11 REYNOSO vs. COURT OF APPEALS and GCC G.R. Nos. 116124-25.

November 22, 2000 FACTS: Sometime in the early 1960s, the Commercial Credit Corporation, a financing and investment firm, decided to organize franchise companies in different parts of the country, wherein it shall hold thirty percent (30%) equity. Employees of the CCC were designated as resident managers of the franchise companies. Petitioner Bibiano O. Reynoso, IV was designated as the resident manager of the franchise company in Quezon City, known as the Commercial Credit Corporation of Quezon City. CCC-QC entered into an exclusive management contract with CCC whereby the latter was granted the management and full control of the business activities of the former. On August 15, 1980, a complaint, was instituted in the then Court of First Instance of Rizal by CCC-QC against petitioner for embezzlement of funds of CCC-QC amounting to P1,300,593.11. However, the complaint was dismissed. As counterclaim, petitioner filed for Damages against CCC which was granted by the Court. In 1983, CCC became known as the General Credit Corporation (GCC). Both parties appealed. Petitioner appealed for failure of the respondent GCC to satisfy the judgment of the lower Court. On the contrary, respondent GCC appealed on the ground that it is a separate entity from CCC; hence, judgment cannot be executed against them. Thus, the instant petition. ISSUE: Whether or not the judgment in favor of petitioner may be executed against respondent General Credit Corporation RULING: Petition is granted It is obvious that the use by CCC-QC of the same name of Commercial Credit Corporation was intended to publicly identify it as a component of the CCC group of companies engaged in one and the same business. There are other indications in the record which attest to the applicability of the identity rule in this case, namely: the unity of interests, management, and control; the transfer of funds to suit their individual corporate conveniences; and the dominance of policy and practice by the mother corporation insure that CCC-QC was an instrumentality or agency of CCC.

12 MANILA HOTEL CORP. AND MHICL VS. NLRC and SANTOS G.R. No. 120077, October 13, 2000 FACTS: In May, 1988, private respondent Marcelo Santos was an overseas worker employed as a printer at the Mazoon Printing Press, Sultanate of Oman. Subsequently, in June 1988, he was directly hired by the Palace Hotel, Beijing, China and later terminated due to retrenchment. When the case was filed in 1990, Petitioner Manila Hotel Corporation (MHC) was still a government-owned and controlled corporation duly organized and existing under the laws of the Philippines. MHICL is a corporation duly organized and existing under the laws of Hong Kong.7 MHC is an "incorporator" of MHICL, owning 50% of its capital stock.8 By virtue of a "management agreement"9 with the Palace Hotel, MHICL10 trained the personnel and staff of the Palace Hotel at Beijing, China. On February 20, 1990, respondent Santos filed a complaint for illegal dismissal with National Labor Relations Commission (NLRC), which ruled against the petitioners. On appeal, petitioners questioned the jurisdiction of NLRC over the case. NLRC then enjoined Santos to file his complaint before the POEA. On September 18, 1992, respondent Santos moved for reconsideration, arguing that the case was not cognizable by the POEA as he was not an "overseas contract worker." On May 31, 1993, the NLRC granted the motion and reversed itself. On December 15, 1994, the NLRC ruled in favor of private respondent, and ordered petitioners to pay the contractual benefits due for Santos. Petitioners appealed but denied. Hence, this petition. ISSUE: Whether or not petitioners are liable for the contractual benefits of private respondent Santos RULING: Petition is granted. True, MHC is an incorporator of MHICL and owns fifty percent (50%) of its capital stock. However, this is not enough to pierce the veil of corporate fiction between MHICL and MHC, mere ownership by a single stockholder or by another corporation of all or nearly all of the capital stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate corporate personalities. Likewise, there is no evidence to show that the Palace Hotel and MHICL are one and the same entity. The fact that the Palace Hotel is a member of the "Manila Hotel Group" is not enough to pierce the corporate veil between MHICL and the Palace Hotel. 45In this case, we find no evidence to show that MHICL and MHC are one and the same entity.

