Thursday, 26 August 2021

PEOPLE vs. CONCEPCION, 44 Phil. 126 (Credit Transaction Case Digest)

PEOPLE vs. CONCEPCION, 44 Phil. 126

FACTS: 

  1. Venancio Concepcion, President of the PNB and a member of the Board thereof is a partner of "Puno y Concepcion, S. en C.” 
  2. It authorized an extension of credit [300K] in favor of "Puno y Concepcion, S. en C.” to the manager of the Aparri branch, PNB. 
  3. Defendant Conception was found guilty of violating Sec. 35 of Act No. 2747 which provides that the National Bank shall not, directly or indirectly, grant loans to any of the members of the Board of Directors of the bank or to agents of the branch banks. 
    1. wife of the defendant, WHO IS A PARTNER, held one-half of the capital of this partnership
    2. A loan, therefore, to a partnership of which the wife of a director of a bank is a member, is an indirect loan to such director.
  4. As a defense, defendant’s counsel argued that the documents of record only prove a concession of a credit, and “not a loan” within the meaning of section 35 of Act No. 2747.


ISSUE: 

Whether  the granting of credit to the co-partnership was considered as a loan within the meaning of Sec. 35 of Act No. 2747.

HELD:  YES. 

  1. The "credit" of an individual means his ability to borrow money by virtue of the confidence or trust reposed by a lender that he will pay what he may promise.
  2. A "loan" means the delivery by one party and the receipt by the other party of a given sum of money, upon an agreement, express or implied, to repay the sum loaned, with or without interest. 
  3. The concession of a "credit" necessarily involves the granting of "loans" up to the limit of the amount fixed in the “credit,”
  4. GUILTY OF VIOLATION OF THE CRIME CHARGED IN THE INFORMATION
    1. when the corporation itself is forbidden to do an act, the prohibition extends to the board of directors, and to each director separately and individually.


WAS IT A LOAN OR DISCOUNT? IT WAS A LOAN

  1. In its last analysis, to discount a paper is only a mode of loaning money, with, however, these distinctions: 
    1. In a discount, interest is deducted in advance, while in a loan, interest is taken at the expiration of a credit; 
    2. a discount is always on double-name paper; a loan is generally on single-name paper.
  2. The law covers loans and not discounts, yet the conclusion is inevitable that the demand notes signed by the firm "Puno y Concepcion, S. en C." were not discount paper but were mere evidences of indebtedness, because
    1. interest was not deducted from the face of the notes, but was paid when the notes fell due; and 
    2. they were single-name and not double-name paper.

Thursday, 13 May 2021

CONSTITUTIONAL LAW CASE DIGESTS By: A.J. Gomez

 CONSTITUTIONAL LAW CASE DIGESTS

By: A.J. Gomez [May 14, 2021]




(1) Title of the Case: Denmark Valmores vs. Dra. Cristina Achacoso


G.R. No. and date of promulgation: G.R. No. 217453, July 19, 2017 (Religious Freedom)


Facts:

Petitioner Denmark S. Valmores (Valmores), a member of the Seventh-day Adventist Church, whose fundamental beliefs include the strict observance of the Sabbath as a sacred day. Petitioner Valmores was unable to take his Histo-Pathology laboratory examination held on September 13, 2015, a Saturday. Despite his request for exemption, no accommodation was given by either of the respondents. As a result, petitioner Valmores received a failing grade of 5 for that particular module and was considered ineligible to retake the exam.


Dr. Macapado Abaton Muslim (Dr. Muslim), President of MSU, instructed respondent Achacoso to enforce the 2010 CHED Memorandum. Despite the foregoing correspondence, petitioner Valmores' request still went unheeded. 


Issue: 

Whether mandamus lies to compel respondents to enforce the 2010 CHED Memorandum.


Ruling: YES.


The enforcement of the 2010 CHED Memorandum is compellable by writ of mandamus.


The Constitution guarantees the freedom to believe absolutely, while the freedom to act based on belief is subject to regulation by the State when necessary to protect the rights of others and in the interest of public welfare.


In the 2010 CHED Memorandum, the CHED laid down guidelines for the exemption of teachers, personnel, and students from participating in school or related activities due to compliance with religious obligations. 


