ALHAMBRA CIGAR & CIGARETTE MANUFACTURING COMPANY, INC vs.

SEC
G.R. No. L-23606 July 29, 1968

FACTS: Alhambra Cigar and Cigarette Manufacturing Company, Inc. was duly
incorporated under Philippine laws on January 15, 1912. By its corporate articles it was
to exist for fifty (50) years from incorporation. Its term of existence expired on January
15, 1962. On that date, it ceased transacting business, entered into a state of
liquidation. Thereafter, a new corporation, Alhambra Industries, Inc., was formed to
carry on the business of Alhambra. On June 20, 1963, within Alhambra's three-year
statutory period for liquidation, RA 3531 was enacted into law. It amended Section 18 of
the Corporation Law empowering domestic private corporations to extend their
corporate life beyond the period fixed by the articles of incorporation for a term not to
exceed fifty years in any one instance. Previous to RA 3531, the maximum non-
extendible term of such corporations was fifty years. On July 15, 1963, at a special
meeting, Alhambra's board of directors resolved to amend paragraph "Fourth" of its
articles of incorporation to extend its corporate life for an additional fifty years, or a total
of 100 years from its incorporation. Alhambra's articles of incorporation as so
amended certified correct by its president and secretary and a majority of its board
of directors, were then filed with SEC. SEC, however, returned said amended articles of
incorporation to Alhambra's counsel with the ruling that RA 3531 "which took effect only
on June 20, 1963, cannot be availed of by the said corporation, for the reason that its
term of existence had already expired when the said law took effect in short, said law
has no retroactive effect."

ISSUE: Whether or not a corporation can extend its life by amendment of its
articles of incorporation effected during the three-year statutory period for liquidation
when its original term of existence had already expired.

RULING: Plain from the language of the provision of Section 77 of Corporation Law is
its meaning: continuance of a "dissolved" corporation as a body corporate for three
years has for its purpose the final closure of its affairs, and no other; the corporation is
specifically enjoined from "continuing the business for which it was established". The
liquidation of the corporation's affairs set forth in Section 77 became necessary
precisely because its life had ended. For this reason alone, the corporate existence and
juridical personality of that corporation to do business may no longer be extended. And
it should be clearly evident that no corporation in a state of liquidation can act in any
way, much less amend its articles, "for the purpose of continuing the business for which
it was established".
ANG MGA KAANIB VS. IGLESIA
(December 12, 2001)

FACTS: Respondent Iglesia ng Dios Kay Cristo Jesus, Haligi at Suhay ng Katotohanan
(Church of God in Christ Jesus, the Pillar and Ground of Truth), is a non-stock religious
society or corporation registered in 1936. Sometime in 1976, one Eliseo Soriano and
several other members of respondent corporation disassociated themselves from the
latter and succeeded in registering on March 30, 1977 a new non-stock religious society
or corporation, named Iglesia ng Dios Kay Kristo Hesus, Haligi at Saligan ng
Katotohanan. Respondent corporation filed with the SEC a petition to compel the Iglesia
ng Dios Kay Kristo Hesus, Haligi at Saligan ng Katotohanan to change its corporate
name to another name that is not similar or identical to any name already used by a
corporation, partnership or association registered with the Commission. Petitioner is
compelled to change its corporate name and be barred from using the same or similar
name on the ground that the same causes confusion among their members as well as
the public. SEC rendered a decision ordering petitioner to change its corporate name.
The Court of Appeals rendered the assailed decision affirming the decision of the SEC
En Banc.

