MODULE 4

PARTIES TO CIVIL ACTIONS (RULE 3)

(Four Hours)

Lesson Outline:

1) Who are real parties in interest?

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 provided by law or these Rules, every
action must be prosecuted or defended in the name of the real party in
interest.

2) What are the distinctions between an indispensable party and a necessary

party?

Indispensable Party: A party is said to be indispensable when no final

determination can be had of an action without him being joined as plaintiff or
as defendant.

On the other hand, when any of the two requirements for permissive joinder
of parties is not satisfied, then there is a case of misjoinder of parties. This
may well happen where there is no question of law common to the parties,
or where the claims by or against the parties do not arise from the same
transaction or series of transactions

Necessary Party: A party is considered to be “necessary” where he 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.

Neither misjoinder nor non-joinder of parties is a ground for dismissal of an

action. Any claim against a misjoined party may be severed and proceeded
with separately. Parties may be dropped or added by order of the court on
motion of any party or motu proprio at any stage of the action and on such
terms as are just.

In the case of non-joinder of an indispensable party, the party who insists on

his impleader may move for such joinder and upon failure of the party
ordered to comply with the order of the court.

3) What are the requisites of joinder of parties?

Requisites of Permissive Joinder of Parties:

 a) Right to relief arises out of the same transaction or series of
transactions, whether jointly, severally, or in the alternative;

b) There is a question of law or fact common to all the plaintiffs and

defendants;

c) Such joinder is not otherwise proscribed by the provisions of the

Rules on jurisdiction and venue.

4) Is misjoinder of parties a ground for dismissal of the action?

Misjoinder of causes of action. - Misjoinder of causes of action is not a

ground for dismissal of an action. A misjoined cause of action may, on
motion of a party or on the initiative of the court, be severed and proceeded
with separately.

5) What are the requisites of a class suit?

The requisites of a class suit are: 1) the subject matter of controversy is one
of common or general interest to many persons; 2) the parties affected are
so numerous that it is impracticable to bring them all to court; and 3) the
parties bringing the class suit are sufficiently numerous or representative of
the class and can fully protect the interests of all concerned.

6) If an action is brought against a debtor for collection of his debt of P2 Million

based on a promissory note, and while the action is pending in court, the
defendant-debtor dies, should the action be dismissed? Explain.

Readings:

a) Yao Ka Sin Trading v. CA, G.R. No. 53820, June 15, 1992

FACTS:

Constancio B. Maglana, President and Chairman of the Board of PWCC,

submitted a letter-offer to YKS, to wit:

a) To deliver 45,000 bags of white cement;

b) At YKS option: a) P24.30 per 94 Ibs. bag net, FOB Cebu City; and b)
P23.30 per 94 Ibs. bag net, FOB Asturias Cebu;

c) With downpayment of P243k, et al.

 But 23 days after the signing of the confirmation of the said letter, PWCC
Board disapproved the same as evidenced on the minutes of their meeting.
PWCC informed YKS of the disapproval of the letter-offer. But it issued the
corresponding Delivery Order of 10,000 bags of cement at P24.30, and
Official Receipt for the payment of the same in the amount of P243,000.00,
which YKS accepted without protest. Then, a series of correspondence
ensued between the parties: YKS demanding the delivery of the balance
35,000 bags of cement as per letter-offer; while PWCC insisting on the full
compliance with the terms thereof and informing the latter that it is
exercising the option therein stipulated. YKS filed a complaint against PWCC,
on the basis of the aforesaid letter-offer, as accepted by YKS, as a contract
that binds the PWCC. The CFI Leyte ruled in favor of YKS, but reversed by
the CA on the ground that the said letter-offer is not binding upon it because
Mr. Maglana was not authorized to make the offer and sign the contract in
behalf of the corporation as the Board rejected the same.

ISSUE:

WON Mr. Maglana, the PWCC President and Chairman, was empowered to
execute the contract for the corporation as implied from its By-Laws.

HELD:

No, the Court holds that Mr. Maglana was not so authorized under the By-
Laws of PWCC to enter into contracts for the corporation independently of
the Board of Directors.

"ARTICLE 1317. No one may contract in the name of another without being
authorized by the latter, or unless he has by law a right to represent him. A
contract entered into in the name of another by one who has no authority or
legal representation, or who has acted beyond his powers, shall be
unenforceable, unless it is ratified, expressly or impliedly, by the person on
whose behalf it has been executed, before it is revoked by the other
contracting party."

In the case at bar, the letter-offer was effectively disapproved and rejected
by the Board of Directors which, at the same time, considered the amount of
P243,000.00 received by Maglana as payment for 10,000 bags of white
cement, treated as an entirely different contract, and forthwith notified YKS
its decision to accept the new transaction involving only 10,000 bags of white
cement within 10 days, otherwise it will return the latter’s payment in check
of P243k.

Thus, judgment appealed is AFFIRMED.

b) Resident Marine Mammals v. Secretary of Department of Energy, G.R. No.

180771, April 21, 2015
FACTS:

June 13, 2002, the Government of the Philippines, acting through the DOE,
entered into a Geophysical Survey and Exploration Contract-102 (GSEC-102)
with JAPEX. This contract involved geological and geophysical studies of the
Tañon Strait.

May 9 to 18, 2005, JAPEX conducted seismic surveys in and around the
Tañon Strait. A multi-channel sub-bottom profiling covering approximately
751 kilometers was also done to determine the area's underwater
composition.

January 31, 2007, the Protected Area Management Board of the Tañon Strait
(PAMB-Tañon Strait) issued Resolution No. 2007-001, wherein it adopted the
Initial Environmental Examination (IEE) commissioned by JAPEX, and
favorably recommended the approval of JAPEX's application for an ECC.

March 6, 2007, the EMB of DENR Region VII granted an ECC to the DOE and
JAPEX for the offshore oil and gas exploration project in Tañon Strait. Months
later, on November 16, 2007, JAPEX began to drill an exploratory well, with a
depth of 3,150 meters, near Pinamungajan town in the western Cebu
Province. This drilling lasted until February 8, 2008.

Petitioners then applied to this Court for redress, via two separate original
petitions both dated December 17, 2007, wherein they commonly seek that
respondents be enjoined from implementing SC-46 for, among others,
violation of the 1987 Constitution.

ISSUE:

Whether or not the service contract is prohibited on the ground that there is
no general law prescribing the standard or uniform terms, conditions, and
requirements for service contracts involving oil exploration and extraction.

HELD:

No, the disposition, exploration, development, exploitation, and utilization of

indigenous petroleum in the Philippines are governed by Presidential Decree
No. 87 or the Oil Exploration and Development Act of 1972. This was enacted
by then President Ferdinand Marcos to promote the discovery and production
of indigenous petroleum through the utilization of government and/or local or
foreign private resources to yield the maximum benefit to the Filipino people
and the revenues to the Philippine Government.

Contrary to the petitioners' argument, Presidential Decree No. 87, although

enacted in 1972, before the adoption of the 1987 Constitution, remains to be
a valid law unless otherwise repealed.
 Moreover, in cases where the statute seems to be in conflict with the
Constitution, but a construction that it is in harmony with the Constitution is
also possible, that construction should be preferred. This Court, in
Pangandaman v. Commission on Elections expounding on this point,
pronounced: It is a basic precept in statutory construction that a statute
should be interpreted in harmony with the Constitution and that the spirit,
rather than the letter of the law determines its construction; for that reason,
a statute must be read according to its spirit and intent.

