Pilipinas Loan Company, Inc. vs. Hon.

Securities and Exchange Commission and Filipinas

Pawnshop, INC.,

Facts of the Case:

 Private respondent Filipinas Pawnshop, Inc. is an organized corporation registered with
the SEC or the Securities and Exchange Commission with its main business located in
Metro Manila; as stated in the articles of incorporation of the respondent states that its
main purpose is to extend loans at legal interest on the security of either personal
properties or on the security of real properties and to finance sales of motor vehicles on
installment basis, home appliances and other chattels.
 Petitioner, on the other hand, is a lending corporation registered with the SEC in which
some of its offices are located in Manila, the main purpose as written in their articles of
incorporation is to be a lending investor or to engage in lending money on the security
of real or personal tangible or intangible properties whether as pledge, real or chattels
mortgage.
 Private respondent then files a complaint against petitioner alleging that the petitioner
has been in the business of pawnshop within the same neighborhood where the
respondent is operating its business as well for 30 years in violation of its main purpose
without any licence from the Central Bank to engage in the pawnshop business thus
eliciting an unjust and unfair competition. Furthermore, the respondent also alleged
that the business name of the petitioner “PILIPINAS” loan held similarity with the name
of the respondents pawnshop “FILIPINAS” pawnshop which creates confusion to the
public and to the customers of the respondent. Respondent then prayed to the sec to
have the petitioner changed its business name, Pilipinas Loan, to have the Pilipinas Loan
to cease from engaging in the business of pawnbroking. More over, the respondent also
asked for the imposition upon the director, officers, employees.

ISSUE OF THE CASE:

Whether there is a violation of the primary franchise

RULING OF THE CASE: Yes

 A Corporation has the only power expressly granted by law and by its own articles of
incorporation, those that may be incidental to the conferred powers, and those of which
are necessary to accomplish its main purposes and those which may be incidental to its
existence.
 In this case, the limitation as to the powers of the petitioner’s corporaton is crystal clear,
it is prohibited to engage In pawnbroking
 In determining whether the petitioner’s corporation had indeed violated its own articled
of incorporation, the SEC had questioned whether the petitioner was indeed
representing itself to the public as a pawnshop. It must be noted that the determination
whether the petitioner had indeed the violated the provision PD 114 was ensuant to the
 regulatory powers of the SEC, just to check whether a corporation is acting beyond its
powers conferred to it by its articles of corporation.

COST AGAINST THE PETITIONER

 Central Textile Mills, inc. v. NPWPC
Facts of the case:
 The respondent Tripartite Wages and Productiitty Board-NCR, the board, issued a wage
order which mandated a 12.00 increase in the minimum daily wage all employees and
workers in the private sector in the NCR, but the distressed employers whose capital has
been impaired by at least 25% in the preceding year, was exempted from the Wage
order.
 A guideline on exemptions from compliance with the prescribed wage/cost of living
allowance increase granted by the regional tripartite wage and productivity boards was
issued and defined capital as the paid-up capital at the end of the last full accounting
period (in case of corporations). Under the guidelines, an applicant may be granted an
exemption from payment of the prescribed increases in wag allowance for a period not
exceeding 1 year from the effectivity of the order.
 Petitioner Central Textile Mills filed an application for exemption from compliance with
the subject wage order because of the financial losses.
 The vice chairman of the Board, disallowed the application of the petitioner for
exemption after the documents submitted by the petitioner concluded that the
documents submitted. The petitioner sustained an impairment of only 24.41%
 Petitioner’s request for motion of reconsideration was also denied by the board, the
board also has stated that that the petitoner’s capital of 305, 767, 900.00 should be the
basis as to the determination of the capital impairment of the petitioner, instead of the
authorized capital of 128,000,000 to which the petitioner said it should be the basis for
the computation.
 The board said that the petitioner didn’t file its board resolution with the SEC which
approves an increase in the petitioner’s authorized capital stock. More so, the petitioner
did not even file any petitione as to the amendment of its Article of Incorporation
regarding the increase in its capitalization.
 Petitioner contended that the authorized capital should be the one to be used to
determine its capital impairment, not the unauthorized paid-up capital.

ISSUE OF THE CASE: