You are on page 1of 3

01 - Reynoso vs CA, 345 SCRA 335 violated DOSRI, CCC CCC-qc CCC-Equity - GCC

At the outset, it must be stressed that there is no longer any controversy over petitioners claims against his former
employer, CCC-QC, inasmuch as the decision in Civil Case No. Q-30583 of the Regional Trial Court of Quezon City has
long become final and executory. The only issue, therefore, to be resolved in the instant petition is whether or not the
judgment in favor of petitioner may be executed against respondent General Credit Corporation. The latter contends
that it is a corporation separate and distinct from CCC-QC and, therefore, its properties may not be levied upon to
satisfy the monetary judgment in favor of petitioner. In short, respondent raises corporate fiction as its defense. Hence,
we are necessarily called upon to apply the doctrine of piercing the veil of corporate entity in order to determine if
General Credit Corporation, formerly CCC, may be held liable for the obligations of CCC-QC.
In First Philippine International Bank v. Court of Appeals, et al.,[19] we held:
When the fiction is urged as a means of perpetrating a fraud or an illegal act or as a vehicle for the evasion of an existing
obligation, the circumvention of statutes, the achievement or perfection of a monopoly or generally the perpetration of
knavery or crime, the veil with which the law covers and isolates the corporation from the members or stockholders
who compose it will be lifted to allow for its consideration merely as an aggregation of individuals.
The defense of separateness will be disregarded where the business affairs of a subsidiary corporation are so
controlled by the mother corporation to the extent that it becomes an instrument or agent of its parent. But even when
there is dominance over the affairs of the subsidiary, the doctrine of piercing the veil of corporate fiction applies only
when such fiction is used to defeat public convenience, justify wrong, protect fraud or defend crime.
02 - Tayag vs Benguet consolidated, Inc. 26 SCRA 242 lost stock certificates
Confronted by an obstinate and adamant refusal of the domiciliary administrator, the County Trust Company of New
York, United States of America, of the estate of the deceased Idonah Slade Perkins, who died in New York City on
March 27, 1960, to surrender to the ancillary administrator in the Philippines the stock certificates owned by her in a
Philippine corporation, Benguet Consolidated, Inc., to satisfy the legitimate claims of local creditors, the lower court,
then presided by the Honorable Arsenio Santos, now retired, issued on May 18, 1964, an order of this tenor: "After
considering the motion of the ancillary administrator, dated February 11, 1964, as well as the opposition filed by the
Benguet Consolidated, Inc., the Court hereby (1) considers as lost for all purposes in connection with the administration
and liquidation of the Philippine estate of Idonah Slade Perkins the stock certificates covering the 33,002 shares of stock
standing in her name in the books of the Benguet Consolidated, Inc., (2) orders said certificates cancelled, and (3) directs
said corporation to issue new certificates in lieu thereof, the same to be delivered by said corporation to either the
incumbent ancillary administrator or to the Probate Division of this Court."
We start with the undeniable premise that, "a corporation is an artificial being created by operation of law...."16 It owes
its life to the state, its birth being purely dependent on its will. As Berle so aptly stated: "Classically, a corporation was
conceived as an artificial person, owing its existence through creation by a sovereign power."17As a matter of fact, the
statutory language employed owes much to Chief Justice Marshall, who in the Dartmouth College decision defined a
corporation precisely as "an artificial being, invisible, intangible, and existing only in contemplation of law."
As a matter of fact, a corporation once it comes into being, following American law still of persuasive authority in our
jurisdiction, comes more often within the ken of the judiciary than the other two coordinate branches. It institutes the
appropriate court action to enforce its right. Correlatively, it is not immune from judicial control in those instances,
where a duty under the law as ascertained in an appropriate legal proceeding is cast upon it.
To assert that it can choose which court order to follow and which to disregard is to confer upon it not autonomy which
may be conceded but license which cannot be tolerated. It is to argue that it may, when so minded, overrule the state,
the source of its very existence; it is to contend that what any of its governmental organs may lawfully require could be
ignored at will. So extravagant a claim cannot possibly merit approval.
03 - International Express Travel vs CA, 343 SCRA 674 Philippine Football Federation, Association or
The resolution of the case at bar hinges on the determination of the existence of the Philippine Football Federation as a
juridical person. In the assailed decision, the appellate court recognized the existence of the Federation. In support of
this, the CA cited Republic Act 3135, otherwise known as the Revised Charter of the Philippine Amateur Athletic
Federation, and Presidential Decree No. 604 as the laws from which said Federation derives its existence.
However, while we agree with the appellate court that national sports associations may be accorded corporate status,
such does not automatically take place by the mere passage of these laws.

