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Question Answer
Answer: Suggested answer of Anna Elaine (not sure)
Answer: Not Sure
Answer: Other Sources

Xander subscribed for 5 shares with par value of Php a. Highest bidder is Anton at Php 100 per share. In the
100.00 each from MAX Corp., paying Php 300.00 as case of the 2 other bidders, Brenda is buying the shares
initial payment. The balance of Php 200.00 was at a cost of Php 60.00 per share while Carla is buying
the shares at the cost of Php 80.00 per share.
called in and Xander failed to pay and his stock was
declared delinquent. The interest expenses and cost
of sale is Php 50.00 thereby making the total amount
due at Php 250.00. At the delinquency sale, Anton
Brenda and Carla are the bidders as follows: b. Yes the corporation may participate in the bidding in
the sale of delinquent shares as per Sec. 67 of the
Anton - 200 for 2 shares Revised Corporation Code which states that:
“Should there be no bidder at the public auction who
Brenda - 240 for 4 shares
offers to pay the full amount of the balance on the
Carla- 240 for 3 shares subscription together with accrued interest, costs of
advertisement, and expenses of sale, for the smallest
(a) Who is the highest bidder? number of shares or fraction of a share, the corporation
may, subject to the provisions of this Code, bid for the
(b) May the corporation participate in the bidding? same, and the total amount due shall be credited as
Explain. fully paid in the books of the corporation. Title to all the
shares of stock covered by the subscription shall be
vested in the corporation as treasury shares and may
be disposed of by said corporation in accordance with
the provisions of this Code.”

Yoko filed a complaint for sum of money with
damages and application for the issuance of a writ of
attachment against Rory to recover an unpaid debt of
Php 5.8M. The RTC issued a writ of preliminary
attachment with notice of garnishment served on
HopeBank, where Rory maintained a savings
account. The RTC eventually decided in Yoko’s favor,
finding Rory liable to the latter for the full amount of
the unpaid debt.
While the case was pending, HopeBank merged with
NationBank, Inc. with the latter being the surviving
corporation, which merger was approved by the BSP
and the SEC.
Case: Associated Bank vs. CA
Provision: Sec. 79
The contention of NationBank is incorrect. As held by
the court in the case of Associated Bank vs. CA,
petitioner was allowed by the court to go after the
respondent for the amount owed by the latter in a
Promissory Note executed in favor of Citizens Bank and
Trust Company even after its merger with Associated
Bank which was the surviving Company. The case held
that even after the merger and the Surviving
Corporation possess all the rights, privileges,
immunities, and powers and shall subject to all the
duties and liabilities of a corporation organized under

After the decision had reached finality, Yoko filed a
Motion for Execution, and he sought the release to
him of the garnished savings account of Rory from
National Bank, as the surviving corporation.
NationBank refused, alleging that HopeBank no
longer existed and that NationaBank had no
obligation to garnish Rory’s account.
Rule on NationBank’s argument.
Mr. Zu named his wife, Mrs. Zu and their son, Mr. Zu
Il as nominee and alternate nominee, respectively.
Unfortunately, Mr. Zu got infected with the virus that
led to his untimely death in 2021. Mrs. Zu then fled
the necessary documents to take over the
corporation. Upon learning of the same, Ms. Patas
sought for the return of the capital she infused,
together with interests. Mrs. Zu denied the demand
because there were no shares issued to Ms. Patas
based on corporate records. Ms. Patas proceeded to
file an intra-corporate dispute against the corporation
and Mrs. Zu and Mr. Zu III.
The Corporation advanced the defense that it cannot
be held liable because being an OPC, there was only
one stockholder on record. Ms. Patas counters that
there is a stock corporation by estoppel because of
the Subscription Agreement she signed. Mrs. Zu
claims that she cannot be held liable because the
Corporation is a separate and distinct personality, to
which Ms. Patas answered that an OPC is no
different from a sole proprietorship. Mr. Zu IlI poses
the defense that he cannot be held liable because he
is a mere alternate nominee.
a. Is the OPC bound to pay the debt to Ms. Patas?
Explain.
b. Can Mrs. Zu and Mr. Zu III be held liable for the
return of the amount in question?
the Revised Corporation Code.
In the case at bar, since the merger and consolidation of
HopeBank and NationBank has been approved by the
SEC and the BSP then the merger has taken effect and
the surviving corporation, which in this case is
NationBank shall then comply with the order of the court
to garnish Rory’s account since HopeBank thus
becomes inexistent and continues business merged
with NationBank.
a. (CHECK SEC. 130)
(not sure. Ako lang to hahhaa)
Yes, the OPC is bound to pay the debt to Ms. Patas
As a general rule, only the OPC is liable for the debts
and obligations because of the limited liability rule.
Further, the RCC provides that no part of the subscribed
capital may be returned or released to the stockholder
except in the redemption of the redeemable shares. The
subscribed capital cannot be condoned or remitted.
Sec. 130 of RCC provides that an OPC is separate and
distinct from its single stockholder. However, in order to
avoid the piercing of its corporate veil, the single
stockholder must comply or demonstrate with the
following: a. The OPC has been adequately financed, b.
Its properties have been treated independently from the
single stockholder’s separate properties, c. there has
been no commingling of funds, d. It has maintained
adequate records and its reportorial requirements in
accordance with law, e. It has appointed the proscribed
officers and nominees, and f. Whenever a single
stockholder deals with a third parties, it must be clear
that he is dealing with such parties as the president of
the OPC, and not in his personal capacity.
-capital infusion (subscription agreement) = property not
independent
b.
( Not sure)
It depends. As a general rule, only the OPC is liable for
the debts and obligations. However, if the stockholder
fails to prove that the OPC is adequately financed or the
property of the stockholder is different or separate from
the OPC, then the stockholders of the OPC may be
personally liable.

