Facts:

The case revolves around the City of Bacolod, represented by the plaintiff, and Leandro Gruet, who serves as the defendant and appellant. The events leading up to the case took place on November 29, 1962, wherein the Court of First Instance of Negros Occidental adjudicated Civil Case No. 5693. The court initially ruled that San Miguel Brewery, Inc., as the employer and principal of Gruet, should be liable to pay the City of Bacolod P26,306.54, as well as an additional tax of P0.03 per case, imposed by City Ordinances No. 66 and No. 150 starting from March 1, 1960, along with the cost of the suit. Gruet, the manager of the Coca Cola Plant in Bacolod, argued that the trial court erred in its decision as he claimed he was not the proper party defendant since the plant was owned and operated by San Miguel Brewery, Inc., a corporation separate from him. Despite the provisions of the complaint which did not name San Miguel Brewery, Inc. or serve it with summons, the trial proceeded on

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Facts:

Background of the Case

• The case involves the City of Bacolod as the plaintiff/appellee and Leandro Gruet as the defendant/appellant.
• The underlying issue concerns the payment of a tax assessed at P0.03 per case on the bottling or selling of Coca Cola and True Orange, as levied by Bacolod City Ordinances Nos. 66 (Series of 1949) and 150 (Series of 1959), which commenced in March 1960.
• Although the complaint names Leandro Gruet as the defendant, he is identified as the Manager of the San Miguel Brewery, Bacolod Coca Cola Plant, which is actually owned and operated by San Miguel Brewery, Inc.
• No summons was served on San Miguel Brewery, Inc., and there is no allegation within the complaint connecting the corporation directly to the cause of action.

Procedural and Pleading Defects

• The complaint was filed solely in the name of Leandro Gruet, without naming or impleading San Miguel Brewery, Inc., the real party in interest.
• In his answer, Gruet asserted as a first affirmative defense that he was improperly named because he was merely the manager of the Coca Cola Plant, while the plant is owned by San Miguel Brewery, Inc.
• Despite this defense, no amendment was made to the complaint to include San Miguel Brewery, Inc., and the case proceeded on the merits based on stipulated facts.

Stipulated Facts and Exhibits

• The parties agreed to a series of facts during trial, which included:
• Defendant Gruet had paid the tax of P0.01 per case under Ordinance No. 66.
• Upon the amendment by Ordinance No. 150 (in effect July 1, 1959), the defendant refused to pay the additional levy of P0.02 and formally protested via a letter addressed to the City Mayor. This letter was furnished to both the City Mayor and City Treasurer and was introduced at trial as Exhibit '1'.
• It was stipulated that the Coca Cola Plant had been paying an annual tax of P100.00 as 'manufacturer of aerated water' under Ordinance No. 48 (Series of 1949), with documentary evidence submitted as Exhibits '2' and '2-A'.
• Additional evidence was provided by defendant Gruet in the form of a tabulated statement of tax payments over a five-year span (1955 to 1960), presented as Exhibit '3'.
• The plaintiff acknowledged receipt of the protest letter but did not admit the underlying facts contained in it.
• Despite the clear indication that San Miguel Brewery, Inc. was the true owner and operator of the plant, the pleadings, including the stipulation, did not refer to the corporation.

The Trial Court’s Decision

• The trial court identified that the real party defendant should have been San Miguel Brewery, Inc. rather than Leandro Gruet, who was acting in a managerial capacity only.
• The court noted that the defect was merely formal and, in its view, did not affect the merits of the case.
• Consequently, the trial court, after amending the pleadings ex officio, ordered San Miguel Brewery, Inc. to pay P26,306.54 plus tax and costs to the City of Bacolod.

Legal Context and Precedents Cited

• The case cites Section 2, Rule 3 of the Rules of Court, which mandates that every action must be prosecuted in the name of the real party in interest.
• The decision also references Salmon and Pacific Commercial Co. vs. Tan Cueco (36 Phil. 556), emphasizing that a judgment obtained against a party improperly named or when the real party was never served (as in this case with San Miguel Brewery, Inc.) is null and void by law.

Issue:

Proper Party to be Sued

• Whether the Action was Properly Prosecute by Naming Leandro Gruet Instead of San Miguel Brewery, Inc., the real party in interest.
• Determining if the misidentification affects the validity of the proceedings and any judgment rendered.

Effect of Procedural Defects

• Whether the procedural defect of failing to name San Miguel Brewery, Inc. in the complaint is fatal to the action.
• How the omission relates to the mandatory requirement under Section 2, Rule 3, of the Rules of Court and Section 114 of the Code of Civil Procedure.

Validity of the Judgment Rendered

• Whether the judgment ordering San Miguel Brewery, Inc. to pay the assessed tax and additional costs can bind the corporation, given that it was not summoned or properly named in the pleadings.
• The impact of citing prior jurisprudence (Salmon and Pacific Commercial Co. vs. Tan Cueco) on the enforceability of the judgment.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

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