Asia Banking Corporation v. Standard Products Co.

(1924) Ostrand, J.
Petitioner: Asia Banking Corporation
Respondents: Standard Products Co., Inc.
Concept: Formation and Organization of Corporations
Doctrine: The general rule is that in the absence of
fraud, a person who has contracted or otherwise dealt
with an association in such a way as to recognize and
in effect admit its legal existence as a corporate body
is thereby estopped to deny its corporate existence in
any action leading out of or involving such contract or
dealing, unless its existence is attacked for causes
which have arisen since making the contract or other
dealing relied on as an estoppel.
FACTS:
1. The Stadard Products Co., Inc executed a
promissory note through its president George H.
Seaver in favour of Asia Banking Corporation or
order.
2. This is an action brought by Asia Banking
Corporation to recover the sum of P24, 736.47
which is the balance due on such note.
Lower Court: Rendered judgment in favour of plaintiff
for the sum demanded in the complaint, with interest
on the sum of P24, 147.34 from November 1, 1923 at
the rate of 10% per annum, and the costs. From this
judgment, the defendant appeals to this court.
At the trial, plaintiff failed to prove affirmatively the
corporate existence of the parties, and Standard
Products Co. argues that the lower court erred in
finding that the parties were corporations with judicial
personality.

ISSUES:
WON the judgment of the lower court is a reversible
error despite Asia Bakings failure to present evidence
of its corporate existence (NO)
RATIO:
- The general rule is that in the absence of fraud, a
person who has contracted or otherwise dealt with
an association in such a way as to recognize and in
effect admit its legal existence as a corporate body
is thereby estopped to deny its corporate existence
in any action leading out of or involving such
contract or dealing, unless its existence is
attacked for causes which have arisen since
making the contract or other dealing relied on as
an estoppel.
- This doctrine applies to domestic as well as foreign
corporations.
- Since Standard Products has recognized the
corporate existence of Asia Banking by making a
promissory note in its favour and making partial
payments on the same, it is estopped from denying
Asia Bankings corporate existence.
- It is also denied from denying its own corporate
existence.
- Under these circumstances, it was unnecessary for
Asia Banking to present other evidence of the
corporate existence of either of the parties.
DISPOSITIVE: Judgment appealed from is affirmed,
with costs against appellant.
Digest maker: Kat