G.R. No.

L-19118 January 30, 1965

MARIANO A. ALBERT, plaintiff-appellant,
vs.
UNIVERSITY PUBLISHING CO., INC., defendant-appellee.
Uy & Artiaga and Antonio M. Molina for plaintiff-appellant.
Aruego, Mamaril & Associates for defendant-appellees.

(BENGZON, J.P., J.)

Facts:
The University Publishing Co. Inc. through its President Jose Aruego entered into a
contract with Mariano Albert whereby the corporation agreed to pay a certain sum in
installments for the exclusive right to publish his revised commentaries in the RPC and for his
share in the previous sale of the books first edit edition. The corporation failed to pay the
second installment thereby making the whole amount due and demandable (i.e. there was an
acceleration clause). Albert then sued the corporation.
The lower court rendered judgment in favor of Albert and a writ of execution was issued
against the corporation. Albert however, petitioned for a writ of execution against Aruego, as the
real defendant, stating that there is no such entity as University Publishing Co. Inc. Albert
annexed to his petition a certification from the SEC saying that their records contain no such
registered corporation.
The corporation countered by saying that Aruego is not a party to this case and that,
therefore, Alberts petition should be denied. The corporation countered by saying that Aruego is
not a party to this case, and that therefore, Alberts petition should be denied. The
corporation, actually did not want Aruego to be declared a party to the present case is
because there would be no need to institute a separate action against Aruego to be declared
a party to the present case is because there would then be a need to institute a separate
action against Aruego; and if this is done, Aruego can set up the defense of prescription under
the Statute of Limitations.

Held:

1.) The corporation cannot invoke the doctrine of estoppel. The fact of non-registration of
the corporation has not been disputed because the corporation only raised the point that it
and not Aruego is the party defendant thereby assuming that the corporation is an
existing corporation with an independent juridical personality. HOWEVER, precisely on account of
non- registration, it cannot be considered a corporation not even a corporation de facto. It has
therefore no personality separate from Aruego; it cannot be sued independently. The estoppel
doctrine has not been invoked and even if it had been, it is not applicable to the case at bar: (a)
Aruego had represented a non-existing entity and induced not only Albert but also the court
to believe in such representation (b) He signed the contract as president of the
corporation stating that this was a corporation duly organized and existing under the laws of
the Philippines. One who induced another to act upon his willful misrepresentation that a
corporation was duly organized and existing under the law, cannot thereafter set up against
his victim the principle of corporation by estoppel.

2.) Aruego is the real defendant as he had control over the proceedings. Had Aruego been
named as party defendant instead of or together with the corporation, there would be no
room for debate as to his personal liability. Since he was not so named, matters of due process
have arisen. Parties to a suit are persons who have a right to control the proceedings, to
make defense, to adduce and crossexamine witnesses and to appeal from a decision. In the case
at bar, Aruego, was and in reality, the one who answered and litigated through his own firm as
counsel. He was in fact, if not on name, the defendant. Clearly then Aruego had his day in
court as the real defendant and due process of law has been substantially observed.

3.) Aruego is the real party in interest because he reaped the benefits from the contract.