Stonehill v. Diokno 20 SCRA 283 (1967) Concepcion, CJ Facts: 1.

Respondent (prosecution) made possible the issuance of 42 search warrants against the petitioner and the corporation to search persons and premises of several personal properties due to an alleged violation of Central Bank Laws, Tariff and Custom Laws, Internal Revenue Code and the Revised Penal Code of the Philippines. As a results, search and seizures were conducted in the both the residence of the petitioner and in the corporation's premises. 2. The petitioner contended that the search warrants are null and void as their issuance violated the Constitution and the Rules of Court for being general warrants. Thus, he filed a petition with the Supreme Court for certiorari, prohibition, mandamus and injunction to prevent the seized effects from being introduced as evidence in the deportation cases against the petitioner. The court issued the writ only for those effects found in the petitioner's residence. Issue: Whether or not the petitioner can validly assail the legality of the search and seizure in both premises RULING: No, he can only assail the search conducted in the residences but not those done in the corporation's premises. The petitioner has no cause of action in the second situation since a corporation has a personality separate and distinct from the personality of its officers or herein petitioner regardless of the amount of shares of stock or interest of each in the said corporation, and whatever office they hold therein. Only the party whose right has been impaired can validly object the legality of a seizure--a purely personal right which cannot be exercised by a third party. The right to object belongs to the corporation (for the 1st group of documents, papers, and things seized from the offices and the premises).

Bataan Shipyard & Engineering Co., Inc. vs Presidential Commission on Good Government on November 19, 2012 150 SCRA 181 Business Organization Corporation Law A Corporation Cannot Invoke the Right Against Self-Incrimination Facts: When President Corazon Aquino took power, the Presidential Commission on Good Government (PCGG) was formed in order to recover ill gotten wealth allegedly acquired by former President Marcos and his cronies. Aquino then issued two executive orders in 1986 and pursuant thereto; a sequestration and a takeover order were issued against Bataan Shipyard & engineering Co., Inc. (BASECO). BASECO was alleged to be in actuality owned and controlled by the Marcoses through the Romualdez family, and in turn, through dummy stockholders. The sequestration order issued in 1986 required, among others, that BASECO produce corporate records from 1973 to 1986 under pain of contempt of the PCGG if it fails to do so. BASECO assails this order as it avers, among others, that it is against BASECOs right against self incrimination and unreasonable searches and seizures. ISSUE: Whether or not BASECO is correct. HELD: No. First of all, PCGG has the right to require the production of such documents pursuant to the power granted to it. Second, and more importantly, right against self-incrimination has no application to juridical persons. There is a reserve right in the legislature to investigate the contracts of a corporation and find out whether it has exceeded its powers. It would be a strange anomaly to hold that a state, having chartered a corporation like BASECO to make use of certain franchises, could not, in the exercise of sovereignty, inquire how these franchises had been employed, and whether they had

been abused, and demand the production of the corporate books and papers for that purpose. Neither is the right against unreasonable searches and seizures applicable here. There were no searches made and no seizure pursuant to any search was ever made. BASECO was merely ordered to produce the corporate records. Professional Services, Inc V. CA (2010) G.R. No. 126297 February 2, 2010 Lessons Applicable: Liability for Torts (Corporate Law) FACTS: Enrique Agana told his wife Natividad Agana to go look for their neighbor, Dr. Ampil, a surgeon staff member of Medical City, a prominent and known hospital Natividad suffered from injury due to 2 gauges left inside her body so they sued Professional Inc. (PSI) Despite, the report of 2 missing gauzes after the operation PSI did NOT initiate an investigation

2. 3.

NOT limited to record the 2 missing gauzes Extended to determining Dr. Ampils role in it, bringing the matter to his attention and correcting his negligence

Admission bars itself from arguing that its corp. resp. is NOT yet in existence at the time Natividad underwent treatment Dr. Ampil - medial negligence PSI - Corporate Negligence NOTE: Liability unique to this case because of implied agency and admitted corporate duty 26 years already and Dr. Ampil's status could no longer be ascertained

Heirs of Wilson P. Gamboa vs. Finance Secretary Margarito Teves Et Al. G.R. No. 176579, October 9, 2012 [Constitutional Law, Corporation] The term capital does not refer to both preferred and common stocks treated as the same class of shares regardless of differences in voting rights and privileges. Consistent with the constitutional mandate that the State shall develop a self-reliant and independent national economy effectively controlled by Filipinos, the term "capital" means the outstanding capital stock entitled to vote (voting stock), coupled with beneficial ownership, both of which results to "effective control." "Mere legal title is insufficient to meet the 60 percent Filipino owned capital required in the Constitution for certain industries. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled with 60 percent of the voting rights, is required." In this case, such twin requirements must apply uniformly and across the

