Corpo Cases

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 41570 September 6, 1934

RED LINE TRANSPORTATION CO., petitioner-appellant, vs.RURAL TRANSIT CO., LTD., respondent-appellee.

L. D. Lockwood for appellant.Ohnick and Opisso for appellee.

BUTTE, J.:

This case is before us on a petition for review of an order of the Public Service Commission entered December 21, 1932, granting to the Rural Transit Company, Ltd., a certificate of public convenience to operate a transportation service between Ilagan in the Province of Isabela and Tuguegarao in the Province of Cagayan, and additional trips in its existing express service between Manila Tuguegarao.

On June 4, 1932, the Rural Transit Company, Ltd., a Philippine corporation, filed with the Public Company Service Commission an application in which it is stated in substance that it is the holder of a certificate or public convenience to operate a passenger bus service between Manila and Tuguegarao; that it is the only operator of direct service between said points and the present authorized schedule of only one trip daily is not sufficient; that it will be also to the public convenience to grant the applicant a certificate for a new service between Tuguegarao and Ilagan.

On July 22, 1932, the appellant, Red Line Transportation Company, filed an opposition to the said application alleging in substance that as to the service between Tuguegarao and Ilagan, the oppositor already holds a certificate of public convenience and is rendering adequate and satisfactory service; that the granting of the application of the Rural Transit Company, Ltd., would not serve public convenience but would constitute a ruinous competition for the oppositor over said route.

After testimony was taken, the commission, on December 21, 1932, approved the application of the Rural Transit Company, Ltd., and ordered that the certificate of public convenience applied for be "issued to the applicant Rural Transit Company, Ltd.," with the condition, among others, that "all the other terms and conditions of the various certificates of public convenience of the herein applicant and herein incorporated are made a part hereof."

On January 14, 1933, the oppositor Red Line Transportation Company filed a motion for rehearing and reconsideration in which it called the commission's attention to the fact that there was pending in the Court of First Instance of Manila case N. 42343, an application for the voluntary dissolution of the corporation, Rural Transit Company, Ltd. Said motion for reconsideration was set down for hearing on March 24, 1933. On March 23, 1933, the Rural Transit Company, Ltd., the applicant, filed a motion for postponement. This motion was verified by M. Olsen who swears "that he was the secretary of the Rural Transit Company, Ltd., in the above entitled case." Upon the hearing of the motion for reconsideration, the commission admitted without objection the following documents filed

in said case No. 42343 in the Court of First Instance of Manila for the dissolution of the Rural Transit Company, Ltd. the petition for dissolution dated July 6, 1932, the decision of the said Court of First Instance of Manila, dated February 28, 1933, decreeing the dissolution of the Rural Transit Company, Ltd.

At the trial of this case before the Public Service Commission an issue was raised as to who was the real party in interest making the application, whether the Rural Transit Company, Ltd., as appeared on the face of the application, or the Bachrach Motor Company, Inc., using name of the Rural Transit Company, Ltd., as a trade name. The evidence given by the applicant's secretary, Olsen, is certainly very dubious and confusing, as may be seen from the following:

Q. Will you please answer the question whether it is the Bachrach Motor Company operating under the trade name of the Rural Transit Company, Limited, or whether it is the Rural Transit Company, Limited in its own name this application was filed?

A. The Bachrach Motor Company is the principal stockholder.

Q. Please answer the question.

ESPELETA. Objecion porque la pregunta ya ha sido contestada.

JUEZ. Puede contestar.

A. I do not know what the legal construction or relationship existing between the two.

JUDGE. I do not know what is in your mind by not telling the real applicant in this case?

A. It is the Rural Transit Company, Ltd.

JUDGE. As an entity by itself and not by the Bachrach Motor Company?

A. I do not know. I have not given that phase of the matter much thought, as in previous occassion had not necessitated.

JUDGE. In filing this application, you filed it for the operator on that line? Is it not!

A. Yes, sir.

JUDGE. Who is that operator?

A. The Rural Transit Company, Ltd.

JUDGE. By itself, or as a commercial name of the Bachrach Motor Company?

A. I cannot say.

ESPELETA. The Rural Transit Company, Ltd., is a corporation duly established in accordance with the laws of the Philippine Islands.

JUDGE. According to the records of this commission the Bachrach Motor Company is the owner of the certificates and the Rural Transit Company, Ltd., is operating without any certificate.

JUDGE. If you filed this application for the Rural Transit Company, Ltd., and afterwards it is found out that the Rural Transit Company, Ltd., is not an operator, everything will be turned down.

JUDGE. My question was, when you filed this application you evidently made it for the operator?

A. Yes, sir.

JUDGE. Who was that operator you had in mind?

A. According to the status of the ownership of the certificates of the former Rural Transit Company, the operator was the operator authorized in case No. 23217 to whom all of the assets of the former Rural Transit Company were sold.

JUDGE. Bachrach Motor Company?

A. All actions have been prosecuted in the name of the Rural Transit Company, Ltd.

JUDGE. You mean the Bachrach Motor Company, Inc., doing business under the name of the Rural Transit Company, Ltd.?

A. Yes, sir.

LOCKWOOD. I move that this case be dismissed, your Honor, on the ground that this application was made in the name of one party but the real owner is another party.

ESPELETA. We object to that petition.

JUDGE. I will have that in mind when I decide the case. If I agree with you everything would be finished.

The Bachrach Motor Company, Inc., entered no appearance and ostensibly took no part in the hearing of the application of the Rural Transit Company, Ltd. It may be a matter of some surprise that the commission did not on its own motion order the amendment of the application by substituting the Bachrach Motor Company, Inc., as the applicant. However, the hearing proceeded on the application as filed and the decision of December 2, 1932, was rendered in favor of the Rural Transit Company, Ltd., and the certificate ordered to be issued in its name, in the face of the evidence that the said corporation was not the real party in interest. In its said decision, the commission undertook to meet the objection by referring to its resolution of November 26, 1932, entered in another case. This resolution in case No. 23217 concludes as follows:

Premises considered we hereby authorize the Bachrach Motor Co., Inc., to continue using the name of "Rural Transit Co., Ltd.," as its trade name in all the applications, motions or other petitions to be filed in this commission in connection with said business and that this authority is given retroactive effect as of the date, of filing of the application in this case, to wit, April 29, 1930.

We know of no law that empowers the Public Service Commission or any court in this jurisdiction to authorize one corporation to assume the name of another corporation as a trade name. Both the Rural Transit Company, Ltd., and the Bachrach Motor Co., Inc., are Philippine corporations and the very law of their creation and continued existence requires each to adopt and certify a distinctive name. The incorporators "constitute a body politic and corporate under the name stated in the certificate." (Section 11, Act No. 1459, as amended.) A corporation has the power "of succession by its corporate name." (Section 13, ibid.) The name of a corporation is therefore essential to its existence. It cannot change its name except in the manner provided by the statute. By that name alone is it authorized to transact business. The law gives a corporation no express or implied authority to assume another name that is unappropriated: still less that of another corporation, which is expressly set apart for it and protected by the law. If any corporation could assume at pleasure as an unregistered trade name the name of another corporation, this practice would result in confusion and open the door to frauds and evasions and difficulties of administration and supervision. The policy of the law expressed in our corporation statute and the Code of Commerce is clearly against such a practice. (Cf. Scarsdale Pub. Co. Colonial Press vs. Carter, 116 New York Supplement, 731; Svenska Nat. F. i. C. vs. Swedish Nat. Assn., 205 Illinois [Appellate Courts], 428, 434.)

The order of the commission of November 26, 1932, authorizing the Bachrach Motor Co., Incorporated, to assume the name of the Rural Transit Co., Ltd. likewise in corporated, as its trade name being void, and accepting the order of December 21, 1932, at its face as granting a certificate of public convenience to the applicant Rural Transit Co., Ltd., the said order last mentioned is set aside and vacated on the ground that the Rural Transit Company, Ltd., is not the real party in interest and its application was fictitious.

In view of the dissolution of the Rural Transit Company, Ltd. by judicial decree of February 28, 1933, we do not see how we can assess costs against said respondent, Rural Transit Company, Ltd.

Malcolm, Villa-Real, Imperial and Goddard, JJ., concur.

THIRD DIVISION

[G.R. No. 100468. May 6, 1997]

LAUREANO INVESTMENT & DEVELOPMENT CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and BORMAHECO, INC.,respondents.

D E C I S I O N

PANGANIBAN, J.:

May a plaintiff/petitioner which purports to be a corporation validly bring suit under a name other than that registered with the Securities and Exchange Commission?