Its policy is crystal clear: a student's religious obligations takes precedence over his academic responsibilities, consonant with the constitutional guarantee of free exercise and enjoyment of religious worship. Accordingly, the CHED imposed a positive duty on all HEIs to exempt students, as well as faculty members, from academic activities in case such activities interfere with their religious obligations.


That petitioner is being made to choose between honoring his religious obligations and finishing his education is a patent infringement of his religious freedoms. As the final bulwark of fundamental rights, the Court will not allow such violation to perpetuate any further.


As representatives of the State, educational institutions are bound to safeguard the religious freedom of their students. 


Thus, our schools carry the responsibility to restrict its own academic liberties, should they collide with constitutionally preferred rights.


Petition GRANTED.





(2) Title of the Case: Cesar Yatco vs. Bel-Air


G.R. No. and date of promulgation: G.R. No. 211780, November 21, 2018 (Right to Association)


Facts: 

Bel-Air Village Association, Inc. (Association), Bel-Air Village's homeowners' association, was constituted as a non-stock, non-profit association to promote its members' best interests. Under its by-laws, all lot owners of Bel-Air Village automatically became members of the Association.


Issue: 

Whether or not petitioners Cezar Yatco Real Estate Services, et. al., 

can be compelled to maintain their membership with respondent Bel-Air Village Association, Inc. under its bylaws. 


Ruling: YES.


In the case of Tanchoco v. Aquino, (154 SCRA 1[1987]), the Court ruled that purchasers of a registered land are bound by the annotations found at the back of the certificate of title covering the subject parcel of land. . . 


When the petitioner voluntarily bought the subject parcel of land it was understood that he took the same free of all encumbrances except notations at the back of the certificate of title, among them, that he automatically becomes a member of the respondent association.


Bel Air Village Association, Inc. also underscored that the constitutional guarantee of freedom of association can only be invoked against the State, and does not apply to private transactions, like a sale, where a condition was validly imposed by the vendor. [CONTRACT OF SALE ITO EH, PRIVATE CONTRACT]


PADCOM Condominium Corporation v. Ortigas Center Association, Inc. reiterated that automatic membership in a homeowners' association does not violate lot owners' right to freedom of association because they were not forced to buy their lots from the developer:


Petition DENIED. CA Decision AFFIRMED.





(3) Title of the Case: Davao City Water District vs. Aranjuez,  (Freedom of Expression)


G.R. No. and date of promulgation: G.R. 194192, June 16, 2015


Facts:

Petitioner Davao City Water District(DCWD) is a government-owned and controlled corporation in Davao City represented by its General Manager Engr. Rodora N. Gamboa (GM Gamboa). The private respondents, Rodrigo L. Aranjuez, Gregorio S., et. al., are officers and members of Nagkahiusang Mamumuo sa Davao City Water District (NAMADACWAD). 


Came the anniversary, officers and members sported t-shirts with inscriptions "CNA Incentive Ihatag Na, Dir. Braganza Pahawa Na!" at the beginning of the Fun Run at VictoriaPlaza at around 6:30 in the morning and continued to wear the same inside the premises of the DCWD office during the office hours. 


They were charged with several administrative cases due to acts committed during the anniversary celebration of DCWD. 


CSC ruled in favor of respondents. CA  affirmed in toto CSC Resolution.


Issue:

WoN the concerted mass action of respondents violates CSC Resolution No. 021316.


Ruling: NO.


The operative phrases are "any collective activity" and "work stoppage or service disruption." 


Without the intent at work stoppage or service disruption, the concerted activity is not prohibited. The time and place of the activity are not determinative of the prohibition. Whether done within government hours, a concerted activity is allowed if it is without any intent at work stoppage.


Respondents joined, and did not disrupt the fun run. They were in sports attire that they were allowed, and required, to wear. Else, government employees would be deprived of their constitutional right to freedom of expression. 


This freedom can be reasonably regulated only but can never be taken away.


In simple paraphrase we say, regulation of the freedom of expression is not removal of the constitutional right.


Petition DENIED. Nonetheless, the CSC Decision which was affirmed in toto by the CA is MODIFIED. 





(4) Title of the Case: Marcelo Saluday vs. People (Right to Privacy)


G.R. No. and date of promulgation: G.R. 215305, April 3, 2018, 


Facts:

Bus No. 66 of Davao Metro Shuttle was flagged down by Task Force Davao of the Philippine Army at a checkpoint near the Tefasco Wharf in Ilang, Davao City. SCAA Buco then requested petitioner to open the bag. The bag revealed firearms and explosives. Unable to show any authority, petitioner was immediately arrested and informed of his rights by SCAA Buco. The Prosecutor of Davao City found probable cause for violation of PD 1866. RTC declared petitioner to be in actual or constructive possession of firearm and explosive without authority or license. CA DISMISSED the appeal. 


