1.

Gregorio Palacio and Mario Palacio (minor)

vs Fely Transportation Company
Ponente: Regala

Facts:
In their complaint, the Palacio alleged that Fely hired Alfredo Canillo as driver who negligently run
over a child (Mario). Gregorio , the father of Mario is a welder and in the account of his child's injuries
has abandoned his shop which is the family's source of income.

Fely filed a motion to dismiss on the grounds that there is no cause of action against the company
and that the cause of action is barred by prior judgment. But the court deferred the determination of
the grounds alleged in the motion to dismiss until the trial of the case.

The defendant then alleges (1) that complaint states no cause of action against defendant, and (2)
that the sale and transfer of the jeep AC-687 by Isabelo Calingasan to the Fely Transportation was
made on December 24, 1955, long after the driver Alfredo Carillo of said jeep had been convicted and
had served his sentence.

In view of the evidence presented, the lower court barred the judgment in the criminal case and held
that the person subsidiarily liable to pay damages is Isabel Calingasan, the employer.

Issue: Whether Fely Transportation can be held liable for the damages.

Ruling:
The Court agrees with this contention of the plaintiffs. Isabelo Calingasan and defendant Fely
Transportation may be regarded as one and the same person. It is evident that Isabelo Calingasan's
main purpose in forming the corporation was to evade his subsidiary civil liability resulting from the
conviction of his driver, Alfredo Carillo. This conclusion is borne out by the fact that the incorporators
of the Fely Transportation are Isabelo Calingasan, his wife, his son, Dr. Calingasan, and his two
daughters.

Accordingly, defendants Fely Transportation and Isabelo Calingasan should be held subsidiarily liable
for P500.00 which Alfredo Carillo was ordered to pay in the criminal case and which amount he could
not pay on account of insolvency.

2. Corporate Law Case Digest:Professional Services, Inc V. CA (2010)

FACTS:

Enrique Agana told his wife Natividad Agana to go look for their neighbor, Dr. Ampil, a surgeon staff
member of Medical City, a prominent and known hospital
Natividad suffered from injury due to 2 gauges left inside her body so they sued Professional Inc.
(PSI)
Despite, the report of 2 missing gauzes after the operation PSI did NOT initiate an investigation

ISSUE: W/N PSI should be liable for tort.

HELD: YES. 15M + 12% int. until full satisfaction.

While PSI had no power to control the means/method by which Dr. Ampil conducted the surgery on
Natividad, they had the power to review or cause the review
PSI had the duty to tread on as captain of the ship for the purpose of ensuing the safety of the
patients availing themselves of its services and facilities
PSI defined its standards of corporate conduct:
Even after her operation to ensure her safety as a patient
NOT limited to record the 2 missing gauzes
Extended to determining Dr. Ampils role in it, bringing the matter to his attention and correcting his
negligence

Admission bars itself from arguing that its corp. resp. is NOT yet in existence at the time Natividad
underwent treatment
Dr. Ampil - medial negligence
PSI - Corporate Negligence
NOTE:
Liability unique to this case because of implied agency and admitted corporate duty
26 years already and Dr. Ampil's status could no longer be ascertained

3. Gonzales vs PNB 122 SCRA 489

FACTS: Gonzales instituted a suit, as a taxpayer, against Sec. of Public Works and Communications,
the Commissioner of Public Highways, and PNB for alleged anomalies committed regarding the
banks extension of credit to import public works equipment intended for the massive development
program. The petitioners standing was questioned because he did not owned any share in PNB.
Consequently, Petitioner bought 1 share of PNB stocks in order to gain standing as a stockholder.
Petitioner thereafter sought to inquire and ordered PNB to produce its books and records which the
Bank refused, invoking the provisions from its charter created by Congress. The petitioner filed
petition for mandamus to compel PNB to produce its books and records. The RTC dismissed the
petition and it ruled that the right to examine and inspect corporate books is not absolute, but is
limited to purposes reasonably related to the interest of the stockholder, must be asked for in good
faith for a specific and honest purpose and not gratify curiosity or for speculative or vicious purposes;
that such examination would violate the confidentiality of the records of the respondent bank as
provided in Section 16 of its charter, Republic Act No. 1300, as amended; and that the petitioner has
not exhausted his administrative remedies.

