Divinagracia v. Parilla et al.

Divinagracia v. Parilla, et al.
[G.R. No. 196750, March 11, 2015]

Facts:
​Conrado Nobleza, Sr. (Conrado, Sr.) owned a 313-square meter parcel of land located at Cor. Fuentes-Delgado Streets, Iloilo City. During his lifetime, Conrado Sr. was legally married twice, first to Lolita Palermom, and later to Eusela Niangar, with whom he had the following children

Lolita (2):

• Cresencio
• Conrado, Jr

Eusela (7) 

• Mateo, Sr. (deceased; survived by Felcon, Landelin, Eusela, Giovanni, Mateo, Jr., Tito, and Gaylord)
• Coronacion
• Cecilia
• Celestial
• Celedonio
• Ceruleo,
• Cebeleo, Sr. (deceased; survived by wife Maude, and children Cebeleo, Jr. and Neobel) 

illegitimate

• Eduardo
• Rogelio
• Ricardo 

Upon Conrado, Sr.’s death, his children from his marriage to Lolita, as well as  Felcon (representing his father and siblings), Coronacion, Celestial, Cecilia, and his three illegitimate children sold their respective interests over the subject land to now-deceased petitioner Santiago Divinagracia for a consideration of 447,695.66. However, respondents Ceruleo, Celedonio, and Maude (representing Cebeleo, Sr., and their children), did not sign the Adjudication with Deed of Sale as they did not sell their respective shares. As a result, Santiago was unable to have the TCT No. over the subject property cancelled and the subject document registered because of respondent’s refusal to surrender the said title. This fact, coupled with respondent’s failure to partition the subject land, prompted Santiago to file a Complaint for judicial partition and for receivership. Respondents’s allegations is that that Santiago had no legal right to file an action for judicial partition nor compel them to surrender the TCT  No. because, inter alia: (a) Santiago did not pay the full purchase price of the shares sold to him; and (b) the subject land is a conjugal asset of Conrado Sr. and Eusela Niangar and, thus, only their legitimate issues may validly inherit the same. The RTC ruled in favor of petitioner, ordering the cancellation of TCT No. T- 12255 and the issuance of a new owner’s duplicate certificate in favor of Santiago and the group of Ceruleo, Celedonio, Maude, and the heirs of Mateo, Sr. The RTC found that through the subject document, Santiago became a co-owner of the subject land and, as such, has the right to demand the partition of the same. However, the RTC held that Santiago did not validly acquire Mateo, Sr.’s share over the subject land, considering that Felcon admitted the lack of authority to bind his siblings with regard to Mateo, Sr.’s share thereon. On appeal to the CA, the court reversed the RTC’s ruling, stating that that Felcon’s siblings, as well as Maude’s children, are indispensable parties to the judicial partition of the subject land, and their non-inclusion as defendants in Santiago’s complaint would necessarily result in its dismissal. Hence the current petition before the SC

Issue:
Whether or not the CA correctly: (a) ruled that Felcon’s siblings and Cebeleo, Sr. and Maude’s children are indispensable parties to Santiago’s complaint for judicial partition; and (b) dismissed Santiago’s complaint for his failure to implead said omitted heirs.

Held:
Petition partly granted.
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. Thus, 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 actions for partition, the court cannot properly issue an order to divide the property, unless it first makes a determination as to the existence of co-ownership. The court must initially settle the issue of ownership, which is the first stage in an action for partition. Until and unless this issue of co-ownership is resolved, it would be premature to effect a partition of the disputed properties. 
In the current case, while Santiago bought the interests of majority of the heirs of Conrado, Sr., as a vendee, he merely steps into the shoes of the vendors-heirs. Since his interest over the subject land is merely derived from that of the vendors-heirs, the latter should first be determined as co-owners thereof, thus necessitating the joinder of all those who have vested interests in such land, i.e., the aforesaid heirs of Conrado, Sr., in Santiago’s complaint. The absence of the aforementioned indispensable parties in the instant complaint for judicial partition renders all subsequent actions of the RTC null and void for want of authority to act, not only as to the absent parties, but even as to those present.
However, the CA erred in ordering the dismissal of the complaint on account of Santiago’s failure to implead all the indispensable parties in his complaint. The non-joinder of indispensable parties is not a ground for the dismissal of an action. At any stage of a judicial proceeding and/or at such times as are just, parties may be added on the motion of a party or on the initiative of the tribunal concerned. If the plaintiff refuses to implead an indispensable party despite the order of the court, that court may dismiss the complaint for the plaintiff’s failure to comply with the order. The remedy is to implead the non-party claimed to be indispensable.