Facts 1. Union Glass v SEC - Hofilena filed with SEC for cancellation of the sale of the glass plant to Union Glass which was sold to it by DBP. - The action is in the form of a derivative suit instituted by a stockholder for the benefit of the corporation, respondent Pioneer Glass and Manufacturing Corporation, principally against another stockholder (a status gained as a result of its being a creditor of the latter), Development Bank of the Philippines, for alleged illegal acts and gross bad faith which resulted in the dacion en pago arrangement now being questioned by complainant. - Union Glass has no intra-corporate relation with either the complainant or the DBP
Issues WON SEC or regular court has jurisdiction over the case.
Held/Ratio Held: Regular court has jurisdiction. Ratio: Otherwise stated, in order that the SEC can take cognizance of a case, the controversy must pertain to any of the following relationships: [a] between the corporation, partnership or association and the public; [b] between the corporation, partnership or association and its stockholders, partners, members, or officers; [c] between the corporation, partnership or association and the state in so far as its franchise, permit or license to operate is concerned; and [d] among the stockholders, partners or associates themselves. Dissenting opinion: Certainly, the joinder of Union Glass does not divest the SEC of jurisdiction over the case. The joinder of Union Glass is necessary because the DBP, its transferor, is being sued regarding the dacion en pago. The defenses of Union Glass are tied up with the defenses of the DBP in the intra-corporate dispute. Hofileñas cause of action should not be split.
2. Abejo v dela Cruz -Teletronics bought shares from Abejo sps and Virginia Braga (VB) making it a majority stockholder upon registration and transfer of shares. -Norberto Braga (NB) refused to register and transfer shares because of the ff reasons: 1. the Bragas claim pre-emptive rights over Abejo’s shares 2. VB never transferred her shares but has lost 5 stock certificates.
WON SEC or RTC has jurisdiction over the case. Actions before SEC: 1. Mandamus by Abejo and Telectronics Compel NB to register and transfer shares 2. Injunction and TRO by AT Enjoin Bragas from disposing funds and assets 3. Petition for Certiorari, Prohibition and Mandamus by Bragas Sought dismissal of case for lack of jurisdiction SEC: dismissed petition ruling that the issue is not the ownership of shares but the non-performance of NB of the ministerial duty of recording transfer of shares
Held: Ratio: Insofar as the Bragas and their corporate secretary's refusal on behalf of the corporation Pocket Bell to record the transfer of the 56% majority shares to Telectronics may be deemed a device or scheme amounting to fraud and misrepresentation emplolyed by them to keep themselves in control of the corporation to the detriment of Telectronics (as buyer and substantial investor in the corporate stock) and the Abejos (as substantial stockholders-sellers), the case falls under paragraph (a) of PD No. 902-A. The dispute is likewise an intra-corporate controversy between and among the majority and minority stockholders as to the transfer and disposition of the controlling shares of the corporation, falling under paragraph (b) of PD No. 902-A .
is misplaced for. qualification. It is a typical intra-corporate dispute. v. Magalad v Premier . therefore. -MD failed to redeem. Unless the by-laws provide otherwise. as explicitly stated in those cases. There is no distinction.
4. Held: NO Ratio: . 1983 with expired permit to issue commercial papers and with intention not to pay or defraud its creditors.Premiere is a financing company engaged in soliciting and accepting money market placements or deposits. CA did not act in grave abuse of discretion. which is incident to the operation of the club and its golf course. and assigned the right to redeem to MD.
WON the Club is liable for the payment of the amounts assessed against it in connection with the operation of its bar and restaurant. Ratio: Considering that Magalad's complaint sufficiently alleges acts amounting to fraud and misrepresentation committed by Premiere. 8 the Court spelled out that"'an intracorporate controversy is one which arises between a stockholder and the corporation.
