Gokongwei v SEC

Gokongwie is a stockholder with San Mig and filed for declaration of nullity of the amended by laws of
said corporation against its BOD

Gokongwei alleged that its BOD amended their by laws based on the authority given to them on a
resolution adopted in 1961.

It was contended that sec 22 of the corp code held that the by laws of the corporation may be amended,
modified, repealed or adopt new laws by its BOD with the the affirmative vote 2/3 of stockholders.

The amendment was based on the 1961 resolution, which Goks contended that the BOD acted without
authority and usurpation of its stockholders.

He also stated that the 1961 authority was excercised in 1962 and 63, after which such authority has
already passed.

Pena v CA

PAMBUSCO took a loan out of DBP USED and used a parcel of land to secure the load.

Due to non-payment, DBP foreclosed it

In a bidding, Pena became the highest bidder

In 1974, PAMBUSCO BOD had a meeting which was only attended by 3 of 5 members

There they made a resolution authorizing one of its directors, Briones, to assign the properties of
PAMBUSCO

Briones assigned the assets to Enriquez.

Enriquez knowing the properties were already mortgaged, excercised PAMBUSCOS right to redeem

In 1975 he sold them to Yap

Yap registered the properties to his name and demaded Pena to vacate the property

Pena refused which prompted Yap to file a complaint

Pena averred that Yap has no power over the property since the resolution passed by PAMBUSCO was
void since there was no quorum under the by laws of PAMBUSCO

Such quorum requires 4 of 5 directors and only 3 appeared

Issue: W/N the board resolution is valid

Held: NO

The by laws of a corporation are its own private laws which have same affect as the laws of coporation

These by laws are written into the charter is the fundamental law of the copopration to which its
officers must comply

Here there was no quorum because according to the by laws of the corporation 4 of 5 BOD must attend
the meeting.

Fleische v Botica Nolasco

Fleischer filed a case against Nolasco Inc

Fleischer alleges that he bought 5 shares from Gonzales of Nolasco Inc

Gonzales refused however to register said shares in the books of the corpo

Fleicher ffiled a case against Nolasco to register his name in the books

Nolasco filed a demurrer on the grounds that the complaint was ambiguous which was denied by the CFI

Nolasco then alleged that in accordance with its by-laws, Nolasco has preferential right to buy from
Fleischer the shares. They then prayed for absolving of liability

Judge Capirstrano held that the by laws of Nolasco was in violation of the corporate code.

Issue:Are the by laws of Nolasco in violation of the corporate code?

Held: Yes

Corporate Code state that the corporation has the power to make by laws so long as it is not
inconsistent with any law

It also held that shares of stock are considered as personal property.

It held that the owner of these shares is at liberty on how he disposes of It.
The by law created by Nolasco transcended the limits fixed in by law, more specifically The corporate
code.

The by laws also have no eefect on Fleischer since he has no knowledge of the by laws when the shares
were assigned to him since he obtained it in good faith. Said by law cannot operate to defeat the rights
as a purchaser

Government of the Phil v El Hogar

Citibank v Chua

Sps velez are good clients of Citibank filing for a case of damages afainst them

They claim they had an arrangement with Citibank for creditlines and offered than an accommodation of
6M

When the tried to exchange with Citibank 6 checks worth 3m, it was denied

Citibank prosed an agreement but failed to comply with it which prompted sps to sue

Citibank however alleged that the sps velez would try to fraud them with the sps depoisiting unfunded
personal checks with his personal account and telling the bank officer that the checks were fundeds
since the sps were good clients

The velez would then withdraw managers checks and deposit them in other banks, In the end he
deposited 3.095m from Citibank and withdrew 3.24

Citibank filed a case of BP22 and estafa against velez

During pre-trial, counsel presented an SPA executed by Citibank officer tarriela in favor JP Garcia and
associates

Velez moved to declare Citibank in default since SPA was not executed by board of director

Citibank executed another SPA executed by Ferguson, VP of Citibank phil

RTC denied motion to declare in default

On pre-trial, sps again tried to declare Citibank in default for failure to appear through an authorized
agent

