Laureano Investment and Devt. Corp. v. CA

LAUREANO INVESTMENT AND DEVELOPMENT CORPORATION vs. COURT OF APPEALS

G.R. No. 100468

FACTS OF THE CASE

Spouses Reynaldo Laureano and Florence Laureano are majority stockholders of petitioner Corporation entered into a series of loan and credit transactions with Philippine National Cooperative Bank (PNCB for short).  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.  The bank was the purchaser of the properties in question in the foreclosure sale and titles thereof were consolidated in PNCB’s name.

Private respondent Bormaheco, Inc. became the successor of the obligations and liabilities of PNCB over subject lots by virtue of a Deed of Sale/Assignment including the two parcels of land in question, formerly registered in the name of the Laureano spouses.  

Five (5) days after securing titles over the said properties, Bormaheco filed an ‘Ex-Parte Petition for the Issuance of Writ of Possession of the two lots formerly owned by the Laureanos. LIDECO filed a motion to intervene. However, BOMAHECO filed a motion to strike out LIDECO’s complaint in intervention and all other pleadings submitted by LIDECO on the ground that the latter has no juridical personality of its own, and therefore, no capacity to sue.

ISSUE

Whether LIDECO, not registered with the SEC, has the capacity to sue.

RULING

No. 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:

“Article 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;

x x x” (underscoring supplied)

As the trial and appellate courts have held, “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.