ASSIGNMENT #1 (ATP)

JARANTILLA, JR. vs. JARANTILLA

636 SCRA 299, G.R. No. 154486, December 1, 2010, Leonardo-De Castro, J.: p

FACTS:

Petitioner herein is one of the defendants in a case instituted by Antonieta.

The present case stems from the said case/complaint filed by Antonieta Jarantilla
against her siblings (Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla,
Jr., Doroteo Jarantilla and Tomas Jarantilla,) for the accounting of the assets and
income of the co-ownership, for its partition and the delivery of her share corresponding
to eight percent (8%), and for damages.

Antonieta claimed that in 1946, she had entered into an agreement with the defendants
to engage in business evidenced by "Acknowledgement of Participating Capital”.

Antonieta also alleged that she had helped in the management of the business they co-
owned without receiving any salary. Antonieta further claimed co-ownership of certain
properties (the subject real properties) in the name of the defendants since the only way
the defendants could have purchased these properties were through the partnership as
they had no other source of income.

On the other hand, The respondents did not deny the existence and validity of the
"Acknowledgement of Participating Capital" and they used it as evidence to support
their claim that Antonieta’s 8% share was limited to the businesses enumerated in the
said document. Further, The respondents denied using the partnership’s income to
purchase the subject real properties.

During the course of the trial at the RTC, petitioner herein Federico Jarantilla, Jr., who
was one of the original defendants, entered into a compromise agreement with
Antonieta Jarantilla wherein he supported Antonieta’s claims and asserted that he too
was entitled to six percent (6%) of the supposed partnership like Antonieta.

The RTC ruled in favor of Antonieta Jarantilla, giving her an 8% share in the three
businesses listed therein and in the other businesses and real properties of the
respondents as they had supposedly acquired these through funds from the
partnership.

Court of Appeals, on the other hand, agreed with the RTC as to Antonieta’s 8% share
only in the business enumerated in the Acknowledgement of Participating Capital, but
not as to her share in the other corporations and real properties. 

Antonieta Jarantilla filed before SC her own petition for review on certiorari, but
dismissed on for failure to file the appeal.

Petitioner herein filed before this court petition for review on certiorari. Petitioner asserts
that he was in a partnership with the respondents, (they are his aunts and uncles),
as evidenced by the Acknowledgement of Participating Capital the Remotigue spouses
executed in 1957. He contends that from this partnership, several other corporations
and businesses were established and several real properties were acquired. 

In this petition, he is essentially asking for his 6% share in the subject real properties.
He is relying on the Acknowledgement of Participating Capital, on his own testimony,
and Antonieta Jarantilla’s testimony to support this contention.
ISSUE: Whether or not the partnership subject of the Acknowledgement of Participating
Capital funded the subject real properties?

HELD:

The SC held that there was no error in the ruling of CA.

Under Article 1767 of the Civil Code, there are two essential elements in a contract of
partnership: 

(a) an agreement to contribute money, property or industry to a common fund; and (

b) intent to divide the profits among the contracting parties.

In the case at bar, the first element is present as well as the second.  It is not denied that
all the parties in this case have agreed to contribute capital to a common fund to be able
to later on share its profits as evidence to prove such partnership is the
Acknowledgement of Participating Capital.

The petitioner himself claims his share to be 6%, as stated in the Acknowledgement of
Participating Capital. However, petitioner fails to realize that this document specifically
enumerated the businesses covered by the partnership: Manila Athletic Supply,
Remotigue Trading in Iloilo City and Remotigue Trading in Cotabato City.

Since there was a clear agreement that the capital the partners contributed went to the
three businesses, then there is no reason to deviate from such agreement and go
beyond the stipulations in the document.

There is no evidence that the subject real properties were assets of the partnership
referred to in the Acknowledgement of Participating Capital. As such, his shares should
be only limited to the businesses enumerated in said document and to exclude the
subject real properties.

Petition denied.

