mesina and Genoveva S. Mesina, represented
by Norman Mesina as plaintiffs as well as Heirs of Domingo Fian, Sr.
represented by Theresa Fian Yray as defendants, do not fall within
the category as natural or juridical persons as contemplated by law.
 Said heirs not having been individually named could not be
the real parties in interest.
 CA affirmed the RTC
 all the heirs of the spouses Fian are indispensable parties
and should have been impleaded in the complaint. The appellate
court explained that this failure to implead the other heirs of the late
spouses Fian is a legal obstacle to the trial court’s exercise of judicial
power over the case and any order or judgment 
ISSUE/S && RATIO
WON the CA erred in dismissing the petition on the ground that the
complaint states no cause of action- YES
 CA ruled that the complaint states no cause of action
because all the heirs of the spouses Fian are indispensable parties;
hence, they should have been impleaded in the complaint.
 By a simple reading of the elements of a failure to state a
cause of action, it can be readily seen that the inclusion of Theresa’s
co-heirs does not fall under any of the above elements. The infirmity
is, in fact, not a failure to state a cause of action but a non-joinder of
an indispensable party.
 Non-joinder means the "failure to bring a person who is a
necessary party or in this case an indispensable party into a lawsuit."
 An indispensable party, on the other hand, is a party-in-
interest without whom no final determination can be had of the action,
and who shall be joined either as plaintiff or defendant.m
 As such, this is properly a non-joinder of indispensable party,
the indispensable parties who were not included in the complaint
being the other heirs of Fian, and not a failure of the complaint to state
a cause of action.
 The non-joinder of indispensable parties is not a ground for
the dismissal of an action. At any stage of a judicial proceeding and/or
at such times as are just, parties may be added on the motion of a
party or on the initiative of the tribunal concerned. If the plaintiff
refuses to implead an indispensable party despite the order of the
court, that court may dismiss the complaint for the plaintiff’s failure to
comply with the order. The remedy is to implead the non-party
claimed to be indispensable.12 x x x (Emphasis Ours.)
 Thus, the dismissal of the case for failure to state a cause of
action is improper. What the trial court should have done is to direct
petitioner Norman Mesina to implead all the heirs of Domingo Fian,
Sr. as defendants within a reasonable time from notice with a warning
that his failure to do so shall mean dismissal of the complaint
PACANA V ROVILA WATER SUPPLY
Pacana filed a case for accounting and damages against Rovilia Inc.,
and several persons including Lilia who was a former trusted
employee in their family water supply business who allegedly hid
business records and burned family files and then took over the
business. Pacana claims that the business was surreptitiously
registered with the SEC by using Pacana’s name as one of the
incorporators. An MTD was filed saying that RTC had no juris over
intra corpo dispute. When Lourdes died, another MTD was filed
stating no valid COA as a ground since petitioners are not RPI.
Respondents filed a petition for certiorari under Rule 65 because it is
the deceased spouses Luciano and Lourdes, not the petitioners,
which were RPI. CA: Granted. Petitioners should first be declared as
heirs before they can be considered as the real parties in interest.SC:
Heirs are RPI and indispensable parties. The MTD in the present
case based on failure to state a cause of action was not timely filed
and was thus waived and in any case, dismissal on this ground
entails an examination of whether the parties presently pleaded are
interested in the outcome of the litigation, and not whether all persons
interested in such outcome are actually pleaded. While the sps.
Pacana are indeed indispensable, the remedy is for the court to
implead but since they’re already dead, based on equity (just and
inexpensive disposition of the case), the heirs, whose hereditary
rights are to be affected by the case, are deemed indispensable
parties who should have been impleaded by the trial court. SC
ordered them to be impleaded.
FACTS
 Petitioners Rebecca Pacaña-Contreras and Rosalie Pacaña,
children of Lourdes Teves Pacaña and Luciano Pacaña, filed the
present case against Rovila Inc., Earl, Lilia, Dalla and Marisa for
accounting and damages
 Petitioners: has long been known in the community to be
engaged in the water supply business;
o They operated the "Rovila Water Supply" from their family
residence and were engaged in the distribution of water to customers
in Cebu City.
 The petitioners alleged that Lilia was a former trusted
employee in the family business who hid business records and burned
and ransacked the family files.
o Lilia also allegedly posted security guards and barred the
members of the Pacaña family from operating their business
 She then claimed ownership over the family business through
a corporation named "Rovila Water Supply, Inc." (Rovila Inc.) 
 Upon checking with SEC the petitioners claimed that Rovila
Inc. was surreptitiously formed with the respondents as the majority
stockholders.
 In forming the respondent corporation, the respondents
allegedly used the name of Lourdes as one of the incorporators and
made it appear in the SEC documents that the family business was
operated
o Used the Pacaña family’s receipts and the deliveries and
sales were made to appear as those of the respondent Rovila Inc. 
 Petitioners filed the complaint in their own names although
Rosalie was authorized by Lourdes through a sworn declaration and
special power of attorney (SPA)
 Respondents filed a first motion to dismiss on the ground that
the RTC had no jurisdiction over an intra-corporate controversy
 At the subsequent pre-trial, the respondents manifested to the
RTC that a substitution of the parties was necessary in light of the
deaths of Lourdes and Lucian
o That they would seek the dismissal of the complaint because
the petitioners are not the real parties in interest to prosecute the
case.
 RTC Pre-trial Order: one of the issues submitted was
whether the complaint should be dismissed for failure to comply with
Section 2, Rule 3 of the Rules of Court which requires that every
action must be prosecuted in the name of the real party in interest
 Respondent: again filed an MTD. Petitioners are not the
real parties in interest, that they have no valid cause of action against
respondents
 RTC: denied the MTD for having been filed out of time.
o The motion to dismiss based on the grounds invoked by the
respondents may only be filed within the time for, but before, the filing
of their answer to the amended complaint
o Rule on substitution of parties only applies when the parties
to the case die, which is not what happened in the present case
 Respondents filed a petition for certiorari under Rule 65 of the
Rules of Court with the CA
o Deceased spouses Luciano and Lourdes, not the petitioners,
were the real parties in interest
 CA: Granted
o Petitioners are not the real parties in interest and cannot bring
an action in their own names
o Petitioners should first be declared as heirs before they can
be considered as the real parties in interest.  
 Respondents: moved for the dismissal of the case during the
pre-trial conference due to the petitioners’ procedural lapse in refusing
to comply with a condition precedent, which is, to substitute the heirs
as plaintiffs. Besides, an administrator of the estates of Luciano and
Lourdes has already been appointed
ISSUE/S && RATIO
WON petitioners are real parties interest- YES
WON the heirs of spouses Panaca are indispensable parties- YES
 The failure to implead the indispensable parties in this case,
was not a ground for dismissal. Petitioners were ordered to implead
the heirs of spouses. It is in their failure to do so that would warrant
the dismissal.
 The history and development of the ground "fails to state a
cause of action" in the 1940, 1964 and the present 1997 Rules of
Court Preliminarily, a suit that is not brought in the name of the real
party in interest is dismissible on the ground that the complaint "fails
to state a cause of action.
 Respondents alleged that the petitioners are not the real
parties in interest because: 1) the petitioners should not have filed the
case in their own names, being merely attorneys-in-fact of their
mother; and 2) the petitioners should first be declared as heirs.
 As the rule now stands, the failure to invoke this ground in a
motion to dismiss or in the answer would result in its waiver.
 The motion to dismiss in the present case based on failure to
state a cause of action was not timely filed and was thus waived
 Applying Rule 16 of the Rules of Court which provides for the
grounds for the dismissal of a civil case, the respondents’ grounds for
dismissal fall under Section 1(g) and (j), Rule 16 of the Rules of Court,
particularly, failure to state a cause of action and failure to comply with
a condition precedent (substitution of parties), respectively.
As the respondents’ motion to dismiss was based on the
grounds which should be timely invoked, material to the resolution of
this case is the period within which they were raised.
 Both the RTC and the CA found that the motion to dismiss
was only filed after the filing of the answer and after the pre-trial had
been concluded. Because there was no motion to dismiss before the
filing of the answer, the respondents should then have at least raised
these grounds as affirmative defenses in their answer
 Failure to state a cause of action and lack of cause of action
are really different from each other. On the one hand, failure to state a
cause of action refers to the insufficiency of the pleading, and is a
ground for dismissal under Rule 16 of the Rules of Court. On the other
hand, lack of cause [of] action refers to a situation where the evidence
does not prove the cause of action alleged in the pleading.
 Section 1, Rule 9 of the Rules of Court, a motion to dismiss
based on the grounds invoked by the respondents may be waived if
not raised in a motion to dismiss or alleged in their answer
 Court cannot uphold the dismissal of the present case based
on the grounds invoked by the respondents which they have waived
for failure to invoke them within the period prescribed by the Rules.
The Court cannot also dismiss the case based on "lack of cause of
action" as this would require at least a preponderance of evidence
which is yet to be appreciated by the trial court.
 It should be emphasized that insofar as the petitioners are
concerned, the respondents have waived the dismissal of the
complaint based on the ground of failure to state a cause of action
because the petitioners are not the real parties in interest.  technical defect. To do so would serve proper administration of justice
 Real party in interest is the party who stands to be benefited
or injured by the judgment of the suit, or the party entitled to the avails
of the suit.
 On the other hand, an indispensable party is a party in
interest without whom no final determination can be had of an action
 In contrast to a necessary party, which is one who is not
indispensable but who ought to be joined as a party if complete relief
is to be accorded as to those already parties, or for a complete
determination or settlement of the claim subject of the action.
 If a suit is not brought in the name of or against the real party
in interest, a motion to dismiss may be filed on the ground that the
complaint states no cause of action. However, the dismissal on this
ground entails an examination of whether the parties presently
pleaded are interested in the outcome of the litigation, and not
whether all persons interested in such outcome are actually pleaded
 Both indispensable and necessary parties are considered as
real parties in interest, since both classes of parties stand to be
benefited or injured by the judgment of the suit
 At the inception of the present case, both the spouses
Pacaña were not impleaded as parties-plaintiffs.
 The Court notes, however, that they are indispensable parties
to the case as the alleged owners of Rovila Water Supply. Without
their inclusion as parties, there can be no final determination of the
present case.
 They possess such an interest in the controversy that a final
decree would necessarily affect their rights, so that the courts cannot
proceed without their presence. Their interest in the subject matter of
the suit and in the relief sought is inextricably intertwined with that of
the other parties
 With these discussions as premises, the Court is of the view
that the proper remedy in the present case is to implead the
indispensable parties especially when their non-inclusion is merely a
and prevent further delay and multiplicity of suits.
 Pursuant to Section 9, Rule 3 of the Rules of Court, parties
may be added by order of the court on motion of the party or on its
own initiative at any stage of the action. If the plaintiff refuses to
implead an indispensable party despite the order of the court, then the
court may dismiss the complaint for the plaintiff’s failure to comply
with a lawful court order.
