Rule 3- Parties to Civil Actions real party in interest in the case below.
Section 2, Rule 3 of the Rules of Court reads:
Theodore Ang VS Sps. Alan Ang
Facts:
On September 2, 1992, spouses Alan
and Em Ang (respondents) obtained a loan in
the amount of US$300,000.00 from Theodore
and Nancy Ang (petitioners). On same date,
the respondents executed a promissory note
in favor of the petitioners wherein they
promised to pay the latter the said amount,
with interest at the rate of ten percent (10%)
per annum, upon demand. However, despite
repeated demands, the respondents failed to
pay the petitioners. Thus, on August 28, 2006,
the petitioners sent the respondents a
demand letter asking them to pay their
outstanding debt which, at that time, already
amounted to US$719,671.23, inclusive of the
(10%) annual interest that had accumulated
over the years.
Notwithstanding the receipt of the
said demand letter, the respondents still
failed to settle their loan obligation. On
August 6, 2006, the petitioners, who were
then residing in Los Angeles, California,
United States of America (USA), executed
their respective Special Powers of Attorney6
in favor of Attorney Eldrige Marvin B. Aceron
(Atty. Aceron) for the purpose of filing an
action in court against the respondents. On
September 15, 2006, Atty. Aceron, in behalf of
the petitioners, filed a Complaint7 for
collection of sum of money with the RTC of
Quezon City against the respondents.
Issues: WON Atty. Aceron, being merely a
representative of the petitioners, is the real
party in interest in the case.
Held: Atty. Aceron, despite being the
attorney-in-fact of the petitioners, is not a
Sec. 2.Parties in interest. – A real party in
interest is the party who stands to be
benefited or injured by the judgment in the
suit, or the party entitled to the avails of the
suit. Unless otherwise authorized by law or
these Rules, every action must be prosecuted
or defended in the name of the real party in
interest.
Interest within the meaning of the Rules of
Court means material interest or an interest
in issue to be affected by the decree or
judgment of the case, as distinguished from
mere curiosity about the question involved. A
real party in interest is the party who, by the
substantive law, has the right sought to be
enforced. Applying the foregoing rule, it is
clear that Atty. Aceron is not a real party in
interest in the case below as he does not
stand to be benefited or injured by any
judgment therein. He was merely appointed
by the petitioners as their attorney-in-fact for
the limited purpose of filing and prosecuting
the complaint against the respondents. Such
appointment, however, does not mean that he
is subrogated into the rights of petitioners
and ought to be considered as a real party in
interest. Being merely a representative of the
petitioners, Atty. Aceron in his personal
capacity does not have the right to file the
complaint below against the respondents. To
stress, the right sought to be enforced in the
case below belongs to the petitioners and not
to Atty. Aceron. Clearly, an attorney-in-fact is
not a real party in interest.
Fortich VS Corona
FACTS
This case concerns the motion for
reconsideration of the court’s resolution
dated November 17, 1998 and motion to refer
the case to the Court en banc. In previous
case, the Court voted two-two on the separate
motions for reconsideration as a result of
which the decision was affirmed. The Court
noted in a resolution dated January 27, 1999
that the movants have no legal personality to
seek redress before the Court as their motion
to intervene was already denied and that the
motion to refer the case to the Court en banc
is akin to a second MR which is prohibited. In
this motion, both respondents and
intervenors prayed that the case be referred
to the Court en banc inasmuch as their earlier
MR was resolved by a vote of two-two, the
required number to carry a decision under
the Constitution was not met.
ISSUE
Whether or not the referral to the court en
banc partakes of the nature of a second
motion for reconsideration.
HELD
It is affirmative. The contention, therefore,
that the Resolution of November 17, 1998 did
not dispose of the earlier MR of the Decision
dated April 24, 1998 is flawed. Consequently,
the present MR necessarily partakes of the
nature of a second motion for reconsideration
which, according to the clear and
unambiguous language of Rule 56, Section 4,
in relation to Rule 52, Section 2, of the 1997
Rules of Civil Procedure, is prohibited. True,
there are exceptional cases when this Court
may entertain a second motion for
reconsideration, such as where there are
extraordinarily persuasive reasons. Even
then, we have ruled that such second MRs
must be filed with express leave of court first
obtained. In this case, not only did movants
fail to ask for prior leave of court, but more
importantly, they have been unable to show
that there are exceptional reasons for us to
give due course to their second motions for
reconsideration. Stripped of the arguments
for referral of this incident to the Court en
banc, the motions subject of this resolution
are nothing more but rehashes of the motions
for reconsideration which have been denied
in the Resolution of November 17, 1998. To
be sure, the allegations contained therein
have already been raised before and passed
upon by this Court in the said Resolution.
