USA v.

GUINTO
FACTS:
The cases have been consolidated because they all involve the doctrine of state immunity. In GR No. 76607, private
respondents re suing several officers of the US Air Force in connection with the bidding for barbering services in
Clark Air Base. In GR No. 80018, Luis Bautista was arrested following a buy-bust operation for violation of the
Dangerous Drugs Act. Bautista then filed a complaint for damages claiming that because of the acts of the
respondents, he lost his job. In GR No. 79470, Fabian Genove filed a complaint for damages against petitioner for
his dismissal as cook in the US Air Force. In GR No. 80258, complaint for damage was filed by the respondents
against petitioners for injuries allegedly sustained by plaintiffs. All cases invoke the doctrine of state immunity as
ground to dismiss the same.
ISSUE:
Are the petitioners immune from suit?
HELD:
It is clear that the petitioners in GR No. 80018 were acting in the exercise of their official functions. They cannot be
directly impleaded for the US government has not given its consent to be sued. In GR No. 79470, petitioners are not
immune for restaurants are commercial enterprises, however, claim of damages by Genove cannot be allowed on the
strength of the evidence presented. Barber shops are also commercial enterprises operated by private persons, thus,
petitioners in GR No. 76607 cannot plead any immunity from the complaint filed. In GR No. 80258, the respondent
court will have to receive the evidence of the alleged irregularity in the grant of the barbershop concessions before it
can be known in what capacity the petitioners were acting at the time of the incident.

US vs. Guinto (Consti1)

En Banc
Cruz, February 26,1990
Topic: Sovereignty - Suits not against the state - Failure to raise immunity as defense
Facts:

In the 4 consolidated suits, the USA moves to dismiss the cases on the ground that they are in effect suits
against it which it has not consented
On the first suit:
On February 24, 1986, the Western Pacific Contracting Office, Okinawa Area Exchange, US Air Force,
solicited bids for barber services contracts through its contracting officer James F. Shaw
Among those who submitted their bids were private respondents Roberto T. Valencia, Emerenciana C.
Tanglao, and Pablo C. del Pilar
Bidding was won by Ramon Dizon over the objection of the private respondents who claimed that he had
made a bid for 4 facilities, including the Civil Engineering Area which was not included in the invitation to
bid
The Philippine Area Exchange (PHAX), through its representatives petitioners Yvonne Reeves and Frederic
M. Smouse, upon the private respondents' complaint, explained that the Civil Engineering concession had
not been awarded to Dizon
But Dizon was alreayd operating this concession, then known as the NCO club concession
On June 30, 1986, the private respondents filed a complaint in the court below to compel PHAX and the
individual petitioners to cancel the award to Dizon, to conduct a rebidding for the barbershop concessions
and to allow the private respondents by a writ of preliminary injunction to continue operating the
concessions pending litigation
Respondent court directed the individual petitioners to maintain the status quo
On July 22, 1986, the petitioners filed a motion to dismiss and opposition to the petition for preliminary
injunction on the ground that the action was in effect a suit against USA which had not waived its nonsuability
On July 22, 1986, trial court denied the application for a writ of preliminary injunction
On Oct. 10, 1988, trial court denied the petitioners' motion to dismiss
On the second suit:

Fabian Genove filed a complaint for damages against petitioners Anthony Lamachia, Wilfredo Belsa, Rose
Cartalla and Peter Orascion for his dismissal as cook in the US Air Force Recreation Center at the John Hay
Air Station in Baguio City
It had been ascertained that Genove had poured urine into the soup stock used in cooking the vegetables
served to the club customers
His dismissal was effected on March 5, 1986 by Col. David C. Kimball, Commander of the 3rd Combat
Support Group, PACAF Clark Air Force Base
Genove filed a complaint in the RTC of Baguio
The defendants, joined by the United States of America, moved to dismiss the complaint, alleging that
Lamachia (the manager) as an officer of the US Air Force was immune from suit for the acts done by him
in his official capacity; they argued that the suit was in effect against USA, which had not given its consent
to be sued

