Rebecca Boyer - Roxas and Guillermo Roxas vs. Hon.

Renato Tayag vs Benguet Consolidated, Inc.

CA and Heirs of Eugenia Roxas, Inc.
In March 1960, Idonah Perkins died in New York. She left GR. No. 100866, July 14, 1992
behind properties here and abroad. One property she left
behind were two stock certificates covering 33,002 shares of Facts:
stocks of the Benguet Consolidated, Inc (BCI). Said stock The questioned properties belonged to Eugenia V.
certificates were in the possession of the Country Trust Roxas. After her death, the heirs of Eugenia V. Roxas, among
Company of New York (CTC-NY). CTC-NY was the domiciliary them the petitioners herein, decided to form a corporation —
administrator of the estate of Perkins (obviously in the USA). Heirs of Eugenia V. Roxas, Incorporated (private respondent
Meanwhile, in 1963, Renato Tayag was appointed as the herein) with the inherited properties as capital of the
ancillary administrator (of the properties of Perkins she left corporation. The corporation was incorporated on December
behind in the Philippines). 4, 1962 with the primary purpose of engaging in agriculture
to develop the inherited properties. The Articles of
A dispute arose between CTC-NY and Tayag as to who Incorporation of the respondent corporation were amended
between them is entitled to possess the stock certificates. A in 1971 to allow it to engage in the resort business.
case ensued and eventually, the trial court ordered CTC-NY Accordingly, the corporation put up a resort known as Hidden
to turn over the stock certificates to Tayag. CTC-NY refused. Valley Springs Resort where the questioned properties are
Tayag then filed with the court a petition to have said stock located.
certificates be declared lost and to compel BCI to issue new In two separate complaints for recovery of
stock certificates in replacement thereof. The trial court possession filed with the Regional Trial Court of Laguna
granted Tayag’s petition. against petitioners, respondent corporation prayed for the
ejectment of the petitioners from buildings inside property
BCI assailed said order as it averred that it cannot possibly
allegedly owned by the respondent. In the case of petitioner
issue new stock certificates because the two stock certificates
Rebecca Boyer-Roxas, the respondent corporation alleged
declared lost are not actually lost; that the trial court as well
that Rebecca is in possession of two (2) houses, one of which
Tayag acknowledged that the stock certificates exists and
is still under construction, built at the expense of the
that they are with CTC-NY; that according to BCI’s by laws,
respondent corporation; and that her occupancy on the two
it can only issue new stock certificates, in lieu of lost, stolen,
(2) houses was only upon the tolerance of the respondent
or destroyed certificates of stocks, only after court of law has
corporation. In the case of petitioner Guillermo Roxas, the
issued a final and executory order as to who really owns a
respondent corporation alleged that Guillermo occupies a
certificate of stock.
house which was built at the expense of the former during
ISSUE: Whether or not the arguments of Benguet the time when Guillermo's father, Eriberto Roxas, was still
Consolidated, Inc. are correct. living and was the general manager of the respondent
corporation; that the house was originally intended as a
HELD: No. Benguet Consolidated is a corporation who owes recreation hall but was converted for the residential use of
its existence to Philippine laws. It has been given rights and Guillermo; and that Guillermo's possession over the house
privileges under the law. Corollary, it also has obligations and lot was only upon the tolerance of the respondent
under the law and one of those is to follow valid legal court corporation.
orders. It is not immune from judicial control because it is
domiciled here in the Philippines. BCI is a Philippine The RTC ruled in favor of the respondent
corporation owing full allegiance and subject to the corporation. The CA also affirmed the decision.
unrestricted jurisdiction of local courts. Its shares of stock
cannot therefore be considered in any wise as immune from Issue/s: WoN Respondent Court is
lawful court orders. Further, to allow BCI’s opposition is to justified when it refused to pierce the veil of corporate fiction
render the court order against CTC-NY a mere scrap of paper. over private respondent and maintain the petitioners in their
It will leave Tayag without any remedy simply because CTC- possession and/or occupancy of the subject premises
NY, a foreign entity refuses to comply with a valid court considering that petitioners are owners of aliquot part of the
order. The final recourse then is for our local courts to create properties of private respondent.
a legal fiction such that the stock certificates in issue be WoN respondent Court misapplied the law when it
declared lost even though in reality they exist in the hands ordered petitioner Rebecca Boyer-Roxas to remove the
of CTC-NY. This is valid. As held time and again, fictions unfinished building, when the trial court opined that she
which the law may rely upon in the pursuit of legitimate ends spent her own funds for the construction thereof.
have played an important part in its development.
