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G.R. No. L-19118 January 30, 1965 MARIANO A. ALBERT, Plaintiff-Appellant, UNIVERSITY PUBLISHING CO., INC., Defendant-Appellee
G.R. No. L-19118 January 30, 1965 MARIANO A. ALBERT, Plaintiff-Appellant, UNIVERSITY PUBLISHING CO., INC., Defendant-Appellee
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,
Albert’s petition should be denied. The corporation countered by saying that Aruego is not a party to this
case, and that therefore, Albert’s 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.