CAUSE OF ACTION/AFFFIRMATIVE DEFENSE

G.R. No. 168979               December 2, 2013

REBECCA PACAÑA-CONTRERAS et al
vs.
ROVILA WATER SUPPLY, et al
BRION, J.:
THE FACTUAL ANTECEDENTS
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.6
The petitioners claimed that their family has long
been known in the community to be engaged in the
water supply business; 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. 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 inquiry with the Securities and
Exchange Commission (SEC), the petitioners
claimed that Rovila Inc. was surreptitiously formed
with the respondents as the majority stockholders.
The respondents did so by conspiring with one
another and forming the respondent corporation to
takeover and illegally usurp the family business’
registered name.
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 in a place other than the Pacaña
residence. Thereafter, the respondents used the
Pacaña family’s receipts and the deliveries and
sales were made to appear as those of the
respondent Rovila Inc. Using this scheme, the
respondents fraudulently appropriated the
collections and payments.
The petitioners filed the complaint in their own
names although Rosalie was authorized by
Lourdes through a sworn declaration and
special power of attorney (SPA).
The respondents filed a first motion to dismiss on
the ground that the RTC had no jurisdiction over
an intra-corporate controversy.9
The RTC denied the motion. On September 26,
2000, Lourdes died10 and the petitioners amended
their complaint, with leave of court, on October 2,
2000 to reflect this development.11
They still attached to their amended complaint the
sworn declaration with SPA, but the caption of the
amended complaint remained the same.
On October 10, 2000, Luciano also died.13
The respondents filed their Answer on November
16, 2000.14
The petitioners’ sister, Lagrimas Pacaña-Gonzales,
filed a motion for leave to intervene and her answer-
in-intervention was granted by the trial court. 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
Luciano. They further stated that they would seek
the dismissal of the complaint because the
petitioners are not the real parties in interest to
prosecute the case. The pre-trial pushed through as
scheduled and the RTC directed the respondents to
put into writing their earlier manifestation. The RTC
issued a pre-trial order where 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.15
ISSUE:
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.

