Yao Kee vs. Sy-Gonzales

Case Digest

G.R. No. L-55960 

November 24, 1988

Facts:

Sy Kiat, a Chinese national died in Caloocan City where he was then residing, leaving behind real and personal properties here in the Philippines worth P300,000.00 more or less.

Thereafter, respondents filed a petition for the grant of letters of administration and appointment as administratrix one of the respondents.

The petition was opposed by the petitioners alleging that: (a) Yao Kee is the lawful wife of Sy Kiat whom he married in China; (b) the other oppositors are the legitimate children of the deceased with Yao Kee; and, (c) Sze Sook Wah is the eldest among them and is competent, willing and desirous to become the administratrix of the estate of Sy Kiat.

The lower court ruled that Yao Kee is the lawful wife of Sy Kiat and the other oppositors are the legitimate children.  The eldest was appointed as the administratrix of the estate of Sy Kiat.

However, Court of Appeals modified the decision and rendered that the legality of the marriage of Sy Kiat and Yao Kee had not been proven to be valid to the laws of China.

Issue:

Whether or not oral testimonies, such as those presented by the petitioners are sufficient to establish validity of foreign marriage?

Ruling:

To establish a valid foreign marriage two things must be proven, namely: (1) the existence of the foreign law as a question of fact; and (2) the alleged foreign marriage by convincing evidence.  Without proofs of said requisites, the foreign marriage cannot be recognized in this country.

In this case the petitioners did not present any competent evidence relative to the law and custom of China on marriage. The testimonies presented cannot be considered as proof of China's law or custom on marriage not only because they are self-serving evidence, but more importantly, there is no showing that they are competent to testify on the subject matter. For failure to prove the foreign law or custom, and consequently, the validity of the marriage in accordance with said law or custom, the marriage between Yao Kee and Sy Kiat cannot be recognized in this jurisdiction.

Garcia vs. Recio

Case Digest
G.R. No. 138322

Facts:

Respondent, a Filipino, was married to an Australian citizen. They lived together as husband and wife in Australia. Two years later, a decree of divorce, purportedly dissolving the marriage, was issued by an Australian family court.

Sometime later respondent became an Australian citizen and married Petitioner -- a Filipina in Cabanatuan City. In their application for a marriage license, respondent was declared as single and Filipino.

Petitioner and respondent lived separately without prior judicial dissolution of their marriage.  Petitioner then filed a Complaint for Declaration of Nullity of Marriage in the court a quo, on the ground of bigamy -- respondent allegedly had a prior subsisting marriage at the time he married her. She claimed that she learned of respondent’s prior marriage to an Australian citizen only at a later time.

Respondent averred that, he had revealed to petitioner his prior marriage and its subsequent dissolution.  He contended that his first marriage to an Australian citizen had been validly dissolved by a divorce decree obtained in Australia; thus, he was legally capacitated to marry petitioner.

About five years after the couple’s wedding and while the suit for the declaration of nullity was pending -- respondent was able to secure a divorce decree from a family court in Sydney, Australia.

Issue:

Whether or not the divorce decree obtained abroad may be ipso facto admitted as evidence in Philippine courts?

Ruling:

No. Before a foreign judgment is given presumptive evidentiary value, the document must first be presented and admitted in evidence. A divorce obtained abroad is proven by the divorce decree itself. Indeed the best evidence of a judgment is the judgment itself. The decree purports to be a written act or record of an act of an official body or tribunal of a foreign country.

Under Sections 24 and 25 of Rule 132, on the other hand, a writing or document may be proven as a public or official record of a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having legal custody of the document. If the record is not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office.

GRANGER ASSOCIATES vs. MICROWAVE SYSTEMS, INC.

G.R. No. 79986

September 14, 1990

Foreign Corporation doing business in the Philippines

FACTS:

Granger Associates is a foreign corporation which was organized in the United States and has no license to do business in this country.   Microwave Systems, Inc., is a domestic corporation which has been sued for recovery of a sum equivalent to US$900,633.30 allegedly due from it to the petitioner.

