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SY VS. TYSON, G.R. No.

L-56763 December 15, 1982 (Residence of a domestic corporation)


Facts:
Tyson Enterprises, Inc. filed against John Sy and Universal Parts Supply Corporation in the Court of First
Instance of Rizal, Pasig a complaint for the collection of P288,534.58 plus interest, attorney's fees and
litigation expenses.
It is alleged in the complaint that John Sy, doing business under the trade name, Universal Parts Supply,
is a resident of Fuentebella Subdivision, Bacolod City and that his co-defendant, Universal Parts Supply
Corporation, allegedly controlled by Sy, is doing business in Bacolod City.
No allegation in the complaint as to the office or place of business of plaintiff Tyson Enterprises, Inc., a
firm actually doing business at 1024 Magdalena, now G. Masangkay Street, Binondo, Manila.
What is alleged is the postal address or residence of Dominador Ti, the president and general manager of
plaintiff firm, which is at 26 Xavier Street, Greenhills Subdivision, San Juan, Rizal. The evident purpose of
alleging that address and not mentioning the place of business of plaintiff firm was to justify the filing of
the suit in Pasig, Rizal instead of in Manila.
Defendant Sy and Universal Parts Supply Corporation first filed a motion for extension of time to file their
answer and later a motion for a bill of particulars. The latter motion was denied. Then, they filed a motion
to dismiss on the ground of improper venue invoking the provision of section 2(b), Rule 4 of the Rules of
Court that personal actions "may be commenced and tried where the defendant or any of the defendants
resides or may be found, or where the plaintiffs or any of the plaintiffs resides, at the election of the
plaintiff."
To strengthen that ground, they also cited the stipulation in the sales invoice that "the parties expressly
submit to the jurisdiction of the Courts of the City of Manila for any legal action arising out of the
transaction.
The plaintiff opposed the motion to dismiss on the ground that the defendants had waived the objection
based on improper venue because they had previously filed a motion for a bill of particulars which was
not granted. The trial court denied the motion to dismiss on the ground that by filing a motion for a bill of
particulars the defendants waived their objection to the venue.
CA issued a restraining order, enjoining respondent judge from acting on the case. He disregarded the
restraining order.
CA dismissed the petition. It ruled that the parties did not intend Manila as the exclusive venue of the
actions arising under their transactions and that since the action was filed in Pasig, which is near Manila,
no useful purpose would be served by dismissing the same and ordering that it be filed in Manila
Issue:
Whether or not the collection suit was correctly filed in CFI Pasig?
Whether or not petitioners waived their objection to the improper venue as held by RTC and CA?
Held:

There is no question that the venue was improperly laid in this case. The place of business of plaintiff
Tyson Enterprises, Inc., which for purposes of venue is considered as its residence, because a
corporation has a personality separate and distinct from that of its officers and stockholders.
Consequently, the collection suit should have been filed in Manila, the residence of plaintiff corporation
and the place designated in its sales invoice, or it could have been filed also in Bacolod City, the
residence of defendant Sy.
RTC and CA erred in ruling that petitioners waived their objection to the improper venue. As the trial court
proceeded in defiance of the Rules of Court in not dismissing the case, prohibition lies to restrain it from
acting in the case
Section 4, Rule 4 of the Rules of Court provides that, "when improper venue is not objected to in a motion
to dismiss it is deemed waived" and it can no longer be pleaded as an affirmative defense in the answer
(Sec. 5, Rule 16).
In this case, the petitioners, before filing their answer, filed a motion to dismiss based on improper venue.
That motion was seasonably filed The fact that they filed a motion for a bill of particulars before they filed
their motion to dismiss did not constitute a waiver of their objection to the venue.
The rules on venue, like the other procedural rules, are designed to insure a just and orderly
administration of justice or the impartial and evenhanded determination of every action and proceeding.
Obviously, this objective will not be attained if the plaintiff is given unrestricted freedom to choose the
court where he may file his complaint or petition.
The choice of venue should not be left to the plaintiff's whim or caprice. He may be impelled by some
ulterior motivation in choosing to file a case in a particular court even if not allowed by the rules on venue.
As perspicaciously observed by Justice Moreland, the purpose of procedure is not to restrict the court's
jurisdiction over the subject matter but to give it effective facility "in righteous action", "to facilitate and
promote the administration of justice" or to insure "just judgments" by means of a fair hearing. If that
objective is not achieved, then "the administration of justice becomes incomplete and unsatisfactory and
lays itself open to grave criticism." (Manila Railroad Co. vs. Attorney General, 20 Phil. 523, 530.)
WHEREFORE, the decision of the Court of Appeals and the order of respondent judge denying the
motion to dismiss are reversed and set aside. The writ of prohibition is granted. Civil Case No. 34302
should be considered dismissed without prejudice to refiling - it in the Court of First Instance of Manila or
Bacolod City at the election of plaintiff which should be allowed to withdraw the documentary evidence
submitted in that case. All the proceedings in said case, including the decision, are also set aside. Costs
against Tyson Enterprises, Inc.