On January 23, 2002,16 the respondents again filed a

motion to dismiss on the grounds, among others,
that the petitioners are not the real parties in interest
to institute and prosecute the case and that they
have no valid cause of action against the
respondents.
RULLING:
THE RTC RULING
The RTC denied the respondents’ motion to dismiss.
It ruled that, save for the grounds for dismissal which
may be raised at any stage of the proceedings, a
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. Thus, even
granting that the defenses invoked by the
respondents are meritorious, their motion was filed
out of time as it was filed only after the conclusion of
the pre-trial conference. Furthermore, the rule on
substitution of parties only applies when the parties
to the case die, which is not what happened in the
present case.
The RTC likewise denied the respondents’ motion
for reconsideration.
The respondents filed a petition for certiorari under
Rule 65 of the Rules of Court with the CA, invoking
grave abuse of discretion in the denial of their
motion to dismiss. They argued that the deceased
spouses Luciano and Lourdes, not the petitioners,
were the real parties in interest. Thus, the petitioners
violated Section 16, Rule 3 of the Rules of Court on
the substitution of parties.
Furthermore, they seasonably moved for the
dismissal of the case and the RTC never acquired
jurisdiction over the persons of the petitioners as
heirs of Lourdes and Luciano.
THE CA RULING
The CA granted the petition and ruled that the RTC
committed grave abuse of discretion as the
petitioners filed the complaint and the amended
complaint as attorneys-in-fact of their parents. As
such, they are not the real parties in interest and
cannot bring an action in their own names; thus, the
complaint should be dismissed pursuant to the
Court’s ruling in Casimiro v. Roque and Gonzales.
Neither are the petitioners suing as heirs of their
deceased parents.1awp++i1 Pursuant to
jurisprudence, the petitioners should first be
declared as heirs before they can be considered as
the real parties in interest. This cannot be done in
the present ordinary civil case but in a special
proceeding for that purpose.
The CA agreed with the respondents that they
alleged the following issues as affirmative
defenses in their answer:
1) the petitioners are not the real parties in
interest; and
2) that they had no legal right to institute the
action in behalf of their parents.
That the motion to dismiss was filed after the period
to file an answer has lapsed is of no moment. The
RTC judge entertained it and passed upon its merit.
He was correct in doing so because in the pre-trial
order, one of the submitted issues was whether the
case must be dismissed for failure to comply with
the requirements of the Rules of Court. Furthermore,
in Dabuco v. Court of Appeals, the Court held that
the ground of lack of cause of action may be raised
in a motion to dismiss at anytime.
The CA further ruled that, in denying the motion to
dismiss, the RTC judge acted contrary to
established rules and jurisprudence which may be
questioned via a petition for certiorari. The phrase
"grave abuse of discretion" which was traditionally
confined to "capricious and whimsical exercise of
judgment" has been expanded to include any action
done "contrary to the Constitution, the law or
jurisprudence[.]"
THE PARTIES’ ARGUMENTS
The petitioners filed the present petition and argued
that, first, in annulling the interlocutory orders, the
CA unjustly allowed the motion to dismiss which did
not conform to the rules.
Specifically, the motion was not filed within the time
for, but before the filing of, the answer to the
amended complaint, nor were the grounds raised in
the answer. Citing Section 1, Rule 9 of the Rules of
Court, the respondents are deemed to have waived
these grounds, as correctly held by the RTC.
Second, even if there is non-joinder and
misjoinder of parties or that the suit is not
brought in the name of the real party in interest,
the remedy is not outright dismissal of the
complaint, but its amendment to include the real
parties in interest.
Third, the petitioners sued in their own right because
they have actual and substantial interest in the
subject matter of the action as heirs or co-owners,
pursuant to Section 2, Rule 3 of the Rules of Court.
Their declaration as heirs in a special proceeding is
not necessary, pursuant to the Court’s ruling in
Marabilles, et al. v. Quito.
Finally, the sworn declaration is evidentiary in
nature which remains to be appreciated after the
trial is completed.
The respondents reiterated in their comment that the
petitioners are not the real parties in interest.
They likewise argued that they 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.
The respondents also argued that the grounds
invoked in their motion to dismiss were timely
raised, pursuant to Section 2, paragraphs g and
i, Rule 18 of the Rules of Court. Specifically, the
nature and purposes of the pre-trial include, among
others, the dismissal of the action, should a valid
ground therefor be found to exist; and such other
matters as may aid in the prompt disposition of the
action. Finally, the special civil action of certiorari
was the proper remedy in assailing the order of the
RTC.
THE COURT’S RULING
We find the petition meritorious.
Petition for certiorari under Rule 65 is a proper
remedy for a denial of a motion to dismiss
attended by grave abuse of discretion
In Barrazona v. RTC, Branch 61, Baguio City, the
Court held that while an order denying a motion to
dismiss is interlocutory and non-appealable,
certiorari and prohibition are proper remedies to
address an order of denial made without or in
excess of jurisdiction. The writ of certiorari is granted
to keep an inferior court within the bounds of its
jurisdiction or to prevent it from committing grave
abuse of discretion amounting to lack or excess of
jurisdiction.
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."
Pursuant to jurisprudence, this is also the ground
invoked when the 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.

