FACTS:

Gabriel Ching obtained loans from Equitable PCI Bank, Inc. amounting to P7 Million secured by a Real Estate Mortgage (REM) executed by Antonio C. Tiu in favor of the bank. On October 5, 1998, Antonio executed an Amendment to the Real Estate Mortgage (AREM) increasing the amount secured to P26 Million. The property mortgaged was covered by TCT No. T-1381 registered in the name of the mortgagor. Antonio died on December 26, 1999. Petitioner filed a "Petition for Sale" for the extrajudicial foreclosure of the AREM. The heirs of Antonio, namely Arlene T. Fu, Michael U. Tiu, Andrew U. Tiu, Edgar U. Tiu, and Erwin U. Tiu, filed a Complaint/Petition for annulment of the AREM, injunction, and damages, alleging that the REM was executed without the valid consent of Antonio's wife Matilde who was allegedly incapacitated at that time due to advanced Alzheimer's Disease. The RTC issued a temporary restraining order and preliminary injunction. Petitioner filed a Motion to Dismiss, which was denied by the RTC. The Petition for Certiorari, Prohibition, and Mandamus filed by petitioner with the Court of Appeals was also denied.

ISSUES:

1. Whether the complaint filed by the heirs of Antonio, without impleading Matilde who was principally obliged under the AREM, states a cause of action.

RULING:

1. The Supreme Court ruled in favor of the petitioner and granted the petition. The Court held that Matilde, as the wife of Antonio and the main obligor under the AREM, is the real party in interest in the case. The action should have been prosecuted in her name since she stands to be benefited or injured in the action. If Matilde is indeed incapacitated, her legal guardian should have filed the action on her behalf. However, there were no allegations that the respondents were legally designated as guardians. Additionally, Matilde's name was not included in the title of the case, violating the rule that the real party in interest should be named. As a result, the complaint was dismissed for lack of cause of action.