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Issues: Whether Capt. Clarke is an indispensible party to the case—No; Whether respondent
lacked legal capacity and personality in the suit—No
Held:
• Capt. Clarke was merely an agent of respondent
o His participation was limited to being a representative of respondent; as a mere
representative, Capt. Clarke acquired no rights whatsoever, nor did he incur any
liabilities, arising from the contract between petitioner and respondent
o Therefore, he was not an indispensible party to the case
• CA also correctly pointed out that from the very language itself of the MOA entered into
by the petitioner, whereby he obligated himself to allow the use of the hangar space for
company aircraft/helicopter, petitioner cannot deny that he contracted with
respondent
o In petitioner’s final letter to respondent, he reiterated and strongly demanded the
respondent to immediately vacate the hangar space “his company is
occupying/utilizing”
• Sec. 21 of the Corporation Code:
o One who assumes an obligation to an ostensible corporation, as such,
cannot resist performance thereon on the ground that there was in fact no
corporation
o In the case at bar…
§ Petitioner is bound by his obligation under the MOA not only on estoppel,
but by express provision of law
§ It is futile to insist that petitioner issued receipts for rental payments in
respondent’s name and not with Capt. Clarke’s, whom petitioner allegedly
contracted in the latter’s personal capacity, only because it was upon the
instruction of an employee
People v. Garcia
Facts:
• In 1993, Carlos Garcia, Patricio Botero and Luisa Miraples were accused of illegal
recruitment
• It was alleged that they represented themselves as the incorporators and officers of
Ricorn Philippine International Shipping Lines, Inc.
o That they represented Ricorn is a recruitment agency for seamen
o That they represented Garcia as the president, Botero as vice president, and
Miraples as the treasurer
• It was later discovered that Ricorn was never registered with the SEC and that it was
never authorized to recruit by the POEA
• Thereafter, Botero and Garcia were convicted. Botero appealed
o Botero avers that he was not an incorporator, but he was a mere employee of
Ricorn in charge of following up on their documents
Held:
• It was proven by evidence that he was introduced to applicant’s as the vice president of
Ricorn
o When he was receiving applicants he was receiving them behind a desk which
has a nameplate representing his name and his position as VP of Ricorn
• Relevant Issue: In light of Ricorn not being incorporated, how will this affect his liability in
the crime of illegal recruitment?
o Under the law, if the offender is a corporation, partnership, association or
entity, the penalty shall be imposed upon the officer or officers of the
corporation, partnership, or entity responsible for such violation
o In the case at bar…
§ Even if Ricorn was not incorporated, Botero and his cohorts are
estopped from denying liability as corporate officers of Ricorn
§ Sec. 25 of the Corporation Code: all persons who assume to act as a
corporation knowing it to be without authority to do so shall be
liable as a 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 any tort committed by it
as such, it shall not be allowed to used as a defense its lack of
corporate personality
Held:
• PFF, upon its creation, is not automatically considered a national sports association
o It must first be recognized and accredited by the Philippine Amateur Athletic
Federation and the Department of Youth and Sports Development
o This fact was never proved by Kahn
• Therefore, PFF is considered as an unincorporated sports association
o Under the law, any person acting or purporting to act on behalf of a corporation
which has no valid existence assumes such privileges and becomes personally
liable for the contract entered into or for other acts performed as such agent
o Kahn is therefore personally liable for the contract entered into by PFF with IETTI
• There is also no merit on finding IETTI is in estoppel
o The application of the doctrine of corporation by estoppel applies to a third party
only when he tries to escape liability on a contract from which he has benefited
on the irrelevant ground of defective incorporation
o In the case at bar, IETTI is not trying to escape liability from the contract but
rather is the one claiming from the contract