G.R. No. L-55687 July 30, 1982
Juasing Hardware, petitioner, vs. The Honorable Rafael T. Mendoza, Judge of the Court of First Instance of Cebu, and Pilar Dolla, respondents.

FACTS

Juasing Hardware, described as a single proprietorship represented by its manager Ong Bon Yong, filed a complaint for collection of a sum of money against Pilar Dolla. In her Answer, Dolla specifically alleged that she had “no knowledge about plaintiff’s legal personality and capacity to sue.” The case proceeded to pre-trial and trial. After the plaintiff rested its case, the defendant filed a Motion for Dismissal of Action (Demurrer to Evidence), contending that Juasing Hardware, being a mere single proprietorship and not a registered corporation or partnership, lacked juridical personality and therefore the legal capacity to sue.
The plaintiff filed an Opposition and moved for the admission of an Amended Complaint to address the defect. Respondent Judge Rafael T. Mendoza, in an Order dated September 5, 1980, dismissed the case and denied the admission of the Amended Complaint. The court ruled that the plaintiff’s lack of legal capacity to sue was evident, as a sole proprietorship is not a juridical person, and that allowing an amendment at that stage would be too late as it was substantial. A Motion for Reconsideration was subsequently denied in an Order dated October 21, 1980.

ISSUE

Whether the respondent Judge committed grave abuse of discretion in dismissing the case and refusing to admit the Amended Complaint.

RULING

Yes, the Supreme Court granted the petition and annulled the challenged Orders. The Court clarified that a sole proprietorship is not a juridical person under Article 44 of the Civil Code and has no legal capacity to sue or be sued independently. The suit should have been instituted in the name of the proprietor, with a description such as “doing business as Juasing Hardware.”
However, the defect in the complaint was merely formal, not substantial. Rule 10, Section 4 of the Revised Rules of Court authorizes the summary correction of a defect in the designation of parties at any stage of the action, provided no prejudice is caused to the adverse party. The amendment sought—to substitute the real party in interest (the owner) for the trade name—did not change the identity of the parties or the cause of action. No unfairness or surprise would result for respondent Dolla, as the body of the complaint already indicated the nature of the claim.
The Court emphasized that litigation is not a game of technicalities. Citing Alonzo v. Villamor, it held that defects in form should not prevail over substantial justice when no substantial rights are prejudiced. The liberal allowance of amendments to pleadings is favored to present real controversies and decide cases on their merits. Therefore, the lower court committed grave abuse of discretion in its rigid application of procedural rules. The case was remanded with instructions to admit the Amended Complaint.