1. PRISCILO B. PAZ vs.

NEW INTERNATIONAL ENVIRONMENTAL

UNIVERSALITY, INC., G.R. No. 203993, April 20, 2015

Clearly, petitioner is bound by his obligation under the MOA not only on
estoppel but by express provision of law. As aptly raised by respondent in its
Comment to the instant petition, it is futile to insist that petitioner issued the
receipts for rental payments in respondent’s name and not with Capt.
Clarke’s, whom petitioner allegedly contracted in the latter’s personal
capacity, only because it was upon the instruction of an employee. Indeed, it
is disputably presumed that a person takes ordinary care of his concerns, and
that all private transactions have been fair and regular. Hence, it is assumed
that petitioner, who is a pilot, knew what he was doing with respect to his
business with respondent.

2. Narra Nickel Mining and Development Corp., Tesoro Mining

andDevelopment, Inc., and Mcarthur Mining, Inc., vs.
RedmontConsolidated Mines Corp., G.R. No. 195580, January 28, 2015

The grandfather rule finds no basis in the text of 1987 Constitution. Section
3 (a) of the Foreign Investments Act (FIA) defines “Philippine National” as
including “a corporation organized under the laws of the Philippines of
which at least 60% of the capital stock outstanding and entitled to vote is
owned and held by citizen of the Philippines.”

In resolving disputes "ʺinvolving rights to mining areas"ʺ and "ʺinvolving

mineral agreements or permits,"ʺ the POA has jurisdiction to make a
preliminary finding of the required nationality of the corporate applicant in
order to determine its right to a mining area or a mineral agreement.

The Grandfather Rule is "ʺthe method by which the percentage of Filipino

equity in a corporation engaged in nationalized and/or partly nationalized
areas of activities, provided for under the Constitution and other
nationalization laws, is computed, in cases where corporate shareholders are
present, by attributing the nationality of the second or even subsequent tier
of ownership to determine the nationality of the corporate shareholder."ʺ
Thus, to arrive at the actual Filipino ownership and control in a corporation,
both the direct and indirect shareholdings in the corporation are determined.

The method employed in the Grandfather Rule of attributing the

shareholdings of a given corporate shareholder to the second or even the
subsequent tier of ownership hews with the rule that the "ʺbeneficial
ownership"ʺ of corporations engaged in nationalized activities must reside in
the hands of Filipino citizens.

If the subject corporation’s Filipino equity falls below the threshold 60%, the
corporation is immediately considered foreign-​‐‑owned, in which case, the
need to resort to the Grandfather Rule disappears.

While the Grandfather Rule was originally intended to trace the

shareholdings to the point where natural persons hold the shares, the SEC
had already set up a limit as to the number of corporate layers the attribution
of the nationality of the corporate shareholders may be applied.

The Grandfather Rule was originally conceived to look into the citizenship
of the individuals who ultimately own and control the shares of stock of a
 corporation for purposes of determining compliance with the constitutional
requirement of Filipino ownership.

Transnational transactions entail differing laws on the requirements for the

validity of the formalities and substantive provisions of contracts and their
interpretation. These transactions inevitably lend themselves to the
possibility of various fora for litigation and dispute resolution. As observed
by an eminent expert on transnational law: The more jurisdictions having an
interest in, or merely even a point of contact with, a transaction or
relationship, the greater the number of potential fora for the resolution of
disputes arising out of or related to that transaction or relationship. In a
world of increased mobility, where business and personal transactions
transcend national boundaries, the jurisdiction of a number of different fora
may easily be invoked in a single or a set of related disputes.
3. PHILIPPINE NATIONAL BANK vs. MERELO B. AZNAR et al., G.R.
No. 171805, May 30, 2011

Stockholders cannot claim ownership over corporate properties by virtue of

the Minutes of a Stockholder’s meeting which merely evidence a loan
agreement between the stockholders and the corporation. As such, their
interest over the properties ismerely inchoate.

