Tumagan v.

Kairuz

G.R. No. 198124; Sept. 12, 2018

Principle:

- An indispensable party is a party in interest without whom no final determination can be

had of an action and who shall be joined either as plaintiffs or defendants. The presence of
indispensable parties is necessary to vest the court of jurisdiction.
- Intra-corporate disputes are cognizable by RTC and not the MCTC.

Facts:

- Mariam Kairuz filed a complaint for ejectment in the MCTC of Benguet as she was ejected by
Petitioner John Tumagan together with armed men and padlocked the entrance of her lot.
- Petitioner contended that the lot was already a subject of a transfer by her late husband to BIRI
and subjected to a MOA.
- That respondent cannot deny knowledge of such transfer as she was the successor of her
husband, and a part of the ManCom of BIRI together with the petitioner.
- That the bringing of security guards and padlocking the lot, was part of the petitioner’s duty as
agent of BIRI corporation to not let in persons who are persona non grata in the property as
respondent failed to do her part of the MOA entered into BIRI and the Kairuzes.

Argument of Petitioner

- Ejectment was proper since she was ejected from the property she owned with the use of force.
- The Kairuzes are co-owner of such lot as they held 30% share of the BIRI corporation.
- MCTC has proper jurisdiction over the case as it is a possession issue and not an intra-corporate
dispute.

Argument of Respondent

- It was an intra-corporate dispute as he was only exercising his duty as an agent of the
corporation against a shareholder.
- BIRI corporation is an indispensable party since such lot is owned by the corporation.
- Lot was already owned by the corporation and not co-owned by the Kairuzes as it was already
subjected to a transfer and was subject of a Memorandum of Agreement between PASUDECO
and the Kairuzes.

Ruling of the MCTC and RTC

- Dismissed the case for not impleading indispensable party

CA ruled

- Set aside previous ruling

- Non-joinder of indispensable party not a ground for dismissal
- Not an intra-corporate dispute since possession of land is in question.

Issue:
 Whether or not the indispensable parties are impleaded.

Whether or not that was an intra-corporate dispute cognizable by the RTC and not the MCTC

Held:

No, the indispensable party was not joined.

Joinder of indispensable parties is not a mere technicality, it is mandatory and the responsibility of
impleading all the indispensable parties’ rests on the plaintiff. Their absence renders all subsequent
actions of the court null and void for want of authority to act not only as to the absent party but even as
to those present.

The MCTC and RTC correctly held that BIRI is an indispensable party, being the registered owner of the
lot at whose behest the petitioner-employee acted. Thus without the participation of BRII, there could
be no full determination of the issues in this case considering that it was sufficiently established that
petitioners did not take possession of the property for their own use but for that of BIRI’s.

It is an intra-corporate dispute cognizable by the proper RTC.

There are two elements here to be considered to determine the existence of an intra-corporate
controversy (a) the status or relationship of the parties; and (b) the nature of the question that is the
subject of their controversy.

While it was correctly pointed out by the CA that the non-joinder of indispensable parties does not
warrant dismissal, however, a remand of the case to the MCTC cannot be had as they did not have any
authority to decide the case since this case involves an intra-corporate controversy between the
shareholder Mariam Kairuz and BIRI corporation. The lot was not co-owned by the Kairuzes just because
they held 30% share of the BIRI corporation. The lot is a corporate property by virtue of the transfer.
What appears is that the true controversy is that of a shareholder seeking relief from the court to
contest the management decision to post guards, padlock premises and deny her access to property.