Issue:

WoN the right of the petitioner to privacy and against unreasonable searches and seizures were violated


Ruling: NO.


The prohibition of unreasonable search and seizure ultimately stems from a person's right to privacy. 


The bus inspection conducted by Task Force Davao at a military checkpoint constitutes a reasonable search. Bus No. 66 of Davao Metro Shuttle was a vehicle of public transportation where passengers have a reduced expectation of privacy. Further, SCAA Buco merely lifted petitioner's bag. This visual and minimally intrusive inspection was even less than the standard x-ray and physical inspections done at the airport and seaport terminals, Section 2, Article III of the Constitution finds no application, thereby precluding the necessity for a warrant.


Also, petitioner consented to the baggage inspection done by SCAA Buco. When SCAA Buco asked if he could open petitioner's bag, petitioner answered "yes, just open it" based on petitioner's own testimony. This is clear consent by petitioner to the search of the contents of his bag. 


The search of persons in a public place is valid because the safety of others may be put at risk. The Court takes judicial notice that public transport buses and their tenninals, just like passenger ships and seaports, are in that category.


To emphasize, the guidelines do not apply to privately-owned cars. Neither are they applicable to moving vehicles dedicated for private or personal use, as in the case of taxis, which are hired by only one or a group of passengers such that the vehicle can no longer be flagged down by any other person until the passengers on board alight from the vehicle.


Petition DENIED. CA Decision and Resolution  AFFIRMED.




(5) Title of the Case: People vs. Lino Alejandro (Double Jeopardy)


G.R. No. and date of promulgation: G.R. 223099, February 11, 2018


Facts:

Accused-appellant was charged with two counts of rape, defined and penalized under Article 266-A, paragraph 1(a) of the Revised Penal Code, in relation to Republic Act No. 83693, of a 12-year old minor, AAA.


The RTC acquitted the accused-appellant. On the same day, however, the RTC recalled and set aside its decision. Motion for reconsideration on account of double jeopardy was denied. The CA dismissed the appeal and held that the RTC's Order 

was justified. 


Issue: 

WoN the accused-appellant's right against double jeopardy was violated. 


Ruling: YES.


In our jurisdiction, We adhere to the finality-of-acquittal doctrine, that is, a judgment of acquittal is final and unappealable.


Here, all the elements were present. There was a valid information for two counts of rape over which the RTC had jurisdiction and to which the accused-appellant entered a plea of not guilty. 


Indeed, a judgment of acquittal, whether ordered by the trial or the appellate court, is final, unappealable, and immediately executory upon its promulgation.


Also, exceptions of right against double jeopardy do not exist in this case. 


Too elementary is the rule that a decision once final is no longer susceptible to amendment or alteration except to correct errors which are clerical in nature, to clarify any ambiguity caused by an omission or mistake in the dispositive portion or to rectify a travesty of justice brought about by a moro-moro or mock trial. 


A final decision is the law of the case and is immutable and unalterable regardless of any claim of error or incorrectness.


The inherent power of a court to modify its order or decision does not extend to a judgment of acquittal in a criminal case.


Appeal GRANTED. CA Decision REVERSED and SET ASIDE.





(6) Title of the Case: Chiok vs. People  (Double Jeopardy)


G.R. No. and date of promulgation: G.R. No. 179814, December 7, 2015


Facts:

Chiok was charged with estafa, under Article 315, paragraph 1(b) of the Revised Penal Code. Chiok denied the allegations. 


The RTC convicted Chiok of the crime of estafa (RTC conviction). Chiok's motion for reconsideration was denied.


On appeal, the CA found that the RTC conviction did not contain findings of fact on the prosecution's evidence but merely recited the evidence of the prosecution as if such evidence was already proof of the ultimate facts constituting estafa. Simply put, the prosecution was not able to prove the element of misappropriation (i.e., deviation from Chua's instructions). 


Issue:

WoN the case is an exception to the rule on finality of acquittal and the doctrine of double jeopardy.


Ruling: NO. 