ISSUE: Whether the court of appeals failed to properly appreciate the scope of the
constitutional guarantee on religious freedom

RULING: The additional words "Ang Mga Kaanib " and "Sa Bansang Pilipinas, Inc." in
petitioner's name are, as correctly observed by the SEC, merely descriptive of and also
referring to the members, or kaanib, of respondent who are likewise residing in the
Philippines. These words can hardly serve as an effective differentiating medium
necessary to avoid confusion or difficulty in distinguishing petitioner from respondent.
This is especially so, since both petitioner and respondent corporations are using the
same acronym — H.S.K.; not to mention the fact that both are espousing religious
beliefs and operating in the same place. The fact that there are other non-stock religious
societies or corporations using the names Church of the Living God, Inc., Church of
God Jesus Christ the Son of God the Head, Church of God in Christ & By the Holy
Spirit, and other similar names, is of no consequence. It does not authorize the use by
petitioner of the essential and distinguishing feature of respondent's registered and
protected corporate name. Ordering petitioner to change its corporate name is not a
violation of its constitutionally guaranteed right to religious freedom. In so doing, the
SEC merely compelled petitioner to abide by one of the SEC guidelines in the approval
of partnership and corporate names, namely its undertaking to manifest its willingness
to change its corporate name in the event another person, firm, or entity has acquired a
prior right to the use of the said firm name or one deceptively or confusingly similar to it.
The instant petition for review is DENIED. The appealed decision of the Court of
Appeals is AFFIRMED in toto
PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS
INDUSTRIAL DEVELOPMENT v. COURT OF APPEALS, SECURITIES &
EXCHANGE COMMISSION and STANDARD PHILIPS CORPORATION,respondents.

FACTS:

Petitioner Philips Export B.V. (PEBV), aforeign corporation organized under the laws of
the Netherlands, although not engaged in business here, is the registered owner of the
trademarks PHILIPS and PHILIPS SHIELD EMBLEM .
Respondent Standard Philips Corporation (Standard Philips), on the other hand, was
issued a Certificate of Registration by respondent Commission on 19 May 1982.
Petitioners filed a letter complaint with the Securities & Exchange Commission (SEC)
asking for the cancellation of the word “PHILIPS” from Private Respondent’s corporate
name.
As a result of Private Respondent’s refusal to amend its Articles of Incorporation,
Petitioners filed with the SEC. Alleging, among others, that Private Respondent’s use of
the word PHILIPS amounts to an infringement and clear violation of Petitioners’
exclusive right to use the same considering that both parties engage in the same
business.
Private Respondent countered that Petitioner PEBV has no legal capacity to sue; that
its use of its corporate name is not at all similar to Petitioners’ trademark PHILIPS when
considered in its entirety; and that its products consisting of chain rollers, belts, bearings
and cutting saw are grossly different from Petitioners’ electrical products.

ISSUE: WON petitioner may sue private respondent.

HELD: YES.

The Court declared that a corporation’s right to use its corporate and trade name is a
property right, a rightin rem, which it may assert and protect against the world in the
same manner as it may protect its tangible property, real or personal, against trespass
or conversion. It is regarded, to a certain extent, as a property right and one which
cannot be impaired or defeated by subsequent appropriation by another corporation in
the same field.
A name is peculiarly important as necessary to the very existence of a corporation. Its
name is one of its attributes, an element of its existence, and essential to its identity.
A corporation acquires its name by choice and need not select a name identical with or
similar to one already appropriated by a senior corporation while an individual’s name is
thrust upon him. A corporation can no more use a corporate name in violation of the
rights of others than an individual can use his name legally acquired so as to mislead
the public and injure another
Our own Corporation Code, in its Section 18, expressly provides that:
No corporate name may be allowed by the Securities and Exchange Commission if the
proposed name is identical or deceptively or confusingly similar to that of any existing
corporation or to any other name already protected by law or is patently deceptive,
confusing or contrary to existing [Link] a change in a corporate name is approved,
the commission shall issue an amended certificate of incorporation under the amended
name.

The statutory prohibition cannot be any clearer. To come within its scope, two requisites
must be proven, namely:

(1) that the complainant corporation acquired a prior right over the use of such
corporate name; and

(2) the proposed name is either:

(a) identical; or

(b) deceptively or confusingly similar

to that of any existing corporation or to any other name already protected by law; or

(c) patently deceptive, confusing or contrary to existing law.

