Damage liability

Dear Atty. Kathy,

I have a small bakery business. One of my suppliers for customized packaging is “X,” whose company has a Department of Trade and Industry (DTI) registration for “ABC,” which is also under his name only. I made a purchase order in advance for customized Christmas packaging with X, but X only fulfilled about 30 percent of my order. I wrote a demand letter to X, asking for a refund plus damages. However, X is saying he is not liable because it was his business partner who handled the operations during the peak holiday season. Can I still run after X?

Stephanie

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Dear Stephanie,

Act No. 3883, Section 1, as amended by Act No. 4147, deems it unlawful for any person to use any name in connection with his or her business other than his or her true name, without first registering such other business name with the DTI, together with his or her true name and that of any other person having a joint or common interest with him or her in such business:

SECTION 1. It shall be unlawful for any person to use or sign, on any written or printed receipt, including receipt for tax on business, or on any written or printed contract not verified by a Notary Public, or on any written or printed evidence of any agreement or business transactions, any name used in connection with his business other than his true name, or keep conspicuously exhibited in plain view in or at the place where his business is conducted, if he is engaged in a business, any sign announcing a firm name or business name or style, without first registering such other name, or such firm name, or business name, or style, in the Bureau of Commerce (now Department of Trade and Industry) together with his true name and that of any other person having a joint or common interest with him in such contract, agreement, business transaction, or business.

In this regard, the Supreme Court has held that the main purpose of the law is the easy identification of the owner who can be held responsible for any accident, damage or injury caused by the property registered; and that the public has the right to assume that the registered owner is the actual or lawful owner of the property; otherwise, it would be very difficult and often impossible for the members of the general public to enforce its rights of action that they may have against the property owner.

Further, Act No. 3883 was enacted for the protection of the members of the general public who deal with businesses being operated under a name other than the true name of the owner. It seeks the prevention of tremendous confusion in the field of trade, wherein businesses would be operated under fictitious names, with the true owner being obscured from the public.

Accordingly, pursuant to Act No. 3883, members of the public who transact with businesses being operated under a name different from the true name of the owner has a right to assume that the registered owner is the actual or lawful owner thereof. Further, for the policy of the law to be enforced, the registered owner cannot be allowed to prove the contrary and evade liability to prejudiced third persons, but he or she may seek indemnity or reimbursement from the actual operator of the business at the time the injury was caused to a third party. A different treatment would make it very difficult for the transacting public to maintain an action against the owner should the business incur obligations, which would certainly defeat the very purpose of the law, such as, to protect members of the general public who transact with such businesses.

Based solely on your narration, your supplier, X, registered with the DTI the Company — ABC, under his name only, but that X is denying liability because someone else handled the business during the period of the order in issue. Such argument by X is futile because as ruled by the Supreme Court, you cannot be faulted in relying on the DTI registration where X is identified as the only owner or proprietor of the Company — ABC. Thus, since X is the only registered owner of ABC, you can pursue your claims against X for your unfulfilled purchase order.

(Marcelina Villanueva vs. Coca-Cola Bottlers Phils. Inc., et al., G.R. No. 264746, 7 August 2024)

Atty. Kathy Larios