CARANDANG v. HEIRS OF DE GUZMAN costs of suit.
The Carandangs appealed the trial courts decision to the CA, but
Necessary and indispensable parties | November 29, 2006 | Chico-Nazario, J
Nature of Case: Petition for review on certiorari
Digest maker: Niq Polido
SUMMARY: The Spouses Carandang and the decedent Quirino de Guzman were
stockholders and corporate officers of Mabuhay Broadcasting System (MBS). The
Carandangs have equities at 54 % while Quirino has 46%. When the capital stock of
MBS was increased, the Carandang borrowed money from Quirino. When Quirino
sent a demand letter to the Carandangs for the payment of the loan, the Carandangs
refused to pay. Thereafter, Quirino filed a complaint seeking to recover the P336,375
total amount of the loan together with damages. The RTC ruled in favor of Quirino
and ordered the Carandangs to pay the loan plus interest, attorneys fees, and costs
of suit. Carandangs argued that three of the four checks used to pay their stock
subscriptions were issued in the name of Milagros de Guzman, the decedents wife.
Thus, Milagros should be considered as an indispensable party in the complaint.
Being such, the failure to join Milagros as a party in the case should cause the
dismissal of the action.
DOCTRINE: In suits to recover properties, all co-owners are real parties in interest.
However, pursuant to Article 487 of the Civil Code and relevant jurisprudence, any
one of them may bring an action, any kind of action, for the recovery of co-owned
properties. Therefore, only one of the co-owners, namely the co-owner who filed the
suit for the recovery of the co-owned property, is an indispensable party thereto. The
other co-owners are not indispensable parties. They are not even necessary parties, for
a complete relief can be accorded in the suit even without their participation, since the
suit is presumed to have been filed for the benefit of all co-owners
FACTS:
The Spouses Carandang and the decedent Quirino de Guzman were
stockholders and corporate officers of Mabuhay Broadcasting System (MBS).
The Carandangs have equities at 54 % while Quirino has 46%.
When the capital stock of MBS was increased, the Carandangs subscribed
P345,000 from it, P293,250 from the said amount was loaned by Quirino to the
Carandangs.
In the subsequent increase in MBS capital stock, the Carandangs subscribed
again to the increase in the amount of P93,750. But, P43,125 out of the mentioned
amount was again loaned by Quirino.
When Quirino sent a demand letter to the Carandangs for the payment of the
loan, the Carandangs refused to pay. They contend that a pre-incorporation
agreement was executed between Arcadio Carandang and Quirino, whereby
Quirino promised to pay for the stock subscriptions of the Arcadio without
cost, in consideration for Arcadios technical expertise, his newly purchased
equipment, and his skill in repairing and upgrading radio/communication
equipment therefore, there is no indebtedness on the part of the Carandangs.
Thereafter, Quirino filed a complaint seeking to recover the P336,375 total
amount of the loan together with damages. The RTC ruled in favor of Quirino
and ordered the Carandangs to pay the loan plus interest, attorneys fees, and
the CA affirmed the same. The subsequent Motion for Reconsideration filed by
the Carandangs were also denied. Hence, this appeal to the SC.
SPOUSES CARANDANG: Three of the four checks used to pay their stock
subscriptions were issued in the name of Milagros de Guzman, the decedents
wife. Thus, Milagros should be considered as an indispensable party in the
complaint. Being such, the failure to join Milagros as a party in the case should
cause the dismissal of the action by reason of a jurisprudence stating that: (i)f
a suit is not brought in the name of or against the real party in interest, a motion
to dismiss may be filed on the ground that the complaint states no cause of
action."
ISSUE/S & RATIO:
1. WON the RTC should have dismissed the case for failure to state a cause of
action, considering that Milagros de Guzman, allegedly an indispensable party,
was not included as a party-plaintiff NO
a. Although the spouses Carandang were correct in invoking the
aforementioned doctrine, the ground set forth entails an examination of
whether the parties presently pleaded are interested in the outcome of
the litigation, and not whether all persons interested in such outcome
are actually pleaded. The first query seeks to answer the question of
whether Milagros is a real party in interest, while the latter query is
asking if she is an indispensable party. Since the issue of this case calls
for the definition of an indispensable party, invoking the
abovementioned doctrine is irrelevant to the case because the doctrine
talks about a real party in interest and not an indispensable party.
Although it is important to take note that an indispensable party is also
a real party in interest.
b. Definitions:
i. Real party in interest the party who stands to be benefited or
injured by the judgment of the suit, or the party entitled to the
avails of the suit.
ii. Indispensable party a party in interest without whom no
final determination can be had of an action
iii. Necessary party one who is not indispensable but who
ought to be joined as a party if complete relief is to be
accorded as to those already parties, or for a complete
determination or settlement of the claim subject of the action
iv. Pro-forma parties those who are required to be joined as co-
parties in suits by or against another party as may be provided
by the applicable substantive law or procedural rule. Pro-
forma parties can either be indispensable, necessary or neither
indispensable nor necessary. The third case occurs if, for
example, a husband files an action to recover a property which
he claims to be part of his exclusive property. The wife may
have no legal interest in such property, but the rules
nevertheless require that she be joined as a party.
c. All property acquired during the marriage, whether the acquisition
appears to have been made, contracted or registered in the name of one
or both spouses, is presumed to be conjugal unless the contrary is
 proved. Credits are personal properties, acquired during the time the
loan or other credit transaction was executed. Therefore, credits loaned
during the time of the marriage are presumed to be conjugal property.
i. Assuming that the four checks are credits, they are assumed to
be conjugal properties of Quirino and Milagros. There being
no evidence to the contrary, such presumption subsists. As
such, Quirino de Guzman, being a co-owner of specific
partnership property, is certainly a real party in interest.
Being co-owners of the alleged credit, Quirino and Milagros
de Guzman may separately bring an action for the recovery
thereof.
d. In sum, in suits to recover properties, all co-owners are real parties
in interest. However, pursuant to Article 487 of the Civil Code and
relevant jurisprudence, any one of them may bring an action, any
kind of action, for the recovery of co-owned properties. Therefore,
only one of the co-owners, namely the co-owner who filed the suit for
the recovery of the co-owned property, is an indispensable party
thereto. The other co-owners are not indispensable parties. They are
not even necessary parties, for a complete relief can be accorded in the
suit even without their participation, since the suit is presumed to have
been filed for the benefit of all co-owners.

RULING: Quirino de Guzman, being a co-owner of specific partnership property, is certainly a

real party in interest. Being co-owners of the alleged credit, Quirino and Milagros de Guzman
may separately bring an action for the recovery thereof.