A sole proprietorship does not possess a juridical personality separate and distinct from the personality of the owner of the enterprise. The law does not vest a separate legal personality on the sole proprietorship or empower it to file or defend an action in court.[34] Only natural or juridical persons or entities authorized by law may be parties to a civil action and every action must be prosecuted and defended in the name of the real parties-in-interest.[35]
The records show that respondent enterprise, M.R. Vargas Construction Co., is a sole proprietorship and, therefore, an entity without juridical personality. Clearly, the real party-in-interest is Marcial R. Vargas who is the owner of the enterprise. Thus, the petition for injunction should have impleaded him as the party respondent either simply by mention of his name or by denominating him as doing business under the name and style of M.R. Vargas Construction Co. It was erroneous to refer to him, as the petition did in both its caption and body, as representing the enterprise. Petitioners apparently realized this procedural lapse when in the petition for certiorari filed before the Court of Appeals and in the instant petition, M.R. Vargas Construction, Marcial R. Vargas and Renato Agaro were separately named as individual respondents.
Since respondent enterprise is only a sole proprietorship, an entity without juridical personality, the suit for injunction may be instituted only against its owner, Marcial Vargas. Accordingly summons should have been served on Vargas himself, following Rule 14, Sections 6[36] and 7[37] of the Rules of Court on personal service and substituted service. In the instant case, no service of summons, whether personal or substituted, was effected on Vargas. It is well-established that summons upon a respondent or a defendant must be served by handing a copy thereof to him in person or, if he refuses to receive it, by tendering it to him. Personal service of summons most effectively ensures that the notice desired under the constitutional requirement of due process is accomplished. If however efforts to find him personally would make prompt service impossible, service may be completed by substituted service, i.e., by leaving copies of the summons at his dwelling house or residence with some person of suitable age and discretion then residing therein or by leaving the copies at his office or regular place of business with some competent person in charge thereof.[38]
The modes of service of summons should be strictly followed in order that the court may acquire jurisdiction over the respondents, and failure to strictly comply with the requirements of the rules regarding the order of its publication is a fatal defect in the service of summons. It cannot be overemphasized that the statutory requirements on service of summons, whether personally, by substituted service or by publication, must be followed strictly, faithfully and fully, and any mode of service other than that prescribed by the statute is considered ineffective.[39]
Agarao was not a party respondent in the injunction case before the trial court. Certainly, he is not a real party-in-interest against whom the injunction suit may be brought, absent any showing that he is also an owner or he acts as an agent of respondent enterprise. Agarao is only a foreman, bereft of any authority to defend the suit on behalf of respondent enterprise. As earlier mentioned, the suit against an entity without juridical personality like respondent enterprise may be instituted only by or against its owner. Impleading Agarao as a party-respondent in the suit for injunction would have no legal consequence. In any event, the petition for injunction described Agarao only as a representative of M.R. Vargas Construction Co., which is a mere inconsequentiality considering that only Vargas, as its sole owner, is authorized by the Rules of Court to defend the suit on behalf of the enterprise. (Ejercito vs. Vargas Construction, G.R. No. 172595, April 10, 2008)
The suit against an entity without juridical personality may be instituted only by or against its owner
4/
5
Oleh
Philippine Legal Forms