Laureano vs. CA, G.R. No. 100468. May 6, 1997 ~ Mister Criminology

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

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

FACTS:

Reynaldo and Florence Laureano are majority stockholders of petitioner who entered into a series of loan and credit transactions with Philippine National Cooperative Bank.
To secure payment of the loans, they executed Deeds of Real Estate Mortgage.
They failed to pay, PNCB applied for extrajudicial foreclosure of the mortgages.
The bank was the purchaser of the properties in question in the foreclosure sale.
PNCB did not secure a writ of possession nor did it file ejectment proceedings against the Laureano spouses.
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.
Bormaheco filed an ExParte Petition for the Issuance of Writ of Possession.
Respondent Court Issued its order, 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.
Respondent Bormaheco filed its Motion to Strike out the Complaint in Intervention and all related pleadings filed by LIDECO Corporation.
The motion was granted, which reads: 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 separate and distinct entities.
Therefore, no way whatsoever that LIDECO Corporations interests will be adversely affected by the outcome of the instant case.

ISSUE:

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

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RULING:

The equitable doctrine of estoppel was explained by this Court in Caltex (Philippines), Inc. vs. Court of Appeals; - 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.

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 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).

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 not estopped from questioning the juridical personality of Lideco Corporation, even after the trial court had allowed it to intervene in the case.

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.