TIME, INC. VS. REYES, G.R. No. L-28882 May 31, 1971 (Crim. Action against a corporation, its
officers)
Facts:
Antonio J. Villegas and Juan Ponce Enrile seek to recover from the herein petitioner damages upon an
alleged libel arising from a publication of Time (Asia Edition) magazine, in its issue of 18 August 1967, of
an essay, entitled "Corruption in Asia".
Petitioner received the summons and a copy of the complaint at its offices in New York on 13 December
1967 and, on 27 December 1967, it filed a motion to dismiss the complaint for lack of jurisdiction and
improper venue, relying upon the provisions of Republic Act 4363. Private respondents opposed the
motion.
In an order dated 26 February 1968, respondent court deferred the determination of the motion to dismiss
until after trial of the case on the merits, the court having considered that the grounds relied upon in the
motion do not appear to be indubitable.
Failing in its efforts to discontinue the taking of the depositions, previously adverted to, and to have action
taken, before trial, on its motion to dismiss, petitioner filed the instant petition for certiorari and prohibition.
The orders for the taking of the said depositions, for deferring determination of the motion to dismiss, and
for reaffirming the deferment, and the writ of attachment are sought to be annulled in the petition..
Issue:
1. Whether or not, under the provisions of Republic Act No. 4363 the respondent Court of First Instance
of Rizal has jurisdiction to take cognizance of the civil suit for damages arising from an allegedly libelous
publication, considering that the action was instituted by public officers whose offices were in the City of
Manila at the time of the publication; if it has no jurisdiction, whether or not its erroneous assumption of
jurisdiction may be challenged by a foreign corporation by writ of certiorari or prohibition; and
2. Whether or not Republic Act 4363 is applicable to action against a foreign corporation or non-resident
defendant?
Held:
ART. 360, RPC provides Persons responsible. Any person who shall publish, exhibit, or cause the
publication or exhibition of any defamation in writing or by similar means, shall be responsible for the
same.
The author or editor of a book or pamphlet, or the editor or business manager of a daily newspaper,
magazine or serial publication, shall be responsible for the defamations contained therein to the extent as
if he were the author thereof.
The assertion that a foreign corporation or a non-resident defendant is not inconvenienced by an out-of-
town suit is irrelevant and untenable, for venue and jurisdiction are not dependent upon convenience or
inconvenience to a party; and moreover, venue was fixed under Republic Act No. 4363, pursuant to the
basic policy of the law that is, as previously stated, to protect the interest of the public service when the
offended party is a public officer, by minimizing as much as possible any interference with the discharge
of his duties.

That respondents-plaintiffs could not file a criminal case for libel against a non-resident defendant does
not make Republic Act No. 4363 incongruous of absurd, for such inability to file a criminal case against a
non-resident natural person equally exists in crimes other than libel. It is a fundamental rule of
international jurisdiction that no state can by its laws, and no court which is only a creature of the state,
can by its judgments or decrees, directly bind or affect property or persons beyond the limits of the
state.

Not only this, but if the accused is a corporation, no criminal action can lie against it,

whether such
corporation or resident or non-resident. At any rate, the case filed by respondents-plaintiffs is case for
damages.
The dismissal of the present petition is asked on the ground that the petitioner foreign corporation failed
to allege its capacity to sue in the courts of the Philippines. Respondents rely on section 69 of the
Corporation law, which provides:
SEC. 69. No foreign corporation or corporations formed, organized, or existing under any laws other than
those of the Philippines shall be permitted to ... maintain by itself or assignee any suit for the recovery of
any debt, claim, or demand whatever, unless it shall have the license prescribed in the section
immediately preceding. ..." ...;
Petitioner's failure to aver its legal capacity to institute the present petition is not fatal, for ...
A foreign corporation may, by writ of prohibition, seek relief against the wrongful
assumption of jurisdiction. And a foreign corporation seeking a writ of prohibition against
further maintenance of a suit, on the ground of want of jurisdiction in which jurisdiction is
not bound by the ruling of the court in which the suit was brought, on a motion to quash
service of summons, that it has jurisdiction.
It is also advanced that the present petition is premature, since respondent court has not definitely ruled
on the motion to dismiss, nor held that it has jurisdiction, but only argument is untenable. The motion to
dismiss was predicated on the respondent court's lack of jurisdiction to entertain the action; and the
rulings of this Court are that writs of certiorari or prohibition, or both, may issue in case of a denial or
deferment of action on such a motion to dismiss for lack of jurisdiction.
WHEREFORE, the writs applied for are granted: the respondent Court of First Instance of Rizal is
declared without jurisdiction to take cognizance of its Civil Case No. 10403; and its orders issued in
connection therewith are hereby annulled and set aside,. Respondent court is further commanded to
desist from further proceedings in Civil case No. 10403 aforesaid. Costs against private respondents,
Antonio J. Villegas and Juan Ponce Enrile.
The writ of preliminary injunction heretofore issued by this Supreme Court is made permanent.









WEST COAST LIFE, INS. VS. HURD, G.R. No. L-8527 March 30, 1914
Facts:
The petitioner is a foreign life-insurance corporation, duly organized under and by virtue of the laws of the
State of California, doing business regularly and legally in the Philippine Islands pursuant to its laws.
Assistant prosecuting attorney of the city of Manila filed an information in a criminal action in the Court of
First Instance of that city against West Coast Life, Ins., and also against John Northcott (general agent
and manager) and Manuel C. Grey (treasurer), charging said corporation and said individuals with the
crime of libel for printing, publishing, and distributing a large number of circulars to policy holders and
prospective policy holders of Insular Life Insurance Company stating that the rumor about it is true
regarding it being in a bad shape and its capital has diminished.
Judge Hurd signed and issued a process directed to the plaintiff and the other accused.

Plaintiff filed with the clerk of the court a motion to quash said summons and the service thereof, on the
ground that the court had no jurisdiction over the said company, there being no authority in the court for
the issuance of the process. The court denied the motion and directed plaintiff to appear.
The basis of the action is that the Court of First Instance has no power or authority, under the laws of the
Philippine Islands, to proceed against a corporation, as such, criminally, to bring it into court for the
purpose of making it amenable to the criminal laws. It is contended that the court had no jurisdiction to
issue the process in evidence against the plaintiff corporation; that the issuance and service thereof upon
the plaintiff corporation were outside of the authority and jurisdiction of the court, were authorized by no
law, conferred no jurisdiction over said corporation, and that they were absolutely void and without force
or effect.
Issue:
The question remains as to whether or not the court may, of itself and on its own motion, create not only a
process but a procedure by which the process may be made effective?
Whether or not West Coast Life Insurance should also be criminally charged?
Held:
We do not believe that the authority of the courts of the Philippine Islands extends so far. While having
the inherent powers which usually go with courts of general jurisdiction, we are of the opinion that, under
the circumstances of their creation, they have only such authority in criminal matters as is expressly
conferred upon them by statute or which it is necessary to imply from such authority in order to carry out
fully and adequately the express authority conferred. We do not feel that Courts of First Instance have
authority to create new procedure and new processes in criminal law. The exercise of such power verges
too closely on legislation.
To bring a corporation into court criminally requires many additions to the present criminal procedure.
While it may be said to be the duty of courts to see to it that criminals are punished, it is no less their duty
to follow prescribed forms of procedure and to go out upon unauthorized ways or act in an unauthorized
manner.
The courts of the Philippine Islands are creatures of statute and, as we have said, have only those
powers conferred upon them by statute and those which are required to exercise that authority fully and

