Heirs of Juan M. Dinglasan vs. Ayala Corporation

Non-joinder of an indispensable party is not a ground for dismissal of an action; the defect is cured by ordering the party’s impleader at any stage of the proceedings. In an action assailing the validity of an original certificate of title and its derivative titles, the registered owner of the original certificate is an indispensable party without whom the court lacks authority to act. The proper course is to remand the case to the trial court to implead the absent party and allow the presentation of evidence before resolving the merits.

Petitioners, as heirs of Juan M. Dinglasan, claimed ownership of a 93,120-square meter parcel of land in Barangay Tabangao, Batangas City, designated as Lot 11808, Cad-264, by virtue of inheritance and possession since time immemorial. They filed an application for judicial confirmation of title. Respondents Ayala Corporation and Omniport Economic Center, Inc., as well as Pilipinas Shell Petroleum Corporation, opposed, asserting registered ownership over portions of the lot under Transfer Certificates of Title derived from Original Certificate of Title (OCT) No. 18989 in the name of Severina Luna Orosa. The land registration court issued a partial decision and later an order excluding the oppositors’ lots from the application and ultimately dismissing the application because the disputed lands were already under the Torrens system. This gave rise to two separate civil actions by petitioners to cancel respondents’ titles and quiet title, which in turn led to the procedural and substantive rulings under review.

• Nature of the action: Petitioners, as heirs of Juan M. Dinglasan, sought the nullification of OCT No. 18989 and the cancellation of all derivative Transfer Certificates of Title held by respondents, alleging the OCT was fake or fraudulently issued. They also prayed for damages and a declaration of their absolute ownership.
• Petitioners’ claim of ownership: Juan M. Dinglasan was asserted to be the sole cadastral claimant of Lot 11808, Cad-264, Batangas Cadastre, with an area of 93,120 square meters, subdivided into Lots 11808-A, 11808-B, and 11808-C. Petitioners claimed continuous, peaceful, and uninterrupted possession in the concept of owner since time immemorial and regular payment of realty taxes.
• Respondents’ titles: Omniport and Ayala traced their registered titles to OCT No. 18989 in the name of Severina Luna Orosa. A portion of Lot 11808-C remained registered under Orosa’s name in TCT No. T-23177. Shell held a lease over Ayala’s properties.
• Prior registration proceedings: In Land Registration Case No. N-1515, Branch 8 of the Batangas RTC rendered a Partial Decision on March 3, 1998, excluding Omniport’s lots from petitioners’ application because they were already covered by existing certificates of title. On November 6, 2000, the same court dismissed the entire application after finding that Ayala’s lots were likewise under the Torrens system.
• Procedural defects invoked by respondents: The motion for reconsideration of the CA decision was filed beyond the 15-day period. The verification and certification against forum shopping was signed only by Sonia Dinglasan, not by all the heirs. Respondents argued that these defects rendered the petition dismissible and that only questions of law could be raised.
• Lower courts’ treatment of indispensable party: Both the RTC and the CA explicitly found that Severina Luna Orosa, in whose name the mother title was issued, was an indispensable party who had not been impleaded. Despite this finding, both courts proceeded to rule on the merits and dismissed the complaints.

• Relaxation of procedural rules: Petitioners argued that compelling circumstances—the substantial value of the property, meritorious grounds, and the absence of any frivolous or dilatory purpose—justified setting aside the late filing of the motion for reconsideration under recognized exceptions to the immutability of final judgments.
• Review of factual issues: Petitioners contended that the CA’s factual findings were contradicted by the evidence on record, based on a misapprehension of facts, and lacked specific evidentiary citation, thus falling under established exceptions that permit review of factual questions in a Rule 45 petition.
• Substantial compliance with verification requirement: Petitioners maintained that all the heirs shared a common interest in the property and a common cause of action; Sonia Dinglasan was authorized by a Special Power of Attorney and her sole signature constituted substantial compliance under the Altres doctrine.
• Non-joinder not a ground for dismissal: Petitioners insisted that under the Rules of Court, non-joinder of an indispensable party is never a ground for dismissal and that the proper remedy is to order the absent party’s impleader. The dismissal on this basis was therefore reversible error.
• Merits of the claim: Petitioners reiterated that OCT No. 18989 was spurious, that no valid decree of registration covered the property, and that they possessed superior equitable title.

