SALUDO VS.

PNB
G.R.No. 193138, Aug. 20, 2018

SUMMARY
: SC ordered the impleading of SAFA Law Office as the real party-in-interest involving aContract of Lease between said law
office and PNB.

DOCTRINE
: Article 1767 of the Civil Code provides that by a contract of partnership, two or morepersons bind themselves to contribute
money, property, or industry to a common fund, with theintention of dividing the profits among themselves.
Two or more persons may also form a partnershipfor 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 thereto, in which case a publicinstrument shall be necessary. Article 1784, on the other hand, provides that a
partnership begins fromthe moment of the execution of the contract, unless it is otherwise stipulated

FACTS:
On June 11, 1998, SAFA Law Office entered into a Contract of Lease with PNB, whereby the latter
agreed to lease the 2nd floor of the PNB Financial Center Building in QC for a period of 3 years and for a
monthly rental fee of P189,600.00. The rental fee is subject to a yearly escalation rate of 10%.
SAFA Law Office then occupied the leased premises and paid advance rental fees and
security deposit in the total amount of  P1,137,600.00.On August 2001, the Contract of Lease
expired. According to PNB, SAFA Law Office continued to
occupyt h e   l e a s e d   p r e m i s e s   u n t i l   F e b r u a r y   2 0 0 5 ,   b u t   d i s c o n t i n u e d   p a y i n g   i t s   m o n t h l
y   r e n t a l   o b l i g a t i o n s   a f t e r   December 2002.
 
Consequently, PNB sent 2 demand letters demanding the payment of unpaid rent. In February 2005,
SAFA Law Office vacated the leased premises.
 
PNB sent another demand letter. In response, SAFA Law Office proposed a settlement. PNB,
however, declined the settlement proposal statingthat it was not amenable to the settlement's terms. On
September 1, 2006, Petitioner Aniceto Saludo, Jr, in his capacity as managing partner of
SAFA Law Office, filed an amended complaint for accounting and/or recomputation of unpaid
rentals and damages against PNB in relation to the Contract of Lease. PNB filed a motion to include
SAFA Law Office as principal plaintiff. PNB argued that the lessee in the Contract of Lease is not Saludo
but SAFA Law Office, and that Saludo merely signed the Contract of Lease as the managing partner of
the law firm. Thus, SAFA Law Office must be joined as a plaintiff in the complaint because it is considered
an indispensable party under Section7, Rule 3 of the Rules of Court. Saludo filed his motion to dismiss
counterclaims arguing that SAFA Law Office is neither a legal entity nor p a r t y l i t i g a n t . A s i t i s o n l y
a relationship or association of lawyers in the practice of law and a single
proprietorship which may only be sued through its owner or proprietor, no valid
counterclaims may be asserted against it.

The RTC issued an Omnibus Order denying PNB's motion to include an indispensable party as plaintiff
and
granting Saludo's motion to dismiss counterclaims.  It held that SAFA Law Offices 
i s   a   m e r e   s i n g l e proprietorship and not a commercial and business partnership. PNB has even
admitted that the SAFA Law Office, being a partnership in the practice of law, is a non-legal entity. Being
a non-legal entity, it cannot be aproper party, and therefore, it cannot sue or be sued.
CA Ruling
The CA held that SAFA Law office is not an indispensable party nor is it a legal entity. A partnership for
thepractice of law is not a legal entity but a mere relationship or association for a particular
purpose. Thus,SAFA Law Office cannot file an action in court. Nevertheless, while SAFA Law Office is
not a legal entity, itcan still be sued under Section 15,Rule 3 of the Rules of Court considering that it
entered into the Contractof Lease with PNB. Furthermore, according to the CA, the presence of SAFA
Law Office is required for the granting of complete relief in the determination of PNB's counterclaim. The
court must, therefore, order it tobe brought in since jurisdiction over it can be obtained pursuant to Section
12, Rule 6 of the Rules of Court.