ISSUE: W/N PSI should be liable for tort. HELD: YES. 15M + 12% int. until full satisfaction. While PSI had no power to control the means/method by which Dr. Ampil conducted the surgery on Natividad, they had the power to review or cause the review PSI had the duty to tread on as captain of the ship for the purpose of ensuing the safety of the patients availing themselves of its services and facilities PSI defined its standards of corporate conduct: 1. Even after her operation to ensure her safety as a patient

board to all classes of shares comprising the capital. Thus, "the 60-40 ownership requirement in favor of Filipino citizens must apply separately to each class of shares, whether common, preferred nonvoting, preferred voting or any other class of shares." This guarantees that the controlling interest in public utilities always lies in the hands of Filipino citizens. Corporate Law Case Digest: Ching V. Sec. Of Justice (2006) 164317 February 6, 2006 Lessons Applicable: Corp. Officers or employees, through whose act, default or omission the corp. commits a crime, are themselves individually guilty of the crime (Corporate Law) FACTS: Sept-Oct 1980: PBMI, through Ching, Senior VP of Philippine Blooming Mills, Inc. (PBMI), applied with the Rizal Commercial Banking Corporation (RCBC) for the issuance of commercial letters of credit to finance its importation of assorted goods RCBC approved the application, and irrevocable letters of credit were issued in favor of Ching. The goods were purchased and delivered in trust to PBMI. Ching signed 13 trust receipts as surety, acknowledging delivery of the goods Under the receipts, Ching agreed to hold the goods in trust for RCBC, with authority to sell but not by way of conditional sale, pledge or otherwise In case such goods were sold, to turn over the proceeds thereof as soon as received, to apply against the relative acceptances and payment of other indebtedness to respondent bank. In case the goods remained unsold within the specified period, the goods were to be returned to RCBC without any need of demand.

goods, manufactured products or proceeds thereof, whether in the form of money or bills, receivables, or accounts separate and capable of identification - RCBCs property When the trust receipts matured, Ching failed to return the goods to RCBC, or to return their value amounting toP6,940,280.66 despite demands. RCBC filed a criminal complaint for estafa against petitioner in the Office of the City Prosecutor of Manila. December 8, 1995: no probable cause to charge petitioner with violating P.D. No. 115, as petitioners liability was only civil, not criminal, having signed the trust receipts as surety RCBC appealed the resolution to the Department of Justice (DOJ) via petition for review On July 13, 1999: reversed the assailed resolution of the City Prosecutor execution of said receipts is enough to indict the Ching as the official responsible for violation of P.D. No. 115 April 22, 2004: CA dismissed the petition for lack of merit and on procedural grounds Ching filed a petition for certiorari, prohibition and mandamus with the CA

ISSUE: W/N Ching should be held criminally liable. HELD: YES. DENIED for lack of merit There is no dispute that it was the Ching executed the 13 trust receipts. law points to him as the official responsible for the offense Since a corporation CANNOT be proceeded against criminally because it CANNOT commit crime in which personal violence or malicious intent is required, criminal action is limited to the corporate agents guilty of an act amounting to a crime and never against the corporation itself execution by Ching of receipts is enough to indict him as the official responsible for violation of PD 115

RCBC is estopped to still contend that PD 115 covers only goods which are ultimately destined for sale and not goods, like those imported by PBM, for use in manufacture. Moreover, PD 115 explicitly allows the prosecution of corporate officers without prejudice to the civil liabilities arising from the criminal offense thus, the civil liability imposed on respondent in RCBC vs. Court of Appeals case is clearly separate and distinct from his criminal liability under PD 115 Chings being a Senior Vice-President of the Philippine Blooming Mills does not exculpate him from any liability The crime defined in P.D. No. 115 is malum prohibitum but is classified as estafa under paragraph 1(b), Article 315 of the Revised Penal Code, or estafa with abuse of confidence. It may be committed by a corporation or other juridical entity or by natural persons. However, the penalty for the crime is imprisonment for the periods provided in said Article 315. law specifically makes the officers, employees or other officers or persons responsible for the offense, without prejudice to the civil liabilities of such corporation and/or board of directors, officers, or other officials or employees responsible for the offense rationale: officers or employees are vested with the authority and responsibility to devise means necessary to ensure compliance with the law and, if they fail to do so, are held criminally accountable; thus, they have a responsible share in the violations of the law If the crime is committed by a corporation or other juridical entity, the directors, officers, employees or other officers thereof responsible for the offense shall be charged and penalized for the crime, precisely because of the nature of the crime and the penalty therefor. A corporation cannot be arrested and imprisoned; hence, cannot be penalized for a crime punishable by imprisonment. However, a corporation may be charged and prosecuted for a crime if the imposable penalty is fine. Even if the statute prescribes both fine and imprisonment as penalty, a corporation may be prosecuted and, if found guilty, may be fined When a criminal statute designates an act of a corporation or a crime and prescribes punishment therefor, it creates a criminal

offense which, otherwise, would not exist and such can be committed only by the corporation. But when a penal statute does not expressly apply to corporations, it does not create an offense for which a corporation may be punished. On the other hand, if the State, by statute, defines a crime that may be committed by a corporation but prescribes the penalty therefor to be suffered by the officers, directors, or employees of such corporation or other persons responsible for the offense, only such individuals will suffer such penalty. Corporate officers or employees, through whose act, default or omission the corporation commits a crime, are themselves individually guilty of the crime. The principle applies whether or not the crime requires the consciousness of wrongdoing. It applies to those corporate agents who themselves commit the crime and to those, who, by virtue of their managerial positions or other similar relation to the corporation, could be deemed responsible for its commission, if by virtue of their relationship to the corporation, they had the power to prevent the act. Benefit is not an operative fact.