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Smith, Bell & Company (Ltd.

), pet
vs.
Joaquin Natividad, Collector of Customs of the port of Cebu,
resp.
This is a petition for a writ of mandamus filed by the petitioner to compel Natividad
to issue a certificate of Philippine registry in favor of the former for its motor vessel
Bato.
Facts:
Smith, Bell & Co., (Ltd.), is a corporation organized and existing under the laws of
the Philippine Islands. A majority of its stockholders are British subjects. It is the
owner of a motor vessel known as the Bato built for it in the Philippine Islands in
1916, of more than fifteen tons gross The Bato was brought to Cebu in the present
year for the purpose of transporting plaintiff's merchandise between ports in the
Islands. Application was made at Cebu, the home port of the vessel, to the
Collector of Customs for a certificate of Philippine registry. The Collector refused to
issue the certificate, giving as his reason that all the stockholders of Smith, Bell &
Co., Ltd., were not citizens either of the United States or of the Philippine Islands.
The instant action is the result.
Counsel argues that Act No. 2761 denies to Smith, Bell & Co., Ltd., the equal
protection of the laws because it, in effect, prohibits the corporation from owning
vessels, and because classification of corporations based on the citizenship of one
or more of their stockholders is capricious, and that Act No. 2761 deprives the
corporation of its property without due process of law because by the passage of
the law company was automatically deprived of every beneficial attribute of
ownership in the Bato and left with the naked title to a boat it could not use .
Issue:
Whether the Government of the Philippine Islands, through its Legislature, can
deny the registry of vessel in its coastwise trade to corporations having alien
stockholders
Ruling:
Yes. Act No. 2761 provides:
Investigation into character of vessel. No application for a certificate of
Philippine register shall be approved until the collector of customs is satisfied from
an inspection of the vessel that it is engaged or destined to be engaged in
legitimate trade and that it is of domestic ownership as such ownership is defined
in section eleven hundred and seventy-two of this Code.
Certificate of Philippine register. Upon registration of a vessel of domestic
ownership, and of more than fifteen tons gross, a certificate of Philippine register
shall be issued for it. If the vessel is of domestic ownership and of fifteen tons
gross or less, the taking of the certificate of Philippine register shall be optional
with the owner.

While Smith, Bell & Co. Ltd., a corporation having alien stockholders, is entitled to
the protection afforded by the due-process of law and equal protection of the laws
clause of the Philippine Bill of Rights, nevertheless, Act No. 2761 of the Philippine
Legislature, in denying to corporations such as Smith, Bell &. Co. Ltd., the right to
register vessels in the Philippines coastwise trade, does not belong to that vicious
species of class legislation which must always be condemned, but does fall within
authorized exceptions, notably, within the purview of the police power, and so
does not offend against the constitutional provision.

Harry Stonehill,Robert Brooks, John Brooks and Karl Beck,


petitioner
vs.
Hon. Jose Diokno as Sec of Justice, Prosecutors and Judges,
respondents
This is a petition for certiorari, prohibition, mandamus and injunction to restrain the
respondent-Prosecutors, their agents and/or representatives from using the effects
seized by the police officers from the petitioners offices and residences by virtue
of search warrants.
Facts:
Upon application of the Respondent-Prosecutors and Respondent-Judges, a total of
42 search warrants were issued on different dates against petitioners and/or the
corporations of which they were officers, directing any peace officer to search the
petitioners and/or the premises of their offices, warehouses and/or residences and
to seize and take possession of records to all business transactions.
Petitioners questioned the validity of the search warrants and alleged that they are
null and void, mainly, because they do not describe with particularity the books
and things to be seized.
Respondents alleged that the said search warrants are valid and issued in
accordance with law, that the defects, if any, were cured by petitioners consent
Issue:
Whether the petitioners can assail the legality of the search warrants and of the
seizures made in pursuance thereof
Ruling:
No. The petitioners herein and the corporations of which they are officers have
personalities separate and distinct from each other.
It is well settled that the legality of a seizure can be contested only by the party
whose rights have been impaired thereby, and that the objection to an unlawful
search and seizure is purely personal and cannot be availed of by third parties.
Consequently, petitioners herein may not validly object to the use in evidence
against them of the documents, papers and things seized from the offices and
premises of the corporations adverted to above, since the right to object to the
admission of said papers in evidence belongs exclusively to the corporations, to

