REBECCA PACAÑA-CONTRERAS and ROSALIE PACAÑA v.

ROVILA WATER SUPPLY

FACTS:

>Rebecca Pacaña-Contreras and Rosalie Pacaña, children of Lourdes Teves Pacaña and Luciano Pacaña,
their family had been operating a water supply business, known as Rovila Water Supply

>One of their trusted employees, Lilia, allegedly hid business records, burned and ransacked the family
files, posted security guards and barred the members of the Pacaña family from operating their
business, and claimed ownership over the family business through an SEC-registered corporation named
"Rovila Water Supply, Inc."

>In forming Rovila Water Supply, Inc., Lilia, et al. allegedly used the name of Lourdes (the mother of the
petitioners) as one of the incorporators and made it appear in the SEC documents that the family
business was operated in a place other than the Pacaña residence.

>Upon discovery of this modus, Rebecca and Rosalie filed an action in their own names for accounting
and damages against herein respondents. Their parents, Lourdes and Luciano, who were the owners of
the family business, did not file any action. Lourdes and Luciano died during the pendency of the suit.

>The respondents contended that the deceased Lourdes and Luciano were the real parties in interest in
the case. As such, Rebecca and Rosalie were not the real parties in interest to institute and prosecute
the case and that they did not have a valid cause of action against herein respondents. Hence, the
instant petition.

PROCEDURAL HISTORY:

>Respondents filed a motion to dismiss on the ground that the RTC had no jurisdiction over an intra-
corporate controversy. Motion was denied.

>They later filed another motion to dismiss on the ground of failure to state a cause of action.

>Respondents filed an appeal before the CA, which reversed the RTC ruling.

>Petition to SC

ISSUE: W/N Petitioners Rebecca and Rosalie should be impleaded as parties in the case.

RULING: YES.  

A 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.

At the inception of the present case, both the spouses Lourdes and Lucio 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.

Since the complaint was instituted by their children, the proper remedy is to implead Lourdes and Lucio
as indispensable parties. But this is impossible to do now, given that both the elderly Pacañas are
already dead. Upon their death, however, their ownership and rights over their properties were
transmitted to their heirs, including Rebecca and Rosalie.

Given that the outcome of the present case has a bearing on the hereditary rights of Rebecca and
Rosalie, the two are therefore deemed indispensable parties themselves who should be impleaded as
parties-plaintiffs.

GOLANGCO VS FUNG

Facts:

>Golangco as a complainant inititated a prosecution for libel against the respondent Fung in RTC

>Allegedly, the respondent had issued an office memorandum dated May 10, 1995 maliciously imputing
against the petitioner the commission of bribery and had sent copies of the memorandum to the
petitioners’ superiors in the POEA and to other public officers and personalities not connected with the
POEA and to other Public Officers causing damage and prejudice to the petitioner.

>On hearing day, the Prosecution still failed to present Atty. Ramos as its witness because no subpoena
had been issued to and served on him for the purpose.

>RTC judge issued an order terminating the Prosecution’s presentation of evidence

>Petitioner went to CA on certiorari to assail the order and claimed that the RTC Judge committed grave
abuse of discretion for not issuing subpoena to require ATTY. Ramos to appear and testify

>CA rejected the petitioner and dismissed the petition for certiorari. Hence, a petition for review on
certiorari was filed.

PROCEDURAL HISTORY:

>RTC judge issued an order terminating the Prosecution’s presentation of evidence

>Petitioner went to CA on certiorari to assail the order and claimed that the RTC Judge committed grave
abuse of discretion

>CA rejected the petitioner and dismissed the petition for certiorari.

>Hence, a petition for review on certiorari to SC

ISSUE: W/N the Court of Appeals correctly ruled on the petition for certiorari of the petitioner.

RULING: YES.

We point out the gross procedural misstep committed by the petitioner in the Court of Appeals.
The petitioner did not join the People of the Philippines as a party in his action for certiorari in the Court
of Appeals. He thereby ignored that the People of the Philippines were indispensable parties due to his
objective being to set aside the trial court's order dated May 23, 2001 that concerned the public aspect
of Criminal Case No. 95-145703. The omission was fatal and already enough cause for the summary
rejection of his petition for certiorari.

The petitioner did not also obtain the consent of the Office of the Solicitor General (OSG) to his petition
for certiorari. At the very least, he should have furnished a copy of the petition for certiorari to the OSG
prior to the filing thereof,8 but even that he did not do. Thereby, he violated Section 35(l), Chapter 12,
Title III of Book IV of Executive Order No. 292 (The Administrative Code of 1987), which mandates the
OSG to represent "the Government in the Supreme Court and the Court of Appeals in all criminal
proceedings; represent the Government and its officers in the Supreme Court, the Court of Appeals, and
all other courts or tribunals in all civil actions and special proceedings in which the Government or any
officer thereof in his official capacity is a party.

EQUITABLE PCI BANK, INCvs. HEIRS OF ANTONIO C. TIU

FACTS:

>Gabriel Ching obtained a loan from petitioner Equitable PCI Bank the aggregate amount of ₱7 Million.
Antonio C. Tiu (Antonio), of which herein respondents allege to be heirs a Real Estate Mortgage (REM) in
favor of petitioner covering a lot located in Tacloban City.

>Before the words "With my Marital Consent" appearing in the REM is a signature attributed to
Antonio’s wife Matilde

> Antonio died on December 26, 1999. The loan obligation having remained unsettled, petitioner filed in
before the Regional Trial Court (RTC) of Tacloban City a "Petition for Sale" for the extrajudicial
foreclosure of the AREM and the sale at public auction of the lot covered thereby.