The claim arose from a series of agreements concluded between the two parties, giving MSI the license to manufacture and sell its products in the Philippines and extended to the latter certain loans, equipment and parts.  Payment of these contracts not having been made as agreed upon, Granger filed a complaint against MSI and the other private respondents in the Regional Trial Court.

MSI alleged the affirmative defense that the plaintiff had no capacity to sue, being an unlicensed foreign corporation, and moved to dismiss.

Motion to dismiss was granted by RTC which was affirmed by the CA.

In this petition, Granger seeks the reversal of the respondent court on the ground that MSI has failed to prove its affirmative allegation that Granger was transacting business in the Philippines. It insists that it has dealt only with MSI and not the general public and contends that dealing with the public itself is an indispensable ingredient of transacting business. It also argues that its agreements with MSI covered only one isolated transaction for which it did not have to secure a license to be able to file its complaint.

ISSUE:

Whether or not Granger Associates was doing business in the Philippines?

RULING:

YES.  It can be shown that the parties entered into a series of agreements, as in successive sales of the foreign company's regular products, that company shall be deemed as doing business in the Philippines.

The quoted stipulations show that Granger had extended its personality in the Philippines and would receive orders for its products and discharge its warranty obligations through the agency of MSI It would even appear that Granger intended to transact business in the Philippines through the instrumentality of MSI not only for the sale and warranty of its products in this country.

There is also a showing that the investment of Granger in MSI is quite substantial, enabling it to participate in the actual management and control of MSI In fact, it appointed a representative in the board of directors to protect its interests, and this director was so influential that, at his request, the regular board meeting was converted into an annual stockholder's meeting to take advantage of his presence. 

We are convinced from an examination of the terms and conditions of the contracts and agreements entered into between petitioner and private respondents indicate that they established within our country a continuous business, and not merely one of a temporary character. Such agreements did not constitute only one isolated transaction, as the petitioner contends, but a succession of acts signifying the intent of Granger to extend its operations in the Philippines.

The purpose of the rule requiring foreign corporations to secure a license to do business in the Philippines is to enable us to exercise jurisdiction over them for the regulation of their activities in this country, If a foreign corporation operates in the Philippines without submitting to our laws, it is only just that it not be allowed to invoke them in our courts when it should need them later for its own protection. While foreign investors are always welcome in this land to collaborate with us for our mutual benefit, they must be prepared as an indispensable condition to respect and be bound by Philippine law in proper cases, as in the one at bar.

Republic vs. Sandiganbayan

REPUBLIC OF THE PHILIPPINES, (PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT) vs. THE HONORABLE SANDIGANBAYAN (FIRST DIVISION) AND EDUARDO COJUANGCO, JR., 
G.R. No. 88809 
July 10, 1991

REPUBLIC OF THE PHILIPPINES, (PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT) vs. THE HONORABLE SANDIGANBAYAN (FIRST DIVISION) AND EDUARDO COJUANGCO, JR., 
G.R. No. 88858 
July 10, 1991

Corporation Law, Right of Inspection of a Stockholder, Corporation Code of the Philippines

Facts: 

Private respondent who is a stockholder of SMC sought to the production, inspection, examination/verification and/or photocopying of the SMC corporate records to inform him of the decisions, policies, acts and performance of the management of the SMC under the PCGG-Board.  In another case, same private respondent who was a stockholder of record sought authority to inspect and examine the corporate records of United Coconut Planters Bank.  Both requests were denied by PCGG.

At the time of the request, SMC and UCPB Shares were sequestered by the PCGG.

Issue: 

Whether or not sequestration automatically deprives a stockholder of his right of inspection?