FRANCISCO REYES v. ADOLFO REYES et. Al

Doctrine: Article 1767; Article 1772; Joint Venture is a form of Partnership.

Parties:
Francisco Reyes – Owner of Reyes Barbeque / petitioner
Adolfo, Ramon, and Carlos – Brothers ; Plaintiff / Respondent

Contention:
Frank - He claimed that the intent, from the start, was to form a franchising
corporation with his brothers, not a partnership

Brothers -
Nature: Plaintiff (brothers) filed an action demanding an accounting of the business to
determine any share in the profits that may be due them and filed a Complaint for
Damages that judgment be rendered restoring management, control, and
administration of the franchising business to them.

Ruling:
RTC – dismissed
CA- In favor of the Brother (Respondent/ plaintiff)
SC- Ruled in favor of the brother ( There is Partnership) remanded the case to RTC ;
Affirmed the conclusion of CA.

FACTS:

Petitioner Francisco R. Reyes (Frank) established “Reyes Barbeque” he registered

as sole proprietorship.

Around Three years after, Frank needed risk capital to expand the business and
allegedly offered his brothers, Adolfo, Ramon, and Carlos, all surnamed Reyes
(respondents), to form a partnership for the franchising arm of Reyes Barbecue
which they agreed and provided Frank with the capital needed for the expansion.

Each of the brothers contributed for the Franshising arm of Reyes Barbeque.
Adolfo and Carlos each contributed P100,000.00 in exchange for a 24% and 15%
share, respectively, in the alleged partnership. Ramon contributed a desktop
computer valued at P39,000.00 for a 25% share. For Frank, it was agreed that his
contribution will be the "Reyes Barbecue" trademark registered in his name

Frank denied proposing to form a partnership with his brothers. He claimed that the
intent, from the start, was to form a franchising corporation with his brothers,
not a partnership, and that the contributions his brothers made were really
subscription payments to the franchising corporation. However, He allegedly decided to
abandon the plan because of disagreements between them as to ownership structures,
capitalization requirements, lack of consensus to the royalty to be paid to him for using
the trademark “Reyes Barbeque”.

Thereafter, his brothers - Adolfo, Carlos, and Ramon, through counsel, sent a
demand letter dated May 8, 2008 to Frank, demanding an accounting of the business
to determine any share in the profits that may be due them.

They alleged that Frank breached his legal obligations to the partnership and files a
complaint for Damages with prayer for TRO against Petitioner.

RTC dismissed the complain on the ground that no Partnership was formed or finalized.

CA REINSTATED the case is REMANDED to Branch 216, Regional Trial Court of

Quezon City, which is DIRECTED sc hedule the conduct of an accounting of
the profits of the "Reyes Barbecue" business among the parties.

CA ruled in favor of the respondents, the CA held that even if no partnership

agreement was formalized. a contract for a joint venture was perfected and
actually executed the time Frank received the material contributions of his siblings
and allowed them to actively participate in the business.

ISSUE:

Whether or not a Partnership was formed?

HELD:

The SC ruled in the affirmative.

A declaration by CA that there is no partnership is inconsistent with the finding
that-a joint venture agreement was entered into by the parties. Under Philippine
law, a joint venture is a form of partnership and should thus be governed by
the law of partnerships.

Moreover, under Art. 1767. By the 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.

The moment the contributions of Adolfo, Ramon, and Carlos were received by
Frank and the fact that each carried out their respective tasks in the
management of the business is conclusive that a partnership was created.

Although the registration of the franchising arm of Reyes Barbecue did not
materialize, numerous franchises were opened through the contributions and
efforts of all the Reyes brothers.

Even in case of failure to comply with the requirements of Article 1772, with
reference to the execution of a public instrument and registration with the
Securities and Exchange Commission (SEC) in cases when the partnership capital
exceeds P3,000.00, the partnership acquires juridical personality.

