BENGUET v MARIANO PINEDA

Benguet Consolidated Mining Company was organized in 1903 under the Spanish Code of Commerce of 1886 as a sociedad anonima. It
was agreed by the incorporators that Benguet Mining was to exist for 50 years.

In 1906, Act 1459 (Corporation Law) was enacted which superseded the Code of Commerce of 1886. Act 1459 essentially introduced the
American concept of a corporation. The purpose of the law, among others, is to eradicate the Spanish Code and make sociedades anonimas obsolete.

In 1953, the board of directors of Benguet Mining submitted to the Securities and Exchange Commission an application for them to be
allowed to extend the life span of Benguet Mining. Then Commissioner Mariano Pineda denied the application as it ruled that the extension requested
is contrary to Section 18 of the Corporation Law of 1906 which provides that the life of a corporation shall not be extended by amendment beyond
the time fixed in their original articles.

Benguet Mining contends that they have a vested right under the Code of Commerce of 1886 because they were organized under said law;
that under said law, Benguet Mining is allowed to extend its life by simply amending its articles of incorporation; that the prohibition in Section 18 of
the Corporation Code of 1906 does not apply to sociedades anonimas already existing prior to the Law’s enactment; that even assuming that the
prohibition applies to Benguet Mining, it should be allowed to be reorganized as a corporation under the said Corporation Law.

ISSUE:

Whether or not Benguet Mining is correct.

HELD:

No. Benguet Mining has no vested right to extend its life. It is a well settled rule that no person has a vested interest in any rule of law entitling him
to insist that it shall remain unchanged for his benefit. Had Benguet Mining agreed to extend its life prior to the passage of the Corporation Code of
1906 such right would have vested. But when the law was passed in 1906, Benguet Mining was already deprived of such right.

To allow Benguet Mining to extend its life will be inimical to the purpose of the law which sought to render obsolete sociedades anonimas. If this is
allowed, Benguet Mining will unfairly do something which new corporations organized under the new Corporation Law can’t do – that is, exist beyond
50 years. Plus, it would have reaped the benefits of being a sociedad anonima and later on of being a corporation. Further, under the Corporation
Code of 1906, existing sociedades anonimas during the enactment of the law must choose whether to continue as such or be organized as a
corporation under the new law. Once a sociedad anonima chooses one of these, it is already proscribed from choosing the other. Evidently, Benguet
Mining chose to exist as a sociedad anonima hence it can no longer elect to become a corporation when its life is near its end.

TAYAG v BENGUET CONSOLIDATED

In March 1960, Idonah Perkins died in New York. She left behind properties here and abroad. One property she left behind were two stock
certificates covering 33,002 shares of stocks of the Benguet Consolidated, Inc (BCI). Said stock certificates were in the possession of the Country Trust
Company of New York (CTC-NY). CTC-NY was the domiciliary administrator of the estate of Perkins (obviously in the USA). Meanwhile, in 1963, Renato
Tayag was appointed as the ancillary administrator (of the properties of Perkins she left behind in the Philippines).

A dispute arose between CTC-NY and Tayag as to who between them is entitled to possess the stock certificates. A case ensued and
eventually, the trial court ordered CTC-NY to turn over the stock certificates to Tayag. CTC-NY refused. Tayag then filed with the court a petition to
have said stock certificates be declared lost and to compel BCI to issue new stock certificates in replacement thereof. The trial court granted Tayag’s
petition.

BCI assailed said order as it averred that it cannot possibly issue new stock certificates because the two stock certificates declared lost are
not actually lost; that the trial court as well Tayag acknowledged that the stock certificates exists and that they are with CTC-NY; that according to
BCI’s by laws, it can only issue new stock certificates, in lieu of lost, stolen, or destroyed certificates of stocks, only after court of law has issued a final
and executory order as to who really owns a certificate of stock.

ISSUE:

Whether or not the arguments of Benguet Consolidated, Inc. are correct.

HELD:

No. Benguet Consolidated is a corporation who owes its existence to Philippine laws. It has been given rights and privileges under the law. Corollary,
it also has obligations under the law and one of those is to follow valid legal court orders. It is not immune from judicial control because it is domiciled
here in the Philippines. BCI is a Philippine corporation owing full allegiance and subject to the unrestricted jurisdiction of local courts. Its shares of
stock cannot therefore be considered in any wise as immune from lawful court orders. Further, to allow BCI’s opposition is to render the court order
against CTC-NY a mere scrap of paper. It will leave Tayag without any remedy simply because CTC-NY, a foreign entity refuses to comply with a valid
court order. The final recourse then is for our local courts to create a legal fiction such that the stock certificates in issue be declared lost even though
in reality they exist in the hands of CTC-NY. This is valid. As held time and again, fictions which the law may rely upon in the pursuit of legitimate ends
have played an important part in its development.

Further still, the argument invoked by BCI that it can only issue new stock certificates in accordance with its bylaws is misplaced. It is worth noting
that CTC-NY did not appeal the order of the court – it simply refused to turn over the stock certificates hence ownership can be said to have been
settled in favor of estate of Perkins here. Also, assuming that there really is a conflict between BCI’s bylaws and the court order, what should prevail
is the lawful court order. It would be highly irregular if court orders would yield to the bylaws of a corporation. Again, a corporation is not immune
from judicial orders.

PHILIPPINE STOCK EXCHANGE v CA

Puerto Azul Land, Inc. (PALI) is a corporation engaged in the real estate business. PALI was granted permission by the Securities and
Exchange Commission (SEC) to sell its shares to the public in order for PALI to develop its properties.

PALI then asked the Philippine Stock Exchange (PSE) to list PALI’s stocks/shares to facilitate exchange. The PSE Board of Governors denied
PALI’s application on the ground that there were multiple claims on the assets of PALI. Apparently, the Marcoses, Rebecco Panlilio (trustee of the
Marcoses), and some other corporations were claiming assets if not ownership over PALI.

PALI then wrote a letter to the SEC asking the latter to review PSE’s decision. The SEC reversed PSE’s decisions and ordered the latter to
cause the listing of PALI shares in the Exchange.

ISSUE:

Whether or not it is within the power of the SEC to reverse actions done by the PSE.

HELD:

Yes. The SEC has both jurisdiction and authority to look into the decision of PSE pursuant to the Revised Securities Act and for the purpose of ensuring
fair administration of the exchange. PSE, as a corporation itself and as a stock exchange is subject to SEC’s jurisdiction, regulation, and control. In
order to insure fair dealing of securities and a fair administration of exchanges in the PSE, the SEC has the authority to look into the rulings issued by
the PSE. The SEC is the entity with the primary say as to whether or not securities, including shares of stock of a corporation, may be traded or not in
the stock exchange.

HOWEVER, in the case at bar, the Supreme Court emphasized that the SEC may only reverse decisions issued by the PSE if such are tainted with bad
faith. In this case, there was no showing that PSE acted with bad faith when it denied the application of PALI. Based on the multiple adverse claims
against the assets of PALI, PSE deemed that granting PALI’s application will only be contrary to the best interest of the general public. It was reasonable
for the PSE to exercise its judgment in the manner it deems appropriate for its business identity, as long as no rights are trampled upon, and public
welfare is safeguarded.

PNB vs. Andrada Electric & Engineering Co.Case Digest

On 26 August 1975, the Philippine national Bank (PNB) acquired the assets of the Pampanga Sugar Mills (PASUMIL) that were earlier
foreclosed by the Development Bank of the Philippines (DBP) under LOI 311. The PNB organized the ational Sugar Development Corporation
(NASUDECO) in September 1975, to take ownership and possession of the assets and ultimately to nationalize and consolidate its interest in other
PNB controlled sugar mills. Prior to 29 October 1971, PASUMIL engaged the services of the Andrada Electric & Engineering Company (AEEC) for
electrical rewinding and repair, most of which were partially paid by PASUMIL, leaving several unpaid accounts with AEEC. On 29 October 1971, AEEC
and PASUMIL entered into a contract for AEEC to perform the (a) Construction of a power house building; 3 reinforced concrete foundation for 3
units 350 KW diesel engine generating sets, 3 reinforced concrete foundation for the 5,000 KW and 1,250 KW turbo generator sets, among others.
Aside from the work contract, PASUMIL required AEEC to perform extra work, and provide electrical equipment and spare parts. Out of the total
obligation of P777,263.80, PASUMIL had paid only P250,000.00, leaving an unpaid balance, as of 27 June 1973, amounting to P527,263.80. Out of
said unpaid balance of P527,263.80, PASUMIL made a partial payment to AEEC of P14,000.00, in broken amounts, covering the period from 5 January
1974 up to 23 May 1974, leaving an unpaid balance of P513,263.80. PASUMIL and PNB, and now NASUDECO, allegedly failed and refused to pay AEEC
their just, valid and demandable obligation (The President of the NASUDECO is also the Vice-President of the PNB. AEEC besought said official to pay
the outstanding obligation of PASUMIL, inasmuch as PNB and NASUDECO now owned and possessed the assets of PASUMIL, and these defendants
all benefited from the works, and the electrical, as well as the engineering and repairs, performed by AEEC).

