NICENCIO TAN QUIOMBING, PETITIONER, VS. COURT OF APPEALS, AND SPS. FRANCISCO AND MANUELITA A. SALIGO, RESPONDENTS.

May one of the two solidary creditors sue by himself alone for
the recovery of amounts due to both of them without joining the other creditor
as a co-plaintiff? In such a case, is
the defendant entitled to the dismissal
of the complaint on the ground of non-joinder of the second creditor as
an indispensable party? More to the
point, is the second solidary creditor an indispensable party?

These questions were raised in the case at bar, with both the
trial and respondent courts ruling in favor of the defendants. The petitioner is now before us, claiming
that the said courts committed reversible error and misread the applicable laws
in dismissing his complaint.

This case stemmed from a “Construction and Service
Agreement”^[1]
concluded on August 30, 1983, whereby Nicencio Tan Quiombing and Dante
Biscocho, as the First Party, jointly and severally bound themselves to
construct a house for private respondents Francisco and Manuelita Saligo, as
the Second Party, for the
contract price of P137,940.00, which the latter agreed to pay.

On October 10, 1984, Quiombing and Manuelita Saligo entered into
a second written agreement^[2] under
which the latter acknowledged the completion of the house and undertook to pay
the balance of the contract price in the manner prescribed in the said second
agreement.

On November 19, 1984, Manuelita Saligo signed a promissory note
for P125,363.50 representing the amount still due from her and her husband,
payable on or before December 31, 1984, to Nicencio Tan Quiombing.^[3]

On October 9, 1986, Quiombing filed a complaint for recovery of
the said amount, plus charges and interests, which the private respondents had
acknowledged and promised to pay – but had not, despite repeated demands – as
the balance of the contract price for the construction of their house.^[4]

Instead of filing an answer, the defendants moved to dismiss the
complaint on February 4, 1987, contending that Biscocho was an indispensable
party and therefore should have been included as a co-plaintiff. The motion was initially denied but was
subsequently reconsidered and granted by the trial court. The complaint was dismissed, but without
prejudice to the filing of an amended complaint to include the other solidary
creditor as a co-plaintiff.^[5]

Rather than file the amended complaint, Quiombing chose to appeal
the order of dismissal to the respondent court, where he argued that as a
solidary creditor he could act by himself alone in the enforcement of his claim
against the private respondents. Moreover,
the amounts due were payable only to him under the second agreement, where
Biscocho was not mentioned at all.

The respondent court sustained the trial court and held that it
was not correct at that point to assume that Quiombing and Biscocho were
solidary obligees only. It noted that as
they had also assumed the reciprocal obligation of constructing the house, they
should also be considered obligors of the private respondents under the
contract. If, as was possible, the
answer should allege a breach of the agreement, “the trial court cannot
decide the dispute without the involvement of Biscocho whose rights will
necessarily be affected since he is a part of the First Party.”

Refuting the petitioner’s second contention, the respondent court
declared that the “second agreement referred to the Construction and
Service Agreement as its basis
and specifically stated that it (was) merely a ‘part of the original
agreement.'”^[6]

The concept of the solidary obligation requires a brief
re-statement.

Distinguishing it from the joint obligation, Tolentino makes the
following observations in his distinguished work on the Civil Code:

A joint obligation
is one in which each of the debtors is liable only for a proportionate part of
the debt, and each creditor is entitled only to a proportionate part of the
credit. A solidary obligation is
one in which each debtor is liable for the entire obligation, and each creditor
is entitled to demand the whole obligation. Hence, in the former, each creditor can recover only his share of the
obligation, and each debtor can be made to pay only his part; whereas, in the
latter, each creditor may enforce the entire obligation, and each debtor may be
obliged to pay it in full.^[7]

The same work describes the concept of active solidarity thus:

The essence of active solidarity consists in the authority of each
creditor to claim and enforce the rights of all, with the resulting obligation
of paying every one what belongs to him; there is no merger, much less a
renunciation of rights, but only mutual representation.^[8]

It would follow from these observations that the question of who
should sue the private respondents was a personal issue between Quiombing and
Biscocho in which the spouses Saligo had no right to interfere. It did not matter who as between them filed
the complaint because the private respondents were liable to either of the two
as a solidary creditor for the full amount of the debt. Full satisfaction of a judgment obtained against them by Quiombing would discharge
their obligation to Biscocho, and vice versa; hence, it was not
necessary for both Quiombing and Biscocho to file the complaint. Inclusion of Biscocho as a co-plaintiff, when Quiombing was
competent to sue by himself alone, would be a useless formality.

