Professional Documents
Culture Documents
Corpo Digested Incomplete
Corpo Digested Incomplete
SIMEX complained to TRB and found out Held: YES. Award SIMEX with moral
that the sum of P100,000.00 deposited damages (P20,000) and exemplary
had not been credited. The error was damages (P50,000).
rectified on June 17, 1981, and the
dishonored checks were paid after they The initial carelessness of the respondent
bank, aggravated by the lack of
were re-deposited. SIMEX sent demand
promptitude in repairing its error, justifies
letter for reparation against TRB, which
was not met, thus a complaint was filed the grant of moral damages. This rather
in CFI Rizal by SIMEX. The court denied lackadaisical attitude toward the
complaining depositor constituted the ineptness comes under the concept of
gross negligence, if not wanton bad the wanton manner contemplated in
faith, that the respondent court said the Civil Code that calls for the
had not been established by the imposition of exemplary damages.
petitioner.
Jardine Davies Inc. vs. CA and Far East
There was also prejudice suffered by Mills Supply Corporation; Pure Foods
SIMEX in the fact that the petitioner's Corporation vs CA (June 19, 2000)
credit line was canceled and its orders Corporation entitled to Moral Damages
were not acted upon pending receipt (reputation besmirched)
of actual payment by the suppliers. Its
business declined. Its reputation was
Facts: In 1992 Purefoods decided to
tarnished. Its standing was reduced in install 2 generators in its food processing
the business community. All this was due plant in San Roque, Marikina. A bidding
to the fault of the respondent bank for the supply and installation was held
which was undeniably remiss in its duty among the bidders was Far East Mills
to the petitioner. Supply Corporation (FEMSCO).
Thereafter, in a letter addressed to
We shall recognize that the petitioner FEMSCO president, Purefoods confirmed
did suffer injury because of the private the award of the contract. Immediately
FEMSCO submitted the requirements
respondent's negligence that caused
such as a performance bond and all risk
the dishonor of the checks issued by it. insurance policy as well as purchasing
The immediate consequence was that the necessary materials. However, in
its prestige was impaired because of the another letter, Purefoods unilaterally
bouncing checks and confidence in it cancelled the award citing significant
as a reliable debtor was diminished. factors which were uncovered and
brought to their attention which
In the case at bar, it is obvious that the dictate the cancellation and warrant a
respondent bank was remiss in that duty total review and re-bid of the project.
FEMSCO protested the cancellation but
and violated that relationship. What is
before the matter could be resolve,
especially deplorable is that, having Purefoods awarded the project with
been informed of its error in not Jardine Nell, a division of Jardine Davies.
crediting the deposit in question to the FEMSCO sued both Purefoods and
petitioner, the respondent bank did not Jardine. The RTC granted Jardines
immediately correct it but did so only demurrer to evidence but found in favor
one week later or twenty-three days of FEMSCO against Purefoods and order
indemnification. FEMSCO appealed the
after the deposit was made. It bears
granting of the demurrer filed by Jardine
repeating that the record does not and Purefoods appealed the decision
contain any satisfactory explanation of of the court. The CA affirmed the
why the error was made in the first decision of the RTC but ordered Jardine
place and why it was not corrected to pay FEMSCO damages for inducing
immediately after its discovery. Such Purefoods to violate the contract as
such, Jardine must pay moral damages.
In addition, Purefoods was also directed P60 million. Later, Santos-Concio, in a
to pay FEMSCO moral damages and letter to Del Rosario, proposed a
exemplary damages Both Purefoods counterproposal of 53 films (including
and Jardine filed motions for the 14 films initially requested) for P35
reconsideration which were denied. million. Del Rosario presented the
counter offer to Vivas Board of
Issue: Whether or not moral damages Directors but the Board rejected the
may be granted to a corporation? counter offer. Several negotiations were
subsequently made but on April 29,
Held: The Court has awarded in the past 1992, Viva made an agreement with
moral damages to a corporation whose Republic Broadcasting Corporation
reputation has been besmirched. (Asset (referred to as RBS or GMA 7) which
Privatization Trust v. CA, 300 SCRA 379) gave exclusive rights to RBS to air 104
In this case, respondent FEMSCO has Viva films including the 14 films initially
sufficiently shown that its reputation was requested by ABS-CBN.
