[G.R. No. 100468.

May 6, 1997]
LAUREANO INVESTMENT & DEVELOPMENT CORPORATION, petitioner, vs. THE HONORABLE
COURT OF APPEALS and BORMAHECO, INC., respondents.
DECISION
PANGANIBAN, J.:

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?
In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioner seeks the
reversal of the Decision[1] of the Court of Appeals[2] in CA-G.R. SP No. 22763, promulgated on February 28,
1991, which resolved the above question in the negative; and its Resolution [3] promulgated on June 10,
1991, denying petitioners motion for reconsideration. The assailed Decision upheld the following
questioned orders of the Regional Trial Court of Makati, Branch 141: [4] (1) the Order dated September 8,
1989, ruling that Lideco Corporation (the name under which herein petitioner represented itself before the
trial court) lacked personality to intervene;[5] (2) the Order dated May 7, 1990, denying the motion of
petitioner to take the place of Lideco Corporation as party-intervenor and adopt the latters complaint in
intervention and other pleadings;[6] and (3) the Order dated August 8, 1990, which denied the motion for
reconsideration of petitioner.[7]
The Facts

The antecedents of this petition are summarized by the Respondent Court as follows:
The records show that spouses Reynaldo Laureano and Florence Laureano are majority stockholders of
petitioner Corporation who 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 dated December 11, 1962, January 9, 1963, July 2, 1963 and September 5, 1964, for
the following amounts: P100,000.00, P20,000.00, P70,000.00 and P13,424.04, respectively. 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 PNCBs name on February 20, 1984. PNCB did not secure a writ of
possession nor did it file ejectment proceedings against the Laureano spouses, because there were
then pending cases, such as x x x involving the titles of ownership of subject two lots, which are
situated at Bel-Air Subdivision[,] Makati, Metro Manila.

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 on September 26, 1988 wherein Bormaheco
bought from PNCB under a bulk sale 114 titled and untitled properties including the two parcels of land
in question, formerly registered in the name of the Laureano spouses. Transfer Certificate of Title Nos.
157724 and 157725 over the lots in question were issued on October 12, 1988 in the name of
Bormaheco.
Five (5) days after securing titles over the said properties, Bormaheco filed an Ex-Parte Petition for the
Issuance of Writ of Possession of Lots 4 and 5, Block 4 situated at Bel-Air Village, Makati, Metro Manila
and embraced in TCT Nos. 157724 and 157725 of the Registry of Deeds of Makati, Metro Manila,
docketed as LRC Case No. M-1530 before respondent Court. Petitioner Corporation filed on January 18,
1989 its Motion for Intervention and to Admit Attached Complaint in Intervention in said case. After an
exchange of pleadings, respondent Court issued its order dated February 9, 1988, which reads:
There being a prima facie showing in the attached complaint in intervention that herein intervenor
LIDECO CORPORATION has an interest which may eventually and adversely be affected in
whatever decision the Court may render in the instant case; to enable the parties concerned to
properly ventilate and litigate all the issues involving the subject property thereby avoid
multiplicity of suits, and in the interest of justice, the Motion for Intervention, filed by LIDECO
CORPORATION is hereby GRANTED; and the attached complaint in intervention ADMITTED.
On July 26, 1989, respondent Bormaheco filed its Motion to Strike out the Complaint in Intervention and
