Dispensable party

If a trade name is registered in the name of the married woman only, does it necessarily mean that the business with said trade name is hers alone? This is one of the questions raised and resolved in this case of Karla Gomez.

Karla is the registered owner of a sole proprietorship doing business under the trade name of “Kargo Enterprises” engaged in buying and selling of motor vehicles including trucks and heavy equipment, with her husband Gerry Gomez as manager.

On August 8, 1997, a Lease Agreement with Option to Purchase was entered into by and between Kargo Enterprises represented by its Manager, Gerry Gomez and Rolly Nubla, covering a mounted crane. Pursuant to the said agreement, Rolly delivered six postdated checks each in the amount of P66,333.33.

On October 1, 1997, another lease agreement was signed between Kargo and Rolly covering another mounted crane for which Rolly issued three postdated checks of P100,000 each.

The fifth and sixth checks totaling P132,666.66 on the first lease agreement however were dishonored by the bank when deposited and presented for payment on their maturity dates, while the third check of P100,000 on the second agreement were likewise dishonored. And despite oral and written demands, Rolly failed to pay the said amounts or to return the mounted crane.

So on September 12, 1998, “Karla Gomez doing business under the name Kargo Enterprises” filed two complaints against Rolly Nubla before the Regional Trial Court (RTC) praying for the seizure and return of the cranes (replevin) and or recovery of the sum of money with damages. On October 12, and 14, 1998, the RTC issued the writs of replevin. So the vehicles were seized and returned to Karla.

In his answer, Rolly asked for the dismissal of Karla’s complaint and the return of the vehicles which he alleged was illegally seized. He claimed that Karla has no cause of action against him since Karla was not a party to the Lease Agreements with Option to Purchase — the actionable documents on which the complaints were based. He argued that Kargo Enterprises is a mere trade name and therefore had no juridical personality to sue. So the actual parties to the case should have been himself and Gerry Gomez.

While the RTC initially granted Rolly’s motion to dismiss, it subsequently reconsidered its decision. Acting on the presumption that the leasing business under the name of Kargo Enterprises is a conjugal property, the RTC held that Karla has sufficient interest in the business and therefore has a cause of action against Rolly. But the RTC said that Karla should also include Gerry as co-plaintiff.

Rolly questioned this ruling. He said that the RTC gravely abused its discretion when it assumed that the leased vehicles are part of the conjugal property of Gerry and Karla. Since Karla is the registered owner of “Kargo Enterprises”, the vehicles subjects of the complaints are her paraphernal properties. So Rolly contended that the RTC gravely erred in ordering the inclusion of Gerry as co-plaintiff. Was Rolly correct?

No. The registration of the trade name in the name of one person — a woman — does not necessarily lead to the conclusion that the trade name as a property is hers alone, particularly when the woman is married. By law all property acquired during the marriage whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal until the contrary is proved.

Under Article 108 of the Family Code, the conjugal partnership is governed by the rules on the contract of partnership in all that is not in conflict with what is determined in the Chapter of this Code or by the spouses in their marriage settlements. In the absence of any marriage settlements between Karla and Gerry, the Code provides that a partner is a co-owner with the other partners of a specific property.

In suits to recover properties, all co-owners are real parties in interest but any one of them may bring an action for the recovery of the co-owned properties. Therefore only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property is an indispensable party. So Gerry Gomez is not strictly an indispensable party in the action to recover possession of the leased vehicles; he only needs to be impleaded as a proforma party to the suit based on Section 4, Rule 4 of the Rules of Court (Navarro vs. Escobido, G.R. 153788, 606 SCRA, 1).

 Note: Books containing compilation of my articles on Labor Law and Criminal Law (Vols. I and II) are now available. Call tel. 7249445.

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