TITLE: CRISANTA F. SENO, CAROLA SENO SANTOS, MANUEL SENO, JR.

, DIANA SENO CONDER,

EMILY SENO and WALTER SENO vs. MARCOS MANGUBAT and Spouses FRANCISCO LUZAME
and VERGITA PENAFLOR, ANDRES EVANGELISTA and BIENVENIDO MANGUBAT

G.R. No. L-44339 December 2, 1987

TOPIC/S: INDISPENSABLE PARTIES; PROPER PARTIES; PRESCRIPTION; LACHES

FACTS:

Plaintiffs filed a complaint seeking:

1) the reformation of a Deed of Sale executed in favor of defendant Marcos Mangubat and,
2) the annulment of a subsequent sale to defendant spouses Francisco Luzame and Vergita
Penaflor of a parcel of land in Barrio Dongalo, Paranaque, Rizal covered by OCT No. 1197 of the
Land Registry of Rizal.

Plaintiff Crisanta Seno negotiated with defendant Marcos Mangubat to enter with him a mortgage over a
parcel of land so she can pay off a previous indebtedness. Here are the conditions agreed upon:

 Money borrowed: P15,000.00 (with interest of 2% a month payable every month;

 As long as the interest is being paid, the mortgage over the property will not be foreclosed;
 Plaintiff Crisanta F. Seno (on the assurance of defendant Marcos Mangubat, which is a practicing
lawyer) agreed to the execution of a Deed of Absolute Sale over the subject property for a
consideration of P5,000.00. Later, the Deed of Absolute Sale was executed transferring the title
of the subject property to defendant Marcos Mangubat.

All the while, plaintiff Crisanta F. Seno continued paying defendant Marcos Mangubat the usurious 2%
interest per month. When plaintiff failed to pay one monthly interest, she was sued for ejectment.

PLAINTIFF:

 Learned that defendant Marcos Mangubat sold the subject property in favor of spouses Francisco
Luzame and Vergita Penaflor
 Buyers are in bad faith since they had knowledge of the circumstances surrounding the
transaction between plaintiff and defendant Marcos Mangubat;
 Defendant spouses Luzame filed an ejectment case against plaintiff Crisanta Seno for alleged
non-payment of rentals.

Spouses Luzame and Penaflor moved to include as defendants Andres Evangelista and Bienvenido
Mangubat on the ground that they are indispensable parties.

The newly impleaded defendants moved for the dismissal of the case against them on the ground of
prescription.

DEFENDANTS Luzame, Penaflor and Marcos Mangubat asked the court a quo to dismiss the case
against all the defendants.

RTC:

 Dismissed the case against all the defendants – it is no longer in a position to grant plaintiffs'
demands, principally the reformation of subject Deed of Absolute Sale.
 Plaintiffs filed for MR, denied.

An appeal was brought to CA. CA certified the instant case to SC since the assignment of errors made
by plaintiffs are purely legal questions.
ISSUE/S:

1) W/N defendants Andres Evangelista and Bienvenido Mangubat indispensable parties in the case
without whom no action can be properly taken thereon?
2) If they are such, has the action prescribed against them in view of Art. 1144, Civil Code?
3) If they are not, was the dismissal of said defendants a legal grounds for dismissal of the complaint
as against the other defendants? and
4) W/N a dismissal of the case without a hearing on the merits in accordance with law?

RULING:

FIRST ISSUE: NO. They are not indispensable parties, just proper parties.

Sections 7 and 8, Rule 3 of the Revised Rules of Court which provide:

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.

Sec. 8. Joinder of proper parties. — When persons who are not indispensable but who ought to
be parties if complete relief is to be accorded as between those already parties, have not been
made parties and are subject to the jurisdiction of the court as to both service of process and
venue, the court shall order them summoned to appear in the action. But the court may, in its
discretion, proceed in the action without making such persons parties, and the judgment rendered
therein shall be without prejudice to the rights of such persons.

Under Section 7, indispensable parties must always be joined either as plaintiffs or defendants, for the
court cannot proceed without them. Necessary parties must be joined, under Section 8, in order to
adjudicate the whole controversy and avoid multiplicity of suits.

Indispensable parties are those with such an interest in the controversy that a final decree would
necessarily affect their rights, so that the courts cannot proceed without their presence. Necessary parties
are those whose presence is necessary to adjudicate the whole controversy, but whose interests are so
far separable that a final decree can be made in their absence without affecting them.

In the present case, there are no rights of defendants Andres Evangelista and Bienvenido Mangubat to
be safeguarded if the sale should be held to be in fact an absolute sale nor if the sale is held to be an
equitable mortgage. Defendant Marcos Mangubat became the absolute owner of the subject property by
virtue of the sale to him of the shares of the aforementioned defendants in the property. Said defendants
no longer have any interest in the subject property. However, being parties to the instrument sought to
be reformed, their presence is necessary in order to settle all the possible issues of tile controversy.
Whether the disputed sale be declared an absolute sale or an equitable mortgage, the rights of all the
defendants will have been amply protected. Defendants-spouses Luzame in any event may enforce their
rights against defendant Marcos Mangubat.