In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner seeks the reversal of the Decision[1] of the Court of Appeals[2] in CA-G.R. SP No. 22763, promulgated on February 28, 1991, which resolved the above question in the negative; and its Resolution[3] promulgated on June 10, 1991, denying petitioners motion for reconsideration.The assailed Decision upheld the following questioned orders of the Regional Trial Court of Makati, Branch 141:[4] (1) the Order dated September 8, 1989, ruling that Lideco Corporation (the name under which herein petitioner represented itself before the trial court) lacked personality to intervene; [5] (2) the Order dated May 7, 1990, denying the motion of petitioner to take the place of Lideco Corporation as party-intervenor and adopt the latters complaint in intervention and other pleadings; [6] and (3) the Order dated August 8, 1990, which denied the motion for reconsideration of petitioner.[7]

The Facts

The antecedents of this petition are summarized by the Respondent Court as follows:

The records show that spouses Reynaldo Laureano and Florence Laureano are majority stockholders of petitioner Corporation who entered into a series of loan and credit transactions with Philippine National Cooperative Bank (PNCB for short). To secure payment of the loans, they executed Deeds of Real Estate Mortgage dated December 11, 1962, January 9, 1963, July 2, 1963 and September 5, 1964, for the following amounts: P100,000.00, P20,000.00, P70,000.00 and P13,424.04, respectively. In view of their failure to pay their indebtedness, PNCB applied

http://sc.judiciary.gov.ph/jurisprudence/1997/may1997/100468.htm#_edn7







for extrajudicial foreclosure of the real estate mortgages. The bank was the purchaser of the properties in question in the foreclosure sale and titles thereof were consolidated in PNCBs name on February 20, 1984. PNCB did not secure a writ of possession nor did it file ejectment proceedings against the Laureano spouses, because there were then pending cases, such as x x x involving the titles of ownership of subject two lots, which are situated at Bel-Air Subdivision[,] Makati, Metro Manila.

Private respondent Bormaheco, Inc. became the successor of the obligations and liabilities of PNCB over subject lots by virtue of a Deed of Sale/Assignment on September 26, 1988 wherein Bormaheco bought from PNCB under a bulk sale 114 titled and untitled properties including the two parcels of land in question, formerly registered in the name of the Laureano spouses. Transfer Certificate of Title Nos. 157724 and 157725 over the lots in question were issued on October 12, 1988 in the name of Bormaheco.

Five (5) days after securing titles over the said properties, Bormaheco filed an Ex-Parte Petition for the Issuance of Writ of Possession of Lots 4 and 5, Block 4 situated at Bel-Air Village, Makati, Metro Manila and embraced in TCT Nos. 157724 and 157725 of the Registry of Deeds of Makati, Metro Manila, docketed as LRC Case No. M-1530 before respondent Court. Petitioner Corporation filed on January 18, 1989 its Motion for Intervention and to Admit Attached Complaint in Intervention in said case. After an exchange of pleadings, respondent Court issued its order dated February 9, 1988, which reads:

There being a prima facie showing in the attached complaint in intervention that herein intervenor LIDECO CORPORATION has an interest which may eventually and adversely be affected in whatever decision the Court may render in the instant case; to enable the parties concerned to properly ventilate and litigate all the issues involving the subject property thereby avoid multiplicity of suits, and in the interest of justice, the Motion for Intervention, filed by LIDECO CORPORATION is hereby GRANTED; and the attached complaint in intervention ADMITTED.

On July 26, 1989, respondent Bormaheco filed its Motion to Strike out the Complaint in Intervention and all related pleadings filed by LIDECO Corporation. The motion was granted in the first questioned order dated September 8, 1989, which reads:

x x x

On the instant motion, the records show that LIDECO Corporation appeared thru counsel and filed its complaint in intervention,

representing therein that it is a corporation duly organized and registered in accordance with law.

The Corporation Code explicitly provides that the use of the word corporation presupposes that an entity is duly registered (with the SEC) in accordance with law.

Intervening in the instant petition, with the use of the name LIDECO Corporation, the latter, in effect, represents to this court that it is a corporation whose personality is distinct and separate from its stockholders and/or any other corporation bearing different names. Hence, herein intervenor LIDECO Corporation and LAUREANO INVESTMENT AND DEVELOPMENT CORPORATION, to the mind of this Court, are two (2) separate and distinct entities. Inasmuch as the documents in support of its complaint in intervention -- tax declarations -- are in the names of Laureano Investment and Development Corporation, and it appearing that LIDECO Corporation is not a corporation or partnership duly organized and registered with the SEC, there is, therefore, no way whatsoever that LIDECO Corporations interests will be adversely affected by the outcome of the instant case.

WHEREFORE, for intervenors lack of personality to intervene in the instant proceedings, petitioners motion to strike out complaint in intervention is hereby GRANTED.

Accordingly, all pleadings filed relative thereto are ordered expunged from the records.

x x x

After the issuance of the above-cited order, petitioner Corporation filed on October 4, 1989, its Urgent Motion to Substitute Party Intervenor and to Adopt Complaint in Intervention and All Pleadings. An opposition thereto was filed by BORMAHECO, after which the lower court issued its second questioned order quoted below:

x x x

The court has painstakingly examined the two (2) tax declarations and has found out that the said tax declarations refer to two houses erected on Lot 3, Block 4 and Lot 3, Block 4 of the Bel-Air Village, Makati, Metro Manila. On the other hand, the subject matter of the instant petition are Lot 4, Block 4 and Lot 5, Block 4 of Bel-Air Village, Makati, Metro Manila. Clearly, therefore, the properties upon which

the herein movant-corporation has interests refer to properties different from those subject of the instant petition.

Not only that. As correctly pointed out by the petitioner, the afore-mentioned tax declarations according to the records of the Makati Assessors Office were canceled on July 22, 1982 or five (5) years, two (2) months and four (4) days before the petitioner (BORMAHECO) purchased from the Philippine National Cooperative Bank the two (2) lots and the improvements found thereon evidenced by the copies of Tax Declaration Nos. A-002-00512 and 6103 attached as Annexes A and B respectively to the petitioners rejoinder dated October 26, 1989.

The movant-corporation not having shown documentary evidence showing that it has interest on the two lots subject of the complaint and the improvements found therein, it has, therefore, no personality to file the instant motion. x x x

There is yet another reason why the motion should not be granted. The movant corporations request to be substituted as party intervenor is not one of the instances provided for in Sec. 20, Rule 3 of the Rules of Court. Substitution of party litigant may be requested in the following:

(a) When a party dies and the claim is not extinguished, upon proper motion, the Honorable Court may order the legal representative of the deceased to appear and to be substituted for the deceased within the period of thirty (30) days or within such time as may be granted. (Sec. 17, Rule 3, Rules of Court)

(b) In case of any transfer of interest, upon motion, the Honorable Court may direct the person to whom the interest is transferred to be substituted in the action or joined with the original party.(Sec. 20, Rule 30 [should be Rule 3], supra.)

which is not so in the case.

x x x

WHEREFORE, in view of the foregoing considerations, the motions under consideration are hereby DENIED.

A Motion for Reconsideration of the above-cited order was denied by respondent Court in its third questioned order dated August 8, 1990, x x x[8]

In likewise denying the petition of Laureano Investment and Development Corporation (petitioner corporation), Respondent Court ratiocinated:


Petitioner Corporation contends that respondent Bormahecos motion to strike out the complaint in intervention and all related pleadings filed by LIDECO Corporation was based on misleading and confusing assertions that LIDECO Corporation is not a registered corporation despite its admission and/or use of the word LIDECO as acronym for Laureano Investment and Development Corporation. The contention is untenable. BORMAHECO has shown that LIDECO Corporation is not organized and existing under Philippine laws. Neither has it been registered with the Securities and Exchange Commission. In support of said claim, BORMAHECO presented a certification to the effect that the records of the Commission do not show the registration of LIDECO, INC. either as a corporation or as partnership.

Petitioner also contends that the motion x x x should have been denied outright because it was filed in bad faith and without legal and factual basis. On the contrary, from the very first motion and pleading filed by petitioner in LRC No. M-1530 pending before respondent Court, it is very clear that the intervenor therein is LIDECO Corporation. Nowhere in its complaint does it appear that LIDECO Corporation is the brevity or acronym for Laureano Investment and Development Corporation. The claim that Lideco Corporation is the name of a corporation which is duly registered and organized in accordance with law has been belied by the absence of SEC record showing the registration of Lideco, Inc. either as corporation or as a partnership. It was only when intervenor (petitioner herein) filed its opposition to the motion to strike out that it clarified that Lideco Corporation is the acronym for Laureano Investment and Development Corporation.

x x x x x x x x x

Moreover, even assuming that Lideco Corporation and Laureano Investment and Development Corporation are one and the same, it was found by respondent Court that the properties being claimed by petitioner are different from those for which private respondent is seeking the issuance of a writ of possession; hence, the complaint in intervention was correctly dismissed.[9]

In conclusion, the appellate court said:

We, therefore, fail to see the alleged grave abuse of discretion on the part of respondent Court in issuing the questioned orders, as they were issued after the Court had considered the arguments of the parties and the evidence on record. Clearly, the lower court acted within its authority and sound discretion in issuing the said orders.[10]

Petitioners motion for reconsideration of the above ruling was, as earlier stated, denied by Respondent Court in its Resolution[11] promulgated on June 10, 1991. Hence, this petition.