Article 1212 of the Civil Code provides:

Each one of the solidary creditors may do whatever may be useful to
the others, but not anything which may be prejudicial to the latter.

Suing for the recovery of the contract price is certainly a
useful act that Quiombing could do by himself alone.

Parenthetically, it must be observed that the complaint having
been filed by the petitioner, whatever amount is awarded against the debtor
must be paid exclusively to him, pursuant to Article 1214. This provision states that “the debtor
may pay any of the solidary creditors; but if any demand, judicial or
extrajudicial, has been made by
any one of them, payment should be made to him.”

If Quiombing eventually collects the amount due from the solidary
debtors, Biscocho may later claim his share thereof, but that decision is for
him alone to make. It will affect only
the petitioner as the other solidary creditor and not the private respondents,
who have absolutely nothing to do with this matter. As far as they are concerned, payment of the judgment debt to the
complainant will be considered payment to the other solidary creditor even if
the latter was not a party to the suit.

Regarding the possibility that the private respondents might plead breach of contract in their
answer, we agree with the petitioner that it is premature to consider this
conjecture – for such it is – at this stage. The possibility may seem remote, indeed, since they have actually
acknowledged the completion of the house in the second agreement, where they
also agreed to pay the balance of the contract price. At any rate, the allegation, if made and proved, could still be
enforceable against the petitioner alone as one of the solidary debtors,
subject to his right of recourse against Biscocho.

The respondent court was correct in ruling that the second agreement,
which was concluded alone by the petitioner with the private respondents, was
based on the original Construction and Service Agreement. So too in fact was the promissory note later
signed by Manuelita Saligo since it was
for the amount owing on the construction cost. However, this matter is not really that
important now in view of our conclusion that the complaint could have been filed alone by the petitioner.

The rest of the pieces should easily fall into place.

Section 7, Rule 3 of the Rules of Court mandates the inclusion of
indispensable parties as follows:

Sec. 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.

Indispensable parties are those with such an interest in the
controversy that a final decree would necessarily
affect their rights, so that
the court cannot proceed without their presence. Necessary parties are those whose presence is necessary to adjudicate the whole controversy, but whose interests are so far separable that a final decree can be made in their
absence without affecting them.^[9] (Necessary parties are now called proper parties under the
1964 amendments of the Rules of Court.)^[10]

According to Justice
Jose Y. Feria, “where the
obligation of the parties is
solidary, either one of the parties is indispensable, and the other is not even necessary (now proper) because complete relief
may be obtained from
either.”^[11]

We hold that, although he signed the original Construction and
Service Agreement, Biscocho need not be included as a co-plaintiff in the complaint filed by the petitioner against the private
respondents. Quiombing as solidary
creditor can by himself alone enforce payment of the construction costs by the
private respondents and as a solidary
debtor may by himself alone be held liable for any possible breach of contract that may
be proved by the private respondents. In either case, the participation of Biscocho is not at all necessary,
much less indispensable.

WHEREFORE, the petition is GRANTED. The decision of the respondent court dated
March 27, 1990, is SET ASIDE, and the Regional Trial Court of Antipolo, Rizal, is directed to
REINSTATE Civil Case No. 913-A. Costs
against the private respondents.

SO ORDERED.

Narvasa, (Chairman), Gancayco, Griño-Aquino, and Medialdea, JJ., concur.

^[1]
Rollo, pp. 31-33.

^[2]
Ibid., pp. 34-35.

^[3]
Id., p. 36.

^[4]
Id., pp. 28-30.

^[5]
Id., p. 42.

^[6]
Id., p. 25. Penned by
Justice Reynato S. Puno and concurred in by Justices Jorge S. Imperial and
Artemon D. Luna.

^[7]
Tolentino, Civil Code of the Philippines, Vol. IV, 1985 Ed., p. 218.

^[8]
Ibid., p. 228.

^[9]
Wyoga Gas and Oil Corp. v.
Schrack, I Fed. Rules Service, 292,
cited in I Moran 191, 1979 Ed.

^[10]
Rule 3, Section 8.

^[11]
Feria, Civil Procedure, 1969 Ed., p.
153.