 Although there are decided cases wherein the non-joinder of
indispensable parties in fact led to the dismissal of the suit or the
annulment of judgment, such cases do not jibe with the matter at
hand. The better view is that non-joinder is not a ground to dismiss
the suit or annul the judgment. The rule on joinder of indispensable
parties is founded on equity
 Galicia, et al. v. Vda. De Mindo, et al., the Court ruled that in
line with its policy of promoting a just and inexpensive disposition of a
case, it allowed the intervention of the indispensable parties instead of
dismissing the complaint.
 The Court has the power to avoid delay in the disposition of
this case, and to order its amendment in order to implead an
indispensable party.
 The operative act that would lead to the dismissal of the case
would be the refusal to comply with the directive of the court for the
joinder of an indispensable party to the case
 Obviously, in the present case, the deceased Pacañas can no
longer be included in the complaint as indispensable parties because
of their death during the pendency of the case. Upon their death,
however, their ownership and rights over their properties were
transmitted to their heirs, including herein petitioners
 Court acknowledged that the heirs, whose hereditary rights
are to be affected by the case, are deemed indispensable parties who
should have been impleaded by the trial court.
 Therefore, to obviate further delay in the proceedings of the
present case and given the Court’s authority to order the inclusion of
an indispensable party at any stage of the proceedings, the heirs of
the spouses Pacaña, except the petitioners who are already parties to
the case are Lagrimas Pacaña-Gonzalez who intervened in the case,
are hereby ordered impleaded as parties-plaintiffs.
METROBANK V RURAL BANK
CB AND RBG entered into an agreement for the latter to facilitate
loan apps of farmers. A special savings account was opened by RBG
with Metrobank to facilitate the agreement where Metrobank will
receive the credit advice released by CB and credit the proceeds to
RBG’s account for the release of loans to farmers. However, CB
issued debit advices which reversed the grant of loan—this led to
Metrobank debiting the same BUT the amount became insufficient to
for all so it asked for the P334K from RB by filing a complaint for
collection of a sum of money. RTC: ruled for Metrobank, finding that
legal subrogation had ensued. CA: recognized that Metrobank had a
right to be reimbursed since no evidence exists why the CB reversed
the credit advices it should be impleaded as a necessary party so it
could shed light on the IBRD loan reversals. SC determined who the
liable parties are—the farmer borrows (primary) and RBG (under
Project Terms and Conditions). CB erred when it deducted the
amounts covered by the debit advices from Metrobank’s demand
deposit account. Metrobank was simply an outsider to the agreement
—no legal subrogation took place. Metrobank’s interest is simply to
collect the amounts it paid the Central Bank. Whatever cause of
action RBG may have against the Central Bank for the unexplained
reversals and any undue deductions is for RBG to ventilate as a third-
party claim. Impleading CB is unnecessary.
FACTS
 RBG is a rural banking corporation organized under
Philippine laws and located in Gerona, Tarlac.
 Central Bank and the RBG entered into an agreement
providing that RBG shall facilitate the loan applications of farmers-
borrowers under the Central Bank-International Bank for
Reconstruction and Development’s (IBRD’s) 4th Rural Credit Project
 The agreement required RBG to open a separate bank
account where the IBRD loan proceeds shall be deposited. 
 RBG accordingly opened a special savings account with
Metrobank’s Tarlac Branch.
 As the depository bank of RBG, Metrobank was designated to
receive the credit advice released by the Central Bank representing
the proceeds of the IBRD loan of the farmers-borrowers
 Metrobank, in turn, credited the proceeds to RBG’s special
savings account for the latter’s release to the farmers-borrowers.
 The Central Bank granted loans to the farmers, whereby
Metro bank was credit RBG’s special account and that RBG would
then withdraw for release.
 Central Bank approved Ponciano Lagman’s loan application
for ₱220,000.00. As with the two other IBRD loans, the amount was
credited to Metrobank’s demand deposit account, which amount
Metrobank later credited in favor of RBG’s special savings account. Of
the ₱220,000.00, RBG only withdrew ₱75,375.00
 Central Bank issued debit advices, reversing all the approved
IBRD loans.6 The Central Bank implemented the reversal by debiting
from Metrobank’s demand deposit account the amount corresponding
to all three IBRD loans.
 Upon receipt of the November 3, 1978 debit advices,
Metrobank, in turn, debited the following amounts from RBG’s special
savings account: ₱189,052.00, ₱115,000.00, and ₱8,000.41.
 Metrobank, however, claimed that these amounts were
insufficient to cover all the credit advices that were reversed by the
Central Bank. It demanded payment from RBG which could make
partial payments
 Metrobank claimed that RBG had an outstanding balance of
₱334,220.00. To collect this amount, it filed a complaint for collection
of sum of money against RBG before the RTC, docketed as Civil
Case No. 6028.
 RTC: ruled for Metrobank, finding that legal subrogation had
ensued
 [Metrobank] had allowed releases of the amounts in the credit
advices it credited in favor of [RBG’s special savings account] which
credit advices and deposits were under its supervision. Being faulted
in these acts or omissions, the Central Bank [sic] debited these
amounts against [Metrobank’s] demand [deposit] reserve; thus[,
Metrobank’s] demand deposit reserves diminished correspondingly,
[Metrobank as of this time,] suffers prejudice in which case legal
subrogation has ensued.
 CA: no legal subrogation. CA recognized that Metrobank had
a right to be reimbursed of the amount it had paid and failed to
recover, as it suffered loss in an agreement that involved only the
Central Bank and the RBG
 Noting that no evidence exists why the Central Bank reversed
the credit advices it had previously confirmed, the CA declared that
the Central Bank should be impleaded as a necessary party so it
could shed light on the IBRD loan reversals.  disagreement with the appellate court is in its conclusion that no legal
ISSUE/S && RATIO
WON the CA erred in ruling that the Central Bank is a necessary
party-YES
 Metrobank: disagrees with the CA’s ruling to implead the
Central Bank as a necessary party and to remand the case to the
RTC for further proceedings. It argues that the inclusion of the Central
Bank as party to the case is unnecessary since RBG has already
admitted its liability for the amount Metrobank failed to recover.
 A basic first step in resolving this case is to determine who
the liable parties are on the IBRD loans that the Central Bank
extended
 Farmers-borrowers to whom credits have been extended, are
primarily liable for the payment of the borrowed amounts. 
 The loans were extended through the RBG which also took
care of the collection and of the remittance of the collection to the
Central Bank.
 RBG, however, was not a mere conduit and collector. While
the farmers-borrowers were the principal debtors, RBG assumed
liability under the Project Terms and Conditions by solidarily binding
itself with the principal debtors to fulfill the obligation
 Based on these arrangements, the Central Bank’s immediate
recourse, therefore should have been against the farmers-borrowers
and the RBG; thus, it erred when it deducted the amounts covered by
the debit advices from Metrobank’s demand deposit account. 
 Metrobank had no responsibility over the proceeds of the
IBRD loans other than serving as a conduit for their transfer from the
Central Bank to the RBG once credit advice has been issued. 
 We agree with the CA’s conclusion that the agreement
governed only the parties involved – the Central Bank and the RBG.
Metrobank was simply an outsider to the agreement. Our
subrogation took place
 Was there express or tacit approval by RBG of the payment
enforced against Metrobank? After Metrobank received the Central
Bank’s debit advices in November 1978, it (Metrobank) accordingly
debited the amounts it could from RBG’s special savings account
without any objection from RB
 In so far as Metrobank is concerned, however, the Central
Bank’s presence and the reasons for its reversals of the IBRD loans
are immaterial after subrogation has taken place; Metrobank’s interest
is simply to collect the amounts it paid the Central Bank. Whatever
cause of action RBG may have against the Central Bank for the
unexplained reversals and any undue deductions is for RBG to
ventilate as a third-party claim; if it has not done so at this point, then
the matter should be dealt with in a separate case that should not in
any way further delay the disposition of the present case that had
been p ending before the courts since 1980.
 Under this situation, impleading the Central Bank as a party is
completely unnecessary. We note that the CA erroneously believed
that the Central Bank’s presence is necessary "in order x x x to shed
light on the matter of reversals made by it concerning the loan
applications of the end users and to have a complete determination or
settlement of the claim."  course of the proceedings—what he can do is institute a separate
 As discussed, Metrobank was a third party to the Central
Bank-RBG agreement, had no interest except as a conduit, and was
not legally answerable for the IBRD loans. Despite this, it was
Metrobank’s demand deposit account, instead of RBG’s, which the
Central Bank proceeded against, on the assumption perhaps that this
was the most convenient means of recovering the cancelled loans.
That Metrobank’s payment was involuntarily made does not change
the reality that it was Metrobank which effectively answered for RBG’s
obligations.
CAGATO V ALMONTE
This action for annulment of deeds of sale, cancellation of title and
damages was filed by Cagatao against Almonte and Fernandez
siblings for a land that was originally acquired through a homestead
patent issued in favor of Gatchalian who bartered this to Manzulin for
a carabao and the latter sold the same to his son in law Cagatao who
occupied and cultivated the land until the Fernandez Siblings
attempted to take possession of the lot. ON THE OTHER HAND,
respondents contended that in 1993,the Spouses Fernandez
purchased the property from Almonte and Aguilar (Fernandez
Siblings) who had in their possession a tax declaration of the land. To
protect their interest, Spouses Fernandez once again bought the
same property for ₱220,000.00 from Carlos, believed to be the owner
of the lot by virtue of the TCT. RTC in favor of respondents—no public
docu to show ownership by Cagatao. CA reversed, upholding
homestead patent of Gatchalian but later reversed itself and ruled that
deed of sale b/w Carlos and Sps. Fernanded cannot be nullified since
Carlos was not impleaded. SC affirmed that Carlos is an
indispensable party. The validity of TCT No. 12159-A cannot be
attacked collaterally; nowhere in his complaint did Cagatao mention
that he sought to invalidate TCT No. 12159-A. It was only during the
proceeding because a Torrens title is irrevocable and its validity can
only be challenged in a direct proceeding. A person dealing with a
registered land has the right to rely on the face of the Torrens title and
need not inquire further, unless the party concerned has actual
knowledge of facts and circumstances that would impel a reasonably
cautious man to make such an inquiry—there were no encumbrances
annotated on the title.
FACTS
 This case stemmed from an action for annulment of deeds of
sale, cancellation of title and damages filed on April 18, 1996 by
petitioner Virgilio G. Cagatao (Cagatao) against respondents
Guillermo Almonte (Almonte) and the Fernandez Siblings
 How the land was acquired:
 On February 16, 1949, a homestead patent over the property
subject of this controversy (Lot No. 5598, Pls-67) was issued in favor
of Juan Gatchalian.
 Cagatao claimed that sometime in 1940, Gatchalian sold the
lot to Delfin Manzulin (Manzulin) in exchange for one carabao, as
embodied ina barter agreement which was unfortunately destroyed or
lost during the Second World War.
 1990, Manzulin allegedly executed a private written document
in the Ilocano dialect, transferring ownership over the property to his
son-in-law, Cagatao.
