BENNY Y. HUNG vs. BPI CARD FINANCE CORP.

G.R. No. 182398, July 20, 2010, J. Perez

A sole proprietorship has no juridical personality apart from its owner. As such, its owner may
be held personally responsible for its obligation. Contrarily, a corporation acquires a juridical personality
separate and distinct from its stockholders and officers. It follows that its stockholders and officers are
not personally liable for its obligation unless piercing the corporate veil is warranted.

Facts:

Benny Hung is the owner of B & R Sportswear Enterprises. He signed merchant agreements with
BPI Corporation whereby B & R agreed to honor BPI Credit Cards. In relation to this, respondent BPI
mistakenly credited 3.5 million to the account of B & R. BPI filed a collection suit naming as defendant B
& R Sportswear. However, it was B & R Footwear Distributors, Inc., that filed an answer, appeared and
participated in the trial. After trial, the RTC ruled in favor of BPI, but it failed to execute the judgment as
it was discovered that B & R Footwear Distributors, Inc. is a non-existing entity. Consequently, the RTC
ordered Benny Hung to pay BPI since he signed the merchant agreements in his personal capacity.

Hung brought the case to the Supreme Court claiming that he never represented B & R
Footwear Distributor, Inc., and that such corporation is different from his single proprietorship B & R
Sportswear Enterprises. On the other hand, BPI argued that Hung treats the two B & R entities as one
and the same entity. Hung used the letterhead of B & R Footwear Distributor, Inc., yet the fund from
which the partial payment came belongs to his sole proprietorship.

Issue:

Whether or not Benny Hung be held liable for the satisfaction of the RTC's Decision against B &
R Footwear Distributor, Inc.

Ruling:

Yes. Petitioner has represented in his dealings with respondent that B & R Footwear
Distributors, Inc. is also B & R Sportswear Enterprises. He used the letterhead of B & R Footwear
Distributor's, Inc., in his directive to the bank to transfer the funds belonging to his sole proprietorship B
& R Sportswear Enterprises. Clearly, Hung treats the two B & R entities as one and the same entity.
Furthermore, the SEC certification proves that B & R Footwear Distributor, Inc. is not an existing
corporation. For this reason, the sole proprietorship is the proper defendant. As such, Benny Hung shall
be held liable for the satisfaction of the RTC’s decision because his sole proprietorship B & R Sportswear
Enterprises has no juridical personality apart from him.