Marvel Building Corporation, et. al. v. David, 94 Phil.

376
Facts: Upon consideration of the report with regards to the war profit tax case of Maria B.
Castro, the Secretary of Finance recommended the collection of war profit taxes from the
latter. Pursuant thereto, arious properties including the !guinaldo Building, "ise Building
and #ewey Bouleard Padre Faura Mansion were sei$ed %y the C&'. !n action was filed
%y the plaintiffs en(oining the defendant C&' from selling at pu%lic auction the three
properties since it %elong to Marel Corporation and not to Maria B. Castro. #efendant
claims that Maria B. Castro is the sole and true owner of all the su%scri%ed stoc)s of the
Marel Corporation including those appearing to hae %een su%scri%ed and paid for %y
other mem%ers. CF& of Manila rendered (udgment ordering the release of properties and
en(oined C&' from selling the same. C&' appealed.
Issue: "hether or not Maria B. Castro is the owner of the share of stoc) of Marel Building
Corp.
eld: *es. +he C&' presented eidence to proe his claim that Maria B. Castro the sole
and true owner of the share of stoc) Marel Building Corp., this was the supposed
endorsement in %lan) of the shares of stoc) in the name of other incorporators. +his
eidence was testified %y !,uino, &nternal 'eenue examiner, Mariano, examiner and
Crispin -lamado, undersecretary of Finance. .ulio -lamado who was at that time the
%oo))eeper of Marel Building Corp also testified that he was the one who had prepared
the original certificates which was gien %y Maria for comparison with the !rticles of
&ncorporation and that he also prepared a stoc) certificates which was copied in the
Photostat presented in eidence.
C&' was also a%le to su%mit an eidence, is the fact that the other stoc)holder did not
hae incomes in such amounts during the time of the organi$ation of the corporation in
/012 or immediately thereto, as to ena%le them to pay full for their supposed su%scription
and that this supposed su%scri%ers fail to come to court to assert that they actually paid for
their su%scription and are not mere dummies.
!i"al #ight $ ice Co., Inc. v. Pu%lic &ervice Co''ission, et. al.,
() &C!* (+)
Facts: 'i$al -ight 3 &ce Co. was granted %y the Commission a certificate of pu%lic
conenience and necessity for the installation, operation and maintenance of an electric
light, heat and power serice in the municipality of Morong, 'i$al. +he Commission
re,uired the petitioner to appear %efore it to show cause why it should not %e penali$ed for
iolation of the conditions of its certificate of pu%lic conenience and the regulations of the
Commission, and for failure to comply with the directies to raise its serice oltage and
maintain them within the limits prescri%ed in the 'eised 4rder 5o. / of the Commission,
and to ac,uire and install a )ilowattmeter to indicate the load in )ilowatts at any particular
time of the generating unit. +he motion was set for hearing and Mr. Pedro S. +alaera,
Chief, &ndustrial #iision of the Commission, was authori$ed to conduct the hearing for the
reception of the eidence of the parties.
For failure of the petitioner to appear at the hearing, Commission ordered the cancellation
and reocation of petitioner6s certificate of pu%lic conenience and necessity and the
forfeiture of its franchise. Petitioner moed for reconsideration of said order on the ground
that its manager was not aware of said hearing. Finding that the failure of the petitioner to
appear at the hearing7 the sole %asis of the reocation of petitioner6s certificate 7 was
really due to the illness of its manager, the Commission set aside its order of reocation.
+he municipality formally as)ed the Commission to reo)e petitioner6s certificate of pu%lic
conenience and to forfeit its franchise on the ground, among other things, that it failed to
comply with the conditions of said certificate and franchise. &nspections had %een made of
petitioner6s electric plant and installations.
"hen the case was called for hearing, petitioner failed to appear again so municipality
was then allowed to present its documentary eidence, and thereafter the case was
su%mitted for decision. 4n the %asis of the inspection reports, Commission found that the
petitioner had failed to comply with the directies and had iolated the conditions of its
certificate of pu%lic conenience as well as the rules and regulations of the Commission
ordered the cancellation and reocation of petitioner6s certificate of pu%lic conenience and
the forfeiture of its franchise.
