LAUREANO VS. CA

Posted: February 8, 2016 in case digests, corporation law, education, Uncategorized
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LAUREANO VS. CA

G.R. No. 100468      272 Scra 253

May 6, 1997

By: Karen P. Lustica

 

Facts: Spouses Reynaldo Laureano and Florence Laureano are majority stockholders of LAUREANO INVESTMENT & DEVELOPMENT CORPORATION. They entered into a series of loan and credit transactions with Philippine National Cooperative Bank (PNCB). To secure payment of the loans, they executed Deeds of Real Estate Mortgage. In view of their failure to pay their indebtedness, PNCB applied for extrajudicial foreclosure of the real estate mortgages.

 

Bormaheco, Inc. became the successor of the obligations and liabilities of PNCB over subject lots by virtue of a Deed of Sale/Assignment.

 

Bormaheco, Inc. filed an ex-parte petition with the Registry of Deeds of Makati for the issuance of a writ of possession over various lots that it bought from a bank. A motion for intervention was filed by LIDECO Corporation for certain adverse claims. Bormaheco opposed the motion on the ground that Lideco has no personality to sue because it is not a juridical entity. Apparently, Lideco is not a corporation registered with the Securities and Exchange Commission. Bormaheco’s opposition was granted.

 

Lideco assailed the decision on the ground that LIDECO is an acronym for Laureano Investment & Development Corporation which is a duly organized corporation.

 

Both the lower court and CA rendered a decision in favor of Bormaheco.

 

Issue: 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?

 

Held: No.

 

Ratio: 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). Additionally, Article 36 of the Corporation Code similarly provides:

 

Art. 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;

 

In the case at bar, 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.

 

A corporation cannot sue under a name other than that registered with the SEC. The contention that Laureano Investment & Development Corporation merely used the abbreviation is not tenable. “Lideco Corporation” had no personality to intervene since it had not been duly registered as a corporation.

 

 

Dispositive: The petition is hereby DENIED.

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