A. What is the doctrine of continuity of business
enterprise?
B. What do you understand about Commodity
Futures Contract? Is it an illegal contract?
Since Mrs. Zu was the nominee, she can take over the
management of the OPC as director and president.
Further, the shares in the OPC ceased to be held by a
single stockholder since Mr. Zu died and Ms. Patas was
able to prove the capital infusion via a subscription
agreement.
(heirs - liable to return)
a. The Continuity of Business Enterprise Requirement is
what differentiates a De Facto Merger or Consolidation
from a Voluntary Dissolution of a Corporation.
If a surviving or consolidated corporation will continue
the business of the constituent corporations, then the
Liquidation (as part of the Two-Step Merger Process)
should be tax free.
Without the Continuity of Business, there is no reason to
defer recognition of gain or loss.
The merger would be “a disguise for concealing its real
character, and the sole object and accomplishment of
which was the consummation of a preconceived plan,
not to reorganize a business or any party of a business.”
b. “Commodity Future Contract” means a contract
providing for the making or taking delivery at a
prescribed time in the future of a specific quantity and
quality of a commodity or the cash value thereof, which
is customarily offset prior to the delivery date, and
includes standardized contracts having the indicia of
commodities futures, commodity options, and commonly
leverage, or margin contracts.
NOTE: read the case of Onapal v. CA for this.
Additional notes: Illustration
● “You bought it today, at a price today, but it will
be delivered to you after two weeks, or after one
month.
● So you bought it today, at a price today, and it
will be delivered to you on a future date.
● Now, come that future date, and if the price
increase or decrease, that would now be your
risk.
● The purpose now, and the main motivation of
some investors in engaging in CFC, is to save
money.