ISSUES AND RULING:

1. WoN SAFA LAW OFFICE IS A SOLE PROPRIETORSHIP.- NO, it is a partnership. SAFA Law Office was
constituted as a partnership at the time its partnerssigned the Articles of Partnership wherein they bound
themselves to establish a partnership for thepractice of law, contribute capital and industry for
the purpose, and receive compensation and b e n e f i t s i n t h e c o u r s e o f i t s o p e r a t i o n .
T h e o t h e r p r o v i s i o n s o f t h e A r t i c l e s o f P a r t n e r s h i p a l s o positively identify SAFA
Law Office as a partnership. It constantly used the words "partners" and "partnership.
Moreover, it provided for the cause and manner of dissolution of the partnership.
Thes a i d   p r o v i s i o n s   w o u l d   n o t   h a v e   b e e n   n e c e s s a r y   i f   w h a t   h a d   b e e n   e s t
a b l i s h e d   w a s   a   s o l e proprietorship.Since SAFA Law Office is a partnership, it acquired
juridical personality by operation of law. Theperfection and validity of a contract of
partnership brings about the creation of a juridical personseparate and  distinct from the
individuals comprising the partnership. It is this juridical personality that allows a partnership
to enter into business transactions to fulfill its purposes.2. WoN SAFA LAW OFFICE IS A REAL PARTY IN
INTEREST.- YES. SAFA Law Office is the party that would be benefited or injured by the
judgment in the suitbefore 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 theone that entered into the contract of lease 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 i m p o r t a n t , t h e g e n e r a l r u l e u n d e r A r t i c l e 1 8 1 6 o f
the Civil Code is that partnership assets areprimarily liable for the contracts
e n t e r e d i n t o i n t h e n a m e o f t h e p a r t n e r s h i p a n d b y a p e r s o n authorized to act on its
behalf. All partners, including industrial ones, are only liable pro rata with alltheir property after all the
partnership assets have been exhausted. Consequently, considering thatSAFA Law Office is
primarily liable under the contract of lease, it is the real party-in-interest that should be
joined as plaintiff in the RTC case.Section 2, Rule 3 of the Rules of Court requires that every action must
be prosecuted or defended inthe name of the real party-in-interest. Any decision rendered against a
person who is not a real partyin interest in the case cannot be executed. Hence, a complaint filed against
such a person should bedismissed for failure to state a cause of action. As the one primarily affected by
the outcome of thesuit, SAFA Law Office should have filed the complaint with the RTC and should be
made to respondto any counterclaims that may be brought in the course of the
proceeding.WHEREFORE, the petition is DENIED. Petitioner is hereby ordered to amend his complaint to
include SAFALaw Office as plaintiff in Civil Case No. 06-678 pending before Branch 58 of
the Regional Trial Court of  Makati City, it being the real party-in-interest. SO ORDERED.

Antonio C. Goquilay, ET AL. vs. Washington Z. Sycip, ET AL.

Antonio C. Goquilay, ET AL. vs. Washington Z. Sycip, ET AL. GR NO. L-11840, December 10, 1963

FACTS:
 