 Cagato then occupied and cultivated the land until the
Fernandez Siblings attempted to take possession of the lot, thereby
prompting him to file the subject complaint before the RTC.
 The respondents, on the other hand, contended that on April
3, 1993,the Spouses Fernandez purchased the property from Almonte
and Aguilar (Fernandez Siblings) who had in their possession a tax
declaration covering the said land
 To protect their interest, Spouses Fernandez once again
bought the same property for ₱220,000.00 from Emmaculada Carlos
(Carlos), believed to be the owner of the lot by virtue of Transfer
Certificate of Title (TCT)
 Carlos, in turn, executed a deed of sale, dated January 22,
1996, in favor of their children, the Fernandez Siblings, resulting in the
issuance of TCT No.T-249437 in their names
 Cagatos Memorandum before the RTC:
 Questioned the sale to Spouses Fernandez by Carlos
because, at that time, Manzulin was already the owner of the subject
property.
 He also pointed out that it was highly irregular that Spouses
Fernandez would buy the same property from two different vendors
on two different occasions
 He insists that TCT No. T-249437 in the name of the
Fernandez Siblings was a nullity because the sale from the Spouses
Fernandez was simulated, as testified to by Avelina Fernandez
(Fernandez) who confirmed that she and her husband did not sign the
deed of sale purporting to have transferred ownership of the property
to the Fernandez Siblings.
 Respondents: Cagatao was unable to present proof of title or
any public document embodying the sale of the property from
Gatchalian to Manzulin and from the latter to Cagatao. They also
argued that even if a homestead patent was indeed issued to
Gatchalian, the same became void when he (Gatchalian) did not
occupy the land himself, in violation of Commonwealth Act No. 141 
 RTC: issued a writ of preliminary injunction restraining the
respondents from disturbing Cagatao’s possession of the land in
question during the pendency of the case
 RTC ruled that Cagatao’s evidence was insufficient to prove
his ownership over the land in question because Manzulin never
acquired a lawful title to the property from his predecessor,
Gatchalian.
 The court explained that the transfer to Manzulin was null and
void document alleged to be a deed of sale was a private document
which did not conclusively establish his (Cagatao’s) right to the
property because of the requirement in contract law that the
transmission of rights over an immovable property must be contained
in a public document.
 RTC: Cagatao’s possession cannot prevail over he claim of
ownership if Sps. Fernandez which was Accordingly, it upheld the
validity of the deed of sale, dated January 17, 1996, between
Spouses Fernandez and Carlos.
 It, however, nullified the transfer from Spouses Fernandez to
Fernandez Siblings because Avelina herself admitted that she and her
husband never signed the deed of sale which transferred ownership
to their children.
 Finally, the RTC sustained the validity of TCT No. T-12159-A
in the name of Carlos, theorizing that someone must have applied for
an original certificate of title from which the said title was derived.
 CA: ownership of the land remained with Gatchalian by virtue
of the homestead patent in his name, and neither the alleged transfer
to Manzulin nor the theory of abandonment of the RTC could divest
him of said title.
 Found the existence of another deed of sale entered into by
Carlos and the respondents on January 17, 1979. Holding that the two
sales could not overlap, it invalidated the January 17, 1996 deed of
sale (to Fernandez siblings)
 CA declared that Cagatao’s claim of ownership could not be
recognized, it nevertheless ruled that his possession could not be
disturbed because only the true owner could challenge him for
possession of the subject property. Leaving the parties where it found
them
 Respondent filed MR
 CA Amended Decision: reversing itself when it ruled that the
deed of sale between Carlos and Spouses Fernandez could not be
declared null and void, especially because Carlos was not impleaded
as a party in the case.
ISSUE/S && RATIO
WON Carlos is an indispensable party to declare the deed of sale
between him and sps. Fernandez void- YES
 Cagatao’s entire petition revolves around the assertion that
the reconstituted TCT No. 12159-A in the name of Carlos was a fake
and should have been declared void.  
 The Court cannot accommodate the petitioner.
 The validity of TCT No. 12159-A cannot be attacked
collaterally; Carlos is an indispensable party
 Nowhere in his complaint did Cagatao mention that he sought
to invalidate TCT No. 12159-A.1âwphi1 It was only during the course
of the proceedings, when Spouses Fernandez disclosed that they had
purchased the property from Carlos, that Cagatao thought of
questioning the validity of TCT No. 12159-A.
 Although the CA correctly ruled that the transfer from
Gatchalian to Manzulin was invalid, the existence of a valid Torrens
title in the name of Carlos which has remained unchallenged before
the proper courts has made irrelevant the issue of whether Gatchalian
and his successors-in-interest should have retained ownership over
the property. This is pursuant to the principle that a Torrens title is
irrevocable and its validity can only be challenged in a direct
proceeding.
 Moreover, Carlos, as the registered owner of the lot whose
title Cagatao seeks to nullify, should have been impleaded as an
indispensable party. 
 Section 7, Rule 3 of the 1997 Rules of Civil Procedure defines
indispensable parties to be "parties in interest without whom no final
determination can be had of an action." It is clear in this case that
Cagatao failed to include Carlos in his action for the annulment of
TCT No. 12159-A.
Basic is the rule in procedural law that no man can be
affected by any proceeding to which he is a stranger and strangers to
a case cannot be bound by a judgment rendered by the court.26 It
would be the height of injustice to entertain an action for the
annulment of Carlos’ title without giving her the opportunity to present
evidence to support her claim of ownership through title. In addition, it
is without question a violation of the constitutional guarantee that no
person shall be deprived of property without due process of law.
 Thus, should Cagatao wish to question the ownership of the
subject lot of Carlos and Spouses Fernandez, he should institute a
direct action before the proper courts for the cancellation or
modification of the titles in the name of the latter two. He cannot do so
now because it is tantamount to a collateral attack on Carlos’ title,
which is expressly prohibited by law and jurisprudence
 The CA did not err in amending its decision and recognizing
the validity of the sale between Spouses Fernandez and Carlos.
 Time and again, the Court has repeatedly ruled that a person
dealing with a registered land has the right to rely on the face of the
Torrens title and need not inquire further, unless the party concerned
has actual knowledge of facts and circumstances that would impel a
reasonably cautious man to make such an inquiry.
 The indefeasibility of a Torrens title as evidence of lawful
ownership of the property protects buyers in good faith who rely on
what appears on the face of the said certificate of title.
 In this case, there has been no showing that Spouses
Fernandez were aware of any irregularity in Carlos’ title that would
make them suspicious and cause them to doubt the legitimacy of
Carlos’ claim of ownership, especially because there were no
encumbrances annotated on Carlos’ title. At any rate, that is the
proper subject of another action initiated for the purpose of
questioning Carlos’ certificate of title from which Spouses Fernandez
derived their ownership because, otherwise, the title of Spouses
Fernandez would become indefeasible
LEGASPI 300 V MUER
This complaint for the declaration of nullity of elections with prayer for
issuance of a TRO and WPI and Damages were filed by Petitioners
against respondents who are members of the condo corp who
decided to push through with the election of new Board members
despite the adjournment of the meeting for lack of quorum (irregular
proxy votes). RTC issued a TRO on the assumption of office but this
was later clarified by another RTC judge stating that this TRO no
longer applies because respondents already assumed office. When
petitioners tried to implead Legaspi Towers 300 in its Amended
Complaint, this was assailed by respondent Board members saying
that inclusion was without authority by the current Board. RTC denied
motion to amend complaint. CA dismissed pet for certiorari for GAD.
SC ruled that petitioners, as Board of Directors have NO right to bring
action on behalf of Legaspi 300. Petitioners contend that Legaspi
Towers 300, Inc. is a real party-in- interest as it stands to be affected
the most by the controversy, because it involves the determination of
whether or not the corporation’s by-laws was properly carried out in
the meeting.
FACTS
 Pursuant to the by-laws of Legaspi Towers 300, Inc.,
petitioners Lilia Marquinez Palanca, Rosanna D. Imai, Gloria Domingo
and Ray Vincent, the incumbent Board of Directors, set the annual
meeting of the members of the condominium corporation and the
election of the new Board of Directors 2004-1005 
 Out of a total number of 5,723 members who were entitled to
vote, 1,358 were supposed to vote through their respective proxies
and their votes were critical in determining the existence of a quorum,
which was at least 2,863 
 The Committee on Elections of Legaspi Towers 300, Inc.,
however, found most of the proxy votes, at its face value, irregular,
thus, questionable; and for lack of time to authenticate the same,
petitioners adjourned the meeting for lack of quorum.
 However, the group of respondents challenged the
adjournment of the meeting
 Respondents pushed through with the scheduled election and
were elected as the new Board of Directors and officers of Legaspi
Towers 300
 Petitioners filed a Complaint for the Declaration of Nullity of
Elections with Prayers for the lssuance of Temporary Restraining
Orders and Writ of Preliminary Injunction and Damages  against
respondents with the RTC of Manila.  WON Petitioner-Appellants, as Board of Directors have the right to
 Before respondents could file an Answer   to the original
Complaint,  petitioners filed an 2 Amended Complaints and for the
lssuance of Ex-Parte Temporary Restraining Order Effective only for
Seventy-Two (72) Hours
 RTC: Seventy-two (72) hour Temporary Restraining Order is
hereby issued, enjoining defendants from taking over management, or
to maintain a status quo
 Respondents Answer: alleging that the election on April 2,
2004 was lawfully conducted. From the proceedings of the election
reported by SEC representative, Atty. Patricio, it was clear that the
election held on April 2, 2004 was legitimate and lawful; thus, they
prayed for the dismissal of the complaint for lack cause of action
against them
 RTC MNL Judge Antonio I. De Castro: clarifying that the TRO
issued by Executive Judge Enrico A. Lanzanas, enjoining
respondents from taking over management, was not applicable as the
current Board of Directors (respondents) had actually assumed
management of the corporation
 Respondents filed a Comment on the Motion to Amend
Complaint: the name of Legaspi Towers 300, Inc., as party-plaintiff in
the Second Amended Complaint, be deleted as the said inclusion by
petitioners was made without the authority of the current Board
 TC during pre trial conference: petitioners' motion to amend
complaint to implead Legaspi Towers 300, Inc. as plaintiff, which
motion was denied 
 MR Denied
 Petitioners filed a petition for certiorari with the Court of
Appeals alleging that the trial court gravely abused its discretion
amounting to lack or excess of jurisdiction.
 CA Dismissed
ISSUE/S && RATIO
bring action on behalf of Legaspi 300- NO
 Why should Legaspi Towers 300, Inc be included as party-
plaintiff when defendants are members thereof too like plaintiffs. Both
parties are deemed to be acting in their personal capacities as they
both claim to be the lawful board of directors. The motion for
reconsideration for the admission of the second amended complaint is
hereby DENIED
 Petitioners: act of including the corporation as party-plaintiff is
consistent with their position that the election conducted by
respondents was invalid; hence, petitioners, under their by-laws, could
reconstitute themselves as the Board of Directors of Legaspi Towers
300, Inc. in a hold-over capacity for the succeeding term.
