Case Digest, Juasing Hardware v. Mendoza

JUASING HARDWARE, petitioner, vs. THE HONORABLE RAFAEL T. MENDOZA, Judge of the Court of First Instance of Cebu, and PILAR DOLLA, respondents.

G.R. No. L-55687 July 30, 1982

GUERRERO, J.:

Juasing Hardware, alleging to be a single proprietorship duly organized and existing under and by virtue of the laws of the Philippines and represented by its manager Ong Bon Yong, filed a complaint for the collection of a sum of money against Pilar Dolla. 

In her Answer, Dolla stated that she has no knowledge about Juasing Hardware's legal personality and capacity to sue as alleged in the complaint. 

After Juasing Hardware had completed the presentation of its evidence and rested its case, Dolla filed a Motion for Dismissal of Action for Juasing Hardware’s lack of legal capacity to sue. Dolla contended that Juasing Hardware is a single proprietorship, not a corporation or a partnership duly registered in accordance with law, and therefore is not a juridical person with legal capacity to bring an action in court. Juasing Hardware filed an opposition and moved for the admission of an Amended Complaint to change the name.

Respondent Judge issued an Order dismissing the case and denying admission of the Amended Complaint.

ISSUE: W/N the Court properly dismissed the case filed by Juasing Hardware.

RULING: No.

Juasing Hardware is definitely not a natural person; nor is it a juridical person as defined in the New Civil Code of the Philippines thus:

Art. 44. The following are juridical persons:

(1) The State and its political subdivisions;

(2) Other corporations, institutions and entities for public interest or purpose, created by law; their personality begins as soon as they have been constituted according to law;

(3) Corporations, partnerships and associations for private interest or purpose to which the law grants a juridical personality, separate and distinct from that of each shareholder, partner or member.

There is no law authorizing sole proprietorships like Juasing Hardware to bring suit in court. 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 the proprietor or owner thereof to secure licenses and permits, register the business name, and pay taxes to the national government. It does not vest juridical or legal personality upon the sole proprietorship nor empower it to file or defend an action in court.

Thus, the complaint in the court should have been filed in the name of the owner of Juasing Hardware. The allegations in the body of the complaint would show that the suit is brought by such person as proprietor or owner of the business conducted under the name and style “Juasing Hardware.” The descriptive words "doing business as Juasing Hardware' " may be added in the title of the case, as is customarily done.

Be that as it may, Juasing Hardware's contention that respondent judge erred in not allowing the amendment of the complaint to correct the designation of the party plaintiff in the lower court, is impressed with merit. The defect of the complaint in the instant case is merely formal, not substantial. Substitution of Juasing Hardware would not constitute a change in the Identity of the parties. No unfairness or surprise to Dolla would result by allowing the amendment, the purpose of which is merely to conform to procedural rules or to correct a technical error.