Because of the failure and refusal of PNB, PASUMIL and/or NASUDECO to pay their obligations, AEEC allegedly suffered actual damages in
the total amount of P513,263.80; and that in order to recover these sums, AEEC was compelled to engage the professional services of counsel, to
whom AEEC agreed to pay a sum equivalent to 25% of the amount of the obligation due by way of attorney's fees. PNB and NASUDECO filed a joint
motion to dismiss on the ground that the complaint failed to state sufficient allegations to establish a cause of action against PNB and NASUDECO,
inasmuch as there is lack or want of privity of contract between the them and AEEC. Said motion was denied by the trial court in its 27 November
order, and ordered PNB nad NASUDECO to file their answers within 15 days. After due proceedings, the Trial Court rendered judgment in favor of
AEEC and against PNB, NASUDECO and PASUMIL; the latter being ordered to pay jointly and severally the former (1) the sum of P513,623.80 plus
interest thereon at the rate of 14% per annum as claimed from 25 September 1980 until fully paid; (2) the sum of P102,724.76 as attorney's fees;
and, (3) Costs. PNB and NASUDECO appealed. The Court of Appeals affirmed the decision of the trial court in its decision of 17 April 2000 (CA-GR CV
57610. PNB and NASUDECO filed the petition for review.

Issue:

Whether PNB and NASUDECO may be held liable for PASUMIL’s liability to AEEC.

Held:

Basic is the rule that a corporation has a legal personality distinct and separate from the persons and entities owning it. The corporate veil may be
lifted only if it has been used to shield fraud, defend crime, justify a wrong, defeat public convenience, insulate bad faith or perpetuate injustice.
Thus, the mere fact that the Philippine National Bank (PNB) acquired ownership or management of some assets of the Pampanga Sugar Mill
(PASUMIL), which had earlier been foreclosed and purchased at the resulting public auction by the Development Bank of the Philippines (DBP), will
not make PNB liable for the PASUMIL's contractual debts to Andrada Electric & Engineering Company (AEEC). Piercing the veil of corporate fiction
may be allowed only if the following elements concur: (1) control — not mere stock control, but complete domination — not only of finances, but of
policy and business practice in respect to the transaction attacked, must have been such that the corporate entity as to this transaction had at the
time no separate mind, will or existence of its own; (2) such control must have been used by the defendant to commit a fraud or a wrong to perpetuate
the violation of a statutory or other positive legal duty, or a dishonest and an unjust act in contravention of plaintiff's legal right; and (3) the said
control and breach of duty must have proximately caused the injury or unjust loss complained of. The absence of the foregoing elements in the
present case precludes the piercing of the corporate veil. First, other than the fact that PNB and NASUDECO acquired the assets of PASUMIL, there
is no showing that their control over it warrants the disregard of corporate personalities. Second, there is no evidence that their juridical personality
was used to commit a fraud or to do a wrong; or that the separate corporate entity was farcically used as a mere alter ego, business conduit or
instrumentality of another entity or person. Third, AEEC was not defrauded or injured when PNB and NASUDECO acquired the assets of PASUMIL.
Hence, although the assets of NASUDECO can be easily traced to PASUMIL, the transfer of the latter's assets to PNB and NASUDECO was not
fraudulently entered into in order to escape liability for its debt to AEEC. Neither was there any merger or consolidation with respect to PASUMIL
and PNB. The procedure prescribed under Title IX of the Corporation Code 59 was not followed. In fact, PASUMIL's corporate existence had not been
legally extinguished or terminated. Further, prior to PNB's acquisition of the foreclosed assets, PASUMIL had previously made partial payments to
AEEC for the former's obligation in the amount of P777,263.80. As of 27 June 1973, PASUMIL had paid P250,000 to AEEC and, from 5 January 1974
to 23 May 1974, another P14,000. Neither did PNB expressly or impliedly agree to assume the debt of PASUMIL to AEEC. LOI 11 explicitly provides
that PNB shall study and submit recommendations on the claims of PASUMIL's creditors. Clearly, the corporate separateness between PASUMIL and
PNB remains, despite AEEC's insistence to the contrary.

VASQUEZ v DE BORJA

In January 1932, Francisco De Borja entered into a contract of sale with the NVSD (Natividad-Vasquez Sabani Development Co., Inc.). The subject of
the sale was 4,000 cavans of rice valued at Php2.10 per cavan. On behalf of the company, the contract was executed by Antonio Vasquez as the
company’s acting president. NVSD. only delivered 2,488 cavans and failed and refused despite demand to deliver the rest hence De Borja incurred
damages (apparently, NVSD was insolvent). He then sue Vasquez for payment of damages.

ISSUE:

Whether or not Vasquez is liable for damages.

HELD:

No. Vasquez is not party to the contract as it was NVSD which De Borja contracted with. It is well known that a corporation is an artificial being
invested by law with a personality of its own, separate and distinct from that of its stockholders and from that of its officers who manage and run its
affairs. The mere fact that its personality is owing to a legal fiction and that it necessarily has to act thru its agents, does not make the latter personally
liable on a contract duly entered into, or for an act lawfully performed, by them for an in its behalf.

The fact that the corporation, acting thru Vazquez as its manager, was guilty of negligence in the fulfillment of the contract did not make Vazquez
principally or even subsidiarily liable for such negligence. Since it was the corporation’s contract, its non fulfillment, whether due to negligence or
fault or to any other cause, made the corporation and not its agent liable.
JUSTICE PARAS Dissenting :

Vasquez as president of NVSD is liable for damages. Vasquez, as acting president and manager of NVSD, and with full knowledge of the then insolvent
status of his company, agreed to sell to De Borja 4,000 cavans of palay. Further, NVSD was soon thereafter dissolved.

WENSHA SPA v YUNG

Wensha Spa is in the business of sauna bath and massage services. Xu is the president and Loreta was the administrative manager at the
time of her termination from employment. Loreta used to be employed by Manmen where Xu was a client. Since Su was impressed with Loreta’s
performance, he convinced Loreta to transfer and work at Wensha. Loreta started working on April 21, 2004 as Xu’s personal assistant and
interpreter. She was promoted to the position of Administrative Manager. Loreta was asked to resign from Wensha because according to a Feng Shui
master, her aura did not match that of Xu. Loreta filed a case for illegal dismissal against Xu and Wensha. The Labor Arbiter dismissed Loreta’s
complaint for lack of merit. He found it more probable that Loreta was dismissed due to loss of trust and confidence in her.

Issue:

Whether or not Xu is solidarily liable with Wensha, assuming that Loreta was illegally dismissed.

RULING:

No. Xu is not solidarily liable with Wensha. Elementary is the rule that a corporation is invested by law with a personality separate and distinct from
those of the persons composing it and from that of any other legal entity to which it may be related. Mere ownership by a single stockholder or by
another corporation of all or nearly all of the capital stock of a corporation is not of itself sufficient ground for disregarding the separate corporate
personality.- In labor cases, corporate directors and officers may be held solidarily liable with the corporation for the termination of employment
only if done with malice or in bad faith. Bad faith does not connote bad Judgment or negligence it imports a dishonest purpose or some moral
obli2uity and conscious doing of wrong; it means breach of a known duty through some motive or interest or ill will; it partakes of the nature of fraud.
In the subject decision, the CA concluded that petitioner Xu and Wensha are jointly and severally liable to Loreta. We have read the decision in its
entirety but simply failed to come across any finding of bad faith or malice on the part of Xu. There is, therefore, no justification for such a ruling. To
sustain such a finding, there should be an evidence on record that an officer or director acted maliciously or in bad faith in terminating the services
of an employee. Moreover, the finding or indication that the dismissal was effected with malice or bad faith should be stated in the decision itself.

MONFORT HERMANOS AGRICULTURAL DEVELOPMENT CORPORATION v. ANTONIO B. MONFORT III

Facts:

Monfort Hermanos Agricultural Development Corporation, a domestic private corporation, is the registered owner of a farm, fishpond and sugar
cane plantation known as Haciendas San Antonio II, Marapara, Pinanoag and Tinampa-an, all situated in Cadiz City.

It also owns one unit of motor vehicle and two units of tractors.[4] The same allowed Ramon H. Monfort, its Executive Vice President, to breed and
maintain fighting cocks in his personal capacity at Hacienda San Antonio.

The group of Antonio Monfort III, through force and intimidation, allegedly took possession of the 4 Haciendas, the produce thereon and the motor
vehicle and tractors, as well as the fighting cocks of Ramon H. Monfort.

Thee Corporation, represented by its President, Ma. Antonia M. Salvatierra, and Ramon H. Monfort, in his personal capacity, filed against the group
of Antonio Monfort III, a complaint[6] for delivery of motor vehicle, tractors and 378... fighting cocks, with prayer for injunction and damages

The group of Antonio Monfort III filed a motion to dismiss contending, inter alia, that Ma. Antonia M. Salvatierra has no capacity to sue on behalf of
the Corporation because the March 31, 1997 Board Resolution[7] authorizing Ma. Antonia M.