adequately. The courts here have no common law jurisdiction or powers. If they have any powers not
conferred by statute, expressly or impliedly, they would naturally come from Spanish and not from
common law sources. It is undoubted that, under the Spanish criminal law and procedure, a corporation
could not have been proceeded against criminally, as such, if such an entity as a corporation in fact
existed under the Spanish law, and as such it could not have committed a crime in which a willful purpose
or a malicious intent was required. Criminal actions would have been restricted or limited, under that
system, to the officials of such corporations and never would have been directed against the corporation
itself. This was the rule with relation to associations or combinations of persons approaching, more or
less, the corporation as it is now understood, and it would undoubtedly have been the rue with
corporations. From this source, then, the courts derive no authority to bring corporations before them in
criminal actions, nor to issue processes for that purpose.
CFI of Manila is hereby enjoined and prohibited from proceeding further in the criminal cause which is
before us in this proceeding, entitled United States vs. West Coast Life Insurance Company, a
corporation, John Northcott and Manuel C. Grey, so far as said proceedings relate to the said West Coast
Life Insurance Company, a corporation, the plaintiff in the case.























CRUZVALE,INC. VS. EDUQUE, G.R. Nos. 172785-86 June 18, 2009
Facts:
Petitioner is a client of East Asia (AEA) Capital Corporation (East Asia) which is a duly licensed Philippine
investment house engaged in the buy and sell or trading of securities and commercial papers. As a
practice, East Asia purchases Long Term Commercial Papers (LTCPs) for petitioner from various
corporations the latter has chosen. These LTCPs are registered with the issuing corporations in the name
of East Asia in trust for petitioner. In turn, East Asia issues Outright Sales Invoices and Custodian
Receipts to petitioner. Once the LTCPs mature, petitioner instructs East Asia to re-invest or roll-over the
principal amounts and accrued interests to other similar LTCPs.1avvphi1
Petitioner learned of East Asias irregular transactions and precarious financial condition. Thus, it asked
East Asia for an accounting of all its LTCPs. Meanwhile, petitioner conducted its own investigation and
discovered that: (1) some of its outstanding LTCPs were sold or assigned to third parties; (2) the
proceeds of such sale or assignment were covered by petitioners alleged purchase of East Asia
promissory notes; (3) the proceeds of its matured LTCPs were not used to purchase other similar LTCPs
but covered instead petitioners alleged purchase of East Asia promissory notes; and (4) interest
payments from its LTCPs were received by East Asia and covered petitioners alleged purchase of East
Asia promissory notes. All these were done without petitioners prior knowledge and consent.
Petitioners representatives met with respondent Jose Armando L. Eduque, Chief Executive Officer and
Director of East Asia, to confirm and discuss the foregoing. Eduque proposed to: (1) secure the East Asia
promissory notes with collateral; and/or (2) dacion the LTCPs with East Asia real properties and shares of
stock.
Eduque proposed the conversion of a part or all of petitioners LTCPs into East Asia equity. Petitioner
declined the proposal and made a final demand for the turn-over of the proceeds of its matured LTCPs
and the delivery of its outstanding LTCPs, with interest payments accruing thereto.
As the demand remained unheeded, petitioner filed a complaint-affidavit with the Office of the City
Prosecutor of Makati charging respondents, as officers and/or directors of East Asia, with violation of
Article 315(1)(b) and (2)(a) of the Revised Penal Code.
An Information for estafa under Article 315(1)(b) was filed against respondents. Joson filed a motion for
reconsideration while Eduque, Binamira and Delgado filed a petition for review with the Department of
Justice.
The Secretary of Justice granted the petition and directed the City Prosecutor of Makati to withdraw the
information against respondents. On the other hand, the City Prosecutor of Makati granted Josons
motion and recommended the dismissal of the charge against her.
The City Prosecutor of Makati then filed a motion to withdraw information which was denied by Judge
Guillen.

Joson filed a motion for reconsideration separate from the motion for reconsideration filed by
Eduque, Binamira and Delgado.
Judge Romeo F. Barza, who took over as presiding judge, granted Josons motion but denied

that of
Eduque, Binamira and Delgado. Thereafter, they were arraigned over their objections. They filed another
motion for reconsideration. Petitioner also moved to reconsider the withdrawal of the information against
Joson.

Due to Judge Barzas voluntary inhibition, the case was re-raffled and re-assigned to Judge Rebecca R.
Mariano of the RTC of Makati City, Branch 134. Judge Mariano dismissed the criminal case against all
respondents due to the absence of probable cause.
Petitioner moved for partial reconsideration which Judge Mariano granted. She also denied respondents
motion for reconsideration and ordered the pre-trial to proceed.
Before the Court of Appeals, Joson filed a petition for review docketed as CA-G.R. SP No. 81518 while
Eduque, Binamira and Delgado filed a petition for review docketed as CA-G.R. SP No. 81526.
The appellate court granted the petitions. The Supreme Court ruled in Sesbreo v. Court of
Appeals that a money market transaction partakes of a nature of a loan and therefore, the non-payment
thereof would not give rise to criminal liability for estafa through misappropriation or conversion. East Asia
did not receive money in trust, or on commission or for administration, or under any other obligation to
make delivery of or to return the same. It did not become a trustee of petitioner, nor was any fiduciary
relationship created. Thus, the appellate court ordered the dismissal of the criminal charge for estafa
under Article 315(1)(b) against respondents for lack of probable cause:

Issue:
Whether or not respondents should be held liable for estafa?
Held:
We find no reason to depart from the recommendations of the City Prosecutor of Makati and the
Secretary of Justice, which were affirmed by the appellate court, to dismiss the criminal charge against
respondents for lack of probable cause.
To be held liable for estafa under Article 315(1)(b) of the Revised Penal Code, the following elements
must concur: (1) that money, goods, or other personal properties are received by the offender in trust, or
on commission, or for administration, or under any other obligation involving the duty to make delivery of,
or to return, the same; (2) that there is a misappropriation or conversion of such money or property by the
offender or denial on his part of such receipt; (3) that such misappropriation or conversion or denial is to
the prejudice of another; and (4) that there is a demand made by the offended party on the offender.
28

While East Asia acted as custodian of the LTCPs and was obliged to turn-over the proceeds of the
matured LTCPs and to deliver the outstanding LTCPs to petitioner, with interest payments accruing
thereto, there was no showing that respondents misappropriated or converted the same. East Asia
periodically remitted the proceeds and interest payments to petitioner even before petitioner filed its
complaint-affidavit. Moreover, apart from its sweeping allegation that respondents misappropriated or
converted its money placements, petitioner failed to establish the particular role or actual participation of
each respondent in the criminal act. Neither was it shown that they assented to its commission. It is basic
that only corporate officers shown to have participated in the alleged anomalous acts may be held
criminally liable.
WHEREFORE, the Decision dated March 1, 2006 of the Court of Appeals in CA-G.R. SP Nos. 81518 and
81526 and its Resolution dated May 22, 2006, denying reconsideration, are AFFIRMED.




SIA vs. PEOPLE, G.R. No. L-30896 April 28, 1983
Facts:
Jose 0. Sia was General Manager of the Metal Manufacturing Company of the Philippines, Inc. engaged
in the manufacture of steel office equipment. Because his company was in need of raw materials to be
imported from abroad, he applied for a letter of credit to import steel sheets from Mitsui Bussan Kaisha,
Ltd. of Tokyo, Japan, the application being directed to the Continental Bank, herein complainant, and his
application having been approved, the letter of credit was opened on 5 June, 1963 in the amount of
$18,300, and the goods arrived sometime in July, 1963 according to accused himself. According to
Complainant Bank, there was permitted delivery of the steel sheets only upon execution of a trust receipt,
while according to the accused, the goods were delivered to him sometime before he executed that trust
receipt in fact they had already been converted into steel office equipment by the time he signed said
trust receipt; but there is no question - and this is not debated - that the bill of exchange issued for the
purpose of collecting the unpaid account thereon having fallen due neither accused nor his company
having made payment thereon notwithstanding demands, and the accounts having reached the sum in
pesos of P46,818.68 after deducting his deposit valued at P28,736.47; that was the reason why upon
complaint by Continental Bank, the Fiscal filed the information after preliminary investigation as has been
said on 22 October, 1964.
Issue:
Whether petitioner Jose O. Sia, having only acted for and in behalf of the Metal Manufacturing Company
of the Philippines (Metal Company, for short) as President thereof in dealing with the complainant, the
Continental Bank, (Bank for short) may be liable for the crime charged?
Held:
No. In discussing this question, petitioner proceeds, in the meantime, on the assumption that the acts
imputed to him would constitute the crime of estafa, which he also disputes, but seeks to avoid liability on
his theory that the Bank knew all along that petitioner was dealing with him only as an officer of the Metal
Company which was the true and actual applicant for the letter of credit and which, accordingly, assumed
sole obligation under the trust receipt. In disputing the theory of petitioner, the Solicitor General relies on
the general principle that when a corporation commits an act which would constitute a punishable offense
under the law, it is the responsible officers thereof, acting for the corporation, who would be punished for
the crime, The Court of Appeals has subscribed to this view when it quoted approvingly from the decision
of the trial court the following:
A corporation is an artificial person, an abstract being. If the defense theory is followed
unscrupulously legions would form corporations to commit swindle right and left where
nobody could be convicted, for it would be futile and ridiculous to convict an abstract
being that can not be pinched and confined in jail like a natural, living person, hence the
result of the defense theory would be hopeless chose in business and finance. It is
completely untenable. (Rollo [CA], p. 108.)
The above-quoted observation of the trial court would seem to be merely restating a general principle that
for crimes committed by a corporation, the responsible officers thereof would personally bear the criminal
liability. (People vs. Tan Boon Kong, 54 Phil. 607. See also Tolentino, Commercial Laws of the
Philippines, p. 625, citing cases.)

The case cited by the Court of Appeals in support of its stand-Tan Boon Kong case, supra-may however
not be squarely applicable to the instant case in that the corporation was directly required by law to do an
act in a given manner, and the same law makes the person who fails to perform the act in the prescribed
manner expressly liable criminally. The performance of the act is an obligation directly imposed by
the law on the corporation. Since it is a responsible officer or officers of the corporation who actually
perform the act for the corporation, they must of necessity be the ones to assume the criminal liability;
otherwise this liability as created by the law would be illusory, and the deterrent effect of the law, negated.
In the present case, a distinction is to be found with the Tan Boon Kong case in that the act alleged to be
a crime is not in the performance of an act directly ordained by law to be performed by the corporation.
The act is imposed by agreement of parties, as a practice observed in the usual pursuit of a business or a
commercial transaction. The offense may arise, if at all, from the peculiar terms and condition agreed
upon by the parties to the transaction, not by direct provision of the law. The intention of the parties,
therefore, is a factor determinant of whether a crime was committed or whether a civil obligation alone
intended by the parties. With this explanation, the distinction adverted to between the Tan Boon Kong
case and the case at bar should come out clear and meaningful. In the absence of an express provision
of law making the petitioner liable for the criminal offense committed by the corporation of which he is a
president as in fact there is no such provisions in the Revised Penal Code under which petitioner is being
prosecuted, the existence of a criminal liability on his part may not be said to be beyond any doubt. In all
criminal prosecutions, the existence of criminal liability for which the accused is made answerable must
be clear and certain. The maxim that all doubts must be resolved in favor of the accused is always of
compelling force in the prosecution of offenses. This Court has thus far not ruled on the criminal liability of
an officer of a corporation signing in behalf of said corporation a trust receipt of the same nature as that
involved herein. In the case of Samo vs. People, L-17603-04, May 31, 1962, the accused was not clearly
shown to be acting other than in his own behalf, not in behalf of a corporation.


















