Vous êtes sur la page 1sur 16

NO.

12
Manacop vs. Equitable PCIBank
GR No. 162814-17 Aug. 2005

Nature: Petition for Review on Certiorari of a decision of Court of Appeals

FACTS:
Lavine Loungewear Manufacturing Inc. insured its buildings and supplies
against fire with several insurance companies. All policies provides that loss,
if any, under the policy is payable to Equitable Banking Corp., Greenhills
Branch subject to terms, conditions, clauses and warranties. On Agust 1,
1998 a fire gutted Lavine’s buildings and their contents thus claims were
made against the policies amounting to P112, 245, 324.34.
Lavine is represented by Chandru Pessumal in negotiating with the
insurance companies. Notwithstanding Chandru’s request that payments be
made first to Lavine who shall thereafter pay Equitable Bank, certain
insurance companies released the proceeds directly to Equitable Bank. Thus,
Chandru filed a Petition for Issuance of Writ of Preliminary Injunction with
Prayer for Temporary Restraining Order (TRO) before RTC Pasig City
against PhilFire, Rizal Surety, Tabacalera Insurance, First Lepanto and
Equitable Bank.
The board of directors of Lavine moved to intervene claiming that they were
the incumbent directors. The trial court granted the Motion for Intervention
and rendered its judgment in favor of the plaintiff through intervenors.
The intervenors filed a Motion for Execution pending appeal on the grounds
that : (a) Tabacalera Insurance was on the brink of insolvency (b) Lavine
was in imminent danger of extinction (c) any appeal from the trial court’s
judgment would be merely dilatory. The trial judge granted the execution
pending appeal. Meanwhile Equitable Bank and Lavine filed a Petition for
Certiorari with TRO and Writ of Preliminary Injunction before the Court of
Appeals. The Court of Appeals rendered judgment lifting the order of levy
and garnishment of the properties and deposits of the insurance companies
and denied Equitable Bank’s Motion to Disqualify Judge Lavina. Hence this
case.

ISSUE: Is an execution pending appeal be granted if the prevailing party is a


corporation?
RULING: No, an execution pending appeal cannot be granted where the
winning party is a corporation. A juridical entity’s existence cannot be
likened to a natural person. Its precarious financial condition is not by itself
a compelling circumstance warranting immediate execution and also does
not outweigh the long standing general policy of enforcing only final and
executory judgment.

NO. 19

PHILIPPINE NATIONAL BANK, petitioner,


vs.
RITRATTO GROUP INC., RIATTO INTERNATIONAL, INC., and
DADASAN GENERAL MERCHANDISE, respondent

Nature of the case:

Petition for review on certiorari under Rule 45 of the Revised Rules of


Court, petitioner seeks to annul and set aside the Court of Appeals' decision
in C.A. CV G.R. S.P. No. 55374 dated March 27, 2000, affirming the Order
issuing a writ of preliminary injunction of the Regional Trial Court of
Makati, Branch 147 dated June 30, 1999, and its Order dated October 4,
1999, which denied petitioner's motion to dismiss.

Facts:
Petitioner Philippine National Bank is a domestic corporation organized and
existing under Philippine law. Meanwhile, respondents Ritratto Group, Inc.,
Riatto International, Inc. and Dadasan General Merchandise are domestic
corporations, likewise, organized and existing under Philippine law.
On May 29, 1996, PNB International Finance Ltd. (PNB-IFL) a subsidiary
company of PNB, organized and doing business in Hong Kong, extended a
letter of credit in favor of the respondents in the amount of US$300,000.00
secured by real estate mortgages constituted over four (4) parcels of land in
Makati City. This credit facility was later increased successively to
US$1,140,000.00 in September 1996; to US$1,290,000.00 in November
1996; to US$1,425,000.00 in February 1997; and decreased to
US$1,421,316.18 in April 1998. Respondents made repayments of the loan
incurred by remitting those amounts to their loan account with PNB-IFL in
Hong Kong.
However, as of April 30, 1998, their outstanding obligations stood at
US$1,497,274.70. Pursuant to the terms of the real estate mortgages, PNB-
IFL, through its attorney-in-fact PNB, notified the respondents of the
foreclosure of all the real estate mortgages and that the properties subject
thereof were to be sold at a public auction on May 27, 1999 at the Makati
City Hall.
On May 25, 1999, respondents filed a complaint for injunction with prayer
for the issuance of a writ of preliminary injunction and/or temporary
restraining order before the Regional Trial Court of Makati. The Executive
Judge of the Regional Trial Court of Makati issued a 72-hour temporary
restraining order. On May 28, 1999, the case was raffled to Branch 147 of
the Regional Trial Court of Makati. The trial judge then set a hearing on
June 8, 1999. At the hearing of the application for preliminary injunction,
petitioner was given a period of seven days to file its written opposition to
the application. On June 15, 1999, petitioner filed an opposition to the
application for a writ of preliminary injunction to which the respondents
filed a reply. On June 25, 1999, petitioner filed a motion to dismiss on the
grounds of failure to state a cause of action and the absence of any privity
between the petitioner and respondents. On June 30, 1999, the trial court
judge issued an Order for the issuance of a writ of preliminary injunction,
which writ was correspondingly issued on July 14, 1999. On October 4,
1999, the motion to dismiss was denied by the trial court judge for lack of
merit.
Petitioner, thereafter, in a petition for certiorari and prohibition assailed the
issuance of the writ of preliminary injunction before the Court of Appeals. In
the impugned decision, the appellate court dismissed the petition.

