Borlasa v. Polistico
REITERATIONFacts
The Antecedents: Plaintiffs instituted an action to secure the dissolution of a voluntary association, Turuhan Polistico & Co., and to compel defendants to account for and surrender the association's money and property for liquidation. The association was formed in April 1911, with Vicente Polistico as president and treasurer. Members were obligated to pay weekly contributions, with the understanding that a weekly lottery would be conducted among members, and the winner would receive the collected amount. The president-treasurer was to receive P200 from the society's funds. From April 1911 to April 1917, Vicente Polistico allegedly received approximately P74,000, which he retained or used to purchase real property. Procedural History: The Court of First Instance of Laguna sustained a demurrer for defect of parties. Plaintiffs amended their complaint to include hundreds of other members as additional parties plaintiff. Defendants again demurred on the ground of lack of necessary parties, which was sustained, leading to the dismissal of the case. The Petition: Plaintiffs appealed the dismissal, arguing that the trial court erred in dismissing the case for defect of parties, contending that the action could proceed as a class suit.
Issue(s)
Whether all members of a voluntary association must be joined as actual parties in an action for dissolution and accounting, or if the action may be maintained as a class suit under Section 118 of the Code of Civil Procedure.
Ruling
The Supreme Court reversed the order of dismissal, overruled the demurrer for lack of parties, and ordered the defendants to answer the amended complaint. Costs of appeal were taxed against the defendants.
Ratio Decidendi
On Issue 1: The Supreme Court held that the trial judge's insistence on joining all members of 'Turnuhan Polistico & Co.' was entirely mistaken and contrary to Section 118 of the Code of Civil Procedure. The Court reasoned that the situation was a classic example for a class suit, where one or more parties may sue for the benefit of all when it is impossible to bring all interested persons into the case. While the presence of indispensable parties is generally a sine qua non for judicial power, the practice is relaxed in class suits to allow litigation to proceed when the class is sufficiently represented. The Court emphasized that requiring several hundred individuals to be joined would be tantamount to a denial of justice due to the impracticality of managing so many parties. Furthermore, the Court distinguished this case from Rallonza v. Evangelista, noting that the current controversy involves an indivisible right affecting many individuals whose interests are of indeterminate extent. Consequently, the Court recommended that the plaintiffs amend their complaint to explicitly state it is a class suit and to retain a sufficient number of responsible persons to ensure liability for costs while dismissing unnecessary parties.
Main Doctrine
In a class suit involving numerous persons with a common interest, it is not indispensable to make each member of the class an actual party, provided the class is sufficiently represented to enable the court to deal justly with the interests involved.