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    4-CORPO-MISSIONARY SISTERS v. ALZONA

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    Czarina Lynne Yecla
    The Supreme Court granted the petition of the Missionary Sisters and reversed the decision of the Court of Appeals. While the Missionary Sisters were not incorporated at the time of the donation, the Court applied the doctrine of corporation by estoppel since Purificacion dealt with the Missionary Sisters as if they were a corporation when she executed documents donating her properties to them. This doctrine prevents unjust enrichment by affording an entity corporate personhood for the sole purpose of upholding transactions entered into with third parties. As such, the Missionary Sisters had the capacity to accept the donation despite not being incorporated at that time.

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    4-CORPO-MISSIONARY SISTERS v. ALZONA

    Uploaded by

    Czarina Lynne Yecla
    1K views1 page
    The Supreme Court granted the petition of the Missionary Sisters and reversed the decision of the Court of Appeals. While the Missionary Sisters were not incorporated at the time of the donation, the Court applied the doctrine of corporation by estoppel since Purificacion dealt with the Missionary Sisters as if they were a corporation when she executed documents donating her properties to them. This doctrine prevents unjust enrichment by affording an entity corporate personhood for the sole purpose of upholding transactions entered into with third parties. As such, the Missionary Sisters had the capacity to accept the donation despite not being incorporated at that time.

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    The Supreme Court granted the petition of the Missionary Sisters and reversed the decision of the Court of Appeals. While the Missionary Sisters were not incorporated at the time of the donation, the Court applied the doctrine of corporation by estoppel since Purificacion dealt with the Missionary Sisters as if they were a corporation when she executed documents donating her properties to them. This doctrine prevents unjust enrichment by affording an entity corporate personhood for the sole purpose of upholding transactions entered into with third parties. As such, the Missionary Sisters had the capacity to accept the donation despite not being incorporated at that time.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views1 page

    4-CORPO-MISSIONARY SISTERS v. ALZONA

    Uploaded by

    Czarina Lynne Yecla
    The Supreme Court granted the petition of the Missionary Sisters and reversed the decision of the Court of Appeals. While the Missionary Sisters were not incorporated at the time of the donation, the Court applied the doctrine of corporation by estoppel since Purificacion dealt with the Missionary Sisters as if they were a corporation when she executed documents donating her properties to them. This doctrine prevents unjust enrichment by affording an entity corporate personhood for the sole purpose of upholding transactions entered into with third parties. As such, the Missionary Sisters had the capacity to accept the donation despite not being incorporated at that time.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    MISSIONARY SISTERS vs.

    ALZONA
    G.R. No. 224307. August 6, 2018.

    Jurisprudence settled that "[t]he filing of articles of incorporation  and the issuance of the certificate of incorporation are
    essential for the existence of a  de facto  corporation." In fine, it is the act of registration with SEC through the
    issuance of a certificate of incorporation that marks the beginning of an entity's corporate existence .

    Overview:
    Respondent, represented and substituted by his legal heirs, sought to annul the Deed of Donation Inter Vivos between Purificacion and
    the petitioner on the ground that at the time of the donation, petitioner was not registered with the SEC and therefore has no juridical
    personality and cannot legally accept the donation.

    RTC held that petitioner is a corporation de facto and thus, has the personality to be a beneficiary. CA disagreed.
    SC agreed with CA but held that the doctrine of corporation by estoppel should apply instead. As this doctrine rests on the idea that
    unjust enrichment would result if the Court were to disregard the existence of an entity which entered into a transaction with a third
    party, in this instance, the Court afforded upon the petitioner corporate fiction and juridical personality for the sole purpose of upholding
    the contract or transaction.

    FACTS:
    The petitioner came into being as a corporation by virtue of a Certificate issued by the SEC on August 31, 2001. Mother Concepcion is
    the petitioner's Superior General. The respondents, on the other hand, are the legal heirs of the late Purificacion.

    Before she died, Purificacion executed a Deed of Donation Inter Vivos (Deed) in favor of the petitioner, conveying her properties and
    her undivided share in another property covered by different TCT. The Deed was notarized by Atty. Arcillas and witnessed by
    Purificacion's nephews and grandnephew. The donation was accepted on even date by Mother Concepcion for and in behalf of the
    petitioner.

    However, Amando, the sole surviving heir of Purificacion, who nonetheless died during the pendency of the case, filed a complaint
    seeking to annul the Deed on the ground that at the time the donation was made, petitioner was not registered with the SEC and
    therefore has no juridical personality and cannot legally accept the donation.

    RTC: dismissed the complaint. It held that at the time of the execution of the Deed, the petitioner was a  de facto corporation and as
    such has the personality to be a beneficiary and has the power to acquire and possess property.

    CA: declared the Deed as VOID, holding that petitioner cannot be considered as a de facto corporation considering that at the time of
    the donation, there was no bona fide attempt on its part to incorporate. As an unregistered corporation, it is bereft of juridical personality
    thus cannot enter into a contract of Donation with Purificacion.

    ISSUE: WON petitioner is a de facto corporation

    RULING: NO. Jurisprudence settled that "[t]he filing of articles of incorporation and the issuance of the certificate of incorporation are
    essential for the existence of a de facto corporation." In fine, it is the act of registration with SEC through the issuance of a certificate of
    incorporation that marks the beginning of an entity's corporate existence.

    Here, petitioner filed its Articles of Incorporation and by-laws on August 28, 2001. However, the SEC issued the corresponding
    Certificate of Incorporation only on August 31, 2001, two (2) days after Purificacion executed a Deed of Donation on August 29, 2001.
    Clearly, at the time the donation was made, petitioner cannot be considered a corporation de facto.

    RATHER, a review of the attendant circumstances reveals that it calls for the application of the doctrine of corporation by estoppel as
    provided for under Section 21 of the Corporation Code. The doctrine of corporation by estoppel applies when a non-existent corporation
    enters into contracts or dealings with third persons. In which case, the person who has contracted or otherwise dealt with the non-
    existent corporation is estopped to deny the latter's legal existence in any action leading out of or involving such contract or
    dealing.

    In this controversy, Purificacion dealt with the petitioner as if it were a corporation. This is evident from the fact that Purificacion
    executed two (2) documents conveying her properties in favor of the petitioner — first, via handwritten letter, and second, through a
    Deed; the latter having been executed the day after the petitioner filed its application for registration with the SEC.

    The doctrine of corporation by estoppel rests on the idea that if the Court were to disregard the existence of an entity which entered into
    a transaction with a third party, unjust enrichment would result as some form of benefit have already accrued on the part of one of the
    parties. Thus, in that instance, the Court affords upon the unorganized entity corporate fiction and juridical personality for the sole
    purpose of upholding the contract or transaction.

    FALLO: petition GRANTED. Accordingly, Decision and Resolution of the CA are REVERSED and SET ASIDE

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