Sy Tiong Shiou vs. Sy Chim, G.R. No. 174168, March 30, 2009 (Criminal liability under the
Corporation Code)
Facts:
The officers of the corporation (Sy Tiong Shiou, et al.) denied the Spouses Sy access to corporate
records because of pending civil and intra-corporate cases. This prompted the Spouses Sy to file several
cases against Tiong Shiou, et al.
Two of the complaints were for alleged violation of Section 74 in relation to Section 144 of the Corporation
Code. In these complaints, the Spouses Sy averred that they are stockholders and directors of Sy Siy Ho
& Sons, Inc. (the corporation) who asked Sy Tiong Shiou, et al., officers of the corporation, to allow them
to inspect the books and records of the business on three occasions to no avail. In a letter dated 21 May
2003, Sy Tiong Shiou, et al. denied the request, citing civil and intra-corporate cases pending in court.
In the two other complaints Sy Tiong Shiou was charged with falsification under Article 172, in relation to
Article 171 of the Revised Penal Code (RPC), and perjury under Article 183 of the RPC. According to the
Spouses Sy, Sy Tiong Shiou executed under oath the 2003 General Information Sheet (GIS) wherein he
falsely stated that the shareholdings of the Spouses Sy had decreased despite the fact that they had not
executed any conveyance of their shares.
Sy Tiong Shiou, et al. argued before the prosecutor that the issues involved in the civil case for
accounting and damages pending before the RTC of Manila were intimately related to the two criminal
complaints filed by the Spouses Sy against them, and thus constituted a prejudicial question that should
require the suspension of the criminal complaints. They also argued that the Spouses Sys request for
inspection was premature as the latters concern may be properly addressed once an answer is filed in
the civil case. Sy Tiong Shiou, on the other hand, denied the accusations against him, alleging that before
the 2003 GIS was submitted to the Securities and Exchange Commission (SEC), the same was shown to
respondents, who at that time were the President/Chairman of the Board and Assistant Treasurer of the
corporation, and that they did not object to the entries in the GIS. Sy Tiong Shiou also argued that the
issues raised in the pending civil case for accounting presented a prejudicial question that necessitated
the suspension of criminal proceedings.
The investigating prosecutor issued a resolution recommending the suspension of the criminal complaints
for violation of the Corporation Code and the dismissal of the criminal complaints for falsification and
perjury against Sy Tiong Shiou. The reviewing prosecutor approved the resolution. The Spouses Sy
moved for the reconsideration of the resolution, but their motion was denied on 14 June 2004. The
Spouses Sy thereupon filed a petition for review with the Department of Justice (DOJ), which the latter
denied in a resolution issued on 02 September 2004. Their subsequent motion for reconsideration was
likewise denied in the resolution of 20 July 2005.

The Spouses Sy elevated the DOJs resolutions to the Court of Appeals through a petition for certiorari,
imputing grave abuse of discretion on the part of the DOJ. The appellate court granted the petition and
directed the City Prosecutors Office to file the appropriate informations against Sy Tiong Shiou, et al. for
violation of Section 74, in relation to Section 144 of the Corporation Code and of Articles 172 and 183 of
the RPC.
The appellate court ruled that the civil case for accounting and damages cannot be deemed prejudicial to
the maintenance or prosecution of a criminal action for violation of Section 74 in relation to Section 144 of
the Corporation Code since a finding in the civil case that respondents mishandled or misappropriated the
funds would not be determinative of their guilt or innocence in the criminal complaint. In the same
manner, the criminal complaints for falsification and/or perjury should not have been dismissed on the
ground of prejudicial question because the accounting case is unrelated and not necessarily
determinative of the success or failure of the falsification or perjury charges. Furthermore, the Court of
Appeals held that there was probable cause that Sy Tiong Shiou had committed falsification and that the
City of Manila where the 2003 GIS was executed is the proper venue for the institution of the perjury
charges. Sy Tiong Shiou, et al. sought reconsideration of the Court of Appeals decision but their motion
was denied.
Issue:
Whether or not DOJ abused its discretion when it suspended the hearing of the charges of violation of the
Corporation Code on the ground of prejudicial question?
Whether or not there is a probable cause to warrant the institution with the criminal charge?
Held:
Yes. The Supreme Court ruled that the DOJ gravely abused its discretion when it suspended the hearing
of the charges for violation of the Corporation Code on the ground of prejudicial question and when it
dismissed the criminal complaints. According to the Supreme Court: Indeed, a preliminary proceeding is
not a quasi-judicial function and that the DOJ is not a quasi-judicial agency exercising a quasi-judicial
function when it reviews the findings of a public prosecutor regarding the presence of probable cause.
Moreover, it is settled that the preliminary investigation proper, i.e., the determination of whether there is
reasonable ground to believe that the accused is guilty of the offense charged and should be subjected to
the expense, rigors and embarrassment of trial, is the function of the prosecution. This Court has adopted
a policy of non-interference in the conduct of preliminary investigations and leaves to the investigating
prosecutor sufficient latitude of discretion in the determination of what constitutes sufficient evidence as
will establish probable cause for the filing of information against the supposed offender.

