1. UNION GLASS & CONTAINER CORPORATION vs.

THE SECURITIES AND EXCHANGE

COMMISSION
DOCTRINE: Section 3 of PD No. 902-A confers upon the SEC "absolute jurisdiction,
supervision, and control over all corporations, partnerships or associations, who are grantees of
primary franchise and/or license or permit issued by the government to operate in the Philippines ... "

Thus the law explicitly specified and delimited its jurisdiction to matters intrinsically connected with
the regulation of corporations, partnerships and associations and those dealing with the internal
affairs of such corporations, partnerships or associations.

The fact that the controversy at bar involves the rights of petitioner Union Glass who has no intra-
corporate relation either with complainant or the DBP, places the suit beyond the jurisdiction of the
respondent SEC.

2. SPOUSES JOSE AND AURORA ABEJO, ET.AL vs. HON. RAFAEL DELA CRUZ
DOCTRINE: An intracorporate controversy is one which arises between the
stockholders and the corporation; it is broad enough to cover all kinds of controversies between
the said parties. Thus, jurisdiction over intracorporate controversies fall within the exlusive and
original jurisdiction of the SEC as provided in PD 902-A Section 5.

3. Alma Magalad vs Priemier Financing Corp.

DOCTRINE: 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. The expanded
jurisdiction of the SEC was conceived primarily to protect the interest of the investing public.

4. SECURITIES AND EXCHANGE COMMISSION v. SUBIC BAY GOLF AND COUNTRY CLUB, INC.
AND UNIVERSAL INTERNATIONAL GROUP DEVELOPMENT CORPORATION
DOCTRINE: Intra-corporate controversies, previously under the SEC’s jurisdiction, are
now under the jurisdiction of the Regional Trial Courts. However it does not necessarily oust the
SEC’s of its regulatory and administrative jurisdiction to determine and act if there were
administrative violations committed.

5. PHILCOMSAT v. SANDIGANBAYAN
DOCTRINE: A combined application of the relationship test and the nature of the controversy
test has become the norm in determining whether a case is an intra-corporate controversy to be “heard
and decided by the [b]ranches of the RTC specifically designed by the Court to try and decide such
cases.”

Under the relationship test, the existence of any of the following relationships makes the conflict
intra-corporate: (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.
 On the other hand, the nature of the controversy test dictates that “the controversy must not only
be rooted in the existence of an intra-corporate relationship, but must as well pertain to the enforcement of
the parties’ correlative rights and obligations under the Corporation Code and the internal and intra-
corporate regulatory rules of the corporation.

6. THE COLLECTOR OF INTERNAL REVENUE vs.THE CLUB FILIPINO, INC. DE

CEBU
DOCTRINE: For a stock corporation to exist, two requisites must be complied with, to
wit: (1) a capital stock divided into shares and (2) an authority to distribute to the holders of such
shares, dividends or allotments of the surplus profits on the basis of the shares held.

7. Dulay v. Court of Appeals

Doctrine: A 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.

8. National Development Company And New Agrix, Inc. v. Philippine Veterans Bank,
DOCTRINE: A private corporation should be organized under the Corporation Law in accordance with
Article XIV, Section 4 of the 1973 Constitution (now Sec. 16, Art. XII of the 1987 Constitution).

9. PIONEER INSURANCE & SURETY CORPORATION, petitioner, vs.

THE HON. COURT OF APPEALS

DOCTRINE: Where persons associate themselves together under articles

to purchase property to carry on a business, and their organization is so
defective as to come short of creating a corporation within the statute, they
become in legal effect partners inter se, and their rights as members of the
company to the property acquired by the company will be recognized. 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, so as to be
liable as such in an action for settlement of the alleged partnership and
contribution.