• Finality of the CA decision: Respondents contended the CA decision had become final and executory due to the untimely motion for reconsideration, and that no exceptional circumstances justified reopening it.
• Factual findings conclusive: Respondents asserted the concurrent factual findings of the RTC and CA were binding and could not be disturbed in a petition limited to questions of law.
• Defective verification and certification: Ayala argued that the petition was fatally defective because not all petitioners signed the verification and certification against forum shopping, warranting outright dismissal.
• Indispensable party not impleaded: Respondents agreed with the lower courts that Severina Luna Orosa was an indispensable party whose absence rendered the proceedings void and supported the dismissal of the complaints on that ground.
• Failure to prove fraud and laches: Respondents argued petitioners failed to adduce sufficient evidence that OCT No. 18989 was fraudulently issued, and that petitioners’ predecessor-in-interest had slept on his rights, barring the action by laches.

• Relaxation of procedural rules: Whether the late filing of the motion for reconsideration and the review of factual issues are warranted under recognized exceptions to the doctrines of immutability of judgments and the limitations of a Rule 45 petition.
• Verification and certification against forum shopping: Whether the petition is fatally defective because only one petitioner signed the verification and certification against forum shopping.
• Indispensable party: Whether Severina Luna Orosa is an indispensable party whose non-joinder renders the proceedings void.
• Proper remedy upon non-joinder: Whether the complaints should be dismissed for non-joinder of an indispensable party or remanded for the absent party’s inclusion.

• Relaxation of procedural rules: The late motion for reconsideration was excused. Compelling circumstances existed because the case involved a substantial amount of property, the petition stood on meritorious grounds, and there was no indication the review was frivolous or dilatory. Procedural rules must yield to substantial justice when their strict application would cause grave injustice, consistent with the Court’s equity jurisdiction.
• Exceptions to the rule limiting review to questions of law: The Court found the case fell under recognized exceptions: the CA’s findings were based on a misapprehension of facts, conclusions lacked citation of specific evidence, and were contradicted by the evidence on record. Accordingly, a review of the factual milieu was proper.
• Verification and certification against forum shopping: The defect did not warrant dismissal. All petitioners are immediate relatives and heirs of Juan Dinglasan who share a common interest in the property and advance a common cause of action. Under the guidelines in Altres v. Empleo and Medado v. Heirs of Consing, the signature of one of them substantially complies with the Rules. Sonia Dinglasan’s authority was further bolstered by a Special Power of Attorney.
• Indispensable party: Severina Luna Orosa, the registered owner of OCT No. 18989 and of a remaining portion under TCT No. T-23177, is an indispensable party. The core issue—whether OCT No. 18989 was fraudulently obtained—directly affects her rights. Any judgment annulling the OCT and its derivative titles would necessarily injure her. Her absence deprived the court of jurisdiction to act, rendering all previous proceedings void as to all parties.
• Proper remedy upon non-joinder: Non-joinder of an indispensable party is not a ground for dismissal of an action. The settled rule, as articulated in Heirs of Mesina v. Heirs of Fian, Sr. and Divinagracia v. Parilla, is that the remedy is to order the absent party to be impleaded, either on motion of a party or on the court’s own initiative, at any stage of the proceedings. The lower courts thus erred in dismissing the complaints; the proper course is to remand the consolidated cases to the trial court to implead Orosa and all other persons holding titles derived from OCT No. 18989, allow them to present evidence, and resolve the case on the merits with dispatch.

