CAPACITY TO SUE OR BE SUED UNDER THE PHILIPPINE RULES OF COURT (RULE 8, PARTICULARLY SECTION 7)

1. Overview and Governing Provision

Under Philippine civil procedure, the concept of “capacity to sue or be sued” pertains to a party’s legal standing or competence to be a litigant in court. The primary source provision for allegations relating to capacity in pleadings is found in Rule 8 of the 2019 Amended Rules of Civil Procedure, specifically Section 7, which (in substance) provides:

Section 7. Capacity. — Facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be sued in a representative capacity, or the legal existence of an organized association of persons that is made a party, must be averred.

This requirement ensures that the court and the opposing party are adequately informed of (a) the nature of the parties' legal status or personality, (b) the basis for their presence in the suit (e.g., as guardian, executor, corporate representative, etc.), and (c) any special qualifications or disqualifications that may affect a party’s standing in litigation.

2. Importance of Alleging Capacity

Notice to the Court and Adverse Party
The principal rationale is notice: the court and the adverse party should not be left guessing as to why or how a particular person or entity may bring suit, or be subjected to it. Proper averment of capacity helps determine if a plaintiff or defendant can validly maintain or defend an action.
Jurisdictional and Procedural Considerations
While “capacity to sue or be sued” is distinct from “jurisdiction,” a party’s lack of capacity can lead to dismissal. Courts can dismiss actions for failure to state a cause of action if the party prosecuting or defending cannot validly appear. This underscores the necessity of specifically pleading capacity.
Avoiding Surprise and Delay
Proper allegations ensure neither side is ambushed by claims that a party is unauthorized or is a fictitious entity. It also helps the court streamline issues and avoid protracted technical contests later on in the litigation.

3. Scope of “Capacity”

“Capacity” is often intertwined with, but is not exactly the same as, “personality”.

Personality to sue or be sued refers to whether the entity is recognized as a juridical person (like a corporation) or a natural person that can stand as a party.
Capacity to sue or be sued refers to the legal qualification of that party to participate in a proceeding (e.g., minors or incompetent persons who require a representative, foreign corporations doing business in the Philippines, etc.).

Rule 8, Section 7 covers both:

Capacity in the sense of general legal competence (e.g., majority age, mental competence, corporate existence, or valid representation by guardians, administrators, etc.); and
Authority or representation in instances such as:
- Guardians (for minors or incompetents),
- Executors or administrators (for estates),
- Trustees,
- Corporate representatives,
- Agents authorized by power of attorney,
- Associations or organizations that may sue under a common name.

4. When and How Capacity Should Be Alleged

4.1. When

The rule requires that the capacity or authority be averred in the complaint or other pleadings (e.g., the answer, if the defendant has a special representation capacity). Although a specific section or paragraph may not be strictly mandated, it is crucial to affirmatively show the facts establishing such capacity or representation.

4.2. How

The pleader must state:

Age (when suing or being sued as a minor) or the fact of emancipation, if relevant;
Representative capacity (for instance, “Juan dela Cruz, in his capacity as executor of the estate of ____,” or “Guardian for minor ____”);
Legal existence of juridical entities or associations (e.g., “XYZ Corporation, a domestic corporation duly organized and existing under Philippine laws, with principal office at ____”);
Authority of an officer or representative to institute the action on behalf of an entity, if the adverse party is challenging such authority.

While the rules do not require attaching all documentary evidence (like a board resolution) directly to the pleading, it is prudent to at least allege the basis of authority. Should the capacity be contested, supporting documents may be required in subsequent proceedings or in compliance with the rules on evidence.

5. Representative Suits and Special Capacities

Minors or Incompetent Persons
- They can only sue or be sued through a guardian (legal or judicial).
- The fact that a minor is represented by a guardian or next friend, or that a person declared incompetent has a duly appointed guardian or administrator, must be affirmatively alleged.
Deceased Person’s Estate
- The real party in interest is typically the estate, represented by a duly appointed executor or administrator.
- A suit must reflect that it is the “Estate of ___ represented by ___, as executor/administrator,” or a similar phrasing showing authority.
Corporations and Juridical Entities
- A corporation sues or is sued through its authorized corporate officers or representative.
- The pleading should state that it is a “domestic corporation duly organized under Philippine laws” (or foreign corporation, if applicable), and that the representative has authority to file or defend.
Associations without Juridical Personality
- They may be treated as a juridical entity (sued under the association name) if the law so permits or if all members are joined. The facts establishing their legal capacity to sue or be sued must appear in the pleading.
Foreign Corporations
- Under Philippine law, a foreign corporation must generally have a license to do business in the Philippines to sue in Philippine courts (save for certain exceptions, such as isolated transactions).
- If a foreign corporation sues in the Philippines, the pleading should aver that it is duly licensed to transact business here, or state the factual basis why no such license is required (e.g., the cause of action arose from an isolated or single transaction).

