Recoletos aw Center “HOME OF THE NATION'S TOP BAR REVIEWERS” PERALTA, Tulien F. LEONARDO - DE CASTRO DOCTRINES COMMERCIAL LAW CORPORATION LAW The following are juridical persons: (1) The State and its political subdivisions; (2) Other corporations, institutions and entities for public interest or purpose created by law; their Personality begins as soon as they have been constituted according to law; (3) Corporations, Partnerships and associations for private interest or purpose to which the law grants a juridical Personality, separate and distinct from that of each shareholder, partner or member. Evidently, the BSP, which was created by a special law (RA 7278) to serve a public purpose in pursuit of a constitutional mandate, comes within the class of “public corporations” defined by paragraph 2, Article 44 of the Civil Code and governed by the law which creates it, pursuant to Article 45 of the same Code. The BSP is a public corporation or a government agency or instrumentality with juridical personality, which does not fall within the constitutional prohibition in Article XII, Section 16, notwith-standing the amendments to its charter. Not all corporations, which are not government owned or controlled, are ipso facto to be considered private corporations as there exists another distinct class of corporations or chartered institutions which are otherwise known as “public corporations.” These corporations are treated by law as agencies or instrumentalities of the government which are not subject to the tests of ownership or control and economic viability but to different criteria relating to their public purposes/interests or constitutional policies and objectives and their administrative relationship to the government or any of its Departments or Offices [Boy Scouts of the Philippines vs. Commission on Audit, 651 SCRA 146(2011)). Corporation Law; Principle of Limited Liability. A corporation is an artificial entity created by operation of law. It possesses the right of succession and such powers, attributes, and properties expressly authorized by law or incident to its existence. It has a personality separate and distinct from that of its stockholders and from that of other corporations to which it may be connected. As a consequence of its status as a distinct legal entity and as a result of a conscious policy decision to promote capital formation, a corporation incurs its own liabilities and is legally responsible for payment of its obligations. In other words, by virtue of the separate juridical personality of a corporation, the corporate debt or credit is not the debt or credit of the stockholder. This protection from liability for shareholders is the principle of limited liability [Philippines National Bank vs. Hydro Resources Contractors Corporation, 693 SCRA 294(2013)]. Corporation Law;Corporate officers. As a general rule, a corporate officer cannot be held liable for acts done in his official capacity because a corporation, by legal fiction, has a personality separate and distinct from its officers, stockholders, and members. To pierce this fictional veil, it must be shown that the corporate personality was used to perpetuate fraud or an illegal act, or to evade an existing obligation, or to confuse a legitimate issue. In illegal dismissal cases, corporate officers may be held solidarily liable with the corporation if the termination was done with malice or bad faith {Culili vs, Eastern Telecommunications Philippines, Inc. 642 SCRA 338(2011)]. Page 2 of 5determine the it to Alter Ego Theory; Instrumentality Theory. There are anaes theory, namely: application of the alter ego theory, which is also known as the instru ee (1) Control, not mere majority or complete stock control, but complete « sce : a rie finances but of policy and business practice in respect to the transaction attacl : ae corporate entity as to this transaction had at the time no separate mind, will or existence own; (2) Such control must have been used by the defendant to commit fraud or vo S Perpetuate the violation of a statutory or other positive legal duty, or dishonest and unjust act in contravention of plaintiff's legal right; and (3) The aforesaid control and breach of duty must have proximately caused the injury or unjust loss complained of. While ownership by one corporation of all or a great majority of stocks of another corporation and their interlocking directorates may serve as indicia of control, by themselves and without more, however, these circumstances are insufficient to establish an alter ego relationship that will justify the puncturing of the latter's corporate cover. The mere ‘ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is ’ot of itself sufficient ground for disregarding the separate corporate personality.” Also the “existence of interlocking directors, corporate officers and shareholders is not enough Corporation Law; Interim Rules of Procedure for Intra-Corporate Controversies (A.M. No, 01- 20-04-SC); Appeals; Inspection of Corporate Books; Civil cases involving the inspection of conporate books are governed by the rules of procedure set forth in AM. No. 01-2-04-Sc, Republic Act No. 8799 (Interim Rules). Section 4, Rule 1 of the Interim Rules defines the nature of the judgments rendered thereunder as follows: “SEC. 4. Executory nature of decisions and orders.