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MACASAET et al vs.

June 5, 2013 | Bersamin and Justice Mendiola | Pet for Review | Corporation by Estoppel

HAGOS, Respondents: FRANCISCO R. CO, JR.,

SUMMARY: Respondent Police officer filed a case for damages against Abante Tonight (daily tabloid) and several of its officers
(Petitioners), for publishing an allegedly libelous article. The RTC issued summons, and the Sherrif, after 2 failed attempts of personal
service to the officers in their office, he resorted to substitute service of summons upon the secretary of the president. The Petitioners
filed a motion to dismiss assailing the invalid service of summons, and also moved to drop the corporation (Abante Tonight) as a
defendant since it is neither a natural nor juridical person (since it is allegedly not registered with the SEC). The RTC denied this saying
Abante Tonight is a corporation by estoppel because of the way it held itself out to the public as such. The CA and SC affirmed this.
(see the RTC and CA rulings for substantial doctrine)

DOCTRINE: (from the CA decision) An unincorporated association, which represents itself to be a corporation, will be estopped from denying its
corporate capacity in a suit against it by a third person who relies in good faith on such representation.

FACTS: apply….An unincorporated association, which represents

Respondent, a retired police officer assigned at the Western Police itself to be a corporation, will be estopped from denying its
District in Manila, sued Abante Tonite, a daily tabloid of general corporate capacity in a suit against it by a third person who
circulation; its Publisher Allen A. Macasaet; its Managing Director relies in good faith on such representation.
Nicolas V. Quijano; its Circulation Manager Isaias Albano; its Editors
Janet Bay, Jesus R. Galang and Randy Hagos; and its ISSUES/ HELD/RATIO:
Columnist/Reporter Lily Reyes (petitioners), claiming damages because
of an allegedly libelous article petitioners published in the June 6, 2000 1. W/N Abante Tonight could be impleaded as a party in this case –
issue of Abante Tonite YES

The RTC issued summons to be served on each defendant, including We CANNOT sustain petitioners’ contention that Abante Tonite
Abante Tonite, at their business address at Monica Publishing could not be sued as a defendant due to its not being either a
Corporation, 301-305 3rd Floor, BF Condominium Building, Solana natural or a juridical person. In rejecting their contention, the CA
Street corner A. Soriano Street, Intramuros, Manila categorized Abante Tonite as a corporation by estoppel as the
result of its having represented itself to the reading public as a
RTC Sheriff Raul Medina proceeded to the stated address to effect the corporation despite its not being incorporated. Thereby, the CA
personal service of the summons on the defendants. But his efforts to concluded that the RTC did not gravely abuse its discretion in
personally serve each defendant in the address were futile because the holding that the non-incorporation of Abante Tonite with the
defendants were then out of the office and unavailable. He returned in Securities and Exchange Commission was of no consequence, for,
the afternoon of that day to make a second attempt at serving the otherwise, whoever of the public who would suffer any damage
summons, but he was informed that petitioners were still out of the office. from the publication of articles in the pages of its tabloids would
He decided to resort to substituted service of the summons (on the be left without recourse. We cannot disagree with the CA,
Secretary of the office), and explained why in his sheriff’s return considering that the editorial box of the daily tabloid disclosed that
basis, nothing in the box indicated that Monica Publishing
Petitioners moved for the dismissal of the complaint through counsel’s Corporation (business address) had owned Abante Tonite.
special appearance in their behalf, alleging lack of jurisdiction over their
persons because of the invalid and ineffectual substituted service of 2. CIV PRO STUFF, in case sir asks: W/N the Trial Court acquired Jurisdiction over
summons. defendants by substitute service of summons – YES

They further moved to drop Abante Tonite as a defendant by virtue of its Under the Rules of Court, the service of the summons should firstly be effected on
the defendant himself whenever practicable. Such personal service consists either
being neither a natural nor a juridical person that could be impleaded as in handing a copy of the summons to the defendant in person, or, if the defendant
a party in a civil action. refuses to receive and sign for it, in tendering it to him. The rule on personal service
is to be rigidly enforced in order to ensure the realization of the two fundamental
RTC denied the motion to dismiss, saying: objectives earlier mentioned. If, for justifiable reasons, the defendant cannot be
- Considering that summonses cannot be served within a served in person within a reasonable time, the service of the summons may then
reasonable time to the persons of all the defendants, hence be effected either (a) by leaving a copy of the summons at his residence with some
substituted service of summonses was validly applied. person of suitable age and discretion then residing therein, or (b) by leaving the
copy at his office or regular place of business with some competent person in
- Regarding the impleading of Abante Tonite as defendant, the charge thereof. The latter mode of service is known as substituted service because
RTC held: "Abante Tonite" is a daily tabloid of general the service of the summons on the defendant is made through his substitute. Only
circulation. People all over the country could buy a copy of when the defendant cannot be served personally within a reasonable time may
"Abante Tonite" and read it, hence, it is for public substituted service be resorted to. Hence, the impossibility of prompt personal
consumption. The persons who organized said publication service should be shown by stating the efforts made to find the defendant himself
obviously derived profit from it. The information written on and the fact that such efforts failed, which statement should be found in the proof
the said newspaper will affect the person, natural as well as of service or sheriff’s return.
juridical, who was stated or implicated in the news. All of There is no question that Sheriff Medina twice attempted to serve the summons
these facts imply that "Abante Tonite" falls within the upon each of petitioners in person at their office address, the first in the morning
provision of Art. 44 (2 or 3), New Civil Code. Assuming of September 18, 2000 and the second in the afternoon of the same date. Each
arguendo that "Abante Tonite" is not registered with the attempt failed because Macasaet and Quijano were "always out and not available"
Securities and Exchange Commission, it is deemed a and the other petitioners were "always roving outside and gathering news." After
corporation by estoppels considering that it possesses Medina learned from those present in the office address on his second attempt
attributes of a juridical person, otherwise it cannot be held that there was no likelihood of any of petitioners going to the office during the
business hours of that or any other day, he concluded that further attempts to serve
liable for damages and injuries it may inflict to other persons. them in person within a reasonable time would be futile. The circumstances fully
warranted his conclusion. He was not expected or required as the serving officer
When the petitioners filed a petition for certiorari with the CA, it merely to effect personal service by all means and at all times, considering that he was
affirmed the RTC, saying: expressly authorized to resort to substituted service should he be unable to effect
- Abante Tonite’s newspapers are circulated nationwide, the personal service within a reasonable time. In that regard, what was a
showing ostensibly its being a corporate entity, thus the reasonable time was dependent on the circumstances obtaining.
doctrine of corporation by estoppel may appropriately