Petitioner moed for reconsideration of the decision %ut %efore said motion for
reconsideration was filed, Morong 8lectric filed with the Commission an application for a
certificate of pu%lic conenience and necessity for said serice. Petitioner opposed the
application of Morong 8lectric.

Issues: "45 the cancellation of petitioner6s certificate of pu%lic conenience was
unwarranted.
eld: 54. Settled is the rule that in reiewing the decision of the Pu%lic Serice
Commission this Court is not re,uired to examine the proof de noo and determine for
itself whether or not the preponderance of eidence really (ustifies the decision. +he only
function of this Court is to determine whether or not there is eidence %efore the
Commission upon which its decision might reasona%ly %e %ased. +his Court will not
su%stitute its discretion for that of the Commission on ,uestions of fact and will not
interfere in the latter6s decision unless it clearly appears that there is no eidence to
support it. &nasmuch as the only function of this Court in reiewing the decision of the
Commission is to determine whether there is sufficient eidence %efore the Commission
upon which its decision can reasona%ly %e %ased, as it is not re,uired to examine the proof
de noo, the eidence that should %e made the %asis of this Court6s determination should
%e only those presented in this case %efore the Commission. +he Commission %ased its
decision on the inspection reports su%mitted %y its engineers who conducted the
inspection of petitioner6s electric serice upon orders of the Commission. Said inspection
reports specify in detail the deficiencies incurred, and iolations committed, %y the
petitioner resulting in the inade,uacy of its serice. SC considers that said reports are
sufficient to sere reasona%ly as %ases of the decision in ,uestion. &t should %e
emphasi$ed, in this connection that said reports, are not mere documentary proofs
presented for the consideration of the Commission, %ut are the results of the
Commission6s own o%serations and inestigations which it can rightfully ta)e into
consideration, particularly in this case where the petitioner had not presented any
eidence in its defense, and spea)ing of petitioner6s failure to present eidence, as well as
its failure to cross9examine the authors of the inspection reports, petitioner should not
complain %ecause it had waied not only its right to cross9examine %ut also its right to
present eidence.
Circu'stances that ,arranted the i'position o- %oth a -ine and a revocation o-
certi-icate o- pu%lic convenience.
Section /: ;n< of Commonwealth !ct 5o. /1:, as amended, confers upon the Commission
ample power and discretion to order the cancellation and reocation of any certificate of
pu%lic conenience issued to an operator who has iolated, or has willfully and
contumaciously refused to comply with, any order, rule or regulation of the Commission or
any proision of law. "hat matters is that there is eidence to support the action of the
Commission. "here the eidence shows: ;a< a contumacious refusal of the petitioner
since /0=1 to comply with the directies, rules and regulations of the Commission> ;%< a
iolation of the conditions of the certificate of pu%lic conenience> and ;c< municipality to
comply with commitment as shown %y inade,uate serice, such circumstances warranted
the action of the Commission in not merely imposing a fine %ut in reo)ing altogether
petitioner6s certificate.
!e.uisites -or the grant o- certi-icate o- pu%lic convenience.
Before any certificate of pu%lic conenience may %e granted, three re,uisites must %e
complied with, namely: ;/< the applicant must %e a citi$en of the Philippines or of the
United States, or a corporation or co9partnership, association or (ointstoc) company
constituted and organi$ed under the laws of the Philippines, sixty per centum at least of
the stoc) or paid9up capital of which %elongs entirely to citi$ens of the Philippines or of the
United States> ;?< the applicant must %e financially capa%le of underta)ing the proposed
serice and meeting the responsi%ilities incident to its operation> and ;@< the applicant must
proe that the operation of the pu%lic serice proposed and the authori$ation to do
%usiness will promote the pu%lic interest in a proper and suita%le manner.
