3.

6 SAWADJAAN v CA

Facts:

Sappari K. Sawadjaan was one of the first employees of Philippine Amanah Bank (PAB) through PD 264
on 2 August 1973.

He became an appraiser/investigator and was assigned to inspect collaterals by Compressed Air

Machineries and Equipment Corpo (CAMEC) for a PhP5M credit line. The collaterals were in the form of
TCTs. The loan was granted, but when it matured, a 120 day extension was given by PAB.

In January 1990, congress passed RA 6848 creating AIIBP to replace PAB.

CAMEC failed to pay even after the extension, and upon investigation, the TCTs were either spurious or
already had prior existing mortgages. An Investigating Committee was formed to look into the CAMEC
transaction and found Sawadjaans liable for negligence and guilty of dishonesty.

On March 1999, Sawadjaan filed a Motion for New Trial because he discovered the AIIBP had not yet
adopted corporation-by-laws and therefore did not have legal standing or even juridical personality as a
corporation to initiate an administrative case against him.

ISSUE

Whether the lack of By-laws deprive AIIBP from being a corporation

DECISION

No. AIIBP had an office, corporate officers, assets, and personnel. Lack of by-laws makes it a de facto
corporation whose right to exercise corporate powers may not be inquired into collaterally in any
private suit to which such corporations may be a party.

Further, failing to file by-laws does not ipso facto makes it lose corporate powers. Unless the SEC
suspends it or revokes its corporate life, it is considered a corporation. There is no showing that such a
procedure was initiated against AIIBP.

Lastly, the present case is a labor dispute and whether or not AIIBP was a corporation is irrelevant since
it is clear that it was his employer, and he was dismissed for cause.

Petition is Dismissed.