The appeal from the judgment of acquittal will place Chiok in double jeopardy.


Rules on criminal proceedings require that a judgment of acquittal, whether ordered by the trial or the appellate court, is final, unappealable, and immediately executory upon its promulgation. This is referred to as the "finality-of-acquittal" rule. 


At the outset, the CA validly acquired jurisdiction over Chiok's appeal. 


The Court also  did not see any exception to the rule on double jeopardy in this case.


The factual milieu in Galman v. Sandiganbayan is starkly different from this case. 


Purported errors of judgment or those involving misappreciation of evidence which cannot be raised and be reviewed in a petition for certiorari under Rule 65.


Certainly, no grave abuse of discretion can be ascribed where both parties had the opportunity to present their case and even required them to submit memoranda from which its decision is based, as in this case.


The petitioner must clearly and convincingly demonstrate that the appellate court blatantly abused its authority to a point so grave and so severe as to deprive it of its very power to dispense justice. Chua failed to do so.


Petition DENIED. The petition for review on certiorari GRANTED. CA Decision and Resolution AFFIRMED with the MODIFICATION 

CA’S ACQUITTAL BECOMES FINAL, NOT JUST ONLY ON THE RTC ACQUITTAL. ANY APPEAL ON THAT CONSTITUTES DOUBLE JEOPARDY. 




(7) Title of the Case: Jeffrey Miguel vs. People (Right Against Unreasonable Search and Seizure)


G.R. No. and date of promulgation: G.R. 227308, July 31, 2017


Facts:

Upon responding on a report of a man showing off his private parts at Kaong Street. Petitioner was brought to the police station for having seized in his possession

two (2) pieces of rolled paper containing dried marijuana leaves, which was later  confirmed and that petitioner was positive for the presence of methamphetamine but negative for THC-metabolites, both dangerous drugs.


Petitioner pleaded not guilty to the charge, and thereafter, presented a different version of the facts. 


The RTC found petitioner guilty beyond reasonable doubt. The CA affirmed petitioner's conviction.


Issue:

WoN the CA correctly upheld petitioner's conviction for illegal possession of dangerous drugs.


Ruling: NO.


The Bill of Rights may be applied to the Bantay Bayan operatives because such individuals act under the color of a state-related function.


However, in warrantless arrest, the officer's personal knowledge of the fact of the commission of an offense is essential. Verily, the prosecution's claim that petitioner was showing off his private parts was belied by the aforesaid testimonies. Clearly, these circumstances do not justify the conduct of an in flagrante delicto arrest, considering that there was no overt act constituting a crime committed by petitioner in the presence or within the view of the arresting officer. 


All told, the Bantay Bayan operatives conducted an illegal search on the person of petitioner. Consequently, the marijuana purportedly seized from him on account of such search is rendered inadmissible in evidence pursuant to the exclusionary rule under Section 3 (2), Article III of the 1987 Constitution. 


Petition GRANTED. CA Decision REVERSED and SET ASIDE. 




(8) Title of the Case: People vs. Jaime Sison  (Unreasonable Search)


G.R. No. and date of promulgation: G.R. No. 238453, July 31, 2019


Facts:

The Municipal Police Station of M'lang, North Cotabato received a radio message about a silver gray Isuzu pickup was transporting marijuana from Pikit. The Chief of Police instructed to set up a checkpoint. The tipped vehicle was found to have two (2) sacks of marijuana were discovered beside the engine.The vehicle, its driver, and its passengers were brought to the local police station. The driver and the two (2) passengers were later identified as Sison, Bautista, and Yanson, respectively. An Information was filed against Sison, Yanson, and Bautista RTC Cotabato City, charging them with violation of Section 4 of the Dangerous Drugs Act of 1972.


RTC convicted the accused. CA denied the appeal. 


Issue:

WoN a valid search and seizure was conducted.  


Ruling: NO

The finding of probable cause must be premised on more than just the initial information relayed by assets. It was the confluence of initial tips and a myriad of other occurrences that ultimately sustained probable cause.


Here, the police officers relied solely on the radio message they received when they proceeded to inspect the vehicle. Exclusive reliance on information tipped by informants goes against the very nature of probable cause. 


It cannot be said that Sison, the driver, consented to the search made by the arresting officers. Jurisprudence has settled that "[m]ere passive conformity or silence to the warrantless search is only an implied acquiescence, which amounts to no consent at all." Here, Sison, was under the coercive force of armed law enforcers. His consent, if at all, was clearly vitiated.


