Civil Procedure: Rules of Court, Rule 3 (A.M. No. 19-10-20-SC)

RULE 3

PARTIES TO CIVIL ACTIONS

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.

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.

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.

Section 4. Spouses as parties. - Husband and wife shall sue or be sued jointly, except as provided by law.

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.

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.

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.

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.

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.

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.

Section 11. Misjoinder and nonjoinder 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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 dock et and other lawful fees, and of transcripts of stenographic notes which the court may order to be furnished him. The amount of the dock et 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 dock et 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.

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.

Notes:

Classes of Parties

I. Real Parties in Interest
II. Representative Parties
III. Permissive Parties
IV. Indispensable Parties
V. Necessary Parties

Sec. 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.

There are two main categories of parties in a civil action namely, the plaintiff and the defendant.

Plaintiff

The plaintiff is the claiming party or more appropriately, the original claiming party and is the one who files the complaint.
The term however, does not exclusively apply to the original plaintiff. It may also apply to a defendant who files a counterclaim, a cross-claim or third party complaint.
Hence Section 1 defines “plaintiff” as the claiming party, the counter-claimant, the cross-claimant or the third-party plaintiff, etc.

Defendant

The defendant does not only refer to the original defending party.
If a counterclaim is filed against the original plaintiff, the latter becomes a defendant and the former, a plaintiff in the counterclaim.
Hence, in Sec. 1, the term “defendant” refers also to a defendant in a counterclaim, the cross-defendant or the third-party defendant, etc.

Q: Who may be parties to a civil case?

A: Only the following may be parties to a civil action:

He must be either:

natural or
juridical persons or
entities authorized by law.

he must have the legal capacity to sue; and
he must be a real party-in-interest.

So, you cannot sue or be sued unless you are either a person or an entity authorized by law.
A dead man cannot sue and he cannot be sued because he has no more personality.

Situation:

B sued “Rama Eatery.” So, it is “B vs. Rama Eatery.”

It is wrong. Rama Eatery is not a person nor an entity authorized by law.

The correct procedure is you sue the owner because he is the real person.

But the defect is not really substantial. It is only a formal defect that can easily be corrected.

Juridical person as parties

The juridical persons who may be parties are those enumerated in Art. 44 of the Civil Code, namely:

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.

Entities Authorized by Law

The best example is Section 15 of this rule.

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.

Thus, if A, B, C, D and E without incorporating themselves or without registering as a partnership, enter into transactions using the common name “Ocean Quest Corporation”, they may be sued as such.
When the defendant “corporation” answers, the names of A, B, C, D and E and their addresses must be revealed.
Note however, that the authority to be a party under this section is confined only to being a defendant and not as a plaintiff.
This is evident from the words, “they may be sued.”
Another example of an entity authorized by law which may not be a natural or juridical person is a labor union or organization under the Labor Code.
It is an entity authorized by law to file a case in behalf of its members.
Although it may not have been incorporated under the Corporation Law but registered under the Labor Code.
A legitimate labor organization may sue and be sued in its registered name (Art. 242 [e], Labor Code of the Philippines)

Q: What are the others?

An estate of a deceased person may be a party to an action.
The Roman Catholic Church may be a party and as to its properties, the archbishop or diocese to which they belong may be a party.
A dissolved corporation may prosecute and defend suits by or against it provided that the suits occur within 3 years after its dissolution, and the suits are in connection with the settlement and closure of its affairs.
A corporation by estoppel is precluded from denying its existence and the members thereof can be sued and be held liable as general partners.
A contract of partnership having a capital of three thousand pesos or more but which fails to comply with the registration requirements is nevertheless liable as a partnership to third persons.
A political party incorporated under Act 1459.

Remedy when a party impleaded is not authorized to be a party.

As to plaintiff:

Where the plaintiff is not a natural or a juridical person or an entity authorized by law, a motion to dismiss may be filed on the ground that “the plaintiff has no legal capacity to sue.” (Sec. 1[d] R 16)
When plaintiff is not the real party in interest: also, if the plaintiff has capacity to sue but he is not the ‘real party in interest’, the ground for dismissal is a ‘failure to state a cause of action not lack of legal capacity to sue.’

As to defendant:

Where it is the defendant who is not any of the above, the complaint may be dismissed on the ground that the “pleading asserting the claim states no cause of action” or “failure to state a cause of action” (Sec. 1[g], R 16) because there cannot be a cause of action against one who cannot be a party to a civil action.