Xian owns 10,000 shares in Zian Telecoms Corp.. As
he is in immediate need of money, he offered to sell
all his shares to his friend, Yian, at a bargain price.
Upon receipt of the purchase price from Yian, Xian
proceeded to indorse in blank the certificate of
shares and delivered these to Yian. The latter then
went to the corporate secretary of Zian Telecoms
Corp. and request the transfer of the shares in his
name. The corporate secretary refused since Xian
merely indorsed the certificate in blank to Yian.
According to the corporate secretary, the certificate
should have been specifically indorsed to the
purchaser, Yian. Yian brought suit against the
corporate secretary to compel her to transfer the
shares to his name. If you were the judge handling
the case, how would you decide the case?
Mga sis own words ko po yung answerism ko
dyan ah hahahha if u will use paki paraphrase na
lang ng malupwet HAHAHHA SALAMUCH
● Let’s say, they would foresee, that in a matter of
3-months, the price of commodity would triple.
● So, as early as now, you would buy it at the
present rate, because they would predict that,
after several months, the price would increase.
● That’s the motivation behind a CFC.
● But in here there should be actual delivery on a
particular future date.
● In the case of Onapal, in the transactions
entered, there was no actual delivery, that’s why
the SC held that it was GAMBLING."
I would compel the Corporate Secretary to record the
transfer of shares from Xian to Yian. As provided for
under Sec. 62 of the Revised Corporation Code, the
transfer of shares of stock may be completed by
delivery or indorsement of the certificate by the owner or
his authorized representative. There is no where in the
law which requires that the indorsement be specifically
in favor of the holder thus the blank indorsement of Xian
to Yian of the certificate should suffice for the Corporate
Secretary to record the transfer in the books of the
corporation.
(other opinion po) I will deny the request of Yian. Art
62. Provides that no No transfer, however, shall be
valid, except as between the parties, until the transfer is
recorded in the books of the corporation
showing the names of the parties to the transaction, the
date of the transfer, the number of the
certificate or certificates, and the number of shares
transferred.
- Case: RURAL Bank of Lipa vs CA
When a stock certificate is Endorsed in Blank by the
owner thereof, it constitutes what is termed as a “Street
Certificate,” so that upon its face, the holder is entitled
to demand transfer into his name from the issuing
corporation.
Such Certificate is deemed quasi-negotiable and as
such, the transferee thereof is justified in believing that it
belongs to the holder and transferor (Guy vs Guy ; GR
no. 189486 ; September 5, 2012)
Certificates of stocks are considered as
"quasi-negotiable" instruments. When the owner or
shareholder of these certificates signs the printed form
of sale or assignment at the back of every stock
certificate without filing in the blanks provided for the

Atlantis Realty Corporation is a local firm engaged in
real estate development Its prime asset is a
three-hectare land valued at about P100-million, in
order to fully develop and maximize its property, said
corporation entered into a De Facto Merger with
Aqua Realty Corporation. For this purpose, the board
of directors of ARC unanimously passed a resolution
approving the said De Facto Merger with Aqua
Realty, a rival realty firm. The resolution also called
for a special stockholders meeting at which the
name of the transferee as well as for the name of the
attorney-in-fact, the said owner or shareholder, in effect,
confers on another all the indicia of ownership of the
said stock certificates. (Campos and Lopez-Campos,
Notes and Selected Cases on Negotiable Instruments
Law, 1971 ed., p. 605). In the case at bar, the petitioner
signed the printed form at the back of both Stock
Certificate Nos. 002 and 026 without filling in the blanks
at the time the said stock certificates were delivered to
respondent Macasaet. Hence, the petitioner's acts of
indorsement and delivery conferred on respondent
Macasaet the right to hold them as though they were his
own.||| (Capco v. Macasaet, G.R. No. 90888,
[September 13, 1990], 267 PHIL 591-603)
Ponce v. Alsons Cement:
If the shareholder-transferor does not have any
certificate, the delivery and the indorsement
requirement cannot obviously be complied with. The
Supreme Court ruled in Vicente C. Ponce v. Alsons
Cement Corporation that if the corporation never issued
certificates, the transferee cannot demand for the
issuance of the certificates of stock in his name. The
Court explained that it is a basic rule that a transfer of
shares of stock not recorded in the Stock and Transfer
Book of the corporation is non-existent as far as the
corporation is concerned. Without such recording, the
transferee may not be regarded by the corporation as
one of its stockholders and the corporation may legally
refuse the issuance of stock certificates. In other words,
the Stock and Transfer Book is the basis for
ascertaining the persons entitled to the rights of a
stockholder. Where a transferee is not yet recognized
as a stockholder, the corporation is under no specific
legal duty to issue stock certificates in the transferee's
name.
BAR 2009
(A) Can Atty. Edric, who owns only one share in the
company, initiate a derivative suit? Why or why not?
(2%)
ANSWER: Yes, Atty. Edric can initiate a derivative suit,
otherwise known as the minority stockholders’ suit. It is
allowed by law to enable the minority stockholder/s to
protect the interest of the corporation against illegal or
disadvantageous act/s of its officers or directors, the
people who are supposed to protect the corporation
proposed corporate act would be up for ratification.
Atty, Edric, a stockholder who owns only one (1)
share in Atlantis Realty Corp, dissented to the
corporate decision and demanded the Board to stop
its implementation. When his demand was not
heeded, brought the matter to the Mediation
Committee of the corporation pursuant to the
company's by-laws that require all controversies be
referred for mediation proceedings before filing any
suit in court. But. since the mediation proceedings
failed, he then commences a derivative suit it in
behalf and in the name of the corporation, to enjoin
the board of directors and the stockholders from
implementing the corporate action.
a. Can Atty. Edric, who owns only one share in the
company, initiate a derivative suit?
b. If such a suit is commenced, would it constitute an
intra-corporate dispute? If so, why and where would
such a suit be filed? Explain.
c. Will the suit prosper? Explain.
(Pascual v. Del Zaz Orozco, 19 Phil. 82 (1991)).
(B) If such a suit is commenced, would it constitute an
intra-corporate dispute? If so, why and where would
such a suit be filed? If not, why not? (2%)
ANSWER:
Yes, such a suit would constitute an intra-corporate
dispute as it is a suit initiated by a stockholder against
other stockholders who are officers and directors of the
same corporation (P.D. No. 902-A, Sec. 5(b)). Such suit
should be filed in the Regional Trial Court designated by
the Supreme Court as a corporate or commercial court.
(C) Will the suit prosper? Why or why not? (3%)
ANSWER: No. The suit will not prosper. There is no
requisite demand on the officers and directors
concerned. There is, therefore, no exhaustion of
administrative remedies.
*ANSWER LAST YEAR*
A. YES, Atty. Edric may file a derivative suit.
Pursuant to R8, S1 of the Interim rules of
procedure for Intra-corporate controversies
(interim rules) provides the 5 requisites for filing
derivative suits:
a. He was a SH or member at the time of
the acts or transactions subject of the
action occurred and at the time the action
was filed;
b. He exerted all reasonable efforts and
alleges the same with particularity in the
complaint, to exhaust all remedies
available under the AOI, by-lawd, laws or
rules governing the corporation or
partnership to obtain the relief he
desires;
c. No appraisal rights are available for the
act or acts complained of; and
d. The suit is not a nuisance or harassment
suit.
Atty. Edric is a SH at the time of the dissenting and
brought an action in the name of corporation making
him eligible to file for a derivative suit regardless of
whether he has only one share in the company.
B. The suit shall be filed with the SEC. P.D. 902-A
as amended, gives them jurisdiction to hear and
decided cases involving intra-corporate