Motion was denied by respondent judge: although acting intially in their official capacities, the defendants
went beyond what their functions called for; this brought them out of the protective mantle of whatever
immunities they may have had in the beginning

On the third suit:

Luis Bautisa, who was employed as a barracks boy in Camp O'Donnell, an extension of Clark Air Base,
was arrested following a buy-bust operation conducted by the individual petitioners Tomi J. King, Darrel D.
Dye and Stephen F. Bostick, officers of the US Air Force and special agents of the Air Force of Special
Investigators (AFOSI)
Bautista was dismissed from his employment as a result of the filing of the charge
He then filed a complaint for damages against the individual petitioners, claiming that it was because of
their acts that he was removed
Defendants alleged that they had only done their duty in the enforcement of laws of the Philippines inside
the American bases, pursuant to the RP-US Military Bases Agreement

The counsel for the defense invoked that the defendants were acting in their official capacity; that the
complaint was in effect a suit against the US without its consent
Motion was denied by respondent judge: immunity under the Military Bases Agreement covered only
criminal and not civil cases; moreover, the defendants had come under the jurisdiction of the court when
they submitted their answer
On the fourth suit:
Complaint for damages was filed by private respondents against the petitioners (except USA)
According to the plaintiffs, the defendants beat them up, handcuffed the, and unleashed dogs on them
Defendants deny this and claim that the plaintiffs were arrested for theft and were bitten by dogs because
they were struggling and resisting arrest
USA and the defendants argued that the suit was in effect a suit against the United States which had not
given its consent to be sued; that they were also immune from suit under the RP-US Bases Treaty for acts
done by them in the performance of their official functions
Motion to dismiss was denied by the trial court: the acts cannot be considered Acts of State, if they were
ever admitted by the defendants
Issue:
Whether or not the suits above are in effect suits against United States of America without its consent
In relation, whether or not the defendants are also immune from suit for acting within their official
functions.
Holding and Ratio:
1st suit: No. The barbershops concessions are commercial enterprises operated by private persons. They are
not agencies of the US Armed forces. Petitioners cannot plead immunity. Case should be remanded to the
lower court.
2nd suit: No. The petitioners cannot invoke the doctrine of state immunity. The restaurants are commercial
enterprises. By entering into the employment contract with Genove, it impliedly divested itself of its
sovereign immunity from suit. (However, the petitioners are only suable, not liable.)
3rd suit: Yes. It is clear that the petitioners were acting in the exercise of their official functions. For
discharging their duties as agents of the US, they cannot be directly impleaded for acts attributable to their
principal, which has not given its consent to be sued.
4th suit: The contradictory factual allegations deserve a closer study. Inquiry must first be made by the
lower court. Only after can it be known in what capacity the petitioners were acting at the time of the
incident.

