MANALASTAS, ANJELO C

3FM5

Francisco Motors Corporation vs. Court of Appeals
GR 100812, June 25, 1992

Facts:
On January 23, 1985 Francisco Motors Corporation (FMC) filed complaints against Mr. and Mrs.
Gregorio Manuel to claim P3,412.06 for the unpaid balance of the purchased jeep body. Also
additional P20,454.80 and P6,000 for the repair and attorneys fee respectively. The balance was
added to the cost of repair. On the other hand, the spouses Manuel counterclaimed that FMC has
unpaid legal services rendered by Mr. Gregorio Manuel, as being employed as an assistant legal
officer to the FMC, amounting to P50,000. June 26, 1985, the RTC decided the case in favor of
FMC but also said that spouses Manuels claims to be allowed. Both parties appealing to the decision
of the RTC, the case was moved to the Court of Appeals where the decision was held the same.

Issue:
Is Mr. Gregorio Manuel entitled to be paid for his legal services rendered to Francisco Motors
Corporation?

Ruling:
Yes, Mr. Gregorio Manuel is entitled for payment by Francisco Motors Corporation but not insofar
against the person he has filed legal demands for. As said by the Supreme Courts decision that
the assailed decision is hereby REVERSED insofar only as it held Francisco Motors
Corporation liable for the legal obligation owing to private respondent Gregorio Manuel; but this
decision is without prejudice to his filing the proper suit against the concerned members of the
Francisco family in their personal capacity. No pronouncement as to costs. As a basic rule in a
corporation, that the corporation is a separate and distinct entity from its stockholders and
incorporators unless violations were made (i.e the corporation was clearly made as an instrument for personal
goals).
MANALASTAS, ANJELO C
3FM5

Jardine Davies vs. Court of Appeals
GR 128066, June 19, 2000

Facts:
During the 1992 national power crisis, Pure Foods Corporation (PFC) decided to install two
1500KW generators in its processing plant in San Roque, Marikina City. These generators are the
remedy to cover the losses incurring during the power failures. PFC held a pre-bidding to determine
who would supply and install the said machineries and also to discuss the conditions, proposal and
specifications needed by PFC. Three submitted bid proposals, namely, Far East Mills Supply
Corporation (FEMSCO), Monark, and Advance Power. PFC confirmed to award the contract to
FEMSCO, through a letter dated December 12, 1992 addressed to FEMSCO President Alfonso Po.
FEMSCO paid and submitted the required performance bond and insurance policy which amounted
to P1,841,187.90 and P6,137,293 respectively. The said amount was later acknowledged by PFC VP
Benedicto Tope. FEMSCO also started the arrangements and purchased the equipment needed for
the project, while PFC returned the P1M bidders bond as requested. However, on December 22,
1992, PFC Senior VP Teodoro Dimayuga cancelled the award of contract to FEMSCO, which the
latter protested and requested a meeting with PFC. March 26, 1993, before preceding matters were
resolved, PFC already contracted with Jardine Davies, Inc. as contractors for the said project.
FEMSCO, sued both Jardine and PFC, one for interference and the other for reneging its contract.
RTC favoured FEMSCO but dismissed the complaint against Jardine. FEMSCO and PFC appealed
to the RTC decision and the case gone up the CA, which in turn verdict that PFC pay the damages
to FEMSCO and reversing the RTC decision of dismissing the case against Jardine, therefore
compelling the latter to pay damages.

Issue:
Is Jardine Davies, Inc. compelled to pay FEMSCO for moral damages?

Ruling:
No, Jardine Davies, Inc. is not legally binded to pay moral damages to FEMSCO for the alleged
inducement with PFC ang thus resulting to cancellation of contract between the two original parties.
The Court of Appeals decision of reversing the RTC decision and thus ordering Jardine to pay P2M
as moral damages were reversed and set aside by Supreme Court due to insufficiency of evidence.
Therefore only PFC, who according to SC, acted in bad faith shall pay damages to FEMSCO.
MANALASTAS, ANJELO C
3FM5

Filipinas Broadcasting Network Inc. vs. Ago Medical and Educational Center-Bicol
Christian College of Medicine
GR 141994 January 17, 2005

Facts:
Radio broadcasters Carmelo Rima and Hermogenes Alegre in their documentary program Expos
exposed various allegations and complaints from students, teachers and parents against Ago Medical
and Educational Center-Bicol Christian College of Medicine (AMEC). AMEC and its Dean Angelita
Ago, filed complaints for the insulting broadcast against the said broadcasters and Filipinas
Broadcasting Network, Inc. (FBNI), owners of the station airing the program. AMEC also claimed
that the institution is a reputable learning center and the accusations exposed by the said
broadcasters have damage the reputation of both the dean and college. FBNI were also sued for
allegedly failing to exercise their due diligence in the selection and supervising their employees,
especially the said broadcasters. It was counterclaimed by FBNI, Rima, and Alegre thru their
attorney that allegations brought about were fair and true; the broadcasters were plainly impelled by
a sense of public duty to report the goings-on in AMEC as an institution with public interest. FBNI
stated that they have fulfilled their due diligence in selecting and supervising their broadcasters.