10. IRON AND STEEL AUTHORITY, petitioner, vs. CA

CASE DOCTRINE: When the statutory term of a non-incorporated agency expires, the
powers, duties and functions as well as the assets and liabilities of that agency revert back to,
and are re-assumed by, the Republic of the Philippines, in the absence of special provisions of
law specifying some other disposition thereof such as, e.g., devolution or transmission of such
powers, duties, functions, etc. to some other identified successor agency or instrumentality of the
Republic of the Philippines. When the expiring agency is an incorporated one, the consequences
of such expiry must be looked for, in the first instance, in the charter of that agency and, by way
of supplementation, in the provisions of the Corporation Code. Since, in the instant case, ISA is a
non-incorporated agency or instrumentality of the Republic, its powers, duties, functions, assets
and liabilities are properly regarded as folded back into the Government of the Republic of the
Philippines and hence assumed once again by the Republic, no special statutory provision
having been shown to have mandated succession thereto by some other entity or agency of the
Republic.

11. JACINTO vs CA
DOCTRINE: Corporate veil was pierced because it was used as a shield to perpetuate fraud
and/or confuse legitimate issues. There was no clear cut delimitation between the personality of Jacinto
and the corporation.

13. PHILIPPINE FIRST INSURANCE COMPANY vs. MARIA CARMEN HARTIGAN, CGH, and O.
ENGKEE
DOCTRINE: The general rule as to corporations is that each corporation shall have a
name by which it is to sue and be sued and do all legal acts. The name of a corporation in this
respect designates the corporation in the same manner as the name of an individual
designates the person." Since an individual has the right to change his name under certain
conditions, there is no compelling reason why a corporation may not enjoy the same right. Of
course, as in the case of an individual, such change may not be made exclusively. by the
corporation's own act. It has to follow the procedure prescribed by law for the purpose; and
this is what is important and indispensably prescribed — strict adherence to such procedure.

15. Municipality of Malabang v. Benito

Doctrine: : It is indeed true that, generally, an inquiry into the legal existence of a
municipality is reserved to the State in a proceeding for quo warranto or other direct proceeding,
and that only in a few exceptions may a private person exercise this function of
government. 4 But the rule disallowing collateral attacks applies only where the municipal
corporation is at least a de facto corporations. 5 For where it is neither a corporation de
jure nor de facto, but a nullity, the rule is that its existence may be, questioned collaterally or
directly in any action or proceeding by anyone whose rights or interests ate affected thereby,
including the citizens of the territory incorporated unless they are estopped by their conduct from
doing so. In the cases where a de facto municipal corporation was recognized as such despite the
fact that the statute creating it was later invalidated, the decisions could fairly be made to rest on
the consideration that there was some other valid law giving corporate vitality to the
organization.

16. JOSE YULO AGRICULTURAL CORPORATION v. SPS. DAVIS

DOCTRINE: Where two certificates of title purport to include the same land, the earlier in
date prevails. Yulo, and petitioner for that matter, which is a corporation that belonged to Yulo
himself or is connected to him and which became his successor-in-interest, knew everything as
far as his land is concerned, or is charged with knowledge at least. They cannot claim to be
ignorant of everything that went on with the properties they owned.

20. REYNALDO M. LOZANO, Lozano, vs . HON. ELIEZER R. DE LOS SANTOS,

Presiding Judge, RTC, Br. 58, Angeles City; and ANTONIO ANDA, respondents.
G.R. No. 125221. June 19, 1997
Ponente: PUNO, J

DOCTRINE:
The jurisdiction of the Securities and Exchange Commission is determined by a
concurrence of two elements: (1) the status or relationship of the parties; and (2) the
nature of the question that is the subject of their controversy.

The principal function of the Securities and Exchange Commission is the supervision
and control of corporations, partnerships and associations with the end in view that
investments in these entities may be encouraged and protected, and their activities
pursued for the promotion of economic development.

There is no intracorporate nor partnership relation between two jeepney drivers’ and
operators’ associations whose plan to consolidate into a single common association is
still a proposal—consolidation becomes effective not upon mere agreement of the
members but only upon issuance of the certificate of consolidation by the SEC.