Rivera v. Florendo, 144 SCRA 647
F*C/&: Petitioner corporation was organi$ed and register under Philippine laws with a
capital stoc) of P/,AAA,AAA.AA diided into /A,AAA shares of P/AA.AA par alue each %y
the herein petitioner 'iera and four ;1< other incorporators. Sometime thereafter petitioner
'iera increased his su%scription from the original /,?=A to a total of 1B00 shares.
Su%se,uently, &samu !)asa)o, a .apanese national and co9petitioner who is allegedly the
real owner of the shares of stoc) in the name of petitioner !,uilino 'iera, sold ?==A
shares of the same to priate respondent Milagros +suchiya for a consideration of
P11A,AAA.AA with the assurance that Milagros +suchiya will %e made the President and
-ourdes .ureidini a director after the purchase. Coweer, after the sale was consummated
and the consideration was paid with a receipt of payment therefor shown, !,uilino 'iera
refused to ma)e the indorsement unless he is also paid.
&t also appears that the other incorporators sold their shares to %oth respondent .ureidini
and +suchiya such that %oth respondents %ecame the owners of a total of @@AA shares or
the ma(ority out of =,:10 outstanding su%scri%ed shares of the corporation ;'ollo, pp. 19=<,
and that there was no dispute as to the legality of the transfer of the stoc) certificate.
5onetheless, priate respondents attempted seeral times to register their stoc)
certificates with the corporation %ut the latter refused to register the same. ;Ibid., 'ollo, pp.
=19==<. +hus, priate respondents filed a special ciil action for mandamus and damages
with preliminary mandatory in(unction andDor receiership naming herein petitioners as
respondents.
I&&01: "hether it is the regular court or the Securities and 8xchange Commission that
has (urisdiction oer the present controersy.
1#D: &t has already %een settled that an intracorporate controersy would call for the
(urisdiction of the Securities and 8xchange Commission. ;Philippine School of Business
!dministration . -anao, /?2 SC'! 2B/, Fe%ruary ?1, /0B1<. 4n the other hand, an intra9
corporate controersy has %een defined as Eone which arises %etween a stoc)holder and
the corporate. +here is no distinction, ,ualification, nor any exemption whatsoeer.E
;Philex Mining Corporation . 'eyes, //B SC'! :A=, 5oem%er /0, /0B?<. +his Court has
also ruled that cases of priate respondents who are not shareholders of the corporation,
cannot %e a Econtroersy arising out of intracorporate or partnership relations %etween and
among stoc)holders, mem%ers or associates> %etween any or all of them and the
corporation, partnership or association, of which they are stoc)holders, mem%ers or
associates, respectiely.E ;Sunset Fiew Condominium Corporation . Campos, .r., /A1
SC'! @A@, !pril ?2, /0B/<.
Shares of stock, how transferred
!s confirmed %y this Court, Eshares of stoc) may %e transferred %y deliery to the
transferee of the certificate properly indorsed. 6+itle may %e ested in the transferee %y
deliery of the certificate with a written assignment or indorsement thereof 6 ;/B C... S.
0?B<. +here should %e compliance with the mode of transfer prescri%ed %y law ;/B C...S.
0@A<6 E ;5aa . Peers Mar)eting Corp. 21 SC'! :=, :0, 5o. ?=, /02:<
Where private respondents are merely seeking to register as stockholders due to
alleged sale of shares of stock to them, is not an intracorporate controversy, and
the regular courts have jurisdiction.
!s the %one of contention in this case, is the refusal of petitioner 'iera to indorse the
shares of stoc) in ,uestion and the refusal of the Corporation to register priate
respondents6 shares in its %oo)s, there is merit in the findings of the lower court that the
present controersy is not an intracorporate controersy> priate respondents are not yet
stoc)holders> they are only see)ing to %e registered as stoc)holders %ecause of an alleged
sale of shares of stoc) to them. +herefore, as the petition is filed %y outsiders not yet
mem%ers of the corporation, (urisdiction properly %elongs to the regular courts.
