ALHAMBRA CIGAR VS CA

24 SCRA 269 Business Organization Corporation Law Corporate Lifespan

On January 15, 1912, Alhambra Cigar & Cigarette Manufacturing Company, Inc. was incorporated. Its lifespan was for 50
years so on January 15, 1962, it expired. Thereafter, its Board authorized its liquidation. Under the prevailing law,
Alhambra has 3 years to liquidate.
In 1963, while Alhambra was liquidating, Republic Act 3531 was enacted. It amended Section 18 of the Corporation Law;
it empowered domestic private corporations to extend their corporate life beyond the period fixed by the articles of
incorporation for a term not to exceed fifty years in any one instance. Previous to Republic Act 3531, the maximum non-
extendible term of such corporations was fifty years.
Alhambra now amended its articles of incorporation to extend its lifespan for another 50 years. The Securities and
Exchange Commission (SEC) denied the amended articles of incorporation.
ISSUE: Whether or not a corporation under liquidation may still amend its articles of incorporation to extend its lifespan.
HELD: No. Alhambra cannot avail of the new law because it has already expired at the time of its passage. When a
corporation is liquidating pursuant to the statutory period of three years to liquidate, it is only allowed to continue for
the purpose of final closure of its business and no other purposes. In fact, within that period, the corporation is enjoined
from continuing the business for which it was established. Hence, Alhambras board cannot validly amend its articles of
incorporation to extend its lifespan.

SEC. 87-88, CORPORATION CODE

Classification of Corporations; Existence of Shares; Non-Stock Corporation

COLLECTOR OF INTERNAL REVENUE vs. CLUB FILIPINO, INC. DE CEBU

G.R. No. L-12719 [5 SCRA 321]
May 31, 1962

FACTS:
Club Filipino, Inc. de Cebu is a civic corporation with an original authorized capital stock of P22,000.00, which was
subsequently increased to P200,000.00, among others, to it provide, operate, and maintain x x x all sorts of games not
prohibited under general laws and general ordinances; and develop and cultivate sports of every kind and any
denomination for recreation and healthy training of its members and shareholders.
The Club owns and operates a club house, a bowling alley, a golf course, and a bar-restaurant for its members and their
guests, which was a necessary incident to the operation of the club. The club is operated mainly with funds derived from
membership fees and dues.
As a result of a capital surplus, arising from the increased value due to the revaluation of its real properties, the Club
declared stock dividends; but no actual cash dividends were distributed to the stockholders.
A BIR agent discovered that the Club has never paid percentage tax on the gross receipts of its bar and restaurant. The
Collector of Internal Revenue assessed against and demanded from the Club the unpaid percentage tax on the gross
receipts plus surcharges. The Club requested for the cancellation of the assessment. The request having been denied, the
Club filed the instant petition for review.

ISSUE:
Whether or not Club Filipino is a stock corporation.

HELD:
NO. It is a non-stock corporation.
The fact that the capital stock of the respondent Club is divided into shares does not detract from the finding of the trial
court that it is not engaged in the business of operator of bar and restaurant. What is determinative of whether or not
the Club is engaged in such business is its object or purpose, as stated in its articles and by-laws. It is a familiar rule that
the actual purpose is not controlled by the corporate form or by the commercial aspect of the business prosecuted, but
may be shown by extrinsic evidence, including the by-laws and the method of operation. From the extrinsic evidence
adduced, the Tax Court concluded that the Club is not engaged in the business as a barkeeper and restaurateur.
Moreover, for a stock corporation to exist, two requisites must be complied with, to wit: (1) a capital stock divided into
shares and (2) an authority to distribute to the holders of such shares, dividends or allotments of the surplus profits on
the basis of the shares held (sec. 3, Act No. 1459). In the case at bar, nowhere in its articles of incorporation or by-laws
 could be found an authority for the distribution of its dividends or surplus profits. Strictly speaking, it cannot, therefore,
be considered a stock corporation, within the contemplation of the corporation law.
G.R. No. 96161 February 21, 1992

PHILIPS EXPORT B.V., PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS INDUSTRIAL DEVELOPMENT v. COURT OF APPEALS,
SECURITIES & EXCHANGE COMMISSION and STANDARD PHILIPS CORPORATION,respondents.

