William Uy and Rodel Roxas vs. Court of Appeals, Hon. Robert Balao, and National Housing Authority
### Facts:
Petitioners William Uy and Rodel Roxas, acting as authorized agents, offered to sell eight parcels of land in Tuba, Benguet to the National Housing Authority (NHA) for a housing project. On February 14, 1989, the NHA Board approved the purchase of the lands for P23.867 million. Although deeds of absolute sale were executed for all eight parcels, only five were paid for by NHA due to reports from the Land Geosciences Bureau of the DENR indicating that the remaining land was in an active landslide area. Consequently, the NHA issued a resolution on November 22, 1991, canceling the sale of these three parcels and offered P1.225 million as damages. The petitioners filed a complaint for damages against NHA and its General Manager, which, after trial, the RTC ruled in favor of awarding P1.255 million in damages. This was reversed by the Court of Appeals, dismissing the complaint on the grounds of the petitioners being mere attorneys-in-fact and not the real parties-in-interest.
### Issues:
1. Whether the NHA had a legal basis for rescinding the sale of the last three parcels of land.
2. Whether the petitioners, assuming NHA had the basis to rescind the sale, were nonetheless entitled to damages.
3. Whether the Court of Appeals erred in dismissing the complaint due to the failure of the petitioners to join the selling lot-owners as indispensable parties.
### Court’s Decision:
The Supreme Court upheld the decision of the Court of Appeals, finding the petitioners were not the real parties-in-interest as they were merely agents of the landowners. The Court emphasized that actions must be prosecuted in the name of the real party-in-interest. The Court also distinguished between the cancellation of the contract by NHA and rescission under Article 1191 of the Civil Code, explaining that NHA’s cancellation was due to the realization that the lands were unsuitable for housing, which negated the cause of the contract making it inexistent.
### Doctrine:
Every action must be prosecuted in the name of the real party-in-interest. Agents, unless they are assignees, heirs, or have an interest allowing them to bring an action in their name, cannot sue on behalf of their principals without including them in the lawsuit.
### Class Notes:
1. **Real Party-in-Interest Requirement**: The party who stands to be benefited or injured by the judgment or the party entitled to the avails of the suit must prosecute and defend every action.
2. **Agent’s Authority to Sue**: Agents cannot sue in their own name unless they have a direct interest or have been assigned the rights under the contract.
3. **Cause vs. Motive in Contracts**: The cause is the essential reason for contracting, distinct from motive unless the motive predetermines the cause, affecting the validity of the contract.
4. **Article 1311 of the Civil Code**: Establishes that contracts take effect only between the parties, their assigns, and heirs, except in cases where the rights and obligations arising from the contract are not transmissible.
### Historical Background:
The case reflects the legal intricacies involved in transactions concerning real estate development in the Philippines, particularly the due diligence required in assessing the suitability of land for specific purposes and the implications of agency in contractual relationships. It underscores the importance of aligning the interests of all parties involved and the procedural requirements in pursuing legal actions related to contractual disputes.
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