3 Marquez v. Valera

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L. G. MARQUEZ et al, v FRANCISCO VARELA et al.

G.R. No. L-4845, December 24, 1952, EN BANC

DOCTRINE:

The principle underlying the code system of pleading is that all persons having a
material interest under the substantive law should be made parties, as distinguished
from that of the common law which allowed only a two-sided controversy, each party to
be opposed to the other.

FACTS:

Gutierrez Lora was authorized by defendants to negotiate the sale of their share
or interest in a parcel of land in Manila, and having meet his co-plaintiff L. G. Marquez,
a real estate broker, both of them agreed to work together for the sale of defendant's
property; that they found a ready, willing, and able buyer, which accepted defendants'
price and terms, but that thereafter defendants, without any justifiable reason, refused
to carry out the sale and execute the necessary deed therefor; and that as a consequence
plaintiffs failed to receive the commission which they were entitled to receive.

The defendants presented a motion to dismiss the complaint as to L. G. Marquez


on the ground that he has no cause of action against defendants given that Marquez
cannot join in the action and enforce therein his rights directly against the defendants,
evidently because defendants never dealt with Marquez, directly or indirectly. The
motion having been granted; plaintiff L. G. Marquez has prosecuted an appeal.

ISSUE:

Was there a cause of action in favor of Marquez against the defendants?

RULING:

Yes, Marquez has a cause of action against the defendants.

The principle underlying defendants' objection is one of substantive law,


recognized under common law, where no one could sue for a breach of a contract who
was not a party thereto, and the action allowed to be brought only in the name of the
one holding the legal title. The requirement was based upon the doctrine of privity of
contract. At common law, in order that two or more persons may join in an action upon
a contract, there must be community of interest between them; that is, they must be
parties to the contract and jointly interested in therein.

However, this jurisdiction does not make use of the common law procedure,
rather it is a system of code pleading. The code system of pleading adopted in substance
the rules of equity practice as to parties, under which "all persons having an interest in
the subject of the action, and in obtaining the relief demanded, may be joined as
plaintiffs". The principle underlying the rule is that all persons having a material interest
under the substantive law should be made parties, as distinguished from that of the
common law which allowed only a two-sided controversy, each party to be opposed to
the other.
Marquez clearly falls under the above rule. He is entitled to be paid his
commission out of the very contract of agency between Lora and the defendants; Lora
and he acted jointly in rendering services to defendants under Lora's contract, and the
same questions of law and fact govern their claims. The rules do not require the
existence of privity of contract between Marquez and the defendants as required under
the common law; all that they demand is that Marquez has a material interest in the
subject of the action, the right to share in the broker's commission to be paid Lora under
the latter's contract, which right Lora does not deny. This is sufficient to justify the
joinder of Marquez as a party plaintiff, even in the absence of privity of contract between
him and the defendants.

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