College of Hospitality Management

First Semester, AY: 2023-2024

MODULE 4
Other Kinds of Corporation

Introduction

In this module it discusses here the other kinds of corporation according to the
Pertinent Laws on Hospitality Management 2007 Edition of Corporation. It states here the
Classification of corporation in the relation to the state, and the classification of corporation
as to the place of incorporation

I. Objectives

At the end of the course, the student is able to:

1. Enumerate and explain the other types of Corporations

2. Discuss the Corporation in Relation to the state

3. Explain and Classify Corporation as to the place of Incorporation

II. Lecture

Introduction:

Classifications of Corporation in Relation to the State

Corporation- is an artificial being created by operation of law having the right of succession,
powers attributes expressly authorized by law and incident to its existence.

• Public Corporations – are those formed or organized for the government of a portion of
the state.

• Private Corporation – are those formed for some private purpose, benefit or end.
Example: ABS-CBN corporation, Jollibee Food Corporation, San Miguel Corporation •
Quasi-Public Corporation- is a cross between private corporation and Public
corporations.

Example: School Districts, water Districts, PLDT

Classification of Corporation as to the place of Incorporation

Domestic Corporation – is the one incorporated under the Philippine laws.

Foreign Corporation is an entity formed, organized, or existing under any laws other
than those of the Philippines and whose laws allow Filipino citizens and corporations to
conduct business in its country or state of origin

Other Kinds of Corporation

1. De Jure Corporation
2. De Facto Corporation
3. Corporation
4. Close Corporation
5. Open Corporation
6. Eleemosynary Corporation
7. Ecclesiastical Corporation
8. Lay Corporation
9. Corporation Aggregate
10. Corporation by Estoppel
11. Multi-National Corporation

Distinction between Corporators and Incorporators

 Incorporators – these are the original founders or organizers of the corporation,

stock or non-stock. They must be natural persons. The law provides that the
incorporators must at least five (5) but not more than (15).
 Corporators – these are the total number of persons who compose the corporation
after its formation which include the incorporators, and members.
 College of Hospitality Management
First Semester, A.Y. 2023-2024
Module 5
Obligations and Contracts

Introduction

This module involves the different kinds of obligations that should be given full
attention because the effect my greatly affect the business.

I. Objectives

At the end of the course, the student can:

• Define Obligation
• Discuss the Elements of Obligation
• Identify Kinds of Obligation
• Discuss Sources of Obligation
II. Lecture

Obligation – is a juridical necessity to give, to do or not to do. (Article 1156 of the New Civil
Code of the Philippines)

• Juridical necessity – noncompliance of what is demanded by the obligation would give

legal sanctions.

2 parties in an obligation:

1. Debtor- the party who is obliged to perform the obligation

2. Creditor- the party who has the right to demand performance of the obligation
Real Obligation- obligation to give
Personal Obligation- obligation to do and not to do
Positive personal obligation- obligation to do
Negative personal obligation- obligation not to do

• To give – it involves delivery of movable or immovable thing to the creditor.

• To do – it covers all kinds of works or services whether physical or mental. Example:

Contract for professional service like painting, modelling, singing.
 • Not to do – it means refraining from doing some acts like obligations of a building
proprietor to refrain from committing nuisance through noise, offensive odor, smoke,
heat. Etc.

Elements of Obligation

• Active Subject(creditor/obligee) – the party who has the right to demand performance
of the obligation; the one who is demanding the performance of obligation

• Passive Subject – the party who is obliged to perform the obligation; the one bound to
perform the prestation to give, to do or not to do. He is called the debtor or obligor.

• Prestation or Object – the object or subject matter of the obligation. It may consist of
giving doing or not doing something; the subject matter of the obligation which has an
economic value or susceptible of pecuniary substitution in case of noncompliance.

• Efficient Cause – the vinculum or the legal or juridicial tie which binds the parties to an
obligation; the juridical tie or vinculum by virtue of which the debtor has become
bound to perform the prestation.

Kinds of Obligation

• Civil Obligation – based on positive law (enforceable by a court action) an

obligation which if not fulfilled when it becomes due and demandable, may
be enforced in court through action.

• Natural Obligation –based on natural law (not enforceable by a court action) a

special obligation which can be enforced in court but which authorizes the
retention of the voluntary payment or performance made by the debtor.

Note: The Obligation in Article 1156 is a civil obligation.

Sources of Obligation

• Law – A rule of conduct, just and obligatory, laid down by legitimate authority for
common observance and benefit. A law is a binding custom or practice of a community
: a rule of conduct or action prescribed or formally recognized as binding or enforced
by a controlling authority.4 Obligation derived from law must not be presumed.
example: The National Internal Revenue Code (NIRC)- provides for the payment of
taxes; The Family Code of the Philippines- provides for the obligation to support one’s
family.
• Contracts – a meeting of minds between two persons whereby one binds himself with
respect to the other, to give something or to render some service; this is the duty of
the party to fulfill his undertaking in the contracts such as the payment for the
breakage of utensils used in the catering services as stipulated in the contract.
Example: contract of lease- provides for the payment of rental by the lessee, the 2
parties are lessor and lessee

• Quasi-contracts – they refer to certain lawful, voluntary and unilatearal cts giving rise
to a juridicial relation to the end that no one shall be unjustly enriched at the expense
of another; it is a kind of contract created without the consent of one party but
whose missing consent is given by the law.

Unjust enrichment- there is an enrichment when a person unjustly retains a benefit to

the loss of another, or when a person retains money or property of another against
the fundamental principles of justice, equity and good conscience.”

• Actsor omission punishable by law – it is also known as delicts, these are crimes or
felonies, the commission of a crime makes the offender civilly liable. Every person
criminally liable for a felony is also civilly liable. Commission of a crime makes the
offender civilly liable. Such civil liability includes Restitution, Reparation of the damage
caused and Indemnification for consequential damages.

Example:

If D steals the carabao of C, D’s civil liability consists of:

1. returning the carabao

2. paying for its value if he cannot return it

3. indemnifying the consequential damages suffered not only by C but also those of his
family or by a third person by reason of the crime.

This will be in addition to any prison term or other penalty that may be imposed upon him
by the court.

• Quasi-delicts or tort (art 1157)- these are acts or omissions that cause damage to another,
there being fault or negligence but without any pre-existing contractual relation
between the parties. Certain lawful, voluntary and unilateral acts give rise to the juridical
relation of quasi-contract to the end that no one shall be unjustly enriched or benefited
at the expense of another (n). Quasi-contract arises because of these acts which might
result to an unjust enrichment. Example: If a person, while cleaning his window, causes
a flower pot to fall through his negligence thereby injuring someone passing by, the
 former is liable for damages to the latter

Kinds of Obligation as to number of persons bound to perform

• Unilateral Obligation – a kind of obligation in which only one of the parties is bound to
fulfill a presentation.

• Bilateral Obligation – a kind of obligation in which parties are bound to perform a part in
the obligation.

Diligence Needed

Every person with obligation to give something is also obliged to take care of it with the
proper diligence of a good father of a family, unless the law requires another standard of
care. (Article 1163 of the civil code of the Philippines)

Other Important Civil Code Provisions Necessary in the Conduct of Hospitality Business

Article 1169 – those who are obliged to deliver or to do something incur in delay from the time
oblige judicially or extra judicially demands from them the fulfillment of their obligation.

Article 1170 – those who in the performance of their obligation are guilty or fraud, negligence,
or delay, and those who in any manner contravene the tenor thereof, are liable for damages.

Article 1171 – Responsibility arising from fraud is demandable in all obligations. Any waiver of
an action for future fraud or void.