In this regard, there is no doubt with respect to Petitioners’ prior adoption of’ the name
”PHILIPS” as part of its corporate name. Petitioners Philips Electrical and Philips
Industrial were incorporated on 29 August 1956 and 25 May 1956, respectively, while
Respondent Standard Philips was issued a Certificate of Registration on 12 April 1982,
twenty-six (26) years later (Rollo, p. 16). Petitioner PEBV has also used the trademark
“PHILIPS” on electrical lamps of all types and their accessories since 30 September
1922.
The second requisite no less exists in this case. In determining the existence of
confusing similarity in corporate names, the test is whether the similarity is such as to
mislead a person, using ordinary care and discrimination. In so doing, the Court must
look to the record as well as the names themselves. While the corporate names of
Petitioners and Private Respondent are not identical, a reading of Petitioner’s corporate
names, to wit: PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and
PHILIPS INDUSTRIAL DEVELOPMENT, INC., inevitably leads one to conclude that
“PHILIPS” is, indeed, the dominant word in that all the companies affiliated or
associated with the principal corporation, PEBV, are known in the Philippines and
abroad as the PHILIPS Group of Companies.
What is lost sight of, however, is that PHILIPS is a trademark or trade name which was
registered as far back as 1922. Petitioners, therefore, have the exclusive right to its use
which must be free from any infringement by similarity. A corporation has an exclusive
right to the use of its name, which may be protected by injunction upon a principle
similar to that upon which persons are protected in the use of trademarks and
tradenames (18 C.J.S. 574). Such principle proceeds upon the theory that it is a fraud
on the corporation which has acquired a right to that name and perhaps carried on its
business thereunder, that another should attempt to use the same name, or the same
name with a slight variation in such a way as to induce persons to deal with it in the
belief that they are dealing with the corporation which has given a reputation to the
name.
SEVENTH DAY ADVENTIST CONFERENCE CHURCH OF SOUTHERN
PHILIPPINES, [Link]. NORTHEASTERN MINDANAO MISSION OF SEVENTH DAY
ADVENTIST, [Link]: Juridical Personality & De Facto Corporation

Facts: The subject of this case is a land situated in Bayugan, Agusan del Sur. It was
owned by Spouses Felix & Felisa Cosio. In 1959, the spouses donated the land to the
South Philippines Union Mission of Seventh Day Adventist Church of Bayugan (SDA
Bayugan). A Deed of Donation was executed. The donation was allegedly accepted by
one Liberato Rayos, an elder of the church. Twenty-one years later (1980), this land
was sold by the spouses to the Seventh Day Adventist Church of Northeastern
Mindanao Mission (SDA-NEMM). A TCT was issued in its name. In 1987, SDA
Conference Church of Southern Philippines (SDA CCSP) filed a suit for cancellation of
title, quieting of ownership and possession, declaratory relief and reconveyance with
prayer for preliminary injunction and damages in the RTC of Bayugan, Agusan del
[Link] SDA CCSP claimed to be the SDA Bayugan’s successors-in-interest, and
claimed ownership over the land. SDA-NEMM opposed this, alleging that SDA Bayugan
could not legally be a donee back then because it was not yet incorporated then, thus, it
had no juridical personality. The RTC ruled against SDA CCSP and upheld the validity
of the sale to SDA NEMM. The CA affirmed. Hence this petition.

Issue: Who is the legal owner of the land?

SC’s ruling: SDA-NEMM is the legal owner.

SDA CCSP cannot claim ownership. Donation is an act of liberality whereby a person
disposes gratuitously of a thing or right in favor of another person who accepts it. The
donation could not have been made in favor of an entity yet inexistent at the time it was
made. Nor could it have been accepted as there was yet no one to accept it.
When the deed of donation was executed, SDA Bayugan had no juuridical personality
and therefore had no capacity to accept. SDA CCSP also argued that SDA Bayugan
was a de facto corporation. Requisites of a de facto corporation:
(a) the existence of a valid law under which it may be incorporated;
(b) an attempt in good faith to incorporate; and
(c) assumption of corporate powers.
In this case, there was no proof that SDA Bayugan attempted to incorporate at the time.
They were not registered with the SEC. The filing of articles of incorporation and the
issuance of the certificate of incorporation are essential for the existence of a de facto
corporation. Corporate existence begins only from the moment a certificate of
incorporation is issued. Since SDA Bayugan was not a corporation, SDA CCSP cannot
claim to be its successor in interest. Moreover, there is sufficient basis to affirm the title
of SDA-NEMM. A Certificate of Title is generally a conclusive evidence of ownership of
the land. The TCT in this case was issued in favor of SDA NEMM, after a valid sale as
evidenced by a public instrument
MARIANO ALBERT VS. UNIVERSITY PUBLISHING