Thus, here, the arresting officers' search and subsequent seizure are invalid. As such, the two (2) sacks of marijuana supposedly being transported in the pickup cannot be admitted in evidence.


Even assuming that they were admissible, there remains no proof, whether direct or circumstantial, that the accused actually knew that there were drugs under the hood of their vehicle. Ultimately, their actual authorship of or conscious engagement in the illegal activity of transporting dangerous drugs could not be ascertained.


CA Decision REVERSED and SET ASIDE. 




(9) Title of the Case: People vs. Amador Pastrana (Unreasonable Search)


G.R. No. and date of promulgation: G.R No. 196045, February 21, 2108


Facts:

On the basis of received confidential information, NBI Special Investigator Albert Froilan Gaerlan (SI Gaerlan) was able to secure a search warrant from RTC Makati to search the office premises of respondents Amador Pastrana and Rufina Abad at Makati City. Respondent Abad moved to quash Search Warrant.


When the case was re-raffled to the RTC, Makati City, Branch 58. it ruled that the search warrant was null and void. CA affirmed the ruling of the RTC. 


Issue:

WoN NBI Agent Gaerlan’s search warrant was valid. 


Ruling: NO.

In this case, Search Warrant No. 01-118 was issued for "violation of R.A. No. 8799 (The Securities Regulation Code) and for estafa (Art. 315, RPC)." 


First, the SRC is not merely a special penal law. Hence, it is imperative to specify what particular provision of the SRC was violated.


Second, the applicant for the search warrant did not present proof that respondents lacked the license to operate as brokers or dealers. Such circumstance only reinforces the view that at the time of the application, the NBI and the SEC were in a quandary as to what offense to charge respondents with.


Third, contrary to petitioner's claim that violation of Section 28.1 of the SRC and estafa are so intertwined with each other that the issuance of a single search warrant does not violate the one-specific-offense rule, the two offenses are entirely different from each other and neither one necessarily includes or is necessarily included in the other. 


Moreover, The terms used in this warrant were too all-embracing, 


In fine, Search Warrant No. 01-118 is null and void for having been issued for more than one offense and for lack of particularity in the description of the things sought for seizure.


Petition DENIED. CA Decision AFFIRMED.




(10) Title of the Case: Jesus Nicardo Falcis, III vs. Civil Registrar General (Equal Protection Clause) (Right to Marry)


G.R. No. and date of promulgation: G.R. No. 21790, September 3, 2019


Facts: 

Jesus Nicardo M. Falcis III (Falcis) filed pro se before the Court a Petition for Certiorari and Prohibition under Rule 65 of the 1997 Rules of Civil Procedure, seeking to "declare Articles 1 and 2 of the Family Code as unconstitutional and, as a consequence, nullify Articles 46(4)2 and 55(6)3 of the Family Code,” claiming that Articles 1 and 2 of the Family Code deny the existence of "individuals belonging to religious denominations that believe in same-sex marriage" and that they have a "right to found a family in accordance with their religious convictions."


Issues:

  1. WoN denying same-sex couples the right to marry amounts to a denial of their right to lifeand/or liberty without due process of law;

  2. WoN limiting civil marriages to opposite-sex couples violates the equal protection clause;


Ruling:

  1. NO. Marriage is a legal relationship, entered into through a legal framework, and enforceable according to legal rules. Law stands at its very core. Due to this inherent “legalness” of marriage, the constitutional right to marry cannot be secured simply by removing legal barriers to something that exists outside of the law. Rather, the law itself must create the “thing” to which one has a right. As a result, the right to marry necessarily imposes an affirmative obligation on the state to establish this legal framework. 


Allowing same-sex marriage based on this Petition alone can delay other more inclusive and egalitarian arrangements that the State can acknowledge. Prematurely adjudicating issues in a judicial forum despite a bare absence of facts is presumptuous. It may unwittingly diminish the LGBTQI+ community’s capacity to create a strong movement that ensures lasting recognition, as well as public understanding, of SOGIESC.


  1. NO. Petitioner argues that there is no substantial distinction between same-sex and opposite-sex couples. 


However, petitioner miserably failed to discharge even the most elementary burden to demonstrate that the relief he prays for is within this Court's power to grant. Petitioner did not present to the Court any other provision of law that will be affected as a consequence of his Petition.