all related pleadings filed by LIDECO Corporation. The motion was granted in the first questioned
order dated September 8, 1989, which reads:
On the instant motion, the records show that LIDECO Corporation appeared thru counsel and
filed its complaint in intervention, representing therein that it is a corporation duly organized
and registered in accordance with law.
The Corporation Code explicitly provides that the use of the word corporation
presupposes that an entity is duly registered (with the SEC) in accordance with law.
Intervening in the instant petition, with the use of the name LIDECO Corporation, the latter, in
effect, represents to this court that it is a corporation whose personality is distinct and separate
from its stockholders and/or any other corporation bearing different names. Hence, herein
intervenor LIDECO Corporation and LAUREANO INVESTMENT AND DEVELOPMENT
CORPORATION, to the mind of this Court, are two (2) separate and distinct
entities. Inasmuch as the documents in support of its complaint in intervention -- tax
declarations -- are in the names of Laureano Investment and Development Corporation,
and it appearing that LIDECO Corporation is not a corporation or partnership duly
organized and registered with the SEC, there is, therefore, no way whatsoever that
LIDECO Corporations interests will be adversely affected by the outcome of the instant
case.
WHEREFORE, for intervenors lack of personality to intervene in the instant proceedings, petitioners
motion to strike out complaint in intervention is hereby GRANTED.
Accordingly, all pleadings filed relative thereto are ordered expunged from the records.
After the issuance of the above-cited order, petitioner Corporation filed on October 4, 1989, its Urgent
Motion to Substitute Party Intervenor and to Adopt Complaint in Intervention and All Pleadings . An
opposition thereto was filed by BORMAHECO, after which the lower court issued its second questioned
order quoted below:
The court has painstakingly examined the two (2) tax declarations and has found out that the said
tax declarations refer to two houses erected on Lot 3, Block 4 and Lot 3, Blsock 4 of the Bel-Air
Village, Makati, Metro Manila. On the other hand, the subject matter of the instant petition are Lot
4, Block 4 and Lot 5, Block 4 of Bel-Air Village, Makati, Metro Manila. Clearly, therefore, the
properties upon which the herein movant-corporation has interests refer to properties different
from those subject of the instant petition.
Not only that. As correctly pointed out by the petitioner, the afore-mentioned tax declarations
according to the records of the Makati Assessors Office were canceled on July 22, 1982 or five (5)
years, two (2) months and four (4) days before the petitioner (BORMAHECO) purchased from the
Philippine National Cooperative Bank the two (2) lots and the improvements found thereon
evidenced by the copies of Tax Declaration Nos. A-002-00512 and 6103 attached as Annexes A and
B respectively to the petitioners rejoinder dated October 26, 1989.
The movant-corporation not having shown documentary evidence showing that it has
interest on the two lots subject of the complaint and the improvements found therein,
it has, therefore, no personality to file the instant motion. x x x
There is yet another reason why the motion should not be granted. The movant corporations
request to be substituted as party intervenor is not one of the instances provided for in Sec. 20,
Rule 3 of the Rules of Court. Substitution of party litigant may be requested in the following:

(a) When a party dies and the claim is not extinguished, upon proper motion, the Honorable Court may
order the legal representative of the deceased to appear and to be substituted for the deceased within the
period of thirty (30) days or within such time as may be granted. (Sec. 17, Rule 3, Rules of Court)

(b) In case of any transfer of interest, upon motion, the Honorable Court may direct the person to whom
the interest is transferred to be substituted in the action or joined with the original party. (Sec. 20, Rule 30
[should be Rule 3], supra.)

which is not so in the case.

WHEREFORE, in view of the foregoing considerations, the motions under consideration are hereby
DENIED.
A Motion for Reconsideration of the above-cited order was denied by respondent Court in its third
questioned order dated August 8, 1990, x x x[8]
In likewise denying the petition of Laureano Investment and Development Corporation (petitioner
corporation), Respondent Court ratiocinated:
Petitioner Corporation contends that respondent Bormahecos motion to strike out the complaint in
intervention and all related pleadings filed by LIDECO Corporation was based on misleading and
confusing assertions that LIDECO Corporation is not a registered corporation despite its admission
and/or use of the word LIDECO as acronym for Laureano Investment and Development
Corporation. The contention is untenable. BORMAHECO has shown that LIDECO Corporation
is not organized and existing under Philippine laws. Neither has it been registered with the
Securities and Exchange Commission. In support of said claim, BORMAHECO presented a
certification to the effect that the records of the Commission do not show the registration
of LIDECO, INC. either as a corporation or as partnership.
Petitioner also contends that the motion x x x should have been denied outright because it was filed in
bad faith and without legal and factual basis. On the contrary, from the very first motion and pleading
filed by petitioner in LRC No. M-1530 pending before respondent Court, it is very clear that the
intervenor therein is LIDECO Corporation. Nowhere in its complaint does it appear that LIDECO
Corporation is the brevity or acronym for Laureano Investment and Development
Corporation. The claim that Lideco Corporation is the name of a corporation which is duly
registered and organized in accordance with law has been belied by the absence of SEC
record showing the registration of Lideco, Inc. either as corporation or as a partnership. It
was only when intervenor (petitioner herein) filed its opposition to the motion to strike out that it
clarified that Lideco Corporation is the acronym for Laureano Investment and Development
Corporation.
Moreover, even assuming that Lideco Corporation and Laureano Investment and Development
Corporation are one and the same, it was found by respondent Court that the properties being
claimed by petitioner are different from those for which private respondent is seeking the
issuance of a writ of possession; hence, the complaint in intervention was correctly
dismissed.[9]
In conclusion, the appellate court said:
We, therefore, fail to see the alleged grave abuse of discretion on the part of respondent Court in
issuing the questioned orders, as they were issued after the Court had considered the arguments of the
parties and the evidence on record. Clearly, the lower court acted within its authority and sound
discretion in issuing the said orders.[10]
Petitioners motion for reconsideration of the above ruling was, as earlier stated, denied by Respondent
Court in its Resolution[11] promulgated on June 10, 1991. Hence, this petition.
Issues
Petitioner raises for resolution the following questions:
1. Whether Respondent Bormaheco, Inc. is estopped from contesting the legal personality to sue of
Lideco Corporation;
2. Whether bad faith attended the filing of private respondents motion to strike out the complaint in
intervention and related pleadings.[12]
Petitioner contends that private respondent is estopped from, and is in bad faith for, denying its
knowledge that Lideco Corporation and Laureano Investment and Development Corporation are one and
the same entity since it has previously used LIDECO as an acronym for the latter corporation.
Private respondent submitted a lengthy (sixty-page) amended comment [13] to the petition, giving a
detailed background to the instant case including various actions allegedly commenced by the Spouses
Laureano questioning the foreclosure of the subject properties. In sum, Bormaheco, Inc. maintains that
Respondent Court did not commit reversible error in disallowing Lideco Corporation to intervene for the
reason that said entity did not satisfy the essential requisites for being a party to an action, to wit: (1)
natural or juridical personality; (2) legal capacity to sue or be sued, i.e., having all the qualifications and
none of the disqualifications provided for by law; and (3) real interest in the subject matter of the action. [14]
Private respondent adds that petitioner corporation is merely an alter ego of the Laureano spouses
who have lost their rights over the subject properties in favor of Bormahecos predecessor-in-interest, the
Philippine National Cooperative Bank (PNCB), by virtue of extrajudicial foreclosures.Petitioners motion to
intervene in the case below is just another ploy of the spouses to prevent subsequent owners from
effectively exercising their rights of ownership over the properties.
Private respondent also filed before us a motion [15] to declare petitioner as engaged in forum shopping
and to resolve the instant petition. In support of its motion, private respondent enumerates a string of civil
actions allegedly commenced by the Laureano spouses before the trial court as well as petitions before the
appellate court concerning the properties in question. As a result, Bormaheco claims, an issue which could
have been laid to rest in 1967 is still being litigated. Furthermore, in an omnibus motion [16] filed on
February 11, 1997, private respondent claims that it is being unduly deprived of rental income by as much
as P40,000.00 a month for each property, or a total of eight million pesos since 1988. On the other hand, it
claims to have been assessed for and to have actually paid real estate taxes and Bel-Air Village Association
dues since such date.

The Courts Ruling

The petition is not meritorious.

