CORPORATION

LAW
UNIBERSIDAD DE MANILA
COLLEGE OF LAW
2ND SEM 2020-2021
ATTY. SEVERO C. MADRONA JR.

COURSE OUTLINE AND COURSE SCHEDULE

FEBRUARY 13-20, 2021

TITLE I
GENERAL PROVISIONS, DEFINITIONS AND CLASSIFICATIONS

SEC 1 TITLE OF THE CODE
Revised Corporation Code of the Philippines (RA 11232); a reenactment of the old Corporation Code

SEC 2 CORPORATION DEFINED
Doctrine of separate juridical personality
Stockholders of F Guanzon v RD 6 SCRA 373 (1962)
Gochan v Young 354 SCRA 207 (2001)
Puno v Puno Enterprises Inc 599 SCRA 585 (2009)
Vda De Roxas v Our Lady's Foundation Inc. GR 182378 Mar 6, 2013
Mayor v Tiu GR 203770 Nov 23, 2016
Tee Ling Kiat v Ayala Corp et al GR 192530 Mar 7, 2018

Doctrine of piercing the corporate veil
Kukan Intl Corp v Hon Amor Reyes GR 182729 Sep 29, 2010
PNB v Hydro Resources GR 167530 Mar 13, 2013
Pacific Rehouse Corp et al v CA et al GR 199687 Mar 24, 2014
Com of Customs v Oilink Intl Corp GR 161759 Jul 2, 2014
WPM Intl Trading Inc et al v Labayen GR 182770 Sep 17, 2014
Optyman Mfg Corp v Security Bank GR 177984 Dec 3, 2014
Maricalum Mining v Florentino et al GR 221813 Jul 23, 2018

Distinguish from sole proprietorship, partnership, joint venture and cooperatives
Aurbach v Sanitary Wares 189 SCRA 130 (1989)
Kilosbayan Inc et al v Guingona 232 SCRA 110 (1994)
Excellent Quality Apparel v Win Multiple Rich Builders 578 SCRA 272 (2009)
SC Megaworld v Engr Parada GR 183804 Sep 11, 2013
Saludo v PNB GR 193138 Aug 20, 2018

Can a corporation recover moral damages?
ABSCBN v CA 301 SCRA 589 (1999)
NPC v Philipp Brothers Oceanic GR 126204 Nov 20, 2001 (read also the dissent)
Filipinas Broadcasting Network v Ago Medical GR 141994 Jan 17, 2005

SEC 3 CLASSES OF CORPORATION
Feliciano e al v Aranez GR 165641 Aug 25, 2010
Stock v. non-stock corporations (associations, foundations, membership clubs)
Close corporations
Special corporations (educational, religious and one person corporations)

SEC 4 CORPORATIONS CREATED BY SPECIAL LAWS OR CHAPTERS
Bases Conversion and Dev Authority v CIR GR 205925 Jun 20, 2018

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 Liban et al v Gordon GR 175352 Jul 15, 2009
Chartered GOCCs v non-chartered GOCCs
Under special laws – Boy Scouts of the Philippines, Philippine National Red Cross

SEC 5 CORPORATIONS AND INCORPORATORS, STOCKHOLDERS AND MEMBERS
Incorporators
Francisco Motors v CA GR 100812 Jun 25, 1999
Guillen v Arnado AC No. 10547 Nov 8, 2017
Stockholders, shareholders, members
Halley v Printwell Inc GR 157549 May 30, 2011
Stakeholders – creditors, employees, suppliers, customers
Nacpil v Intl Broadcasting Corp 379 SCRA 653 (2002)

SEC 6 CLASSIFICATION OF SHARES
Must be indicated in the articles
Equality of shares - Gamboa et al v Teves et al GR 176579 Oct 9, 2012 (Resolution); CIR v CA, CTA
and A. Soriano Corp GR 108576 Jan 20, 1999
Classes or series of shares (e.g. Class A, Class B, etc)
Voting v non-voting shares (only preferred or redeemable)
When non-voting stockholders may vote
Preferred shares – Castillo et al v Balinghasay et al GR 150976 ct 18, 2004
Par v no par shares (not allowed for certain corporations; no par shares are fully paid, non-
assessable/not liable to corporation or creditors)

FEBRUARY 27, 2021

SEC 7 FOUNDER’S SHARES
Forest Hills Golf and Country Club Inc v Fil-Estate Properties Inc. et al GR 206649 Jul 20, 2016

SEC 8 REDEEMABLE SHARES
Republic Planters Bank v Agana 269 SCRA 1 (1997)
SEC Rules Governing Redeemable and Treasury Shares

SEC 9 TREASURY SHARES
When and how may a corporation reacquire its shares – Sec 40
Voting right for treasury shares – Sec 56
Not included in “outstanding capital stock” – Sec 173
Lanuza et al v CA et al GR 131394 Mar 28, 2005


TITLE II
INCORPORATION AND ORGANIZATION
OF PRIVATE CORPORATIONS

SEC 10 NUMBER AND QUALIFICATIONS OF INCORPORATORS
Care Best International, Inc. v SEC GR 215510 Mar 16, 2015
Freddie Guillen v Atty. Audie Arnado AC 10547 Nov 8, 2017

SEC 11 CORPORATE TERM
Alhambra Cigar v SEC 24 SCRA 269 (1968)
CRMD v Ching Bee Trading Corp GR 205291 Nov 12, 2014
Chua et al v People GR 216146 Aug 24, 2016