13 UBS MARKETING CORPORATION VS. COURT OF APPEALS G.R. No. 130328, May 31, 2000 FACTS: Petitioner Johnny K.H. Uy and private respondents Ban Hua Uy-Flores and Ban Ha Uy-Chua are brother and sisters, who owns several corporations, including UBS Marketing Corporation and the Soon Kee Commercial, Inc. All the three (3) abovenamed individuals, including other members of the Uy family, were interlocking stockholders and officers of the two (2) aforementioned corporations. Due to serious disagreements and conflicts, the members of the Uy family agreed to divide the family business so that the UBS Marketing Corporation would go to petitioner Johnny K.H. Uy while the Soon Kee Commercial, Inc. would go to the rest of the Uy family, including herein private respondents Ban Hua Uy-Flores and Ban Ha UyChua. On 6 April 1988, petitioners Johnny K.H. Uy and UBS Marketing Corporation filed with the Securities and Exchange Commission a complaint against the private respondents Ban Hua Uy-Flores, Ban Ha Uy-Chua, Roland King and Soon Kee Commercial, Inc. for the recovery of UBS Marketing Corporation's corporate books, books of account, and the accounting and turn-over of the funds and properties belonging to UBS Marketing Corporation. The SEC ruled in favor of the Petitioners. On appeal, the Court of Appeals set aside the order and ruling of the SEC. Hence, this petition. ISSUE: Whether or not the Court of Appeals erred in setting aside the order of the SEC RULING: Petition is granted. The Court of Appeals decision is hereby reversed and set aside. The relief granted by the SEC en banc was clearly based on its findings that respondents, as officers of Soon Kee Commercial, Inc. and UBS Marketing Corp., had an obligation, not only to petitioners but to the other stockholders as well, to render an accounting of said companies' finances. Further, contrary to the ruling of the CA, this relief does not constitute "specific performance" and is well within the jurisdiction of the SEC.

14 ACEBEDO OPTICAL VS. COURT OF APPEALS G.R. No. 100152 March 31, 2000 FACTS: Petitioner applied with the Office of the City Mayor of Iligan for a business permit. After consideration of petitioner's application and the opposition interposed thereto by local optometrists, respondent City Mayor issued the Business Permit. On December 5, 1988, private respondent Samahan ng Optometrist Sa Pilipinas (SOPI), Iligan Chapter, filed a complaint before the office of the City Mayor against the petitioner for violating the conditions set forth in the business permit. On July 19, 1989, the City Mayor sent petitioner a Notice of Resolution and Cancellation of Business Permit effective as of said date and giving petitioner three (3) months to wind up its affairs. Petitioner filed a petition for certiorari before the RTC of Iligan against private respondents. Petition was denied. Likewise, on appeal, the Court of Appeals denied petitioners petition for certiorari. Hence, this petition. ISSUE: Whether or not the Court of Appeals erred in holding that the contract between petitioner and the City Mayor of Iligan was entered into by the latter in the performance of its proprietary functions RULING: Petition is granted. The Court of Appeals erred in adjudging subject business permit as having been issued by responded City Mayor in the performance of proprietary functions of Iligan City. As hereinabove elaborated upon, the issuance of business licenses and permits by a municipality or city is essentially regulatory in nature. The authority, which devolved upon local government units to issue or grant such licenses or permits, is essentially in the exercise of the police power of the State within the contemplation of the general welfare clause of the Local Government Code.

