Register of Deeds of Rizal vs.

Ung Sui Si Temple

Facts: Jesus Dy, a Filipino citizen executed a deed of donation in favour of the Ung Siu Si
Temple, an unregistered religious organization that operated through three trustees all of
Chinese nationality. The Register of Deeds refused to record the deed of donation executed
in due form arguing the Constitution provides that acquisition of land is limited to Filipino
citizens, or to corporations or associations at least 60% of which is owned by such citizens.

The CFI ruled that UNG SIU SI TEMPLE is a religious organization whose deaconess,
founder, trustees and administrator are all Chinese citizens, the Court is of the opinion and
so hold that in view of the provisions of the sections 1 and 5 of Article XIII of the
Constitution of the Philippines limiting the acquisition of land in the Philippines to its citizens,
or to corporations or associations at least sixty per centum of the capital stock of which is
owned by such citizens adopted after the enactment of said Act No. 271 and the decision of
the Supreme Court in the case of Krivenko vs. the Register of Deeds of Manila, the deed of
donation in question should not be admitted for admitted for registration.

Uy Siu Si Temple has appealed to this Court, claiming: (1) that the acquisition of the land in
question, for religious purposes, is authorized and permitted by Act No. 271.

Issue: W/N the subject non-incorporated religious organization can acquire lands

Ruling: the Constitution makes no exception in favor of religious associations.

The fact that the appellant religious organization has no capital stock does not suffice to
escape the Constitutional inhibition, since it is admitted that its members are of foreign
nationality. The purpose of the sixty per centum requirement is obviously to ensure that
corporations or associations allowed to acquire agricultural land or to exploit natural
resources shall be controlled by Filipinos; and the spirit of the Constitution demands that in
the absence of capital stock, the controlling membership should be composed of Filipino
citizens.

People vs. Quasha

Facts: William H. Quasha, a member of the Philippine bar, was charged in the Court of First
Instance of Manila with the crime of falsification of a public and commercial document in
that, having been entrusted with the preparation and registration of the article of
incorporation of the Pacific Airways Corporation, a domestic corporation organized for the
purpose of engaging in business as a common carrier, he caused it to appear in said article
of incorporation that one Arsenio Baylon, a Filipino citizen, had subscribed to and was the
owner of 60.005 per cent of the subscribed capital stock of the corporation when in reality,
as the accused well knew, such was not the case, the truth being that the owner of the
portion of the capital stock subscribed to by Baylon and the money paid thereon were
American citizen whose name did not appear in the article of incorporation, and that the
purpose for making this false statement was to circumvent the constitutional mandate that
no corporation shall be authorize to operate as a public utility in the Philippines unless 60
per cent of its capital stock is owned by Filipinos.
Found guilty after trial and sentenced to a term of imprisonment and a fine, the accused has
appealed to this Court.

The falsification imputed in the accused in the present case consists in not disclosing in the
articles of incorporation that Baylon was a mere trustee ( or dummy as the prosecution
chooses to call him) of his American co-incorporators, thus giving the impression that Baylon
was the owner of the shares subscribed to by him which, as above stated, amount to 60.005
per cent of the sub-scribed capital stock. This, in the opinion of the trial court, is a malicious
perversion of the truth made with the wrongful intent circumventing section 8, Article XIV of
the Constitution.

Issue: W/n a corporation to be entitled to operate a public utility is it necessary that it be

organized with 60 per cent of its capital owned by Filipinos from the start

Ruling: The Constitution does not prohibit the mere formation of a public utility corporation
without the required formation of Filipino capital. What it does prohibit is the granting of a
franchise or other form of authorization for the operation of a public utility to a corporation
already in existence but without the requisite proportion of Filipino capital. This is obvious
from the context, for the constitutional provision in question qualifies the terms " franchise",
"certificate", or "any other form of authorization" with the phrase "for the operation of a
public utility," thereby making it clear that the franchise meant is not the "primary franchise"
that invest a body of men with corporate existence but the "secondary franchise that may
receive during its life for the exercise of a privilege granted by law, such as the operation of
a public utility.

