1. Ms. Purity, a spinster, is a registered owner of several parcels of land. Ms.

Purity
dedicated her life to the service of her local church and helping others. The Missionary
Sisters Mary (The Missionary), is a religious and charitable group established on January
20, 2000. The Missionary is headed by a Catholic nun, in the person of Mother Maricon.
Because of their shared passion for helping others, the two ladies became close friends.
Sometime in February 2010, Ms. Purity accompanied by Mother Maricon, went to a
hospital for a check-up due to persistent fever. Ms. Purity was then diagnosed to be
suffering from a viral infection and was immediately admitted to the hospital. All the time
Ms. Purity was hospitalized, Mother Maricon never left her side. Sometime in March 1,
2010, Ms. Purity sent a letter to Mother Maricon and informed that latter that the former
is donating a parcel of land registered in her name together with the house built on it to
the Missionary. On June 14, 2010, Mother Maricon, upon the instance of Ms. Purity,
accompanied the latter to a notary public for the execution of a deed of donation. During
their meeting, lawyer asked Mother Maricon whether their group is registered with the
SEC, to which the latter replied in the negative. Upon the advice given Mother Maricon
went to SEC and filed the corresponding registration application on June 15, 2001. The
following day, the deed of donation executed by Ms. Purity in favor of the Missionary was
notarized.
Sometime in the year 2021, Ms. Purity died of Covid19. Ms. Purity was survived only by
Altivo, her brother of full blood. On April 5, 2021, Altivo filed a Complaint before the RTC,
seeking to annul the Deed executed between Ms. Purity and the Missionary, on the
ground that at the time the donation was made, the latter was not registered with the SEC
and therefore has no juridical personality and cannot legally accept the donation.
a) Is the Missionary considered as a corporation, if so what kind of corporation? Explain
(5 pts)
b) If the Missionary raises the defense of collateral attack on its corporate existence, will
the defense prosper? Explain. (5 pts)
c) Is Altivo correct? Explain. (5 pts)

2. Budol Club Inc. is a corporation whose primary purpose as stated in its articles of
incorporation is to engage in the business of providing world class golf resort. Among its
stated secondary purposes

a. A golf course that would meet the standards of the PGA.

b. Club facilities with a restaurant

c. Covered parking lot

Because of the above-stated purposes of Budol Club Inc., Boy Ilaron was persuaded into
subscribing and paying several shares of stock of Budol Club Inc. Five years after Budol
Club Inc. was issued with a Certificate of Registration by the SEC, none of the above-

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mentioned purposes were met and Budol Club has not yet commenced its business
operation. On the sixth year, only the covered parking lot was constructed. Feeling
deceived, Boy Ilaron filed for a Petition for Cancellation of Budol Club’s certificate of
registration with a prayer for the refund of his paid subscription of shares. Budol Club Inc.
For its part, Budol Club Inc. raised the defense that the issue at hand is an intra-corporate
dispute, hence it is the regional trial court which has jurisdiction.
a) When does corporate existence begin? When does it end? (5 pts)
b) What is the consequence of the failure of a corporation to formally organize and
commence its business within five (5) years from the date of its incorporation? (5 pts)
c) Does the SEC have jurisdiction over the petition with prayer for refund filed by Boy
Ilaron? Explain. (5 pts)

3. Cebuano Pawnshop Corp. is a corporation registered with the SEC on March 1, 2010
with its principal office located along Junquera, Cebu City. Its articles of incorporation
states that its primary purpose is to engage in the business of pawnbroking.
Cebuana Loan Company Corp. is a corporation duly registered with the SEC on August
7, 2015 with a principal office located along Subangdako, Mandaue City. Based on its
articles of incorporation, its primary purpose is to act as a lending investor without
however, engaging in pawnbroking as defined by law.
Sometime in 2017, Cebuano Pawnshop Corp. filed a complaint against Cebuana Loan
Company Corp alleging that:
i) The latter started operating and doing business as a pawnshop or “sanglaan” in the
same area where the former had its own pawnshop in violation of its primary purpose
and without the sanction of the Central Bank to engage in the pawnshop business.
ii) The business “Cebuana” Loan bears similarity in spelling and phonetics with the
corporate name of Cebuano Pawshop thereby creating constant confusion in the minds
of the public and the customers of the latter.
Cebuana Loan Company in its answer moved for the dismissal of the complaint and
alleged that a prior determination by the Central Bank of alleged violation of the
Pawnshop Regulation Act is a condition precedent to the exercise of SEC of its
regulator

a) Does the SEC have the power to disallow the use of a corporation name? If so, what
are the grounds? (5 pts)
b) Is the contention of Cebuana Loan Company Corp. correct? Explain. (5 pts)

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4) Which of the following can be subjected to collateral attack (2 pts)
on its exercise of corporate powers
a) De Jure Corporation
b) De Facto Corporation
c) Government owned and controlled corporation
d) All of the above
e) None of the above

5) Which of the following can be subjected to a quo warranto petition: (2 pts)

a) De Jure Corporation
b) De Facto Corporation
c) Government owned and controlled corporation
d) All of the above
e) none of the above

6. Which of the following is actually and legally a non-existent juridical entity (2 pts)

a) Corporation by estoppel
b) De Facto Corporation
c) Government owned and controlled corporation
d) All of the above
e) none of the above

7. Which of the following can be an incorporator. (2 pts)

a) Partnership
b) Corporation
c) A Lawyer
d) All of the above

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e) only a and b

-end-