Mariano Alber v University Publishing Co., Inc. Bengzon, J.P. J.

| 1965 Facts: No less than three times have the parties here appealed to this Court. In 1949, Albert sued University Publishing Co. (UPC). He alleged that UPC was organized and existing under PH laws and that thru its president Jose Aruego (Aruego), they entered into a contract where UPC would pay him 30 thousand pesos for the exclusive right to publish his revised Commentaries on the RPC and for his share in previous sales of the books 1st edition; that UPC undertook to pay in 8 instalments of 3.5k and failure to pay one instalment would render the rest due Albert said UPC failed to pay the 2nd instalment but the latter countered that it was the former who violated their contract by his failure to deliver the manuscript. Later, Albert died and Justo Albert (his administrator) substituted him. The CFI then favoured Justo and ordered UPC to pay him 23 thousand. The cases went to SC which reduced it to 15 thousand pesos. The CFI then ordered for the execution against UPC but at some point, Justo petitioned for a writ of execution against Aruego (its president) because he and the sheriff discovered that UPC wasnt registered in the SEC. UPC countered by saying that Aruego was not a party to the case so the petition should be denied. SC notes that UPC doesnt want Aruego to be a party to the case because if hes not a party, a separate action will have to be filed by Justo which will result in him dealing with the statute of limitations. The CFI denied the petition so Justo appealed. W/N Aruego considered a party in the case. Yes. Ratio: Non-registration of UPC: Undisputed; on account of the non-registration it cannot be considered a corporation, not even a corporation de facto; UPC then has no personality separate from Aruego, thus cannot be sued independently; Corporation-by-estoppel not invoked by UPC: Even if invoked, its not applicable; Aruego represented a non-existent entity and induced not only Justo but also the court to believe such representation; (he signed the contract as president and stated the UPC was registered); One who has induced another to act upon his wilful misrepresentation that a corporation was duly organized and existing under the law, cannot thereafter set up against his victim the principle of corporation by estoppel (Salvatiera vs. Garlitos, 56 O.G. 3069); Aruego is the real defendant:

UPC who came to the court, but as said, it does not have independent personaility; it is just a name; In reality, it was Aruego, in reality, the one who answered and litigated, through his own law firm as counsel;

On Agency: 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; On due process question (since Aruego wasnt named in the case): Aruego was given his day in court; Parties to a suit are "persons who have a right to control the proceedings, to make defense, to adduce and crossexamine witnesses, and to appeal from a decision; in reality, it was Aruego who exercised these rights; By due process of law we mean a law which hears before it condemns; which proceeds upon inquiry, and renders judgment only after trial; Summary: The evidence is patently clear that Jose M. Aruego, acting as representative of a non-existent principal, was the real party to the contract sued upon; that he was the one who reaped the benefits resulting from it, so much so that partial payments of the consideration were made by him; that he violated its terms, thereby precipitating the suit in question; and that in the litigation he was the real defendant. CASE REMANDED: Lower court to hold supplementary proceedings for the purpose of carrying the judgment into effect against University Publishing Co., Inc. and/or Jose M. Aruego (because others might be liable to him for reimbursement or contribution).