1. G.R. No. L-53820 June 15, 1992
YAO KA SIN TRADING, owned and operated by YAO KA
SIN, petitioner,
vs.
HONORABLE COURT OF APPEALS and PRIME WHITE CEMENT
CORPORATION, represented by its President-Chairman,
CONSTANCIO B. MALAGNA, respondents.
Facts: The root of this controversy is the undated letter-offer
(hereinafter referred to as Exh. “A”) of Constancio B. Maglana,
President and Chairman of the Board of private respondent Prime
White Cement Corporation (PWCC), to Yao Ka Sin Trading (YKS),
which describes itself as "a business concern of single
proprietorship," and is represented by its manager, Mr. Henry Yao.
The letter is about the offer of Maglana to sell to YKS 45,000 bags of
white cement with the prices a) P24.30 per 94 lbs. bag net, FOB Cebu
City; and b) P23.30 per 94 lbs. bag net, FOB Asturias Cebu at the
option of YKS. Terms of Payment is a down payment of P243,000.00
payable on the signing of this contract and the balance to be paid
upon presentation of corresponding shipping documents.
23 days after the signing of Exhibit "A", the Board of Directors of
PWCC disapproved the same. PWCC wrote a letter to YKS (Exh. “1”)
informing the latter of its disapproval of Exh. “A”. The Board of
Directors of PWCC however, agreed to sell to YKS 10,000 bags of
cement not because of Exh. “A” but because of a new and separate
contract. A letter was then sent to YKS to that effect. (Exh. 4)
YKS on its part, denied having received a copy of Exh. “1”.
PWCC wrote another letter to YKS (Exh. “2”) that it is withdrawing or
taking delivery of not less than 10,000 bags of white cement. PWCC
also reminded YKS that it only committed to deliver 10,000 bags of
cement of which 4,150 bags were already delivered.
YKS wrote PWCC insisting on the delivery of 45,030 bags of cement.
Another letter was sent to PWCC by YKS, the latter insisting that the
former comply fully with the terms of Exh. “A”.
As of 7 December 1973, PWCC had delivered only 9,775 bags of white
cement.
PWCC in its reply (Exh. “7”) reiterated the unenforceability of Exhibit
“A”.
YKS then filed a complaint for Specific Performance with Damages
with the then CFI of Leyte.
In its answer, PWCC posits:
1. YKS "has no legal personality to sue having no legal personality
even by fiction to represent itself;
2. The signing of Exhibit “A” was subject to the condition that it
be approved by the Board of Directors of PWCC, as corporate
commitments are made through it;
3. the latter disapproved it, hence Exhibit "A" was never
consummated and is not enforceable against PWCC;
4. it agreed to sell 10,000 bags of white cement, not under
Exhibit "A", but under a separate contract;
5. the rejection by the Board of Exhibit "A" was made known to
YKS through various letters sent to it;
6. YKS knew that only 10;000 bags were sold to it without any
terms or conditions, at P24.30 per bag FOB Asturias, Cebu;
7. YKS is solely to blame for the failure to take complete delivery
of 10,000 bags for it did not send its boat or truck to PWCC's
plant; and
8. YKS has, therefore, no cause of action.
The trial court found that according to the By-Laws of PWCC, the
Chairman of the Board, who is also the President of the corporation,
"has the power to execute and sign, for and in behalf of the
corporation, all contracts or agreements which the corporation enters
into," subject to the qualification that "all the president's actuations,
prior to and after he had signed and executed said contracts, shall be
given to the board of directors of defendant Corporation."
Furthermore, it was likewise stated for the record "that the
corporation is a semi-subsidiary of the government because of the
NIDC participation in the same, and that all contracts of the
corporation should meet the approval of the NIDC and/or the PNB
Board because of an exposure and financial involvement of around
P10 million therein.
The RTC, however, ruled in favor of YKS. The trial court interpreted
the provision of the By-Laws to mean that the latter may enter into
such contract or agreement at any time and that the same is not
subject to the ratification of the board of directors but "subject only to
the declared objects and purpose of the corporation and existing laws.
The CA reversed the lower court’s finding stating that While it may be
true that Maglana is President of defendant corporation nowhere in
the Articles of Incorporation nor in the By-Laws of said corporation
was he empowered to enter into any contract all by himself and bind
the corporation without first securing the authority and consent of the
Board of Directors. A corporate officers power as an agent must be
sought from the law, the articles of incorporation and the By-Laws or
from a resolution of the Board
Issue: Whether or not the aforesaid letter-offer, as accepted by YKS,
is a contract that binds the PWCC.
