G.R. No. 171698 - Viesca vs. Gilinsky

Luis Regner, during his lifetime, acquired several properties including a share in the Cebu Country Club, Inc. (evidenced by Proprietary Ownership Certificate No. 0272).
Luis had three daughters with his first wife, Anicita C. Regner: Cynthia, Teresa, and Melinda. Victoria Regner is his second wife.
The subject property was transferred by donation from Luis to his daughters Cynthia and Teresa.

On 15 May 1998, Luis executed a Deed of Donation in favor of Cynthia and Teresa covering the property share at Cebu Country Club, Inc.
Victoria Regner alleged in her complaint that:

Luis had made a written declaration on 17 March 1997 that he would not sign any document without his lawyer’s knowledge due to his illness and forgetfulness.
By 15 May 1998, Luis was already very ill and not of sound and disposing mind.
Cynthia and Teresa, allegedly in conspiracy, fraudulently induced or manipulated the execution of the deed—reportedly even involving Melinda, who assisted by allegedly manipulating Luis’ thumbmark.

On 15 June 1999, Victoria filed a Complaint for Declaration of Nullity of the Deed of Donation with the RTC, seeking also the issuance of preliminary injunctions to restrain the Cebu Country Club, Inc. from transferring the membership certificate to the donees.
Summons were attempted:

The summons for Cynthia could not be served in the Philippines because she was noted as a non-resident residing in the United States (California).
Teresa, although a non-resident, was eventually served on 1 June 2000, upon her visit to the Philippines.
The summons for Cynthia was never effected, with the service being attempted on Melinda who refused to accept them on behalf of her sisters.

On 9 November 2000, the RTC granted Teresa’s motion to dismiss the complaint for failure to serve summons on Cynthia—an indispensable party.
Petitioner's motion for reconsideration was denied on 14 February 2001.
Victoria appealed and the Court of Appeals, on 6 May 2005, affirmed the lower court’s order dismissing the complaint for lack of due diligence and failure to prosecute the case within a reasonable period.
Key findings emphasized that the failure to arrange extraterritorial service for the non-resident defendant (Cynthia) contributed to the delay and the subsequent dismissal.

Whether a co-donee (Cynthia) is considered an indispensable party in an action seeking to declare the nullity of the deed of donation.
Whether the delay in the service of summons upon the non-resident defendant (Cynthia) constitutes a failure to prosecute the case for an unreasonable length of time, warranting dismissal.