Case:

Although the action was brought against the "Broadway Theatre" which is not a juridical person, but the lessee thereof filed an answer and later entered into a compromise agreement admitting liability and pursuant to which judgment was rendered, the procedural defect was cured. The writ of execution cannot be enforced against the theatre but against the lessee. (Oscar Ventanilla Enterprises Corp. vs. Lazaro, G.R. No. 53856, Aug. 21, 1980)
Sec. 1 of this Rule provides that only natural or juridical persons may be parties in a civil action and, in this case, the educational institution failed to comply with its obligation to incorporate under the Corporation Law after its recognition by the Government. However, having contracted with its teacher for 32 years under the representation that it was possessed of juridical personality to do so, it is now estopped from denying such personality to defeat her claim against it. (Chiang Kai Shek School us. CA, et al., G.R. No. 58028, April 18, 1989)
Non-resident aliens living abroad may maintain personal actions against Philippine residents in Philippine courts, even if a counterclaim is brought against said plaintiffs. It is not indispensable for a foreigner to establish a residence, nor need he be physically present in a state of which he is not a resident or citizen in order that he may initiate or maintain a personal action against a resident or citizen of that ether state for rights of action arising in, or for violations of laws committed within, the territorial jurisdiction of that other state. In this jurisdiction, no general law has come to our knowledge or notice which restricts the right of nonresident aliens to sue in our courts. (Dilweg us. Philip, L-19596, Oct. 30, 1964)

REAL PARTIES IN INTEREST

Sec. 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.

Q: Who is a real party in interest?

A: 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 (Salonga vs. Warner, Barnes & Co., Ltd., 88 Phil. 125)

To be a real party-in-interest, the interest must be “real”, which is present substantial interest as distinguished from a mere expectancy or a future, contingent, subordinate or consequential interest.
It is an interest that is material and direct, as distinguished from a mere incidental interest in the question.
The determination of who the real party-in-interest is requires going back to the elements of a cause of action.
Evidently the owner of the right violated stands to be the real party-in-interest as plaintiff and the person responsible for the violation is the real party-in-interest as defendant.
Thus, in a suit for violation of a contract, the parties-in-interest would be those covered by the operation of the doctrine of relativity of contracts under Art. 1311 of the Civil Code, namely, the parties, their assignees and heirs. Likewise in a suit for annulment of a contract, the real parties in interest would be those who are principally or subsidiarily bound by the contract. (Art. 1397 Civil Code)

Indispensable Party

Those who are not indispensable but ought to be parties 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 (Sec. 8).

Example: Buyer of land is the indispensable party. Seller is a necessary party.
A person is not an indispensable party, however, if his interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them. Also, a person is not an indispensable party if his presence would merely permit complete relief between him and those already parties to the action, or if he has no interest in the subject matter of the action. It is not a sufficient reason to declare a person to be an indispensable party that his presence will avoid

Necessary Party

Those without whom no final determination can be had of an action (Sec. 7).

Representative Party

Those referred to in Sec. 3 of this Rule.

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.

Nominal Party

Those who are required to be joined as co-parties in suits by or against another party as may be provided by the applicable substantive law or procedural rule (Sec. 4).

One who is joined as a plaintiff or defendant, not because such party has any real interest in the subject matter or because any relief is demanded, but merely because the technical rules of pleadings require the presence of such party on the record.

Quasi-Party

Those in whose behalf a class or representative suit is brought (Sec. 17).

Parties who were not initially and formally impleaded as original parties to the case, but later bound themselves to comply with the terms of a judgment on compromise rendered therein may also be considered as quasi parties in said case (Rodriguez, et al. vs. Alikpala, L-38314, June 25, 1974)

Every action must be prosecuted or defended in the name of the real party in interest

So a complaint is dismissible if it is not made in the name of the real party in interest.
In an action to recover ownership over or title to a piece of land, you do not file a case against the tenant. He is not the real party in interest. You must file the case against the owner of the land.
Neither can your boyfriend file the case. When you are riding in a common carrier which collided and you were injured, do not file a case against the driver for damages. Your contract is not with the driver. Your contract is with the operator. So you file a case of culpa contractual against the owner or operator.

GENERAL RULE: In a breach of contract, the real parties in interest are the parties to the contract. So strangers, as a rule, have no business suing in a contract because they are not real parties in interest.