A review of the 1940, 1964 and the present

1997 Rules of Court shows that the fundamentals of
the ground for dismissal based on "failure to state a
cause of action" have drastically changed over time.
A historical background of this particular ground is in
order to preclude any confusion or misapplication of
jurisprudence decided prior to the effectivity of the
present Rules of Court. The 1940 Rules of Court
provides under Section 10, Rule 9 that:
Section 10. Waiver of defenses- Defenses and
objections not pleaded either in a motion to dismiss
or in the answer are deemed waived; except the
defense of failure to state a cause of action, which
may be alleged in a later pleading, if one is
permitted, or by motion for judgment on the
pleadings, or at the trial on the merits; but in the last
instance, the motion shall be disposed of as
provided in section 5 of Rule 17 in the light of any
evidence which may have been received. Whenever
it appears that the court has no jurisdiction over the
subject-matter, it shall dismiss the action.
[underscoring supplied]
This provision was essentially reproduced in Section
2, Rule 9 of the 1964 Rules of Court, and we quote:
Section 2. Defenses and objections not pleaded
deemed waived. — Defenses and objections not
pleaded either in a motion to dismiss or in the
answer are deemed waived; except the failure to
state a cause of action which may be alleged in a
later pleading, if one is permitted, or by motion for
judgment on the pleadings, or at the trial on the
merits; but in the last instance, the motion shall be
disposed of as provided in section 5 of Rule 10 in
the light of any evidence which may have been
received. Whenever it appears that the court has no
jurisdiction over the subject-matter, it shall dismiss
the action. [underscoring supplied]
Under the present Rules of Court, this provision was
reflected in Section 1, Rule 9, and we quote:
Section 1. Defenses and objections not pleaded.
— Defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed
waived. However, when it appears from the
pleadings or the evidence on record that the court
has no jurisdiction over the subject matter, that there
is another action pending between the same parties
for the same cause, or that the action is barred by a
prior judgment or by statute of limitations, the court
shall dismiss the claim.
Notably, in the present rules, there was a deletion of
the ground of "failure to state a cause of action"
from the list of those which may be waived if not
invoked either in a motion to dismiss or in the
answer. Another novelty introduced by the present
Rules, which was totally absent in its two
precedents, is the addition of the period of time
within which a motion to dismiss should be filed as
provided under Section 1, Rule 16 and we quote:
Section 1. Grounds. — Within the time for but before
filing the answer to the complaint or pleading
asserting a claim, a motion to dismiss may be made
on any of the following grounds: xxx [underscoring
supplied]
All these considerations point to the legal reality that
the new Rules effectively restricted the dismissal of
complaints in general, especially when what is being
invoked is the ground of "failure to state a cause of
action." Thus, jurisprudence governed by the 1940
and 1964 Rules of Court to the effect that the ground
for dismissal based on failure to state a cause of
action may be raised anytime during the
proceedings, is already inapplicable to cases
already governed by the present Rules of Court
which took effect on July 1, 1997. 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. According to Oscar M. Herrera, the
reason for the deletion is that failure to state a cause
of action may be cured under Section 5, Rule 10
and we quote:
Section 5. Amendment to conform to or
authorize presentation of evidence. — When
issues not raised by the pleadings are tried with the
express or implied consent of the parties they shall
be treated in all respects as if they had been raised
in the pleadings. Such amendment of the pleadings
as may be necessary to cause them to conform to
the evidence and to raise these issues may be made
upon motion of any party at any time, even after
judgment; but failure to amend does not effect the
result of the trial of these issues. If evidence is
objected to at the trial on the ground that it is not
within the issues made by the pleadings, the court
may allow the pleadings to be amended and shall do
so with liberality if the presentation of the merits of
the action and the ends of substantial justice will be
subserved thereby. The court may grant a
continuance to enable the amendment to be made.
With this clarification, we now proceed to the
substantial issues of the petition.1âwphi1
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. The first
paragraph of Section 1,42
Rule 16 of the Rules of Court provides for the period
within which to file a motion to dismiss under the
grounds enumerated. Specifically, the motion should
be filed within the time for, but before the filing of,
the answer to the complaint or pleading asserting a
claim.

Rule 9 of the Rules of Court which states that

defenses and objections not pleaded either in a
motion to dismiss or in the answer are deemed
waived, except for the following grounds:
1) the court has no jurisdiction over the subject
matter;
2) litis pendencia;
3) res judicata; and
4) prescription.

