Keywords and Doctrinal Rulings
Corporation Law Cases
Definition, Nature and Attributes of a Corporation
Tayag vs. Benguet Consolidated, Inc.,
GR No. L-23415, Nov. 29, 1968;
Keywords: Stock certificates, Domiciliary &
Ancillary Administrator
Care Best International, Inc. v. SEC,
G.R. No. 215510, March 16, 2015   
Keywords: Aliases/Fictitious names,
Certificate of Registration,  
Philippine Stock Exchange, Inc. vs. Court
of Appeals, 281 SCRA 232;
G.R. No. 125469. October 27, 1997
Keywords: List of Shares, PALI – domestic
real estate corp.
T.SEJANE
Benguet Consolidated, Inc. is a Philippine corporation owing
full allegiance and subject to the unrestricted jurisdiction of local
courts.
Assuming that a contrariety exists between the above by-law and
the command of a court decree, the latter is to be followed.
Corporation is an artificial being created by operation of
law...."It owes its life to the state, its birth being purely
dependent on its will.  Cannot ignore the source of its very
existence.
Incorporation is a mere grant of privilege from the State. In
order to be entitled to such privilege, the requirements and
procedures for the grant thereof must be complied with. 
Under Section 14 (5) of the Corporation Code, the articles of
incorporation must state the names of the incorporators and this
must necessarily refer to their legal names, not fictitious names
or aliases which they have no authority to use, as in this case. 
The fact that petitioner had for its clients various government
agencies is irrelevant as all corporations must comply with the
provisions of the Corporation Code.
The PSE’s management prerogatives are not under the absolute
control of the SEC, for the PSE is, after all, a corporation
authorized by its corporate franchise to engage in its proposed
and duly approved business.— One of the PSE’s main concerns,
as such, is still the generation of profit for its stock-holders.
Moreover, the PSE has all the rights pertaining to corporations,
including the right to sue and be sued, to hold property in its
own name, to enter (or not to enter) into contracts with third
persons, and to perform all other legal acts within its allocated
express or implied powers.
The SEC has both jurisdiction and authority to look into the
decision of PSE pursuant to the Revised Securities Act and for
the purpose of ensuring fair administration of the exchange. (but
only if the exercise of the PSE’s powers was attended with
bad faith. The denial of the application of PALI is proper
due to the controversies surrounding its ownership.)
Keywords and Doctrinal Rulings
Corporation Law Cases
Attributes of a Corporation
PNB vs. Andrada Electric Engineering Co.,
381 SCRA 244; G.R. No. 142936
G.R. No. 142936. April 17, 2002
Keywords: Corporate Veil,
repairs/construction, acquired the assets earlier (1) control—not mere stock control, but complete domination—
foreclosed
International Express Travel & Tour
Services, Inc. vs. Court of Appeals, 343
SCRA 674  juridical personality, the State must give its consent either in the
G.R. No. 119020. October 19, 2000
Keywords: Sport association,
T.SEJANE
A corporation is an artificial being created by operation of law.
It possesses the right of succession and such powers, attributes,
and properties expressly authorized by law or incident to its
existence. It has a personality separate and distinct from the
persons composing it, as well as from any other legal entity to
which it may be related. This is basic.
Piercing the Corporate Veil; The corporate mask may be
removed or the corporate veil pierced when the corporation
is just an alter ego of a person or of another corporation.—
For reasons of public policy and in the interest of justice, the
corporate veil will justifiably be impaled only when it becomes a
shield for fraud, illegality or inequity committed against third
persons.
Elements before piercing the veil of corporate fiction may be
allowed.—Piercing the veil of corporate fiction may be
allowed only if the following elements concur:
not only of finances, but of policy and business practice in
respect to the transaction attacked, must have been such that the
corporate entity as to this transaction had at the time no separate
mind, will or existence of its own;
(2) such control must have been used by the defendant to
commit a fraud or a wrong to perpetuate the violation of a
statutory or other positive legal duty, or a dishonest and an
unjust act in contravention of plaintiff ’s legal right; and
(3) the said control and breach of duty must have proximately
caused the injury or unjust loss complained of.
It is a basic postulate that before a corporation may acquire
form of a special law or a general enabling act.
Corporation Law; National Sports Associations; Statutes; R.A.
