019 ASIA BANKING CORP v.

STANDARD PRODUCTS AUTHOR: (Keith Meridores)

September 11, 1924, G.R. No. 22106 Be mindful of the words “Inc.” and “Corp”, as they indicate
TOPIC: Corporation by Estoppel the type of organization.
PONTENTE: OSTRAND, J.
FACTS
1. On Nov. 28, 1921, Standard Products, Inc. (note the inclusion of “Inc. as an indication of a corporation) issued a promissory
note amounting to P24, 736.47 to Asia Banking Corporation.
2. Asian Banking filed a case to recover the said amount plus 10% interest.
3. The lower court, on Nov. 1, 1923 ruled in favor of Asia Banking Corp.
(No mention where appeal was brought, presumably to SC)
4. But, Standard Products, Inc. (appellant) contended that Asia Banking Corp (plaintiff) failed to prove affirmatively the
corporate existence of the parties. Appellant also assigned this as a reversible error.

ISSUE:

Whether or not the failure of Asia Banking Corp to prove corporate existence of both parties is fatal to its suit to recover?

HELD:

No. The defendant having recognized the corporate existence of the plaintiff by making a promissory note in its favor and
making partial payments on the same is therefore estopped to deny said plaintiff's corporate existence.

RATIO:

1. There is no merit whatever in the appellant's contention. 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 cause which have arisen since making the contract or other dealing relied on as an
estoppel and this applies to foreign as well as to domestic corporations.

2. The defendant having recognized the corporate existence of the plaintiff by making a promissory note in its favor and
making partial payments on the same is therefore estopped to deny said plaintiff's corporate existence. It is, of course, also
estopped from denying its own corporate existence. Under these circumstances it was unnecessary for the plaintiff to present
other evidence of the corporate existence of either of the parties. It may be noted that there is no evidence showing
circumstances taking the case out of the rules stated.

CASE LAW/ DOCTRINE:

Absent any fraud, any person who recognized and in effect admitted its legal existence as a corporate body is estopped to deny
its corporate existence, unless its existence is attacked since making the contract or dealings.