Samaniego VS Aguila
Facts:
Samaniego et. al. are tenants in a landholding
that belongs to Salud Aguila. The land in
question was identified by the DAR-Region 2
as covered by the Operation Land Transfer
Program of the government. Aguila, in behalf
of her children, filed a petition for exemption
from the coverage of P.D. No. 27. Samaniego
et. al. opposed the application on the ground
that Aguila's transfer of the title to the lands
to her children was in violation of the rules
and regulations of the DAR.The Regional
Director granted the application for
exemption. On appeal to the DAR, the
decision was affirmed. However, on motion of
petitioners, the DAR reversed its ruling and
denied Aguila’s application for exemption and
declared petitioners the rightful farmer-
beneficiaries of the land. Aguila appealed to
the Office of the President which declared
that subject landholdings are not covered by
the OLT program of the government pursuant
to P.D. No. 27. Aguila et. al appealed to the
Court of Appeals, but their petition was
dismissed on the ground that the Office of the
President is an indispensable party to the
case. Failure to implead said Office is fatal to
the petitioners' cause and, hence, should be
dismissed.
Issue: Whether the Office of the President is
an indispensable party in an appeal from its
decision and, therefore, must be impleaded
pursuant to the Rules of Civil Procedure?
Held:
No. Under Rule 3, Section 7 of the Rules of
Civil Procedure, an indispensable party is a
party in interest without whom no final
determination can be had of an action
without that party being impleaded.
Indispensable parties are those with such an
interest in the controversy that a final decree
would necessarily affect their rights, so that
the court cannot proceed without their
presence. "Interest", within the meaning of
this rule, should be material, directly in issue
and to be affected by the decree, as
distinguished from a mere incidental interest
in the question involved. On the other hand, a
nominal or pro forma party is one who is
joined as a plaintiff or defendant, not because
such party has any real interest in the subject
matter or because any relief is demanded, but
merely because the technical rules of
pleadings require the presence of such party
on the record. In the case at bar, even
assuming that the Office of the President
should have been impleaded by petitioner, it
is clear that the Office of the President is
merely a pro forma party, in the same way
that a respondent court is a pro forma party
in special civil actions for certiorari. Court of
Appeals is ORDERED to decide the case on the
merits with deliberate speed.
Florendo VS Coloma
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
plaintiffappellant 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.
Oposa VS Factoran
FACTS
: discretion in dismissing the action.
A Civil Case was filed before Regional Trial
Court. The principal plaintiffs therein, now
the principal petitioners, are all minors duly
represented and joined by their respective
parents. The original defendant was the
Honorable Fulgencio S. Factoran, Jr., then
Environment and Natural Resources
Secretary. His substitution in this petition by
the new Secretary, the Honorable Angel C.
Alcala, was subsequently ordered upon
proper motion. The complaint was instituted
as a taxpayers' class suit and alleges that the
plaintiffs "are all citizens of the Republic of
the Philippines, taxpayers, and entitled to the
full benefit, use and enjoyment of the natural
resource treasure that is the country's virgin
tropical rainforests." The same was filed for
themselves and others who are equally
concerned about the preservation of said
resource but are "so numerous that it is
impracticable to bring them all before the
Court." The minors further asseverate that
they "represent their generation as well as
generations yet unborn." Consequently, it is
prayed for that judgment be rendered,
ordering defendant to cancel all existing
timber license agreements in the country.
Factoran filed a Motion to Dismiss the
complaint stating the plaintiffs have no cause
of action against him and the issue is a
political question which properly pertains to
the legislative or executive branches.
Subsequently, respondent Judge issued an
order granting the motion to dismiss. The
respondent Judge ruled that the granting of
the reliefs prayed for would impair contracts.
Plaintiffs thus filed the instant special civil
action for certiorari under Rule 65 of the
Rules of Court asking for rescission and
setting aside the dismissal order since the
respondent Judge gravely abused his
Whether or not a class suit was the proper
course of action taken.
