Equitable PCI Bank, Inc. vs.

Heirs of Antonio Mortgage (AREM) was executed by the

Tiu, September 4, 2009
Facts: This is a petition for certiorari,
prohibition, and mandamus with prayer for
preliminary injunction before the CA .
Antonio, with the marital consent of his wife
Matilde, executed a REM in favor of petitioner
covering a lot in Tacloban City to secure loans in
the aggregate amount of 7 million in favor of
one Gabriel Ching. Antonio executed an AREM
increasing the amount secured by the mortgage
to 26million. Antonio died.
The loan obligation having remain unsettled,
petitioner filed a petition for sale for the
extrajudicial foreclosure of the AREM and the
sale at public auction of the lot. A day before
the scheduled auction sale, respondents filed a
complaint/petition for annulment of the AREM,
injunction with prayer for the issuance of writ of
preliminary injunction and/or TRO and
damages. Respondents argued that the AREM
was void having been executed by the wife who
was suffering from advance Alzheimer’s
Disease, hence, no valid consent was given.
husband, with the marital consent of the wife,
the wife is obliged principally under the AREM
and she is a real party in interest, hence, any
action must be prosecuted in her name as she
stands to be benefited or injured in the action.
The AREM was executed by Antonio, with the
marital consent of Matilde. Since the
mortgaged property is presumed conjugal, she
is obliged principally under the AREM. It is thus
she, following Art. 1397 of the Civil Code vis-à-
vis Sec. 2 of Rule 3 of the Rules of Court, who is
the real party in interest, hence, the action
must be prosecuted in her name as she stands
to be benefited or injured in the action.
Assuming that Matilde is indeed incapacitated,
it is her legal guardian who should file the
action on her behalf. Not only is there no
allegation in the complaint, however, that
respondents have been legally designated as
guardians to file the action on her behalf. The
name of Matilde, who is deemed the real party
in interest, has not been included in the title of
the case, in violation of Sec. 3 of Rule 3 of the
Rules of Court.

The RTC issued a TRO, and subsequently, a writ WHEREFORE, the petition is GRANTED. The
of preliminary injunction. A MD was filed by Decision of the Court of Appeals dated August
petitioner. He argued that plaintiffs/petitioners 30, 2006 is REVERSED and SET ASIDE. Civil Case
not being the real parties-in-interest, their No. 2003-12-205 lodged before
complaint states no cause of action. The MD
was denied by the RTC. The CA affirmed the
RTC’s decision.

ISSUE: WON the complaint filed by

respondents-children of Antonio, without
impleading Matilde who must also be Antonios
heir, was principally obliged under the AREM
sought to be annulled, is dismissible for lack of
cause of action.