Baliwag Transit v. CA 169 SCRA 649 [1989 BAR]

FACTS: A student who was riding in one of the Baliwag buses met an accident. So, an action was filed where the parents and the injured boy were the co-plaintiffs against Baliwag Transit. While the case was going on, the boy entered into amicable settlement with the bus company. Based on the settlement, Baliwag moved to dismiss the case. The parents objected, “We are objecting because we are also plaintiffs. We didn’t know about the settlement. We were the ones who spent money, therefore it should not be dismissed simply because our son is withdrawing the case.”

HELD: The parents are not the real party in interest. They were not the passengers. The real parties in a contract of carriage are the parties to the contract itself. “In the absence of any contract of carriage between the transportation company and the parents of the injured party, the parents are not real parties in interest in an action for breach of contract.” Of course, if the child is a minor the parents can file as representatives but not as principal party.

EXCEPTION: When there is a stipulation in the contract favorable to a third person (stipulation pour autrui – Art. 1311, NCC)

Example:

Third-Party Liability (TPL) in insurance.

A insured his car with B for TPL. A bumped C. C can file a case against A and B to recover from the insurance contract. In other words, while only A and B are the parties to the insurance contract yet the third party liability stipulation is intended to benefit a third party who may be damaged by A while driving his car.

Also parties who have not taken part in a contract may show that they have a real interest affected by its performance or annulment.

In other words, those who are not principally or subsidiarily obligated in a contract, in which they had no intervention, may show their detriment that could result from it.
Thus, Article 1313 of the Civil Code provides that “creditors are protected in cases of contracts intended to defraud them.”
Further, Article 1381 of the Civil Code provides that contracts entered into in fraud of creditors may be rescinded when the creditors cannot in any manner collect the claims due them.
Thus, a creditor who is not a party to a contract can sue to rescind the contract to redress the fraud committed upon him.

A mere agent, who is not an assignee of the principal cannot bring suit under a deed of sale entered into in behalf of his principal because it is the principal, not the agent who is the real party in interest (Uy vs. CA 314 SCRA 69).

In case the action is brought against the agent, the action must be brought against an agent acting in his own name and for the benefit of an undisclosed principal without joining the principal, except when the contract involves things belonging to the principal. The real party-in-interest is the party who would be benefited or injured by the judgment or is the party entitled to the avails of the suit. An attorney-in-fact is not a real party-in-interest and that there is no law permitting an action to be brought by and against an attorney-in-fact (Carillo vs. CA 503 SCRA 66).

The term "party" includes a surety who, although not initially a party to the case, is sought to be held liable on its performance bond, hence, as such party, it can appeal from the order rendered thereon (PHHC vs. Jeremias, et al., L-43252, Sept. 30, 1976)

Suits for corporations

When the corporate offices have been illegally searched, the corporate officer is not the real party in interest to question the search. The right to contest the transgression belongs to the corporation alone which has a personality of its own separate and distinct from that of an officer or a stockholder. The objection to an unlawful search and seizure is purely personal and cannot be availed of by third persons. (Stonehill vs. Diokno 20 SCRA 383)
A corporation cannot maintain an action to recover property belonging to its stockholders as it has no interest therein, it having a separate personality and the properties not having been transferred to it (Sulo ng Bayan, Inc. vs. Gregorio Araneta, Inc., et al., L-31061, Aug. 17, 1976).

Derivative suit

However, even if the cause of action belongs to the corporation, if the board refuses to sue despite demand by the stockholders to sue and protect or vindicate corporate rights, a stockholder is allowed by law to file a derivative suit in the corporate name. In such a suit, the real party-in-interest is actually the corporation and the stockholder filing the action is a mere nominal party. (Asset Privatization Trust vs. CA 300 SCRA 579)

Partnerships

Under Art. 1768 of the Civil Code a partnership has a juridical personality separate and distinct from that of each of the partners.
Hence, if the contract was entered into by the partnership in its name, it is the partnership, not its officers or agents which should be impleaded in any litigation involving property registered in its name.
A violation of this rule will result in dismissal of the complaint for failure to state a cause of action (Aguila vs. CA 319 SCRA 345).

Failure to include the name of a party in the pleading

The mere failure to include the name of a party in the title of the complaint is not fatal because the Rules of Court requires the courts to pierce the form and go into the substance and not be misled by a false or wrong name in the pleadings.
The averments are controlling and not the title.
Hence, if the body indicates the defendant as a party to the action, his omission in the title is not fatal. (Vlasons Enterprises vs. CA 310 SCRA 26).