 Tan Sin An and Goquiolay entered into a general commercial partnership under the partnership name
“Tan Sin An and Antonio Goquiolay” for the purpose of dealing in real estate. The agreement lodged upon
Tan Sin An the sole management of the partnership affairs. The lifetime of the partnership was fixed at
ten years and the Articles of Co-partnership stipulated that in the event of death of any of the partners
before the expiration of the term, the partnership will not be dissolved but will be continued by the heirs or
assigns of the deceased partner. But the partnership could be dissolved upon mutual agreement in writing
of the partners. Goquiolay executed a GPA in favor of Tan Sin An. The plaintiff partnership purchased 3
parcels of land which was mortgaged to “La Urbana” as payment of P25,000. Another 46 parcels of land
were purchased by Tan Sin An in his individual capacity which he assumed payment of a mortgage debt
for P35K. A downpayment and the amortization were advanced by Yutivo and Co. The two obligations
were consolidated in an instrument executed by the partnership and Tan Sin An, whereby the entire 49
lots were mortgaged in favor of “Banco Hipotecario”Tan Sin An died leaving his widow, Kong Chai Pin
and four minor children. The widow subsequently became the administratrix of the estate. Repeated
demands were made by Banco Hipotecario on the partnership and on Tan Sin An. Defendant Sing Yee,
upon request of defendant Yutivo Sons , paid the remaining balance of the mortgage debt, the mortgage
was cancelled Yutivo Sons and Sing Yee filed their claim in the intestate proceedings of Tan Sin An for
advances, interest and taxes paid in amortizing and discharging their obligations to “La Urbana” and
“Banco Hipotecario.” Kong Chai Pin filed a petition with the probate court for authority to sell all the 49
parcels of land. She then sold it to Sycip and Lee in consideration of P37K and of the vendees assuming
payment of the claims filed by Yutivo Sons and Sing Yee. Later, Sycip and Lee executed in favor of
Insular Development a deed of transfer covering the 49 parcels of land.When Goquiolay learned about
the sale to Sycip and Lee, he filed a petition in the intestate proceedings to set aside the order of the
probate court approving the sale in so far as his interest over the parcels of land sold was concerned.
Probate court annulled the sale executed by the administratrix w/ respect to the 60% interest of Goquiolay
over the properties Administratrix appealed.The decision of probate court was set aside for failure to
include the indispensable parties. New pleadings were filed. The second amended complaint prays for the
annulment of the sale in favor of Sycip and Lee and their subsequent conveyance to Insular
Development. The complaint was dismissed by the lower court hence this appeal.
 
ISSUE/S: Whether or not a widow or substitute become also a general partner or only a limited partner.
Whether or not the lower court err in holding that the widow succeeded her husband Tan Sin An in the
sole management of the partnership upon Tan’s death Whether or not the consent of the other partners
was necessary to perfect the sale of the partnership properties to Sycip and Lee?
 
 
HELD:
 
Kong Chai Pin became a mere general partner. By seeking authority to manage partnership property, Tan
Sin An’s widow showed that she desired to be considered a general partner. By authorizing the widow to
manage partnership property (which a limited partner could not be authorized to do), Goqulay recognized
her as such partner, and is now in estoppel to deny her position as a general partner, with authority to
administer and alienate partnership property. The articles did not provide that the heirs of the deceased
would be merely limited partners; on the contrary, they expressly stipulated that in case of death of either
partner, “the co partnership will have to be continued” with the heirs or assignees. It certainly could not be
continued if it were to be converted from a general partnership into a limited partnership since the
difference between the two kinds of associations is fundamental, and specially because the conversion
into a limited association would leave the heirs of the deceased partner without a share in the
management. Hence, the contractual stipulation actually contemplated that the heirs would become
general partners rather than limited ones.

But where the express and avowed purpose of the partnership is to buy and sell real estate, the
immovables thus acquired by the fi rm form part of its stock-in-trade (not merely as business site), and
the sale thereof is in pursuance of partnership purposes, hence, within the ordinary powers of the
partner. (Goquiolay vs. Sycip, 9 SCRA 663 [1963].)

G.R. No. L-11840 December 10, 1963 ANTONIO C. GOQUIOLAY, ET AL., plaintiffs-appellants, vs.
WASHINGTON Z. SYCIP, ET AL., defendants-appellees.
Facts:
Tan Sin An and Goquiolay entered into a general commercial partnership under the partnership name
“Tan Sin An and Antonio Goquiolay” for the purpose of dealing in real estate. The agreement lodged
upon Tan Sin An the sole management of the partnership affairs. The lifetime of the partnership was
fixed at ten years and the Articles of Copartnership stipulated that in the event of death of any of the
partners before the expiration of the term, the partnership will not be dissolved but will be continued by
the heirs or assigns of the deceased partner.

