PHI

LIPPI
NESUPREMECOURTDECI
SIONS

ENBANC

[
G.R.No.L-
23145.Nov
ember29,
1968.
]

TESTATEESTATEOFI DONAHSLADEPERKI
NS,deceased.RENATOD.TAYAG,anci
l
lar
y
admini
str
ator
-appel
l
ee,v
.BENGUETCONSOLI
DATED,INC.,Opposi
tor
-Appel
l
ant
.

Ci
ri
loF.Asper
il
lo,
Jr.
,foranci
l
lar
yadmi
nist
rat
or-
appel
l
ee.

Ross,
Sal
cedo,
Del
Rosar
io,
Bit
o&Mi
saf
orOpposi
tor
-Appel
l
ant
.

SYLLABUS

1.REMEDI ALLAW; SPECIALPROCEEDI NGS; SETTLEMENTOFESTATE; WHENANCI LLARY

ADMI NISTRATI ONISPROPER.—Theanci ll
aryadmi ni
strati
onisproper,whenev eraper sondies,
l
eav inginacount ryotherthant hatofhi
slastdomi ci l
e,proper
tytobeadmi nist
eredinthenat ure
ofasset soft hedeceasedl i
ableforhisi
ndiv i
dualdebt sortobedistri
butedamonghi shei r
s
(Johannesv .Harvey,
43Phi l.175).Anci
l
laryadmi nistrat
ionisnecessaryort hereasonf orsuch
admi nistrati
onisbecauseagr antofadministr
ati
ondoesnotexpr opri
ov i
gor ehaveanyef fect
bey ondt helimit
softhecount ryinwhichiti
sgr anted.Hence, anadmi ni
stratorappointedina
foreignst atehasnoaut hori
tyinthePhil
ippines.

2.I
D.;
ID.
;I
D.;
SCOPEOFPOWERANDAUTHORI
TYOFANANCI
LLARYADMI
NISTRATOR.—No
onecoul ddisputethepowerofananci l
lar
yadmi nistr
at ortogaincont r
olandpossessi onofal l
asset soft hedecedentwi thi
nt hej urisdict
ionoft hePhi li
ppines.Suchapoweri sinher enti nhis
dutyt oset tl
eherest ateandsat isfythecl aimsofl ocal creditors(Rule84,Sec.3,RulesofCour t.
CfPav iav.Del aRosa, 8Phi l.70; Li
wanagv .Reyes, L-19159, Sept.29,1964;I
gnaciov .El chico,
L
-18937, May16, 1967; etc.
).Itisagener alr
uleuni versallyrecognizedthatadminist
ration,
whet herpr i
ncipaloranci ll
ary,cer t
ainlyextendst ot heasset sofadecedentf oundwit hint he
stateorcount r
ywher eitwasgr anted, thecor ol
larybei ng" t
hatanadmi ni
str
atorappoi ntedi n
onest at eorcount r
yhasnopowerov erproper t
yi nanot herst at
eorcount r
y"(LeonandGhezzi v.
Manuf acturer
sLi f
eIns.Co. ,
90Phi l.459) .

3.ID.;
ID.;ID.;I
D.;CASEATBAR.—Si nce, i
nt hecaseatbar ,t
hereisar ef
usal,persistentl
y
adheredt obyt hedomicil
i
aryadmi ni
st rat
ori nNewYor k,todeli
vertheshar esofst ocksof
appell
antcor porati
onownedbyt hedecedentt otheanci ll
aryadminist
ratorinthePhi li
ppines,
therewasnot hi
ngunreasonableorar bitr
aryinconsi deri
ngt hem aslostandr equiri
ngt he
appell
antt oissuenewcer t
if
icatesinlieut hereof.Thereby,thetaskincumbentundert hel awon
theancill
aryadmi ni
str
atorcouldbedi schar gedandhi sresponsibi
l
ityful
fil
l
ed.Anyot herview
wouldr esulti
nt hecompli
ancet oav alidjudicial
or derbeingmadet odependont he
uncontroll
eddi scr
eti
onofapar tyorent it
y.

4.CORPORATI ONLAW; CORPORATI ONS; CONCEPTANDNATURE.—Acor porati

oni san
arti
f i
cial bei ngcreatedbyoper ati
onoflaw( Sec.2,ActNo.1459) .Acor por ati
onasknownt o
Philippinej uri
sprudencei sacreatur
ewi t
houtanyexi stenceunt i
lithasr eceivedt heimpr imatur
oft hest ateact i
ngaccor dingtolaw.Iti
slogicall
yinconceivablethereforet hatitwillhav eri
ghts
andpr i
v ilegesofahi gherpri
ori
tythanthatofitscreator.Mor ethant hat,itcannotlegi t
imat el
y
refuset oy ieldobediencet oactsofitsstateorgans,certai
nlynotexcl udingt hejudiciary,
whenev ercal l
edupont odoso.Acor porationisnotinf actandinr eali
tyaper son,butthel aw
treatsi tast houghitwer eaper sonbyprocessoff ict
ion,orbyr egardingitasanar tifi
cialperson
distinctandsepar atefrom it
sindivi
dualstockholders(1Fletcher,Cyclopedi aCor porati
ons, pp.
19-20)

