G.R. No. L-26364 - Albert vs. Court of 1st Instance

The litigation commenced in 1949 and spanned nearly 19 years, having been presented in several cases:

L-9300 (promulgated April 18, 1958)
L-15275 (promulgated October 24, 1960)
L-18350 (dismissed May 17, 1961)
L-19118 (promulgated January 30, 1965, with a subsequent resolution on June 16, 1965)

The present petition for certiorari is the fifth time the dispute has been elevated, highlighting the prolonged “legal marathon.”

Plaintiff Mariano A. Albert initially filed suit against University Publishing Company, Inc. for breach of contract.
Following Albert’s death, Justo R. Albert was substituted as the administrator of his estate.
In case L-15275, liability was determined, and the plaintiff was awarded P15,000.00 with legal interest from judicial demand.

During execution proceedings following a July 22, 1961 order by the Court of First Instance of Manila, counsel and the Sheriff discovered that University Publishing Company, Inc. was not registered.
A verification conducted with the Securities and Exchange Commission (SEC) on July 31, 1961 confirmed that there was no record of registration for the entity, either as a corporation or as a partnership.

With the discovery of non-registration, the plaintiff sought to enforce the judgment against the real party in interest, Jose M. Aruego, who had signed the contract on behalf of the supposed corporation.
Throughout the litigation, Jose M. Aruego acted as both president and counsel for University Publishing Company, Inc.
Instead of producing documents that might have proven the entity’s existence, the company (through its law firm) remained silent until after the court had been misled into believing that the corporation existed.
On August 11, 1961, through an unsworn manifestation, Aruego denied being a party to the suit, arguing that the judgment was solely against University Publishing Company, Inc.

In the January 30, 1965 decision (L-19118), the Supreme Court addressed the issue of corporate existence:

It was clearly held that the non-registration of University Publishing Company, Inc. meant it did not possess a separate juristic personality.
The Court clarified that Aruego, who litigated and executed the contract in his capacity as “President,” effectively represented the non-existent corporation and is thereby personally liable.

The doctrine of corporate personality and the principle of piercing the corporate veil were discussed, with the Court emphasizing that even a de facto corporation requires some valid registration to operate independently.

Following the Supreme Court ruling, execution proceedings were re-initiated against Aruego.
Aruego repeatedly argued that he was not a formal party to the action and that the judgment ought to be executed solely against the defunct corporate entity.
A series of motions, oppositions, and reconsiderations ensued in the lower court, with Judge Gaudencio Cloribel issuing conflicting orders regarding the issuance of a writ of execution.
Ultimately, the contested orders—specifically those denying execution against Aruego (March 5, May 20, and July 13, 1966)—became the subject of the present petition for certiorari and mandamus.

The Supreme Court reaffirmed in its prior decision that due process had been observed and that Aruego, having fully participated in the litigation by appearing, litigating, and even making partial payments, was the real party in interest.
The Court condemned the lower court’s repeated failure to give effect to its clear decisions, thereby ensuring that the judgment must be executed against either University Publishing Company, Inc. and/or Jose M. Aruego.
The protracted litigation and misrepresentations by Aruego ultimately resulted in his imposition of personal liability along with treble costs.

Whether the judgment rendered against University Publishing Company, Inc. can be enforced against Jose M. Aruego, even though he was not formally named as a party defendant in the action.
Whether the failure to register University Publishing Company, Inc. strips it of a separate juridical personality, thereby implicating Aruego’s personal liability.
Whether Aruego’s misrepresentations—by signing the contract as the "President" of a non-existent corporation—preclude him from invoking the corporation-by-estoppel doctrine.
Whether the lower court’s decisions denying the issuance of a writ of execution against Aruego, in light of the Supreme Court’s earlier rulings in L-19118, violate the principles of due process and the conclusiveness of judgment.