Ruling: No.
Rationale.
Since a corporation, such as the private respondent, can act only
through its officers and agents, "all acts within the powers of said
corporation may be performed by agents of its selection; and, except
so far as limitations or restrictions may be imposed by special charter,
by-law, or statutory provisions, the same general principles of law
which govern the relation of agency for a natural person govern the
officer or agent of a corporation, of whatever status or rank, in
respect to his power to act for the corporation; and agents when once
appointed, or members acting in their stead, are subject to the same
rules, liabilities and incapacities as are agents of individuals and
private persons.
A corporate officer or agent may represent and bind the corporation
in transactions with third persons to the extent that authority to do so
has been conferred upon him, and this includes powers which have
been intentionally conferred, and also such powers as, in the usual
course of the particular business, are incidental to, or may be implied
from, the powers intentionally conferred, powers added by custom
and usage, as usually pertaining to the particular officer or agent, and
such apparent powers as the corporation has caused persons dealing
with the officer or agent to believe that it has conferred.
While there can be no question that Mr. Maglana was an officer — the
President and Chairman — of private respondent corporation at the
time he signed Exhibit "A", the above provisions of said private
respondent's By-Laws do not in any way confer upon the President
the authority to enter into contracts for the corporation
independently, of the Board of Directors. That power is exclusively
lodged in the latter.
Cost against petitioner.
2. WOLFGANG AURBACH, ET AL. vs. SANITARY WARES
MANUFACTURING CORP, ET AL.
G.R. No. 75875 ; December 15, 1989
DOCTRINE: The legal concept of a Joint Venture is of common law
origin, and has no precise legal definition. Under Philippine law, a
Joint Venture is a form of partnership and should thus be governed by
the Law on Partnerships, which would then include the features of
separate juridical personality, mutual agency among the co-ventures ,
and unlimited liability.
FACTS:
In 1961, Saniwares, a domestic corporation was incorporated for the
primary purpose of manufacturing and marketing sanitary wares. One
of the incorporators, Mr. Baldwin Young went abroad to look for
foreign partners who could help in its expansion plans.
On August 15, 1962, American Standard Inc. ASI, a foreign
corporation domiciled in Delaware, United States entered into an
Agreement with Saniwares and some Filipino investors whereby ASI
and the Filipino investors agreed to participate in the ownership of an
enterprise which would engage primarily in the business of
manufacturing in the Philippines and selling here and abroad vitreous
china and sanitary wares.. The parties agreed that the business
operations in the Philippines shall be carried on by an incorporated
enterprise and that the name of the corporation shall initially be
"Sanitary Wares Manufacturing Corporation."
The joint enterprise thus entered into by the Filipino investors and the
American corporation prospered. Unfortunately, with the business
successes, there came a deterioration of the initially harmonious
relations between the two groups, ASI and the Filipino investors.
On March 8, 1983, the annual stockholders' meeting was held. The
stockholders held the election of the members of the board of
directors. The ASI group nominated three persons namely; Wolfgang
Aurbach, John Griffin and David P. Whittingham. The Philippine
investors nominated six, namely; Ernesto Lagdameo, Sr., Raul A.
Boncan, Ernesto R. Lagdameo, Jr., George F. Lee, and Baldwin Young.
Mr. Eduardo R, Ceniza then nominated Mr. Luciano E. Salazar, who in
turn nominated Mr. Charles Chamsay. The chairman, Baldwin Young
ruled the last two nominations out of order on the basis of section 5
(a) of the Agreement.
3. Articles of Incorporation
(a) The Articles of Incorporation of the Corporation shall be
substantially in the form annexed hereto as Exhibit A and,
insofar as permitted under Philippine law, shall specifically
provide for
(1) Cumulative voting for directors:
xxx xxx xxx
5. Management
(a) The management of the Corporation shall be vested in a
Board of Directors, which shall consist of nine individuals. As
long as American-Standard shall own at least 30% of the
outstanding stock of the Corporation, three of the nine directors
shall be designated by American-Standard, and the other six
shall be designated by the other stockholders of the
Corporation.
These incidents triggered off the filing of separate petitions by the
parties with the Securities and Exchange Commission (SEC). The first
HOLDING: Joint Venture.
petition filed was for preliminary injunction by Saniwares, Emesto V.