 By so doing, petitioners had the right as the rightful Board of
Directors to bring the action in representation of Legaspi Towers 300,
Inc..
 Petitioners contend that Legaspi Towers 300, Inc. is a real
party-in- interest as it stands to be affected the most by the
controversy, because it involves the determination of whether or not
the corporation’s by-laws was properly carried out in the meeting
 The Court agrees with the Court of Appeals that the Second
Amended Complaint is meant to be a derivative suit filed by
petitioners in behalf of the corporation.
 In short, the amendment of the complaint [to include] Legaspi
Towers 300, Inc. was done in order to protect the interest and enforce
the right of the Legaspi [Towers 300,] Inc. to be administered and
managed [by petitioners] as the duly constituted Board of Directors.
 This is no different from and may in fact be considered as a
DERIVATIVE SUIT instituted by an individual stockholder against
those controlling the corporation but is being instituted in the name of
and for the benefit of the corporation whose right/s are being violated
 In this case, petitioners, as members of the Board of Directors
of the condominium corporation before the election in question, filed a
complaint against the newly-elected members of the Board of
Directors for the years 2004-2005, questioning the validity of the
election held on April 2, 2004, as it was allegedly marred by lack of
quorum, and praying for the nullification of the said election.
 As stated by the Court of Appeals, petitioners’ complaint seek
to nullify the said election, and to protect and enforce their individual
right to vote. Petitioners seek the nullification of the election of the
Board of Directors for the years 2004-2005, composed of herein
respondents, who pushed through with the election even if petitioners
had adjourned the meeting allegedly due to lack of quorum.
 Petitioners are the injured party, whose rights to vote and to
be voted upon were directly affected by the election of the new set of
board of directors. The party-in-interest are the petitioners as
stockholders, who wield such right to vote.
 The cause of action devolves on petitioners, not the
condominium corporation, which did not have the right to vote. Hence,
the complaint for nullification of the election is a direct action by
petitioners, who were the members of the Board of Directors of the
corporation before the election, against respondents, who are the
newly-elected Board of Directors. Under the circumstances, the
derivative suit filed by petitioners in behalf of the condominium
corporation in the Second Amended Complaint is improper
 Further, petitioners’ change of argument before this Court,
asserting that the Second Amended Complaint is a direct action filed
by the corporation, represented by the petitioners as the incumbent
Board of Directors, is an afterthought, and lacks merit, considering
that the newly-elected Board of Directors had assumed their function
to manage corporate affairs
 Petitioners question the validity of the election of the Board of
Directors for the years 2004-2005, which election they seek to nullify
in Civil Case No. 04-109655. However, the valid election of a new set
of Board of Directors for the years 2005-2006 would, indeed, render
this petition moot and academic
REPUBLIC V AGUNOY
This reversion proceedings involves 2 parcels of land in Nueva Ecija
allegedly acquired by Agunoy through a free patent application (as
disposable public land) but is being claimed by the Heirs of Perez as
part of their private property. They caused the annotation of an
adverse claim on the OCT and filed a formal protest with the Bureau
of Lands which ruled that the free patent was issued improperly and
fraudulently. In the meantime, the heirs of Agunoy executed a Deed of
Extrajudicial Partition in favor of Sangabol and a new TCT was
issued. In 1979, Sangabol sold 3 ha to Jimenez and in 1980, the
adverse claim on the OCT was cancelled by RD. Several transactions
occurred between 1980-1986. In 1988, the Heirs of Perez filed a
Supplemental Protest and it was recommended to the Dir of Lands
that a court action be filed to cancel the free patent. Hence, the RP
filed this complaint to revert the private property to the mass of public
domain, questioning the free patent issued and claiming that the BL
has no juris bec it was a private property. TC ruled in favor of R. CA
reversed and ruled that RP is not an RPI. SC ruled that it was the
Heirs of Perez who are the RPI. RP itself admitted in its pleading that
the lands were no longer disposable public land—how can it thus
have interest? Lands are no longer public domain so a favorable
decision would not benefit RP.
FACTS
 Gregorio Agunoy, Sr. filed his application for Free Patent No.
5-1414 covering two parcels of land identified as Lot Nos. 1341 and
1342, Cad 269, Sta. Rosa Cadastre, Nueva Ecija, containing an
aggregate area of 18.6486 hectares with the Bureau of Lands. On
January 18, 1967, he was issued Free Patent No. 314450 by the
Director of Lands.
 Register of Deeds of Nueva Ecija registered Free Patent No.
314450 and issued the corresponding Original Certificate of Title
(OCT) No. P-4522 in the name of Gregorio Agunoy, Sr.
 Heirs of Eusebio Perez, represented by Francisca Perez,
caused the annotation on the said OCT of an adverse claim in their
favor over a portion of 15.1593 hectares of the property.
 Heirs of Eusebio Perez filed a formal protest docketed as B.L.
Claim No. 760 (n) with the Bureau of Lands alleging that Lot 1341 of
the Sta. Rosa Cadastre, Nueva Ecija, covered by Original Certificate
of Title No-P4522 is identical to Lots 1 and 2 of Plan Psu-47200 which
had been adjudicated as private property of said protestant pursuant
to a decision promulgated on October 24, 1960 
 Upon investigation by Chief of the Legal Division, Bureau of
Lands: ascertained that Free Patent No. 314450 and its
corresponding OCT No. P-4522 were improperly and fraudulently
issued
 Upon the death of the wife of Gregoro Agunoy, Sr., the heirs,
namely Gregorio Sr., Tomas, Lilian, Angelito and Gregorio, Jr.,
executed a Deed of Extrajudicial Partition with Sale in favor of Joaquin
Sangabol for and in consideration of the sum of (P20,000.00).
 A new TCT was issued in the name of Joaquin
 1979: Joaquin Sangabol sold an undivided portion of three (3)
hectares to Fortunato Para and Virginia P. Jimenez. TCTs were
issued in their favor
 1980: The adverse claim of Francisca Perez, et al. annotated
at the back of the OCT was cancelled by the Register of Deeds of
Nueva Ecija
 1980-1986: Multiple transactions between Joaquin and his
vendees took place. TCTs were cancelled and new ones issued
accordingly. Some transactions even involved mortgages ans
foreclosure sales.
 1988 Heirs of Ruperto Perez (oldest son of Eusebio), now
represented by Sabina P. Hernandez, filed a supplemental protest 
 Chief of the Legal Division: recommended to the Director of
Lands that court action be instituted for the cancellation of Free Patent
and its corresponding OCT in the name Gregorio Agunoy, Sr., as well
as other subsequent transfer certificates of title issued therefrom
based on the foregoing findings
 Petitioner Republic of the Philippines, filed the complaint
against respondents claiming that the property in question (Lots 1341
and 1342) at the time the patent and the title were issued was already
adjudicated as private property of the heirs of Eusebio Perez and
Valeriano Espiritu, respectively. Consequently, the then Bureau of
Lands, now Lands Management Bureau, no longer had any
jurisdiction and control over the same. The fraudulent acts and
misrepresentation of defendant Gregorio Agunoy, Sr. had misled the
then Bureau of Lands in issuing said patent. Since the property in
question was no longer a disposable public land, Free Patent issued
to defendant Gregorio Agunoy, Sr. are null and void and should be
cancelled.
 TC: In favor of Republic
 Declaring as null and void Free Patent No. 314450 and the
corresponding Original Certificate of Title No. P-4522 in the name of
Gregorio Agunoy, as well as all other subsequent transfer certificates
of titles emanating therefrom
 Therefrom, the spouses Eduardo Dee and Arcelita Marquez-
Dee and the Rural Bank of Gapan, Nueva Ecija went to the Court of
Appeals, whereat their recourse was docketed as CA-G.R. CV No.
55732
 CA: Defendant Gregorio Agunoy, Sr. is declared to have
validly and properly acquired Free Patent. Petitioner Republic is not
the real party in interest
ISSUE/S && RATIO
WON the CA erred in ruling that Petitioner Republic is NOT a real
party in interest- NO.
 HEIRS OF PEREZ ARE THE TRUE PARTIES IN INTEREST
 Basic it is in the law of procedure that every action must be
prosecuted or defended in the name of the real party-in-interest,
meaning "the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit",a
procedural rule reechoed in a long line of cases decided by this
Court. 
 Shipside, Inc. vs. Court of Appeals : Under Section 2 of Rule 3
of the 1997 Rules of Civil Procedure, "every action must be
prosecuted or defended in the name of the real party in interest." To
qualify a person to be a real party in interest in whose name an action
must be prosecuted, he must appear to be the present real owner of
the right sought to enforced
 The very complaint in this case, supra, filed by petitioner
Republic before the trial court unmistakably alleges that at the time
Free Patent No. 31445 and its corresponding Original Certificate of
Title No. P-45222 were issued to Gregorio Agunoy, Sr., " the property
in question (Lots 1341 and 1342) xxx was already adjudicated
as private propertyof the heirs of Eusebio Perez and Valeriano
Espiritu", and that at that time, " the property in question was no longer
a disposable public land"
 With the very admissions by the petitioner itself in its basic
pleading that Lots No. 1341 and 1342 are already private properties of
the heirs of Eusebio Perez and Valeriano Espiritu, and are, therefore,
"no longer disposable public land"over which the then Bureau of
Lands, now Lands Management Bureau, "no longer had any
jurisdiction and control", we are simply at a loss to understand how
petitioner Republic can still profess to be the real party-in-interest in
this case, and insists that the disputed properties are still part of the
public domain. If ever, the real party-in-interest could be none other
than the heirs of Eusebio Perez and Valeriano Espiritu, but certainly
not the petitioner.
 Then, too, it is striking to note that even as the complaint is
basically one for reversion of private property to the mass of public
domain, petitioner did not implead either the heirs of Eusebio Perez or
that of Valeriano Espiritu. Without doubt, if our decision hereon were
to be in favor of petitioner, the real beneficiary thereof is not the State
 And because, as no less admitted by the petitioner, the lands
subject of this case are no longer part of the public domain, the
nullification of Agunoy’s Free Patent P-314450 and OCT No. P-4522
would not result in the reversion of the lands subject thereof to the
mass of public land. And the government, not being the real party-in-
interest, is without personality to institute reversion proceedings
 There is no merit in petitioners' contention that only the State
may bring an action for reconveyance of the lots in dispute.
 To reiterate, Lot 2344 is a private property in open,
continuous, exclusive and notorious possession of the Santiago
family.
 The nullification of its free patent and title would not therefore
result in its reversion to the public domain. Hence, the State,
represented by the Solicitor General, is not the real party in interest.
