THIRD DIVISION
|
PEPSICO, INC., doing
business under the name and style PEPSICO RESTAURANTS INTERNATIONAL, Petitioner, - versus - EMERALD PIZZA, INC., Respondent. |
G.R. No. 153059
Present: YNARES-SANTIAGO,
J., Chairperson, AUSTRIA-MARTINEZ, CHICO-NAZARIO, and NACHURA, JJ. Promulgated: August
14, 2007 |
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D E C I S I O
N
NACHURA, J.:
Before
the court is a Petition for Review on Certiorari
under Rule 45 of the Rules of Court assailing the December 12, 2001 Decision[1] of
the Court of Appeals (CA) in CA-G.R. CV No. 53758 and the April 16, 2002 Resolution[2]
denying the motion for reconsideration thereof.
Petitioner
PepsiCo, Inc. (PepsiCo) is a foreign corporation organized and existing under
the laws of
On
In order to show that the
registration requirements of the Ministry (now Department) of Trade and
Industry (MTI) were complied with, more specifically on the period of the
franchise, the said agreement with Pizza Hut was amended on
In 1988, due to an alleged breach by
the franchisor of the franchise agreement, Emerald instituted a civil action
against PepsiCo (not Pizza Hut). However, the parties amicably settled their
differences and executed a compromise agreement to this effect on
On
Then
again, on account of purported violations by the franchisor of the franchise
agreement, among which was its refusal to renew the franchise, Emerald, on
April 23, 1996, instituted before the Regional Trial Court (RTC) of Pasig City,
Branch 165, Civil Case No. 65645, a Complaint[10] against
PepsiCo for specific performance, injunction and damages with an application
for the issuance of a temporary restraining order (TRO) or a writ of
preliminary injunction. The trial court initially ordered the parties to
maintain the status quo for 72 hours.[11]
In opposing Emerald’s application for
a TRO, PepsiCo, through its resident representative, argued, among others, that
it was not a signatory to the franchise agreement subject of the case, thus,
the complaint states no cause of action
for it was not brought against the real party-in-interest.[12]
After summary hearing, the RTC issued
its
There being no allegation in the complaint
much less was it shown (sic) that the
instant dispute was submitted by the plaintiff for arbitration, the case at bar
is prematurely filed and therefore, dismissable (sic) (Puromines, Inc. vs. Court of Appeals, 220 SCRA 281-291, G.R.
No. 91228, March 22, 1993). The Court need not pass upon the other
grounds/points raised in the position paper (opposition) of Yolanda M. Eleazar.
Wherefore, the temporary restraining order
issued on
SO ORDERED.[14]
As its motion for reconsideration was
later denied,[15] Emerald
appealed the case to the CA.[16]
While the appellate court agreed with the RTC that the complaint was
prematurely filed because arbitration was not availed of as a remedy pursuant
to the parties’ franchise agreement, it found as erroneous the trial court’s
dismissal of the complaint.[17] The
CA further found petitioner as a real party-in-interest, although it was not
the franchisor in the original franchise agreement.[18] Thus,
in the assailed
WHEREFORE, the trial court’s order of
dismissal is REVERSED and SET ASIDE. If the parties cannot reach an amicable
settlement at this late hour, then the trial court should give them at least 60
days from notice within which to settle their disputes by arbitration, and if
no settlement is finalized within that period, it should hold a pre-trial and
try the case. No costs.
SO ORDERED.[20]
Both parties moved for the
reconsideration of the said ruling, but the appellate court denied their
motions on
For resolution, therefore, by the Court
is the singular issue of whether or not PepsiCo is a real party-in-interest in
the civil case filed by Emerald.
We rule in the affirmative.
Under the Rules of Civil Procedure,
every action must be prosecuted or defended in the name of the real party-in-interest,
the party who stands to be benefited or injured by the judgment in the suit, or
the party entitled to the avails of the suit.[25] “Interest”
within the meaning of the rule means material interest, an interest in issue
and to be affected by the decree, as distinguished from mere interest in the
question involved, or a mere incidental interest.[26]
The purpose of the rule is to protect
parties against undue and unnecessary litigation and to ensure that the court
will have the benefit of having before it the real adverse parties in the
consideration of the case. This rule, however, is not to be narrowly and
restrictively construed, and its application should be neither dogmatic nor
rigid at all times but viewed in consonance with extant realities and
practicalities.[27] Since a
contract may be violated only by the parties thereto as against each other, in
an action upon that contract, the real parties-in-interest, either as plaintiff
or as defendant, must be parties to the said contract.[28]
It is true that PepsiCo is not a
signatory to the
A G R E E M E N T
In order to settle the differences
between PepsiCo Food Service International and Emerald Pizza, Inc. as well as the
pending litigation between Emerald Pizza, Inc. and PepsiCo, Inc., et al., it is
agreed that:
[1] Emerald’s
Cubao unit will be relocated to Robinson’s Galleria Shopping Complex located at
the corner of EDSA and
[2] Emerald
will be granted a third unit site in Alabang, such unit to be identified and
construction to commence not later than
[3] Effective as of the date of the signing of this document, the protective radius for all units will be reduced from 3 kms. to 0.5 km.
[4] Effective as of the date of the signing of this document, additional Pizza Hut restaurants will be allowed to be constructed and opened within the 0.5 km. protective radius of the existing Cubao Pizza Hut prior to Dec. 31, 1989, provided Apex guarantees Emerald’s 1989 sales based on 1988 sales by allowing Emerald to withhold the pertinent amount/s from the rental proceeds due to Apex from Emerald.
