G.R. No. L-19118, 30 January 1965
Mariano A. Albert sued University Publishing Co., Inc. Plaintiff alleging that defendant was a corporation duly organized and existing under the laws of the Philippines; wherein Jose M. Aruego, its President, entered into a contract with plaintiff and thereby agreed to pay plaintiff P30,000.00 for the exclusive right to publish his revised Commentaries on the Revised Penal Code and for his share in previous sales of the book’s first edition.
Defendant admitted plaintiff’s allegation of defendant’s corporate existence and the execution of the terms of the contract dated July 19, 1948; but alleged that it was plaintiff who breached their contract by failing to deliver his manuscript.
Plaintiff died before trial and Justo R. Albert, his estate’s administrator, was substituted for him.
Defendant admitted plaintiff’s allegation of defendant’s corporate existence; admitted the execution and terms of the contract dated July 19, 1948; but alleged that it was plaintiff who breached their contract by failing to deliver his manuscript. Furthermore, defendant counterclaimed for damages. Plaintiff died before trial and Justo R. Albert, his estate’s administrator, was substituted for him.
Thereafter, the court a quo ordered issuance of an execution writ against University Publishing Co., Inc. Plaintiff, petitioned for a writ of execution against Jose M. Aruego, as the real defendant, stating, “plaintiff’s counsel and the Sheriff of Manila discovered that there is no such entity as University Publishing Co., Inc as stated in a certification from the securities and Exchange Commission dated July 31, 1961, attesting:
“The records of this Commission do not show the registration of UNIVERSITY PUBLISHING CO., INC., either as a corporation or partnership.” “University Publishing Co., Inc.” countered by filing, through counsel (Jose M. Aruego’s own law firm), a “manifestation” stating that “Jose M. Aruego is not a party to this case,” and that, therefore, plaintiff’s petition should be denied.
Whether or not University Publishing Co., Inc. is a corporation.
NO. “University Publishing Co., Inc.” purported to come to court, answering the complaint and litigating upon the merits. But as stated, “University Publishing Co., Inc.” has no independent personality; it is just a name. Jose M. Aruego was, in reality, the one who answered and litigated, through his own law firm as counsel. He was in fact, if not, in name, the defendant.
Even with regard to corporations duly organized and existing under the law, we have in many a case pierced the veil of corporate fiction to administer the ends of justice. And in Salvatiera vs. Garlitos, supra, p. 3073, we ruled: “A person acting or purporting to act on behalf of a corporation which has no valid existence assumes such privileges and obligations and becomes personally liable for contracts entered into or for other acts performed as such agent.” Had Jose M. Aruego been named as party defendant instead of, or together with, “University Publishing Co., Inc.,” there would be no room for debate as to his personal liability. Since he was not so named, the matters of “day in court” and “due process” have arisen.
*Case Digest by JAY MARK P. BALBOSA JD – IV, Andres Bonifacio College, SY 2019 – 2020