The SEC has no jurisdiction over a dispute between members of separate and distinct
associations.

The doctrine of corporation by estoppel cannot override jurisdictional requirements—

jurisdiction is fixed by law and cannot be acquired through or waived, enlarged or
diminished by, any act or omission of the parties, and neither can it be conferred by the
acquiescence of the court.

Corporation by estoppel is founded on principles of equity and is designed to prevent

injustice and unfairness, and where there is no third person involved and the conflict
arises only among those assuming the form of a corporation, who know that it has not
been registered, there is no corporation by estoppel.

21. LIM TONG LIM, petitioner, vs. PHILIPPINE FISHING GEAR INDUSTRIES, INC., respondent.

Doctrine: Under the law on estoppel, those acting on behalf of a corporation and those benefited by it,
knowing it to be without valid existence, are held liable as general partners.
 22. INTERNATIONAL EXPRESS TRAVEL & TOUR SERVICES, INC., petitioner, vs. HON.
COURT OF APPEALS, HENRI KAHN, PHILIPPINES FOOTBALL FEDERATION,
DOCTRINE: Any person acting or purporting to act on behalf of a corporation which has
no valid existence assumes such privileges and becomes personally liable for contract entered
into or for other acts performed as such agent

23. LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION, INC vs. CA

DOCTRINE: Failure to file the by-laws within any period does not imply the "demise" of the
corporation. The failure to exercise the power will be ascribed to mere non-action which will not
render void any acts of the corporation which would otherwise be valid. By-laws are indispensable
to corporations in this jurisdiction Nonetheless, failure to file them within the period required by
law by no means tolls the automatic dissolution of a corporation. Incorporators must be given the
chance to explain their neglect or omission and remedy the same.

25. THE GOVERNMENT OF THE PHILIPPINE ISLANDS (on relation of the Attorney-General), plaintiff,
vs.EL HOGAR FILIPINO, defendant.
G.R. No. L-26649; July 13, 1927
STREET, J.:
DOCTRINES:
 While the Constitution and the statutes provide that no corporation shall engage in any business
other than that expressly authorized by its charter, we are of opinion that, in renting out the
unoccupied and unused portions of the building so erected, the association could not be said to
engaged in any other business than that authorized by its charter. The renting of the unused
portions of the building is a mere incident in the conduct of its real business. (2nd COA)
 Unless the law or the charter of a corporation expressly provides that an office shall become
vacant at the expiration of the term of office for which the officer was elected, the general rule
is to allow the officer to holdover until his successor is duly qualified. (5th COA)
 It is true that the corporation law does not expressly grant this power to maintain these
reserves, but we think it is to be implied. The government insists, we thing, upon an
interpretation of section 188 of the Corporation Law that is altogether too strict and literal. But
it will be noted that it is provided in the same section that the profits and losses shall be
determined by the board of directors and this means that they shall exercise the usual discretion
of good businessmen in allocating a portion of the annual profits to purposes needful to the
welfare of the association. (11th and 12th COA)
 There is no statute here expressly declaring that loans may be made by these
associations solely for the purpose of building homes. On the contrary, the building of homes is
mentioned in section 171 of the Corporation Law as only one among several ends which building
and loan associations are designed to promote. Furthermore, section 181 of the Corporation
Law expressly authorities the Board of directors of the association from time to time to fix the
premium to be charged. (13th COA)
 26. STOCKHOLDERS OF F. GUANZON AND SONS, INC. vs. REGISTER OF DEEDS OF MANILA
G.R. No. L-18216. October 30, 1962
J. Bautista Angelo

DOCTRINE: While shares of stock constitute personal property they do not represent property of the
corporation. The corporation has property of its own which consists chiefly of real estate. A share of stock
only typifies an aliquot part of the corporation's property, or the right to share in its proceeds to that extent
when distributed according to law and equity, but its holder is not the owner of any part of the capital of
the corporation. Nor is he entitled to the possession of any definite portion of its property or assets.