Note that while Presidential Decree No. 87 may serve as the general law
upon which a service contract for petroleum exploration and extraction may
be authorized, as will be discussed below, the exploitation and utilization of
this energy resource in the present case may be allowed only through a law
passed by Congress, since the Tañon Strait is a NIPAS area.

c) Tanpingco v. IAC, G.R. No. 76225, March 31, 1992

FACTS:

Petitioner Espiridion Tanpingco is a tenant-lessee of Benedicto Horca

(respondent) who owns a riceland in Jaro, Leyte. In a letter dated April 9,
1985, Horca’s representative informed Tanpingco to desist from working on
the land. Tanpingco is also ordered to vacate the premises because the
subject lot was donated to the Ministry of Education, Culture, and Sports
Region VIII as a school site for the Buenavista Barangay High School.

Tanpingco filed for payment of disturbance compensation against Horca.

Respondent files a motion to dismiss, stating that the petitioner has no cause
of action because he is not the real party-in-interest (after donating the
subject lot).

ISSUE: Whether or not respondent is the real party-in-interest.

RULING: Respondent is not the real party-in-interest, and is not responsible

for the payment of disturbance compensation. The Ministry of Education, as
the new owner of the land should pay the disturbance compensation before
constructing the school building.

d) Salvador v. CA, G.R. No. 109910, April 5, 1995

FACTS:

Alipio Yabo was the owner of Lot No. 6080 and Lot No. 6180 situated in
Cagayan de Oro City. Title devolved upon his nine children, namely,
Victoriano, Procopio, Lope, Jose, Pelagia, Baseliza, Francisca, Maria, and
Gaudencia, upon his death sometime before or during the WWII.
Pastor Makibalo, husband of Maria Yabo, filed with the CFI a complaint
against the spouses Alberto and Elpia Yabo for quieting of title. He alleged
that he owned 8/9 of the subject lots, having purchased the shares of seven
of Alipio's children and inherited the share of his wife, Maria, and that except
for the portion corresponding to Gaudencia's share which he did not buy, he
occupied, cultivated, and possessed continuously, openly, peacefully, and
exclusively the two parcels of land.

The grandchildren and great-grandchildren of the late Alipio Yabo filed a

complaint for partition and quieting of title with damages against Pastor
Makibalo, Enecia Cristal, and the spouses Eulogio and Remedies Salvador.
They alleged that said lots are the common property of the heirs of Alipio
Yabo; that after Alipio's death, the spouses Pastor and Maria Makibalo,
Enecia Cristal and Jose Yabo became the de facto administrators of the said
properties; and that much to their surprise, they discovered that the Salvador
spouses, who were strangers to the family, have been harvesting coconuts
from the lots.

The trial court decided in favor of the plaintiffs.CA held, among others, that
prescription and laches have not run against the private respondents with
respect to the 1/9 share of Maria Yabo in the estate of her father and to her
conjugal share in the portions acquired from her brothers and sisters.

ISSUE

Has Pastor Makibalo acquired by prescription the shares of his other co-heirs
or co-owners.

RULING:

No. Upon Maria's death, the conjugal partnership of gains was dissolved. Half
of the conjugal properties, together with Maria's 1/9 hereditary share in the
disputed lots, constituted Maria's estate and should thus go to her surviving
heirs. Under Article 1001 of the Civil Code, her heirs are her spouse, Pastor
Makibalo, who shall be entitled to half of her estate; and her brother, Jose,
and the children of her other brothers and sisters, who shall inherit the other
half. There having been no actual partition of the estate yet, the said heirs
became co-owners by operation of law.

Article 494 of the Civil Code provides that each co-owner may demand at any
time the partition of the common property implies that an action to demand
partition is imprescriptible or cannot be barred by laches. The
imprescriptibility of the action cannot, however, be invoked when one of the
co-owners has possessed the property as exclusive owner and for a period
sufficient to acquire it by prescription. Prescription as a mode of acquiring
ownership requires a continuous, open, peaceful, public, and adverse
possession for a period of time fixed by law.
 The possession of a co-owner is like that of a trustee and shall not be
regarded as adverse to the other co-owners but in fact as beneficial to all of
them. Acts which may be considered adverse to strangers may not be
considered adverse insofar as co-owners are concerned. A mere silent
possession by a co-owner, his receipt of rents, fruits or profits from the
property, the erection of buildings and fences and the planting of trees
thereon, and the payment of land taxes, cannot serve as proof of exclusive
ownership, if it is not borne out by clear and convincing evidence that he
exercised acts of possession which unequivocably constituted an ouster or
deprivation of the rights of the other co-owners.

Thus, in order that a co-owner's possession may be deemed adverse to the

cestui que trust or the other co-owners, the following elements must concur:
(1) that he has performed unequivocal acts of repudiation amounting to an
ouster of the cestui que trust or the other co-owners; (2) that such positive
acts of repudiation have been made known to the cestui que trust or the
other co-owners; and (3) that the evidence thereon must be clear and
convincing.

Records do not show that Pastor Makibalo adjudicated to himself the whole
estate of his wife by means of an affidavit filed with the Office of the Register
of Deeds which caused the issuance of a certificate of title in his name or the
cancellation of the tax declaration in Alipio's name and the issuance of a new
one in his own name. The only act which may be deemed as a repudiation by
Pastor of the co-ownership over the lots is his filing of an action to quiet title.
The period of prescription started to run only from this repudiation. However,
this was tolled when his co-heirs, the private respondents herein, instituted
an action for partition. Hence, the adverse possession by Pastor being for
only about six months would not vest in him exclusive ownership of his wife's
estate, and absent acquisitive prescription of ownership, laches and
prescription of the action for partition will not lie in favor of Pastor.

e) Arcelona v. CA, G.R. No. 102900, Oct. 2, 1997

THE FACTS

Petitioners Marcelino Arcelona, Tomasa Arcelona-Chiang and Ruth Arcelona

are natural-born Filipinos who are now naturalized Americans residing in
California, U.S.A. Petitioner Ruth Arcelona is the surviving spouse and legal
heir of the deceased Benedicto Arcelona, brother of Marcelino and Tomasa.
Together with their three sisters — Pacita Arcelona-Olanday, Maria Arcelona-
Arellano and Natividad Arcelona-Cruz (hereinafter collectively referred to as
Olanday, Et. Al.) — petitioners are co-owners pro-indiviso of a fishpond which
they inherited from their deceased parents. 4 The six Arcelonas (two brothers
and four sisters) are named as co-owners in Transfer Certificate of Title No.
34341 which evidences ownership over the fishpond.
On March 4, 1978, a contract of lease over the fishpond was executed
between Cipriano Tandoc and Olanday, Et. Al. The lease contract was for a
period of three (3) years but was renewed up to February 2, 1984 5

Private Respondent Moises Farnacio was appointed in turn by Tandoc as

caretaker-tenant of the same fishpond, effective on the date the contract of
lease was executed. After the termination of the lease contract, the lessee
(Tandoc) surrendered possession of the leased premises to the lessors,
Olanday, Et. Al.