tarnished after it immediately ordered
equipment from its suppliers on account ABS-CBN now filed a complaint for
of the urgency of the project, only to be specific performance against Viva as it
canceled later. The Court thus, alleged that there is already a
sustained respondent appellate courts perfected contract between Viva and
award of moral damages. However, as ABS-CBN in the April 2, 1992 meeting.
there is no showing whatsoever that Lopez testified that Del Rosario agreed
Jardine induced Purefoods, the decision to the counterproposal and he (Lopez)
of the CA is modified. The order to even put the agreement in a napkin
Jardine Davies to pay FEMSCO moral which was signed and given to Del
damages is reversed and set aside. Rosario. ABS-CBN also filed an injunction
against RBS to enjoin the latter from
ABS-CBN Broadcasting Corporation vs airing the films. The injunction was
Court of Appeals granted. RBS now filed a countersuit
with a prayer for moral damages as it
301 SCRA 572 Business Organization claimed that its reputation was
Corporation Law Delegation of debased when they failed to air the
Corporate Powers Moral Damages shows that they promised to their
viewers. RBS relied on the ruling in
In 1992, ABS-CBN Broadcasting People vs Manero and Mambulao
Corporation, through its vice president Lumber vs PNB which states that a
Charo Santos-Concio, requested Viva corporation may recover moral
Production, Inc. to allow ABS-CBN to air damages if it has a good reputation
at least 14 films produced by Viva. that is debased, resulting in social
Pursuant to this request, a meeting was humiliation. The trial court ruled in favor
held between Vivas representative of Viva and RBS. The Court of Appeals
(Vicente Del Rosario) and ABS-CBNs affirmed the trial court.
Eugenio Lopez (General Manager) and
Santos-Concio was held on April 2, 1992. ISSUE:
During the meeting Del Rosario
proposed a film package which will 1. Whether or not a contract was
allow ABS-CBN to air 104 Viva films for perfected in the April 2, 1992 meeting
between the representatives of the two did not result to a contract because it
corporations. will not bind Viva sans authorization.
2. Whether or not a corporation, like
RBS, is entitled to an award of moral 2. No. The award of moral damages
damages upon grounds of debased cannot be granted in favor of a
reputation. corporation because, being an artificial
person and having existence only in
HELD: legal contemplation, it has no feelings,
no emotions, no senses, It cannot,
1. No. There is no proof that a contract therefore, experience physical suffering
was perfected in the said meeting. and mental anguish, which call be
Lopez testimony about the contract experienced only by one having a
being written in a napkin is not nervous system. No moral damages can
corroborated because the napkin was be awarded to a juridical person. The
never produced in court. Further, there statement in the case of People vs
is no meeting of the minds because Del Manero and Mambulao Lumber vs PNB
Rosarios offer was of 104 films for P60 is a mere obiter dictum hence it is not
million was not accepted. And that the binding as a jurisprudence.
alleged counter-offer made by Lopez
on the same day was not also
accepted because theres no proof of
such. The counter offer can only be Boyer-Roxas vs. CA
deemed to have been made days after
the April 2 meeting when Santos-Concio G.R. No. 100866; July 14, 1992
sent a letter to Del Rosario containing
the counter-offer. Regardless, there was FACTS:
no showing that Del Rosario accepted.
But even if he did accept, such The corporation, Heirs of Eugenia
acceptance will not bloom into a Roxas Inc, was established to engage in
perfected contract because Del Rosario agriculture to develop the properties
has no authority to do so. inherited from Eugenia Roxas and
Eufroncio Roxas, which includes the
As a rule, corporate powers, such as the
land upon which the Hidden Valley
power; to enter into contracts; are
Springs Resort was put up, including
exercised by the Board of Directors. But
this power may be delegated to a various improvements thereon, using
corporate committee, a corporate corporate funds. The AOI of Heirs Inc.
officer or corporate manager. Such a was amended for this purpose. Heirs Inc.