For a corporation to be entitled to operate a public utility it is not necessary that it be

organized with 60 per cent of its capital owned by Filipinos from the start. A corporation
formed with capital that is entirely alien may subsequently change the nationality of its
capital through transfer of shares to Filipino citizens. conversely, a corporation originally
formed with Filipino capital may subsequently change the national status of said capital
through transfer of shares to foreigners.

What need is there then for a corporation that intends to operate a public utility to have, at
the time of its formation, 60 per cent of its capital owned by Filipinos alone? That condition
may anytime be attained thru the necessary transfer of stocks. The moment for determining
whether a corporation is entitled to operate as a public utility is when it applies for a
franchise, certificate, or any other form of authorization for that purpose. And that can be
done after the corporation has already come into being and not while it is still being formed.
And at that moment, the corporation must show that it has complied not only with the
requirement of the Constitution as to the nationality of its capital, but also with the
requirements of the Civil Aviation Law if it is a common carrier by air, the Revised
Administrative Code if it is a common carrier by water, and the Public Service Law if it is a
common carrier by land or other kind of public service.

Filipinas Comania vs. Christern

Facts:
On October 1, 1941, the respondent corporation, Christern Huenefeld and Co., Inc., after
payment of corresponding premium, obtained from the petitioner, Filipinas Cia de Seguros
fire policy covering merchandise contained in a building located at Binondo, Manila. On
February 27, 1942 or during the Japanese military occupation, the building and insured
merchandise were burned. In due time, the respondent submitted to the petitioner its claim
under the policy. The petitioner refused to pay the claim on the ground that the policy in
favor of the respondent that ceased to be a force on the date the United States declared
war against Germany, the respondent corporation (through organized under and by virtue of
the laws of Philippines) being controlled by German subjects and the petitioner being a
company under American jurisdiction when said policy was issued on October 1, 1941. The
theory of the petitioner is that the insured merchandise was burned after the policy issued in
1941 had ceased to be effective because the outbreak of the war between United States
and Germany on December 10, 1941, and that the payment made by the petitioner to the
respondent corporation during the Japanese military occupation was under pressure.

Issue: Whether or not the respondent corporation is a corporation of public enemy.

RULING:
Since the majority of stockholders of the respondent corporation were German subjects, the
respondent became an enemy of the state upon the outbreak of the war between US and
Germany. The English and American cases relied upon by the Court of Appeals lost in force
upon the latest decision of the Supreme Court of US in which the control test has adopted.
Since World War I, the determination of enemy nationality of corporations has been
discussed in many countries, belligerent and neutral. A corporation was subject to enemy
legislation when it was controlled by enemies, namely managed under the influence of
individuals or corporations themselves considered as enemies
The Philippine Insurance Law (Act No 2427, as amended), in Section 8, provides that
“anyone except a public enemy may be insured”. It stands to reason that an insurance
policy ceases to be allowable as soon as an insured becomes a public enemy.
The respondent having an enemy corporation on December 10, 1941, the insurance policy
issued in its favor on October 1, 1941, by the petitioner had ceased to be valid and
enforceable, and since the insured good were burned during the war, the respondent was
not entitled to any indemnity under said policy from the petitioner. However, elementary
rule of justice (in the absence of specific provisions in the Insurance Law) require that the
premium paid by the respondent for the period covered by its policy from December 11,
1941, should be returned by the petitioner.

