NATIONAL BREWERY AND ALLIED INDUSTRIES LABOR UNION OF THE PHILIPPINES (PAFLU),

vs.
SAN MIGUEL BREWERY, INC.
G.R. No. L-19017 . December 27, 1963

FACTS:
The National Brewery and Allied Industries Labor Union of the Philippines (PAFLU) filed before
the Court of First Instance of Manila against the San Miguel Brewery, Inc. a complaint alleging, among
others, that said union and the company entered into a collective bargaining agreement which provides
that the company will pay the basic daily rates of those workers within the bargaining unit who may
participate in the Labor Day parade. Hence, about 600 members of the union joined and participated in
said parade whose total basic daily wage amounts to P3,900.00. The union demanded payment; but, the
company refused to do so. Thus, the union filed a case against the company for payment of the said
amount, actual or compensatory damages, as well as moral and exemplary damages, and 6,000 pesos
for the attorneys fees.
The company in its answer set up special and affirmative defenses. Among those, the company
alleged that the union has no cause of action against the company since the union is not the real party in
interest but the individual members whose right to recover the one day's wage is personal to them. The
lower court issued an order requiring the complaint to be amended by including as parties plaintiffs the
real parties in interest. The union submitted a motion for reconsideration. The company in turn moved for
outright dismissal of the complaint on the plea that lack of cause of action is not correctible by
amendment. Both motions were denied, but after the company had sought reconsideration on the ground
that the union failed to amend the complaint despite the lapse of the 10-day period given to it to do so, an
order was issued dismissing the complaint without prejudice. Hence, the present appeal.

ISSUE:
Whether or not the union has cause of action against the company.

RULING:
YES. It was held by the Supreme Court that Section 3, Rule 3 of our Rules of Court, wherein it is
provided, among others, that a party with whom or in whose name a contract has been made for the
benefit of another may sue or be sued without joining the party for whose benefit the action is presented
or defended even if the court may at its discretion order such beneficiary to be made also a party.
The union is the party with whom or in whose name the collective bargaining agreement in
question has been entered into for the benefit of its members and, in line with the above rule, the union
may sue thereon without joining the members for whose benefit the action has been presented. This is
especially so when to join said members would be cumbersome because they amount to more than 600.
The Court ruled that the orders appealed from are set aside and the case is remanded to the
court a quo for further proceedings.

Soliman, Rhea-Ann J.

SULO NG BAYAN INC.

vs.
GREGORIO ARANETA, INC., PARADISE FARMS, INC., NATIONAL WATERWORKS & SEWERAGE
AUTHORITY, HACIENDA CARETAS, INC, and REGISTER OF DEEDS OF BULACAN
G.R. No. L-31061 . August 17, 1976
FACTS:
Sulo ng Bayan, Inc. filed an accion de revindicacion with the Court of First Instance (now RTC) of
Bulacan, Fifth Judicial District, Valenzuela, Bulacan, against Gregorio Araneta Inc. (GAI), Paradise Farms
Inc., National Waterworks & Sewerage Authority (NAWASA), Hacienda Caretas Inc., and the Register of
Deeds of Bulacan to recover the ownership and possession of a large tract of land in San Jose del Monte,
Bulacan, containing an area of 27,982,250 sq. ms., more or less, registered under the Torrens System in
the name of GAI. The latter filed a motion to dismiss the amended complaint on the grounds that (1) the
complaint states no cause of action; and (2) the cause of action, if any, is barred by prescription and
laches. Paradise Farms, Inc. and Hacienda Caretas, Inc. filed motions to dismiss based on the same
grounds. NAWASA did not file any motion to dismiss. However, it pleaded in its answer as special and
affirmative defenses lack of cause of action by Sulo ng Bayan Inc. and the barring of such action by
prescription and laches. The trial court issued an Order dismissing the (amended) complaint. Thus, Sulo
ng Bayan filed a motion to reconsider the Order of dismissal, arguing among others that the complaint
states a sufficient cause of action because the subject matter of the controversy is one of common
interest to the members of the corporation who are so numerous that the present complaint should be
treated as a class suit. The motion was denied by the trial court.
Sulo ng Bayan appealed to the Court of Appeal which found that no question of fact was involved
in the appeal but only questions of law and jurisdiction; hence, certified the case to the Supreme Court for
resolution of the legal issues involved in the controversy.

ISSUE:
1.
2.

Whether the (non-stock) corporation may institute an action in behalf of its individual members for
the recovery of certain parcels of land allegedly owned by said members.
Whether the complaint filed by the corporation in behalf of its members may be treated as a class
suit.

RULING:

1. NO. It is a doctrine well-established that a corporation is a distinct legal entity to be considered

as separate and apart from the individual stockholders or members who compose it, and is not affected
by the personal rights, obligations and transactions of its stockholders or members. The property of the
corporation is its property and not that of the stockholders or members, as owners, although they have
equities in it. Properties registered in the name of the corporation are owned by it as an entity separate
and distinct from its members. Conversely, a corporation ordinarily has no interest in the individual
property of its stockholders unless transferred to the corporation, "even in the case of a one-man
corporation." It must be noted, however, that the juridical personality of the corporation, as separate and
distinct from the persons composing it, is but a legal fiction introduced for the purpose of convenience and
to subserve the ends of justice. This separate personality of the corporation may be disregarded, or the
veil of corporate fiction pierced, in cases where it is used as a cloak or cover for fraud or illegality, or to
work -an injustice, or where necessary to achieve equity. In the present case, it has not been claimed that
the members have assigned or transferred whatever rights they may have on the land in question to the
corporation. Therefore, plaintiff corporation has no personality to bring an action for and in behalf of its
members for the purpose of recovering property which belongs to said members in their personal
capacities.
2. NO. In order that a class suit may prosper, the following requisites must be present: (1) that the
subject matter of the controversy is one of common or general interest to many persons; and (2) that the
parties are so numerous that it is impracticable to bring them all before the court. Here, there is only one
party plaintiff, and the corporation does not even have an interest in the subject matter of the controversy,
and cannot, therefore, represent its members or stockholders who claim to own in their individual
capacities ownership of the said property. Moreover, a class suit does not lie in actions for the recovery of
property where several persons claim partnership of their respective portions of the property, as each one
could allege and prove his respective right in a different way for each portion of the land.

Soliman, Rhea-Ann J.

Below are the lists of requirements from our client:

Legal documents of the property
Opinion/clearance from your legal advisor regarding any claims over
the property & school litigations etc
Contact address of your legal advisor (name, address, telephone,
email & website)
Contact address of your external auditors (CPA Firm) (name, address,
telephone, email & website)
School permit/license and other school documents issued by
regulatory authorities
Certificate of incorporation as a non stock non profit organization
Memorandum and Articles of Association of the school & Other bye
Laws
Audited financial statements for the last 5 years (including 2008)
Annual information sheet submitted to BIR (Board of Internal
Revenue) for the last 5 years (including 2008)
General Information Sheet submitted to SEC (Securities & Exchange
Commission)/ Department of Trade & Industry for the last 5 years
(including 2008)
Income Tax Return of the school (although it is tax exempt, but
return has to be filed annually) for the last 5 years (including 2008)
Any other documents to be submitted to the regulatory authorities
School Profile

Soliman, Rhea-Ann J.