4. COM. OF CUSTOMS vs. OILINK INT’L. CORP, G.R. No. 161759,

July 2, 2014

URC and Oilink had the same Board of Directors and Oilink was 100%
owned by URC. The doctrine of piercing the corporate veil has no
application because the Commissioner of Customs did not establish that
Oilink was set up to avoid the payment of taxes or duties, or for purposes
that would defeat public convenience, justify wrong, protect fraud, defend
crime, confuse legitimate legal or judicial issues, perpetrate deception or
otherwise circumvent the law.

5. GIRLY G. ICO vs. SYSTEMS TECHNOLOGY INSTITUTE, INC.,

MONICO V. JACOB and PETER K. FERNANDEZ, G.R. No. 185100,
July 9, 2014

A corporation, as a juridical entity, may act only through its directors,

officers and employees. Obligations incurred as a result of the directors’ and
officers’ acts as corporate agents, are not their personal liability but the
direct responsibility of the corporation they represent. As a rule, they are
only solidarily liable with the corporation for the illegal termination of
services of employees if they acted with malice or bad faith. To hold a
director or officer personally liable for corporate obligations, two requisites
must concur: (1) it must be alleged in the complaint that the director or
officer assented to patently unlawful acts of the corporation or that the
officer was guilty of gross negligence or bad faith; and (2) there must be
proof that the officer acted in bad faith.

6. Palm Avenue Holding Co., Inc., and Palm Avenue Realty and
Development Corporation vs. Sandiganbayan 5th Division, Republic of
The Philippines, Represented by The Presidential Commission on Good
Government (PCGG), G.R. No. 173082, August 6, 2014

The writ of sequestration issued against the assets of the corporation is not
valid because the suit in the civil case was against the shareholder inthe
corporation and is not a suit against the latter. Thus, the failure to implead
these corporations as defendants and merely annexing a list of such
corporations to the complaints is a violation of their right to due process for
 it would be, in effect, disregarding their distinct and separate personality
without a hearing. Furthermore, the sequestration order issued against the
corporation is deemed automatically lifted due to the failure of the Republic
to commence the proper judicial action or to implead them therein withinthe
period under the Constitution.

7. Boy Scouts of the Philippines vs. Commission on Audit, 651 SCRA 146,
2011

The following are juridical persons: (1) The State and its political
subdivisions; (2) Other corporations, institutions and entities for public
interest or purpose created by law; their personality begins as soon as they
have been constituted according to law; (3) Corporations, partnerships and
associations for private interest or purpose to which the law grants a juridical
personality, separate and distinct from that of each shareholder, partner or
member. Evidently, the BSP, which was created by a special law (RA 7278)
to serve a public purpose in pursuit of a constitutional mandate, comes
within the class of “public corporations” defined by paragraph 2, Article 44
of the Civil Code and governed by the law which creates it, pursuant to
Article 45 of the same Code. The BSP is a public corporation or a
government agency or instrumentality with juridical personality, which does
not fall within the constitutional prohibition in Article XII, Section 16,
notwithstanding the amendments to its charter. Not all corporations, which
are not government owned or controlled, are ipso facto to be considered
private corporations as there exists another distinct class of corporations or
chartered institutions which are otherwise known as “public corporations.”
These corporations are treated by law as agencies or instrumentalities of the
government which are not subject to the tests of ownership or control and
economic viability but to different criteria relating to their public
purposes/interests or constitutional policies and objectives and their
administrative relationship to the government or any of its Departments or
Offices

