THEODORE and NANCY ANG, represented by ELDRIGE MARVIN B.

ACERON,
vs. SPOUSES ALAN and EM ANG
G.R. No. 186993
August 22, 2012
Reyes, J.
FACTS: Respondents spouses Alan and Em Ang obtained a loan from petitioners Theodore and Nancy
Ang. Respondents executed a promissory note in favor of petitioners wherein they promised to pay the
latter the said amount, with interest, upon demand. However, despite repeated demands, the
respondents failed to pay the petitioners.
Petitioners, who were then residing in Los Angeles, California, executed their respective Special Powers
of Attorney (SPA) in favor of Attorney Eldrige Marvin B. Aceron (Atty. Aceron) for the purpose of filing an
action in court against the respondents, which Atty. Aceron promptly did -- a collection case against
respondents filed with the Quezon City RTC.
Respondents moved for the dismissal of the complaint filed by the petitioners on, inter alia, the ground of
improper venue; they asserted that the complaint against them may only be filed in the court of the place
where either they or the petitioners reside. They averred that they reside in Bacolod City while the
petitioners reside in Los Angeles, California, USA. Thus, the respondents maintain, the filing of the
complaint against them in the Quezon City RTC was improper. The RTC issued an Order denying the
respondents motion to dismiss.
Reconsideration was sought but denied, leading to the respondents filing with the Court of Appeals a
petition for certiorari. The respondents contended that the petitioners SPA in favor of Atty. Aceron
notwithstanding, the complaint may not be filed in the court of the place where Atty. Aceron resides, i.e.,
the Quezon City RTC; Atty. Aceron, being merely a representative of the petitioners, is not the real party
in interest in the case, and therefore, his residence should not be considered in determining the proper
venue of the said complaint. The CA annulled and set aside the Orders of the RTC. Petitioners sought a
reconsideration, but in vain -- hence, this petition.
ISSUES:
(1) Did the Quezon City RTC have jurisdiction over the case?
(2) Was Atty. Aceron a real party in interest to the case?
RULING:
(1) NO.
It is a legal truism that the rules on the venue of personal actions are fixed for the convenience of
the plaintiffs and their witnesses. Equally settled, however, is the principle that choosing the
venue of an action is not left to a plaintiffs caprice; the matter is regulated by the Rules of Court.
The petitioners complaint for collection of sum of money against the respondents is a personal
action as it primarily seeks the enforcement of a contract. The Rules give the plaintiff the option of
choosing where to file his complaint. He can file it in the place (1) where he himself or any of
them resides, or (2) where the defendant or any of the defendants resides or may be found. The
plaintiff or the defendant must be residents of the place where the action has been instituted at
the time the action is commenced.
However, if the plaintiff does not reside in the Philippines, the complaint in such case may only be
filed in the court of the place where the defendant resides. [The] situs for bringing real and
personal civil actions is fixed by the Rules of Court to attain the greatest convenience possible to
the litigants and their witnesses by affording them maximum accessibility to the courts.

(2) NO.
[Atty. Aceron] does not stand to be benefited or injured by any judgment [in the case at bench].
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. He may only
do so, as what he did, in behalf of the petitioners the real parties in interest.
[To] construe the express requirement of residence under the rules on venue as applicable to the
attorney-in-fact of the plaintiff would abrogate the meaning of a real party in interest, as defined
in Section 2 of Rule 3 of the 1997 Rules of Court vis--vis Section 3 of the same Rule.

LIVING @ SENSE, INC., vs. MALAYAN INSURANCE COMPANY, INC.