Roman Catholic Administrator vs. LRC

Facts:

On October 4, 1954, Mateo L. Rodis, a Filipino citizen and resident of the City of Davao,
executed a deed of sale of a parcel of land located in the same city covered by Transfer
Certificate No. 2263, in favor of the Roman Catholic Apostolic Administrator of Davao
Inc.,(RCADI) is corporation sole organized and existing in accordance with Philippine Laws,
with Msgr. Clovis Thibault, a Canadian citizen, as actual incumbent. Registry of Deeds Davao
(RD) required RCADI to submit affidavit declaring that 60% of its members were Filipino
Citizens. As the RD entertained some doubts as to the registerability of the deed of sale, the
matter was referred to the Land Registration Commissioner (LRC) en consulta for resolution.
LRC held that pursuant to provisions of sections 1 and 5 of Article XII of the Philippine
Constitution, RCADI is not qualified to acquire land in the Philippines in the absence of proof
that at leat 60% of the capital, properties or assets of the RCADI is actually owned or
controlled by Filipino citizens. LRC also denied the registration of the Deed of Sale in the
absence of proof of compliance with such requisite. RCADI’s Motion for Reconsideration was
denied. Aggrieved, the latter filed a petition for mandamus.
Issue:
Whether or not the Universal Roman Catholic Apostolic Church in the Philippines, or better
still, the corporation sole named the Roman Catholic Apostolic Administrator of Davao, Inc.,
is qualified to acquire private agricultural lands in the Philippines pursuant to the provisions
of Article XIII of the Constitution.

Ruling:
RCADI is qualified.
While it is true and We have to concede that in the profession of their faith, the Roman
Pontiff is the supreme head; that in the religious matters, in the exercise of their belief, the
Catholic congregation of the faithful throughout the world seeks the guidance and direction
of their Spiritual Father in the Vatican, yet it cannot be said that there is a merger of
personalities resultant therein. Neither can it be said that the political and civil rights of the
faithful, inherent or acquired under the laws of their country, are affected by that
relationship with the Pope. The fact that the Roman Catholic Church in almost every country
springs from that society that saw its beginning
It has been shown before that: (1) the corporation sole, unlike the ordinary corporations
which are formed by no less than 5 incorporators, is composed of only one persons, usually
the head or bishop of the diocese, a unit which is not subject to expansion for the purpose
of determining any percentage whatsoever; (2) the corporation sole is only
the administrator and not the owner of the temporalities located in the territory comprised
by said corporation sole; (3) such temporalities are administered for and on behalf of the
faithful residing in the diocese or territory of the corporation sole; and (4) the latter, as
such, has no nationality and the citizenship of the incumbent Ordinary has nothing to do
with the operation, management or administration of the corporation sole, nor effects the
citizenship of the faithful connected with their respective dioceses or corporation sole.
In view of these peculiarities of the corporation sole, it would seem obvious that when the
specific provision of the Constitution invoked by respondent Commissioner (section 1, Art.
XIII), was under consideration, the framers of the same did not have in mind or overlooked
this particular form of corporation. If this were so, as the facts and circumstances already
indicated tend to prove it to be so, then the inescapable conclusion would be that this
requirement of at least 60 per cent of Filipino capital was never intended to apply to
corporations sole, and the existence or not a vested right becomes unquestionably
immaterial.

Republic vs. Villanueva

Lots Nos. 568 and 569, located at Barrio Dampol, Plaridel, Bulacan, with an area of 313
square meters and an assessed value of P1,350 were acquired by the Iglesia Ni Cristo on
January 9, 1953 from Andres Perez in exchange for a lot with an area of 247 square meters
owned by the said church (Exh. D).

The said lots were already possessed by Perez in 1933. They are not included in any military
reservation. They are inside an area which was certified as alienable or disposable by the
Bureau of Forestry in 1927.
The Iglesia Ni Cristo, a corporation sole, duly existing under Philippine laws, filed with the
Court of First Instance of Bulacan an application for the registration of the two lots. It
alleged that it and its predecessors-in-interest had possessed the land for more than thirty
years. It invoked section 48(b) of the Public Land Law.

The Republic of the Philippines, through the Direct/r of Lands, opposed the application on
the grounds that applicant, as a private corporation, is disqualified to hold alienable lands of
the public domain, that the land applied for is public land not susceptible of private
appropriation and that the applicant and its predecessors-in-interest have not been in the
open, continuous, exclusive and notorious possession of the land since June 12, 1945.