SEC 12 MINIMUM CAPITAL STOCK NOT REQUIRED OF STOCK CORPORATIONS

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SEC 13 CONTENTS OF ARTICLES OF INCORPORATION
1. Name; specific purpose; place of principal office; term; names, nationalities and residence addresses
of incorporators; number of directors v trustees; authorized capital stock, number of shares,
subscribed, paid up; if non-stock, amount of capital; other matters;
2. Arbitration
3. Electronic document
4. Pre-incorporation Agreement
Fong v Duenas GR 185592 Jun 15, 201
5. Purpose Clause
Leo Y. Querubin, et al v Comelec et al, GR 218787 Dec 8, 2015
Asuncion v De Ynarte 28 Phil 67 (1914)
See Sec 34 for non-stock corporations
6. Principal Place of Business
SEC Circular No 3, Series of 2006
Pilipinas Shell Petroleum Corp. v Royal Ferry Services Inc. GR 188146 Feb 1, 2017 Golden Arches Dev
Corp v St. Francis Square GR 183843 Jan 19, 2017
Sy v Tyson Enterprises 119 SCRA 367 (1982)
7. Authorized capital stock
Central Textile Mills v NWPC, et al GR 104102 Aug 7, 1996

SEC 14 FORM OF ARTICLES OF INCORPORATION
SEC 15 AMENDMENT OF ARTICLES OF INCORPORATION
SEC 16 GROUNDS WHEN ARTICLES OF INCORPORATION OR AMENDMENT MAY BE DISAPPROVED
Rafael H. Galvez and Katherine L. Guy v Hon. CA and AUB GR 187919 Apr 25, 2012

SEC 17 CORPORATE NAME
1. SEC Revised Guidelines on the Approval of Corporate and Partnership Names
Philips Export BV v CA GR 96161 Feb 21, 1992
PC Javier & Sons v CA GR 129582 Jun 29, 2005
Zuelllig Freight and Cargo v NLRC GR 157900 Jul 22, 2013
2. First in time, first in right
Indian Chamber of Commerce Phils, Inc v Filipino Indian Chamber of Commerce in the Philippines, Inc.
GR 184008 Aug 3, 2016
GSIS Family Bank v BPI Family Bank GR 175278 Sep 23, 2015
Ang Mga Kaanib sa Iglesia ng Dios Kay Kristo Hesus , et al v Iglesia ng Dios Kay Cristo Jesus, et al GR
137592 Dec 12 2001
3. corporate name v business name or brand
L.C. Big Mak Burger Inc. v McDonald’s Corporation GR 233073, Feb 14, 2018
Beverly Hills Medical Group, Inc.v Beverly Hills Cosmetic Surgery & Skin Institute, Inc. GR 201437 Jan 20,
2014
4. generic or descriptive
De La Salle Montessori International of Malolos, Inc. v De La Salle Brothers, Inc., et al GR No 205548 Feb
7, 2018

SEC 18 REGISTRATION, INCORPORATION AND COMMENCEMENT OF CORPORATE EXISTENCE
Chung Ka Bio et al v IAC et al GR 71837 Jul 26, 1988

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SEC 19 DE FACTO CORPORATION
Arnold Hall v Piccio 86 Phil 603 (1950)
Seventh Day Adventist Conference Church et al v Northeastern Mindanao Mission, et al GR 150416 Jul 21, 2006

SEC 20 CORPORATION BY ESTOPPEL

The Missionary Sisters of our Lady of Fatima v Alzona GR 224307 Aug 6, 2018 Priscilo B Paz v New
International Environmental Universality GR 203993 Apr 20, 2015
Dee Hwa Liong Foundation Medical Center and Anthony Dee v Asiamed Supplies and Equipment Corp
GR 205638 Aug 23, 2017

SEC 21 EFFECTS OF NON-USE OF CORPORATE CHARTER AND CONTINUOUS INOPERATION OF A
CORPORATION


MARCH 6, 2021
TITLE III
BOARD OF DIRECTORS/ TRUSTEES/ OFFICERS

SEC 22 THE BOARD OF DIRECTORS OR TRUSTEES
1. Doctrine of centralized management; source of corporate powers; the Board must act as one body to
bind the corporation
Yao Ka Sin Trading v CA et al GR 53820 209 SCRA 763 June 15, 1992
Torres v CA 278 SCRA 793
Hornilla v Salunat 405 SCRA 220 (2003)
Manila Metal Container Corp v PNB 511 SCRA 444 (2006)
People’s Aircargo v CA 297 SCRA 170 (1998)
2. The Board may delegate authority in favor of corporate officers
San Juan Structural and Steel Fabricators, Inc. v CA, 296 SCRA 631 (1998)
ABS-CBN Broadcasting v CA 301 SCRA 572 (1999)
3. Business Judgment Rule
Montelibano v Bacolod Murcia Milling Co., 5 SCRA 36 (1962)
Filipinas Port Service v Go 518 SCRA 453 (2007)
Prime White Cement Corp. v IAC 220 SCRA 103, 110 (1993)
Grace Christian High School v CA 281 SCR 133 (1997)
4. Corporations vested with public interest
a. Enumeration
b. Good corporate governance is a function of board policies, actions and conduct – see SEC Code of
Corporate Governance for publicly listed companies and the I-ACGR
Required percentage of independent directors
Definition of “independent director”
Qualifications of an independent director
c. Other applicable provisions – Secs. 6, 23, 24, 29, 73 and 177

