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    Hall Vs Piccio

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    Lindsay Mills
    1) The document discusses a court case regarding a company called Far Eastern Lumber and Commercial Co. that was attempting to incorporate but had not yet received its certificate of incorporation from the proper authorities. 2) The court ruled it had jurisdiction to dissolve the company because, without the certificate of incorporation, Far Eastern could not claim to be a corporation "in good faith" as required under Section 20. 3) Additionally, Section 20 did not apply because this was a case between stockholders seeking dissolution of the company, not a case with the company as a party.

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    Hall Vs Piccio

    Uploaded by

    Lindsay Mills
    3K views1 page
    1) The document discusses a court case regarding a company called Far Eastern Lumber and Commercial Co. that was attempting to incorporate but had not yet received its certificate of incorporation from the proper authorities. 2) The court ruled it had jurisdiction to dissolve the company because, without the certificate of incorporation, Far Eastern could not claim to be a corporation "in good faith" as required under Section 20. 3) Additionally, Section 20 did not apply because this was a case between stockholders seeking dissolution of the company, not a case with the company as a party.

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    Case Digest

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    Hall vs Piccio

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    1) The document discusses a court case regarding a company called Far Eastern Lumber and Commercial Co. that was attempting to incorporate but had not yet received its certificate of incorporation from the proper authorities. 2) The court ruled it had jurisdiction to dissolve the company because, without the certificate of incorporation, Far Eastern could not claim to be a corporation "in good faith" as required under Section 20. 3) Additionally, Section 20 did not apply because this was a case between stockholders seeking dissolution of the company, not a case with the company as a party.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    3K views1 page

    Hall Vs Piccio

    Uploaded by

    Lindsay Mills
    1) The document discusses a court case regarding a company called Far Eastern Lumber and Commercial Co. that was attempting to incorporate but had not yet received its certificate of incorporation from the proper authorities. 2) The court ruled it had jurisdiction to dissolve the company because, without the certificate of incorporation, Far Eastern could not claim to be a corporation "in good faith" as required under Section 20. 3) Additionally, Section 20 did not apply because this was a case between stockholders seeking dissolution of the company, not a case with the company as a party.

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    © All Rights Reserved
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    of 1

    SECTION 20

    Sec. 20. De facto corporations. The due incorporation of any corporation claiming in good faith to be a
    corporation under this Code, and its right to exercise corporate powers, shall not be inquired into collaterally in
    any private suit to which such corporation may be a party. Such inquiry may be made by the Solicitor General in a
    quo warranto proceeding.
    HALL v PICCIO
    86 Phil 603, GR No L-2598, June 29, 1950
    Facts: On May 28, 1947, petitioners C. Arnold Hall and Bradley P. Hall, and respondents Fred Brown, Emma
    Brown, Hipolita D. Chapman and Ceferino S. Abella, signed and acknowledged in Leyte, the article of
    incorporation of the Far Eastern Lumber and Commercial Co., Inc., organized to engage in a general lumber
    business to carry on as general contractors, operators and managers, . Attached to the article was an affidavit of
    the treasurer stating that 23,428 shares of stock had been subscribed and fully paid with certain properties
    transferred to the corporation. The said articles of incorporation was filed in the office of SEC. Pending action of
    the articles of incorporation by SEC, the respondents filed a civil case against the petitioners alleging that Far
    Eastern Lumber and Commercial Co was an unregistered partnership and that they wished it dissolved because of
    bitter dissension among the members, mismanagement and fraud by the managers and heavy financial losses.
    The court (thru Judge Piccio) ordered the dissolution of the company. Halls offered to file a counter bond for the
    discharge of the receiver but the judge refused to accept the offer and discharge the receiver.
    Issue: W/N the court had jurisdiction to decree the dissolution of the company, because it being a de facto
    corporation, dissolution thereof may only be ordered in a quo warranto proceeding instituted in accordance with
    section 19 of the Corporation Law.
    Held: Yes, the court has jurisdiction to take cognizance of the case!
    Section 20 of the Corporation Law does not apply in this situation
    First, not having obtained the certificate of incorporation, the Far Eastern Lumber and Commercial Co. even its
    stockholders may not probably claim "in good faith" to be a corporation. (Under our statue it is to be noted
    (Corporation Law, sec. 11) that it is the issuance of a certificate of incorporation by the Director of the Bureau of
    Commerce and Industry which calls a corporation into being. The immunity if collateral attack is granted to
    corporations "claiming in good faith to be a corporation under this act." Such a claim is compatible with the
    existence of errors and irregularities; but not with a total or substantial disregard of the law. Unless there has
    been an evident attempt to comply with the law the claim to be a corporation "under this act" could not be made
    "in good faith." )
    Second, this is not a suit in which the corporation is a party. This is a litigation between stockholders of the
    alleged corporation, for the purpose of obtaining its dissolution. Even the existence of a de jure corporation may
    be terminated in a private suit for its dissolution between stockholders, without the intervention of the state.

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