Issue:
Whether a juridical person such as AMEC entitled to be awarded moral damages.

Ruling:
As the basic principle that a juridical person or entity cannot be physically suffering or any similar
sentiments like a natural person, AMEC is still awarded by the Court for moral damages. The
decision Considering the degree of damages caused by the controversial utterances, which are not
found by this court to be really very serious and damaging, and there being no showing that indeed
the enrollment of plaintiff school dropped and that the nature is libellous enough for them to
cause moral damage. Therefore, the broadcasters and FBNI were ordered to pay P150,000 moral
damages.
MANALASTAS, ANJELO C
3FM5

Villa Rey Transit vs. Ferrer
GR L-23893 October 29, 1968

Facts:
Jose Villarama, the operator of the bus transportation Villa Rey Transit (VRT), has been granted 2
certificates of public convenience and operates a total of 32 buses by Public Service Commission
(PSC). The granted certificates entitled his operation on various lines from Pangasinan to Manila and
vice versa. Jose Villarama then sold these 2 certificates to Pangasinan Transportation Company, Inc.
(PANTRANCO) for P350,000 with condition that Villarama "shall not for a period of 10 years from
the date of this sale, apply for any TPU service identical or competing with the buyer." March 6,
1959, Jose Villaramas wife, Natividad Villarama incorporated Villa Rey Transit, Inc. The company
bought 5 certificates of public convenience from Valentin Fernando and applied the sold certificates
to PSC for approval. PSC allowed the company to temporarily operate during the application was in
process, but before PSC approved their application the Sheriff of Manila levied the 2 certificates in
favor of Eusebio Ferrer. Ferrer later on sold these certificates to PANTRANCO which in turn sued
Jose Villarama/company for allegedly breached the agreement beforehand and that they are
disqualified for the 2 certificates in issue.

Issue:
Whether the clause shall not for a period of 10 years from the date of this sale, apply for any TPU service
identical or competing with the buyer. binds the company Villa Rey Transit, Inc.

Ruling:
Yes because Jose Villarama said himself that he used his financial resources to support the accused
company therefore the Court decided that the Villa Rey Transit, Inc. is an alter ego of Jose M.
Villarama, and that the restrictive clause in the contract entered into by the latter and Pantranco is
also enforceable and binding against the said Corporation. For the rule is that a seller or promisor
may not make use of a corporate entity as a means of evading the obligation of his covenant. Where
the Corporation is substantially the alter ego of the covenantor to the restrictive agreement, it can be
enjoined from competing with the covenantee.
MANALASTAS, ANJELO C
3FM5

Feliciano vs. Commission on Audit
GR 147402 January 14, 2004

Facts:
On July 19, 1999 Leyte Metropolitan Water District (LMWD) received a letter from COA requesting
for the payment of auditing done on their accounts. Engr. Ranulfo C. Feliciano, the general manager
of LMWD, wrote a reply to COAs Regional Director that the said water district cannot pay the fees
being charged from them and also requested that they refund all fees previously paid to COA for the
auditing services. Feliciano, questioned whether a Local Water District (LWD) is subject for COA
auditing if they are not a government owned institution. Further to his request was to stop all audit
services and charging of fees. All these request were denied by the Chairman of COA thru the
resolution dated January 3, 2000.

Issue:
Does a Local Water District such as LMWD a government-owned or controlled corporation?

Ruling:
A local water district is an institution without incorporators and stockholders and are not registered
at SEC. LWD has a special charter which are only given to government owned or controlled
corporation therefore making LMWD a GOCC (Government Owned and Controlled Corporation).
Furthermore, LMWD would be liable to pay COA, not COA auditors, for fees charge in auditing
their books. Denying their rights for reimbursement and cancellation of fee charging.

