C. Parties to Civil Actions (Rule 3)

D. Parties to Civil Actions (Rule 3)

• Kinds of parties
• Joinder of parties
• Compulsory
• Permissive
• Third (Fourth, etc.) Parties
• Class Suit
• Death of a Party
• Transfer of Interest

> 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. The term “plaintiff” may refer to the claiming party, the counter-claimant, the cross-claimant, or the third (fourth, etc.)[-]party plaintiff. The term “defendant” may refer to the original defending party, the defendant in a counterclaim, the cross-defendant, or the third (fourth, etc.)[-]party defendant. (1a) 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. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. (2a) Section 3. Representatives as parties. – Where the action is allowed to be prosecuted or defended by a representative or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest. A representative may be a trustee of an express trust, a guardian, an executor or administrator, or a party authorized by law or these Rules. An agent acting in his own name and for the benefit of an undisclosed principal may sue or be sued without joining the principal except when the contract involves things belonging to the principal. (3a) Section 4. Spouses as parties. – Husband and wife shall sue or be sued jointly, except as provided by law. (4a) Section 5. Minor or incompetent persons. – A minor or a person alleged to be incompetent, may sue or be sued, with the assistance of his father, mother, guardian, or if he has none, a guardian ad litem. (5a) Section 6. Permissive joinder of parties. – All persons in whom or against whom any right to relief in respect to or arising out of the same transaction or series of transactions is alleged to exist, whether jointly, severally, or in the alternative, may, except as otherwise provided in these Rules, join as plaintiffs or be joined as defendants in one complaint, where any question of law or fact common to all such plaintiffs or to all such defendants may arise in the action; but the court may make such orders as may be just to prevent any plaintiff or defendant from being embarrassed or put to expense in connection with any proceedings in which he may have no interest. (6) Section 7. Compulsory joinder of indispensable parties. – Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. (7) Section 8. Necessary party. – A necessary party 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. (8a) Section 9. Non-joinder of necessary parties to be pleaded. – Whenever in any pleading in which a claim is asserted a necessary party is not joined, the pleader shall set forth his name, if known, and shall state why he is omitted. Should the court find the reason for the omission unmeritorious, it may order the inclusion of the omitted necessary party if jurisdiction over his person may be obtained. The failure to comply with the order for his inclusion, without justifiable cause, shall be deemed a waiver of the claim against such party. The non-inclusion of a necessary party does not prevent the court from proceeding in the action, and the judgment rendered therein shall be without prejudice to the rights of such necessary party. (8a, 9a) Section 10. Unwilling co-plaintiff. – If the consent of any party who should be joined as plaintiff can not be obtained, he may be made a defendant and the reason therefor shall be stated in the complaint. (10) Section 11. Misjoinder and non-joinder of parties. – Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined party may be severed and proceeded with separately. (11a) Section 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 representative as to fully protect the interests of all concerned may sue or defend for the benefit of all. Any party in interest shall have the right to intervene to protect his individual interest. (12a) Section 13. Alternative defendants. – Where the plaintiff is uncertain against who of several persons he is entitled to relief, he may join any or all of them as defendants in the alternative, although a right to relief against one may be inconsistent with a right of relief against the other. (13a) Section 14. Unknown identity or name of defendant. – Whenever the identity or name of a defendant is unknown, he may be sued as the unknown owner, heir, devisee, or by such other designation as the case may require; when his identity or true name is discovered, the pleading must be amended accordingly. (14) Section 15. Entity without juridical personality as defendant. – When two or more persons not organized as an entity with juridical personality enter into a transaction, they may be sued under the name by which they are generally or commonly known. In the answer of such defendant, the names and addresses of the persons composing said entity must all be revealed. (15a) Section 16. Death of party; duty of counsel. – Whenever a party to a pending action dies, and the claim is not thereby extinguished, it shall be the duty of his counsel to inform the court within thirty (30) days after such death of the fact thereof, and to give the name and address of his legal representative or representatives. Failure of counsel to comply with this duty shall be a ground for disciplinary action. 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. The court charges in procuring such appointment, if defrayed by the opposing party, may be recovered as costs. (16a, 17a) Section 17. Death or separation of a party who is a public officer. – When a public officer is a party in an action in his official capacity and during its pendency dies, resigns, or otherwise ceases to hold office, the action may be continued and maintained by or against his successor if, within thirty (30) days after the successor takes office or such time as may be granted by the court, it is satisfactorily shown to the court by any party that there is a substantial need for continuing or maintaining it and that the successor adopts or continues or threatens to adopt or continue the action of his predecessor. Before a substitution is made, the party or officer to be affected, unless expressly assenting thereto, shall be given reasonable notice of the application therefor and accorded an opportunity to be heard. (18a) Section 18. Incompetency or incapacity. – If a party becomes incompetent or incapacitated, the court, upon motion with notice, may allow the action to be continued by or against the incompetent or incapacitated person assisted by his legal guardian or guardian ad litem. (19a) Section 19. Transfer of interest. – In case of any transfer of interest, the action may be continued by or against the original party, unless the court upon motion directs the person to whom the interest is transferred to be substituted in the action or joined with the original party. (20) Section 20. Action on contractual money claims. – When the action is for recovery of money arising from contract, express or implied, and the defendant dies before entry of final judgment in the court in which the action was pending at the time of such death, it shall not be dismissed but shall instead be allowed to continue until entry of final judgment. A favorable judgment obtained by the plaintiff therein shall be enforced in the manner especially provided in these Rules for prosecuting claims against the estate of a deceased person. (21a) Section 21. Indigent party. – A party may be authorized to litigate his action, claim or defense as an indigent if the court, upon an ex parte application and hearing, 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. Such authority shall include an exemption from payment of docket and other lawful fees, and of transcripts of stenographic notes which the court may order to be furnished him. The amount of the docket and other lawful fees which the indigent was exempted from paying shall be a lien on any judgment rendered in the case favorable to the indigent, unless the court otherwise provides. Any adverse party may contest the grant of such authority at any time before judgment is rendered by the trial court. If the court should determine 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 thereof, without prejudice to such other sanctions as the court may impose. (22a) Section 22. Notice to the Solicitor General. – In any action involving the validity of any treaty, law, ordinance, executive order, presidential decree, rules or regulations, the court, in its discretion, may require the appearance of the Solicitor General who may be heard in person or through a representative duly designated by him. (23a)