DECISION: YES. Where the Amendment to the

Real Estate

Stanley Fine Furniture vs. Gallano and Siarez,
November 26, 2014
Facts: This is a petition for review on certiorari
seeking to reverse the decision of the CA.
Respondents were hired, through its owners
Elena and Carlos Wang, as painters/carpenters
by petitioner. Respondents then filed a labor
complaint for underpayment/nonpayment of
salaries, wages, ECOL, and 13th month pay while
were “still working” for Stanley. Respondents
amended their complaint to actual illegal
dismissal, and claims of other benefits e.g. SSS
benefits, holiday pay. The petitioner Elena
Briones claimed that respondents were
“required to explain their absences for the
month of May 2005, but they refused”.
The LA ruled that respondents were illegally
dismissed. The LA noted the contradictory
statements on Stanley’s position paper of
dismissing the employees for failure to report
back to work on time and filing an
unmeritorious labor case.”
On appeal, the NLRC reversed the LA. It ruled
that “filing an unmeritorious labor case” is not
an admission that they dismissed the
employees in retaliation.
The CA on appeal by way of certiorari, reversed
the NLRC, and affirmed the LA. Hence, Elena
filed a petition for review.
ISSUE: WON Elena Briones has standing to file
this petition for review on certiorari
DECISION:
YES. Elena has standing to file this case. A sole
proprietorship does not possess a juridical
personality separate and distinct from the
personality of the owner of the enterprise
Respondents did not refute Elena’s allegation
that Stanley Fine is a sole proprietorship. In
Excellent Quality Apparel, Inc. v. Win Multi- Rich
Builders, Inc., 578 SCRA 272 (2009), this court
stated that: A sole proprietorship does not
possess a juridical personality separate and
distinct from the personality of the owner of
the enterprise. The law merely recognizes the
existence of a sole proprietorship as a form of
business organization conducted for profit by a
single individual and requires its proprietor or
owner to secure licenses and permits, register
its business name, and pay taxes to the national
government. The law does not vest a separate
legal personality on the sole proprietorship or
empower it to file or defend an action in court.
(Emphasis supplied) Thus, Stanley Fine, being a
sole proprietorship, does not have a personality
separate and distinct from its owner, Elena
Briones. Elena, being the proprietress of Stanley
Fine, can be considered as a real party-in-
interest and has standing to file this petition for
review.
WHEREFORE, premises considered, the Court of
Appeals’ decision dated July 28, 2009, and its
resolution dated November 27, 2009,
reinstating the Labor Arbiter’s decision dated
August 2, 2006, are hereby AFFIRMED.
Africa vs Insurance Saving and Investment
Agency, April 20, 2015
Facts: This is a petition for review on Certiorari
under Rule 45 brought directly before the court
for pure questions of law.
ISIA filed a petition for mandamus before the
RTC alleging that they purchased the subject
property from Sps. Orfmada, through their
attorney-in-fact Jimenez as evidenced by a Deed
of Absolute Sale (DOAS). After completing all
the requirement, ISIA proceeded to the RD for
registration. Atty. Paner denied the registration
on the ground that another owner’s duplicate
copy is in possession of Africa. Atty. Paner filed
its Comment on the petition recognizing the
validity of the sale, that transfer of title is
immediately effected upon payment of the
necessary government taxes but in this case,
registration of the sale can be done providence
that the affidavit of Africa is carried over to the
new title.
Africa, although not impleaded as one of the
respondent, filed a Vehement Opposition
arguing that the sale was tainted with fraud,
hence not valid. Africa anchored her argument
on the order rendered by the RTC and affirmed
by the CA and SC ordering Jimenez to surrender
the duplicate’s copy (TCT No. 38910-A) as the
sale between ISIA and Sps. Orfamada is void ab
initio.
RTC granted the petition for mandamus
ordering the RD to register the DOAS, cancel
TCT No. 38910-A, and issue a new title in favor
of ISIA. Both Africa and RoD filed a separated
MRs. Both were denied.
Hence, Africa filed this petition for certiorari on
behalf of SPS Orginada. She alleged that her
contract of agency with Sps. Orfinada is coupled
with interest explicitly stating her interest
therein. ISIA filed a MD maintaining that the
death of Sps. Orfmada prior to the filing of the
present petition extinguished the contract of
agency between them and Africa.
ISSUE: WON Africa is a real party-in-interest in
this case.
DECISION:
NO. Even without delving into the factual
finding of the court a quo in this case that
Africa, through subterfuge, never even
presented a certified true copy of the “owner’s
duplicate copy” which she claims to be in her
possession, we deny due course to this petition,
Africa not being a proper party under Rule 3,
Section 3 of the Rules of Court.
In this instance, with the death of the Spouses
Orfinada and despite the claim of ownership by
Africa over the subject property, Africa is not
the proper party to file an appeal by certiorari
from the adverse rulings of the trial court.
Section 3 of Rule 3 of the Rules of Court is
explicit on the requirement that an agent as
party may sue without joining the principal
except when the contract involves things
belonging to the principal. The herein subject
property is ostensibly owned by the Spouses
Orfinada covered by TCT No. 38910-A
registered in their names. This TCT No. 38910-A
is one of the titles ISIA seeks to annul as part of
its claim of ownership over vast tracts of land
bounded by the Pasig River in the North, by the
Tunisan River in the South, by Laguna de Bay in
the East, and by the Manila de Bay in the West.
The claim covers about 143,102,167 sq. m.,
more or less, comprising one-half of Metro
Manila. ISIA’s claim includes the subject parcel
of land covered by TCT No. 38910-A, which ISIA
seeks to recover from herein parties resulting in
all kinds of litigation between the opposing
parties, including this suit for mandamus before
the court a quo. Africa’s belated claim of
ownership via purchase cannot make her a
proper party to this case and circumvent the
requirements for establishing ownership over
the subject property.

