Facts:
Two (2) loans were entered into by the Municipality with Land Bank of the Philippines (LBP) in order to finance the Redevelopment Plan of the Agoo Public Plaza. As security for the loans, the Municipality used as collateral a lot situated at the plaza.
A group of residents led by Mr. Cacayuran opposed the redevelopment of the public plaza. He invoked his right as a taxpayer and filed a complaint against LBP and various officers of the Municipality but excluded the Municipality itself as party-defendant.
LBP asserted that Mr. Cacayuran did not have any cause of action since he was not privy to the loan agreements entered into by LBP and the Municipality.
In proceedings before the Supreme Court, the Municipality filed a motion for leave that it be included as party-litigant in the case. It contends that as a contracting party to the subject loans, it is an indispensable party to the action filed by Mr. Cacayuran.
Issue:
Should the municipality be deemed as an indispensable party and be ordered impleaded in the case?
Ruling:
Yes, the municipality should be deemed as an indispensable party and should be impleaded in the case.
Sec. 7 states:
Compulsory joinder of indispensable parties. Parties-in-interest without whom final determination can be had of an action shall be joined either as plaintiffs or defendants.
An indispensable party is one whose interest will be affected by the court’s action in the litigation and without whom no final determination of the case can be had. The party’s interest in the subject matter of the suit and in the relief sought are so inextricably intertwined with the other parties that his legal presence as a party to the proceeding is an absolute necessity. In his absence, there cannot be a resolution of the dispute of the parties before the court which is effective, complete, or equitable. Absence of an indispensable party renders all subsequent actions of the court void, for want of authority to act, not only as to the absent parties but even as to those present.
Failure to implead any indispensable party to a suit does not necessarily result in the outright dismissal of the complaint (Heirs of Mesina v. Heirs of Fian, Sr.).
The Municipality on whose land stands and is found the Agoo Public Plaza stands to be benefited or injured in the judgment in the case so filed or the party entitled to the avails of the case and is therefore, a real party-in-interest.
The presence of the indispensable party is necessary to vest the court with jurisdiction. Impleading such party may be raised at any stage of the proceedings.
The case was remanded back to the RTC to include the indispensable parties and its immediate disposition on the merits.
