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College of Law
Corporation Law (Law 106)
2nd Semester, AY 2013-2014
COURSE OUTLINE
Chapter I – INTRODUCTION
4. Stockholders or members
(1) Requirements of stockholders' or members' meeting, and of voting
Notice
Sec. 50, Corporation Code
Board of Directors vs. Tan, et al
Place of meeting
Sec. 51, 93, Corporation Code
Quorum
Sec. 52, Corporation Code
Vote
Sec. 137, 89, 56, 55, Corporation Code
Non-voting stocks or members
Sec. 6, Corporation Code
Where all stockholders present
Sec. 51, Corporation Code
Logan Johnston, et al vs. Louis A. Johnston, et al
(2) Where no meeting called
Ponce, et al vs. Encarnacion
Basis of Right
What Records Covered
Sec. 74, 75, Corporation Code
Extent of and Limitations on Right
1. Limitations as to time and place
2. Purpose
Who May Exercise Right
Remedies Available if Inspection Refused
W.G. Philpotts vs. Philippine Manufacturing Co. and F.N. Berry
Pardo vs. Hercules Lumber Co.
Gonzales vs. PNB
Veraguth vs. Isabel Sugar Co.
Gokongwei vs. SEC
Slay vs. Polonia Publishing Co.
Klein vs. Scranton Life Ins. Co.
Nature and Basis of Derivative Suit: Distinguished from Individual and Representative Suit
Requirements Relating to Derivative Suit
Pascual vs. Orozco
Evangelista vs. Santos
Liken vs. Shaffer
Keenan vs. Eshleman
Otis & Co. vs. Pennsylvania R. Co.
Republic Bank vs. Cuaderno
Reyes vs. Tan
Chase vs. CFI of Manila
Holmes vs. Camp
Gamboa vs. Victoriano
San Miguel Corp. vs. Kahn
A. Sources of Financing
B. Capital Structure
b. As to voting rights
Ellingwood v. Wolf’s Head Oil Refining
1. Pre-incorporation subscription
Sec. 13
Sec. 61
Utah Hotel Co. v. Madsen
Wallace v. Eclipse Pocahontas Coal Co.
2. Post-incorporation subscription
Sec. 60
Sec. 80
Bayla, et. al. v. Silang Traffic Co., Inc.
G. Debt Securities
1. Form of Borrowings
2. Bonds and Debentures
3. Convertible Securities; stock options
Meritt-Chapman & Scott Corp. v. New York Trust Co.
4. Hybrid Securities
John Kelley Co. v. Commissioner of Int. Revenue
Jordan v. Allen
5. The Trust indenture
Alladin Hotel Co. v. Bloom
I. Underwriting Securities
A. Form of Consideration
Sec. 32
D. Effect of Delinquency
Sec. 71
F. Issuance of Certificate
A. Form of Dividends
Nielson & Co. v. Lepanto Consolidated Mining Co.
B. Source of Dividends
Sec. 43
Berks Broadcasting Co. v. Crammer
Lich v. United States Rubber
A. Amendment by Legislature
Sec. 145
B. Amendment by Stockholders
Sec. 36 (4)
Sec. 16
1. Limitations on power
2. Grounds for rejection of amendment
Sec. 17
3. Amendment changing stockholders’ rights
Sec. 81
Hartford Accident & Indemnity Co. v. W.S. Dickey Clay Mfg. Co.
Marcus .v R.H. Macy & Co., Inc.
Keller v. Wilson & Co., Inc.
4. Effectivity of amendment
5. Special amendments
a. Increase of capital stock
Sec. 38
b. Reduction of capital stock
Sec. 122
Philippine Trust Co. v. Rivera
Shaw v. Noyes
c. Change in corporate term
Sec. 37
Sec. 11
6. Amendments in close corporations
Sec. 103
C. Unauthorized Transfers
1. Certificate indorsed in blank; when quasi-negotiable
2. Forged transfers
J. Santamaria v. Hongkong & Shanghai Banking Corporation, et. al.
A. de los Santos, et. al. v. J.H. McGrath, Atty. General of the United States
D. Collateral Transfers
Chua Guan v. Samahang Magsasaka, Inc. et. al.
A. Cause of Dissolution
1. Expiration of original, extended or shortened term
Sec. 120
2. Voluntary dissolution when no creditors affected
Sec. 118
3. Voluntary dissolution where creditors affected
Sec. 119
Sec. 122
Lebold v. Inland Steel Co.
4. Dissolution by minority in close corporations
Sec. 105
Financing Corp. v. Teodoro
5. Failure to organize and commence business; cessation of business for 5 years
Sec. 22
Art. 3, Code of Commerce
6. Involuntary dissolution
a. Revocation of certification of registration by SEC
Sec. 121
Sec. 6, PD 902-A
Sec. 2, Rule 66, Rules of Court
b. Quo Warranto proceedings
Government v. El Hogar Filipino
Government v. Philippine Sugar Estates
Republic v. Security Credit
Republic v. Bisaya Land Trans. Co.
D. Exchange of Stocks
A. Definition, Status
A. Special Corporations
1. Educational corporations
a. Stock and non-stock
b. Temporary permit
c. Government recognition
d. Special requirement to be University
e. Incorporation under the Code
Sec. 108
f. Educational foundations
2. Religious Corporations
a. Corporation Sole
b. Religious societies
Sec. 116
B. Close Corporations
C. Miscellaneous Provisions