VICTORIANO BORLASA ET AL., PLAINTIFFS AND APPELLANTS, VS. VICENTE POLISTICO ET AL., DEFENDANTS AND APPELLEES.

This action was instituted in the Court of First Instance of Laguna on
July 25, 1917, by Victoriano Borlasa and others against Vicente
Polistico and others, chiefly for the purpose of securing the
dissolution of a voluntary association named Turnuhan Polistico & Co.,
and to compel the defendants to account for and surrender the money and
property of the association in order that its affairs may be liquidated
and its assets applied according to law. The trial judge having
sustained a demurrer for defect of parties and the plaintiffs electing
not to amend, the cause was dismissed, and from this order an appeal
was taken by the plaintiffs to this court.

The material
allegations of the complaint, so far as affects the present appeal, are
to the following effect: In the month of April, 1911, the plaintiffs
and defendants, together with several hundred other persons, formed an
association under the name of Turnuhan Polistico & Co.
Vicente Polistico, the principal defendant herein, was elected
president and treasurer of the association, and his house in Lilio,
Laguna, was made its principal place of business. The life of the
association was fixed at fifteen years, and under the by-laws each
member obligated himself to pay to Vicente Polistico, as
president-treasurer, before 3 o’clock in the afternoon of every Sunday
the sum of 50 centavos, except that on every fifth Sunday the amount
was P1, if the president elected to call this amount, as he always did.
It is alleged that from April, 1911, until April, 1917, the sums of
money mentioned above were paid weekly by all of the members of the
society with few irregularities. The inducement to these weekly
contributions was found in provisions of the by-laws to the effect that
a lottery should be conducted weekly among the members of the
association and that the successful member should be paid the amount
collected each week, from which, however, the president-treasurer of
the society was to receive the sum of P200, to be held by him as funds
of the society.

It is further alleged that by virtue of
these weekly lotteries Vicente Polistico, as president-treasurer of the
association, received sums of money amounting to P74,000, more or less,
in the period stated, which he still retains in his power or has
applied to the purchase of real property largely in his own name and
partly in the names of others. The defendants in the complaint are the
members of the board of directors of the association, including Vicente
Polistico, as president-treasurer, Alfonso Noble, secretary, Felix
Garcia and Vivencio Zulaybar, as promoters (propagandistas), and Afroniano de la Peña and Tomas Orencia, as members (vocales) of the board.

In an amended answer the defendants raised the question of lack of
parties and set out a list of some hundreds of persons whom they
alleged should be brought in as parties defendant on the ground, among
others, that they were in default in the payment of their dues to the
association. On November 28, 1922, the court made an order requiring
the plaintiffs to amend their complaint within a stated period so as to
include all of the members of the Turnuhan Polistico & Co.
either as plaintiffs or defendants. The plaintiffs excepted to this
order, but acquiesced to the extent of amending their complaint by
adding as additional parties plaintiff some hundreds of persons,
residents of Lilio, said to be members of the association and desirous
of being joined as plaintiffs. Some of these new plaintiffs had not
been named in the list submitted by the defendants with their amended
answer; and on the other hand many names in said list were here
omitted, it being claimed by the plaintiffs that the persons omitted
were not residents of Lilio but residents of other places and that
their relation to the society, so far as the plaintiffs could discover,
was fictitious. The defendants demurred to the amended complaint on the
ground that it showed on its face a lack of necessary parties and this
demurrer was sustained, with the ultimate result of, the dismissal of
the action, as stated in the first paragraph of this opinion.

The trial judge appears to have supposed that all the members of the Turnuhan Polistico & Co.
should be brought in either plaintiffs or defendants. This notion is
entirely mistaken. The situation involved is precisely the one
contemplated in section 118 of the Code of Civil Procedure, where one
or more may sue for the benefit of all. It is evident from the showing
made in the complaint, and from the proceedings in the court below,
that it would be impossible to make all of the persons in interest
parties to the case and to require all of the members of the
association to be joined as parties would be tantamount to a denial of
justice.

The general rule with reference to the making of
parties in a civil action requires, of course, the joinder of all
necessary parties wherever possible, and the joinder of all
indispensable parties under any and all conditions, the presence of
those latter being a sine qua non of the exercise of judicial
power. The class suit contemplates an exceptional situation where there
are numerous persons all in the same plight and all together
constituting a constituency whose presence in the litigation is
absolutely indispensable to the administration of justice. Here the
strict application of the rule as to indispensable parties would
require that each and every individual in the class should be present.
But at this point the practice is so far relaxed as to permit the suit
to proceed, when the class is sufficiently represented to enable the
court to deal properly and justly with that interest and with all other
interests involved in the suit. In the class suit, then, representation
of a class interest which will be affected by the judgment is
indispensable; but it is not indispensable to make each member of the
class an actual party.

A common illustration in American
procedure of the situation justifying a class suit is that presented by
the creditors’ bill, which is filed by one party interested in the
estate of an insolvent, to secure the distribution of the assets
distributable among all the creditors. In such cases the common
practice is for one creditor to sue as plaintiff in behalf of himself
and other creditors. (Johnson vs. Waters, 111 U. S., 640; 28 Law. ed., 547.) Another illustration is found in the case of Smith vs.
Swormstedt (16 How., 288; 14 Law. ed., 942), where a limited number of
individuals interested in a trust for the benefit of superannuated
preachers were permitted to maintain an action in their own names and
as representatives of all other persons in the same right.

His Honor, the trial judge, in sustaining this demurrer was possibly influenced to some extent by the case of Rallonza vs.
Evangelista (15 Phil., 531) ; but we do not consider that case
controlling, inasmuch as that was an action for the recovery of real
property and the different parties in interest had determinable, though
undivided interests, in the property there in question. In the present
case, the controversy involves an indivisible right affecting many
individuals whose particular interest is of indeterminate extent and is
incapable of separation.

The addition of some hundreds of
persons to the number of the plaintiffs, made in the amendment to the
complaint of December 13, 1922, was unnecessary, and as the presence of
so many parties is bound to prove embarrassing to the litigation from
death or removal, it is suggested that upon the return of this record
to the lower court for further proceedings, the plaintiff shall again
amend their complaint by dismissing as to unnecessary parties
plaintiffs, but retaining a sufficient number of responsible persons to
secure liability for costs and fairly to represent all the members of
the association.

There is another feature of the complaint
which makes a slight amendment desirable, which is, that the complaint
should be made to show on its face that the action is intended to be
litigated as a class suit. We accordingly recommend that the plaintiffs
further amend by adding after the names of the parties plaintiffs the
words, “in their own behalf and in behalf of other members of Turnuhan Polistico & Co.”

The order appealed from is reversed, the demurrer of the defendants
based upon supposed lack of parties is overruled, and the defendants
are required to answer to the amended complaint within the time allowed
by law and the rules of the court. The costs of this appeal will be
paid by the defendants. So ordered.

Johnson, Malcolm, Villamor, Ostrand, Johns, and Romualdez, JJ., concur.