Aurbach vs. Sanitary Wares (Partnership; Joint Venture; Foreign and Domestic Corp)
F: This consolidated petition assailed the decision of the CA directing a certain MA!" #F !$!CT%# #F #FF%C!"& % T'! #A"D #F D%"!CT#"& There There are t*o groups groups in this this case+ case+ the Lagdameo group composed of Filipino in,estors and the American Standard Inc- (A&%) composed of foreign in,estorsThe A&% .roup and petitioner &ala/ar (.-"- os- 01201304) contend that the actual intention of the parties should 5e ,ie*ed strictl6 on the 7Agreement7 dated August 81+8249 *herein it is clearl6 stated that the parties intention *as to form a corporation and not a oint ,enture%: The main issue hinges on *ho *ere the dul6 elected directors of &ani*ares for the 6ear 82<= during its annual stoc>holders meeting held on March <+ 82<=- T o ans*er this ?uestion the follo*ing factors should 5e determined: (8) the nature of the 5usiness esta5lished 56 the parties *hether it *as a oint ,enture or a corporation and ': @hile certain pro,isions of the Agreement *ould ma>e it appear that the parties thereto disclaim 5eing 5eing partne partners rs or oint oint ,entur ,enturers ers such such discla disclaime imerr is direct directed ed at third third partie partiess and is not inconsistent *ith+ and does not preclude+ the eistence of t*o distinct groups of stoc>holders in &ani*ares one of *hich (the Philippine %n,estors) shall constitute the maorit6+ and the other A&% shall constitute the minorit6 stoc>holder- %n an6 e,ent+ the evident intention of the Philippine %n,estors and A&% in entering into the Agreement is to enter into a joint venture enterprise
An eamination of the Agreement sho*s that certain certain pro,isions *ere inccuded to protect protect the interests of A&% as the minorit6- For eample+ the ,ote of 0 out of 2 directors is re?uired in certain enumerated corporate acts- A&% is contractuall6 entitled to designate a mem5er of the !ecuti,e Committee and the ,ote of this mem5er is re?uired for certain transactions The Agreement also re?uires a 01B super3maorit6 ,ote for the amendment of the articles and 563la*s of &ani*ares- A&% is also gi,en the right to designate the president and plant manager -The Agreement further pro,ides that the sales polic6 of &ani*ares shall 5e that *hich is normall6 follo*ed 56 A&% and that &ani*ares should not eport 7&tandard7 products other*ise than through A&%s !port Mar>eting &er,ices- nder the Agreement+ A&% agreed to pro,ide technolog6 and >no*3ho* to &ani*ares and the latter paid ro6alties for the same-
The legal concept of a joint venture is of common la* origin- %t has no precise legal defini definitio tion n 5ut it has 5een generall generall66 unders understoo tood d to mean an organi/ation formed for some temporar6 purpose- %t is in fact hardl6 distinguisha5le from the partnership+ since their elements are similar communit6 of interest in the 5usiness+ sharing of profits and losses+ and a mutual right of control The main distinction cited 56 most opinions in common la* urisdictions is that the partnership contemplates a general business with some degree of continuity + *hile the joint venture is formed for the execution of a single transaction, and is thus of a temporary nature -
ambulao Lumber !ompany v. "#$ %&.'. #o. L())*+-
Facts: Petitioner Mam5ulao $um5er applied for an industrial loan *ith herein respondent P and *as appro,ed *ith its real estate+ machiner6 and e?uipments as collateral- P released the appro,ed loan 5ut petitioner failed to pa6 and *as later disco,ered to ha,e alread6 stopped in its operation- P then mo,ed for the foreclosure and sale of the mortgaged properties- The properties *ere sold and petitioner sent a 5an> draft to P to settle the 5alance of the o5ligation- P ho*e,er alleges that a remaining 5alance stands and a foreclosure sale *ould still 5e held unless petitioner remits said amount- The foreclosure sale proceeded and petitioners properties *ere ta>en out of its compound- Petitioner filed actions 5efore the court and claims among others+ moral damages%ssue: @hether or not petitioner