JUANA V FIL ESTATE
This complaint for damages was instituted as a class suit by residents
of subdivisions (Juana Complex) representing commuters and
motorists allegedly deprived of access to La Paz Road (to Manila/from
Calamba) due to Fil-Estate Land’s excavation of the road that led to
SLEX. Result: traffic rerouting to narrow streets cause terrible traffic
congestion and the closure prejudiced the right to free and
unhampered use of property, allegedly causing great damage and
irreparable injury. Complainant prayed for issuance of a TRO or WPI.
Fil Estate filed an MTD (failure to state COA and it was improperly
filed as a class suit). RTC ruled against Fil Estate. CA affirmed—it
was a class suit; there is a common interest and representative
enough but too numerous that it’s impractical to include all. SC ruled
that it states a COA and is a class suit. Here, they have a (1)
demandable right to use the road (right of way), (2) the excavations
violated such right and (3) they suffered an injury. The necessary
elements for the maintenance of a class suit are: 1) the subject matter
of controversy is one of common or general interest to many persons;
2) the parties affected are so numerous that it is impracticable to bring
them all to court; and 3) the parties bringing the class suit are
sufficiently numerous or representative of the class and can fully
protect the interests of all concerned. In this case, the suit is clearly
one that benefits all commuters and motorists who use La Paz Road
(as shown by manifestations filed by residents in Laguna)
FACTS
 Juana Complex I Homeowners Association, Inc. (JCHA),
together with individual residents of Juana Complex I and other
neighboring subdivisions (Collectively referred as JCHA, et.
al.),  instituted a complaint for damages, in its own behalf and as a
class suit representing the regular commuters and motorists of Juana
Complex I and neighboring subdivisions who were deprived of the use
of La Paz Road, against Fil-Estate Land, FEEC, La Paz, and Warbird
Security Agency and their respective officers (collectively referred as
Fil-Estate, et al.)
 The complaint alleged that JCHA, et al. were regular
commuters and motorists who constantly travelled towards the
direction of Manila and Calamba; that they used the entry and exit toll
gates of (SLEX) by passing through right-of-way public road known as
La Paz Road; that they had been using La Paz Road for more than
ten (10) years
 Fil-estate excavated, broke and deliberately ruined La Paz
Road that led to SLEX so JCHA, et al. would not be able to pass
through the said road; that La Paz Road was restored by the residents
to make it passable but Fil-estate excavated the road again
 JCHA reported the matter to the Municipal Government and
the Office of the Municipal Engineer but the latter failed to repair the
road
 The act of Fil-estate in excavating La Paz Road caused
damage, prejudice, inconvenience, annoyance, and loss of precious
hours to them, to the commuters and motorists because traffic was re-
routed to narrow streets that caused terrible traffic congestion and
hazard; and that its permanent closure would not only prejudice their
right to free and unhampered use of the property but would also
cause great damage and irreparable injury.
 JCHA, et al. also prayed for the immediate issuance of a
Temporary Restraining Order (TRO) or a writ of preliminary
injunction (WPI) to enjoin Fil-Estate, et al. from stopping and
intimidating them in their use of La Paz Road.
 Fil-Estate, et al. filed a motion to dismiss 7 arguing that the
complaint failed to state a cause of action and that it was improperly
filed as a class suit
 RTC: issued WPI
 RTC Omnibus Order: denying both the motion to dismiss and
the motion for reconsideration filed by Fil-Estate, et al
 CA: complaint sufficiently stated a cause of action when
JCHA, et al. alleged in their complaint that they had been using La
Paz Road for more than ten (10) years and that their right was
violated when Fil-Estate closed and excavated the road.
 It sustained the RTC ruling that the complaint was properly
filed as a class suit as it was shown that the case was of common
interest and that the individuals sought to be represented were so
numerous that it was impractical to include all of them as parties
ISSUE/S && RATIO
WON complaint states a cause of action- YES
 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
 Stated differently, if the allegations in the complaint furnish
sufficient basis by which the complaint can be maintained, the same
should not be dismissed regardless of the defense that may be
asserted by the defendant
 In the present case, the Court finds the allegations in the
complaint sufficient to establish a cause of action.  excavation of La Paz Road would not necessarily give rise to a
 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.  representative as to fully protect the interests of all concerned may
 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.
WON complaint has been properly filed as a class suit- YES
 JCHA, et al.: La Paz Road has attained the status and
character of a public road or burdened by an apparent easement of
public right of way.
 Fil-Estate, et al.: La Paz Road is included in the parcels of
land covered by Transfer Certificates of Title (TCT) Nos. T-120008, T-
90321 and T-90607, all registered in the name of La Paz
 They likewise argue that the complaint was improperly filed
as a class suit for it failed to show that JCHA, et al. and the
commuters and motorists they are representing have a well-defined
community of interest over La Paz Road. They claim that the
common right or cause of action for JCHA, et al. against them since
each of them has a separate and distinct purpose and each may be
affected differently than the others.
 Section 12, Rule 3 of the Rules of Court defines a class suit,
as follows:
 Sec. 12. Class suit. – When the subject matter of the
controversy is one of common or general interest to many persons so
numerous that it is impracticable to join all as parties, a number of
them which the court finds to be sufficiently numerous and
sue or defend for the benefit of all. Any party in interest shall have the
right to intervene to protect his individual interest.
 The necessary elements for the maintenance of a class suit
are: 1) the subject matter of controversy is one of common or general
interest to many persons; 2) the parties affected are so numerous that
it is impracticable to bring them all to court; and 3) the parties bringing
the class suit are sufficiently numerous or representative of the class
and can fully protect the interests of all concerned
 In this case, the suit is clearly one that benefits all commuters
and motorists who use La Paz Road. As succinctly stated by the CA:
 The subject matter of the instant case, i.e., the closure and
excavation of the La Paz Road, is initially shown to be of common or
general interest to many persons. The records reveal that numerous
individuals have filed manifestations with the lower court, conveying
their intention to join private respondents in the suit and claiming that
they are similarly situated with private respondents for they were also
prejudiced by the acts of petitioners in closing and excavating the La
Paz Road.
 Moreover, the individuals sought to be represented by private
respondents in the suit are so numerous that it is impracticable to join
them all as parties and be named individually as plaintiffs in the
complaint.
 These individuals claim to be residents of various barangays
in Biñan, Laguna and other barangays in San Pedro, Laguna.
BANDA V ERMITA. This class suit filed (petition for certiorari) on
behalf of co-employees at the National Printing Office assailed the
constitutionality of EO 378 issued by Pres. Arroyo removing the
exclusive juris of NPO over printing services of govt agencies. As a
result, services were allowed to be sourced from competitive bidding
(private supplier must give superior quality at a lower cost). This
allegedly threatened the security of tenure of NPO employees
(gradual abolition of NPO). SC ruled that it is not a class suit. An
action does not become a class suit merely because it is designated
as such in the pleadings. Whether the suit is or is not a class suit
depends upon the attending facts, and the complaint, or other
pleading initiating. Here, the petition failed to state the number of NPO
employees who would be affected. Of the 67 petitioners, 32 executed
an Affidavit of Desistance, reducing the number of petitioners to 34
and only 20 of them were mentioned in the jurat as having duly
subscribed the petition before the notary public. An element of a class
suit is the adequacy of representation, the court must consider (a)
whether the interest of the named party is coextensive with others; (b)
the proportion of those made a party to the total membership and (c)
any other factor bearing on the ability of the named party to speak for
the rest of the class. Also, Manifestation of Desistance (by President
of NAPO) showed divergence of interests.
FACTS
 The present controversy arose from a Petition
for Certiorari  and prohibition challenging the constitutionality of
Executive Order No. 378 dated October 25, 2004, issued by President
Gloria Macapagal Arroyo
 Petitioners characterize their action as a class suit filed on
their own behalf and on behalf of all their co-employees at the
National Printing Office (NPO)
 The NPO was formed during the term of former President
Corazon C. Aquino by virtue of Executive Order No. 285 which
provided, among others, the creation of the NPO from the merger of
the Government Printing Office and the relevant printing units of the
Philippine Information Agency (PIA).
 President Arroyo issued the herein assailed Executive Order
No. 378, amending Section 6 of Executive Order No. 285 by, inter
alia, removing the exclusive jurisdiction of the NPO over the printing
services requirements of government agencies and instrumentalities
 Pursuant to Executive Order No. 378, government agencies
and instrumentalities are allowed to source their printing services from
the private sector through competitive bidding, subject to the condition
that the services offered by the private supplier be of superior quality
and lower in cost compared to what was offered by the NPO.
 Perceiving Executive Order No. 378 as a threat to their
security of tenure as employees of the NPO, petitioners now
challenge its constitutionality, contending that: (1) it is beyond the
executive powers of President Arroyo to amend or repeal Executive
Order No. 285 and (2) Executive Order No. 378 violates petitioners'
security of tenure, because it paves the way for the gradual abolition
of the NPO.
ISSUE/S && RATIO
WON the case at bar is a class suit- NO
 In Board of Optometry v. Colet, courts must exercise utmost
caution before allowing a class suit, which is the exception to the
requirement of joinder of all indispensable parties. For while no
difficulty may arise if the decision secured is favorable to the plaintiffs,
a quandary would result if the decision were otherwise as those who
were deemed impleaded by their self-appointed representatives would
certainly claim denial of due process."
 Requisites of a class suit are: 1) the subject matter of
controversy is one of common or general interest to many persons; 2)
the parties affected are so numerous that it is impracticable to bring
them all to court; and 3) the parties bringing the class suit are
sufficiently numerous or representative of the class and can fully
protect the interests of all concerned.
 An action does not become a class suit merely because it is
designated as such in the pleadings.
 Whether the suit is or is not a class suit depends upon the
attending facts, and the complaint, or other pleading initiating the
class action should allege the existence of the necessary facts, to wit,
the existence of a subject matter of common interest, and the
existence of a class and the number of persons in the alleged class, in
order that the court might be enabled to determine whether the
members of the class are so numerous as to make it impracticable to
bring them all before the court, to contrast the number appearing on
the record with the number in the class and to determine whether
claimants on record adequately represent the class and the subject
matter of general or common interest.
 Here, the petition failed to state the number of NPO
employees who would be affected by the assailed Executive Order
and who were allegedly represented by petitioners. It was the Solicitor
General, as counsel for respondents, who pointed out that there were
about 549 employees in the NPO.
 The 67 petitioners undeniably comprised a small fraction of
the NPO employees whom they claimed to represent. Subsequently,
32 of the original petitioners executed an Affidavit of Desistance, while
one signed a letter denying ever signing the petition, 5cЃa ostensibly
reducing the number of petitioners to 34. 
 A perusal of the petition itself would show that of the 67
petitioners who signed the Verification/Certification of Non-Forum
Shopping, only 20 petitioners were in fact mentioned in the jurat as
having duly subscribed the petition before the notary public. In other
words, only 20 petitioners effectively instituted the present case.
 MVRS Publications, Inc. v. Islamic Da'wah Council of the
Philippines, Inc.,7cЃa we observed that an element of a class suit or
representative suit is the adequacy of representation. In determining
the question of fair and adequate representation of members of a
class, the court must consider (a) whether the interest of the named
party is coextensive with the interest of the other members of the
class; (b) the proportion of those made a party, as it so bears, to the
total membership of the class; and (c) any other factor bearing on the
ability of the named party to speak for the rest of the class.
