Renato Tayag vs Benguet Consolidated, Inc.

26 SCRA 242 Business Organization Corporation Law Domicile of a Corporation By Laws Corporation is an Artificial Being ust !iel" #o a Court Or"er

In March 1960, Idonah Perkins died in New York. She left behind properties here and abroad. One propert she left behind were two stock certificates co!erin" ##,00$ shares of stocks of the %en"&et 'onsolidated, Inc (%'I). Said stock certificates were in the possession of the 'o&ntr *r&st 'o+pan of New York ('*',NY). '*',NY was the do+iciliar ad+inistrator of the estate of Perkins (ob!io&sl in the -S.). Meanwhile, in 196#, /enato *a a" was appointed as the ancillar ad+inistrator (of the properties of Perkins she left behind in the Philippines). . disp&te arose between '*',NY and *a a" as to who between the+ is entitled to possess the stock certificates. . case ens&ed and e!ent&all , the trial co&rt ordered '*',NY to t&rn o!er the stock certificates to *a a". '*',NY ref&sed. *a a" then filed with the co&rt a petition to ha!e said stock certificates be declared lost and to co+pel %'I to iss&e new stock certificates in replace+ent thereof. *he trial co&rt "ranted *a a"0s petition. %'I assailed said order as it a!erred that it cannot possibl iss&e new stock certificates beca&se the two stock certificates declared lost are not act&all lost1 that the trial co&rt as well *a a" acknowled"ed that the stock certificates e2ists and that the are with '*',NY1 that accordin" to %'I0s b laws, it can onl iss&e new stock certificates, in lie& of lost, stolen, or destro ed certificates of stocks, onl after co&rt of law has iss&ed a final and e2ec&tor order as to who reall owns a certificate of stock. ISS-34 5hether or not the ar"&+ents of %en"&et 'onsolidated, Inc. are correct. 63784 No. %en"&et 'onsolidated is a corporation who owes its e2istence to Philippine laws. It has been "i!en ri"hts and pri!ile"es &nder the law. 'orollar , it also has obli"ations &nder the law and one of those is to follow !alid le"al co&rt orders. It is not i++&ne fro+ 9&dicial control beca&se it is do+iciled here in the Philippines. %'I is a Philippine corporation owin" f&ll alle"iance and s&b9ect to the &nrestricted 9&risdiction of local co&rts. Its shares of stock cannot therefore be considered in an wise as i++&ne fro+ lawf&l co&rt orders. :&rther, to allow %'I0s opposition is to render the co&rt order a"ainst '*',NY a +ere scrap of paper. It will lea!e *a a" witho&t an re+ed si+pl beca&se '*',NY, a forei"n entit ref&ses to co+pl with a !alid co&rt order. *he final reco&rse then is for o&r local co&rts to create a le"al fiction s&ch that the stock certificates in iss&e be declared lost e!en tho&"h in realit the e2ist in the hands of '*',NY. *his is !alid. .s held ti+e and a"ain, fictions which the law +a rel &pon in the p&rs&it of le"iti+ate ends ha!e pla ed an i+portant part in its de!elop+ent. :&rther still, the ar"&+ent in!oked b %'I that it can onl iss&e new stock certificates in accordance with its b laws is +isplaced. It is worth notin" that '*',NY did not appeal the order of the co&rt ; it si+pl ref&sed to t&rn o!er the stock certificates hence ownership can be said to ha!e been settled in fa!or of estate of Perkins here. .lso, ass&+in" that there reall is a conflict between %'I0s b laws and the co&rt order, what sho&ld pre!ail is the lawf&l co&rt order. It wo&ld be hi"hl ,irre"&lar if co&rt orders wo&ld ield to the b laws of a corporation. ."ain, a corporation is not i++&ne fro+ 9&dicial orders.

