4. PHILIPPINE SOCIETY FOR THE PREVENTION OF CRUELTY TO ANIMALS vs. COA G.R. No.

169752
September 25, 2007
FACTS:
The petitioner was incorporated as a juridical entity over one hundred years ago by virtue of Act No. 1285, enacted
on January 19, 1905, by the Philippine Commission. The petitioner, at the time it was created, was composed of animal
aficionados and animal propagandists. The objects of the petitioner, as stated in Section 2 of its charter, shall be to
enforce laws relating to cruelty inflicted upon animals or the protection of animals in the Philippine Islands, and generally,
to do and perform all things which may tend in any way to alleviate the suffering of animals and promote their welfare.

At the time of the enactment of Act No. 1285, the original Corporation Law, Act No. 1459, was not yet in existence. Act
No. 1285 antedated both the Corporation Law and the constitution of the Securities and Exchange
Commission. Important to note is that the nature of the petitioner as a corporate entity is distinguished from
the sociedad anonimas under the Spanish Code of Commerce.

For the purpose of enhancing its powers in promoting animal welfare and enforcing laws for the protection of animals,
the petitioner was initially imbued under its charter with the power to apprehend violators of animal welfare laws. In
addition, the petitioner was to share one-half (1/2) of the fines imposed and collected through its efforts for violations of
the laws related thereto.

Subsequently, however, the power to make arrests as well as the privilege to retain a portion of the fines collected for
violation of animal-related laws were recalled by virtue of Commonwealth Act (C.A.) No. 148, which reads Sec. 4. The
said society is authorized to appoint not to exceed ten agents in the City of Manila, and not to exceed one in each
municipality of the Philippines who shall have the authority to denounce to regular peace officers any violation of the laws
enacted for the prevention of cruelty to animals and the protection of animals and to cooperate with said peace officers in
the prosecution of transgressors of such laws.

Sec. 2. The full amount of the fines collected for violation of the laws against cruelty to animals and for the protection of
animals, shall accrue to the general fund of the Municipality where the offense was committed.

Immediately thereafter, then President Manuel L. Quezon issued Executive Order (E.O.) No. 63 dated November 12,
1936, portions of which provide: Commissioner of Public Safety, the Provost Marshal General as head of the Constabulary
Division of the Philippine Army, every Mayor of a chartered city, and every municipal president to detail and organize
special members of the police force, local, national, and the Constabulary to watch, capture, and prosecute
offenders against the laws enacted to prevent cruelty to animals. When the COA was to perform an audit on them they
refuse to do so, by the reason that they are a private entity and not under the said commission. It argued that COA
covers only government entities. On the other hand the COA decided that it is a government entity.

PSPCA’S CONTENTION: first, even though it was created by special legislation in 1905 as there was no general law
then existing under which it may be organized or incorporated, it exercises no governmental functions because these
have been revoked by C.A. No. 148 and E.O. No. 63;

second, nowhere in its charter is it indicated that it is a public corporation, unlike, for instance, C.A. No. 111 which
created the Boy Scouts of the Philippines, defined its powers and purposes, and specifically stated that it was An Act to
Create a Public Corporation in which, even as amended by Presidential Decree No. 460, the law still adverted to the Boy
Scouts of the Philippines as a public corporation, all of which are not obtaining in the charter of the petitioner;
third, if it were a government body, there would have been no need for the State to grant it tax exemptions under
Republic Act No. 1178, and the fact that it was so exempted strengthens its position that it is a private institution;
fourth, the employees of the petitioner are registered and covered by the Social Security System at the latters initiative
and not through the Government Service Insurance System, which should have been the case had the employees been
considered government employees;
fifth, the petitioner does not receive any form of financial assistance from the government, since C.A. No. 148, amending
Section 5 of Act No. 1285, states that the full amount of the fines, collected for violation of the laws against cruelty to
animals and for the protection of animals, shall accrue to the general fund of the Municipality where the offense was
committed;
sixth, C.A. No. 148 effectively deprived the petitioner of its powers to make arrests and serve processes as these
functions were placed in the hands of the police force;
seventh, no government appointee or representative sits on the board of trustees of the petitioner;
eighth, a reading of the provisions of its charter (Act No. 1285) fails to show that any act or decision of the petitioner is
subject to the approval of or control by any government agency, except to the extent that it is governed by the law on
private corporations in general; and finally,
ninth, the Committee on Animal Welfare, under the Animal Welfare Act of 1998, includes members from both the
private and the public sectors.