corporation+ *ho has alread6 ceased its operation+ ma6 claim for moral damages"uling: #'erein appellants claim for moral damages+ ho*e,er+ seems to ha,e no legal or factual 5asis- #5,iousl6+ an artificial person li>e herein appellant corporation cannot eperience ph6sical sufferings+ mental anguish+ fright+ serious aniet6+ *ounded feelings+ moral shoc> or social humiliation *hich are 5asis of moral damages- A corporation ma6 ha,e a good reputation *hich+ if 5esmirched+ ma6 also 5e a ground for the a*ard of moral damages- The same cannot 5e considered under the facts of this case+ ho*e,er+ not onl6 5ecause it is admitted that herein appellant had alread6 ceased in its 5usiness operation at the time of the foreclosure sale of the chattels+ 5ut also for the reason that *hate,er ad,erse effects of the foreclosure sale of the chattels could ha,e upon its reputation or 5usiness standing *ould undou5tedl6 5e the same *hether the sale *as conducted at Jose Pangani5an+ Camarines orte+ or in Manila *hich is the place agreed upon 56 the parties in the mortgage contract-
$ache !o. Inc. et al vs $I' !ommissioner /ivencio 'ui0 et al
#n 9E Fe5 820+ Commissioner Vera of %nternal "e,enue+ *rote a letter addressed to J "ui/ re?uesting the issuance of a search *arrant against petitioners for ,iolation of &ec E4(a) of the %"C+ in relation to all other pertinent pro,isions thereof+ particularl6 &ects 1=+ 09+ 0=+ 9< and 92+ and authori/ing "e,enue !aminer de $eon ma>e and file the application for search *arrant *hich *as attached to the letter- The net da6+ de $eon and his *itnesses *ent to CF% "i/al to o5tain the search *arrant- At that time J "ui/ *as hearing a certain case; so+ 56 means of a note+ he instructed his Deput6 Cler> of Court to ta>e the depositions of De $eon and $ogronio- After the session had adourned+ J "ui/ *as informed that the depositions had alread6 5een ta>en- The stenographer read to him her stenographic notes; and thereafter+ J "ui/ as>ed respondent $ogronio to ta>e the oath and *arned him that if his deposition *as found to 5e false and *ithout legal 5asis+ he could 5e charged for perur6- J "ui/ signed de $eons application for search *arrant and $ogronios deposition- The search *as su5se?uentl6 conductedISS123 @hether or not there had 5een a ,alid search *arrant42L53 The &C ruled in fa,or of ache on three grounds-
8- J "ui/ failed to personall6 eamine the complainant and his *itnessPersonal eamination 56 the udge of the complainant and his *itnesses is necessar6 to ena5le him to determine the eistence or non3eistence of a pro5a5le cause9- The search *arrant *as issued for more than one specific offenseThe search *arrant in ?uestion *as issued for at least four distinct offenses under the Ta Code- As ruled in &tonehill G&uch is the seriousness of the irregularities committed in connection *ith the disputed search *arrants+ that this Court deemed it fit to amend &ection = of "ule 899 of the former "ules of Court that Ha search *arrant shall not issue 5ut upon pro5a5le cause in connection *ith one specific offense- ot satisfied *ith this ?ualification+ the Court added thereto a paragraph+ directing that Hno search *arrant shall issue for more than one specific offense=- The search *arrant does not particularl6 descri5e the things to 5e sei/edThe documents+ papers and effects sought to 5e sei/ed are descri5ed in the &earch @arrant Gnregistered and pri,ate 5oo>s of accounts (ledgers+ ournals+ columnars+ receipts and dis5ursements 5oo>s+ customers ledgers); receipts for pa6ments recei,ed; certificates of stoc>s and securities; contracts+ promissor6 notes and deeds of sale; tele and coded messages; 5usiness communications+ accounting and 5usiness records; chec>s and chec> stu5s; records of 5an> deposits and *ithdra*als; and records of foreign remittances+ co,ering the 6ears 8244 to 820-I The description does not meet the re?uirement in Art %%%+ &ec- 8+ of the Constitution+ and of &ec- =+ "ule 894 of the "e,ised "ules of Court+ that the *arrant should particularl6 descri5e the things to 5e sei/ed A search *arrant ma6 5e said to particularl6 descri5e the things to 5e sei/ed *hen the description therein is as specific as the circumstances *ill ordinaril6 allo* or *hen the description epresses a conclusion of fact not of la* 56 *hich the *arrant officer ma6 5e guided in ma>ing the search and sei/ure or *hen the things descri5ed are limited to those *hich 5ear direct relation to the offense for *hich the *arrant is 5eing issued-