• Exceptions to immutability of final judgments — A final and executory judgment may be set aside where (a) matters of life, liberty, honor or property are involved; (b) special or compelling circumstances exist; (c) the case is meritorious; (d) the delay is not entirely attributable to the party’s fault or negligence; (e) the review sought is not frivolous or dilatory; and (f) the other party will not be unjustly prejudiced. The Court applied these factors, giving weight to the substantial property interest and the meritorious nature of the petition.
• Substantial compliance with verification/certification requirement — When all plaintiffs or petitioners share a common interest and invoke a common cause of action or defense, the signature of only one of them in the certification against forum shopping constitutes substantial compliance with the Rules. This principle, drawn from Altres v. Empleo and applied in Medado v. Heirs of Consing, was invoked in favor of the heirs’ single signatory.
• Definition and effect of an indispensable party — An indispensable party is one whose interest in the controversy is such that a final decree would necessarily affect his or her rights, standing to be injured or benefited by the outcome. The joinder of all indispensable parties is a condition sine qua non for the exercise of judicial power; without them, the court lacks jurisdiction, and any judgment rendered is null and void, not only as to the absent parties but even as to those present. Orosa, being the registered owner of the challenged mother title, qualified as such.
• Non-joinder of indispensable party not a ground for dismissal; mandatory joinder by court order — The non-joinder of an indispensable party does not warrant dismissal of the action. The remedy is to order the absent party to be impleaded, at any stage of the proceedings and on such terms as are just. The Court remanded the case precisely to cure the defect rather than terminate the action.

• “An indispensable party is one who stands to be injured or benefited by the outcome of the petition. He has an interest in the controversy that a final decree would necessarily affect his rights, such that the courts cannot proceed without his presence. … 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.”
• “As to whether or not the subject Complaints should be dismissed, the settled rule is that the non-joinder of indispensable parties is not a ground for the dismissal of an action. The remedy is to implead the non-party claimed to be indispensable. 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 and/or at such times as are just.”
• “The mandatory character of the rule on immutability of final judgments was not designed to be an inflexible tool to excuse and overlook prejudicial circumstances. As such, the doctrine must yield to practicality, logic, fairness, and substantial justice.”

• Altres v. Empleo, 594 Phil. 246 (2008) — Established the rules on verification and certification against forum shopping, including the principle that substantial compliance is achieved when co-parties share a common interest and one signs the certification.
• Medado v. Heirs of the Late Antonio Consing, 681 Phil. 536 (2012) — Applied the substantial compliance rule to immediate relatives who share a common interest in the property subject of the action.
• Heirs of Faustino and Genoveva Mesina v. Heirs of Domingo Fian, Sr., 708 Phil. 327 (2013) — Followed for the rule that non-joinder of indispensable parties is not a ground for dismissal; case remanded for impleading absent parties.
• Divinagracia v. Parilla, et al., 755 Phil. 783 (2015) — Reiterated that the proper remedy for non-joinder of indispensable parties is to remand the case to the trial court to order their inclusion, not dismissal.
• Pascual v. Robles, 653 Phil. 396 (2010) — Cited for the definition of an indispensable party and the effect of non-joinder on the court’s jurisdiction.
• Neypes v. Court of Appeals, 506 Phil. 613 (2005) — Invoked to support the Court’s authority to relax procedural rules to prevent grave injustice.

• Section 7, Rule 3, 1997 Rules of Civil Procedure — This provision embodies the rule that non-joinder of parties is not a ground for dismissal and that the court may order the addition of an indispensable party at any stage of the proceedings. The Court implicitly relied on this rule in directing remand rather than dismissal.
• Sections 4 and 5, Rule 7, 1997 Rules of Civil Procedure — Govern the requirements for verification and certification against forum shopping; the Court applied the jurisprudential standard of substantial compliance in place of literal conformity.

Perlas-Bernabe, Leonen, A. Reyes, Jr., and Hernando, JJ., concurred.