DECISION
FERNANDO,
J.:

Conf ront edbyanobst i

nateandadamantr efusal oft hedomi ci l
iaryadmi nistrator,theCount y
TrustCompanyofNewYor k,Unit
edSt atesofAmer ica,oft heest ateoft hedeceasedI donah
SladePer kins,whodi edi nNewYor kCi tyonMar ch27, 1960, tosur rendert otheanci l
lary
admi nist ratorint hePhi l
ippinesthest ockcer ti
ficat esownedbyheri naPhi l
ippi necorpor ation,
BenguetConsol idat ed, I
nc., t
osatisfyt helegiti
mat ecl ai
msofl ocalcredi tors, t
hel owercour t,
thenpr esidedbyt heHonor ableArseni oSant os, nowr eti
red, issuedonMay18, 1964,anor derof
thistenor :"Afterconsi deri
ngt hemot ionoft heanci l
laryadmi nistrator,dat edFebr uary11, 1964,
aswel last heopposi tionfiledbyt heBenguetConsol i
dat ed, I
nc. ,theCour ther eby( 1)consi ders
asl ostf oral lpurposesi nconnect ionwi ththeadmi nistrationandl i
quidat i
onoft hePhi l
i
ppi ne
estateofI donahSl adePer kinsthest ockcer tif
icat escov eringt he33, 002shar esofst ock
standi ngi nhernamei nthebooksoft heBenguetConsol idated, I
nc.,(2)or der ssai dcerti
ficates
cancel led, and( 3)di rectssai dcor porat i
ontoi ssuenewcer ti
ficatesi nlieut her eof,thesamet o
bedel i
v eredbysai dcor porat i
ontoei therthei ncumbentanci llaryadmi nistratorort ot hePr obate
Divisionoft hi
sCour t."1

From suchanorder,anappeal wast akentot hi

sCour tnotbythedomi cil
iar
yadmi nistrat
or,t
he
CountyTrustCompanyofNewYor k, butbythePhi li
ppi
necorporat
ion,theBenguetConsol i
dated,
Inc.Theappealcannotpossiblypr
osper .Theor derchall
engedrepresentsar esponseand
expressesapoli
cy ,
toparaphraseFr ankfur
ter,ari
singoutofaspecifi
cpr oblem,addr essedto
theattai
nmentofspecifi
cendsbyt heuseofspeci fi
cremedies,
withfullandampl esuppor t
from l
egaldoct
rinesofweightandsi gnifi
cance.

Thef actswi llexplai

nwhy .Assetf or
thinthebr i
efofappel l
antBenguetConsol i
dat ed,I
nc.,
IdonahSl adePer ki
ns,whodi edonMar ch27, 1960i nNewYor kCity,leftamongot hers,t
wo
stockcer tif
icatescov er
ing33,002sharesofappel l
ant,thecer t
ifi
catesbei nginthepossessi on
oftheCount yTr ustCompanyofNewYor k,whichasnot ed, i
st hedomi ci
li
aryadmi nistr
atorof
theest ateoft hedeceased2Thencamet hispor ti
onoft heappel l
ant’sbrief:"
OnAugust12,
1960, Prosper oSanidadi nst
itut
edancil
laryadmi nistr
ationpr oceedingsi ntheCour tofFi r
st
Inst
anceofMani l
a;LazaroA.Mar quezwasappoi ntedanci l
laryadmi nistr
ator;andonJanuar y
22,1963, hewassubst i
tutedbytheappelleeRenat oD.Tay ag.Adi sput earosebet weent he
domi cil
iaryadmi nistr
atorinNewYor kandt heanci ll
aryadmi nistr
atori nthePhi l
ippinesast o
whichoft hem wasent i
tl
edt othepossessionoft hest ockcer ti
fi
catesi nquest i
on.OnJanuar y
27,1964, t
heCour tofFirstInstanceofMani l
aorder edthedomi cil
iar
yadmi nist
rat
or,County
TrustCompany ,to`produceanddeposi t’them witht heancill
aryadmini
stratororwiththeCl er
k
ofCourt.Thedomi cil
iar
yadmi nistr
atordidnotcompl ywiththeor der
,andonFebr uary11, 1964,
theancil
laryadminist
ratorpet i
tionedthecour tto"issueanor derdeclar
ingt hecert
if
icateor
cert
ifi
catesofstockscov er
ingt he33,002shar esissuedint henameofI donahSl adePer ki
nsby
BenguetConsolidated,Inc.bedecl ared[or]consideredasl ost.
"3

Iti
stobenot edfurt
herthatappel
lantBenguetConsoli
dated,I
nc.admitsthat"i
tisimmater i
al"
asfarasitisconcernedasto"whoi senti
tl
edtothepossessionofthestockcer t
if
icat
esin
questi
on;appell
antopposedthepetiti
onoftheancil
l
aryadmi ni
strat
orbecausethesaidst ock
cert
if
icat
esar ei
nexistence,
theyaretodayinthepossessionofthedomicili
aryadminist
rator,
theCountyTrustCompany ,i
nNewYor k,
U.S.A.
....
"4

I
tisit
sv iew,ther
efor
e,thatundertheci
rcumstances,t
hestockcert
ifi
cat
escannotbedeclar
ed
orconsideredaslost
.Mor eover,
itwoul
dallegethatt
herewasaf ai
lur
etoobservecert
ain
requi
rement sofit
sby-l
awsbef orenewstockcerti
fi
catescoul
dbeissued.Hence,i
tsappeal
.