Petitioner has neither suffered any direct personal injury nor shown that he is in danger of suffering any injury from the present implementation of the Family Code. He has neither an actual case nor legal standing.


Petition DISMISSED. 

Friday, 7 May 2021

ATTY.’S NOTES [MAY 6, 2021 CORPLAW MEETING] — FINALS By: A.J. Gomez

 ATTY.’S NOTES [MAY 6, 2021 CORPLAW MEETING] — FINALS

By: A.J. Gomez


  1. When a foreign corporation buys shares from a filipino corporation, it is not doing business.


Mere advertisement is not doing business

Mere appointment of a lawyer or a nominee is not doing business.


Soliciting business in a continuing basis — doing business

Actively engaged in the management of a Filipino Corp — Doing Business



TWO TEST IN DETERMINING “DOING BUSINESS”

  1. Substance test — when the body of the business of the foreign corporation is conducted here in the Philippines. The AOI as stipulated in the purpose clause  determines the body of the business of the corp. 
  2. Continuity Test — continued series of transaction basis, a going concern. Showing an intention to establish its commercial presence in the Philippines. 


Why it is important to determine?

Firstly, So that we can determine whether or not they can be issued a license by the SEC. 


Foreign  Corp has two choices if they want to do business in the Philippines:

  1. THEY INCORPORATE A SUBSIDIARY 
  2. THE GET A LICENSE FROM THE SEC.


Secondly, whether or not to determine if a foreign corp will be allowed to gain access in the Philippine courts. 


Also, the foreign corp has to show to the SEC that your country allows the Philippines to also transact business in your foreign country under the rule of reciprocity.



Rules on suability with respect to foreign corp:

  1. With license, doing business — may sue and may be sued
  2. Doing business, but no license — may not sue, may be sued

XPN: doctrine of estoppel

      1. If you are full aware that foreign corp has no license and still you pursued to transact your business with that corp, you are estopped
      2. If you received benefits from such corporation without returning it. [unjust enrichment]
      3. Intellectual Property Suit — if their intellectual property rights are violated. That foreign corp will be allowed to sue. The Philippines is a signatory to an international treaty that grants intellectual property rights to those countries who are also signatory in the said treaty


3. A foreign corp not doing business, no license, but suing on isolated transaction — may sue on that isolated transaction, or series of transaction connected with the isolated transaction.



Can that foreign corp be sued? Under the doctrine of equity, YES. SC said , that is true, however, we allow persons of your kind to bring suits in the Philippines against Filipino Corp based on isolated transactions, so if we allow that to your kind, we should allow our own kind to sue you. But Expect the foreign corp to file a motion to dismiss based on lack of jurisdiction.



CORPORATE DISSOLUTION & LIQUIDATION


CORPORATE PERSONALITY OF THE CORP IS NOT A VESTED RIGHT. IT IS A PRIVILEGE GRANTED TO A CORP. Meaning, it may be terminated voluntarily by the corp itself, or involuntarily by the SEC or thru our regular courts or by a complaint of a third party.


End product of a corporate dissolution is the termination of a corporate life. The SJP of the corp ceases to exist essentially. It ceases to exist on paper. 


Different ways of dissolving the corp:

  1. Voluntary dissolution [codal]
  1. Without debts — mere administrative proceeding; get the necessary votes (majority vote of the bod, and majority vote of the stockholder) [CODAL]
  2. With debts — get the majority vote of the bod, 2/3 vote of the stockholder; file a verified complaint to the SEC. Certificate of Dissolution


  1. Involuntary dissolution

May be initiated by the SEC moto propio. The SEC may issue an order to dissolve. Or there is a verified complaint by a third party, based on grounds provided by law. E.g., non-use of corporate charter (5 years from the time it is formed and organized); inoperation; receipt of the SEC an order dissolving the corp, the SEC will be furnished a copy and the SEC may implement it.


If the corp was obtained thru fraud. Puro false info ang inilgagay mo sa AOI mo. Thats why make sure you verify the truthfulness of the information feed to you. You might be liable being a lawyer of the corp. Ground for dissolution and filing of criminal prosecution against those x x x


 Also, Upon finding thru a final judgment that a corp was used to commit criminal activities [Ground for dissolution] - NASA CODE


 Also, Toleration of the commission of crimes [directors, trustees, officers, employees [Ground for dissolution] Nasa CODE.



