### Facts:
In August 1995, Pangan Lim, Jr. and a certain Mercedes M. Oliver (Oliver One) opened a joint account in China Banking Corporation (Chinabank) and secured a P17 million loan, offering a property as collateral which was registered under Oliver One. On November 18, 1996, a different Mercedes M. Oliver (Oliver Two), claimed to be the registered owner of the property and filed a case for annulment of the mortgage. Chinabank moved to dismiss the case citing lack of cause and non-joinder of indispensable parties which was denied. Subsequently, Chinabank was declared in default by the trial court for failing to file an answer within the required period.
Chinabank filed a petition for certiorari with the Court of Appeals which was denied, upholding the trial court’s decisions. The case was then escalated to the Supreme Court on several grounds, predominantly arguing the necessity of including Oliver One as an indispensable party and challenging the default declaration.
### Issues:
1. Whether Oliver One is an indispensable party in the legal suit.
2. Application of Rule 3, Section 7 or 11 of the 1997 Rules of Civil Procedure regarding the joinder of indispensable parties.
3. Validity of the Court of Appeals’ decision sustaining Chinabank’s declaration in default.
4. Whether the dismissal of the complaint against Registry of Deeds officials affirmed Oliver One’s ownership claims.
### Court’s Decision:
The Supreme Court denied the petition, affirming the appellate court’s decision. It ruled that Oliver One, although a party in interest, is not indispensable as her absence doesn’t prevent the court from resolving the dispute between Chinabank and Oliver Two. The case against Chinabank could proceed without necessarily involving Oliver One. It was also determined that a special civil action for certiorari filed by the Chinabank does not interrupt the trial court proceedings, leading to a proper default declaration due to failure to file a responsive pleading within the allotted timeframe.
### Doctrine:
The Court reiterated the doctrine regarding indispensable parties, defining them as those without whom no final determination can be had, and clarified the application of misjoinder and non-joinder of parties under the Rules of Civil Procedure. It emphasized that the non-joinder of parties is not a ground for the dismissal of an action and that parties may be added or dropped at any stage of the action.
### Class Notes:
– **Indispensable Parties**: Defined as parties in interest without whom no final determination of an action can be made (Sec. 7, Rule 3, 1997 Rules of Civil Procedure).
– **Misjoinder and Non-Joinder of Parties**: Not grounds for dismissal; parties can be added or dropped by court order (Sec. 11, Rule 3, 1997 Rules of Civil Procedure).
– **Default Declaration**: Not filing an answer within the reglementary period after a motion to dismiss is denied results in a default declaration. A special civil action for certiorari does not interrupt the proceedings unless accompanied by a TRO or writ of preliminary injunction.
### Historical Background:
This case reflects the intricate issues surrounding property loans, mortgage documentation, and the importance of including all necessary parties in a legal suit. It underscores the judiciary’s approach in handling cases with complications arising from similar identities and alleged ownership disputes, setting a precedent in the treatment of indispensable parties and procedural requirements in Philippine legal proceedings.
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