15 GARCIA vs. JOMOUAD and SPOUSES JOSE ATINON & SALLY ATINON G.R. No. 133969, January 26, 2000 FACTS: Petitioner filed with the Regional Trial Court, Branch 23 of Cebu, an action for injunction with prayer for preliminary injunction against respondents. Said action stemmed from an earlier case for collection of sum of money, before the RTC, Branch 10 of Cebu, filed by the spouses Atinon against Jaime Dico. In that case, the trial court rendered judgment ordering Dico to pay the spouses Atinon the sum of P900,000.00 plus interests. After said judgment became final and executory, respondent sheriff proceeded with its execution. In the course thereof, the Proprietary Ownership Certificate (POC) in the Cebu Country Club, which was in the name of Dico, was levied on and scheduled for public auction. Claiming ownership over the subject certificate, petitioner filed the aforesaid action for injunction with prayer for preliminary injunction to enjoin respondents from proceeding with the auction. Petitioner avers that Dico executed a Deed of Transfer, dated 18 November 1992, covering the subject certificate in favor of petitioner. The Club was furnished with a copy of said deed but the transfer was not recorded in the books of the Club because petitioner failed to present proof of payment of the requisite capital gains tax. After trial, the lower court rendered its Decision, dated 28 July 1995, dismissing petitioner's complaint for injunction for lack of merit. On appeal, the CA affirmed in toto the decision of the RTC upon finding that it committed no reversible error in rendering the same. Hence, this petition ISSUE: Whether or not a bona fide transfer of the shares of a corporation, not registered or noted in the books of the corporation, is valid as against a subsequent lawful attachment of said shares, regardless of whether the attaching creditor had actual notice of said transfer or not. RULING: Petition is denied. The Court holds that the transfer of the subject certificate made by Dico to petitioner was not valid as to the spouses Atinon, the judgment creditors, as the same still stood in the name of Dico, the judgment debtor, at the time of the levy on execution. In addition, as correctly ruled by the CA, the entry in the minutes of the meeting of the Club's board of directors noting the resignation of Dico as proprietary member thereof does not constitute compliance with Section 63 of the Corporation Code. Said provision of law strictly requires the recording of the transfer in the books of the corporation, and not elsewhere, to be valid as against third parties.

16 INTL EXPRESS TRAVEL & TOUR SERVICES, INC vs. COURT OF APPEALS G.R. No. 119002. October 19, 2000 FACTS: On June 30 1989, petitioner International Express Travel and Tour Services, Inc., wrote a letter to the Philippine Football Federation (Federation), offering itself its services as a travel agency to the Federation.[1] The offer was accepted. Petitioner secured the airline tickets for the trips of the athletes and officials of the Federation to the South East Asian Games in Kuala Lumpur as well as various other trips to the People's Republic of China and Brisbane. For the tickets received, the Federation made two partial payments, both in September of 1989, in the total amount of P176,467.50.[2]On 4 October 1989, petitioner wrote the Federation a demand letter requesting for the amount of P265,894.33.[3] On 30 October 1989, the Federation paid the amount of P31,603.00.[4]On 27 December 1989, Henri Kahn issued a personal check in the amount of P50,000 as partial payment for the outstanding balance of the Federation.[5] Thereafter, no further payments were made despite repeated demands. This prompted petitioner to file a civil case before the Regional Trial Court of Manila. Petitioner sued Henri Kahn in his personal capacity and as President of the Federation and impleaded the Federation as an alternative defendant. he averred that the petitioner has no cause of action against him either in his personal capacity or in his official capacity as president of the Federation. He maintained that he did not guarantee payment but merely acted as an agent of the Federation which has a separate and distinct juridical personality. The trial Court ruled against respondent Khan. On appeal by respondent Khan, the Court of Appeals reversed and set aside the decision of the trial Court. Hence, this petition. ISSUE: Whether or not the Federation exist as a separate and distinct juridical person RULING: The decision appealed from is reversed and set aside. Private respondent Henry Kahn should be held liable for the unpaid obligations of the unincorporated Philippine Football Federation. It is a settled principal in corporation law that 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. The law provides that before an entity may be considered as a national sports association; such entity must be recognized by the accrediting organization. Private respondent Khan failed to substantiate the accreditation of the Federation. Hence, the Federation has no distinct and separate personality.

