Lozano

v.
Delos Santos
G.R. No. 125221
June 19, 1997

Facts:
Out of a request from the Sangguniang Bayan of Pampanga to unify the two of Jeepney
associations (KAMAJDA and SAMATOJODA), Mr. Lozano and Mr. Anda ran for presidency of the
now unified Jeepney association (UMAJODA). They agreed that the elected officer shall be given
the sole authority to collect the daily dues from the members of the association (SAMTOJODA).
Mr. Anda lost the election but continued collecting dues from the members of his jeepney
association and Mr. Lozano asked him to desist but to no avail. A case to restrain Mr. Anda
from collecting the dues plus damages was filed by Mr. Lozano. Mr. Anda moved to dismiss the
case on the ground that the SEC has the jurisdiction, the issue between them being intra-
corporate in nature.

Issues:
1. Whether or not there is an intra-corporate relationship between the petitioner and
respondent?
2. Whether or not the said consolidated association is deemed a Corporation by Estoppel?

Ruling:

1. There is no intra-corporate relation when there a plan to consolidate is still a proposal.

Consolidation becomes effective not upon mere agreement of the members but only upon
issuance of the certificate of consolidation by the SEC, i.e., when the SEC, upon processing
and examining the articles of consolidation, is satisfied that the consolidation of the
corporations is not inconsistent with the provisions of the Corporation Code and existing
laws, it issues a certificate of consolidation which makes the reorganization official. The new
consolidated corporation comes into existence and the constituent corporations dissolve
and cease to exist. In this case, the plan of the parties to consolidate their respective
jeepney drivers' and operators' associations into a single common association, if not yet
approved by the SEC, neither had its officers and members submitted their articles of
consolidation in accordance with Sections 78 and 79 of the Corporation Code, is a mere
proposal to form a unified association. Any dispute arising out of the election of officers of a
unified association is therefore not an intra-corporate dispute.

2. No, Corporation by estoppel is founded on principles of equity and designed to prevent

injustice and unfairness, and where there is no third person involved and the conflict arises
only among those assuming the form of a corporation, who know that it has not been
registered, there is no corporation by estoppel.