Bonus Company is engaged in the production of
microchips used in almost all electronic devices. It
bought on installment basis from Lotus corporation, a
foreign corporation, a special machinery that will help
them double their productions. Personnel from Lotus
had to travel to the Philippines in order to install said
machinery and train Bonus workers to operate it.
Lotus would also regularly service the machinery as
part of their warranty service, Unfortunately, Bonus
failed to religiously pay the required installments
prompting Lotus Corporation to filed a suit for sum of
money against Bonus Corporation. The latter,
however, interposes the defense that the contract
was void because Lotus, being a foreign corporation,
is unlicensed to do business in the Philippines. If you
were the judge handling the case, how would you
decide the case?
C Corp. is the direct holder of 10% of the
shareholdings in U Corp., a non-listed (not public)
firm, which in turn owns 50% of the shareholdings in
H. Corp., a publicly listed company. The other
stockholder in H Corp. is C Corp. which owns 1% of
its shares. Meanwhile, the other stocks in U Corp.
are owned by B Corp, and V Corp: at 20% and 20%
respectively, B Corp. and V Corp. later sold their
respective shares in U Corp, to C Corp., thereby
resulting in the increase of C Corp's. Interest in H
Corp., whether direct or indirect, to 51%.
(a) Explain the Tender Offer Rule under the
Securities Regulation Code.
(b) Does the Tender Offer Rule apply in this case?
Explain.
controversies but pursuant to the SRC, the
jurisdiction of the SEC to decide cases involving
intra-corporate disputes was transferred to
courts of general jurisdiction and in accordance
therewith, all cases of this nature with the
exception only of those submitted for decision,
were transferred to the regular courts.
Case: MR Holdings vs. Bejar
I would rule in favor of Lotus Corporation.
a. "A tender offer is an offer by the acquiring person to
stockholders of a PUBLIC COMPANY for them to tender
their shares therein on the terms specified in the offer.
The tender offer is in place to protect minority
stockholders against any scheme that dilutes the share
value of their investments. It gives the minority
shareholders the chance to exit the company under
reasonable terms, giving them the opportunity to sell
their shares at the same price as those of the majority
shareholders."
(CEMCO Holdings vs National Life Insurance)
b. Yes, the mandatory Tender Offer Rule is still
applicable even if the acquisition, direct or indirect, is
less than 35% when the purchase would result in direct
or indirect ownership of over 50% of the total
outstanding equity securities of a public company
(Cemco Holdings v. National Life Insurance Company of
the Philippines, G.R. No. 171815, August 7, 2007). -
2016 bar exam question