Three days thereafter, on February 7, 1984, Private Respondent Farnacio

instituted Civil Case D-7240 for "peaceful possession, maintenance of security
of tenure plus damages, with motion for the issuance of an interlocutory
order" against Olanday, Et Al., before Respondent Regional Trial Court of
Dagupan City, Branch 40. The case was intended to maintain private
respondent as tenant of the fishpond.

On October 31, 1984, the trial court rendered a decision in favor of private
respondent, the dispositive portion of which reads:

"WHEREFORE, in the light of the foregoing considerations, this Court hereby

renders judgment as follows; to wit:

1. Declaring and recognizing Moises Farnacio as tenant-caretaker over the

fishpond in question located at Lomboy District, Dagupan City;

2. Ordering the defendants to maintain plaintiff in the peaceful possession

and cultivation of said fishpond, with all the rights accorded and obligations
imposed upon him by law;

3. Ordering the Branch Clerk of Court to withdraw and deliver to the plaintiff
all the amounts deposited with this Court; and

4. All others claims of the parties are hereby denied for lack of merit."

Olanday, Et. Al. elevated the decision to the then Intermediate Appellate
Court (IAC) 8 which affirmed with slight modification the decision of the trial
court on May 31, 1985. On appeal, this Court 9 sustained the IAC decision in
G.R. No. 71217. On May 25, 1991, after remand of the case to the court of
origin, private respondent was placed in possession of the entire property
covered by TCT 34341.

Petitioners then filed with Respondent Court of Appeals a petition for

annulment of the aforesaid judgment against private respondent and the
implementing sheriff. 10 The case was docketed as CA GR SP No. 24846. On
May 8, 1991, Respondent Court issued a resolution directing petitioners "to
implead as party defendant the Regional Trial Court of Dagupan City, Branch
50, Dagupan City." 11 Respondent Court promulgated in due course the
assailed Decision and Resolution.

Dissatisfied, petitioners lodged this petition for review before us on May 10,
1992. On August 24, 1992, due course was granted to the petition, and the
parties filed their respective memoranda

THE ISSUES

In their Memorandum dated November 7, 1992, petitioners allege that

Respondent Court of Appeals has committed the following errors:

"I. The Respondent Court of Appeals erred in ruling that the sole and only
ground for annulment of judgment is extrinsic fraud.

II. The Respondent Court of Appeals erred when it failed to consider that
lack of due process and jurisdiction over the persons of the petitioners are
also valid grounds for annulment of judgment.

III. In annulment of judgment the grounds should be based solely on the

records of the case. It is then an error for the Respondent Court of Appeals
to consider matters extraneous to the records of the case.

IV. The Respondent Court of Appeals erred in ruling that petitioners should
have intervened in the proceedings for issuance of writ of execution before
the lower court.

V. The Respondent Court of Appeals erred in ruling that the petitioners are
estopped or are guilty of laches in questioning the decision of the lower
court.

The Court believes that these five assigned errors may be condensed into
three issues:

(1) May a final judgment be annulled on the ground of lack of jurisdiction

(over the subject matter and/or over the person of indispensable parties) and
denial of due process, aside from extrinsic fraud

(2) May extraneous matters, not found in the records of the original case, be
used in voiding or defending the validity of such final judgment?

(3) Procedurally, will an independent action for annulment of the decision of

the regional trial court (which was affirmed both by the Court of Appeals and
the Supreme Court) filed before the Court of Appeals prosper, or is
intervention before the court of origin the only remedy?

THE COURT’S RULING

The petition is meritorious.

First Issue: Grounds for Annulment of Final Judgment

Petitioners contend that Respondent Court of Appeals erred in decreeing "the

all-sweeping and categorical pronouncement that the sole and only ground
for annulment of judgment is extrinsic fraud," and in thereby ignoring various
Supreme Court rulings that a final judgment may also be annulled for "a) lack
of jurisdiction over the subject matter; b) lack of jurisdiction over the persons
of necessary or indispensable parties; and c) lack of due process." 13
Petitioners argue that, being co-owners of the subject property, they are
"indispensable parties." 14 Inasmuch as they were not impleaded in Civil
Case D-7240, "the questioned judgment of the lower court is void insofar as
the petitioners are concerned for want of jurisdiction over their persons and
[for] lack of due process." 15 Petitioners "do not see any reason why a
person who was not made a party at all could not assail the same
proceedings involving his property and affecting his rights and interests." 16

Petitioners further maintain that since "the case involves the personal status
of the private respondent, or relates to, or the subject of which is property
within the Philippines, then the petitioners as non-residents" are entitled to
extra-territorial service, 17 which is a "due process requirement." As they
were never served with summons, to "bar them [from] questioning the
proceedings of the lower court will be compounding injustice . . . If a party to
a case can assail the proceedings for defective service of summons," the
same right should be afforded to a person who was not made a party at all.

Public respondent disposed of petitioners’ above contention in this wise:

"First. Annulment of judgment, as the Supreme Court had occasion to rule,

rests on a single ground: extrinsic fraud (Canlas v. Court of Appeals, 170
[sic] SCRA 160, 170). Islamic Da’ Wah Council of the Phils. v. Court of
Appeals, 178, 186, citing Anuran v. Aquino, 38 Phil. 29, emphatically
announced that there can be no question as to the right of any person
adversely affected by a judgment to maintain an action to enjoin its
enforcement and to have it declared a nullity on the ground of fraud and
collusion practiced in obtaining the judgment when such fraud is extrinsic or
collateral to the matters involved in the issues raised at the trial which
resulted in such judgment.

Clearly, there is nothing in the petition that extrinsic fraud, as Macabingkil

defines it, indeed vitiated the proceedings during the trial of Civil Case No. D-
7240.

The essence of the instant petition is worded by the petitioners as follows:

‘The common property involved in this case is covered by a Torrens Title,

specifically mentioning the co-owners thereof. To bind the entire property
and the owners thereof, all the registered owners must be impleaded. The
private respondent ONLY IMPLEADED the three co-owners, excluding the
petitioners herein. For the petitioners to be bound by the questioned
decision, such would really be a derogation of their constitutional right to due
process. The questioned decision, too, suffers the fatal defect of utter want
of jurisdiction.

Accordingly, since the petition for annulment of judgment is not based on the
ground of extrinsic fraud, the petition suffers from a basic and fundamental
infirmity that deprives petitioners of a valid cause of action against
respondents herein"

We hold that the Court of Appeals erred in limiting the ground(s) for
annulment of judgment to only one, namely, extrinsic fraud. While it is true
that in the cited cases of Canlas v. CA 20 and Islamic Da’ Wah Council of the
Philippines. v. Court of Appeals, 21 this Court said that a judgment "may be
annulled on the ground of extrinsic or collateral fraud," 22 we should hasten
to add that in Macabingkil v. People’s Homesite and Housing Corporation, 23
where the above ruling on annulment of judgment was based, we held that
there are really three ways by which a final judgment may be attacked: 24