Aswasmadecl earatt
heoutsetofthisopi
nion,theappeall
acksmerit
.Thechal
lengedor der
consti
tut
esanemphaticaf
fi
rmat i
onofjudi
cialauthor
it
ysoughttobeemasculat
edbyt hewi l
lf
ul
conductoft
hedomicil
i
aryadmi ni
str
atori
nrefusingtoaccor
dobediencetoacourtdecree.How,
then,
canthi
sorderbesti
gmatizedasill
egal
?

Asi str
ueofmanypr oblemsconf r
ont i
ngt hejudici
ary,suchar esponsewascal l
edforbythe
reali
ti
esofthesit
uation.Whatcannotbei gnoredisthatconductbor deri
ngonwi l
lf
uldef
iance,i
f
i
thadnotact ual
lyreachedit
,cannotwi thoutunduel ossofjudicialprest
ige,becondonedor
tol
erated.Fort
helawi snotsolackinginf lexi
bil
it
yandr esourceful
nessast oprecl
udesucha
soluti
on,themoresoasdeeperr eflecti
onwoul dmakecl earit
sbei ngbuttressedbyindi
sputabl
e
pri
nciplesandsupportedbythestrongestpol icyconsiderat
ions.

I
tcant rulybesaidthenthatt her esultarr
ivedatupheldandv i
ndicatedthehonoroft hejudici
ary
nolesst hanthatofthecount ry.Thr oughthischal
lengedor der,ther
eisthusdi spell
edthe
atmospher eofcontingentfrustrationbroughtaboutbyt heper si
stenceoft hedomi ci
li
ary
admi ni
strat
ortoholdont ot hest ockcer t
if
icat
esaf t
erithad,asadmi t
ted,vol
unt ar
il
ysubmi tt
ed
i
tselftothejuri
sdict
ionoft helowercour tbyenter
ingitsappear ancethroughcounsel onJune
27,1963, andfi
li
ngapet it
ionf orr eli
effr
om apr ev
iousor derofMar ch15, 1963.Thusdi dthe
l
owercour t,i
ntheordernowonappeal ,i
mpartv i
tali
tyandeffect
ivenesstowhatwasdecr eed.
Forwi thoutit,
whatithadbeendecidedwouldbesetatnaughtandnul l
if
ied.Unl
esssucha
blatantdisregardbythedomicil
i
aryadminist
rator,withr
esidenceabroad,ofwhatwas
previouslyordainedbyacourtordercoul
dbet husr emedied,i
twouldhav eentai
led,i
nsofaras
thismat terwasconcerned,notaparti
albutawel l
-nighcompleteparaly
sisofjudici
alaut
hor i
ty.

1.Appel lantBenguetConsol idated,Inc.di

dnotdi sput ethepoweroft heappelleeancil
lar
y
admi nistratortogaincontrol andpossessi onofal lasset soft hedecedentwi t
hinthejuri
sdict
ion
ofthePhi li
ppines.Norcoul dit.Suchapoweri sinher entinhi sdut ytoset t
leherestat
eand
sati
sf ythecl aimsoflocal creditors.5AsJust iceTuasonspeaki ngf orthisCourtmadecl ear,
it
i
sa" gener alrul
euniversall
yr ecogni zed"t
hatadmi nistration,whet herprinci
palorancil
lar
y ,
certainly"extendstot heasset sofadecedentf oundwi thinthest ateorcount r
ywher eitwas
granted,"t hecoroll
arybeing" thatanadmi nist
ratorappoi ntedinonest ateorcountryhasno
powerov erpr opert
yinanot herst ateorcount ry.
"6

Iti
st obenot edt hatthescopeoft hepoweroft heanci l
laryadmi nistr
atorwas, inanear li
ercase,
setforthbyJust iceMal colm.Thus: "I
tisof tennecessar yt ohav emor et hanoneadmi ni str
ati
on
ofanest ate.Whenaper sondiesi ntestateowni ngpr opertyinthecount ryofhi sdomi cileaswel l
asinaf oreigncount ry,
admi ni
str
at i
oni shadi nbot hcount ri
es.Thatwhi chi sgr antedi nt he
j
urisdictionofdecedent ’
sl astdomi cil
ei stermedt hepr i
ncipaladmi ni
str
at ion, whileanyot her
admi nistrati
oni st ermedt heancillaryadmi nistrat
ion.Ther easonf ort hel atterisbecausea
grantofadmi nistrat
iondoesnotexpr opri
ov igorehav eanyef fectbey ondt helimi t
soft he
count r
yi nwhi chitisgrant ed.Hence, anadmi nist
ratorappoi nt
edi naf orei gnst atehasno
authorityint he[ Phil
ippines].Theanci llar
yadmi ni
strati
onispr oper, whenev eraper sondi es,
l
eav i
ngi nacount ryothert hanthatofhi slastdomi cil
e,propertytobeadmi nisteredint henat ur
e
ofasset soft hedeceasedl i
ableforhisi ndividual debtsort obedi stri
but edamonghi shei r
s."7

