d2015member Juasing Hardware v. Judge Mendoza (1982) Guererro, J.

Facts:

Juasing Hardware, alleging to be a single proprietorship duly organized under the laws of the Philippines and represented by its manager Ong Bon Yong, filed a complaint in CFI-Cebu for the collection of money against Pilar Dolla. The complaint charged that Dolla refused to pay, despite repeated demands, the price of items she bought from Juasing Hardware. Defendant Dolla answered that she "has no knowledge about plaintiff's legal personality and capacity to sue as alleged in the complaint." After plaintiff Jusaing Hardware completed the presentation of evidence and rested its case, defendant Dolla filed a Demurrer to Evidence based on plaintiff Juasing Hardware's lack of legal capacity to sue. She contends that Juasing Hardware is a single proprietorship, not a corporation or a partnership and therefore is not a juridical person with legal capacity to bring an action in court. o Plaintiff Juasing Hardware filed an Opposition and moved for the admission of an Amended Complaint to correct the designation of the plaintiff. Judge Mendoza dismissed the case and denied admission of the Amended Complaint. o MFR denied.

Issue/Held: Did the CFI commit grave abuse of discretion when it dismissed the case and refused to admit the amended complaint? YES. Ratio: RE: Juasing Hardwares capacity to sue. [SC cites the Revised Rules of Court and the NCC] Rule 3 of the Revised Rules of Court: Sec. 1. Who may be parties. Only natural or juridical persons or entities authorized by law may be parties in a civil action. NCC 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. Therefore, petitioner Juasing Hardware is not a natural person nor a juridical person. There is no law authorizing sole proprietorships to bring suit. The law does not vest juridical or legal personality upon the sole proprietorship nor empower it to file or defend an action 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 lic enses and permits, register the business name, and pay taxes. The complaint should have been filed in the name of the owner. The allegations in the body of the complaint would show that th e suit is brought by the person AS owner of the business conducted under the name Juasing Hardware. The words "doing business as Juasing Hardware" may be added in the title of the case.

RE: Petitioner Juasing Hardware's argument that the judge erred in not allowing the amendment of the complaint Amendment is authorized by Rule 10 of the Revised Rules of Court: Sec. 4. Formal Amendments. A defect in the designation of the parties may be summarily corrected AT ANY STAGE of the action provided no prejudice is caused thereby to the adverse party. The defect of the complaint is merely formal, not substantial. Substitution of the plaintiff would not constitute a change in the identity of the parties. No unfairness or surprise to respondent Dolla would result by allowing the amendment. The purpose of the amendment is merely to conform to procedural rules or correct a technical error. SC cites Alonzo vs. Villamor: the court is authorized, in furtherance of justice, to allow a party to amend any pleading at any stage of the action by adding or striking out the name of any or by correcting a mistake in the name of a party SC also cites Shaffer vs. Palma: the courts should be liberal in allowing amendments to pleadings to avoid multiplicity of suits and so that the real controversies are presented and the case decided on the merits without unnecessary delay. o This rule applies with more reason when the amendment refers to a mere matter of form and no substantial rights are prejudiced.

Dispositive: Admit amended complaint Aquino, J concurs: It should appear in the amended complaint (a copy which was not attached to the petition) that the plaintiff is Ong Hua or Hu at, doing business under the trade name, Juasing Hardware, and in the body of the complaint the personal circumstances of Ong Hua should be stated.