UNIVERSIDAD DE MANILA

College of Law

Corporation Law Syllabus

2nd Semester (2016-2017)

Atty. Maria Katrina L. Infante

FOR: DECEMBER 17, 2016 CLASS

I. The Corporation Code

A. Introduction

1. Kinds of Business Organization

2. Historical Background
- Spain Code of Commerce
Sociedad Anonimas
Cuentas en Participacion

- Corporation Law
- The Corporation Code of the Philippines (BP Blg. 68)

Castillo v Balinghasay, 440 SCRA 442

B. Corporation
1. Definition and Attributes (Sec. 2; Articles 44(3), 45, 46 and 1775, Civil Code)
Construction & Development Corp. v. Cuenca, 466 SCRA 714

Can a corporation claim for moral damages?

LBC Express, Inc. v. CA, 236 SCRA 602 (1994)
Filipinas Broadcasting Network v. Ago Medical and Educational Center, G.R.
No. 141954 (2005) Bedrock Rule

Corporation is an entity vested with limited powers.

Pascual and Santos, Inc. v. Members of Tramo Neighborhood, et al., 422
SCRA 438

2. Advantages and Disadvantages of the Corporate Form of Business

3. Nature of Corporations
Lozano v. Delos Santos, G.R. No. 125221
International Express Travel v. CA, G.R. No. 119002

a. Power to Create a Corporation

Feliciano v. Commission on Audit, 419 SCRA 363
NDC v. Philippine Veterans Bank, 192 SCRA 257

C. Classes of Corporations
1. Private v. Public Corporation
Boy Scout of the Phil. v. COA, June 7, 2011

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 Liban v. Gordon, July 15, 2009
Baluyot v. Holganza, 325 S 526

2. Stock vs Non-Stock Corporations

Collector of Internal Revenue v. Club Filipino, Inc. De Cebu, 5 SCRA 312
(1968)
3. Open vs. Close Corporations
San Juan Structural and Steel Fabricators v. CA, GR No. 129459
4. Domestic vs. Foreign Corporations
Lorenzo Shipping v. Chubb and Sons, Inc., 431 SCRA 669
5. Religious Corporations
Long v. Basa, GR No. 134963-64
Iglesia v. Lazaro, GR No. 184088 (2010)
Corporation Sole
Iglesia vs. Juane, GR No. 172447 (2009)
6. Quasi-Public Corporation
7. Quasi Corporations
8. De Jure v. De Facto Corporations
Sawadjaan v. CA, 459 SCRA 516

C. Nationality of Corporations
Tatad v. Garcia, 243 SCRA 436
Roman Catholic Apostolic Administrator of Davao v. Register or
Deeds, 102 Phil 596

1. Place of Incorporation Test under whose laws incorporated (Sec. 123)

Exceptions:
a) Exploitation of natural resources (Sec 142; Sec 2, Art XII, 1987 Constitution
Narra Nickel Mining, et al v. Redmont Consolidated Mines Corp, GR
No. 195580 (2014)
JG Summit Holdings v. CA, 450 SCRA 169
b) Pubic Utilities (Sec. 11, Art XII Constitution)
People v. Quasha, 93 Phil 333
c) Mass Media (Sec. 11(1), Art XII Constitution)
d) Advertising business (Sec. 11(2), Art XII Constitution)
e) War-time Test
Filipinas Compaia de Seguros v. Christern, Huenefeld and Cp., Inc.,
GR No. L-2294 (1951)
f) Investment test as to Philippine Nationals (Sec. 3 (a) & (b) RA 7042,
Foreign Investments Act of 1992

2) Control Test
3) Grandfather Rule
Gamboa v. Finance Secretary , GR No. 176579 (2011)
Narra Nickel Mining, et al v. Redmont Consolidated Mines Corp

D. Corporate Juridical Personality

1. Corporate Charter
2. Doctrine of Separate Juridical Personality
- General Rule:
Sulo ng Bayan vs. Araneta (GR L-31061, 17 August 1976)
Luxuria Homes vs. Court of Appeals (GR 125986, 28 January 1999)