ISSUE:
HELD
The civil case is indeed a class suit. The case
however has a special and novel element. The
personality of the minors to sue for the
succeeding generations is based on the
concept of intergenerational responsibility
insofar as a balanced and healthful ecology is
concerned. Every generation has a
responsibility to preserve the ecology. The
minors’ right to a sound environment
constitutes at the same time the performance
of the obligation to ensure the protection of
the rights or the generations to come. : The
subject matter of the complaint is of common
and general interest not just to several, but to
all citizens of the Philippines. Consequently,
since the parties are so numerous, it becomes
impracticable, if not totally impossible, to
bring all of them before the court. We
likewise declare that the plaintiffs therein are
numerous and representative enough to
ensure the full protection of all concerned
interests. Hence, all the requisites for the
filing of a valid class suit under Section 12,
Rule 3 of the Revised Rules of Court are
present both in the said civil case and in the
instant petition, the latter being but an
incident to the former.
Tuason VS Bolanos
FACTS
Plaintiff's complaint was amended three
times with respect to the extent and
description of the land sought to be
recovered. The original complaint described
the land as a portion of a lot registered in
plaintiff's name under Transfer Certificate of
Title No. 37686.of the land record of Rizal
Province and as containing an area of 13
hectares more or less. But the complaint was
amended by reducing the area to 6 hectares,
more or less, after defendant had indicated
the plaintiff's surveyors the portion of land
claimed and occupied by him. The second
amendment became necessary and was
allowed following the testimony of plaintiff's
surveyors that a portion of the area was
embraced in another certificate of title, which
was plaintiff's Transfer Certificate of Title No.
37677. And still later, in the course of trial,
after defendant's surveyor and witness,
Quirino Feria, had testified that the area
occupied and claimed by defendant was
about 13 hectares, as shown in his Exhibit 1,
plaintiff again, with the leave of court,
amended its complaint to make its allegations
conform to the evidence.
Defendant, in his answer, sets up prescription
and title in himself thru "open, continuous,
exclusive and public and notorious
possession (of the land in dispute) under
claim of ownership, adverse to the entire
world by defendant and his predecessors in
interest" from "time in- memorial". The
answer further alleges that registration of the
land in dispute was obtained by plaintiff or its
predecessors in interest thru "fraud or error
and without knowledge (of) or notice either
personal or thru publication to defendant
and/or predecessors in interest." The answer
therefore prays that the complaint be
dismissed with costs, and plaintiff required to
reconvey the land to defendant or pay its
value.
After trial, the lower court rendered
judgment for plaintiff, declaring defendant to
be without any right to the land in question
and ordering him to restore possession,
thereof to plaintiff.
Issue
WON the trial court erred in not dismissing
the case on the ground that the case was not
brought by the real party in interest.
HELD
No, there is nothing to the contention
that the present action is not brought by the
real party in interest, that is, by J. M. Tuason &
Co., Inc. What the Rules of Court require is
that an action be brought in the name of, but
not necessarily by, the real party in interest.
(Section 2, Rule 2.)
In fact the practice is for an attorney-
at-law to bring the action,that is to file the
complaint, in the name of the plaintiff. That
practice appears to have been followed in this
case, since the complaint is signed by the law
firm of Araneta & Araneta, "counsel for
plaintiff" and commences with the statement
"Comes now plaintiff, through its undersigned
counsel." It is true that the complaint also
states that the plaintiff is "represented herein
by its Managing Partner Gregorio Araneta,
Inc.", another corporation, but there is
nothing against one corporation being
represented by another person, natural or
juridical, in a suit in court. The contention
that Gregorio Araneta, Inc. cannot act as
managing partner for plaintiff on the theory
that it is illegal for two corporations to enter
into a partnership is without merit, for the
true rule is that "though a corporation has no
power to enter into a partnership, it may
nevertheless enter into a joint venture with
another where, the nature of that venture is
in line with the business-authorized by its
charter."
Simny Guy VS Gilbert Guy
FACTS
With their eldest son, Gaspar G. Guy (Gaspar),
having entered the Missionary in spouses Guy
put the future of the Guy group of companies
in Gilbert’s hands. Gilbert G. Guy (Gilbert)
practically owned almost 80 percent of the
650,000 subscribed capital stock of GoodGold
Realty & Development Corporation.
GoodGold’s remaining shares were divided
among Francisco Guy (Gilbert’s Father) with
130,000 shares, Simny Guy (Gilbert’s
Mother), Benjamin Lim and Paulino Delfin Pe,
with one share each, respectively. In 1999,
the aging Francisco instructed Benjamin Lim,
a nominal shareholder of GoodGold and his
trusted employee to collaborate with Atty.