ISSUE: Whether or not Petitioner may compel PNB to produce its books and records

HELD: No. As may be noted from the Sec 74 BP Blg. 68, among the changes introduced in the new
Code with respect to the right of inspection granted to a stockholder are the following the records
must be kept at the principal office of the corporation; the inspection must be made on business days;
the stockholder may demand a copy of the excerpts of the records or minutes; and the refusal to
allow such inspection shall subject the erring officer or agent of the corporation to civil and criminal
liabilities. However, while seemingly enlarging the right of inspection, the new Code has prescribed
limitations to the same. It is now expressly required as a condition for such examination that the one
requesting it must not have been guilty of using improperly any information through a prior
examination, and that the person asking for such examination must be "acting in good faith and for a
legitimate purpose in making his demand." Although the petitioner has claimed that he has justifiable
motives in seeking the inspection of the books of the respondent bank, he has not set forth the
reasons and the purposes for which he desires such inspection, except to satisfy himself as to the
truth of published reports regarding certain transactions entered into by the respondent bank and to
inquire into their validity. The circumstances under which he acquired one share of stock in the
respondent bank purposely to exercise the right of inspection do not argue in favor of his good faith
and proper motivation. Admittedly he sought to be a stockholder in order to pry into transactions
entered into by the respondent bank even before he became a stockholder. His obvious purpose was
to arm himself with materials which he can use against the respondent bank for acts done by the
latter when the petitioner was a total stranger to the same. He could have been impelled by a
laudable sense of civic consciousness, but it could not be said that his purpose is germane to his
interest as a stockholder. The inspection sought to be exercised by the petitioner would be violative of
the provisions of its charter of PNB. The Philippine National Bank is not an ordinary corporation.
Having a charter of its own, it is not governed, as a rule, by the Corporation Code of the Philippines.
Section 4 of the said Code provides: SEC. 4. Corporations created by special laws or charters.
Corporations created by special laws or charters shall be governed primarily by the provisions of the
special law or charter creating them or applicable to them. supplemented by the provisions of this

Code, insofar as they are applicable. The provision of Section 74 of Batas Pambansa Blg. 68 of the
new Corporation Code with respect to the right of a stockholder to demand an inspection or
examination of the books of the corporation may not be reconciled with the above quoted provisions
of the charter of the respondent bank. It is not correct to claim, therefore, that the right of inspection
under Section 74 of the new Corporation Code may apply in a supplementary capacity to the charter
of the respondent bank.

4. SUNSET VIEW CONDOMINIUM CORPORATION, petitioner, vs. THE HON. JOSE C. CAMPOS,
JR. OF THE COURT OF FIRST INSTANCE, BRANCH XXX, PASAY CITY and AGUILARBERNARES REALTY, respondents. (G.R. No. L-52361 April 27, 1981)
Jul25

Facts:
The petitioner, Sunset View Condominium Corporationis a condominium corporation within the
meaning of Republic Act No. 4726 in relation to a duly registered Amended Master Deed with
Declaration of Restrictions of the Sunset View Condominium Project located at 2230 Roxas
Boulevard, Pasay City of which said petitioner is the Management Body holding title to all the
common and limited common areas.
The private respondent, Aguilar-Bernares Realty, a sole proprietorship owned and operated by the
spouses Emmanuel G. Aguilar and Zenaida B. Aguilar, is the assignee of a unit, Solana, in the
Sunset View Condominium Project with La Perla Commercial, Incorporated, as assignor. The La
Perla Commercial, Incorporated bought the Solana unit on installment from the Tower Builders, Inc.
The petitioner, Sunset View Condominium Corporation, filed for the collection of assessments levied
on the unit against Aguilar-Bernares Realty.
The private respondent filed a Motion to Dismiss the complaint on the grounds (1) that the complaint
does not state a cause of action: (2) that the court has no jurisdiction over the subject or nature other
action; and (3) that there is another action pending between the same parties for the same cause.
The petitioner filed its opposition.
The motion to dismiss was granted by the respondent Judge, pursuant to Section 2 of Republic Act
No. 4726, a holder of a separate interest and consequently, a shareholder of the plaintiff
condominium corporation; and that the case should be properly filed with the Securities & Exchange
Commission which has exclusive original jurisdiction on controversies arising between shareholders
of the corporation. the motion for reconsideration thereof having been denied, the petitioner, alleging
grave abuse of discretion on the part of respondent Judge, filed the instant petition for certiorari
praying that the said orders be set aside.
ISSUE: Whether the CFI or the City Courts have jurisdiction over the claims filed by Sunset View, the
condominium corporation.