Facts: In Albert vs. University Publishing Co., Inc., L-9300, April 18, 1958, we found
plaintiff entitled to damages (for breach of contract) but reduced the amount from P23,
000.00 to P15, 000.00.

Then in Albert vs. University Publishing Co., Inc., L-15275, October 24, 1960, we held
that the judgment for P15,000.00 which had become final and executory, should be
executed to its full amount, since in fixing it, payment already made had been
considered.

15 years ago, Mariano Albert entered into a contract with University Publishing Co., Inc.
through Jose M. Aruego, its President, whereby University would pay plaintiff for the
exclusive right to publish his revised Commentaries on the Revised Penal Code. The
contract stipulated that failure to pay one installment would render the rest of the
payments due. When University failed to pay the second installment, Albert sued for
collection and won.

However, upon execution, it was found that the records of this Commission do not show
the registration of UNIVERSITY PUBLISHING CO., INC., either as a corporation or
partnership. Albert petitioned for a writ of execution against Jose M. Aruego as the real
defendant. University opposed, on the ground that Aruego was not a party to the case.

Issue: WON the non-registration of University Publishing Co., Inc. in the SEC is an
existing corporation with an independent juridical personality.

Held: No.

Ratio: On account of the non-registration it cannot be considered a corporation, not

even a corporation de facto (Hall vs. Piccio, 86 Phil. 603). It has therefore no personality
separate from Jose M. Aruego; it cannot be sued independently.

In the case at bar, Aruego represented a non-existent entity and induced not only Albert
but the court to believe in such representation. He signed the contract as “President” of
“University Publishing Co., Inc.,” stating that this was “a corporation duly organized and
existing under the laws of the Philippines”.

“A person acting or purporting to act on behalf of a corporation which has no valid

existence assumes such privileges and obligations and becomes personally liable for
contracts entered into or for other acts performed as such agent.”

Aruego, acting as representative of such non-existent principal, was the real party to
the contract sued upon, and thus assumed such privileges and obligations and became
personally liable for the contract entered into or for other acts performed as such agent.
The Supreme Court likewise held that the doctrine of corporation by estoppel cannot be
set up against Albert since it was Aruego who had induced him to act upon his
(Aruego’s) willful representation that University had been duly organized and was
existing under the law
ASIA BANKING CORP VS STANDARD PRODUCTS

FACTS: Standard Products, Co., Inc., was indebted to Asia Banking Corporation
for the amount of P37,757.00. To secure its indebtedness, it executed a promissory
note in favor of plaintiff. Upon demand for the balance due, the respondent failed
to pay. Hence an action was brought by plaintiff to recover the sum of
P24,736.47. The court rendered judgment in favor of the plaintiff for the sum
demanded in the complaint, with interest on Hence, this appeal by the respondent. At
the trial of the case the plaintiff failed to prove affirmatively the corporate existence of
the parties and the appellant insists that under these circumstances the court
erred in finding that the parties were corporations with juridical personality and
assigns same as reversible error.

ISSUE:Whether or not respondent is estopped from denying the corporate

existence of the plaintiff.