We can draw a parallel ruling from Tamondong

v. Court of Appeals, 444 SCRA 509 (2004),
where we specifically ruled that the lack of
authority of the representative from the real
party-in-interest, results in the complaint
deemed as not filed. It does not make the
representative as the actual plaintiff in the case.
We held, thus: If a complaint is filed for and in
behalf of the plaintiff who is not authorized to
do so, the complaint is not deemed filed. An
unauthorized complaint does not produce any
legal effect. Hence, the court should dismiss the
complaint on the ground that it has no
jurisdiction over the complaint and the plaintiff.
On the other hand, if a complaint is filed by an
agent or plaintiff, for and in behalf of the
principal, the plaintiff who is merely the agent is
not the proper party. The reason being that
every action must be presented in the name of
the real party-in- interest. The complaint may
be dismissed on the ground that the plaintiff
has no cause of action against the defendants,
conformably to Section 1(g), Rule 16 of the
1997 Rules of Civil Procedure.
V-Gent, Inc. vs. Morning Star Travel and Tours,
Inc., July 22, 2015
Facts: This is a petition for review on certiorari
V-Gent filed a money claim against Morning
Star for payment of the unrefunded unused
tickets before the MeTC. Morning Star
countered that they were not entitled to refund
because the tickets were bought on a “buy one
take one” promo. They also alleged that the real
parties in interest were the passengers in
whose names were issued. MeTC dismissed the
complaint for lack of cause of action. It ruled
that V-Gent were agents of the passengers.
However, V-Gent failed to prove its claim by
preponderance of evidence.
RTC granted the appeal after finding that V-
Gent had established its claim by
preponderance of evidence.
On appeal, the CA dismissed the complaint after
finding that V-Gent is not a real party-in-interest
because it merely acted as an agent of the
passengers who bought the tickets from
Morning Star with their own money.
ISSUE: WON V-Gent is a real party-in-interest to
file the case
DECISION: NO. V-Gent is not a real party-in-
interest to file the case
Every action must be prosecuted or defended in
the name of the real party-in-interest — the
party who stands to be benefited or injured by
the judgment in the suit. In suits where an
agent represents a party, the principal is the
real party-in interest; an agent cannot file a suit
in his own name on behalf of the principal. Rule
3, Section 3 of the Rules of Court provides the
exception when an agent may sue or be sued
without joining the principal. Section 3.
Representatives as parties.— Where the action
is allowed to be prosecuted and defended by a
representative or someone acting in a fiduciary
capacity, the beneficiary shall be included in the
title of the case and shall be deemed to be the
real party-in-interest. A representative may be a
trustee of an express trust, a guardian, an
executor or administrator, or a party authorized
by law or these Rules. An agent acting in his
own name and for the benefit of an undisclosed
principal may sue or be sued without joining the
principal except when the contract involves
things belonging to the principal. (Emphasis
supplied) Thus an agent may sue or be sued
solely in its own name and without joining the
principal when the following elements concur:
(1) the agent acted in his own name during the
transaction; (2) the agent acted for the benefit
of an undisclosed principal; and (3) the
transaction did not involve the property of the
principal.
The power to collect and receive payments on
behalf of the principal is an ordinary act of
administration covered by the general powers
of an agent. On the other hand, the filing of
suits is an act of strict dominion. Under Article
1878(15) of the Civil Code, a duly appointed
agent has no power to exercise any act of strict
dominion on behalf of the principal unless
authorized by a special power of attorney. An
agent’s authority to file suit cannot be inferred
from his authority to collect or receive
payments; the grant of special powers cannot
be presumed from the grant of general powers.
Moreover, the authority to exercise special
powers must be duly established by evidence,
even though it need not be in writing.
WHEREFORE, premises considered, we DENY
the petition for lack of merit.