Lagdameo, Baldwin Young, Raul A. Bonean Ernesto R. Lagdameo, Jr.,
Enrique Lagdameo and George F. Lee against Luciano Salazar and
Charles Chamsay. The second petition was for quo warranto and The rule is that whether the parties to a particular contract have
application for receivership by Wolfgang Aurbach, John Griffin, David thereby established among themselves a joint venture or some other
Whittingham, Luciano E. Salazar and Charles Chamsay against the relation depends upon their actual intention which is determined in
group of Young and Lagdameo and Avelino F. Cruz. Both sets of accordance with the rules governing the interpretation and
parties except for Avelino Cruz claimed to be the legitimate directors construction of contracts.
of the corporation.
The ASI Group contend that the actual intention of the parties should
These present consolidated petitions seek the review of the amended be viewed strictly on the "Agreement" wherein it is clearly stated that
decision of the Court of Appeals in the separate petitions, which the parties' intention was to form a corporation and not a joint
ordered that in all subsequent elections for directors of Saniwares, venture.
American Standard Inc. (ASI) cannot nominate more than three (3)
They specifically mention number 16 under Miscellaneous Provisions
directors; that the Filipino stockholders shall not interfere in ASI's
which states:
choice of its three (3) nominees; that, on the other hand, the Filipino
stockholders can nominate only six (6) candidates and in the event
xxx xxx xxx
they cannot agree on the six (6) nominees, they shall vote only
among themselves to determine who the six (6) nominees will be, c) nothing herein contained shall be construed to constitute
with cumulative voting to be allowed but without interference from any of the parties hereto partners or joint venturers in respect
ASI. of any transaction hereunder. (At P. 66, Rollo-GR No. 75875)

The main issue hinges on who were the duly elected directors of
Saniwares for the year 1983 during its annual stockholders' meeting
held on March 8, 1983. To answer this question, the nature of the
business established by the parties must be determined, whether it
was a joint venture or a corporation.
Contrary to ASI Group's stand, the Lagdameo and Young Group
pleaded in their Reply and Answer to Counterclaim that the
“Agreement” failed to express the true intent of the parties, to wit:
xxx xxx xxx

ISSUE: WON the nature of the business is a Joint Venture or a

Corporation.
 4. While certain provisions of the Agreement would make it
appear that the parties thereto disclaim being partners or joint
venturers such disclaimer is directed at third parties and is not
inconsistent with, and does not preclude, the existence of two
distinct groups of stockholders in Saniwares one of which (the
Philippine Investors) shall constitute the majority, and the
other ASI shall constitute the minority stockholder. In any
event, the evident intention of the Philippine Investors and
ASI in entering into the Agreement is to enter into ajoint
venture enterprise, and if some words in the Agreement
appear to be contrary to the evident intention of the parties,
the latter shall prevail over the former (Art. 1370, New Civil
Code). The various stipulations of a contract shall be
interpreted together attributing to the doubtful ones that
sense which may result from all of them taken jointly (Art.
1374, New Civil Code). Moreover, in order to judge the
intention of the contracting parties, their contemporaneous
and subsequent acts shall be principally considered. (Art.
1371, New Civil Code).
In the instant cases, our examination of important provisions of the
“Agreement”as well as the testimonial evidence presented by the
Lagdameo and Young Group shows that the parties agreed to
establish a joint venture and not a corporation. The history of the
organization of Saniwares and the unusual arrangements which
govern its policy making body are all consistent with a joint venture
and not with an ordinary corporation. As stated by the SEC:
According to the unrebutted testimony of Mr. Baldwin Young,
he negotiated the Agreement with ASI in behalf of the
Philippine nationals. He testified that ASI agreed to accept the
role of minority vis-a-vis the Philippine National group of
investors, on the condition that the Agreement should contain
provisions to protect ASI as the minority.
An examination of the Agreement shows that certain
provisions were included to protect the interests of ASI as the
minority. For example, the vote of 7 out of 9 directors is
required in certain enumerated corporate acts [Sec. 3 (b) (ii)
(a) of the Agreement]. ASI is contractually entitled to
designate a member of the Executive Committee and the vote
of this member is required for certain transactions [Sec. 3 (b)
(i)].
The Agreement also requires a 75% super-majority vote for
the amendment of the articles and by-laws of Saniwares [Sec.