27. CARAM vs COURT OF APPEALS

DOCTRINE:
- The petitioners were merely among the financiers whose interest was to be invited and who were in fact
persuaded, on the strength of the project study, to invest in the proposed airline. As a bona fide
corporation, the Filipinas Orient Airways should alone be liable for its corporate acts as duly authorized by
its officers and directors.

- The most that can be said is that they benefited from such services, but that surely is no justification to
hold them personally liable therefor.
Otherwise, all the other stockholders of the corporation, including those who came in later, and regardless
of the amount of their share holdings, would be equally and personally liable also with the petitioners for
the claims of the private respondent.

28. PALAY, INC. VS JACOBO CLAVE

DOCTRINE:

The veil of corporate fiction cannot be pierced when no sufficient proof exists that the
corporation was used to commit acts of fraud. Thus, the President cannot be held personally
liable, jointly and severally, with the corporation for the latter’s liabilities.

29. JG Summit Holdings vs. CA

DOCTRINE: Public bidding is the accepted method in arriving at a fair and reasonable
price and ensures that overpricing, favoritism and other anomalous practices are
eliminated or minimized. But the requirement for public bidding does not negate the
exercise of the right of first refusal.

30. YOUNG AUTO SUPPLY CO. AND NEMESIO GARCIA, petitioners, vs.
THE HONORABLE COURT OF APPEALS
Doctrine: A corporation has no residence in the same sense in which this term is applied to a
natural person. But for practical purposes, a corporation is in a metaphysical sense a resident of the
place where its principal office is located as stated in the articles of incorporation.
31. BUILDING v. SATURNINO DAVID
DOCTRINE: Piercing the veil of corporate fiction; Castro would not have asked them to endorse
their stock certificates, or be keeping these in her possession, if they were really the owners.

32. GREGORIO PALACIO vs. FELY TRANSPORTATION COMPANY

DOCTRINE: Corporation should not be heard to say that it has a personality separate and
distinct from its members when to allow it to do so would be to sanction the use of the fiction of
corporate entity as a shield to further an end subversive of justice.

33. National Marketing Corp. v. Associated Finance Co., Inc.

Doctrine: It is settled law in this and other jurisdictions that when the corporation is the mere
alter ego of a person, the corporate fiction may be disregarded; the same being true when the
corporation is controlled, and its affairs are so conducted as to make it merely an instrumentality,
agency or conduit of another.

34. Tan Boon Bee & Co., Inc., v. The Honorable Hilarion U. Jarencio, Presiding Judge Of
Branch XXIII of the Court of First Instance of Manila, Graphic Publishing, Inc., and
Philippine American Drug Company
DOCTRINE:
It is true that a corporation, upon coming into being, is invested by law with a personality
separate and distinct from that of the persons composing it as well as from any other legal entity
to which it may be related. However, this separate personality of the corporation may be
disregarded, or the veil of corporate fiction pierced, in cases where it is used as a cloak or cover
for fraud or illegality, or to work an injustice, or where necessary to achieve equity or when
necessary for the protection of creditors.

35. CONCEPCION MAGSAYSAY-LABRADOR, SOLEDAD MAGSAYSAY-

CABRERA, LUISA MAGSAYSAY-CORPUZ, assisted be her husband, Dr. Jose
Corpuz, FELICIDAD P. MAGSAYSAY, and MERCEDES MAGSAYSAY-
DIAZ, petitioners, vs. THE COURT OF APPEALS and ADELAIDA
RODRIGUEZ-MAGSAYSAY, Special Administratrix of the Estate of the late
Genaro F. Magsaysay respondents.