Further still, the argument invoked by BCI that it can only Held: YES
issue new stock certificates in accordance with its bylaws is The respondent is a bona fide corporation. It has a
misplaced. It is worth noting that CTC-NY did not appeal the juridical personality of its own separate from the members
order of the court – it simply refused to turn over the stock composing it. The petitioners' stay within the questioned
certificates hence ownership can be said to have been settled properties was merely by tolerance of the respondent
in favor of estate of Perkins here. Also, assuming that there corporation in deference to the wishes of Eufrocino Roxas,
really is a conflict between BCI’s bylaws and the court order, who during his lifetime, controlled and managed the
what should prevail is the lawful court order. It would be corporation. Eufrocino Roxas' actions could not have bound
highly irregular if court orders would yield to the bylaws of a the corporation forever. The petitioners have not cited any
corporation. Again, a corporation is not immune from judicial provision of the corporation by-laws or any resolution or act
orders. of the Board of Directors which authorized Eufrocino Roxas
to allow them to stay within the company premises forever.
The court ruled that in the absence of any existing contract
between the petitioners and the respondent corporation, the
corporation may elect to eject the petitioners at any time it
wishes for the benefit and interest of the respondent
corporation. The petitioners' suggestion that the veil of the
corporate fiction should be pierced is untenable. The
separate personality of the corporation may be disregarded
only when the corporation is used "as a cloak or cover for
fraud or illegality, or to work injustice, or where necessary to
achieve equity or when necessary for the protection of the
creditors."
The construction of the unfinished building started
when Eriberto Roxas, husband of Rebecca Boyer-Roxas, was
still alive and was the general manager of the respondent
corporation. The couple used their own funds to finance the CHING VS SECRETARY OF JUSTICE
construction of the building. The Board of Directors of the
corporation, however, did not object to the construction. FACTS:
They allowed the construction to continue despite the fact Ø Sept-Oct 1980: PBMI, through Ching, Senior VP of Philippine
that it was within the property of the corporation. Under Blooming Mills, Inc. (PBMI), applied with the Rizal
these circumstances, we agree with the petitioners that the Commercial Banking Corporation (RCBC) for the issuance of
provision of Article 453 (as if both had acted in good faith) of commercial letters of credit to finance its importation of
the Civil Code should have been applied by the lower courts. assorted goods
Ø RCBC approved the application, and irrevocable letters of credit
5. PSE vs. Court of Appeals were issued in favor of Ching.
Puerto Azul Land, Inc. (PALI) is a corporation engaged Ø The goods were purchased and delivered in trust to PBMI.
in the real estate business. PALI was granted permission by Ø Ching signed 13 trust receipts as surety, acknowledging
the Securities and Exchange Commission (SEC) to sell its delivery of the goods
shares to the public in order for PALI to develop its Ø Under the receipts, Ching agreed to hold the goods in trust for
properties. RCBC, with authority to sell but not by way of conditional
PALI then asked the Philippine Stock Exchange (PSE) to sale, pledge or otherwise
list PALI’s stocks/shares to facilitate exchange. The PSE Ø In case such goods were sold, to turn over the proceeds thereof
Board of Governors denied PALI’s application on the ground as soon as received, to apply against the relative acceptances
that there were multiple claims on the assets of PALI. and payment of other indebtedness to respondent bank.
Apparently, the Marcoses, Rebecco Panlilio (trustee of the Ø In case the goods remained unsold within the specified period,
Marcoses), and some other corporations were claiming the goods were to be returned to RCBC without any need of
assets if not ownership over PALI. demand.
PALI then wrote a letter to the SEC asking the latter to Ø goods, manufactured products or proceeds thereof, whether in
review PSE’s decision. The SEC reversed PSE’s decisions and the form of money or bills, receivables, or accounts separate
ordered the latter to cause the listing of PALI shares in the and capable of identification - RCBC’s property
Exchange. Ø When the trust receipts matured, Ching failed to return the
goods to RCBC, or to return their value amounting
ISSUE: Whether or not it is within the power of the SEC to toP6,940,280.66 despite demands.
reverse actions done by the PSE. Ø RCBC filed a criminal complaint for estafa against petitioner in
the Office of the City Prosecutor of Manila.