Issues

Petitioner raises for resolution the following questions:

1. Whether Respondent Bormaheco, Inc. is estopped from contesting the legal personality to sue of Lideco Corporation;

2. Whether bad faith attended the filing of private respondents motion to strike out the complaint in intervention and related pleadings.[12]

Petitioner contends that private respondent is estopped from, and is in bad faith for, denying its knowledge that Lideco Corporation and Laureano Investment and Development Corporation are one and the same entity since it has previously used LIDECO as an acronym for the latter corporation.

Private respondent submitted a lengthy (sixty-page) amended comment [13] to the petition, giving a detailed background to the instant case including various actions allegedly commenced by the Spouses Laureano questioning the foreclosure of the subject properties. In sum, Bormaheco, Inc. maintains that Respondent Court did not commit reversible error in disallowing Lideco Corporation to intervene for the reason that said entity did not satisfy the essential requisites for being a party to an action, to wit: (1) natural or juridical personality; (2) legal capacity to sue or be sued, i.e., having all the qualifications and none of the disqualifications provided for by law; and (3) real interest in the subject matter of the action.[14]

Private respondent adds that petitioner corporation is merely an alter ego of the Laureano spouses who have lost their rights over the subject properties in favor of Bormahecos predecessor-in-interest, the Philippine National Cooperative Bank (PNCB), by virtue of extrajudicial foreclosures. Petitioners motion to intervene in the case below is just another ploy of the spouses to prevent subsequent owners from effectively exercising their rights of ownership over the properties.

Private respondent also filed before us a motion [15] to declare petitioner as engaged in forum shopping and to resolve the instant petition. In support of its motion, private respondent enumerates a string of civil actions allegedly commenced by the Laureano spouses before the trial court as well as petitions before the appellate court concerning the properties in question.As a result, Bormaheco claims, an issue which could have been laid to rest in 1967 is still being litigated. Furthermore, in an omnibus motion[16] filed on February 11, 1997, private respondent claims that it is being unduly deprived of rental income by as much as P40,000.00 a month for each property, or a total of eight million pesos since 1988. On the other hand, it claims to have been assessed for and to have actually paid real estate taxes and Bel-Air Village Association dues since such date.

The Courts Ruling






The petition is not meritorious.

Petitioners Issues:Estoppel

Petitioner contends that it was private respondent which first made use of LIDECO as a shorter term for Laureano Investment and Development Corporation when it filed its first motion to strike dated January 9, 1989, [17] prior to the filing by Lideco Corporation of its motion for intervention and complaint in intervention [18] on January 18, 1989. Hence, private respondent should be considered estopped from denying that petitioner and Lideco Corporation are one and the same corporation.

The equitable doctrine of estoppel was explained by this Court in Caltex (Philippines), Inc. vs. Court of Appeals:[19]

Under the doctrine of estoppel, an admission or representation is rendered conclusive upon the person making it, and cannot be denied or disproved as against the person relying thereon. A party may not go back on his own acts and representations to the prejudice of the other party who relied upon them. In the law of evidence, whenever a party has, by his own declaration, act, or omission, intentionally and deliberately led another to believe a particular thing true, to act upon such belief, he cannot, in any litigation arising out of such declaration, act, or omission, be permitted to falsify it.(footnotes omitted)

We elaborated in Maneclang vs. Baun[20]

In estoppel by pais, as related to the party sought to be estopped, it is necessary that there be a concurrence of the following requisites: (a) conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (b) intent, or at least expectation that this conduct shall be acted upon, or at least influenced by the other party; and (c) knowledge, actual or constructive of the actual facts. (citing Kalalo vs. Luz, 34 SCRA 337, 1974)

Examining the records of the case, we observe that the motion [21] adverted to indeed made use of LIDECO as an acronym for Laureano Investment and Development Corporation. But said motion distinctly specified that LIDECO was the shorter term for Laureano Investment and Development Corporation. It is obvious that no false representation or concealment can be attributed to private respondent. Neither can it be charged with conveying the impression that the facts are other than, or inconsistent with, those which it now asserts since LIDECO, as an acronym, is clearly different from Lideco Corporation which represented itself as a corporation duly registered and organized in accordance with law.[22] Nor can it be logically inferred that petitioner relied







or acted upon such representation of private respondent in thereafter referring to itself as Lideco Corporation; for petitioner is presumed to know by which name it is registered, and the legal provisions on the use of its corporate name.

Section 1, Rule 3 of the Rules of Court provides that only natural or juridical persons or entities authorized by law may be parties to a civil action. Under the Civil Code, a corporation has a legal personality of its own (Article 44), and may sue or be sued in its name, in conformity with the laws and regulations of its organization (Article 46).[23] Additionally, Article 36 of the Corporation Code similarly provides:

Article 36. Corporate powers and capacity. -- Every corporation incorporated under this Code has the power and capacity:

1. To sue and be sued in its corporate name;

x x x (underscoring supplied)

As the trial and appellate courts have held, Lideco Corporation had no personality to intervene since it had not been duly registered as a corporation. If petitioner legally and truly wanted to intervene, it should have used its corporate name as the law requires and not another name which it had not registered. Indeed, as the Respondent Court found, nowhere in the motion for intervention and complaint in intervention does it appear that Lideco Corporation stands for Laureano Investment and Development Corporation. Bormaheco, Inc., thus, was notestopped from questioning the juridical personality of Lideco Corporation, even after the trial court had allowed it to intervene in the case.

Granting arguendo that the name Lideco Corporation could be used by petitioner corporation in its motion, there is an even more cogent reason for denying the petition. The trial court concluded, and we have no reason to disagree, that the intervention of Lideco or petitioner corporation was not proper because neither had any legal interest in the subject of litigation. The evidence (tax declarations) attached to the petition for intervention and the complaint for intervention pertained to properties not being litigated in the instant case. Lideco and petitioner corporation both claimed to have an interest in two houses constructed in Lot 3, Block 4 in Bel Air Village, Makati.[24] The subject matter of the instant petition, on the other hand, are Lots 4 and 5, Block 4, of Bel Air Village. This factual finding was affirmed by the Court of Appeals.

Since the conclusion of the trial and appellate courts is based on facts, and since the Supreme Court is not a trier of facts -- our function not being to examine and evaluate the evidence presented to the concerned tribunal which formed the basis of its questioned decision, resolution or order[25] -- it is clear that we cannot review such holding. We note further that petitioner has failed to show that the factual findings of the trial and appellate courts were arbitrary and/or constituted one of the exceptions allowing review by this Court.[26]

Bad Faith





(B)ad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral obliquity; x x x bad faith contemplates a state of mind affirmatively operating with furtive design or ill will.[27]

Other than its bare allegations that private respondent acted in bad faith, petitioner failed to show that the former acted consciously and deliberately to achieve a dishonest purpose or moral obliquity, or was motivated by ill will. Rather, as discussed above, no false representation was contrived nor concealment made by private respondent. Neither did it deliberately convey facts other than, or inconsistent with, what it now asserts and upon which petitioner had relied or acted upon due to the representations of private respondent. Hence, we hold that petitioner failed to demonstrate that private respondent acted in bad faith in filing its assailed second motion.

Private Respondents Issue:Forum Shopping

Private respondent, in turn, accuses petitioner and/or its chairman of the board and majority stockholder, Reynaldo Laureano, of forum shopping, alleging that both have improperly instituted a string of cases through deliberate splitting of causes of action thereby trifling with the courts and abusing their processes.

There is forum shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than appeal or certiorari) in another,[28] raising identical causes of action, subject matter, and issues. [29] However, private respondent, other than the enumeration in its motion [30] of the case number and titles, nature of the actions and decisions therein, failed to substantiate its allegations. It did not show convincingly that the cases enumerated had identical causes of action, subject matter and issues. From its bare assertions, the Court cannot intelligently make a valid finding of whether petitioner, indeed, engaged in forum shopping. In any event, a ruling on this issue is not necessary to the final resolution of the entire case.

WHEREFORE, premises considered, the petition is hereby DENIED for its failure to show any reversible error on the part of Respondent Court. The questioned Decision of the Court of Appeals is AFFIRMED. Costs against petitioner.

SO ORDERED.

Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.