DOCTRINE: While a share of stock represents a proportionate or aliquot interest

in the property of the corporation, it does not vest the owner thereof with any
legal right or title to any of the property, his interest in the corporate property
being equitable or beneficial in nature. Shareholders are in no legal sense the
owners of corporate property, which is owned by the corporation as a distinct
legal person.
36. INDOPHIL TEXTILE MILL WORKERS UNION-PTGWO, petitioner, vs.
VOLUNTARY ARBITRATOR TEODORICO P. CALICA and INDOPHIL TEXTILE
MILLS, INC., respondents.
CASE DOCTRINE: Under the doctrine of piercing the veil of corporate entity, when valid
grounds therefore exist, the legal fiction that a corporation is an entity with a juridical
personality separate and distinct from its members or stockholders may be disregarded. In such
cases, the corporation will be considered as a mere association of persons. The members or
stockholders of the corporation will be considered as the corporation, that is liability will attach
directly to the officers and stockholders. The doctrine applies when the corporate fiction is used
to defeat public convenience, justify wrong, protect fraud, or defend crime, or when it is made as
a shield to confuse the legitimate issues, or where a corporation is the mere alter ego or business
conduit of a person, or where the corporation is so organized and controlled and its affairs are
so conducted as to make it merely an instrumentality, agency, conduit or adjunct of another
corporation. (Umali et al. v. Court of Appeals, G.R. No. 89561, September 13, 1990, 189 SCRA
529, 542)

37. Lyceum vs CA
DOCTRINE: 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," is the avoidance of fraud upon
the public which would have occasion to deal with the entity concerned, the evasion of legal obligations
and duties, and the reduction of difficulties of administration and supervision over corporations. We do not
consider that the corporate names of private respondent institutions are "identical with, or deceptively or
confusingly similar" to that of the petitioner institution. True enough, the corporate names of private
respondent entities all carry the word "Lyceum" but confusion and deception are effectively precluded by
the appending of geographic names to the word "Lyceum." Thus, we do not believe that the "Lyceum of
Aparri" can be mistaken by the general public for the Lyceum of the Philippines, or that the "Lyceum of
Camalaniugan" would be confused with the Lyceum of the Philippines.

39. EDUARDO CLAPAROLS, ROMULO AGSAM and/or CLAPAROLS STEEL AND NAIL PLANT vs.
COURT OF INDUSTRIAL RELATIONS, ALLIED WORKERS' ASSOCIATION and/or DEMETRIO
GARLITOS, ALFREDO ONGSUCO, JORGE SEMILLANO, SALVADOR DOROTEO, ROSENDO
ESPINOSA, LUDOVICO BALOPENOS, ASER AMANCIO, MAXIMO QUIOYO, GAUDENCIO QUIOYO,
and IGNACIO QUIOYO

DOCRTINE: When the notion of legal entity is used to defeat public convenience, justify wrong, protect
fraud, or defend crime, the law will regard the corporation as an association or persons, or, in the case of
two corporations, will merge them into one.

41. Secosa v. Heirs of Francisco

Doctrine: The so-called veil of corporation fiction treats as separate and distinct the affairs of a
corporation and its officers and stockholders. As a general rule, a corporation will be looked
upon as a legal entity, unless and until sufficient reason to the contrary appears. When the notion
of legal entity is used to defeat public convenience, justify wrong, protect fraud, or defend crime,
the law will regard the corporation as an association of persons.[19] Also, the corporate entity may
be disregarded in the interest of justice in such cases as fraud that may work inequities among
members of the corporation internally, involving no rights of the public or third persons. In both
instances, there must have been fraud and proof of it. For the separate juridical personality of a
corporation to be disregarded, the wrongdoing must be clearly and convincingly established. It
cannot be presumed.

42. BENJAMIN YU vs. NLRC and JADE MOUNTAIN PRODUCTS COMPANY LIMITED, ET.
AL.
DOCTRINE:
The legal effect of the changes in the membership of the partnership was the dissolution of the
old partnership and the emergence of a new firm. The occurrence of events which precipitate
the legal consequence of dissolution of a partnership do not, however, automatically result in
the termination of the legal personality of the old partnership. Article 1829 of the Civil Code
states that “on dissolution the partnership is not terminated, but continues until the winding up of
partnership affairs is completed.” In the ordinary course of events, the legal personality of the
expiring partnership persists for the limited purpose of winding up and closing of the affairs of
the partnership.

