Regner vs. Logarta

A co-donee of an undivided property is an indispensable party in an action to nullify the deed of donation, and the plaintiff's failure to move for extraterritorial service of summons on a non-resident indispensable party constitutes failure to prosecute for an unreasonable length of time under Section 3, Rule 17 of the Rules of Court.

Luis Regner executed a Deed of Donation covering his Cebu Country Club share (Proprietary Ownership Certificate No. 0272) in favor of his two daughters from his first marriage, Cynthia Logarta and Teresa Tormis. Upon Luis's death, his second wife, Victoria Regner, sought to nullify the donation, alleging that Luis was already very ill and lacked disposing mind, and that his thumbmark was fraudulently affixed through the manipulation of his hand by his daughter Melinda. Cynthia and Teresa were residents of California, U.S.A., but frequently visited the Philippines.

• The Donation: Luis Regner executed a Deed of Donation on May 15, 1998, covering Proprietary Ownership Certificate No. 0272 of the Cebu Country Club, Inc. in favor of his daughters, respondents Cynthia Logarta and Teresa Tormis. Luis died on February 11, 1999.
• The Complaint: On June 15, 1999, petitioner Victoria Regner, Luis's second wife, filed a complaint for declaration of nullity of the deed of donation. She alleged that Luis was very ill and no longer of sound and disposing mind at the time of the donation, and that his thumbmark was fraudulently affixed through the manipulation of his hand by his daughter Melinda, acting under the influence of Cynthia and Teresa.
• Residence of Defendants: In the complaint, petitioner alleged that Cynthia and Teresa were residents of California, U.S.A., but usually visited the Philippines and could be served summons at the Borja Family Clinic in Tagbilaran City, Bohol.
• Service of Summons: The sheriff attempted to serve summonses at the Borja Family Clinic, but Melinda refused to receive them. Teresa was personally served with summons on June 1, 2000, upon arriving in the Philippines, and subsequently filed her Answer. Cynthia, however, was never served with summons.
• Motion to Dismiss: On September 12, 2000, Teresa filed a motion to dismiss based on failure to prosecute and the lack of summons on Cynthia, arguing that Cynthia was an indispensable party. The RTC granted the motion and dismissed the complaint without prejudice on November 9, 2000.

• Failure to Prosecute: Petitioner argued that the delay in serving summons on one defendant does not constitute failure to prosecute, considering that the rest of the co-defendants were duly served with summonses.
• Benefit of Answer: Petitioner maintained that the answer filed by one individual defendant (Teresa) redounded to the benefit of the other defendant (Cynthia) who had not been served with summons, given that the nature of the action was admittedly common among all defendants.

• Indispensable Party: Respondent Teresa countered that Cynthia was an indispensable party to the action, and the case could not proceed without her presence, justifying the dismissal of the complaint.
• Extraterritorial Service: Respondent argued, and the Court of Appeals agreed, that petitioner should have moved for extraterritorial service of summons for the non-resident defendants. The failure to do so for an unreasonable length of time constituted failure to prosecute, warranting dismissal.

• Indispensable Party: Whether a co-donee is an indispensable party in an action to declare the nullity of a deed of donation.
• Failure to Prosecute: Whether delay in the service of summons upon one of the defendants constitutes failure to prosecute that would warrant dismissal of the complaint.

• Indispensable Party: A co-donee of an undivided property is an indispensable party in an action to nullify the deed of donation. Because the country club membership certificate is undivided and it is impossible to pinpoint which specific portion belongs to either co-donee, any decision in the case cannot bind the absent co-donee, and the court cannot nullify the donation of the property she co-owns even if limited only to the portion of the co-donee who was served. Without the presence of an indispensable party, a judgment cannot attain finality and all subsequent actions of the court are null and void for want of authority to act.
• Failure to Prosecute: Failure to move for extraterritorial service of summons on a non-resident defendant for over 15 months constitutes failure to prosecute for an unreasonable length of time. The action to nullify the donation of a personal property and recover damages based on personal liability is an action in personam, which requires jurisdiction over the person of the defendant. Because Cynthia is a non-resident not found in the Philippines, extraterritorial service of summons under Section 15, Rule 14 of the Rules of Court was necessary. The plaintiff bears the duty to diligently prosecute the case and cannot idly wait for a non-resident defendant to visit the Philippines to be served with summons, nor rely solely on the clerk of court to effect service. The non-performance of this duty justifies dismissal under Section 3, Rule 17 of the Rules of Court.