RULING:The general rule is that in the absence of fraud, a person who has
contracted or otherwise dealt with an association in such a way as to recognize and in
effect admit its legal existence as a corporate body is thereby estopped to den# its
corporate existence in any action leading out of or insisting such contract or
dealing, unless its existence is attacked for cause which has arisen since making
the contract or other dealing relied on as an estoppel and this applies to foreign as
well as to domestic corporations. The defendant having recognized the corporate
existence of the plaintiff by making a promissory note in its favor and making
partial payments on the same is therefore estopped to deny said plaintiff‘s corporate
existence. It is, of course, also estopped from denying its own corporate existence.
Under these circumstances it was unnecessary for the plaintiff to present other
evidence of the corporate existence of either of the parties. It ma# be noted that there is
no evidence showing circumstances taking the case out of the rules stated.
BISAYA LAND
TRANSPORTATION
COMPANY, INC vs. MIGUEL
CUENCO
G.R. No. L-18173 April 22,
1968
FACTS: In 1959 the Solicitor
General, in representation of the
Republic, filed a petition for quo
warranto against the Bisaya Land
Transportation Co., Inc., seeking
its forcible dissolution. The
petition was docketed as
special civil case No. 39766,
CFI of Manila. Impleaded
with the
corporation as respondents were its
officers, among them is Miguel
Cuenco. Respondent filed
his individual answer to the
petition, admitting the allegations
therein insofar as the offending
acts of the corporation and of the
other individual respondents were
concerned but disclaiming
any participation in such acts by
him. He joined in the prayer for
dissolution as well as for the
appointment of a receiver, and
at the same time filed a cross-
claim "in his own behalf as
bonafide stockholder and as
director for the benefit of
cross-respondent Corporation."
On
August 31, 1959 Miguel, as cross-
claimant, filed a notice of lis
pendens with the Register of
Deeds for the City of Cebu,
covering real properties of the
corporation. The corporation went
to
the CFI of Cebu and in the original
land registration records of said
properties filed a petition for
the cancellation of the notice of lis
pendens, making Miguel the party-
respondent. After hearing,
the court in its decision held the
annotation of lis pendens to be
irregular and unwarranted and
so ordered its cancellation. Hence,
this appeal.
ISSUE: Whether or not the
petition for quo warranto filed
by the Solicitor General for
the
dissolution of the appellee
corporation affects the latter's title
or right of possession to the real
properties subject of the lis
pendens.
RULING: The Republic and
respondent cross-claimant Miguel
Cuenco lays no any claim of
right or title to the lands covered
by the notice. They admit
ownership thereof by the
corporation.
Indeed the cross-claim is for
the latter's benefit and against
the other individual cross-
respondents, who likewise do not
claim any right or title to the said
properties. As far as the
cross-claim is concerned it merely
prays that the cross-respondents be
ordered to reimburse the
corporation certain sums of money
allegedly realized by them as a
result of their fraudulent
transactions. The title to or right to
possess the properties subject of
the lis pendens is nowhere
in issue. The fact that in case the
petitioning corporation is dissolved
its assets will be liquidated
and distributed among the
stockholders, after paying off the
creditors, and that part of those
assets as of the present consists
of the properties now in
question, does not convert this
proceeding into a real action
involving the title to these
properties so as to justify the
notation
of lis pendens. The rights of the
stockholders to the assets will arise
only after dissolution of the
corporation, and even then they
cannot individually lay claim to
any particular property or any
part thereof as their own except as
a result of the liquidation. They
have therefore no title or
possessory right to protect by the
notice. 
BISAYA LAND TRANSPORTATION COMPANY, INC vs. MIGUEL CUENCOG.R. No.
L-18173 April 22, 1968
FACTS: In 1959 the Solicitor General, in representation of the Republic, filed a petition
for quo warranto against the Bisaya Land Transportation Co., Inc., seeking its forcible
dissolution. The petition was docketed as special civil case No. 39766, CFI
of Manila. Impleaded with the corporation as respondents were its officers, among
them is Miguel Cuenco. Respondent filed his individual answer to the petition, admitting
the allegations therein insofar as the offending acts of the corporation and of the other
individual respondents were concerned but disclaiming any participation in such acts by
him. He joined in the prayer for dissolution as well as for the appointment of a
receiver, and at the same time filed a cross-claim "in his own behalf as
bonafide stockholder and as director for the benefit of cross-respondent
Corporation." On August 31, 1959 Miguel, as cross-claimant, filed a notice of lis
pendens with the Register of Deeds for the City of Cebu, covering real properties of the
corporation. The corporation went to the CFI of Cebu and in the original land registration
records of said properties filed a petition for the cancellation of the notice of lis pendens,
making Miguel the party-respondent. After hearing, the court in its decision held the
annotation of lis pendens to be irregular and unwarranted and so ordered its
cancellation. Hence, this appeal.
43ISSUE: Whether or not the petition for quo warranto filed by the Solicitor
General for the dissolution of the appellee corporation affects the latter's title or right
of possession to the real properties subject of the lis pendens.
RULING: The Republic and respondent cross-claimant Miguel Cuenco lays no any
claim of right or title to the lands covered by the notice. They admit ownership thereof by
the corporation. Indeed the cross-claim is for the latter's benefit and against
the other individual cross-respondents, who likewise do not claim any right or title to
the said properties. As far as the cross-claim is concerned it merely prays that the
cross-respondents be ordered to reimburse the corporation certain sums of money
allegedly realized by them as a result of their fraudulent transactions. The title to or right
to possess the properties subject of the lis pendens is nowhere in issue. The fact
that in case the petitioning corporation is dissolved its assets will be liquidated and
distributed among the stockholders, after paying off the creditors, and that part of those
assets as of the present consists of the properties now in question, does not
convert this proceeding into a real action involving the title to these properties so as to
justify the notation of lis pendens. The rights of the stockholders to the assets will arise
only after dissolution of the corporation, and even then they cannot individually lay claim
to any particular property or any part thereof as their own except as a result of the
liquidation. They have therefore no title or possessory right to protect by the notice.
HALL VS EDMUNDO PICCIO
G.R. No. L-2598, 29 June 1950