Who May Be Parties: (NJE) Only the following may be parties to a civil action

• Natural persons;
• Juridical persons; and
• Entities authorized by law.

The JURIDICAL persons who may be parties to a civil action:

• The State and its political subdivisions;
• Other corporations, institutions and entities for public interest or purpose, created by law; and
• Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder, partner or member (Civil Code, Art. 44)

Definition of residencee

The term “resides” as employed in the rule means the place of abode, whether permanent or temporary, of the plaintiff or defendant, as distinguished from “domicile” which denotes a fixed permanent residence to which, when absent, one has the intention of returning. [Dangwa Transportation Company v. Sarmiento, G.R. No. L-22795 (1977)]

The residence of a person is his personal, actual or physical habitation or his actual residence or place of abode, which may not necessarily be his legal residence or domicile provided he resides therein with continuity and consistency [Boleyley v. Villanueva, G.R. No. 128734 (1999)]

A corporation cannot be allowed to file personal actions in a place other than its principal place of business unless such place is also the residence of a co-plaintiff or defendant. [Davao Light v. CA, G.R. No. 111685 (2001)]

REAL PARTIES IN INTEREST; INDISPENSABLE PARTIES; REPRESENTATIVES AS PARTIES; NECESSARY PARTIES; INDIGENT PARTIES; ALTERNATIVE DEFENDANTS

Real Party in Interest

One who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. (Rule 3, Sec. 2)

“Interest” within the meaning of the rule, means material interest, an interest in issue and to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest. (Republic v. Coalbrine Int’l Philippines, Inc., G.R. No. 161838, 2010)

[We find] no merit to petitioners’ contention that they are not real parties-in-interest since they are not parties nor signatories to the contract and hence should not have been impleaded as defendants. It is undeniable that petitioner Chan is an heir of Ramon Chan and, together with petitioner Co, was a successor-in-interest to the restaurant business of the late Ramon Chan. Both continued to operate the business after the death of Ramon. Thus, they are real parties-in-interest in the case filed by private respondent, notwithstanding that they are not signatories to the Contract of Lease. (Sui Man Hui Chan v. CA, G.R. No. 147999, 2004)

Every action must be prosecuted and defended in the name of the real party-in-interest.