Plaintiffs were not after defendants Andres Evangelista and Bienvenido Mangubat as shown by their non-
inclusion in the complaint and their opposition to the motion to include said defendants in the complaint
as indispensable parties. It was only because they were ordered by the court a quo that they included the
said defendants in the complaint. The lower court erroneously held that the said defendants are
indispensable parties.

Notwithstanding, defendants Andres Evangelista and Bienvenido Mangubat not being indispensable
parties but only proper parties, their joinder as parties defendants was correctly ordered being in
accordance with Sec. 8 of Rule 3.

SECOND ISSUE YES. Sufficient time has already lapsed and prescription has ripened.

Art. 1144, Civil Code provides:

 The following actions must be brought ten years from the time the right of action accrues:

1) Upon a written contract;

xxx xxx xxx

The prescriptive period for such actions based upon a written contract and for reformation thereof is ten
years as provided in Article 1144 of the Civil Code. Such right to reformation is expressly recognized in
Article 1365 of the same Code which provides:

If two parties agree upon the mortgage or pledge of real or personal property, but the instrument
states that the property is sold absolutely or with a right of repurchase, reformation of the
instrument is proper.

Article 1605 of the Civil Code in conjunction with Article 1604 likewise allows the apparent vendor to ask for the
reformation of the instrument.

In the instant case, defendants Andres Evangelista and Bienvenido Mangubat were only impleaded in
the amended complaint of December 29, 1971 or ten (10) years, five (5) months and twelve (12) days
from July 17, 1961 the date of execution of the subject Deed of Absolute Sale, clearly more than the ten
(10) year prescriptive period.

THIRD ISSUE AND FOURTH ISSUE:

It should be remembered that the court a quo dismissed the complaint against defendants Andres
Evangelista and Bio Mangubat upon their motion to dismiss on the ground of prescription.

Section 3, Rule 16 provides:

"After hearing, the court may deny or grant the motion or allow amendment, or may defer the
hearing and determination of the motion until the trial if the ground alleged therein does not appear
to be indubitable."

A motion to dismiss on the ground of prescription will be given due course only if the complaint shows
upon its face that the action has already prescribed. If it does not so appear, the determination of the motion to dismiss must
be deferred until trial.

As earlier pointed out in this decision, the action against said defendants has prescribed. The court a
quo properly ordered its dismissal as what it originally did in its order of July 3, 1972.

By the dismissal of the case against defendants Andres Evangelista and Bienvenido Mangubat, the
court a quo had lost jurisdiction over them. The joinder of proper parties is necessary in order to determine
all the possible issues of the controversy; but if for some reason or another it is not possible to join them,
as when they are out of the jurisdiction of the Court, the court may proceed without them, and the
judgment that may be rendered shall be without prejudice to their rights. Hence, notwithstanding the
absence of said defendants, the court could still proceed with the trial of the case as against the remaining
defendants in accordance with Sec. 8 of Rule 3.

***Nevertheless, the court is constrained to affirm the dismissal of the complaint against all the defendants
as there is merit in the argument raised by defendants-appellees that plaintiffs are barred by laches to
bring suit against them.

Laches (or estoppel by laches) is unreasonable delay in the bringing of a cause of action before the courts
of justice. Case records would show that for a period of 8 years, I month and 12 days, plaintiffs never
took any step to enforce their rights which they claim to have despite the several opportunities available
to them. They chose to sleep on their rights and to rely on defendants' alleged word that their true
agreement would be respected rather than bring their grievances to a court of law. However, when an
ejectment case was filed against them just when the 10-year prescriptive period for bringing of their suit
was nearly over, they finally decided to stake their claim against the defendants.

By the negligence of plaintiffs in asserting their rights for an unreasonable length of time, they are now
forever precluded from enforcing whatever right they may have against defendants. Indeed, it is
an indicia of the infirmity of their claim.

IN VIEW OF THE FOREGOING CONSIDERATIONS, the order of dismissal dated September 29, 1972
and the order denying the motion for reconsideration dated January 13, 1973 of the Court of First Instance
of Rizal, Branch I, are hereby AFFIRMED. No costs.

SO ORDERED.

*** I REMOVED THE DISCUSSION ON BUYER IN GOOD / BAD FAITH ISSUE. I RETAINED THE
DISCUSSION ON LACHES AND PRESCRIPTION BECAUSE IT IS SOMEWHAT RELATED TO THE CIVIL
PROCEDURE ISSUE. THANKS.

COURT DECISION LEGAL BASIS

RTC Dismissed the Seno’s complaint against all defendants. The prescription limit of 10 years
has already lapsed.
CA Forwarded the case to SC Purely legal questions were asked.
SC (1) The joinder of A. Evangelista and B. Mangubat is valid. (1) Rule 3, Section 7 & 8

(2) Prescription has already set in. (2) Article 1144 NCC

(3) & (4) Dismissal is valid. No need to conduct further (3) Rule 3, Section 16 RoC
proceedings.