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De Liano vs. CA G.R. No. 142316 FACTS: SMC, De Liano and Abrille appealed to the Court of Appeals.

In due time, their counsel, Atty. Edgar B. Afable, filed an Appellants' Brief which failed to comply with Section 13, Rule 44 of the Rules of Court. The appellee (herein private respondent) was quick to notice these deficiencies, and accordingly filed a "Motion to Dismiss Appeal" dated March 8, 1999. Required to comment, the appellants averred that their brief had substantially complied with the contents as set forth in the rules. They proffered the excuse that the omissions were only the result of oversight or inadvertence and as such could be considered "harmless" errors. They prayed for liberality in the application of technical rules, adding that they have a meritorious defense. The appellate court issued a resolution dismissing the appeal and denied their motion for reconsideration. ISSUE: Whether or not the CA erred in dismissing SMCs appeal on the basis of pure technicalities RULING: No. The premise that underlies all appeals is that they are merely rights which arise from statute; therefore, they must be exercised in the manner prescribed by law. It is to this end that rules governing pleadings and practice before appellate courts were imposed. These rules were designed to assist the appellate court in the accomplishment of its tasks, and overall, to enhance the orderly administration of justice. Generally, the negligence of counsel binds his client. Actually, Atty. Afable is also an employee of petitioner San Miguel Corporation. Yet even this detail will not operate in petitioner's favor. A corporation, it should be recalled, is an artificial being whose juridical personality is only a fiction created by law. It can only exercise its powers and transact its business through the instrumentalities of its board of directors, and through its officers and agents, when authorized by resolution or its by-laws. That Atty. Afable was clothed with sufficient authority to bind petitioner SMC is undisputable. Petitioner SMC's board resolution of May 5, 1999 attests to that. Coupled with the provision of law that a lawyer has authority to bind his client in taking appeals and in all matters of ordinary judicial procedure, a fortiori then, petitioner SMC must be held bound by the actuations of its counsel of record, Atty. Afable.

Smith, Bell & Co. v. Natividad G.R. No. 15574 FACTS: Petitioner is the owner of a motor vessel known as the Bato built for it in the Philippine Islands in 1916. The Bato was brought to Cebu in the present year for the purpose of transporting plaintiff's merchandise between ports in the Islands. Application was made at Cebu, the home port of the vessel, to the Collector of Customs for a certificate of Philippine registry. The Collector refused to issue the certificate, giving as his reason that all the stockholders of Smith, Bell & Co., Ltd., were not citizens either of the United States or of the Philippine Islands. A writ of mandamus is prayed for by petitioner against the Collector Philippine Islands, to compel him to issue a certificate of Philippine registry to the petitioner for its motor vessel Bato. ISSUE: Whether or not the Government of the Philippine Islands can deny the registry of vessel in its coastwise trade to corporations having alien stockholders RULING: Yes. While Smith, Bell & Co. Ltd., a corporation having alien stockholders, is entitled to the protection afforded by the due-process of law and equal protection of the laws clause of the Philippine Bill of Rights, nevertheless, Act No. 2761 of the Philippine Legislature, in denying to corporations such as Smith, Bell &. Co. Ltd., the right to register vessels in the Philippines coastwise trade, does not belong to that vicious species of class legislation which must always be condemned, but does fall within authorized exceptions, notably, within the purview of the police power, and so does not offend against the constitutional provision.

San Miguel Corp. v. Kahn G.R. No. 85339 FACTS: An "Agreement" was executed between Andres Soriano III, as "Buyer," and fourteen corporations, as "Sellers," for the purchase by Soriano, "for himself and as agent of several persons of the shares of stock. According to Soriano and the other private respondents, the buyer of the shares was a foreign company, Neptunia Corporation Limited of Hongkong, a wholly owned subsidiary of San Miguel International which is, in turn, a wholly owned subsidiary of SMC; and it was Neptunia which had made the down payment. The shares were sequestered by the PCGG. San Miguel promptly suspended payment of the other installments of the price to the fourteen seller corporations. The latter as promptly sued for rescission and damages. The PCGG directed SMC to issue qualifying shares in the corporation to seven individuals, including Eduardo de los Angeles, to be held in trust by said persons. The SMC Board passed a resolution to assume the loans incurred by Neptunia for the down payment. The Board opined that there was nothing illegal in this assumption since Neptunia was an indirectly wholly owned subsidiary of SMC. Eduardo de los Angeles impugned the resolution denying that it was ever adopted. ISSUE: Whether or not de los Angeles has legal capacity for a derivative suit RULING: Yes. The requisites for a derivative suit are as follows: a) The party bringing suit should be a shareholder as of the time of the act or transaction complained of, the number of his shares not being material; b) He has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of directors for the appropriate relief but the latter has failed or refused to heed his plea; and c) The cause of action actually devolves on the corporation, the wrongdoing or harm having been, or being caused to the corporation and not to the particular stockholder bringing the suit. The bona fide ownership by a stockholder of stock in his own right suffices to invest him with standing to bring a derivative action for the benefit of the corporation. The number of his shares is immaterial since he is not suing in his own behalf, or for the protection or vindication of his own particular right, or the redress of a wrong committed against him, individually, but in behalf and for the benefit of the corporation.