"Under existing rules, there are three (3) ways by which a final and
executory judgment may be set aside. The first is by petition for relief from
judgment under Rule 38 of the Revised Rules of Court, when judgment has
been taken against the party through fraud, accident, mistake or excusable
negligence, in which case the petition must be filed within sixty (60) days
after the petitioner learns of the judgment, but not more than six (6) months
after such judgment was entered. The second is by direct action to annul and
enjoin the enforcement of the judgment. This remedy presupposes that the
challenged judgment is not void upon its face, but is entirely regular in form,
and the alleged defect is one which is not apparent upon its face or from the
recitals contained in the judgment. [fn: Abbain v. Chua, 22 SCRA 798;
Cadano v. Cadano, 49 SCRA 33; Anuran v. Aquino, 38 Phil. 329] As explained
in Banco Español-Filipino v. Palanca, [fn: 37 Phil. 291, 949] ‘under accepted
principles of law and practice, long recognized in American courts, the proper
remedy in such case, after the time for appeal or review has passed, is for
the aggrieved party to bring an action enjoining the judgment, if not already
carried into effect; or if the property has already been disposed of, he may
institute suit to recover it.’ The third is either a direct action, as certiorari, or
by a collateral attack against the challenged judgment (which is) is void upon
its face, or that the nullity of the judgment is apparent by virtue of its own
recitals. As aptly explained by Justice Malcolm in his dissent in Banco
Español-Filipino v. Palanca, supra, ‘A judgment which is void upon its face,
and which requires only an inspection of the judgment roll to demonstrate its
want of vitality is a dead limb upon the judicial tree, which should be lopped
off, if the power so to do exists.’
Since the aforementioned decision in Civil Case No. Q-5866 is not void upon
its face, it may only be annulled by direct action on the ground of fraud.

It is only extrinsic or collateral fraud, as distinguished from intrinsic fraud,

however, that can serve as a basis for the annulment of judgment. [Aring v.
Original, 6 SCRA 1021, 1025; Velasco v. Velasco, 2 SCRA 736] Fraud has
been regarded as extrinsic or collateral, within the meaning of the rule,
‘where it is one the effect of which prevents a party from having a trial, or
real contest, or from presenting all of his case to the court, or where it
operates upon matters pertaining, not to the judgment itself, but to the
manner in which it was procured so that there is not a fair submission of the
controversy.’[46 Am. Jur. 913] . . ."

It is clear then that to set aside a final and executory judgment, there are
three remedies available to a litigant: first, a petition for relief from judgment
under Rule 38 of the Rules of Court 25 on grounds of fraud, accident,
mistake and excusable negligence filed within sixty (60) days from the time
petitioner learns of the judgment but not more than six (6) months from the
entry thereof; second, a direct action to annul the judgment on the ground of
extrinsic fraud; and third a direct action for certiorari or collateral attack to
annul a judgment that is void upon its face or void by virtue of its own
recitals. Thus, Macabingkil did not preclude the setting aside of a decision
that is patently void where mere inspection of the judgment is enough to
demonstrate its nullity on grounds of want of jurisdiction or non-compliance
with due process of law. This doctrine is recognized in other cases: 26

". . . There is no question that a final judgment may be annulled. There are,
however, certain requisites which must be established before a judgment can
be the subject of an action for annulment ‘Under the present procedure,
aside from the reliefs provided in these two sections (Secs. 1 & 2, Rule 38),
there is no other means whereby the defeated party may procure final and
executory judgment to be set aside with a view to the renewal of the
litigation, unless (a) the judgment is void for want of jurisdiction or for lack of
due process of law, or (b) it has been obtained by fraud.’ (I Moran’s Rules of
Court 1950 Ed., p. 697, citing Anuran v. Aquino, 38 Phil. 29; Banco Español-
Filipino v. Palanca, 37 Phil. 921). Reason of public policy which favors the
stability of judicial decisions are (sic) mute in the presence of fraud which the
law abhors (Garchitorena v. Sotelo, 74 Phil. 25)."

On the one hand, extrinsic fraud is the ground to annul a voidable final
judgment; the declaration of nullity of a patently void final judgment, on the
other, is based on grounds other than extrinsic fraud. To say, then, that
petitioners can avail themselves only of the ground of extrinsic fraud and no
other is to fail to appreciate the true meaning and ramifications of
annulment/nullity.

Jurisdiction is conferred by law. Its exercise must strictly comply with the
legal requisites; otherwise, a challenge on the ground of lack of jurisdiction
may be brought up anytime. Such jurisdiction normally refers to jurisdiction
over the subject. As an example, in a case involving the issuance of a new
owner’s duplicate certificate of title, the original of which was lost, stolen or
destroyed, the court must strictly comply with the requisites of Section 109 of
P.D. 1529; otherwise, its jurisdiction may be attacked anytime. Thus, we
ruled in New Durawood Co. Inc. v. Court of Appeals: 27

"In Demetriou v. Court of Appeals, Et Al., [238 SCRA 158, at 162 (November
14, 1994)] this Court ruled:

‘In Serra Serra v. Court of Appeals (195 SCRA 482 [1991]), on facts
analogous to those involved in this case, this Court already held that if a
certificate of title has not been lost but is in fact in the possession of another
person, the reconstituted title is void and the court rendering the decision
has not acquired jurisdiction. Consequently the decision may be attacked any
time.’

In the instant case, the owner’s duplicate certificates of title were in the
possession of Dy Quim Pong, the petitioner’s chairman of the board and
whose family controls the petitioner corporation. Since said certificates were
not in fact ‘lost or destroyed,’ there was no necessity for the petition filed in
the trial court for the ‘Issuance of New Owner’s Duplicate Certificates of
Title . . .,’ In fact, the said court never acquired jurisdiction to order the
issuance of new certificates. Hence, the newly issued duplicates are
themselves null and void.

It is obvious that this lapse happened because private respondents and

respondent judge failed to follow the procedure set forth in P.D. No. 1529
which, as already stated, governs the issuance of new owner’s duplicate
certificates of title.

Section 109 of the said law provides, inter alia, that ‘due notice under oath’
of the loss or theft of the owner’s duplicate certificate ‘shall be sent by the
owner or by someone in his behalf to the Register of Deeds . . .’ (Emphasis
supplied). In this case, while an affidavit of loss was attached to the petition
in the lower court, no such notice was sent to the Register of Deeds

Private respondents tried to convince the Court that by their failure to locate
Francis Dytiongsee, they had no other recourse but to file a petition for
reconstitution. Sec. 107 of the P.D. 1529, however, states that the remedy,
in case of the refusal or failure of the holder — in this case, the petitioner —
to surrender the owner’s duplicate certificate of title, is a ‘petition in court to
compel surrender of the same to the Register of Deeds,’ and not a petition
for reconstitution"

Ineluctably, a judgment rendered without jurisdiction over the subject matter

is void. As we elucidated in Leonor v. CA: 2
"Clearly and unequivocally, the summary procedure under Rule 108, and for
that matter under Art. 412 of the Civil Code, cannot be used by Mauricio to
change his and Virginia’s civil status from married to single and of their three
children from legitimate to illegitimate. Neither does the trial court, under
said Rule, have any jurisdiction to declare their marriage null and void and as
a result thereof, to order the local civil registrar to cancel the marriage entry
in the civil registry. Further, the respondent trial judge gravely and seriously
abused his discretion in unceremoniously expanding his very limited
jurisdiction under such rule to hear evidence on such a controversial matter
as nullity of a marriage under the Civil Code and/or Family Code, a process
that is proper only in ordinary adversarial proceedings under the Rules

Jurisdiction over the Persons of Indispensable Parties

True, the above dispositions refer to jurisdiction over the subject matter.
Basic considerations of due process, however, impel a similar holding in
cases involving jurisdiction over the persons of indispensable parties which a
court must acquire before it can validly pronounce judgments personal to
said defendants. Courts acquire jurisdiction over a party plaintiff upon the
filing of the complaint. On the other hand, jurisdiction over the person of a
party defendant is assured upon the service of summons in the manner
required by law or otherwise by his voluntary appearance. As a rule, if a
defendant has not been summoned, the court acquires no jurisdiction over
his person, and a personal judgment rendered against such defendant is null
and void. 29 A decision that is null and void for want of jurisdiction on the
part of the trial court is not a decision in the contemplation of law and,
hence, it can never become final and executory. 30

Rule 3, Section 7 of the Rules of Court, defines indispensable parties as

parties-in-interest without whom there can be no final determination of an
action. As such, they must be joined either as plaintiffs or as defendants. The
general rule with reference to the making of parties in a civil action requires,
of course, the joinder of all necessary parties where possible, and the joinder
of all indispensable parties under any and all conditions, their presence being
a sine qua non for the exercise of judicial power. 31 It is precisely "when an
indispensable party is not before the court (that) the action should be
dismissed." 32 The 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 to those present.