It is a basic postulate that before a corporation may acquire juridical personality, the State must give its consent either
in the form of a special law or a general enabling act. We cannot agree with the view of the appellate court and the
private respondent that the Philippine Football Federation came into existence upon the passage of these laws. Nowhere
can it be found in R.A. 3135 or P.D. 604 any provision creating the Philippine Football Federation. These laws merely
recognized the existence of national sports associations and provided the manner by which these entities may acquire
juridical personality.
Thus being said, it follows that private respondent Henry Kahn should be held liable for the unpaid obligations of the
unincorporated Philippine Football Federation. It is a settled principal in corporation law that any person acting or
purporting to act on behalf of a corporation which has no valid existence assumes such privileges and becomes
personally liable for contract entered into or for other acts performed as such agent.
04 - PSE vs CA, 281 SCRA 232 PALI stocks to be publicly listed denied by PSE, but reversed by SEC. Is it
A corporation is but an association of individuals, allowed to transact under an assumed corporate name, and with a
distinct legal personality. In organizing itself as a collective body, it waives no constitutional immunities and perquisites
appropriate to such a body. 11 As to its corporate and management decisions, therefore, the state will generally not
interfere with the same. Questions of policy and of management are left to the honest decision of the officers and
directors of a corporation, and the courts are without authority to substitute their judgment for the judgment of the
board of directors. The board is the business manager of the corporation, and so long as it acts in good faith, its orders
are not reviewable by the courts. 12
Thus, notwithstanding the regulatory power of the SEC over the PSE, and the resultant authority to reverse the PSE's
decision in matters of application for listing in the market, the SEC may exercise such power only if the PSE's judgment
is attended by bad faith. In Board of Liquidators vs. Kalaw, 13 it was held that bad faith does not simply connote bad
judgment or negligence. It imports a dishonest purpose or some moral obliquity and conscious doing of wrong. It means
a breach of a known duty through some motive or interest of ill will, partaking of the nature of fraud.
In reaching its decision to deny the application for listing of PALI, the PSE considered important facts, which, in the
general scheme, brings to serious question the qualification of PALI to sell its shares to the public through the stock
exchange. During the time for receiving objections to the application, the PSE heard from the representative of the late
President Ferdinand E. Marcos and his family who claim the properties of the private respondent to be part of the
Marcos estate. In time, the PCGG confirmed this claim. In fact, an order of sequestration has been issued covering the
properties of PALI, and suit for reconveyance to the state has been filed in the Sandiganbayan Court. How the
properties were effectively transferred, despite the sequestration order, from the TDC and MSDC to Rebecco Panlilio,
and to the private respondent PALI, in only a short span of time, are not yet explained to the Court, but it is clear that
such circumstances give rise to serious doubt as to the integrity of PALI as a stock issuer. The petitioner was in the
right when it refused application of PALI, for a contrary ruling was not to the best interest of the general public. The
purpose of the Revised Securities Act, after all, is to give adequate and effective protection to the investing public
against fraudulent representations, or false promises, and the imposition of worthless ventures.
05 - NDC vs Philippine Veterans Bank, 192 SCRA 257 di ko na maprocess.tsktsktsk
06 - PLDT vs NTC, 190 SCRA 717 transfer of stocks and transfer of franchise of ETCI
A franchise is a property right and cannot be revoked or forfeited without due process of law. The determination of the
right to the exercise of a franchise, or whether the right to enjoy such privilege has been forfeited by non-user, is more
properly the subject of the prerogative writ of quo warranto, the right to assert which, as a rule, belongs to the State
"upon complaint or otherwise" (Sections 1, 2 and 3, Rule 66, Rules of Court), 2 the reason being that the abuse of a
franchise is a public wrong and not a private injury. A forfeiture of a franchise will have to be declared in a direct
proceeding for the purpose brought by the State because a franchise is granted by law and its unlawful exercise is
primarily a concern of Government.
A distinction should be made between shares of stock, which are owned by stockholders, the sale of which requires only
NTC approval, and the franchise itself which is owned by the corporation as the grantee thereof, the sale or transfer of
which requires Congressional sanction. Since stockholders own the shares of stock, they may dispose of the same as they
see fit. They may not, however, transfer or assign the property of a corporation, like its franchise. In other words, even if
the original stockholders had transferred their shares to another group of shareholders, the franchise granted to the
corporation subsists as long as the corporation, as an entity, continues to exist The franchise is not thereby invalidated
by the transfer of the shares. A corporation has a personality separate and distinct from that of each stockholder. It has
the right of continuity or perpetual succession.

07 - DBP vs NLRC, 186 SCRA 841

08 - Keller vs COB Group Marketing, 141 SCRA 86 - As to the liability of the stockholders, it is settled that a
stockholder is personally liable for the financial obligations of a corporation to the extent of his unpaid
09 - Western Agro vs CA, 188 SCRA 709 representative made solidarily liable with the corporation.
It appears, therefore, that the appellate courts ruling that Antonio Rodriguez is solidarily liable with WESGRO for the
latter's P84,626.70 obligation to SIA is based principally on the ground that Rodriguez represented WESGRO in its
dealings with SIA.
It is significant to note that SIA never questioned the legal personality of WESGRO. Hence, we can assume that
WESGRO is a bona fide corporation. Therefore, as a bona fide corporation, WESGRO should alone be liable for its
corporate acts as duly authorized by its officers and directors. (Caram Jr. v. Court of Appeals, 151 SCRA 372 [1987]).
This is so, because a corporation "is invested by law with a separate personality, separate and distinct from that of the
persons composing it as well as from any other legal entity to which it may be related." (Tan Boon Bee & Co Inc. v.
Jarencio, 163 SCRA 205 [1988] citing Yutivo and Sons Hardware Company v. Court of Tax Appeals, 1 SCRA 160
[1961]; Emilio Cano Enterprises, Inc. v. Court of Industrial Relations, 13 SCRA 290 [1965]). A corporation is an
artificial person and can transact its business only through its officers or agents. Necessarily, somebody has to act for it.
The separate personality of the corporation may be disregarded, or the veil of corporate fiction pierced and the
individual stockholders may be personally liable to obligations of the corporation only when the corporation is used "as
a cloak or cover for fraud or illegality, or to work an injustice, or where necessary to achieve equity or when necessary
for the protection of creditors." (Sulo ng Bayan, Inc. v. Araneta, Inc., 72 SCRA 347 [1976] cited in Tan Boon Bee & Co.,
Inc. v. Jarencio, supra).
In the case at bar, there is no showing that Antonio Rodriguez, a director and officer of WESGRO was not authorized
by the corporation to enter into purchase contracts with SIA.
10 - Lim vs CA, 323 SCRA 102 May a corporation, in its universality, be the proper subject of and be included
in the inventory of the estate of a deceased person?