Case digest for corporation law Essay Example

states that a juridical entity being impressed with public interest does not automatically classify it as a public corporation. The determination of whether a corporation is private or public depends on the overall relationship between the corporation and the State. The petitioners are part of over 500 water districts in the country established under Presidential Decree No. 198, amended by Presidential Decrees Nos. 768 and 1479, also known as the "Provincial Water Utilities Act of 1973."

President Ferdinand E. Marcos issued Presidential Decree No. 198, which permits local legislative bodies to create water districts by adhering to specified guidelines and adopting a resolution. The decree also establishes the "Local Water Utilities Administration" (LWUA) as a national agency under the National Economic and Development Authority (NEDA). The LWUA is granted regulatory authority to improve public service offered by water utilities.

After examining the arguments presented by both parties and thoroughly reviewing the relevant laws and constitutional provisions, we decide in favor of the respondents and reaffirm our previous decision in the Tanjay case, which established that water districts are government-owned or controlled corporations operating under their own charter.

The text in the

tag states that PD 198 is a special law that applies specifically to the water districts created under it. Despite its general application to all water districts in the country, it is still considered a special law. The previous decision of the Metro Iloilo case, which declared PD 198 as a general legislation, is now abandoned. By "government-owned or controlled corporation with original charter," it refers to government-owned or controlled corporations created by a special law and not under the Corporation Code of the

Philippines.

The above statement indicates that the corporations excluded from the coverage of the CSC are those formed under the Corporation Code. It is important to note that the petitioners were not formed under this code, but instead were established under a special law and are primarily regulated by its provisions. The provisions of PD 198, as amended, are comparable to those found in other corporate charters.

The conclusion is undeniable that the mentioned decree is indeed the charter of the different water districts as it clearly outlines their main goal and basic organizational structure. Put simply, PD 198, as amended, is the law that grants a water district legal recognition. Although it is true that a resolution from a local sanggunian is still needed to officially establish a district, this Court believes that such resolution cannot be deemed as its charter, as it merely serves to enforce the provisions of the aforementioned decree.

Jesus Dy, a Filipino citizen, gifted a residential land in Caloocan to the unregistered religious organization "Ung Siu Si Temple", which is run by three Chinese trustees. Yu Juan, the founder and deaconess of the Temple, accepted the donation on behalf of the temple and its trustees. Nevertheless, the Register of Deeds declined to officially document the donation.

Should the Register of Deeds deny registration of a land donation to a religious organization with Chinese citizens as its founder, trustees, and administrator?

The Register of Deeds is authorized by the Constitution, which does not make any exceptions for religious associations. Article XIII sections 1 and 2 also do not allow corporations or associations that are at

least sixty percent owned by Filipino citizens to acquire public agricultural lands and other natural resources.

Despite the fact that the appellant religious organization does not have capital stock, it cannot avoid the Constitutional restriction because its members are foreigners. The purpose of the sixty per cent requirement is to guarantee that corporations or associations allowed to own agricultural land or to exploit natural resources are under the control of Filipinos. The Constitution's intention is that if there is no capital stock, the controlling membership should be Filipino citizens.

People v. Quasha Facts: William H. Quasha, a lawyer representing Pacific Airways Corporation, was charged with the crime of falsification of a public and commercial document. The corporation, organized as a common carrier, entrusted Quasha with the preparation and registration of the article of incorporation. In said article of incorporation, Quasha falsely indicated that Arsenio Baylon, a Filipino citizen, had subscribed to and owned 60.

The article of incorporation stated that Baylon owned 0.05% of the subscribed capital stock of the corporation, but in truth, it was American citizens who owned and paid for it. The names of these Americans were not mentioned in the article. The purpose behind this false statement was to bypass the constitutional stipulation that a public utility corporation in the Philippines must have at least 60% Filipino ownership.

Baylon, acting as their trustee, was found guilty by the lower court. He appealed the decision, questioning whether he intentionally tried to bypass the fundamental law by not disclosing his role as a trustee in the articles of incorporation. This resulted in the entire subscribed capital stock of the

American co-incorporation being American. Ultimately, the court overturned the lower court's decision.

According to the court's ruling, the defendant is not required to provide the mentioned disclosure as stated in the Corporation Law. Therefore, they are relieved from any obligation to do so. Since there is no legal duty or malicious intent present, there is no justification for convicting the defendant of the supposed crime. Additionally, it is not necessary for a corporation to have 60 percent Filipino ownership at its inception in order to be classified as a public utility.

The nationality of a corporation's capital can be changed if it was initially funded by foreign capital by transferring shares to Filipino citizens. Similarly, a corporation that originally had Filipino capital can change the nationality of its capital by transferring shares to foreigners. The determination of whether a corporation is eligible to operate as a public utility is made when it applies for a franchise, certificate, or any other form of authorization specifically for that purpose.

After its establishment, the corporation is required to fulfill various obligations. These include demonstrating compliance with the Constitution regarding the nationality of its capital. If the corporation operates as a common carrier by air, it must also adhere to the Civil Aviation Law. Likewise, if it functions as a common carrier by water, adherence to the Revised Administrative Code is necessary. Lastly, if it provides public service as a common carrier by land or in any other capacity, it must meet the requirements stated in the Public Service Law.

According to the court majority, the defendant's previous act of falsification is no longer considered

a crime. This change is due to the Party Amendment to the Constitution in March 1947, which granted equal rights to Americans and Filipino citizens regarding public utilities in the Philippines. As a result, American citizens are no longer subject to the prohibition stated in section 8, Article XIV of the Constitution. Consequently, it is impossible to hold the defendant legally responsible for this action.

On October 1, 1941, Christern Huenefeld ; Co., Inc. purchased a fire policy from Filipinas Cia. de Seguros. The policy covered merchandise in a building on Roman Street, Binondo Manila, for a sum of P1000,000. However, during the Japanese military occupation, both the building and the insured merchandise were destroyed by fire. Following the incident, Christern Huenefeld ; Co., Inc. promptly submitted a claim to Filipinas Cia. de Seguros.

The respondent suffered a total loss of P92,650 from the salvage goods that were sold at public auction. The petitioner, however, refused to pay the claim because they argued that the policy in favor of the respondent was no longer valid when the United States declared war against Germany. This is because the respondent Corporation, despite being organized under Philippine law, was controlled by German subjects. The petitioner, on the other hand, was a company under American jurisdiction when the policy was issued on October 1, 1941. In compliance with the order from the Director of Bureau of Financing, Philippine Executive Commission, the petitioner eventually paid the respondent P92,650.