Petitioners are co-owners of a fishpond. Private respondent does not deny

this fact, and the Court of Appeals did not make any contrary finding. The
fishpond is undivided; it is impossible to pinpoint which specific portion of the
property is owned by Olanday, Et. Al. and which portion belongs to
petitioners. Thus, it is not possible to show over which portion the tenancy
relation of private respondent has been established and ruled upon in Civil
Case D-7240. Indeed, petitioners should have been properly impleaded as
indispensable parties. Servicewide Specialists, Incorporated v. Court of
Appeals 34 held that no final determination of a case could be made if an
indispensable party is not impleaded:

". . . An indispensable party is one whose interest will be affected by the

court’s action in the litigation, and without whom no final determination of
the case can be had. The party’s interest in the subject matter of the suit and
in the relief sought are so inextricably intertwined with the other parties that
his legal presence as a party to the proceeding is an absolute necessity. In
his absence there cannot be a resolution of the dispute of the parties before
the court which is effective, complete, or equitable

Formerly, Article 487 of the old Civil Code provided that "any one of the co-
owners may bring an action in ejectment." It was subsequently-held that a
co-owner could not maintain an action in ejectment without joining all the
other co-owners. Former Chief Justice Moran, an eminent authority on
remedial law, explains: 35

". . . As held by the Supreme Court, were the courts to permit an action in
ejectment to be maintained by a person having merely an undivided interest
in any given tract of land, a judgment in favor of the defendants would not
be conclusive as against the other co-owners not parties to the suit, and thus
the defendant in possession of the property might be harassed by as many
succeeding actions of ejectment, as there might be co-owners of the title
asserted against him. The purpose of this provision was to prevent
multiplicity of suits by requiring the person asserting a right against the
defendant to include with him, either as co-plaintiffs or as co-defendants, all
persons standing in the same position, so that the whole matter in dispute
may be determined once and for all in one litigation."

Contrariwise, it is logical that a tenant, in an action to establish his status as

such, must implead all the pro-indiviso co-owners; in failing to do so, there
can be no final determination of the action. In other words, a tenant who
fails to implead all the co-owners cannot establish with finality his tenancy
over the entire co-owned land.

Co-owners in an action for the security of tenure of a tenant are

encompassed within the definition of indispensable parties; thus, all of them
must be impleaded. As defined: 3

"An indispensable party is a party who has such an interest in the

controversy or subject matter that a final adjudication cannot be made, in his
absence, without injuring or affecting that interest, a party who has not only
an interest in the subject matter of the controversy, but also has an interest
of such nature that a final decree cannot be made without affecting his
interest or leaving the controversy in such a condition that its final
determination may be wholly inconsistent with equity and good conscience.
It has also been considered that an indispensable party is a person in whose
absence there cannot be a determination between the parties already before
the court which is effective, complete, or equitable. Further, an indispensable
party is one who must be included in an action before it may properly go
forward.

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 multiple
litigation."

Clearly, the decision in Civil Case D-7240 cannot bind petitioners and cannot
adjudicate the entire co-owned property, not even that portion belonging to
Olanday Et. Al., ownership of the property being still pro-indiviso. Obviously,
the failure to implead petitioners barred the lower court from making a final
adjudication. Without the presence of indispensable parties to a suit or
proceeding, a judgment therein cannot attain finality. 37

Ergo, res inter alios judicatae nullum aliis praejudicarium faciunt. 38 Thus,
the Court, through former Chief Justice Marcelo B. Fernan, held that a person
who was not impleaded in the complaint cannot be bound by the decision
rendered therein, for no man shall be affected by a proceeding in which he is
a stranger.

Admittedly, in this case, the want of jurisdiction of the trial court in rendering
its decision in Civil Case No. D-7240 is not patent on the face of said
judgment. However, there were glaring documentary and testimonial pieces
of evidence referred to by the trial court in its decision which should have
prompted it to inquire further whether there were other indispensable parties
who were not impleaded. These facts and circumstances should have
forewarned the trial court that it had not acquired jurisdiction over a number
of indispensable parties. In American jurisprudence, the nullity of a decision
arising from lack of jurisdiction may be determined from the record of the
case, not necessarily from the face of the judgment only. 40 We believe that
this rule should be applied to this case, considering that in the assailed trial
court’s decision, referrals were made to crucial evidence which if scrutinized
would readily reveal that there were indispensable parties omitted.

First, the decision referred to the subject property "as Lot No. 3312 of the
Cadastral Survey.’’ 41 This lot was particularly described in private
respondent’s Complaint dated February 6, 1984 filed in Civil Case D-7240. 42
Obviously such description was copied by private respondent from the
transfer certificate of title over the subject fishpond issued on August 12,
1975 naming all the co-owners, including the herein petitioners and the fact
of their foreign residences, thus: 43
"IT IS HEREBY CERTIFIED that certain land situated in the City of Dagupan,
formerly in the Province of Pangasinan bounded and described as follows:

A parcel of land (Lot 3312 of the Cadastral Survey of Dagupan), situated in

the City of Dagupan. . .

is registered in accordance with the provisions of the Land Registration Act in

the name of PACITA ARCELONA, married to Miguel Ulanday; TOMASA
ARCELONA, married to Tung Ming Chiang; MARCELINO V. ARCELONA,
married to Soledad Tiongco; MARIA V. ARCELONA, married to Oreste
Arellano; BENEDICTO V. ARCELONA, married to Ruth Suget; and NATIVIDAD
ARCELONA, married to Agrimero Cruz; all of legal age, Filipinos, the second
and fifth named residents of Los Angeles, California, U.S.A., third & fourth of
Manila; first of Villasis, Pangasinan & the last named of Lingayen, Pangasinan
as owner thereof in fee simple, subject to such of the incumbrances
mentioned in Section 39 of said Act as may be subsisting, and to

Entered at the City of Dagupan Philippines, on the 12th day of August in the
year nineteen hundred and seventy-five at 4:00 pm." (Emphasis supplied).

Considering that private respondent was suing to establish his status as a

tenant over the subject fishpond, the responsibility for impleading all the
indispensable parties undeniably rested on him as provided under Rule 3 of
the Rules of Court. Section 2 of Rule 3 requires that "every action must be
prosecuted and defended in the name of the real party in interest. All
persons having an interest in the subject of the action and in obtaining the
relief demanded shall be joined as plaintiffs." Further, Section 7 of the same
rule states that" (p)arties in interest without whom no final determination can
be had of an action shall be joined either as plaintiffs or defendants."