Key Word: Kim Bon
Key word: Doctrine
Key Word: ECE; Nueva Ecija; FHM
The contentions of Kim Bon are without merit. A De
Facto corporation which actually exists for all practical
purposes as a corporation but which has no legal right
to corporate existence as against the State. Having
complied sufficiently to be accorded corporate status as
against third parties although not against the State. In
the case at bar, X Corp. has substantial legal existence
and the capacity to enter into a contract and sue in its
own name with regard to any third person except the
State.
a) If a corporation, knowingly permits one of its
officers, or any other agent, to act within the scope
of an apparent authority, it holds him out to the
public as in possession of the power to do those
acts, and thus, the corporation will, as against
anyone who has in good faith dealt with it through
such agent, be estopped from denying the agent’s
authority.
b) A de facto merger occurs when a transaction
(which is not structured as a merger) is in substance
a merger of the seller and buyer. The de facto
merger doctrine is meant to detect these
transactions (usually an asset sale) to prevent
companies from avoiding the assumption of seller's
liabilities while enjoying all the benefits of a merger.
c) The subscribed capital stock of the corporation
is a trust fund for the payment of debts of the
corporation which the creditors have the right to look
up to satisfy their credits, and which the corporation
may not dissipate. The creditors may sue the
stockholders directly for the latter’s unpaid
subscription.
d) Self-dealing directors, trustees or officers are
those who personally contract with the corporation
in which they are directors, trustees, or officers.
The contention of FHM Corp. is without merit. Having
possession of the controlling shares of ECE Corp. does
not make the former the owner of the latter’s properties
other than those which are equitable in nature. Owning
shares of a corporation only entitles the holder the right
to share in its proceeds. Becoming the holder of the
controlling shares does not make FHM Corp. the legal
owner of ECE. Therefore, possession of the tract of land
should be given back to ECE Corporation.

Key Word: Castro; Brothers
Key word: Peter ; Pre-emptive Right
Key Word: Donald Dy; ALFA; Voting Trust
Agreement
The action will not prosper. According to the Corporation
code a subscription for shares of stock of a corporation
still to be formed shall be irrevocable for a period of at
least six (6) months from the date of subscription,
unless all of the other subscribers consent to the
revocation, or unless the incorporation of said
corporation fails to materialize within said period or
within a longer period as may be stipulated in the
contract of subscription: Provided, That no
pre-incorporation subscription may be revoked after the
submission of the articles of incorporation to the
Securities and Exchange Commission.
No, as a general rule, all stockholders of a stock
corporation shall enjoy pre-emptive right to subscribe to
all issues or disposition of shares of any class, in
proportion to their respective shareholdings, with
exception. The shareholders' pre-emptive rights do not
generally apply where the shares belong to the original
(or increased) capital stock of the corporation
unsubscribed or undisposed of, inasmuch as such
shares constitute a part of the assets, and may be sold
either to stockholders or to strangers as the corporation
may deem best even without notice to stockholders.
In this case, Peter does not have pre-emptive rights
over the said remaining shares. If the number of the
shares originally offered for subscription were specified
and the rest were reoffered, the subscriber cannot claim
dilution of interest in case additional issues of originally
authorized shares are offered to the public or purchased
by others.
The ruling is correct. The Rules of Court requires that
such service shall be made exclusively to the President,
the Managing Director, the Corporate Secretary, the
in-house counsel, the Treasurer or the General
Manager.

Key Word: VGCCI
Key Word: Anna; Bruna; Christine
Key Word: Board Approval
Key Word: Redeemable; Preferred
No, the Supreme Court ruled that in order to be bound,
the third party must have acquired knowledge of the
pertinent by-laws at the time the transaction or
agreement between said third party and the shareholder
was entered into, in this case, at the time the pledge
agreement was executed.
CASE: Chinabanking Corporation vs. Valley Golf
A. Approval by the stockholders of the managed
corporation owning at least 2/3 of the total outstanding
capital stock entitled to vote, or by at least 2/3 of the
members in the case of a non-stock corporation.
Provided, the period must not be longer than 5 years for
any 1 term except those contracts which relate to the
exploration, development, exploitation or utilization of
natural resources that may be entered into for such
periods as may be provided by pertinent laws or
regulations.
C. To amend the AOI, it requires Resolution by at least
a majority of the board of directors or trustees; Vote or
written assent of the stockholders representing at least
2/3 of the outstanding capital stock s or 2/3 of the
members in case of non-stock corporations. Further, a
submission with the SEC of pertinent documents such
as the original AOI and amended AOI, duly certified
under oath by the corporate secretary and majority of
the directors/trustees and other requirements required
by law.
F. Letters B, C and D
Section 6
 D. Filling in Vacancy in the Board