8. FVR SKILLS AND SERVICES EXPONENTS, INC. (SKILLEX), et.al,

vs. JOVERT SEV A, et.al. G.R. No. 200857, October 22, 2014

A corporation is a juridical entity with legal personality separate and distinct

from those acting for and in its behalf and, in general, from the people
comprising it. The general rule is that, obligations incurred by the
corporation, acting through its directors, officers and employees, are its sole
liabilities. A director or officer shall only be personally liable for the
obligations of the corporation, if the following conditions concur: (1) the
complainant alleged in the complaint that the director or officer assented to
patently unlawful acts of the corporation, or that the officer was guilty of
gross negligence or bad faith; and (2) the complainant clearly and
convincingly proved such unlawful acts, negligence or bad faith. In the
present case, the respondents failed to show the existence of the first
requisite. They did not specifically allege in their complaint that Rana and
Burgos willfully and knowingly assented to the petitioner's patently unlawful
act of forcing the respondents to sign the dubiousemployment contracts in
exchange for their salaries. The respondents also failed to prove that Rana
and Burgos had been guilty of gross negligence or bad faith in directing the
affairs of the corporation.

9. Arco Pulp and Paper Co., Inc. and Candida A. Santos vs. Dan T. Lim,
Doing Business Under The Name and Style Of Quality Papers & Plastic
Products Enterprises, G.R. No. 206806, June 25, 2014

The corporate existence may be disregardedwhere the entity is formed or

used for non-legitimate purposes, such as to evade a justand due obligation,
 or to justify a wrong, toshield or perpetrate fraud or to carry outsimilar or
inequitable considerations, otherunjustifiable aims or intentions, in
whichcase, the fiction will be disregarded and theindividuals composing it
and the twocorporations will be treated as identical. Inthe case at bar, when
petitioner Arco Pulpand Paper’s obligation to Lim became dueand
demandable, she not only issued anunfunded check but also contracted with
athird party in an effort to shift petitionerArco Pulp and Paper’s liability.
Sheunjustifiably refused to honor petitionercorporation’s obligations to
respondent.These acts clearly amount to bad faith. In thisinstance, the
corporate veil may be pierced,and petitioner Santos may be held
solidarilyliable with petitioner Arco Pulp and Paper.

10.HaciendaCataywa/Manuel Villanueva, et al. vs. Rosario Lorezo, G.R.

No. 179640, March 18, 2015

The Court agrees with the petitioners thatthere is no need to pierce the
corporate veil.Respondent failed to substantiate her claimthat Mancy and
Sons Enterprises, Inc. andManuel and Jose Marie Villanueva are oneand the
same. She based her claim on the SSSform wherein Manuel Villanueva
appearedas employer. However, this does not prove,in any way, that the
corporation is used todefeat public convenience, justify wrong,protect fraud,
or defend crime, or when it ismade as a shield to confuse the
legitimateissues, warranting that its separate anddistinct personality be set
aside.

11.Essencia Q. Manarpiis vs. Texan Philippines, Inc., Richard Tan And

Catherine P. Rialubin-Tan, G.R. No. 197011, January 28, 2015

It is basic that a corporation being a juridical entity, may act only through its
directors, officers and employees. Obligations incurred by them, acting as
such corporate agents arenot theirs but the direct accountabilities ofthe
corporation they represent. However, incertain exceptional situations,
solidaryliability may be incurred by corporateofficers. In labor cases for
instance, this Courthas held corporate directors and officerssolidarily liable
with the corporation for thetermination of employment of employeesdone
with malice or bad faith.

12.Forest Hills Golf and Country Club, Inc. vs. Gardpro, Inc., G.R. No.
164686, October 22, 2014

The relevant provisions of the articles of incorporation and the by‑laws of

Forest Hillsgoverned the relations of the parties as far as theissues between
them were concerned. Indeed,the articles of incorporation of Forest
Hillsdefined its charter as a corporation and thecontractual relationships
between Forest Hillsand the State, between its stockholders and theState,
and between Forest Hills and itsstockholder; hence, there could be
nogainsaying that the contents of the articles ofincorporation were binding
not only on ForestHills but also on its shareholders. On the other hand, the
by‑laws were the self-imposed rulesresulting from the agreement between
ForestHills and its members to conduct the corporatebusiness in a particular
way. In that sense, the by-laws were the private “statutes” by whichForest
Hills was regulated, and would function. The charter and the by-laws were
thus thefundamental documents governing the conductof Forest Hills’
corporate affairs; theyestablished norms of procedure for exercisingrights,
and reflected the purposes and intentionsof the incorporators. Until repealed,
the by‑lawswere a continuing rule for the government ofForest Hills and its
officers, the proper function being to regulate the transaction of theincidental
business of Forest Hills. The by-lawsconstituted a binding contract as
between ForestHills and its members, and as between themembers
themselves. Every stockholder governed by the by-laws was entitled to
 access them. The by-laws were self-imposed privatelaws binding on all
members, directors andofficers of Forest Hills. The prevailing rule isthat the
provisions of the articles ofincorporation and the by-laws must be
strictlycomplied with and applied to the letter.