G.R. No. 193753
September 26, 2012
Perlas-Bernabe, J.
FACTS: Petitioner Living @ Sense, Inc. was the main contractor of the FOC Network Project of Globe
Telecom in Mindanao. In connection with the project, petitioner entered into a Sub-Contract Agreement
(Agreement) with Dou Mac, Inc. (DMI), under which the latter was tasked to undertake an underground
open-trench work. Petitioner required DMI to give a bond, in the event that DMI fails to perform its
obligations under the Agreement. Thus, DMI secured surety and performance bonds from respondent
Malayan Insurance Company, Inc. (respondent) to answer: (1) for the unliquidated portion of the
downpayment, and (2) for the loss and damage that petitioner may suffer, respectively, should DMI fail to
perform its obligations under the Agreement. Under the bonds, respondent bound itself jointly and
severally liable with DMI.
During the course of excavation and restoration works, the Department of Public Works and Highways
(DPWH) issued a work-stoppage order against DMI after finding the latters work unsatisfactory.
Notwithstanding the said order, however, DMI still failed to adopt corrective measures, prompting
petitioner to terminate the Agreement and seek indemnification from respondent. However, respondent
effectively denied petitioners claim on the ground that the liability of its principal, DMI, should first be
ascertained before its own liability as a surety attaches. This led to the filing of a complaint with the
Paraaque City RTC, premised on respondents liability under the surety and performance bonds secured
by DMI.
Seeking the dismissal of the complaint, respondent claimed that DMI is an indispensable party that
should be impleaded and whose liability should first be determined before respondent can be held liable.
On the other hand, petitioner asserted 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 DMI fails to perform its
obligations under the Agreement.
The RTC dismissed the complaint (without prejudice) for failure to implead DMI as a party defendant. It
ruled that before respondent could be held liable on the surety and performance bonds, it must first be
established that DMI, with whom petitioner had originally contracted, had indeed violated the Agreement.
DMI, therefore, is an indispensable party that must be impleaded in the instant suit. The RTC later denied
petitioners motion for reconsideration for failure to set the same for hearing as required under the rules
hence this petition for review on certiorari.
ISSUE: Was DMI an indispensable party in this case?
RULING: NO.

Records show that when DMI secured the surety and performance bonds from respondent in compliance
with petitioners requirement, respondent bound itself "jointly and severally" with DMI for the damages and
actual loss that petitioner may suffer should DMI fail to perform its obligations under the Agreement []
The term "jointly and severally" expresses a solidary obligation granting petitioner, as creditor, the right to
proceed against its debtors, i.e., respondent or DMI.
The nature of the solidary obligation under the surety does not make one an indispensable party. An
indispensable party is a party-in-interest without whom no final determination can be had of an action,
and who shall be joined mandatorily either as plaintiffs or defendants. The presence of indispensable
parties is necessary to vest the court with jurisdiction, thus, without their presence to a suit or proceeding,
the judgment of a court cannot attain real finality. 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.
In this case, DMI is not an indispensable party because petitioner can claim indemnity directly from
respondent, having made itself jointly and severally liable with DMI for the obligation under the bonds.
Therefore, the failure to implead DMI is not a ground to dismiss the case, even if the same was without
prejudice.
Moreover, even on the assumption that DMI was, indeed, an indispensable party, the RTC committed
reversible error in dismissing the complaint. Failure to implead an indispensable party is not a ground for
the dismissal of an action, as the remedy in such case is to implead the party claimed to be
indispensable, considering that parties may be added by order of the court, on motion of the party or on
its own initiative at any stage of the action.

Respondent Gilbert G. Guy (Gilbert) practically owned almost 80 percent of the 650,000 subscribed
capital stock of GoodGold Realty & Development Corporation (GoodGold), one of the multi-million
corporations which Gilbert claimed to have established in his 30s. GoodGolds remaining shares were
divided among his parents, Francisco Guy (Francisco) and petitioner Simny Guy (Simny), and Benjamin
Lim and Paulino Delfin Pe.
However, Simny alleged that it was she and her husband who established GoodGold, putting the bulk of
its shares under Gilberts name. Simny further claimed that upon the advice of their lawyers, upon the
incorporation of GoodGold, they issued stock certificates reflecting the shares held by each stockholder
duly signed by Francisco as President and Atty. Emmanuel Paras as Corporate Secretary, with
corresponding blank endorsements at the back of each certificate under Gilberts name. These
certificates were all with Gilberts irrevocable endorsement and power of attorney to have these stocks
transferred in the books of corporation. All of these certificates were always in the undisturbed possession
of the spouses Francisco and Simny.
Years later, the aging Francisco instructed Benjamin Lim, a nominal shareholder of GoodGold and his
trusted employee, to collaborate with Atty. Emmanuel Paras, to redistribute GoodGolds shareholdings
evenly among his children, namely, Gilbert, Grace Guy-Cheu (Grace), Geraldine Guy (Geraldine), and
Gladys Guy (Gladys), while maintaining a proportionate share for himself and Simny. Accordingly, some
of GoodGolds certificates were cancelled and new ones were issued to represent the redistribution of
GoodGolds shares of stock. The new certificates of stock were signed by Francisco and Atty. Emmanuel
Paras, as President and Corporate Secretary, respectively.
Five years after the redistribution of GoodGolds shares of stock, Gilbert filed with the Manila RTC a
complaint for the Declaration of Nullity of Transfers of Shares in GoodGold and of General Information
Sheets and Minutes of Meeting, and for Damages with Application for a Preliminary Injunctive Relief,
against Simny and his sisters, Geraldine, Grace, and Gladys. Gilbert alleged, among others, that no stock
certificate ever existed; that his signature at the back of the spurious stock certificates which purportedly
endorsed the same and that of the corporate secretary, Emmanuel Paras, at the obverse side of the