• Indispensable Parties — Defined as parties-in-interest without whom there can be no final determination of an action. Their presence is a sine qua non for the exercise of judicial power, and their absence renders all subsequent actions of the court null and void, not only as to the absent parties but even as to those present. Co-owners of an undivided property are indispensable parties in a suit involving the co-owned property, as a judgment without their presence would not be conclusive and could lead to multiplicity of suits.
• Extraterritorial Service of Summons — Required when a defendant does not reside and is not found in the Philippines, and the action affects the personal status of the plaintiff or relates to property within the Philippines in which the defendant has a lien or interest, or the relief demanded consists of excluding the defendant from any interest in property located in the Philippines. In an action in personam against a non-resident, jurisdiction over the person is essential, and extraterritorial service is necessary to comply with due process.
• Dismissal Due to Fault of Plaintiff — Under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, a complaint may be dismissed if the plaintiff fails to prosecute the action for an unreasonable length of time. The plaintiff has the duty to diligently pursue the prosecution of the case, including ensuring the service of summons on indispensable parties, and cannot simply rely on the clerk of court to perform this task.

• "An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that interest, a party who has not only an interest in the subject matter of the controversy, but also has an interest of such nature that a final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience."
• "If there were no means of summoning any of the defendants, petitioner should have so informed the court within a reasonable period of time, so that the case could be disposed of one way or another and the administration of justice would not suffer delay. The non-performance of that duty by petitioner as plaintiff is an express ground for dismissing an action. For, indeed, this duty imposed upon her was precisely to spur on the slothful."

• Quisumbing v. Court of Appeals, 189 SCRA 325 — Cited for the definition of indispensable parties as those with such an interest in the controversy that a final decree would necessarily affect their rights, such that the court could not proceed without their presence.
• Alberto v. Mananghala, 89 Phil. 188 — Followed for the rule that in an action for recovery of property or nullity of transfers/donations, the predecessors or parties who intervened in the transfers are indispensable parties if the annulment can directly affect them.
• Arcelona v. Court of Appeals, 345 Phil. 250 — Cited for the rationale that all co-owners of a property must be treated as indispensable parties in a suit involving the co-owned property to prevent multiplicity of suits and avoid harassing the defendant with several actions.
• Servicewide Specialists, Incorporated v. Court of Appeals, 321 Phil. 427 — Followed for the principle that no final determination of a case could be made if an indispensable party is not legally present therein.
• Perkin Elmer Singapore PTE LTD v. Dakila Trading Corporation, G.R. No. 172242 — Cited for the rule that extraterritorial service of summons is not for vesting the court with jurisdiction in rem or quasi in rem, but for complying with due process so the defendant is informed of the pending action.

• Rule 3, Section 7, Rules of Court — Defines indispensable parties as parties-in-interest without whom there can be no final determination of an action. Applied to establish that co-donees of an undivided property are indispensable parties in a suit to nullify the donation.
• Section 15, Rule 14, Rules of Court — Provides for extraterritorial service of summons when the defendant does not reside and is not found in the Philippines, and the action relates to property within the Philippines in which the defendant claims an interest. Applied to determine the proper mode of service on the non-resident co-donee and to highlight the plaintiff's failure to utilize this provision.
• Section 3, Rule 17, 1997 Rules of Civil Procedure — Allows for the dismissal of a complaint due to the plaintiff's fault, including failure to prosecute the action for an unreasonable length of time. Applied to justify the dismissal of the complaint due to the plaintiff's 15-month inaction in securing service of summons on the indispensable party.

Ynares-Santiago, Austria-Martinez, Nachura, Reyes