whom the seized effects belong, and may not be invoked by the corporate officers
in proceedings against them in their individual capacity.
Moreover, the Government's action in gaining possession of papers belonging to
the corporation did not relate to nor did it affect the personal defendants. If these
papers were unlawfully seized and thereby the constitutional rights of or any one
were invaded, they were the rights of the corporation and not the rights of the
other defendants.

Mambulao Lumber Company, plaintiff-appellant


vs.
Philippine Natl. Bank and Anacleto Heraldo, Deputy Provincial
Sheriff of Cam-Norte, def-appellees
This is an appeal from the decision of the CFI of Manila dismissing the complaint
against both defendants and sentencing the plaintiff to pay the defendant the sum
of P3,582.52 with interest thereon at the rate of 6% per annum from Dec. 22,1961
until fully paid and the costs of the suit.
Facts:
In seeking the reversal of the decision, the plaintiff contended that its total
indebtedness to the PNB has been paid by the proceeds of the foreclosure sale of
its real property and the additional amount remitted by it to the Bank.
On the belief that the proceeds of the above-stated sale is insufficient to cover the
Plaintiffs debt, PNB sent a letter to the Provincial Sheriff of Cam-Norte requesting
him to take possession of the chattels mortgaged to it by the plaintiff and sell them
at public auction.
Plaintiff alleged that the auction sale of the chattels mortgaged is void for being
violative of the agreement provided in the mortgage contract:
in cases of both judicial and extra-judicial foreclosure under Act 1508, as
amended, the corresponding complaint for foreclosure or the petition for sale
should be filed with the courts or the Sheriff of Manila, as the case may be
Herein appellant claims moral damages on account of the said violation.
Issue:
Whether Mambulao can validly claim for moral damages
Ruling:

No. An artificial person like herein appellant corporation cannot experience


physical sufferings, mental anguish, fright, serious anxiety, wounded feelings,
moral shock or social humiliation which are basis of moral damages
A corporation may have a good reputation which, if besmirched, may also be a
ground for the award of moral damages. The same cannot be considered under the
facts of this case, however, not only because it is admitted that herein appellant
had already ceased in its business operation at the time of the foreclosure sale of
the chattels, but also for the reason that whatever adverse effects of the
foreclosure sale of the chattels could have upon its reputation or business standing
would undoubtedly be the same whether the sale was conducted at Jose
Panganiban, Camarines Norte, or in Manila which is the place agreed upon by the
parties in the mortgage contract.

Jose Maglutac, pet.

vs. NLRC

These petitions for Certiorari seek to review the Decision of respondent NLRC,
affirming the finding of the Labor Arbiter that complainant was illegally dismissed
by Commart but deleting the award for moral and exemplary damages in favor of
the complainant and absolving Jesus Maglutac from any personal liability.
Facts:
Jose Maglutac was employed by Commart (Phils.) Inc. in 1980 as Manager of
Energy Equipment Sales. In 1984, he received a notice of termination signed by
the VP-Gen Mgr, and Corporate Sec of CMS Intl., a Corp controlled by Commart.
Jose Maglutac filed a case for illegal dismissal against Commart and Jesus
Maglutac, pres and Chairman of the BD of Commart. Jose alleged that his
dismissal was part of a vendetta drive against his parents who dared to expose the
massive and fraudulent diversion of company funds to the company presidents
private accounts.
In this petition, Jose Maglutac raised the issue that the NLRC committed grave
abuse of discretion and contravened existing laws and jurisprudence in holding
that resp. Jesus should not have been held liable in solidum with the resp. Corp
Issue:
Whether Jesus Maglutac should be held jointly and severally liable with Commart
Ruling:
Yes. The president or presidents of the corporation may be held liable for the
corporations obligations to its workers. Since a Corp is an artificial being, it must
have an officer who can be presumed to be the employer being the person acting
in the interest of the employer, otherwise, any decision that may be rendered

against the latter would be useless and ineffective for there would be no one
against whom it can be enforced.
The same circumstance is obtaining in the instant case in the light of the
manifestation of Commar that it had become insolvent and that It had suspended
operations.
The Labor Arbiter therefore correctly ruled that Jesus T. Maglutac was jointly and
severally liable with Commart not only because he was the most ranking officer of
Commart at the time of the termination of the complainant, it was likewise found
that he had a direct hand in the latters dismissal..

Northwest Airlines- petitioner


v.
CA and C.F. Sharp & Company-respondents
This is a petition for review on certiorari which seeks to set aside the decision of the Court of
Appeals affirming the dismissal of the petitioner's complaint to enforce the judgment of a Japanese
court.
Facts:
Northwest Air and Sharp through its Japan branch, entered into an International Passenger Sales
Agency Agreement, whereby the former authorized the latter to sell its air transportation tickets.
Unable to remit the proceeds of the ticket sales made by defendant on behalf of the plaintiff under
the said agreement, plaintiff sued defendant in Tokyo, Japan, for collection of the unremitted
proceeds of the ticket sales, with claim for damages.
A writ of summons was issued by the District Court of Japan. After the two attempts of service were
unsuccessful, the judge of the Tokyo District Court decided to have the complaint and the writs of
summons served at the head office of the defendant in Manila through diplomatic channels.
Defendant received from Deputy Sheriff Balingit copy of the judgment. Defendant not having
appealed the judgment, the same became final and executory.
Plaintiff was unable to execute the decision in Japan, hence, a suit for enforcement of the judgment
was filed by plaintiff before the RTC of Manila.
Issue:
Whether a Japanese court can acquire jurisdiction over a Philippine corporation doing business in
Japan by serving summons through diplomatic channels on the Philippine corporation at its principal
office in Manila after prior attempts to serve summons in Japan had failed.

Ruling:
Yes. A foreign judgment is presumed to be valid and binding in the country from which it comes,
until the contrary is shown. It is also proper to presume the regularity of the proceedings and the
giving of due notice therein.
It is settled that matters of remedy and procedure such as those relating to the service of process
upon a defendant are governed by the lex fori or the internal law of the forum. In this case, it is the
procedural law of Japan where the judgment was rendered that determines the validity of the
extraterritorial service of process on SHARP. As to what this law is is a question of fact, not of law. It
may not be taken judicial notice of and must be pleaded and proved like any other fact. It was then
incumbent upon SHARP to present evidence as to what that Japanese procedural law is and to show
that under it, the assailed extraterritorial service is invalid. It did not. Accordingly, the presumption
of validity and regularity of the service of summons and the decision thereafter rendered by the
Japanese court must stand.

Andaya v. Abadia et al
This is an appeal praying for the reversal of the orders of the RTC Q.C. Maintaining that the RTC and
not the SEChas jurisdiction over his complaint, petitioner argues that the court a quo should not
have dismissed Civil Case filed by him against the respondents.. He asserts that the complaint is
based not so much on plaintiff's attempted removal but rather on the manner of his removal and
the consequent effects thereof.
Facts:
Before the RTC of Q.C., Andaya filed an action for Injunction and Damages with Restraining Orders
and/or Preliminary Injunction against Abadia et al, alleging that the latter acting in concerts and
pursuant to an illegal and nefarious scheme to oust petitioner from his then positions as President
and General Manager of the AFPSLAI, with grave abuse of authority and in gross and deliberate
violation of the norms of human relations and of petitioner's right to due process, illegally,
maliciously and with evident bad faith, convened a meeting of the AFPSLAI Board of Directors and
illegally reorganized the management of AFPSLAI by ousting and removing, without just and lawful
cause, petitioner from his positions therein, causing petitioner moral and exemplary damages.
The Court ruled that it has no jurisdiction on corporate matters. Hence this appeal
Issue:
Whether the RTC and not the SEC has jurisdiction over the petitioners complaint
Ruling:
The allegations against herein respondents in the amended complaint unquestionably reveal intracorporate controversies cleverly concealed, although unsuccessfully, by use of civil law terms and
phrases. The amended complaint impleads herein respondents who, in their capacity as directors of
AFPSLAI, allegedly convened an illegal meeting and voted for the reorganization of management