The trial court ordered the registration of the two lots, as described in Plan Ap-04-001344
(Exh. E), in the name of the Iglesia Ni Cristo, a corporation sole, represented by Executive
Minister Eraño G. Manalo.

Issue: Whether or not a corporate sole can acquire an alienable land of the public domain

Ruling: The Iglesia Ni Cristo, as a corporation sole or a juridical person, is disqualified to

acquire or hold alienable lands of the public domain, like the two lots in question, because of
the constitutional prohibition already mentioned and because the said church is not entitled
to avail itself of the benefits of section 48(b) which applies only to Filipino citizens or natural
persons. A corporation sole (an "unhappy freak of English law") has no nationality.

What was considered private land in the Susi case was a parcel of land possessed by a
Filipino citizen since time immemorial, as in Cariño vs. Insular Government, 212 U.S. 449, 53
L. ed. 594, 41 Phil. 935 and 7 Phil. 132. The lots sought to be registered in this case do not
fall within that category. They are still public lands. A land registration proceeding under
section 48(b) "presupposes that the land is public"

CIR vs. Club Filipino

As found by the Court of Tax Appeals, the "Club Filipino, Inc. de Cebu," (Club, for short), is
a civic corporation organized under the laws of the Philippines with an original authorized
capital stock of P22,000.00, which was subsequently increased to P200,000.00, among
others.

Neither in the articles or by-laws is there a provision relative to dividends and their
distribution, although it is covenanted that upon its dissolution, the Club's remaining assets,
after paying debts, shall be donated to a charitable Philippine Institution in Cebu.

The Club owns and operates a club house, a bowling alley, a golf course (on a lot leased
from the government), and a bar-restaurant where it sells wines and liquors, soft drinks,
meals and short orders to its members and their guests. The bar-restaurant was a necessary
incident to the operation of the club and its golf-course. The club is operated mainly with
funds derived from membership fees and dues. Whatever profits it had, were used to defray
its overhead expenses and to improve its golf-course. In 1951, as a result of a capital
surplus, arising from the re-valuation of its real properties, the value or price of which
increased, the Club declared stock dividends; but no actual cash dividends were distributed
to the stockholders. In 1952, a BIR agent discovered that the Club has never paid
percentage tax on the gross receipts of its bar and restaurant, although it secured B-4, B-
9(a) and B-7 licenses.

The Club wrote the Collector, requesting for the cancellation of the assessment. The request
having been denied, the Club filed the instant petition for review.

The Court of Tax Appeals, reversed the decision of the Collector of Internal Revenue,
assessing against and demanding from the "Club Filipino, Inc. de Cebu", the sum of
P12,068.84 as fixed and percentage taxes, surcharge and compromise penalty, allegedly
due from it as a keeper of bar and restaurant.

Issue: W/N the respondent is a capital stock corporation

For a stock corporation to exist, two requisites must be complied with, to wit: (1) a capital
stock divided into shares and (2) an authority to distribute to the holders of such shares,
dividends or allotments of the surplus profits on the basis of the shares held (sec. 3, Act No.
1459). In the case at bar, nowhere in its articles of incorporation or by-laws could be found
an authority for the distribution of its dividends or surplus profits. Strictly speaking, it
cannot, therefore, be considered a stock corporation, within the contemplation of the
corporation law.

Dulay Enterprises vs. CA

Manuel R.Dulay Enterprises, Inc., a domestic corporation with the following as members of
its Board of Directors: Manuel R. Dulay with 19,960 shares and designated as president,
treasurer and general manager; Atty. Virgilio E. Dulay with 10 shares and designated as
vice-president; Linda E. Dulay with 10 shares; Celia Dulay-Mendoza with 10 shares; and
Atty. Plaridel C. Jose with 10 shares and designated as secretary, owned a property covered
by TCT 17880 4 and known as Dulay Apartment consisting of 16 apartment units on a 689
square meter lot, more or less, located at Seventh Street (now Buendia Extension) and F.B.
Harrison Street, Pasay City. The corporation through its president, Manuel Dulay, obtained
various loans for the construction of its hotel project, Dulay Continental Hotel (now Frederick
Hotel). It even had to borrow money from Virgilio Dulay to be able to continue the hotel
project. As a result of said loan, Virgilio Dulay occupied one of the unit apartments of the
subject property since 1973 while at the same time managing the Dulay Apartment as his
shareholdings in the corporation was subsequently increased by his father.

