(b) Quasi-corporation or one which exists without formal legislative grant.

It is an exception to the
general rule that a corporation can exist only by authority of law. It may be:

1) Corporation by prescription or one which has exercised corporate powers for an indefinite
period without interference on the part of the sovereign power and which by fiction of law is
given the status of a corporation. (1 Fletcher, p. 415.)

The Roman Catholic Church has been recognized as a corporation by prescription, having acted
as such and assumed corporate powers for a long period of time. According to the Supreme
Court, it "antedates by almost a thousand years any other personality in Europe and existed
when the Grecian eloquence still flourished in Antioch and when idols were still worshipped in
the temples of Mecca, x x x. Persecuted as an unlawful association since the early days of its
existence up to the time of Galieno, who was the first of the Roman emperors to admit it among
the the juridical entities protected by the laws of the Empire, it existed until then by mercy and
will of the faithful and depended for such existence upon pious gifts and offerings. Since the
latter half of the third century, and more particularly since the year 313, when Constantine, by
the Edict of Milan, inaugurated an era of protection for the church, the latter gradually entered
upon the exercise of such rights as were required for the acquisition, preservation, and
transmission of property the same as any other juridical entity under the laws of the Empire, x x
x" (Barlin vs. Ramirez, 7 Phil. 41 [1906].); or

2) Corporation by estoppel or one which in reality is not a corporation, either de jure or de facto,
because it is so defectively formed, but is considered a corporation in relation to those only
who, by reason of their acts or admissions, are precluded from asserting that it is not a
corporation. This legal assumption is not good, however, as against the State but may arise only
for purposes of

private litigation.

Corporation by estoppel is another instance whereby

a corporation may exist without formal statutory authority. It has no real existence in law as has a de
facto corporation but is a mere fiction. (8 Fletcher, pp. 218-219; see Sec 21.)

Important distinctions between public and private corporations.

The most important division of corporations is into public and private, for there are many principles of
law which apply to the former and not to the latter.

(1) The most important distinction is with respect to governmental control. Public corporations, being
mere instrumentalities of the State, are subject to governmental visitation and control, whereas the
charter of a private corporation is a contract between the State and the corporation or incorporators,
which, under the provision of the Constitution prohibiting laws impairing the obligation of contracts,
renders such corporations not subject to visitation, control, or change by the State, except in the
exercise of the police power.
(2) Another distinction is that a public corporation may be created without the consent of the locality to
be affected, whereas the consent of the incorporators is necessary to the creation of a private
corporation.

(3) The distinction is also important with respect to taxation, to the question of liability for the torts or
negligence of officers and agents, and to various other questions.

Dual status of public corporations.

A public or municipal corporation possesses two kinds of power, governmental or public and proprietary
or private, and in the exercise of the former, it is a "municipal government," while as to the latter, it is a
"corporate legal individual." (see 9-A Words and Phrases 391.)

A public corporation engaged in the performance of governmental or public functions {e.g.,

maintenance of peace and order) as distinguished from corporate or proprietary functions (e.g.,
operation of a public market), in the absence of statute, is not liable for damages occasioned by the
negligent or wrongful actions of its officers, agents, or employees. The test for distinguishing the first
kind of power from the second, and consequently, in determining liability or nonliability for torts of its
agents, is whether the act performed is for the common good or whether it is for the special benefit or
profit of the corporate entity, (see Ibid., p. 390.)

A quo warranto proceeding is the proper legal remedy to determine a person's right or title to a
public office and to oust the holder from its enjoyment.   It is the proper action to inquire into a public
11

officer's eligibility  or the validity of his appointment.   Under Rule 66 of the Rules of Court, a quo
12 13

warranto proceeding involves a judicial determination of the right to the use or exercise of the office.

Impeachment, on the other hand, is a political process undertaken by the legislature to determine
whether the public officer committed any of the impeachable offenses, namely, culpable violation of
the Constitution, treason,
bribery, graft and corruption,
other high crimes, or
betrayal of public trust.   It 14

does not ascertain the

officer's eligibility for
appointment or election, or
challenge the legality of his
assumption of office.
Conviction for any of the
impeachable offenses shall
result in the removal of the
impeachable official from
office. (Republic v. Sereno)