Sc remanded the case to the RTC to determine the following:

(1) the portion of the profits derived from the franchising business that may be
attributed the Plaintiff’s contribution only.
(2) the portion of the profits derived from the franchising business of Reyes
Barbecue that may be attributed to Francisco Reyes' contribution only.

SANTIAGO v. SPS. GARCIA

[ G.R. No. 228356, March 09, 2020 ]

FACTS:

Petitioner Merian B. Santiago (Merian) invested money in Edna’s (Respondent) lending

business with a promise of high returns in terms of monthly interest ranging from 5% to
8%. The parties agreed that monthly interest shall be remitted by Edna to Merian and
that the principal amount invested shall be returned to Merian upon demand, however,
this agreement was not in writing.

For about three years after,  Edna defaulted in remitting to Merian the interest due from
said investments despite demands. Consequently, Merian, through her lawyer, sent a
letter dated January 20, 2004 to Edna demanding for the return of Merian's total
investment of P1,569,000.00.

Merian filed the complaint a quo on February 12, 2004, for sum of money with prayer for
the issuance of a writ of preliminary attachment against spouses Edna L. Garcia and
Bayani Garcia (spouses Garcia).

The Regional Trial Court (RTC) rendered its decision finding that a partnership was
formed between Merian and Edna – the former as capitalist partner and the latter as
industrial partner.  As such, the RTC dismissed Merian's complaint, and further ordered
the payment of moral damages, attorney's fees, and costs of suit in favor of spouses
Garcia.
When Merian's motion for reconsideration was denied, she appealed to the CA.

The CA held that the contractual relation between the parties was neither a partnership
nor a contract of loan but was an investment that entailed business risk.

ISSUE: WON the contractual relation between the parties is a partnership? NO.

HELD:

The court rules in Negative.

Under the Civil code, by the 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. 

Partnership is essentially a result of an agreement or a contract, either express or

implied, oral or in writing, between two or more persons. 

In the case at bar, there was neither allegation nor proof that Merian and Edna agreed
to enter into a partnership for purposes of carrying out the lending business.

There was likewise no agreement for the sharing of profits, only that Merian expects to
receive remittance of monthly interest from the amount she invested.

At any rate, the receipt by a person of a share of the profits, or of a payment of a

contingent amount in case of profits earned, is not a conclusive evidence of
partnership. 

Article (Art.) 1769(3) of the Civil Code provides that "the sharing of gross returns does
not of itself establish a partnership, whether or not the persons sharing them have a
joint or common right or interest in any property from which the returns are derived" .
There must be an unmistakable intention to form a partnership .

Most importantly, the facts do not disclose that there is mutual agency between Merian
and Edna, that is, neither party alleged that she can bind by her acts the other, and can
be bound by the acts of the other in the ordinary course of business. The facts of the
instant case do not support the conclusion that the parties entered into a contract of
loan either

The facts therefore demonstrate that Edna was engaged in the business of lending and
that she solicited funds from Merian which Edna then used to grant loans to other
persons. 

In the case, the parties' contemporaneous and subsequent acts reveal their intent to
enter into an investment contract in a lending business and not an intention to form a
partnership.As such, No partnership was formed.

Court of Appeals are REVERSED and SET ASIDE. Spouses Edna L. Garcia and

Bayani Garcia are ORDERED to PAY Merian B. Santiago the principal amount of One
Million Five Hundred Forty-Nine Thousand Pesos (P1,549,000.00).
 ESTANISLAO V. CA

SUMMARY: Estanislao siblings owned a Shell Gas Station. They designated Petitioner
Eligio to operate and manage the gas station since Shell had a policy that there must
only one dealer. Respondents filed a complaint praying for their shares and the
execution of a public document embodying the terms of the partnership. The SC ruled in
favor of the private respondents since the sole proprietorship was only to comply with
Shell’s policy and the acts of the parties clearly indicate that it was their intention to
divide the profits amongst themselves.

