A.C. No. 5161 - Re: Rolando S. Torres

Juasing Hardware, a single proprietorship organized under Philippine law, is represented by its manager, Ong Bon Yong.
The business, operating under the trade name “Juasing Hardware,” initiated a legal action for the collection of a monetary sum from Pilar Dolla, who allegedly failed to pay for items, materials, and merchandise purchased.

On August 17, 1979, Juasing Hardware filed its complaint in Civil Case No. R-18386 seeking relief for non-payment.
The complaint asserted that despite repeated demands, defendant Pilar Dolla neglectfully refused to pay the purchase price of the goods acquired.

In her Answer, Pilar Dolla challenged the legal personality and capacity of the plaintiff by stating she “has no knowledge about plaintiff’s legal personality and capacity to sue.”
The defendant’s position centrally questioned Juasing Hardware’s capacity to initiate a suit because it is a single proprietorship rather than a corporation or a registered partnership.

After the pre-trial and trial stages, where plaintiff presented its evidence and rested its case, defendant filed a Motion for Dismissal of Action (demurrer to evidence).
The Motion for Dismissal argued that Juasing Hardware, being a single proprietorship and not a juridical person duly recognized under law, lacked the requisite legal capacity to sue.
In response, the plaintiff opposed the motion and moved for the admission of an Amended Complaint to rectify the designation of the party.

On September 5, 1980, the respondent Judge, based on the defendant’s assertion and the evidence presented at trial, issued an Order dismissing the case and denying the admission of the Amended Complaint.

The Order stressed that the affirmative defense of lack of legal capacity was clear since a single proprietorship does not have juridical personality unlike a corporation or partnership.
It noted that an amendment at such a late stage, being substantial in form, was untimely.

A subsequent Motion for Reconsideration was filed by the plaintiff, which was denied by the lower court on October 21, 1980, reaffirming the dismissal of the case.

The central legal framework includes Rule 3 of the Revised Rules of Court, which mandates that only natural or juridical persons may be parties in a civil action.
The New Civil Code’s definition of juridical persons excludes sole proprietorships from possessing an independent legal personality.
The case involved a technical defect in the naming of the plaintiff, essentially a defect in form rather than substance, which affected the capacity to sue.

Whether the lower court committed a grave abuse of discretion by dismissing the case and refusing to admit the Amended Complaint intended to correct the party’s designation.

Whether the failure of Juasing Hardware to file the complaint in the proper name (i.e., the proprietor’s name) prevents it from pursuing a claim, given that sole proprietorships are not recognized as juridical persons.
Whether the defect in the designation of the plaintiff in the complaint is a substantial defect or merely a technical/formal error that can be remedied by an amendment.
Whether allowing the amendment would cause any prejudice or unfair surprise to the opposing party, Pilar Dolla.