3 (a) (iv) and (b) (iii)]. ASI is also given the right to designate
the president and plant manager [Sec. 5 (6)]. The Agreement
further provides that the sales policy of Saniwares shall be
that which is normally followed by ASI [Sec. 13 (a)] and that
Saniwares should not export "Standard" products otherwise
than through ASI's Export Marketing Services [Sec. 13 (6)].
Under the Agreement, ASI agreed to provide technology and
know-how to Saniwares and the latter paid royalties for the
same. (At p. 2).
xxx xxx xxx
It is pertinent to note that the provisions of the Agreement
requiring a 7 out of 9 votes of the board of directors for
certain actions, in effect gave ASI (which designates 3
directors under the Agreement) an effective veto power.
Furthermore, the grant to ASI of the right to designate certain
 officers of the corporation; the super-majority voting
requirements for amendments of the articles and by-laws; and
most significantly to the issues of tms case, the provision that
ASI shall designate 3 out of the 9 directors and the other
stockholders shall designate the other 6, clearly indicate that
there are two distinct groups in Saniwares, namely ASI, which
owns 40% of the capital stock and the Philippine National
stockholders who own the balance of 60%, and that 2) ASI is
given certain protections as the minority stockholder.
Premises considered, we believe that under the Agreement
there are two groups of stockholders who established a
corporation with provisions for a special contractual
relationship between the parties, i.e., ASI and the other
stockholders.
As correctly held by the SEC Hearing Officer:
It is said that participants in a joint venture, in organizing the joint
venture deviate from the traditional pattern of corporation
management. A noted authority has pointed out that just as in close
corporations, shareholders' agreements in joint venture corporations
often contain provisions which do one or more of the following: (1)
require greater than majority vote for shareholder and director
action; (2) give certain shareholders or groups of shareholders
power to select a specified number of directors; (3) give to the
shareholders control over the selection and retention of employees;
and (4) set up a procedure for the settlement of disputes by
arbitration.
The legal concept of a joint venture is of common law origin. It has no
precise legal definition but it has been generally understood to mean
an organization formed for some temporary purpose. It is in fact
hardly distinguishable from the partnership, since their elements are
similar community of interest in the business, sharing of profits and
losses, and a mutual right of control. The main distinction cited by
most opinions in common law jurisdictions is that the partnership
contemplates a general business with some degree of continuity,
while the joint venture is formed for the execution of a single
transaction, and is thus of a temporary nature. This observation is not
entirely accurate in this jurisdiction, since under the Civil Code, a
partnership may be particular or universal, and a particular
partnership may have for its object a specific undertaking. (Art. 1783,
Civil Code). It would seem therefore that under Philippine law, a joint
venture is a form of partnership and should thus be governed by the
law of partnerships. The Supreme Court has however recognized a
distinction between these two business forms, and has held that
although a corporation cannot enter into a partnership contract, it
may however engage in a joint venture with others.
Moreover, the usual rules as regards the construction and operations
of contracts generally apply to a contract of joint venture.
Bearing these principles in mind, the correct view would be that the
resolution of the question of whether or not the ASI Group may vote
their additional equity lies in the agreement of the parties.
Necessarily, the appellate court was correct in upholding the
agreement of the parties as regards the allocation of director seats
under Section 5 (a) of the "Agreement," and the right of each group
of stockholders to cumulative voting in the process of determining
who the group's nominees would be under Section 3 (a) (1) of the
"Agreement." As pointed out by SEC, Section 5 (a) of the Agreement
relates to the manner of nominating the members of the board of
directors while Section 3 (a) (1) relates to the manner of voting for 3. [BUSINESS ORGANIZATION IN GENERAL]
these nominees. This is the proper interpretation of the Agreement of
the parties as regards the election of members of the board of
DR. JOEL C. MENDEZ vs. PEOPLE OF THE PHILIPPINES and
directors. COURT OF TAX APPEALS
G.R. No. 179962 June 11, 2014
To allow the ASI Group to vote their additional equity to help elect
even a Filipino director who would be beholden to them would
obliterate their minority status as agreed upon by the parties.The
insinuation that the ASI Group may be able to control the enterprise FACTS:
under the cumulative voting procedure cannot, however, be ignored.