DOCTRINE:
There is a partnership when parties bind themselves to contribute money to a common
fund with the intention of dividing the profits among themselves

FACTS:

1. Petitioner and private respondents are brothers and sisters who are co-owners of
certain lots at the corner of Annapolis and Aurora Blvd which were then being
leased to Shell.
2. They agreed to open and operate a gas station with an initial investment of P
15,000.00 to be taken from the advance rentals due to them from SHELL
3. A joint affidavit was executed by them
a.  They agreed to help their brother, petitioner EligioEstanislao Jr. , by
allowing him to operate and manage the gasoline service station of the
family.
b. They negotiated with SHELL and in order not to run counter to the
company's policy of appointing only one dealer, it was agreed that
petitioner would apply for the dealership.
c. Respondent Remedios helped in managing the business with petitioner
from May 3, 1966 up to February 16, 1967.
4. the parties entered into an Additional Cash Pledge Agreement with SHELL
wherein it was reiterated that the P 15,000.00 advance rental shall be deposited
with SHELL with a proviso that said agreement "cancels and supersedes the
Joint Affidavit dated 11 April 1966 executed by the co-owners.
5. For sometime, the petitioner submitted financial statements to private
respondents, but therafter petitioner failed to render subsequent accounting.
6. a demand was made on petitioner to render an accounting of the profits
7. private respondents filed a complaint against petitioner praying among others
that the latter be ordered:
a. to execute a public document embodying all the provisions of the
partnership agreement as provided in Article 1771, NCC
b. to render a formal accounting
c. to pay the plaintiffs their lawful shares in an amount of no less than P
l50,000.00 with interest
8. TC - dismissed the complaint
9. MR- previous decision set aside
10. CA affirmed

ISSUES/HELD
1. WN the CA erred in declaring that a partnership was established by and among
the petitioner and the private respondents as regards the ownership and or
operation of the gasoline service station business. – NO
2. w/n the cash

RULE:
Art. 1767. By the 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.
RATIO:

1. Petitioner relies heavily on the provisions of the Joint Affidavit of and the
Additional Cash Pledge Agreement
a. In the Joint Affidavit, it is clearly stipulated by the parties that the P
15,000.00 advance rental due to them from SHELL shall augment their
"capital investment" in the operation of the gasoline station
b. In the "Additional Cash Pledge Agreement", the private respondents and
petitioners assigned to SHELL the monthly rentals due them until such
time that the monthly rentals accumulated equal P 15,000.00 which
private respondents agree to be a cash deposit of petitioner in favor of
SHELL to increase his credit limit as dealer.
c. it provided therein that "This agreement, therefore, cancels and
supersedes the Joint Affidavit dated 11 April 1966 executed by the CO-
OWNERS."
2. Petitioner contends that because of the said stipulation cancelling and
superseding that previous Joint Affidavit, whatever partnership agreement there
was in said previous agreement had thereby been abrogated. SC finds no merit
in this argument.
a. Said cancelling provision was necessary for the Joint Affidavit speaks of P
15,000.00 advance rentals starting May 25, 1966 while the latter
agreement also refers to advance rentals of the same amount starting
May 24, 1966.
b. There is, therefore, a duplication of reference to the P 15,000.00 hence
the need to provide in the subsequent document that it "cancels and
supersedes" the previous one.
c. It is true that the Agrreement speaks of petitioner as the sole dealer, but
this is as it should be for in the latter document SHELL was a signatory
and it would be against its policy if in the agreement it should be stated
that the business is a partnership with private respondents and not a sole
proprietorship of petitioner.
3. Other evidence in the record shows that there was in fact such partnership
agreement between the parties.
a. Petitioner submitted to private respondents periodic accounting of the
business.  
b. Petitioner gave a written authority to private respondent Remedies
Estanislao, his sister, to examine and audit the books of their "common
business' amingnegosyo). 
c. Respondent Remedios assisted in the running of the business.
d. There is no doubt that the parties hereto formed a partnership when they
bound themselves to contribute money to a common fund with the
intention of dividing the profits among themselves (Art. 1767)
4. The sole dealership by the petitioner and the issuance of all government permits
and licenses in the name of petitioner was in compliance with the afore-stated
policy of SHELL and the understanding of the parties of having only one dealer of
the SHELL products.
 G.R. No. 159333             July 31, 2006
ARSENIO T. MENDIOLA, petitioner,  vs.
COURT OF APPEALS, NATIONAL LABOR RELATIONS COMMISSION,
PACIFIC FOREST RESOURCES, PHILS., INC. and/or CELLMARK
AB, respondents.