Manila

THIRD DIVISION

G.R. No. 117890 September 18, 1997

PISON-ARCEO AGRICULTURAL and DEVELOPMENT CORPORATION, petitioner, vs.NATIONAL LABOR RELATIONS COMMISSION and NATIONAL FEDERATION OF SUGAR WORKERS-FOOD and GENERAL TRADE (NFSW-FGT)/JESUS PASCO, MARTIN BONARES, EVANGELINE PASCO, TERESITA NAVA, FELIXBERTO NAVA, JOHNNY GARRIDO, EDUARDO NUÑEZ and DELMA NUÑEZ, respondents.

PANGANIBAN, J.:

In the proceedings before the labor arbiter, only the unregistered trade name of the employer-corporation and its administrator/manager were impleaded and subsequently held liable for illegal dismissal, backwages and separation pay. On appeal, however, the National Labor Relations Commission motu proprio included the corporate name of the employee as jointly and severally liable for the workers' claims. Because of such inclusion, the corporation now raises of due process and jurisdiction before this Court.

The Case

Assailed in this petition for certiorari under Rule 65 of the Rules of Court is the Decision 1 of Public Respondent National Labor Relations Commission 2 in NLRC Case No. V-0334-92 3 promulgated on September 27, 1993 and its Resolution 4 promulgated on September 12, 1994 denying reconsideration. Affirming the decision 5dated September 2, 1992 of Executive Labor Arbiter Oscar S. Uy, the impugned NLRC Decision disposed thus: 6

WHEREFORE, judgment is hereby rendered affirming the decision of Executive Labor Arbiter Oscar S. Uy, dated September 2, 1992, subject to the amendments and modification stated above and ordering the respondent-appellant, Jose Edmundo Pison and the respondent Pison-Arceo Agricultural and Development Corporation to pay jointly and severally the claims for backwages and separation pay of the complainant-appellees in the above-entitled case, except the claims of Danny Felix and Helen Felix, in the amount specified below:

Name Backwages Separation Pay Total

1. Jesus Pasco P14,729.00 P12,818.06 P27,547.06

2. Evangeline 14,729.00 12,874.81 27,603.81

Pasco

3. Martin Bonares 14,729.00 9,035.06 23,764.06

4. Mariolita Bonares 14,729.00 8,455.00 23,184.00

5. Felixberto Nava 14,729.00 13,505.31 28,234.31

6. Teresita Nava 14,729.00 3,417.31 18,146.31

7. Johnny Garrido 8,489.00 4,463.94 12,952.94

8. Eduardo Nuñez 8,489.00 11,399.44 19,888.44

9. Delma Nuñez 8,489.00 9,507.94 17,996.94

In addition, the respondent-appellant and the respondent corporation are ordered to pay attorney's fees equivalent to ten (10%) percent of the total award.

The dispositive portion of the assailed Resolution, on the other hand, reads: 7

WHEREFORE, the decision in question is hereby modified in the sense that the monetary award of Mariolita Bonares be [sic] deleted. Except for such modification, the rest of the decision stands.

Arguing that the National Labor Relations Commission did not have jurisdiction over it because it was not a party before the labor arbiter, petitioner elevated this matter before this Court via a petition forcertiorari under Rule 65.

Acting on petitioner's prayer 8, this Court (First Division) issued on January 18, 1995 a temporary restraining order enjoining the respondents from executing the assailed Decision and Resolution.

The Facts

As gathered from the complaint 9 and other submissions of the parties filed with Executive Labor Arbiter Oscar S. Uy, the facts of the case are as follows:

Together with Complainants Danny and Helen Felix, private respondents — Jesus Pasco, Evangeline Pasco, Martin Bonares, Teresita Nava, Felixberto Nava, Johnny Garrido, Eduardo Nuñez and Delma Nuñez, all represented by Private Respondent National Federation of Sugar Workers-Food and General Trade (NSFW-FGT) — filed on June 13, 1988 a complaint for illegal dismissal, reinstatement, payment of backwages and attorney's fees against "Hacienda Lanutan/Jose Edmundo Pison." Complainants alleged that they were previously employed as

regular sugar farm workers of Hacienda Lanutan in Talisay, Negros Occidental. On the other hand, Jose Edmundo Pison claimed that he was merely the administrator of Hacienda Lanutan which was owned by Pison-Arceo Agricultural and Development Corporation.

As earlier stated, the executive labor arbiter rendered on September 2, 1992 a decision in favor of the workers-complainants, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering respondent Jose Edmundo Pison/Hda. Lanutan, Talisay, Negros Occidental, to PAY the following complainants their backwages (one year) plus separation pay in the following amounts, to wit:

BACKWAGES SEPARATION PAY TOTAL

1. J. Pasco P14,729.00 P12,818.06 P27,547.06

2. E. Pasco 14,729.00 12,784.81 27,603.81

3. Bonares 14,729.00 8,404.56 23,133.56

4. F. Nava 14,729.00 13,505.31 28,234.31

5. T. Nava 14,729.00 3,427.31 18,146.31

6. J. Garrido 8,489.00 4,463.94 12,952.94

7. E. Nuñez 8,489.00 11,399.44 19,888.44

8. D. Nuñez 8,489.00 9,507.94 17,996.94

plus ten percent (10%) of the total award as attorney's fees in the amount of P17,550.34 or in the total amount of ONE HUNDRED NINETY THREE THOUSAND FIFTY THREE AND 71/100 (P193,053.71), all these amounts to be deposited with this Office within ten (10) days from receipt of this decision. The claim of complainants Danny and Helen Felix are hereby DENIED for lack of merit.

In affirming the decision of the executive labor arbiter, public respondent ordered "respondent-appellant, Jose Edmundo Pison and the respondent Pison-Arceo Agricultural and Development Corporation to pay jointly and severally the claims for backwages and separation pay" of private respondents. The motion for reconsideration dated October 14, 1993 was apparently filed by Jose Edmundo Pison for and on his own behalf only. However, Pison did not elevate his case before this Court. The sole petitioner now before us is Pison-Arceo Agricultural and Development Corporation, the owner of Hacienda Lanutan.

The Issue

Petitioner submits only one issue for our resolution: 10

Public Respondent NLRC acted without or in excess of jurisdiction or with grave abuse of discretion when it included motu proprio petitioner corporation

as a party respondent and ordered said corporation liable to pay jointly and severally, with Jose Edmundo Pison the claims of private respondents.

In essence, petitioner alleges deprivation of due process.

The Court's Ruling

The petition lacks merit.

Petitioner contends that it was never served any summons; hence, public respondent did not acquire jurisdiction over it. It argues that "from the time the complaint was filed before the Regional Arbitration Branch No. VI up to the time the said case was appealed by Jose Edmundo Pison to the NLRC, Cebu, petitioner Corporation was never impleaded as one of the parties . . . ." It was only in the public respondent's assailed Decision of September 27, 1993 "that petitioner Corporation was wrongly included as party respondent without its knowledge." Copies of the assailed Decision and Resolution were not sent to petitioner but only to Jose Edmundo Pison, on the theory that the two were one and the same. Petitioner avers that Jose Edmundo Pison, "is only a minority stockholder" of Hacienda Lanutan, which in turn is one of the of business of petitioner. 11 Petitioner further argues that it did not "voluntarily appear before said tribunal" and that it was not "given (any) opportunity to be heard", 12 thus, the assailed Decision and Resolution in this case are void "for having been issued without jurisdiction." 13

In its memorandum, petitioner adds that Eden vs. Ministry of Labor and Employment, 14 cited by public respondent, does not apply to this case. In Eden, "petitioners were duly served with notices of hearings, while in the instant case, the petitioner was never summoned nor was served with notice of hearings as a respondent in the case." 15

At the outset, we must stress that in quasi-judicial proceedings, procedural rules governing service of summons are not strictly construed. Substantial compliance thereof is sufficient. 16 Also, in labor cases, punctilious adherence to stringent technical rules may be relaxed in the interest of the working man; it should not defeat the complete and equitable resolution of the rights and obligations of the parties. This Court is ever mindful of the underlying spirit and intention of the Labor Code to ascertain the facts of each case speedily and objectively without regard to technical rules of law and procedure, all in the interest of due process. 17 Furthermore, the Labor Code itself, as amended by RA 6715, 18 provides for the specific power of the Commission to correct, amend, or waive any error, defect or irregularity whether in the substance or in the form of the proceedings before it 19 under Article 218 (c) as follows:

(c) To conduct investigation for the determination of a question, matter or controversy within its jurisdiction, proceed to hear and determine the disputes in the absence of any party thereto who has been summoned or served with notice to appear, conduct its proceedings or any part thereof in public or in private, adjourn its hearings to any time and place, refer technical matters or accounts to an expert and to accept his report as evidence after hearing of the parties upon due notice, direct parties to be joined in or excluded from the proceedings, correct, amend, or waive any error, defect or irregularity whether in substance or in form, give all such directions as it may deem necessary or expedient in the determination of the dispute before it, and dismiss any matter or refrain from further hearing or from determining the dispute or part thereof, where it is trivial or where further proceedings by the Commission are not necessary or desirable; . . . (Emphasis supplied.)