Exceptions:

• A beneficiary of a stipulation pour autrui may demand fulfillment of the contract. (Civil Code, Art. 1311). A beneficiary is a real party in interest/indispensable party.
• Those who are not principally or subsidiarily obligated in a contract may show the detriment that could result from it i.e., when contracts entered into in fraud of creditors may be rescinded when the creditors cannot collect the claims due them. (Civil Code, Art. 1318)

Defendant

The defendants are all the co-owners of the disputed property. All the co-owners MUST be joined. Accordingly, an action will not lie without the joinder of all co-owners and other persons having interest in the property. (Reyes v. Cordero, G.R. No. L-14242, 1920).

All the co-owners, therefore, are INDISPENSABLE parties.

Non-Inclusion of a Co-Owner

• Non-inclusion of co-owner BEFORE judgment: not a ground for motion to dismiss. The remedy is to file a motion to include party;
• Non-inclusion of co-owner AFTER judgment: judgment is VOID because co-owners are indispensable parties.

Note: Creditors/assignees of co-owners may intervene and object to a partition effected without their concurrence. However, the creditors/assignees cannot impugn a partition already executed, unless:

• There has been fraud; or
• In case partition was made notwithstanding a formal opposition presented to prevent it.

The intervenor must show a legitimate and proper interest in the subject property (De Borja v. Jugo, G.R.Nno. 45297, 1937)

Note: The Municipal Trial Court MAY HAVE JURISDICTION in actions for partition if the value of the real property is less than Three Hundred Thousand (P300,000) if not in Metro Manila or less than Four Hundred Thousand (P400,000) if located in Metro Manila.

Indispensable Party

A real party-in-interest without whom NO FINAL DETERMINATION can be had of an action. They are those with such an interest in the controversy that a final adjudication cannot be made, in his absence, without injuring or affecting that interest. (Rule 3, Sec. 7)

Without the presence of this party the judgment of a court cannot attain real finality. (Servicewide Specialists, Inc. v. CA, G.R. No. 110048, 1999)

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 those present. (MWSS v. Court of Appeals, G.R. No. 126000, 1998)

When an indispensable party is not before the court, the action should be dismissed. However, outright dismissal is not the immediate remedy for failure to implead an indispensable party; parties may be dropped or added at any stage upon motion of any party or on court’s own initiative; only when the order of the court to implead an indispensable party goes unheeded may the case be dismissed. (Riano, 2014, p. 279)

In an action for the cancellation of memorandum annotated at the back of a certificate of title, the persons considered as indispensable include those whose liens appear as annotations pursuant to Section 108 of Presidential Decree (PD) No. 1529. The reason behind the compulsory joinder of indispensable parties is the complete determination of all possible issues, not only between the parties themselves but also as regards other persons who may be affected by the judgment. (Crisologo v. JEWM Agro, G.R. No. 196894, 2014)

NOTE: While the general rule is that joinder of parties is permissive, it becomes compulsory when the one involved is an indispensable party.

Necessary Party

A necessary party is not an indispensable party. He is ought to be joined as a party if COMPLETE RELIEF is to be accorded as to those already parties; he should be joined whenever possible.