MANALASTAS, ANJELO C
3FM5

Ang mga Kaanib sa Iglesia ng Dios Kay Kristo Hesus, HSK sa Bansang Pilipinas Inc. vs.
Iglesia ng Dios kay Cristo Jesus, Haligi at Suhay ng Katotohanan
GR 137592 December 12, 2001

Facts:
In 1976, Eliseo Soriano and several members of the Iglesia ng Dios Kay Cristo Jesus, Haligi at Suhay
ng Katotohanan (IDCJ-HSK), a non-stock religious corporation, separated themselves from the
latter group and formed a new one. The newly registered organization which was named as Iglesia
ng Dios Kay Kristo Hesus, Haligi at Saligan ng Katotohanan (IDKJ-HSK). On July 16, 1979 IDCJ-
HSK filled to SEC a petition for IDKJ-HSK to change their corporate name for it was almost
identical to the former. While the case was pending, Soriano and its subordinates filed registration
on July 25 1980 for the name Ang Mga Kaanib sa Iglesia ng Dios Kay Kristo Hesus, H.S.K, sa
Bansang Pilipinas (AKIDKH-HSKBP), the H.S.K stands for Haligi at Saligan ng Katotohanan. For
having resemblance on the corporate names, IDCJ-HSK filed petition that they again change their
corporate names; this petition was filed twice because it creates confusion to the public. AKIDKH-
HSKBP tried to dismiss the said petition but ended up denied, and their lack of answer defaulted
them and favouring IDCJ-HSK.

Issue:
Are the corporate names IDCJ-HSK and AKIDKH-HSKBP confusingly similar that the former
petition the latter to change their corporate name?

Ruling:
Yes, the two corporate names are unusually similar in the case that the only difference were the
words "Ang Mga Kaanib " and "Sa Bansang Pilipinas, Inc." in AKIDKH-HSKBP's name which
merely describes their members as individuals who currently lives in the Pilippines. Furthermore,
their corporate name highlights IGLESIA NG DIOS KAY KRISTO HESUS, HALIGI AT
SALIGAN NG KATOTOHANAN which is undeniably the same and similar to IDCJ-HSK. This
would cause confusion among the public and therefore the Court favors the former with their
petition to compel the latter change their corporate name.

MANALASTAS, ANJELO C
3FM5

JG Summit Holdings Inc. vs. Court of Appeals
GR 124293 November 20, 2000

Facts:
January 27, 1977, the National Investment and Development Corporation (NIDC) entered into a
joint venture agreement with Kawasaki Heavy Industries, Ltd. of Kobe, Japan (Kawasaki) for the
construction, operation and management of Subic National Shipyard, Inc. which later became the
Philippine Shipyard and Engineering Corporation (PHILSECO). Under the agreement, NIDC and
Kawasaki would have 60-40 shareholding proportion respectively and parties the right of first refusal
should either party sell, assign or transfer its interest in the joint venture. NIDCs rights were
eventually transferred and ended with the National Government. In the 1989 reorganization of
PHILSECO due to settlements of debt, resulted for the National Government to have 97.41%
shareholdings and the remaining 2.59% to Kawasaki. At the discretion of COP and APT,
PHILSECO was privatized and 87.67% of their total outstanding stocks were on sale. The selling of
the stocks was done via an auction. The winning group, namely: JG Summit Holdings, Inc. (JGSMI),
Sembawang Shipyard Ltd. of Singapore (Sembawang), and Jurong Shipyard Limited of Malaysia
(Jurong) were the highest bidder at P2.03B. JGSMI received notification from COP that Philyards
Holding, Inc. as agreed by COP, APT and Kawasaki has the right to top the highest bidder by 5%.
This was contested by JGSMI for they have violated certain grounds said on the Asset Specific
Bidding Rules.

Issue:
Was APTs action in allowing Kawaski to participate in the public bidding reasonable and legally
right?

Ruling:
No. PHILSECO being a public utility is under the condition that it shareholdings are in the interest
of the public or atleast 60% were owned by citizens of the Philippines or organization owned by
Filipinos. Allowing Kawasaki to participate in that bidding and consequently winning would grant
them more than 40% of the allowed maximum volume of shareholdings for foreign investors.
Therefore violating the Article VII of the Constitution applying that the proportion of 60%-40%
Filipino-foreign capitalization.
MANALASTAS, ANJELO C
3FM5

Lyceum of the Philippines vs. Court of Appeals
GR 101897 March 5, 1993

Facts:
Lyceum of the Philippines previously won a case against the Lyceum of Bagiuo, Inc. for the latter to
change its institutional name not similar or identical to the former. This is in consideration that
names of institutions registered in SEC be clear and distinguished from other institutions. Carrying
the said resolution, Lyceum of the Philippines requested that other institutions carrying the word
Lyceum change their respective names. RTC favoring the claim of Lyceum of the Philippines
based on SEC ruling, educational institutions Lyceum Of Aparri, Lyceum Of Cabagan, Lyceum Of
Camalaniugan, Inc., Lyceum Of Lallo, Inc., Lyceum Of Tuao, Inc., Buhi Lyceum, Central Lyceum
Of Catanduanes, Lyceum Of Southern Philippines, Lyceum Of Eastern Mindanao, Inc. and Western
Pangasinan Lyceum, Inc. claimthat The SEC En Banc did not consider the word "Lyceum" to have
become so identified with Lyceum of the Philippines as to render use thereof by other institutions as
productive of confusion about the identity of the schools concerned in the mind of the general
public. Unlike its hearing officer, the SEC En Banc held that the attaching of geographical names to
the word "Lyceum" served sufficiently to distinguish the schools from one another, especially in
view of the fact that the campuses of Lyceum of the Philippines and those of the other Lyceums
were physically quite remote from each other. Therefore rendering the previous decision reversed
and set aside.