Second, Respondent Court of Appeals ruled that private respondent "in his
motion to dismiss (before said Court) alleged that petitioners knew of the
lessee as revealed by the testimony of Pacita Olanday, one of the defendants
in Civil Case No. D-7240 and a sister of petitioners. (TSN, pp. 15-16, hearing
of October 2, 1984, Civil Case No. D-7240)." That being so, why did private
respondent fail to include petitioners as defendants in the case below? It
should be noted that the lease contract was between Cipriano Tandoc and
Olanday, Et. Al. Private respondent, a caretaker-tenant of Tandoc, knew or
should have known that there were co-owners other than Olanday, Et. Al.
And even conceding arguendo that petitioners had authorized Olanday, Et.
Al. to enter into a lease contract with Tandoc, this fact did not authorize the
latter to represent petitioner in the civil case he brought. Under Rule 9,
Section 9 of the Rules of Court, the pleader is required to set forth the
names, if known to him, of persons who ought to be parties, if complete
relief is to be accorded to those who are already parties but who are not
joined; and to state why they have been omitted. Surely, he brought suit to
establish his status as a tenant. It is thus his responsibility to state the names
of all the persons against whom he wants to establish his status as
tenant.chanrobles.com : virtual lawlibrary

Third, both the private respondent and the trial court knew of the obvious
omission of petitioners as party defendants. Telling is the fact that, by
reciting part of the transcript of stenographic notes, private respondent
himself provided clear evidence in his memorandum that he knew of the
existence of other co-owners who were not impleaded in his case against
Olanday Et. Al.: 44

"As admitted by Pacita Olanday, one of the defendants in Civil Case No. D-
7240, the petitioners know of the lease with Cipriano Tandoc; they were
authorized to lease the shares of the petitioners. Here is the testimony of
Pacita Olanday:

A. I talked with my brothers when they ‘balik-bayan’, they said I will make an
agreement. (tsn. October 2, 1984 pp. 15 and 16 — CV# D-7240)."

He also knew that in executing the lease, Pacita Olanday represented only
her sisters (Maria and Natividad) who were residing in the Philippines.
Definitely, at the time of the execution of the contract, she had no brother
residing in the Philippines because her only brothers, Marcelino and
Benedicto Arcelona, (the latter now deceased and represented in this case by
Petitioner Ruth Arcelona) were living in California. This fact can be deduced
from the recitals of the RTC decision: 45

"It is undisputed in the records that the defendants (referring to Olanday, Et.
Al.) are co-owners and civil law lessors of a fishpond otherwise known as Lot
No. 3312 of the Cadastral Survey of Dagupan City; that as owners, they
entered into a Contract of Lease (Exh.’1’) with one Cipriano Tandoc dated
March 4, 1978 for a term of three (3) years from February 2, 1982, which
contract was renewed for another two (2) years up to February 2, 1984. On
the 31st of January, 1984, Exhibit ‘3’, an ‘Affidavit of Surrender of Rights and
Possession of Lessee over a Fishpond’ was executed between Cipriano
Tandoc and Pacita Olanday who signed for herself and in behalf of her two
(2) sisters. Plaintiff Moises Farnacio was however, instituted as caretaker-
tenant over the same fishpond by Cipriano Tandoc on the date of the
Contract of Lease was entered into between the owners-lessors and Cipriano
Tandoc. The private agreement (Exh.’D’) signed by Cipriano Tandoc and
Moises Farnacio is, however, assailed in a criminal case for falsification in the
Fiscal’s Office." (Underscoring supplied).

In fact, only these co-owners who are residing in the Philippines were joined
as defendants in Civil Case D-7240. But the mention of Pacita’s relatives who
were residing abroad should have made the trial court aware of the existence
of indispensable parties who were not yet impleaded.
Despite this knowledge of the apparent defect in the complaint and in its
jurisdiction, the trial court did not take the initiative to implead petitioners as
defendants or to order private respondent to do so, contrary to the clear
mandate of Rule 3, Sec. 11 of the Rules of Court 46 which provides:

Sec. 11. Misjoinder and non-joinder of parties. — Misjoinder of parties is not

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 party may be
severed and proceeded with separately.

The foregoing testimony on the existence of other co-owners was a clear

signal that indispensable parties had not yet been impleaded. Indeed, this
knowledge should have put the private respondent and the trial court on
guard. The burden to implead or to order the impleading of indispensable
parties is placed on private respondent and on the trial court, respectively.
Since no evidence was presented to prove that petitioners were aware of the
civil case filed against Olanday Et. Al., they cannot be faulted for not
intervening therein.

In sum, we hold that the nullity of a judgment grounded on lack of

jurisdiction may be shown not only by what patently appears on the face of
such decision but also by documentary and testimonial evidence found in the
records of the case and upon which such judgment is based.

Before ending our discussion on the first issue, we must stress that the then
Intermediate Appellate Court and this Court, in affirming the RTC decision in
Civil Case No. D-7240 which we here nullify, had not been given the occasion
to rule on the issue of the trial court’s jurisdiction over the persons of
indispensable parties; verily, this question had not been raised before the
two appellate courts. The review of civil cases by appellate courts is confined
only to the issues raised by the parties. Hence, appellate courts do not have
the privilege or the opportunity afforded the trial courts to consider matters
beyond the specifically contested issues, e.g., jurisdiction over indispensable
parties, as in this case. Such lack of jurisdiction could not have been known
by the appellate courts, including this Court, as it was not patent from the
documents or submissions filed before them. The issue raised before the
then Intermediate Appellate Court and this Court was formulated in this
wise:" (t)he validity of private respondent’s claim that he is a tenant of the
petitioners’ fishpond, with security of tenure as such assured under the law,
is the basic question presented in this appeal." 47 We underscore the fact
that the issue of whether all the indispensable parties had been validly
impleaded, if at all, had not been raised at that time. In any event, whether
the indispensable parties were actually impleaded and jurisdiction over them
was acquired was a factual question for the trial court to determine.
Consistent with the basic doctrine that factual findings of lower courts are
binding on appellate courts unless covered by the recognized exceptions, 48
appellate courts must be able to rely on the implied affirmation of the trial
 court that jurisdiction had been acquired over indispensable parties,
especially when this was not raised as an issue on appeal. The responsibility
for impleading indispensable parties for the exhaustive trial of a case cannot
rest on this forum or on the then Intermediate Appellate Court. Indeed, the
Decision of this Court affirming the said trial court’s decision is captioned only
as "Pacita A. Olanday, Maria A. Arellano and Natividad A. Cruz, Petitioners, v.
Intermediate Appellate Court and Moises Farnacio, respondents", clearly
indicating that petitioners herein had been omitted as indispensable parties in
the proceedings before the trial court and before the appellate tribunals.
Substantial justice requires that this error be now rectified.

f) Florendo v. Coloma, G.R. No. L-60544, May 19, 1984

FACTS:

The issue in this petition is whether petitioners Florendos, heirs of Adela

Salindon have the right to substitute the original petitioner Adela Salindon.
The original case is about the ejectment case filed by Adela Salindon against
William Vazquez and Silverio Nicolas. The ejectment case originated from the
Adela Salindon v. William Vasquez and Silverio Nicolas case where the court
adjudged the Vazquez and Nicolas as the owner of the land bought by
Salindon with the Philippines Homesite and Housing Corporation. This was
appealed by Salindon claiming that the parties are “squatters” and that the
RTC has no jurisdiction over the matter as the same is within the PHHC (now
NHA).

