Title:#11 V-GENT, INC. v.
MORNING STAR TRAVEL  Thus an agent may sue or be sued solely in its own name and without
Details: G.R. No. 186305 | July 22, 2015 | J. Brion
Topic: Agency coupled with an Interest
Doctrine:
Facts:
1. After buying 26 two-way plane tickets from Morning Star Travel and
Tours, Inc (respondent), V-Gent Inc (petitioner) returned 15 unused
tickets worth $8,747.50 to the respondent, which refunded only the six
tickets worth $3,445.63.
2. Despite demand, Morning Star refused to refund the nine remaining
tickets, hence V-Gent filed money claim against Morning Star.
3. Aside from countering that V-Gent is not entitled to a refund, Morning
Star questioned the personality of V-Gent to file the action as it is the
passengers who bought the tickets who are the real parties in interest.
4. The MeTC dismissed the complaint for lack of cause of action. While it
declared V-Gent as agent of the ticket buyers, it failed to prove its case
by preponderance of evidence.
5. On appeal to the RTC, the latter court reversed the MeTC judgment,
holding that V-Gent proved its case by preponderance of
evidence. Morning Star elevated the case to the Court of Appeals.
6. The appellate court granted the petition for review filed by Morning
Star, by ruling that V-Gent is not the 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 in the case. – NO
Held:
 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.
o 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.)
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.
 When these elements are present, the agent becomes bound as if the
transaction were its own. This rule is consistent with Article 1883 of the
Civil Code which says:
o Art. 1883. If an agent acts in his own name, the principal has
no right of action against the persons with whom the agent has
contracted; neither have such persons against the principal. In
such case, the agent is the one directly bound in favor of the
person with whom he has contracted, as if the transaction
were his own, except when the contract involves things
belonging to the principal.
 In the present case, only the · first element is present; the purchase
order and the receipt were in the name of V-Gent. However, the
remaining elements are absent because: (1) V-Gent disclosed the
names of the passengers to Morning Star - in fact the tickets were in
their names; and (2) the transaction was paid using the passengers'
money. Therefore, Rule 3, Section 3 of the Rules of Court cannot apply.
 V-Gent argues that by making a partial refund, Morning Star was
already estopped from refusing to make a full refund on the ground
that V-Gent is not the real party-in-interest to demand reimbursement.9
 The SC found no merit in this argument.
 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.
 By granting the initial refund, Morning Star recognized V-Gent's
authority to buy the tickets and collect refunds on behalf of the
passengers. However, Morning Star's recognition of V-Gent's authority
to collect a refund for the passengers is not equivalent to recognition
of V-Gent's authority to initiate a suit on behalf of the passengers.
Morning Star therefore, is not estopped from questioning V-Gent's legal
standing to initiate the suit.