WON RTC had jurisdiction. -Magalad sued Premier in RTC w/c rendered judgment in favour of Magalad. Dulay v CA -MD (majority stockholder of MRDEI and President) sold the property to Veloso with right to repurchase within 2 years. Ratio: Section 101 of the Corporation Code of the Philippines provides: Sec. a sports complex. written consent thereto is
3. she was the victim of alleged fraud and misrepresentation. Held: No. The expanded jurisdiction of the SEC was conceived primarily to protect the interest of the investingpublic. the SEC must be held to retain its original and exclusive jurisdiction over the case. v. nor any exemption whatsoever. The BIR seeks to tax the said restaurant as a business. The provision is broad and covers all kinds of controversies between stockholders and corporations. On September 12. HELD: No. which it failed to pay. The club is operated mainly with funds derived from membership fees and dues. encompasses a category of relationship within the SEC jurisdiction. and a bar restaurant. -VD (VP of Dulay) intervened alleging that MD was not authorized by
.or a stock corporation to exist. -Veloso mortgaged the property to Torres.
5. Reliance by Magalad on the case of Union Glass& Container Corp. 101. Reyes. were nothing more than simple money claims.2
In Philex Mining Corp. the recovery of which would originally fall within the jurisdiction of regular courts. Premiere induced and misled Magalad into making a money market placement of P50.000. The fact that Premiere's authority to engage in financing already expired will not have the effect of divesting the SEC of its original and exclusive jurisdiction. dividends or allotments of the surplus profits on the basis of shares held. The causes of action. CIR v Club Filipino Club Filipino owns and operates a club house. That M agalad's money placements were in the nature of investments in P remiere can not be gainsaid. where the jurisdiction of the ordinary Courts was upheld. In the case at bar. therefore. The fraud committed is detrimental to the interest of the public and. WON CA acted in grave abuse of discretion in applying the doctrine of piercing the veil of corporate entity in the instant case considering that the Board Resolution authorizing the sale of the subject property was resolved without the approval of all members of the Board and said resolution was prepared by a person not designated by the corporation to be its secretary. The issue of whether or not a corporation is bound to replace a stockholder's lost certificate of stock is a matter purely between a stockholder and the corporation. nowhere in the AOI or by-laws of Club Filipino could be found an authority for the distribution of its dividends or surplus profits. 2 requisites must be complied with: (1) a capital stock divided into shares (2) an authority to distribute to the holders of such shares.00 at 22% interest per annum. despite the fact that the suit involves collection of sums of money paid to said corporation. Unfortunately. however. any action by the directors of a close corporation without a meeting shall nevertheless be deemed valid if: (1) Before or after such action is taken. SEC (126 SCRA 31). -Premier appealed citing that SEC has jurisdiction over the case and not RTC. nowhere in the complaints therein is found any averment of fraud of misrepresentation committed by the respective corporations involved. Torres moved to consolidate ownership and filed a petition for issuance of writ of possession. When board meeting is unnecessary or improperly held. Magalad had reasonably expected to receive returns from moneys she had paid to Premiere. The question of damages raised is merely incidental to that main issue.
Our finding. Decree No. an action taken therein within the corporate powers is deemed ratified by a director who failed to attend. PVB filed a claim which Agrix and NDC refused to honor on the basis of PD 1717 w/c states that “all mortgages and other liens attached to the assets of the dissolved corporations are hereby extinguished. NDC v PVB -Agrix has a loan with PVB secured by 3 lots. When the corporation is used merely as an alter ego or business conduit of a person. And insofar as the decree also interferes with purely private agreements without any demonstrated connection with the
6. The new corporation is neither owned nor controlled by the govt. Pres. The privilege of being treated as an entity distinct and separate from its stockholder or members is therefore confined to its legitimate uses and is subject to certain limitations to prevent the commission of fraud or other illegal or unfair act.
. the law will regard the corporation as the act of that person. or (3) The directors are accustomed to take informal action with the express or implied acquiese of all the stockholders. in his case. Sec 4. In the instant case. unless he promptly files his written objection with the secretary of the corporation after having knowledge thereof. in sum. being neither owned nor controlled by the Government. Moreover. through PD 1717 was valid. XIV.3
MRDEI to sell or mortgaged the property. is that Pres. corporate action taken at a board meeting without proper call or notice in a close corporation is deemed ratified by the absent director unless the latter promptly files his written objection with the secretary of the corporation after having knowledge of the meeting which. the new corporation. 1973 Constitution: -The Batasang Pambansa shall not. Marcos issued PD 1717 which ordered the rehabilitation of Agrix to be administered by NDC. signed by all the directors. organization. Ratio: Art. The extinction of the mortgage and other liens and of the interest and other charges pertaining to the legitimate creditors of AGRIX constitutes taking without due process of law. HELD: Yes. or regulation of private corporations. 1717 is an invalid exercise of the police power. or (4) All the directors have express or implied knowledge of the action in question and none of them makes prompt objection thereto in writing. provide for the formation. petitioner Virgilio Dulay failed to do. not being in conformity with the traditional requirements of a lawful subject and a lawful method. unless such corporation is owned or controlled by the Govt or any subdivision or instrumentality thereof. At any rate. Inc.If a directors' meeting is held without call or notice. or (2) All the stockholders have actual or implied knowledge of the action and make no prompt objection thereto in writing. should have been created only by general and not special law.
