GR 120465; (September, 1999) (Digest)
G.R. No. 120465 September 9, 1999
WILLIAM UY and RODEL ROXAS, petitioners, vs. COURT OF APPEALS, HON. ROBERT BALAO and NATIONAL HOUSING AUTHORITY, respondents.
FACTS
Petitioners William Uy and Rodel Roxas are agents authorized to sell eight parcels of land by the owners. They offered to sell the lands to respondent National Housing Authority (NHA) for a housing project. The NHA Board approved the acquisition via Resolution No. 1632, and the parties executed Deeds of Absolute Sale. The NHA paid for only five parcels after a report from the Land Geosciences Bureau stated the remaining three were in an active landslide area and unsuitable for development. The NHA cancelled the sale of the three parcels via Resolution No. 2352 and later offered P1.225 million as daños perjuicios to the landowners. Petitioners filed a Complaint for Damages against NHA and its General Manager. The Regional Trial Court declared the cancellation justified but awarded damages of P1.255 million. The Court of Appeals reversed, dismissing the complaint. It held there was sufficient basis for the cancellation and that petitioners, as mere attorneys-in-fact, were not the real parties-in-interest.
ISSUE
1. Whether the Court of Appeals erred in declaring that the NHA had a legal basis for rescinding the sale.
2. Whether the Court of Appeals erred in denying petitioners’ claim for damages.
3. Whether the Court of Appeals erred in dismissing the complaint for failure to join the lot-owners as indispensable party plaintiffs.
RULING
1. On the third issue, the Supreme Court ruled that petitioners are not the real parties-in-interest. Under Section 2, Rule 3 of the Rules of Court, every action must be prosecuted in the name of the real party-in-interest. Petitioners are not parties to the contract of sale between the landowners and NHA; they are mere agents. Under Article 1311 of the Civil Code, contracts take effect only between the parties, their assigns, and heirs. Petitioners are not parties, heirs, or assignees. An agent may bring an action as an assignee if they have acquired an interest in the contract, but petitioners failed to prove any assignment or that they had settled with their principals with an understanding to collect the claim for their own reimbursement. The alleged damages for “unearned income” and advances are not based on a substantive right they possess. Therefore, the complaint was correctly dismissed for lack of real parties-in-interest.
2. Given the resolution of the third issue, the Court deemed it unnecessary to resolve the first and second issues regarding the legal basis for rescission and the claim for damages. The dismissal of the complaint on procedural grounds renders these substantive issues moot.
The petition was DENIED. The decision of the Court of Appeals dismissing the complaint was AFFIRMED.