GARCIA VS CHIEF
Facts: The plaintiff filed with the Court of First Instance of Pangasinan, an action to collect a sum of money against
the above defendants. He suffered injuries while undergoing a 10-month military training at Camp Floridablanca,
Pampanga. He filed a claim under Commonwealth Act 400 and in April 1957 with the Adjutant Generals Office
which later disallow his claim for disability benefit. After further demands of the plaintiff, the same Adjutant
Generals Office denied the claim, alleging that the Commonwealth Act 400 had already been repealed by RA 610
which took effect January 1, 1950. That by the reason of the injuries suffered by plaintiff, he was deprived of his
sight or vision rendering him permanently disabled; and by the reason of unjustified refusal of defendants on the
claim, plaintiff was deprived of his disability pension from July 1948 totalling no less than P4,000 at the rate of
P20/mo and suffered moral damages and attorneys fees the amount of P2,000. The Philippine Veterans
Administration and the Chief of Staff of AFP file separate motions to dismiss the complaint on the grounds that the
court has no jurisdiction over the subject matter of the complaint; that the plaintiff failed to exhaust all
administrative remedies before coming to court; that the complaint states no cause of action; and that the cause of
action is barred by the statute of limitations. Acting on the said Motion, the Court of First Instance, on March 2,
1962, rendered an order dismissing the complaint on the ground that action has prescribed. Motion for
reconsideration of the said order having been denied, the plaintiff has interposed this appeal.
Issue: Whether or not the lower court is right in dismissing the complaint.
Held: The SC uphold the order of dismissal for the simple reason that the Court of First Instance has no jurisdiction
over the subject matter, it being a money claim against the government. It was already held in the case of New
Manila Lumber vs. Republic in L-14248, 4/28/60, that a claim for the recovery of money against the government
should be filed with the Auditor General, in line with the principle that the State can not be sued without its consent.
Commonwealth Act 327 provides:
Section 1. In all cases involving the settlement of accounts or claims, other than those of accountable officers, the
Auditor General shall act and decide the same within 60 days, exclusive of Sundays and holidays after their
presentation.
Section 2. The party aggrieved by the final decision of the Auditor General in the settlement of an account or claim,
may within 30 days from receipt of decision, take an appeal in writing to (c) the Supreme Court, if the appellant is a
private person or entity.The well established rule that no recourse to court can be had until all administrative
remedies had been exhausted and that actions against administrative officers should not be entertained if superior
administrative officer could grant relief is applicable to this case. The order dismissing the complaint is hereby
affirmed, without pronouncement as to costs.
M.H. Wylie v RarangG.R. No. 74135, May 28, 1992
FACTS:Petitioner M.H. Wylie was the assistant administrative officer while petitioner Capt. James Williams
wasthe commanding officer of the US Naval Base in Subic Bay, Olongapo City. Private Respondent (PR)Aurora
Rarang was assigned as merchandise control guard in the Office of the Provost Marshal M.H. Wylie, in his capacity
as asst. admin. Officer, supervised the publication of the so-called Plan of the Day(POD) published daily by
the US Naval Base Station. The POD featured important announcements, necessary precautions and general
matters of interest to military personnel. One of the regular features of the POD was the action line inquiry
(NAVSTA ACTION LINEINQUIRY), a telephone answering device in the Office of the Admin Asst intended to
provide personnel access to the Commanding Officer on mattersthey feel should be brought to his attention for
correction or investigation. On February 3, 1978, the POD under the (NAVSTA) action line inquiry, published and
mentioned a certain AURING as a disgrace to her division and to the Office of the Provost Marshal. The same
article explicitly implied that Auring was consuming and appropriating for herself confiscated items like like
cigarettes and foodstuffs. The PR was the only one who was named Auring in the Office of the Provost Marshal.
As a result thereof, she was investigated by her superior. The PR commenced an ACTION FOR DAMAGES in the
CFI of Zambales against M.H. Wylie, Capt. James Williams and the US Naval Base alleging that the article

