G.R. No. 193138 , August 20, 2018
Aniceto G. Saludo, Jr., Petitioner, vs. Philippine National Bank, Respondent.

FACTS

Petitioner Aniceto G. Saludo, Jr., as managing partner, filed a complaint for accounting and damages against respondent Philippine National Bank (PNB) concerning a Contract of Lease for office space. The lessee named in the contract was the Saludo Agpalo Fernandez and Aquino (SAFA) Law Office. After the lease expired, disputes arose over unpaid rentals, with PNB claiming substantial arrears. In its Answer, PNB filed compulsory counterclaims against both Saludo and the SAFA Law Office for the unpaid amounts.
Saludo moved to dismiss the counterclaims against the law firm, arguing that SAFA Law Office was a single proprietorship or a mere association without juridical personality, and thus could not be sued. The Regional Trial Court granted Saludo’s motion, agreeing that the law firm was a “non-legal entity” and could not be a proper party to the suit. The Court of Appeals reversed this ruling, reinstating the counterclaims. Saludo elevated the case to the Supreme Court.

ISSUE

Whether the SAFA Law Office, as a partnership for the practice of law, possesses juridical personality such that it can be sued and held liable under the subject Contract of Lease.

RULING

Yes. The Supreme Court denied the petition and affirmed the Court of Appeals. The Court held that a partnership for the practice of law, organized under the Civil Code, acquires a juridical personality separate from its partners by operation of law. The SAFA Law Office, as evidenced by its Articles of Partnership, is a partnership with a distinct legal personality. Consequently, it is the real party-in-interest concerning contracts entered into in its name.
The legal logic is clear: a partnership exists when two or more persons bind themselves to contribute money, property, or industry to a common fund with the intention of dividing profits. This definition under the Civil Code applies universally, including to law partnerships. The Court rejected the argument that a law firm is a mere single proprietorship or association without legal standing. Since the Contract of Lease was executed by Saludo in his capacity as managing partner for and on behalf of SAFA Law Office, the firm itself is the obligor and the proper party against whom counterclaims for breach of that contract can be asserted. Its separate juridical personality allows it to sue and be sued. Therefore, the counterclaims against it were properly reinstated.