13. Jose A. Bernas, et al. vs. Jovencio F. Cinco, et al., G.R. Nos. 16335657,
July 10, 2015

A distinction should be made betweencorporate acts or contracts which are

illegal andthose which are merely ultra vires. The formercontemplates the
doing of an act which arecontrary to law, morals or public policy orpublic
duty, and are, like similar transactionsbetween individuals, void: They
cannot serve asbasis of a court action nor acquire validity byperformance,
ratification or estoppel. Mere ultravires acts, on the other hand, or those
which arenot illegal or void ab initio, but are not merelywithin the scope of
the articles of incorporation,are merely voidable and may become
bindingand enforceable when ratified by thestockholders. The 17 December
1997 Meetingbelongs to the category of the latter, that is, it isvoid ab initio
and cannot be validated.

14. Richard K. Tom, vs. Samuel N. Rodriguez, G.R. No. 215764, July 6,
2015

Every director must own at least one (1) share ofthe capital stock of the
corporation of which heis a director, which share shall stand in his nameon
the books of the corporation. Any directorwho ceases to be the owner of at
least one (1)share of the capital stock of the corporation ofwhich he is a
director shall thereby cease to be adirector. Trustees of non‑stock
corporationsmust be members thereof. A majority of thedirectors or trustees
of all corporationsorganized under this Code must be residents ofthe
Philippines. Accordingly, it cannot bedoubted that the management and
control ofGDITI, being a stock corporation, are vested inits duly elected
Board of Directors, the bodythat: (1) exercises all powers provided for
underthe Corporation Code; (2) conducts all businessof the corporation; and
(3) controls and holds allproperty of the corporation. Its members havebeen
characterized as trustees or directorsclothed with a fiduciary character.

15. Lopez Realty, Inc. and Asuncion Lopez-Gonzales vs. Spouses

Reynaldo Tanjangco and Maria Luisa Arguelles‑Tanjangco, G.R. No.
154291, November 12, 2014

The petitioner assails the validity of sale ofshares of stocks to the

respondents claimingthat there was no compliance with therequirement of
prior notice to the Board ofDirectors when the Board Resolutionauthorizing
the sale to the respondentspouses were promulgated. The SupremeCourt
ruled that the general rule is that acorporation, through its board of
directors,should act in the manner and within theformalities,if any,
prescribed by its charteror by the general law. However, the actionstaken in
such a meeting by the directors ortrustees may be ratified expressly
orimpliedly.

16. Al O. Eyana vs. Philippine Transmarine Carriers, Inc., Alain A.

Garillos, Celebrity Cruises, Inc. (U.S.A.), G.R. No. 193468, January 28,
2015

As a general rule, the officers and membersof a corporation are not

personally liable foracts done in the performance of their duties.ʺIn the
absence of malice, bad faith, or aspecific provision of law making acorporate
officer liable, such corporateofficer cannot be made personally liable for
 corporate liabilities." In the instant petition,there was neither an allegation
nor a proofoffered to establish that Garillos, as PTCI'screwing manager and
officialrepresentative, had acted beyond the scopeof his authority or with
malice. The generalrule thus applies and there is no ground tohold him
personally liable for the monetaryawards granted to the petitioner.

