GR 173946 Boston Equity Resources v. CA
GR 173946 Boston Equity Resources v. CA
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* SECOND DIVISION.
17
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such nature that a final decree cannot be made without affecting [that]
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 proceed.
Same; Same; Same; Section 11 of Rule 3 of the Rules of Court states
that “[n]either 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.―Section 11 of Rule 3 of the Rules of Court states
that “[n]either 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.” Based on the last sentence of the afore-
quoted provision of law, a misjoined party must have the capacity to sue or
be sued in the event that the claim by or against the misjoined party is
pursued in a separate case. In this case, therefore, the inclusion of Manuel in
the complaint cannot be considered a misjoinder, as in fact, the action would
have proceeded against him had he been alive at the time the collection case
was filed by petitioner. This being the case, the remedy provided by Section
11 of Rule 3 does not obtain here. The name of Manuel as party-defendant
cannot simply be dropped from the case. Instead, the procedure taken by the
Court in Sarsaba v. Vda. de Te, 594 SCRA 410 (2009), whose facts, as
mentioned earlier, resemble those of this case, should be followed herein.
Same; Same; Same; Where the defendant is neither a natural nor a
juridical person or an entity authorized by law, the complaint may be
dismissed on the ground that the pleading asserting the claim states no
cause of action or for failure to state a cause of action pursuant to Section
1(g) of Rule 16 of the Rules of Court, because a complaint cannot possibly
state a cause of action against one who cannot be a party to a civil
action.―Where the defendant is neither a natural nor a juridical person or
an entity authorized by law, the com-
19
plaint may be dismissed on the ground that the pleading asserting the claim
states no cause of action or for failure to state a cause of action pursuant to
Section 1(g) of Rule 16 of the Rules of Court, because a complaint cannot
possibly state a cause of action against one who cannot be a party to a civil
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action. Since the proper course of action against the wrongful inclusion of
Manuel as party-defendant is the dismissal of the case as against him, thus
did the trial court err when it ordered the substitution of Manuel by his heirs.
Same; Same; Same; Substitution of Parties; Substitution is proper only
where the party to be substituted died during the pendency of the case, as
expressly provided for by Section 16, Rule 3 of the Rules of
Court.―Substitution is proper only where the party to be substituted died
during the pendency of the case, as expressly provided for by Section 16,
Rule 3 of the Rules of Court, which states: 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. x x x The
heirs of the deceased may be allowed to be substituted for the deceased,
without requiring the appointment of an executor or administrator x x x. The
court shall forthwith order said legal representative or representatives to
appear and be substituted within a period of thirty (30) days from notice.
(Emphasis supplied.) Here, since Manuel was already dead at the time of the
filing of the complaint, the court never acquired jurisdiction over his person
and, in effect, there was no party to be substituted.
20
PEREZ, J.:
Before the Court is a Petition for Review on Certiorari seeking
to reverse and set aside: (1) the Decision,1 dated 28 February 2006
and (2) the Resolution,2 dated 1 August 2006 of the Court of
Appeals in CA-G.R. SP No. 88586. The challenged decision granted
herein respondent’s petition for certiorari upon a finding that the
trial court committed grave abuse of discretion in denying
respondent’s motion to dismiss the complaint against her.3 Based on
this finding, the Court of Appeals reversed and set aside the Orders,
dated 8 November 20044 and 22 December 2004,5 respectively, of
the Regional Trial Court (RTC) of Manila, Branch 24.
The Facts
On 24 December 1997, petitioner filed a complaint for sum of
money with a prayer for the issuance of a writ of preliminary
attachment against the spouses Manuel and Lolita Toledo.6 Herein
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1 Penned by Associate Justice Hakim S. Abdulwahid with Associate Justices
Remedios A. Salazar-Fernando and Estela M. Perlas-Bernabe (now an Associate
Justice of this Court) concurring. Rollo, pp. 23-29.
