KENG HUA PAPER PRODUCTS CO. INC. VS.

COURT OF APPEALS
G.R. NO. 116863. FEBRUARY 12, 1998

PANGANIBAN, J.:

FACTS:
Sea Land Service Inc. a shipping company received a sealed container of unsorted
waster paper for shipment to plaintiff in manila. A bill of lading to cover the shipment
was issued by the shipping company. Notice of arrival were transmitted to plaintiff but
the latter failed to discharge the shipment from the container during the grace period,
thus demurrage charges accrued.
Plaintiff alleged that it purchased waste paper from shipper in Hong Kong, Ho Kee
Waste Paper as manifested in a letter of credit issued by Equitable Banking
Corporation. That the shipping company had no cause of action against petitioner
because the latter did not hire the former to carry the merchandise; that the cause of
action should be against the shipper which contracted the shipping company’s service
and not against Keng Hua paper.
ISSUE/S:
Whether or not Ken Hua was bound by the bill of lading thus liable to pay the
demurrage
Whether or not bill of lading is separate from other letter of credit arrangement
RULING:
1 Yes, a bill of lading serves two functions, first, it is a receipt for the goods shipped.
Second, it is a contract by which three parties, namely, the shipper, the carrier and the
consignee. In the case at bar there was a valid and perfected contract between the
shipper (Ho Kee), the consignee ( Keng Hua ), and the carried ( Sea Land ). Sec. 17 of
the bill of lading provides that the shipper and the consignee were liable for the payment
of demurrage charges for the failure to discharge the containerized shipment beyond
grace period allowed by the tariff rules. Prolonged failure of Keng Hua to receive and
discharged the cargo from Sea-Land constitutes a violation of the terms of the bill of
lading. It should thus be liable for demurrage to the former.
2 Yes, there are least 3 distinct and independent contracts involved in a letter of credit
namely: the contract of sale between the buyer and seller; the contact of the buyer with
the issuing bank; and the letter of credit proper. These contracts are to be maintained in
a state of perpetual separation. Hence, the contract of carriage, as stipulated in the bill
of lading in the present case, must be treated independently of the contract of sale
between the seller and the buyer, and the contract of issuance of a letter of credit
between the buyer and the issuing bank. Any discrepancy between the amount of
goods described in the commercial invoice in the contract of sale and the amount
allowed in the letter of credit will not affect the validity and enforceability of the contract
of carriage embodied in the bill of lading. As the bank cannot be expected to look
beyond the documents presented to it by the seller pursuant to the letter of credit,
neither can the carrier be expected to go beyond the representations of the shipper in
the bill of lading and to verify their accuracy vis--vis the commercial invoice and the
letter of credit.
PHILIPPINE AIRLINES VS. SPOUSES SADIC
G.R NO. 146698. SEPTEMBER 24, 2002

VITUG, J.:

FACTS:
Respondents filed a complaint against PAL for breach of contract resulting in damages
due to negligence in the custody of missing luggages. Due to business loses PAL filed a
petition for the approval of a rehabilitation plan and the appointment of rehabilitation
receiver before the SEC. The SEC issued an order granting the prayer for an
appointment of rehabilitation receiver. Thereupon, PAL moved for the suspension of the
proceedings before the Marawi City RTC, however it was denied.
ISSUE:
Whether or not the proceedings before the trial court should have been suspended after
the court was informed that a rehabilitation receiver was appointed over the petitioner
by the SEC under sec 6 (c) of PD no. 902-A
RULING:
Yes, the reason for suspending actions for claims against the corporation should not be
difficult to discover. It is not really to enable the management committee or the
rehabilitation receiver to substitute the defendant in any pending action against it before
any court, tribunal, board or body. Obviously, the real justification is to enable the
management committee or rehabilitation receiver to effectively exercise its/his powers
free from any judicial or extrajudicial interference that might unduly hinder or prevent the
rescue of the debtor company. To allow such other action to continue would only add to
burden of the management committee or rehabilitation receiver, whose time, effort and
resources would be wasted in defending claims against the corporation instead of being
directed toward its restructuring and rehabilitation.

Jenalin florano
WILSON GAMBAO VS. FINANCE SECRETARY MARGARITO TEVES
G.R.NO. 176579 JUNE 28, 2011

CARPIO, J.:

FACTS:
GTE a major stockholder of PLDT sold 26 percent of the outstanding common shares of
PLDT to PTIC. PHI become the owner of 111,415 shares of PTIC, which was later
sequestered by PCGG and declared owned by the government. Frist Pacific, Hong
Kong based investment firm acquired the remaining 54 percent of outstanding capital
stock of PTIC. Later the IPC announced to sell the 111,415 share or 46.125 percent
outstanding capital stock of PTIC. First Pacific exercised its right of first refusal as PTIC
stockholder, and acquired the subject shares through a conditional sale and purchased
agreement.
With the sale, First Pacific’s common shareholdings in PLDT increased from 30.7 to 37
percent, thereby increasing it common shareholdings of foreigners in PLDT to about
81.47 percent. Which was contended by the petitioner as a violation of sec 11 art. XII of
the 1987 constitution which limits foreign ownership of capital of a public utility to not
more than 40 percent.
ISSUE:
Whether or not the term capital refers to shares of stock that can vote
Whether or not voting rights transferred to aliens is considered held by Philippines
national
RULING:
1 Yes, The term capital in sec 11 of art. XII of the constitution refers only to shares of
stock that can vote in the election of directors. It refers to voting stock or controlling
interest of a corporation.
Thus 60 percent of the capital assumes or should result in controlling interest in the
corporation. Reinforcing this interpretation of the term capital as referring to controlling
interest or shares entitled to vote is the definition of a Philippine national in the foreign
investment act of 1991 to wit:
SEC. 3 definitions- a. the term Philippine national shall mean xxx a corporation
organized under the law of the Philippines of which at least sixty percent of the capital
stock outstanding and entitled to vote is owned and held by the citizen of the
Philippines. Xxx provided, that where the corporation and its non- Filipino stockholders
own stocks in a SEC registered enterprise, at least sixty percent of the capital stock
outstanding and entitled to vote of each or both corporations must be owned and held
by the citizen of the Philippines and at least sixty percent of the members of the board
of directors of each or both corporations must be citizen of the Philippines, in order that
the corporation, shall be considered as a Philippine national.
2 No, mere legal title is insufficient to meet 60 percent Filipino-owned capital required in
the constitution. Full beneficial ownership of 60 percent of the outstanding capital stock,
coupled with 60 percent of voting rights is required. Thus stocks, the voting rights of
which have been assigned or transferred to aliens cannot be considered held by the
Philippine citizen or Philippine nationals.