In this case, there are legal and factual reasons to hold petitioner jointly and severally liable with Jose Edmundo Pison.

Jurisdiction AcquiredOver Petitioner

Consistent with the foregoing principles applicable to labor cases, we find that jurisdiction was acquired over the petitioner. There is no dispute that Hacienda Lanutan, which was owned SOLELY by petitioner, was impleaded and was heard. If at all, the non-inclusion of the corporate name of petitioner in the case before the executive labor arbiter was a mere procedural error which did not at all affect the jurisdiction of the labor tribunals. 20 Petitioner was adequately represented in the proceedings conducted at the regional arbitration branch by no less than Hacienda Lanutan's administrator, Jose Edmundo Pison, who verified and signed his/Hacienda Lanutan's position paper and other pleadings submitted before the labor arbiter. It can thus be said that petitioner, acting through its corporate officer Jose Edmundo Pison, traversed private respondents' complaint and controverted their claims. Further rebutted by petitioner are the following findings of public respondent: 21

It should further be noted that two responsible employees of the said corporation, namely, Teresita Dangcasil, the secretary of the administrator/manager, and Fernando Gallego, the hacienda overseer, had submitted their affidavits, both dated July 20, 1988, as part of the evidence for the respondent, and that, as shown by the records, the lawyer who appeared as the legal counsel of the respondent-appellant, specifically, Atty. Jose Ma. Torres, of the Torres and Valencia Law Office in Bacolod City, (Rollo, p. 17) was also the legal counsel of the said corporation. (Rollo, p. 23)

Also, it is undisputed that summons and all notices of hearing were duly served upon Jose Edmundo Pison. Since Pison is the administrator and representative of petitioner in its property (Hacienda Lanutan) and recognized as such by the workers therein, we deem the service of summons upon him as sufficient and substantial compliance with the requirements for service of summons and other notices in respect of petitioner corporation. Insofar as the complainants are concerned, Jose Edmundo Pison was their employer and/or their employer's representative. In view of the peculiar circumstances of this case, we rule that Jose Pison's knowledge of the labor case and effort to resist can be deemed knowledge and action of the corporation. Indeed, to apply the normal precepts on corporate fiction and the technical rules on service of summons would be to overturn the bias of the Constitution and the laws in favor of labor.

Hence, it is fair to state that petitioner, through its administrator and manager, Jose Edmundo Pison, was duly notified of the labor case against it and was actually afforded an opportunity to be heard. That it refused to take advantage of such opportunity and opted to hide behind its corporate veil will not shield it from the encompassing application of labor laws. As we held in Bautista vs. Secretary of Labor and Employment: 22

Moreover, since the proceeding was not judicial but merely administrative, the rigid requirements of procedural laws were not strictly enforceable. It is settled that —

While the administrative tribunals exercising quasi-judicial powers are free from the rigidity of certain procedural requirements they are bound by law and practice to observe the

fundamental and essential requirements of due process in justiciable cases presented before them. However, the standard of due process that must be met in administrative tribunals allows a certain latitude as long as the element of fairness is not ignored. (fn: Adamson & Adamson, Inc. vs. Amores, 152 SCRA 237).

xxx xxx xxx

It is of course also sound and settled rule that administrative agencies performing quasi-judicial functions are unfettered by the rigid technicalities of procedure observed in the courts of law, and this is so that disputes brought before such bodies may be resolved in the most expeditious and inexpensive manner possible. (fn: Rizal Workers Union vs. Ferrer-Calleja, 186 SCRA 431).

Given all these circumstances, we feel that the lack of summons upon the petitioners is not sufficient justification for annulling the acts of the public respondents.

Contrary to petitioner's contention, the principles laid down in Eden are to relevant to this case. In that case, a religious organization, SCAFI, 23 denied responsibility for the monetary claims of several employees, as these were filed against SCAPS 24 and its officer in charge — the employees believed that SCAPS was their employer. In rejecting such defense, this Court ruled: 25

With regard to the contention that SCAPS and SCAFI are two different entities, this lacks merit. The change from SCAPS to SCAFI was a mere modification, if not rectification of the caption as to respondent in the MOLE case, when it was pointed out in the complainant's position paper that SCAPS belongs to or is integral with SCAFI as gleaned from the brochure, Annex "A" of said position paper, which is already part of the records of the case and incorporated in the Comment by way of reference. The brochure stated that SCAPS is the implementing and service arm of SCAFI, with Bishop Gaviola as National Director of SCAPS and Board Chairman of SCAFI, both their address: 2655 F.B. Harrison, St., Pasay City. Thus, the real party in interest is SCAFI, more so because it has the juridical personality that can sue and be sued. The change in caption from SCAPS to SCAFI however does not absolve SCAPS from liability, for SCAFI includes SCAPS, SCAPS — the arm, SCAFI, — the organism to which the arm is an integral part of the rise and fall of SCAPS, and vice-versa. Thus, SCAFI has never been a stranger to the case. Jurisprudence is to the effect that:

An action may be entertained, notwithstanding the failure to include an indispensable party where it appears that the naming of the party would be a formality. (Baguio vs. Rodriguez, L-11078, May 27, 1959)

Comparable to Eden, Hacienda Lanutan is an arm of petitioner, the organism of which it is an integral part. Ineluctably, the real party in interest in this case is petitioner, not "Hacienda Lanutan" which is merely its non-juridical arm. In dealing with private respondents, petitioner represented itself to be "Hacienda Lanutan." Hacienda Lanutan is roughly equivalent to its

trade name or even nickname oralias. The names may have been different, but the IDENTITY of the petitioner is not in dispute. Thus, it may be sued under the same by which it made itself known to the workers.

Liability of Jose Edmundo Pison

Jose Edmundo Pison did not appeal from the Decision of public respondent. It thus follows that he is bound by the said judgment. A party who has not appealed an adverse decision cannot obtain from the appellate court any affirmative relief other than those granted, if there is any, in the decision of the lower court or administrative body. 26

WHEREFORE, premises considered, the petition is hereby DISMISSED, for its failure to show grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the National Labor Relations Commission. The assailed Decision and Resolution are AFFIRMED. The temporary restraining order issued on January 19, 1995 is hereby LIFTED. Cost against petitioner.

SO ORDERED.

Narvasa, C.J., Romero, Melo and Francisco, JJ., concur.

Footnotes

1 In "National Federation of Sugar Workers-Food and General Trade (NFSW-FGT)/Jesus Pasco, et al. vs. Hda. Lanutan/Jose Edmundo Pison (And Pison-Arceo Agricultural and Development Corporation)"; rollo, pp. 43-65.

2 Fourth Division composed of Commissioner Bernabe S. Batuhan, ponente, and Commissioner Irenea S. Ceniza, concurring. The third member is not named in the assailed Decision.

3 Originally numbered as RAB Case No. 06-06-10202-88.

4 Rollo, pp. 78-79, with an additional concurrence of Commissioner Anchito V. Cañete.

5 Ibid., pp. 18-25.

6 Ibid., pp. 64-65.

7 Ibid., p. 78.

8 Ibid., p. 11.

9 Rollo, pp. 15-17.

10 Ibid., p. 7; original text in upper case.

11 Ibid., p. 8.

12 Ibid., p. 9.

13 Ibid., p. 11.

14 182 SCRA 840, February 28, 11990.

15 Rollo, pp. 200-201.

16 Eden vs. Ministry of Labor and Employment, 182 SCRA 840, 847, February 28, 1990; citingAng Tibay vs. Court of Industrial Relations, 69 Phil. 635, February 27, 1940.

17 Cabalan Pastulan Negrito Labor Association vs. NLRC, 241 SCRA 643, 656-657, February 23, 1994; citing YBL (Your Bus Lines), et al. vs. NLRC, et al., 190 SCRA 160, September 28, 1990; Rada vs. NLRC, et al., G.R. No. 96078, 205 SCRA 69, January 9, 1992.

18 The New Labor Relations Law.

19 City Fair Corporation vs. National Labor Relations Commission, 243 SCRA 572, 576, April 21, 1995.

20 This should be distinguished from the case of Laureano Investment & Development Corporation vs. The Honorable Court of Appeals and Bormaheco, Inc., (G.R. No. 100468, p. 13, May 6, 1997) where we ruled:

Examining the records of the case, we observe that the motion adverted to indeed made use of LIDECO as an acronym for Laureano Investment and Development Corporation. But said motion distinctly specified that LIDECO was the shorter term for Laureano Investment and Development Corporation. It is obvious that no false representation or concealment can be attributed to private respondent. Neither can it be charged with conveying the impression that the facts are other than, or inconsistent with, those which it now asserts since LIDECO, as an acronym, is clearly different from "Lideco Corporation" which represented itself as a corporation duly registered and organized in accordance with law. Nor can it be logically inferred that petitioner relied or acted upon such representation or private representation of private respondent in thereafter referring to itself as "Lideco Corporation;" for petitioner is presumed to know by which name it is registered, and the legal provisions on the use of its corporate name.