Emmanuel Paras, to redistribute GoodGold’s
shareholdings evenly among his children
while maintaining a proportionate share for
himself and his wife, Simny. Five years after
the redistribution of GG’s shares of stock,
Gilbert filed with the RTC of Manila, a
Complaint for the to declare the distribution
null and void and prayed for injuction against
his mother, Simny, and his sisters. Gilbert
alleged, among others, that no stock
certificate ever existed; that his signature at
the back of the spurious Stock Certificate Nos.
004014 which purportedly endorsed the
same were forged, and, hence, should be
nullified. It was later withdrawn by Gilbert
after the National Bureau of Investigation
(NBI) submitted a report to the RTC of Manila
authenticating Gilbert’s signature in the
endorsed certificates.
Gilbert again filed another case, now with the
RTC of Mandaluyong alleging the same that
he never signed any document which would
justify and support the transfer of his shares
to his siblings and that he has in no way,
disposed, alienated, encumbered, assigned or
sold any or part of his shares in GoodGold.
Gilbert added that the Amended General
Information Sheets (GIS) of GoodGold for the
years 2000 to 2004 which his siblings
submitted to the Securities and Exchange
Commission (SEC) were spurious as these did
not reflect his true shares in the corporation
which supposedly totaled to 595,000 shares;
that no valid stockholders’ annual to 595,000
shares. Gilbert’s siblings filed a manifestation
claiming that the complaint is a nuisance and
harassment suit, which was granted by the
RTC. Hence, a petition for certiorari.
ISSUE
May a holder of a “street” certificate demand
its transfer to its name from the issuing
corporation?
HELD
YES. In ordinary cases, the failure to
specifically allege the fraudulent acts does not
constitute a ground for dismissal since such a
defect can be cured by a bill of particulars.
However, the same does not apply to intra
corporate controversies. In cases governed by
the Interim Rules of Procedure on Intra
Corporate Controversies a bill of particulars
is a prohibited pleading. It is essential,
therefore, for the complaint to show on its
face what are claimed to be the fraudulent
corporate acts if the complainant wishes to
invoke the court’s special commercial
jurisdiction.
When a stock certificate is endorsed
in blank by the owner thereof, it constitutes
what is termed as “street certificate,” so that
upon its face, the holder is entitled to demand
its transfer into his name from the issuing
corporation. Such certificate is deemed quasi-
negotiable, and as such the transferee thereof
is justified in believing that it belongs to the
holder and transferor.
Living @ Sense, Inc. VS Malaya Insurance
Company
FACTS
Petitioner Living @ Sense, Inc. sub-contracted
to Dou Mac, Inc. (DMI) its underground open-
trench work for the Network Project of Globe
Telecom in Mindanao. As required, DMI gave
surety and performance bonds which it
secured from respondent Malayan Insurance
Company, Inc. (Malayan) which bound itself
jointly and severally liable with DMI. The
bonds will answer for the loss and damage to
petitioner if DMI fails to perform its
obligations under the subcontract.
The excavation and restoration works by DMI
was later stopped by the government after it
found DMI's work unsatisfactory. Eventually,
petitioner terminated the subcontract and
demanded from respondent insurance
company indemnification in the amount of
P1.04 million. Respondent Malayan denied
petitioner's claim arguing that the liability of
its principal, DMI, should first be determined
before Malayan can be held liable. Thus,
petitioner sued Malayan for specific
performance and breach of contract.
Respondent Malayan claimed that the suit
should be dismissed because petitioner failed
to implead DMI as an indispensable party.
Petitioner, on the other hand, argued that
respondent is a surety who is directly and
primarily liable to indemnify petitioner, and
that the bond is "callable on demand" in the
event of breach of obligation. The Regional
Trial Court ruled for the respondent, and the
case was elevated to the Supreme Court on a
pure question of law.
ISSUE: Is DMI an indispensable party in this
case?
RULING
No, DMI is not an indispensable party in this
case. Article 1216 of the Civil Code on
solidary obligations allows petitioner, as
creditor, to proceed against any of the
solidary debtors. Since respondent Malayan
bound itself "jointly and severally" with DMI
under the surety and performance bonds, it is
considered a solidary debtor and is therefore
not an indispensable party. This is because
petitioner can claim indemnity directly from
respondent insurance company who has
bound itself solidarily with DMI for the
obligations under the bonds.
