Case Digest: ALVIN TAN v. COURT OF APPEALS et al.

ALVIN TAN v. COURT OF APPEALS et al.

         Respondent Arthur Dy Guani (Dy Guani), acting as representative of Guani Marketing Corporation, entered into a lease-financing contract with Cebu International Financing Corporation (CIFC) for the purchase of a Mercedes Benz being sold by petitioner Alvin Tan. However, after Dy Guani paid the down-payment and interests the Bureau of Customs (BOC) confiscated the car for failure to comply with the required customs duties and taxes. Separate actions were filed by the BOC and CIFC against Dy Guani. Dy Guani then filed an action for damages against Tan for his alleged fraudulent acts particularly in claiming that the customs requirements for the car had already been complied with.

            In his defense, Tan asserts that Dy Guani had no legal personality to file the complaint being merely an agent of Guani Marketing the lessee of the vehicle. The Regional Trial Court (RTC) decided in favor of Dy Guani which decision was affirmed by the Court of Appeals (CA).

ISSUE:

Whether or not the CA erred in not holding that Dy Guani had no legal personality to file this action

HELD:

It bears noting at the outset that the trial court failed, as did the CA, to address the issue raised by Tan regarding Dy Guani not being the real party in interest. Both Section 2, Rule 3 of the 1964 Rules of Court, the law applicable at the time, and Section 2, Rule 3 of the 1997 Rules of Civil Procedure require that every action must be prosecuted and defended in the name of the real party in interest.

It is fundamental that there cannot be a cause of action without an antecedent primary legal right conferred by law upon a person. Evidently, there can be no wrong without a corresponding right, and no breach of duty by one person without a corresponding right belonging to some other person. Thus, the essential elements of a cause of action are legal right of the plaintiff, correlative obligation of the defendant, an act or omission of the defendant in violation of the aforesaid legal right.

From the facts of the case, Dy Guani merely acted as agent of Guani Marketing, lessee of the vehicle. He is thus not the real party in interest-plaintiff to prosecute the case. It is the corporation, which is a juridical person with a personality separate and distinct from its individual stockholders and from that of its officers who manage and run its affairs,that is the real party in interest.

In fine, Dy Guani not being the real party in interest to file the complaint, he has no cause of action.