Salvatierra and/or Ramon H. Monfort to represent the Corporation is void as the purported Members of the Board who passed the same were not
validly elected officers of the Corporation.

The trial court denied the motion to dismiss.[8] The group of Antonio Monfort III filed a petition for certiorari with the Court of Appeals but the same
was dismissed on June 7, 2002.

The motion for reconsideration filed by the group of Antonio Monfort III was denied.
On April 21, 1997, Ma. Antonia M. Salvatierra filed on behalf of the Corporation a complaint for forcible entry, preliminary mandatory injunction with
temporary restraining order and damages against the group of Antonio Monfort III, before the Municipal Trial Court (MTC) of Cadiz City.It contended
that the latter through force and intimidation, unlawfully took possession of the 4 Haciendas and deprived the Corporation of the produce thereon.

The group of Antonio Monfort III alleged that they are possessing and controlling the Haciendas and harvesting the produce therein on behalf of the
corporation and not for themselves. They likewise raised the affirmative defense... of lack of legal capacity of Ma. Antonia M. Salvatierra to sue on
behalf of the Corporation.

MTC of Cadiz City rendered a decision dismissing the complaint.

The Regional Trial Court of Negros Occidental, Branch 60, reversed the Decision of the MTCC

Aggrieved, the group of Antonio Monfort III filed a petition for review with the Court of Appeals.

Special Tenth Division set aside the judgment of the RTC and dismissed the complaint for forcible entry for lack of capacity of Ma. Antonia M.

Salvatierra to represent the Corporation.

Unfazed, the Corporation filed a petition for review with this Court

The group of Antonio Monfort III claims that the March 31, 1997 Board Resolution authorizing Ma. Antonia M. Salvatierra and/or Ramon H. Monfort
to represent the Corporation is void because the purported Members of the Board who passed the same were not validly elected officers... of the
Corporation.

Issues:

The focal issue in these consolidated petitions is whether or not Ma. Antonia M. Salvatierra has the legal capacity to sue on behalf of the Corporation.

Ruling:

A corporation has no power except those expressly conferred on it by the Corporation Code and those that are implied or incidental to its existence.
In turn, a corporation exercises said powers through its board of directors and/or its duly authorized officers and... agents. Thus, it has been observed
that the power of a corporation to sue and be sued in any court is lodged with the board of directors that exercises its corporate powers. In turn,
physical acts of the corporation, like the signing of documents, can be performed... only by natural persons duly authorized for the purpose by
corporate by-laws or by a specific act of the board of directors.

There is thus a doubt as to whether Paul M. Monfort, Yvete M. Benedicto, Jaqueline M. Yusay and Ester S. Monfort, were indeed duly elected
Members of the Board legally constituted to bring suit in behalf of the Corporation.

We find that Ma. Antonia M. Salvatierra failed to prove that four of those who authorized her to represent the Corporation were the lawfully elected
Members of the Board of the Corporation. As such, they cannot confer valid authority for her to... sue on behalf of the corporation.

PIONEER v CA

Jacob Lim was the owner of Southern Air Lines, a single proprietorship. In 1965, Lim convinced Constancio Maglana, Modesto Cervantes,
Francisco Cervantes, and Border Machinery and Heavy Equipment Company (BORMAHECO) to contribute funds and to buy two aircrafts which would
form part a corporation which will be the expansion of Southern Air Lines. Maglana et al then contributed and delivered money to Lim.

But instead of using the money given to him to pay in full the aircrafts, Lim, without the knowledge of Maglana et al, made an agreement
with Pioneer Insurance for the latter to insure the two aircrafts which were brought in installment from Japan Domestic Airlines (JDA) using said
aircrafts as security. So when Lim defaulted from paying JDA, the two aircrafts were foreclosed by Pioneer Insurance.

It was established that no corporation was formally formed between Lim and Maglana et al.

ISSUE:

Whether or not Maglana et al must share in the loss as general partners.

HELD: No. There was no de facto partnership. Ordinarily, when co-investors agreed to do business through a corporation but failed to incorporate, a
de facto partnership would have been formed, and as such, all must share in the losses and/or gains of the venture in proportion to their contribution.
But in this case, it was shown that Lim did not have the intent to form a corporation with Maglana et al. This can be inferred from acts of unilaterally
taking out a surety from Pioneer Insurance and not using the funds he got from Maglana et al. The record shows that Lim was acting on his own and
not in behalf of his other would-be incorporators in transacting the sale of the airplanes and spare parts.
LING TONG LIM v PFGI

It was established that Lim Tong Lim requested Peter Yao to engage in commercial fishing with him and one Antonio Chua. The three agreed
to purchase two fishing boats but since they do not have the money they borrowed from one Jesus Lim (brother of Lim Tong Lim). They again
borrowed money and they agreed to purchase fishing nets and other fishing equipments. Now, Yao and Chua represented themselves as acting in
behalf of “Ocean Quest Fishing Corporation” (OQFC) they contracted with Philippine Fishing Gear Industries (PFGI) for the purchase of fishing nets
amounting to more than P500k.

They were however unable to pay PFGI and so they were sued in their own names because apparently OQFC is a non-existent corporation.
Chua admitted liability and asked for some time to pay. Yao waived his rights. Lim Tong Lim however argued that he’s not liable because he was not
aware that Chua and Yao represented themselves as a corporation; that the two acted without his knowledge and consent.

ISSUE:

Whether or not Lim Tong Lim is liable.

HELD:

Yes. From the factual findings of both lower courts, it is clear that Chua, Yao and Lim had decided to engage in a fishing business, which they started
by buying boats worth P3.35 million, financed by a loan secured from Jesus Lim. In their Compromise Agreement, they subsequently revealed their
intention to pay the loan with the proceeds of the sale of the boats, and to divide equally among them the excess or loss. These boats, the purchase
and the repair of which were financed with borrowed money, fell under the term “common fund” under Article 1767. The contribution to such fund
need not be cash or fixed assets; it could be an intangible like credit or industry. That the parties agreed that any loss or profit from the sale and
operation of the boats would be divided equally among them also shows that they had indeed formed a partnership.

Lim Tong Lim cannot argue that the principle of corporation by estoppels can only be imputed to Yao and Chua. Unquestionably, Lim Tong Lim
benefited from the use of the nets found in his boats, the boat which has earlier been proven to be an asset of the partnership. Lim, Chua and Yao
decided to form a corporation. Although it was never legally formed for unknown reasons, this fact alone does not preclude the liabilities of the three
as contracting parties in representation of it. Clearly, under the law on estoppel, those acting on behalf of a corporation and those benefited by it,
knowing it to be without valid existence, are held liable as general partners.

SMITH BELL AND COMPANY PHILS. V. CA

M/V “Don Carlos,” an inter-island vessel owned and operated by private respondent Go Thong was sailing south bound for Cebu, when it collided
with M/S “Yotai Maru,” a merchant vessel of Japanese registry which was approaching the port of Manila coming in from Kobe, Japan. The bow of
the “Don Carlos” rammed the left side of the “Yotai Maru” inflicting a gaping hole through which seawater rushed in and flooded the hatch, damaging
all the cargo stowed therein. The consignees of the damaged cargo having been paid by their insurance companies, the latter in turn commenced
actions against private respondent Go Thong for damages sustained by the various shipments. 2 cases were filed before the RTC. The first case (Smith
Bell and Sumitomo Insurance v. Go Thong) reached the SC which ruled in finality that negligence was with the officers and crew of “Don Carlos.” On
the contrary, the second case (Smith Bell and Tokyo Insurance v. Go Thong) was decided by the CA holding the officers and crew of “Yotai Maru” at
fault in the collision. Hence the present petition.

Issue:

Whether or not inscrutable fault is present in said collision.

Ruling:

NO.The Court believes that there are three (3) principal factors which are constitutive of negligence on the part of the “Don Carlos,” which negligence
was the proximate cause of the collision.

(1) The first of these factors was the failure of the “Don Carlos” to comply with the requirements of Rule 18 (a) of the International Rules of the Road
which provides as follows: (a) When two power-driven vessels are meeting end on, or nearly end on, so as to involve risk of collision, each shall alter
her course to starboard, so that each may pass on the port side of the other. The evidence on this factor state that “Don Carlos” altered its course by
five degrees to the left instead of to the right which maneuver was the error that caused the collision in question. Why it did so is because “Don
Carlos” was overtaking another vessel, the “Don Francisco”, and was then at the right side of the aforesaid vessel. It was in the process of overtaking
“Don Francisco” that “Don Carlos” was finally brought into a situation where he was meeting end-on or nearly end-on “Yotai Maru, thus involving
risk of collision.