As in every rule, however, there are settled exceptions. Hence, the principle of non-interference does not
apply when there is grave abuse of discretion which would authorize the aggrieved person to file a
petition for certiorari and prohibition under Rule 65, 1997 Rules of Civil Procedure.
As correctly found by the Court of Appeals, the DOJ gravely abused its discretion when it suspended the
hearing of the charges for violation of the Corporation Code on the ground of prejudicial question and
when it dismissed the criminal complaints.
On the issue of probable cause, the Supreme Court ruled:
Anent the issue of probable cause, the Court also finds that there is enough probable cause to warrant
the institution of the criminal cases.
In order that probable cause to file a criminal case may be arrived at, or in order to engender the well-
founded belief that a crime has been committed, the elements of the crime charged should be
present. This is based on the principle that every crime is defined by its elements, without which there
should beat the mostno criminal offense.

Section 74 of the Corporation Code reads in part:
The records of all business transactions of the corporation and the minutes of
any meeting shall be open to inspection by any director, trustee, stockholder or member
of the corporation at reasonable hours on business days and he may demand, in writing,
for a copy of excerpts from said records or minutes, at his expense.

Any officer or agent of the corporation who shall refuse to allow any director,
trustee, stockholder or member of the corporation to examine and copy excerpts from its
records or minutes, in accordance with the provisions of this Code, shall be liable to such
director, trustee, stockholder or member for damages, and in addition, shall be guilty of
an offense which shall be punishable under Section 144 of this Code: Provided, That if
such refusal is made pursuant to a resolution or order of the Board of Directors or
Trustees, the liability under this section for such action shall be imposed upon the
directors or trustees who voted for such refusal: and Provided, further, That it shall be a
defense to any action under this section that the person demanding to examine and copy
excerpts from the corporation's records and minutes has improperly used any information
secured through any prior examination of the records or minutes of such corporation or of
any other corporation, or was not acting in good faith or for a legitimate purpose in
making his demand.
Meanwhile, Section 144 of the same Code provides:
Sec. 144. Violations of the Code.Violations of any of the provisions of this
Code or its amendments not otherwise specifically penalized therein shall be punished by
a fine of not less than one thousand (P1,000.00) pesos but not more than ten thousand

(P10,000.00) pesos or by imprisonment for not less than thirty (30) days but not more
than five (5) years, or both, in the discretion of the court. If the violation is committed by a
corporation, the same may, after notice and hearing, be dissolved in appropriate
proceedings before the Securities and Exchange Commission: Provided, That such
dissolution shall not preclude the institution of appropriate action against the director,
trustee or officer of the corporation responsible for said violation: Provided, further, That
nothing in this section shall be construed to repeal the other causes for dissolution of a
corporation provided in this Code.

In the recent case of Ang-Abaya, et al. v. Ang, et al.,
[27]
the Court had the occasion to enumerate
the requisites before the penal provision under Section 144 of the Corporation Code may be applied in a
case of violation of a stockholder or members right to inspect the corporate books/records as provided for
under Section 74 of the Corporation Code. The elements of the offense, as laid down in the case, are:

First. A director, trustee, stockholder or member has made a prior demand in
writing for a copy of excerpts from the corporations records or minutes;

Second. Any officer or agent of the concerned corporation shall refuse to allow
the said director, trustee, stockholder or member of the corporation to examine and copy
said excerpts;

Third. If such refusal is made pursuant to a resolution or order of the board of
directors or trustees, the liability under this section for such action shall be imposed upon
the directors or trustees who voted for such refusal; and,

Fourth. Where the officer or agent of the corporation sets up the defense that the
person demanding to examine and copy excerpts from the corporations records and
minutes has improperly used any information secured through any prior examination of
the records or minutes of such corporation or of any other corporation, or was not acting
in good faith or for a legitimate purpose in making his demand, the contrary must be
shown or proved.
[28]



Thus, in a criminal complaint for violation of Section 74 of the Corporation Code, the defense of
improper use or motive is in the nature of a justifying circumstance that would exonerate those who raise
and are able to prove the same. Accordingly, where the corporation denies inspection on the ground of
improper motive or purpose, the burden of proof is taken from the shareholder and placed on the
corporation.
[29]
However, where no such improper motive or purpose is alleged, and even though so
alleged, it is not proved by the corporation, then there is no valid reason to deny the requested inspection.

In the instant case, however, the Court finds that the denial of inspection was predicated on the pending
civil case against the Spouses Sy.


Republic Gas Corp. vs. Petron Corp, June 1, 2013 (Separate Personality not a shield to commit a
crime)
Facts:
Petitioners Petron and Shell are two of the largest bulk suppliers and producers of LPG in the Philippines.
Petron is the registered owner in the Philippines of the trademarks GASUL and GASUL cylinders used for
its LGP products. It is the sole entity in the Philippines authorized to allow refillers and distributors to refill,
use, sell, and distribute GASUL LPG containers, products and its trademarks. Pilipinas Shell, on the other
hand, is the authorized user in the Philippines of the tradename, trademarks, symbols or designs of its
principal, Shell International Petroleum Company Limited, including the marks SHELLANE and SHELL
device in connection with the production, sale and distribution of SHELLANE LPGs. It is the only
corporation in the Philippines authorized to allow refillers and distributors to refill, use, sell and distribute
SHELLANE LGP containers and products. Private respondents, on the other hand, are the directors and
officers of Republic Gas Corporation (REGASCO for brevity), an entity duly licensed to engage in,
conduct and carry on, the business of refilling, buying, selling, distributing and marketing at wholesale and
retail of Liquefied Petroleum Gas (LPG).

LPG Dealers Associations, such as the Shellane Dealers Association, Inc., Petron Gasul Dealers
Association, Inc. and Totalgaz Dealers Association, received reports that certain entities were engaged in
the unauthorized refilling, sale and distribution of LPG cylinders bearing the registered tradenames and
trademarks of the petitioners. As a consequence, Genesis Adarlo, on behalf of the aforementioned
dealers associations, filed a letter-complaint in the National Bureau of Investigation (NBI) regarding the
alleged illegal trading of petroleum products and/or underdelivery or underfilling in the sale of LPG
products.