17 AVELINA G. RAMOSO, ET AL. VS. COURT OF APPEALS G.R. No. 117416. December 8, 2000 FACTS: On March 11, 1957, Commercial Credit Corporation was registered with SEC as a general financing and investment corporation. CCC made proposals to several investors for the organization of franchise companies in different localities. Petitioners herein invested and bought majority shares of stocks, while CCC retained minority holdings. In 1974, CCC attempted to obtain a quasi-banking license from Central Bank of the Philippines, but was unsuccessful. In view of said hindrance, what CCC did was divest itself of its shareholdings in the franchise companies. It incorporated CCC Equity to take over the administration of the franchise companies under new management contracts. The companies operations were on course until 1981 anomalies in the business of GCC were unraveled. Upon investigation, petitioners allegedly discovered the dissipation of the assets of their respective franchise companies. On February 24, 1984, petitioners filed a suit against GCC, CCC Equity and RFC. On June 6, 1984, all respondents, except CCC Equity, filed a motion to dismiss asserting that SEC lacked jurisdiction, and that petitioners were not the real parties in interest. On February 23, 1990, the hearing officer ordered piercing the corporate veil of GCC, CCC Equity, and the franchise companies. In an en banc decision, dated October 6, 1992, the SEC reversed the ruling of its hearing officer. Petitioners appealed to the Court of Appeals. On October 8, 1993, the appellate court affirmed respondent SECs decision. Petitioners moved for a reconsideration, but it was denied on September 22, 1994. Hence, this petition. ISSUE: Whether or not the Court of Appeals erred in ruling against the piercing of Corporate ignorance RULING: The Court agrees with the findings of the SEC concurred in by the appellate court that there was no fraud nor mismanagement in the control exercised by GCC and by CCC Equity, over the franchise companies. Whether the existence of the corporation should be pierced depends on questions of facts, appropriately pleaded. Mere allegation that a corporation is the alter ego of the individual stockholders is insufficient. The presumption is that the stockholders or officers and the corporation are distinct entities. The burden of proving otherwise is on the party seeking to have the court pierce the veil of the corporate entity. In this, petitioner failed.

18 TCL SALES CORPORATION and ANNA TENG vs. CA AND TING PING LAY G.R. No. 129777, January 5, 2001 FACTS: TCL Corporation was organized and registered sometime in 1973. The incorporators were Teng Ching Lay, Henry Teng (son of Teng Ching Lay), Anna Teng (daughter of Teng Ching Lay), Ismaelita Maluto and Peter Chiu. On 2 February 1979, Ting Ping Lay (the brother of Teng Ching Lay) acquired by purchase four-hundred eighty (480) shares of stocks of the corporation from stockholder Peter Chiu. On 22 September 1985, Ting Ping Lay purchased another one-thousand four-hundred (1,400) shares from his brother Teng Ching Lay. On 2 September 1989, Ting Ping Lay acquired 1,440 more shares from Ismaelita Maluto. Teng Ching Lay served as president and operations manager until his death in 1989. Respondent Anna Teng served as the Corporate Secretary. Thereafter, Henry Teng took over the management of the company after his father's death. On 31 August 1989, Ting Ping Lay in order to protect his shareholdings with the company requested Anna Teng to enter the transfer of shares of stocks for the proper recording of his acquisitions in the Stock and Transfer Book of the corporation. Anna Teng and TCL Corporation refused despite repeated demands. Ting Ping Lay filed a petition for mandamus with the Securities and Exchange Commission against TCL Corporation and Anna Teng. The SEC ruled in favor of Ting Ping Lay. Petitioners appealed before the Court of Appeals but petition was dismissed for being filed out of time. Hence, this petition. ISSUE: Whether or not the alleged transfer of shares in favor of private respondent are valid and can be ordered recorded RULING: The Court ruled that the transfer of shares to the private respondent must be recorded on the corporation's stock and transfer book. Jurisprudence provides that the registration of shares in a stockholder's name, the issuance of stock certificates, and the right to receive dividends which pertain to the shares are all rights that flow from ownership. Respondent Ting Ping Lay was able to establish prima facie ownership over the shares of stocks in question, through deeds of transfer of shares of stock of TCL Corporation.18 Petitioners could not repudiate these documents.