delegation must be clear and specific. claims that Boyer-Roxas and Guillermo
In the case at bar, there was no such Roxas had been in possession of the
delegation to Del Rosario. The fact that
various properties and improvements in
he has to present the counteroffer to
the Board of Directors of Viva is proof the resort and only upon the tolerance
that the contract must be accepted first of the corporation. It was alleged that
by the Vivas Board. Hence, even if Del they committed acts that impeded the
Rosario accepted the counter-offer, it corporations expansion and normal
operation of the resort. They also did not
comply with court and regulatory and transacts business only through its
orders, and thus the corporation officers or agents. Whatever authority
adopted a resolution authorizing the these officers or agents may have is
ejectment of the defendants. TC grants. derived from the board or other
CA affirms. Boyer and Roxas contend governing body, unless conferred by the
that, being stockholders, their possession charter of the corporation itself. An
of the properties of the corporation officer's power as an agent of the
must be respected in view of their corporation must be sought from the
ownership of an aliquot portion of all statute, charter, the by-laws or in a
properties of the corporation. delegation of authority to such officer,
from the acts of the board of directors,
ISSUE:
formally expressed or implied from a
WON the possession of the habit or custom of doing business.
properties in question must be In this case the elder Roxas who
respected in view of being a
then controlled the management of the
stockholder. corporation, being the majority
HELD: stockholder, consented to the
petitioners use and stay within the
NO. Regarding properties owned properties. The Board did not object
by the corporation, under the doctrine and were allowed to stay until it
of corporate entity properties adopted a resolution to the effect of
registered in the name of the authorizing to eject them. Since their
corporation are owned by it as an entity stay was merely by tolerance, in
separate and distinct from its members. deference to the wishes of the majority
While shares of stock constitute personal stockholder who controlled the
property, they do not represent property corporation, when Roxas died his
of the corporation. A share of stock only actions cannot bind the company
typifies an aliquot part of the forever. There is no provision in the by-
corporations property, or the right to laws or any other resolution authorizing
share in its proceeds to that extent their continued stay.
when distributed according to law and
equity, but its holder is not the owner of Francisco Motors Corporation vs Court
any part of the capital of the of Appeals
corporation, nor is he entitled to the
309 SCRA 72 Business Organization
possession of any definite portion of its
Corporation Law Piercing the Veil of
property or assets. The stockholder is not Corporate Fiction (Upside Down)
a co-owner or tenant in common of the
corporate property. In 1985, Francisco Motors Corporation
(FMC) sued Atty. Gregorio Manuel to
The corporation has a personality recover from a him a sum of money in
distinct and separate from its members the amount of P23,000.00+. Said amount
was allegedly owed to them by Manuel members of the Francisco Family in their
for the purchase of a jeep body plus individual capacity.
repairs thereto. Manuel filed a
counterclaim in the amount of
P50,000.00. In his counterclaim, Manuel
alleged that he was the Assistant Legal PNB v. Ritratto G.R. No. 142616 362
Officer for FMC; that the Francisco SCRA 216
Family, owners of FMC, engaged his
services for the intestate estate Facts:
proceedings of one Benita Trinidad; that
he was not paid for his legal services;
PNB-IFL, a subsidiary company of PNB
that he is filing the counterclaim against
extended credit to Ritratto and secured
FMC because said corporation was
by the real estate mortgages on four
merely a conduit of the Francisco
parcels of land. Since there was default,
Family. The trial court as well as the
PNB-IFL thru PNB, foreclosed the
Court of Appeals granted Manuels
property and were subject to public
counterclaim on the ground that the
auction. Ritratto Group filed a
legal fees were owed by the
complaint for injunction. PNB filed a
incorporators of FMC (an application of
motion to dismiss on the grounds of
the doctrine of piercing the veil of
failure to state a cause of action and
corporation fiction in a reversed
the absence of any privity between
manner).
respondents and petitioner.
ISSUE: Whether or not the doctrine of
Issue:
piercing the veil of corporate fiction was
properly used by the Court of Appeals.