SEC 23 ELECTION OF DIRECTORS OR TRUSTEES
1. Cumulative voting /straight voting /cumulative voting by distribution
Cumulative voting not for non-stock corporations unless provided in the by-laws such that straight
voting is the default mode under Sec 92
Rev. Ao-As, et al, v CA GR 128464
Valle Verde Country Club Inc. v Africa 598 SCRA 202 (2009)
Grace Christian high School v CA 281 SCRA 133 (1997)

SEC 24 CORPORATE OFFICERS
1. Corporate officers must be expressly mentioned in the bylaws
Marc II Marketing v Joson 662 SCRA 35 (2011

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 Matling Industrial and Commercial Corp v Coros Oct 13m 2010
Cosare v Broadcom Asia Inc GR 201298 Feb 5 2014
2. Mandatory corporate officers
People’s Aircargo and Warehousing v CA 297 SCRA 170 (1998)
Safic Alcan v Imperial Vegetable 355 559 (2001)
San Juan Structural v CA 296 SCRA 631
Lim Tay v CA 293 SCRA 634 (1998)
Pamplona Plantation Co. v Acosta 510 SCRA 249 (2006)
Bank of PI v Case Montessori Internationale 430 SCRA 261 (2004)
3. Doctrine of apparent authority
Francisco v GSIS 7 SCRA 577 (1963)
Woodchild Holdings Inc v. Roxas Electric Construction 436 SCRA 235 (2004)
People’s Aircargo v CA 297 SCRA 170 (1998)
Westmont Bank v Inland Constrction and Dev Corp 582 SCRA 230 (2009)
Benjie B Georg v Holy Trinity College GR 19048 Jul 20, 2016
Advance Paper Corporation v Arma Traders Corporation Dec 11, 2013.
4. Election and appointment
Mita Pardo de Tavera v Phil Tuberculosis Society Inc. 112 SCRA 243 (1982
5. Removal of a corporate officer for cause is a power to be exercised by the Board
Nectarina Raniel v Paul Jochico GR 153413 Mar 1, 2007
Velarde v Lopez 419 SCRA 422 (2004)
6. Service of summons on a corporation
See Rule 4, Sec 11
EB Villarosa & Partner v Benito 312 SCRA 65 (1999)

SEC 25 REPORT OF ELECTION OF DIRECTORS, TRUSTEES AND OFFICERS, NON-HOLDING OF ELECTION AND
CESSATION FROM OFFICE
Premium Marble Resources v CA 264 SCRA 11 (1996)
Monfort Hermanos v Monfort III 434 SCRA 27 (2004)
Valle Verde Country Club Inc v Africa GR 151969 598 SCRA 202

SEC 26 DISQUALIFICATION OF DIRECTORS, TRUSTEES OR OFFICERS
Lee v CA 205 SCRA 752 (1992)
Gokongwei v SEC 89 SCRA 336 (1979)

SEC 27 REMOVAL OF DIRECTORS OR TRUSTEES
Cinco v Bernas GR Nos 163356-57 Jul 1, 2015
Raniel v Jochico 517 SCRA 221 (2007)

SEC 28 VACANCIES IN THE OFFICE OF DIRECTOR OR TRUSTEE
Tan v Sycip 499 SCRA 216 (2006)

SEC 29 COMPENSATION OF DIRECTORS OR TRUSTEES
Western Institute of Technology, Inc. v Salas 278 SCRA 216 (1997)

SEC 30 LIABILITY OF DIRECTORS, TRUSTEES OR OFFICERS

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Virata et al v Alejandro Ng Wee, Westmont Investment Corp., et al GR 220926, Mar 21, 2018 Irene Martel
Francisco v Mallen GR 173169 Sep 22, 2010
MAM Realty Dev Corp v NLRC GR 114787 Jun 2, 1995
Cebu Country Club v Elizagaque 542 SCRA 65 (2008)
Espiritu v Petron Corp et al GR 170891 Nov 24, 2009

1. Sec 30 applies to directors, officers and trustees
2. Duties and liabilities of directors and corporate officers
Palay Inc v Clave 124 SCRA 638 (1983)
Tramat Mercantile v CA 238 SCRA 14 (194)
Tupaz IV v CA 505 SCRA 596 (2006)
Aratea v Suico 518 SCRA 501 (2007)
Carag v NLRC 520 SCRA 28 (2007)
Sanchez v Republic 603 SCRA 229 (2009)
3. Stockholder’s right to file derivative suit; see SC Rules of Procedure on Intra-Corporate Controversies
BSP v Vicente Jose Campa et al GR 185979 Mar 16, 2016
Gochan v Young 354 SCRA 207 (2001)
Bitong v CA 292 SCRA 503 (1998)
Filipinas Port Service v Go 518 SCRA 453 (2007)
Strategic Alliance v Radstock Securities 607 SCRA 413 (2009)
Chua v Court of Appeals 443 SCRA 259 (2004)
Yu v Yukayguan 589 SCRA 588 (2009)
Legaspi Towers v Muer 673 SCRA 453 (2012)
Juanito Ang v Spouses Ang GR 201675 Jun 19, 2013