Saludo vs. PNB, August 20, 2018
Facts: This is a petition for review on certiorari.
SAFA Law Office entered into a Contract of
Lease with PNB. After the expiration of the COL,
SAFA continued to occupy the leased premises
until February 2005, but discontinued paying its
monthly rental obligations after December
2002. PNB made its final demand to SAFA for
payment of its rent in the amount of P25, 587,
838. 09. Saludo, in his capacity as managing
partner of SAFA, filed an amended complaint
for accounting and/or recomputation of unpaid
rentals and damages in relation to the COL. PNB
filed a motion to include an indispensable party
as plaintiff, praying that Saludo be ordered to
amend a new his complaint to include SAFA Law
Office as principal plaintiff. PNB filed its Answer
by way of compulsory counterclaim, it argued
that, as a matter of right and equity, it can claim
that amount from SAFA in solidum with Saludo.
Saludo filed a MD arguing that SAFA is neither
legal entity nor party litigant. As it is only a
relationship or association of lawyers in the
practice of law and a single proprietorship may
only be sued through its owner or proprietor,
no valid counterclaims may be asserted against
it.
RTC granted the MD and issued an Omnibus
Order denying the motion to include an
indispensable party as plaintiff.
On appeal, the CA partially granted the petition.
It ruled that SAFA is not an indispensable party
since it is not a legal entity, but a mere
relationship or association for particular
purpose.
ISSUE: WON SAFA Law Office is neither an
indispensable party nor a legal entity
DECISION: SAFA is a juridical entity and the real
party-in-interest in suit filed with the RTC by
Saludo against PNB. Article 1767 of the Civil
Code provides that by a contract of partnership,
two or more persons bind themselves to
contribute money, property, or industry to a
common fund, with the intention of dividing the
profits among themselves. Two or more
persons may also form a partnership for the
exercise of a profession. Under Article 1771, a
partnership may be constituted in any form,
except where immovable property or real rights
are contributed hereto, in which case a public
instrument shall be necessary. Article 1784, on
the other hand, provides that a partnership
begins from the moment of the execution of the
contract, unless it is otherwise stipulated.
Here, absent evidence of an earlier agreement,
SAFA Law Office was constituted as a
partnership at the time its partners signed the
Articles of Partnership wherein they bound
themselves to establish a partnership for the
practice of law, contribute capital and industry
for the purpose, and receive compensation and
benefits in the course of its operation. The
subsequent registration of the Articles of
Partnership with the SEC, on the other hand,
was made in compliance with Article 1 772 of
the Civil Code, since the initial capital of the
partnership was PS00,000.00.
The foregoing evinces the parties' intention to
entirely shift any liability that may be incurred
by SAFA Law Office in the course of its
operation to Saludo, who shall also receive all
the remaining assets of the firm upon its
dissolution. This MOU, however, does not serve
to convert SAFA Law Office into a sole
proprietorship. As discussed, SAFA Law Office
was manifestly established as a partnership
based on the Articles of Partnership. The MOU,
from its tenor, reinforces this fact. It did not
change the nature of the organization of SAFA
Law Office but only excused the industrial
partners from liability.
Having settled that SAFA Law Office is a juridical decisions by substituting as party-plaintiff the
person, we hold that it is also the real party- real party-in-interest.
interest in the case filed by Saludo against PNB.

SAFA Law Office is the party that would be

benefited or injured by the judgment in the suit
before the RTC. Particularly, it is the party
interested in the accounting and/or
recomputation of unpaid rentals and damages
in relation to the contract of lease. It is also the
party that would be liable for payment to PNB
of overdue rentals, if that claim would be
proven. This is because it is the one that
entered into the contract oflease with PNB. As
an entity possessed of a juridical personality, it
has concomitant rights and obligations with
respect to the transactions it enters into.
Equally important, the general rule under
Article 1816 of the Civil Code is that partnership
assets are primarily liable for the contracts
entered into in the name of the partnership and
by a person authorized to act on its behalf. All
partners, including industrial ones, are only
liable pro rata with all their property after all
the partnership assets have been exhausted

In this case, there is likewise no showing that

SAP A Law Office, as a separate juridical entity,
is being used for fraudulent, unfair, or illegal
purposes. Hence, its partners cannot be held
primarily liable for the obligations of the
partnership. As it was SAFA Law Office that
entered into a contract of lease with
respondent PNB, it should also be impleaded in
any litigation concerning that contract.