REPRESENTATIVE PARTY

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.

Section 3 is consistent with Section 2 because under Section 2, you cannot sue and be sued if you are not the real party in interest.
Section 3 allows one who is not a real party in interest to sue and be sued in behalf of somebody else but requires the beneficiary to be named in the Complaint being the real party in interest.

Example:

Guardian.

Suppose J, a minor was injured, a case for damages can be filed in behalf of the minor. A minor cannot sue and be sued but she is the real party in interest. The law allows the parents to come in and also be the plaintiff. The parents are what we the representative party. The law still requires for the minor to be included in the case. The law states that “the beneficiary shall be included in the title of the case and shall be deemed to be the real party in interest.”
In Oposa vs. Factoran GR No. 101083, 1993, minors represented by their parents were held as real parties in interest to file an action to annul timber license agreements issued by the state under the following principles:

inter-generational responsibility;
inter-generational justice;
the right of the Filipinos to a balanced and healthful ecology; and
minors repersent themselves and the generation to come

Trustee; Executor; Administrator.

Another example is a trustee of an express trust, or executor or administrator of the estate of a deceased person.
When a person dies, what survives after him is his estate which represents everything that is left behind. This later on will be given to his heirs. But for the meantime under the law on succession, the executor or administrator will take charge of his property.

Q: If the estate of the deceased has some collectibles, who will file the case?

A: The administrator or executor as the representative party. If you want to sue the estate, you should sue the estate through the administrator or executor.

Ching vs. CA 181 SCRA 9

FACTS: A wanted to sue D, who owes her a sum of money. The problem is, she cannot locate D’s whereabouts. Also, A is not certain whether D is dead or alive. So, to play it safe, what A did was to file a case against the “defendant and/or the estate of defendant.” A obtained a judgment against the ‘defendant and/or the estate of defendant.’

Later on when the judgment was enforced, it turned out that D was already dead but he has properties left behind. So, they started to take hold of his properties. Now, the heirs of D challenged the decision.

ISSUE: Whether or not there was a valid judgment against the ‘defendant/or the estate of the defendant.”

HELD: The decision is void. “The decision of the lower court insofar as the deceased is concerned, is void for lack of jurisdiction over his person. He was not, and he could not have been validly served with summons. He had no more civil personality. His juridical personality, that is fitness to be subject of legal relations, was lost through death (Arts. 37 and 42 Civil Code).”

“The same conclusion would still inevitably be reached notwithstanding joinder of B’s estate as co-defendant. It is a well-settled rule that an estate can sue or be sued through an executor or administrator in his representative capacity.”

So, the Court cited Section 3. In order to bind the estate, you should sue the executor or the administrator of his estate. So, either way, the case cannot prosper.

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.

The agent cannot sue because the principal is the real party in interest. (Ex: Attorney-in-fact)
But when an agent acts in his own name and for the benefit of an undisclosed principal, he may sue and be sued, EXCEPT when the contract involves things belonging to the principal.
Under the exception, the principal has really to be included. The agent cannot file a case where the principal will lose his property without being named as part to the case.

SPOUSES AS PARTIES

Sec. 4. Spouses as parties. - Husband and wife shall sue or be sued jointly, except as provided by law.

This is an illustration of joinder of pro forma parties required by the Rules. The propriety of suits by or against the spouses should now take into account the pertinent provisions of the Family Code.
Normally, the husband and the wife should sue and be sued together. Even if the wife borrowed money alone and you want to sue the woman, still the husband should be included. Why? In the property relationship between the husband and wife, they are governed by absolute community or conjugal partnership.
Whether you like it or not, the implication of the wife is also the implication of the husband because of the property relationship.
In the same manner, if the wife wants to collect, even if the husband does not know anything about it, the husband should still be named as party plaintiff, on the ground again that the income that she can get redounds to the benefit of the conjugal partnership.
And there were decided cases in the past where even if for example, a wife sues without the husband, the defect is not fatal but merely formal. The complaint should not be dismissed. All that is to be done is to amend the complaint impleading the husband.

Q: Give an exception to that general rule that husband and wife shall sue or be sued jointly.

In case of Complete Separation of Property (Article 145, Family Code), and
Under Article 111, Family Code:

Art. 111. A spouse of age may mortgage, alienate, encumber or otherwise dispose of his or her exclusive property without the consent of the other spouse and appear alone in court to litigate with regard to the same.