FACTS:
On May 28, 1947, the petitioners C. Arnold Hall and Bradley P. Hall, and the
respondents Fred Brown, Emma Brown, Hipolita D. Chapman and Ceferino S. Abella,
signed and acknowledged in Leyte, the articles of incorporation of the Far Eastern
Lumber and Commercial Co., Inc., organized to engage in a general lumber business to
carry on as general contractors, operators and managers, etc. Attached to the articles
was an affidavit of the treasurer stating that 23,428 shares of stock had been
subscribed and fully paid with certain properties transferred to the corporation described
in a list appended thereto.
Immediately after the execution of said articles of incorporation, the corporation
proceeded to do business with the adoption of by-laws and the election of its officers.
On December 2, 1947, the said articles of incorporation were filed in the office of the
Securities and Exchange Commission for the issuance of the corresponding certificate
of incorporation.
On March 22, 1948, pending action on the articles of incorporation by the SEC,
respondents Fred Brown, Emma Brown, Hipolita D. Chapman and Ceferino S. Abella
filed a suit against petitioners before the Court of First Instance of Leyte alleging among
other things that the Far Eastern Lumber and Commercial Co. was an unregistered
partnership; that they wished to have it dissolved because of bitter dissension among
the members, mismanagement and fraud by the managers and heavy financial losses.
The defendants in the suit, namely, C. Arnold Hall and Bradley P. Hall, filed a motion to
dismiss, contesting the court’s jurisdiction and the sufficiency of the cause of action.
After hearing the parties, the Hon. Edmundo S. Piccio ordered the dissolution of the
company; and at the request of plaintiffs, appointed the respondent Pedro A. Capuciong
as receiver of the properties thereof, upon the filing of a P20,000 bond.
The defendants therein (petitioners herein) offered to file a counter-bond for the
discharge of the receiver, but the respondent judge refused to accept the offer and to
discharge the receiver.
Hence, this petition.
ISSUE:
Whether or not the trial court has jurisdiction over the case?