Itwoul
df oll
owt henthattheauthor i
tyoftheprobatecour tt
orequirethatanci
ll
ary
administr
ator’
srightto"t
hestockcer t
ifi
catescoveri
ngt he33,002shar es..st
andi
ngi nher
namei nthebooksof[ appell
ant]BenguetConsol idat
ed, Inc.
."berespectedisequall
ybeyond
questi
on.Forappel l
antisaPhili
ppi necorporati
onowi ngf ul
lall
egianceandsubjecttothe
unrest
rict
edjuri
sdicti
onoflocal courts.It
ssharesofst ockcannott heref
orebeconsideredin
anywiseasi mmunef rom l
awful courtorders.

Ourhol
dinginWellsFar
goBankandUnionv
.Coll
ect
orofInter
nalRevenue8f i
ndsappli
cati
on.
"
Inthei
nstantcase,t
heact
ualsi
tusoft
heshar
esofstockisinthePhil
ippi
nes,thecor
porat
ion
bei
ngdomi cil
ed[her
e].
"Tot hefor
ceoftheaboveundeniabl
epr
oposit
ion,notevenappel
lanti
s
i
nsensi
ble.Itdoesnotdisputei
t.Norcoul
ditsuccessf
ull
ydosoevenifitweresominded.

2.Int hef aceofsuchi ncontroverti

bledoctri
nesthatargueinar atherconcl usivefashionf orthe
l
egal i
tyoft hechal l
engedor der,howdoesappel lantBenguetConsol i
dated,Inc.proposet ocar ry
theext remel yheavyburdenofper suasionofpreci
selydemonst rati
ngt hecont rary?Itwoul d
assignast hebasicerrorallegedlycommi t
tedbythelowercour tit
s" consideringasl ostthe
stockcer t
ifi
catescovering33,002shar esofBenguetbel ongingtot hedeceasedI donahSl ade
Perkins, ..."9Mor especifi
call
y, appell
antwouldstressthatthe" l
owercour tcouldnot` consider
asl ost’thest ockcert
ifi
catesinquest i
onwhen, asamat t
eroff act,hisHonort het r
ialJudge
knew, anddoesknow, andi ti
sadmi t
tedbyt heappell
ee,thatthesai dstockcer ti
fi
catesar ein
existenceandar etodayi nthepossessi onofthedomi ci
li
aryadmi nistrat
orinNewYor k.
"10

Theremaybeanel ementoff i
cti
onintheabov eviewoft hel owercour t.Thatcer t
ainl
ydoesnot
suff
icetocal
lforthereversaloftheappealedorder.Sincet herei sar efusal,persi
stentl
y
adheredtobythedomi cil
i
aryadmi ni
strat
orinNewYor k,todelivert heshar esofst ocksof
appell
antcor
porati
onownedbyt hedecedenttotheanci ll
aryadmi nistr
atorint hePhili
ppines,
ther
ewasnot hi
ngunr easonableorarbitr
aryi
nconsi deri
ngt hem asl ostandr equi
ri
ngt he
appell
anttoi
ssuenewcer ti
fi
catesinli
euthereof
.Ther eby,thet aski ncumbentundert hel awon
theancil
l
aryadministr
atorcouldbedischargedandhi sr esponsi bil
it
yf ulf
il
led.

Anyothervi
ewwoul dr esultinthecompl iancet oav ali
djudici
alorderbei ngmadet odependon
theuncont
roll
eddiscreti
onoft hepartyorent ity,inthiscasedomi cil
edabr oad,whichthusfar
hasshownt heutmostper sistenceinref usingt oyiel
dobedi ence.Certainly,
appel
lantwouldnot
beheardtocontendinal lseriousnesst hataj udicialdecr
eecoul dbet reatedasamer escrapof
paper,
thecourti
ssuingi tbeingpower lesst or emedyi tsfl
agrantdisregard.

Itmaybeadmi ttedofcoursethatsuchall
egedlossasf oundbythelowercour
tdidnot
correspondexactl
ywiththefacts.Tobemor eblunt,t
hequal i
tyoftr
uthmaybel ackinginsucha
conclusionar
ri
vedat.Itist
ober emember edhowev er,againt
oborrowfrom Fr
ankf urt
er,"
that
fict
ionswhichthelawmayr elyuponinthepursuitoflegit
imateendshaveplay
edani mportant
partinit
sdevelopment."11

Speaki
ngofthecommonlawini
tsearl
ierper
iod,Car
dozocoul
dstat
ethatf
icti
ons"
were
devi
cestoadvancet
heendsofj
ust
ice,
[evenif]cl
umsyandatt
imesoff
ensi
v e.
"12Someof
them haveper sistedeventothepresent,thateminentj
uri
st,noti
ng"thequasicontr
act,t
he
adoptedchild,theconst r
ucti
vetr
ust,all
off lour
ishi
ngvit
ali
ty,t
oattesttheempireof`asi
f’
today."13Hel ikewisenoted"acl
assoff icti
onsofanotherorder,t
hef i
cti
onwhichisawor ki
ng
toolofthought, butwhichatti
meshi desitselff
rom vi
ewt i
l
lrefl
ecti
onandanalysishavebrought
i
tt otheli
ght."14