Another is when a spouse without just cause abandons the other or fails to comply with his or her obligations to the family with respect to the marital, parental or property relations.

MINOR OR INCOMPETENT PERSONS

Sec 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.

Section 5 is related to Section 3.
The minor or incompetent person must be assisted by the parents and considered as representative party.
Incompetent persons include insane people or mentally retarded people.
hey are supposed to be under the custody of other persons, the guardians.
If no guardian, the court has to appoint a guardian called the guardian ad litem.
A person need not be judicially declared incompetent it being sufficient that his incompetency be alleged in the corresponding pleading.

PERMISSIVE JOINDER OF PARTIES

Sec. 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.

Section 6 is known as permissive joinder of parties.
This is related to Section 5 [a] of Rule 2 on joinder of causes of action.

Q: May two or more persons join in one complaint as plaintiffs?

Or can two or more persons be joined together as defendants?

A: YES, under two conditions, to wit:

There is a right to relief in favor of or against the parties joined in respect to or arising out of the same transaction or series of transactions; and
There is a question of law or fact common to the parties joined in the action.

An additional condition is that the such joinder is not otherwise proscribed by the provision of the rules on jurisdiction and venue.

Series of Transactions

This pertains to transactions connected with the same subject matter of the suit.

Problem: Suppose some passengers riding a particular common carrier are injured because of an accident. All of them want to sue the operator of the carrier for damages arising out of the breach of contract of carriage. Under the Law on Transportation, it is possible for each passenger to file his own case because their causes of action are different from each other. But can they be joined together in one complaint against the common carrier?
YES, because there is a common question of law or fact in the causes of actions of the injured passengers: the evidence is identical; the issues whether the carrier is at fault are the came; the witnesses for both parties will be the same; the report will be the same; the defense of the operator against one party will be the same defense as against the other passenger. So, since there is a common denominator on their causes of action, they can be joined.

It would be different if the passengers were riding on different buses belonging to the same company, and all of them met an accident. What happened to Passenger No. 1 does not concern Passenger No. 2. The evidence will not be the same. So, there is no common denominator – no common question of fact. Therefore, they cannot be joined.

Now, take note that when there is joinder of parties, there is automatically a joinder of causes of action.
That is why one of the conditions or limitations in joinder of causes of action is you must observe the rule on joinder of parties.
If joinder of parties is improper under Rule 3, the joinder of causes of action is also proper under Rule 2, Section 5.

Problems:

Suppose a story appeared in the Inquirer where 5 people were called as jueteng kings. They were allegedly involved in jueteng. Now, the five of them want to sue the Inquirer for damages arising from libel. Is it possible for the five (5) people named in the article to file only one complaint against the editor and publisher of the Inquirer?

YES, because it is of the same story. Their names appeared in the same story. It is not a different issue. So there is a common question of fact and law in their cause of action.

M, while driving a car, bumped another vehicle, injuring the driver and causing injury to other passengers. So, there are three offended parties: the owner of the vehicle, the driver of the vehicle , and the passenger. There are three(3) causes of action. Can they join in one complaint against Myra, the owner of the car which bumped them?

YES, because there is a common question of fact and law. There is only one accident.

But suppose the three of them will file three separate cases against M, can it be done?

YES, because it is a permissive joinder of parties, not mandatory.

Flores vs. Mallare-Philipps, et al., G.R. No. 66620, Sept. 24, 1986

Where a complaint contained two causes of action, each for a sum of money less than P20,000 (which was then the maximum of the jurisdictional amount for cases cognizable by the municipal trial courts) owed by the plaintiff to a different defendant and arising from different and independent transactions, although the total of both claims exceeded P20,000, the Regional Trial Court had no jurisdiction then since the totality rule involving different parties, in Sec. 33(1) of B.P. Big. 129 and Sec. 11 of the Interim Rules, is subject to the requirements in this section, one of which is that the right to relief arises out of the same transaction or series of transactions.

Q: Why does the law encourage joinder of parties?

The following are the reasons:

to promote convenience in trial;
to prevent multiplicity of suits;
to expedite the termination of the litigation; and
to attain economy of procedure under which several demands arising out of the same occurrence may be tried together thus avoiding the repetition of evidence relating to facts common to the general demands.

Principle:

When there is joinder of parties, there is also a joinder of causes of action.

But there can be a joinder of causes of actions without a joinder of parties.