resulting in petitioner's ouster as corporate officer. While it may be said that the same corporate
acts also give rise to civil liability for damages, it does not follow that the case is necessarily taken
out of the jurisdiction of the SEC as it may award damages which can be considered consequential
in the exercise of its adjudicative powers. Besides, incidental issues that properly fall within the
authority of a tribunal may also be considered by it to avoid multiplicity of actions. Consequently, in
intra-corporate matters such as those affecting the corporation, its directors, trustees, officers,
shareholders, the issue of consequential damages may just as well be resolved and adjudicated by
the SEC.
Moreover, mere allegations of violation of the provisions of the Civil Code on human relations do not
necessarily call for the application of the provisions of the Civil Code in place of AFPSLAI By-Laws.

Good Earth Emporium Inc and Lim Ka Ping, petitioners


v.
CA and Roces-Reyes Realty Inc., respondents
This is a petition for review on certiorari of the decision CA reversing the decision of respondent
Judge RTC of Manila, which reversed the resolution of the Metropolitan Trial Court Of Manila denying
herein GEEs motion to quash the alias writ of execution issued against them.
Facts:
A lease contract was entered into between ROCES and GEE. A five-storey building was the subject
of which, upon failure of the latter to pay its rentals, ROCES filed an ejectment case against the
petitioner. The MTC of Mla rendered a decision ordering GEE and all persons under him to vacate
the premises and surrender the same to ROCES and pay the plaintiffs the rental.
GEE filed a motion to quash the writ of execution but the same was denied by the MTC for lack of
merit. In 1987 the RTC of Manila reversed the decision of the MTC finding that the amount of P1
million evidenced by Exhibit "I" and another P1 million evidenced by the pacto de retro sale
instrument were in full satisfaction of the judgment obligation.
On further appeal, the CA reversed the decision of the RTC and reinstated the Resolution of the MTC
of Manila. GEEs m/r was denied, hence this petition.
Issue:
Whether or not there was full satisfaction of the judgment debt in favor of respondent corporation
which would justify the quashing of the Writ of Execution

Ruling:
The fact that at the time payment was made to the two Roces brothers, GEE was also indebted to
respondent corporation for a larger amount, is not supportive of the Regional Trial Court's
conclusions that the payment was in favor of the latter, especially where the amount was not
receipted for by respondent corporation and there is absolutely no indication in the receipt from
which it can be reasonably inferred, that said payment was in satisfaction of the judgment debt.
Likewise, no such inference can be made from the execution of the pacto de retro sale which was
not made in favor of respondent corporation but in favor of the two Roces brothers in their
individual capacities without any reference to the judgment obligation in favor of respondent
corporation.
Respondent court was correct in stating that it "cannot go beyond what appears in the documents
submitted by petitioners themselves in the absence of clear and convincing evidence" that would
support its claim that the judgment obligation has indeed been fully satisfied which would warrant
the quashal of the Alias Writ of Execution.
It has been an established rule that when the existence of a debt is fully established by the
evidence (which has been done in this case), the burden of proving that it has been extinguished by
payment devolves upon the debtor who offers such a defense to the claim of the plaintiff creditor.

Pabalan and Lagdameo, petitioners


vs.
NLRC, LA and the Sheriff of the NLRC, respondents
This is a petition for certiorari on the decision of the NLRC affirming the ruling of the LA which
ordered the petitioners to pay jointly and severally with the Philippine Inter-Fashion Inc.
Facts:
Eighty-four (84) workers of the PIF filed a complaint against the latter for illegal transfer
simultaneous with illegal dismissal without justifiable cause and in violation of the provision of the
Labor Code on security of tenure as well as the provisions of Batas Pambansa Blg. 130.
Complainants demanded reinstatement with full backwages, living allowance, 13th month pay and
other benefits under existing laws and/or separation pay. The LA ruled in its favor.
In a M/R, the NLRC affirmed the appealed decision. Hence, this petition alleging lack of jurisdiction
and grave abuse of jurisdiction in adjudging herein petitioners as jointly and severally liable with
the PIF
Issue:
(1) Whether the respondents acquired jurisdiction over the peitioners
(2) Whether the officers of the PIF could be held jointly and severally liable with the corporation for
its liablility
Ruling:

1. Yes. Record shows that while originally it was PIF which was impleaded as respondent before the
LA, petitioners also appeared in their behalf through counsel. Thereafter when the supplemental
position paper was filed by complainants, petitioners were impleaded as respondents to which they
filed an opposition inasmuch as they filed their own supplemental position papers. They were
therefore properly served with summons and they were not deprived of due process.
2. No. The settled rule is that the corporation is vested by law with a personality separate and
distinct from the persons composing it, including its officers as well as from that of any other legal
entity to which it may be related. Thus, a company manager acting in good faith within the scope of
his authority in terminating the services of certain employees cannot be held personally liable for
damages.
Here, complainants did not allege or show that petitioners, as officers of the corporation
deliberately and maliciously designed to evade the financial obligation of the corporation to its
employees, or used the transfer of the employees as a means to perpetrate an illegal act or as a
vehicle for the evasion of existing obligations, the circumvention of statutes, or to confuse the
legitimate issues. Hence petitioners can not be held jointly and severally liable with the PIF
corporation

Remo Jr., petitioner


vs
IAC and E.B> Marcha Transport Company Inc., respondents
This is a petition for review of a resolution of the IAC seeking the reversal and the reinstatement of
its earlier decision which set aside the decision of the CFI of Rizal ordering the defendants (B/D of
Akron) to pay jointly and severally with Akron Coprada (later changed to Akron Transport Intl. Inc.)
Facts:
Feliciano Coprada, as President and Chairman of Akron, purchased thirteen trucks from private
respondent on January 25, 1978 for and in consideration of P525,000.00 as evidenced by a deed of
absolute sale. After the lapse of 90 days, private respondent tried to collect from Coprada but the
latter promised to pay only upon the release of the DBP loan. Private respondent sent Coprada a
letter of demand. In his reply to the said letter, Coprada reiterated that he was applying for a loan
from the DBP from the proceeds of which payment of the obligation shall be made. Upon inquiry,
private respondent found that no loan application was ever filed by Akron with DBP.
After an ex parte reception of the evidence, a decision was rendered in favor of the plaintiff and
against the defendants ordering them to pay jointly and severally.

Issue:
Whether the IAC erred in disregarding the corporate fiction and in holding the petitioner personally
liable for the obligation of the Corporation
Ruling:
Yes. The environmental facts of this case show that there is no cogent basis to pierce the corporate
veil of Akron and hold petitioner personally liable for its obligation to private respondent. While it is
true that petitioner was still a member of the board of directors of Akron and that he participated in
the adoption of a resolution authorizing the purchase of 13 trucks for the use in the brokerage
business of Akron to be paid out of a loan to be secured from a lending institution, it does not
appear that said resolution was intended to defraud anyone and more particularly private
respondent. It was Coprada, President and Chairman of Akron, who negotiated with said respondent
for the purchase of 13 cargo trucks. It was Coprada who signed a promissory note to guarantee the
payment of the unpaid balance of the purchase price out of the proceeds of a loan he supposedly
sought from the DBP. The word "WE' in the said promissory note must refer to the corporation which
Coprada represented in the execution of the note and not its stockholders or directors. Petitioner
did not sign the said promissory note so he cannot be personally bound thereby.
It has not been clearly shown that petitioner had any part or participation in the perpetration of the
same. Fraud must be established by clear and convincing evidence.

Universal Rubber Products, petitioner


vs.
CA, Converse Rubber Corp, Edwardson Manufacturing Corp Inc. and
Navarro, respondents