Whatcannotbedi sputed,t
her ef
ore,i
stheatt i
mesi ndi
spensabler ol
et hatficti
onsassuch
playedinthelaw.Thereshoul dbet henont hepartoftheappellantaf urtherrefi
nementinthe
catholi
cit
yofitscondemnat ionofsuchj udici
altechni
que.Ifeveranoccasi ondidcallf
orthe
empl oymentofal egalfi
cti
ont oputanendt otheanomaloussi tuati
onofav al
i
djudici
alorder
beingdisregardedwithappar enti
mpunity,thi
sisit.Whatisthusmostobv iousisthatt
his
parti
cularall
egederrordoesnotcar rypersuasion.

3.Appell
antBenguetConsol i
dated, I
nc.woul dseekt obolstert
heabov econt ent
ionbyits
i
nv oki
ngoneoft hepr ovi
sionsofitsby -
lawswhi chwoul dsetfort
ht heproceduretobef oll
owed
i
ncaseofal ost
, st
olenordest r
oyedst ockcer ti
ficat
e;itwouldstressthatintheeventofa
contestorthependencyofanact ionr egardingowner shi
pofsuchcer t
if
icat
eorcer t
if
icatesof
stockall
egedlylost,stol
enordest royed, t
hei ssuanceofanewcer t
ifi
cateorcerti
fi
cateswould
awaitthe"f
inaldecisionby[a]cour tregardingt heowner shi
p[ t
hereof]
."15

Suchreli
ancei smisplaced.I nthef i
rstplace,t
herei snosuchoccasiont oappl ysuchaby -l
aw.I
t
i
sadmi ttedt hatt
hef oreigndomi ci
li
ar yadminist
ratordidnotappealfrom t heordernowi n
questi
on.Mor eover,
ther eislikewiset heexpressadmi ssionofappel
lantt hatasfarasi ti
s
concerned, "
itisi
mmat erial...whoi sent i
tl
edt othepossessi onoft
hest ockcer t
ifi
cates...
"
Evenifsuchwer enott hecase, i
twoul dbeal egalabsur di
tytoimpar
tt osuchapr ovi
sion
concl
usiv enessandf inali
ty.Assumi ngt hatacont rari
etyexist
sbetweent heabov eby -
lawand
thecommandofacour tdecree,thel att
eristobef oll
owed.

Itisunderst
andable,
asCar dozopointedout,t
hattheConsti
tut
ionov er
ri
desastat
ute,
towhi ch,
howev er
,thejudi
ciar
ymusty ielddef
erence,whenappropri
atel
yinv
okedanddeemedappl i
cable.
Itwouldbemosthi ghlyunort
hodox,howev er
,ifacorpor
ateby-
lawwoul dbeaccor
dedsucha
highestateinthej
uralorderthatacourtmustnotonlytakenoteofitbutyi
eldt
oitsal
leged
control
li
ngforce.

Thef
earofappel
l
antofacont
ingentl
i
abi
l
itywi
thwhi
chi
tcoul
dbesaddl
edunl
esst
heappeal
ed
orderbesetasidef ori
tsinconsistencywi thoneofitsby-l
awsdoesnoti mpressus.I t
s
obediencet oalawfulcourtordercertainlyconsti
tut
esav al
iddefense,assumingt hatsuch
apprehensionofapossi blecourtacti
onagai nsti
tcoul
dpossiblymat eri
ali
ze.Thusf ar,not
hing
i
nt hecircumstancesast heyhav edev elopedgivessubst
ancetosuchaf ear.Gossamer
possibi
lit
iesofaf ut
ureprejudi
cet oappel lantdonotsuff
icetonull
if
yt helawfulexerciseof
j
udicialauthor
it
y .

4.Whati
smorethevi
ewadopt
edbyappel
lantBenguetConsoli
dat
ed,
Inc.i
sfr
aughtwi
th
i
mpli
cati
onsatwarwi
tht
hebasi
cpost
ulat
esofcor por
atetheor
y.

West artwit
htheundeni abl
epr emisethat,"
acorporati
onisanar t
ifi
cialbei
ngcr eatedby
operati
onoflaw... "16Itowesi t
sl i
fetothestate,i
tsbir
thbeingpur elydependentoni tswil
l
.
AsBer l
esoapt lystated:"Classi
call
y,acorporati
onwasconcei vedasanar t
if
ici
al person,owing
i
tsexistencethroughcr eati
onbyasov erei
gnpower .17Asamat t
eroff act,t
hest atutor
y
l
anguageempl oyedowesmucht oChi efJusti
ceMar shal
l,whoi ntheDar tmouthCol lege
decisi
on,defi
nedacor porationpreci
selyas"anar t
if
ici
albeinginvi
sible,int
angible,andexisti
ng
onlyincontempl at
ionofl aw."18