Citibank then executed a third SPA executed by ferguson in favor of employees

Respondent judge however ordered Citibank to be in default since the third SPA made no mention of JP
Garcia as its employees, and therefore Citibank has no representation in court

Issue: is the resolution of the board of directors needed to grant authority to an agent to represent
them in court? – NO

Held:

3 levels in corpo: board of directors, officers and stocjholders

The board of directors have corporate power. It also held that the board has the power to elect its
officers and the power to post qualifications and duties of its personal

Corporate powers may be assigned to officers or agents through statue, article of incorporation byand
by laws.

Since by laws a re a source of authority for corporate officers, a resolution for appointing an attorney is
not needed because it by laws allow its officers, its EO to execute a power of attorney to Ferguson,
clothing him to manage corporate affairs

Here the general power of attorney allows ferguson to delegate his powers

Loyola Grand Villa v CA

LGVAI was incorporated by Loyala Grand Villa Subdivision.

SEC issued a certificate of incorporation under its official seal LGVAI under that same year.

LGVAI was recognized by Home Insurance and Gauranty Corp (HIGCC) a GOCCC whose mandate is to
oversee orgs like LGVAI

LGVAI later found out that there are two homeowner associations within LGV. LGV north and LGV
sourth.

Allegedly, these were formed since LGVAI was inactive

Upon inquiry with HIGC, they told that LGVAI is terminated and dissolved when it failed to submit its by
laws after submitting a certificate of incorporation to the SEC

ISSUE: W/N corporations non submission of by laws leads to dissolution

Held:NO

LGVAI continue to have corporate and juridical existence from the date the SEC issued its certificate of
incorporation
submission is a condition set but it’s non submission does not lead to dissolution (Not intended by the
law)

Failure merely is a ground ofr dissolution which may be raised in a quo warranto proceeding.

Aurbach v Sanitary

Peopls air cargo v CA

Peoples air is a domestic operation that operates a customs bonded warehouse at the old MNL airport.

To obtain a liscemne from the BOC, Punsalan, the president approached Sano for a feasabilityu study.

Sano submitted a proposal worth 350k

Yong, a stockholder of Peoples air initially rejected since another company had a cheaper offer (15k),
however Punsalang wanted Sano due to Sanos membership in the task force, to which Peoples air
agreed to.

Case:

Sano then filed a collection suit against People air for non-payment of services.

Peoples air claimed that the letter agreement signed by Punsalan was without authority.

The RTC ruled in favor of Peoples air but paid Sano for the operations manual and training.

Issue: W/N a corporation where it has previously allowed its president to go into contract with another
without board resolution, has given authority to the president to execute a contract?

Held: authority may obtained through:

1) When a corporation holds out an officer as having the power to act

2) when the acceptenace of an act of a particular nature, with the knowledge thereof, within his
oridinary powers.

In this case Peoples air through its president entered into a contract without board approval.

People’s air did no object to said contract which clothes the president with such authority.

The grant of authority was also evident in the testimony of Yon.

It was also held that the contract was executed with no problems, therefore, Sano cannot be faulted for
believing in the presidents conformity to the contract

Nakpil v IBC

Petitioner is assistant general manager for respondent IBC

Templo, president of IBC harassed petitioner into resigning from position and refused to pay retirement
benitfits and recognize employment

Petioner filed with Labor arbiter for illegal dismissal and non-payment of benefits. LA ruled in favor of
petioner

IBC appealed with the CA and reversed decsions of LA

IBC states that petioner is not an employee of IBC since he was not elected or appointed at comptroller
and assistant GM by its BOD and that he was appointed by the GM in jan 11 1955.