constituted false, injurious, and malicious defamation and libel tending to impeach her honesty, virtue and reputation
exposing her to public hatred, contempt and ridicule. The TC ruled in favour of the PR and dismissed the suit
against the US Naval Base. The IAC (now,CA) affirmed the judgment of the TC with modifications as to the amount
of damages awarded. ISSUE: Whether or not the American naval officers (such as Wylie and Capt. Williams) who
commit a crime or tortious act while discharging official functions still covered by the principle of state
immunity from suit. Does the grant of rights, power, and authority to the US under the RP-US
Bases Treaty cover immunity of its officers from crimes and torts?
HELD:The general rule is that public officials can be held personally accountable for acts claimed to have been
performed in connection with official duties where they have acted ultra vires or where there is showing of bad
faith (Chavez v. Sandiganbayan).It may be argued, as a general rule, that Capt. Williams as
commanding officer of the naval base was far removed in the chain of command from the offensive
publication and it would be asking too much to hold him responsible for everything which goes wrong onthe base.
However, in this particular case, the records show that the offensive publication was sent to the commanding officer
for approval and that he approved it. ART. 2176, CC prescribes a civil liability for damages caused by a
persons act or omission constituting fault or negligence, stating that, Whoever by act or omission,
causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or
negligence,.. Moreover, ART. 2219(7), Civil Code provides that moral damages may be recovered in case of libel,
slander or any other form of defamation.Indeed, the imputation of theft contained in the POD was a defamation
against the character and reputation of the PR. Petitioner Wylie himself admitted that the Office of the Provost
Marshal explicitly recommended the deletion of the name Auring if the article will be published.
The petitioners, however, were NEGLIGENT because under their direction, they issued the publication without
deleting the said name. Such act or omission was ULTRA VIRES and CANNOT be deemed part of
official duty. It was a TORTIOUS ACT which ridiculed the PR. As a result of petitioners act, PR suffered
besmirched reputation, serious anxiety, wounded feelings and social humiliation, especially so, since the article was
baseless and false. The petitioners, alone, in their personal capacities, are liable for the damages they caused the
Private Respondent
LIANG VS PEOPLE OF THE PHILIPPINES
Petitioner: Jeffrey Liang
Respondent: People of the Philippines
FACTS:
Petitioner is an economist working with the Asian Development Bank (ADB). Sometime in 1994, for allegedly
uttering defamatory words against fellow ADB worker Joyce Cabal, he was charged before the MeTC of
Mandaluyong City with two counts of oral defamation. Petitioner was arrested by virtue of a warrant issued by the
MeTC. After fixing petitioners bail, the MeTC released him to the custody of the Security Officer of ADB. The next
day, the MeTC judge received an office of protocol from the DFA stating that petitioner is covered by immunity
from legal process under section 45 of the Agreement between the ADB and the Philippine Government regarding
the Headquarters of the ADB in the country. Based on the said protocol communication that petitioner is immune
from suit, the MeTC judge without notice to the prosecution dismissed the criminal cases. The latter filed a motion
for reconsideration which was opposed by the DFA. When its motion was denied, the prosecution filed a petition for
certiorari and mandamus with the RTC of Pasig City which set aside the MeTC rulings and ordered the latter court
to enforce the warrant of arrest it earlier issued. After the motion for reconsideration was denied, the petitioner
elevated the case to the SC via a petition for review arguing that he is covered by immunity under the Agreement
and that no preliminary investigation was held before the criminal case.
ISSUES:
(1) Whether or not the petitioners case is covered with immunity from legal process with regard to Section 45 of
the Agreement between the ADB and the Philippine Govt.
(2) Whether or not the conduct of preliminary investigation was imperative.

