China Banking Corporation vs Mercedes Oliver CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

CHINA BANKING CORPORATION VS. MERCEDES OLIVER

Topic: RULES 1-5, Specifically in this case Rule 3, Sec . 7

Facts: 1995, Lim and Oliver opened a joint account in Chinabank. They applied for a P17m loan, offering as collateral a 7,782 sqm lot in the name of Oliver. The bank approved the application. They executed in favor of Chinabank a promissory note for P16.6k, as well as a Real Estate Mortgage on the property. The mortgage was duly registered and annotated on the original title under the custody of the Registry of Deeds and on the owners duplicate copy in the bank’s possession. The mortgage document showed Oliver’s address. For brevity, she is hereafter referred to as OLIVER ONE.

1996, respondent claiming that she is Oliver, filed an action for annulment of mortgage and cancellation of title with damages against Chinabank, Register of Deeds, and Deputy Register of Deeds. Respondent, whom we shall call as OLIVER TWO, claimed that she was the registered and lawful owner of the land subject of the real estate mortgage; that the owners duplicate copy of the title had always been in her possession; and that she did not apply for a loan or surrender her title to Chinabank.

1997, Chinabank moved to dismiss the case for lack of cause of action and non-joinder of an indispensable party, the mortgagor. RTC dismissed.

Issue: WON the mortgagor Oliver, referred to as OLIVER ONE, is an indispensable party to the case without whom no final determination could be had of an action.

Held: No. An indispensable party is a party in interest, without whom no final determination can be had of an action. However, mortgagor Oliver One’s absence from the case does not hamper the trial court in resolving the dispute between respondent Oliver Two and petitioner. A perusal of Oliver Twos allegations in the complaint below shows that it was for annulment of mortgage due to petitioners’ negligence in not determining the actual ownership of the property, resulting in the mortgages. To support said allegations, respondent Oliver Two had to prove (1) that she is the real Mercedes M. Oliver referred to in the TCT, and (2) that she is not the same person using that name who entered into a deed of mortgage with the petitioner. This, respondent Oliver Two can do in her complaint without necessarily impleading the mortgagor Oliver One.

Thus, it was the bank who should have filed a third-party complaint or other action versus the mortgagor Oliver One.