HELD: Yes. Ø December 8, 1995: no probable cause to charge petitioner with
The SEC has both jurisdiction and authority to look into violating P.D. No. 115, as petitioner’s liability was only civil,
the decision of PSE pursuant to the Revised Securities Act not criminal, having signed the trust receipts as surety
and for the purpose of ensuring fair administration of the Ø RCBC appealed the resolution to the Department of Justice
exchange. PSE, as a corporation itself and as a stock (DOJ) via petition for review
exchange is subject to SEC’s jurisdiction, regulation, and Ø On July 13, 1999: reversed the assailed resolution of the City
control. In order to insure fair dealing of securities and a fair Prosecutor
administration of exchanges in the PSE, the SEC has the Ø execution of said receipts is enough to indict the Ching as the
authority to look into the rulings issued by the PSE. The SEC official responsible for violation of P.D. No. 115
is the entity with the primary say as to whether or not Ø April 22, 2004: CA dismissed the petition for lack of merit and
securities, including shares of stock of a corporation, may be on procedural grounds
traded or not in the stock exchange. Ø Ching filed a petition for certiorari, prohibition and mandamus
HOWEVER, in the case at bar, the Supreme Court with the CA
emphasized that the SEC may only reverse decisions issued
by the PSE if such are tainted with bad faith. In this case, ISSUE: W/N Ching should be held criminally liable.
there was no showing that PSE acted with bad faith when it
denied the application of PALI. Based on the multiple adverse HELD: YES. DENIED for lack of merit
claims against the assets of PALI, PSE deemed that granting There is no dispute that it was the Ching executed the
PALI’s application will only be contrary to the best interest of 13 trust receipts. The law points to him as the official
the general public. It was reasonable for the PSE to exercise responsible for the offense. Since a corporation CANNOT be
its judgment in the manner it deems appropriate for its proceeded against criminally because it CANNOT commit
business identity, as long as no rights are trampled upon, crime in which personal violence or malicious intent is
and public welfare is safeguarded. required, criminal action is limited to the corporate agents
guilty of an act amounting to a crime and never against the
corporation itself
execution by Ching of receipts is enough to indict him
as the official responsible for violation of PD 115
RCBC is estopped to still contend that PD 115 covers
only goods which are ultimately destined for sale and not
goods, like those imported by PBM, for use in manufacture.
Moreover, PD 115 explicitly allows the prosecution of
corporate officers ‘without prejudice to the civil liabilities
arising from the criminal offense’ thus, the civil liability
imposed on respondent in RCBC vs. Court of Appeals case is
clearly separate and distinct from his criminal liability under
PD 115
Ching’s being a Senior Vice-President of the Philippine
Blooming Mills does not exculpate him from any liability
The crime defined in P.D. No. 115 is malum
prohibitum but is classified as estafa under paragraph 1(b),
Article 315 of the Revised Penal Code, or estafa with abuse
of confidence. It may be committed by a corporation or other
juridical entity or by natural persons. However, the penalty
for the crime is imprisonment for the periods provided in said
Article 315.
law specifically makes the officers, employees or other
officers or persons responsible for the offense, without
prejudice to the civil liabilities of such corporation and/or
board of directors, officers, or other officials or employees Good Earth Emporium Inc. vs Court of Appeals
responsible for the offense 194 SCRA 544 [GR No. 82797 February 27, 1991]
rationale: officers or employees are vested with the
authority and responsibility to devise means necessary to
Facts: A lease contract, dated October 16, 1981, was
ensure compliance with the law and, if they fail to do so, are
entered into by and between Roces-Reyes Realty Inc. as
held criminally accountable; thus, they have a responsible
lessor, and Good Earth Emporium Inc. (GEE) as lessee for a
share in the violations of the law
term of three years beginning November 1, 1981 and ending
If the crime is committed by a corporation or other
October 31, 1984 at a monthly rental of Php65,000. The
juridical entity, the directors, officers, employees or other
building which was the subject of the contract of lease is a
officers thereof responsible for the offense shall be charged
five story building located at the corner of Rizal Avenue and
and penalized for the crime, precisely because of the nature
Bustos Street in Sta. Cruz, Manila. From March 1983 up to
of the crime and the penalty therefor. A corporation cannot
the complaint was filed, the lessee had defaulted in the
be arrested and imprisoned; hence, cannot be penalized for
payment of rentals, as a consequence of which, private
a crime punishable by imprisonment. However, a
respondent Roces-Reyes Realty Inc. filed on October 14,
corporation may be charged and prosecuted for a crime if the
1984 an ejectment case against herein petitioners, Good
imposable penalty is fine. Even if the statute prescribes both
Earth Emporium Inc. and Lim Ka Ring. After the latter had
fine and imprisonment as penalty, a corporation may be
tendered their responsive pleading, the lower court on
prosecuted and, if found guilty, may be fined
motion of Roces rendered judgement on the pleadings dated
When a criminal statute designates an act of a
April 17, 1984 to which petitioners were ordered to vacate
corporation or a crime and prescribes punishment therefor,
the premises and surrender the same to the plaintiffs. On
it creates a criminal offense which, otherwise, would not exist
May 16, 1984, Roces filed a motion for execution which was
and such can be committed only by the corporation. But
opposed by petitioners on May 28, 1984 simultaneous with
when a penal statute does not expressly apply to
the latter’s filing of a notice of appeal. However, on August
corporations, it does not create an offense for which a
15, 1984, GEE thru counsel filed a motion to withdraw said
corporation may be punished. On the other hand, if the
appeal citing as reason that they are satisfied with the
State, by statute, defines a crime that may be committed by
decision of the lower court.