Therefore, the grounds not falling under these four

exceptions may be considered as waived in the
event that they are not timely invoked. 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. The RTC’s
assailed orders did not touch on this particular issue
but the CA ruled that the respondents did, while the
petitioners insist that the respondents did not. In the
present petition, the petitioners reiterate that there
was a blatant non-observance of the rules when the
respondents did not amend their answer to invoke
the grounds for dismissal which were raised only
during the pre-trial and, subsequently, in the subject
motion to dismiss.
The divergent findings of the CA and the petitioners’
arguments are essentially factual issues. Time and
again, we have held that the jurisdiction of the Court
in a petition for review on certiorari under Rule 45,
such as the present case, is limited only to questions
of law, save for certain exceptions. One of these is
attendant herein, which is, when the findings are
conclusions without citation of specific evidence on
which they are based.
In the petition filed with the CA, the respondents
made a passing allegation that, as affirmative
defenses in their answer, they raised the issue that
the petitioners are not the real parties in interest.
On the other hand, the petitioners consistently
argued otherwise in their opposition to the motion to
dismiss, and in their comment and in their
memorandum on the respondents’ petition before
the CA. Our examination of the records shows that
the CA had no basis in its finding that the
respondents alleged the grounds as affirmative
defenses in their answer. The respondents merely
stated in their petition for certiorari that they alleged
the subject grounds in their answer. However,
nowhere in the petition did they support this
allegation; they did not even attach a copy of their
answer to the petition. It is basic that the
respondents had the duty to prove by substantial
evidence their positive assertions. Considering that
the petition for certiorari is an original and not an
appellate action, the CA had no records of the
RTC’s proceedings upon which the CA could refer to
in order to validate the respondents’ claim. Clearly,
other than the respondents’ bare allegations, the CA
had no basis to rule, without proof, that the
respondents alleged the grounds for dismissal as
affirmative defenses in the answer. The
respondents, as the parties with the burden of
proving that they timely raised their grounds for
dismissal, could have at least attached a copy of
their answer to the petition. This simple task they
failed to do. That the respondents did not allege in
their answer the subject grounds are made more
apparent through their argument, both in their
motion to dismiss and in their comment, that it was
only during the pre-trial stage that they verbally
manifested and invited the attention of the lower
court on their grounds for dismissal. In order to
justify such late invocation, they heavily relied on
Section 2(g) and (i), Rule 18 of the Rules of Court
that the nature and purpose of the pre-trial include,
among others, the propriety of dismissing the action
should there be a valid ground therefor and matters
which may aid in the prompt disposition of the
action. The respondents are not correct. The rules
are clear and require no interpretation. Pursuant to
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. On the other
hand, "the pre-trial is primarily intended to make
certain that all issues necessary to the disposition of
a case are properly raised. The purpose is to obviate
the element of surprise; hence, the parties are
expected to disclose at the pre-trial conference all
issues of law and fact which they intend to raise at
the trial, except such as may involve privileged or
impeaching matter."
The issues submitted during the pre-trial are thus
the issues that would govern the trial proper. The
dismissal of the case based on the grounds invoked
by the respondents are specifically covered by Rule
16 and Rule 9 of the Rules of Court which set a
period when they should be raised; otherwise, they
are deemed waived.
The Dabuco ruling is inapplicable in the present
case; the ground for dismissal "failure to state a
cause of action" distinguished from "lack of cause of
action"
To justify the belated filing of the motion to dismiss,
the CA reasoned out that the ground for dismissal of
"lack of cause of action" may be raised at any time
during the proceedings, pursuant to Dabuco v. Court
of Appeals.54
This is an erroneous interpretation and application of
Dabuco as will be explained below.
First, in Dabuco, the grounds for dismissal were