Facts:
Petitioner Mendiola (ATM) entered into a Side Agreement with Pacfor (USA) who
will set up a representative office in the Philippines. They named said office as
PacforPhils in which petitioner is president. In the agreement, petitioner’s base
salary and the company’s overhead expenditures shall be borne by the
representative office and shall be funded by Pacfor/ATM being equally owned on
50-50 equity by ATM and Pacfor-USA.

The Side Agreement was later amended through a Revised Operating and Profit
Sharing Agreement where petitioner’s salary was increased. However, both
agreements show that the operational expenses will be borne by the
representative office and funded by all parties “as equal partners,” while the
profits and commissions will be shared among them.

Years later, petitioner wrote Pacfor’s VP for Asia seeking confirmation of his 50%
equity of PacforPhils to which Pacfor’s President replied that petitioner is not a
part-owner, his office being just a representative office, a “theoretical company
with the purpose of dividing the income 50-50.” He even stressed that the
petitioner knew of this arrangement from beginning, having been the one to
propose to them the setting up of a representative office, instead of a branch
office, to save on taxes.

Issue:
Whether or not a partnership or co-ownership exists between the parties.

Held: NO.
Industrial partner- one who furnishes labor or industry as contribution.

Petitioner is an employee of Pacfor and no partnership or co-ownership exists

between the parties.

In a partnership, the members become co-owners of what is contributed to the

firm capital and of all property that may be acquired thereby and through the
efforts of the members.
The property or stock of the partnership forms a community of goods, a common
fund, in which each party has a proprietary interest. In fact, the New Civil Code
regards a partner as a co-owner of specific partnership property.

Each partner possesses a joint interest in the whole of partnership property. If the
relation does not have this feature, it is not one of partnership. 

This essential element, the community of interest, or co-ownership of, or joint

interest in partnership property is absent in the relations between petitioner and
private respondent Pacfor.
Petitioner is not a part-owner of PacforPhils. Pacfor's President established this
fact when he said that PacforPhils. is simply a "theoretical company" for the
purpose of dividing the income 50-50.

He stressed that petitioner knew of this arrangement from the very start, having
been the one to propose to private respondent Pacfor the setting up of a
representative office, and "not a branch office" in the Philippines to save on
taxes. Thus, the parties in this case, merely shared profits. This alone does not
make a partnership.

Besides, a corporation cannot become a member of a partnership in the absence

of express authorization by statute or charter. This doctrine is based on the
following considerations: (1) that the mutual agency between the partners,
whereby the corporation would be bound by the acts of persons who are not its
duly appointed and authorized agents and officers, would be inconsistent with the
policy of the law that the corporation shall manage its own affairs separately and
exclusively; and, (2) that such an arrangement would improperly allow corporate
property to become subject to risks not contemplated by the stockholders when
they originally invested in the corporation. No such authorization has been
proved in the case at bar.

LIM TONG LIM vs. PHILIPPINE FISHING GEAR INDUSTRIES, INC.

317 SCRA 728, G.R. No. 136448, Nov. 3, 1999, Panganiban, J.:p

FACTS: Chua and Yao, on behalf of “Ocean Quest Fishing Corporation” entered
into a contract with Philippine Fishing Gears Inc. for the purchase of various
fishing nets, without Lim, to whom they were engaged in a business venture with,
not being a signatory to the agreement.

