A party that actively participates in court proceedings through counsel, allows its officer to accompany said counsel, receives court orders and pleadings without repudiating the counsel's authority, and seeks affirmative relief from the court, is estopped from later questioning the counsel's authority and the court's jurisdiction over it, especially after receiving unfavorable rulings.

New Frontier Sugar Corporation (NFSC) defaulted on a loan secured by real estate and chattel mortgages from Equitable PCI Bank (EPCIB). Due to financial difficulties, NFSC entered a Memorandum of Agreement (MOA) allowing Central Iloilo Milling Corporation (CIMICO) to operate its sugar mill. Subsequently, EPCIB foreclosed on the mortgaged properties. CIMICO then entered into another MOA with Megan Sugar Corporation (MEGAN), transferring its operational rights and obligations concerning the sugar mill to MEGAN. This transfer occurred amidst ongoing litigation involving NFSC, CIMICO, and EPCIB.

• NFSC obtained a loan from EPCIB secured by mortgages over its land and sugar mill.
• Facing financial issues, NFSC entered an MOA with CIMICO for the latter to operate the sugar mill (Crop Years 2000-2003).
• Disputes arose, leading to CIMICO filing Civil Case No. 02-243 against NFSC in the RTC.
• EPCIB foreclosed on NFSC's properties due to loan default and acquired them at auction.
• CIMICO amended its complaint to include EPCIB and PISA (security agency hired by EPCIB); the RTC issued a restraining order allowing CIMICO to retain possession.
• CIMICO and MEGAN entered an MOA where MEGAN assumed CIMICO's rights and obligations regarding the sugar mill operation, starting November 18, 2002.
• Passi Iloilo Sugar Central, Inc. moved to intervene in the RTC case, claiming to be a vendee of EPCIB.
• During a hearing on November 29, 2002, Atty. Reuben Mikhail Sabig appeared for MEGAN, accompanied by MEGAN's General Manager, Joey Concha. Atty. Sabig stated his appearance was specifically for that hearing but affirmed his statements would bind MEGAN.
• EPCIB, Passi Sugar, and NFSC filed motions seeking the deposit of the miller's share (sugar quedans) produced by MEGAN/CIMICO.
• On January 16, 2003, the RTC ordered MEGAN to deposit the miller's share in escrow with the court.
• Atty. Sabig, on behalf of MEGAN, filed an Omnibus Motion for Reconsideration and Clarification, which the RTC denied on February 19, 2003.
• The RTC granted EPCIB's motion for execution of the escrow order on February 28, 2003.
• MEGAN filed a petition for certiorari with the Court of Appeals (CA), arguing the RTC lacked jurisdiction over it and Atty. Sabig was unauthorized.
• The CA dismissed MEGAN's petition, ruling MEGAN was estopped due to Atty. Sabig's active participation. MEGAN's motion for reconsideration was also denied.
• MEGAN subsequently filed the present petition for review on certiorari before the Supreme Court.

• MEGAN argued that it is not estopped from questioning the RTC orders because its Board of Directors never issued a resolution authorizing Atty. Sabig to represent it.
• Petitioner contended that Atty. Sabig was an unauthorized agent whose actions could not bind the corporation.
• MEGAN asserted that counsels for the other parties were aware of Atty. Sabig's limited authority, as he initially stated his appearance was only for a specific hearing (Passi Sugar's intervention motion).
• Petitioner claimed the RTC lacked jurisdiction over MEGAN as it was not formally impleaded as a party, and therefore could not issue binding orders against it.
• MEGAN argued it was subrogated only to CIMICO's rights, not its obligations subject to the court's orders.

• Respondents EPCIB and NFSC argued that MEGAN is estopped from assailing Atty. Sabig's authority due to his active participation in the RTC proceedings.
• They pointed out that Atty. Sabig filed motions seeking affirmative relief on behalf of MEGAN.
• Respondents highlighted that MEGAN's director and general manager, Jose Concha, accompanied Atty. Sabig during court hearings, signifying corporate knowledge and consent.
• They contended that MEGAN received all motions, pleadings, and court orders at its operational address (the sugar mill) and forwarded them to Atty. Sabig without ever repudiating his authority.
• Respondents asserted that MEGAN cannot feign ignorance of the proceedings as its MOA with CIMICO explicitly mentioned the ongoing litigation (Civil Case No. 02-243).