Held: Not every purchaser of a condominium unit is a shareholder in the corporation. The Mater Deed
determines when ownership of the unit and participation in the corporation vests in the purchaser.
The City Court and the CFI have jurisdiction.

The share of stock appurtenant to the unit win be transferred accordingly to the purchaser of the unit
only upon full payment of the purchase price at which time he will also become the owner of the unit.
Consequently, even under the contract, it is only the owner of a unit who is a shareholder of the
Condominium Corporation. Inasmuch as owners is conveyed only upon full payment of the purchase
price, it necessarily follows that a purchaser of a unit who has not paid the full purchase price thereof
is not The owner of the unit and consequently is not a shareholder of the Condominium Corporation.
In this case, the Master Deed provides that ownership is transferred only upon full payment of the
purchase price.
Private respondents have not yet fully paid the purchase price, hence they are not shareholders and
the SEC has no jurisdiction over the claims.
5. Alhambra Cigar & Cigarette Manufacturing Company, Inc. vs Securities and Exchange
Commission
On January 15, 1912, Alhambra Cigar & Cigarette Manufacturing Company, Inc. was incorporated. Its
lifespan was for 50 years so on January 15, 1962, it expired. Thereafter, its Board authorized its
liquidation. Under the prevailing law, Alhambra has 3 years to liquidate.
In 1963, while Alhambra was liquidating, Republic Act 3531 was enacted. It amended Section 18 of
the Corporation Law; it empowered 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 Republic Act 3531, the maximum non-extendible term of such corporations was
fifty years.
Alhambra now amended its articles of incorporation to extend its lifespan for another 50 years. The
Securities and Exchange Commission (SEC) denied the amended articles of incorporation.
ISSUE: Whether or not a corporation under liquidation may still amend its articles of incorporation to
extend its lifespan.
HELD: No. Alhambra cannot avail of the new law because it has already expired at the time of its
passage. When a corporation is liquidating pursuant to the statutory period of three years to liquidate,
it is only allowed to continue for the purpose of final closure of its business and no other purposes. In
fact, within that period, the corporation is enjoined from continuing the business for which it was
established. Hence, Alhambras board cannot validly amend its articles of incorporation to extend its
lifespan.
6. UY SIULIONG, MARIANO LIMJAP, GACU UNG JIENG, EDILBERTO CALIXTO and UY CHO
YEE, petitioners,
vs.
THE DIRECTOR OF COMMERCE AND INDUSTRY, respondent.
FACTS:
The purpose of this action is to obtain the writ of mandamus to require the respondent to file and
register, upon the
payment of the lawful fee, articles of incorporation, and to issue to the petitioners as the incorporators
of a certain

corporation to be known as "Siuliong y Compaia, Inc.," a certificate under the seal of the office of
said respondent,
certifying that the articles of incorporation have been duly filed and registered in his office in
accordance with the law. That
prior to the presentation of the petition, petitioners associated together as partners, which partnership
was known as
"mercantil regular colectiva, under the name of "Siuliong y Cia.;" Petitioners have been members of
said partnership of
"Siuliong y Cia.," desired to dissolve the partnership and to form a corporation composed of the same
persons as
incorporators, to be known as "Siulong y Compaia, Incorporada;" That the purpose of said
corporation, "Siuliong y Cia.,
Inc.," is to acquire the business of the partnership theretofore known as Siuliong & Co., and to
continue said business with
some of its objects or purposes; An examination of the articles of incorporation of the said "Siuliong y
Compaia,
Incorporada" (Exhibit A) shows that it is to be organized for the purchase and sale, importation and
exportation, of the
products of the country as well as of foreign countries; To discount promissory notes, bills of
exchange, and other
negotiable instruments; The purchase and sale of bills of exchange, bonds, stocks, or joint account of
mercantile and
industrial associations and of all classes of mercantile documents; commissions, consignments;"xxx..
The respondent
contends (a) that the proposed articles of incorporation presented for file and registry permitted the
petitioners to engage
in a business which had for its end more than one purpose; (b) that it permitted the petitioners to
engage in the banking
business, and (c) to deal in real estate, in violation of the Act of Congress of July 1, 1902. The
petitioners, insisted that
said proposed articles of incorporation do not permit it to enter into the banking business nor to
engage in the purchase
and sale of real estate in violation of said Act of Congress, expressly renounced in open court their
right to engage in such
business under their articles of incorporation, even though said articles might be interpreted in a way
to authorize them to
so to do.