SEC 31 DEALINGS OF DIRECTORS, TRUSTEES OR OFFICERS WITH THE COORPORATION
Mead v McCullough 21 Phil 95 (1911)
Prime White Cement v IAC 220 SCRA 103
Yao Ka Sin Trading v CA 209 SCRA 763 (1992)

SEC 32 CONTRACTS BETWEEN CORPORATIONS WITH INTERLOCKING DIRECTORS
DBP v CA 363 SCRA 307 (2001)

SEC 33 DISLOYALTY OF A DIRECTOR
Erlinda Ponce v Valentino Legaspi and CA GR 79184 May 6, 1992

SEC 34 EXECUTIVE, MANAGEMENT AND OTHER SPECIAL COMMITTEES

MARCH 13-20, 2021
TITLE IV
POWERS OF CORPORATIONS

SEC 35 CORPORATE POWERS AND CAPACITY
1. Theory of General or Specific Capacity (express, implied or incidental); See also Sec 46 of the Civil
Code
Cagayan Valley Drug Corp v CIR 545 SCRA 10 (2008)
2. Sue and be sued
Umale, et al v ASB Realty Corporation GR 181126 Jun 15, 2011
Alliance of QC Homeowners’ Association Inc. v The QC Government et al, GR 230651 Sep 18, 2018
Association of Flood Victims and Jaime Aguilar Hernandez v COMELEC et al GR 203775 Aug 5, 2014
Yu v Yukayguan GR 177549 Jun 18, 2009

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 BPI Leasing v CA 416 SCRA 4 (2003)
3. Power of succession
4. Adopt a corporate seal
5. Amend articles
6. Adopt, repeal or amend by laws
7. Issue stocks to subscribers and sell treasury shares; to admit members in a non-stock corporation
8. Exercise rights of ownership over properties for lawful business
Firme v Bukal Enterprises and Dev Corp 414 SCRA 190 (2003)
9. Enter into merger or consolidation
10. Make donations (except foreign corporations in aid of any political party or candidate or for
purposes of partisan political activity)
11. Establish pension, retirement and other benefits for officers and employees
Lopez v Fontecha 247 SCRA 183 (1995)
12. Others – inherent powers; incidental powers; implied or necessary powers [e.g. issue checks -Atrium
Management Corp v CA 353 SCRA 23 (2001); perform other acts pertinent to purchase of shares of
another corporation - Inter Asia Investments v CA 403 SCRA 452 (2003)]

SEC 36 POWER TO EXTEND OR SHORTEN CORPORATE TERM
1. Since default term is perpetual, shortening the corporate term may be resorted to more than
extending it.

SEC 37 POWER TO INCREASE OR DECREASE CAPITAL STOCK; INCUR, CREATE OR INCREASE BONDED
INDEBTEDNESS
China Bank v CA 210 SCRA 503 (1997)
Nestle Phil Inc v CA and SEC GR 86738 Nov 13, 1991

SEC 38 POWER TO DENY PREEMPTIVE RIGHT
Majority Stockholders of Ruby Industrial Corp. v Lim 650 SCRA 461 (2011)

SEC 39 SALE OR OTHER DISPOSITION OF ASSETS
Nell v Pacific Farms Inc, 15 SCRA 415 (1965)
San Juan Structural v CA 296 SCRA 631 (1998)
China Banking Corp v QBRO Fishing GR 184556 Feb 22, 2012
Y-I Leisure Phils Inc. v Yu GR 207161 Sep 8 2015
Pena v CA 193 SCRA 717, 730
1. Revisit the trust fund doctrine
Ong Yong et al v David s. Tiu et al GR 144476 Apr 8, 2003
Phil Trust Co., v Rivera 44 Phil 469
Lumandan v Cura 59 Phil 746; CIR v CA 301 SCRA 152

SEC 40 POWER TO ACQUIRE OWN SHARES
Boman Environmental Dev Corp v CA GR 77860 Nov 22, 1988
Turner v Lorenzo Shipping Corp 636 SCRA 12 (2010)

SEC 41 POWER TO INVEST CORPORATE FUNDS IN ANOTHER CORPORATION OR BUSINESS OR FOR ANY
OTHER PURPOSE
Within primary purpose; outside of secondary purposes
De La Rama v Ma-ao Sugar Central Co.Inc 27 SCRA 247 (1969)

SEC 42 POWER TO DECLARE DIVIDENDS

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Nelson v Lepanto 26 SCRA 540 (1968)
Republic Planters Bank v Agana 269 SCRA 1 (1997)
Lincoln Phil v Ca 293 SCRA 92 (1998)
Cynamid Phil v CA 322 SCRA 639 (2000)
BIR v Lincoln Philippines 379 SCRA 423 (2002)

SEC 43 POWER TO ENTER INTO MANAGEMENT CONTRACT

SEC 44 ULTRA VIRES ACTS OF CORPORATIONS
Montelibano v Bacolod Murcia Milling 5 SCRA
Twin Towers Condo v CA 398 SCRA 203 (2003)
China Banking Corp v CA 270 SCRA 503 (1997)
Atrium Management Co v CA GR 109491 Feb 28, 2001
Pirovano v De la Rama Steamship Co 96 Phil 335 (1954)
Republic v Acoje Mining Co. 3 SCRA 361 (1963)
Manila Metal Container v PNB 511 SCRA 444 (2006)
Lipat v Pacific Banking Corporation 402 SCRA 339 (2003)
Yasuma v Heirs of Cecilio de Villa 499 SCRA 466 (2006)
Kwok v Philippine Carpet 457 SCRA 465 (2005)