On December 11, 1976, Salindon died. There was, however, no substitution

of party; hence Salindon continued to be the appellant in the appealed case.
The deceased Salindon continued to be an adverse party. Meanwhile, after
Salindon's death, her heirs settled her estate and the subject lot were
transferred with a new Transfer Certificate of Title to the petitioners.

The petitioners challenge the proceeding in the Court of Appeals after the
death of the plaintiff- appellant Adela Salindon. They are of the opinion that
since there was no legal representative substituted for Salindon after her
death, the appellate court lost its jurisdiction over the case and consequently,
the proceedings in the said court are null and void.

ISSUE:

Whether or not the court lost its jurisdiction after the death of the original
plaintiff Adela Salindon?

HELD:

NO. There is no dispute that an ejectment case survives the death of a party.
The supervening death of plaintiff-appellant Salindon did not extinguish her
 civil personality (Republic v. Bagtas, 6 SCRA 242; Vda. de Haberes v. Court of
Appeals, 104 SCRA 534).

Section 17, Rule 3 of the Rules of Court provides:

After a party dies and the claim is not thereby extinguished, the court shall
order upon proper notice, the legal representative of the deceased to appear
and to be substituted for the deceased within a period of thirty (30) days or
within such time as may be granted ...

Section 16 of Rule 3 provides:

Whenever a party to a pending case dies ... it shall be the duty of his
attorney to inform the court promptly of such death ... and to give the name
and residence of the executor, administrator, guardian or other legal
representative of the deceased.

In the case at bar, Salindon's counsel after her death on December 11, 1976
failed to inform the court of Salindon's death. The appellate court could not
be expected to know or take judicial notice of the death of Salindon without
the proper manifestation from Salindon's counsel. In such a case and
considering that the supervening death of appellant did not extinguish her
civil personality; the appellate court was well within its jurisdiction to proceed
as it did with the case.

g) Boston Equity Resources Inc. v. CA, G.R. No. 173946, June 19, 2013

FACTS:

In this case, petitioner called the Court’s attention to the fact that
respondent’s motion to dismiss questioning the trial court’s jurisdiction was
filed more than six years after her amended answer was filed. According to
petitioner, respondent had several opportunities, at various stages of the
proceedings, to assail the trial court’s jurisdiction but never did so for six
straight years. Citing the doctrine laid down in another case, petitioner
claimed that respondent’s failure to raise the question of jurisdiction at an
earlier stage bars her from later questioning it, especially since she actively
participated in the proceedings conducted by the trial court.

Petitioner’s argument is misplaced, in that, it failed to consider that the

concept of jurisdiction has several aspects, namely: (1) jurisdiction over the
subject matter; (2) jurisdiction over the parties; (3) jurisdiction over the
issues of the case; and (4) in cases involving property, jurisdiction over the
res or the thing which is the subject of the litigation.

The aspect of jurisdiction which may be barred from being assailed as a

result of estoppel by laches is jurisdiction over the subject matter. Thus, in
the case relied upon by petitioner, the issue involved was the authority of the
then Court of First Instance to hear a case for the collection of a sum of
money in the amount of 1,908 pesos which amount was, at that time, within
the exclusive original jurisdiction of the municipal courts. The jurisdiction of
the trial court over the subject matter of the case was likewise the issue in
subsequent cases citing that ruling.

For example, in Spouses Gonzaga versus Court of Appeals, the issue for
consideration was the authority of the regional trial court to hear and decide
an action for reformation of contract and damages involving a subdivision lot,
it being argued therein that jurisdiction is vested in the Housing and Land
Use Regulatory Board pursuant to the Subdivision and Condominium Buyers
Protective Decree. Another example is the case of Lee versus Presiding
Judge. In that case, petitioners argued that the respondent municipal trial
court had no jurisdiction over the complaint for ejectment because the issue
of ownership was raised in the pleadings. Finally, in People versus Casuga,
accused-appellant claimed that the crime of grave slander, of which she was
charged, falls within the concurrent jurisdiction of municipal courts or city
courts and the then courts of first instance, and that the judgment of the
court of first instance, to which she had appealed the municipal court's
conviction, should be deemed null and void for want of jurisdiction as her
appeal should have been filed with the Court of Appeals or the Supreme
Court.

In all of these cases, the Supreme Court barred the attack on the jurisdiction
of the respective courts concerned over the subject matter of the case based
on estoppel by laches, declaring that parties cannot be allowed to belatedly
adopt an inconsistent posture by attacking the jurisdiction of a court to which
they submitted their cause voluntarily.

Here, what respondent was questioning in her motion to dismiss before the
trial court was that court’s jurisdiction over the person of defendant. Thus,
the principle of estoppel by laches finds no application in this case. Instead,
the principles relating to jurisdiction over the person of the parties are
pertinent herein.

The Rules of Court provide in Rule 9, Section 1 and Rule 15, Section 8 that
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. Also, subject to the
provisions of Section 1 of Rule 9, a motion attacking a pleading, order,
judgment, or proceeding shall include all objections then available, and all
objections not so included shall be deemed waived.

Based on the foregoing citations, the "objection on jurisdictional grounds

which is not waived even if not alleged in a motion to dismiss or the answer
 is lack of jurisdiction over the subject matter.” Lack of jurisdiction over the
subject matter can be raised anytime, even for the first time on appeal, since
jurisdictional issues cannot be waived. This is subject, however, to the
principle of estoppel by laches.

Since the defense of lack of jurisdiction over the person of a party to a case
is not one of those defenses which are not deemed waived under Section 1
of Rule 9, such defense must be invoked when an answer or a motion to
dismiss is filed in order to prevent a waiver of the defense. If the objection is
not raised either in a motion to dismiss or in the answer, the objection to the
jurisdiction over the person of the plaintiff or the defendant is deemed
waived by virtue of the first sentence of Section 1 of Rule 9 of the Rules of
Court.

The Court of Appeals, in this case, therefore, erred when it made a sweeping
pronouncement in its questioned decision, stating that any issue on
jurisdiction may be raised at any stage of the proceeding, even for the first
time on appeal and that, therefore, respondent timely raised the issue in her
motion to dismiss and is, consequently, not estopped from raising the
question of jurisdiction. As the question of jurisdiction involved here is that
over the person of the defendant, the same is deemed waived if not raised in
the answer or a motion to dismiss. In any case, respondent cannot claim the
defense since "lack of jurisdiction over the person, being subject to waiver, is
a personal defense which can only be asserted by the party who can thereby
waive it by silence."

h) Santiago Land Development Corp. v. CA, G.R. No. 106194, Jan. 28, 1997

Petitioner has filed a motion for reconsideration to which private

respondents, heirs of Norberto J. Quisumbing have filed an opposition.
Petitioner has in turn filed a reply. Petitioner maintains that, as purchaser
pendente lite of the land in litigation in Civil Case No. 10513 of the Makati
Regional Trial Court, entitled "Norberto J. Quisumbing v. Philippine National
Bank," petitioner has a right to intervene under Rule 12, §2.