Is PNB privy to the loan contracts
entered into by respondent & PNB-IFL
HELD: No. In the first place, the doctrine
being that PNB-IFL is owned by PNB?
is to be used in disregarding corporate
fiction and making the incorporators
Held:
liable in appropriate circumstances. In
the case at bar, the doctrine is applied
No. The contract questioned is one
upside down where the corporation is
entered into between Ritratto and PNB-
held liable for the personal obligations
IFL. PNB was admittedly an agent of the
of the incorporators such was uncalled
latter who acted as an agent with
for and erroneous. It must be noted that
limited authority and specific duties
that Atty. Manuels legal services were
under a special power of attorney
secured by the Francisco Family to
incorporated in the real estate
represent them in the intestate
mortgage.
proceedings over Benita Trinidads
estate. The indebtedness was incurred
The mere fact that a corporation owns
by the Francisco Family in their separate
all of the stocks of another corporation,
and personal capacity. These estate
taken alone is not sufficient to justify
proceedings did not involve any
their being treated as one entity. If used
business of FMC. The proper remedy is
to perform legitimate functions, a
for Manuel to sue the concerned
subsidiarys separate existence may be
respected, and the liability of the parent
corporation as well as the subsidiary will directors; that payment of said CBCI to
be confined to those arising in their PUFC is like a payment to FGAC hence
respective business. The courts may, in the sale between PUFC and TRB is valid.
the exercise of judicial discretion, step in In short, TRB avers that that the veil of
to prevent the abuses of separate entity corporate fiction, between PUFC and
privilege and pierce the veil of FGAC, should be pierced because the
corporate entity. two corporations allegedly used their
separate identity to defraud TRD into
Traders Royal Bank vs Court of Appeals buying said CBCI.
269 SCRA 15 Business Organization ISSUE: Whether or not Traders Royal Bank
Corporation Law Piercing the Veil of is correct.
Corporate Fiction
HELD: No. Traders Royal Bank failed to
Filriters Guaranty Assurance Corporation show that the corporate fiction is used
(FGAC) is the owner of several Central by the two corporations to defeat
Bank Certificates of Indebtedness public convenience, justify wrong,
(CBCI). These certificates are actually protect fraud or defend crime or where
proof that FGAC has the required a corporation is a mere alter ego or
reserve investment with the Central business conduit of a person. TRB merely
Bank to operate as an insurer and to showed that PUFC owns 90% of FGAC
protect third persons from whatever and that their directors are the same.
liabilities FGAC may incur. In 1979, FGAC The identity of PUFC cant be
agreed to assign said CBCI to Philippine maintained as that of FGAC because of
Underwriters Finance Corporation this mere fact; there is nothing else
(PUFC). Later, PUFC sold said CBCI to which could lead the court under the
Traders Royal Bank (TRB). Said sale with circumstance to disregard their
TRB comes with a right to repurchase on corporate personalities. Further, TRB
a date certain. However, when the day cant argue that it was defrauded into
to repurchase arrived, PUFC failed to buying those certificates. In the first
repurchase said CBCI hence TRB place, TRB as a banking institution is not
requested the Central Bank to have said ignorant about these types of
CBCI be registered in TRBs name. transactions. It should know for a fact
Central Bank refused as it alleged that that a certificate of indebtedness is not
the CBCI are not negotiable; that as negotiable because the payee therein
such, the transfer from FGAC to PUFC is is inscribed specifically and that the
not valid; that since it was invalid, PUFC Central Bank is obliged to pay the
acquired no valid title over the CBCI; named payee only and no one else.
that the subsequent transfer from PUFC
to TRB is likewise invalid. Magsaysay-Labrador, et. al. vs. Court of
Appeals
TRB then filed a petition for mandamus [GR 58168, 19 December 1989]
to compel the Central Bank to register
said CBCI in TRBs name. TRB averred Facts: On 9 February 1979, Adelaida
that PUFC is the alter ego of FGAC; that Rodriguez-Magsaysay, widow and
PUFC owns 90% of FGAC; that the two special administratix of the estate of the
corporations have identical sets of late Senator Genaro Magsaysay,
brought before the then Court of First appellate court further stated that
Instance of Olongapo an action against whatever claims the Magsaysay sisters
Artemio Panganiban, Subic Land have against the late Senator or against
Corporation (SUBIC), Filipinas SUBIC for that matter can be ventilated
Manufacturer's Bank (FILMANBANK) and in a separate proceeding. The motion
the Register of Deeds of Zambales, for for reconsideration of the Magsaysay
the annulment of the Deed of sisters was denied. Hence, the petition
Assignment executed by the late for review on certiorari.