certificates were forged, and, hence, should be nullified. Gilbert, however, withdrew the complaint, after
the National Bureau of Investigation (NBI) submitted a report to the RTC of Manila authenticating Gilberts
signature in the endorsed certificates.
Three years after the complaint with the RTC of Manila was withdrawn, Gilbert again filed a complaint,
this time, with the Mandaluyong RTC, captioned as Intra Corporate Controversy: For the Declaration of
Nullity of Fraudulent Transfers of Shares of Stock Certificates, Fabricated Stock Certificates, Falsified
General Information Sheets, Minutes of Meetings, and Damages with Application for the Issuance of a
Writ of Preliminary and Mandatory Injunction, against his mother, Simny, his sisters, Geraldine and
Gladys, and the heirs of his late sister Grace.
Gilbert alleged 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. He also denied the existence of the certificates of stocks.
The RTC denied Gilberts Motion for Injunctive Relief which constrained him to file a motion for
reconsideration, and, thereafter, a Motion for Inhibition against Judge Edwin Sorongon, praying that the
latter recuse himself from further taking part in the case. Meanwhile, Gilberts siblings filed a manifestation
claiming that the complaint is a nuisance and harassment suit under Section 1(b), Rule 1 of the Interim
Rules of Procedure on Intra-Corporate Controversies. The RTC denied the motion for inhibition. The RTC
also dismissed the case, declaring it a nuisance and harassment suit.
This constrained Gilbert to assail the above Order before the Court of Appeals (CA). In its Decision, the
CA upheld Judge Sorongons refusal to inhibit from hearing the case on the ground that Gilbert failed to
substantiate his allegation of Judge Sorongons partiality and bias. In the same decision, the CA also
denied Gilberts Petition for the Issuance of Writ of Preliminary Injunction for failure to establish a clear
and unmistakable right that was violated as required under Section 3, Rule 58 of the Rules of Court. The
CA, however, found merit on Gilberts contention that the complaint should be heard on the merits.
ISSUE: Was the decision of the CA proper?
RULING: NO.
It bears emphasis that this controversy started with Gilberts complaint filed with the RTC of Mandaluyong
City in his capacity as stockholder, director and Vice-President of GoodGold.
Gilberts complaint essentially prayed for the return of his original 519,997 shares in GoodGold, by
praying that the court declare that there were no valid transfers [of the contested shares] to defendants
and Francisco. It baffles this Court, however, that Gilbert omitted Francisco as defendant in his
complaint. While Gilbert could have opted to waive his shares in the name of Francisco to justify the
latters non-inclusion in the complaint, Gilbert did not do so, but instead, wanted everything back and
even wanted the whole transfer of shares declared fraudulent. This cannot be done, without including
Francisco as defendant in the original case. The transfer of the shares cannot be, as Gilbert wanted,
declared entirely fraudulent without including those of Francisco who owns almost a third of the total
number.
Francisco is an indispensable party without whom no final determination can be had for the following
reasons: (a) the complaint prays that the shares now under the name of the defendants and Francisco be
declared fraudulent; (b) Francisco owns 195,000 shares some of which, Gilbert prays be returned to him;
(c) Francisco signed the certificates of stocks evidencing the alleged fraudulent shares previously in the
name of Gilbert. The inclusion of the shares of Francisco in the complaint makes Francisco an
indispensable party. Moreover, the pronouncement about the shares of Francisco would impact on the
hereditary rights of the contesting parties or on the conjugal properties of the spouses to the effect that
Francisco, being husband of Simny and father of the other contesting parties, must be included for,
otherwise, in his absence, there cannot be a determination between the parties already before the court
which is effective, complete, or equitable.

The definition in the Rules of Court, Section 7, Rule 3 thereof, of indispensable parties as parties in
interest without whom no final determination can be had of an action has been jurisprudentially amplified.
Settled is the rule that joinder of indispensable parties is compulsory being a sine qua non for the
exercise of judicial power,41 and, it is precisely when an indispensable party is not before the court that
the action should be dismissed for such absence 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.
It bears emphasis that Gilbert, while suing as a stockholder against his co-stockholders, should have also
impleaded GoodGold as defendant [...] GoodGold is a separate juridical entity distinct from its
stockholders and from its directors and officers. The trial court, acting as a special commercial court,
cannot settle the issues with finality without impleading GoodGold as defendant. Like Francisco, and for
the same reasons, GoodGold is an indispensable party which Gilbert should have impleaded as
defendant in his complaint.