An investigation was thereafter conducted by the NBI, particularly within the areas of Caloocan, Malabon,
Novaliches and Valenzuela, which showed that several persons and/or establishments, including
REGASCO, were suspected of having violated provisions of Batas Pambansa Blg. 33 (B.P. 33). The
surveillance revealed that REGASCO LPG Refilling Plant in Malabon was engaged in the refilling and
sale of LPG cylinders bearing the registered marks of the petitioners without authority from the latter.
Based on its General Information Sheet filed in the Securities and Exchange Commission, REGASCOs
members of its Board of Directors are: (1) Arnel U. Ty President, (2) Marie Antoinette Ty Treasurer,
(3) Orlando Reyes Corporate Secretary, (4) Ferrer Suazo and (5) Alvin Ty (hereinafter referred to
collectively as private respondents).

NBI operatives, then conducted a test-buy operation on February 19, 2004 with the former and a
confidential asset going undercover. They brought with them four (4) empty LPG cylinders bearing the
trademarks of SHELLANE and GASUL and included the same with the purchase of J&S, a REGASCOs

regular customer. Inside REGASCOs refilling plant, they witnessed that REGASCOs employees carried
the empty LPG cylinders to a refilling station and refilled the LPG empty cylinders. Money was then given
as payment for the refilling of the J&Ss empty cylinders which included the four LPG cylinders brought in
by De Jemil and his companion. Cash Invoice No. 191391 dated February 19, 2004 was issued as
evidence for the consideration paid.

After leaving the premises of REGASCO LPG Refilling Plant in Malabon, De Jemil and the other NBI
operatives proceeded to the NBI headquarters for the proper marking of the LPG cylinders. The LPG
cylinders refilled by REGASCO were likewise found later to be underrefilled.

De Jemil applied for the issuance of search warrants in the Regional Trial Court, Branch 24, in the City of
Manila against the private respondents and/or occupants of REGASCO LPG Refilling Plant located at
Asucena Street, Longos, Malabon, Metro Manila for alleged violation of Section 2 (c), in relation to
Section 4, of B.P. 33, as amended by PD 1865.
Upon the issuance of the said search warrants, Special Investigator Edgardo C. Kawada and other NBI
operatives immediately proceeded to the REGASCO LPG Refilling Station in Malabon and served the
search warrants on the private respondents. After searching the premises of REGASCO, they were able
to seize several empty and filled Shellane and Gasul cylinders as well as other allied paraphernalia.
NBI lodged a complaint in the Department of Justice against the private respondents for alleged violations
of Sections 155 and 168 of Republic Act (RA) No. 8293, otherwise known as the Intellectual Property
Code of the Philippines.
The prosecutor found that there was no proof introduced by the petitioners that would show that private
respondent REGASCO was engaged in selling petitioners products or that it imitated and reproduced the
registered trademarks of the petitioners. He further held that he saw no deception on the part of
REGASCO in the conduct of its business of refilling and marketing LPG.
Secretary of the Department of Justice affirmed the prosecutors dismissal of the complaint reasoning
that...
At any rate, it is settled doctrine that a corporation has a personality separate and distinct from its
stockholders as in the case of herein respondents. To sustain the present allegations, the acts
complained of must be shown to have been committed by respondents in their individual capacity by clear
and convincing evidence. There being none, the complaint must necessarily fail. As it were, some of the
respondents are even gainfully employed in other business pursuits. x x x.
3


CA reversed. Petitioners filed a MR which was denied by the CA


Issue:
Whether probable cause exists to hold petitioners liable for the crimes of trademark infringement and
unfair competition as defined and penalized under Sections 155 and 168, in relation to Section 170 of
Republic Act (R.A.) No. 8293?
Held:
Mere unauthorized use of a container bearing a registered trademark in connection with the sale,
distribution or advertising of goods or services which is likely to cause confusion, mistake or deception
among the buyers or consumers can be considered as trademark infringement.

Here, petitioners have actually committed trademark infringement when they refilled, without the
respondents consent, the LPG containers bearing the registered marks of the respondents. As noted by
respondents, petitioners acts will inevitably confuse the consuming public, since they have no way of
knowing that the gas contained in the LPG tanks bearing respondents marks is in reality not the latters
LPG product after the same had been illegally refilled. The public will then be led to believe that
petitioners are authorized refillers and distributors of respondents LPG products, considering that they
are accepting empty containers of respondents and refilling them for resale.
In the present case, respondents pertinently observed that by refilling and selling LPG cylinders bearing
their registered marks, petitioners are selling goods by giving them the general appearance of goods of
another manufacturer.

What's more, the CA correctly pointed out that there is a showing that the consumers may be misled into
believing that the LPGs contained in the cylinders bearing the marks GASUL and SHELLANE are
those goods or products of the petitioners when, in fact, they are not. Obviously, the mere use of those
LPG cylinders bearing the trademarks GASUL and SHELLANE will give the LPGs sold by REGASCO
the general appearance of the products of the petitioners.

In sum, this Court finds that there is sufficient evidence to warrant the prosecution of petitioners for
trademark infringement and unfair competition, considering that petitioner Republic Gas Corporation,
being a corporation, possesses a personality separate and distinct from the person of its officers,
directors and stockholders.
12
Petitioners, being corporate officers and/or directors, through whose act,
default or omission the corporation commits a crime, may themselves be individually held answerable for
the crime.
13
Veritably, the CA appropriately pointed out that petitioners, being in direct control and
supervision in the management and conduct of the affairs of the corporation, must have known or are

aware that the corporation is engaged in the act of refilling LPG cylinders bearing the marks of the
respondents without authority or consent from the latter which, under the circumstances, could probably
constitute the crimes of trademark infringement and unfair competition. The existence of the corporate
entity does not shield from prosecution the corporate agent who knowingly and intentionally caused the
corporation to commit a crime. Thus, petitioners cannot hide behind the cloak of the separate corporate
personality of the corporation to escape criminal liability. A corporate officer cannot protect himself behind
a corporation where he is the actual, present and efficient actor.
14


WHEREFORE, premises considered, the petition is hereby DENIED and the Decision dated July 2, 2010
and Resolution dated October 11, 2010 of the Court of Appeals in CA-G.R. SP No. 106385 are
AFFIRMED.
