HELD:No. The court had no jurisdiction in civil case No. 381 to decree the dissolution of
the company, because it being a de facto corporation, dissolution thereof may only be
ordered in a quo warranto proceeding instituted in accordance with section 19 of the
Corporation Law.
Under our statute it is to be noted that it is the issuance of a certificate of incorporation
by the Director of the Bureau of Commerce and Industry which calls a corporation into
being. The immunity of collateral attack is granted to corporations ‘claiming in good faith
to be a corporation under this act.’
Further, this is not a suit in which the corporation is a party. This is a litigation between
stockholders of the alleged corporation, for the purpose of obtaining its dissolution.
Even the existence of a de jure corporation may be terminated in a private suit for its
dissolution between stockholders, without the intervention of the state.

WHEREFORE, the petition is dismissed.

LOZANO VS. DELOS SANTOS
G.R. No. 125221, 19 June 1997

FACTS:
On December 19, 1995, petitioner Reynaldo M. Lozano filed Civil Case No. 1214 for
damages against respondent Antonio Anda before the Municipal Circuit Trial Court
(MCTC), Mabalacat and Magalang, Pampanga. Petitioner alleged that he was the
president of the Kapatirang Mabalacat-Angeles Jeepney Drivers’ Association, Inc.
(KAMAJDA) while respondent Anda was the president of the Samahang Angeles-
Mabalacat Jeepney Operators’ and Drivers’ Association, Inc. (SAMAJODA); in August
1995, upon the request of the Sangguniang Bayan of Mabalacat, Pampanga, petitioner
and private respondent agreed to consolidate their respective associations and form the
Unified Mabalacat-Angeles Jeepney Operators’ and Drivers Association, Inc.
(UMAJODA); petitioner and private respondent also agreed to elect one set of officers
who shall be given the sole authority to collect the daily dues from the members of the
consolidated association; elections were held on October 29, 1995 and both petitioner
and private respondent ran for president; petitioner won; private respondent protested
and, alleging fraud, refused to recognize the results of the election; private respondent
also refused to abide by their agreement and continued collecting the dues from the
members of his association despite several demands to desist.
Private respondent moved to dismiss the complaint for lack of jurisdiction, claiming that
jurisdiction was lodged with the Securities and Exchange Commission (SEC). MCTC
denied the motion and a petition for certiorari was filed before the RTC, The Regional
trial court found the dispute to be intracorporate, hence, subject to the jurisdiction of the
SEC, and ordered the MCTC to dismiss Civil Case No. 1214 accordingly.

ISSUE:
Whether there exist a corporation by estoppel.
RULING:
No. these associations are two separate entities. The dispute between petitioner and
private respondent is not within the KAMAJDA nor the SAMAJODA. It is between
members of separate and distinct associations. Petitioner and private respondent have
no intracorporate relation much less do they have an intracorporate dispute. The SEC
therefore has no jurisdiction over the complaint.