(2) The second circumstance constitutive of negligence on the part of the “Don Carlos” was its failure to have on board that night a “proper look-out”
as required by Rule I (B) Under Rule 29 of the same set of Rules, all consequences arising from the failure of the “Don Carlos” to keep a “proper look-
out” must be borne by the “Don Carlos.” In the case at bar, the failure of the “Don Carlos” to recognize in a timely manner the risk of collision with
the “Yotai Maru” coming in from the opposite direction, was at least in part due to the failure of the “Don Carlos” to maintain a proper look-out.
(3) The third factor constitutive of negligence on the part of the “Don Carlos” relates to the fact that Second Mate Benito German was, immediately
before and during the collision, in command of the “Don Carlos.” Second Mate German simply did not have the level of experience, judgment and
skill essential for recognizing and coping with the risk of collision as it presented itself that early morning when the “Don Carlos,” running at maximum
speed and having just overtaken the “Don Francisco” then approximately one mile behind to the right side of the “Don Carlos,” found itself head-on
or nearly head on vis-a-vis the “Yotai Maru. ” It is essential to point out that this situation was created by the “Don Carlos” itself.

FOR ALL THE FOREGOING, the Decision of the Court of Appeals is hereby REVERSED and SET ASIDE.

*Inscrutable Fault – where it cannot be determined which of the 2 vessels caused the collision, each vessel shall suffer its own damages, and both
shall be solidarily responsible for the losses and damages occasioned to their cargoes.

Stonehill vs Diokno

Respondents herein secured a total of 42 search warrants against petitioners herein and/or the corporations of which they were officers,
to search “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.”

The petitioner contended that the search warrants are null and void as their issuance violated the Constitution and the Rules of Court for
being general warrants.

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.

Issue: Whether petitioners can validly assail the search warrant against the corporation.

Held:

No.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.

Bache v Ruiz

On 24 February 1970, Misael P. Vera, Commissioner of Internal Revenue, wrote a letter addressed to Judge Vivencio M. Ruiz requesting
the issuance of a search warrant against Bache & Co. (Phil.), Inc. and Frederick E. Seggerman for violation of Section 46(a) of the National Internal
Revenue Code (NIRC), in relation to all other pertinent provisions thereof, particularly Sections 53, 72, 73, 208 and 209, and authorizing Revenue
Examiner Rodolfo de Leon to make and file the application for search warrant which was attached to the letter.

In the afternoon of the following day, De Leon and his witness, Arturo Logronio, went to the Court of First Instance (CFI) of Rizal. They
brought with them the following papers: Vera’s letter-request; an application for search warrant already filled up but still unsigned by De Leon; an
affidavit of Logronio subscribed before De Leon; a deposition in printed form of Logronio already accomplished and signed by him but not yet
subscribed; and a search warrant already accomplished but still unsigned by Judge. At that time the Judge was hearing a certain case; so, by means
of a note, he instructed his Deputy Clerk of Court to take the depositions of De Leon and Logronio.

After the session had adjourned, the Judge was informed that the depositions had already been taken. The stenographer, upon request of
the Judge, read to him her stenographic notes; and thereafter, the Judge asked Logronio to take the oath and warned him that if his deposition was
found to be false and without legal basis, he could be charged for perjury.
 The Judge signed de Leon’s application for search warrant and Logronio’s deposition. Search Warrant 2-M-70 was then signed by Judge
and accordingly issued. 3 days later (a Saturday), the BIR agents served the search warrant to the corporation and Seggerman at the offices of the
corporation on Ayala Avenue, Makati, Rizal.

The corporation’s lawyers protested the search on the ground that no formal complaint or transcript of testimony was attached to the
warrant. The agents nevertheless proceeded with their search which yielded 6 boxes of documents.

On 3 March 1970, the corporation and Seggerman filed a petition with the Court of First Instance (CFI) of Rizal praying that the search
warrant be quashed, dissolved or recalled, that preliminary prohibitory and mandatory writs of injunction be issued, that the search warrant be
declared null and void, and that Vera, Logronio, de Leon, et. al., be ordered to pay the corporation and Seggerman, jointly and severally, damages
and attorney’s fees.

After hearing and on 29 July 1970, the court issued an order dismissing the petition for dissolution of the search warrant. In the meantime,
or on 16 April 1970, the Bureau of Internal Revenue made tax assessments on the corporation in the total sum of P2,594,729.97, partly, if not entirely,
based on the documents thus seized.

The corporation and Seggerman filed an action for certiorari, prohibition, and mandamus.

Issue:

Whether the corporation has the right to contest the legality of the seizure of documents from its office.

Held:

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. In Stonehill, et al. vs. Diokno, et al. (GR L-19550, 19 June 1967; 20 SCRA 383)
the Supreme Court impliedly recognized the right of a corporation to object against unreasonable searches and seizures; holding that the corporations
have their respective personalities, separate and distinct from the personality of the corporate officers, regardless of the amount of shares of stock
or the interest of each of them in said corporations, whatever, the offices they hold therein may be; and that the corporate officers therefore 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,
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.

The distinction between the Stonehill case and the present case is that: in the former case, only the officers of the various corporations in whose
offices documents, papers and effects were searched and seized were the petitioners; while in the latter, the corporation to whom the seized
documents belong, and whose rights have thereby been impaired, is itself a petitioner.

On that score, the corporation herein stands on a different footing from the corporations in Stonehill. Moreover, herein, the search warrant was void
inasmuch as First, there was no personal examination conducted by the Judge of the complainant (De Leon) and his witness (Logronio).

The Judge did not ask either of the two any question the answer to which could possibly be the basis for determining whether or not there was
probable cause against Bache & Co. and Seggerman. The participation of the Judge in the proceedings which led to the issuance of Search Warrant
2-M-70 was thus limited to listening to the stenographer’s readings of her notes, to a few words of warning against the commission of perjury, and
to administering the oath to the complainant and his witness. This cannot be consider a personal examination.

Second, the search warrant was issued for more than one specific offense. The search warrant was issued for at least 4 distinct offenses under the
Tax Code. The first is the violation of Section 46(a), Section 72 and Section 73 (the filing of income tax returns), which are interrelated. The second is
the violation of Section 53 (withholding of income taxes at source).

The third is the violation of Section 208 (unlawful pursuit of business or occupation); and the fourth is the violation of Section 209 (failure to make a
return of receipts, sales, business or gross value of output actually removed or to pay the tax due thereon). Even in their classification the 6 provisions
are embraced in 2 different titles: Sections 46(a), 53, 72 and 73 are under Title II (Income Tax); while Sections 208 and 209 are under Title V (Privilege
Tax on Business and Occupation).

Lastly, the search warrant does not particularly describe the things to be seized. Search Warrant No. 2-M-70 tends to defeat the major objective of
the Bill of Rights, i.e., the elimination of general warrants, for the language used therein is so all-embracing as to include all conceivable records of
the corporation, which, if seized, could possibly render its business inoperative. Thus, Search Warrant 2-M-70 is null and void.

PNB v CA

Rita Tapnio owes PNB an amount of P2,000.00. The amount is secured by her sugar crops about to be harvested including her export quota
allocation worth 1,000 piculs. The said export quota was later dealt by Tapnio to a certain Jacobo Tuazon at P2.50 per picul or a total of P2,500. Since
the subject of the deal is mortgaged with PNB, the latter has to approve it. The branch manager of PNB recommended that the price should be at
P2.80 per picul which was the prevailing minimum amount allowable. Tapnio and Tuazon agreed to the said amount. And so the bank manager
recommended the agreement to the vice president of PNB. The vice president in turn recommended it to the board of directors of PNB.

However, the Board of Directors wanted to raise the price to P3.00 per picul. This Tuazon does not want hence he backed out from the
agreement. This resulted to Tapnio not being able to realize profit and at the same time rendered her unable to pay her P2,000.00 crop loan which
would have been covered by her agreement with Tuazon.

Eventually, Tapnio was sued by her other creditors and Tapnio filed a third party complaint against PNB where she alleged that her failure
to pay her debts was because of PNB’s negligence and unreasonableness.

ISSUE:

Whether or not Tapnio is correct.

HELD:

Yes. In this type of transaction, time is of the essence considering that Tapnio’s sugar quota for said year needs to be utilized ASAP otherwise her
allotment may be assigned to someone else, and if she can’t use it, she won’t be able to export her crops. It is unreasonable for PNB’s board of
directors to disallow the agreement between Tapnio and Tuazon because of the mere difference of 0.20 in the agreed price rate. What makes it more
unreasonable is the fact that the P2.80 was recommended both by the bank manager and PNB’s VP yet it was disapproved by the board. Further, the
P2.80 per picul rate is the minimum allowable rate pursuant to prevailing market trends that time. This unreasonable stand reflects PNB’s lack of the
reasonable degree of care and vigilance in attending to the matter. PNB is therefore negligent.