a corporation but prescribes the penalty therefor to be
suffered by the officers, directors, or employees of such
corporation or other persons responsible for the offense, only Issue: Whether or not the payment made by GEE to the
such individuals will suffer such penalty. Corporate officers Roces brothers constitute payment to private respondent
or employees, through whose act, default or omission the corporation which would result to the extinguishment of the
corporation commits a crime, are themselves individually obligation.
guilty of the crime. The principle applies whether or not the
crime requires the consciousness of wrongdoing. It applies Held: No. Under article 1240 of the civil code of the
to those corporate agents who themselves commit the crime Philippines – Payment shall be made to the person in whose
and to those, who, by virtue of their managerial positions or favor the obligation has been constituted, on his successor in
other similar relation to the corporation, could be deemed interest or any person authorized to receive it.
responsible for its commission, if by virtue of their
relationship to the corporation, they had the power to
prevent the act. Benefit is not an operative fact. In the case at bar, the supposed payments were not made
to Roces-Reyes Realty Inc. or to its successors in interest nor
is there positive evidence that payment was made to a
person authorized to receive it. No such proof was submitted
but merely inferred by the RTC from Marcos Roces having
signed the lease contract as President which was witnessed
by Jesus Marcos Roces. The later, however, was no longer
President or even an officer of the Roces-Realty Inc at the
time he received the money and signed the sale with pacto
de retro. He, in fact denied being in possession of authority
to receive payment for the respondent corporation nor does
the receipt show that he signed in the same capacity as he
did in the lease contract at a time when he was President for
respondent corporation.

A corporation has a personality distinct and separate from its

individual stockholders or members. Being an officer or
stockholder of a corporation does not make one’s property
also of the corporation, and vice-versa, for they are separate
entities. Share owners are in no legal sense the owners
corporate property which is owned by the corporation as a
distinct legal person. As a consequence of the separate
juridical personality of a corporation, the corporate debt or
credit is not the debt or credit of the stockholder, nor is the
stockholder’s debt or credit that of the corporation
SAPPARI K. SAWADJAAN V. CA (G.R. NO. 141735)

Facts:
Petitioner Sawadjaan was an appraiser/investigator in the
Philippine Amanah Bank (PAB) when on the basis of his
report, a credit line was granted to Compressed Air
Machineries and Equipment Corporation (CAMEC) by virtue
of the two parcels of land it offered as collaterals. Meanwhile,
Congress passed a law which created Al-Amanah Investment
Bank of the Philippines (AIIBP) and repealed the law creating
PAB, transferring all its assets, liabilities and capital accounts
to AIIBP. Later, AIIBP discovered that the collaterals were
spurious, thus conducted an investigation and found
petitioner Sawadjaan at fault. Petitioner appealed before the
SC which ruled against him. Petitioner moved for a new trial
claiming he recently discovered that AIIBP had not yet
adopted its corporate by-laws and since it failed to file within
60 days from the passage of its law, it had forfeited its
franchise or charter and thus has no legal standing to initiate
an administrative case. The motion was denied.
Issue:
Whether or not the failure of AIIBP to file its by-laws within
the period prescribed results to a nullity of all actions and
proceedings it has initiated.
Ruling: NO.
The AIIBP was created by Rep. Act No. 6848. It has a main
office where it conducts business, has shareholders,
corporate officers, a board of directors, assets, and
personnel. It is, in fact, here represented by the Office of the
Government Corporate Counsel, “the principal law office of
government-owned corporations, one of which is respondent
bank.” At the very least, by its failure to submit its by-laws
on time, the AIIBP may be considered a de facto corporation
whose right to exercise corporate powers may not be
inquired into collaterally in any private suit to which such
corporations may be a party.
Moreover, a corporation which has failed to file its by-laws
within the prescribed period does not ipso facto lose its
powers as such. The SEC Rules on Suspension/Revocation of
the Certificate of Registration of Corporations, details the
procedures and remedies that may be availed of before an
order of revocation can be issued. There is no showing that
such a procedure has been initiated in this case.