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 Concept Builders Inc. vs. National Labor Relations Commission (GR
108734, 29 May 1996)
Villa Rey Transit vs. Ferrer (GR L-23893, 29 October 1968)

a. Liability for Torts and Crimes

PNB v. Court of Appeals, 83 SCRA 237

3. Doctrine of Piercing the Corporate Veil

a. Grounds for Application of Doctrine
- General Rule:
Concept Builders Inc. vs. National Labor Relations Commission
Sulo ng Bayan v. Araneta, Inc., 72 SCRA 347
Prisma Construction and Development Corporation and Rogelio S. Pantaleon
vs. Arthur F. Menchavez, G.R. No. 160545, March 9, 2010
DBP v. NLRC (186 SCRA 841)
PNB vs Andrada Electric (381 scra 244)
Good Earth v. CA (194 SCRA 544)
Malayang Samahan ng mga Manggagawa sa M. Greenfield (MSMGUWP) vs.
Ramos (GR 113907, 20 April 2001)
Powton Conglomerate Inc. vs. Agcolicol (GR 150978, 3 April 2003)
Padilla vs Court of Appeals (362 scra 620)
CKH Industrial vs Court of Appeals (272 scra 333)
Tan Boon Bee vs Jarencio (163 scra 205)

E. Incorporation and Organization

1. Stages in the Life of a Corporation
a) Creation
b) Reorganization or quasi-reorganization
c) Dissolution and Winding-up

2. Creation:
Stages of Creation
i. Promotion the act of getting a corporation organized including the
procurement of subscription to its capital stock

a. Liability of Promoter
Frazier v. Ash
b. Liability of Corporation for Promoters Contracts
McArthur v. Times Printing
Builders Duntile v. Dunn

ii. Incorporation includes the drafting of the Articles of Incorporation,

preparation of supporting documents, filing with the SEC, and the subsequent
issuance of Certificate of Incorporation.

a. Process of Incorporation
De facto Corporations
Hall v. Piccio (G.R. No. L-2598; June 29, 1950)

iii. Organization and Commencement of Business subsequent overt acts after

the incorporation of the corporation, adoption of by-laws, election of officers
and transacting business.

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 3. Corporation by Estoppel
International Express Travel and Tour Services, Inc. v. CA, GR No. 119002
(2000)
Georg Grotjahn v. Insani, 235 SCRA 216 (1994)
Chiang Kai Shek v. CA, 172 SCRA 389 (1989)

4. Number and Qualifications of Incorporators Sec. 5, 10 of the Corporation Code

5. Corporate Name Sec. 18. Limitations on Use of Corporate Name
Red Line Transport v. Rural Transit, 60 Phil. 549
Republic Planters Bank v. CA, 216 SCRA 738 (1992)
P.C. Javier & Sons, Inc. v. CA, 462 SCRA 36
4. Corporate Term Sec. 11
- amendment (Sec. 37)
5. Minimum Capital Stock and Subscription Requirements Sec. 12, 13
6. Articles of Incorporation
a. Nature and Function of Articles
b. Contents Sec. 14; as to the format - Sec. 15
i. Purpose Clause Sec. 14 (2) and 42
Uy Siuliong v. Director of Commerce and Industry , 40 Phil. 541
(1919)
Gala v. Ellice Agro-Industrial Corp., 418 SCRA 431 (2003)
c. Amendment Sec. 16
- Non-amenable provisions
- Effects of change in the corporate name
Republic Planters Bank v. CA, 216 SCRA 738 (1992)
d. Grounds for Disapproval and Rejection of Amendments Sec. 17
7. Registration and Issuance of Certificate of Incorporation
8. Adoption of By-Laws Sec. 46
a. Nature and Functions of By-Laws
Grace Christian High School v. Court of Appeals, 281 SCRA 133 (1997)
Government of P.I. v. El Hogar Flipino, 50 Phil. 399
b. Requisites of Valid By-Laws Sec. 47
c. Binding Effects
d. Amendment or Revision Sec. 48

NOTES:
- Read all the provisions, annotations, and cases. Short quiz will be given after the
recitation.
- Subsequent topics and cases to follow.