On 23 December 1976, Manuel Dulay by virtue of Board Resolution 18 of the corporation

sold the subject property to spouses Maria Theresa and Castrense Veloso in the amount of
P300,000.00 as evidenced by the Deed of Absolute Sale. Thereafter, TCT 17880 was
cancelled and TCT 23225 was issued to Maria Theresa Veloso. Subsequently, Manuel Dulay
and the spouses Veloso executed a Memorandum to the Deed of Absolute Sale of 23
December 1976 dated 9 December 1977 giving Manuel Dulay within 2 years or until 9
December 1979 to repurchase the subject property for P200,000.00 which was, however,
not annotated either in TCT 17880 or TCT 23225. On 24 December 1976, Maria Veloso,
without the knowledge of Manuel Dulay, mortgaged the subject property to Manuel A.
Torres for a loan of P250,000.00 which was duly annotated as Entry 68139 in TCT 23225.
Upon the failure of Maria Veloso to pay Torres, the subject property was sold on 5 April
1978 to Torres as the highest bidder in an extrajudicial foreclosure sale as evidenced by the
Certificate of Sheriff's Sale issued on 20 April 1978.
On 20 July 1978, Maria Veloso executed a Deed of Absolute Assignment of the Right to
Redeem in favor of Manuel Dulay assigning her right to repurchase the subject property
from Torres as a result of the extrajudicial sale. As neither Maria Veloso nor her assignee
Manuel Dulay was able to redeem the subject property within the one year statutory period
for redemption, Torres filed an Affidavit of Consolidation of Ownership 13 with the Registry
of Deeds of Pasay City and TCT 24799 was subsequently issued to Torres on 23 April 1979.
On 1 October 1979, Torres filed a petition for the issuance of a writ of possession against
spouses Veloso and Manuel Dulay in LRC Case 1742-P. However, when Virgilio Dulay
appeared in court to intervene in said case alleging that Manuel Dulay was never authorized
by the corporation to sell or mortgage the subject property, the trial court ordered Torres to
implead the corporation as an indispensable party but the latter moved for the dismissal of
his petition which was granted in an Order dated 8 April 1980. On 20 June 1980, Torres and
Edgardo Pabalan, real estate administrator of Torres, filed an action against the corporation,
Virgilio Dulay and Nepomuceno Redovan, a tenant of Dulay Apartment Unit No. 8-A for the
recovery of possession, sum of money and damages with preliminary injunction in Civil Case
8198-P with the then Court of First Instance of Rizal.

On 21 July 1980, the corporation filed an action against spouses Veloso and Torres for the
cancellation of the Certificate of Sheriff's Sale and TCT 24799 in Civil Case 8278-P with the
then Court of First Instance of Rizal. On 29 January 1981, Pabalan and Torres filed an action
against spouses Florentino and Elvira Manalastas, a tenant of Dulay Apartment Unit No. 7-B,
with the corporation as intervenor for ejectment in Civil Case 38-81 with the Metropolitan
Trial Court of Pasay City which rendered a decision on 25 April 1985, in favor of Pabalan, et
al., ordering the spouses Manalastas and all persons claiming possession under them to
vacate the premises; and to pay the rents in the sum of P500.00 a month from May 1979
until they shall have vacated the premises with interest at the legal rate; and to pay
attorney's fees in the sum of P2,000.00 and P1,000.00 as other expenses of litigation and
for them to pay the costs of the suit.