Example:

When there is only one plaintiff and one defendant: Suppose Melissa will secure three (3) loans from me.

Q: How many causes of action do I have if M will not pay me?
A: Three.
Q: Now, can I join them in one complaint?
A: Yes.
Q: Is there joinder of causes of action?
A: Yes.
Q: Is there joinder of parties?
A: NONE, because there is only one plaintiff and one defendant.

So, there can be joinder of causes of action without joinder of parties because there is only one plaintiff and one defendant.
But if you join parties in Rule 3, automatically, there is joinder of causes of action. This is the relationship of these two provisions.

INDISPENSABLE PARTY and NECESSARY PARTIES

Sec. 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.

Sec. 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.

An indispensable party is a real party in interest without whom no final determination can be had of an action. (Sec. 7) Without the presence of this party, the judgment cannot attain real finality.
A person is not an indispensable party, however:

if his interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them.
if his presence would merely permit complete relief between him and those already parties to the action, or
if he has no interest in the subject matter of the action.

It is not a sufficient reason to declare a person to be an indispensable party that his presence will avoid multiple litigation.
In a joint obligation for instance, the interest of one debtor is separate and distinct from that of his co-debtor and a suit against one debtor does not make the other an indispensable party to the suit.

Compulsory joinder of indispensable parties

Compulsory joinder for both indispensable and necessary parties. (Sec. 9. Rule 3)

While a necessary party is not indispensable to the final determination of the action, said party ought to be joined necessary party, the pleader is under obligation to

set forth the name of said necessary party, if known, and
state the reason why the necessary party is omitted.

Avoid multiplicity of suits.

Although normally, a joinder of parties is permissive (Sec. 6 Rule 3), the joinder of a party becomes compulsory when the one involved is an indispensable party.
Clearly, the rule directs a compulsory joinder of indispensable parties (Sec. 7, Rule 3).
The presence of all indispensable parties is a condition sine qua non for the existence of judicial power.
It is precisely when an indispensable party is not before the court that the action should be dismissed.
Thus, 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 their absent parties but even as to those present. One who is not a party to a case is not bound by the decision of the court; otherwise, he will be deprived of his right to due process (Sepulveda, Sr. vs. Pelaez 450 SCRA 302).

Dismissal for failure to implead an indispensable party

It has been ruled on various occasions that since the joinder of indispensable parties is compulsory, the action should be dismissed when indispensable parties are not impleaded or are not before the court.
The absence of indispensable parties renders all subsequent actions of the trial court null and void for want of authority to act, not only as to the absent parties but even as to those present. (MWSS vs. CA 297 SCRA 287).

Need of an order to implead an indispensable party

It is noteworthy that the Court in its rulings did not hold that the failure to join an indispensable party results in the outright dismissal of the action. An outright dismissal is not the immediate remedy authorized by the Rules because under the Rules a non-joinder (or misjoinder) of parties is not a ground for dismissal of an action. Instead, parties may be dropped or added by 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 (Sec. 11 Rule 3).
It is when the order of the court to implead an indispensable party goes unheeded may the case be dismissed. The court is fully clothed with the authority to dismiss a complaint due to the fault of the plaintiff as when, among others, he does not comply with any order of the court (Sec. 3 Rule 17; Plasabas vs. CA GR No. 166519, March 31, 2009). (See also Pamplona Plantation Co. vs. Tinghil 450 SCRA 421).

Effect of absence of indispensable party

The Court held that whenever it appears to the court in the course of a proceeding that an indispensable party has not been joined, it is the duty of the court to stop the trial and to order the inclusion of such party.
The absence of an indispensable party renders all subsequent actuations 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.
Accordingly, the responsibility of impleading all the indispensable parties rests on the plaintiff. The defendant does not have the right to compel the plaintiff to prosecute the action against a party if he does not wish to do so, but the plaintiff will have to suffer the consequences of any error he might commit in exercising his option (Uy vs. CA 494 SCRA 535).
Ground for Dismissal. See Rule 17, Sec 3. Non-compliance to Court Order.

p.86-87

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Joint debtor

He is an indispensable party in a suit against him but a necessary party in a suit against his co-debtor.

Solidary debtor

In a suit brought by a creditor against one solidary debtor, the other solidary debtor is neither indispensable nor a necessary party.

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.

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Civil Procedure: Rules of Court, Rule 3 (A.M. No. 19-10-20-SC)

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