G.R. NO. 177598 : October 17 2008

Related Topic: Indispensable party, necessary party

  • 1996, San Pedro purchased from the spouses Narciso parcels of land evidenced by Deeds of Sale.
  • San Pedro hired the services of Dela Pena who is known to be very familiar with the intricacies of real property transfers.
  • San Pedro inquired with the Registry of Deeds of Bulacan as to the status of his application for the issuance in his name of new TCTs for the subject properties.
  • He was surprised to find out, however, that the subject properties were still registered in the names of the Narciso spouses and were mortgaged to Willy Ong.
  • 1999, San Pedro filed a Petition for Nullification of Mortgage with Damages against the spouses Narciso, Dela Pena, Landayan, Ong, and Caballes.
    • In order to free the subject properties from the said encumbrances
  • RTC issued summons to spouses Narciso, Dela Peña, Landayan, Ong, and Caballes, directing them to file their Answers to San Pedro’s Petition
  • Caballes and Ong raised in their Joint Answerthe defense of mortgagee-in-good-faith. They claimed that they both relied in good faith on the SPAs granting Dela Peña.
  • RTC: Ruled in favor of San Pedro.
    • San Pedo is the legal and rightful owner of lands.
    • Mortgages constituted over the subject properties in Ong’s favor is null and void
    • SPA in favor of Dela Pena is null and void
    • Ordering the Registry of Deeds for the Province of Bulacan to cancel the recordings of mortgages in favor of Ong
    • Ordering [Ong] to return to [San Pedro] the owner’s duplicate copy of TCT
  • Ong and Caballes filed an appeal to CA assigning as error the lack of jurisdiction of the RTC over the person of Dela Pena which rendered all the proceedings held before said court fatally defective.
  • CA: Reversed RTC ruling on the ground that service of summons on Dela Peña was invalid; thus, the RTC did not acquire jurisdiction over her person. Since Dela Peña was an indispensable party to the controversy, without her no final determination of the case can be had.
  • San Pedro filed a Petition for Review on Certiorari under Rule 45 before SC.

ISSUE: WON CA erred in finding Dela Peña as an indispensable party (which served as the basis of its dismissal of San Pedro’s complaint)?

HELD: YES. CA erred in finding Dela Peña as an indispensable party.

  • Dela Peña is not an indispensable party.
  • the crux of the controversy is the title of San Pedro to the subject properties vis-à-vis that of Ong, for the determination of which, Dela Peña’s participation is not an absolute necessity.
  • Her presence in the proceedings before the RTC would have only permitted complete relief since the said court could have already determined therein her liability for the damages she had caused to any of the parties, but it does not make her presence indispensable.
  • Hence, the proceedings held before RTC is valid.
  • RTC decision is reinstated with modifications (portion ordering Adora Dela Pena to pay Willy G. Ong the sum of P245,000.00 plus legal interest, is deleted)