Ruling: 

No. The right of a stockholder to inspect and/or examine the records of a corporation is explicitly provided in Section 74 of the Corporation Code, the pertinent portion of which reads:

Sec. 74. Books to be kept; stock transfer agent. “The records of all business transactions of the corporation and the minutes of any meeting shall be open to the inspection of any director, trustee, stockholder or member of the corporation at reasonable hours on business days and he may demand, in writing, for a copy of excerpts from said records or minutes, at his expense.”

Records indicate that private respondent is the ostensible owner of a substantial number of shares and is a stockholder of record in SMC and UCPB. * Being a stockholder beyond doubt, there is therefore no reason why private respondent may not exercise his statutory right of inspection in accordance with Sec. 74 of the Corporation Code, the only express limitation being that:

1) the right of inspection should be exercised at reasonable hours on business days;

2) the person demanding to examine and copy excerpts from the corporation's records and minutes has not improperly used any information secured through any previous examination of the records of such corporation; and

3) the demand is made in good faith or for a legitimate purpose.

The latter two limitations, however, must be set up as a defense by the corporation if it is to merit judicial cognizance. As such, and in the absence of evidence, the PCGG cannot unilaterally deny a stockholder from exercising his statutory right of inspection based on an unsupported and naked assertion that private respondent's motive is improper or merely for curiosity or on the ground that the stockholder is not in friendly terms with the corporation's officers.

Cruz vs. Secretary

CRUZ vs. SECRETARY OF ENVIRONMENT AND NATURAL RESOURCES

G.R. No. 135385              

December 6, 2000

Case Summary:

Petitioners assailed the constitutionality of some of the provisions of the IPRA Law and its Implementing Rules and Regulations. 

The respondent, Secretary of DENR submitted its comment through the Solicitor General:  The Solicitor General is of the view that the IPRA is partly unconstitutional on the ground that it grants ownership over natural resources to indigenous peoples and prays that the petition be granted in part.

A group of intervenors defended the constitutionality of such act. Even CHR asserts that IPRA is an expression of the principle of parens patriae and that the State has the responsibility to protect and guarantee the rights of those who are at a serious disadvantage like indigenous peoples.

The petitioners in this case contended that the law is unconstitutional on the ground that they amount to an unlawful deprivation of the State’s ownership over lands of the public domain as well as minerals and other natural resources therein, in violation of the Regalian doctrine.

After due deliberation the members of the Court voted 7 – 7.  As the votes were equally divided (7 to 7) and the necessary majority was not obtained, the case was redeliberated upon. However, after redeliberation, the voting remained the same. Accordingly, pursuant to Rule 56, Section 7 of the Rules of Civil Procedure, the petition is DISMISSED.

ACT NO. 3326

ACT NO. 3326 - AN ACT TO ESTABLISH PERIODS OF PRESCRIPTION FOR VIOLATIONS PENALIZED BY SPECIAL ACTS AND MUNICIPAL ORDINANCES AND TO PROVIDE WHEN PRESCRIPTION SHALL BEGIN TO RUN

Section 1. Violations penalized by special acts shall, unless otherwise provided in such acts, prescribe in accordance with the following rules: (a) after a year for offenses punished only by a fine or by imprisonment for not more than one month, or both; (b) after four years for those punished by imprisonment for more than one month, but less than two years; (c) after eight years for those punished by imprisonment for two years or more, but less than six years; and (d) after twelve years for any other offense punished by imprisonment for six years or more, except the crime of treason, which shall prescribe after twenty years. Violations penalized by municipal ordinances shall prescribe after two months.

Sec. 2. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceeding for its investigation and punishment.

The prescription shall be interrupted when proceedings are instituted against the guilty person, and shall begin to run again if the proceedings are dismissed for reasons not constituting jeopardy.

Sec. 3. For the purposes of this Act, special acts shall be acts defining and penalizing violations of the law not included in the Penal Code.

Sec. 4. This Act shall take effect on its approval.