HELD:
(1) NO. The petitioners case is not covered by the immunity. Courts cannot blindly adhere to the communication
from the DFA that the petitioner is covered by any immunity. It has no binding effect in courts. The court needs to
protect the right to due process not only of the accused but also of the prosecution. Secondly, the immunity under
Section 45 of the Agreement is not absolute, but subject to the exception that the acts must be done in official
capacity. Hence, slandering a person could not possibly be covered by the immunity agreement because our laws
do not allow the commission of a crime, such as defamation, in the name of official duty.
(2) NO. Preliminary Investigation is not a matter of right in cases cognizable by the MeTC such as this case. Being
purely a statutory right, preliminary investigation may be invoked only when specifically granted by law. The rule
on criminal procedure is clear that no preliminary investigation is required in cases falling within the jurisdiction of
the MeTC.
G.R. No. 152318 April 16,2009DEUTSCHE GESELLSCHAFT FRTECHNISCHE
ZUSAMMENARBEIT,ET. AL. vs.HON. COURT OF APPEALS, ET. AL.
FACTS: The governments of the Federal Republic of Germany and the Republic of the Philippines ratified an
Agreement called Social Health InsuranceNetworking and Empowerment (SHINE which was designed
to"enable Philippine familiesespecially pooronesto maintain their health and securehealth care of sustainable quali
ty." Privaterespondents were engaged as contractemployees hired by GTZ to work for
SHINE.Nicolay, a Belgian national, assumedthe post of SHINE Project Manager.Disagreements eventually arose bet
weenNicolay and private respondents in matterssuch as proposed salary adjustments, and the
course Nicolay was taking in the implementation of SHINE different from her predecessors. The dispute culminated
in a signed by the private respondents, addressed to Nicolay, and copies furnished officials of the DOH, Philheath,
and the director of the Manila office of GTZ. The letter raised several issues which private respondents claim had
been brought up several times in the past, but have not been given appropriate response. In response, Nicolay wrote
each of the private respondents a letter, all similarly worded except for their respective addressees. She informed
private respondents that they could no longer find any reason to stay with the project unless ALL of these issues be
addressed immediately and appropriately. Under the foregoing premises and circumstances, it is now imperative that
I am to accept your resignation, which I expect to receive as soon as possible. Negotiations ensued between private
respondents and Nicolay, but for naught. Each of the private respondents received
a letterfrom Nicolay, informing them of the pre-termination of their
contracts of employmenton the grounds of "serious and grossinsubordination, among others, resulting toloss of
confidence and trust."
HELD: NO. This self-description of GTZ in its own official website gives further cause for pause in
adopting petitioners argument that GTZ is entitled to immunity from suit because it is
"animplementing agency." The abovequotedstatement does not dispute thecharacterization of GTZ as an "implement
ingagency of the Federal Republic of Germany, "yet it bolsters the notion that as a company
organized under private law, it has a legal personality independent of that of the Federal Republic of Germany. The
Court is thus holds and so
rulesthat GTZ consistently has been unable toestablish with satisfaction that it enjoys theimmunity from suit
generally enjoyed by its parent country, the Federal Republic of Germany.
Title: US v. Fowler, 1 Phil. 614
Subject Matter: Applications of the provisions of Art. 2 of the Revised Penal Code
Facts:

In August 12, 1901, the defendants were accused of the theft of 16 champagne bottles worth 20 dollars while on
board the vessel, Lawton. The counsel for defendants alleged to the Court of First Instance of Manila that they
were without jurisdiction over the crime charged. Since it happened in the high seas and not in the city of Manila or
in the territory in which the jurisdiction of the court extends, they asked that the case be dismissed.
Issue:
Whether or not the Court of First Instance of Manila has jurisdiction over the criminal case theft committed on board
while navigating on high seas on a vessel not registered in the Philippines.
Held:

No. The Philippine court has jurisdiction over the crime of theft committed on high seas on board a vessel not
registered or licensed in the Philippines. The English Rule states that such crimes are triable in our country when
crimes are committed on board a foreign vessel sailing from a foreign port and which enters the Philippine waters.
In the case at bar, the vessel Lawton was navigating the high seas at the commission of the crime. Given the location
of the vessel at the time, such act is not triable within our jurisdiction.

PEOPLE VS WONG CHENG

The appellant, in representation of the Attorney General, filed an appeal that urges the revocation of a demurrer
sustained by the Court of First Instance of Manila presented by the defendant. The defendant, accused of having
illegally smoked opium aboard the merchant vessel Changsa of English nationality while the said vessel was
anchored in Manila Bay, two and a half miles from the shores of the city. In the said demurrer, the defendant
contended the lack of jurisdiction of the lower court of the said crime, which resulted to the dismissal of the case.

Issue:
Whether or not the Philippine courts have jurisdiction over the crime committed aboard merchant vessels anchored
in our jurisdictional waters.