 It is worth mentioning that a Manifestation of
Desistance,9cЃa to which the previously mentioned Affidavit of
Desistance10cЃa was attached, was filed by the President of the
National Printing Office Workers Association (NAPOWA). The said
manifestation expressed NAPOWA's opposition to the filing of the
instant petition in any court.
 Even if we take into account the contention of petitioners'
counsel that the NAPOWA President had no legal standing to file
such manifestation, the said pleading is a clear indication that there is
a divergence of opinions and views among the members of the class
sought to be represented, and not all are in favor of filing the present
suit.
 There is here an apparent conflict between petitioners'
interests and those of the persons whom they claim to represent.
Since it cannot be said that petitioners sufficiently represent the
interests of the entire class, the instant case cannot be properly
treated as a class suit.
NAPARE V BARBARONA
This involves 2 adjoining lots—one owned by Barbarona and the other
by Napere whose son allegedly planted coconut trees on the portion
of the Barabarona. The relocation survey showed that there was
indeed an encroachment so a case was filed for recovery of
possession, quieting of title and damages. During its pendency
Napere died so his counsel submitted the names of his heirs who did
not contest the right of possession of Barbarona but claimed that they
were planters in GF. RTC ruled against Napere who appealed (the
judgment of the TC was void for lack of jurisdiction over the heirs who
were not ordered substituted as party-defendants for the deceased).
CA affirmed RTC since the judgment is a case which survives the
death of such party. SC ruled that the complaint is an action that
survives death and the counsel of Napere complied with his duty to
inform the court and it is the TC that failed to order the substitution of
the heirs. Nonetheless, despite this oversight, the proceedings and
the judgment are valid. The party alleging nullity must prove that there
was an undeniable violation of due process because the rule on
substitution by heirs is not a matter of jurisdiction, but a requirement of
due process to ensure that the deceased party would continue to be
properly represented in the suit. Formal substitution by heirs is not
necessary when they themselves voluntarily appear, participate in the
case, and present evidence in defense of the deceased. In such case,
there is really no violation of the right to due process. The essence of
due process is the reasonable opportunity to be heard and to submit
any evidence available in support of one’s defense.
FACTS
 Respondent Amando Barbarona is the registered owner of
Lot No. 3177, situated in Barangay San Sotero (formerly Tambis),
Javier, Leyte and covered by Original Certificate of Title (OCT) No. P-
7350
 Lot No. 3176, covered by OCT No. 1110 in the name of
Anacleto Napere, adjoins said lot on the northeastern side.
 After Anacleto died, his son, Juan Napere, and the latter’s
wife, herein petitioner, planted coconut trees on certain portions of the
property with the consent of his co-heirs.
 Respondents alleged that, spouses Napere, their relatives
and hired laborers, by means of stealth and strategy, encroached
upon and occupied the northeastern portion of Lot No. 3177; that the
Naperes harvested the coconut fruits thereon, appropriated the
proceeds thereof, and, despite demands, refused to turn over
possession of the area
 April 1992, a relocation survey was conducted which
confirmed that the respondents’ property was encroached upon by the
Naperes; that on the basis of the relocation survey, the respondents
took possession of this encroached portion of the lot and harvested
the fruits thereon from April 1993 to December 1993
 January 1994, the Naperes repeated their acts by
encroaching again on the respondents’ property, harvesting the
coconuts and appropriating the proceeds thereof, and refusing to
vacate the property on demand.
 While the case was pending, Juan Napere died. Their
counsel informed the court of Juan Napere’s death, and submitted the
names and addresses of Napere’s heirs.
 At the pre-trial, the RTC noted that the Naperes were not
contesting the respondents’ right of possession over the disputed
portion of the property but were demanding the rights of a planter in
good faith 
 RTC: Decision against the estate of Juan Napere. Held them
liable to pay damages
 Petitioner appealed the case to CA: judgment of the trial court
was void for lack of jurisdiction over the heirs who were not ordered
substituted as party-defendants for the deceased.
 CA: affirmed RTC. Failure to substitute the heirs for the
deceased defendant will not invalidate the proceedings and the
judgment in a case which survives the death of such party.
ISSUE/S && RATIO
 WON RTC decision is void for lack of jurisdiction over the
heirs of Juan Napere- NO
 Petitioner: trial court did not acquire jurisdiction over the
persons of the heirs because of its failure to order their substitution
pursuant to Section 17, Rule 3 of the Rule of Court. Hence, decision
rendered by the trial court are null and void
 When a party to a pending case dies and the claim is not
extinguished by such death, the Rules require the substitution of the
deceased party by his legal representative or heirs. In such case,
counsel is obliged to inform the court of the death of his client and
give the name and address of the latter’s legal representative.
 The complaint for recovery of possession, quieting of title and
damages is an action that survives the death of the defendant.
Notably, the counsel of Juan Napere complied with his duty to inform
the court of his client’s death and the names and addresses of the
heirs.
 The trial court, however, failed to order the substitution of the
heirs. Nonetheless, despite this oversight, we hold that the
proceedings conducted and the judgment rendered by the trial court
are valid.
 The Court has repeatedly declared that failure of the counsel
to comply with his duty to inform the court of the death of his client,
such that no substitution is effected, will not invalidate the
proceedings and the judgment rendered thereon if the action survives
the death of such party. The trial court’s jurisdiction over the case
subsists despite the death of the party.
 Mere failure to substitute a deceased party is not sufficient
ground to nullify a trial court’s decision. The party alleging nullity must
prove that there was an undeniable violation of due process.
 Strictly speaking, the rule on substitution by heirs is not a
matter of jurisdiction, but a requirement of due process. The rule on
substitution was crafted to protect every party’s right to due process.  Maglasang. They also alleged that the Judge acted in BF in acquiring
 It was designed to ensure that the deceased party would
continue to be properly represented in the suit through his heirs or the
duly appointed legal representative of his estate.
 Thus, it is only when there is a denial of due process, as
when the deceased is not represented by any legal representative or
heir, that the court nullifies the trial proceedings and the resulting
judgment therein
 Formal substitution by heirs is not necessary when they
themselves voluntarily appear, participate in the case, and present
evidence in defense of the deceased
 In such case, there is really no violation of the right to due
process. The essence of due process is the reasonable opportunity to
be heard and to submit any evidence available in support of one’s
defense.
 When due process is not violated, as when the right of the
representative or heir is recognized and protected, noncompliance or
belated formal compliance with the Rules cannot affect the validity of
a promulgated decision.
SUMALJAG V DIOSDIDIT
 Maglasang filed a complaint for the nullity the deed of sale of
real property she sold to her sister and her sister’s husband (spouses
Literato) because the deed was spurious and falsified. In response,
sps. filed a counterclaim and impleaded Judge Sumaljag who
occupied Lot 1220-D and Lot 1220-E without their authority—the Lot
1220-E is theirs by inheritance while 1220-D had been sold to them by
the 2 lots because he prepared and notarized the contract of lease
over the whole of Lot 1220 between all the Maglasang; thus, the judge
then knew that Maglasang no longer owned Lot 1220-D. Hence, the
sister filed a complaint with the RTC for the declaration of the
inexistence of lease contract, recovery of possession of land, and
damages against the judge and her sister after the RTC dismissed
their counterclaim. According to the sister, Maglasang leased the lot
to judge in BF because they knew that Maglasang no longer own the
leased lots. Maglasang died during the pendency. Atty. Filed a notice
of death and substitution (by judge who allegedly bought property
from the Remismundo—Quitclaim Deed). Sister objected and
suggested substitution instead by another sister, Michaeles. RTC
ruled in favor of sister. CA affirmed. SC ruled that although the notice
was seasonably submitted (though late), it was not sufficient because
the legal heirs were not named. The judge is not among the legal
representatives recognized under R3.16. He is a mere counterclaim
co-defendant in a claim against the interest of the deceased  through
the transfer of her remaining interest in the litigation to another party.
It would be absurd to have the very same person to whom transfer
was made, as the substitute. To state the obvious, the suggested
substitution effectively brings to naught the protection that the Rules
intend; plain common sense tells us that the transferee who has his
own interest to protect, cannot at the same time represent and fully
protect the interest of the deceased transferor.
FACTS
 Josefa D. Maglasang ("Josefa") filed with the Regional Trial
Court ("RTC"), Branch 14, Baybay, Leyte a complaint for the nullity of
the deed of sale of real property purportedly executed between her as
vendor and the spouses Diosdidit and Menendez Literato (the
"respondent spouses") as vendees.
 The complaint alleged that this deed of sale of Lot 1220-D is
spurious.
 Josefa was the sister of Menendez Maglasang Literato
("Menendez").
 The respondent spouses' response to the complaint was an
amended answer with counterclaim denying that the deed of sale was
falsified.
 They impleaded the petitioner judge with Josefa as
counterclaim defendant on the allegation that the petitioner judge, at
the instance of Josefa, occupied Lot 1220-D and Lot 1220-E without
their (the respondent spouses') authority;
 They also alleged that the petitioner judge acted in bad faith
in acquiring the two (2) lots because he prepared and notarized the
contract of lease over the whole of Lot 1220 between all the
Maglasang heirs (but excluding Josefa) and Vicente Tolo, with the
lease running from 1986 to 1991; thus, the petitioner then knew that
Josefa no longer owned the Lot
 (2) Menendez filed a complaint with the RTC for the
declaration of the inexistence of lease contract, recovery of
possession of land, and damages against the petitioner and Josefa
after the RTC dismissed the respondent spouses' counterclaim 
 The complaint alleged that Josefa, who had previously sold
Lot 1220-D to Menendez, leased it, together with Lot 1220-E, to the
petitioner. Menendez further averred that the petitioner and Josefa
were in bad faith in entering their contract of lease as they both knew
that Josefa did not own the leased lots. Menendez prayed, among
others, that this lease contract between Josefa and the petitioner be
declared null and void.
 Josefa died during the pendency of both civil cases
 Atty. Puray filed with the RTC a notice of death and
substitution of party praying that Josefa - in his capacity as plaintiff
and third party counterclaim defendant - be substituted by the
petitioner
 The submission alleged that prior to Josefa's death, she
executed a Quitclaim Deed over Lot 1220-D in favor of Remismundo
D. Maglasang who in turn sold this property to the petitioner.
 Menendez, through counsel, objected to the proposed
substitution, alleging that Atty. Puray filed the notice of death and
substitution of party beyond the thirty-day period
 She recommended instead that Josefa be substituted by the
latter's full-blood sister, Michaeles Maglasang Rodrigo
 RTC: denied Atty. Puray's motion for substitution and instead
ordered the appearance of Michaeles as representative of the
deceased Josefa. MR denied.
 RTC instead ordered the appearance of Mrs. Mechailes
Maglasang-Rodrigo of Brgy. Binulho, Albuera, Leyte, as
representative of the deceased Josefa Maglasang.