Ching vs. Secretary of Justice, G. R. No. 164317 February 6, 2006 (Criminal liability of a
corporation)

Facts:
Petitioner was the Senior Vice-President of Philippine Blooming Mills, Inc. (PBMI). Sometime in
September to October 1980, PBMI, through petitioner, applied with the Rizal Commercial Banking
Corporation (respondent bank) for the issuance of commercial letters of credit to finance its importation of
assorted goods.
RCBC approved the application, and irrevocable letters of credit were issued in favor of petitioner. The
goods were purchased and delivered in trust to PBMI. Petitioner signed 13 trust receipts

as surety,
acknowledging delivery of respective goods.
Under the receipts, petitioner agreed to hold the goods in trust for the said bank, with authority to sell but
not by way of conditional sale, pledge or otherwise; and in case such goods were sold, to turn over the
proceeds thereof as soon as received, to apply against the relative acceptances and payment of other
indebtedness to respondent bank. In case the goods remained unsold within the specified period, the
goods were to be returned to respondent bank without any need of demand. Thus, said "goods,
manufactured products or proceeds thereof, whether in the form of money or bills, receivables, or
accounts separate and capable of identification" were respondent banks property.
When the trust receipts matured, petitioner failed to return the goods to respondent bank, or to return their
value amounting to P6,940,280.66 despite demands. Thus, a criminal case for estafa was filed

against
the Senior VP.
The RTC, however, granted the Motion to Quash the Informations filed by petitioner on the ground that
the material allegations therein did not amount to estafa.
In the meantime, the Court rendered judgment in Allied Banking Corporation v. Ordoez,

holding that the
penal provision of P.D. No. 115 encompasses any act violative of an obligation covered by the trust
receipt; it is not limited to transactions involving goods which are to be sold (retailed), reshipped, stored or
processed as a component of a product ultimately sold. The Court also ruled that "the non-payment of the
amount covered by a trust receipt is an act violative of the obligation of the entrustee to pay."
Thus, the criminal complaint for estafa was re-filed.
Issue:
WON the Honorable Secretary of Justice correctly ruled that petitioner Alfredo Ching is the officer
responsible for the offense charged?
Held:
NO. Assertions of Petitioner that he had no direct participation in the transaction other than being the
Senior VP of the PBMI is too dull that it cannot even just dent the findings of the respondent Secretary,
viz:
"x x x it is apropos to quote section 13 of PD 115 which states in part, viz:

xxx If the violation or offense is committed by a corporation, partnership, association or
other judicial entities, the penalty provided for in this Decree shall be imposed upon the
directors, officers, employees or other officials or persons therein responsible for the
offense, without prejudice to the civil liabilities arising from the criminal offense.
"There is no dispute that it was the respondent, who as senior vice-president of PBM,
executed the thirteen (13) trust receipts. As such, the law points to him as the official
responsible for the offense. Since a corporation cannot be proceeded against criminally
because it cannot commit crime in which personal violence or malicious intent is required,
criminal action is limited to the corporate agents guilty of an act amounting to a crime and
never against the corporation itself (West Coast Life Ins. Co. vs. Hurd, 27 Phil. 401; Times,
[I]nc. v. Reyes, 39 SCRA 303). Thus, the execution by respondent of said receipts is
enough to indict him as the official responsible for violation of PD 115.
xxx
"In regard to the other assigned errors, we note that the respondent bound himself under
the terms of the trust receipts not only as a corporate official of PBM but also as its surety.
It is evident that these are two (2) capacities which do not exclude the other. Logically, he
can be proceeded against in two (2) ways: first, as surety as determined by the Supreme
Court in its decision in RCBC vs. Court of Appeals, 178 SCRA 739; and, secondly, as the
corporate official responsible for the offense under PD 115, the present case is an
appropriate remedy under our penal law.
"Moreover, PD 115 explicitly allows the prosecution of corporate officers without prejudice
to the civil liabilities arising from the criminal offense thus, the civil liability imposed on
respondent in RCBC vs. Court of Appeals case is clearly separate and distinct from his
criminal liability under PD 115."
The Court rules that although petitioner signed the trust receipts merely as Senior Vice-President of PBMI
and had no physical possession of the goods, he cannot avoid prosecution for violation of P.D. No. 115.1
The crime defined in P.D. No. 115 is malum prohibitum but is classified as estafa under paragraph 1(b),
Article 315 of the Revised Penal Code, or estafa with abuse of confidence. It may be committed by a
corporation or other juridical entity or by natural persons.
Though the entrustee is a corporation, nevertheless, the law specifically makes the officers, employees or
other officers or persons responsible for the offense, without prejudice to the civil liabilities of such
corporation and/or board of directors, officers, or other officials or employees responsible for the offense.
The rationale is that such officers or employees are vested with the authority and responsibility to devise
means necessary to ensure compliance with the law and, if they fail to do so, are held criminally
accountable; thus, they have a responsible share in the violations of the law.
If the crime is committed by a corporation or other juridical entity, the directors, officers,
employees or other officers thereof responsible for the offense shall be charged and penalized for
the crime, precisely because of the nature of the crime and the penalty therefor. A corporation
cannot be arrested and imprisoned; hence, cannot be penalized for a crime punishable by
imprisonment.

However, a corporation may be charged and prosecuted for a crime if the
imposable penalty is fine. Even if the statute prescribes both fine and imprisonment as penalty, a




corporation may be prosecuted and, if found guilty, may be fined.