A corporation is civilly liable in the same manner as natural persons for torts, because “generally speaking, the rules governing the liability of a
principal or master for a tort committed by an agent or servant are the same whether the principal or master be a natural person or a corporation,
and whether the servant or agent be a natural or artificial person. All of the authorities agree that a principal or master is liable for every tort which
it expressly directs or authorizes, and this is just as true of a corporation as of a natural person, a corporation is liable, therefore, whenever a tortious
act is committed by an officer or agent under express direction or authority from the stockholders or members acting as a body, or, generally, from
the directors as the governing body.”

People v Tan Boon Kong

On and during the four quarters of the year 1924, in Municipality of Iloilo, Province of Iloilo, the defendant, as manager of the Visayan General Supply
Co., Inc., a corporation organized under the laws of the Philippine Islands and engaged in the purchase and sale of sugar, `bayon,’ coprax, and other
native products and as such subject to the payment of internal-revenue taxes upon its sales, declared in 1924 for purpose of taxation only the sum
of P2,352,761.94, when in truth and in fact, and the accused knew that the total gross sales of said corporation during that year amounted to
P2,543,303.44, thereby failing to declare P190,541.50, and voluntarily not paying the percentage taxes the sum of P2,960.12, corresponding to 1½
per cent of said undeclared sales.

ISSUE:

WON the defendant, as manager of the corporation, is criminally liable for violation of the tax law for the benefit of said corporation.

RULING:

A corporation can act only through its officers and agents, and where the business itself involves a violation of the law, all who participate
in it are liable

In case of State vs. Burnam (71 Wash., 199), the court hold that the manager of a dairy corporation was criminally liable for the violation of a statute
by the corporation though he was not present when the offense was committed.

In the present case the information alleges that the defendant was the manager of a corporation which was engaged in business as a merchant, and
as such manager, he made a false return, for purposes of taxation, of the total amount of sales made by said corporation during the year 1924. As
the filing of such false return constitutes a violation of law, the defendant, as the author of the illegal act, must necessarily answer for its
consequences, provided that the allegations are proven.

The ruling of the court below sustaining the demurrer to the complaint is therefore reversed, and the case will be returned to said court for further
proceedings not inconsistent with our view as hereinbefore stated.
ESPIRITU v PETRON

Respondent Petron Corporation (Petron) sold and distributed liquefied petroleum gas (LPG) in cylinder tanks that carried its trademark Gasul.[1]
Respondent Carmen J. Doloiras owned and operated Kristina Patricia Enterprises (KPE), the exclusive distributor of Gasul LPGs in the whole of
Sorsogon.[2] Jose Nelson Doloiras (Jose) served as KPEs manager.

Bicol Gas Refilling Plant Corporation (Bicol Gas) was also in the business of selling and distributing LPGs in Sorsogon but theirs carried the trademark
Bicol Savers Gas. Petitioner Audie Llona managed Bicol Gas.

In the course of trade and competition, any given distributor of LPGs at times acquired possession of LPG cylinder tanks belonging to other distributors
operating in the same area. They called these captured cylinders. According to Jose, KPEs manager, in April 2001 Bicol Gas agreed with KPE for the
swapping of captured cylinders since one distributor could not refill captured cylinders with its own brand of LPG. At one time, in the course of
implementing this arrangement, KPEs Jose visited the Bicol Gas refilling plant. While there, he noticed several Gasul tanks in Bicol Gas possession. He
requested a swap but Audie Llona of Bicol Gas replied that he first needed to ask the permission of the Bicol Gas owners. That permission was given
and they had a swap involving around 30 Gasul tanks held by Bicol Gas in exchange for assorted tanks held by KPE.

KPEs Jose noticed, however, that Bicol Gas still had a number of Gasul tanks in its yard. He offered to make a swap for these but Llona declined,
saying the Bicol Gas owners wanted to send those tanks to Batangas. Later Bicol Gas told Jose that it had no more Gasul tanks left in its possession.
Jose observed on almost a daily basis, however, that Bicol Gas trucks which plied the streets of the province carried a load of Gasul tanks. He noted
that KPEs volume of sales dropped significantly from June to July 2001.

On August 4, 2001 KPEs Jose saw a particular Bicol Gas truck on the Maharlika Highway. While the truck carried mostly Bicol Savers LPG tanks, it had
on it one unsealed 50-kg Gasul tank and one 50-kg Shellane tank. Jose followed the truck and when it stopped at a store, he asked the driver, Jun
Leorena, and the Bicol Gas sales representative, Jerome Misal, about the Gasul tank in their truck. They said it was empty but, when Jose turned
open its valve, he noted that it was not. Misal and Leorena then admitted that the Gasul and Shellane tanks on their truck belonged to a customer
who had them filled up by Bicol Gas. Misal then mentioned that his manager was a certain Rolly Mirabena.

Because of the above incident, KPE filed a complaint[3] for violations of Republic Act (R.A.) 623 (illegally filling up registered cylinder tanks), as
amended, and Sections 155 (infringement of trade marks) and 169.1 (unfair competition) of the Intellectual Property Code (R.A. 8293). The complaint
charged the following: Jerome Misal, Jun Leorena, Rolly Mirabena, Audie Llona, and several John and Jane Does, described as the directors, officers,
and stockholders of Bicol Gas. These directors, officers, and stockholders were eventually identified during the preliminary investigation.

Subsequently, the provincial prosecutor ruled that there was probable cause only for violation of R.A. 623 (unlawfully filling up registered tanks) and
that only the four Bicol Gas employees, Mirabena, Misal, Leorena, and petitioner Llona, could be charged. The charge against the other petitioners
who were the stockholders and directors of the company was dismissed.

Dissatisfied, Petron and KPE filed a petition for review with the Office of the Regional State Prosecutor, Region V, which initially denied the petition
but partially granted it on motion for reconsideration. The Office of the Regional State Prosecutor ordered the filing of additional informations against
the four employees of Bicol Gas for unfair competition. It ruled, however, that no case for trademark infringement was present. The Secretary of
Justice denied the appeal of Petron and KPE and their motion for reconsideration.

Undaunted, Petron and KPE filed a special civil action for certiorari with the Court of Appeals[4] but the Bicol Gas employees and stockholders
concerned opposed it, assailing the inadequacy in its certificate of non-forum shopping, given that only Atty. Joel Angelo C. Cruz signed it on behalf
of Petron. In its Decision[5] dated October 17, 2005, the Court of Appeals ruled, however, that Atty. Cruzs certification constituted sufficient
compliance. As to the substantive aspect of the case, the Court of Appeals reversed the Secretary of Justices ruling. It held that unfair competition
does not necessarily absorb trademark infringement. Consequently, the court ordered the filing of additional charges of trademark infringement
against the concerned Bicol Gas employees as well.

Since the Bicol Gas employees presumably acted under the direct order and control of its owners, the Court of Appeals also ordered the inclusion of
the stockholders of Bicol Gas in the various charges, bringing to 16 the number of persons to be charged, now including petitioners Manuel C. Espiritu,
Jr., Freida F. Espiritu, Carlo F. Espiritu, Rafael F. Espiritu, Rolando M. Mirabuna, Hermilyn A. Mirabuna, Kim Roland A. Mirabuna, Kaye Ann A. Mirabuna,
Ken Ryan A. Mirabuna, Juanito P. de Castro, Geronima A. Almonite, and Manuel C. Dee (together with Audie Llona), collectively, petitioners Espiritu,
et al. The court denied the motion for reconsideration of these employees and stockholders in its Resolution dated January 6, 2006, hence, the
present petition for review[6] before this Court

The Issues Presented

The petition presents the following issues:

1. Whether or not the certificate of non-forum shopping that accompanied the petition filed with the Court of Appeals, signed only by Atty. Cruz on
behalf of Petron, complied with what the rules require;
2. Whether or not the facts of the case warranted the filing of charges against the Bicol Gas people for:

a) Filling up the LPG tanks registered to another manufacturer without the latters consent in violation of R.A. 623, as amended;

b) Trademark infringement consisting in Bicol Gas use of a trademark that is confusingly similar to Petrons registered Gasul trademark in violation of
section 155 also of R.A. 8293; and

c) Unfair competition consisting in passing off Bicol Gas-produced LPGs for Petron-produced Gasul LPG in violation of Section 168.3 of R.A. 8293.

The Courts Rulings

First. Petitioners Espiritu, et al. point out that the certificate of non-forum shopping that respondents KPE and Petron attached to the petition they
filed with the Court of Appeals was inadequate, having been signed only by Petron, through Atty. Cruz.

But, while procedural requirements such as that of submittal of a certificate of non-forum shopping cannot be totally disregarded, they may be
deemed substantially complied with under justifiable circumstances.[7] One of these circumstances is where the petitioners filed a collective action
in which they share a common interest in its subject matter or raise a common cause of action. In such a case, the certification by one of the
petitioners may be deemed sufficient.[8]

Here, KPE and Petron shared a common cause of action against petitioners Espiritu, et al., namely, the violation of their proprietary rights with respect
to the use of Gasul tanks and trademark. Furthermore, Atty. Cruz said in his certification that he was executing it for and on behalf of the Corporation,
and co-petitioner Carmen J. Doloiras.[9] Thus, the object of the requirement to ensure that a party takes no recourse to multiple forums was
substantially achieved. Besides, the failure of KPE to sign the certificate of non-forum shopping does not render the petition defective with respect
to Petron which signed it through Atty. Cruz.[10] The Court of Appeals, therefore, acted correctly in giving due course to the petition before it.