MIDTERM EXAMINATIONS – MARCH 27, 2021



APRIL 10, 2021
TITLE V
BY-LAWS

SEC 45 ADOPTION OF BYLAWS
Gokongwei Jr v SEC 89 SCRA 336
China Banking Corp v CA 270 SCRA 503 (1997)
SMC v Mandaue Packing Products Plants Union 467 SCRA 107 (2005)
Grace Christian High School v CA 281 SCRA 68 (1997)
Thomson v CA 298 SCRA 280 (1998)
Salafranca v Philamlife Pamplona 300 SCRA 469 (1998)
Loyola Grand Villas Homeowners v CA 276 SCRA 68 (1997)
Colleges v NLRC 277 SCRA 462 (1997)
Fleishcher v Botica Nolasco 47 Phil 583

SEC 46 CONTENTS OF BYLAWS
Pena v CA 193 SCRA 717 (1991)

SEC 47 AMENDMENT TO BYLAWS
Primo Co, Se. et al v The Philippine Canine Club Inc. GR 190112 Apr 22, 2015
Salafrancia v Philamlife (Pamplona) Village Homeowners 300 SCRA 469 (1998)

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 TITLE VI
MEETINGS

SEC 48 KINDS OF MEETINGS
SEC 49 REGULAR AND SPECIAL MEETINGS OF STOCKHOLDERS OR MEMBERS
Simny G. Guy as minority stockholder for and in behalf of Goodland Company, Inc. v Gilbert G. Guy et al GR
184068 Apr 19, 2016
Price and Sulu Development v Martin 58 SCRA 707 (1933

SEC 51 PLACE AND TIME OF MEETINGS OF STOCKHOLDERS OR MEMBERS

SEC 51 QUORUM IN MEETINGS
Lanuza v CA 454 SCRA 54 (2005)
Tan v Sycip 499 SCRA 216 (2006)

SEC 52 REGULAR AND SPECIAL MEETINGS OF DIRECTORS OR TRUSTEES
See SEC MC No. 15, Nov 20, 2011 on video conferencing

SEC 53 WHO SHALL PRESIDE AT MEETINGS

SEC 54 RIGHT TO VOTE OF SECURED CREDITORS AND ADMIISTRATORS
Republic v COCOFED 372 SCRA 462 (2001)
Lim Tay v CA 293 SCRA 634 (1998)
Chemphil Export v CA 251 SCRA 257 (1995)
Monserrat v Ceron 58 Phil 469 (1933)
Fua Cun v Summers 44 Phil 705 (1923);

SEC 55 VOTING IN CASE OF JOINT OWNERSHIP OF STOCK
Tan v Sycip 499 SCRA 216 (2006)

SEC 56 VOTING RIGHT FOR TREASURY SHARES
GSIS v CA 585 SCRA 679 (2009)

SEC 57 MANNER OF VOTING; PROXIES

SEC 58 VOTINGS TRUSTS
Lee v CA 205 SCRA 752, 758 (1992)
Everett v ABC 49 Phil 512 (1926)
NIDC v Aquino 163 SCRA 153 (1988);


TITLE VII
STOCKS AND STOCKHOLDERS

SEC 59 SUBSCRIPTION CONTRACT
BIR v First Express Pawnshop Co 589 SCRA 253 (2009)

SEC 61 PRE-INCORPORATION SUBSCRIPTION
Bayla v Silang Traffic Co. Inc 73 Phil 557 [(1942 pre-Corp Code]
Ong Yon v Tiu 401 SCRA 1 (2003)

SEC 61 CONSIDERATION FOR STOCKS

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SEC 62 CERTIFICATE OF STOCK AND TRANSFER OF SHARES
Tan v SEC 206 SCRA 740 (1992)
De Los Santos v Republic 96 Phil 577 (1955)
Rural Bank of LIpa v CA 366 SCRA 188 (2001)
Neugene Marketing Inc v CA 303 SCRA 295 (1999)
Guy v Guy 680 SCRA 214 (2012)
Raquel-Santos v CA 592 SCRA 169 (2009)
1. Right to transfer/encumber/register
Rural Bank of Lipa v CA GR 124535 Sep 28, 2001
Teng v SEC GR 184332 Feb 17, 2016
Chua Guan v Samahan 62 Phil 472 (1935)
Reyes v RTC and Zenith Ins Corp Aug 11, 2008
Chemphil Export and Import Corp GR 112438-39 Dec 12, 1995
Vicente C. Ponce v Alsons Gen Corp GR 139802 Dec 10, 2002
Won v Wack Wack Golf and Country Club Inc. 104 Phil 466 (1958)
2. Allowable restrictions on the sale of shares
Lambert v Fox 26 Phil 588 [1914]
JG Summit Holdings Inc v CA 450 SCRA 169 (2005)
Fleischer v Botica Nolasco Co. 47 Phil 583 (1925)
Rural Bank of Salinas v CA 210 SCRA510 (1992)
PCGG v SEC GR No 82188 Jun 30, 1988;