Held:
Yes. The crime in the case at bar was committed in our internal waters thus the Philippine courts have a right of
jurisdiction over the said offense. The Court said that having the opium smoked within our territorial waters even
though aboard a foreign merchant ship is a breach of the public order because it causes such drugs to produce
pernicious effects within our territory. Therefore, the demurrer is revoked and the Court ordered further proceedings.
US VS LOOK CHAW
FACTS:
Upon arrival of steamship Erroll of English nationality, that it came from Hongkong, and that it was bound for
Mexico, via the call ports of Manila and Cebu, 2 sacks of opium where found during the inspection and search of the
cargo.
o Smaller sack of opium on the cabin near the saloon
o larger sack in the hold

o Later on, there was also 4 cans of opium found on the part of the ship where the firemen habitually sleep
the firemen and crew of foreign vessels, pursuant to the instructions he had from the Manila custom-house, were
permitted to retain certain amounts of opium, always provided it should not be taken shore so it was returned
2 charges were filed against Look Chaw at the Court of First Instance of Cebu:
o unlawful possession of opium
o unlawful sale of opium
Look Chaw admitted that he had bought these sacks of opium, in Hongkong with the intention of selling them as
contraband in Mexico or Vera Cruz, and that, as his hold had already been searched several times for opium, he
ordered two other Chinamen to keep the sack.
The court ruled that it did not lack jurisdiction, inasmuch as the crime had been committed within its district, on
the wharf of Cebu. The court sentenced him to5 years imprisonment, to pay a fine of P10,000, with additional
subsidiary imprisonment in case of insolvencyxxx It further ordered the confiscation, in favor of the Insular
Government.
ISSUE: W/N the Philippine court has jurisdiction.
HELD: YES. Modified by reducing the imprisonment and the fine imposed to six months and P1,000

GR: mere possession of a thing of prohibited use in these Islands, aboard a foreign vessel in transit, in any of
their ports, does NOT constitute a crime triable by the courts of this country, on account of such vessel being
considered as an extension of its own nationality

EX: when the article, whose use is prohibited within the Philippine Islands, in the present case a can of opium,
is landed from the vessel upon Philippine soil, thus committing an open violation of the laws of the land with respect
to which, as it is a violation of the penal law in force at the place of the commission of the crime, only the court
established in that said place itself had competent jurisdiction, in the absence of an agreement under an international
treaty.
G.R. No. L-45144 April 3, 1939
M. E. GREY, Plaintiff-Appellant, vs. INSULAR LUMBER COMPANY,defendant-appelle.
C. H. Van Hoven and Harvey and O'Brien for appellant.
Ross, Lawrence, Selph and Carrascoso for appellee.
CONCEPCION, J.: chanrobles virtual law library
The only question of law raised in this appeal is whether the plaintiff-appellant is entitled, as stockholder of the
defendant-appellee Insular Lumber Company, to inspect and examine the books records of the transactions of said
defendant.chanroblesvirtualawlibrary chanrobles virtual law library
The parties submitted a stipulation of facts on which the lower court based its judgment denying
the mandamus against the defendant and absolving it from the complaint.chanroblesvirtualawlibrary chanrobles
virtual law library
According to the stipulation of facts, the defendants was and is a corporation organized and existing under the laws
of the State of New York, licensed to engage in business in the Philippines, with offices in the City of Manila, in
Fabrica, Occidental Negros, in New York and in Philadelphia. The plaintiff was and is the owner and possessor of 57
shares of the capital stock of the defendant corporation, registered in his name in the books thereof; that he does not
own three per cent of the total capital stock of the corporation, nor does he represent stockholders who own three per
cent of its capital; that during the years 1932 and 1933, the plaintiff asked the offices of the defendant in Manila and
in Fabrica to permit him to examine the books and records of the business of said defendant, but he was not allowed
to do so; that under the law of New York, the right of a stockholder to examine the books and records of a
corporation organized under the laws of that State, have been, during the entire period material to this action, only
those provided in section 77 of the Stock Corporation Law, which reads as follows:
Financial Statement to Stockholders: Stockholders owning three per centum of the shares of any corporation other
than a moneyed corporation may make a written request to the treasurer or other fiscal officer thereof for a statement