____________________
Remedial Law
Criminal Procedures
Prescription of Special Acts

CMU vs. The Honorable Secretary

G.R. No. 184869

September 21, 2010

Facts:

Central Mindanao University (CMU) is a chartered educational institution owned and run by the State. In Presidential Proclamation 476, 3,401 hectares of lands of the public domain in Bukidnon was reserved as a school site for CMU which eventually obtained title in its name over 3,080 hectares of those lands.  Meanwhile, the government distributed more than 300 hectares of the remaining untitled lands to several tribes belonging to the areas cultural communities.

Forty-five years later President Gloria Macapagal-Arroyo issued Presidential Proclamation 310 that takes 670 hectares from CMUs registered lands for distribution to indigenous peoples and cultural communities in Barangay Musuan, Maramag, Bukidnon.

CMU filed a petition for prohibition seeking to stop the implementation of Presidential Proclamation 310 and have it declared unconstitutional.

Issue: 

W/N Presidential Proclamation issued by President Arroyo to distribute to the ICCP in Bukidnon valid?

Ruling:

No it is not valid.  The lands by their character have become inalienable from the moment President Garcia dedicated them for CMUs use in scientific and technological research in the field of agriculture. They have ceased to be alienable public lands.

Besides, when Congress enacted the Indigenous Peoples Rights Act (IPRA) or Republic Act 8371^[9] in 1997, it provided in Section 56 that property rights within the ancestral domains already existing and/or vested upon its effectivity shall be recognized and respected. In this case, ownership over the subject lands had been vested in CMU as early as 1958. Consequently, transferring the lands in 2003 to the indigenous peoples around the area is not in accord with the IPRA.

Therefore, Presidential Proclamation 310 as null and void for being contrary to law and public policy.

Sison vs. Board of Accountancy

G.R. No. L-2529

Facts:

The Board of Accountancy issued a CPA certificate to a British national named Robert Orr Ferguson to practice his profession in the Philippines without examination.  The issuance of the said certificate was questioned by herein petitioner on the ground that there is no reciprocity between the Philippines and the United Kingdom as regards the practice of accountancy.

To resolve this matter, the Board of Accountancy suspended the validity of the CPA certificates until it can be proven that (a) Filipinos are allowed to take the professional accountant examination given by the British government, if any, and (b) Filipino certified public accountants can, upon application, be registered as chartered accountants or granted similar degrees by the British Government." This resolution is based on the findings that there is no law which regulates the practice of accountancy in England.  However, the Philippine Accountancy Law explicitly provides that the suspension or revocation of the certificate issued under the said Act may be done by the board for unprofessional conduct of the holder or other sufficient cause. The Secretary of Justice further said that he believes that "the change in administrative interpretation with respect to the existence of reciprocity between the Philippines and Great Britain as to the practice of accountancy," does not constitute sufficient cause for the suspension or revocation of the certificates in question within the meaning of said provision.

Issue:

W/N the issuance of the CPA certificates was valid in the absence of reciprocity between the Philippines and the British Government?

Ruling:

Yes it is valid as it comes within the realm of comity as contemplated in our law.  Comity is defined as the recognition which one nation allows within its territory the acts of foreign governments and tribunals, having due regard both to the international duty and convenience and the rights of its own citizens or of other persons who are under the protection of its laws.

The British minister in a note sent to the President of the Philippines wrote that that qualified Philippine citizen are allowed to practice the profession of accountancy including income tax accounting, in the United Kingdom since there is no governmental control of the accounting profession in the said country and any resident of the United Kingdom, of whatever nationality, may engage in the profession of accounting without formality.

Therefore, the SC finds no reason why Robert Orr Ferguson who had previously been registered as certified public accountants and issued the corresponding certificate public accountant in the Philippine Islands, should be suspended from the practice of his profession in these Islands. 