21 NLRC's Decision, pp. 19-20; rollo, pp. 61-62.

22 196 SCRA 470, 475, April 30, 1991, per Cruz, J.

23 Share and Care Apostolate Foundation, Inc. (SCAFI).

24 Share and Care Apostolate for Poor Settlers (SCAPS).

25 Eden vs. Ministry of Labor and Employment, supra, p. 847.

26 Atlantic Gulf and Pacific Company of Manila, Inc. vs. Court of Appeals, 247 SCRA 606, 612-613, August 23, 1995, citing cases of Makati Haberdashery, Inc., et al. vs. National Labor Relations Commission, et al., G.R. Nos. 83380-81, November 15, 1989, 179 SCRA 448; Dizon, Jr. vs. National Labor Relations Commission, et al., G.R. No. 69018, January 29, 1990, 181 SCRA 472; Lumibao vs. Intermediate Appellate Court, et al., G.R. No. 64677, September 13, 1990, 189 SCRA 649; SMI Fish Industries, Inc., et al. vs. National Labor Relations Commission, et al., G.R. Nos. 96952-56, September 2, 1992, 213 SCRA 444; Alba vs. Santander, et al., L-28409, April 15, 1988, 160 SCRA 8; Nessia vs. Fermin, et al., G.R. No. 102918, March 30, 1993, 220 SCRA 615.


Manila

EN BANC

G.R. No. L-15429 December 1, 1919

UY SIULIONG, MARIANO LIMJAP, GACU UNG JIENG, EDILBERTO CALIXTO and UY CHO YEE, petitioners, vs.THE DIRECTOR OF COMMERCE AND INDUSTRY, respondent.

Kincaid and Perkins for petitioners.Attorney-General Paredes for respondent.

JOHNSON, J.:

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 Compañia, 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.

To the petition the respondent demurred and the cause was finally submitted upon the petition and demurrer.

The important facts necessary for the solution of the question presented, which are found in the petition, may be stated as follows:

1. That prior to the presentation of the petition the petitioners had been associated together as partners, which partnership was known as "mercantil regular colectiva, under the style and firm name of "Siuliong y Cia.;"

2. That the petitioners herein, who had theretofore been members of said partnership of "Siuliong y Cia.," desired to dissolve said partnership and to form a corporation composed of the same persons as incorporators, to be known as "Siulong y Compañia, Incorporada;"

3. That the purpose of said corporation, "Siuliong y Cia., Inc.," is (a) to acquire the business of the partnership theretofore known as Siuliong & Co., and (b) to continue said business with some of its objects or purposes;

4. That an examination of the articles of incorporation of the said "Siuliong y Compañia, Incorporada" (Exhibit A) shows that it is to be organized for the following purposes:

(a) The purchase and sale, importation and exportation, of the products of the country as well as of foreign countries;

(b) To discount promissory notes, bills of exchange, and other negotiable instruments;

(c) The purchase and sale of bills of exchange, bonds, stocks, or "participaciones de sociedades mercantiles e industriales [joint account of mercantile and industrial associations]," and of all classes of mercantile documents; "comisiones [commissions];" "consignaciones [consignments];"

(d) To act as agents for life, marine and fire insurance companies; lawphi1.net

(e) To purchase and sell boats of all classes "y fletamento de los mismos [and charterage of same];" and

(f) To purchase and sell industrial and mercantile establishments.

While the articles of incorporation of "Siuliong y Cia., Inc." states that its purpose is to acquire and continue the business, with some of its objects or purposes, of Siuliong & Co., it will be found upon an examination of the purposes enumerated in the proposed articles of incorporation of "Siuliong y Cia., Inc.," that some of the purposes of the original partnership of "Siuliong y Cia." have been omitted. For example, the articles of partnership of "Siuliong y Cia." gave said company the authority to purchase and sell all classes "de fincas rusticas y urbanas [of rural and city real estate]" as well as the right to act as agents for the establishment of any other business which it might esteem convenient for the interests of "la compañia [the company]." (Exhibit C).

The respondent in his argument in support of the demurrer 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, in reply to said argument of the respondent, while insisting 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. That renouncement on the part of the petitioners eliminates from the purposes of said proposed corporation (of "Siuliong y Cia., Inc.") any right to engage in the banking business as such, or in the purchase and sale of real estate.

We come now to the consideration of the principal question raised by the respondent, to wit: that the proposed articles of incorporation of "Siuliong y Cia., Inc.," permits it to engage in a business with more than one purpose.

If upon an examination of the articles of incorporation we find that its purpose is to engage in a business with butone principal purpose, then that contention of the respondent will have been answered and it will be unnecessary to discuss at length the question whether or not a corporation organized for commercial purposes in the Philippine Islands can be organized for more than one purpose.

The attorney for the respondent, at the time of the argument, admitted in open court that corporations in the Philippine Islands might be organized for both the "importation and exportation"

of merchandise and that there might be no relation between the kind of merchandise imported with the class of merchandise exported.

Referring again to be proposed articles of incorporation, a copy of which is united with the original petition and marked Exhibit A, it will be seen that the only purpose of said corporation are those enumerated in subparagraphs (a), (b), (c), (d), (e) and ( f ) of paragraph 4 above. While said articles of incorporation are somewhat loosely drawn, it is clear from a reading of the same that the principal purpose of said corporation is to engage in amercantile business, with the power to do and perform the particular acts enumerated in said subparagraphs above referred to.

Without discussing or deciding at this time whether a corporation organized under the laws of the Philippine Islands may be organized for more than one purpose, we are of the opinion and so decide that a corporation may be organized under the laws of the Philippine Islands for mercantile purposes, and to engage in such incidental business as may be necessary and advisable to give effect to, and aid in, the successful operation and conduct of the principal business. 1awphi1.net

In the present case we are fully persuaded that all of the power and authority included in the articles of incorporation of "Siuliong y Cia., Inc.," enumerated above in paragraph 4 (Exhibit A) are only incidental to the principal purpose of said proposed incorporation, to wit: "mercantile business." The purchase and sale, importation and exportation of the products of the country, as well as of foreign countries, might make it necessary to purchase and discount promissory notes, bills of exchange, bonds, negotiable instruments, stock, and interest in other mercantile and industrial associations. It might also become important and advisable for the successful operation of the corporation to act as agent for insurance companies as well as to buy, sell and equip boats and to buy and sell other establishments, and industrial and mercantile businesses.

While we have arrived at the conclusion that the proposed articles of incorporation do not authorize the petitioners to engage in a business with more than one purpose, we do not mean to be understood as having decided that corporations under the laws of the Philippine Islands may not engage in a business with more than one purpose. Such an interpretation might work a great injustice to corporations organized under the Philippine laws. Such an interpretation would give foreign corporations, which are permitted to be registered under the laws here and which may be organized for more than one purpose, a great advantage over domestic corporations. We do not believe that it was the intention of the legislature to give foreign corporations such an advantage over domestic corporations.

Considering the particular purposes and objects of the proposed articles of incorporation which are specially enumerated above, 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.

Arellano, C.J., Torres and Avanceña, JJ., concur.


Manila

EN BANC

G.R. No. L-22238 February 18, 1967

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.1äwphï1.ñët

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. 1äwphï1.ñët

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-appellee


Manila

SECOND DIVISION

G.R. No. L-56763 December 15, 1982

JOHN SY and UNIVERSAL PARTS SUPPLY CORPORATION, petitioners, vs.TYSON ENTERPRISES, INC., JUDGE GREGORIO G. PINEDA of the Court of First Instance of Rizal, Pasig Branch XXI and COURT OF APPEALS, respondents.

Abraham D. Cana for petitioners.

Alberto A. Domingo for private respondent.

AQUINO, J:

This is a case about the venue of a collection suit. On August 29, 1979, Tyson Enterprises, Inc. filed against John Sy and Universal Parts Supply Corporation in the Court of First Instance of Rizal, Pasig Branch XXI, a complaint for the collection of P288,534.58 plus interest, attorney's fees and litigation expenses (Civil Case No. 34302).

It is alleged in the complaint that John Sy, doing business under the trade name, Universal Parts Supply, is a resident of Fuentebella Subdivision, Bacolod City and that his co-defendant, Universal Parts Supply Corporation, allegedly controlled by Sy, is doing business in Bacolod City.