ISSUE : Whether or not a corporation organized for commercial purposes in the Philippine Islands
can be organized for
more than one purpose?
HELD: YES. Considering the purposes and objects of the proposed articles of incorporation which are
enumerated, we
are of the opinion that it contains nothing which violates in the slightest degree any of the provisions
of the laws of the
Philippine Islands, and the petitioners are, therefore, entitled to have such articles of incorporation
filed and registered as
prayed for by them and to have issued to them a certificate under the seal of the office of the
respondent, setting forth that
such articles of incorporation have been duly filed in his office. (Sec. 11, Act No. 1459.)
Therefore, the petition prayed for is hereby granted, and without any finding as to costs, it is so
ordered.
7. CLAVECILLIA RADIO SYSTEM, petitioner-appellant, vs. HON. AGUSTIN ANTILLON, as City
Judge of the Municipal Court of Cagayan de Oro City
and NEW CAGAYAN GROCERY, respondents-appellees.
B. C. Padua for petitioner and appellant.
Pablo S. Reyes for respondents and appellees.
REGALA, J.:
This is an appeal from an order of the Court of First Instance of Misamis Oriental dismissing the
petition of the Clavecilla Radio System to prohibit the City Judge of Cagayan de Oro from taking
cognizance of Civil Case No. 1048 for damages.
It appears that on June 22, 1963, the New Cagayan Grocery filed a complaint against the Clavecilla
Radio System alleging, in effect, that on March 12, 1963, the following message, addressed to the
former, was filed at the latter's Bacolod Branch Office for transmittal thru its branch office at Cagayan
de Oro:
NECAGRO CAGAYAN DE ORO (CLAVECILLA)
REURTEL WASHED NOT AVAILABLE REFINED TWENTY FIFTY IF AGREEABLE SHALL SHIP
LATER REPLY POHANG
The Cagayan de Oro branch office having received the said message omitted, in delivering the same
to the New Cagayan Grocery, the word "NOT" between the words "WASHED" and "AVAILABLE," thus
changing entirely the contents and purport of the same and causing the said addressee to suffer
damages. After service of summons, the Clavecilla Radio System filed a motion to dismiss the
complaint on the grounds that it states no cause of action and that the venue is improperly laid. The
New Cagayan Grocery interposed an opposition to which the Clavecilla Radio System filed its
rejoinder. Thereafter, the City Judge, on September 18, 1963, denied the motion to dismiss for lack of
merit and set the case for hearing.1wph1.t

Hence, the Clavecilla Radio System filed a petition for prohibition with preliminary injunction with the
Court of First Instance praying that the City Judge, Honorable Agustin Antillon, be enjoined from
further proceeding with the case on the ground of improper venue. The respondents filed a motion to
dismiss the petition but this was opposed by the petitioner. Later, the motion was submitted for
resolution on the pleadings.
In dismissing the case, the lower court held that the Clavecilla Radio System may be sued either in
Manila where it has its principal office or in Cagayan de Oro City where it may be served, as in fact it
was served, with summons through the Manager of its branch office in said city. In other words, the
court upheld the authority of the city court to take cognizance of the case.1wph1.t
In appealing, the Clavecilla Radio System contends that the suit against it should be filed in Manila
where it holds its principal office.
It is clear that the case for damages filed with the city court is based upon tort and not upon a written
contract. Section 1 of Rule 4 of the New Rules of Court, governing venue of actions in inferior courts,
provides in its paragraph (b) (3) that when "the action is not upon a written contract, then in the
municipality where the defendant or any of the defendants resides or may be served with summons."
(Emphasis supplied)
Settled is the principle in corporation law that the residence of a corporation is the place where its
principal office is established. Since it is not disputed that the Clavecilla Radio System has its
principal office in Manila, it follows that the suit against it may properly be filed in the City of Manila.
The appellee maintain, however, that with the filing of the action in Cagayan de Oro City, venue was
properly laid on the principle that the appellant may also be served with summons in that city where it
maintains a branch office. This Court has already held in the case of Cohen vs. Benguet Commercial
Co., Ltd., 34 Phil. 526; that the term "may be served with summons" does not apply when the
defendant resides in the Philippines for, in such case, he may be sued only in the municipality of his
residence, regardless of the place where he may be found and served with summons. As any other
corporation, the Clavecilla Radio System maintains a residence which is Manila in this case, and a
person can have only one residence at a time (See Alcantara vs. Secretary of the Interior, 61 Phil.
459; Evangelists vs. Santos, 86 Phil. 387). The fact that it maintains branch offices in some parts of
the country does not mean that it can be sued in any of these places. To allow an action to be
instituted in any place where a corporate entity has its branch offices would create confusion and
work untold inconvenience to the corporation.
It is important to remember, as was stated by this Court in Evangelista vs. Santos, et al., supra, that
the laying of the venue of an action is not left to plaintiff's caprice because the matter is regulated by
the Rules of Court. Applying the provision of the Rules of Court, the venue in this case was
improperly laid.