>Respondents filed a Complaint/Petition before the RTC of Tacloban against petitioner and the Clerk of
Court-Ex Oficio Sheriff, for annulment of the AREM on the ground that the said AREM is without force
and effect, the same having been executed without the valid consent of the wife of mortgagor Antonio
C. Tiu who at the time of the execution of the said instrument was already suffering from advance
Alzheimer’s Disease and, henceforth, incapable of giving consent, more so writing and signing her name.

>Petitioner filed a motion to dismiss on the grounds that the plaintiffs/petitioners not being the real
parties-in-interest, their complaint states no cause of action; even if there is a cause of action, the same
is already barred by the statute of limitations; and the present action being a personal one, the venue is
improperly laid.

PROCEDURAL HISTORY:

>Petitioner filed in before the Regional Trial Court (RTC) of Tacloban City a "Petition for Sale

>Respondents filed a Complaint/Petition before the RTC of Tacloban against petitioner and the Clerk of
Court-Ex Oficio Sheriff, for annulment of the AREM

>The RTC issued a temporary restraining order.

> Petitioner filed a motion to dismiss on the grounds that the plaintiffs/petitioners not being the real
parties-in-interest

>The RTC denied the motion to dismiss

>Affirmed by the Court of Appeals.

>Hence, Petition to SC

ISSUE: W/N the complaint filed by respondents-children of Antonio, without impleading Matilde who
must also be Antonio’s heir and who, along with Antonio, was principally obliged under the AREM
sought to be annulled, is dismissible for lack of cause of action.

HELD: YES. The AREM was executed by Antonio, with the marital consent of Matilde. Since the
mortgaged property is presumed conjugal, she is obliged principally under the AREM. It is thus she,
following Art. 1397 of the Civil Code vis a vis Sec. 2 of Rule 3 of the Rules of Court, who is the real party
in interest, hence, the action must be prosecuted in her name as she stands to be benefited or injured in
the action. Assuming that Matilde is indeed incapacitated, it is her legal guardian who should file the
action on her behalf. Not only is there no allegation in the complaint, however, that respondents have
been legally designated as guardians to file the action on her behalf. The name of Matilde, who is
deemed the real party in interest, has not been included in the title of the case, in violation of Sec. 3 of
Rule 3 of the Rules of Court.

WHEREFORE, the petition is GRANTED

WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA TOURIST & DEVELOPMENT
CORPORATION, Petitioners,
vs.
CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent.

Facts:

>City Mayor Alfredo S. Lim signed into law Manila City Ordinance No. 7774 entitled “An Ordinance
Prohibiting Short-Time Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels,
Motels, Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila” (the
Ordinance).” The ordinance sanctions any person or corporation who will allow the admission and
charging of room rates for less than 12 hours or the renting of rooms more than twice a day.

>The petitioners White Light Corporation (WLC), Titanium Corporation (TC), and Sta. Mesa Tourist and
Development Corporation (STDC), who own and operate several hotels and motels in Metro Manila,
filed a motion to intervene and to admit attached complaint-in-intervention on the ground that the
ordinance will affect their business interests as operators. The respondents, in turn, alleged that the
ordinance is a legitimate exercise of police power.

>RTC declared Ordinance No. 7774 null and void as it “strikes at the personal liberty of the individual
guaranteed and jealously guarded by the Constitution.” Reference was made to the provisions of the
Petitioners argued that the ordinance is unconstitutional and void since it violates the right to privacy
and freedom of movement; it is an invalid exercise of police power; and it is unreasonable and
oppressive interference in their business.

>CA, in turn, reversed the decision of RTC and affirmed the constitutionality of the ordinance Hence, the
petitioners appeared before the SC.

PROCEDURAL HISTORY:

>Petitioner filed a motion to intervene and to admit attached complaint-in-intervention

>RTC declared Ordinance No. 7774 null and void

>CA, in turn, reversed the decision of RTC and affirmed the constitutionality of the ordinance

>Hence, the petitioners appeared before the SC.

Issue:

Whether Ordinance No. 7774 is a valid exercise of police power of the State.

Held:

No. Ordinance No. 7774 cannot be considered as a valid exercise of police power, and as such, it is
unconstitutional.

The test of a valid ordinance is well established. A long line of decisions including City of Manila has held
that for an ordinance to be valid, it must not only be within the corporate powers of the local
government unit to enact and pass according to the procedure prescribed by law, it must also conform
to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2)
must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but
may regulate trade; (5) must be general and consistent with public policy; and (6) must not be
unreasonable.

Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary
intrusion into private rights.
The behavior which the ordinance seeks to curtail is in fact already prohibited and could in fact be
diminished simply by applying existing laws. Less intrusive measures such as curbing the proliferation of
prostitutes and drug dealers through active police work would be more effective in easing the situation.
So would the strict enforcement of existing laws and regulations penalizing prostitution and drug use.
These measures would have minimal intrusion on the businesses of the petitioners and other legitimate
merchants. Further, it is apparent that the ordinance can easily be circumvented by merely paying the
whole day rate without any hindrance to those engaged in illicit activities. Moreover, drug dealers and
prostitutes can in fact collect “wash rates” from their clientele by charging their customers a portion of
the rent for motel rooms and even apartments.

The ordinance needlessly restrains the operation of the businesses of the petitioners as well as
restricting the rights of their patrons without sufficient justification. The ordinance rashly equates wash
rates and renting out a room more than twice a day with immorality without accommodating innocuous
intentions.