G.R. No. 117010, 18 April 1997


In an Information dated July 21, 1992, accused-appellant Patricio Botero together with Carlos P. Garcia and Luisa Miraples were charged with the crime of illegal recruitment in large scale defined by Article 38 (b) and penalized under Article 39 (a) of the Labor Code. Accused Garcia and Botero pleaded not guilty upon arraignment on January 19, 1993 and March 31, 1993, respectively.

Applicants went to Ricorn Philippine International Shipping Lines, Inc., an entity which recruits workers for overseas employment and paid herein accused for their processing fees. On their follow-up, they discovered that the building was abandoned and was found out that the company was not yet incorporated before the SEC.

The Trial Court held herein appellants as engaged in illegal recruitment.


Whether Ricorn is a corporation by estoppel.


Yes. For engaging in recruitment of workers without obtaining the necessary license from the POEA, Boteros should suffer the consequences of Ricorn’s illegal act for “(i)f the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the officer or officers of the corporation, partnership, association or entity responsible for violation; . . . “The evidence shows that appellant Botero was one of the incorporators of Ricorn. For reasons that cannot be discerned from the records, Ricorn’s incorporation was not consummated.

Even then, appellant cannot avoid his liabilities to the public as an incorporator of Ricorn. He and his co-accused Garcia held themselves out to the public as officers of Ricorn. They received money from applicants who availed of their services. They are thus estopped from claiming that they are not liable as corporate officials of Ricorn.

Section 25 of the Corporation Code provides that “(a)ll persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all the debts, liabilities and damages incurred or arising as a result thereof: Provided, however, That when any such ostensible corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such, it shall not be allowed to use as a defense its lack of corporate personality.”

*Case digest by Paul Jason G. Acasio, JD-IV, Andres Bonifacio Law School, SY 2019-2020