FACTS:

Petitioner Philips Export B.V. (PEBV), a foreign corporation organized under the laws of the Netherlands, although not
engaged in business here, is the registered owner of the trademarks PHILIPS and PHILIPS SHIELD EMBLEM .
Respondent Standard Philips Corporation (Standard Philips), on the other hand, was issued a Certificate of Registration
by respondent Commission on 19 May 1982.

Petitioners filed a letter complaint with the Securities & Exchange Commission (SEC) asking for the cancellation of the
word "PHILIPS" from Private Respondent's corporate name.

As a result of Private Respondent's refusal to amend its Articles of Incorporation, Petitioners filed with the SEC.
Alleging, among others, that Private Respondent's use of the word PHILIPS amounts to an infringement and clear
violation of Petitioners' exclusive right to use the same considering that both parties engage in the same business.

Private Respondent countered that Petitioner PEBV has no legal capacity to sue; that its use of its corporate name is
not at all similar to Petitioners' trademark PHILIPS when considered in its entirety; and that its products consisting of
chain rollers, belts, bearings and cutting saw are grossly different from Petitioners' electrical products.

ISSUE: WON petitioner may sue private respondent.

HELD: YES.

The Court declared that a corporation's right to use its corporate and trade name is a property right, a right in
rem, which it may assert and protect against the world in the same manner as it may protect its tangible property, real
or personal, against trespass or conversion. It is regarded, to a certain extent, as a property right and one which cannot
be impaired or defeated by subsequent appropriation by another corporation in the same field.
A name is peculiarly important as necessary to the very existence of a corporation. Its name is one of its attributes, an
element of its existence, and essential to its identity.

A corporation acquires its name by choice and need not select a name identical with or similar to one already
appropriated by a senior corporation while an individual's name is thrust upon him. A corporation can no more use a
corporate name in violation of the rights of others than an individual can use his name legally acquired so as to mislead
the public and injure another

Our own Corporation Code, in its Section 18, expressly provides that:

No corporate name may be allowed by the Securities and Exchange Commission if the proposed name
is identical or deceptively or confusingly similar to that of any existing corporation or to any other name
already protected by law or is patently deceptive, confusing or contrary to existing law.Where a change
in a corporate name is approved, the commission shall issue an amended certificate of incorporation
under the amended name.

The statutory prohibition cannot be any clearer. To come within its scope, two requisites must be proven, namely:

(1) that the complainant corporation acquired a prior right over the use of such corporate name; and

(2) the proposed name is either:

(a) identical; or

(b) deceptively or confusingly similar

to that of any existing corporation or to any other name already protected by law; or

(c) patently deceptive, confusing or contrary to existing law.

 In this regard, there is no doubt with respect to Petitioners' prior adoption of' the name ''PHILIPS" as part of its
corporate name. Petitioners Philips Electrical and Philips Industrial were incorporated on 29 August 1956 and 25 May
1956, respectively, while Respondent Standard Philips was issued a Certificate of Registration on 12 April 1982,
twenty-six (26) years later (Rollo, p. 16). Petitioner PEBV has also used the trademark "PHILIPS" on electrical lamps of
all types and their accessories since 30 September 1922.
The second requisite no less exists in this case. In determining the existence of confusing similarity in corporate
names, the test is whether the similarity is such as to mislead a person, using ordinary care and discrimination. In so
doing, the Court must look to the record as well as the names themselves. While the corporate names of Petitioners
and Private Respondent are not identical, a reading of Petitioner's corporate names, to wit: PHILIPS EXPORT B.V.,
PHILIPS ELECTRICAL LAMPS, INC. and PHILIPS INDUSTRIAL DEVELOPMENT, INC., inevitably leads one to conclude that
"PHILIPS" is, indeed, the dominant word in that all the companies affiliated or associated with the principal
corporation, PEBV, are known in the Philippines and abroad as the PHILIPS Group of Companies.

What is lost sight of, however, is that PHILIPS is a trademark or trade name which was registered as far back as 1922.
Petitioners, therefore, have the exclusive right to its use which must be free from any infringement by similarity. A
corporation has an exclusive right to the use of its name, which may be protected by injunction upon a principle
similar to that upon which persons are protected in the use of trademarks and tradenames (18 C.J.S. 574). Such
principle proceeds upon the theory that it is a fraud on the corporation which has acquired a right to that name and
perhaps carried on its business thereunder, that another should attempt to use the same name, or the same name
with a slight variation in such a way as to induce persons to deal with it in the belief that they are dealing with the
corporation which has given a reputation to the name.

LAUREANO VS CA

272 SCRA 253 Business Organization Corporation Law Right To Sue Under A Corporate Name
In 1988, Bormaheco, Inc. (Bormaheco) filed an ex-parte petition with the Registry of Deeds of Makati for the
issuance of a writ of possession over various lots that it bought from a bank. Subsequently, a motion for
intervention was filed by LIDECO Corporation (Lideco) for certain adverse claims. Bormaheco opposed the
motion on the ground that Lideco has no personality to sue because it is not a juridical entity. Apparently, Lideco
is not a corporation registered with the Securities and Exchange Commission. Bormahecos opposition was
granted. Lideco assailed the decision on the ground that LIDECO is an acronym for Laureano Investment &
Development Corporation which is a duly organized corporation.
ISSUE: Whether or not Laureano Investment & Development Corporation can sue Bormaheco, Inc. as LIDECO
Corporation.
HELD: No. A corporation cannot sue under a name other than that registered with the SEC. The contention that
Laureano Investment & Development Corporation merely used the abbreviation is not tenable. Lideco
Corporation had no personality to intervene since it had not been duly registered as a corporation. If Laureano
Investment & Development Corporation truly wished to intervene, it should have, it should have used its
corporate name as the law requires and not another name which it had not registered.

Young Auto Supply Co. vs. Court of Appeals

Facts:

1. Young Auto Supply Co Inc. (YASCO) represented by Nemesio Garcia, its president, Nelson Garcia and Vicente Sy,
sold all of their shares of stock in Consolidated Marketing & Development Corporation (CMDC) to Roxas.
Purchase Price: 8M; Downpayment: 4M; Balance: 4M in four postdated checks of 1M each.
2. After the execution of the agreement, Roxas took full control of the four markets of CMDC. However, the vendors
held on to the stock certificates of CMDC as security pending full payment of the balance of the purchase price.
3. The first check representing the downpayment was honored by the drawee bank but the four other checks
representing the balance of 4M was dishonored. In the meantime, Roxas sold one of the markets to a third party
for the amount of 600K, leaving a balance of 3.4M.
4. Nelson Garcia and Vicente Sy assigned all their rights and title to the proceeds of the sale of CMDC shares to
Nemesio Garcia.
5. Petitioners filed a complaint against Roxas in the RTC praying that Roxas be ordered to pay petitioners the sum of
3.4M or that full control of the three markets be turned over to YASCO and Garcia. The complaint also prayed for
the forfeiture of the partial payment of P4,600,000.00 and the payment of attorney's fees and costs.
6. Failing to submit his answer, the trial court declared Roxas in default. The order of default was, however, lifted
upon motion of Roxas.
7. Roxas filed a motion to dismiss. After a hearing, wherein testimonial and documentary evidence were presented
by both parties, the trial court denied Roxas' motion to dismiss.
 8. After receiving said order, Roxas filed another motion for extension of time to submit his answer. He also filed a
motion for reconsideration, which the trial court denied for being pro-forma.
9. Roxas was again declared in default, on the ground that his motion for reconsideration did not toll the running of
the period to file his answer.
10. On 3 May 1991, Roxas filed an unverified Motion to Lift the Order of Default which was not accompanied with
the required affidavit of merit. But without waiting for the resolution of the motion, he filed a petition for
certiorari with the Court of Appeals. The Court of Appeals dismissal of the complaint on the ground of improper
venue.
11. A subsequent motion for reconsideration by YASCO was to no avail. YASCO and Garcia filed the petition.

Issue: Whether the venue for the case against YASCO and Garcia in Cebu City was improperly laid.

Held: A corporation has no residence in the same sense in which this term is applied to a natural person. But for practical
purposes, a corporation is in a metaphysical sense a resident of the place where its principal office is located as stated in
the articles of incorporation. The Corporation Code precisely requires each corporation to specify in its articles of
incorporation the "place where the principal office of the corporation is to be located which must be within the
Philippines." The purpose of this requirement is to fix the residence of a corporation in a definite place, instead of
allowing it to be ambulatory. Actions cannot be filed against a corporation in any place where the corporation maintains
its branch offices. The Court ruled that to allow an action to be instituted in any place where the corporation has branch
offices, would create confusion and work untold inconvenience to said entity. By the same token, a corporation cannot
be allowed to file personal actions in a place other than its principal place of business unless such a place is also the
residence of a co-plaintiff or a defendant. With the finding that the residence of YASCO for purposes of venue is in Cebu
City, where its principal place of business is located, it becomes unnecessary to decide whether Garcia is also a resident
of Cebu City and whether Roxas was in estoppel from questioning the choice of Cebu City as the venue. The decision of
the Court of Appeals was set aside.

REPUBLIC PLANTERS BANK VS CA

16 SCRA 738 Mercantile Law Business Organization Corporation Law Liability of Officers Exception Change of
Corporate Name
In 1979, World Garment Manufacturing (WGM), through its board authorized Shozo Yamaguchi (president) and Fermin
Canlas (treasurer) to obtain credit facilities from Republic Planters Bank (RPB). For this, 9 promissory notes were
executed. Each promissory note was uniformly written in the following manner:
___________, after date, for value received, I/we, jointly and severally promise to pay to the ORDER of the REPUBLIC
PLANTERS BANK, at its office in Manila, Philippines, the sum of ___________ PESOS(.) Philippine Currency
Please credit proceeds of this note to:
________ Savings Account ______XX Current Account
No. 1372-00257-6 of WORLDWIDE GARMENT MFG. CORP.
Sgd. Shozo Yamaguchi
Sgd. Fermin Canlas
However, no payment was made to RPB and the latter sued (WGM) in February 1982. In December 1982, WGM changed
its name to Pinch Manufacturing Corporation (PMC). The trial court ruled that Canlas as well as the other signatory of
the promissory note as solidarily liable for the amount stated therein. Only Canlas appealed. He averred that he cannot
be held liable solidarily because in signing the promissory note, he did so within the scope and authority granted to him
by the corporate board hence he should not be liable. The Court of Appeals agreed with him. The CA also ruled that the
change of name of WGM to PMC extinguished the personality of WGM and hence so is its liability.
ISSUE: Whether or not the Court of Appeals is correct.
HELD: No. The change of name did not create a new corporation. Nor did it render PMC the successor of WGM. There is
still only one corporation to speak of here. It is the same corporation with a different name, and its character is in no
respect changed. A change in the corporate name does not make a new corporation, and whether effected by special act
or under a general law, has no affect on the identity of the corporation, or on its property, rights, or liabilities. The
corporation continues, as before, responsible in its new name for all debts or other liabilities which it had previously
contracted or incurred.
Anent the issue of the liability of Canlas as treasurer of WGM, it is true that as a general rule, officers or directors under
the old corporate name bear no personal liability for acts done or contracts entered into by officers of the corporation, if
duly authorized. However, under the Negotiable Instruments Law, agents who sign a promissory note without indicating
their capacity as such and without disclosing their principal shall be held personally liable to the promissory note. No
parol evidence shall be admitted to prove the agency. In this case, Canlas signed the promissorny note without indicating
that he did so as agent or treasurer of WGM, hence, he is personally liable pursuant to the Negotiable Instruments Law.

LYCEUM OF THE PHILS. V. CA 219 SCRA 610- Confusing Corporate Names

Property, Ownership And Its ModificatioLYCEUM OF THE PHILS. V. CA

219 SCRA 610

FACTS:
1. Petitioner had sometime commenced before in the SEC a complaint against Lyceum of Baguio, to require it to change
its corporate name and to adopt another name not similar or identical with that of petitioner. SEC decided in favor of
petitioner. Lyceum of Baguio filed petition for certiorari but was denied for
lack of merit.
2. Armed with the resolution of the Court, petitioner instituted before the SEC to compel private respondents, which are
also educational institutions, to delete word Lyceum from their corporate names and permanently to enjoin them from
using such as part of their respective names.
3. Hearing officer sustained the claim of petitioner and held that the word Lyceum was capable of appropriation and
that petitioner had acquired an enforceable right to the use of that word.
4. In an appeal, the decision was reversed by the SEC En Banc. They held that the word Lyceum to have become
identified with petitioner as to render use thereof of other institutions as productive of consfusion about the identity of
the schools concerned in the mind of the general public.
5. Petitioner went to appeal with the CA but the latter just affirmed the decision of the SEC En Banc.

HELD:
Under the corporation code, no corporate name may be allowed by the SEC if the proposed name is identical or
deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is
patently deceptive, confusing or contrary to existing laws. The policy behind this provision is to avoid fraud upon the
public, which would have the occasion to deal with the entity concerned, the evasion of legal obligations and duties, and
the reduction of difficulties of administration and supervision over corporations.
The corporate names of private respondents are not identical or deceptively or confusingly similar to that of petitioners.
Confusion and deception has been precluded by the appending of geographic names to the word Lyceum.
Furthermore, the word Lyceum has become associated in time with schools and other institutions providing public
lectures, concerts, and public discussions. Thus, it generally refers to a school or an institution of learning.
Petitioner claims that the word has acquired a secondary meaning in relation to petitioner with the result that the word,
although originally generic, has become appropriable by petitioner to the exclusion of other institutions.
The doctrine of secondary meaning is a principle used in trademark law but has been extended to corporate names since
the right to use a corporate name to the exclusion of others is based upon the same principle, which underlies the right
to use a particular trademark or tradename. Under this doctrine, a word or phrase originally incapable of exclusive
appropriation with reference to an article in the market, because geographical or otherwise descriptive might
nevertheless have been used for so long and so exclusively by one producer with reference to this article that, in that
trade and to that group of purchasing public, the word or phrase has come to mean that the article was his produce. The
doctrine cannot be made to apply where the evidence didn't prove that the business has continued for so long a time
that it has become of consequence and acquired good will of considerable value such that its articles and produce have
acquired a well known reputation, and confusion will result by the use of the disputed name.
Petitioner didn't present evidence, which provided that the word Lyceum acquired secondary meaning. The petitioner
failed to adduce evidence that it had exclusive use of the word. Even if petitioner used the word for a long period of
time, it hadnt acquired any secondary meaning in its favor because the appellant failed to prove that it had been using
the same word all by itself to the exclusion of others.
PEOPLE VS GARCIA
271 SCRA 621 Business Organization Corporation Law Corporation By Estoppel Ostensible Corporation
In 1993, Carlos Garcia, Patricio Botero, and Luisa Miraples were accused of illegal recruitment. It was alleged that they
represented themselves as the incorporators and officers of Ricorn Philippine International Shipping Lines, Inc.; that
Ricorn is a recruitment agency for seamen; that Garcia is the president, Botero is the vice-president, and Miraples (now
at large) is the treasurer. It was later discovered that Ricorn was never registered with the Securities and Exchange
Commission (SEC) and that it was never authorized to recruit by the Philippine Overseas Employment Agency (POEA).
Botero and Garcia were convicted. Botero appealed.
In his defense, Botero averred that he was not an incorporator; that he was merely an employee of Ricorn in charge of
following up on their documents.
ISSUE: Whether or not Botero is a mere employee of Ricorn.
HELD: No. It was proven by evidence that he was introduced to the applicants as the vice president of Ricorn. When he
was receiving applicants, he was receiving them behind a desk which has a nameplate representing his name and his
position as VP of Ricorn.
But Ricorn was never incorporated? How will this affect his liability in the crime illegal recruitment?
Under the law, if the offender is a corporation, partnership, association or entity, the penalty shall be imposed upon the
officer or officers of the corporation, partnership, association or entity responsible for violation. In this case, even if
Ricorn was not incorporated, Botero and his cohorts are estopped from denying liability as corporate officers of Ricorn.
Section 25 of the Corporation Code provides that All persons who assume to act as a corporation knowing it to be
without authority to do so shall be liable as general partners for all the debts, liabilities and damages incurred or arising
as a result thereof: Provided, however, That when any such ostensible corporation is sued on any transaction entered by
it as a corporation or on any tort committed by it as such, it shall not be allowed to use as a defense its lack of corporate
personality.

MERRILL LYNCH FUTURES v. COURT OF APPEALS

G.R. No. 97816; 24 July 1992; Narvasa

FACTS:
ML FUTURES (a foreign corporation not licensed to do business in the PH) and Spouses Lara entered into a "Futures
Customer Agreement", in virtue of which the former agreed to act as the Spouses Laras broker for the purchase and
sale of future contracts in the U.S.
o Pursuant to the contract, orders to buy and sell futures contracts were transmitted to ML FUTURES by the
Spouses Lara "through the facilities of Merrill Lynch Philippines, Inc. (MLPI), a Philippine corporation and a
company servicing ML Futures' customers.
From the outset, Spouses Lara knew and was duly advised that MLPI was not a broker in futures contracts, and that it
did not have a license from the SEC to operate as a commodity trading advisor (i.e., an entity which, not being a
broker, furnishes advice on commodity futures to persons who trade in futures contracts).
In line with the above mentioned agreement and through MLPI, Spouses Lara actively traded in futures contracts,
including "stock index futures" for 4 years or so, i.e., from 1983 to October, 1987, there being more or less regular
accounting and corresponding remittances of money (or crediting or debiting) made between the Spouses and ML
FUTURES.
Because of a loss of US $160,749.69 incurred in respect of 3 transactions involving "index futures," and after setting
this off against an amount of US $75,913.42 then owing by ML FUTURES to Spouses Lara, the latter became indebted
to ML FUTURES for the ensuing balance of US $84,836.27, which the latter asked them to pay.
Spouses Lara however refused to pay this balance, alleging that the transactions were null and void because MLPI
had no license to operate as a commodity and/or financial futures broker. They further averred that they had not
doing business with ML Futures but with another corporation MLPI.
As a consequence of such refusal, ML FUTURES filed a complaint with the RTC QC for the recovery of a debt and
interest thereon. Preliminary attachment issued Ex Parte and the Spouses were duly served with Summons.
Spouses Lara then filed a Motion to Dismiss on the grounds that (1) ML FUTURES had no legal capacity to sue and (2)
the complaints state no cause of action.
RTC granted the Motion to Dismiss. CA affirmed the dismissal. ML FUTURES appealed to the SC on certiorari.

ISSUES/HELD:
1. WON it was proper for the lower courts to grant the Motion to Dismiss NO.
2. WON ML Futures was doing business in the Philippines without license YES.
3. WON in light of the fact that the Laras were fully aware of its lack of license to do business in the Philippines,
and in relation to those transactions had made payments to, and received money from it for several years the
Lara Spouses are estopped to impugn ML FUTURES capacity to sue them in the courts of the forum YES.

RATIO:
1. WON it was proper for the lower courts to grant the Motion to Dismiss NO.
When such a ground is asserted in a Motion to Dismiss, the general rule governing evidence on motions applies.
However, there was no affidavit or deposition attached to the Motion to Dismiss or thereafter offered as proof of the
averments of their motion. The motion was not even verified.
On the ground that the complaint states no cause of action, the test of the sufficiency of the facts alleged in the
complaint as constituting a cause of action is whether or not, admitting the facts alleged, the court might render a
valid judgment upon the same in accordance with the prayer of the complaint. Indeed, it is an error for a judge to
 conduct preliminary hearing and receive evidence on the affirmative defense of failure of the complaint to state a
cause of action.

2. WON ML FUTURES was doing business in the Philippines without license YES.
The facts on record adequately establish that ML FUTURES, operating in the US, had indeed done business with the
Lara Spouses in the Philippines over several years, had done so at all times through MLPI, a corporation organized in
this country, and had executed all these transactions without ML FUTURES being licensed to so transact business
here, and without MLPI being authorized to operate as a commodity futures trading advisor.
o These are the factual findings of the RTC, CA and the SEC which denied MLPI's application to operate as a
commodity futures trading advisor, a denial subsequently affirmed by the CA.
Further, the Laras did transact business with ML FUTURES through its agent corporation organized in the Philippines,
it being unnecessary to determine whether this domestic firm was MLPI or Merrill Lynch Pierce Fenner & Smith
(MLPI's alleged predecessor). The fact is that ML FUTURES did deal with futures contracts in exchanges in the United
States in behalf and for the account of the Lara Spouses, and that on several occasions the latter received account
documents and money in connection with those transactions.
The last transaction executed by ML FUTURES in the Laras's behalf had resulted in a loss amounting to US
$160,749.69. In relation to this loss, ML FUTURES had credited the Laras with the amount of US$75,913.42 which
it (ML FUTURES) then admittedly owed the spouses and thereafter sought to collect the balance, US$84,836.27,
but the Laras had refused to pay (for the reasons already above stated).

3. WON in light of the fact that the Laras were fully aware of its lack of license to do business in the Philippines,
and in relation to those transactions had made payments to, and received money from it for several years the
Lara Spouses are estopped to impugn ML FUTURES capacity to sue them in the courts of the forum YES.
The Laras received benefits generated by their business relations with ML FUTURES. Those business relations,
according to the Laras themselves, spanned a period of 7 years; and they evidently found those relations to be of
such profitability as warranted their maintaining them for that not insignificant period of time; otherwise, it is
reasonably certain that they would have terminated their dealings with ML FUTURES much, much earlier.
In fact, even as regards their last transaction, in which the Laras allegedly suffered a loss in the sum of
US$160,749.69, the Laras nonetheless still received some monetary advantage, for ML FUTURES credited them with
the amount of US $75,913.42 then due to them, thus reducing their debt to US $84,836.27.
Given these facts, and assuming that the Lara Spouses were aware from the outset that ML FUTURES had no license
to do business in this country and MLPI, no authority to act as broker for it, it would appear quite inequitable for the
Laras to evade payment of an otherwise legitimate indebtedness due and owing to ML FUTURES upon the plea that
it should not have done business in this country in the first place, or that its agent in this country, MLPI, had no
license either to operate as a "commodity and/or financial futures broker."
The general rule that in the absence of fraud of 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 and this applies to
foreign as well as domestic corporations.