ALFREDO N. AGUILA, JR, petitioner, vs. HONORABLE COURT OF APPEALS and FELICIDAD S. VDA.

DE
ABROGAR, respondents [G.R. No. 127347. November 25, 1999]

FACTS
Petitioner is the manager of A.C. Aguila & Sons, Co., a partnership engaged in lending activities. Private respondent
Felicidad Abrogar and her late husband, Ruben M. Abrogar, were the registered owners of a house and lot, in
Marikina

On April 18, 1991, Felicidad Abrogar (with consent of her husband) and A.C. Aguila & Sons, Co entered into a
Memorandum of Agreement and Deed of Absolute Sale, as follows:

A.C. Aguila & Sons, Co. shall buy the property of the spouses (house and lot in Marikina) in consideration
of sum of Php 200,000. The deed of absolute sale is with the option to repurchase with a period of 90
days for Php 230, 000.
Should the spouses fail to exercise their right to repurchase, they are obliged to deliver to A.C. Aguila &
Sons, Co. the possession of the property, within 25 days from expiration of 90 days repurchase period.
The parties likewise executed a deed of absolute sale, dated June 11, 1991, wherein private respondent,
with the consent of her late husband, sold the subject property to A.C. Aguila & Sons, Co., represented by
petitioner, for P200,000. In a special power of attorney private respondent authorized petitioner to cause
the cancellation of TCT No. 195101 and the issuance of a new certificate of title in the name of A.C. Aguila
and Sons, Co., in the event she failed to redeem the subject property as provided in the Memorandum of
Agreement.

Private respondent failed to redeem the property, hence, pursuant to the SPA, petitioner caused the cancellation
and the issuance of a new certificate of title in the name of A.C. Aguila and Sons, Co. Subsequently, private
respondent were demanded to vacate the premises

MTC Ruling: Upon the refusal of private respondent to vacate the subject premises, A.C. Aguila & Sons, Co. filed an
ejectment case against her in the MTC Marikina. Said court ruled in favour of in favor of A.C. Aguila & Sons, Co.
RTC Ruling: Private respondent then filed a petition for declaration of nullity of a deed of sale with the Regional
Trial Court, Marikina against Alfredo Aguila. She alleged that the signature of her husband on the deed of sale was
a forgery because he was already dead when the deed was supposed to have been executed on June 11, 1991.
RTC-Marikina dismissed the petition and ruled that documents, to wit: the Memorandum of Agreement, the
Special Power of Attorney, and the Deed of Absolute Sale were all signed by the parties on the same date on April
18, 1991 (death of husband 08 May 1991)
CA Ruling: On appeal, CA reversed the decision of RTC. And ruled that the agreement entered into by the parties is
in the nature of pactum commissorium. Therefore, the deed of sale should be declared void as we hereby so
declare to be invalid, for being violative of law.
Hence this petition for review on Certiorari. Petitioner contends that he is not the real party in interest but A.C.
Aguila & Co., against which this case for nullity of deed of sale should have been brought.
ISSUE: Whether or not the civil case (for nullity of deed of sale) was filed against the real party in interest.
HELD: NO
As pointed out by Aguila, he is not the real party in interest but rather it was the partnership A.C. Aguila & Sons,
Co. The Rules of Court provide that every action must be prosecuted and defended in the name of the real party
in interest. A real party in interest is one who would be benefited or injured by the judgment, or who is entitled to
the avails of the suit. Any decision rendered against a person who is not a real party in interest in the case cannot
be executed. Hence, a complaint filed against such a person should be dismissed for failure to state a cause of
action, as in the case at bar.
Under Art. 1768 of the Civil Code, a partnership has a juridical personality separate and distinct from that of
each of the partners. The partners cannot be held liable for the obligations of the partnership unless it is shown
that the legal fiction of a different juridical personality is being used for fraudulent, unfair, or illegal purposes. In
this case, Felicidad has not shown that A.C. Aguila & Sons, Co., as a separate juridical entity, is being used for
fraudulent, unfair, or illegal purposes. Moreover, the title to the subject property is in the name of A.C. Aguila &
Sons, Co. It is the partnership, not its officers or agents, which should be impleaded in any litigation involving
property registered in its name. A violation of this rule will result in the dismissal of the complaint.

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