IBC also states that the by laws do no include comptroller in its roster of corporate officers

IsssueL whether the petitioner is a corporate officer under the corp by laws whose dismissal falls under
the SEC

Held:

Court held that there 2 elements to whether the SEC has jurisdiction over cases

1. status and relations of parties

2. subject of case

The petioners argument is untenable since even if he was appointed by the GM, his appointment was
approved by the BOD

Although the position of comptroller is not in the by laws, the BOD is empowered to create or appoint
new officers as necessary

An office has been fefined as as the creation of the charter of a corporation while

An officer is defined as a person elected by its BOD or stockholders

An employee is one who occupies an office and is employed by the managing officer not the officer
The petitoners appointment as compotroller required approval from the BOD to become valid. It clear
that the petioner is a corporate officer which may be the subject of controversy cognizable by the SEC.

Ong v CA

This is a case of estafa

Ong, representing AMAGRI, defrauded SOLIDBANK corporation represented by its accountant lazazro

Said accused got 10000 bags of urea valued at 2.5million

Prosecution said that Benito Ong represting AMAGRI applied two letters of credit

Under the trust receipt, it said that ARMAGRI undertook to account for goods they held for the abnk

They also had an obli to keep the proceeds in the form of money as separate property for the bank or
else return to the bank upon demand, If nto sold.

Petioner also stamped said receipts that states that he will be jointly/severally liable for the interest
rates under the receipt.

However, the petioner signed alone in the receipt amount to 2.5m while petioner and Ong signed the
addition trust receipt in the amount of 2m

When the receipts became demandable, AMAGRI failed to pay or deliver the goods

CA held that Ong is not a officer of AMAGRI although he is certainly an officer

Issue: W/N petioner is liable for the offense for mere fac that petitioner acted as an agent for the
coporation

Held:

CA is wrong.

Cebu Country Club v Elizagaque

Country club is a non-stock non-profit corp based in Cebu. Petioners are its BOD

In 1987, Country club ade respondednt Ricardo, its VP and Operations manager, as a special non-
proprietory member

Designation was approved by the BOD

1996 respondent field for proprietory membership which was endorsed by two other proprietory
members

The price of proprieoty share was 5m but president of the corp offered to respondent 3.5m

Respondent instead bought a share from dr. butalid for 3m which was transferred to him

In a meeting, The action on proprietory membership was delayed and eventually denied

Misa, representing respondent sent a letter for reconsideration but was unanswered

Issue: Are petioners liable for damages?

Held: Yes

Petioners violated rules governing human relation, the basic principles observed for proper relationship
between himan beings.

They also held that the petioners committed fraud and bad faith by disapproving respondents
application and is therefore liable for damages

It was also held that the amended by requiring the unanimous vote of the BOD at a meeting was not
printed in the application for the respondent submitted to the club

Such application was silent on the required number of votes eed

It is clear the at the respondent was in the dark wondering why his application was denied.

Petioners are jointly and severally liable

DBP v Ong

Petioners land is subject of controversy

Respondent ong, sent an offer to DBP to buy the subject land

The offer was NOTED by DBP branch head lagriot and receipt for a deposit of 19k was issued.

1988, lagrito informed the ongs that they have received a better offer (they will eject occupants) but the
Ongs were given 3 days to match a better offer

The respondent matched the offer however, the ongs were notified that the property will not be
awarded to them but will be offered for public biffing

Resondents filed for breach of contract but was dismissed because there was perfection of contract,
hence no breach

The case was sent to the RTC

The respondent claim they met with a Roy Palasan, a clerk the CBP for the purchase of 2 lots

Palasan went to talk with Lagrito. Palasan informed the Ongs that he agreed to sell the poprerty but will
pay 10% of the purchase price.

Palasan also made them sign a form expressing the offer to buy the property for formalities purposes

RTC was in favor of the Ongs but DBP applead.

Issue: W/N the contract was perfected between DBP and Ongs

Held: NO

RTC held that the contract was already perfected on the premise of

1. The deposit made by the Ongs was encashed by the bank

2. Sister in law of respondent entered into the same arrangement and was able to buy the property

3. Petioner failed to present any witnesses rebut the testimony of respondent

The courts also held that the act of Palasan, a bank clerk, upon which the respondents trusted the sale
of the house, would bind the perfected contract between the parties.