Thereafter or on 17 May 1985, the corporation and Virgilio Dulay filed an action against the
presiding judge of the Metropolitan Trial Court of Pasay City, Pabalan and Torres for the
annulment of said decision with the Regional Trial Court of Pasay in Civil Case 2880-P.
Thereafter, the 3 cases were jointly tried and the trial court rendered a decision in favor of
Pabalan and Torres. Not satisfied with said decision, the corporation, et al. appealed to the
Court of Appeals which rendered a decision on 23 October 1989, affirming the trial court
decision. On 8 November 1989, the corporation, et al. filed a Motion for Reconsideration
which was denied on 26 January 1990. The corporation, et al. filed the petition for review on
certiorari. During the pendency of the petition, Torres died on 3 April 1991 as shown in his
death certificate and named Torres-Pabalan Realty & Development Corporation as his heir in
his holographic will dated 31 October 1986.

Issue: Whether the sale of the subject property between spouses Veloso and Manuel Dulay
has no binding effect on the corporation as Board Resolution 18 which authorized the sale of
the subject property was resolved without the approval of all the members of the board of
directors and said Board Resolution was prepared by a person not designated by the
corporation to be its secretary

Ruling:
Section 101 of the Corporation Code of the Philippines provides that "When board meeting is
unnecessary or improperly held. Unless the by-laws provide otherwise, any action by the
directors of a close corporation without a meeting shall nevertheless be deemed valid if: (1)
Before or after such action is taken, written consent thereto is signed by all the directors; or
(2) All the stockholders have actual or implied knowledge of the action and make no prompt
objection thereto in writing; or (3) The directors are accustomed to take informal action with
the express or implied acquiesce of all the stockholders; or (4) All the directors have express
or implied knowledge of the action in question and none of them makes prompt objection
thereto in writing. If a directors' meeting is held without proper call or notice, an action
taken therein within the corporate powers is deemed ratified by a director who failed to
attend, unless he promptly files his written objection with the secretary of the corporation
after having knowledge thereof." Herein, the corporation is classified as a close corporation
and consequently a board resolution authorizing the sale or mortgage of the subject
property is not necessary to bind the corporation for the action of its president. At any rate,
a corporate action taken at a board meeting without proper call or notice in a close
corporation is deemed ratified by the absent director unless the latter promptly files his
written objection with the secretary of the corporation after having knowledge of the
meeting which, in this case, Virgilio Dulay failed to do. The corporation's claim that the sale
of the subject property by its president, Manuel Dulay, to spouses Veloso is null and void as
the alleged Board Resolution 18 was passed without the knowledge and consent of the
other members of the board of directors cannot be sustained. Virgilio E. Dulay's
protestations of complete innocence to the effect that he never participated nor was even
aware of any meeting or resolution authorizing the mortgage or sale of the subject premises
is difficult to believe. On the contrary, he is very much privy to the transactions involved. To
begin with, he is an incorporator and one of the board of directors designated at the time of
the organization of Manuel R. Dulay Enterprises, Inc. In ordinary parlance, the said entity is
loosely referred to as a "family corporation." The nomenclature, if imprecise, however, fairly
reflects the cohesiveness of a group and the parochial instincts of the individual members of
such an aggrupation of which Manuel R. Dulay Enterprises, Inc. is typical: four-fifths of its
incorporators being close relatives namely, 3 children and their father whose name identifies
their corporation. Besides, the fact that Virgilio Dulay on 24 June 1975 executed an affidavit
that he was a signatory witness to the execution of the post-dated Deed of Absolute Sale of
the subject property in favor of Torres indicates that he was aware of the transaction
executed between his father and Torres and had, therefore, adequate knowledge about the
sale of the subject property to Torres. Consequently, the corporation is liable for the act of
Manuel Dulay and the sale of the subject property to Torres by Manuel Dulay is valid and
binding.