Thewel l
-knownaut horityFletchercouldsummar i
zethemat terthus: "
Acor porati
onisnoti nfact
andinrealit
yaper son, butthel awtreatsitast houghitwereaper sonbypr ocessoff i
cti
on, or
byregardingitasanar t
ifi
cialpersondi sti
nctandsepar at
efrom i t
si ndi
vidualstockhol
ders..It
owesi t
sex i
stencetol aw.Itisanar t
if
icialpersoncreatedbyl awforcer t
ainspeci f
icpurposes,
theextentofwhoseexi stence, powersandl iberti
esisfi
xedbyi tschar t
er."19DeanPound’ s
ter
sesummar y,ajuristi
cper son, r
esulti
ngf r
om anassoci at
ionofhumanbei ngsgr ant
edl egal
personali
tybythest ate,putst hemat t
erneat ly.20

Therei sthusar eject

ionofGi erke’
sgenosssenchaftt heory,
thebasicthemeofwhi chtoquote
from Friedmann, "i
sther eal
ityofthegroupasasoci alandlegalenti
ty,i
ndependentofstate
recognitionandconcessi on."21Acor porati
onasknownt oPhili
ppi
nejurisprudenceisa
creaturewi t
houtanyexi stenceuntili
thasreceivedthei mprimaturofthest at
eactingaccordi
ng
tolaw.I tisl
ogicallyi
nconcei v
abletheref
orethatitwillhaveright
sandpr ivi
legesofahigher
prior
itythant hatofit
scr eator.Morethanthat,i
tcannotl egi
timatel
yrefuset oyiel
dobedienceto
actsofi tsstateorgans,certainl
ynotexcludi
ngt hejudici
ary,whenevercalledupont odoso.

Asamat
teroff
act
,acor
por
ati
ononcei
tcomesi
ntobei
ng,
fol
l
owi
ngAmer
icanl
awst
il
lof
persuasi
veaut hor
ityinourj
urisdi
cti
on, comesmor eoft
enwi t
hinthekenoft hejudici
aryt
han
theothertwocoor dinat
ebranches.Itinsti
tutestheappropr
iat
eCour tActi
ont oenforceit
sright
s.
Correl
ati
vely
,itisnotimmunef r
om judici
al control
int
hoseinstances,whereadut yunderthe
l
awasascer t
ainedinanappr opri
atelegalpr oceedi
ngiscastuponit.

Toassertthatitcanchoosewhichcourtordertofol
lowandwhi chtodisregardist oconf er
uponitnotautonomywhi chmaybeconcededbutl i
censewhichcannotbet olerated.Itisto
arguethatitmay,whensomi nded,over
rul
et hestat
e,thesour
ceofitsv eryexistence;iti
sto
contendthatwhatanyofitsgovernmental
or gansmayl awf
ull
yrequir
ecoul dbei gnoredatwi l
l
.
Soextravagantaclai
m cannotpossibl
ymer i
tapproval
.

5.Onel astpoi nt.InViloriav .AdministratorofVet eransAf f

airs,22itwasshownt hati na
guardianshi pproceedingt henpendi ngi nal owercour t,t
heUni tedStatesVeter ans
Admi nistrati
onf i
ledamot i
onf orther efundofacer tai
nsum ofmoneypai dtot hemi norunder
guardianshi p,all
egingt hatthel owercour thadpr ev i
ouslygrantedi t
spet i
ti
ont oconsi derthe
deceasedf atherasnotent i
tledtoguer i
llabenefit
saccor di
ngt oadet erminati
onar r
ivedatbyits
mainof fi
cei ntheUnitedSt ates.Themot ionwasdeni ed.Inseekingar econsider ati
onofsuch
order,theAdmi nistr
atorr eli
edonanAmer icanfeder alst
atutemaki nghisdeci sions"finaland
conclusi v
eonal lquestionsofl aworf act"precl
udi nganyot herAmer icanof f
icialtoexami nethe
mat t
eranew, "
exceptaj udgeorj udgesoft heUnitedSt atescour t
."23Reconsi der at
ionwas
denied, andt heAdmi nist r
atorappeal ed.