3135 and P.D. No. 604 recognized the juridical existence of
national sports associations.—As correctly observed by the
appellate court, both R.A. 3135 and P.D. No. 604 recognized the
juridical existence of national sports associations. This may be
gleaned from the powers and functions granted to these
associations. 
The powers and functions granted to national sports
associations clearly indicate that these entities may acquire a
juridical personality.—The above powers and functions granted
to national sports associations clearly indicate that these entities
may acquire a juridical personality. The power to purchase,
sell, lease and encumber property are acts which may only
be done by persons, whether natural or artificial, with
juridical capacity. However, while we agree with the appellate
court that national sports associations may be accorded
corporate status, such does not automatically take place by
Keywords and Doctrinal Rulings
Corporation Law Cases
SME Bank, Inc. vs. De Guzman,
G.R. No. 184517 & GR No. 186641, October
8, 2013
Keyword: Financial difficulties, Stock sale,
turnover, Resignation, Not Rehired
Monfort Hermanos Agricultural Dev. Corp.
vs. Monfort, III, 434 SCRA 37
G.R. No. 155472. July 8, 2004
Keywords: Haciendas, Board Members, force
and intimidation
T.SEJANE
the mere passage of these laws. 
Contrary to petitioner bank’s argument, there was no transfer of
the business establishment to speak of, but merely a change in
the new majority shareholders of the corporation.
The employees are not transferred to a new employer, but
remain with the original corporate employer, notwithstanding
an equity shift in its majority shareholders. This being so, the
employment status of the employees should not have been
affected by the stock sale.
A change in the equity composition of the corporate
shareholders should not result in the automatic termination of
the employment of the corporation’s employees.
The sale was a Stock Sale whereby the transferee acquires the
controlling shares of stock of the corporation. Thus, following
the rule in stock sales, respondent employees may not be
dismissed except for just or authorized causes under the Labor
Code.
A corporation has no power except those expressly conferred on
it by the Corporation Code and those that are implied or
incidental to its existence. In turn, a corporation exercises said
powers through its board of directors and/or its duly authorized
officers and agents. Thus, it has been observed that the power of
a corporation to sue and be sued in any court is lodged with the
board of directors that exercises its corporate powers. 
Corporations are required under Section 26 of the Corporation
Code to submit to the SEC within thirty (30) days after the
election the names, nationalities and residences of the elected
directors, trustees and officers of the Corporation. 
The General Information Sheet shall state, among others,
the names of the elected directors and officers, together with
their corresponding position title.
In the case at bar, the fact that four of the six Members of the
Board listed in the 1996 General Information Sheet were already
dead at the time the March 31, 1997 Board Resolution was
issued, does not automatically make the four signatories (i.e.,
Paul M. Monfort, Yvete M. Benedicto, Jaqueline M. Yusay and
Ester S. Monfort) to the said Board Resolution (whose name do
not appear in the 1996 General Information Sheet) as among the
incumbent Members of the Board. This is because it was not
established that they were duly elected to replace the said
Keywords and Doctrinal Rulings
Corporation Law Cases
University of Mindanao vs. Bangko Sentral
ng Pilipinas,
G.R. No. 194964-65, January 11, 2016
Keywords: Mortgage Contract, Board
Resolution
Spouses Fernandez vs. Smart
Communications, Inc.,
G.R. No. 212885, July 17, 2019.
Keywords:
Entitlement to Constitutional Guarantees as a Juridical Person
Stonehill vs. Diokno, 20 SCRA 383
G.R. No. L-19550. June 19, 1967
Keywords: Search warrants, offices of the
corporation, residences of petitioners, offense
T.SEJANE
deceased Board Members.
Acts of an officer that are not authorized by the board of
directors/trustees do not bind the corporation unless the
corporation ratifies the acts or holds the officer out as a person
with authority to transact on its behalf.
Corporations are artificial entities granted legal personalities
upon their creation by their incorporators in accordance with
law. Unlike natural persons, they have no inherent powers.
Third persons dealing with corporations cannot assume that
corporations have powers. It is up to those persons dealing with
corporations to determine their competence as expressly defined
by the law and their articles of incorporation.
Being a juridical person, petitioner cannot conduct its business,
make decisions, or act in any manner without action from its
Board of Trustees; The corporation may, however, delegate
through a board resolution its corporate powers or functions
to a representative, subject to limitations under the law and the
corporation’s articles of incorporation.