Financing Corporation vs. Teodoro

Asuncion Lopez Vda. de Lizares, Encarnacion Lizares Vda. de Panlilio and Efigenia Vda. de
Paredes, in their own behalf and in behalf of the other minority stockholders of the Financing
Corporation of the Philippines, filed a complaint against the said corporation and J. Amado
Araneta, its president and general manager, claiming among other things alleged gross
mismanagement and fraudulent conduct of the corporate affairs of the defendant corporation by
J. Amado Araneta, and asking that the corporation be dissolved; that J. Amado Araneta be
declared personally accountable for the amounts of the unauthorized and fraudulent
disbursements and disposition of assets made by him, and that he be required to account for
said assets, and that pending trial and disposition of the case on its merits a receiver be
appointed to take possession of the books, records and assets of the defendant corporation
preparatory to its dissolution and liquidation and distribution of the assets. Over the strong
objection of the defendants, the trial court presided by respondent Judge Jose Teodoro, granted
the petition for the appointment of a receiver and designated Mr. Alfredo Yulo as such receiver
with a bond of P50,000. Failing to secure a reconsideration of the order appointing a receiver, the
defendants in said case, Financing Corporation of the Philippines and J. Amado Araneta, as
petitioners, have filed the present petition for certiorari with preliminary injunction to revoke and
set aside the order. Acting upon that part of the petition asking for a writ of preliminary injunction,
a majority of the court granted the same upon the filing of a bond by the petitioners in the sum of
P50,000.

The main contention of the petitioners in opposing the appointment of a receiver in this case is
that said appointment is merely an auxiliary remedy; that the principal remedy sought by the
respondents in the action in Negros Occidental was the dissolution of the Financing Corporation
of the Philippines; that according to the law a suit for the dissolution of a corporation can be
brought and maintained only by the State through its legal counsel, and that respondents, much
less the minority stockholders of said corporation, have no right or personality to maintain the
action for dissolution, and that inasmuch as said action cannot be maintained legally by the
respondents, then the auxiliary remedy for the appointment of a receiver has no basis.

Ruling:

There are cases that hold that even minority stockholders may ask for dissolution, this,
under the theory that such minority members, if unable to obtain redress and protection of
their rights within the corporation, must not and should not be left without redress and
remedy. This was what probably prompted this Court to state in the case of Hall, et al. vs.
Judge Piccio,* G.R. No. L-2598 (47 Off. Gaz. No. 12 Supp., p. 200) that even the existence
of a de jure corporation may be terminated in a private suit for its dissolution by the
stockholders without the intervention of the State. It was therein further held that although
there might be some room for argument on the right of minority stockholders to ask for
dissolution,-that question does not affect the court's jurisdiction over the case, and that the
remedy by the party dissatisfied was to appeal from the decision of the trial court. We
repeat that although as a rule, minority stockholders of a corporation may not ask for its
dissolution in a private suit, and that such action should be brought by the Government
through its legal officer in a quo warranto case, at their instance and request, there might
be exceptional cases wherein the intervention of the State, for one reason or another,
cannot be obtained, as when the State is not interested because the complaint is strictly a
matter between the stockholders and does not involve, in the opinion of the legal officer of
the Government, any of the acts or omissions warranting quo warranto proceedings, in
which minority stockholders are entitled to have such dissolution. When such action or
private suit is brought by them, the trial court had jurisdiction and may or may not grant the
prayer, depending upon the facts and circumstances attending it. The trial court's decision is
of course subject to review by the appellate tribunal. Having such jurisdiction, the
appointment of a receiver pendente lite is left to the sound discretion of the trial court. As
was said in the case of Angeles vs. Santos (64 Phil., 697), the action having been properly
brought and the trial court having entertained the same, it was within the power of said
court upon proper showing to appoint a receiver pendente lite for the corporation; that
although the appointment of a receiver upon application of the minority stockholders is a
power to be exercised with great caution, nevertheless, it should be exercised necessary in
order not to entirely ignore and disregard the rights of said minority stockholders, especially
when said minority stockholders are unable to obtain redress and protection of their rights
within the corporation itself.