Senator in favor of SUBIC (as a result of
which TCT 3258 was cancelled and TCT Issue: Whether the Magsaysay sister,
22431 issued in the name of SUBIC), for allegedly stockholders of SUBIC, are
the annulment of the Deed of interested parties in a case where
Mortgage executed by SUBIC in favor of corporate properties are in dispute.
FILMANBANK (dated 28 April 1977 in the
amount of P 2,700,000.00), and Held: Viewed in the light of Section 2,
cancellation of TCT 22431 by the Rule 12 of the Revised Rules of Court,
Register of Deeds, and for the latter to the Magsaysay sisters have no legal
issue a new title in her favor. On 7 March interest in the subject matter in litigation
1979, Concepcion Magsaysay- so as to entitle them to intervene in the
Labrador, Soledad Magsaysay-Cabrera, proceedings. To be permitted to
Luisa Magsaysay-Corpuz, Felicidad intervene in a pending action, the party
Magsaysay, and Mercedes Magsaysay- must have a legal interest in the matter
Diaz, sisters of the late senator, filed a in litigation, or in the success of either of
motion for intervention on the ground the parties or an interest against both, or
that on 20 June 1978, their brother he must be so situated as to be
conveyed to them 1/2 of his adversely affected by a distribution or
shareholdings in SUBIC or a total of other disposition of the property in the
416,566.6 shares and as assignees of custody of the court or an officer
around 41 % of the total outstanding thereof . Here, the interest, if it exists at
shares of such stocks of SUBIC, they all, of the Magsaysay sisters is indirect,
have a substantial and legal interest in contingent, remote, conjectural,
the subject matter of litigation and that consequential and collateral. At the
they have a legal interest in the success very least, their interest is purely
of the suit with respect to SUBIC. On 26 inchoate, or in sheer expectancy of a
July 1979, the trial court denied the right in the management of the
motion for intervention, and ruled that corporation and to share in the profits
petitioners have no legal interest thereof and in the properties and assets
whatsoever in the matter in litigation thereof on dissolution, after payment of
and their being alleged assignees or the corporate debts and obligations.
transferees of certain shares in SUBIC While a share of stock represents a
cannot legally entitle them to intervene proportionate or aliquot interest in the
because SUBIC has a personality property of the corporation, it does not
separate and distinct from its vest the owner thereof with any legal
stockholders. right or title to any of the property, his
interest in the corporate property being
On appeal, the Court of Appeals found equitable or beneficial in nature.
no factual or legal justification to disturb Shareholders are in no legal sense the
the findings of the lower court. The owners of corporate property, which is
owned by the corporation as a distinct employ the private respondent and so
legal person. they file a complaint for illegal dismissal
before the NLRC who ordered the
Sunio vs. NLRC. G.R. No. L-57767 January
reinstatement of the private respondent
31, 1984
and helt sunio its general manager
jointly and personally liable with the
Facts.
petitioner corp.
1. EMRACO-CIPI sold the plant to RDFC,
ISSUE.
CIPI had terminated the services of its
employees, including herein private
WHETHER OR NOT, Sunio will be held
respondents, giving them their
jointly and severally liable with the
separation pay which they had
petitioner.
accepted.
Cosalan then filed a complaint for The Supreme Court ruled that BENECO
illegal dismissal against the BENECO and the BENECO Board Members are
Board Members, he later impleaded liable for the damages caused against
BENECO itself. The Labor Arbiter (LA) Cosalan. However BENECO can seek
ruled in favor of Cosalan. The National reimbursement from the Board Members
Labor Relations Commission (NLRC) so as not to unduly penalize the
affirmed the decision of the LA but innocent members of BENECO.
modified it so as to absolve the Board
Members from liability as it held that the Gonzales vs. Philippine National Bank
Board Members merely acted in their [GR L-33320, 30 May 1983]
official capacity. BENECO, being the
only party adjudged to be liable, then Facts: Ramon A. Gonzales initially
appealed said decision. instituted several cases in the Supreme
Court questioning different transactions
ISSUE: Whether or not the National Labor entered into by the Bank with other
Relations Commission is correct. parties. First among them is Civil Case
69345 filed on 27 April 1967, by Gonzales
HELD: No. The act of the Board Members as a taxpayer versus Sec. Antonio
is ultra vires. There was no legal basis for Raquiza of Public Works and
them to suspend Cosalan indefinitely Communications, the Commissioner of
for under the Implementing Rules of the Public Highways, the Bank, Continental
Labor Code the maximum period form Ore Phil., Inc., Continental Ore, Huber
preventive suspension should not go Corporation, Allis Chalmers and General
Motors Corporation. In the course of the in Iloilo. On January 23, 1969, the Asst.