Constitutional Law; Search warrants; Corporations; Only party
affected may contest legality of seizure effected by search
warrants.—Officers of certain corporations, from which
documents, papers and things were seized by means of search
warrants, have no cause of action to assail the legality of the
seizures because said corporations have personalities distinct
and separate from those of said officers. The legality of a seizure
can be contested only by the party whose rights have been
impaired thereby. The objection to an unlawful search is purely
personal and cannot be availed of by third parties.
As regards the first group, we hold that petitioners herein have
no cause of action to assail the legality of the contested warrants
and of the seizures made in pursuance thereof, for the simple
reason that said corporations have their respective
personalities, separate and distinct from the personality of
herein petitioners, regardless of the amount of shares of stock
or of the interest of each of them in said corporations, and
whatever the offices they hold therein may be.
Consequently, petitioners herein may not validly object to the
use in evidence against them of the documents, papers and
things seized from the offices and premises of the corporations
adverted to above, since the right to object to the admission of
Keywords and Doctrinal Rulings
Corporation Law Cases
Bataan Shipyard & Engineering Co., Inc.
vs. PCGG,
G.R. No. L-75885, May 27, 1987
Keywords: Executive Orders, Sequestration,
Takeover by PCGG, Right against self-
incrimination
Criminal Liability of a Corporation
Crisologo vs. People of the Philippines,
G.R. No. 199481, December 3, 2012
Keywords: Trust Receipt Agreement, Personal
capacity
Ambassador Hotel, Inc. vs. SSS,
G.R. No. 194137, June 21, 2017
Keywords: Nonpayment of SSS contribution
T.SEJANE
said papers in evidence belongs exclusively to the corporations,
to whom the seized effects belong, and may not be invoked by
the corporate officers in proceedings against them in their
individual capacity
Right against self-incrimination has no application to juridical
persons and the constitutional safeguard against unreasonable
searches and seizures finds no application to the case at bar
either.
BASECO also contends that its right against self-incrimination
and unreasonable searches and seizures had been transgressed
by the Order of April 18,1986 which required it "to produce
corporate records from 1973 to 1986 under pain of contempt of
the Commission if it fails to do so."
The contention lacks merit. It is elementary that the right against
self-incrimination has no application to juridical persons. "While
an individual may lawfully refuse to answer incriminating
questions unless protected by an immunity statute, it does not
follow that a corporation, vested with special privileges and
franchises, may refuse to show its hand when charged with an
abuse of such privileges. 
Trust Receipts Law; Section 13 of the Trust Receipts Law
explicitly provides that if the violation or offense is committed
by a corporation, as in this case, the penalty provided for
under the law shall be imposed upon the directors, officers,
employees or other officials or person responsible for the
offense, without prejudice to the civil liabilities arising from the
criminal offense.
Petitioner was acquitted of the charge for violation of the Trust
Receipts Law in relation to Article 315 1(b) of the RPC. As such,
he is relieved of the corporate criminal liability as well as the
corresponding civil liability arising therefrom.
However, as correctly found by the RTC and the CA, he may
still be held liable for the trust receipts and L/C transactions he
had entered into in behalf of Novachem. Crisologo is only liable
for only one trust receipt that he signed his personal capacity in
as much as the guarantee clauses therein is concerned.
A corporation cannot invoke its separate judicial entity to escape
its liability for nonpayment of Social Security System (SSS)
contributions. Although a corporation is invested by law with a
personality separate and distinct from that of the persons
composing it, the corporate veil is pierced when a director ,
trustee or officer is made personally liable by specific provision
Keywords and Doctrinal Rulings
Corporation Law Cases
Ty, et. al. vs. NBI Supervising Agent Jamil,
et.al.,
G.R. No. 182147, December 15, 2010
Keywords: Illegal trading, Petroleum products
Gosiaco vs. Ching,
G.R. No. 173807, April 16, 2009
Keywords: Dishonored checks
Claim for Moral Damages
ABS CBN vs. Court of Appeals, 301 SCRA
589
G.R. No. 128690. January 21, 1999
Keywords: Airing Rights, Films
T.SEJANE
of law.
Ambassador Hotel, as a juridical entity, is still bound by the
provisions of R.A. No. 8282. To acquire jurisdiction over the
corporation in a criminal case, its head, directors or partners
must be served with a warrant of arrest. To reiterate, the law
specifically disregards the separate personality between the
corporation and its officers with respect to violations of R.A. No.