—All decisions and orders issued under these Rules shall immediately be executory, except the awards for moral damages, exemplary damages and attorney's fees, if any. No appeal or petition taken therefrom shall stay the enforcement or implementation of the decision or order, unless restrained by an appellate court. Interlocutory orders shall not be subject to appeal.” Verily, the first part of Section 4, Rule 1 of the Interim Rules is categorical. Save for the exceptions clearly stated therein, the provision enunciates that a decision and order issued under the Interim Rules shall be enforceable immediately after the rendition thereof. In order to assail the decision or order, however, the second part of the provision speaks of an appeal or petition that needs to be filed by the party concerned. In this appeal or petition, a restraining, order must be sought from the appellate court to enjoin the enforcement or implementation of the decision or order. Unless a restraining order is so issued, the decision or order rendered under the Interim Rules shall remain to be immediately executory [Dee Ping Wee vs. Lee Hiong Wee, 629 SCRA 145(2010)].Recoletos Maw Center “HOME OF THE NATION'S TOP BAR REVIEWERS" Banking Laws Mercantile ; . oe aes and Banking. It is settled that banks, their business being impressed hilar re expected to exercise more care and prudence than private individuals Seer ne Sven those involving registered lands. The rule that persons dealing, with ie lands can rely solely on the certificate of title does not apply to banks [Philippine Trust ‘ompany vs. Court of Appeals, 635 SCRA 518(2010)]. : Doctrine of Last Clear Chance; The Court has consistently applied the doctrine of last clear chance in order to assign liability. In Westmont Bank v. Ong, 375 SCRA 212 (2002), the court ruled: ...[I]t is petitioner [bank] which had the last clear chance to stop the fraudulent encashment of the subject checks had it exercised due diligence and followed the proper and regular banking procedures in clearing checks. As earlier ruled, the one who had a last clear opportunity to avoid the impending harm but failed to do so is chargeable with the consequences thereof [Bank of America NT & SA vs. Philippine Racing Club, 594 SCRA 301(2009)). NEGOTIABLE INSTRUMENTS, Once the drawee accepts, he becomes an acceptor. As acceptor, he engages to pay the bill of exchange according to the tenor of his acceptance.—Under the lawwhat is accepted is a bill of ‘exchange, and the acceptance of a bill of exchange is both the manifestation of the drawee's consent to the drawer’s order to pay money and the expression of the drawee’s promise to pay. Itis “the act by which the drawee manifests his consent to comply with the request contained in the bill of exchange directed to him and it contemplates an engagement or promise to pay.” ‘Once the drawee accepts, he becomes an acceptor. As acceptor, he engages to pay the bill of exchange according to the tenor of his acceptance. Acceptance is made upon presentment of the bill of exchange, or within 24 hours after such presentment. Presentment for acceptance is the production or exhibition of the bill of exchange to the drawee for the purpose of obtaining his acceptance. Presentment for acceptance is necessary only in the instances where the law requires it. In the instances where presentment for acceptance is not necessary, the holder of the bill of exchange can proceed directly to presentment for payment (Hongkong and Shanghai Banking Corporation Limited-Philippine Branches vs. Commissioner of Internal Revenue). Presentment for Payment. Presentment for payment is the presentation of the instrument to the person primarily liable for the purpose of demanding and obtaining payment thereof. Thus, whether it be presentment for acceptance or presentment for payment, the negotiable instrument has to be produced and shown to the drawee for acceptance or to the acceptor for payment (Ibid). Material Alteration. A material alteration is defined in Section 125 of the NIL to be one which changes the date, the sum payable, the time or place of payment, the number or relations of the parties, the currency in which payment is to be made or one which adds a place of payment where no place of payment is specified, or any other change or addition which alters the effect Page 40f 5coletus Daw Center “HOME OF THE NATION'S TOP BAR REVIEWERS” ‘ of the instrument in any respect [Bank of America NT & SA vs. Philippine Racing Club, 59. SCRA 301(2009)]. TRANSPORTATION LAW Common Carriers; Negligence; Damages; The court holds that the carrier had the responsibility to inform itself of the prevailing weather conditions in the areas where its vessel was set to sail. The carrier cannot merely rely on other vessels for weather updates and warnings on approaching storms, as what apparently happened in this case. Common sense and reason dictates this. To do so would be to gamble with the safety of its own vessel, putting the lives of its crew under the mercy of the sea, as well as running the risk of causing damage to the property of third parties for which it would necessarily be liable (Sealoader Shipping Corporation vs. GrandCement Manufacturing Corporation , 638 SCRA 488(2010)],