of its affairs, under oath, embracing a particular account of all its assets and liabilities, and the treasurer shall make
such statement and deliver it to the person making the request within thirty days thereafter, and keep on file in the
office of the corporation for twelve months thereafter a copy of such statement, which shall at all times during
business hours be exhibited to any stockholders demanding an examination thereof; but the treasurer shall not be
required to deliver more than one such statement in any one year. The Supreme Court, or any justice thereof, may
upon application, for good cause shown, extend the time for making and delivering such statement. For every
neglect or refusal to comply with the provisions of this section the corporation shall and pay to the person making
such request the sum of Fifty Dollars, and the further sum of ten dollars for every twenty-four hours thereafter until
such statement shall be furnished. (S. C. L., sec. 77.)
That neither the plaintiff nor any other stockholder of the defendant corporation has asked its treasurer or any of its
officers for a statement of its affairs, as provided in the statutes of New York; neither did the plaintiff ask to be
allowed to examine any of the statements prepared by the defendant corporation and existing in its files, as provided
by the statutes of New York.chanroblesvirtualawlibrary chanrobles virtual law library
In the light of the foregoing facts agreed upon by the parties and in accordance with section 77 of the Stock
Corporation Law of New York which is conceded to be the law that governs the right of a stockholder to examine
the books and papers of a corporation, it is a question fully settled that the plaintiff not being a stockholder owning
at least three per cent of the capital stock of the defendant corporation, has no right to examine the books and
records of the corporation nor to require a statement of its affairs embracing a particular account of its assets and
liabilities.chanroblesvirtualawlibrary chanrobles virtual law library
Plaintiff-appellant contends, however, that, in accordance with our Corporation Law, under which the defendant
company was registered to do business in the Philippines, the plaintiff, as stockholder, is entitled to inspect the
record of the transactions of the defendant corporation (sec. 51, Act No. 1459, and this right, which is recognized in
the common law, has not been altered by section 77 of the Stock Corporation Law of New York quoted in the
stipulation of facts, and can be enforced by mandamus.chanroblesvirtualawlibrary chanrobles virtual law library
To this, defendant corporation answers, in the first place, that stipulation of facts is finding upon both parties and
cannot be altered by either of them. (25 R. C. L., 1104, 1105.) In the second place, on the strength of this principle,
plaintiff-appellant is bound to adhere to the agreement made by him with the defendant corporation in paragraph
four of the stipulation of facts, to the effect that the rights of a stockholder, under the law of New York, to examine
the books and records of a corporation organized under the laws of said State, and during the entire period material
to this action, are only those provided in section 77 Stock Corporation Law of New York. Under this law, plaintiff
has the right to be furnished by the treasurer or other fiscal officer of the corporation with statement of its affairs
embracing a particular account of all its assets and liabilities. In the third place, inasmuch as plaintiff, either at the
hearing or in his motion for new trial, did not ask to have the stipulation of facts altered or changed, he cannot now,
for the first time on appeal, raise the question that aside from the right conferred upon him by section 77 of the Stock
Corporation Law of New York, he also entitled under the common law to examine and inspect the books and records
of the defendant corporation. In the fourth place, neither can this right under the common law be granted the
defendant in the present case, since the same can only be granted at the discretion of the court, under certain
conditions, to wit:
( a) That the stockholder of a corporation in New York has the right to inspect its books and records if it can be
shown that he seeks information for an honest purpose (14 C. J., 853), or to protect his interest as stockholder. ( In
re Steinway, 159 N. Y., 250; 53 N. E., 1103; 45 L. R. A., 461 [aff. 31 App. Div., 70; 52 N. Y. S.,
343]).chanroblesvirtualawlibrarychanrobles virtual law library
( b) That said right to examine and inspect the books of the corporation must be exercised in good faith, for a
specific and honest purpose, and not to gratify curiosity, or for speculative or vexatious purposes. (14 C. J., 854,
855.)
The appellant has made no effort to prove or even allege that the information he desired to obtain through the
examination and inspection of defendant's books was necessary to protect his interests as stockholder of the
corporation, or that it was for a specific and honest purpose, and not to gratify curiosity, nor for speculative or
vexatious purposes.chanroblesvirtualawlibrary chanrobles virtual law library

