Where one of the parties is a juridical entity (Sec. 408, R.A.

7160)

Barangay conciliation not required in case of juridical entity:

4(a) of PD No. 1508, referral of a dispute to the Barangay Lupon is required only where the parties thereto are
"individuals." An "individual" means "a single human being as contrasted with a social group or institution." 5 Obviously,
the law applies only to cases involving natural persons, and not where any of the parties is a juridical person such as a
corporation, partnership, corporation sole, testate or intestate, estate, etc.

Referral of a dispute to the Lupon is required only in cases involving natural persons, and
not where any of the parties is a juridical person such as a corporation, partnership,
corporation sole, testate or intestate, estate, etc. (Vda. De Borromeo v. Pogoy, G.R. No. L63277. November 29, 1983)

Rule 3 of the Revised Rules of Court provides as follows:

Sec. 1. Who may be parties.-Only natural or juridical persons or entities authorized by law may
be parties in a civil action.
Petitioner is definitely not a natural person; nor is it a juridical person as defined in the New Civil Code of the
Philippines thus:
Art. 44. The following are juridical persons:
(1) The State and its political subdivisions;
(2) Other corporations, institutions and entities for public interest or purpose, created by law;
their personality begins as soon as they have been constituted according to law;
(3) Corporations, partnerships and associations for private interest or purpose to which the law
grants a juridical personality, separate and distinct from that of each shareholder, partner or
member.

======================================================================

SECOND DIVISION
BIENVENIDO EJERCITO and G.R. No. 172595
JOSE MARTINEZ,
Petitioners, Present:
QUISUMBING, J.*
Chairperson,
- versus - CARPIO MORALES,
Acting Chairperson,
TINGA,
VELASCO, JR., and
M.R. VARGAS CONSTRUCTION, BRION, JJ.
MARCIAL R. VARGAS, Sole Owner,
RENATO AGARAO,

Project Foreman, Promulgated:

Respondents.
April 10, 2008
x---------------------------------------------------------------------------x

DECISION

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 partyin-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 andRenato 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
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.
============================================
==============================
Mangila v. Court of Appeals,33 435 Phil. 870, 886 (2002) we held that:
x x x In fact, there is no law authorizing sole proprietorships to file a suit in court.
A sole proprietorship does not possess a juridical personality separate and distinct from
the personality of the owner of the enterprise. 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 its proprietor or owner to secure licenses and permits, register its
business name, and pay taxes to the national government. The law does not vest a
separate legal personality on the sole proprietorship or empower it to file or defend an
action in court.

========================================================
===================================

Only individuals shall be parties to the proceedings either

as complainants and respondents. Hence, no complaint by or
against corporations, partnerships or other juridical entitiesshall be filed, received or acted upon (Sec. 1, Rule VI,
Katarungang Pambarangay Rules

Moreover, there is no merit to the petitioners' contention that private respondents' failure to comply with the
conciliation process is fatal to the trial court's jurisdiction. The conciliation procedure under Pres. Dec. No. 1508
is not a jurisdictional requirement and its non-compliance cannot affect the jurisdiction which the court has
already acquired over the subject matter or over the person of the defendant. [Gonzales v. Court of Appeals,
G.R. Nos. L-59495-97, June 26, 1987, 151 SCRA 287; Millare v. Hernando, G.R. No. L-55480, June 30,
1987,151 SCRA 484].

Even assuming that petitioners' motion to dismiss had been filed on time, it is doubtful whether the Lupon has
authority over the controversy considering allegations regarding the residence of the parties involved. Petitioners
and private respondents are admittedly all residents of Jones Avenue, Cebu City, with the exception of petitioner
Connie P. Hall who is a citizen of the United States of America and a resident of Greenberry Drive, La Puerte,
California, U.S.A. The ruling in the case of Tavora v. Velasco [G.R. No. 60367, September 30, 1982, 117 SCRA
613] resolves this point.
... Section 2 (of Pres. Dec. No. 1508) specifies the conditions under which the Lupon of a
barangay "shall have authority" to bring together the disputants for amicable settlement of their
dispute: The parties must be "actually residing in the same city or municipality." At the same
time, Section 3-while reiterating that the disputants must be "actually residing in the same
barangay " or in "different barangays." within the same city or municipality-unequivocably
declares that the Lupon shall have "no authority" over disputes "involving parties who actually
reside in barangays of different cities or municipalities," except where such barangays adjoin
each other.
Thus, by express statutory inclusion and exclusion, the Lupon shall have no jurisdiction over
disputes where the parties are not actual residents of the same city or municipality, except where
the barangays in which they actually reside adjoin each other. [Emphasis supplied].

=========================================================================

SEC.
408. Subject
Matter
for
Amicable
Settlement;
Exception
Thereto. The lupon of each barangay shall have authority to bring together the
parties actually residing in the same city or municipality for amicable settlement of
all disputes except:
(a) Where one party is the government or any subdivision or
instrumentality thereof;

(b) Where one party is a public officer or employee, and the dispute relates
to the performance of his official functions;
(c) Offenses punishable by imprisonment exceeding one (1) year or a fine
exceeding Five Thousand pesos (P5,000.00);
(d) Offenses where there is no private offended party;
(e) Where the dispute involves real properties located in different cities or
municipalities unless the parties thereto agree to submit their differences to
amicable settlement by an appropriate lupon;
(f) Disputes involving parties who actually reside in barangays of different
cities or municipalities, except where such barangay units adjoin each other and
the parties thereto agree to submit their differences to amicable settlement by an
appropriate lupon;
(g) Such other classes of disputes which the President may determine in the
interest of justice or upon the recommendation of the Secretary of Justice.
The court in which non-criminal cases not falling within the authority of
the lupon under this Code are filed may, at any time before trial, motu proprio refer
the case to the lupon concerned for amicable settlement.
The Lupon only refers to individualssingle human being contrasted with a social
group or institution. It only applies to natural persons.