Curiously enough, there is no allegation in the complaint as to the office or place of business of plaintiff Tyson Enterprises, Inc., a firm actually doing business at 1024 Magdalena, now G. Masangkay Street, Binondo, Manila (p. 59, Rollo).

What is alleged is the postal address or residence of Dominador Ti, the president and general manager of plaintiff firm, which is at 26 Xavier Street, Greenhills Subdivision, San Juan, Rizal. The evident purpose of alleging that address and not mentioning the place of business of plaintiff firm was to justify the filing of the suit in Pasig, Rizal instead of in Manila.

Defendant Sy and Universal Parts Supply Corporation first filed a motion for extension of time to file their answer and later a motion for a bill of particulars. The latter motion was denied. Then, they filed a motion to dismiss on the ground of improper venue.

They invoked the provision of section 2(b), Rule 4 of the Rules of Court that personal actions "may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiffs or any of the plaintiffs resides, at the election of the plaintiff."

To strengthen that ground, they also cited the stipulation in the sales invoice that "the parties expressly submit to the jurisdiction of the Courts of the City of Manila for any legal action arising out of" the transaction which stipulation is quoted in paragraph 4 of plaintiff's complaint.

The plaintiff opposed the motion to dismiss on the ground that the defendants had waived the objection based on improper venue because they had previously filed a motion for a bill of particulars which was not granted. The trial court denied the motion to dismiss on the ground that by filing a motion for a bill of particulars the defendants waived their objection to the venue. That denial order was assailed in a petition for certiorari and prohibition in the Court of Appeals which issued on July 29, 1980 a restraining order, enjoining respondent judge from acting on the case. He disregarded the restraining order (p. 133, Rollo).

The Appellate Court in its decision of October 6, 1980 dismissed the petition. It ruled that the parties did not intend Manila as the exclusive venue of the actions arising under their transactions and that since the action was filed in Pasig, which is near Manila, no useful purpose would be served by dismissing the same and ordering that it be filed in Manila (Sy vs. Pineda, CA-G.R. No. SP-10775). That decision was appealed to this Court.

There is no question that the venue was improperly laid in this case. The place of business of plaintiff Tyson Enterprises, Inc., which for purposes of venue is considered as its residence (18 C.J.S 583; Clavecilla Radio system vs. Antillon, L-22238, February 18, 1967, 19 SCRA 379), because a corporation has a personality separate and distinct from that of its officers and stockholders.

Consequently, the collection suit should have been filed in Manila, the residence of plaintiff corporation and the place designated in its sales invoice, or it could have been filed also in Bacolod City, the residence of defendant Sy.

We hold that the trial court and the Court of Appeals erred in ruling that the defendants, now the petitioners, waived their objection to the improper venue. As the trial court proceeded in defiance of the Rules of Court in not dismissing the case, prohibition lies to restrain it from acting in the case (Enriquez vs. Macadaeg, 84 Phil. 674).

Section 4, Rule 4 of the Rules of Court provides that, "when improper venue is not objected to in a motion to dismiss it is deemed waived" and it can no longer be pleaded as an affirmative defense in the answer (Sec. 5, Rule 16).

In this case, the petitioners, before filing their answer, filed a motion to dismiss based on improper venue. That motion was seasonably filed (Republic vs. Court of First Instance of Manila, L-30839, November 28, 1975, 68 SCRA 231, 239). The fact that they filed a motion for a bill of particulars before they filed their motion to dismiss did not constitute a waiver of their objection to the venue.

It should be noted that the provision of Section 377 of the Code of Civil Procedure that "the failure of a defendant to object to the venue of the action at the time of entering his appearance in the action shall be deemed a waiver on his part of all objection to the place or tribunal in which the action is brought" is not found in the Rules of Court.

And the provision of section 4, Rule 5 of the 1940 Rules of Court that "when improper venue is not objected to prior to the trial, it is deemed waived" is not reproduced in the present Rules of Court.

To repeat, what section 4 of Rule 4 of the present Rules of court provides is that the objection to improper venue should be raised in a motion to dismiss seasonably filed and, if not so raised, then the said objection is waived. Section 4 does not provide that the objection based on improper venue should be interposed by means of a special appearance or before any pleading is filed.

The rules on venue, like the other procedural rules, are designed to insure a just and orderly administration of justice or the impartial and evenhanded determination of every action and proceeding. Obviously, this objective will not be attained if the plaintiff is given unrestricted freedom to choose the court where he may file his complaint or petition.

The choice of venue should not be left to the plaintiff's whim or caprice. He may be impelled by some ulterior motivation in choosing to file a case in a particular court even if not allowed by the rules on venue.

As perspicaciously observed by Justice Moreland, the purpose of procedure is not to restrict the court's jurisdiction over the subject matter but to give it effective facility "in righteous action", "to facilitate and promote the administration of justice" or to insure "just judgments" by means of a fair hearing. If that objective is not achieved, then "the administration of justice becomes incomplete and unsatisfactory and lays itself open to grave criticism." (Manila Railroad Co. vs. Attorney General, 20 Phil. 523, 530.)

The case of Marquez Lim Cay vs. Del Rosario, 55 Phil. 962, does not sustain the trial court's order of denial because in that case the defendants, before filing a motion to dismiss on the ground of improper venue, interposed a demurrer on the ground that the complaint does not state a cause of action. Then, they filed a motion for the dissolution of an attachment, posted a bond for its dissolution and later filed a motion for the assessment of the damages caused by the attachment. All those acts constituted a submission to the trial court's jurisdiction and a waiver of the objection based on improper venue under section 377 of the Code of Civil Procedure.

The instant case is similar to Evangelista vs. Santos, 86 Phil. 387, where the plaintiffs sued the defendant in the Court of First Instance of Rizal on the assumption that he was a resident of Pasay City because he had a house there. Upon receipt of the summons, the defendant filed a motion to dismiss based on improper venue. He alleged under oath that he was a resident of Iloilo City.

This Court sustained the dismissal of the complaint on the ground of improper venue, because the defendant was really a resident of Iloilo City. His Pasay City residence was used by his children who were studying in Manila. Same holding in Casilan vs. Tomassi, 90 Phil. 765; Corre vs. Corre, 100 Phil. 321; Calo vs. Bislig Industries, Inc., L-19703, January 30, 1967, 19 SCRA 173; Adamos vs. J. M. Tuason, Co., Inc.,. L-21957, October 14, 1968, 25 SCRA 529.

Where one Cesar Ramirez, a resident of Quezon City, sued in the Court of First Instance of Manila Manuel F. Portillo, a resident of Caloocan City, for the recovery of a sum of money, the trial court erred in not granting Portillo's motion to dismiss the complaint on the ground of improper venue This Court issued the writ of prohibition to restrain the trial court from proceeding in the case (Portillo vs. Judge Reyes and Ramirez, 113 Phil. 288).

WHEREFORE, the decision of the Court of Appeals and the order of respondent judge denying the motion to dismiss are reversed and set aside. The writ of prohibition is granted. Civil Case No. 34302 should be considered dismissed without prejudice to refiling - it in the Court of First Instance of Manila or Bacolod City at the election of plaintiff which should be allowed to withdraw the documentary evidence submitted in that case. All the proceedings in said case, including the decision, are also set aside. Costs against Tyson Enterprises, Inc.

SOORDERED.

Makasiar (Chairman), Concepcion, Jr., Guerrero and Abad Santos, JJ., concur.


Manila

FIRST DIVISION

G.R. No. 104175 June 25, 1993

YOUNG AUTO SUPPLY CO. AND NEMESIO GARCIA, petitioners, vs.THE HONORABLE COURT OF APPEALS (THIRTEENTH DIVISION) AND GEORGE CHIONG ROXAS,respondents.

Angara, Abello, Concepcion, Regala & Cruz for petitioners.

Antonio Nuyles for private respondent.

QUIASON, J.:

Petitioners seek to set aside the decision of respondent Court of Appeals in CA-G.R. SP No. 25237, which reversed the Order dated February 8, 1991 issued by the Regional Trial Court, Branch 11, Cebu City in Civil Case No. CEB 6967. The order of the trial court denied the motion to dismiss filed by respondent George C. Roxas of the complaint for collection filed by petitioners.

It appears that sometime on October 28, 1987, Young Auto Supply Co. Inc. (YASCO) represented by Nemesio Garcia, its president, Nelson Garcia and Vicente Sy, sold all of their shares of stock in Consolidated Marketing & Development Corporation (CMDC) to Roxas. The purchase price was P8,000,000.00 payable as follows: a downpayment of P4,000,000.00 and the balance of P4,000,000.00 in four post dated checks of P1,000,000.00 each.

Immediately after the execution of the agreement, Roxas took full control of the four markets of CMDC. However, the vendors held on to the stock certificates of CMDC as security pending full payment of the balance of the purchase price.

