Philippine Veterans Bank v.

Spouses Sabado

G.R. No. 224204; Aug. 30 2017

Principle:

- An indispensable party is one whose interest will be affected by the court’s action in the
litigation, and without whom no final determination of the case can be had. The party’s
interest in the subject matter of the suit and in the relief sought are so inextricably
intertwined with the other parties’ that his legal presence as a party to the proceeding is an
absolute necessity. In his absence, all subsequent actions of the court are null and void for
want of authority to act.

Facts:

- HTPMI entered a contract to sell with Respondent spouses Sabado.

- The contract to sell has a condition that upon failure of respondent to pay shall be a ground for
cancellation of the contract to sell and forfeiture of the down payment.
- Subsequently, by virtue of a deed of assignment HTPMI assigned the rights to collect payments
and enforce obligations in the contract to sell except the ownership to Petitioner Philippine
Veterans Bank.
- Upon demand by petitioner and respondents’ failure to pay and refusal to vacate the premises,
the petitioner instituted this unlawful detainer case by herein petitioner.

Respondents’ argument

- Only the rights to the receivables under the contract to sell and not the ownership and
possession was transferred.
- HTPMI having the right of ownership is an indispensable party or the real party in interest.

MTCC and RTC ruling:

- By virtue of the Deed of assignment petitioner was subrogated the rights of HTPMI, hence, PVB
is the real party-in-interest in the case.
- That it was not only the right to collect balance but also all the rights of the assignors including
the rights to sue in its own as the legal assignee.

CA Ruling:

- Reversed the ruling stating that HTPMI must be impleaded since legal title to the subject
property was retained by HTPMI pursuant to the provisions of the deed of assignment.
- HTPMI is not just the real party in interest but also an indispensable party which should be
impleaded.

Issue:

Whether or not HTPMI is a real party in interest?

Held:

HTPMI is not a real party in interest.

An indispensable party is one who has an interest in the subject matter of the controversy which is
inseparable from the interest of the other parties and that a final adjudication cannot be made without
affecting such interest.

In the present case, the only issue in the instant unlawful detainer suit is who between the litigating
parties has the better right to possess de facto the subject property. Thus HTPMI’s interest in the subject
property as one holding legal title thereto is completely separable from petitioner’s rights under the
contract to sell which includes the cancellation or rescission of such contract and resultantly, the
recovery of actual possession of the subject property by virtue of this case.