SEC 63 ISSUANCE OF STOCK CERTIFICATES
1. Right to issuance of stock certificate
Lincoln Philippines Life v CA 293 SCRA 92 (1998)
Bitong V CA 292 SCRA 503 (1998)
Ponce v Alsons Cement Corp 393 SCRA 602 (2002)
Makati Sports Club v Cheng 621 SCRA 103 (2010)
Nava v Peers Marketing 74 SCRA 65 (1976)
Lingayen v Baltazar 93 Phil 404 (1953)
2. Other rights of a stockholder:
• appraisal right – Turner v Lorenzo Shipping 636 SCRA 13 (2010) (extend or shorten corporate term;
amend features of shares in articles; disposition of corporate assets; investment in other business;
merger or consolidation)
• right to vote - COCOFED v Republic 612 SCRA 255 (2010)
• right to attend stockholders’ meeting – Price and Sulu Dev v Martin 58 Phil 797 (1933)
• rights upon dissolution - Ong Yong v. Tiu (401 SCRA 1 (2003); President of PDIC v Reyes 460 SCRA 473
(2005)

SEC 64 LIABILITY OF DIRECTORS FOR WATERED STOCKS
SEC 65 INTEREST ON UNPAID SUBSCRIPTIONS
SEC 66 PAYMENT OF BALANCE OF SUBSCRIPTION
SEC 67 DELINQUENCY
SEC 68 WHEN SALE MAY BE QUESTIONED
SEC 69 COURT ACTION TO RECOVER UNPAID SUBSCRIPTION
SEC 70 EFFECT OF DELINQUENCY
SEC 71 RIGHTS OF UNPAID SHARES
SEC 72 LOST OR DESTROYED CERTIFICATES

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APRIL 17, 2021
TITLE VIII
CORPORATE BOOKS AND RECORDS

SEC 73 BOOKS TO BE KEPT; STOCK TRANSFER AGENT
Ponce v Alsons Cement Corp 393 SCRA 602 (2002)
Escano v. Filipinas Mining Corp 74 Phil 711 (1944)
BLTB v Bitanga 362 SCRA 635 (2001)
Provident Int’l Resources Corp v Venus 554 SCRA 540 (2008)
Torres V CA 278 SCRA 793 (1997)
NATU v Sec of Labor 109 SCRA 139 (1981)
Terelay Investment and Dev Corp v Cecilia Yulo GR 160924 Aug 5, 2015;
Puno v Puno Enterprises 599 SCRA 585 (2009);
WG Philpotts v Philippine Manufacturing Co. 40 Phil 471 (1919);
Pardo v Hercules Lumber 47 Phil 964 (1924);
Gokongwei Jr v SEC 89 SCRA 336 (1979);
Africa v PCGG 205 SCRA 39, 41 (1992);
Ang-Abaya v Ang 573 SCRA 129 (2008);
Gonzales v PNB 122 SCRA 489 (1983)
Dee Ping Wee v Lee Hiong Wee 629 SCRA 145 (2010)
Sy Tiong Shiou v Sy Chim 582 SCRA 517 (2009)

SEC 74 RIGHT TO FINANCIAL STATEMENTS


TITLE IX
MERGER AND CONSOLIDATION

SEC 75 PLAN OF MERGER OR CONSOLIDATION
See the Philippine Competition Act (RA 10667)
1. Assumption of obligations
Nell Co v Pacific 15 SCRA 415 (1965);
Y-1 Leisure Philippines v Yats Intel 770 SCRA 56 (2015)3.
2. SEC approval required
PNB v Andrada Electric & Engr Co GR 142936, Apr 17, 2002
3. Stock purchase or equity transfer v asset purchase v business enterprise transfers v spin offs
San Miguel Corp Employees v Confessor 262 SCRA 81 (1996)
4. De facto merger
Bank of Commerce v RPN Inc GR 195615

SEC 76 SHAREHOLDERS OR MEMBERS APPROVAL

SEC 77 ARTICLES OF MERGER OR CONSOLIDATION
Note additional requirements to enable SEC to determine fairness of exchange of properties for shares

SEC 78 EFFECTIVITY OF MERGER OR CONSOLIDATION
Mindanao Savings and Loan Association,
PDIC v Edward Willkon, et al GR 178618 Oct 20, 2010;
Associated Bank v CA 291 SCRA 511 (1998)

SEC 79 EFFECTS OF MERGER OR CONSOLIDATION
Associated Bank v CA and Lorenzo Sarmiento Jr. GR 123793 Jun 29, 1998;

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Global Business Holdings v Surecompsoftware, BV 633 SCRA 94 (2010)
Bank of Phil Islands v BPI Employees Union 627 SCRA 590 (2010)
Filipinas Port Services Inc v NLRC GR 97237 Aug 16, 1991
Damasticor v NLRC GR 86026 Aug 31, 1989

TITLE X
APPRAISAL RIGHT

SEC 80 INSTANCES OF APPRAISAL RIGHT

SEC 81 HOW RIGHT IS EXERCISED
Philip Turner et al v Lorenzo Shipping Corporation GR 157479 Nov 24, 2010

SEC 82 EFFECT OF DEMAND AND TERMINATION OF RIGHT
SEC 83 WHEN RIGHT TO PAYMENT CEASES
SEC 84 WHO BEARS COST OF APPRAISAL
SEC 87 NOTATION ON CERTIFICATE(S); RIGHT OF TRANSFEREE


APRIL 24, 2021
TITLE XI
NONSTOCK CORPORATIONS

SEC 86 DEFINITION
Collector of Internal Revenue v Club Filipino 5 SCRA 321 (1962)
Calatagan Golf Club v Clemente Jr. 585 SCRA 300 (2009)
SEC 87 PURPOSES