8282; thus, an arrest on its officers binds the corporation. 
Corporation Law; Statutory Construction; Expressio Unius Est
Exclusio Alterius; There can be no quibble that the enumeration
of persons who may be held liable for corporate violators of
Batas Pambansa Blg. 33, as amended, excludes the members of
the board of directors;
Even if the corporate powers of a corporation are reposed in the
board of directors under the first paragraph of Sec. 23 of the
Corporation Code, it is of common knowledge and practice that
the board of directors is not directly engaged or charged with the
running of the recurring business affairs of the corporation; If a
statute enumerates the thing upon which it is to operate,
everything else must necessarily and by implication be excluded
from its operation and effect.
Depending on the powers granted to them by the Articles of
Incorporation, the members of the board generally do not
concern themselves with the day-to-day affairs of the
corporation, except those corporate officers who are charged
with running the business of the corporation and are
concomitantly members of the board, like the President.
Where the check is drawn by a corporation, company or entity,
the person or persons, who actually signed the check on behalf of
such drawer shall be liable under this Act.
When a corporate officer issues a worthless check in the
corporate name he may be held personally liable for violating
a penal statute. The statute imposes criminal penalties on
anyone who with intent to defraud another of money or property,
draws or issues a check on any bank with knowledge that he has
no sufficient funds in such bank to meet the check on
presentment. Moreover, the personal liability of the corporate
officer is predicated on the principle that he cannot shield
himself from liability from his own acts on the ground that it was
a corporate act and not his personal act.
GR: A corporate officer who issues a bouncing corporate check
can only be held civilly liable when he is convicted.
Civil Law; Contracts; Damages; Except as provided by law or by
stipulation, one is entitled to compensation for actual damages only for
such pecuniary loss suffered by him as he has duly proved.
Keywords and Doctrinal Rulings
Corporation Law Cases
Filipinas Broadcasting Networks, Inc. vs.
AGO Medical & Educational Center,
G.R. No. 141994, January 17, 2005
Keywords: Radio Program, Expose, Libel
Crystal vs. BPI,
G.R. No. 172428, Nov. 28, 2008
Keywords: Mortgages, heavy equipment and
machinery,
T.SEJANE
The award of moral damages cannot be granted in favor of a
corporation because, being an artificial person and having
existence only in legal contemplation, it has no feelings, no
emotions, no senses. It cannot, therefore, experience physical
suffering and mental anguish, which can be experienced only by
one having a nervous system.
It may be reiterated that the claim of RBS against ABS-CBN is
not based on contract, quasi-contract, delict, or quasi-delict,
Hence, the claims for moral and exemplary damages can only be
based on Articles 19, 20, and 21 of the Civil Code.
There is no adequate proof that ABS-CBN was inspired by
malice or bad faith.   If damages result from a person's exercise
of a right, it is damnum absque injuria.
A juridical person is generally not entitled to moral damages
because, unlike a natural person, it cannot experience physical
suffering or such sentiments as wounded feelings, serious
anxiety, mental anguish or moral shock.
Where the broadcast is libelous per se, the law implies damages.
In such a case, evidence of an honest mistake or the want of
character or reputation of the party libeled goes only in
mitigation of damages. Neither in such a case is the plaintiff
required to introduce evidence of actual damages as a
condition precedent to the recovery of some damages. In this
case, the broadcasts are libelous per se. Thus, AMEC is entitled
to moral damages.
Moral Damages; Corporation Law; Statements in Manero and
Mambulao are mere obiter dicta; While the Court may allow the
grant of moral damages to corporations, it is not automatically
granted; there must still be proof of the existence of the factual
basis of the damage and its causal relation to the defendant’s
acts.
BPI is not entitled to moral damages. A juridical person is
generally not entitled to moral damages because, unlike a natural
person, it cannot experience physical suffering or such
sentiments as wounded feelings, serious anxiety, mental anguish
or moral shock. The Court of Appeals found BPI as "being
famous and having gained its familiarity and respect not only in
the Philippines but also in the whole world because of its good
will and good reputation must protect and defend the same
against any unwarranted suit such as the case at bench.
Obviously, an artificial person like herein appellant corporation
cannot experience physical sufferings, mental anguish, fright,
serious anxiety, wounded feelings, moral shock or social
humiliation which are the basis of moral damages. A corporation
may have a good reputation which, if besmirched, may also be a
ground for the award of moral damages.