46. KOPPEL (PHILIPPINES), INC., Koppel (Philippines), Inc.-Koppel (Philippines),

Inc, vs . ALFREDO L. YATCO, Collector of Internal Revenue, CIR-appellee
DOCTRINE:
A corporation will be looked upon as a legal entity as a general rule, and until sufficient
reason to the contrary appears; but, when the notion of legal entity is used to defeat
public convenience, justify wrong, protect fraud, or defend crime, the law will regard the
corporation as an association of persons.

Control by another corporation - The corporate entity is disregard where it is so

organized and controlled, and its affairs are so conducted, as to make it merelan
instrumentality, agency, conduit or adjunct of another corporation.

47. LIDDELL & CO., INC., petitioner-appellant, vs. THE COLLECTOR OF INTERNAL
REVENUE, respondent-appellee.
Doctrine: Where a corporation is a dummy and serves no business purpose and is intended only
as a blind, the corporate form may be ignored.

48. LA CAMPANA COFFEE FACTORY, INC., and TAN TONG, doing business under the
trade name "LA CAMPANA GAUGAU PACKING", petitioners, vs. KAISAHAN NG MGA
MANGGAGAWA SA LA CAMPANA (KKM) and THE COURT OF INDUSTRIAL RELATIONS,
respondents.
DOCTRINE: The doctrine that a corporation is a legal entity existing separate and apart
from the persons composing it is a legal theory introduced for purposes of convenience
and to subserve the ends of justice. The concept cannot, therefore, be extended to a
point beyond its reason and policy, and when invoked in support of an end subversive of
this policy, will be disregarded by the courts.
 49. WPM INTERNATIONAL TRADING, INC vs. FE CORAZON LABAYEN
DOCTRINE:
The mere ownership by a single stockholder of even all or nearly all of the capital stocks of
a corporation is not by itself a sufficient ground to disregard the separate corporate
personality. The control necessary to invoke the instrumentality or alter ego rule is not
majority or even complete stock control but such domination of finances, policies and
practices that the controlled corporation has, so to speak, no separate mind, will or
existence of its own, and is but a conduit for its principal. The control must be shown to
have been exercised at the time the acts complained of took place. Moreover, the control
and breach of duty must proximately cause the injury or unjust loss for which the
complaint is made.

51. JOSE EMMANUEL P. GUILLERMO, Petitioner, v. CRISANTO P. USON, Respondent.

DOCTRINE: The veil of corporate fiction can be pierced, and responsible corporate directors and
officers or even a separate but related corporation, may be impleaded and held answerable
solidarily in a labor case, even after final judgment and on execution, so long as it is established
that such persons have deliberately used the corporate vehicle to unjustly evade the judgment
obligation, or have resorted to fraud, bad faith or malice in doing so.

53. ADELIO C. CRUZ vs. QUITERIO L. DALISAY

DOCTRINE: Respondent (Deputy Sheriff) chose to "pierce the veil of corporate entity" usurping a power
belonging to the court and assumed improvidently that since the complainant is the owner/president of
Qualitrans Limousine Service, Inc., they are one and the same.

It is a well-settled doctrine both in law and in equity that as a legal entity, a corporation has a personality
distinct and separate from its individual stockholders or members. The mere fact that one is president of a
corporation does not render the property he owns or possesses the property of the corporation, since the
president, as individual, and the corporation are separate entities.

54. NASECO Guards Association-PEMA v. National Service Corporation

DOCTRINE:
Control, by itself, does not mean that the controlled corporation is a mere instrumentality
or a business conduit of the mother company. There must be a perpetuation of fraud behind the
control or at least a fraudulent or illegal purpose behind the control in order to justify piercing
the veil of corporate fiction.