2 Id., at p. 31.
3 Id., at p. 28.
4 CA Rollo, pp. 9-11.
5 Id., at pp. 12-15.
6 Id., at pp. 16-21.
7 Id., at pp. 23-28.
8 Id., at p. 24.
9 Id., at p. 49.
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action; (2) that the trial court did not acquire jurisdiction over the
person of Manuel pursuant to Section 5, Rule 86 of the Revised
Rules of Court; (3) that the trial court erred in ordering the substitu-
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10 Id., at pp. 31-33.
11 Id., at p. 36.
12 Id., at pp. 34-35.
13 Petitioner Boston’s Opposition to Defendant’s Motion to Dismiss, dated 20
October 2004, filed before the trial court, id., at p. 52; Respondent Toledo’s
Memorandum dated 8 December 2005 filed before the CA, id., at p. 176.
14 Id., at pp. 95-97.
15 Order of the trial court dated 8 November 2004. Id., at p. 10.
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tion of the deceased Manuel by his heirs; and (4) that the court must
also dismiss the case against Lolita Toledo in accordance with
Section 6, Rule 86 of the Rules of Court.16
The trial court, in an Order dated 8 November 2004, denied the
motion to dismiss for having been filed out of time, citing Section 1,
Rule 16 of the 1997 Rules of Court which states that: “[W]ithin the
time for but before filing the answer to the complaint or pleading
asserting a claim, a motion to dismiss may be made x x x.”17
Respondent’s motion for reconsideration of the order of denial was
likewise denied on the ground that “defendants’ attack on the
jurisdiction of this Court is now barred by estoppel by laches” since
respondent failed to raise the issue despite several chances to do
so.18
Aggrieved, respondent filed a petition for certiorari with the
Court of Appeals alleging that the trial court seriously erred and
gravely abused its discretion in denying her motion to dismiss
despite discovery, during the trial of the case, of evidence that would
constitute a ground for dismissal of the case.19
The Court of Appeals granted the petition based on the following
grounds:
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16 Id., at pp. 37-48.
17 Id., at pp. 10-11.
18 Id., at p. 13.
19 Id., at p. 4.
23
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20 Rollo, pp. 25-27.
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The Issues
Petitioner claims that the Court of Appeals erred in not holding
that:
1. Respondent is already estopped from questioning the trial
court’s jurisdiction;
2. Petitioner never failed to implead an indispensable party as
the estate of Manuel is not an indispensable party;
3. The inclusion of Manuel as party-defendant is a mere
misjoinder of party not warranting the dismissal of the case
before the lower court; and
4. Since the estate of Manuel is not an indispensable party, it is
not necessary that petitioner file its claim against the estate of
Manuel.
In essence, what is at issue here is the correctness of the trial
court’s orders denying respondent’s motion to dismiss.
The Ruling of the Court
We find merit in the petition.
Motion to dismiss filed out of time
To begin with, the Court of Appeals erred in granting the writ of
certiorari in favor of respondent. Well settled is the rule that the
special civil action for certiorari is not the proper remedy to assail
the denial by the trial court of a motion to dismiss. The order of the
trial court denying a motion to dismiss is merely interlocutory, as it
neither terminates nor finally disposes of a case and still leaves
something to be done by the court before a case is finally decided on
the merits.21
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21 Malicdem v. Flores, 532 Phil. 689, 697; 501 SCRA 248, 256 (2006) citing East
Asia Traders, Inc. v. Republic of the Philippines, G.R. No. 152947, 7 July 2004, 433
SCRA 716.
25
Even assuming that certiorari is the proper remedy, the trial court
did not commit grave abuse of discretion in denying respondent’s
motion to dismiss. It, in fact, acted correctly when it issued the
questioned orders as respondent’s motion to dismiss was filed SIX
YEARS AND FIVE MONTHS AFTER SHE FILED HER
AMENDED ANSWER. This circumstance alone already warranted
the outright dismissal of the motion for having been filed in clear
contravention of the express mandate of Section 1, Rule 16, of the
Revised Rules of Court. Under this provision, a motion to dismiss
shall be filed within the time for but before the filing of an answer to
the complaint or pleading asserting a claim.24
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22 Indiana Aerospace University v. Comm. on Higher Education, 408 Phil. 483,
501; 356 SCRA 367, 384 (2001) cited in Bonifacio Construction Management
Corporation v. Judge Perlas-Bernabe, G.R. No. 148174, 501 Phil. 79, 84; 462 SCRA
392, 397 (2005).