The order appealed from is therefore reversed, but without prejudice to the filing of the action in
Which the venue shall be laid properly. With costs against the respondents-appellees.
8.Philippine First Insurance Company, Inc v. Hartigan
(IE) PLAINTIFF-APPELLANT: PHILIPPINE FIRST INSURANCE COMPANY, INC. DEFENDANTSAPPELLEES: MARIA CARMEN HARTIGAN, CGH, and O. ENGKEE G.R. No. L-26370 July 31, 1970
RATIO: Section 18 explicitly permits the articles of incorporation to be amended thus: (Act. No.

1459) 2 Corp Digest Sec 10-19 Sec. 18. Any corporation may for legitimate corporate purpose or
purposes, amend its articles of incorporation by a majority vote of its board of directors or trustees
and the vote of 2/3 of its members or stockholders
A copy of the articles of incorporation as amended, duly certified to be correct by the president and
the secretary of the corporation and a majority of the board of directors or trustees, shall be filed with
the Securities and Exchange Commissioner, who shall attach the same to the original articles of
incorporation, on file in his office. this section does not only authorize corporations to amend their
charter; it also lays down the procedure for such amendment
The general rule as to corporations is that each corporation shall have a name by which it is to sue
and be sued and do all legal acts. a corporation may change its name by merely amending its charter
in the manner prescribed by law o A general power to alter or amend the charter of a corporation
necessarily includes the power to alter the name of the corporation An authorized change in the name
of a corporation has no more effect upon its identity as a corporation than a change of name of a
natural person has upon his identity. It does not affect the rights of the corporation or lessen or add to
its obligations. After a corporation has effected a change in its name it should sue and be sued in its
new name .... (13 Am. Jur. 276-277, citing cases.) Actions brought by a corporation after it has
changed its name should be brought under the new name although for the enforcement of rights
existing at the time the change was made. the approval by the stockholders of the amendment of its
articles of incorporation changing the name "The Yek Tong Lin Fire & Marine Insurance Co., Ltd." to
"Philippine First Insurance Co., Inc." on March 8, 1961, did not automatically change the name of said
corporation on that date. To be effective, Section 18 of the Corporation Law, requires that "a copy of
the articles of incorporation as amended, duly certified to be correct by the president and the
secretary of the corporation and a majority of the board of directors or trustees, shall be filed with the
Securities & Exchange Commissioner", and it is only from the time of such filing, that "the corporation
shall have the same powers and it and the members and stockholders thereof shall thereafter be
subject to the same liabilities as if such amendment had been embraced in the original articles of
incorporation. WHEREFORE, judgment of the lower court is revers ed, and this case is remanded to
the trial court for further proceedings consistent here with. With costs against appellees.
9. P.C. Javier & Sons vs. CAG.R. No. 129552; June 29, 2005
FACTS:Petitioner applied with First Summa Bank for a loan accommodation under the Industrial
Guarantee Loan Fund(IGLF). The corporation through Pablo Javier was advised that its loan
application was approved and that the same shall be forwarded to the Central Bank for processing.
The Central Bank released the loan. To secure the loan, Javier executed chattel mortgage
in favor of the bank. In the meantime, the bank changed its named to PAIC Savings and
Mortgage Bank Inc. Thereafter, the corporation failed to pay; this prompted the bank to move for the
extrajudicial foreclosure of the mortgages. Petitioner filed an action tore strain the extrajudicial
foreclosure on the ground that First Summa Bank and PAIC Bank are separate entities.
ISSUE:WON the debtor should be formally notified of the corporate creditors change of name.
HELD:NO. There is no such requirement under the law or any regulation ordering a bank that
changes its corporate name to formally notify all its debtors. This Court cannot impose on a bank that
changes its corporate name to
notifya debtor of such change absent any law, circular orregulation requiring it. Such act would be judi
ciallegislation. The formal notification is, therefore, discretionary on the bank. Unless there is a
law, regulationor circular from the SEC or BSP requiring the formalnotification of all debtors of banks