An indispensable party is defined as "a party-
in-interest without whom no final
determination can be had of an action, and
who shall be joined either as plaintiff or
defendant." Without it, the court cannot act
on the case not only as to the absent party but
also as to those present.
Even if assuming that DMI was indeed an
indispensable party, the Regional Trial Court
should not have dismissed the case but
should have ordered the petitioner to
implead the indispensable party, which can
be done on motion of the party or on the
court's own initiative at any stage of the
action.
Sepulveda VS Pelaez
FACTS: On December 6, 1972, private
respondent Atty. Pacifico Pelaez filed a
complaint against his granduncle, Pedro
Sepulveda, Sr., for the recovery of possession
and ownership of his 1/2 undivided share of
several parcels of land; his undivided 1/3
share in several other lots; and for the
partition thereof among the co-owners. The
11 lots were among the 25 parcels of land,
which Dulce (private respondent's mother)
and her uncles Pedro and Santiago co-owned,
each with an undivided 1/3 share thereof. In
his complaint, the private respondent claims
that his grandmother Carlota repeatedly
demanded the delivery of her mother’s share
in the 11 parcels of land, but Pedro
Sepulveda, Sr. who by then was the Municipal
Mayor of Tudela, refused to do so. Dulce,
likewise, later demanded the delivery of her
share in the eleven parcels of land, but Pedro
still refused.
During the trial, Pedro Sepulveda, Sr.
died intestate. A petition for the settlement of
his estate was filed with the RTC of Cebu. His
daughter, petitioner Socorro Sepulveda
Lawas, was appointed administratrix of his
estate and substituted the deceased in this
case. It was pointed out that the private
respondent failed to implead Paz Sepulveda
and her minor children as parties-defendants
in the complaint.
ISSUE: WON private respondent's action will
prosper, despite having failed to implead all
the indispensable parties in his complaint.
HELD
NO. It appears that when the private
respondent filed the complaint, his father,
Rodolfo Pelaez, was still alive. Thus, when his
mother Dulce Pelaez died intestate on March
2, 1944, she was survived by her husband
Rodolfo and their son, the private respondent.
Section 1, Rule 69 of the Rules of Court
provides that in an action for partition, all
persons interested in the property shall be
joined as defendants. Section 1. Complaint in
action for partition of real estate.- A person
having the right to compel the partition of
real estate may do so as in this rule
prescribed, setting forth in his complaint the
nature and extent of his title and an adequate
description of the real estate of which
partition is demanded and joining as
defendants all the other persons interested in
the property. Thus, all the co-heirs and
persons having an interest in the property are
indispensable parties; as such, an action for
partition will not lie without the joinder of
the said parties. In the present action, the
private respondent failed to implead the
following indispensable parties: his father,
Rodolfo Pelaez; the heirs of Santiago
Sepulveda, namely, Paz Sepulveda and their
children; and the City of Danao which
purchased the property from Pedro
Sepulveda, Sr. and maintained that it had
failed to pay for the purchase price of the
property. Section 7, Rule 3 of the Rules of
Court reads: SEC. 7. Compulsory joinder of
indispensable parties. – Parties in interest
without whom no final determination can be
had of an action shall be joined either as
plaintiffs or defendants. Indeed, the presence
of all indispensable parties is a condition sine
qua non for the exercise of judicial power. It
is precisely when an indispensable party is
not before the court that the action should be
dismissed. Thus, the plaintiff is mandated to
implead all the indispensable parties,
considering that the absence of one such
party renders all subsequent actions of the
court null and void for want of authority to
act, not only as to the absent parties but even
as to those present. One who is a party to a
case is not bound by any decision of the court,
otherwise, he will be deprived of his right to
due process. Without the presence of all the
other heirs as plaintiffs, the trial court could
not validly render judgment and grant relief
in favor of the private respondent. The failure
of the private respondent to implead the
other heirs as parties-plaintiffs constituted a
legal obstacle to the trial court and the
appellate court’s exercise of judicial power
over the said case, and rendered any orders
or judgments rendered therein a nullity. To
reiterate, 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.
Algura VS LGU
Facts:
Spouses Antonio F. Algura and Lorencita S.J.
Algura filed a Verified Complaint for damages
against the Naga City Government and its
officers, arising from the alleged illegal
demolition of their residence and boarding
house and for payment of lost income derived
from fees paid by their boarders amounting
to PhP 7,000.00 monthly.
