BARRETO VS.

LA PREVISORA FILIPINA

This action was brought by the directors of defendant corporation to recover 1% from
each of the plaintiffs of the profits of the corporation for 1929 pursuant to a by-law provision
which grants the directors the right to receive a life gratuity or pension in such amount for the
corporation.

The SC held that the by-law provision is not valid. Such provision is ultra vires for a
mutual loan and building association to make. It is not merely a provision for the compensation
of directors. The authority conferred upon corporations refers only to providing compensation for
the future services of directors, officers, and employees after the adoption of the by-law in
relation thereto. The by-law can't be held to authorize the giving of continuous compensation to
particular directors after their employment has terminated for past services rendered gratuitously
by them to the corporation.

CITIBANK, N.A. v. CHUA (220 SCRA 75)

Where the SEC grants a license to a foreign corporation, it is deemed to have approved
its
foreign-enacted by-laws. Sec. 46 of the Corporation Code which states that by-laws are
not valid without SEC approval applies only to domestic corporations.

A board resolution appointing an attorney-in-fact to represent the corporation during pre-

trial is not necessary where the by-laws authorize an officer of the corporation to make
such appointment.

GOVT. OF P.I. V. EL HOGAR

Is a provision in the by-laws allowing the BOD, by vote of absolute majority, to cancel shares
valid?

No. It is a patent nullity, being in direct conflict with Sec. 187 of the Corp. Law which
prohibits forced surrender of unmatured stocks except in case of dissolution.

Is a provision in the by-laws fixing the salary of directors valid?

Yes. Since the Corporation Law does not prescribe the rate of compensation, the power
to fix compensation lies with the corporation.

Is a provision requiring persons elected to the Board of Directors to own at least P 5,000 shares
valid?

Yes. The Corporation Law gives the corporation the power to provide qualifications of
its directors.
CITIBANK, N.A. v. CHUA (220 SCRA 75)
 Where the SEC grants a license to a foreign corporation, it is deemed to have approved
its
foreign-enacted by-laws. Sec. 46 of the Corporation Code which states that by-laws are
not valid without SEC approval applies only to domestic corporations.

A board resolution appointing an attorney-in-fact to represent the corporation during pre-

trial is not necessary where the by-laws authorize an officer of the corporation to make
such appointment.

DETECTIVE AND PROTECTIVE BUREAU VS. CLORIBEL (26 SCRA 225;

1968)

The Corporation Law says that every director must own at least one (1) share of the
capital stock of the corporation.