REYES vs. TAN

G.R. No. L-16982             

September 30, 1961 

FACTS:

Several purchases of raw materials were allegedly made in New York for the textile mill and was shipped to the Philippines.  However, the shipment were found out to consist not of raw materials but of finished products, such as, West Point Khaki rayon suiting materials dyed in the piece, finished rayon tafetta in cubes, cotton eyelets, etc., for which reasons the Central Bank of the Philippines stopped all dollar allocations for raw materials for the corporation which necessarily led to the paralyzation of the operation of the textile mill and its business;

It was said that the Defendant Dalamal, who was the representative in the New York office had interests in the supplier of the aforesaid finished goods and in the Indian Commmercial Company and the Indian Traders responsible for the issuance of the Letters of Credit.

The plaintiff and some members of the board of directors urged defendants to proceed against Dalamal, exposing his offense to the Central Bank, and to initiate suit against Dalamal for his fraud against the corporation;

That defendants refused to proceed against Dalamal and instead continued to deal with the Indian Commercial Company to the damage and prejudice of the corporation. The prayer asks for the appointment of a receiver and a judgment marking defendants jointly and severally liable for the damages.

ISSUE:

W/N the minority stockholders of the corporation are justified in the filing of suit hence making the appointment of a receiver necessary?

RULING:

The importation of textiles instead of raw materials, as well as the failure of the board of directors to take actions against those directly responsible for the misuse of the dollar allocations constitute fraud, or consent thereto on the part of the directors. Therefore, a breach of trust was committed which justified the suit by a minority stockholder of the corporation.

It is well settled in this jurisdiction that where corporate directors are guilty of a breach of trust — not of mere error of judgment or abuse of discretion — and intracorporate remedy is futile or useless, a stockholder may institute a suit in behalf of himself and other stockholders and for the benefit of the corporation, to bring about a redress of the wrong inflicted directly upon the corporation and indirectly upon the stockholders.

The directors permitted the fraudulent transaction to go unpunished and nothing appears to have been done to remove the erring purchasing managers. In a way the appointment of a receiver may have been thought of by the court below so that the dollar allocation for raw material may be revived and the textile mill placed on an operating basis. It is possible that if a receiver in which the Central Bank may have confidence is appointed, the dollar allocation for raw material may be restored. Claim is made that if a receiver is appointed, the Philippine National Bank to which the corporation owes considerable sums of money might be led to foreclose the mortgage. Precisely the appointment of a receiver in whom the bank may have had confidence might rehabilitate the business and bring a restoration of the dollar allocation much needed for raw material and an improvement in the business and assets the corporation, thus insuring the collection of the bank's loan.

Considering the above circumstances we are led to agree with the judge below that the appointment of a receiver was not only expedient but also necessary to restore the faith and confidence of the Central Bank authorities in the administration of the affairs of the corporation, thus ultimately leading to a restoration of the dollar allocation so essential to the operation of the textile mills. The first assignment of error is, therefore, overruled.

HOLMES vs. CAMP

DECEMBER 7, 1917

Corporation, Representative Action

FACTS:

The Doe Run Lead Company acquired a large number of shares of the capital stock of the St. Joseph Lead Company, where such stock were held in trust for the use and benefit of the Doe Run Lead Company, which was the real owner thereof.

It was kept in secret knowledge by some of the stockholders that the St. Joseph Lead Company's stock was of much greater value than was commonly known and that the company was about to declare large future dividends.

A conspiracy was made to buy from the Doe Run Lead Company the stock of the St. Joseph Lead Company then held by and for it, thereby committed a fraud upon the Doe Run Lead Company.

The purpose of the action is to compel those who thus defrauded the Doe Run Lead Company as it is alleged, to return to that company the stock which they acquired from it, or if they have parted with the stock to account for its value.

Plaintiffs were, stockholders of the Doe Run Lead Company, but they exchanged this stock for shares of stock of the St. Joseph Lead Company, which they now own.