WON the creation of New Agrix. petitioner corporation is classified as a close corporation and consequently a board resolution authorizing the sale or mortgage of the subject property is not necessary to bind the corporation for the action of its president.” RTC declared PD 1717 null. except by general law. Agrix went bankrupt. and this is compounded by the reduction of the secured creditors to the category of unsecured creditors in violation of the equal protection clause.
on the other hand. the commission shall issue an amended certificate of incorporation under the amended name. The record shows that the petitioner was acting on his own and not in behalf of his other would-be incorporators in transacting the sale of the airplanes and spare parts. and it should be implied only when necessary to do justice between the parties. so as to be liable as such in an action for settlement of the alleged partnership and contribution. Spouses Cervantes. A corporation's right to use its corporate and trade name is a property right. or (b) deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law. Sec. against trespass or conversion. -Respondent Standard Philips Corporation was issued a Certificate of Registration by the SEC on 1982. it is ordinarily held that persons who attempt. Due to this. The statutory prohibition cannot be any clearer. belts. when their purpose is that no partnership shall exist. . Applying therefore the principles of law earlier cited to the facts of the case. as between themselves. Pioneer Insurance v CA -Jacob Lim was engaged in the airline business as owner of Southern Airlines (SAL) a single proprietorship. Where a change in a corporate name is approved. Issue: What legal rules govern the relationship among co-investors whose agreement wasto do business through the corporate vehicle but who failed to incorporate the entityin which they had chosen to invest? How are the losses to be treated in situations where their contributions to the intended 'corporation' were invested not through the corporate form? (These questions are premised on the petitioner's theory that as a result of the failure of respondents Bormaheco. real or personal. Respondent. such a relation does not necessarily exist. To come within its scope. two requisites must be proven. but fail. . and (2) the proposed name is either: (a) identical. thus. which it may assert and protect against the world in the same manner as it may protect its tangible property. there is likewise an impairment of the obligation of the contract. and that as a consequence of such relationship all must share in the losses and/or gains of the venture in proportion to their contribution. said that its products of chain rollers. to form a corporation and who carry on business under the corporate name occupy the position of partners inter se. Bormaheco and Cervanteses. namely: (1) that the complainant corporation acquired a prior right over the use of such corporate name. Philips Export BV. -2 Indemnity agreements in favour of Pioneer: (1) signed by Magalana: (2) signed by Lim. no de facto partnership was created among the parties which would entitle the petitioner to a reimbursement of the supposed losses of the proposed corporation.Contributions to the purchase of aircrafts: Bormaheco. to a certain extent. 18 Corporation Code. petitioners filed for a writ of preliminary injunction in the SEC arguing that the use of the word PHILIPS by the respondent infringes on their exclusive right to use the name. Respondent refused to amend its articles of incorporation. V CA -Petitioner Philips export BV (PEBV) is the registered owner of trademarks PHILIPS and PHILIPS SHIELD EMBLEM in the Philippine Patent Office in 1956.) While it has been held that as between themselves the rights of the stockholders in a defectively incorporated association should be governed by the supposed charter and the laws of the state relating thereto and not by the rules governing partners.Petitioners filed a letter complaint in the SEC asking that the word “PHILIPS” be cancelled from the respondent’s corporate name.