The first check of P4,000,000.00, representing the down-payment, was honored by the drawee bank but the four other checks representing the balance of P4,000,000.00 were dishonored. In the meantime, Roxas sold one of the markets to a third party. Out of the proceeds of the sale, YASCO received P600,000.00, leaving a balance of P3,400,000.00 (Rollo, p. 176).

Subsequently, Nelson Garcia and Vicente Sy assigned all their rights and title to the proceeds of the sale of the CMDC shares to Nemesio Garcia.

On June 10, 1988, petitioners filed a complaint against Roxas in the Regional Trial Court, Branch 11, Cebu City, praying that Roxas be ordered to pay petitioners the sum of P3,400,00.00 or that full control of the three markets be turned over to YASCO and Garcia. The complaint also prayed for the forfeiture of the partial payment of P4,600,000.00 and the payment of attorney's fees and costs (Rollo, p. 290).

Roxas filed two motions for extension of time to submit his answer. But despite said motion, he failed to do so causing petitioners to file a motion to have him declared in default. Roxas then filed, through a new counsel, a third motion for extension of time to submit a responsive pleading.

On August 19, 1988, the trial court declared Roxas in default. The order of default was, however, lifted upon motion of Roxas.

On August 22, 1988, Roxas filed a motion to dismiss on the grounds that:

1. The complaint did not state a cause of action due to non-joinder of indispensable parties;

2. The claim or demand set forth in the complaint had been waived, abandoned or otherwise extinguished; and

3. The venue was improperly laid (Rollo, p. 299).

After a hearing, wherein testimonial and documentary evidence were presented by both parties, the trial court in an Order dated February 8, 1991 denied Roxas' motion to dismiss. After receiving said order, Roxas filed another motion for extension of time to submit his answer. He also filed a motion for reconsideration, which the trial court denied in its Order dated April 10, 1991 for being pro-forma (Rollo, p. 17). Roxas was again declared in default, on the ground that his motion for reconsideration did not toll the running of the period to file his answer.

On May 3, 1991, Roxas filed an unverified Motion to Lift the Order of Default which was not accompanied with the required affidavit or merit. But without waiting for the resolution of the motion, he filed a petition for certiorari with the Court of Appeals.

The Court of Appeals sustained the findings of the trial court with regard to the first two grounds raised in the motion to dismiss but ordered the dismissal of the complaint on the ground of improper venue (Rollo, p. 49).

A subsequent motion for reconsideration by petitioner was to no avail.

Petitioners now come before us, alleging that the Court of Appealserred in:

1. holding the venue should be in Pasay City, and not in Cebu City (where both petitioners/plaintiffs are residents;

2. not finding that Roxas is estopped from questioning the choice of venue (Rollo, p. 19).

The petition is meritorious.

In holding that the venue was improperly laid in Cebu City, the Court of Appeals relied on the address of YASCO, as appearing in the Deed of Sale dated October 28, 1987, which is "No. 1708 Dominga Street, Pasay City." This was the same address written in YASCO's letters and several commercial documents in the possession of Roxas (Decision, p. 12; Rollo, p. 48).

In the case of Garcia, the Court of Appeals said that he gave Pasay City as his address in three letters which he sent to Roxas' brothers and sisters (Decision, p. 12; Rollo, p. 47). The appellate court held that Roxas was led by petitioners to believe that their residence is in Pasay City and that he had relied upon those representations (Decision, p. 12, Rollo, p. 47).

The Court of Appeals erred in holding that the venue was improperly laid in Cebu City.

In the Regional Trial Courts, all personal actions are commenced and tried in the province or city where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff [Sec. 2(b) Rule 4, Revised Rules of Court].

There are two plaintiffs in the case at bench: a natural person and a domestic corporation. Both plaintiffs aver in their complaint that they are residents of Cebu City, thus:

1.1. Plaintiff Young Auto Supply Co., Inc., ("YASCO") is a domestic corporation duly organized and existing under Philippine laws with principal place of business at M. J. Cuenco Avenue, Cebu City. It also has a branch office at 1708 Dominga Street, Pasay City, Metro Manila.

Plaintiff Nemesio Garcia is of legal age, married, Filipino citizen and with business address at Young Auto Supply Co., Inc., M. J. Cuenco Avenue, Cebu City. . . . (Complaint, p. 1; Rollo, p. 81).

The Article of Incorporation of YASCO (SEC Reg. No. 22083) states:

THIRD That the place where the principal office of the corporation is to be established or located is at Cebu City, Philippines (as amended on December 20, 1980 and further amended on December 20, 1984) (Rollo, p. 273).

A corporation has no residence in the same sense in which this term is applied to a natural person. But for practical purposes, a corporation is in a metaphysical sense a resident of the place where its principal office is located as stated in the articles of incorporation (Cohen v. Benguet Commercial Co., Ltd., 34 Phil. 256 [1916] Clavecilla Radio System v. Antillon, 19 SCRA 379 [1967]). The Corporation Code precisely requires each corporation to specify in its articles of incorporation the "place where the principal office of the corporation is to be located which must be within the Philippines" (Sec. 14 [3]). The purpose of this requirement is to fix the residence of a corporation in a definite place, instead of allowing it to be ambulatory.

In Clavencilla Radio System v. Antillon, 19 SCRA 379 ([1967]), this Court explained why actions cannot be filed against a corporation in any place where the corporation maintains its branch offices. The Court ruled that to allow an action to be instituted in any place where the corporation has branch offices, would create confusion and work untold inconvenience to said entity. By the same token, a corporation cannot be allowed to file personal actions in a place other than its principal place of business unless such a place is also the residence of a co-plaintiff or a defendant.

If it was Roxas who sued YASCO in Pasay City and the latter questioned the venue on the ground that its principal place of business was in Cebu City, Roxas could argue that YASCO was in estoppel because it misled Roxas to believe that Pasay City was its principal place of business. But this is not the case before us.

With the finding that the residence of YASCO for purposes of venue is in Cebu City, where its principal place of business is located, it becomes unnecessary to decide whether Garcia is also a resident of Cebu City and whether Roxas was in estoppel from questioning the choice of Cebu City as the venue.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals appealed from is SET ASIDE and the Order dated February 8, 1991 of the Regional Trial Court is REINSTATED.

98 Phil 711 – Business Organization – Corporation Law – Sociedad Anonima – Corporate

Existence

Benguet Consolidated Mining Company was organized in 1903 under the Spanish Code

of Commerce of 1886 as a sociedad anonima. It was agreed by the incorporators that

Benguet Mining was to exist for 50 years.

In 1906, Act 1459 (Corporation Law) was enacted which superseded the Code

ofCommerce of 1886. Act 1459 essentially introduced the American concept of a

corporation. The purpose of the law, among others, is to eradicate the Spanish Code and

make sociedades anonimas obsolete.

In 1953, the board of directors of Benguet Mining submitted to the Securities and Exchange

Commission an application for them to be allowed to extend the life span of Benguet

Mining. Then Commissioner Mariano Pineda denied the application as it ruled that the

extension requested is contrary to Section 18 of the Corporation Law of 1906 which

provides that the life of a corporation shall not be extended by amendment beyond the time

fixed in their original articles.

Benguet Mining contends that they have a vested right under the Code of Commerceof

1886 because they were organized under said law; that under said law, Benguet Mining is

allowed to extend its life by simply amending its articles of incorporation; that the prohibition

in Section 18 of the Corporation Code of 1906 does not apply to sociedades anonimas

already existing prior to the Law’s enactment; that even assuming that the prohibition

applies to Benguet Mining, it should be allowed to be reorganized as a corporation under

the said Corporation Law.

ISSUE: Whether or not Benguet Mining is correct.

HELD: No. Benguet Mining has no vested right to extend its life. It is a well settled rule that

no person has a vested interest in any rule of law entitling him to insist that it shall remain

unchanged for his benefit. Had Benguet Mining agreed to extend its life prior to the passage

of the Corporation Code of 1906 such right would have vested. But when the law was

passed in 1906, Benguet Mining was already deprived of such right.

To allow Benguet Mining to extend its life will be inimical to the purpose of the law which

sought to render obsolete sociedades anonimas. If this is allowed, Benguet Mining will

unfairly do something which new corporations organized under the new Corporation Law

can’t do – that is, exist beyond 50 years. Plus, it would have reaped the benefits of being a

sociedad anonima and later on of being a corporation. Further, under the Corporation Code

of 1906, existing sociedades anonimas during the enactment of the law must choose

whether to continue as such or be organizedas a corporation under the new law. Once a

sociedad anonima chooses one of these, it is already proscribed from choosing the other.

Evidently, Benguet Mining chose to exist as a sociedad anonima hence it can no longer

elect to become a corporation when its life is near its end.

Corpo Cases

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