Issue:
Is the use of the word Lyceum by other schools aside from Lyceum of the Philippines makes it
confusingly similar to that of the latter?

Ruling:
No, theCourt does not consider that the corporate names of the academic institutions are "identical
with, or deceptively or confusingly similar" to that of Lyceum of the Philippines Inc.. True enough,
the corporate names of the other schools (defendant institutions) entities all carry the word
"Lyceum" but confusion and deception are effectively precluded by the appending of geographic
names to the word "Lyceum." Thus, the "Lyceum of Aparri" cannot be mistaken by the general
public for the Lyceum of the Philippines, or that the "Lyceum of Camalaniugan" would be confused
with the Lyceum of the Philippines.
MANALASTAS, ANJELO C
3FM5

Republic Planters Bank vs. Agana
GR 51765 March 3, 1997

Facts:
September 18, 1961, Robes-Francisco Realty & Development Corporation (RFRDC) secured a loan
from the Republic Planters Bank (RPB) in the amount of P120,000.00. Proceeds were not given full
in legal tender, part of it were in the form of preferred shares through RFRDC officers, Carlos
Robes and Adalia Robes. Each received 400 shares with P10 par value. Carlos Robes endorsed his
shares in favour of Adalia Robes. Said certificates of stock bear the following terms and conditions:
"The Preferred Stock shall have the following rights, preferences, qualifications and limitations, to
wit: 1. Of the right to receive a quarterly dividend of 1%, cumulative and participating. 2. That such
preferred shares may be redeemed, by the system of drawing lots, at any time after 2 years from the
date of issue at the option of the Corporation." On January 31, 1979, RFRDC and Robes filed a
complaint against the bank to have their stocks redeem as said in their agreement. RPB tried to
dismiss the case by filling a motion, but the RTC denied the said motion and rendered the case in
favour of RFRDC and Robes.

Issue:
Was RFRDC and Robes complaint of compelling RPB to redeem their stocks valid?

Ruling:
The complaint is not valid insofar that the agreement between the known parties stipulated that
redemption is optional and the decision rest with the corporation (RPB) andnot to the stockholder.
Furthermore the word may denotes that it is not mandatory for them to do such actions. The
Central Bank, moreover, made a finding that the Bank has been suffering from chronic reserve
deficiency, and that such finding resulted in a directive, issued on January 31, 1973 by then Gov. G.
S. Licaros of the Central Bank, to the President and Acting Chairman of the Board of the bank
prohibiting the latter from redeeming any preferred share, on the ground that said redemption
would reduce the assets of the Bank to the prejudice of its depositors and creditors. Redemption of
preferred shares was prohibited for a just and valid reason.
MANALASTAS, ANJELO C
3FM5

Industrial Refractories Corporation of the Philippines vs. Court of Appeals
GR 122174 October 3, 2002

Facts:
Refactories Corporation of the Philippines (RCP), a manufacturing company registered since 1976,
registered its corporate and business name with the Bureau of Domestic Trade on June 19, 1977.
Meanwhile, Industrial Refactories Corporation of the Philippines (IRCP) was incorporated August
23, 1979 as "Synclaire Manufacturing Corporation". Their corporate name was changed after they
have amended their articles of incorporations. Like RCP, IRCP is also engaged in manufacturing and
both companies are local suppliers of monolithic gunning mix. On April 14, 1988 at the attention of
RCP that IRCP is using such name, they filed a petition to SEC for the latter to change their
corporate name that is not similar to the former and avoid further confusion. Favoring RCP, IRCP
appealed to the SEC En Banc in which they ordered the petitioner to drop from their corporate
name Refactories. IRCP still appealed and filed petition for review on the CA.

Issue:
Is the appeal of IRCP from dropping the word Refactories from their corporate name justifiable?

Ruling:
The word Refactories although being a generic term, is not widely used among the industry and
accordingly the continuous use by RCP of the term made it so closely indentified with the company.
For IRCP to use the word and adoption of RCPs corporate name to theirs creates confusion to the
public and therefore cannot find justification with the use of the generic term. The Court decided
that their petition denied and therefore ordering them to change their corporate name distinct and
separate from that of RCP.