COA’S CONTENTION: The respondents contend that since the petitioner is a body politic created by virtue of a special
legislation and endowed with a governmental purpose, then, indubitably, the COA may audit the financial activities of the
latter.

first, the test to determine whether an entity is a government corporation lies in the manner of its creation, and, since
the petitioner was created by virtue of a special charter, it is thus a government corporation subject to respondents
auditing power; second, the petitioner exercises sovereign powers, that is, it is tasked to enforce the laws for the
protection and welfare of animals which ultimately redound to the public good and welfare, and, therefore, it is deemed
to be a government instrumentality as defined under the Administrative Code of 1987

In view of the phrase One-half of all the fines imposed and collected through the efforts of said society, the Court, in a
Resolution dated January 30, 2007, required the Office of the Solicitor General (OSG) and the parties to comment

Petitioner and the OSG filed their respective Comments. Respondents filed a Manifestation stating that since they were
being represented by the OSG which filed its Comment, they opted to dispense with the filing of a separate one and
adopt for the purpose that of the OSG.

PSPCA’S COMMENT: avers that it does not have the authority to impose fines for violation of animal welfare laws;
it only enjoyed the privilege of sharing in the fines imposed and collected from its efforts in the enforcement of animal
welfare laws; such privilege, however, was subsequently abolished by C.A. No. 148; that it continues to exist as a private
corporation since it was created by the Philippine Commission before the affectivity of the Corporation law, Act No. 1459;
and the 1935 and 1987 Constitutions.

OSG/COA’S COMMENT: OSG submits that Act No. 1285 and its amendatory laws did not give petitioner the
authority to impose fines for violation of laws relating to the prevention of cruelty to animals and the protection of
animals; that even prior to the amendment of Act No. 1285, petitioner was only entitled to share in the fines imposed;
C.A. No. 148 abolished that privilege to share in the fines collected; that petitioner is a public corporation and has
continued to exist since Act No. 1285; petitioner was not repealed by the 1935 and 1987 Constitutions which contain
transitory provisions maintaining all laws issued not inconsistent therewith until amended, modified or repealed.

ISSUE: whether the petitioner qualifies as a government agency that may be subject to audit by respondent COA.

HELD:

First, the Court agrees with the petitioner that the charter test cannot be applied.

Essentially, the “charter test” provides that the test to determine whether a corporation is government owned or
controlled, or private in nature is simple. Is it created by its own charter for the exercise of a public function, or by
incorporation under the general corporation law? Those with special charters are government corporations subject to its
provisions, and its employees are under the jurisdiction of the CSC, and are compulsory members of the GSIS.

And since the “charter test” had been introduced by the 1935 Constitution and not earlier, it follows that the test cannot
apply to the petitioner, which was incorporated by virtue of Act No. 1285, enacted on January 19, 1905. Settled is the
rule that laws in general have no retroactive effect, unless the contrary is provided. All statutes are to be construed as
having only a prospective operation, unless the purpose and intention of the legislature to give them a retrospective
effect is expressly declared or is necessarily implied from the language used. In case of doubt, the doubt must be
resolved against the retrospective effect.
 Q: What then is the nature of the petitioner as a corporate entity? What legal regime governs its rights, powers,
and duties?

A: at the time the petitioner was formed, the applicable law was the Philippine Bill of 1902, and, emphatically, as
also stated above, no proscription similar to the charter test can be found therein.

The textual foundation of the charter test, which placed a limitation on the power of the legislature, first appeared in the
1935 Constitution. However, the petitioner was incorporated in 1905 by virtue of Act No. 1258, a law antedating the
Corporation Law (Act No. 1459) by a year, and the 1935 Constitution, by thirty years. There being neither a general law
on the formation and organization of private corporations nor a restriction on the legislature to create private corporations
by direct legislation, the Philippine Commission at that moment in history was well within its powers in 1905 to constitute
the petitioner as a private juridical entity.

The amendments introduced by C.A. No. 148 made it clear that the petitioner was a private corporation and not an
agency of the government. This was evident in Executive Order No. 63, issued by then President of the Philippines
Manuel L. Quezon, declaring that the revocation of the powers of the petitioner to appoint agents with powers of arrest
corrected a serious defect in one of the laws existing in the statute books.

Second, a reading of petitioner’s charter shows that it is not subject to control or supervision by any agency of the State,
unlike government-owned and -controlled corporations. No government representative sits on the board of trustees of the
petitioner. Like all private corporations, the successors of its members are determined voluntarily and solely by the
petitioner in accordance with its by-laws, and may exercise those powers generally accorded to private corporations, such
as the powers to hold property, to sue and be sued, to use a common seal, and so forth. It may adopt by-laws for its
internal operations: the petitioner shall be managed or operated by its officers in accordance with its by-laws in force.