hearing of said case on 3 August 1967, Vice President and Legal Counsel of the
the personality of Gonzales to sue the Bank answered petitioner's letter
bank and question the letters of credit it denying his request for being not
has extended for the importation by the germane to his interest as a one share
Republic of the Philippines of public stockholder and for the cloud of doubt
works equipment intended for the as to his real intention and purpose in
massive development program of the acquiring said share. In view of the
President was raised. In view thereof, he Bank's refusal, Gonzales instituted the
expressed and made known his petition for mandamus. The Court of First
intention to acquire one share of stock Instance of Manila denied the prayer of
from Congressman Justiniano Montano Gonzales that he be allowed to
which, on the following day, 30 August examine and inspect the books and
1967, was transferred in his name in the records of PNB regarding the
books of the Bank. Subsequent to his transactions mentioned on the grounds
aforementioned acquisition of one that the right of a stockholder to inspect
share of stock of the Bank, Gonzales, in the record of the business transactions
his dual capacity as a taxpayer and of a corporation granted under Section
stockholder, filed the following cases 51 of the former Corporation Law (Act
involving the bank or the members of its No. 1459, as amended) is not absolute,
Board of Directors to wit: (1) On 18 but is limited to purposes reasonably
October 1967, Civil Case 71044 versus related to the interest of the
the Board of Directors of the Bank; the stockholder, must be asked for in good
National Investment and Development faith for a specific and honest purpose
Corp., Marubeni Iida Co., Ltd., and and not gratify curiosity or for
Agro-Inc. Dev. Co. or Saravia; (2) On 11 speculative or vicious purposes; that
May 1968, Civil Case 72936 versus such examination would violate the
Roberto Benedicto and other Directors confidentiality of the records of the
of the Bank, Passi (Iloilo) Sugar Central, bank as provided in Section 16 of its
Inc., Calinog-Lambunao Sugar Mill charter, RA 1300, as amended; and that
Integrated Farming, Inc., Talog sugar Gonzales has not exhausted his
Milling Co., Inc., Safary Central, Inc., and administrative remedies. Gonzales filed
Batangas Sugar Central Inc.; and (3) On the petition for review.
8 May 1969, Civil Case 76427 versus
Alfredo Montelibano and the Directors Issue:
of both the PNB and DBP.
1. Whether Gonzales' can ask for an
On 11 January 1969, however, Gonzales examination of the books and
addressed a letter to the President of records of PNB, in light of his
the Bank, requesting submission to look ownership of one share in the
into the records of its transactions bank.
covering the purchase of a sugar 2. Whether the inspection sought to
central by the Southern Negros be exercised by Gonzales would
Development Corp. to be financed by be violative of the provisions of
Japanese suppliers and financiers; its PNB's charter.
financing of the Cebu-Mactan Bridge to
be constructed by V.C. Ponce, Inc. and Held:
the construction of the Passi Sugar Mills
1. The unqualified provision on the right that his purpose is germane to his
of inspection previously contained in interest as a stockholder.
Section 51, Act No. 1459, as amended,
no longer holds true under the provisions 2. Section 15 of the PNB's Charter (RA
of the present law. The argument of 1300, as amended) provides that
Gonzales that the right granted to him "Inspection by Department of
under Section 51 of the former Supervision and Examination of the
Corporation Law should not be Central Bank. The National Bank shall
dependent on the propriety of his be subject to inspection by the
motive or purpose in asking for the Department of Supervision and
inspection of the books of PNB loses Examination of the Central Bank."
