THERE IS NO LAW AUTHORIZING SOLE PROPRIETORSHIPS TO BRING SUIT IN COURT

The 1997 Rules of Civil Procedure requires that every action must be prosecuted or defended in the name of the real party-in-interest, i.e., the party who stands to be benefited or injured by the judgment in the suit, or the party entitled to the avails of the suit. (Rule 3, Section 2).  x x x x x

In Juasing Hardware v. Mendoza, 201 Phil. 369, 372-373 (1982), the Supreme Court said:

“Finally, there is no law authorizing sole proprietorships like petitioner 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 below should have been filed in the name of the owner of Juasing Hardware. The allegation 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 to the title of the case, as is customarily done. [Emphasis supplied.] (ROGER V. NAVARRO, vs. HON. JOSE L. ESCOBIDO, G.R. No.  153788, November 27, 2009, BRION, J.).

NON-JOINDER OF INDISPENSABLE PARTIES IS NOT GROUND FOR DISMISSAL OF THE ACTION:

The Supreme Court has held in a number of cases (Domingo v. Scheer, 466 Phil. 235 (2004); Vesagas, et al. v. Court of Appeals, et al., 422 Phil. 860 (2001); Salvador, et al. v. Court of Appeals, et al., 313 Phil. 36 (1995); Cuyugan v. Dizon, 79 Phil. 80 (1947); Alonso v. Villamor, 16 Phil. 315 (1910) that the misjoinder or non-joinder of indispensable parties in a complaint is not a ground for dismissal of action.

As stated in Macababbad v. Masirag, G.R. No. 161237, January 14, 2009:

Rule 3, Section 11 of the Rules of Court provides that neither misjoinder nor nonjoinder of parties is a ground for the dismissal of an action, thus:

“Sec. 11. Misjoinder and non-joinder of parties. Neither misjoinder nor non-joinder of parties is ground for dismissal of an action. Parties may be dropped or added by order of the court on motion of any party or on its own initiative at any stage of the action and on such terms as are just. Any claim against a misjoined party may be severed and proceeded with separately” (emphasis supplied).

In Domingo v. Scheer, the Supreme Court held that the proper remedy when a party is left out is to implead the indispensable party at any stage of the action.  The court, either motu proprio or upon the motion of a party, may order the inclusion of the indispensable party or give the plaintiff opportunity to amend his complaint in order to include indispensable parties.  If the plaintiff to whom the order to include the indispensable party is directed refuses to comply with the order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion.  Only upon unjustified failure or refusal to obey the order to include or to amend is the action dismissed. x x x (ROGER V. NAVARRO, vs. HON. JOSE L. ESCOBIDO, G.R. No.  153788, November 27, 2009, BRION, J.).

REPLEVIN: PRIOR DEMAND IS NOT A CONDITION PRECEDENT TO AN ACTION FOR A WRIT OF REPLEVIN

In Navarro vs. Hon. Escobido, the Supreme Court explained that plaintiff erred in arguing that prior demand is required before an action for a writ of replevin is filed since we cannot liken a replevin action to an unlawful detainer.

          For a writ of replevin to issue, all that the applicant must do is to file an affidavit and bond, pursuant to Section 2, Rule 60 of the Rules, which states:

“Sec. 2. Affidavit and bond.

The applicant must show by his own affidavit or that of some other person who personally knows the facts:

(a)      That the applicant is the owner of the property claimed, particularly describing it, or is entitled to the possession thereof;

(b)      That the property is wrongfully detained by the adverse party, alleging the cause of detention thereof according to the best of his knowledge, information, and belief;

(c)      That the property has not been distrained or taken for a tax assessment or a fine pursuant to law, or seized under a writ of execution or preliminary attachment, or otherwise placed under custodia legis, or if so seized, that it is exempt from such seizure or custody; and

(d) The actual market value of the property.

The applicant must also give a bond, executed to the adverse party in double the value of the property as stated in the affidavit aforementioned, for the return of the property to the adverse party if such return be adjudged, and for the payment to the adverse party of such sum as he may recover from the applicant in the action” (emphasis supplied).

          The Supreme Court held that there is nothing in the afore-quoted provision which requires the applicant to make a prior demand on the possessor of the property before he can file an action for a writ of replevin. Thus, prior demand is not a condition precedent to an action for a writ of replevin.

          More importantly, the Supreme Court held that the plaintiff is no longer in the position to claim that a prior demand is necessary, as he has already admitted in his Answers that he had received the letters that defendant sent him, demanding that he either pay his unpaid obligations or return the leased motor vehicles. Accordingly, plaintiff’s position that a demand is necessary and has not been made is totally unmeritorious. (ROGER V. NAVARRO, vs. HON. JOSE L. ESCOBIDO, G.R. No.  153788, November 27, 2009, BRION, J.).