Second. The Court of Appeals held that under the facts of the case, there is probable cause that petitioners Espiritu, et al. committed all three crimes:
(a) illegally filling up an LPG tank registered to Petron without the latters consent in violation of R.A. 623, as amended; (b) trademark infringement
which consists in Bicol Gas use of a trademark that is confusingly similar to Petrons registered Gasul trademark in violation of Section 155 of R.A.
8293; and (c) unfair competition which consists in petitioners Espiritu, et al. passing off Bicol Gas-produced LPGs for Petron-produced Gasul LPG in
violation of Section 168.3 of R.A. 8293.

Here, the complaint adduced at the preliminary investigation shows that the one 50-kg Petron Gasul LPG tank found on the Bicol Gas truck belonged
to [a Bicol Gas] customer who had the same filled up by BICOL GAS.[11] In other words, the customer had that one Gasul LPG tank brought to Bicol
Gas for refilling and the latter obliged.

R.A. 623, as amended,[12] punishes any person who, without the written consent of the manufacturer or seller of gases contained in duly registered
steel cylinders or tanks, fills the steel cylinder or tank, for the purpose of sale, disposal or trafficking, other than the purpose for which the
manufacturer or seller registered the same. This was what happened in this case, assuming the allegations of KPEs manager to be true. Bicol Gas
employees filled up with their firms gas the tank registered to Petron and bearing its mark without the latters written authority. Consequently, they
may be prosecuted for that offense.

But, as for the crime of trademark infringement, Section 155 of R.A. 8293 (in relation to Section 170[13]) provides that it is committed by any person
who shall, without the consent of the owner of the registered mark:

1. Use in commerce any reproduction, counterfeit, copy or colorable imitation of a registered mark or the same container or a dominant feature
thereof in connection with the sale, offering for sale, distribution, advertising of any goods or services including other preparatory steps necessary
to carry out the sale of any goods or services on or in connection with which such use is likely to cause confusion, or to cause mistake, or to deceive;
or

2. Reproduce, counterfeit, copy or colorably imitate a registered mark or a dominant feature thereof and apply such reproduction, counterfeit, copy
or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used in commerce upon or in
connection with the sale, offering for sale, distribution, or advertising of goods or services on or in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive.

KPE and Petron have to show that the alleged infringer, the responsible officers and staff of Bicol Gas, used Petrons Gasul trademark or a confusingly
similar trademark on Bicol Gas tanks with intent to deceive the public and defraud its competitor as to what it is selling.[14] Examples of this would
be the acts of an underground shoe manufacturer in Malabon producing Nike branded rubber shoes or the acts of a local shirt company with no
connection to La Coste, producing and selling shirts that bear the stitched logos of an open-jawed alligator.

Here, however, the allegations in the complaint do not show that Bicol Gas painted on its own tanks Petrons Gasul trademark or a confusingly similar
version of the same to deceive its customers and cheat Petron. Indeed, in this case, the one tank bearing the mark of Petron Gasul found in a truck
full of Bicol Gas tanks was a genuine Petron Gasul tank, more of a captured cylinder belonging to competition. No proof has been shown that Bicol
Gas has gone into the business of distributing imitation Petron Gasul LPGs.
As to the charge of unfair competition, Section 168.3 (a) of R.A. 8293 (also in relation to Section 170) describes the acts constituting the offense as
follows:

168.3. In particular, and without in any way limiting the scope of protection against unfair competition, the following shall be deemed guilty of unfair
competition:

(a) Any person, who is selling his goods and gives them the general appearance of goods of another manufacturer or dealer, either as to the goods
themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their
appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer, other than the
actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;

Essentially, what the law punishes is the act of giving ones goods the general appearance of the goods of another, which would likely mislead the
buyer into believing that such goods belong to the latter. Examples of this would be the act of manufacturing or selling shirts bearing the logo of an
alligator, similar in design to the open-jawed alligator in La Coste shirts, except that the jaw of the alligator in the former is closed, or the act of a
producer or seller of tea bags with red tags showing the shadow of a black dog when his competitor is producing or selling popular tea bags with red
tags showing the shadow of a black cat.

Here, there is no showing that Bicol Gas has been giving its LPG tanks the general appearance of the tanks of Petrons Gasul. As already stated, the
truckfull of Bicol Gas tanks that the KPE manager arrested on a road in Sorsogon just happened to have mixed up with them one authentic Gasul tank
that belonged to Petron.

The only point left is the question of the liability of the stockholders and members of the board of directors of Bicol Gas with respect to the charge
of unlawfully filling up a steel cylinder or tank that belonged to Petron. The Court of Appeals ruled that they should be charged along with the Bicol
Gas employees who were pointed to as directly involved in overt acts constituting the offense.

Bicol Gas is a corporation. As such, it is an entity separate and distinct from the persons of its officers, directors, and stockholders. It has been held,
however, that corporate officers or employees, through whose act, default or omission the corporation commits a crime, may themselves be
individually held answerable for the crime.[15]

Jose claimed in his affidavit that, when he negotiated the swapping of captured cylinders with Bicol Gas, its manager, petitioner Audie Llona, claimed
that he would be consulting with the owners of Bicol Gas about it. Subsequently, Bicol Gas declined the offer to swap cylinders for the reason that
the owners wanted to send their captured cylinders to Batangas. The Court of Appeals seized on this as evidence that the employees of Bicol Gas
acted under the direct orders of its owners and that the owners of Bicol Gas have full control of the operations of the business.[16]

The owners of a corporate organization are its stockholders and they are to be distinguished from its directors and officers. The petitioners here,
with the exception of Audie Llona, are being charged in their capacities as stockholders of Bicol Gas. But the Court of Appeals forgets that in a
corporation, the management of its business is generally vested in its board of directors, not its stockholders.[17] Stockholders are basically investors
in a corporation. They do not have a hand in running the day-to-day business operations of the corporation unless they are at the same time directors
or officers of the corporation. Before a stockholder may be held criminally liable for acts committed by the corporation, therefore, it must be shown
that he had knowledge of the criminal act committed in the name of the corporation and that he took part in the same or gave his consent to its
commission, whether by action or inaction.

The finding of the Court of Appeals that the employees could not have committed the crimes without the consent, [abetment], permission, or
participation of the owners of Bicol Gas[18] is a sweeping speculation especially since, as demonstrated above, what was involved was just one
Petron Gasul tank found in a truck filled with Bicol Gas tanks. Although the KPE manager heard petitioner Llona say that he was going to consult the
owners of Bicol Gas regarding the offer to swap additional captured cylinders, no indication was given as to which Bicol Gas stockholders Llona
consulted. It would be unfair to charge all the stockholders involved, some of whom were proved to be minors.[19] No evidence was presented
establishing the names of the stockholders who were charged with running the operations of Bicol Gas. The complaint even failed to allege who
among the stockholders sat in the board of directors of the company or served as its officers.

The Court of Appeals of course specifically mentioned petitioner stockholder Manuel C. Espiritu, Jr. as the registered owner of the truck that the KPE
manager brought to the police for investigation because that truck carried a tank of Petron Gasul. But the act that R.A. 623 punishes is the unlawful
filling up of registered tanks of another. It does not punish the act of transporting such tanks. And the complaint did not allege that the truck owner
connived with those responsible for filling up that Gasul tank with Bicol Gas LPG.

WHEREFORE, the Court REVERSES and SETS ASIDE the Decision of the Court of Appeals in CA-G.R. SP 87711 dated October 17, 2005 as well as its
Resolution dated January 6, 2006, the Resolutions of the Secretary of Justice dated March 11, 2004 and August 31, 2004, and the Order of the Office
of the Regional State Prosecutor, Region V, dated February 19, 2003. The Court REINSTATES the Resolution of the Office of the Provincial Prosecutor
of Sorsogon in I.S. 2001-9231 (inadvertently referred in the Resolution itself as I.S. 2001-9234), dated February 26, 2002. The names of petitioners
Manuel C. Espiritu, Jr., Freida F. Espititu, Carlo F. Espiritu, Rafael F. Espiritu, Rolando M. Mirabuna, Hermilyn A. Mirabuna, Kim Roland A. Mirabuna,
Kaye Ann A. Mirabuna, Ken Ryan A. Mirabuna, Juanito P. De Castro, Geronima A. Almonite and Manuel C. Dee are ORDERED excluded from the
charge.
ABS CBN v CA

In 1992, ABS-CBN Broadcasting Corporation, through its vice president Charo Santos-Concio, requested Viva Production, Inc. to allow ABS-
CBN to air at least 14 films produced by Viva. Pursuant to this request, a meeting was held between Viva’s representative (Vicente Del Rosario) and
ABS-CBN’s Eugenio Lopez (General Manager) and Santos-Concio was held on April 2, 1992. During the meeting Del Rosario proposed a film package
which will allow ABS-CBN to air 104 Viva films for P60 million. Later, Santos-Concio, in a letter to Del Rosario, proposed a counterproposal of 53 films
(including the 14 films initially requested) for P35 million. Del Rosario presented the counter offer to Viva’s Board of Directors but the Board rejected
the counter offer. Several negotiations were subsequently made but on April 29, 1992, Viva made an agreement with Republic Broadcasting
Corporation (referred to as RBS – or GMA 7) which gave exclusive rights to RBS to air 104 Viva films including the 14 films initially requested by ABS-
CBN.