23 Id.
24 Chan v. Court of Appeals, 468 Phil. 244, 251; 424 SCRA 127, 133 (2004)
citing Kho v. Court of Appeals, G.R. No. 115758, 19 March 2002, 379 SCRA 410,
421.
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25 CA Rollo, p. 10.
26 Id., at pp. 11 and 13.
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order to finally settle the controversy and fully dispose of all the
issues in this case, it was deemed imperative to resolve the issue of
jurisdiction.
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27 Id., at p. 10.
28 Suntay v. Cojuangco-Suntay, 360 Phil. 932, 941; 300 SCRA 760, 768 (1998).
29 Id.
28
1. Aspects of Jurisdiction
Petitioner calls 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 the case of
Tijam, et al. v. Sibonghanoy, et al.30 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.31
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 Tijam, 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 P1,908.00 which amount was, at that time, within the
exclusive original jurisdiction of the municipal courts.
In subsequent cases citing the ruling of the Court in Tijam, what
was likewise at issue was the jurisdiction of the trial court over the
subject matter of the case. Accordingly, in
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30 131 Phil. 556; 23 SCRA 29 (1968).
31 Hasegawa v. Kitamura, G.R. No. 149177, 23 November 2007, 538 SCRA 261,
273-274 citing Regalado, Remedial Law Compendium, Volume 1, 8th Revised Ed.,
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pp. 7-8. See also Riano, Civil Procedure (The Bar Lecture Series), Volume I, 2011
edition, pp. 64-65.
29
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32 442 Phil. 735, 740; 394 SCRA 472, 475 (2002).
33 229 Phil. 405, 412; 145 SCRA 408, 416 (1986).
34 153 Phil. 38, 42-43; 53 SCRA 278, 281 (1973).
35 Lee v. Presiding Judge, MTC, Legaspi City, supra, note 33 at p. 415; p. 417.
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RULE 9
EFFECT OF FAILURE TO PLEAD
Section 1. Defenses and objections not pleaded.―Defenses and
objections not pleaded either in a motion to dismiss or in the answer are
deemed waived. However, when it appears from the pleadings or the
evidence on record that the court has no jurisdiction over the subject matter,
that there is another action pending between the same parties for the same
cause, or that the action is barred by a prior judgment or by statute of
limitations, the court shall dismiss the claim.
RULE 15
MOTIONS
Sec. 8. Omnibus motion.―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.
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36 Regalado, Remedial Law Compendium, Volume One, Tenth Edition, p. 187.
31
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37 Riano, Civil Procedure (The Bar Lecture Series), Volume I, 2011 Edition, p. 90.
38 Id., at p. 89.
39 Carandang v. Heirs of Quirino A. De Guzman, 538 Phil. 319, 331; 508 SCRA
469, 480 (2006).
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brought against him. Service of such writ is the means by which the
court acquires jurisdiction over his person.”40
In the case at bar, the trial court did not acquire jurisdiction over
the person of Manuel since there was no valid service of summons
upon him, precisely because he was already dead even before the
complaint against him and his wife was filed in the trial court. The
issues presented in this case are similar to those in the case of
Sarsaba v. Vda. de Te.41
In Sarsaba, the NLRC rendered a decision declaring that Patricio
Sereno was illegally dismissed from employment and ordering the
payment of his monetary claims. To satisfy the claim, a truck in the
possession of Sereno’s employer was levied upon by a sheriff of the
NLRC, accompanied by Sereno and his lawyer, Rogelio Sarsaba, the
petitioner in that case. A complaint for recovery of motor vehicle
and damages, with prayer for the delivery of the truck pendente lite
was eventually filed against Sarsaba, Sereno, the NLRC sheriff and
the NLRC by the registered owner of the truck. After his motion to
dismiss was denied by the trial court, petitioner Sarsaba filed his
answer. Later on, however, he filed an omnibus motion to dismiss
citing, as one of the grounds, lack of jurisdiction over one of the
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40 Romualdez-Licaros v. Licaros, G.R. No. 150656, 449 Phil. 824, 833; 401
SCRA 762, 769 (2003) citing Cano-Gutierrez v. Gutierrez, G.R. No. 138584, 2
October 2000, 341 SCRA 670.
