Case Digest: Mangila v. Guina

ANITA MANGILA, petitioner, vs. COURT OF APPEALS and LORETA GUINA, respondents.

G.R. No. 125027. August 12, 2002

CARPIO, J.:

Petitioner Anita Mangila, a resident of Pampanga, is a single proprietor exporting sea foods and doing business under the name and style of Seafoods Products. Private respondent Loreta Guina is single proprietor providing freight forwarding service doing business as Air Swift International, with office address in Pasay.

Mangila contracted the freight forwarding services of Guina for shipment of sea food products to Guam where Mangila maintains an outlet. Mangila agreed to pay Guina cash on delivery. 

On the first shipment, Mangila requested for seven days within which to pay Guina. However, for the next three shipments, Mangila failed to pay Guina the shipping charges.

Despite several demands, Mangila never paid Guina. Thus, Guina filed before the Regional Trial Court of Pasay City a case for collection of sum of money.

Mangila filed a Motion to Dismiss on the ground of improper venue. Guina’s invoice for the freight forwarding service stipulates that if court litigation becomes necessary to enforce collection, the agreed venue for such action is Makati.

Guina filed an Opposition asserting that although Makati appears as the stipulated venue, the same was merely an inadvertence by the printing press. Moreover, Guina claimed that Mangila knew that Guina was holding office in Pasay City and not in Makati.

The trial court, finding credence in private respondents assertion, denied the Motion to Dismiss and allowed the case to proceed.

The trial court thereafter ruled in favor of Guina, ordering Mangila to pay her outstanding balance.

ISSUE: W/N there was improper venue.

RULING: Yes.

The case should be dismissed for improper venue, but not for the reason stated by Mangila.

Mangila raised the issue of improper venue due to the stipulation in the invoice that any litigation’s agreed venue is Makati. However,  the stipulation does not limit the venue exclusively to Makati.

Nevertheless, Pasay is not the proper venue for this case.

Under the Rules of Court, venue in personal actions is where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff. The exception to this rule is when the parties agree on an exclusive venue other than the places mentioned in the rules. But, as discussed, this exception is not applicable in this case. Hence, following the general rule, the case may be brought in the place of residence of the plaintiff or defendant, at the election of the plaintiff.

In the instant case, the residence of Guina was not alleged in the complaint. Rather, what was alleged was the postal address of her sole proprietorship, Air Swift International. It was only during trial that she mentioned her residence to be in Paranaque City.  

In the instant case, it was established in the lower court that petitioner resides in San Fernando, Pampanga while private respondent resides in Paranaque City. However, this case was brought in Pasay City, where the business of Guina is found. This would have been permissible had Guina’s business been a corporation. However, as Guina admitted in her Complaint in the trial court, her business is a sole proprietorship, and as such, does not have a separate juridical personality that could enable it to file a suit in court. In fact, there is no law authorizing sole proprietorships to file a suit in court.

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.^[42]

Thus, not being vested with legal personality to file this case, Air Swift International is not the plaintiff in this case but rather Loreta Guina in her personal capacity.