Section 34 (b)

Key Word: Competence; Executive Committee

TOP Corporation is contemplating on a business (https://www.sec.gov.ph/wp-content/uploads/2019/12/20

project where it will develop and construct a 11OpinionNo11-49.pdf)
condominium-hotel. Under their business plan, TOP
^ Please see the link yan na yung sagot AS IN
Corp. will build condotel units and assign both its
LITERAL
leasehold rights over the lot and the units to
interested assignees for valuable consideration. Said - As per the sain SEC opinion, such terms and
condotel units will be enrolled by their assignees in conditions as well as the business plan
the pool of units to be rented out as hotel rooms. The constitutes as “Security” under the SRC
condotel project will be managed by TOP Corp. or its
authorized condotel operator under the following
terms and conditions:

(a) The costs and expenses for maintenance of the

condotel units shall be for the condotel operator’s
account;

(b) In consideration of the management services

rendered by the condotel operator, it shall receive
from the assignee a fixed monthly management fee
inclusive of sales and marketing commissions; and

(c) Profits realized will be remitted to the assignee on

top of the guaranteed aggregate of thirty (30) days
use per year of the condotel units.

As their retained counsel, you are being consulted if

the scheme constitutes “Securities” under the SRC.
What will be your advice?

(A) What is meant by “Over-the-Counter Markets” as
provided in the Securities Regulations Code? (5%)
(B) Xavi has the following plans:
1. Organize the Tagaytay Country Club,
Incorporated.
(A) Under the Security Regulations Code an
Over-theCounter Market is defined as a market
created by the buying and selling of a security
on a bilateral basis between parties that takes
place outside of an Exchange or Alternative
Trading System
(https://www.sec.gov.ph/wp-content/uploads/201
9/11/sec-memo-14s2006.pdf)
 2. Let the club buy a 10 hectare land for P10 M (B) Yes since the certificate of membership
which will be developed into a sports and constitute shares in the country club (Paragraph
health club complete with an Olympic size E in the definition of securities as per the SRC)
swimming pool, tennis and pelota courts,
bowling lanes, pool rooms, etc.
3. Five of the ten million pesos needed to
develop the club will be raised thru the sale of
certificates of membership.
4. The certificate of membership shall give the
purchaser the right to use all club facilities
and shall be transferable. It shall not,
however, give the purchaser any right in the
income or assets of the club. The purchaser
must also pay monthly dues.

Xavi wants to know whether the certificate of

membership is an investment contract and hence,
must be registered before offering it to the public
pursuant to RA 8799. What is your opinion? (5%)

Which are the instances where appraisal right is D. All of the Above
extinguished? Explain. (5 points)
Section 83
a. Withdrawal of the demand
b. Proposed corporation action is abandoned
c. The SEC disapproves the proposed action
d. All of the above
e. Letters b and c
f. None of the above

Which of the following is/are not considered as C. Stocks issued for consideration other than actual
Watered Stocks? Explain. (5 points) cash, the fair valuation of which is less than its market
a. Bonus Shares value
b. Discounted Shares
Section 64
c. Stocks issued for consideration other than actual
cash, the fair valuation of which is less than its
market value
d. Stocks issued as stock dividend when there is no
sufficient retained earnings or surplus
e. None of the above
f. Letters c and d

