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EN BANC

G.R. No. L-47677 April 22, 1941

THE INSULAR LIFE ASSURANCE CO., LTD., plaintiff. ANGEL VARELA CALDERON and PAULA VARELA CALDERON, appellees, vs. MIGUEL VARELA CALDERON, Defendant-Appellant.

Nicasio Yatco and Miguel Varela Calderon in the latter's behalf.
C. A. Sobral for appellees.
Araneta, Zaragoza & Araneta for plaintiff.

LAUREL, J.:

On April 22, 1938, the Insular Life Assurance Co., Ltd., filed an action, in the Court of First Instance of Manila for the foreclosure of a mortgage constituted by the defendant appellant herein, Miguel Varela Calderon, on the properties described in the complaint. Included as co-defendants in this complaint were the herein plaintiffs-appellees, Angel Varela Calderon and Paula Varela Calderon, who, it appears were subsequent lienholders on the properties thus mortgaged. On August 5, 1938, and during the pendency of the foreclosure suit, the Insular Life Assurance Co., Ltd., transferred its credit, including the mortgage, and the corresponding right of action against Miguel Varela Calderon to his said co-defendants therein, and on September 19, 1938 upon, their own motion, said transferees, Angel Varela Calderon and Paula Varela Calderon, were allowed by the court to substitute as plaintiffs for and in place of the original plaintiff, the Insular Life Assurance Co., Ltd. Thereafter, September 26, 1938, the plaintiffs in substitution filed a supplementary complaint, which was admitted by the court in its order of October 18, 1938. After due hearing, judgment was rendered by the Court of First Instance of Manila condemning the defendant-appellant to pay the amount sought in the complaint originally filed by Insular Life Assurance Co., Ltd., and decreeing the foreclosure of the mortgage and sale of the mortgaged properties upon his failure to satisfy the judgment within three months from the entry thereof.chanroblesvirtualawlibrary chanrobles virtual law library

The defendant-appellant now appeals to this court from the above judgment of the Court of First Instance of Manila and assigns the following as errors allegedly committed by the said court:

1. The lower court erred in allowing the substitution of Angel Varela Calderon and Paula Varela Calderon as party plaintiffs.chanroblesvirtualawlibrary chanrobles virtual law library

2. The lower court erred in not dismissing the original complaint of the Insular Life Assurance Co.. Ltd., before proceeding with the trial of the case and in admitting the supplementary complaint presented by Angel Varela Calderon and Paula Varela Calderon who were co-defendants in the original complaint presented by the Insular Life Assurance Co., Ltd.

It is the theory of the defendant-appellant that the court below should have first dismissed the complaint originally filed by the Insular Life Assurance Co., Ltd., and the transferees required to institute an independent action for the same cause. This view is untenable. Litigation should be conducted in the name of the real party in interest, and the proceedings ought to be instituted originally in the name of the assignee where an assignable right has been transferred before action is brought; but where such assignment is effected pendente lite, it is proper to have the assignee substituted for the original plaintiff. (Oria Hermanos y Compañia v. Gutierrez Hermanos, 52 Phil. 156, 163).chanroblesvirtualawlibrary chanrobles virtual law library

It appearing that, in the present case, the right of the original plaintiff was transferred to the herein plaintiff-appellees during the pendency of the foreclosure suit, we hold that the court below was not in error in having allowed the substitution now complained of. Neither did the said court err in having admitted the supplementary complaint, the same having been filed to recover from the defendant appellant the amount of land taxes paid by the plaintiffs-appellees on the mortgaged properties after the institution of the original action, and which should have been paid by the defendant-appellant under the terms and conditions of the mortgage.chanroblesvirtualawlibrary chanrobles virtual law library

The judgment appealed from is, therefore, hereby affirmed, without pronouncement as to cost. So ordered.chanroblesvirtualawlibrary chanrobles virtual law library

Imperial, Diaz, Moran and Horrilleno, JJ., concur.