41 G.R. No. 175910, 30 July 2009, 594 SCRA 410.
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saba Case claimed, as did respondent herein, that since one of the
defendants died before summons was served on him, the trial court
should have dismissed the complaint against all the defendants and
the claim should be filed against the estate of the deceased
defendant. The petitioner in Sarsaba, therefore, prayed that the
complaint be dismissed, not only against Sereno, but as to all the
defendants, considering that the RTC did not acquire jurisdiction
over the person of Sereno.42 This is exactly the same prayer made by
respondent herein in her motion to dismiss.
The Court, in the Sarsaba Case, resolved the issue in this wise:
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42 Id., at p. 425.
43 Id., at p. 427.
34
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44 Lagunilla v. Velasco, G.R. No. 169276, 16 June 2009, 589 SCRA 224, 232
citing Regner v. Logarta, G.R. No. 168747, 19 October 2007, 537 SCRA 277, 289
and Arcelona v. Court of Appeals, 345 Phil. 250, 267; 280 SCRA 20, 40 (1997).
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ble 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 or her and those already parties to the action, or
if he or she 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 simply because his or her presence will avoid multiple
litigations.45
Applying the foregoing pronouncements to the case at bar, it is
clear that the estate of Manuel is not an indispensable party to the
collection case, for the simple reason that the obligation of Manuel
and his wife, respondent herein, is solidary.
The contract between petitioner, on the one hand and respondent
and respondent’s husband, on the other, states:
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45 Id., at pp. 232-233.
46 Emphasis and underscoring supplied.
47 CA Rollo, p. 22.
48 Id., dorsal portion.
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rected against the others, so long as the debt has not been fully
collected.”
In other words, the collection case can proceed and the demands
of petitioner can be satisfied by respondent only, even without
impleading the estate of Manuel. Consequently, the estate of Manuel
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the case of Manila Surety & Fidelity Co., Inc. v. Villarama, et al.,49
held:50
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49 107 Phil. 891, 897 (1960).
50 Philippine National Bank v. Asuncion, 170 Phil. 356, 358-359; 122 SCRA 113, 115
(1983).
51 Id., at pp. 358-360; p. 116.
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39
cannot be made to prevail over Article 1216 of the New Civil Code,
the former being merely procedural, while the latter, substantive.
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52 Supra note 41.
40
the Supreme Court agreed with the trial court when it resolved the
issue of jurisdiction over the person of the deceased Sereno in this
wise:
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53 Id., at pp. 427-428.
54 374 Phil. 562, 571-573; 316 SCRA 226, 233-234 (1999) citing 59 Am Jur 2d,
Sec. 19, p. 407, 59 Am Jur 2d, Sec. 41, pp. 438 and 439 and 59 Am Jur 2d, Sec. 20, p.
440.
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Here, since Manuel was already dead at the time of the filing of
the complaint, the court never acquired jurisdiction over his person
and, in effect, there was no party to be substituted.
WHEREFORE, the petition is GRANTED. The Decision dated
28 February 2006 and the Resolution dated 1 August 2006 of the
Court of Appeals in CA-G.R. SP No. 88586 are REVERSED and
SET ASIDE. The Orders of the Regional Trial Court dated 8
November 2004 and 22 December 2004, respectively, in Civil Case
No. 97-86672, are REINSTATED. The Regional Trial Court,
Branch 24, Manila is hereby DI-
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55 Riano, Civil Procedure (The Bar Lecture Series), Volume I, 2011 Edition, p.
229.
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** Designated Additional Member per raffle dated 19 June 2013.
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