FAME Corporation was organized in 2001 as Stock The contention is without merit. FAME Corp, having 20
Corporation but does not make any public offering of stockholders and the non-offering of its stocks to the
any of its stock. It has 20 stockholders, 5 of whom
are elected as members of the Board. Its Articles of
Incorporation grant existing stockholders the right of
first refusal should any of its stockholders decide to
transfer their respective shares. In 2005, the
corporation and its stockholders were sued by
Sophie, a former employee, for non-payment of
separation pay. The stockholders do not dispute that
the separation was unlawfully withheld but interpose
as defense the doctrine of separate personality. Rule
on said contention. Explain.
Sarahgo Shipping Corp. (SSC), a Philippine *ANSWER LAST YEAR:*
corporation, loaded 500 bundles of black steel pipes A. Both Dutard and Haroque as subrogee cannot
on board its vessel M/V Baluktot, for delivery to
consignee Dutard Corp. (Dutard), a foreign
corporation based in Singapore. The latter, in turn,
insured the goods with Haroque, Inc. (Haroque), also
a Singaporean-based foreign corporation.
BEcause the goods arrived heavily rusted in
Singapore, Dutard rejected the damaged steel pipes
and declared them unfit for the purpose they were
intended.
It then filed a marine insurance claim with Haroque
which the latter fully settled.
Haroque, as subrogee, field with the proper RTC a
claim for collection of money against SSC. It was
established in the hearings that Dutard was
doing business in the Philippines without a
license, and that Haroque was not doing
business in the Philippines.
public, is considered a close corporation and as such,
its stockholders are deemed to be directors and shall be
subject to the liabilities of directors. Under the RCC, one
of the instances when a director may be held liable and
the veil of corporate fiction may be pierced is when he
willfully and knowingly assents to the patently unlawful
acts of the corporation. In the case at bar, the
stockholders did not dispute that the separation pay
was unlawfully withheld. Thus, they may be held liable.
*ANSWER LAST YEAR*:
I would rule against FAME Corp. the doctrine of piercing
the veil is applicable in this case, because the non
payment of separation pay constitutes fraud, w/c
according to jurisprudence, a legal fiction may be
disregarded when it is used to perpetuate fraud,
illegality or defeating public convenience. Thus, the
court may disregard the separate personality on the
ground of non-payment of separation pay. Therefore,
they cannot use the defense of doctrine of separate
personality.
sue. Under the RCCP, no foreign corporation
transacting business in the PH without a license,
or its successors or assigns , shall be permitted
to maintain or intervene any action, suit or
proceeding in any court or administrative agency
of the PH. However, the Foreign Corp. may still
be sued or proceeded against before PH Courts
or tribunals. In applying the provision in the case
at bar, Dutard as foreign corporation cannot sue
since there is no license obtained before
entering into business with the PH. While rights
vested to Haroque as subrogee only pertain to
the obligations not to capacity, incapacity of the
insured will not affect the capacity of the insurer
exercising its right of subrogation since such
capacity is personal to its holder.
B. The counsel of Haroque is not correct. Even if it
is made beyond 3 year winding up period.
Corporate creditors may still sue the SH even
beyond the 3 year liquidation period, because no
corporation shall distribute any of its assets or
property except upon lawful dissolution and after
payment of its debts and liabilities.
A. SSC moved for dismissal of the complaint on
the ground that Haroque has no capacity to
sue, it being a mere subrogee of Dutard. SSC
argued that since Dutard was doing business
in the Philippines without a license and
therefore cannot sue, then its subrogee,
Haroque, likewise cannot sue. Decide and
briefly explain your answer. (5%)

B. On March 1, 2016, during the pendency of

the trial, SSC was dissolved, which fact was
not reported to the Court. Eventually,
sometime in March 2021, the RTC issued a
decision favorable to Haroque. SSC’s counsel
of record appealed to the CA. Counsel for
Haroque, however, countered that SSC could
no longer appeal as there was no longer any
corporation to speak of, no trustee has been
designated during its 3-year winding-up
period, and the appeal was made beyond
send 3-year windnig-up period. Decide and
briefly explain your answer. (5%)

* THIS SECTION IS FOR FINAL EXAM PROPER*

QUESTION ANSWER (PAKI MENTION IF NASA SAMPLEX)

Sec. 57 (not sure)

Proper Place
§ Anywhere, even outside the PH.
§ It can even be done through Video Conference
Can be done through video conferencing if provided for
in the by-laws or authorized by majority of the BOD

Answer ko: depende sa validity ng proxy kasi pag valid

will constitute majority ng BOD pero pag hindi then
pwede iquestion rawr rawr rawr

Nag apply din ba tong rule sa non stock corp? - dein lol
mali akizkiz - nonstock pa rin ba if may shares, BOD
etc??

in a close corporation = designation of an outsider

as a provisional director.
BASIS:SEC. 122 The persons who primarily
operate the One Person Corporation (OPC) are: (a.) the
single stockholder, who will be the sole director and
president at the same time, (b.) the treasurer (unless the
single stockholder appoints himself as treasurer), and (c.)
the corporate secretary. The OPC may also appoint other
officers as it deems necessary.