SEC 88 RIGHT TO VOTE

SEC 89 NONTRANSFERABILITY OF MEMBERSHIP

SEC 90 TERMINATION OF MEMBERSHIP
Valley Golf & Country Club Inc v Caram GR 165443 Apr 16, 2009

SEC 91 ELECTION AND TERM OF TRUSTEES
SEC 92 PLACE OF MEETINGS
SEC 93 RULES FOR DISTRIBUTION
SEC 94 PLAN OF DISTRIBUTION OF ASSETS


TITLE XII
CLOSE CORPORATIONS

SEC 95 DEFINITION AND APPLICABILITY OF TITLE
San Juan Structural and Steel Fabricators Inc v CA 296 SCRA 631
Manuel R Dulay v CA 225 SCRA 678 (1993)
Torres v CA 278 SCRA 793 (1997)
Sergio F.Naguiat v NLRC 269 SCRA 564 (1997)

SEC 96 ARTICLES OF INCORPORATION
Bustos v Millans Shoe Inc. GR 185024 Apr 24, 2017

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SEC 97 VALIDITY OF RESCTRICTIONS ON TRANSFER OF SHARES
SEC 98 EFFECTS OF ISSUANCE OR TRANSFER OF STOCK IN BREACH OF QUALIFYING CONDITIONS
SEC 99 AGREEMENTS BY STOCKHOLDERS
SEC 100 WHEN BOARD MEETING IS UNNECESSARY OR IMPROPERLY HELD
SEC 101 PREEMPTIVE RIGHT IN CLOSE CORPORATIONS
SEC 102 AMENDMENT OF ARTICLES OF INCORPORATION
SEC 103 DEADLOCKS
SEC 104 WITHDRAWAL OF STOCKHOLDER OR DISSOLUTION OF CORPORATION

TITLE XIII
SPECIAL CORPORATION

EDUCATIONAL CORPORATIONS
See Art XV, Sec 8(1) Phil Constitution

SEC 105 INCORPORATION
Barayuga v Adventist University 655 SCRA 640 (2011)
Angeles University Foundation v City of Angeles GR 189999 Jun 27, 2012

SEC 106 BOARD OF TRUSTEES

RELIGIOUS CORPORATIONS
SEC 107 CLASSES OF RELIGIOUS CORPORATIONS

SEC 108 CORPORATION SOLE
Roman Catholic Bishop of Nueva Caceres v Mun of Tabaco Sep 29, 1924
Roman Catholic Apostolic Church v LRC 102 Phil 596 (1957)
Iglesia Evangelica Metodista v Lazaro et al GR 184088 Jul 6, 2010
Iglesia Evangelica Metodista v Juane GR 172447 Sep 18, 2009
Iglesia De Jesucristo Nueva of Manila v Dela Cruz GR 208284 Apr 23, 2018

SEC 109 ARTICLES OF INCORPORATION
SEC 110 SUBMISSION OF ARTICLES OF INCORPORATION
SEC 111 ACQUISITION AND ALIENATION OF PROPERTY
SEC 112 FILLING OF VACANCIES

SEC 113 DISSOLUTION

SEC 114 RELIGIOUS SOCIETIES
See Art XV, Sec 15
Alfredo Long v Lydia Basa GR 134963-64 Sep 27, 2001
United Church of Christ in the Philippines, Inc. v Bradford United Church of Christ Inc., et al GR 171905 Jun 20,
2012
Canete v CA 171 SCRA 13(1989)
IEMELIF v Bishop Lazaro GR 184088, 624 SCRA 224,Jul 6, 2010

ONE PERSON CORPORATIONS
SEC 115 APPLICABILITY OF PROVISIONS TO ONE PERSON CORPORATIONS

Sec 116 ONE PERSON CORPORATION
SEC 117 MINIMUM CAPITAL STOCK NOT REQUIRED FOR ONE PERSON CORPORATION
SEC 118 ARTICLES OF INCORPORATION
SEC 119 BYLAWS
SEC 120 DISPLAY OF CORPORATE NAME

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SEC 121 SINGLE STOCKHOLDER AS DIRECTOR, PRESIDENT
SEC 122 TREASURER, CORPORATE SECRETARY AND OTHER OFFICERS
SEC 123 SPECIAL FUNCTIONS OF THE CORPORATE SECRETARY
SEC 124 NOMINEE AND ALTERNATE NOMINEE
SEC 125 TERM OF NOMINEE AND ALTERNATE NOMINEE
SEC 126 CHANGE OF NOMINEE OR ALTERNATE NOMINEE
Sec 127 MINUTES BOOK
SEC 128 RECORDS IN LIEU OF MEETINGS
SEC 129 REPORTORIAL REQUIREMENTS
SEC 130 LIABILITY OF SINGLE STOCKHOLDER
SEC 131 CONVERSION FROM AN ORDINARY CORPORATION TO A ONE PERSON CORPORATION
SEC 132 CONVERSION FROM A ONE PERSON CORPORATION TO AN ORDINARY STOCK CORPORATION

MAY 8, 2021
TITLE XIV
DISSOLUTION

SEC 133 METHODS OF DISSOLUTION
Republic v Tancinco 394 SCRA 386 (2002)
Vesagas v CA 371 SCRA 509 (2002)
Majority Stockholders of Ruby Industrial Corp v Lim 650 SCRA 461 (2011)
PVBank Employees Union NUBE v Vega 360 SCRA 33 (2001)
Chung Ka Bio v IAC 163 SCRA 534 (1988)