whatever validity it might have had Section 16 thereof providest that
before the amendment of the law. If "Confidential information. The
there is any doubt in the correctness of Superintendent of Banks and the
the ruling of the trial court that the right Auditor General, or other officers
of inspection granted under Section 51 designated by law to inspect or
of the old Corporation Law must be investigate the condition of the National
dependent on a showing of proper Bank, shall not reveal to any person
motive on the part of the stockholder other than the President of the
demanding the same, it is now Philippines, the Secretary of Finance,
dissipated by the clear language of the and the Board of Directors the details of
pertinent provision contained in Section the inspection or investigation, nor shall
74 of Batas Pambansa Bilang 68. they give any information relative to the
Although Gonzales has claimed that he funds in its custody, its current accounts
has justifiable motives in seeking the or deposits belonging to private
inspection of the books of the PNB, he individuals, corporations, or any other
has not set forth the reasons and the entity, except by order of a Court of
purposes for which he desires such competent jurisdiction." On the other
inspection, except to satisfy himself as to hand, Section 30 of the same provides
the truth of published reports regarding that "Penalties for violation of the
certain transactions entered into by the provisions of this Act. Any director,
respondent bank and to inquire into officer, employee, or agent of the Bank,
their validity. The circumstances under who violates or permits the violation of
which he acquired one share of stock in any of the provisions of this Act, or any
the PNB purposely to exercise the right person aiding or abetting the violations
of inspection do not argue in favor of his of any of the provisions of this Act, shall
good faith and proper motivation. be punished by a fine not to exceed ten
Admittedly he sought to be a thousand pesos or by imprisonment of
stockholder in order to pry into not more than five years, or both such
transactions entered into by the PNB fine and imprisonment." The Philippine
even before he became a stockholder. National Bank is not an ordinary
His obvious purpose was to arm himself corporation. Having a charter of its own,
with materials which he can use against it is not governed, as a rule, by the
the PNB for acts done by the latter Corporation Code of the Philippines. The
when Gonzales was a total stranger to provision of Section 74 of Batas
the same. He could have been impelled Pambansa Blg. 68 of the new
by a laudable sense of civic Corporation Code with respect to the
consciousness, but it could not be said right of a stockholder to demand an
inspection or examination of the books fund campaigns, private contributions
of the corporation may not be and rentals from its properties. 3) it is not
reconciled with the above quoted audited by COA. PNRC, petitioner
provisions of the charter of the PNB. It is
claims falls under the International
not correct to claim, therefore, that the
right of inspection under Section 74 of Federation of Red Cross, Swiss-based
the new Corporation Code may apply organization.
in a supplementary capacity to the
charter of the PNB. Issue: Whether or not PNRC is a
government owned or controlled
corporation or a private corporation.
Francisca Baluyot vs. Paul Holganza and
the Office of the Ombudsman (Visayas) Held: The Court cited the case of
Camporedondo vs. NLRC. Resolving
Incorporation Test to determine Nature the issue set outwe rule that the PNRC
of Corporation ( Private/ Public) is a government owned and controlled
corporation, with an original charter
Facts: During a spot audit in 1977, the
under RA No. 95, as amended, The test
auditors from the Philippine National
to determine whether a corporation is
Red Cross (PNRC) headquarters
government owned or controlled or
discovered a case shortage in the funds
private in nature is simple. Is it created
of its Bohol chapter. The chapter
by its own charter for the exercise of a
administrator, petitioner Baluyot, was
public function, or by incorporation
held accountable and thereafter,
under the general corporation law?
respondent Holganza as member of the
Those with special charters are
board Bohol chapter, filed a complaint
government corporations subject to its
with the Ofc. of the Ombudsman for
provisions, and its employees are under
malversation. Upon recommendation
the jurisdiction of the Civil Service
of respondent Militante, an
Commission, and are compulsory
administratiave docket of dishonesty
members of the GSIS. The PNRC was
was also opened against Baluyot.
not impliedly converted to a private
Baluyot raised the defense that the
corporation simply because its charter
Ombudsman had no jurisdiction as he
was amended to vest in it the authority
had authority only over government
to secure loans, be exempted from
owned or controlled corporations which
payment of all duties, taxes, fees and
the PNRC was not. She gives as
other charges of all kinds on all
evidence of its private character 1) it
importations and purchases for its
does not receive budgetary support
exclusive use, on donations for its
from the government and all money
disaster relief work and other services
given to it by the latter and its
and in its benefits and fund raising
instrumentalities become private funds
drives Clearly then, public
of the organization. 2) funds for the
respondent has jurisdiction over the
payment of personnels salaries and
matter.
other emoluments come from yearly