ABS-CBN now filed a complaint for specific performance against Viva as it alleged that there is already a perfected contract between Viva
and ABS-CBN in the April 2, 1992 meeting. Lopez testified that Del Rosario agreed to the counterproposal and he (Lopez) even put the agreement in
a napkin which was signed and given to Del Rosario. ABS-CBN also filed an injunction against RBS to enjoin the latter from airing the films. The
injunction was granted. RBS now filed a countersuit with a prayer for moral damages as it claimed that its reputation was debased when they failed
to air the shows that they promised to their viewers. RBS relied on the ruling in People vs Manero and Mambulao Lumber vs PNB which states that
a corporation may recover moral damages if it “has a good reputation that is debased, resulting in social humiliation”. The trial court ruled in favor
of Viva and RBS. The Court of Appeals affirmed the trial court.

ISSUE:

1. Whether or not a contract was perfected in the April 2, 1992 meeting between the representatives of the two corporations.

2. Whether or not a corporation, like RBS, is entitled to an award of moral damages upon grounds of debased reputation.

HELD:

1. No. There is no proof that a contract was perfected in the said meeting. Lopez’ testimony about the contract being written in a napkin is not
corroborated because the napkin was never produced in court. Further, there is no meeting of the minds because Del Rosario’s offer was of 104 films
for P60 million was not accepted. And that the alleged counter-offer made by Lopez on the same day was not also accepted because there’s no proof
of such. The counter offer can only be deemed to have been made days after the April 2 meeting when Santos-Concio sent a letter to Del Rosario
containing the counter-offer. Regardless, there was no showing that Del Rosario accepted. But even if he did accept, such acceptance will not bloom
into a perfected contract because Del Rosario has no authority to do so.

As a rule, corporate powers, such as the power; to enter into contracts; are exercised by the Board of Directors. But this power may be delegated to
a corporate committee, a corporate officer or corporate manager. Such a delegation must be clear and specific. In the case at bar, there was no such
delegation to Del Rosario. The fact that he has to present the counteroffer to the Board of Directors of Viva is proof that the contract must be
accepted first by the Viva’s Board. Hence, even if Del Rosario accepted the counter-offer, it did not result to a contract because it will not bind Viva
sans authorization.

2. No. The award of moral damages cannot be granted in favor of a corporation because, being an artificial person and having existence only in legal
contemplation, it has no feelings, no emotions, no senses, It cannot, therefore, experience physical suffering and mental anguish, which call be
experienced only by one having a nervous system. No moral damages can be awarded to a juridical person. The statement in the case of People vs
Manero and Mambulao Lumber vs PNB is a mere obiter dictum hence it is not binding as a jurisprudence.

REGISTER OF DEES v UNG SIU

The Register of Deeds for the province of Rizal refused to accept for record a deed of donation executed in due form on January 22, 1953,
by Jesus Dy, a Filipino citizen, conveying a parcel of residential land, in Caloocan, Rizal, known as lot No. 2, block 48-D, PSD-4212, G.L.R.O. Record No.
11267, in favor of the unregistered religious organization “Ung Siu Si Temple”, operating through three trustees all of Chinese nationality. The
donation was duly accepted by Yu Juan, of Chinese nationality, founder and deaconess of the Temple, acting in representation and in behalf of the
latter and its trustees.

CFI upheld the action of the Rizal Register of Deeds. Basis: sections 1 and 5 of Article XIII of the Constitution of the Philippines limiting the
acquisition of land in the Philippines to its citizens, or to corporations or associations at least sixty per centum of the capital stock of which is owned
by such citizens adopted after the enactment of said Act No. 271, and the decision of the Supreme Court in the case of Krivenko vs. the Register of
Deeds of Manila, the deed of donation in question should not be admitted for admitted for registration.
Not satisfied with the ruling of the Court of First Instance, counsel for the donee Uy Siu Si Temple has appealed to this Court, claiming: (1) that the
acquisition of the land in question, for religious purposes, is authorized and permitted by Act No. 271 of the old Philippine Commission, providing as
follows:

SECTION 1. It shall be lawful for all religious associations, of whatever sort or denomination, whether incorporated in the Philippine Islands or in the
name of other country, or not incorporated at all, to hold land in the Philippine Islands upon which to build churches, parsonages, or educational or
charitable institutions.

SEC. 2. Such religious institutions, if not incorporated, shall hold the land in the name of three Trustees for the use of such associations; . . .. (Printed
Rec. App. p. 5.) and (2) that the refusal of the Register of Deeds violates the freedom of religion clause of our Constitution [Art. III, Sec. 1(7)].

ISSUE: whether a deed of donation of a parcel of land executed in favor of a religious organization whose founder, trustees and administrator are
Chinese citizens should be registered or not.

HELD:

The provisions of Act No. 271 of the old Philippine Commission must be deemed repealed since the Constitution was enacted, in so far as incompatible
therewith. In providing that, —

Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations or associations
qualified to acquire or hold lands of the public domain in the Philippines,the Constitution makes no exception in favor of religious associations.

The fact that the appellant religious organization has no capital stock does not suffice to escape the Constitutional inhibition, since it is admitted that
its members are of foreign nationality. To permit religious associations controlled by non-Filipinos to acquire agricultural lands would be to drive the
opening wedge to revive alien religious land holdings in this country.

The resolution appealed from is affirmed, with costs against appellant.

ROMAN CATHOLIC v LRD

On October 4, 1954, Mateo L. Rodis, a Filipino citizen and resident of the City of Davao, executed a deed of sale of a parcel of land located
in the same city covered by Transfer Certificate No. 2263, in favor of the Roman Catholic Apostolic Administrator of Davao Inc.,(RCADI) is corporation
sole organized and existing in accordance with Philippine Laws, with Msgr. Clovis Thibault, a Canadian citizen, as actual incumbent. Registry of Deeds
Davao (RD) required RCADI to submit affidavit declaring that 60% of its members were Filipino Citizens. As the RD entertained some doubts as to the
registerability of the deed of sale, the matter was referred to the Land Registration Commissioner (LRC) en consulta for resolution. LRC hold that
pursuant to provisions of sections 1 and 5 of Article XII of the Philippine Constitution, RCADI is not qualified to acquire land in the Philippines in the
absence of proof that at leat 60% of the capital, properties or assets of the RCADI is actually owned or controlled by Filipino citizens. LRC also denied
the registration of the Deed of Sale in the absence of proof of compliance with such requisite. RCADI’s Motion for Reconsideration was denied.
Aggrieved, the latter filed a petition for mandamus.

Issue:

Whether or not the Universal Roman Catholic Apostolic Church in the Philippines, or better still, the corporation sole named the Roman Catholic
Apostolic Administrator of Davao, Inc., is qualified to acquire private agricultural lands in the Philippines pursuant to the provisions of Article XIII of
the Constitution.

Ruling:

RCADI is qualified.

While it is true and We have to concede that in the profession of their faith, the Roman Pontiff is the supreme head; that in the religious matters, in
the exercise of their belief, the Catholic congregation of the faithful throughout the world seeks the guidance and direction of their Spiritual Father
in the Vatican, yet it cannot be said that there is a merger of personalities resultant therein. Neither can it be said that the political and civil rights of
the faithful, inherent or acquired under the laws of their country, are affected by that relationship with the Pope. The fact that the Roman Catholic
Church in almost every country springs from that society that saw its beginning in Europe and the fact that the clergy of this faith derive their
authorities and receive orders from the Holy See do not give or bestow the citizenship of the Pope upon these branches. Citizenship is a political right
which cannot be acquired by a sort of “radiation”. We have to realize that although there is a fraternity among all the catholic countries and the
dioceses therein all over the globe, the universality that the word “catholic” implies, merely characterize their faith, a uniformity in the practice and
the interpretation of their dogma and in the exercise of their belief, but certainly they are separate and independent from one another in jurisdiction,
governed by different laws under which they are incorporated, and entirely independent on the others in the management and ownership of their
temporalities. To allow theory that the Roman Catholic Churches all over the world follow the citizenship of their Supreme Head, the Pontifical Father,
would lead to the absurdity of finding the citizens of a country who embrace the Catholic faith and become members of that religious society, likewise
citizens of the Vatican or of Italy. And this is more so if We consider that the Pope himself may be an Italian or national of any other country of the
world. The same thing be said with regard to the nationality or citizenship of the corporation sole created under the laws of the Philippines, which is
not altered by the change of citizenship of the incumbent bishops or head of said corporation sole.

