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.

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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.

Zulueta vs. CA, G.R. No. 107383

FACTS:

Petitioner, the wife of private respondent, entered the clinic of her husband, a doctor of medicine, and in the presence of her mother, a driver and private respondents secretary, forcibly opened the drawers and cabinet in her husband’s clinic and took 157 documents consisting of private correspondence between private respondent and his alleged paramours, greetings cards, cancelled checks, diaries, passport, and photographs. The documents and papers were seized for use in evidence in a case for legal separation and for disqualification from the practice of medicine which petitioner had filed against her husband.

ISSUE:

W/N the documents taken by the wife admissible as evidence in the action for legal separation?

RULING:

No. Indeed the documents and papers in question are inadmissible in evidence. The constitutional injunction declaring the privacy of communication and correspondence [to be] inviolable is no less applicable simply because it is the wife (who thinks herself aggrieved by her husbands infidelity) who is the party against whom the constitutional provision is to be enforced. The only exception to the prohibition in the Constitution is if there is a lawful order [from a] court or when public safety or order requires otherwise, as prescribed by law. Any violation of this provision renders the evidence obtained inadmissible for any purpose in any proceeding.

The intimacies between husband and wife do not justify any one of them in breaking the drawers and cabinets of the other and in ransacking them for any telltale evidence of marital infidelity. A person, by contracting marriage, does not shed his/her integrity or his right to privacy as an individual and the constitutional protection is ever available to him or to her.

The law insures absolute freedom of communication between the spouses by making it privileged. Neither husband nor wife may testify for or against the other without the consent of the affected spouse while the marriage subsists. Neither may be examined without the consent of the other as to any communication received in confidence by one from the other during the marriage, save for specified exceptions.  But one thing is freedom of communication; quite another is a compulsion for each one to share what one knows with the other. And this has nothing to do with the duty of fidelity that each owes to the other.