The plaintiff partnership purchased 3 parcels of land which was mortgaged to “La Urbana”. Another 46
parcels of land were purchased by Tan Sin An in his individual capacity which he assumed payment of a
mortgage debt for P35K. The downpayment and the amortization were advanced by Yutivo and Co.

Tan Sin An died leaving his widow, Kong Chai Pin. The widow subsequently became the administratrix of
the estate.

Yutivo Sons and Sing Yee filed their claim in the intestate proceedings of Tan Sin An for advances,
interest and taxes paid in amortizing and discharging their obligations to “La Urbana”.

Kong Chai Pin filed a petition with the probate court for authority to sell all the 49 parcels of land. She
then sold it to Sycip and Lee in consideration of P37K and of the vendees assuming payment of the
claims filed by Yutivo Sons and Sing Yee.

When Goquiolay learned about the sale to Sycip and Lee, he filed apetition in the intestate proceedings
to set aside the order of the probate court approving the sale in so far as his interest over the parcels of
land sold was concerned. Probate court annulled the sale executed by the administratrix w/respect to
the 60% interest of Goquiolay over the properties. Administratrix appealed. Decision was set aside,
hence this petition.

Issues:
1) Did the lower court err in holding that the widow succeeded her husband Tan Sin An in the sole
management of the partnership upon Tan’s death? Yes

2) WON the consent of the other partners was necessary to perfect the sale of the partnership
properties to Sycip and Lee? No.

Held:
1) Yes. While in the Articles of Co-Partnership and the power of attorney executed by Goquiolay
conferred upon Tan the exclusive management of the business, such power premised as it is upon trust
and confidence, was a mere personal right that terminated upon Tan’s demise. The provision in the
articles stating that “in the event of death of any one of the partners within the 10 year term of the
partnership, the deceased partner shall be represented by his heirs” could not have referred to the
managerial right given to Tan. The heirs of the deceased, by never repudiating or refusing to be bound
under the said provision in the articles became individual partners with Goquiolay upon Tan’s demise.
This is sanctioned under Article 222 under the Code of Commerce.

2) No. Strangers dealing with a partnership have the right to assume, in the absence of restrictive
clauses in the copartnership agreement that every general partner has power to bind the partnership
specially those acting with ostensible authority. Also, inspite of the provision of Art 129 of the Code of
Commerce to the effect that “if the management of the general partnership has not been limited by
special agreement to any of the members, all shall have the power to take part in the direction and
management of the common business, and the members present shall come to an agreement for all
contracts or obligations which may concern the association,” such obligation is one imposed by law on
the partners among themselves, that does not necessarily affect the validity of the acts of a partner
while acting within the scope of the ordinary course of business of the partnership as regards third
persons without notice. The latter may rightfully assume that the contracting partner was duly
authorized to contract for and in behalf of the firm and that he would not ordinarily act to the prejudice
of his co-partners. Also, the records fail to disclose that Goquiolay made any opposition to the sale of
the partnership realty to Sycip and Lee. On the contrary, it appears that he only interposed his
objections after the deed of conveyance was executed and approved by the probate court, and
consequently, his opposition came too late to be effective.

Mactan-Cebu International Airport Authority v. Unchuan

 June 01, 2016 | G.R. No. 182537 | MENDOZA, J
 
FACTS:
 