In view of the foregoing, we affirm the judgment of the lower court, with costs against the appellant. So ordered.

Pedro Palting vs San Jose Petroleum, Inc.

In 1956, San Jose Petroleum, Inc. (SJP), a mining corporation organized under the laws of Panama, was allowed by
the Securities and Exchange Commission (SEC) to sell its shares of stocks in the Philippines. Apparently, the
proceeds of such sale shall be invested in San Jose Oil Company, Inc. (SJO), a domestic mining corporation. Pedro
Palting opposed the authorization granted to SJP because said tie up between SJP and SJO is violative of the
constitution; that SJO is 90% owned by SJP; that the other 10% is owned by another foreign corporation; that a
mining corporation cannot be interested in another mining corporation. SJP on the other hand invoked that under the
parity rights agreement (Laurel-Langley Agreement), SJP, a foreign corporation, is allowed to invest in a domestic
corporation.
ISSUE: Whether or not SJP is correct.
HELD: No. The parity rights agreement is not applicable to SJP. The parity rights are only granted to American
business enterprises or enterprises directly or indirectly controlled by US citizens. SJP is a Panamanian corporate
citizen. The other owners of SJO are Venezuelan corporations, not Americans. SJP was not able to show contrary
evidence. Further, the Supreme Court emphasized that the stocks of these corporations are being traded in stocks
exchanges abroad which renders their foreign ownership subject to change from time to time. This fact renders a
practical impossibility to meet the requirements under the parity rights. Hence, the tie up between SJP and SJO is
illegal, SJP not being a domestic corporation or an American business enterprise contemplated under the LaurelLangley Agreement.
State Investment House, Inc. vs. Citibank, et al, G.R. No. 79926-27, Oct. 17, 1991

FACTS:
Consolidated Mines, Inc. (CMI) obtained loans from Citibank, Bank of America and HSBC, all foreign corporations but with branches
in the Philippines. Meanwhile, State Investment House, Inc. (SIHI) and State Financing Center, Inc. (SFCI), also creditors of CMI,
filed collection suits against the latter with writs of preliminary attachment. Subsequently, the three banks jointly filed with the court a
petition for involuntary insolvency of CMI. SHI and SFCI opposed the petition on the ground that the petitioners are not resident
creditors in contemplation of the Insolvency Law.
ISSUE: Whether or not a foreign corporation with a branch in the Philippines and doing business
therein can be considered a resident
HELD:
Foreign corporations duly licensed to do business in the Philippines are considered residents of the Philippines, as the word is
understood in Sec. 20 of the Insolvency Law, authorizing at least three resident creditors of the Philippines to file a petition to declare
a corporation insolvent. The Tax Code declares that the term resident foreign corporation applies to foreign corporation engaged in
trade or business within the Philippines as distinguished from a non-resident foreign corporation which is not engaged in trade or
business within the Philippines. The Offshore Banking Law sates that: Branches, subsidiaries, affiliates, extension offices or any
other units of corporation or juridical person organized under the laws of any foreign country operating in the Philippines shall be
considered residents of the Philippines. The General Banking Act places branches and agencies in the Philippines of foreign
banks in the category as commercial banks, rural banks, stock savings and loan association making no distinction between the
former ad the latter in so far as the terms banking institutions and banks are used in said Act.