17.Aderito Z. Yujuico and Bonifacio C. Sumbilla vs. Cezar T. Quiambao

and Eric C. Pilapil, G.R. No. 180416, June 02, 2014

A criminal action based on the violation of astockholderʹs right to examine

or inspect thecorporate records and the stock and transferhook of a
corporation under the second andfourth paragraphs of Section 74 of
theCorporation Code can only he maintainedagainst corporate officers or
any other personsacting on behalf of such corporation. Thecomplaint and the
evidence Quiambao andSumbilla submitted during preliminaryinvestigation
do not establish that Quiambaoand Pilapil were acting on behalf of
STRADEC.Violations of Section 74 contemplates a situationwherein a
corporation, acting thru one of itsofficers or agents, denies the right of any of
itsstockholders to inspect the records, minutes andthe stock and transfer
book of such corporation.Thus, the dismissal is valid.

18. Securities and Exchange Commission, vs. Subic Bay Golf and Country
Club, Inc. and Universal International Group Development
Corporation, G.R. No. 179047, March 11, 2015

Villareal and Filart alleged in their letter-complaint that the world‑class golf
coursethat was promised to them when theypurchased shares did not
materialize. Thisis an intra‑corporate matter that is underthe designated
Regional Trial Courtʹs jurisdiction. Villareal and Filart's right to arefund of
the value of their shares wasbased on SBGCCI and UIGDCʹs allegedfailure
to abide by their representations intheir prospectus. Specifically, Villareal
andFilart alleged in their letter‑complaint thatthe world‑class golf course that
waspromised to them when they purchasedshares did not materialize. This is
an intra‑corporate matter that is under thedesignated Regional Trial
Court'sjurisdiction. It involves the determination of a shareholder's rights
under theCorporation Code or other intra‑corporaterules when the
corporation or associationfails to fulfill its obligations.

However, the Securities and Exchange Commission's regulatory power does

notinclude the authority to order the refund ofthe purchase price of
Villarealʹs and Filart'sshares in the golf club. The issue of refundis intra-
corporate or civil in nature. Similarto issues such as the existence or
inexistenceof appraisal rights, pre-emptive rights, andthe right to inspect
books and corporaterecords, the issue of refund is an intra‑corporate dispute
that requires the court todetermine and adjudicate the parties'ʹ rightsbased on
law or contract. Injuries, rights,and obligations involved in
intra‑corporatedisputes are specific to the parties involved.They do not affect
the Securities andExchange Commission or the publicdirectly.

19. Dee Ping Wee vs. Lee Hiong Wee, 629 SCRA 145(2010)

Interim Rules of Procedure for Intra-Corporate Controversies (A.M. No. 01-

20‑04-SC)‑ Civil cases involving the inspection ofcorporate books are
governed by the rules ofprocedure set forth in A.M. No. 01-
2‑04‑SC,otherwise known as the Interim Rules ofProcedure for
Intra‑Corporate Controversiesunder Republic Act No. 8799 (Interim
Rules).Section 4, Rule 1 of the Interim Rules definesthe nature of the
judgments renderedthereunder as follows: “SEC. 4. Executorynature of
decisions and orders.—Alldecisions and orders issued under theseRules shall
 immediately be executory, exceptthe awards for moral damages,
exemplarydamages and attorney’s fees, if any. Noappeal or petition taken
therefrom shall staythe enforcement or implementation of thedecision or
order, unless restrained by an appellate court. Interlocutory orders shall
notbe subject to appeal.” Verily, the first part ofSection 4, Rule 1 of the
Interim Rules iscategorical. Save for the exceptions clearlystated therein, the
provision enunciates that adecision and order issued under the InterimRules
shall be enforceable immediately afterthe rendition thereof. In order to assail
thedecision or order, however, the second partof the provision speaks of an
appeal orpetition that needs to be filed by the partyconcerned. In this appeal
or petition, arestraining order must be sought from theappellate court to
enjoin the enforcement orimplementation of the decision or order.Unless a
restraining order is so issued, thedecision or order rendered under the
InterimRules shall remain to be immediatelyexecutory [Dee Ping Wee vs.
Lee Hiong Wee,629 SCRA 145(2010)].