• Whether petitioner MEGAN is estopped from questioning the authority of its counsel, Atty. Reuben Mikhail Sabig, to represent it in the RTC proceedings.
• Whether petitioner MEGAN is estopped from questioning the jurisdiction of the Regional Trial Court to issue the assailed orders dated January 16, 2003, February 19, 2003, and February 28, 2003.

• The Supreme Court denied MEGAN's petition and affirmed the Court of Appeals' decision.
• The Court ruled that MEGAN is estopped from questioning both Atty. Sabig's authority and the RTC's jurisdiction.
• Estoppel applies because: (1) Atty. Sabig actively participated in the proceedings on MEGAN's behalf, even filing motions for affirmative relief; (2) MEGAN's director/general manager, Concha, accompanied Atty. Sabig, implying corporate awareness and consent; (3) MEGAN received court documents at its office and forwarded them to Atty. Sabig, failing to repudiate his authority despite ample opportunity, especially after unfavorable orders; (4) MEGAN knew about the litigation involving CIMICO from their MOA; (5) MEGAN, through Atty. Sabig and even its Plant Manager, complied partially or sought modifications of the RTC orders, thereby invoking the court's jurisdiction.
• The Court found MEGAN's challenge to jurisdiction and counsel's authority to be a belated attempt to evade unfavorable court orders, contrary to principles of fair dealing and public policy.

• Estoppel — A legal principle preventing someone from arguing something or asserting a right that contradicts what they previously said or agreed to by law. It was applied here to bar MEGAN from denying Atty. Sabig's authority and the RTC's jurisdiction after its actions (active participation, non-repudiation, seeking relief) led others and the court to rely on that authority and jurisdiction.
• Apparent Authority (Ostensible Agency / Holding Out Theory) — Imposes liability on a principal for the acts of its agent when the principal's actions mislead the public into believing the agent has authority, even if no actual authority exists. This was applied because MEGAN, through its actions (Concha's presence, receiving documents without protest), clothed Atty. Sabig with apparent authority to act on its behalf, making the parties believe he was the proper person to deal with.
• Jurisdiction by Estoppel — A party is barred from questioning a court's jurisdiction after invoking it by seeking affirmative relief or actively participating in the proceedings without timely objection. The Court applied this doctrine, finding that MEGAN's active participation through Atty. Sabig and its subsequent actions (like filing motions for reconsideration and seeking release of quedans) constituted an invocation of the RTC's jurisdiction, preventing it from later challenging that same jurisdiction.

• "The doctrine of estoppel is based upon the grounds of public policy, fair dealing, good faith and justice, and its purpose is to forbid one to speak against his own act, representations, or commitments to the injury of one to whom they were directed and who reasonably relied thereon."
• "A corporation may be held in estoppel from denying as against innocent third persons the authority of its officers or agents who have been clothed by it with ostensible or apparent authority."
• "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."
• "The rule is that the active participation of the party against whom the action was brought, coupled with his failure to object to the jurisdiction of the court or administrative body where the action is pending, is tantamount to an invocation of that jurisdiction and a willingness to abide by the resolution of the case and will bar said party from later on impugning the court or body's jurisdiction."

• Philippine National Bank v. Court of Appeals (1979) — Cited for the general definition and basis of the doctrine of estoppel (public policy, fair dealing, good faith, justice).
• Rural Bank of Milaor (Camarines Sur) v. Ocfemia (2000) — Referenced for the principle that a corporation can be estopped from denying the authority of officers/agents clothed with ostensible or apparent authority.
• Professional Services, Inc. v. Agana (2007) — Cited for the definition and application of apparent authority (holding out theory/ostensible agency).
• Woodchild Holdings, Inc. v. Roxas Electric and Construction Company, Inc. (2004) — Referenced for the concept that estoppel arises when a principal clothes an agent with indicia of authority leading a prudent person to believe such authority exists.
• Tijam v. Sibonghanoy (1968) — A landmark case cited for the principle of jurisdiction by estoppel, barring a party from questioning jurisdiction after invoking it to seek affirmative relief.
• La Campana Food Products, Inc. v. Court of Appeals (1993) — Cited to support the idea that challenging jurisdiction after active participation is barred not because the order is valid, but for reasons of public policy against tolerating such practice.
• Marquez v. Secretary of Labor (1989) — Cited for the rule that active participation coupled with failure to object to jurisdiction amounts to an invocation of that jurisdiction, barring later challenge.

• Rules of Court, Rule 45 — Mentioned as the procedural basis (Petition for Review on Certiorari) for bringing the case from the Court of Appeals to the Supreme Court.