19 PHILIP MORRIS, INC., ET AL VS. FORTUNE TOBACCO CORPORATION G.R. No. 158589, June 27, 2006 FACTS: On August 18, 1982, petitioners filed a Complaint for Infringement of Trademark and Damages against respondent Fortune Tobacco Corporation. Petitioners alleged that they are foreign corporations not doing business in the Philippines and are suing on an isolated transaction. Petitioners manifested being registered owners of the trademark "MARK VII" and "MARK TEN" for cigarettes as evidenced by the corresponding certificates of registration and an applicant for the registration of the trademark "LARK MILDS". Imputing bad faith on the part of the [respondent], petitioners claimed that the [respondent], without any previous consent from any of the [petitioners], manufactured and sold cigarettes bearing the identical and/or confusingly similar trademark "MARK". Accordingly, they argued that [respondents] use of the trademark "MARK" in its cigarette products have caused and is likely to cause confusion or mistake, or would deceive purchasers and the public in general into buying these products under the impression and mistaken belief that they are buying petitioners products. Respondent filed its Answer denying petitioners material allegations and averred among other things that "MARK" is a common word, which cannot particularly identify a product to be the product of the petitioners. The complaint, however, was dismissed. Hence, this petition. ISSUE: Whether or not respondent is liable for trademark infringement RULING: The "likelihood of confusion" is the gravamen of trademark infringement.40 But likelihood of confusion is a relative concept, the particular, and sometimes peculiar, circumstances of each case being determinative of its existence. Thus, in trademark infringement cases, more than in other kinds of litigation, precedents must be evaluated in the light of each particular case. Petitioners failed to provide convincing proof of actual use of their registered trademarks prior to respondents use of its mark and for petitioners failure to demonstrate confusing similarity between said trademarks. Hence, the decision of dismissal must be affirmed.

20 ANG MGA KAANIB SA IGLESIA NG DIOS KAY KRISTO HESUS, H.S.K. SA BANSANG PILIPINAS, INC vs. IGLESIA NG DIOS KAY CRISTO JESUS, HALIGI AT SUHAY NG KATOTOHANAN G.R. No. 137592, December 12, 2001 FACTS: Respondent is a non-stock religious society or corporation registered in 1936. Sometime in 1976, one Eliseo Soriano and several other members of respondent corporation disassociated themselves from the latter and succeeded in registering on March 30, 1977 a new non-stock religious society or corporation, named Iglesia ng Dios Kay Kristo Hesus, Haligi at Saligan ng Katotohanan. On July 16, 1979, respondent corporation filed with the SEC a petition to compel the Iglesia ng Dios Kay Kristo Hesus, Haligi at Saligan ng Katotohanan to change its corporate name, On May 4, 1988, the SEC rendered judgment in favor of respondent. During the pendency of SEC Case No. 1774, Soriano, et al., caused the registration on April 25, 1980 of petitioner corporation, Ang Mga Kaanib sa Iglesia ng Dios Kay Kristo Hesus, H.S.K, sa Bansang Pilipinas. The acronym "H.S.K." stands for Haligi at Saligan ng Katotohanan. On March 2, 1994, respondent corporation filed before the SEC a petition, praying that petitioner be compelled to change its corporate name and be barred from using the same or similar name on the ground that the same causes confusion among their members as well as the public. Petitioner filed a motion to dismiss on the ground of lack of cause of action. The motion to dismiss was denied. On November 20, 1995, the SEC rendered a decision ordering petitioner to change its corporate name. Petitioner filed a petition for review with the Court of Appeals, but was denied. Hence, this petition ISSUE: Whether or not petitoners corporate name and that of respondents are identical. RULING: Petition is denied. Significantly, the only difference between the corporate names of petitioner and respondent are the wordsSALIGAN and SUHAY. These words are synonymous both mean ground, foundation or support. Section 18 of the Corporation Code provides: No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing or is contrary to existing laws. When a change in the corporate name is approved, the Commission shall issue an amended certificate of incorporation under the amended name.