Third. The employees of the petitioner are registered and covered by the Social Security System at the latters initiative,
and not through the Government Service Insurance System, which should be the case if the employees are considered
government employees. This is another indication of petitioners nature as a private entity. Section 1 of Republic Act No.
1161, as amended by Republic Act No. 8282, otherwise known as the Social Security Act of 1997

Fourth. The respondents contend that the petitioner is a “body politic” because its primary purpose is to secure the
protection and welfare of animals which, in turn, redounds to the public good. This argument, is not tenable. The fact
that a certain juridical entity is impressed with public interest does not, by that circumstance alone, make the entity a
public corporation, inasmuch as a corporation may be private although its charter contains provisions of a public
character, incorporated solely for the public good. This class of corporations may be considered quasi-public
corporations, which are private corporations that render public service, supply public wants, or pursue other
eleemosynary objectives. While purposely organized for the gain or benefit of its members, they are required by law to
discharge functions for the public benefit. Examples of these corporations are utility, railroad, warehouse, telegraph,
telephone, water supply corporations and transportation companies. It must be stressed that a quasi-public corporation
is a species of private corporations, but the qualifying factor is the type of service the former renders to the public: if it
performs a public service, then it becomes a quasi-public corporation.

Authorities are of the view that the purpose alone of the corporation cannot be taken as a safe guide, for the fact is that
almost all corporations are nowadays created to promote the interest, good, or convenience of the public. A bank, for
example, is a private corporation; yet, it is created for a public benefit. Private schools and universities are likewise
private corporations; and yet, they are rendering public service. Private hospitals and wards are charged with heavy
social responsibilities. More so with all common carriers. On the other hand, there may exist a public corporation even if
it is endowed with gifts or donations from private individuals.

The true criterion, therefore, to determine whether a corporation is public or private is found in the totality of the relation
of the corporation to the State. If the corporation is created by the State as the latter’s own agency or instrumentality to
help it in carrying out its governmental functions, then that corporation is considered public; otherwise, it is private.
Applying the above test, provinces, chartered cities, and barangays can best exemplify public corporations. They are
created by the State as its own device and agency for the accomplishment of parts of its own public works.
Fifth. The respondents argue that since the charter of the petitioner requires the latter to render periodic reports to the
Civil Governor, whose functions have been inherited by the President, the petitioner is, therefore, a government
instrumentality.

This contention is inconclusive. By virtue of the fiction that all corporations owe their very existence and powers to
the State, the reportorial requirement is applicable to all corporations of whatever nature, whether they are public, quasi-
public, or private corporations—as creatures of the State, there is a reserved right in the legislature to investigate the
activities of a corporation to determine whether it acted within its powers. In other words, the reportorial requirement is
the principal means by which the State may see to it that its creature acted according to the powers and functions
conferred upon it.

6. Seventh Day Adventist Conference Church of Southern Philippines vs. North Eastern Mindanao Mission
of Seventh Day Adventist, Inc. (496 SCRA 215) G.R. No. 150416 July 21, 2006

FACTS:
This case involves a 1,069 sq. m. lot covered by Transfer Certificate of Title (TCT) No. 4468
in Bayugan, Agusan del Sur originally owned by Felix Cosio and his wife, Felisa Cuysona.

On April 21, 1959, the spouses Cosio donated the land to the South Philippine Union Mission of Seventh Day Adventist
Church of Bayugan Esperanza, Agusan (SPUM-SDA Bayugan). The donation was allegedly accepted by
one Liberato Rayos, an elder of the Seventh Day Adventist Church, on behalf of the donee.

Twenty-one years later, however, on February 28, 1980, the same parcel of land was sold by the spouses Cosio to the
Seventh Day Adventist Church of Northeastern Mindanao Mission (SDA-NEMM). TCT No. 4468 was thereafter issued in
the name of SDA-NEMM.

Claiming to be the alleged donees successors-in-interest, petitioners asserted ownership over the property. This was
opposed by respondents who argued that at the time of the donation, SPUM-SDA Bayugan could not legally be a done
because, not having been incorporated yet, it had no juridical personality. Neither were petitioners members of the local
church then, hence, the donation could not have been made particularly to them.

On September 28, 1987, petitioners filed a case for cancellation of title, quieting of ownership and possession, declaratory
relief and reconveyance with prayer for preliminary injunction and damages), in the RTC of Bayugan, Agusan del Sur.
After trial, the trial court rendered a decision on November 20, 1992 upholding the sale in favor of respondents. On
appeal, the CA affirmed the RTC decision but deleted the award of moral damages and attorneys fees.Petitioners motion
for reconsideration was likewise denied. Thus, this petition.