 CA: affirmed
ISSUE/S && RATIO
WON the notice of death was seasonably submitted by the counsel of
Josefa to the RTC within the extended period granted- YES. But the
notice was INSUFFICIENT. LEGAL HEIRS NOT NAMED.
 Section 16, Rule 3 of the 1997 Rules of Civil Procedure The
heirs of the deceased may be allowed to be substituted for the
deceased, without requiring the appointment of an executor or
administrator and the court may appoint a guardian ad litem for the
minor heir
 A question preliminary to the application of the above
provision is whether Civil Case Nos. B-1239 and B-1281 are actions
that survive the death of Josefa
 The question as to whether an action survives or not depends
on the nature of the action and the damage sued for. In the causes of
action which survive, the wrong complained [of] affects primarily and
principally property and property rights, the injuries to the person
being merely incidental, while in the causes of action which do not
survive, the injury complained of is to the person, the property and
rights of property affected being incidental.
 Since the question involved in these cases relate to property
and property rights, then we are dealing with actions that survive so
that Section 16, Rule 3 must necessarily apply.
 The duty of counsel under the aforecited provision is to inform
the court within thirty (30) days after the death of his client of the fact
of death, and to give the name and address of the deceased's legal
representative or representatives. Incidentally, this is the only
representation that counsel can undertake after the death of a client
as the fact of death terminated any further lawyer-client relationship
 In the present case, it is undisputed that the counsel for
Josefa did in fact notify the lower court, although belatedly, of the fact
of her death
 This notification, although filed late, effectively informed the
lower court of the death of litigant Josefa Maglasang so as to free her
counsel of any liability for failure to make a report of death under
Section 16, Rule 3 of the Rules of Court.
 In our view, counsel satisfactorily explained to the lower court
the circumstances of the late reporting, and the latter in fact granted
counsel an extended period. The timeliness of the report is therefore a
non-issue.
 The reporting issue that goes into the core of this case is
whether counsel properly gave the court the name and address of the
legal representative of the deceased that Section 16, Rule 3
specifies. We rule that he did not. The "legal representatives" that the
provision speaks of, refer to those authorized by law - the
administrator, executor or guardian
 Section 16, Rule 3 likewise expressly provides that " the heirs
of the deceased may be allowed to be substituted for the deceased,
without requiring the appointment of an executor or administrator . . . ".
Significantly, the person - now the present petitioner - that counsel
gave as substitute was not one of those mentioned under Section 16,
Rule 3.
 Rather, he is a counterclaim co-defendant of the deceased
whose proferred justification for the requested substitution is the
transfer to him of the interests of the deceased in the litigation prior to
her death.
 Under the circumstances, both the lower court and the CA
were legally correct in not giving effect to counsel's suggested
substitute.
 The reason for the Rule is to protect all concerned who may
be affected by the intervening death, particularly the deceased and
her estate.
 We note in this respect that the Notice that counsel filed in
fact reflects a claim against the interest of the deceased  through the
transfer of her remaining interest in the litigation to another party.
 Interestingly, the transfer is in favor of the very same person
who is suggested to the court as the substitute. To state the obvious,
the suggested substitution effectively brings to naught the protection
that the Rules intend; plain common sense tells us that the transferee
who has his own interest to protect, cannot at the same time
represent and fully protect the interest of the deceased transferor
 The second paragraph of the Section 16, Rule 3 of the 1997
Rules of Court, as amended, is clear - the heirs of the deceased may
be allowed to be substituted for the deceased, without requiring the
appointment of an executor or administrator.
 For the protection of the interests of the decedent, this Court
has in previous instances recognized the heirs as proper
representatives of the decedent, even when there is already an
administrator appointed by the court. When no administrator has been
appointed, as in this case, there is all the more reason to recognize
the heirs as the proper representatives of the deceased.
 Josefa's death certificate shows that she was single at the
time of her death. The records do not show that she left a will.
Therefore, as correctly held by the CA, in applying Section 16, Rule 3,
her heirs are her surviving sisters (Michaelis, Maria, Zosima, and
Consolacion) and the children of her deceased sister, Lourdes
(Manuel, Cesar, Huros and Regulo) who should be her legal
representatives.
 Menendez, although also a sister, should be excluded for
being one of the adverse parties in the cases before the RTC
M. CRUZ V O. CRUZ
This complaint by mother against son was for the annulment of sale,
reconveyance and damages because her son Oswaldo allegedly
transferred the title in his and his wife’s name through fraud, forgery,
misrepresentation and simulation. After the mother finished presenting
her evid, she died and the lawyer notified the court. Her son filed an
MTD saying that the action does not survive death bec it is a personal
action (and also legal absurdity because one of the defendants is an
heir). TC dismissed the case. Another son, Edgardo, retained the
lawyer’s services and filed with the CA a Pet for Review under R45.
CA affirmed with modification (deletion of directive to prosecute in
estate proceedings). SC reversed and ruled that the action for
annulment and reconveyance is not purely personal and survives
death. Whether an action survives or not depends on the nature of the
action and the damage sued for. In the causes of action which
survive, the wrong complained [of] affects primarily and principally
property and property rights. When the son Edgardo filed a
Manifestation retaining service of the lawyer, that was a sufficient
formal substitution. Court here also explained the process for
substitution in that if there are heirs, no need for admin or exec. If no
one is named, the opposing party may be ordered by court to procure
an admin or exec.
FACTS
 Memoracion Z. Cruz filed with the Regional Trial Court in
Manila a Complaint against her son, defendant-appellee Oswaldo Z.
Cruz, for "Annulment of Sale, Reconveyance and Damages.
 Memoracion claimed that during her union with her common-
law husband (deceased) Architect Guido M. Cruz, she acquired a
parcel of land located at Tabora corner Limay Streets, Bo. Obrero,
Tondo Manila; that the said lot was registered in her name under 
 Sometime in July 1992, she discovered that the title to the
said property was transferred by appellee and the latter’s wife in their
names in August 1991 under TCT No. 0-199377 by virtue of a Deed
of Sale. That the said deed was executed through fraud, forgery,
misrepresentation and simulation, hence, null and void;
 that she, with the help of her husband’s relatives, asked
appellee to settle the problem; that despite repeated pleas and
demands, appellee refused to reconvey to her the said property
 After Memoracion finished presenting her evidence in chief,
she died on October 30, 1996. (no reason given)
 Through a Manifestation, Memoracion’s counsel, Atty.
Roberto T. Neri, notified the trial court on January 13, 1997 of the fact
of such death, evidenced by a certificate
 Oswaldo filed a Motion to Dismiss on the grounds that (1) the
plaintiff’s reconveyance action is a personal action which does not
survive a party’s death, pursuant to Section 21, Rule 3 of the Revised
Rules of Court, and (2) to allow the case to continue would result in
legal absurdity whereby one heir is representing the defendant [and is
a] co-plaintiff in this case.
 TC: dismissed without prejudice to the prosecution thereof in
the proper estate proceedings
 Memoracion’s son-heir, Edgardo Z. Cruz, manifested to the
trial court that he is retaining the services of Atty. Neri for the plaintiff.
 Petitioner Memoracion Z. Cruz, represented by Edgardo Z.
Cruz, filed with the Court of Appeals a Petition for Review under Rule
45
 CA: affirmed w modification. The trial court’s directive as to
the prosecution of the action in the proper estate proceedings
is DELETED.
ISSUE/S && RATIO
WON the CA erred in ruling that Memoracion Z. Cruz’s Petition for
Annulment of Deed of Sale, Reconveyance and Damages is a purely
personal action which did not survive her death- YES
 The Petition for Annulment of Sale, Reconveyance  and
Damages survived the death of petitioner
 The question as to whether an action survives or not depends
on the nature of the action and the damage sued for. In the causes of
action which survive, the wrong complained [of] affects primarily and
principally property and property rights, the injuries to the person
being merely incidental, while in the causes of action which do not
survive, the injury complained of is to the person, the property and
rights of property affected being incidental
 If the case affects primarily and principally property and
property rights, then it survives the death of the plaintiff or petitioner.
 Petition for Declaration of Nullity of Deed of Sale of Real
Property is one relating to property and property rights, and therefore,
survives the death of the petitioner. Accordingly, the instant case for
annulment of sale of real property merits survival despite the death of
petitioner Memoracion Z. Cruz.
 When a party dies during the pendency of a case, Section 16,
Rule 3 of the 1997 Revised Rules of Civil Procedure necessarily
applies,
 The heirs of the deceased may be allowed to be substituted
for the deceased, without requiring the appointment of an executor or
administrator and the court may appoint a guardian ad litem for the
minor heirs.
 The court shall forthwith order said legal representative or
representatives to appear and be substituted within a period of thirty
(30) days from notice.
 If no legal representative is named by the counsel for the
deceased party, or if the one so named shall fail to appear within the
specified period, the court may order the opposing party, within a
specified time, to procure the appointment of an executor or
administrator for the estate of the deceased and the latter shall
immediately appear for and on behalf of the deceased. 
 In the instant case, petitioner (plaintiff) Memoracion Z. Cruz
died on 30 October 1996. Her counsel, Atty. Roberto T. Neri, notified
the trial court of such death on 13 January 1997, through a
Manifestation
 The legal representative of the deceased plaintiff is her son
EDGARDO CRUZ whose address is at No. 3231-E Tabora St., Bo.
Obrero, Tondo, Manila.
 Respondent Oswaldo Z. Cruz moved to dismiss the case
alleging that it did not survive Memoracion’s death. The RTC granted
the motion to dismiss
 We rule that it was error for the RTC to dismiss the case. As
mentioned earlier, the petition for annulment of deed of sale involves
property and property rights, and hence, survives the death of
petitioner Memoracion.
 The RTC was informed, of the death of Memoracion, and was
supplied with the name and address of her legal representative,
Edgardo Cruz.
 What the RTC could have done was to require Edgardo Cruz
to appear in court and substitute Memoracion as party to the pending
case, pursuant to Section 16, Rule 3 of the 1997 Revised Rules of
Civil Procedure, and established jurisprudence.
 We note that on 17 October 1997, Edgardo Cruz filed with the
RTC a Manifestation, stating that he is retaining the services of Atty.
Roberto T. Neri.