$ataan Shipyard 2ngineering !o., Inc. vs "residential !ommission on &ood &overnment 81F &C"A 8<8 J (usiness #rgani/ation J Corporation $a* J A Corporation Cannot %n,o>e the "ight Against &elf3%ncrimination
@hen President Cora/on A?uino too> po*er+ the Presidential Commission on .ood .o,ernment (PC..) *as formed in order to reco,er ill gotten *ealth allegedl6 ac?uired 56 former President Marcos and his cronies- A?uino then issued t*o eecuti,e orders in 82<4 and pursuant thereto+ a se?uestration and a ta>eo,er order *ere issued against ataan &hip6ard K engineering Co-+ %nc- (A&!C#)- A&!C# *as alleged to 5e in actualit6 o*ned and controlled 56 the Marcoses through the "omualde/ famil6+ and in turn+ through dumm6 stoc>holdersThe se?uestration order issued in 82<4 re?uired+ among others+ that A&!C# produce corporate records from 820= to 82<4 under pain of contempt of the PC.. if it fails to do so- A&!C# assails this order as it a,ers+ among others+ that it is against A&!C#s right against self incrimination and unreasona5le searches and sei/uresISS123 @hether or not A&!C# is correct42L53 o- First of all+ PC.. has the right to re?uire the production of such documents pursuant to the po*er granted to it- &econd+ and more importantl6+ right against self3incrimination has no application to uridical persons- There is a reser,e right in the legislature to in,estigate the contracts of a corporation and find out *hether it has eceeded its po*ers- %t *ould 5e a strange anomal6 to hold that a s tate+ ha,ing chartered a corporation li>e A&!C# to ma>e use of certain franchises+ could not+ in the eercise of so,ereignt6+ in?uire ho* these franchises had 5een emplo6ed+ and *hether the6 had 5een a5used+ and demand the production of the corporate 5oo>s and papers for that purpose-
either is the right against unreasona5le searches and sei/ures applica5le here- There *ere no searches made and no sei/ure pursuant to an6 search *as e,er made- A&!C# *as merel6 ordered to produce the corporate records-
Stonehill vs 5io6no )7 S!'A 8 9acts3
"espondents herein secured a total of E9 search *arrants against petitioners herein andLor the corporations of *hich the6 *ere officers+ to search G5oo>s of accounts+ financial records+ ,ouchers+ correspondence+ receipts+ ledgers+ ournals+ portfolios+ credit ournals+ t6pe*riters+ and other documents andLor papers sho*ing all 5usiness transactions including dis5ursements receipts+ 5alance sheets and profit and loss statements and o55ins (cigarette *rappers)+I as Gthe su5ect of the offense; stolen or em5e//led and proceeds or fruits of the offense+I or Gused or intended to 5e used as the means of committing the offense+I *hich is descri5ed in the applications ad,erted to a5o,e as G,iolation of Central an> $a*s+ Tariff and Customs $a*s+ %nternal "e,enue (Code) and the "e,ised Penal Code-I The petitioner contended that the search *arrants are n ull and ,oid as their issuance ,iolated the Constitution and the "ules of Court for 5eing general *arrantsThe documents+ papers+ and things sei/ed under the alleged authorit6 of the *arrants in ?uestion ma6 5e split into t*o (9) maor groups+ namel6: (a) those found and sei/ed in the offices of the aforementioned corporations+ and (5) those found and sei/ed in the residences of petitioners hereinIssue3 @hether petitioners can ,alidl6 assail the search *arrant against the corporation4eld3 o-