First. Petitioner points out that Sen. Vicente J. Francisco's book on the Rules
of Court (Vol. 1, page 719), which the Court cited in its decision, in turn cites
Moore's Federal Practice (Vol. 2, page 2307) which actually supports
petitioner's right to intervene. Petitioner states:

9. Prof. Moore, in his above-cited treatise, cites among others a case decided
by the Supreme Court of California for the proposition that intervention of a
purchaser pendente lite is recognized by the U.S. courts. (Ibid., Chapter
24.03, page 19, note 49; See, e.g., Dutcher v. Haines City Estate, 26 F. 2d
669 [CCA Fla., 1928]; State ex rel. Thelen v. District Court for Toole Country,
17 P. 2d 57, 93 Mont. 149 [S.C. Mont., 1932]; Bily v. Board of Property
Assessment Appeals & Review, 44 A. 2d 250, 353 Pa. 49 [S.C. Penn., 1945];
Miracle House Corp v. Hange et al., 96 So 2d 417 [S.C. Fla., 1957]).
The Court cited Sen. Francisco's work on the Rules of Court only for the
proposition, not disputed by petitioner, that the purpose of Rule 12, §2 on
intervention is to enable a stranger to an action to become a party to protect
his interest and the court to settle in the process all conflicting claims. Since
petitioner is not a stranger in the action between Quisumbing and the PNB,
petitioner in fact having stepped into the shoes of PNB in a manner of
speaking, it follows that it cannot claim any further right to intervene in the
action.

Nor do we find the cases said to be cited in Moore's Federal Practice

supportive of petitioner's right to intervene in this case. The first three cases
(Dutcher v. Haines City Estate, 26 F.ed 669 (CCA Fla., 1928); State ex rel.
Thelen v. District Court, 17 P. 2d 57, 93 Mont. 149 (S.C. Mont., 1932) and
Bily v. Board of Property Assessment Appeals and Review, 44 A.2d 250, 353
Pa. 49 (S.C. Penn. 1945)) involve purchasers pendente lite in execution or
sheriff's sales, not in voluntary transactions. The difference is important. In
voluntary sales or transactions, the vendor can be expected to defend his
title because of his warranty to the vendee. No such obligation is owed by
the owner whose land is sold at execution sale. In fact the buyer at such
sales takes the property subject to the superior right of other parties. Thus,
in Dutcher v. Haines City Estates, supra, in the action brought by Dutcher
against the Haines City Estates to claim a lien on certain lands, it was held
that a bank, which subsequently obtained a judgment against the Haines City
Estates for a sum of money and bought the lands being claimed by Dutcher,
was entitled to intervene. It was held that "the title of the bank is superior to
any lien asserted by appellants [Dutchers and company]. . . . It is immaterial
that the title was acquired by the purchaser pendente lite, as it is valid and
cannot be affected by the pending litigation."

In State ex rel. Thelen v. District Court, supra, Ke-Sun Oil Co. brought a suit
to quiet title against Sunburst Oil & Refining, Oil Well Supply and Ferdig Oil
Co. Oil Well Supply, which had a lien on a property belonging to Ferdig Oil,
foreclosed the lien and the property was sold to J.N. Thelen. It was held that
J.N. Thelen should have been allowed by the lower court to intervene in
order "to have his rights adjudicated." ((17 P.2d at 59)

And in Bily v. Board of Property Assessment Appeals, supra, it was held that
in an appeal brought by property owners to protest an assessment, a party
who foreclosed a mortgage on one of the properties and purchased the
property at sheriff's sale has a right to intervene. It was held that the right of
intervention should be accorded to any one having title to property "which is
the subject of litigation, provided that his rights will be substantially affected
by the direct legal operation and effect of the decision, and provided also
that it is reasonably necessary for him to safeguard an interest of his own
which no other party on record is interested in protecting." (44 A.2d at 251)

As the purchaser in those cases did not acquire the property from their
owners but adverse to them, he could expect no party in the pending suit to
safeguard his interest. Hence the necessity of allowing his intervention. In
contrast, in the case at bar, petitioner himself considers the defenses raised
by PNB, its predecessor in interest, to be "formidable" and all that it desires
in seeking to intervene is "to fortify even more such defenses" (Reply to
Opposition, p. 4). Petitioner is thus unlike the heirs in Dizon v. Romero, 26
SCRA 452 (1968) or the purchaser pendente lite at a sheriff's sale in Bily v.
Board of Property Assessment who had to be allowed to intervene because it
was "reasonably necessary for him to safeguard an interest of his own which
no other party on record is interested in protecting." (44 A.2d at 251) It is
simply petitioner's perfectionism or meticulousness that makes it want to
intervene "to further improve the defenses of the original party (here, PNB)."
But otherwise there is no reasonable necessity for its intervention.

On the other hand the last case cited in Moore's Federal Practice, Miracle
House Corp. v. Haige, supra, while involving a vendee who sought to
intervene in a case in which said vendee had an interest by virtue of a
contract of sale made in its favor by one of the vendors, does not involve a
purchaser pendente lite so as to be considered on all fours with the case at
bar. He was a purchaser but not pendente lite. Hence the ruling in that case
cannot be invoked by petitioner.

Second. Petitioner contends that, unless its right to intervene is upheld, a

stranger to the action would have a better right contrary to the constitutional
guarantee of equal protection of the laws. Petitioner is not really denied
protection. It is represented in the action by its predecessor in interest whose
defenses petitioner itself considers to be "formidable." As private respondents
point out, it is not really the case that petitioner is denied a hearing. It is not.
As already stated, since petitioner is a transferee pendente lite with notice of
the pending litigation between Quisumbing and PNB, petitioner stands
exactly in the shoes of defendant PNB and is bound by any judgment or
decree which may be rendered for or against PNB. Under Rule 3, §20, the
action may be continued against PNB, the original defendant. In the
alternative — although it was not essential that the transferee be substituted
and the latter insist on such substitution — the trial court could have directed
that petitioner be either substituted as party-defendant or joined with
defendant PNB.

Third. Petitioner points out:

20. On a separate matter, this Honorable Court stated in its decision that:

[T]he appellate court therefore properly refused to pass upon petitioner's

attempt to inquire into the consideration paid for the assignment of the right
of redemption to the late Norberto J. Quisumbing, as well as petitioner's
claim that the transfer of interest to Quisumbing was made in violation of Art.
1491(5) of the Civil Code, prohibiting attorneys from acquiring property or
interest which is the object of the litigation in which they take part as such.
This matter was never alleged by PNB in its answer to Quisumbing's
complaint.

Petitioner most respectfully wishes to point out that the foregoing statement
as to PNB's supposed failure to raise the defense that the "transfer of interest
to Quisumbing was made in violation of Art. 1491(5) of the Civil Code, is not
correct.

Indeed, PNB raised this defense. Attached hereto as Annex "A" is PNB's
answer with counterclaim in Civil Case No. 10513 wherein PNB expressly
raised the nullity under Art. 1491(5) of the supposed assignment to Atty.
Quisumbing (Annex "A" at page 3, par. [e], among its various defenses.
Hence, it is most respectfully asked that manifestation this be NOTED to
prevent any party from unreasonably capitalizing on the erroneous statement
of fact.

The Court regrets the error. The underscored portion, should not have been
made. However, correction of the error does not call for the modification of
the decision.

ACCORDINGLY, the motion for reconsideration is DENIED for lack of merit.