Petitioners Issues:
Estoppel
Petitioner contends that it was private respondent which first made use of LIDECO as a shorter term
for Laureano Investment and Development Corporation when it filed its first motion to strike dated January
9, 1989,[17] prior to the filing by Lideco Corporation of its motion for intervention and complaint in
intervention[18] on January 18, 1989. Hence, private respondent should be considered estopped from
denying that petitioner and Lideco Corporation are one and the same corporation.
The equitable doctrine of estoppel was explained by this Court in Caltex (Philippines), Inc.
vs. Court of Appeals:[19]
Under the doctrine of estoppel, an admission or representation is rendered conclusive upon the person
making it, and cannot be denied or disproved as against the person relying thereon. A party may not
go back on his own acts and representations to the prejudice of the other party who relied upon
them. In the law of evidence, whenever a party has, by his own declaration, act, or omission,
intentionally and deliberately led another to believe a particular thing true, to act upon such belief, he
cannot, in any litigation arising out of such declaration, act, or omission, be permitted to falsify
it. (footnotes omitted)
We elaborated in Maneclang vs. Baun[20]
In estoppel by pais, as related to the party sought to be estopped, it is necessary that there be a
concurrence of the following requisites: (a) conduct amounting to false representation or concealment
of material facts or at least calculated to convey the impression that the facts are otherwise than, and
inconsistent with, those which the party subsequently attempts to assert; (b) intent, or at least
expectation that this conduct shall be acted upon, or at least influenced by the other party; and (c)
knowledge, actual or constructive of the actual facts. (citing Kalalo vs. Luz, 34 SCRA 337, 1974)
Examining the records of the case, we observe that the motion [21] adverted to indeed made use of
LIDECO as an acronym for Laureano Investment and Development Corporation. But said motion distinctly
specified that LIDECO was the shorter term for Laureano Investment and Development Corporation. It is
obvious that no false representation or concealment can be attributed to private respondent . Neither can it
be charged with conveying the impression that the facts are other than, or inconsistent with, those which it
now asserts since LIDECO, as an acronym, is clearly different from Lideco Corporation which represented
itself as a corporation duly registered and organized in accordance with law.[22] Nor can it be logically
inferred that petitioner relied or acted upon such representation of private respondent in thereafter
referring to itself as Lideco Corporation; for petitioner is presumed to know by which name it is registered,
and the legal provisions on the use of its corporate name.
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). [23] 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.
Granting arguendo that the name Lideco Corporation could be used by petitioner corporation in its
motion, there is an even more cogent reason for denying the petition. The trial court concluded, and we
have no reason to disagree, that the intervention of Lideco or petitioner corporation was not proper
because neither had any legal interest in the subject of litigation. The evidence (tax declarations) attached
to the petition for intervention and the complaint for intervention pertained to properties not being
litigated in the instant case. Lideco and petitioner corporation both claimed to have an interest in two
houses constructed in Lot 3, Block 4 in Bel Air Village, Makati. [24] The subject matter of the instant petition,
on the other hand, are Lots 4 and 5, Block 4, of Bel Air Village. This factual finding was affirmed by the
Court of Appeals.
Since the conclusion of the trial and appellate courts is based on facts, and since the Supreme Court is
not a trier of facts -- our function not being to examine and evaluate the evidence presented to the
concerned tribunal which formed the basis of its questioned decision, resolution or order [25] -- it is clear that
we cannot review such holding. We note further that petitioner has failed to show that the factual findings
of the trial and appellate courts were arbitrary and/or constituted one of the exceptions allowing review by
this Court.[26]
Bad Faith
(B)ad faith implies a conscious and intentional design to do a wrongful act for a dishonest purpose or moral
obliquity; x x x bad faith contemplates a state of mind affirmatively operating with furtive design or ill will.
[27]

Other than its bare allegations that private respondent acted in bad faith, petitioner failed to show that
the former acted consciously and deliberately to achieve a dishonest purpose or moral obliquity, or was
motivated by ill will. Rather, as discussed above, no false representation was contrived nor concealment
made by private respondent. Neither did it deliberately convey facts other than, or inconsistent with, what
it now asserts and upon which petitioner had relied or acted upon due to the representations of private
respondent. Hence, we hold that petitioner failed to demonstrate that private respondent acted
in bad faith in filing its assailed second motion.

Private Respondents Issue:

Forum Shopping
Private respondent, in turn, accuses petitioner and/or its chairman of the board and majority
stockholder, Reynaldo Laureano, of forum shopping, alleging that both have improperly instituted a string
of cases through deliberate splitting of causes of action thereby trifling with the courts and abusing their
processes.
 There is forum shopping whenever, as a result of an adverse opinion in one forum, a party seeks a
favorable opinion (other than appeal or certiorari) in another,[28] raising identical causes of action, subject
matter, and issues.[29] However, private respondent, other than the enumeration in its motion [30] of the case
number and titles, nature of the actions and decisions therein, failed to substantiate its allegations. It did
not show convincingly that the cases enumerated had identical causes of action, subject matter and
issues. From its bare assertions, the Court cannot intelligently make a valid finding of whether petitioner,
indeed, engaged in forum shopping. In any event, a ruling on this issue is not necessary to the final
resolution of the entire case.
WHEREFORE, premises considered, the petition is hereby DENIED for its failure to show
any reversible error on the part of Respondent Court. The questioned Decision of the Court of
Appeals is AFFIRMED. Costs against petitioner.
SO ORDERED.