WON the word PHILIPS should be cancelled from respondent’s trade name. confusing or contrary to existing law. -Pioneer executed security bond to secure payment of balance. bearings and cutting saw are different from the electrical products of petitioner. Cervanteses and Maglana contributed to the purchase of the aircrafts as contribution to the corporation that Lim proposed. a right in rem. It is regarded. due to the previous registration of the said word. necessarily. one who takes no part except to subscribe for stock in a proposed corporation which is never legally formed does not become a partner with other subscribers who engage in business under the name of the pretended corporation. a de facto partnership among them was created.4
public interest. -Chattel mortgage: Lim executed a deed of chattel mortgage over the 2 aircrafts in favour of Pioneer as security for suretyship. 7. or (c)
. No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive. -Lim bought 2 aircrafts and spare part from JDA. as a property right and one which cannot be impaired or defeated by subsequent appropriation by another corporation in the same field. for ordinarily persons cannot be made to assume the relation of partners. Constancio Maglana and petitioner Lim to incorporate. However.
the same doctrine or principle cannot be made to apply where the evidence did not prove that the business (of the plaintiff) has continued for so long a time that it has become of consequence and acquired a good will of considerable value such that its articles and produce have acquired a well-known reputation. -Petitioner was first to incorporate prior to respondent. because geographical or otherwise descriptive might nevertheless have been used so long and so exclusively by one producer with reference to this article that." is the avoidance of fraud upon the public which would have occasion to deal with the entity concerned. In determining the existence of confusing similarity in corporate names. and similar products also show that they may eventually deal in the same line of business. Consequently. and confusion will result by the use of the disputed name (by the
9. This circumstance has been referred to as the distinctiveness into which the name or phrase has evolved through the substantial and exclusive use of the same for a considerable period of time. the word or phrase has come to mean that the article was his produce (Ana Ang vs.name registered since 1922. Corporate name. Held: NO Ratio: “SECTION 18. PHILIPS is a trade mark. using ordinary care and discrimination. Respondents name being STANDARD PHILIPS CORPORATION. mechanical.
WON Lyceum of the Philippines has acquired exclusive use of “Lyceum” in its corporate name under the doctrine of secondary meaning
. confusing or contrary to existing law. Toribio Teodoro. and the reduction of difficulties of administration and supervision over corporations. the test is whether the similarity is such as to mislead a person. only one word is different as “corporation” merely serves as distinguishing it from partnership and other business organizations. in that trade and to that group of the purchasing public. and respondent’s name has 2 different words.5
patently deceptive. —The policy underlying the prohibition in Section 18 against the registration of a corporate name which is "identical or deceptively or confusingly similar" to that of any existing corporation or which is "patently deceptive" or "patently confusing" or "contrary to existing laws. a word or phrase originally incapable of exclusive appropriation with reference to an article in the market. -A corporation has the exclusive right to use its own name and others must not be allowed to free-ride on a corporation’s goodwill. 74 Phil. "Under the doctrine of secondary meaning. 56). -The primary purposes of both petitioner and respondent as seen in their AOI to manufacture and deal among others electronic. Lyceum of the Philippines -Lyceum of the Philippines commenced a proceeding against Lyceum of Baguio to require it to change its corporate name. the evasion of legal obligations and duties. -While the SEC Guidelines on the Approval of Corporate and Partnership names must contain 2 other words different from the company already registered.
P. It is the same corporation with a different name.. is in no sense a new corporation. this Court cannot impose on a bank that changes its corporate name to notify a debtor of such change absent any law. circular or regulation requiring it. rights. Such act would be judicial legislation. Javier and Sons -PC Javier took out a loan from First Summa Savings and Mortgage Bank which changed its name to PAIC Savings and Mortgage Bank. we find that there is no requirement ordering a bank that changes its corporate name to formally notify all its debtors. It has no effect on the identity of the corporation. regulation or circular from the SEC or BSP requiring the formal notification of all debtors of banks of any change in corporate name. therefore. whether effected by a special act or under a general law. or liabilities. Unless there is a law. Inc. nor the successor of the original corporation.
10. or on its property.[
. as well as the regulations and circulars of both the SEC and the Bangko Sentral ng Pilipinas (BSP). 448). discretionary on the bank. The formal notification is.
WON petitioners are liable to pay considering that they were not properly notified of the change in corporate name of First Summa (now PIAC)
After going over the Corporation Code and Banking Laws. Wellington Department Store. and its character is in no respect changed. This being the case. such notification remains to be a mere internal policy that banks may or may not adopt A change in the corporate name does not make a new corporation.C. The corporation. 92 Phil. upon such change in its name.6
defendant) (Ang Si Heng vs.