[5] PepsiCo represents that Apex shall accede to the terms of this Agreement.
[6] The Franchisor agrees to execute a Franchise Agreement as soon as possible, granting a three-restaurant franchise, with explicit right to relocate (as close as possible to the existing restaurant site and subject to the approval of PepsiCo Food Service, Int’l) in the event of lease expiration/termination, to Emerald for submission to the Technology Transfer Board, without prejudice to the original term agreed upon in the Franchise Agreement of March 12, 1981.
[7] Pursuant to this Agreement, the parties after the execution of the new Franchise Agreement shall instruct their respective counsels to submit the appropriate motion/s in court for the purpose of dismissing the same with prejudice.
|
PEPSICO, INC. PIZZA HUT, INC. PEPSICO FOOD SERVICE INTERNATIONAL (FRANCHISOR) By: TONY KITCHNER Director Franchise Operations |
EMERALD PIZZA, INC. (FRANCHISEE) By: (signed) GLORIA A. SABIDO President (signed) REMEDIOS P. ERAÑA Vice-President |
|
|
(signed) JOSEPH J. JOYCE PEPSICO, INC. Vice-President Asst. General Counsel |
(signed) ROBERTO F. DEL CASTILLO ACABAN CORVERA DEL CASTILLO Legal Counsel[29] |
|
PepsiCo could not have allowed
Emerald to relocate its then existing restaurant, granted it a third unit site,
reduced the protective radius of the franchise, guaranteed its sales,
represented that the overseeing unit would accede to the settlement, and agreed
to execute a franchise agreement without prejudice to the original term agreed
upon in the March 12, 1981 franchise, had it not been acting as one of the
franchisors or had it not assumed the duties, rights and obligations of a
franchisor. Thus, in this suit involving the franchise, PepsiCo is a real party-in-interest.
The subsequent execution of the
amendatory agreement on
Moreover, Emerald in its complaint
before the RTC pleaded as one of its causes of action the franchisor’s refusal
to abide by the 20-year franchise period, one of the important subjects of the
settlement to which both PepsiCo and Pizza Hut conformed. Necessarily,
therefore, both of them, PepsiCo and Pizza Hut, will stand to benefit from a
possible breach of the said provision.
Notably, however, while PepsiCo was
properly impleaded as a party defendant, Pizza Hut, an indispensable party, was
not. An indispensable party is a party-in-interest without whom no final
determination can be had of an action, and who shall be joined either as
plaintiff or defendant.[30]
The joinder of indispensable parties is mandatory. Their presence is necessary
to vest the court with jurisdiction, which is “the authority to hear and
determine a cause, the right to act in a case.” Thus, without their presence to
a suit or proceeding, judgment of a court cannot attain real finality. The
absence of an indispensable party renders all subsequent actions of the court
null and void for want of authority to act, not only as to the absent parties
but even as to those present.[31]
Nevertheless, the non-joinder of
indispensable parties is not a ground for the dismissal of an action, and the
remedy is to implead the non-party claimed to be indispensable. Parties may be
added by order of the court on motion of the party or on its own initiative at
any stage of the action and/or at such times as are just.[32] If
the petitioner refuses to implead an indispensable party despite the order of
the court, the latter may dismiss the complaint/petition for the plaintiff/petitioner's
failure to comply therewith.[33]
Hence, as no final ruling on this
matter can be had without impleading Pizza Hut, its inclusion is necessary for
the effective and complete resolution of the case and in order to accord all
parties the benefit of due process and fair play.[34]
WHEREFORE, premises considered, the appeal is DENIED DUE COURSE. The December 12,
2001 Decision of the Court of Appeals in CA-G.R. CV No. 53758 is AFFIRMED, with the MODIFICATION that the trial court include Pizza Hut, Inc. as an
indispensable party to the case.
SO
ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
WE CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
|
MA. ALICIA AUSTRIA-MARTINEZ Associate Justice |
MINITA V. CHICO-NAZARIO Associate
Justice |
A
T T E S T A T I O N
I
attest that the conclusions in the above decision were reached in consultation
before the case was assigned to the writer of the opinion of the Court’s
Division.
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division
C
E R T I F I C A T I O N
Pursuant
to Article VIII, Section 13 of the Constitution, and the Division Chairperson's
Attestation, it is hereby certified that the conclusions in the above decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court.
REYNATO S. PUNO
Chief Justice
[1]
Penned by Associate Justice Eliezer R. de los
[2]
[3] Rollo, p. 59.
[4] Records, p. 153.
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17] CA rollo, pp. 260-267.
[18]
[19]
[20]
[21]
[22] Rollo, pp. 69-77.
[23]
[24]
[25] RULES OF COURT, Rule III, Section 2.
[26] BPI Family Bank v.
[27]
[28] BPI Family Bank v.
[29] Records,
pp. 73-74.
[30] RULES OF COURT, Rule III, Section 7.
[31] Lotte Phil. Co., Inc. v. Dela Cruz, G.R.
No. 166302, July 28, 2005, 464 SCRA 591, 595-596.
[32] RULES OF COURT, Rule III, Section 11.
[33] CommissionerDomingo v. Scheer, 466 Phil.
235, 265 (2004).
[34] Lotte Phil. Co., Inc. v. Dela Cruz, supra, at 597.