Simultaneously, petitioners filed an Ex-Parte
Motion to Litigate as Indigent Litigants, to
which petitioner Antonio Algura's Pay Slip)
was appended, showing a gross monthly
income of Ten Thousand Four Hundred
Seventy Four Pesos (PhP 10,474.00) and a net
pay of Three Thousand Six Hundred Sixteen
Pesos and Ninety Nine Centavos (PhP
3,616.99) for [the month of] July 1999. Also
attached as Annex "B" to the motion was a
July 1999 Certification issued by the Office of
the City Assessor of Naga City, which stated
that petitioners had no property declared in
their name for taxation purposes.
Finding that petitioners' motion to litigate as
indigent litigants was meritorious, Executive
Judge Jose T. Atienza of the Naga City RTC, in
the September 1, 1999 Order, granted
petitioners' plea for exemption from filing
fees.
Meanwhile, as a result of respondent Naga
City Government's demolition of a portion of
petitioners' house, the Alguras allegedly lost a
monthly income of PhP 7,000.00 from their
boarders' rentals. With the loss of the rentals,
the meager income from Lorencita Algura's
sari-sari store and Antonio Algura's small
take home pay became insufficient for the
expenses of the Algura spouses and their six
(6) children for their basic needs including
food, bills, clothes, and schooling, among
others.
On March 2000, respondents filed a Motion
to Disqualify the Plaintiffs for Non-Payment
of Filing Fees dated March 10, 2000. They
asserted that in addition to the more than
PhP 3,000.00 net income of petitioner
Antonio Algura, who is a member of the
Philippine National Police, spouse Lorencita
Algura also had a mini-store and a computer
shop on the ground floor of their residence
along Bayawas St., Sta. Cruz, Naga City. Also,
respondents claimed that petitioners' second
floor was used as their residence and as a
boarding house, from which they earned
more than PhP 3,000.00 a month. In addition,
it was claimed that petitioners derived
additional income from their computer shop
patronized by students and from several
boarders who paid rentals to them. Hence,
respondents concluded that petitioners were
not indigent litigants.
On May 2000, the trial court issued an Order
giving petitioners the opportunity to comply
with the requisites laid down in Section 18,
Rule 141, for them to qualify as indigent
litigants.
On May 2000, petitioners submitted their
Compliance attaching the affidavits of
petitioner Lorencita Algura and Erlinda
Bangate, to comply with the requirements of
then Rule 141, Section 18 of the Rules of
Court and in support of their claim to be
declared as indigent litigants.
In her May 2000 Affidavit, petitioner
Lorencita Algura claimed that the demolition
of their small dwelling deprived her of a
monthly income amounting to PhP 7,000.00.
She, her husband, and their six (6) minor
children had to rely mainly on her husband's
salary as a policeman which provided them a
monthly amount of PhP 3,500.00, more or
less. Also, they did not own any real property
as certified by the assessor's office of Naga
City. More so, according to her, the meager
net income from her small sari-sari store and
the rentals of some boarders, plus the salary
of her husband, were not enough to pay the
family's basic necessities.
Issue: Whether or Not petitioners Algura
should be considered as indigent litigants
who qualify for exemption from paying filing
fees.
Held:
Yes. Applying Rule 3, Section 21 of the 1997
Rules of Civil Procedure, The petitioner
Algura should be declared and considered as
indigent litigants who qualify for exemption
from paying filing fees. The court rule that if
the applicant for exemption meets the salary
and property requirements under Section 19
of Rule 141, then the grant of the application
is mandatory. On the other hand, when the
application does not satisfy one or both
requirements, then the application should not
be denied outright; instead, the court should
apply the "indigency test" under Section 21 of
Rule 3 and use its sound discretion in
determining the merits of the prayer for
exemption.
In the Case at bar, the trial court should have
applied Rule 3, Section 21 to the application
of the Alguras after their affidavits and
supporting documents showed that
petitioners did not satisfy the twin
requirements on gross monthly income and
ownership of real property under Rule 141.
Instead of disqualifying the Alguras as
indigent litigants, the trial court should have
called a hearing as required by Rule 3, Section
21 to enable the petitioners to adduce
evidence to show that they didn't have
property and money sufficient and available
for food, shelter, and basic necessities for
them and their family. In that hearing, the
respondents would have had the right to also
present evidence to refute the allegations and
evidence in support of the application of the
petitioners to litigate as indigent litigants.
Since this Court is not a trier of facts, it will
have to remand the case to the trial court to
determine whether petitioners can be
considered as indigent litigants using the
standards set in Rule 3, Section 21.