raised as affirmative defenses in the answer which is
in stark contrast to the present case.
Second, in Dabuco, the Court distinguished between
the dismissal of the complaint for "failure to state a
cause of action" and "lack of cause of action." The
Court emphasized that in a dismissal of action for
lack of cause of action, "questions of fact are
involved, [therefore,] courts hesitate to declare a
plaintiff as lacking in cause of action. Such
declaration is postponed until the insufficiency of
cause is apparent from a preponderance of
evidence.
Usually, this is done only after the parties have been
given the opportunity to present all relevant
evidence on such questions of fact."55
In fact, in Dabuco, the Court held that even the
preliminary hearing on the propriety of lifting the
restraining order was declared insufficient for
purposes of dismissing the complaint for lack of
cause of action. This is so because the issues of fact
had not yet been adequately ventilated at that
preliminary stage. For these reasons, the Court
declared in Dabuco that the dismissal by the trial
court of the complaint was premature. In the case of
Macaslang v. Zamora,56 the Court noted that the
incorrect appreciation by both the RTC and the CA
of the distinction between the dismissal of an action,
based on "failure to state a cause of action" and
"lack of cause of action," prevented it from properly
deciding the case, and we quote:
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. Justice
Regalado, a recognized commentator on remedial
law, has explained the distinction: xxx What is
contemplated, therefore, is a failure to state a cause
of action which is provided in Sec. 1(g) of Rule 16.
This is a matter of insufficiency of the pleading. Sec.
5 of Rule 10, which was also included as the last
mode for raising the issue to the court, refers to the
situation where the evidence does not prove a cause
of action. This is, therefore, a matter of insufficiency
of evidence. Failure to state a cause of action is
different from failure to prove a cause of action. The
remedy in the first is to move for dismissal of the
pleading, while the remedy in the second is to demur
to the evidence, hence reference to Sec. 5 of Rule
10 has been eliminated in this section. The
procedure would consequently be to require the
pleading to state a cause of action, by timely
objection to its deficiency; or, at the trial, to file a
demurrer to evidence, if such motion is warranted.
[italics supplied]
Based on this discussion, the 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. Therefore, the RTC
did not commit grave abuse of discretion in issuing
the assailed orders denying the respondents’ motion
to dismiss and motion for reconsideration. The Court
shall not resolve the merits of the respondents’
grounds for dismissal which are considered as
waived.
Other heirs of the spouses Pacaña to be impleaded
in the case.
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. At
this juncture, a distinction between a real party in
interest and an indispensable party is in order. In
Carandang v. Heirs of de Guzman, et al.,57 the Court
clarified these two concepts and held that "[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. 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. xxx 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. The latter query is relevant in
discussions concerning indispensable and
necessary parties, but not in discussions concerning
real parties in interest. 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.
Jurisprudence on the procedural consequence of the
inclusion or non-inclusion of an indispensable party
is divided in our jurisdiction. Due to the non-inclusion
of indispensable parties, the Court dismissed the
case in Lucman v. Malawi, et al. and Go v.
Distinction Properties Development Construction,
Inc., while in Casals, et al. v. Tayud Golf and
Country Club et al., the Court annulled the judgment
which was rendered without the inclusion of the
indispensable parties.
In Arcelona et al. v. Court of Appeals and Bulawan
v. Aquende, and Metropolitan Bank & Trust
Company v. Alejo et al. the Court ruled that the
burden to implead or order the impleading of an
indispensable party rests on the plaintiff and on the
trial court, respectively. Thus, the non-inclusion of
the indispensable parties, despite notice of this
infirmity, resulted in the annulment of these cases.
In Plasabas, et al. v. Court of Appeals, et al., the
Court held that the trial court and the CA committed
reversible error when they summarily dismissed the
case, after both parties had rested their cases
following a protracted trial, on the sole ground of
failure to implead indispensable parties.