55. Pacific Rehouse vs. CA and EIB-Securities

DOCTRINE: Existence of interlocking directors, corporate officers and shareholders is not
enough justification to pierce the veil of corporate fiction in the absence of fraud or other public
policy considerations.
56. KUKAN INTERNATIONAL CORPORATION vs. HON. AMOR REYES
Doctrine: The principle of piercing the veil of corporate fiction, and the resulting treatment of two
related corporations as one and the same juridical person with respect to a given transaction, is
basically applied only to determine established liability; it is not available to confer on the court a
jurisdiction it has not acquired, in the first place, over a party not impleaded in a case.

57. PHILIPPINE NATIONAL BANK v. HYDRO RESOURCES

DOCTRINE: Piercing the corporate veil based on the alter ego theory requires the
concurrence of three elements: control of the corporation by the stockholder or parent
corporation, fraud or fundamental unfairness imposed on the plaintiff, and harm or damage
caused to the plaintiff by the fraudulent or unfair act of the corporation. The absence of any of
these elements prevents piercing the corporate veil.

58. MACASAET VS CO
DOCTRINE: A corporation by estoppel is a result of having represented itself to the reading public as a
corporation despite its not being incorporated.

59. Aboitiz Equity Ventures, Inc. v. Chiongbian

Doctrine: It is basic that a corporation has a personality separate and distinct from that of its
individual stockholders. Thus, a stockholder does not automatically assume the liabilities of the
corporation of which he is a stockholder.

60. Eric Godfrey Stanley Livesey v Binswanger Philippines, Inc. and Keith Elliot
DOCTRINE:
Evasion of unfulfilled financial obligation can only be attributed to the President as it was
apparent that Binswanger's stockholders had nothing to do with the corporation’s operations. The
President knew that the corporation had not fully complied with its financial obligation under the
compromise agreement. He made sure that it would not be fulfilled when he allowed the
corporation's closure, despite the condition in the agreement that "unless and until the
Compromise Amount has been fully settled and paid by, the Company shall not suspend,
discontinue, or cease its entire or a substantial portion of its business operations."

61. HEIRS OF FE TAN UY (Represented by her heir, Mauling Uy Lim),

Petitioners, vs. INTERNATIONAL EXCHANGE BANK, Respondent.
DOCTRINE: A corporation is a juridical entity which is vested with a legal
personality separate and distinct from those acting for and in its behalf and, in
general, from the people comprising it. Following this principle, obligations
incurred by the corporation, acting through its directors, officers and
employees, are its sole liabilities. A director, officer or employee of a
corporation is generally not held personally liable for obligations incurred by
the corporation. Nevertheless, this legal fiction may be disregarded if it is used
as a means to perpetrate fraud or an illegal act, or as a vehicle for the evasion
of an existing obligation, the circumvention of statutes, or to confuse legitimate
issues. Before a director or officer of a corporation can be held personally liable
for corporate obligations, however, the following requisites must concur: (1) the
complainant must allege in the complaint that the director or officer assented
to patently unlawful acts of the corporation, or that the officer was guilty of
gross negligence or bad faith; and (2) the complainant must clearly and
convincingly prove such unlawful acts, negligence or bad faith

63. MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION vs. CULLEN

DOCTRINE: The nature of an action involving any dispute as to the validity of the assessment
of association dues has been settled by the Court in Chateau de Baie Condominium
Corporation v. Moreno. The Court held that the dispute as to the validity of the assessments is
purely an intra-corporate matter. More so in this case as respondent repeatedly questioned his
characterization as a delinquent member and, consequently, petitioner’s decision to bar him
from exercising his rights to vote and be voted for. These issues are clearly corporate and the
demand for damages is just incidental. Being corporate in nature, the issues should be threshed
out before the RTC sitting as a special commercial court. Pursuant to Section 5.2 of RA No.
8799, otherwise known as the Securities Regulation Code, the jurisdiction of the SEC over all
cases enumerated under Section 5 of Presidential Decree No. 902-A has been transferred to
RTCs designated by this Court as Special Commercial Courts.