Dr. Joel Mendez was the sole proprietor of 6 different
The validity of the cumulative voting procedure is dependent on the
businesses. Petitioner failed to file an income tax return on those
directors thus elected being genuine members of the Filipino group,
businesses during the taxable years 2001 to 2013. When a complaint
not voters whose interest is to increase the ASI share in the
was filed against him by the BIR for failure to file an income tax
management of Saniwares.
return, petitioner admitted that he has been operating as a single
proprietor under these trade names in Quezon City, Makati,
The joint venture character of the enterprise must always be taken
Dagupan and San Fernando. An information was filed against
into account, so long as the company exists under its original
him in the Court of Tax Appeals for violation of Art. 255 of the Tax
agreement. Cumulative voting may not be used as a device to enable
Reform Act of 1997, to which he plead not guilty. After his
ASI to achieve stealthily or indirectly what they cannot accomplish
arraignment, the prosecution filed a motion to amend the
openly. There are substantial safeguards in the Agreement which are
information:
intended to preserve the majority status of the Filipino investors as
i. change in the date in the commission of the crime
well as to maintain the minority status of the foreign investors group
from 2001 to 2002;
as earlier discussed. They should be maintained.
ii. the addition of the phrase “doing business in
the name and style of”
iii. the addition of the phrase "for income earned."
iv. Business name was changed to “WEIGH LESS
CENTER/MENDEZ MEDICAL GROUP”
v. DAGUPAN, SAN FERNANDO omitted,
MANDALUYONG, MUNTINLUPA added
Petitioner failed to file a comment on the motion. The motion was
granted.
Petitioner now assails the validity of the amended information.
(PETITION FOR CERTIORARI AND PROHIBITION).
He contends that the prosecution’s amendment is a substantial
amendment prohibited under Section 14, Rule 110 of the Revised
Rules of Criminal Procedure.
a. It is substantial in nature because its additional
allegations alter the prosecution’s theory of the case so
as to cause surprise to him and affect the form of his
defense.
b. Thus, he was not properly informed of the
nature and cause of the accusation against him.
2. The addition of the phrase "doing business under the
ISSUE: WON the prosecution’s amendments made after
the petitioner’s arraignment are substantial in nature and must
perforce be denied?
HELD: NO SUBSTANTIAL AMENDMENT
1. The "change" in the date from 2001 to 2002 and the
addition of the phrase "for income earned"
a. petitioner still baselessly belabored the point in its
present petition by citing the erroneous content of the
prosecution’s motion to amend instead of the original
information itself
b. That the actual date of the commission of the offense
pertains to the year 2002 is only consistent with the
allegation in the information on the taxable year it
covers, i.e., for the taxable year 2001. Since the
information alleges that petitioner failed to file his
income tax return for the taxable year 2001, then the
offense could only possibly be committed when
petitioner failed to file his income tax return before the
due date of filing, which is on April of the succeeding
year, 2002. Accordingly, the addition of the phrase "for
the income earned" before the phrase "for the taxable
year 2001" cannot but be a mere formal amendment
since the added phrase merely states with additional
precision something that is already contained in the
original information, i.e., the income tax return is
required to be filed precisely for the income earned for
the preceding taxable year.
name and style of Mendez Medical Group and the
change and/or addition of the branches of petitioner’s
operation
a. Under the National Internal Revenue Code, a person
practicing his profession must file an income tax return
on his INCOME FROM ALL SOURCES
b. Since the petitioner operates as a sole proprietor
from taxable years 2001 to 2003, the petitioner
should have filed a consolidated return IN HIS
PRINCIPAL PLACE OF BUSINESS, regardless of
the number and location of his other branches.
i. Consequently, the change and/or addition of
the branches of the petitioner’s operation in
the information does not constitute
substantial amendment because it does not
 change the prosecution’s theory that the
petitioner failed to file his income tax
return.
1. PETITIONER’S FAILURE TO FILE HIS
RETURN and consequently to pay the
correct amount of taxes. Accordingly,
the petitioner could not have been
surprised at all.
c. “doing business”
i. Merely an added description of the business
operations of the petitioner
1. Because his businesses are not separate
juridical entities
a. A sole proprietorship is a form of
business organization conducted
for profit by a single individual,
and requires the proprietor or owner
thereof, like the petitioner-accused,
to secure licenses and permits,
register the business name, and
pay taxes to the national
government without acquiring
juridical or legal personality of
its own.
4. FELICIANO VS. COA (G.R. NO. 147402, JANUARY 14,
2004
FACTS: COA assessed Leyte Metropolitan Water District (LMWD)
auditing fees. Petitioner Feliciano, as General Manager of LMWD,
contended that the water district could not pay the said fees on the
basis of Sections 6 and 20 of P.D. No. 198 as well as Section 18 of
R.A. No. 6758. He primarily claimed that LMWD is a private
corporation not covered by COA's jurisdiction. Petitioner also asked for
refund of all auditing fees LMWD previously paid to COA.COA
Chairman denied petitioner’s requests. Petitioner filed a motion for
reconsideration which COA denied. Hence, this petition.