ISSUE: should SDA-NEMMs ownership of the lot covered by TCT No. 4468 be upheld?

HELD: We answer in the affirmative.

The controversy between SPUM-SDA and SDA-NEMinvolves two supposed transfers of the lot previously owned by the
spouses Cosio: (1) a donation to petitioners alleged predecessors-in-interest in 1959 and (2) a sale to respondents in
1980.

Donation is undeniably one of the modes of acquiring ownership of real property. Likewise, ownership of a property may
be transferred by tradition as a consequence of a sale.

SPUM-SDA contended that the appellate court should not have ruled on the validity of the donation since it was not
among the issues raised on appeal. This is not correct because an appeal generally opens the entire case for review.

We agree with the appellate court that the alleged donation to SPUM-SDA was void.

Donation is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another person who
accepts it. The donation could not have been made in favor of an entity yet inexistent at the time it was made. Nor could
it have been accepted as there was yet no one to accept it.
The deed of donation was not in favor of any informal group of SDA members but a supposed SPUM-
SDA Bayugan (the local church) which, at the time, had neither juridical personality nor capacity to accept
such gift.

Declaring themselves a de facto corporation, petitioners allege that they should benefit from the donation.

But there are stringent requirements before one can qualify as a de facto corporation:

(a) the existence of a valid law under which it may be incorporated;

(b) an attempt in good faith to incorporate; and

(c) assumption of corporate powers.

While there existed the old Corporation Law (Act 1459), a law under which SPUM-SDA Bayugan could have been
organized, there is no proof that there was an attempt to incorporate at that time.

The filing of articles of incorporation and the issuance of the certificate of incorporation are essential for the existence of
a de facto corporation.We have held that an organization not registered with the Securities and Exchange Commission
(SEC) cannot be considered a corporation in any concept, not even as a corporation de facto. SPUM-SDA themselves
admitted that at the time of the donation, they were not registered with the SEC, nor did they even attempt to
organize to comply with legal requirements.

Corporate existence begins only from the moment a certificate of incorporation is issued. No such certificate
was ever issued to petitioners or their supposed predecessor-in-interest at the time of the donation. Petitioners obviously
could not have claimed succession to an entity that never came to exist. Neither could the principle of separate juridical
personality apply since there was never any corporation to speak of. And, as already stated, some of the representatives
of petitioner Seventh Day Adventist Conference Church of Southern Philippines, Inc. were not even members of the local
church then, thus, they could not even claim that the donation was particularly for them.

The de facto doctrine thus effects a compromise between two conflicting public interest[s]the one opposed to an
unauthorized assumption of corporate privileges; the other in favor of doing justice to the parties and of establishing a
general assurance of security in business dealing with corporations.

Generally, the doctrine exists to protect the public dealing with supposed corporate entities, not to favor
the defective or non-existent corporation.

In view of the foregoing, SPUM-SDA arguments anchored on their supposed de facto status hold no water.
We are convinced that there was no donation to petitioners or their supposed predecessor-in-interest.

On the other hand, there is sufficient basis to affirm the title of SDA-NEMM. Well-entrenched is the rule that a
Certificate of Title is generally a conclusive evidence of [ownership] of the land. There is that strong and solid
presumption that titles were legally issued and that they are valid. It is irrevocable and indefeasible and the duty of the
Court is to see to it that the title is maintained and respected unless challenged in a direct proceeding. xxx The title shall
be received as evidence in all the Courts and shall be conclusive as to all matters contained therein.

8. G.R. No. L-31061 August 17, 1976

SULO NG BAYAN INC. vs. GREGORIO ARANETA, INC., PARADISE FARMS, INC., NATIONAL WATERWORKS &
SEWERAGE AUTHORITY, HACIENDA CARETAS, INC, and REGISTER OF DEEDS OF BULACAN
FACTS:
On April 26, 1966, Sulo ng Bayan, Inc. filed an accion de revindicacion with the CFI of Bulacan, Fifth Judicial District,
Valenzuela, Bulacan, against defendants-appellees 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 square meters, more or less, registered under the Torrens
System in the name of defendants-appellees' predecessors-in-interest. The complaint, as amended on June 13, 1966,
specifically alleged that Sulo ng Bayan, Inc is a corporation organized and existing under the laws of the Philippines, with
its principal office and place of business at San Jose del Monte, Bulacan; that its membership is composed of natural
persons residing at San Jose del Monte, Bulacan; that the members of the plaintiff corporation, through themselves and
their predecessors-in-interest, had pioneered in the clearing of the tract of land, cultivated the same since the Spanish
regime and continuously possessed the said property openly and public under concept of ownership adverse against the
whole world.

