NATIONAL TRANSMISSION CORPORATION, PETITIONER, VS. HON. JOSE C. SARCILLA (PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 31, PILI, CAMARINES SUR), AND THE ESTATE OF SUSANO RODRIG…

National Transmission Corporation versus Estate of Susano Rodriguez

The Case

This is a petition for certiorari filed by the National Transmission Corporation, known as Transco, against the presiding judge of the Regional Trial Court of Pili, Camarines Sur, Branch 31, and the Estate of the late Susano Rodriguez. Transco asks the Supreme Court to annul two orders of that trial court: one converting the Estate's action for recovery of possession into an inverse condemnation proceeding, and the other refusing to implead certain persons Transco claims are indispensable parties. The case matters because it fixes the working test for an indispensable party — the party without whom no final determination can be had — and applies it to a claim for just compensation over land crossed by high voltage transmission lines.

Procedural History

The Estate of Susano Rodriguez first sued the National Power Corporation for ejectment, and it won before the Municipal Trial Court and then before the Regional Trial Court. In December 2012 the Estate filed a separate complaint for recovery of possession against Transco before the Regional Trial Court of Pili, Camarines Sur, Branch 31. In its answer Transco argued that public policy barred the action despite the non payment of just compensation. The Estate treated that as an admission that its property had been taken for public use without just compensation, and moved to convert the action into one for inverse condemnation, or for payment of just compensation. Transco, for its part, moved to implead Remedios Rodriguez, Atty. Remigio Gerardo, the Department of Agrarian Reform, and ninety seven farmer beneficiaries as indispensable parties.

The trial court granted the conversion and denied the motion to implead. It reasoned that the action is brought for the Estate, that all the heirs are already represented, and that any claimant may simply intervene. Transco's motion for reconsideration was denied, with the court adding that Atty. Gerardo and the farmer beneficiaries could likewise intervene. Transco then came to the Supreme Court by petition for certiorari, imputing grave abuse of discretion to the trial court.

Facts

Two parcels of residential land in Camarines Sur, covered by transfer certificates of title in the name of the late Susano Rodriguez, are the subject of this case. Sometime in 1972 the National Power Corporation was allowed to construct steel towers and high power voltage transmission lines on the lots. The understanding was that it would pay the full value of the affected area, or a monthly rental of six pesos per square meter if it failed to pay the full consideration within six months from March 1972 or from the time of construction.

The National Power Corporation never complied. Not a single centavo was paid to the Estate. The Estate therefore sued for ejectment in 2008 and won. In 2001, Republic Act Number 9136 created Transco to assume the transmission facilities and related assets of the National Power Corporation, including its nationwide franchise for the transmission system.

Claiming that Transco had unlawfully taken possession of portions of the lots, the Estate filed its complaint for recovery of possession in December 2012. Transco answered that public policy barred the action notwithstanding the non payment of just compensation. The Estate moved to convert the case into inverse condemnation. Transco moved to implead Remedios Rodriguez, the surviving spouse, who had written letters claiming Lot H-2-F-2 as her share under a partial project of partition; Atty. Remigio Gerardo, to whom Remedios had executed a deed of sale of inheritance; and the Department of Agrarian Reform and ninety seven farmer beneficiaries holding titles over part of the land. The trial court granted the conversion, denied the impleading, and denied reconsideration. Hence this petition.

Issues

• Whether or not the trial court committed grave abuse of discretion in denying Transco's motion to implead Remedios Rodriguez, Atty. Remigio Gerardo, and the ninety seven farmer beneficiaries as indispensable parties.
• Whether or not the trial court committed grave abuse of discretion in granting the conversion of the action for recovery of possession into inverse condemnation proceedings before those persons were impleaded.

Applicable Provisions

Section 7 of Rule 3 of the 1997 Rules of Court provides:

Section 7. Compulsory joinder of indispensable parties. Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants.

This is the rule the Court construes: the joinder is compulsory only for those without whom no final determination can be had, and the whole question is whether the three groups Transco names fall within that description.

Ruling

On the first issue, the Court held that Remedios Rodriguez and Atty. Remigio Gerardo are not indispensable parties, for the simple reason that they have no interest in the portion of Lot H-2-F-2 covered by the title involved in this case. Under the partial project of partition approved by the probate court and upheld by this Court, one half of Lot H-2-F-2 was allotted to Remedios as her share. The probate court of Lucena City, Branch 56, ordered the cancellation of the old title and the issuance of two separate titles, one in her name and one in the name of the Heirs of Susano Rodriguez, and that order has attained finality. Transco itself acknowledged that the transmission lines affect only the portion allotted not to Remedios but to the other heirs. Since her only share was that half portion, the deed of sale of inheritance she executed in favor of Atty. Gerardo could only have covered that same half portion, so he too is not indispensable. The farmer beneficiaries hold title to and possess the half adjudicated to Remedios, and thus have no interest in the portion subject of this case.

The Court laid down the test in these words:

An indispensable party is one who has such an interest in the controversy or subject matter of a case that a final adjudication cannot be made in his or her absence, without injuring or affecting that interest.

And it added the negative side of the rule:

Also, a person is not an indispensable party if his presence would merely permit complete relief between him or her and those already parties to the action, or if he or she has no interest in the subject matter of the action.

The Court stressed that it is not a sufficient reason to declare a person indispensable simply because his presence will avoid multiple litigations. On the second issue, since none of the named persons is indispensable, the trial court could not be faulted for granting the conversion before impleading them. The Court found no grave abuse of discretion in either assailed order.

Doctrine

An indispensable party is one who has such an interest in the controversy or subject matter that a final adjudication cannot be made in his or her absence without injuring or affecting that interest — a party in whose absence no determination between those already before the court can be effective, complete, or equitable. Conversely, a person is not indispensable if his interest is separable from that of the other parties, so that it will not necessarily be directly or injuriously affected by a decree doing complete justice between them; if his presence would merely permit complete relief between him and those already parties; or if he has no interest in the subject matter at all. The mere avoidance of multiple litigations is not enough to make a person indispensable. Applying Section 7 of Rule 3, the joinder is compulsory only for parties in interest without whom no final determination can be had. Where a probate partition has already segregated the land and fixed each heir's share, a person whose share lies outside the portion actually occupied by the transmission lines has no interest in the controversy and need not be impleaded; intervention under Rule 19 remains available to anyone whose claim requires further evidence.

Disposition

The petition was denied for lack of merit, so Transco lost and the trial court's orders stood.

Remember This

Memorize the line: an indispensable party is one without whom no final determination can be had without injuring or affecting his interest, and avoiding multiple litigations is never enough to make him one. Examiners use this case in civil procedure on compulsory joinder and indispensable parties, and in expropriation and inverse condemnation on who must be impleaded before just compensation is adjudged.