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CA made a trustee for the other incorporators who were pilots and thus had
difficulty in getting together & deciding their respective share holdings.

o Quasha was charged w/falsification of a public & commercial document

under Art. 172.11 in connection Art. 171.42 of the RPC.
o CFI: guilty

Issues & Ratio:

1. WON Quasha is guilty as charged. – NO.
o J. Albert commentary: requisites for perversion of truth in the narration of
PEOPLE vs. ISLA a. wrongful intent of injuring a 3rd person
b. offender has legal obligation to disclose the truth
o Falsification imputed to Quasha: not disclosing in the articles of
incorporation that Baylon was a mere trustee w/c in effect gave the
impression that he owned the shares subscribed to by him.
o Lower court based its decision on the alleged circumvention of the
constitutional provision aforementioned. But such provision prohibits
granting of franchise/other form of authorization for the operation of a public
utility to a corporation already in existence but w/o the requisite Filipiono
capital proportion. It does not prohibit mere formation of a public utility corp
w/o the proper Filipino capital proportion as wrongly interpreted by the CFI.
The formation of the corporation is not necessarily an indispensable
PEOPLE OF THE PHILIPPINES, plaintiff & appellee, vs. WILLIAM H. preparatory step to the to the subversion of the constitutional provision. A
QUASHA, defendant & appellant [1953] corporation may be entirely owned by aliens & it is entitled to operate as a
public utility. It may subsequently change the nationality of its capital by
o Quasha, a lawyer, was entrusted w/the preparation & registration of articles transferring the shares to Filipino citizens & thus, entitled to the
of incorporation of Pacific Airways Corp, a domestic corporation engaged as franchise/authorization to operate as a public utility.
a common carrier business. Articles of Incorporation were registered w/the o Thus, Quasha can’t be held to have the legal obligation to disclose the truth
Securities & Exchange Commission. that Baylon was only a trustee at the time of the formation of the
o Quasha made it appear in the articles of incorporation that Arsenio Baylon, corporation. Such duty only arose upon the application for franchise or
Filipino, owned 60.005% of the corporation’s subscribed capital stock authorization to operate. Since Quasha had no obligation to disclose the
(amounting to P200k) when in fact the American citizens named as co- truth & he had no alleged wrongful intent, he can’t be legally convicted of
subscribers of Baylon owned it. The articles stipulated that Baylon had the crime charged.
1,145 preferred shares & 6,500 common shares while the American
subscribers had 200 preferred shares & 59k common shares. But Baylon 2. WON Quasha should at least be held liable for an impossible crime. –
still didn’t have the controlling vote due to the difference in voting power NO.
between the preferred & common shares. o He could not have intended to circumvent the constitutional provision w/c
o Purpose in making Baylon appear as the owner: to circumvent the was still inexistent at the time he committed alleged acts.
constitutional provision w/c mandates that at least 60% capital stock of a o Besides, the Parity Amendment placed Americans in equal footing as
corporation operated as a public utility in the RP must be owned by Filipinos WRT the rt to operate public utilities in the country, thus doing
Filipinos. away w/the invoked constitutional prohibition. (Meaning, the Americans also
o Corporation was registered & issued a certificate of incorporation. had the rt to operate public utilities in the country.)
o Although Baylon did pay his subscription, the money used did not belong to 1
him but to the American subscribers. Quasha testified that Baylon was Punishes a private individual who commits any act of falsification in any public/official document or
letter of exchange or any other kind of commercial document.
Punishes making untruthful statement in a narration of facts.
Holding: Quasha acquitted.