1. Unchuan alleged, among others, that he was the legal and rightful owner of Lot No. 4810-A, with an
area of177,176 square meters, and Lot No. 4810-B, with an area of 2,740 square meters, both located in
BarrioBuaya, Lapu-Lapu City, and covered by Original Certificate of Title (OCT) No. R0-1173;2. Unchuan
further alleged that he came to know that Atanacio Godinez (Atanacio), the supposed attorney-in-fact of
all the registered owners and their heirs, already sold both lots to Civil Aeronautics Administration(CAA);
the predecessor of MCIAA that the sale covered by the Deed of Absolute Sale, was null and voidbecause
the registered owners and their heirs did not authorize Atanacio to sell their undivided shares
in thesubject lots in favor of CAA.3. That no actual consideration was paid to the said registered owners
or their heirs, despite promises that theywould be paid; that the deed of absolute sale did not bear the
signature of the CAA representative; that therewas no proof that the Secretary of the Department of
Public Works and Highways approved the sale; and thathis predecessors-in-interest merely tolerated the
possession by CAA and, later, by MCIAA.4.
RTC RULED:
 rendered judgment in favor of Unchuan. The Deed of Sale signed by Atanacio Godinezalienating the
lands denominated as Lot Nos. 4810-A and 4810-B in favor of Defendant's predecessor-in-interest as
VOID; Defendant is directed to vacate from Lot Nos. 4810-A and 4810-B;a. RTC held that Atanacio was
not legally authorized to act as the attorney-in-fact of his brothers andsisters and to transact on their
behalf because he was not clothed with a special power of attorneygranting him authority to sell
the disputed lots. "This lack of authority of Atanacio Godinez, therefore,has an effect of making the
contract of sale between the parties' predecessors-in-interest as voidexcept perhaps for the share of
Atanacio Godinez which he could very well alienate." Moreover, thedocumentation of the sale was never
transmitted to CAA's Manila Office; hence, the heirs did notreceive any payment for the
sale transaction.b. RTC also noted that the deed of absolute sale presented to the trial court did not bear
the signatureof the then CAA Administrator which would have shown that the vendee consented to the
sale. Thus,the RTC concluded that (1) there was no valid consideration for the alleged conveyance; (2)
Atanaciolacked the authority to alienate the undivided shares of his co-heirs to CAA, MCIAA's
predecessor-in-interest; and (3) the lack of signature of the CAA Administrator was indicative of the lack
of consentfrom him to purchase the lots.5.
CA RULED:
 affirmed the RTC decision. Atanacio had no authority to act as an agent for the other registeredowners
and their heirs absent the special power of attorney specifically executed for such purpose as requiredin
Article 1874 of the New Civil Code. no evidence was adduced to show that the purchase price for the
saidlots was paid. For being a void contract, the heirs' deed of partition acknowledging the purported sale
in favorof CAA was found by the CA to have produced no legal effects and not susceptible of ratification.
ISSUE: : W/N the decision of the RTC affirmed by the CA is valid?
 –
 YES but with MODIFICATIONS
 
RULING:
 the petition is PARTIALLY GRANTED
 
RATIO:
 
1. Court finds that the sale transaction executed between Atanacio, acting as an agent of his
fellow registeredowners, and the CAA was indeed void insofar as the other registered owners were
concerned. They wererepresented without a written authority from them clearly in violation of the
requirement under Articles 1874and 1878 of the Civil Code.
a. a. Art. 1874. When a sale of a piece of land or any interest therein is through an agent, the authorityof
the latter shall be in writing; otherwise, the sale shall be void.b. b. Art. 1878. Special powers of attorney
are necessary in the following cases: x x x 
 
(5) To enter into any contract by which the ownership of an immovable is transmitted oracquired either
gratuitously or for a valuable consideration.
 2. In the case of
Dizon v. CA
 - When the sale of a piece of land or any interest thereon is through an agent, the authority of the latter
shall be in writing; otherwise, the sale shall be void. Thus the authority of an agent to execute a contract
for the sale of real estate must be conferred in writing and must give him specific authority,
either to conduct the general business of the principal or to execute a binding contract
containing terms and conditions which are in the contract he did execute. A special power of
attorney is necessary to enter into any contract by which the ownership of an immovable is
transmitted or acquired either gratuitously or for a valuable consideration. The express mandate
required by law to enable an appointee of an agency (couched) in general terms to sell must be
one that expressly mentions a sale or that includes a sale as a necessary ingredient of the act
mentioned. For the principal to confer the right upon an agent to sell real estate, a power of
attorney must so express the powers of the agent in clear and unmistakable language. When
there is any reasonable doubt that the language so used conveys such power, no such
construction shall be given the document.

Without a special power of attorney specifying his authority to dispose of an immovable,
Atanacio could not be legally considered as the representative of the other registered co-owners
of the properties in question. Atanacio's act of conveying Lot No. 4810-A and Lot No. 4810-B
cannot be a valid source of obligation to bind all the other registered co-owners and their heirs
because he was not clothed with any authority to enter into a contract with CAA. The other heirs
could not have given their consent as required under Article 1475[50] of the New Civil Code
because there was no meeting of the minds among the other registered co-owners who gave no
written authority to Atanacio to transact on their behalf. Therefore, no contract was perfected
insofar as the portions or shares of the other registered co-owners or their heirs were concerned.

In the case at bench, although the sale transaction insofar as the other heirs of the registered
owners was void, the sale insofar as the extent of Atanacio's interest is concerned, remains valid.
Atanacio was one of the registered co-owners of the subject lots, but he was not clothed with
authority to transact for the other co-owners. By signing the deed of sale with the CAA, Atanacio
effectively sold his undivided share in the lots in question. Thus, CAA became a co-owner of the
undivided subject lots. Accordingly, Atanacio's heirs could no longer alienate anything in favor
of Unchuan because he already conveyed his pro indiviso share to CAA.

Consequently, the Court deems it just and fair to modify the disposition of the subject lots to
Unchuan. Unchuan is not entitled to the whole 179,916 square meters of the property, as
originally awarded by the RTC and affirmed by the CA. Atanacio's share should be excluded
from the computation as his heirs were already precluded from further conveying what he, their
predecessor-in-interest, had previously sold to CAA. Thus, Unchuan is only legally entitled to an
unidentified 149,930 square meters of the property after excluding Atanacio's unidentified share
of 29,986 square meters.

Alejandro Ty vs. Sylvia Ty

553 SCRA 306

Facts: Alexander Ty, son of Alejandro Ty and husband of Sylvia Ty, dies of cancer at the age of 34.
Sylvia files petition for the settlement of Alexander’s intestate estate. She also asks court to sell or
mortgage properties in order to pay the estate tax amounting to P4,714,560.02 assessed by the BIR. The
properties include a parcel of land in EDSA Greenhills, a residential land in Wack Wack, and the Meridien
condo unit in Annapolis, Greenhills.

Alejandro Ty opposed the move and filed for recovery of the property with prayer for preliminary injunction
and/or temporary restraining order. Plaintiff Alejandro claims that he owns the EDSA, Wack Wack and
Meridien condo unit because he paid for them. The property was supposedly registered in trust for
Alexander’s brothers and sisters in case plaintiff dies. Plaintiff also claimed that Alex had no financial
capacity to purchase the disputed property, as the latter was only dependent on the former.

Sylvia countered that Alexander had purchased the property with his money. Alexander was financially
capable of purchasing it because he had been managing the family corporations since he was 18 years
old and was also engage in other profitable businesses.

The RTC granted the application for preliminary injunction and decides in favor of plaintiff regarding the
recovery of the property. CA reversed the RTC stating that the implication created by law under Art. 1448
does not apply if the property was in the name of the purchaser’s child. They agreed that plaintiff partly
paid for the EDSA property. Plaintiff appealed.

Issue: whether or not there was an implied trust under Art. 1448 of the Civil Code.
Held: No, there was no implied trust created in relation to the EDSA property. If the person to whom the
title is conveyed is the child of the one paying the price of the sale, no trust is implied by law under Art.
1448, the so-called purchase money resulting trust. The said article provides an exception: “if the person
to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale,
NO TRUST is IMPLIED by LAW, it being disputable presumed that there is a gift in favor of the child.” The
Court also noted that plaintiff failed to prove that he did not intend a donation.

Regarding the Meridien Condo and Wack Wack property, the court said that plaintiff failed to prove that
purchase money came from him. They also said that Alexander was capable of purchasing the property
as he had been working for nine years, had a car care business, and was actively engaged in the
business dealings of several family corporations from which he received emoluments and other benefits.
Hence, no implied trust created because there was no proof that plaintiff had paid for said properties.