ISSUE: Whether a Local Water District (“LWD”) created under PD
198, as amended, is a government-owned or controlled corporation
subject to the audit jurisdiction of COA or a private corporation which
is outside of COA’s audit jurisdiction.
HELD: Petition lacks merit. The Constitution under Sec. 2(1), Article
IX-D and existing laws mandate COA to audit all government
agencies, including government-owned and controlled corporations
with original charters. An LWD is a GOCC with an original charter.
The Constitution recognizes two classes of corporations. The first
refers to private corporations created under a general law. The
second refers to government-owned or controlled corporations
created by special charters. Under existing laws, that general law is
the Corporation Code.
Obviously, LWD’s are not private corporations because they are not
created under the Corporation Code. LWD’s are not registered with
the Securities and Exchange Commission. Section 14 of the
Corporation Code states that “all corporations organized under this
code shall file with the SEC articles of incorporation x x x.” LWDs have
no articles of incorporation, no incorporators and no stockholders or
members. There are no stockholders or members to elect the board
directors of LWDs as in the case of all corporations registered with the
SEC. The local mayor or the provincial governor appoints the directors
of LWDs for a fixed term of office. The board directors of LWDs are
not co-owners of the LWDs. The board directors and other personnel
of LWDs are government employees subject to civil service laws and
anti-graft laws. Clearly, an LWD is a public and not a private entity,
hence, subject to COA’s audit jurisdiction.
6. FILIPINAS COMPAÑIA DE SEGUROS,
petitioner,
vs.
CHRISTERN, HUENEFELD and CO., INC.,
respondent.
G.R. No. L-2294 May 25, 1951
Ponente:
PARAS,
C.J.
:
FACTS: On October 1, 1941, the respondent corporation,
Christern Huenefeld, & Co., Inc., after payment of corresponding
premium, obtained from the petitioner ,Filipinas Cia. de Seguros, fire
policy No. 29333 in the sum of P1000,000, covering merchandise
contained in a building located at No. 711 Roman Street, Binondo
Manila. On February 27, 1942, or during the Japanese military
occupation, the building and insured merchandise were burned.
Respondent then claimed under its policy with the petitioner. The
salvage goods were sold at public auction and, after deducting their
value, the total loss suffered by the respondent was fixed at P92,650.
The petitioner refused to pay the claim on the ground that the policy
in favor of the respondent had ceased to be in force on the date the
United States declared war against Germany, the respondent
Corporation (though organized under and by virtue of the laws of the
Philippines) being controlled by the German subjects and
the petitioner being a company under American jurisdiction when said
policy was issued on October 1,
1941. The petitioner, however, in pursuance of the order of the Direct
or of Bureau of Financing, Philippine ExecutiveCommission, dated April
9, 1943, paid to the respondent the sum of P92,650 on April 19,
1943.After trial, the Court of First Instance of Manila dismissed the
action filed by the petitioner to re coverthe amount from respondent.
Upon appeal to the Court of Appeals, the judgment of the Court of
First Instance of Manila was affirmed. Hence this petition.

ISSUE: Whether or not Filipinas Cia de Seguros can claim the amount
it paid against respondent.

HELD: In case of war, the control test applies to determine the

nationality of a corporation. The Court of Appeals overruled the
contention of the petitioner that the respondent corporation became
an enemy when the United States declared war against Germany,
relying on English and American cases which held that a corporation is
a citizen of the country or state by and under the laws of which it was
created or organized. It rejected the theory that nationality of private
corporation is determine by the character or citizenship of its
controlling stockholders. There is no question that majority of the
stockholders of the respondent corporation were German subjects.
This being so, we have to rule that said respondent became an enemy
corporation upon the outbreak of the war between the United
States and Germany. The English and American cases relied upon
by the Court of Appeals have lost their force in view of the latest
decision of the Supreme Court of the United States in Clark vs.
Uebersee Finanz Korporation, decided on December 8, 1947, 92 Law.
Ed. Advance Opinions, No. 4, pp. 148-153, in which the control
test has been adopted. This pronouncement was based on
the situation that arise during the WWI and WWII.