Feliciano vs. Commission on Audit

GR 147402, 14 anua!y 2004 :acts4 . Special .&dit *ea+ fro+ 'o++ission on .&dit ('O.) /e"ional Office No. <III a&dited the acco&nts of the 7e te Metropolitan 5ater 8istrict (7M58). S&bse=&entl , 7M58 recei!ed a letter fro+ 'O. dated 19 >&l 1999 re=&estin" pa +ent of a&ditin" fees. .s ?eneral Mana"er of 7M58, 3n"r. /an&lfo '. :eliciano sent a repl dated 1$ October 1999 infor+in" 'O.0s /e"ional 8irector that the water district co&ld not pa the a&ditin" fees. :eliciano cited as basis for his action Sections 6 and $0 of P8 19@, as well as Section 1@ of /. 6AB@. *he /e"ional 8irector referred :eliciano0s repl to the 'O. 'hair+an on 1@ October 1999. On 19 October 1999, :eliciano wrote 'O. thro&"h the /e"ional 8irector askin" for ref&nd of all a&ditin" fees 7M58 pre!io&sl paid to 'O.. On 16 March $000, :eliciano recei!ed 'O. 'hair+an 'elso 8. ?an"an0s /esol&tion dated # >an&ar $000 den in" :eliciano0s re=&est for 'O. to cease all a&dit ser!ices, and to stop char"in" a&ditin" fees, to 7M58. *he 'O. also denied :eliciano0s re=&est for 'O. to ref&nd all a&ditin" fees pre!io&sl paid b 7M58. :eliciano filed a +otion for reconsideration on #1 March $000, which 'O. denied on #0 >an&ar $001. On 1# March $001, :elicaino filed the petition for certiorari. Iss&e4 $%et%er a Local $ater District &'L$D() is a go*ernment+owne" or controlle" corporation, 6eld4 *he 'onstit&tion reco"niCes two classes of corporations. *he first refers to pri!ate corporations created &nder a "eneral law. *he second refers to "o!ern+ent,owned or controlled corporations created b special charters. *he 'onstit&tion e+phaticall prohibits the creation of pri!ate corporations e2cept b a "eneral law applicable to all citiCens. *he p&rpose of this constit&tional pro!ision is to ban pri!ate corporations created b special charters, which historicall "a!e certain indi!id&als, fa+ilies or "ro&ps special pri!ile"es denied to other citiCens. In short, 'on"ress cannot enact a law creatin" a pri!ate corporation with a special charter. S&ch le"islation wo&ld be &nconstit&tional. Pri!ate corporations +a e2ist onl &nder a "eneral law. If the corporation is pri!ate, it +&st necessaril e2ist &nder a "eneral law. Stated differentl , onl corporations created &nder a "eneral law can =&alif as pri!ate corporations. -nder e2istin" laws, that "eneral law is the 'orporation 'ode, e2cept that the 'ooperati!e 'ode "o!erns the incorporation of cooperati!es. *he 'onstit&tion a&thoriCes 'on"ress to create

"o!ern+ent,owned or controlled corporations thro&"h special charters. Since pri!ate corporations cannot ha!e special charters, it follows that 'on"ress can create corporations with special charters onl if s&ch corporations are "o!ern+ent,owned or controlled. Ob!io&sl , 758s are not pri!ate corporations beca&se the are not created &nder the 'orporation 'ode. 758s are not re"istered with the Sec&rities and 32chan"e 'o++ission. Section 1D of the 'orporation 'ode states that EF.Gll corporations or"aniCed &nder this code shall file with the Sec&rities and 32chan"e 'o++ission articles of incorporation 2 2 2.H 758s ha!e no articles of incorporation, no incorporators and no stockholders or +e+bers. *here are no stockholders or +e+bers to elect the board directors of 758s as in the case of all corporations re"istered with the Sec&rities and 32chan"e 'o++ission. *he local +a or or the pro!incial "o!ernor appoints the directors of 758s for a fi2ed ter+ of office. 758s e2ist b !irt&e of P8 19@, which constit&tes their special charter. Since &nder the 'onstit&tion onl "o!ern+ent,owned or controlled corporations +a ha!e special charters, 758s can !alidl e2ist onl if the are "o!ern+ent,owned or controlled. *o clai+ that 758s are pri!ate corporations with a special charter is to ad+it that their e2istence is constit&tionall infir+. -nlike pri!ate corporations, which deri!e their le"al e2istence and power fro+ the 'orporation 'ode, 758s deri!e their le"al e2istence and power fro+ P8 19@.

"angila vs CA
G.R. No. 125027. August 12, 2002 Facts: Petitioner Mangila hired the freight service of private respondent Guina for the importation of seafoods to USA. Petitioner failed to pay the services rendered by Air Swift nternational a business operating under the sole proprietorship of Guina. !he latter filed a case for collection of money but summons were unsuccessfully served thus a writ of Preliminary Attachment was issued. Petitioner filed a motion to discharge without submitting herself to the "urisdiction of the court. !he #A upheld the validity of the issuance of the writ attachment and sustained the filing of the case in Pasay as the proper venue$ despite stipulation in the contract that in case of complaints$ cases should be filed in Ma%ati #ity. Pasay #ity is the office location of Air Swift. ssue: &hether or not the venue of the swift was properly laid when it was filed in Pasay #ity where the sole proprietorship business of the respondent was located. 'eld: A mere stipulation on the venue of an action is not enough to preclude the parties from bringing a case in other venues. !he partiers must be able to show that the stipulation is e(clusive. n the present case) there are no *ualifying or restrictive words in the invoice that would evince the intention of the parties that Ma%ati is the only or e(clusive venue where the action would be instituted. +evertheless$ we hold that Pasay is not the proper venue. n this case it was established that petitioner resides in Pampanga while respondent resides in Para,a*ue. !he case was filed in Pasay where the business is located. A sole proprietorship does not possess a "uridical personality separate and distinct from the personality of the owner of the enterprise) !he law does not vest a separate legal personality on the sole proprietorship to empower it to file or defend an action in court. !hus$ not being vested with legal personality to file this case$ the sole proprietorship is not the plaintiff but Guina herself.