As regards the first group+ *e hold that petitioners herein ha,e no cause of action to assail the legalit6 of the contested *arrants and of the sei/ures made in pursuance thereof+ for the simple reason that said corporations ha,e their respecti,e personalities+ separate and distinct from the personalit6 of herein petitioners+ regardless of the amount of shares of stoc> or of the interest of each of them in said corporations+ and *hate,er the offices the6 hold therein ma6 5e- %ndeed+ it is *ell settled that the legalit6 of a sei/ure can 5e contested onl6 56 the part6 *hose rights ha,e 5een impaired there56+ and that the o5ection to an unla*ful search and sei/ure is purel6 personal and cannot 5e a,ailed of 56 third parties- Conse?uentl6+ petitioners herein ma6 not ,alidl6 o5ect to the use in e,idence against them of the documents+ papers and things sei/ed from the offices and premises of the corporations ad,erted to a5o,e+ since the right to o5ect to the admission of said papers in e,idence 5elongs eclusi,el6 to the corporations+ to *hom the sei/ed effects 5elong+ and ma6 not 5e in,o>ed 56 the corporate officers in proceedings against them in their indi,idual capacit6-
Land $an6 of the "hilippines vs !ourt of Appeals
%n 82<+ !C# Management Corporation (!C#) o5tained loans amounting to a5out P94 million from $and an>- !C# defaulted in its pa6ment 5ut in 82<8+ !C # su5mitted a Pa6ment Plan *ith the hope of restructuring its loan- The plan *as reected and $and an> sued !C#- %t impleaded !mmanuel C- #ate+ the maorit6 stoc>holder of !C# *ho is ser,ing as the Chairman and treasurer of !C#The trial court ruled in fa,or of $and an> 5ut #ate *as a5sol,ed from lia5ilities- The Court of A ppeals affirmed the decision of the trial court$and an> appealed as it *anted #ate to 5e personall6 lia5le on the follo*ing grounds (among others): a) !C# stands for !mmanuel C- #ate+ 5) #ate is the maorit6 stoc>holder+ c) !C# *as formed ostensi5l6 to allo* #ate to ac?uire loans from $and an> *hich he used for his personal ad,antage+ d) #ate holds t*o positions in the corporation+ and e) !C# ne,er held an6 5oard meeting *hich ust sho*s onl6 #ate *as in control of the corporationISS123 @hether or not #ate should 5e held personall642L53 o- $and an> *as not a5le to produce sufficient e,idence to pro,e its claim- A corporation+ upon coming into eistence+ is in,ested 56 la* *ith a personalit6 separate and distinct from those persons composing it as *ell as from an6 other legal entit6 to *hich it ma6 5e related- The corporate fiction is onl6 disregarded *hen the fiction is used to defeat pu5lic con,enience+ ustif6 *rong+ protect fraud+ defend crime+ confuse legitimate legal or udicial issues+ perpetrate deception or other*ise circum,ent the la*- This is li>e*ise true *here the corporate entit6 is 5eing used as an alter ego+ adunct+ or 5usiness conduit for the sole 5enefit of the stoc>holders or of another corporate entit6- one of the foregoing *as pro,ed 56 $and an>-
The mere fact that #ate o*ned the maorit6 of the shares of !C# is not a ground to conclude that #ate and !C# is one and the same- Mere o*nership 56 a single stoc>holder of all or nearl6 all of the capital stoc> of a corporation is not 56 itself sufficient reason for disregarding the fiction of separate corporate personalities Anent the issue of the corporate name+ the fact that #ates initials coincide *ith the corporate name !C# is not sufficient to disregard the corporate fiction- !,en if !C# does stand for G!mmanuel C- #ateI+ it does not mean that the said corporation is merel6 a dumm6 of #ate- A corporation ma6 assume an6 name pro,ided it is la*ful- There is nothing illegal in a corporation ac?uiring the name or as in this case+ the initials of one of its shareholders-
$::! vs $A#;1AS
3 ooc filed a case of .ross %gnorance of the $a* and .ra,e A5use of Authorit6 against sheriff antuas in relation to a ci,il case-
3 ooc is the President of Fi,e &tar Mar>eting Corporation- &heriff antuas allegedl6 proceeded to file the otice of $e,6 despite the fact that the su5ect propert6 *as o*ned 56 the corporation *hich *as not a part6 to the case-
3 The corporation alleged that the propert6 *as o*ned 56 the corporation and that ooc had no share or interest in it+ 5ut antuas did not heed the corporation-
