View full case

ALFREDO N. AGUILA v. CA

FACTS:

Petitioner Alfredo N. Aguila, Jr. is the manager of A.C. Aguila & Sons, Co., a lending partnership. Private respondent Felicidad Vda. de Abrogar and her late husband Ruben M. Abrogar were the registered owners of a house and lot in Marikina, Metro Manila. On April 18, 1991, private respondent and A.C. Aguila & Sons, Co., represented by petitioner, entered into a Memorandum of Agreement (MOA). The MOA provided for the sale of the property to A.C. Aguila & Sons, Co. for P200,000.00 and granted private respondent an option to repurchase the property within 90 days. If private respondent failed to repurchase, she was obliged to deliver the possession of the property to A.C. Aguila & Sons, Co. Petitioner was also authorized to cancel the existing certificate of title and obtain a new one in the name of A.C. Aguila & Sons, Co. In August 1991, petitioner demanded that private respondent vacate the premises, but the latter refused. A.C. Aguila & Sons, Co. then filed an ejectment case against private respondent, which she appealed but lost. Private respondent subsequently filed a petition for the nullity of the deed of sale, alleging that her late husband's signature was forged. The trial court dismissed the petition, finding no merit in the forgery claim.

ISSUES:

  1. Whether the complaint for the declaration of nullity of a deed of sale should have been brought against A.C. Aguila & Sons, Co.

  2. Whether the judgment in the ejectment case bars the filing of the complaint for nullity of a deed of sale.

  3. Whether the contract between A.C. Aguila & Sons, Co. and the private respondent is a pacto de retro sale or an equitable mortgage.

RULING:

  1. Yes. The Supreme Court ruled that the action should have been brought against A.C. Aguila & Sons, Co., as it is the partnership that holds the title to the property and the executed Memorandum of Agreement. Since A.C. Aguila & Sons, Co. was not impleaded, the complaint should be dismissed.

  2. Not ruled upon. Because the resolution of the first issue renders a discussion on the ejectment case unnecessary.

  3. Not ruled upon. The resolution of the first issue makes it unnecessary to determine whether the contract was a pacto de retro sale or an equitable mortgage.

PRINCIPLES:

  • Real Party in Interest: An action must be prosecuted and defended in the name of the real party in interest, as mandated by Rule 3, §2 of the 1964 Rules of Court.

  • Separate Juridical Personality of a Partnership: A partnership has a juridical personality separate and distinct from that of each of the partners (Art. 1768 of the Civil Code). Partners are not held liable for the obligations of the partnership unless used for fraudulent, unfair, or illegal purposes.

  • Failure to Implead the Proper Party: An action against a person who is not the real party in interest cannot be sustained and must be dismissed.