Issue:
Is PNB privy to the loan contracts entered into by respondent & PNB-IFL
being that PNB-IFL is owned by PNB?

Ruling:
The contract questioned is one entered into between respondent and PNB-
IFL, not PNB. In their complaint, respondents admit that petitioner is a mere
attorney-in-fact for the PNB-IFL with full power and authority to, inter alia,
foreclose on the properties mortgaged to secure their loan obligations with
PNB-IFL. In other words, herein petitioner is an agent with limited authority
and specific duties under a special power of attorney incorporated in the real
estate mortgage. It is not privy to the loan contracts entered into by
respondents and PNB-IFL.

The general rule is that as a legal entity, a corporation has a personality


distinct and separate from its individual stockholders or members, and is not
affected by the personal rights, obligations and transactions of the latter. The
mere fact that a corporation owns all of the stocks of another corporation,
taken alone is not sufficient to justify their being treated as one entity. If
used to perform legitimate functions, a subsidiary's separate existence may
be respected, and the liability of the parent corporation as well as the
subsidiary will be confined to those arising in their respective business. The
courts may in the exercise of judicial discretion step in to prevent the abuses
of separate entity privilege and pierce the veil of corporate entity.

Doctrine of Piercing the corporate evil is an equitable doctrine developed to


address situations where the separate corporate personality of a corporation
is abused or used for wrongful purposes. It applies when the corporate
fiction is used to defeat public convenience, justify wrong, protect fraud or
defend crime, or when it is made a shield to confuse the legitimate issues, or
where a corporation is the mere alter ego or business conduit of a person, or
where the corporation is so organized and controlled and its affairs are so
conducted as to make it merely an instrumentality, agency, conduit or
adjunct of another corporation.

Test in determining the applicability of the doctrine of piercing the veil of


corporate fiction:
1. Control, not mere majority or complete control, but complete domination,
not only of finances but of policy and business practice in respect to the
transaction attacked so 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 fraud or
wrong, to perpetuate the violation of a statutory or other positive legal duty,
or dishonest and, unjust act in contravention of plaintiff's legal rights; and,
3. The aforesaid control and breach of duty must proximately cause the
injury or unjust loss complained of.
The absence of any one of these elements prevents "piercing the corporate
veil." In applying the "instrumentality" or "alter ego" doctrine, the courts are
concerned with reality and not form, with how the corporation operated and
the individual defendant's relationship to the operation
Aside from the fact that PNB-IFL is a wholly owned subsidiary of petitioner
PNB, there is now showing of the indicative factors that the former
corporation is a mere instrumentality of the latter are present. Neither is
there a demonstration that any of the evils sought to be prevented by the
doctrine of piercing the corporate veil exist. Inescapably, therefore, the
doctrine of piercing the corporate veil based on the alter ego or
instrumentality doctrine finds no application in the case at bar.

IN VIEW OF THE FOREGOING, the petition is hereby GRANTED. The


assailed decision of the Court of Appeals is hereby REVERSED. The Orders
dated June 30, 1999 and October 4, 1999 of the Regional Trial Court of
Makati, Branch 147 in Civil Case No. 99-1037 are hereby ANNULLED and
SET ASIDE and the complaint in said case DISMISSED.

NO. 23

G.R. No. 136448 November 3, 1999


LIM TONG LIM, petitioner, vs.PHILIPPINE FISHING GEAR
INDUSTRIES, INC., respondent.