Non-joinder of indispensable parties is not a ground

for the dismissal of an action.
The remedy is to implead the non-party claimed to
be indispensable. However, in the cases of Quilatan,
et al. v. Heirs of Quilatan, et al. and Lagunilla, et al.
v. Monis, et al., the Court remanded the case to the
RTC for the impleading of indispensable parties. On
the other hand, in Lotte Phil. Co., Inc. v. Dela Cruz,
PepsiCo, Inc. v. Emerald Pizza, and Valdez Tallorin,
v. Heirs of Tarona, et al., the Court directly ordered
that the indispensable parties be impleaded. Mindful
of the differing views of the Court as regards the
legal effects of the non-inclusion of indispensable
parties, the Court clarified in Republic of the
Philippines v. Sandiganbayan, et al., that the failure
to implead indispensable parties is a curable error
and the foreign origin of our present rules on
indispensable parties permitted this corrective
measure. This cited case held:
Even in those cases where it might reasonably be
argued that the failure of the Government to implead
the sequestered corporations as defendants is
indeed a procedural aberration xxx, slight reflection
would nevertheless lead to the conclusion that the
defect is not fatal, but one correctible under
applicable adjective rules – e.g., Section 10, Rule 5
of the Rules of Court [specifying the remedy of
amendment during trial to authorize or to conform to
the evidence]; Section 1, Rule 20 [governing
amendments before trial], in relation to the rule
respecting omission of so-called necessary or
indispensable parties, set out in Section 11, Rule 3
of the Rules of Court. It is relevant in this context to
advert to the old familiar doctrines that the omission
to implead such parties "is a mere technical defect
which can be cured at any stage of the proceedings
even after judgment"; and that, particularly in the
case of indispensable parties, since their presence
and participation is essential to the very life of the
action, for without them no judgment may be
rendered, amendments of the complaint in order to
implead them should be freely allowed, even on
appeal, in fact even after rendition of judgment by
this Court, where it appears that the complaint
otherwise indicates their identity and character as
such indispensable parties." 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. And the
spirit of the law is reflected in Section 11, Rule 3 of
the 1997 Rules of Civil Procedure. It prohibits the
dismissal of a suit on the ground of non-joinder or
misjoinder of parties and allows the amendment of
the complaint at any stage of the proceedings,
through motion or on order of the court on its own
initiative. Likewise, jurisprudence on the Federal
Rules of Procedure, from which our Section 7, Rule
3 on indispensable parties was copied, allows the
joinder of indispensable parties even after judgment
has been entered if such is needed to afford the
moving party full relief. Mere delay in filing the
joinder motion does not necessarily result in the
waiver of the right as long as the delay is excusable.
In Galicia, et al. v. Vda. De Mindo, et al., 72 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. Furthermore, in
Commissioner Domingo v. Scheer,73 the Court cited
Salvador, et al. v. Court of Appeals, et al. and held
that the Court has full powers, apart from that power
and authority which are inherent, to amend the
processes, pleadings, proceedings and decisions by
substituting as party-plaintiff the real party in
interest. 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. 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
technical defect. To do so would serve proper
administration of justice 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.75
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.76
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, pursuant to Article 77477 in
relation with Article 77778 of the Civil Code.
In Orbeta, et al. v. Sendiong,79 the 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 petirioners who are already parties to the
case are Lagrimas Pacaña-Gonzalez who
intervened in the case, are hereby ordered
impleaded as parties-plaintiffs.
WHEREFORE, the petition is GRANTED. The
decision dated January 27, 2005 and the resolution
date June 6, 2005 of the Court of Appeals in CA-
G.R. SP No. 71551 are REVERSED and SET
ASIDE. The heirs of the spouses Luciano and
Lourdes Pacaña, except herein petitioner and
Lagrimas Pacaña-Gonzalez, are ORDERED
IMPLEADED as parties plaintiffs and the RTC is
directed tO proceed with the trial of the case with
DISPATCH.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR: