If Defendants legally and truly wanted to acquire the subject property, it

should have not used Plaintiff’s-Corporation name since it is allegedly
revoked. Nowhere in the Defendants documents does it appear that they
stand in their own names, thus, was estopped from questioning the juridical
personality of Plaintiff-Corporation.

The allegation was not proper since the Defendants themselves used the
Plaintiff-Corporation’s name to acquire the subject lots.
Section 19 of the Corporation Law, part of which is now Section 22 of the Corporation Code,
provided that the powers of the corporation would cease if it did not formally organize and
commence the transaction of its business or the continuation of its works within two years from date
of its incorporation. Section 20, which has been reproduced with some modifications in Section 46 of
the Corporation Code, expressly declared that "every corporation formed under this Act, must within
one month after the filing of the articles of incorporation with the Securities and Exchange
Commission, adopt a code of by-laws." Whether this provision should be given mandatory or only
directory effect remained a controversial question until it became academic with the adoption of PD
902-A. Under this decree, it is now clear that the failure to file by-laws within the required period is
only a ground for suspension or revocation of the certificate of registration of corporations.
It should be stressed in this connection that substantial compliance with conditions subsequent will
suffice to perfect corporate personality. Organization and commencement of transaction of corporate
business are but conditions subsequent and not prerequisites for acquisition of corporate
personality.
Distinguishing creation from defects in organization, Fletcher has the following to say:
Ordinarily, want of, or defects in, the organization of a corporation, as distinguished
from its creation, do not preclude the existence of a de facto corporation; and
requirements in special charters or general incorporation laws relating to organization
are often construed to be merely directory, or to conditions subsequent rather than
conditions precedent, so that compliance therewith is not necessary to create even
a dejure corporation. It has been held that there may be a de factocorporation
notwithstanding a failure to give the notice required by the statute of the meeting for
the of or organization; or though there would failure to fix and limit the amount of the
capital stock of the company at the first meeting; or a failure to issue stock; or that
there were informalities in the proceedings of such meeting, or that no certificate of
organization was executed or filed. And the same has been held to be true though no
board of directors has been elected, and though there were irregularities with respect

It is needless as well to dwell on the fourth contention. even though the taking of these various steps is necessary to the proper use of the franchise. In any case. Estoppel may be in pais or by deed. 685). Said doctrine springs from equitable principles and the equities of the case. all of which provide: Art. Gutierrez Repide. 6 Phil. 4. or commitments to the injury of one to whom they were directed and who reasonably relied thereon. good faith and justice. 1431. intentionally or through culpable negligence induces another to believe certain facts to exist and such other rightfully relies and acts on such belief. or by his silence when he ought to speak out.. place of residence and of meeting of the board of directors. provided that the powers of the corporation would cease if it did not formally organize and commence the transaction of its business or the continuation of its works within two years from date of its incorporation. so that he will be prejudiced if the former is permitted to deny the existence of such facts (Huyatid v. Rule 131 of the Rules of Court.. representations. Jan. It is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief to afterwards deny that same jurisdiction to escape a penalty A doctrine in American jurisprudence whereby a party creating an appearance of fact which is not true is held bound by that appearance as against another person who has acted on the faith of it. 1433. L-30831. and its purpose is to forbid one to speak against his own act. The doctrine of estoppel is based upon the grounds of public policy. part of which is now Section 22 of the Corporation Code. Huyatid 47265-R. stoppel arises when one. fair dealing. by his acts.. or admissions. November 21. representations. which is provided for in Articles 1431 and 1433 of the New Civil Code in conjunction with Section 3. or some of the persons chosen as directors are not qualified. It is designed to aid the law in the administration of justice where without its aid injustice might result. 94 SCRA 368) Section 19 of the Corporation Law. paragraph (a).to the number. 1979. 1978). term. Through estoppel an admission or representation is rendered conclusive upon the person making it. Section 20. Court of Appeals. and cannot be denied or disproved as against the person relying thereon.' (Philippine National Bank v. (Strong v. 22 thus rendering the third issue also moot and academic. the deficiency claimed was corrected when the new PBM adopted and filed its by-laws on September 6. . 1981. which has been reproduced with some . in view of the findings that the new PBM has not been ipso facto dissolved.' ' Art.

" Whether this provision should be given mandatory or only directory effect remained a controversial question until it became academic with the adoption of PD 902-A. There is nothing in the said case which allows an already defunct corporation to initiate a suit after the lapse of the said threeyear period. Organization and commencement of transaction of corporate business are but conditions subsequent and not prerequisites for acquisition of corporate personality. It is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to secure an affirmative relief to afterwards deny that same jurisdiction to escape a penalty. even if such judgment is rendered beyond the three-year period allowed by Section 122 of the Corporation Code. Under this decree. the corporation may continue to prosecute a case commenced by the same within three years from its dissolution until rendition of the final judgment. expressly declared that "every corporation formed under this Act. must within one month after the filing of the articles of incorporation with the Securities and Exchange Commission. Based on Section 122 of the Corporation Code. it is now clear that the failure to file by-laws within the required period is only a ground for suspension or revocation of the certificate of registration of corporations. However. . It should be stressed in this connection that substantial compliance with conditions subsequent will suffice to perfect corporate personality. adopt a code of by-laws. this is not attendant in the factual circumstances of the instant case.modifications in Section 46 of the Corporation Code.