Title
Quiombing vs. Court of Appeals
Case
G.R. No. 93010
Decision Date
Aug 30, 1990
Quiombing, a solidary creditor, sued Saligos for unpaid construction balance; SC ruled he could sue alone without co-plaintiff Biscocho, reinstating the complaint.
solidary creditor
lawsuit
recovery

Case Summary (G.R. No. 93010)

Factual Background

Quiombing and Dante Biscocho executed a Construction and Service Agreement dated August 30, 1983, whereby they as First Party bound themselves jointly and severally to construct a house for Sps. Francisco and Manuelita Saligo for P137,940.00. On October 10, 1984, Quiombing and Manuelita Saligo executed a second written agreement in which Manuelita acknowledged completion of the house and undertook to pay the balance of the contract price under the terms of that instrument. On November 19, 1984, Manuelita signed a promissory note for P125,363.50 payable on or before December 31, 1984 to Quiombing for the balance due. Quiombing filed a complaint for recovery of that amount, with charges and interest, on October 9, 1986.

Trial Court Proceedings

The defendants moved to dismiss the complaint on February 4, 1987 on the ground that Biscocho, as co-creditor under the original agreement, was an indispensable party and should have been joined as co-plaintiff. The trial court initially denied the motion but later reconsidered and granted it, dismissing the complaint without prejudice to the filing of an amended complaint joining the other solidary creditor.

Court of Appeals Ruling

The Court of Appeals affirmed the trial court. The respondent court reasoned that it was premature to assume Quiombing and Biscocho were solely solidary obligees because they had assumed reciprocal obligations to construct the house and thus might also be obligors vis-à-vis the Saligos. The Court of Appeals held that if the defendants asserted breach of contract in their answer, the dispute could not be finally resolved without Biscocho, whose rights might be affected as part of the First Party. The respondent court also observed that the second agreement referenced the original Construction and Service Agreement and was therefore not independent of it. The Court of Appeals’ opinion was penned by Justice Reynato S. Puno, with Justices Jorge S. Imperial and Artemon D. Luna concurring.

Issues Presented

The Supreme Court considered whether one of two solidary creditors may sue alone for the recovery of amounts due to both without joining the other solidary creditor. The Court also considered whether the non-joining solidary creditor was an indispensable party under Section 7, Rule 3 of the Rules of Court and whether dismissal for nonjoinder was proper.

Parties’ Contentions

The petitioner argued that as a solidary creditor he could enforce the entire debt by himself and that the second agreement and promissory note were payable to him alone, excluding Biscocho. The private respondents contended that Biscocho was an indispensable party because he had signed the original agreement and might be affected by defenses the respondents might raise, including breach of contract; therefore, complete adjudication required his presence. The respondent court also emphasized that the second agreement incorporated the original agreement.

Court’s Analysis and Reasoning

The Court recited the distinction between joint and solidary obligations as stated in Tolentino and noted that the essence of active solidarity is the authority of each creditor to claim and enforce the rights of all, subject to the obligation to render to each what belongs to him. The Court explained that the question of which creditor should sue was a personal matter among the creditors and that third parties, here the Saligos, had no right to insist on joinder of a co-creditor. The Court observed that a judgment against the debtors in favor of one solidary creditor discharged the debt as to the other creditor and that payment made to one creditor after demand must be paid to the creditor who made the demand, pursuant to Article 1214.

The Court held that suing for recovery was a useful act under Article 1212 that any one of the solidary creditors might perform alone. The Court rejected the respondents’ prediction that a defense of breach would render Biscocho indispensable as speculative at the pleading stage. It explained that even if the respondents pleaded and proved breach, the petitioner could be held liable as one of the solidary debtors and could pursue recourse against Biscocho for any resulting obligation; such internal adjustments between solidary creditors did not render the co-creditor an indispensable party with respect to the debtor. The Court acknowledged that the second agreement and the promissory note were based on the original Construction and Service Agreement, but it regarded that factual circumstance as immaterial to the core legal question whether the complaint could be prosecuted by one solidary creditor alone.

The Court invoked Section 7, Rule 3 to define indispensable parties as those without whom no final determination can be had, and contrasted them with necessary (now proper) parties. The Court cited Justice Jose Y. Feria’s teaching that where the obligation is solidary, relief may be complete with the presence of one creditor, making the other creditor not a necessary or indispensable party.

Ruling and Disposition

The Supreme Court hel

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