65. NARRA NICKEL MINING AND DEVELOPMENT CORP., TESORO MINING AND DEVELOPMENT,
INC., and MCARTHUR MINING, INC. vs. REDMONT CONSOLIDATED MINES CORP.

DOCTRINE: The Grandfather Rule applies only when the 60-40 Filipino-foreign equity ownership is in
doubt. Stated differently, where the 60-40 Filipino- foreign equity ownership is not in doubt, the
Grandfather Rule will not apply.

67. Cagayan Fishing Development Co. Inc. v. Sandiko

Doctrine: A corporation, until organized, has no life and therefore no faculties. It is, as it were, a child in ventre sa
mere. This is not saying that under no circumstances may the acts of promoters of a corporation be ratified by the
corporation if and when subsequently organized. There are, of course, exceptions but under the peculiar facts and
circumstances of the present case we decline to extend the doctrine of ratification which would result in the
commission of injustice or fraud to the candid and unwary.

68. RIZAL LIGHT & ICE CO., INC. vs. THE PUBLIC SERVICE COMMISSION and MORONG
ELECTRIC CO., INC.
DOCTRINE:
Before any certificate may be granted, authorizing the operation of a public service, three
requisites must be complied with, namely: (1) the applicant must be a citizen of the Philippines
or of the United States, or a corporation or co-partnership, association or joint-stock company
constituted and organized under the laws of the Philippines, sixty per centum at least of the
stock or paid-up capital of which belongs entirely to citizens of the Philippines or of the United
States; (2) the applicant must be financially capable of undertaking the proposed service and
meeting the responsibilities incident to its operation; and (3) the applicant must prove that the
operation of the public service proposed and the authorization to do business will promote the
public interest in a proper and suitable manner.

70. IRINEO G. CARLOS v. MINDORO SUGAR CO., ET AL.

DOCTRINE:
It is not, however, ultra vires for a corporation to enter into contracts of guaranty or suretyship
where it does so in the legitimate furtherance of its purposes and business. And it is well settled
that where a corporation acquires commercial paper or bonds in the legitimate transaction of
its business it may sell them, and in furtherance of such a sale it may, in order to make them
the more readily marketable, indorse or guarantee their payment.

72. NATIONAL POWER CORPORATION, petitioner, vs. HONORABLE ABRAHAM

P. VERA
DOCTRINE:
For if that act is one which is lawful in itself and not otherwise prohibited, and is done for
the purpose of serving corporate ends, and reasonably contributes to the promotion of
those ends in a substantial and not in a remote and fanciful sense, it may be fairly
considered within the corporation's charter powers

73. MADRIGAL & COMPANY, INC., petitioner, vs. HON. RONALDO B. ZAMORA,
[G.R. No. L-48237. June 30, 1987.]
Doctrine: It is incorrect to say that such profits — in the form of dividends — are beyond the
reach of the petitioner's creditors since the petitioner had received them as compensation for its
management services in favor of the companies it managed as a shareholder thereof. As such
shareholder, the dividends paid to it were its own money, which may then be available for wage
increments. It is not a case of a corporation distributing dividends in favor of its stockholders, in
which case, such dividends would be the absolute property of the stockholders and hence, out of
reach by creditors of the corporation.

75. UNIVERSITY OF MINDANAO, INC vs. BANGKO SENTRAL NG PILIPINAS

G.R. Nos. 194964-65. January 11, 2016.
LEONEN, J.

DOCTRINE:
Acts of an officer that are not authorized by the board of directors/trustees do not bind the
corporation unless the corporation ratifies the acts or holds the officer out as a person with
authority to transact on its behalf.
77. HARRY S. STONEHILL, ROBERT P. BROOKS, JOHN J. BROOKS and KARL
BECK, petitioners, vs. HON. JOSE W. DIOKNO
DOCTRINE:
The right to object to the admission of said papers in evidence belongs exclusively to the
corporations, to whom the seized effects belong, and may not be invoked by the corporate officers in
proceedings against them in their individual capacity.