Ultimately, however, they were unable to fully pay for the fishing nets. Thus, the
respondent filed for a writ of attachment against the three since Ocean Quest
Fishing Corporation was a nonexistent corporation.

Lim, however, contested that he should not be liable since there was no
partnership formed.

The court, however, averred that there was a partnership formed as revealed by
a compromise agreement executed by the three which indicates that a loan was
executed between the three and Lim’s brother to purchase boats and fishing nets
with the intention to pay the loan with the proceeds of the sale of the boats and to
divide equally the excess among the three. 

Lim, nevertheless, maintains that he was in fact a lessor on the basis of a

contract of lease executed between him and Chua and Yao, and that he was the
owner of the boats as shown by the registration papers.

**(BOOK) It is not uncommon to register the properties acquired from a

loan in the name of the person the lender trusts, who in this
case is the petitioner himself. After all, he is the brother of the
creditor, Jesus Lim.

CA affirmed.
ISSUE: Whether or not by their acts, Lim, Chua, and Yao are deemed to have
entered into a partnership.

HELD: Yes.

The Court held that a partnership was indeed formed on the basis of the
compromise agreement because
1) the three are engaged in a fishing business, which they started by buying
boats financed by a loan;
2) the purchase and repair of the boats were financed with borrowed money.

The Court stresses that the contribution to such fund need not be cash or fixed
assets, but may be intangible like credit or industry.

Furthermore, the argument of Lim as being merely a lessor cannot be sustained

for having defied logic since no lessor would sell his own property to pay a debt
executed by another.

Thus, the implication is that there was an existing partnership between the three,
notwithstanding the fact that the boat was named only after Lim.

The boat is said to be attributed to the partnership, since it is not uncommon to

register properties acquired from the loan in the name of the person the lender
trusts which, in this case, is the lender’s brother. 

YULO V. YANG CHIAO SENG

FACTS:
Yang Chiao Seng proposed to form a partnership with Rosario Yulo to run and
operate a theatre on the premises occupied by Cine Oro, Plaza Sta. Cruz,
Manila,

the principal conditions of the offer being

(1) Yang guarantees Yulo a monthly participation of P3,000
(2) partnership shall be for a period of 2 years and 6 months with the condition
that if the land is expropriated, rendered impracticable for business, owner
constructs a permanent building, then Yulo’s right to lease and partnership even
if period agreed upon has not yet expired;
(3) Yulo is authorized to personally conduct business in the lobby of the building;
and (4) after Dec 31, 1947, all improvements placed by partnership shall belong
to Yulo
but if partnership is terminated before lapse of 1 and ½ years, Yang shall
have right to remove improvements. Parties established, “Yang and Co.
Ltd.”, to exist from July 1, 1945 – Dec 31, 1947.

In June 1946, they executed a supplementary agreement extending the

partnership for 3 years beginning Jan 1, 1948 to Dec 31, 1950.
The land on which the theater was constructed was leased by Yulo from owners,
Emilia Carrion and Maria Carrion Santa Marina for an indefinite period but that
after 1 year, such lease may be cancelled by either party upon 90-day notice.

In Apr 1949, the owners notified Yulo of their desire to cancel the lease contract
come July.

Yulo and husband brought a civil action to declare the lease for a indefinite
period. Owners brought their own civil action for ejectment upon Yulo and Yang.

CFI: Two cases were heard jointly; Complaint of Yulo and Yang dismissed
declaring contract of lease terminated.

CA: Affirmed the judgment.

In 1950, Yulo demanded from Yang her share in the profits of the business.

Yang answered saying he had to suspend payment because of pending

ejectment suit.

Yulo filed present action in 1954, alleging the existence of a partnership between
them and that Yang has refused to pay her shares.

Yang’s Position: The real agreement between plaintiff and defendant was one
of lease and not of partnership; that the partnership was adopted as a subterfuge
to get around the prohibition contained in the contract of lease between the
owners and the plaintiff against the sublease of the property.

