Lotte Phil. Co. Inc vs Dela Cruz et. al CASE DIGEST - Civil Procedure - Real Party in Interest - Indispensable Party

LOTTE PHIL. CO., INC V DELA CRUZ ET.AL

TOPIC: INDISPENSIBLE PARTY; NON-JOINDER – EFFECTS

Facts: 1995 until 2000, 7J Maintenance and Janitorial Services (7J) entered into a contract with Lotte to provide manpower. In compliance with the contract, and to accommodate the needs of Lotte for workers, Dela Cruz were hired and assigned to Lotte as repackers or sealers. However, Lotte dispensed with their services allegedly due to the expiration/termination of the service contract by Lotte with 7J. Respondents were never called back again.

LA declared 7J as employer of respondents and finding 7J guilty of illegal dismissal. NLRC denied the MR.

CA reversed LA and NLRC and declared Lotte as the real employer of respondents and that 7J who engaged in labor-only contracting was merely the agent of Lotte.

Issue: WON 7J is an indispensable party and should have been impleaded in respondent’s petition in the CA

Held: YES. An indispensable party is a party in interest without whom no final determination can be had of an action, and who shall be joined either as plaintiffs or defendants. The joinder of indispensable parties is mandatory. The presence of indispensable parties is necessary to vest the court with jurisdiction, which is the authority to hear and determine a cause, the right to act in a case. Thus, without the presence of indispensable parties to a suit or proceeding, 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.

Here, 7J is an indispensable party. It is a party in interest because it will be affected by the outcome of the case.  Hence, the CA did not acquire jurisdiction over 7J. No final ruling on this matter can be had without impleading 7J, whose inclusion is necessary for the effective and complete resolution of the case and in order to accord all parties with due process and fair play.

In Domingo v. Scheer, we held that the non-joinder of indispensable parties is not a ground for the dismissal of an action and 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 such times as are just. If the petitioner refuses to implead an indispensable party despite the order of the court, the latter may dismiss the complaint/petition for the petitioner/plaintiff’s failure to comply therefor.