SEC 134 VOLUNTARY DISSOLUTION WHERE NO CREDITORS ARE AFFECTED

SEC 135 VOLUNTARY DISSOLUTION WHERE CREDITORS ARE AFFECTED; PROCEDURE AND CONENTS OF
PETITION

SEC 136 DISSOLUTION BY SHORTENING CORPORATE TERM

SEC 137 WITHDRAWAL OF REQUEST AND PETITION FOR DISSOLUTION

SEC 138 INVOLUNTARY DISSOLUTION

SEC 139 CORPORATE LIQUIDATION
Aguirre II v FQB + 7 Inc 688 SCRA 242 (2013)
Chua v NLRC 190 SCRA 558 (1990)
Vigilia v Philippine College of Criminology 698 SCRA 247 (2013)
Clemente v CA 242 SCRA 717 (1995)
Gelano v CA 103 SCRA 90 (1991)
Reburiano v CA 301 SCRA 342
Alabang Dev Corp v Alabang Hills Village Ass GR 187456 Jun 2, 2014
Republic v Marsman 44 SCRA 418 (1972)
Knecht v United Cigarette 384 SCRA 48 (2002)

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 TITLE XV
FOREIGN CORPORATIONS

SEC 140 DEFINITION AND RIGHTS OF FOREIGN CORPORATIONS
Nationality of Corporations
• Place of Incorporation Test
• Control Test SEC Op No. 04-40 dtd Aug 10, 2004
• Definition of a “Philippine National” FIA of 1991 RA 7042 as amended by RA 8179 Sec 3 (a)
• Foreign ownership restrictions
Grandfather rule v control test – Narra Nickel Mining and Dev Corp v Redmont Consolidated
Mines, Corp GR 195580 Jan 28, 2015
Voting control test v beneficial ownership test - SEC MC No. 8, Sec 2; Roy III v Herbosa, et al
GR 207246, Nov 22, 2016;
Where foreign ownership is not allowed or is limited by the Constitution or law

SEC 141 APPLICATION TO EXISTING FOREIGN CORPORATIONS

SEC 142 APPLICATION FOR A LICENSE
Doctrine of “Doing Business”
B. Van Zuiden Bros Ltd. v GTVL Manufacturing Industries GR 147905 May 28, 2007
Steel Case Inc v Design Intl Selections, Inc. GR 171995 Apr 18, 2012
Agilent Techonologies v Integrated Silicon Technology 427 SCRA 593 (2004)
Cargill Inc v Intra Strata Assurance Corp 615 SCRA 304 (2010)
Global Business Holdings Inc v Surecomp Software BV GR 173463 Oct 13, 2010
MR Holdings Ltd v Bajar 380 SCRA 617 (2002)
Avon Insurance PLC v CA 228 SCRA 312 (1997)

SEC 143 ISSUANCE OF A LICENSE

SEC 144 WHO MAY BE A RESIDENT AGENT
The new Section no longer refers to a resident agent as “some person”. It now states that a resident agent may
be either an individual residing in the Philippines or a domestic corporation lawfully transacting business in
the Philippines. Further, “the individual resident must be of good moral character and of sound financial
standing”; provided that in the case of a “domestic corporation who will act as resident agent, it must likewise
be of sound financial standing and must show proof that it is in good standing as certified by the Commission”.

SEC 145 RESIDENT AGENT; SERVICE OF PROCESS

SEC 146 LAW APPLICABLE
SEC147 AMENDMENTS TO ARTICLES OF INCORPORATION OR BYLAWS OF FOREIGN CORPORATION
SEC 148 AMENDED LICENSE
SEC 149 MERGER OR CONSOLIDATION INVOLVING A FOREIGN CORPORAION LICENSED IN THE
PHILIPPINES

SEC 150 DOING BUSINESS WITHOUT A LICENSE

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Talon Security Consulting and Trade Limited v DND, et al GR 195055 Aug 18, 2014
Steelcase Inc. v Design International Selections Inc. GR 171995 Apr 18, 2012
Top Weld v ECED 138 SCRA 118
Lingner v Fisher GMBH v IAC 125 SCRA 522 (1983)
Meryll Lynch v CA 211 SCRA 824 (1992)
Home Insurance v Eastern Shipping Lines 123 SCRA 424 (1988)
Facilities Management Corp v De la Osa 89 SCRA 131 (1979)
Signetics Corp v CA 225 SCRA 737 (1993)
Converse Rubber v Universal Rubber Products 147 SCRA 154 (1987)

SEC 151 REVOCATION OF LICENSE
SEC 152 ISSUANCE OF CERTIFICATE OF REVOCATION
SEC 153 WITHDRAWAL OF FOREIGN CORPORATIONS
SEC 134 REVOCATION OF LICENSE
SEC 135 ISSUANCE OF CERTIFICATE OF REVOCATION
SEC 136 WITHDRAWAL OF FOREIGN CORPORATION


TITLE XVI
INVESTIGATIONS, OFFENSES, AND PENALTIES

James Ient et al v Tullett Prebon (Phil) Inc GR 189158 Jan 11, 2017
SEC v G Cosmos Phil Inc. GR 167435 Apr 20, 2015
Baviera v Paglinawan GR 168380 Feb 8, 2007


FINAL EXAM – MAY 15, 2021

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