The non-inclusion of a necessary party does NOT prevent the court from proceeding in the action, and the judgment rendered therein shall be without prejudice to the rights of such necessary party. (Agro Conglomerates, Inc. v. CA, G.R. No. 117660, 2000)

DEFINITIONS AND DISTINCTION

WHO MAY INSTITUTE THE ACTION AND WHEN; AGAINST WHOM MAY THE ACTION BE MAINTAINED

Duty of a Pleader When a Necessary Party is NOT Joined:

• Set forth the name of the said necessary party, if known; and
• State the reason why the necessary party is omitted (Rule 3, Sec. 9)

NOTE: If the reason given for the non-joinder of the necessary party is found by the court to be unmeritorious, it may order the pleader to join the omitted party if jurisdiction over his person may be obtained. Failure to comply with such order without justifiable cause shall be deemed a waiver of the claim against such party. (Rule 3, Sec. 9)

Where the obligation of the parties is solidary, either of the parties is indispensable, and the other is not even a necessary party because complete relief is available from either. (Cerezo v. Tuazon, G.R. No. 141538, 2004)

Representatives as Parties

Even where the action is allowed to be prosecuted or defended by a representative party or someone acting in a fiduciary capacity, the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest (Rule 3, Sec. 3)

NOTE: Impleading the beneficiary as a party is mandatory.

The attorney in fact of the principal plaintiff filed the complaint in his residence. An attorney in fact is not a real party in interest. Hence, his residence is immaterial. A real party in interest is the party who, by the substantive law has the right sought to be enforced. Nowhere in Rule 3, Sec. 3 is it stated or implied that the representative is likewise deemed as the real party in interest. The Rule simply states that in actions which are allowed to be prosecuted or defended by a representative, the beneficiary shall be deemed the real party in interest and hence, should be included in the title of the case. (Ang v. Ang, G.R. No. 186993, 2012)

If a complaint is filed for and in behalf of the plaintiff [by one] who is not authorized to do so, the complaint is not deemed filed. An unauthorized complaint does not produce any legal effect. Hence, the court should dismiss the complaint on the ground that it has no jurisdiction over the complaint and the plaintiff (Palmiano-Salvador v. Angeles, G.R. No. 171219, 2012)

Grandchildren-heirs will only be deemed to have a material interest over the subject land - and the rest of the decedent’s estate for that matter - if the right of representation provided under Article 970, in relation to Article 982, of the Civil Code is available to them. In this situation, representatives will be called to the succession by the law and not by the person represented; and the representative does not succeed the person represented but the one whom the person represented would have succeeded. (Ang v. Pacunio, G.R. No. 208928, 2015)

Alternative Defendant

Where the plaintiff cannot definitely identify who among two or more persons should be impleaded as a defendant, he may join all of them as defendants in the alternative, although a right to relief against one may be inconsistent with a right of relief against the other. (Rule 3, Sec. 13)

Exceptions:

• When the litigation pertains to the exclusive property of a spouse or when there is abandonment. (See Rule 3, Sec. 4)
• A petition for declaration of absolute nullity of a void marriage may be filed solely by the husband or wife (A.M. No. 02-11-10-SC)
• A petition for legal separation may be filed only by the husband or wife (A.M. No. 02-11-11-SC)

DISTINCTION BETWEEN REAL PARTY IN INTEREST AND LOCUS STANDI

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. Unless otherwise authorized by law or these Rules, every action must be prosecuted or defended in the name of the real party in interest. (Rule 3, Sec. 2)

Legal Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party’s participation in the case. (White Light v. City of Manila, G.R. No. 122846, 2009)

COMPULSORY AND PERMISSIVE JOINDER OF PARTIES

General Rule: Joinder of parties is not compulsory, but merely permissive.

Exception: When it refers to joinder of indispensable parties. (Rule 3, Sec. 7)

Requisites for Joinder of Parties:

• The right to relief should arise out of the SAME transaction or series of transactions; and
• That there exists a common question of law or fact.

NOTE: Same transaction means that it pertains to transactions connected with the same subject matter of the suit.

NOTE: The plaintiff is mandated to implead all the indispensable parties, considering that the absence of one such 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. (Riano, 2014, p. 278)

MISJOINDER AND NON-JOINDER OF PARTIES

A party is MISJOINED when he is made a party to the action although he should not be impleaded.

A party is NOT JOINED when he is supposed to be joined but is not impleaded in the action.