FACTS

On behalf of "Ocean Quest Fishing Corporation," Antonio Chua and Peter


Yao entered into a Contract dated February 7, 1990, for the purchase of
fishing nets of various sizes from the Philippine Fishing Gear Industries, Inc.
(herein respondent). They claimed that they were engaged in a business
venture with Lim Tong Lim, who however was not a signatory to the
agreement. The total price of the nets amounted to P532,045. Four hundred
pieces of floats worth P68,000 were also sold to the Corporation.
The buyers, however, failed to pay for the fishing nets and the floats; hence,
private respondents filed a collection suit against Chua, Yao and Lim Tong
Lim with a prayer for a writ of preliminary attachment. The suit was brought
against the three in their capacities as general partners, on the allegation that
"Ocean Quest Fishing Corporation" was a nonexistent corporation as shown
by a Certification from the Securities and Exchange Commission.
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.
Corporation by Estoppel
Petitioner argues that under the doctrine of corporation by estoppel, liability
can be imputed only to Chua and Yao, and not to him. Again, we disagree.
Sec. 21 of the Corporation Code of the Philippines provides:
Sec. 21. Corporation by estoppel. — All persons who assume to act as a
corporation knowing it to be without authority to do so shall be liable as
general partners for all debts, liabilities and damages incurred or arising as a
result thereof: Provided however, That when any such ostensible corporation
is sued on any transaction entered by it as a corporation or on any tort
committed by it as such, it shall not be allowed to use as a defense its lack of
corporate personality.
One who assumes an obligation to an ostensible corporation as such, cannot
resist performance thereof on the ground that there was in fact no
corporation.
Thus, even if the ostensible corporate entity is proven to be legally
nonexistent, a party may be estopped from denying its corporate existence.
"The reason behind this doctrine is obvious — an unincorporated association
has no personality and would be incompetent to act and appropriate for itself
the power and attributes of a corporation as provided by law; it cannot create
agents or confer authority on another to act in its behalf; thus, those who act
or purport to act as its representatives or agents do so without authority and
at their own risk. And as it is an elementary principle of law that a person
who acts as an agent without authority or without a principal is himself
regarded as the principal, possessed of all the right and subject to all the
liabilities of a principal, a person acting or purporting to act on behalf of a
corporation which has no valid existence assumes such privileges and
obligations and becomes personally liable for contracts entered into or for
other acts performed as such agent.
The doctrine of corporation by estoppel may apply to the alleged corporation
and to a third party. In the first instance, an unincorporated association,
which represented itself to be a corporation, will be estopped from denying
its corporate capacity in a suit against it by a third person who relied in good
faith on such representation. It cannot allege lack of personality to be sued to
evade its responsibility for a contract it entered into and by virtue of which it
received advantages and benefits.
On the other hand, a third party who, knowing an association to be
unincorporated, nonetheless treated it as a corporation and received benefits
from it, may be barred from denying its corporate existence in a suit brought
against the alleged corporation. In such case, all those who benefited from
the transaction made by the ostensible corporation, despite knowledge of its
legal defects, may be held liable for contracts they impliedly assented to or
took advantage of.
NO. 40

G.R. No. L-27155 May 18, 1978


PHILIPPINE NATIONAL BANK, petitioner,
vs.
THE COURT OF APPEALS, RITA GUECO TAPNIO, CECILIO
GUECO and THE PHILIPPINE AMERICAN GENERAL
INSURANCE COMPANY, INC., respondents.

Facts:
Plaintiff, Philam gen as surety, issued a bond in favor of Tapnio, to secure
the latter’s obligation to PNB 2371.79 plus 12% interest. Philamgen paid the
said amount to PNB and seek indemnity from Tapnio. Tapnio refused to pay
alleging that he was not liable to the bank because due to the negligence of
the latter the contract of lease w/ Tuazon was rescind which amounts to
2800.

Tapnio mortgage his standing crops and sugar quota to PNB. Tapnio agreed
to leased the sugar quota, in excess of his need to Tuazon which was
approved by the branch and vice president of the PNB in the amount of
P2.80 per picul. However, the bank’s board of directors disapproved the
lease, stating that the amount should be P3.00 per picul, its market value.
Tuazon ask for reconsideration to the board which was not acted by the
board, so the lease was not consummated resulting to the loss of P2,800,
which could have been earned by Tapnio.

The Trial court and CA ruled that the bank was liable to Tapnio. Thus this
petition

Issue :

WON PNB is liable to tapnio


Held:

Yes PNB is liable to Tapnio. PNB argued that it has a right both under its
own Charter and under the Corporation Law, to approve or disapprove the
said lease of sugar quota and in the exercise of that authority.

The SC said that time is of the essence in the approval of the lease of sugar
quota allotments, since the same must be utilized during the milling season.
There was no proof that there was any other person at that time willing to
lease the sugar quota allotment of private respondents for a price higher than
P2.80 per picul. Also, Considering that all the accounts of Rita Gueco
Tapnio with the Bank were secured by chattel mortgage on standing crops,
assignment of leasehold rights and interests on her properties, and surety
bonds and that she had apparently "the means to pay her obligation to the
Bank, there was NO REASONABLE BASIS for the Board of Directors of
petitioner to have rejected the lease agreement.

While petitioner had the ultimate authority of approving or disapproving the


proposed lease since the quota was mortgaged to the Bank, the latter
certainly cannot escape its responsibility of observing, for the protection of
the interest of private respondents.