The courts found the transaction was limited only to Palasan, the clerk since Lagrito had no direct
communication with the respondents stating his consent.

The courts held that there was no approval by the bank officer and the signature affixed by Lagrito was
merely a note which did not mean an approval of the sale.

The courts also held that a clerk is not one of the bank officers who has authority given by a third party
to bind a contract.

Therefore, since there is no contract to speak of, there is no breach of contract.

Gallegher v Germania

Plaintiff filed an action to recover goods against his assignee Gallagher (Defendant)

Barge and Vander Horck intervented stating that they can intervene because they own all capital stock
of the defendant and that they have an interest with the property of defendant.

They also stated that a cost of action against Westphal which accrued before the assignment to plaintiff
and that Westphal is onsolvent
The relief BV is seeking is to equitably set-off their claims with Westphal from those that Gallagher has
agaomst the copr

Gallagher states that BV has no interst in this to entitle them to intervene and that claims cannot be set
off against a claim against the corporation since a corporation is a legal entity, entirely different from its
stockholders

Issue: W/N the claims of BV can be equitable set off

Held: No

A corporation is an entity that is distinct from its stockholderders. It is essential in the pursuit of justice
to treat a corp as a collective entity disregarding its stockholders.

If the rights of a corporation are affected by the acts of a stockholder, it can lead into confusion and
corporate affairs will will fail

In this case,

San Juan Structual v Ca

San Juan entered into an agreement with Motorich for the transfer of land in Acropolis

San Juan paid for the downpayment and the balance on or before march 2 1989

Andres, president of San Juan sent a letter to motorich for the computation of the balance to be paid
and telling them they are ready to pay the balance

Nanita Lee of motorich did not appear in the meeting and did not execute the deed of assignment
needed for the transfer of TCT

ACL was involved in the party since the TCT is still in their name was JNM was involved as the
transferero of right in favor of Motroich

On April 1989, ACL and motorich entered into deed of absolte sale to transfer property to motorich and
was issued a new title

Nenita and motorich’s bad fait in refusing to execute the transder of rights resulted in damages to San
Juan

Nenita and Motorich contended that the president and chairman of motorich did not sign the
agreement but it was Nenita’s which was inadequate to bind Motorich

At the time the agreement was signed, San Juan insited that Nenita accept the earnest money of 100k

It was also agreed that the transfer would be accepted upon issuance of the cash payment

Issue: Whether there was a valid contract

Whether the doctrine of piercing the veil of corporate fiction applicable in this case
Held:

1. No. Not binding since Motorich never authorized the sale.

A corporation is juridical person distinct from its stockholders. Any property that corporation has cannot
be sold by its stockholders or members without approval from the BOD

A corporation may act only through its BOD or when authorized by its by laws through its officers or
agents

An officer or agent may represent or bind the corpo only upon authorization given to him

Persons dealing with the agent are bound to know the fact of agency and their authority. If there is
controversy, it us upon them to prove it

In this case, Motorich denies that it ever sold the land and it is upon San Juan to prove that Nenita was
authorized to represent them.

It was not shown anywhere in the by laws or article of incorporation to prove that Nenita had that
power

As A general rule, acts of officers within the scope of their authority are binding upon the corp

But when these acts exceed authority, these cannot bind the corporation

In this case, There is an abscsnce of proof that Motorich authorized Nenita to sell the land nor was there
any proof that Motorich validated it.

Stockholder of Guanzon v Register of deeds

5 stockholders of Guanzon executed a certificate of liquidation of the asses of the corporation for it to
be distributed among thmselves

Registry of deeds denied the certificate

Stockholders appealed stating that the liquidation is not a transfer buy a distribution of assestion of a
corporation that has ceased to exist

Issue: W/N The certificate involves a distribution of the corporations assets

Held:

No

A corporation is disctinct from the members that compose it

Property registered in the coporations name is owned by it and not by its members

While shares of stock constitute personal property, they do not represent the coporation.
A share of stock is a part of a coporation but its holder not the owner to any part of the corporation no
entitled to possession. The stockholder is not a co-owner of the porporty.