Indispensable

Parties in interest without whom no final determination can be had of a court action are indispensable parties and shall be joined either as plaintiffs or defendants. If they are not joined as parties, will the case be dismissed? This is answered in this case between Ana and the heirs of Juan.

The case involved the Tax Declaration (TD) over a parcel of land with an area of 6,186 square meters. Originally, it was in the name of Juan under TD 463. But in 1981, the Assessor’s Office cancelled it and placed it under the names of Ana, Marita and Dolores under TD 6164. The cancellation was based on an unsigned but thumb-marked and notarized affidavit of Juan wherein Juan allegedly admitted he was a mere agricultural tenant of the land and he was waiving and surrendering his occupation and tenancy rights to Ana, Marita and Dolores for a consideration of P29,240.

When the heirs of Juan learned of such cancellation and that it was based on an unsigned although notarized affidavit of their father which was not even on file in the Assessor’s Office, they filed an action before the RTC for the cancellation of TD 6164. But in their suit only Ana was named as party defendant. Marita and Dolores were not included in the suit.

In her answer, Ana raised the affirmative defense of prescription and non-compliance with the requirement on conciliation proceedings. Since the answer was filed beyond the reglamentary period, the RTC eventually declared Ana in default despite Ana’s legal maneuvers against it. The RTC thus rendered a decision (1) annulling TD 6164 in the names of Ana, Marita and Dolores (2) reinstating TD 463 in Juan’s name and (3) ordering the issuance in its place of a new TD in the names of his heirs. On appeal, the Court of Appeals affirmed said ruling despite the issue raised by Ana on the non-inclusion of Marita and Dolores as parties which the CA did not address. Were the RTC and the CA correct?

No. Judgments do not bind strangers to the suit. The absence of indispensable parties renders all subsequent actions of the court null and void. It has no authority to act not only as to the absent party but as to those present as well. The responsibility for impleading them lies in the plaintiffs.

Here the heirs of Juan sought the annulment of TD 6164 in the names of Ana, Marita and Dolores and the reinstatement of Juan’s TD 463. They also sought to strike down the affidavit in which Juan renounced his tenancy rights of favor the three. It is inevitable that any decision granting the heirs’ prayers would necessarily affect the rights to the property of such persons covered by the TD.

TDs are important to the persons in whose name they are issued. Their cancellation affects the rights and interest of such persons over the properties covered by them because they are the primary evidence, if not the source, of the right to claim title of ownership over a real property enforceable against another person. Although not conclusive, TDs are telling evidence of the declarant’s possession which could ripen into ownership. No one in his right mind would pay taxes for a property not in his possession. This honest sense of obligation proves that a TD holder claims title over the property against the State and other persons putting them on notice that he would eventually seek issuance of a certificate of title in his name. A TD also expresses its holder’s intent to contribute revenues to the Government, a circumstance that strengthens the bona fide claim to ownership.

Here, the RTC and the CA annulled TD 6164 belonging not only to Ana but to Marita and Dolores who had no opportunity to be heard as they were never impleaded. Hence the RTC and the CA had no authority to annul said TD.

But the non-joinder of Marita and Dolores is not a ground for dismissal. It only allows the amendment of the complaint at any stage of the proceeding through motion or order of the court on its own initiative (Section11, Rule 3, 1997 Rules of Court). Only if plaintiff refuses to implead the indispensable parties despite the order of the court may the action be dismissed. There is therefore a need to remand the case to the RTC with an order to implead Marita and Dolores as defendants so they may, if they so desire, be heard. The RTC and CA decision should thus be set aside (Tallorin vs. Heirs of Tarona, G.R.177429, November 24, 2009).

Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.

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