of any change incorporate name, such notification remains to be a mere internal policy that banks
may or may not adopt. A change in the corporate name does not make anew corporation, whether
effected by a special act or under a general law. It has no effect on the identity
of thecorporation, or on its property, rights, or liabilities. Thecorporation, upon such change in its
name, is in no sense anew corporation, nor the successor of the originalcorporation. It is the same
corporation with a different name, and its character is in no respect changed.
10. Hall vs. Piccio
[GR L-2598, 29 June 1950]
Facts: On 28 May 1947, C. Arnold Hall and Bradley P. Hall, and Fred Brown, Emma Brown, Hipolita
D. Chapman and Ceferino S. Abella, signed and acknowledged in Leyte, the article 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 article 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 2 December 1947, the said articles of incorporation were filed in the office of the Securities and
Exchange Commissioner, for the issuance of the corresponding certificate of incorporation. On 22
March 1948, pending action on the articles of incorporation by the aforesaid governmental office,
Fred Brown, Emma Brown, Hipolita D. Chapman and Ceferino S. Abella filed before the Court of First
Instance of Leyte the civil case, 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. C. Arnold Hall and Bradley P. Hall, filed a motion to dismiss, contesting the court's
jurisdiction and the sufficiently of the cause of action.
After hearing the parties, the Hon. Edmund S. Piccio ordered the dissolution of the company; and at
the request of Brown, et. al., appointed Pedro A. Capuciong as the receiver of the properties thereof,
upon the filing of a P20,000 bond. Hall and Hall offered to file a counter-bond for the discharge of the
receiver, but Judge Piccio refused to accept the offer and to discharge the receiver. Whereupon, Hall
and Hall instituted the present special civil action with the Supreme Court.
Issue: Whether Brown, et. al. may file an action to cause the dissolution of the Far Eastern Lumber
and Commercial Co., without State intervention.
Held: The Securities and Exchange Commission has not issued the corresponding certificate of
incorporation. The personality of a corporation begins to exist only from the moment such certificate is
issued not before. Not having obtained the certificate of incorporation, the Far Eastern Lumber and
Commercial Co. even its stockholders may not probably claim "in good faith" to be a
corporation. Under the statue 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 if collateral attack is granted to corporations "claiming in good faith to be a corporation
under this act." Such a claim is compatible with the existence of errors and irregularities; but not with
a total or substantial disregard of the law. Unless there has been an evident attempt to comply with
the law the claim to be a corporation "under this act" could not be made "in good faith."

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.
11. Albert vs. University Publishing Co.G.R. No. L-19118; January 30, 1965
FACTS: Mariano Albert entered into a contract with University Publishing Co., Inc. through Jose
M. Aruego, its President, w h e r e b y U n i v e r s i t y w o u l d p a y p l a i n t i f f f o r t h e e x c l u s i v e
right to publish his revised Commentaries on the Revised Penal Code. The contract
stipulated that failure to pay one i n s t a l l m e n t w o u l d r e n d e r t h e r e s t o f t h e p a ym e n t s
d u e . When University failed to pay the second installment, Albert sued for collection and
won. However, upon execution, it was found that University was not registered with the
SEC.A l b e r t p e t i t i o n e d f o r a w r i t o f e x e c u t i o n a g a i n s t J o s e M . Aruego as the real
defendant. University opposed, on the ground that Aruego was not a party to the case.
ISSUE: W O N Ar u e g o c a n b e h e l d p e r s o n a l l y l i a b l e t o t h e plaintiff.
HELD: YES. The Supreme Court found that Aruegor e p r e s e n t e d a n o n - e x i s t e n t e n t i t y a n d
induced not onlyAlbert but the court to believe in such representation.Aruego, a
c t i n g a s r e p r e s e n t a t i v e o f s u c h n o n - e x i s t e n t principal, was the real party to the contract
sued upon, andthus assumed such privileges and obligations and became personally liable
for the contract entered into or for
othera c t s p e r f o r m e d a s s u c h a g e n t . O n e w h o h a s i n d u c e d a n o t h e r t o a c t u p
o n h i s w i l f u l m i s r e p r e s e n t a t i o n t h a t a corporation was duly organized and existing under the
law,cannot thereafter set up against his victim the principle of corporation by estoppel The
Supreme Court likewise held that the doctrine of c o r p o r a t i o n b y e s t o p p e l c a n n o t b e s e t u p
a g a i n s t Al b e r t since it was Aruego who had induced him to act upon
his(Aruego's) willful representation that University had beenduly organized and was existing
under the law.