GR 127347; (November, 1999) (Digest)
G.R. No. 127347 November 25, 1999
ALFREDO N. AGUILA, JR., petitioner, vs. HONORABLE COURT OF APPEALS and FELICIDAD S. VDA. DE ABROGAR, respondents.
FACTS
Petitioner Alfredo N. Aguila, Jr. is the manager of A.C. Aguila & Sons, Co., a partnership. Private respondent Felicidad S. Vda. de Abrogar and her late husband were the registered owners of a house and lot. On April 18, 1991, the parties executed a Memorandum of Agreement and a Deed of Absolute Sale covering the property for P200,000.00, with a 90-day option for private respondent to repurchase it for P230,000.00. A Special Power of Attorney was also executed authorizing petitioner to effect the transfer of title if the repurchase option was not exercised. Private respondent failed to redeem the property. Consequently, title was transferred to the partnership, and an ejectment case was filed against her, which she lost.
Thereafter, private respondent filed a petition for declaration of nullity of the Deed of Sale with the Regional Trial Court, alleging her husband’s signature was forged as he had died before the notarized date of the deed. The trial court dismissed the petition, finding the documents were signed simultaneously on April 18, 1991, a common practice in such transactions. The Court of Appeals reversed, declaring the contract an equitable mortgage. Petitioner elevated the case to the Supreme Court.
ISSUE
Whether petitioner Alfredo N. Aguila, Jr. is the proper party against whom the action for declaration of nullity of the deed of sale should be prosecuted.
RULING
The Supreme Court ruled that petitioner is not the real party in interest. The action must be prosecuted against the real party in interest, defined as the party who would be benefited or injured by the judgment. Under Article 1768 of the Civil Code, a partnership has a juridical personality separate and distinct from its partners. The subject property was registered in the name of A.C. Aguila & Sons, Co., and the Memorandum of Agreement was executed between private respondent and the partnership, represented by petitioner as its manager. The partnership, not its officer or agent, should be impleaded in any litigation involving property registered in its name, absent any showing that the separate juridical entity is being used for fraudulent, unfair, or illegal purposes. Since private respondent failed to demonstrate this, the complaint against petitioner individually must fail. The Court emphasized that both lower courts sidestepped this fundamental issue. Consequently, the Court reversed the decision of the Court of Appeals and dismissed the complaint against petitioner for failure to state a cause of action against him.