6. Consequences of Failing to Properly Allege Capacity

Ground for Motion to Dismiss or Affirmative Defense
Under the current rules, a defendant may raise lack of capacity to sue as an affirmative defense in its Answer. Failure to properly allege capacity can subject the case to dismissal if it leads to a finding that the plaintiff is not a real party in interest or is otherwise incompetent to maintain the action.
Possible Amendment of Pleadings
Courts generally allow correction of defects regarding capacity by amending the pleadings, especially if done before trial and it does not prejudice the adverse party. The rules on liberal construction often permit amendments to cure technical defects.
Effect on Judgment
If a party with no legal capacity obtains a favorable judgment, the judgment can be later questioned for invalidity or lack of enforceability if the defect is substantial. Conversely, the defendant can mount a direct or collateral attack on that judgment if capacity was never properly established.

7. Distinction from Real Party in Interest

Real party in interest is governed by Rule 3, Section 2: it focuses on whether the party stands to be benefited or injured by the outcome or is entitled to the avails of the suit.
Capacity to sue is about legal qualification to appear in court.
- Example: A trustee may be the real party in interest in behalf of a trust, but if the trustee is not duly appointed or has not complied with the special representation requirements, the capacity is lacking.

8. Challenges to Capacity

The opposing party may question a pleader’s capacity by:
1. Specific negative averment in an Answer (stating that the plaintiff lacks capacity);
2. Affirmative defense raising “lack of capacity to sue” under the enumerated grounds in Rule 8 in relation to Rule 6 and Rule 15;
3. Motion for bill of particulars if the allegations regarding capacity are vague or insufficient.
The burden to establish capacity or authority lies on the party invoking it. If an opposing party challenges capacity, documentary or testimonial proof may be demanded during the preliminary stages (e.g., motion for preliminary hearing on affirmative defenses) or in the main trial on the merits.

9. Procedural Remedies and Strategies

For the Plaintiff
- Thoroughly verify that you (or your client) have the requisite legal capacity or authority;
- Clearly and specifically allege capacity in the complaint;
- If representing an entity, consider attaching or at least referencing board resolutions, certificates of authority, or guardianship orders, so any challenge to capacity can be speedily addressed.
For the Defendant
- Scrutinize the complaint to see if capacity or authority is properly alleged;
- If capacity or authority is absent or defective, raise this in the Answer as an affirmative defense;
- If the defect is patently incurable (e.g., an unlicensed foreign corporation engaged in business transactions in the Philippines), consider moving for an early dismissal or an appropriate summary judgment if the defect in capacity is undisputed.

10. Key Jurisprudence and Principles

While there are numerous cases discussing capacity to sue or be sued, the overarching doctrines from the Supreme Court emphasize:

Substantial Compliance
- Technical rules should not defeat substantial rights. If the deficiency in alleging capacity is curable and no prejudice arises, courts may allow amendment rather than outright dismissal.
Proof of Corporate Existence or Representative Authority
- Mere assertion in pleadings may suffice at the onset, but if challenged, the party must prove actual authority or valid corporate status. Courts require, at times, a showing of the Certificate of Incorporation, Articles of Incorporation, or the appropriate board resolution.
Guardian and Minor Representation
- Strict compliance with guardianship rules is required, as minors or incompetent persons cannot independently prosecute or defend suits. A judgment rendered against a minor who was not properly represented is generally voidable.
Foreign Corporations
- The Supreme Court has consistently ruled that a foreign corporation doing business in the Philippines without a license lacks capacity to sue. However, if the cause of action arises from a single or isolated transaction, the courts have allowed suits to proceed.

11. Practical Tips for Drafting Pleadings

Always identify the status of the parties:
- State if they are “of legal age, Filipino citizen, and resident of ____”;
- For corporations: “(Name of Corporation), a corporation duly organized and existing under Philippine laws (or foreign laws), with principal office at ____.”
For representative suits, include:
- The basis (e.g., “as guardian ad litem,” “as executor appointed by [court],” “authorized by board resolution dated ____”).
- If dealing with minors or incompetents, cite relevant guardianship orders, if already obtained.
Check for any statutory requirement unique to the entity or the cause of action (e.g., co-ownership situations, partnership suits, etc.).
Anticipate challenges:
- If the party is a foreign corporation, be prepared to show its licensing status or the reason why no license is required.

12. Conclusion

“Capacity to sue or be sued” under Rule 8, Section 7 is a crucial procedural requirement in Philippine civil litigation. Properly alleging—and if challenged, proving—capacity ensures orderly proceedings, safeguards the rights of all litigants, and upholds the integrity of court judgments. Parties and practitioners must pay attention to these requirements at the pleading stage to avoid pitfalls that could lead to dismissal, delays, or unenforceable judgments. By meticulously stating the necessary facts and supporting them when required, litigants can avert procedural setbacks and focus on the substantive merits of their case.