Trial Court: Dismissal. It is not true that a partnership was created between them
because defendant has not actually contributed the sum mentioned in the
Articles of Partnership or any other amount. The agreement is a lease because
plaintiff didn’t share either in the profits or in the losses of the business as
required by Art 1769 (CC) and because plaintiff was granted a “guaranteed
participation” in the profits belies the supposed existence of a partnership.

Issue: Was the agreement a contract a lease or a partnership?

Ruling: Dismissal.

The agreement was a sublease not a partnership.

The following are the requisites of partnership:

(1) two or more persons who bind themselves to contribute money, property
or industry to a common fund;
(2) the intention on the part of the partners to divide the profits among
themselves (Article 1761, CC)

Plaintiff did not furnish the supposed P20,000 capital nor did she furnish any help
or intervention in the management of the theatre.

Neither has she demanded from defendant any accounting of the expenses and
earnings of the business. She was absolutely silent with respect to any of the
acts that a partner should have done; all she did was to receive her share of
P3,000 a month which cannot be interpreted in any manner than a payment for
the use of premises which she had leased from the owners.
 ALFREDO N. AGUILA, JR, petitioner, vs.
HONORABLE COURT OF APPEALS and
FELICIDAD S. VDA. DE ABROGAR, respondents.

Facts:
Alfredo N. Aguilar, Jr. (petitioner) is the manager of A.C. Aguila & Sons, Co., a
partnership engaged in lending activities.
Felicidad S. Vda. de Abrogar (private respondent) and her late husband, Ruben
M. Abrogar, were the registered owners of a house and lot, covered by Transfer
Certificate of Title No. 195101, in Marikina, Metro Manila. On April 18, 1991,
private respondent, with the consent of her late husband, and A.C. Aguila &
Sons, Co., represented by petitioner, entered into a Memorandum of Agreement
which provided that A.C. Aguila & Sons, Co. shall buy the property from private
respondent for P200,000 subject to an option to repurchase for P230,000 (valid
for 90 days), etc.
On the same day, 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
P200,000,00.
In a special power of attorney dated the same day, April 18, 1991, 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. Pursuant to the special power
of attorney mentioned above, petitioner caused 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.
Private respondent then received a letter dated August 10, 1991 from Atty.
Lamberto C. Nanquil, counsel for A.C. Aguila & Sons, Co., demanding that she
vacate the premises within 15 days after receipt of the letter and surrender its
possession peacefully to A.C. Aguila & Sons, Co.
Otherwise, the latter would bring the appropriate action in court. Upon the refusal
of private respondent to vacate the subject premises, A.C. Aguila & Sons, Co.
filed an ejectment case against her in the Metropolitan Trial Court, Branch 76,
Marikina, Metro Manila. MeTC, Marikina, MM (April 3, 1992): Ruled in favor of
A.C. Aguila & Sons, Co.
Private respondent appealed to RTC Pasig, CA, and then SC but she still lost.
Private respondent then filed a petition for declaration of nullity of a deed of sale
filed by Felicidad S. Vda. de Abrogar against Alfredo N. Aguila, Jr. 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,MM(April11,1995):Dismissed.
•CA(November29,1990):Reversed (in favor of private respondent) ruling of the
RTC. Hence, this petition for review on certiorari.

Petitioner now contends that:

(1) he is not the real party in interest but A.C. Aguila & Co., against which this
case should
have been brought;
(2) the judgment in the ejectment case is a bar to the filing of the complaint for
declaration of nullity of a deed of sale in this case; and
(3) the contract between A.C.bAguila & Sons, Co. and private respondent is a
pacto de retrobsale and not an equitable mortgage as held by the
appellatencourt.

Issue: Whether the real party in interest is A.C. Aguila & Co. and not petitioner. –
YES

Ratio:
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, private respondent 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. and the Memorandum of Agreement was executed between private
respondent, with the consent of her late husband, and A.C. Aguila & Sons, Co.,
represented by petitioner.
Hence, 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