!e2es v. Blouse, 93 Phil. 34)
F*C/&: Plaintiffs as minority stoc)holders of the -aguna +aya%as Bus Co. instituted an
action to restrain its Board of #irectors composed of the defendants from carrying out a
resolution approed %y approximately 0?G per cent of the stoc)holders in a meeting,
authori$ing said Board of #irectors to ta)e the necessary steps to consolidate the
properties and franchises of the -aguna +aya%as Bus Co. with those of the Batangas
+ransportation Co. +he plaintiffs argue that the proposed consolidation or merger of the
two companies would %e pre(udicial to the -.+.B. Co. and to the appellants in particular do
not own shares of stoc) of B.+. Co. that the proposed consolidation or merger was illegal
%ecause the unanimous ote of the stoc)holders was not secured and that the same was
contrary to the spirit of our laws.
#efendants twice moed to dissole the writ of preliminary in(unction, %ut %oth motions
were denied %y the lower court.
+he defendants also as)ed for the dismissal of the complaint on the ground that the facts,
therein alleged do not constitute sufficient cost of action. &n connection with the
determination of this incident, defendants su%mitted an affidait of Max Blouse, President
of the -aguna +aya%as Bus Co., outlining the steps to %e ta)en %y the Board of #irectors
in carrying out the merger or consolidation authori$ed in the disputed resolution. +he court
howeer, deferred its resolution on the motion until after trial on the merits and dismissed
the complaint.
4n appeal, on one hand, counsel for plaintiffs contends that its real purpose is to effect a
merger or consolidation, and as such there is no law in the Philippines under which it may
properly %e carried out> on the other hand, counsel for the defendants maintains the
negatie iew, holding that it is merely an exchange of properties sanctioned %y our
corporation law, as amended, and that een if it %e considered as a consolidation, the
same can still %e carried out under Commonwealth !ct 5o. /1:, section ?A, otherwise
)nown as the Pu%lic Serice -aw.
I&&01: "hether said merger or consolidation can %e carried out under the law now
existing and in force in the Philippines.
1#D: +he fact that the intent of the resolution of the Board of #irectors is not to dissole
the company %ut merely to transfer its assets to a new corporation in exchange for its
corporate stoc) is clearly deduci%le from the proision that the company will not %e
dissoled %ut will continue existing until its stoc)holders decide to dissole the same. +his
comes s,uarely within the puriew of section ?BG of the Corporation -aw which proides,
among others, that a corporation may sell, exchange, lease or otherwise dispose of all its
property and assets, including its goodwill, upon such terms and conditions as its Board of
#irectors may deem expedient when authori$ed %y the affirmatie ote of the shareholders
holding at least ?D@ of the oting power. +he phrase Eor otherwise disposed ofE is ery
%road and in a sense coers a merger or consolidation.
M1!51! de-ined
! merger implies necessarily the termination or cessation of the merged corporations and
not merely a merger of their properties and assets.
P0B#IC &1!6IC17 Merger or consolidation o- land transportation co'panies
Section ?A H(g) of Commonwealth !ct 5o. /1:, as amended, spea)s of merger or
consolidation of pu%lic serices engaged in land transportation. &t does not impose any
,ualification except that it shall %e done with the approal of the Pu%lic Serice
Commission. +here is no dou%t that the intended merger or consolidation of the two
companies comes within the puriew of this legal proision.
M1!51! 8! C89&8#ID*/I897 /,o:thirds vote o- stoc;:holders7 remedy of
minority stockholders
"here merger or consolidation of two transportation companies has %een oted upon %y
two9thirds ote of the stoc)holders with only the %est interest of %oth companies in iew, it
is not fair to allow a small minority to undo or set at naught what they hae done, and the
remedy of the appellant minority stoc)holders is to register their o%(ection in writing and
demand payment of their shares from the corporation as proided for in section ?BG of the
Corporation -aw.