UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW Civ Pro

Julia Giezl SM. Nunag (D2025) Prof. Reyes

Case Name Navarro v. Hon. Escobido and Karen T. Go, doing business under the name Kargo Enterprises

Topic Real Parties-in-interest (Sec. 2, Rule 3)

Case No. | Date G.R. No. 153788 November 2009

Ponente Brion, J.
Karen Go, as the co-owner of Kargo Enterprises, filed a complaint against Navarro when the checks
he issued for the 2 motor vehicles he leased were dishonored due to insufficiency of funds. Navarro
alleged as a special affirmative defense that the complaints stated no cause of action since Karen Go
is not a party to the lease agreement as the contract was signed by her husband, Glenn Go, and not
her. RTC dismissed the case. But on MR, it reversed its dismissal and held that Karen had sufficient
interest in the leasing business as it a conjugal property. She was ordered to file a motion for the
inclusion of her husband as co-plaintiff, in compliance with Sec. 4, Rule 3 of the ROC.

The issue in this case is whether Karen Go is a real-party-in-interest, to which the court said she is.
Case Summary
The Ruled on Civil Procedure requires that every action must be prosecuted or defended in the name
of the real party-in-interest. Karen Go, as the registered owner of the Kargo Enterprises, is the real
party-in-interest as she will directly benefit from or be injured by a judgment in this case. And since
it is a conjugal property, it is governed by the rules on the contract of partnership. NCC 1811 provides
that husband and wife both have an equal right to possess specific partnership property for
partnership purposes. Since Karen and Glenn are co-owners of Kargo Enterprises, they both have an
equal right to seek possession of the property. Glenn Go is not strictly an indispensable party in the
action to recover possession of the leased vehicles, he only needs to be impleaded as a pro-forma
party to the suit, based on Section 4, Rule 4 of the ROC which states that husband and wife shall sue
or be sued jointly, except as provided by law.
SEC. 2. Parties in interest. — A real party in interest is the party who stands to be benefited or injured
by the judgment in the suit, or the party entitled to the avails of the suit . Unless otherwise authorized
Doctrine
by law or these Rules, every action must be prosecuted or defended in the name of the real party in
interest.

RELEVANT FACTS
1. Kargo Enterprises, a business registered under the name of Karen T. Go, and Roger Navarro entered into a lease
agreement with option to purchase for 2 motor vehicles.
2. Karen Go filed a first complaint praying that the RTC issue writs of replevin for the seizure of the 2 motor vehicles
when the last 2 checks out of 6 checks which Navarro issued was dishonored due to insufficiency of funds,
amounting to P132,666.66.
3. She also filed a second complaint, essentially of the same allegation as the first but for the dishonor of the third
check out of the 3 checks Navarro issued for the other motor vehicle, amounting to P100,000.
4. The RTC issued the writs of replevin for both cases. Thus, the Sheriff seized the 2 vehicles and delivered them to
her.
5. In his answer, Navarro alleged as a special affirmative defense that the 2 complaints stated no cause of action
since Karen Go is not a party to the lease agreement as the contract was signed by her husband, Glenn Go, and
not her.
6. RTC dismissed the case. On MR, it reversed its dismissal and held that Karen had sufficient interest in the leasing
business as it a conjugal property. However, she was ordered to file a motion for the inclusion of her husband
as co-plaintiff, in compliance with Sec. 4, Rule 3 of the ROC.
7. Navarro filed a petition for certiorari before the CA, contending that a complaint which failed to state the cause
of action could not be converted into one with a cause of action by mere amendment or supplemental pleading.
8. The CA denied his petition and affirmed the RTC’s order. Thus, this petition for review on certiorari.

ISSUE RATIO
 UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW Civ Pro
Julia Giezl SM. Nunag (D2025) Prof. Reyes
Whether Karen Go The Ruled on Civil Procedure requires that every action must be prosecuted or defended in the name
is a real-party-in- of the real party-in-interest. Rule 3, Sec. 2 of the ROC states that:
interest. - YES SEC. 2. Parties in interest. — A real party in interest is the party who stands to be benefited
or injured by the judgment in the suit, or the party entitled to the avails of the suit . Unless
otherwise authorized by law or these Rules, every action must be prosecuted or defended
in the name of the real party in interest.

In this case, Kargo Enterprises is a sole proprietorship, which is neither a natural nor a juridical person
as defined by NCC 44. Thus, as pursuant to the aforementioned rule, as the registered owner of Kargo
Enterprises, Karen Go is the real party-in-interest as she will directly benefit from or be injured by a
judgment in this case. Navarro is wrong to say that her complaint did not state a cause of action because
her name did not appear in the lease agreement as it was her husband that signed in it because there
was an express term in the lease agreement that Glenn Go was only signing as the manager of the Kargo
Enterprises.

Moreover, the name in the title of the complaint was “KAREN T. GO doing business under the name
KARGO ENTERPRISES”. It was held in the case of Juasing Hardware v. Mendoza that since there is no law
authorizing sole proprietorship to bring suit in court and that the law merely recognizes sole
proprietorship as a form of business organization run by a single individual, the complaint should be
filed in the name of the owner of the business. The descriptive words “doing business as Juansing
Hardware” may be added.

As for the issue whether Kargo Enterprises as a sole proprietorship is conjugal or paraphernal property,
it is a conjugal property. Under FC 108, the conjugal partnership is governed by the ruled on the contract
of partnership. NCC 1811 provides that husband and wife both have an equal right to possess specific
partnership property for partnership purposes. Since Karen and Glenn are co-owners of Kargo
Enterprises, they both have an equal right to seek possession of the property. Co-owners may bring
actions for the recovery of the co-owned property without the necessity of joining all the other co-
owners as co-plaintiff because the suit is presumed to have been filed for the benefit of his co-owners.

Given this, either spouses Go may bring an action against Navarro to recover possession of the Kargo
Enterprises’ leased vehicles. Since Glenn Go is not strictly an indispensable party in the action to recover
possession of the leased vehicles, he only needs to be impleaded as a pro-forma party to the suit, based
on Section 4, Rule 4 of the Rules, which states:
Section 4. Spouses as parties. — Husband and wife shall sue or be sued jointly, except as
provided by law.

RULING
WHEREFORE, premises considered, we DENY the petition for review for lack of merit. Costs against petitioner Roger V. Navarro.