The law makes it imperative that every person "must in the exercise of his
rights and in the performance of his duties, act with justice, give everyone
his due, and observe honesty and good faith. Certainly, it knew that the
agricultural year was about to expire, that by its disapproval of the lease
private respondents would be unable to utilize the sugar quota in question.

Under Article 21 of the New Civil Code, "any person who willfully causes
loss or injury to another in a manner that is contrary to morals, good customs
or public policy shall compensate the latter for the damage." This grants
adequate legal remedy for the untold number of moral wrongs which is
impossible for human foresight to specifically provide in the statutes.
NO. 44
G.R. No. L-30896 April 28, 1983
JOSE O. SIA, petitioner,
vs.
THE PEOPLE OF THE PHILIPPINES, respondent.

NATURE OF THE CASE :

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,
FACTS OF THE CASE :
The CA has this finding of facts : There is no debate on certain antecedents:
Accused Jose 0. Sia sometime prior to 24 May, 1963, was General Manager
of the Metal Manufacturing Company of the Philippines, Inc. engaged in the
manufacture of steel office equipment; on 31 May, 1963, because his
company was in need of raw materials to be imported from abroad, he
applied for a letter of credit to import steel sheets from Mitsui Bussan
Kaisha, Ltd. of Tokyo, Japan, the application being directed to the
Continental Bank, herein complainant, Exhibit B and his application having
been approved, the letter of credit was opened on 5 June, 1963 in the amount
of $18,300, Exhibit D; and the goods arrived sometime in July, 1963
according to accused himself, tsn. II:7; now from here on there is some
debate on the evidence; according to Complainant Bank, there was permitted
delivery of the steel sheets only upon execution of a trust receipt, Exhibit A;
while according to the accused, the goods were delivered to him sometime
before he executed that trust receipt in fact they had already been converted
into steel office equipment by the time he signed said trust receipt, tsn. II:8;
but there is no question - and this is not debated - that the bill of exchange
issued for the purpose of collecting the unpaid account thereon having fallen
due (see Exh. B) neither accused nor his company having made payment
thereon notwithstanding demands, Exh. C and C-1, dated 17 and 27
December, 1963, and the accounts having reached the sum in pesos of
P46,818.68 after deducting his deposit valued at P28,736.47; that was the
reason why upon complaint by Continental Bank, the Fiscal filed the
information after preliminary investigation as has been said on 22 October,
1964. (Rollo [CA], pp. 103- 104).

ISSUE :

WON 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.

RULING :

No, petitioner is not liable.

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 can not 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. (Rollo [CA], p. 108.)
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.

RATIO :

An officer of a corporation can be held criminally liable for acts or


omissions done in behalf of the corporation only where the law directly
requires the corporation 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

NO. 58
FILIPINAS BROADCASTING NETWORK, INC., petitioner, vs. AGO
MEDICAL AND EDUCATIONAL CENTER-BICOL CHRISTIAN
COLLEGE OF MEDICINE, (AMEC-BCCM) and ANGELITA F.
AGO, respondents. G.R. No. 141994. January 17, 2005

Facts:
Rima & Alegre were host of FBNI radio program “Expose”. Respondent
Ago was the owner of the Medical & Educational center, subject of the radio
program “Expose”. AMEC claimed that the broadcasts were defamatory and
owner Ago and school AMEC claimed for damages. The complaint further
alleged that AMEC is a reputable learning institution. With the supposed
expose, FBNI, Rima and Alegre “transmitted malicious imputations and as
such, destroyed plaintiff’s reputation. FBNI was included as defendant for
allegedly failing to exercise due diligence in the selection and supervision of
its employees. The trial court found Rima’s statements to be within the
bounds of freedom of speech and ruled that the broadcast was libelous. It
ordered the defendants Alegre and FBNI to pay AMEC 300k for moral
damages.”

ISSUE: Whether or not AMEC is entitled to moral damages.

RULING:

YES.
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, AMEC’s claim, or moral damages fall under item 7 of Art –
2219 of the NCC.
This provision expressly authorizes the recovery of moral damages in cases
of libel, slander or any other form of defamation. Art 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 implied damages. In such a case,
evidence of an honest mistake or the want of character or reputation of the
party libeled goes only in mitigation of damages. In this case, the broadcasts
are libelous per se. thus, AMEC is entitled to moral damages. However, we
find the award P500,000 moral damages unreasonable. The record shows
that even though the broadcasts were libelous, per se, AMEC has not
suffered any substantial or material damage to its reputation. Therefore, we
reduce the award of moral damages to P150k.
NO. 65

Roman Catholic Apostolic Administrator of Davao, Inc. v. The Land


Registration Commission and the Register of Deeds of Davao City, G.R.
No. L-8451, December 20,1957

Facts:

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.