Accordingly, the complaint filed by Saludo

should be amended to include SAP A Law Office
as plaintiff. Section 11,79 Rule 3 of the Rules of
Court gives power to the court to add a party to
the case on its own initiative at any stage of the
action and on such terms as are just. We have
also held in several cases80 that the court has
full powers, apart from that power and
authority which are inherent, to amend
processes, pleadings, proceedings, and

Cameron Granville Asset Mgt. vs Chua,
September 16, 2016
FACTS: This is a petition for review on certiorari
under Rule 45
Respondents obtained a loan from Metrobank
in the amount of 4M secured by a REM. For
failure to pay the loan, Metrobank sought
extrajudicial foreclosure of the REM. Seeking to
stop the public auction, respondents filed a
TRO. The RTC issued a TRO. However, upon its
expiration, Metrobank scheduled another
public auction. An order was issued by the RTC
directing Metrobank to reschedule the intended
sale to a da date after the resolution of the
application for preliminary injunction (PI).
However, the order was allegedly received after
the public auction. The application for PI by
herein respondents was dismissed for its
mootness. On appeal, the CA reversed the RTC
and remanded the case back to the RTC for
reraffling.
Respondents then filed a motion to admit
amended complaint with attanched amended
verified complaint for annulment of foreclosure
or mortgage, declaration of nullity of certificate
of sale, and injuction. It alleged that Metrobank
sold to Asia Recovery Corporation its credit
against respondents including all rights,
interests, claims, and causes of action arising
out of the load and mortgage agreements
between Metrobank and respondents. ARC in
trun assigned its credit to herein petitioner.
Petitioner prayed that it be substituted in lieu of
Metrobank in proceedings before the RTC. The
motion was opposed by respondents. They
alleged that they were entitled to a full
disclosure of the details of the sale, as well as
the transfer and assignment of their debt
pursuant to their right of redemption under the
SPV Act and Article 1634 of the Civil Code.
The RTC granted the motion and ordered
petitioner to be joined as party-defendant, but
without dropping Metrobank.
On appeal, CA reversed the RTC. It ruled that if
it was true that Metrobank had divested itself
of any interest in respondents’ debt, then the
trial court should have forthwith ordered the
bank’s exclusion from the proceedings. At
bottom, the CA ruled that petitioner could not
substitute for Metrobank in the proceedings
before the trial court without first disclosing the
consideration paid by petitioner for the transfer
of interest.
ISSUE: WON petitioner may be joined as a
party-defendant
DECISION: YES. CGAM may be joined as a party-
defendant.
According to the CA, this statement allowed for
a “provisional” joinder/substitution of parties. It
is difficult to fathom how the above statement
of the trial court could have constituted grave
abuse of discretion when the ruling was in
accordance with Section 11, Rule 3 of the Rules
of Court. The rule provides that parties may be
dropped or added by order of the court on
motion of any party or on the court’s own
initiative at any stage of the action and on such
terms as are just. For the CA to say that, as
between Metrobank and petitioner, “only one
of them is clothed with the personality to
actively participate in the proceedings below” is
to show a regrettable lack of understanding of
the rules and an unwarranted restriction of the
trial court’s discretion.
The rationale for allowing parties to join in a
proceeding that delves on a common question
of law or fact concerning them is trial
convenience; i.e., to save the parties
unnecessary work, trouble and expense. In
order to meet the requirements of justice and
convenience, the rule on the joinder of parties
is construed with considerable flexibility. Hence,
courts are given broad discretion in determining
who may properly be joined in a proceeding.
The rules also provide that in case of a transfer
of interest, the court, upon motion, may direct
the person to whom the interest is transferred
to be substituted in the action or joined with
the original party.

Indeed, a transferee pendente lite is a proper

party that stands exactly in the shoes of the
transferor, the original party. Transferees are
bound by the proceedings and judgment in the
case, such that there is no need for them to be
included or impleaded by name. We have even
gone further and said that the transferee is
joined or substituted in the pending action by
operation of law from the exact moment when
the transfer of interest is perfected between
the original party and the transferee.