We must therefore, declare that although a branch of the Universal Roman Catholic Apostolic Church, every Roman Catholic Church in different
countries, if it exercises its mission and is lawfully incorporated in accordance with the laws of the country where it is located, is considered an entity
or person with all the rights and privileges granted to such artificial being under the laws of that country, separate and distinct from the personality
of the Roman Pontiff or the Holy See, without prejudice to its religious relations with the latter which are governed by the Canon Law or their rules
and regulations.

It has been shown before that: (1) the corporation sole, unlike the ordinary corporations which are formed by no less than 5 incorporators, is
composed of only one persons, usually the head or bishop of the diocese, a unit which is not subject to expansion for the purpose of determining
any percentage whatsoever; (2) the corporation sole is only the administrator and not the owner of the temporalities located in the territory
comprised by said corporation sole; (3) such temporalities are administered for and on behalf of the faithful residing in the diocese or territory of the
corporation sole; and (4) the latter, as such, has no nationality and the citizenship of the incumbent Ordinary has nothing to do with the operation,
management or administration of the corporation sole, nor effects the citizenship of the faithful connected with their respective dioceses or
corporation sole.

In view of these peculiarities of the corporation sole, it would seem obvious that when the specific provision of the Constitution invoked by
respondent Commissioner (section 1, Art. XIII), was under consideration, the framers of the same did not have in mind or overlooked this particular
form of corporation. If this were so, as the facts and circumstances already indicated tend to prove it to be so, then the inescapable conclusion would
be that this requirement of at least 60 per cent of Filipino capital was never intended to apply to corporations sole, and the existence or not a vested
right becomes unquestionably immaterial.

PEOPLE v QUASHA

William H. Quasha

 a member of the Philippine bar, committed a crime of falsification of a public and commercial document for causing it to appear that
Arsenio Baylon, a Filipino citizen, had subscribed to and was the owner of 60.005 % of the subscribed capital stock of Pacific Airways Corp.
(Pacific) when in reality the money paid belongs to an American citizen whose name did not appear in the article of incorporation,
 to circumvent the constitutional mandate that no corp. shall be authorize to operate as a public utility in the Philippines unless 60% of its
capital stock is owned by Filipinos
 Found guilty after trial and sentenced to a term of imprisonment and a fine

Quasha appealed to this Court

Primary purpose: to carry on the business of a common carrier by air, land or water

Baylon did not have the controlling vote because of the difference in voting power between the preferred shares and the common shares

ISSUE:

For a corporation to be entitled to operate a public utility is it necessary that it be organized with 60 per cent of its capital owned by Filipinos from
the start?

HELD:

No. For a corporation to be entitled to operate a public utility it is not necessary that it be organized with 60 per cent of its capital owned by Filipinos
from the start. A corporation formed with capital that is entirely alien may subsequently change the nationality of its capital through transfer of
shares to Filipino citizens. Conversely, a corporation originally formed with Filipino capital may subsequently change the national status of said capital
through transfer of shares to foreigners. What need is there then for a corporation that intends to operate a public utility to have, at the time of its
formation, 60 per cent of its capital owned by Filipinos alone? That condition may anytime be attained thru the necessary transfer of stocks. The
moment for determining whether a corporation is entitled to operate as a public utility is when it applies for a franchise, certificate, or any other
form of authorization for that purpose. And that can be done after the corporation has already come into being and not while it is still being formed.
And at that moment, the corporation must show that it has complied not only with the requirement of the Constitution as to the nationality of its
capital, but also with the requirements of the Civil Aviation Law if it is a common carrier by air, the Revised Administrative Code if it is a common
carrier by water, and the Public Service Law if it is a common carrier by land or other kind of public service.
NATIONAL COAL

National Coal Co. was ctreates by a special law and was enacted by virtue of Act 2705 in order to develop a coal industry. It was engaged in coal
mining on reserved lands belonging to the government, The National Coal filed a case against the CIR for the recovery of the sum of money it paid
on protest as a specific tax on 24, 089 tons of coals claiming exemption to tax pursuant to Sec. 14 and 15 of Act 2719

ISSUE:

WON NCC is a private corporation?

Held:

YES. The mere fact that the government is a majority stockholder of the corporation does not make the corporation,

Act 2705 as amended by Act 2822 makes t subject to all provisions of the corporation law. As a private corporation, it has no greater rights, powers
or privileges than any other corporation which may be org.anized foe the same purpose under the corporation law and certainly it was not the
intention of the legislature to give preference or right or privilege over other legitimate private corporation in the mining of coal. NCC is required o
pay taxes pursuant to Sectin 1496 of the Administrative Code. Moreover, Act 2719 is applicable only to lessee or owner of coal bearing lands which
NCC is not

MIAA v CA

MIAA received Final Notices of Real Estate Tax Delinquency from the City of Parañaque for the taxable years 1992 to 2001. MIAA’s real
estate tax delinquency was estimated at P624 million. The City of Parañaque, through its City Treasurer, issued notices of levy and warrants of levy
on the Airport Lands and Buildings. The Mayor of the City of Parañaque threatened to sell at public auction the Airport Lands and Buildings should
MIAA fail to pay the real estate tax delinquency.

MIAA filed a petition sought to restrain the City of Parañaque from imposing real estate tax on, levying against, and auctioning for public
sale the Airport Lands and Buildings.

The City of Parañaque contended that Section 193 of the Local Government Code expressly withdrew the tax exemption privileges of
“government-owned and-controlled corporations” upon the effectivity of the Local Government Code. Thus, MIAA cannot claim that the Airport
Lands and Buildings are exempt from real estate tax.

MIAA argued that Airport Lands and Buildings are owned by the Republic. The government cannot tax itself. The reason for tax exemption
of public property is that its taxation would not inure to any public advantage, since in such a case the tax debtor is also the tax creditor.

Issue:

Whether or not the City of Parañaque can impose real tax, levy against and auction for public sale the Airport Lands and Buildings.

Held:

MIAA is Not a Government-Owned or Controlled Corporation. The Airport Lands and Buildings of MIAA are property of public dominion and therefore
owned by the State or the Republic of the Philippines. No one can dispute that properties of public dominion mentioned in Article 420 of the Civil
Code, like “roads, canals, rivers, torrents, ports and bridges constructed by the State,” are owned by the State. The term “ports” includes seaports
and airports. The MIAA Airport Lands and Buildings constitute a “port” constructed by the State.

Under Article 420 of the Civil Code, the MIAA Airport Lands and Buildings are properties of public dominion and thus owned by the State or the
Republic of the Philippines. The Airport Lands and Buildings are devoted to public use because they are used by the public for international and
domestic travel and transportation. The fact that the MIAA collects terminal fees and other charges from the public does not remove the character
of the Airport Lands and Buildings as properties for public use. The charging of fees to the public does not determine the character of the property
whether it is of public dominion or not. Article 420 of the Civil Code defines property of public dominion as one “intended for public use.”

The Court has also ruled that property of public dominion, being outside the commerce of man, cannot be the subject of an auction sale. Properties
of public dominion, being for public use, are not subject to levy, encumbrance or disposition through public or private sale. Any encumbrance, levy
on execution or auction sale of any property of public dominion is void for being contrary to public policy. Essential public services will stop if
properties of public dominion are subject to encumbrances, foreclosures and auction sale. This will happen if the City of Parañaque can foreclose
and compel the auction sale of the 600-hectare runway of the MIAA for non-payment of real estate tax.
BARLIN v RAMIREZ

The def., Ramirez, having been appointed by the pltff parish priest, took possession of the church on 7/5/01. He administered if as such under the
orders of his superiors until 11/14/02. His successor having been then appointed, the latter made a demand on this def. for the delivery to him of
the church, convent, and cemetery, and the sacred ornaments, books, jewels, money, and other prop. of the church. The def., by a written document
of that date, refused to make such delivery, stating that "the town of Lagonoy, in conjunction w/ the parish priest of thereof, has seen fit to sever
connection w/ the Pope at Rome and his representatives in these Islands, and to join the Filipino Church, the head of w/c is at Mla.

In 1/4, the pltff. brought this action against def., alleging in his amended complaint that the Roman Catholic Church was the owner of the church
bldg, the convent, cemetery, the books, money, and other prop. belonging thereto, and asking that it be restored to the possession thereof and that
the def. render an account of the prop. w/c he had received and w/c was retained by him, and for other relief. The CFI-Ambos Camarines ruled in
favor of the pltff.

HELD:

It is suggested by the appellant that the Roman Catholic Church has no legal personality in the Philippine Islands. This suggestion, made with
reference to an institution w/c antedates by almost a thousand years any other personality in Europe, and w/c existed "when Grecian eloquence still
flourished in Antioch, and when idols were still worshipped in the temple of Mecca," does not require serious consideration.