20. Alabang Development Corporation vs. Alabang Hills Village

Association and Rafael Tinio, G.R. No. 187456, June 02, 2014

ADC filed its complaint not only after itscorporate existence was terminated
but alsobeyond the three‑year period allowed bySection 122 of the
Corporation Code. Toallow ADC to initiate the subject complaintand pursue
it until final judgment, on theground that such complaint was filed for
thesole purpose of liquidating its assets, wouldbe to circumvent the
provisions of Section122 of the Corporation Code. Thus, it is clearthat at the
time of the filing of the subjectcomplaint petitioner lacks the capacity to
sueas a corporation.

21.Saudi Arabian Airlines (Saudia) and Brenda J. Betia vs. Ma. Jopette
M. Rebesencio, Montassah B. Sacar-Adiong, Rouen Ruth A. Cristobal
and Loraine S. Schneider-Cruz, G.R. No. 198587, January 14, 2015

By its own admission, Saudia, while a foreigncorporation, has a Philippine

office. Section3(d) of Republic Act No. 7042, otherwiseknown as the
Foreign Investments Act of 1991,provides the following: The phrase
"doingbusiness" shall include . . . opening offices,whether called "liaisonʺ
offices or branches; .. . and any other act or acts that imply acontinuity of
commercial dealings orarrangements and contemplate to that extentthe
performance of acts or works, or theexercise of some of the functions
normallyincident to, and in progressive prosecution ofcommercial gain or of
the purpose and objectof the business organization. (Emphasissupplied) A
plain application of Section 3(d) ofthe Foreign Investments Act leads to no
otherconclusion than that Saudia is a foreigncorporation doing business in
the Philippines.As such, Saudia may be sued in the Philippinesand is subject
to the jurisdiction of Philippinetribunals.A corporation has a personality
separate anddistinct from those of the persons composingit. Thus, as a rule,
corporate directors andofficers are not liable for the illegal terminationof a
corporation's employees. It is only whenthey acted in bad faith or with
malice that theybecome solidarity liable with the corporation.

22.Bank of Commerce vs. Radio Philippines Network, Inc., et al., G.R.

No. 195615, April 21, 2014

Indubitably, it is clear that no merger tookplace between Bancommerce and

TRB asthe requirements and procedures for amerger were absent. A merger
does notbecome effective upon the mere agreementof the constituent
corporations. All therequirements specified in the law must becomplied with
in order for merger to takeeffect. Here, Bancommerce and TRBremained
separate corporations withdistinct corporate personalities. Whathappened is
that TRB sold andBancommerce purchased identifiedrecorded assets of TRB
 in consideration ofBancommerce’s assumption of identifiedrecorded
liabilities of TRB includingbooked contingent accounts. There is nolaw that
prohibits this kind of transactionespecially when it is done openly and
withappropriate government approval.

23. Commissioner of Internal Revenue, vs. La Tondena Distillers, Inc.

(Ltdi (Now Ginebra San Miguel), G.R. No. 175188, July 15, 2015

In a merger, the real properties are notdeemed "soldʺ to the surviving

corporationand the latter could not be considered as"purchaser" of realty
since the realproperties subject of the merger weremerely absorbed by the
survivingcorporation by operation of law and theseproperties are deemed
automaticallytransferred to and vested in the survivingcorporation without
further act or deed.Therefore, the transfer of real properties tothe surviving
corporation in pursuance of amerger is not subject to documentary stamptax.
As stated at the outset, documentarystamp tax is imposed only on
allconveyances, deeds, instruments or writingwhere realty sold shall be
conveyed to a purchaser or purchasers. The transfer ofSPPC’s real property
to respondent wasneither a sale nor was it a conveyance ofreal property for a
consideration contractedto be paid as contemplated under Section196 of the
Tax Code. Hence, Section 196 ofthe Tax Code is inapplicable andrespondent
is not liable for documentarystamp tax.