  1. Expiration of corporate term — though now, term is perpetual. No expiration. XPN. You are a corp that falls into the exception [formed before the RCC was revised, may lifespan yun for 50 years]. You inform the SEC that you are sticking with your original corporate term. [Corp before the passage of the RCC]. In that case, you are automatically dissolved on the fiftieth year and one day. Ipso facto.
  2. Shortening of corporate term — just amend your articles of corp. majority BOD, 2/3 OCS, and from 50 years you can shorten it to 10 years. 

Upon approval of amended AOI you are deemed dissolved [no need for certificate of dissolution] 


END PRODUCT — termination of corporate existence or corporate life. Technically speaking, on paper. Because on reality, something still needs to happen. 


What needs to happen is Corporate Liquidation or Winding Up of corporate affairs. This is where the settlement of corporate obligations are made. Meaning, payment of corporate debts and running after corporate debtors. File collection suit, damage suit etc., use corporate asset to pay off corporate creditors in accordance when preference of payment of creditors. Make good of trust fund doctrine, to satisfy corporate creditors which include the State  through the payment of tax obligations.


Once these corporate obligations are settled, and there are residual assets, this is where stockholders can partake of that, whether inchoate interest as a stock holder will now ripen into corporate rights over specific corporate assets.


What will be followed in the distribution is the AOI, or bylaws, or if it is contained in the plan of liquidation or distribution of assets, if there is none, SEC may intervene or RTC may intervene. But normally my distribution plan talaga.



How long does this dissolution process last? 


Technically three years counting from the dissolution of the corp. from the effectivity of the dissolution of the corp, you count three years. Hopefully, within three year period, you finish he winding up process. In reality, it goes beyond three years. Usually due to the litigation aspect. 


What happens after the expiration of the three year period, are they extinguish? Definitely not, they continue. The litigation continues.


Who is in charge of the liquidation process of the corporation? Who calls the shots?

Law says:

BOD takes charge of the liquidation process. Hire abogado, file cases, prosecute defense against corporation creditors, BOD.


HOWEVER, the mandate of the board will end on the third year from dissolution. What happens after the mandate of the board is terminated on the third year? Somebody has to continue the job of overseeing the winding up process.


The board may decide to appoint a receiver or trustee. 


Their job?

The remaining asset of the corp which is not yet distributed or liquidated will be vested under the name of the receiver or trustee for the purpose of completing the winding up process. 


Term of office? 


SC did not give him the deadline. So, As long as necessary. law knows fully well that litigation may prolong. So hindi siya binigyan nang dealine.


What happens if for example, the board during the three year winding up period engaged a lawyer for a collection suit and within the three year the BOD had not appointed a receiver or trustee?

 In this case, the counsel of record is the receiver or trustee. So the case continues until fully terminated or satisfied.


The appointment of receiver or trustee with whom the remaining asset of the corp will be vested and take charge of during the winding up process depends upon the BOD.

For example, Upon dissolution, the board may already  appoint a receiver or trustee. PWD TO. TOTAL DIYAN DIN NAMAN PAPUNTA YAN. Appoint a trustee or receiver right-away, or appoint a receiver or trustee after three years from dissolution.





NOTE: Liquidation and Rehabilitation are Completely opposite

Liquidation — the corp is beyond rehabilitation. It is insolvent and no longer viable to be revived. If viable to be revived, ang paguusapan natin ay hindi liquidation kundi rehabilitation. 

The goal of a Liquidation Proceeding is to wind up the affairs of the entity and distribute its assets among its creditors. It involves either the filing of a Petition for Liquidation or the failure or conversion of a Rehabilitation Proceeding into a Liquidation Proceeding.


Rehabilitation — how to improve the finance, customer based of the corp, etc. 

Rehabilitation aims to restore the corporation to a state of solvency or to its former healthy financial condition through the adaptation of a Rehabilitation Plan showing that the continued operations is economically feasible and its creditors can recover more if the debtor continues as a going concern instead of it being immediately liquidated


PEOPLE vs. CONCEPCION, 44 Phil. 126 (Credit Transaction Case Digest)

PEOPLE vs. CONCEPCION, 44 Phil. 126 FACTS:  Venancio Concepcion, President of the PNB and a member of the Board thereof is a partner of ...