Gregorio Araneta, Inc., sometime in the year 1958, through force and intimidation, ejected the members of the plaintiff
corporation from their possession of the aforementioned vast tract of land;

Upon investigation conducted by the members and officers of plaintiff corporation, they found out in the year 1961 that
the land in question "had been either fraudelently or erroneously included, by direct or constructive fraud, in OCT No. 466
of the Land of Records of the province of Bulacan", issued on May 11, 1916, which title is fictitious, non-existent and
devoid of legal efficacy.

Plaintiff-appellant consequently prayed (1) that Original Certificate of Title No. 466, as well as all transfer certificates of
title issued and derived therefrom, be nullified; (2) that "plaintiff's members" be declared as absolute owners in common
of said property and that the corresponding certificate of title be issued to plaintiff; and (3) that defendant-appellee
Gregorio Araneta, Inc. be ordered to pay to plaintiff the damages therein specified.

On September 2, 1966, defendant-appellee Gregorio Araneta, Inc. 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.
Appellee National Waterworks & Sewerage Authority did not file any motion to dismiss. However, it pleaded in its answer
as special and affirmative defenses lack of cause of action by the plaintiff-appellant and the barring of such action by
prescription and laches.

ISSUE: Whether or not plaintiff corporation (non- stock) may institute an action in behalf of its individual members for
the recovery of certain parcels of land allegedly owned by said members

HELD: NO

The issue of lack of cause of action raised in the motions to dismiss refer to the lack of personality of plaintiff to file the
instant action. Essentially, the term 'cause of action' is composed of two elements: (1) the right of the plaintiff and (2) the
violation of such right by the defendant. (Moran, Vol. 1, p. 111). For these reasons, the rules require that every action
must be prosecuted and defended in the name of the real party in interest and that all persons having an interest in the
subject of the action and in obtaining the relief demanded shall be joined as plaintiffs (Sec. 2, Rule 3).

In the amended complaint, the people whose rights were alleged to have been violated by being deprived and
dispossessed of their land are the members of the corporation and not the corporation itself. The corporation has a
separate and distinct personality from its members, and this is not a mere technicality but a matter of substantive law.
There is no allegation that the members have assigned their rights to the corporation or any showing that the corporation
has in any way or manner succeeded to such rights. The corporation evidently did not have any rights violated by the
defendants for which it could seek redress. Even if the Court should find against the defendants, therefore, the plaintiff
corporation would not be entitled to the reliefs prayed for, which are recoveries of ownership and possession of the land,
issuance of the corresponding title in its name, and payment of damages. Neither can such reliefs be awarded to the
members allegedly deprived of their land, since they are not parties to the suit. It appearing clearly that the action has
not been filed in the names of the real parties in interest, the complaint must be dismissed on the ground of lack of cause
of action.

It is a doctrine well-established and obtains both at law and in equity 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, 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.

It has not been claimed that the members have assigned or transferred whatever rights they may have on the land in
question to the plaintiff corporation. Absent any showing of interest, therefore, a corporation, like plaintiff-appellant
herein, has no personality to bring an action for and in behalf of its stockholders or members for the purpose of
recovering property which belongs to said stockholders or members in their personal capacities.

12. G.R. No. L-19550 June 19, 1967

HARRY S. STONEHILL, ROBERT P. BROOKS, JOHN J. BROOKS and KARL BECK, vs.HON. JOSE W. DIOKNO
FACTS:

Upon application of different government officers (several judges) issued, on different dates,3 a total of 42 search
warrants against petitioners and/or the corporations of which they were officers, directed to the any peace officer, to
search the persons above-named and/or the premises of their offices, warehouses and/or residences, and to seize and
take possession of the following personal property :Books of accounts, financial records, vouchers, correspondence,
receipts, ledgers, journals, portfolios, credit journals, typewriters, and other documents and/or papers showing all
business transactions including disbursements receipts, balance sheets and profit and loss statements and Bobbins
(cigarette wrappers).

as "the subject of the offense; stolen or embezzled and proceeds or fruits of the offense," or "used or intended to be
used as the means of committing the offense," which is described in the applications adverted to above as "violation of
Central Bank Laws, Tariff and Customs Laws, Internal Revenue (Code) and the Revised Penal Code."