The doctrine of corporation by estoppel advanced by private respondent cannot

override jurisdictional requirements. Jurisdiction is fixed by law and is not subject to the
agreement of the parties. It cannot be acquired through or waived, enlarged or
diminished by, any act or omission of the parties, neither can it be conferred by the
acquiescence of the court.
Corporation by estoppel is founded on principles of equity and is designed to prevent
injustice and unfairness. It applies when persons assume to form a corporation and
exercise corporate functions and enter into business relations with third person. Where
there is no third person involved and the conflict arises only among those assuming the
form of a corporation, who therefore know that it has not been registered, there is no
corporation by estoppel.
BISAYA LAND
TRANSPORTATION
COMPANY, INC vs. MIGUEL
CUENCO
G.R. No. L-18173 April 22,
1968
FACTS: In 1959 the Solicitor
General, in representation of the
Republic, filed a petition for quo
warranto against the Bisaya Land
Transportation Co., Inc., seeking
its forcible dissolution. The
petition was docketed as
special civil case No. 39766,
CFI of Manila. Impleaded
with the
corporation as respondents were its
officers, among them is Miguel
Cuenco. Respondent filed
his individual answer to the
petition, admitting the allegations
therein insofar as the offending
acts of the corporation and of the
other individual respondents were
concerned but disclaiming
any participation in such acts by
him. He joined in the prayer for
dissolution as well as for the
appointment of a receiver, and
at the same time filed a cross-
claim "in his own behalf as
bonafide stockholder and as
director for the benefit of
cross-respondent Corporation."
On
August 31, 1959 Miguel, as cross-
claimant, filed a notice of lis
pendens with the Register of
Deeds for the City of Cebu,
covering real properties of the
corporation. The corporation went
to
the CFI of Cebu and in the original
land registration records of said
properties filed a petition for
the cancellation of the notice of lis
pendens, making Miguel the party-
respondent. After hearing,
the court in its decision held the
annotation of lis pendens to be
irregular and unwarranted and
so ordered its cancellation. Hence,
this appeal.
ISSUE: Whether or not the
petition for quo warranto filed
by the Solicitor General for
the
dissolution of the appellee
corporation affects the latter's title
or right of possession to the real
properties subject of the lis
pendens.
RULING: The Republic and
respondent cross-claimant Miguel
Cuenco lays no any claim of
right or title to the lands covered
by the notice. They admit
ownership thereof by the
corporation.
Indeed the cross-claim is for
the latter's benefit and against
the other individual cross-
respondents, who likewise do not
claim any right or title to the said
properties. As far as the
cross-claim is concerned it merely
prays that the cross-respondents be
ordered to reimburse the
corporation certain sums of money
allegedly realized by them as a
result of their fraudulent
transactions. The title to or right to
possess the properties subject of
the lis pendens is nowhere
in issue. The fact that in case the
petitioning corporation is dissolved
its assets will be liquidated
and distributed among the
stockholders, after paying off the
creditors, and that part of those
assets as of the present consists
of the properties now in
question, does not convert this
proceeding into a real action
involving the title to these
properties so as to justify the
notation
of lis pendens. The rights of the
stockholders to the assets will arise
only after dissolution of the
corporation, and even then they
cannot individually lay claim to
any particular property or any
part thereof as their own except as
a result of the liquidation. They
have therefore no title or
possessory right to protect by the
noti
SALVATIERRA VS GARLITOS

FACTS: In 1954, Manuela Vda. De Salvatierra entered into a lease contract

with Philippine Fibers Producers Co., Inc. (PFPC). PFPC was represented by its
president Segundino Refuerzo. It was agreed that Manuela shall lease her land
to PFPC in exchange of rental payments plus shares from the sales of crops.
However, PFPC failed to comply with its obligations and so in 1955, Manuela
sued PFPC and she won.
An order was issued by Judge Lorenzo Garlitos of CFI Leyte ordering the
execution of the judgment against Refuerzo‘s property (there being no property under
PFPC). Refuerzo moved for reconsideration on the ground that he should not be
held personally liable because he merely signed the lease contract in his official
capacity as president of PFPC. Garlitos granted Refuerzo‘s motion. Manuela assailed
the decision of the judge on the ground that she sued PFPC without impleading
Refuerzo because she initially believed that PFPC was a legitimate corporation.
However, during trial, she found out that PFPC was not actually registered with the
Securities and Exchange Commission (SEC) hence Refuerzo should be personally
liable.

ISSUE: Whether or not Manuela is correct.

HELD: Yes. It is true that as a general rule, the corporation has a personality
separate and distinct from its incorporators and as such the incorporators cannot
be held personally liable for the obligations of the corporation. However, this
doctrine is not applicable to unincorporated associations. The reason behind this
doctrine is obvious-since an organization which before the law is non-existent has
no personality and would be incompetent to act and appropriate for itself the powers
and attribute of a corporation as provided by law; it cannot create agents or confer
authority on another to act in its behalf; thus, those who act or purport to act as its
representatives or agents do so without authority and at their own risk. In this case,
Refuerzo was the moving spirit behind PFPC. As such, his liability cannot be limited
or restricted that imposed upon would-be corporate shareholders. In acting on
behalf of a corporation which he knew to be unregistered, he assumed the risk
of reaping the consequential damages or resultant rights, if any, arising out of such
transaction.