3 "espondent alleged that according to the documents from the &!C+ ooc *as the o*ner of 9 shares of stoc> in said corporation+ and that the le,6 *as made on the share+ rights andLor interest and participation *hich ooc+ as president and stoc>holder of the compan6+ ma6 ha,e in the parcel of land-
3 A careful scrutin6 of the records sho*s that respondent sheriff did not fail to mention that *hat *as 5eing le,ied upon and sold *as *hate,er shares+ rights+ interests and participation "ufino ooc+ as president and stoc>holder in Fi,e &tar Mar>eting Corporation ma6 ha,e on su5ect propert6- "espondent sheriff+ ho*e,er+ o,erstepped his authorit6 *hen he disregarded the distinct and separate personalit6 of the corporation from that of "ufino ooc as stoc>holder of the corporation 56 le,6ing on the propert6 of the corporation- "espondent sheriff should not ha,e made the le,6 5ased on mere conecture that since "ufino ooc is a stoc>holder and officer of the corporation+ then he might ha,e an interest or share in the su5ect propert6-
3 %t is settled that a corporation is clothed *ith a personalit6 separate and distinct from that of its stoc>holders- %t ma6 not 5e held lia5le for the personal inde5tedness of its stoc>holders-
"eople vs 5elima !ase 5igest
9acts3
$oren/o apilon escaped from the ail- &ome da6s after*ards+ policeman Felipe Delima found him in the house of Jorge Alegria+ armed *ith a pointed piece of 5am5oo in the shape of a lance+ and demanded his surrender- apilon ans*ered *ith a stro>e of his lance- Delima dodged+ it+ and to impose his authorit6 fired his re,ol,er+ 5ut the 5ullet did not hit him- apilon ran a*a6+ *ithout parting *ith his *eapon- Delima *ent after him and fired again his re,ol,er+ this time hitting and >illing him- Delima *as tried and con,icted for homicide and sentenced to reclusion temporal and the accessor6 penalties4eld3
The >illing *as done in the performance of a dut6- The deceased *as under the o5ligation to surrender+ and had no right+ after e,ading ser,ice of his sentence+ to commit assault and diso5edience *ith a *eapon in the hand+ *hich compelled the policeman to resort to such an etreme means+ *hich+ although it pro,ed to 5e fatal+ *as ustified 56 the circumstances-
!ase 5igest in 2vidence %'emedial Law-3 S2A:IL "etroleum !orp. vs. A1;:!:'"
&!A#%$ P!T"#$!M C#"P#"AT%# V&- AT#C#"P ."#P AD PA$ N- "#D"%.!O .-"- o- 84E=94+ #cto5er 80+ 9< 9A!;S3Petitioner &eaoil Petroleum Corporation purchased one unit of "#! 9 $C !ca,ator+ Model 822E from respondent Autocorp .roup- The sales agreement *as em5odied in the Vehicle &ales %n,oice o- A392 and Vehicle &ales Confirmation o- 91 <- &eaoil issued 89 chec>s as pa6ment therefor; ho*e,er 8 chec>s *ere not honored 56 the 5an> since &eaoil re?uested that pa6ment 5e stopped Autocorp filed a complaint for reco,er6 of personal propert6 *ith damages and reple,in in the "egional Trial Court&eaoil claims that &eaoil and Autocorp *ere onl6 utili/ed as conduits to settle the o5ligation of one foreign entit6 named niline Asia+ in fa,or of another foreign entit6+ Focus Point %nternational+ %ncorporated- The real transaction is that niline+ through "odrigue/+ o*ed mone6 to Focus- %n lieu of pa6ment+ niline instead agreed to con,e6 the eca,ator to Focus- This *as to 5e paid 56 chec>s issued 56 &eaoil 5ut *hich in turn *ere to 5e funded 56 chec>s issued 56 nilinePetitioner &eaoil in sum alleges that the *ritten agreement failed to epress the true intent and agreement of the parties+ thus parol e,idence is admissi5leISS123
@hether or not parol e,idence rule is applica5le in this case42L53
o- Although parol e,idence is admissi5le to eplain the meaning of a contract+ it cannot ser,e the purpose of incorporating into the contract additional contemporaneous conditions *hich are not mentioned at all in the *riting unless there has 5een fraud or mista>e- !,idence of a prior or contemporaneous ,er5al agreement is generall6 not admissi5le to ,ar6+ contradict or defeat the operation of a ,alid contractThe Vehicle &ales %n,oice is the 5est e,idence of the transaction- The terms of the su5ect sales in,oice are clear- The6 sho* that Autocorp sold to &eaoil one unit "o5e 9 $C !ca,ator paid for 56 chec>s issued 56 one "omeo Valera-