Petitioners filed with the Supreme Court this original action for certiorari, prohibition and mandamus and injunction and
prayed that, pending final disposition of the case, a writ of preliminary injunction be issued against the prosecutors, their
agents and representatives from using the effect seized or any copies thereof, in the deportation case and that thereafter,
a decision be rendered quashing the contested search warrants and declaring the same null and void. For being violative
of the constitution and the Rules of court by: (1) not describing with particularity the documents, books and things to be
seized; (2) money not mentioned in the warrants were seized; (3) the warrants were issued to fish evidence for
deportation cases filed against the petitioner; (4) the searches and seizures were made in an illegal manner; and (5) the
documents paper and cash money were not delivered to the issuing courts for disposal in accordance with law.

In their answer, the prosecutors (respondent) alleged; (1) search warrants are valid and issued in accordance with law;
(2) defects of said warrants, were cured by petitioners consent; and (3) in any event the effects are admissible regardless
of the irregularity.

The Court granted the petition and issued the writ of preliminary injunction. However by a resolution, the writ was
partially lifted dissolving insofar as paper and things seized from the offices of the corporations.

ISSUE: Whether or not the petitioners have the legal standing to assail the legality of search warrants issued against the
corporation of which they were officers.
HELD:
The documents, papers, and things seized under the alleged authority of the warrants in question may be split into two
(2) major groups, namely: (a) those found and seized in the offices of the aforementioned corporations, and (b) those
found and seized in the residences of petitioners herein.

As regards the first group, we hold that petitioners herein have no cause of action to assail the legality of the
contested warrants and of the seizures made in pursuance thereof, for the simple reason that said corporations
have their respective personalities, separate and distinct from the personality of herein petitioners,
regardless of the amount of shares of stock or of the interest of each of them in said corporations, and
whatever the offices they hold therein may be.Indeed, 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. Indeed, it has been held:

. . . that 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. Next, it is clear
that a question of the lawfulness of a seizure can be raised only by one whose rights have been invaded. Certainly,
such a seizure, if unlawful, could not affect the constitutional rights of defendants whose property had not been seized
or the privacy of whose homes had not been disturbed; nor could they claim for themselves the benefits of the Fourth
Amendment, when its violation, if any, was with reference to the rights of another.

With respect to the documents, papers and things seized in the residences of petitioners herein, the aforementioned
resolution of June 29, 1962, lifted the writ of preliminary injunction previously issued by this Court, thereby, in effect,
restraining herein Respondents-Prosecutors from using them in evidence against petitioners herein.

14. G.R. No. L-30896 April 28, 1983 JOSE O. SIA vs.THE PEOPLE OF THE PHILIPPINES
FACTS:
Petition for review of the decision of the Court of Appeals affirming the decision of the Court of First Instance of Manila
convicting the appellant of estafa, under the information:

Between July 24, 1963 and December 31, 1963, both dates inclusive, in the City of Manila,Sia did then and there willfully,
unlawfully and feloniously defraud the Continental Bank, a banking institution duly organized and doing business in the
City of Manila, in the following manner:

Sia in his capacity as president and general manager of the Metal Manufacturing of the Philippines, Inc. (MEMAP)
and on behalf of said company, obtained delivery of 150 M/T Cold Rolled Steel Sheets valued at P 71,023.60 under
a trust receipt agreement under L/C No. 63/109, which cold rolled steel sheets were consigned to the Continental
Bank, under the express obligation on the part of said accused of holding the said steel sheets in trust and selling
them and turning over the proceeds of the sale to the Continental Bank but Sia wilfully, unlawfully and feloniously
misappropriated, misapplied and converted to his own personal use and benefit, to the damage and prejudice of
the said Continental Bank in the total amount of P146,818.68, that is the balance including the interest after
deducting the sum of P28,736.47 deposited by the said accused with the bank as marginal deposit and forfeited by
the said from the value of the said goods, in the said sum of P71,023.60.

ISSUE: Whether petitioner Jose O. Sia, having only acted for and in behalf of the Metal Manufacturing Company of the
Philippines (Metal Company, for short) as President thereof in dealing with the complainant, the Continental Bank, (Bank
for short) he may be liable for the crime charged.

HELD: Solicitor General relies on the general principle that when a corporation commits an act which would constitute a
punishable offense under the law, it is the responsible officers thereof, acting for the corporation, who would be punished
for the crime, The Court of Appeals has subscribed to this view when it quoted approvingly from the decision of the trial
court the following:

A corporation is an artificial person, an abstract being. If the defense theory is followed unscrupulously legions would
form corporations to commit swindle right and left where nobody could be convicted, for it would be futile and ridiculous
to convict an abstract being that cannot be pinched and confined in jail like a natural, living person, hence the result of
the defense theory would be hopeless chose in business and finance. It is completely untenable.
The above-quoted observation of the trial court would seem to be merely restating a general principle that for crimes
committed by a corporation, the responsible officers thereof would personally bear the criminal liability. (People vs. Tan
Boon Kong, 54 Phil. 607. See also Tolentino, Commercial Laws of the Philippines, p. 625, citing cases.) The case cited by
the Court of Appeals in support of its stand-Tan Boon Kong case, supra-may however not be squarely applicable to the
instant case in that the corporation was directly required by law to do an act in a given manner, and the same law makes
the person who fails to perform the act in the prescribed manner expressly liable criminally. The performance of the act is
an obligation directly imposed by the law on the corporation. Since it is a responsible officer or officers of the corporation
who actually perform the act for the corporation, they must of necessity be the ones to assume the criminal liability;
otherwise this liability as created by the law would be illusory, and the deterrent effect of the law, negated.

In the present case, a distinction is to be found with the Tan Boon Kong case in that the act alleged to be a crime is not
in the performance of an act directly ordained by law to be performed by the corporation. The act is imposed by
agreement of parties, as a practice observed in the usual pursuit of a business or a commercial transaction. The offense
may arise, if at all, from the peculiar terms and condition agreed upon by the parties to the transaction, not by direct
provision of the law. The intention of the parties, therefore, is a factor determinant of whether a crime was committed or
whether a civil obligation alone intended by the parties. With this explanation, the distinction adverted to between the
Tan Boon Kong case and the case at bar should come out clear and meaningful. In the absence of an express
provision of law making the petitioner liable for the criminal offense committed by the corporation of
which he is a president as in fact there is no such provisions in the Revised Penal Code under which
petitioner is being prosecuted, the existence of a criminal liability on his part may not be said to be beyond
any doubt. In all criminal prosecutions, the existence of criminal liability for which the accused is made answerable must
be clear and certain. The maxim that all doubts must be resolved in favor of the accused is always of compelling force in
the prosecution of offenses. This Court has thus far not ruled on the criminal liability of an officer of a corporation signing
in behalf of said corporation a trust receipt of the same nature as that involved herein. In the case of Samo vs. People, L-
17603-04, May 31, 1962, the accused was not clearly shown to be acting other than in his own behalf, not in
behalf of a corporation.

16. [G.R. No. 141994. January 17, 2005]

FILIPINAS BROADCASTING NETWORK, INC.vs. AGO MEDICAL AND EDUCATIONAL CENTER-BICOL
CHRISTIAN COLLEGE OF MEDICINE, (AMEC-BCCM) and ANGELITA F. AGO
FACTS:
Expos is a radio documentary program hosted by Carmelo Mel Rima (Rima) and Hermogenes Jun Alegre (Alegre).Expos is
aired every morning over DZRC-AM which is owned by Filipinas Broadcasting Network, Inc. (FBNI). Expos is heard over
Legazpi City, the Albay municipalities and other Bicol areas.

In the morning of 14 and 15 December 1989, Rima and Alegre exposed various alleged complaints from students,
teachers and parents against Ago Medical and Educational Center-Bicol Christian College of Medicine (AMEC) and its
administrators. Claiming that the broadcasts were defamatory, AMEC and Angelita Ago (Ago), as Dean of AMECs College
of Medicine, filed a complaint for damages against FBNI, Rima and Alegre on 27 February 1990.

The complaint further alleged that AMEC is a reputable learning institution. With the supposed exposs, FBNI, Rima and
Alegre transmitted malicious imputations, and as such, destroyed plaintiffs (AMEC and Ago) reputation. AMEC and Ago
included FBNI as defendant for allegedly failing to exercise due diligence in the selection and supervision of its
employees, particularly Rima and Alegre.

On 18 June 1990, FBNI, Rima and Alegre, through Atty. Rozil Lozares, filed an Answer alleging that the broadcasts
against AMEC were fair and true. FBNI, Rima and Alegre claimed that they were plainly impelled by a sense of public duty
to report the goings-on in AMEC, [which is] an institution imbued with public interest.

Thereafter, trial ensued. During the presentation of the evidence for the defense, Atty. Edmundo Cea, collaborating
counsel of Atty. Lozares, filed a Motion to Dismiss on FBNIs behalf. The trial court denied the motion to dismiss.
Consequently, FBNI filed a separate Answer claiming that it exercised due diligence in the selection and supervision of
Rima and Alegre. On 14 December 1992, the trial court rendered a Decision finding FBNI and Alegre liable for libel except
Rima. The trial court held that the broadcasts are libelous per se. The trial court rejected the broadcasters claim that their
utterances were the result of straight reporting because it had no factual basis. The broadcasters did not even verify their
reports before airing them to show good faith. In holding FBNI liable for libel, the trial court found that FBNI failed to
exercise diligence in the selection and supervision of its employees.