Neither of the two is a ground for the dismissal of an action, as parties may be dropped or added by order of the court or on motion of any party OR on its own initiative at any stage of the action and on such terms as are just.

Any claim against a misjoined party in interest shall have the right to intervene to protect his individual interest. (Rule 3, Sec. 11)

NOTE: However, the failure to obey the order of the court to drop or add a party is a ground for the dismissal of the complaint, because it is a disobedience to the order of a court.

CLASS SUIT

A class suit is an action where one or more may sue for the benefit of all if the requisites for said action are complied with.

An action does not become a class suit merely because it is designated as such in the pleadings; it depends upon the attendant facts. (Banda v. Ermita, G.R. No. 166620, 2010)

Requisites of a Class Suit:

• Subject matter of the controversy of common or general interest to many persons;
• Persons are so numerous that it is impracticable to join all as parties;
• The parties actually before the court are sufficiently numerous and representative; and
• The representatives sue or defend for the benefit of all. (Juana Complex I Homeowners Association v. Fil-Estate Land, G.R. No. 152272, 2012)

The subject matter of the complaint is of common and general interest not just to several, but to all citizens of the Philippines. Consequently, since the parties are so numerous, it becomes impracticable, if not totally impossible, to bring all of them before the court. We likewise declare that the plaintiffs therein are numerous and representative enough to ensure the full protection of all concerned interests. Hence, all the requisites for the filing of a valid class suit under Section 12, Rule 3 of the Revised Rules of Court are present both in the said civil case and in the instant petition, the latter being but an incident to the former. (Oposa v. Factoran G.R. No. 101083, 1993).

Requirements:

• A claim by one party against a co-party;
• Must arise out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim; and
• The cross-claimant is prejudiced by the claim against him by the opposing party.

Tests to Determine Whether the Third-Party Complaint is in Respect of Plaintiff’s Claim:

• Whether it arises out of the same transaction on which the plaintiff’s claim is based, or although arising out of another or different transaction, is connected with the plaintiff’s claim;
• Whether the third-party defendant would be liable to the plaintiff or to the defendant for all or part of the plaintiff’s claim against the original defendant; and
• Whether the third party defendant may assert any defenses that the third-party plaintiff has or may have to plaintiff’s claim. (Asian Construction & Dev’t Corp v. CA, G.R. No. 160242, 2005)

Summons on third, fourth etc.-party defendant must be served for the court to obtain jurisdiction over his person, since he is not an original party.

Where the trial court has jurisdiction over the main case, it also has jurisdiction over the third party complaint; regardless of the amount involved as a third party complaint is merely auxiliary to and is a continuation of the main action.

Bringing new parties

This is availed of when none of the parties desired to be brought into the action is a part of the main action.

Plaintiff dies

Plaintiff’s heirs or legal representatives will be substituted for him and the case will proceed.

Q: Was there a failure to effect substitution when Respondent X passed away and the counsel of the respondent had yet to inform the court about such fact?

A: No. It is a well-settled principle that issues of fact and arguments not adequately brought to the attention of the lower courts will not be considered by the reviewing courts as they cannot be raised for the first time on appeal. In this case even when the spouses had the opportunity to raise such a question in the Trial Court the Spouses failed to do so. Moreover, It has been ruled that "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. In this case, there is neither dispute nor allegation that parties were fully able to participate and present their evidence during trial. (Spouses Rabamonte v Spouses Lucero, G.R. 237812, October 2, 2019 )

Several judgments is proper where:

• The liability of each party is clearly separable and distinct from his co-parties such that the claims against each of them could have been the subject of separate suits, and
• The judgment for or against one of them will not necessarily affect the other. (Fernandez v. Sta. Maria, G.R. No. 160730, 2004)

It is NOT proper in actions against solidary debtors. (Fernandez v. Sta. Maria, G.R. No. 160730, 2004)

Substitution of parties

If the deceased left an heir and the claim is not extinguished by death, the heir may be allowed to be substituted for the deceased without need for an appointment of an administrator or executor.

Service of summons is NOT necessary to effect such substitution as the court shall order such legal representative to appear and be substituted for the deceased within thirty (30) days from notice.