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AURBACH
vs.
SANITARY
WARES
MANUFACTURING CORPORATION (Saniwares)(1989)
FACTS:
Saniwares, a domestic corporation, was incorporated for the primary
purpose of manufacturing and marketing sanitary wares. One of the
incorporators, Mr. Young went abroad to look for foreign partners. ASI, a
foreign corporation domiciled in the US entered into an agreement with
Saniwares and some Filipino investors whereby ASI and the Filipino
investors agreed to participate in the ownership of an enterprise
which would engage primarily in the business of
manufacturing in the Philippines and selling here and abroad
China and sanitarywares. The parties agreed that the business
operations in the Philippines shall be carried on by an
incorporated enterprise which name shall be Sanitary Wares Manufacturing
Corporation. The agreement has the provision that the management of the
corporation shall be vested in the Board of Directors (BOD) which shall
consists of 9 individuals. And as long as ASIwill own 30% of the
outstanding capital stock, 3 of the 9 directors shall be
designated by ASI and the other directors by the other stockholders.
Veto power was also given to ASI which is designed to protect it as a
minority group. The joint enterprise prospered. However, disagreements
came up due to objection of ASI of the desired expansion of the Filipino
group. When the time came to elect the BOD, instead of 9 nominees, 11
were nominated contrary to the usual practice. The meeting was
subsequently adjourned.ASI, other stockholders and Salazar, one of the
nominees as director continued the meeting at the elevator lobby
of ASI Building and consequently, 5 directors were elected as
certified by the acting secretary.
ISSUE: Whether or not the directors as nominated by the
ASI group are valid members of the BOD of Saniwares
HELD:
No. A corporation cannot enter into a partnership contract but may engage in
a joint venture with other. Since the relationship is a joint venture, the
agreement of the parties governs.
FACTS:
Sometime in December 2006, respondent Redmont
Consolidated Mines Corp. (Redmont), a domestic corporation
organized and existing under Philippine laws, took interest in
mining and exploring certain areas of the province of Palawan.
After inquiring with the Department of Environment and
Natural Resources (DENR), it learned that the areas where it
wanted to undertake exploration and mining activities where
already covered by Mineral Production Sharing Agreement
(MPSA) applications of petitioners Narra, Tesoro and
McArthur.
Petitioner McArthur Narra and Tesoro, filed an application for
an MPSA and Exploration Permit (EP) which was
subsequently issued.
On January 2, 2007, Redmont filed before the Panel of
Arbitrators (POA) of the DENR three (3) separate petitions for
the denial of petitioners applications for MPSA.
Redmont alleged that at least 60% of the capital stock of
McArthur, Tesoro and Narra are owned and controlled by
MBMI Resources, Inc. (MBMI), a 100% Canadian
corporation. Redmont reasoned that since MBMI is a
considerable stockholder of petitioners, it was the driving
force behind petitioners filing of the MPSAs over the areas
covered by applications since it knows that it can only
participate in mining activities through corporations which are
deemed Filipino citizens. Redmont argued that given that
petitioners capital stocks were mostly owned by MBMI, they
were likewise disqualified from engaging in mining activities
through MPSAs, which are reserved only for Filipino citizens.
Petitioners averred that they were qualified persons under
Section 3(aq) of Republic Act No. (RA) 7942 or the Philippine
Mining Act of 1995. They stated that their nationality as
applicants is immaterial because they also applied for
Financial or Technical Assistance Agreements (FTAA)
denominated as AFTA-IVB-09 for McArthur, AFTA-IVB-08
for Tesoro and AFTA-IVB-07 for Narra, which are granted to
foreign-owned corporations. Nevertheless, they claimed that
the issue on nationality should not be raised since McArthur,
Tesoro and Narra are in fact Philippine Nationals as 60% of
their capital is owned by citizens of the Philippines.
On December 14, 2007, the POA issued a Resolution
disqualifying petitioners from gaining MPSAs. The POA
considered petitioners as foreign corporations being
ISSUE:
Whether or notthe Court of Appeals ruling that
Narra, Tesoro and McArthur are foreign corporations based on
the "Grandfather Rule" is contrary to law, particularly the
express mandate of the Foreign Investments Act of 1991, as
amended, and the FIA Rules.
HELD:
No. There are two acknowledged tests in determining
the nationality of a corporation: the control test and the
grandfather rule. Paragraph 7 of DOJ Opinion No. 020,
Series of 2005, adopting the 1967 SEC Rules which
implemented the requirement of the Constitution and other
laws pertaining to the controlling interests in enterprises
engaged in the exploitation of natural resources owned by
Filipino citizens, provides:
GATEWAY
ELECTRONICS
CORPORATION, petitioner, vs. LAND BANK OF
THE PHILIPPINES, respondent.
DECISION
YNARES-SANTIAGO, J.:
Before the Court are consolidated petitions (1) for review
of the decision of the Court of Appeals in CA-G.R. SP No.
62658,[1] which set aside the Order dated October 18, 2000 of
the Regional Trial Court of Makati City, Branch 133, in Civil
Case No. 98-782;[2] and (2) to cite Landbank President
Margarito Teves, and Landbanks counsel, in contempt of
Court.
The undisputed facts are as follows: In 1995, petitioner
Gateway Electronics Corporation applied for a loan in the
amount of one billion pesos with respondent Landbank to
finance the construction and acquisition of machineries and
equipment for a semi-conductor plant at Gateway Business
Park in Javalera, General Trias, Cavite. However, Landbank
was only able to extend petitioner a loan in the amount of six
hundred million pesos (P600,000,000.00). Hence, it offered to
assist petitioner in securing additional funding through its
investment banking services, which offer petitioner
accepted. Thereafter, Landbank released to petitioner the
initial amount of P250,000,000.00, with the balance of
P350,000,000.00 to be released in June 1996. As security for
the said loans, petitioner mortgaged in favor of Landbank two
parcels of land[3] located in Barangay Jalavera, General Trias,
Cavite, the movable properties as well as the machineries to be
installed therein.[4]
After petitioners acceptance of Landbanks financial
banking services, the latter prepared an Information
Memorandum which it disseminated to various banks to
attract them into providing additional funding for
petitioner. The Information Memorandum stated that the
security for the proposed loan syndication will be the
Mortgage Trust Indenture (MTI) on the project assets
including land, building and equipment.[5] In a letter dated
July 30, 1996, Landbank informed petitioner of its willingness
to share the loan collateral which the latter constituted in its
favor as part of the collateral for the syndicated loan from the
other banks.[6] On August 20, 1996, Landbank confirmed its
undertaking to share the said collateral with the other creditor
banks, to wit:
In case of failure of syndication of the loan, allow the banks
that have granted loans to GEC [Gateway Electronics
Corporation] in anticipation of the loan syndication to have a
registered pari passu mortgage with you over the property, the
intention being that all banks, including Landbank, shall be on
equal footing where the aforesaid collateral is concerned.[7]
CORPORATION LAW
CASE DIGESTS
BIENVENIDO
EJERCITO, v. M.R.
CONSTRUCTION,
VARGAS