 We consider such Manifestation, signed by Memoracion’s
heir, Edgardo Cruz, and retaining Atty. Neri’s services as counsel,
a formal substitution of deceased Memoracion by her heir, Edgardo
Cruz. It also needs mention that Oswaldo Cruz, although also an heir
of Memoracion, should be excluded as a legal representative in the
case for being an adverse party therein
ALGURA V CITY OF NAGA
This was filed against the city of Naga for the alleged illegal demolition
of residences. The petitioners filed an Ex-Parte Motion to Litigate as
Indigent Litigants, appendng Algura's Pay Slip showing a gross
monthly income of PhP 10,474.00 and a Certification issued by the
Office of the City Assessor of Naga City, which stated that he had no
property declared in his name for taxation purposes. The Exec Judge
of RTC granted plea for exemption from filing fees. Resp filed a
Motion to Disqualify Plaintiffs for Non-Payment of Filing Fees and the
Naga City RTC granted this since they allegedly failed to substantiate
their claim for exemption. Petitioners alleged that the demolition led to
their losing their primary source of income (boarders). RTC denied
(not indicated that less than 3k)
FACTS
 Spouses Antonio F. Algura and Lorencita S.J. Algura filed a
Verified Complaint dated August 30, 1999 4 for damages against the
Naga City Government and its officers, arising from the alleged illegal
demolition of their residence and boarding house and for payment of
lost income derived from fees paid by their boarders amounting to
PhP 7,000.00 monthly.
 Simultaneously, petitioners filed an Ex-Parte Motion to
Litigate as Indigent Litigants, to which petitioner Antonio Algura's Pay
Slip No. 2457360 was appended, showing a gross monthly income of
Ten Thousand Four Hundred Seventy Four Pesos (PhP 10,474.00).
Also attached as Annex "B" to the motion was a July 14, 1999
Certification issued by the Office of the City Assessor of Naga City,
which stated that petitioners had no property declared in their name
for taxation purposes.
 Finding that petitioners' motion to litigate as indigent litigants
was meritorious, Executive Judge Jose T. Atienza of the Naga City
RTC, granted petitioners' plea for exemption from filing fees.
 Meanwhile, as a result of respondent Naga City
Government's demolition of a portion of petitioners' house, the
Alguras allegedly lost a monthly income of PhP 7,000.00 from their
boarders' rentals.
 With the loss of the rentals, the meager income from
Lorencita Algura's sari-sari store and Antonio Algura's small take
home pay became insufficient for the expenses of the Algura spouses
and their six (6) children
 Respondents filed an Answer with Counterclaim dated
October 10, 1999, arguing that the defenses of the petitioners in the
complaint had no cause of action, the spouses' boarding house
blocked the road right of way, and said structure was a nuisance per
se
 Respondents filed a Motion to Disqualify the Plaintiffs for
Non-Payment of Filing Fees 
 Naga City RTC: disqualifying petitioners as indigent litigants
on the ground that they failed to substantiate their claim for exemption
from payment of legal fees and to comply with the third paragraph of
Rule 141, Section 18 of the Revised Rules of Court—directing them to
pay the requisite filing fees
 Trial court issued an Order giving petitioners the opportunity
to comply with the requisites laid down in Section 18, Rule 141, for
them to qualify as indigent litigants.
 Petitioners submitted their Compliance attaching the affidavits
of petitioner Lorencita Algura and Erlinda Bangate, to comply with the
requirements of then Rule 141, Section 18 of the Rules of Court and
in support of their claim to be declared as indigent litigants.
 Affidavit, petitioner Lorencita Algura claimed that the
demolition of their small dwelling deprived her of a monthly income
amounting to PhP 7,000.00. She, her husband, and their six (6) minor
children had to rely mainly on her husband's salary as a policeman
which provided them a monthly amount of PhP 3,500.00, more or
less. Also, they did not own any real property 
 To buttress their position as qualified indigent litigants,
petitioners also submitted the affidavit of Erlinda Bangate, who
attested under oath, that she personally knew spouses Antonio Algura
and Lorencita Algura, who were her neighbors; that they derived
substantial income from their boarders; that they lost said income
from their boarders' rentals when the Local Government Unit of the
City of Naga
 RTC: denied MR
 Judge Barsaga ratiocinated that the pay slip of Antonio F.
Algura showed that the "GROSS INCOME or TOTAL EARNINGS of
plaintiff Algura [was] ₧10,474.00 which amount [was] over and above
the amount mentioned in the first paragraph of Rule 141, Section 18
for pauper litigants residing outside Metro Manila." Said rule provides
that the gross income of the litigant should not exceed PhP 3,000.00 a
month and shall not own real estate with an assessed value of PhP
50,000.00.
 The trial court found that, in Lorencita S.J. Algura's May 13,
2000 Affidavit, nowhere was it stated that she and her immediate
family did not earn a gross income of PhP 3,000.00.
ISSUE/S && RATIO
WON petitioners should be considered as indigent litigants who
qualify for exemption from paying filing fees- REMANDED to
determine whether petitioners can be considered as indigent litigants
using the standards set in Rule 3, Section 21.
 A review of the history of the Rules of Court on suits in forma
pauperis (pauper litigant) is necessary before the Court rules on the
issue of the Algura spouses' claim to exemption from paying filing
fees.
 It is undisputed that the Complaint (Civil Case No. 99-4403)
was filed on September 1, 1999. However, the Naga City RTC, in its
April 14, 2000 and July 17, 2000 Orders, incorrectly applied Rule 141,
Section 18 on Legal Fees when the applicable rules at that time
were Rule 3, Section 21 on Indigent Party which took effect on July 1,
1997 and Rule 141, Section 16 on Pauper Litigants which became
effective on July 19, 1984 up to February 28, 2000.
 The old Section 16, Rule 141 requires applicants to file an ex-
parte motion to litigate as a pauper litigant by submitting an affidavit
that they do not have a gross income of PhP 2,000.00 a month or PhP
24,000.00 a year for those residing in Metro Manila and PhP 1,500.00
a month or PhP 18,000.00 a year for those residing outside Metro
Manila or those who do not own real property with an assessed value
of not more than PhP 24,000.00 or not more than PhP 18,000.00 as
the case may be.
 Thus, there are two requirements: a) income requirement—
the applicants should not have a gross monthly income of more than
PhP 1,500.00, and b) property requirement––they should not own
property with an assessed value of not more than PhP 18,000.00.
 In the case at bar, petitioners Alguras submitted the Affidavits
of petitioner Lorencita Algura and neighbor Erlinda Bangate, the pay
slip of petitioner Antonio F. Algura showing a gross monthly income of
PhP 10,474.00, and a Certification of the Naga City assessor stating
that petitioners do not have property declared in their names for
taxation
 Undoubtedly, petitioners do not own real property as shown
by the Certification of the Naga City assessor and so the property
requirement is met.
 However with respect to the income requirement, it is clear
that the gross monthly income of PhP 10,474.00 of petitioner Antonio
F. Algura and the PhP 3,000.00 income of Lorencita Algura when
combined, were above the PhP 1,500.00 monthly income threshold
prescribed by then Rule 141, Section 16 and therefore, the income
requirement was not satisfied.
 The trial court was therefore correct in disqualifying
petitioners Alguras as indigent litigants
 Petitioners Motion for Reconsideration: rules have been
relaxed by relying on Rule 3, Section 21 of the 1997 Rules of Civil
procedure which authorizes parties to litigate their action as indigents
if the court is satisfied that the party is "one who has no money or
property sufficient and available for food, shelter and basic necessities
for himself and his family." The trial court did not give credence to this
view of petitioners and simply applied Rule 141 but ignored Rule 3,
Section 21 on Indigent Party
 The Court rules that Rule 3, Section 21 and Rule 141, Section
16 are still valid and enforceable rules on indigent litigants
 For one, the history of the two seemingly conflicting rules
readily reveals that it was not the intent of the Court to consider the
old Section 22 of Rule 3, which took effect on January 1, 1994 to have
been amended and superseded by Rule 141, Section 16, which took
effect on July 19, 1984 through A.M. No. 83-6-389-0.  evidence to disprove the evidence presented by the applicant; after
 The fact that Section 22 which became Rule 3, Section 21 on
indigent litigant was retained in the rules of procedure, even
elaborating on the meaning of an indigent party, and was also
strengthened by the addition of a third paragraph on the right to
contest the grant of authority to litigate only goes to show that there
was no intent at all to consider said rule as expunged from the 1997
Rules of Civil Procedure
 Instead of declaring that Rule 3, Section 21 has been
superseded and impliedly amended by Section 18 and later Section
19 of Rule 141, the Court finds that the two rules can and should be
harmonized.
 When an application to litigate as an indigent litigant is filed,
the court shall scrutinize the affidavits and supporting documents
submitted by the applicant to determine if the applicant complies with
the income and property standards prescribed in the present Section
19 of Rule 141—that is, the applicant's gross income and that of the
applicant's immediate family do not exceed an amount double the
monthly minimum wage of an employee; and the applicant does not
own real property with a fair market value of more than Three
Hundred Thousand Pesos (PhP 300,000.00). If the trial court finds
that the applicant meets the income and property requirements, the
authority to litigate as indigent litigant is automatically granted and the
grant is a matter of right.
 However, if the trial court finds that one or both requirements
have not been met, then it would set a hearing to enable the applicant
to prove that the applicant has "no money or property sufficient and
available for food, shelter and basic necessities for himself and his
family." In that hearing, the adverse party may adduce countervailing
which the trial court will rule on the application depending on the
evidence adduced.
 In addition, Section 21 of Rule 3 also provides that the
adverse party may later still contest the grant of such authority at any
time before judgment is rendered by the trial court, possibly based on
newly discovered evidence not obtained at the time the application
was heard.
 If the court determines after hearing, that the party declared
as an indigent is in fact a person with sufficient income or property,
the proper docket and other lawful fees shall be assessed and
collected by the clerk of court. If payment is not made within the time
fixed by the court, execution shall issue or the payment of prescribed
fees shall be made, without prejudice to such other sanctions as the
court may impose.
 The Court concedes that Rule 141, Section 19 provides
specific standards while Rule 3, Section 21 does not clearly draw the
limits of the entitlement to the exemption.
 Knowing that the litigants may abuse the grant of authority,
the trial court must use sound discretion and scrutinize evidence
strictly in granting exemptions, aware that the applicant has not
hurdled the precise standards under Rule 141.
mandatory. On the other hand, when the application does not satisfy
one or both requirements, then the application should not be denied
outright; instead, the court should apply the "indigency test" under
Section 21 of Rule 3 and use its sound discretion in determining the
merits of the prayer for exemption.

 The trial court must also guard against abuse and misuse of
the privilege to litigate as an indigent litigant to prevent the filing of
exorbitant claims which would otherwise be regulated by a legal fee
requirement.

 Thus, the trial court should have applied Rule 3, Section 21 to

the application of the Alguras after their affidavits and supporting
documents showed that petitioners did not satisfy the twin
requirements on gross monthly income and ownership of real property
under Rule 141. Instead of disqualifying the Alguras as indigent
litigants, the trial court should have called a hearing as required by
Rule 3, Section 21 to enable the petitioners to adduce evidence to
show that they didn't have property and money sufficient and
available for food, shelter, and basic necessities for them and their
family.

 Since this Court is not a trier of facts, it will have to remand

the case to the trial court to determine whether petitioners can be
considered as indigent litigants using the standards set in Rule 3,
Section 21.

 Recapitulating the rules on indigent litigants, therefore, if the

applicant for exemption meets the salary and property requirements
under Section 19 of Rule 141, then the grant of the application is