SECTION 89. Non Transferability of Membership. —

Membership in a nonstock corporation and all rights
arising therefrom are personal and non transferable,
unless the articles of incorporation or the bylaws
otherwise provide. DI KO SURE.
(sec 89 lagay ko unless may stipulation sa by laws, ma
lose niya rights nya for failure to pay fees)
No? Exhaust muna lahat ng administrative remedies?

ANSWER NI HANZ SA GC:

Cua v. Ocampo: The 2 requirements of a derivative suit
are:
o 1. It must be alleged that it is a derivative suit, meaning
it is
filed on behalf of the corporation
o 2. It must include all indispensible parties, meaning that
the
corporation itself must be impleaded
Ø A derivative suit may be filed by a SH on behalf of the
corporation as
the real party in interest only when the Board of directors
do NOT file a
case. Reason: the power to sue in the name of the corp
resides with the
board.
Ø The SH may enforce a corporate cause of action thru a
derivative suit
Ø In the case at bar, the petition was for certiorari and
was not alleged to
be a derivative suit nor was the corporation impleaded as
a party.

Arbitration if stated in the by laws , if there is an

arbitration provision …ata

Di to intracorporate diba? Kasi borrower and lender tapos

Uu nga hahaha sorry different companies?
So tama small claims yes
Oo. Tama MTC noh?
Yes, MTC siya…ata
Same company lang ata sila. Pero i think di pa rin
itnracorporate.

di
Naman sinabi
Nag utangan lang sila basically
Mayrequisites ba kayo ng intra-c dispute?
May nabasa ako before eh
- Relating to internal affairs dapat para ma consider
as IC
VD Lecture - If umutang si SH in his personal capacity sa
isang SH such is not considered an intra-corporate
dispute as defined sa SRC (yes, correct i remember this
sabi nya)

Under the relationship test, there is an intra-corporate

controversy when the conflict is:

● (1) between the corporation, partnership, or

association and the public;
● (2) between the corporation, partnership, or
association and the State insofar as its franchise,
permit, or license to operate is concerned;
● (3) between the corporation, partnership, or
association and its stockholders, partners,
members, or officers; and
● (4) among the stockholders, partners, or associates
themselves.

D ba or f :(( kasi may kulang na words lol

Nag-d na lang me kasi same essence naman
Montik na ako mag f
HAHAHAHA marked safe ✅
Which of the following is/are not considered as Watered Stocks issued for consideration other than actual cash,
Stocks? the fair valuation of which is less than its market value

Reverse-piercing flows in the opposite direction of

traditional corporate veil piercing and makes the
corporation liable for the debt of the shareholders

In a reverse piercing action, the plaintiff seeks access to

a corporation's assets to satisfy claims against a
shareholder/director
No. The Supreme Court, however, cautioned that
Reverse Corporate Piercing may lead to disastrous
consequences for corporations and that ordinary
judgement collection procedures or other legal remedies
are preferred over that which would risk damage to third
parties (for instance, innocent stockholders or voluntary
creditors) with unprotected interest in the assets of the
corporation.

Estelita Burgos Lipat vs. Pacific Banking -di ko lang

sure naalala ko lang
NASA SAMPLEX no. 1

A. Consignment by a foreign chuvaness

What Constitutes Doing Business in the Philippines |
SVBB Law Offices (sapalovelez.com)
NASA SAMPLEX ULIT

SAMPLEX no.5

B????

A
B rin akin eh
B ata “not doing business”

The FIA Also describes acts which do not constitute

 doing business in the Philippines, specifically:
(1) Mere investment as a SH by a foreign entity in
domestic corporations duly registered to do business,
and/or the exercise of rights of such investor;
(2) Having a nominee director or officer to represent its
interests in such corporation;
(3) Appointing a representative or distributor
domiciled in the Philippines that transacts business
in its own name

The meeting is valid for the requirement in a board

meeting is the presence of majority of all members of the
board. In this case, there was a presence of the majority.
The meetings may also be validly held thru video calls.
The voting was not valid. For investments of corporate
funds in another corporation, there must be a majority
vote of ALL members of the board strictly. In this case,
not all the members of the board was able to vote.

Difference between provisional and sole director