PEPSICO V. EMERALD PIZZA (REMEDIAL LAW)

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 stand to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. Interest within the meaning of the rules means material interest, as interest in issue ans to be affected by the decree, as distinguished from mere interest in the question involved, or a mere incidental interest.

The purpose of the rule is to protect parties against undue and unnecessary litigation ans 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 is however not to be narrowly and restrictively construed, and its application should neither be dogmatic nor rigid at all times but viewed in consonance with extant realities and practicalities. 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, weather plaintiff or as defendant, must be parties to the said contract.

The subsequent execution of the amendatory agreement only by and between Emerald and Pizza Hut does not in any way relieve PepsiCo of the obligations it assumed as a franchisor in the settlement agreement. Let it be noted that the said amendatory agreement came into being merely to formally implement the stipulations in the settlement.

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. 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.

Nevertheless, the NON-JOINDER OF INDISPENSABLE PARTIES IS NOT A GROUND FOR THE DISMISSAL OF 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. 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.

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.