Inanopi ni
onbyJust iceJ.B.L.Rey es,wesust ainedt hel owercour t.Thus: "Wear eoftheopinion
thattheappeal shoul dber ejected.Thepr ovi
sionsoft heU. S.Code, invokedbyt heappel l
ant,
maket hedeci sionsofU. S.Vet eranAdmi nist
ratorf i
nal andconcl usivewhenmadeoncl aims
properlysubmi ttedt ohimf orr esol uti
on; buttheyar enotappl i
cabl etot hepr esentcase, where
theAdmi nistr
atori snotact i
ngasaj udgebutasal i
tigant.Ther eisagr eatdiff
erencebet ween
actionsagai nstt heAdmi nistrator( whichmustbef i
ledst ri
ctl
yinaccor dancewi ththecondi ti
ons
thatarei mposedbyt heVet erans’ Act,includingt heexcl usiverev i
ewbyUni tedStatescour t
s),
andt hoseact ionswher etheVet erans’ Admi nistr
atorseeksar emedyf rom ourcour tsand
submi tst otheirjurisdicti
onbyf il
ingact ionst herein.Ourat tentionhasnotbeencal l
edtoany
l
awort reatythatwoul dmaket hef i
ndingsoft heVet erans’ Admi ni
strator ,i
nactionswher ehei s
apar ty
, conclusiv eonourcour ts.That ,inef f
ect,woul ddepr iveourt ribunalsofj udi
cial
discret
ionandr endert hem mer esubor dinateinstrument al
iti
esoft heVet erans’
Admi nistrator
."cralawv i
rt
ua1awl i
br ar
y
Iti
sbadenoughast heVilori
adecisionmadepat entforourj
udici
arytoacceptasf i
naland
conclusive,
deter
mi nati
onsmadebyf or
eigngovernmentalagenci
es.Itisinf
ini
tel
yworseif
thr
ought heabsenceofanycoer civepowerbyourcour tsoverj
uri
dicalpersonswithi
nour
j
urisdict
ion,t
heforceandef f
ecti
vit
yoft hei
rorderscouldbemadet odependont hewhi m or
capriceofali
enentiti
es.Itisdif
fi
culttoimagineofasi t
uati
onmor eoffensiv
etothedignit
yof
thebenchort hehonoroft hecountry.

Yetthatwouldbet heeff
ect,evenifunint
ended,ofthepropositi
ontowhi chappellantBenguet
Consoli
datedseemst obef i
rmlycommi t
tedasshownbyi tsfail
uretoacceptt hev ali
dit
yofthe
ordercomplai
nedof ;i
tseeksitsrever
sal.Cert
ainl
ywemustatal lpainsseetoi tt
hati tdoesnot
succeed.Thedeplorabl
econsequencesat t
endantonappellantprevail
i
ngattesttot henecessit
y
ofanegativeresponsefrom us.Thatiswhatappellantwil
lget.

Thatisall
thent hatthi
scasepresent s.Itisobv i
ouswhyt heappeal cannotsucceed.I ti
salways
easytoconjureextremeandev enoppr essivepossibili
ti
es.Thatisnotdecisive.Itdoesnot
sett
letheissue.Whatcar ri
esweightandconv i
cti
oni stheresultar
rivedat,t
hej ustsoluti
on
obtai
ned,groundedi nthesoundestofl egal doctr
inesanddi sti
nguishedbyitscor respondence
withwhatasenseofr eal
ism r
equires.Fort hrought heappealedorder ,t
heimper ati
ve
requi
rementofj ust
iceaccordi
ngt olawi ssat i
sfi
edandnat i
onal di
gnityandhonormai ntai
ned.

WHEREFORE, theappeal
edor
deroftheHonor
abl
eArseni
oSantos,
theJudgeoftheCourtof
Fi
rstI
nstance,dat
edMay18,1964,
isaff
ir
med.Wit
hcostsagai
nstopposi
tor
-appel
l
antBenguet
Consol
idated,
Inc.

Makal
i
ntal
,Zal
div
ar,
andCapi
str
ano,
JJ.
,concur
.

Concepci
on,
C.J.
,Rey
es,
J.B.
L.,
Dizon,
SanchezandRui
zCast
ro,
JJ.
,concuri
nther
esul
t.

Endnot
es:

1.St
atementoft
heCaseandI
ssuesI
nvol
ved,
Bri
eff
ort
heopposi
tor
-appel
l
ant
.,p.2.
2.I
bid,
p.3.

3.I
bid,
pp.3t
o4.

4.I
bid,
p.4.

5.Rule84, Sec.3, RulesofCour t

.Cf.Paviav.del aRosa, 8Phi l.70(1907) ;Suil
iongandCo.v .
Chio-
Tay san,12Phi l.13(1908) ;Malahacanv .Ignacio,19Phi l.434( 1911) ;McMi ckingv.Sy
Conbieng,21Phi l
.211( 1912) ;I
nr eEstat
eofDeDi os, 24Phi l.573( 1913) ;Santosv .Manar ang,
27Phi l
.209( 1914) ;Jaucianv .Querol,
38Phi l.707(1918) ;Buenav enturav .Ramos, 43Phil
.704
(1922);Roxasv .Pecson, 82Phi l
.407(1948); DeBorjav .DeBor j
a,83Phi l.405( 1949);Barracav.
Zayco,88Phi l.774( 1951) ;
Pabi l
oniav.Santi
ago, 93Phi l.516( 1953);Sisonv .Teodor o,98Phi l
.
680(1956) ;Ozaet av .Pal
anca, 101Phi l
.976( 1957);NatividadCast elvideRaqui zav .Castelvi
,Et
Al.
,L-17630, Oct.31, 1963;Habanav .I
mbo, L-15598&15726, March31, 1964; Gl i
ceri
aLiwanag
v.Hon.LuisRey es,L-19159, Sept.29,1964;Ignaciov .El
chi co, L-18937, May16, 1967.

6.LeonandGhezzi
v.Manuf
.Li
feI
ns.Co.
,90Phi
l
.459(
1951)
.

7.Johannesv
.Har
vey
,43Phi
l
.175,
177-
178(
1922)
.

8.70Phi
l
.325(
1940)
,Cf
.Per
kinsv
.Di
zon,
69Phi
l
.186(
1939)
.

9.Briefforoppositor-
appellant,
p.5.TheAssignmentofEr rorr
eads:"Thel owercourterr
edin
enteri
ngi tsorderofMay18, 1964,(1)consi
deringaslostt
hestockcer t
if
icatescoveri
ng33,002
sharesofBenguetbel ongi
ngt othedeceasedI donahSladePerki
ns,(2)orderingt
hesaid
certi
ficatescancell
ed,and( 3)orderi
ngappell
antt oi
ssuenewcer t
if
icatesinlieut
hereofandto
deli
vert hem totheancill
aryadmi ni
strat
orofthedeceasedIdonahSladePer kinsortothe
probat edivi
sionofthelowercour t.
"cral
awvir
tua1awlibrar
y

10.I
bid,
pp.5t
o6.
11.Nashv
il
leC.St
.Loui
sRyv
.Br
owni
ng,
310US362(
1940)

12.Car
dozo,
ThePar
adoxesofLegal
Sci
ence,
34(
1928)

13.I
bid,
p.34.

14.I bid,p.34.Thel ateProfessorGr ayi nhisTheNat ureandSour cesoftheLaw, di

stingui
shed,
followingI heri
ng, histor
icficti
onsf rom dogmat i
cfictions,t
hef or
merbeingdev icestoal l
owt he
addi ti
onofnewl awt ooldwi thoutchangi ngthefor m oftheol dlawandt helatterbeingintended
toar ranger ecogni zedandest abl
isheddoct ri
nesundert hemostconv enientforms.pp.30, 36
(1909)Speaki ngofhi st
ori
cf icti
ons, Grayadded: "Suchf ict
ionshav ehadt hei
rfieldofoper ati
on
l
ar gelyint hedomai nofpr ocedure,andhav econsistedinpr etendi
ngthataper sonort hi
ngwas
othert hant hatwhi chheori twasi nt r
uth( orthatanev enthadoccur r
edwhi chhadnoti nfact
occur red)f orthepur poseoft herebygi vinganact ionatl awt ooragainstaper sonwhodi dnot
reallycomewi thi
nt heclasst ooragai nstwhi chtheol dactionwasconf i
ned."Ibid,pp.30-31See
alsoPound, ThePhi losophyofLaw, pp.179, 180,274( 1922)

15.Thisiswhatt hepar t
icularby-l
awpr ovi
des:Section10.Lost,StolenorDestroyedCerti
ficat
es.
—Anyr egist
eredst ockholderclaimingacer t
if
icateorcerti
fi
catesofst ocktobelost,st
olenor
destroyedshall f
ileanaf fi
dav i
tintr
ipl
icat
ewi t
ht heSecretar
yoft heCompanyorwi t
honeofi ts
TransferAgent s,setti
ngf or
t h,i
fpossi
ble,thecir
cumst ancesast ohow, whenandwher esai d
cert
ifi
cateorcer tif
icateswasorwer elost,st
olenordest r
oyed,thenumberofshar es
representedbyt hecer ti
fi
cateorbyeachoft hecer t
if
icat
es,theserialnumberornumber soft he
cert
ifi
cateorcer tif
icatesandt henameoft hi
sCompany .Theregisteredstockhol
dershallalso
submi tsuchot herinformationandev idencewhi chhemaydeem necessar y.

x x x

Ifacontesti
spresentedtotheCompany,ori
fanacti
onispendi
ngincourtr
egar
dingthe
ownershipofsai
dcertif
icat
eorcert
if
icat
esofst
ockwhichhavebeenclai
medtohav ebeenlost
,
stol
enordestroyed,
theissuanceoft
henewcerti
fi
cateorcer
ti
fi
cat
esinli
euofthatorthose
cl
aimedtohavebeenl
ost
,st
olenordest
royed,
shal
lbesuspendedunti
lfi
nal
decisi
onbythe
courtr
egar
dingt
heowner
shi
pofsaidcerti
fi
cat
eorcert
if
icat
es.Br
ieff
oropposi
tor-
appel
l
ant,pp.
8-10.

16.Sec.2,
ActNo.1459(
1906)

17.Ber
le,
TheTheor
yofEnt
erpr
iseEnt
it
y,47Co.LawRev
.343(
1907)

18.Dar
tmouthColl
egev.Woodward,4Wheat
.518(1819)
.Cookwoul
dtr
acesuchaconceptt
o
LordCoke.See1CookonCorpor
ations,
p.2(
1923)

19.1Flet
cher
,Cycl
opedi
aCorpor
ations,
pp.19-
20(193l
).Chancel
l
orKentandChi
efJust
ice
Baldwi
nofConnecti
cutwer
eli
kewisecit
edtothesameeffect
.Atpp.12-
13.

20.4PoundonJur
ispr
udence,
pp.207-
209(
1959)

21.Fr
iedmann,
LegalTheory,
pp.164-
168(
1947)
.Seeal
soHol
dswor
th,
Engl
i
shCor
por
ati
onLaw,
31YaleLawJournal
,382(1922)

22.101Phi
l
.762(
1957)

23.38USCA,
Sec.808.