ISSUES:
1. Whether the broadcasts are libellous
2. Whether AMEC is entitled to moral damages
3. Whether the award of attorneys fees is proper
4. Whether FBNI is solidarily liable with Rima and Alegre for moral damages, attorneys fees and costs of suit
HELD:
1. A libel is a public and malicious imputation of a crime, or of a vice or defect, real or imaginary, or any act or
omission, condition, status, or circumstance tending to cause the dishonor, discredit, or contempt of a natural or
juridical person, or to blacken the memory of one who is dead.

There is no question that the broadcasts were made public and imputed to AMEC defects or circumstances tending to
cause it dishonor, discredit and contempt.

Every defamatory imputation is presumed malicious. Rima and Alegre failed to show adequately their good intention and
justifiable motive in airing the supposed gripes of the students. As hosts of a documentary or public affairs program, Rima
and Alegre should have presented the public issues free from inaccurate and misleading information. Hearing the
students alleged complaints a month before the expos, they had sufficient time to verify their sources and information.
However, Rima and Alegre hardly made a thorough investigation of the students alleged gripes. Neither did they inquire
about nor confirm the purported irregularities in AMEC from the Department of Education, Culture and Sports. Alegre
testified that he merely went to AMEC to verify his report from an alleged AMEC official who refused to disclose any
information. Alegre simply relied on the words of the students because they were many and not because there is proof
that what they are saying is true. This plainly shows Rima and Alegres reckless disregard of whether their report was true
or not.

2. A juridical person is generally not entitled to moral damages because, unlike a natural person, it cannot
experience physical suffering or such sentiments as wounded feelings, serious anxiety, mental anguish or moral
shock.

Nevertheless, AMECs claim for moral damages falls under item 7 of Article 2219 of the Civil Code. This provision expressly
authorizes the recovery of moral damages in cases of libel, slander or any other form of defamation. Article 2219(7) does
not qualify whether the plaintiff is a natural or juridical person. Therefore, a juridical person such as a corporation can
validly complain for libel or any other form of defamation and claim for moral damages. Moreover, where the broadcast is
libelous per se, the law implies damages.

3. The award of attorneys fees is not proper because AMEC failed to justify satisfactorily its claim for attorneys fees.
AMEC did not adduce evidence to warrant the award of attorneys fees. Moreover, both the trial and appellate
courts failed to explicitly state in their respective decisions the rationale for the award of attorneys fees. While it
mentioned about the award of attorneys fees by stating that it lies within the discretion of the court and depends
upon the circumstances of each case, the Court of Appeals failed to point out any circumstance to justify the
award.

4. FBNI contends that it is not solidarily liable with Rima and Alegre for the payment of damages and attorneys fees
because it exercised due diligence in the selection and supervision of its employees, particularly Rima and Alegre.
FBNI maintains that its broadcasters, including Rima and Alegre, undergo a very regimented process before they
are allowed to go on air. Those who apply for broadcaster are subjected to interviews, examinations and an
apprenticeship program.

However, The basis of the present action is a tort. Joint tort feasors are jointly and severally liable for the tort
which they commit (are all the persons who command, instigate, promote, encourage, advise, countenance, cooperate
in, aid or abet the commission of a tort, or who approve of it after it is done, if done for their benefit. Thus, AMEC
correctly anchored its cause of action against FBNI on Articles 2176 and 2180 of the Civil Code.

As operator of DZRC-AM and employer of Rima and Alegre, FBNI is solidarily liable to pay for damages arising from the
libelous broadcasts. As stated by the Court of Appeals, recovery for defamatory statements published by radio or
television may be had from the owner of the station, a licensee, the operator of the station, or a person who procures, or
participates in, the making of the defamatory statements. An employer and employee are solidarily liable for a
defamatory statement by the employee within the course and scope of his or her employment, at least
when the employer authorizes or ratifies the defamation.In this case, Rima and Alegre were clearly performing
their official duties as hosts of FBNIs radio program Expos when they aired the broadcasts. Moreover, there is insufficient
evidence on record that FBNI exercised due diligence in the selection and supervision of its employees, particularly Rima
and Alegre. FBNI merely showed that it exercised diligence in the selection of its broadcasters without introducing any
evidence to prove that it observed the same diligence in the supervision of Rima and Alegre. FBNI did not show how it
exercised diligence in supervising its broadcasters. FBNI claims that it has taken all the precaution in the selection of Rima
and Alegre as broadcasters, bearing in mind their qualifications. However, no clear and convincing evidence shows that
Rima and Alegre underwent FBNIs regimented process of application.