Robert Holmes individually is a stockholder in the Doe Run Lead Company as well as in the St. Joseph Lead Company, while all the other plaintiffs are stockholders only in the St. Joseph Lead Company. They all sue, however, in the right and on behalf of the Doe Run Lead Company to compel restitution to that company,

ISSUE:

W/N stockholders of a holding company may maintain a representative action for the benefit and in behalf of the subsidiary company, the directors of both companies having refused, after due request, to institute an action in the name of either company?

RULING:

We are unable to see any controlling reason why it should not be permitted.

Representative actions by stockholders are unique in that they are not prosecuted by the stockholder plaintiff for his own direct benefit, or in his own direct right, or because any right of his has been directly violated or because he is entitled individually to the relief sought. Such actions are, as they are commonly designated, purely representative, the plaintiff being permitted to maintain the action, notwithstanding his lack of direct interest, solely to set the machinery of justice in motion, and to prevent what would otherwise be a complete failure of justice.

This form of action is an invention of equity, and stockholders are allowed to resort to it, notwithstanding a lack of direct interest in the relief sought because, as it has been said, "the claims of justice would be found superior to any difficulties arising out of technical rules respecting the mode in which corporations are required to sue."

The part which a stockholder plays in such an action is merely that of an instigator. The cause of action is that of the corporation, and the recovery must run in its favor. Under these circumstances it is not easy to see why a stockholder in a holding company may not maintain such an action for the benefit of the subsidiary company, and thus indirectly for the advantage of the holding company. His stock interest in the latter company is sufficient to relieve him from the imputation of being a mere officious and impertinent intermeddler.

Clearly no such embarrassment or prejudice can exist in a case like the present when the plaintiffs sue, not in their own right, nor for their own direct benefit, but in the right and for the benefit of a corporation, provided they all sue in the right and for the benefit of the same corporation, and they all have an interest, however indirect, in seeing to it that the corporation receives reparation for the wrongs alleged in the complaint.

What the defendants are called upon to do in this action is to answer to the Doe Run Lead Company, not to these plaintiffs nor to any other stockholder of either company, and it can work no possible prejudice to the defendants who sets the machinery of justice in motion, so long as that person has an ultimate interest in the matter.

CHASE vs. CFI

G.R. No. L-20395 May 13, 1985

Corporation, Derivative Suit

FACTS:

Elton Chase in his capacity a minority stockholder of American Machinery and Parts Manufacturing, Inc. (AMPARTS) and in behalf of the other stockholders of said corporation similarly situated and for the benefit of Amparts filed a derivative suit against Dr. Victor Buencamino, a major stockholders and some other officers, charging them with breach of trust; praying for their removal as directors and, if necessary, for the dissolution and liquidation of said corporation.

The lower court ruled that there was breach of obligation committed by Dr. Buencamino but denied the application for receivership hence ordering the defendant to file a bond amounting to P100,00.00 to answer for the damages that plaintiff may suffer by the non-appointment of a receiver.

The plaintiff contended that the respondent court erred in not ordering the ouster of the defendant from management and in not granting the applied dissolution and receivership.

ISSUE:

W/N removal of defendants who are stockholders/directors shall be granted?

RULING:

In this jurisdiction, it is a "fundamental and settled rule that conclusions and findings of fact by the trial court are entitled to great weight on appeal and should not be disturbed unless for strong and cogent reasons because the trial court is in a better position to examine real evidence, as well as to observe the demeanor of the witnesses while testifying in the case." 

We have reviewed the evidence on record thoroughly and We are satisfied that the lower court has not overlooked factors of substance and value which if considered, might affect the result of the case. We therefore uphold the findings and conclusions of the lower court.

The record further shows that there were other precautionary measures adopted by lower court for the protection of Chase's rights and interest in Amparts. 

The removal of a stockholder (in this case a majority stockholder) from the management of the corporation and/or the dissolution of a corporation in a suit filed by a minority stockholder is a drastic measure. It should be resorted to only when the necessity is clear which is not the situation in the case at bar.