G.R. No.

152542 July 8, 2004

MONFORT HERMANOS AGRICULTURAL DEVELOPMENT CORPORATION, as
represented by MA. ANTONIA M. SALVATIERRA,
vs.
ANTONIO B. MONFORT III, MA. LUISA MONFORT ASCALON, ILDEFONSO B.
MONFORT, ALFREDO B. MONFORT, CARLOS M. RODRIGUEZ, EMILY FRANCISCA R.
DOLIQUEZ, ENCARNACION CECILIA R. PAYLADO, JOSE MARTIN M. RODRIGUEZ and
COURT OF APPEALS
G.R. No. 155472 July 8, 2004
ANTONIO B. MONFORT III, MA. LUISA MONFORT ASCALON, ILDEFONSO B.
MONFORT, ALFREDO B. MONFORT, CARLOS M. RODRIGUEZ, EMILY FRANCISCA R.
DOLIQUEZ, ENCARNACION CECILIA R. PAYLADO, JOSE MARTIN M. RODRIGUEZ,
vs.
HON. COURT OF APPEALS, MONFORT HERMANOS AGRICULTURAL DEVELOPMENT
CORPORATION, as represented by MA. ANTONIA M. SALVATIERRA, and RAMON H.
MONFORT
Monfort Hermanos Agricultural Development Corporation, a domestic private
corporation, is the registered owner of a farm, fishpond and sugar cane plantation known as
Haciendas San Antonio II, Marapara, Pinanoag and Tinampa-an, all situated in Cadiz City. It
also owns one unit of motor vehicle and two units of tractors. The same allowed Ramon H.
Monfort, its Executive Vice President, to breed and maintain fighting cocks in his personal
capacity at Hacienda San Antonio.
In 1997, the group of Antonio Monfort III, through force and intimidation, allegedly took
possession of the 4 Haciendas, the produce thereon and the motor vehicle and tractors, as
well as the fighting cocks of Ramon H. Monfort.
G.R. No. 155472:
April 10, 1997; the Corporation, represented by its president, Maria Antonia M.
Salvatierra and Ramon H. Monfort filed against Monfort III for the delivery of motor
vehicles, tractors, and 478 fighting cocks, with injunction and damages at the RTC of
Negros Occidental.
Respondents moved to dismiss, alleging that the petitioners have no authority to
represent the Corporation as the resolution by the board authorizing the same were
not validly elected by the same. The trial court dismissed the same. On appeal to the
CA, the dismissal was affirmed.
G.R. No. 152542:

April 21, 1997; Ma. Antonia M. Salvatierra filed a complaint for forcible entry,
injunction, and TRO against Monfort III at the MTC of Cadiz City, because the latter,
thru force and intimidation, took possession of the 4 Haciendas. Monfort III alleges
that they are harvesting the produce on behalf of the Corporation and not
themselves. Monfort III also questions the capacity of Salvatierra to sue on behalf of
the Corporation.
The MTC dismissed the complaint. On appeal to the RTC, the decision was reversed
and remanded the case for further proceeding. Monfort III appealed to the CA. The
CA set aside the decision of the RTC and dismissed the complaint for forcible entry
because Salvatierra didnt have the capacity to represent the Corporation. The
Corporation filed this petition for review with the SC.
WON Salvatierra has the legal capacity to represent the Corporation.
The group of Antonio Monfort III claims that the March 31, 1997 Board Resolution
authorizing Ma. Antonia M. Salvatierra and/or Ramon H. Monfort to represent the
Corporation is void because the purported Members of the Board who passed the
same were not validly elected officers of the Corporation.
A corporation has no power except those expressly conferred on it by the
Corporation Code and those that are implied or incidental to its existence. In turn, a
corporation exercises said powers through its board of directors and/or its duly
authorized officers and agents. Thus, it has been observed that the power of a
corporation to sue and be sued in any court is lodged with the board of directors that
exercises its corporate powers. In turn, physical acts of the corporation, like the
signing of documents, can be performed only by natural persons duly authorized for
the purpose by corporate by-laws or by a specific act of the board of directors.
Corporations are required under Section 26 of the Corporation Code to submit to the
SEC within 30 days after the election the names, nationalities and residences of the
elected directors, trustees and officers of the Corporation.
The six signatories to the March 31, 1997 Board Resolution authorizing Ma. Antonia
M. Salvatierra and/or Ramon H. Monfort to represent the Corporation were: Ma.
Antonia M. Salvatierra, President; Ramon H. Monfort, Executive Vice President;
Directors Paul M. Monfort, Yvete M. Benedicto and Jaqueline M. Yusay; and Ester S.
Monfort, Secretary. However, the names of the last four (4) signatories to the said
Board Resolution do not appear in the 1996 General Information Sheet submitted by
the Corporation with the SEC.
The objective sought to be achieved by Section 26 is to give the public information,
under sanction of oath of responsible officers, of the nature of business, financial
condition and operational status of the company together with information on its key
officers or managers so that those dealing with it and those who intend to do
business with it may know or have the means of knowing facts concerning the
corporation's financial resources and business responsibility.
A corporation is mandated to inform the SEC of the names and the change in the
composition of its officers and board of directors within 30 days after election if one
was held, or 15 days after the death, resignation or cessation of office of any of its
director, trustee or officer if any of them died, resigned or in any manner, ceased to
hold office. This, the Corporation failed to do. The alleged election of the directors
and officers who signed the March 31, 1997 Board Resolution was held on October
16, 1996, but the SEC was informed thereof more than two years later, or on
November 11, 1998. The 4 Directors appearing in the 1996 General Information
Sheet died between the years 1984 1987, but the records do not show if such
demise was reported to the SEC.
Considering the foregoing, we find that Ma. Antonia M. Salvatierra failed to prove that
four of those who authorized her to represent the Corporation were the lawfully
elected Members of the Board of the Corporation. As such, they cannot confer valid
authority for her to sue on behalf of the corporation.
The Court notes that the complaint in Civil Case No. 506-C, for replevin before the
Regional Trial Court of Negros Occidental, Branch 60, has 2 causes of action, i.e.,
unlawful detention of the Corporation's motor vehicle and tractors, and the unlawful
detention of the of 387 fighting cocks of Ramon H. Monfort. Since Ramon sought
redress of the latter cause of action in his personal capacity, the dismissal of the
complaint for lack of capacity to sue on behalf of the corporation should be limited
only to the corporation's cause of action for delivery of motor vehicle and tractors. In
view, however, of the demise of Ramon on June 25, 1999, substitution by his heirs is
proper.
G.R. No. L-23145 November 29, 1968
TESTATE ESTATE OF IDONAH SLADE PERKINS, deceased. RENATO D. TAYAG,
vs.
BENGUET CONSOLIDATED, INC.,
Idonah Slade Perkins, who died on in New York City, left among others, two stock
certificates covering 33,002 shares of appellant, the certificates being in the
possession of the County Trust Company of New York, which as noted, is the
domiciliary administrator of the estate of the deceased.
Renato Tayag, was substituted as ancilliary administrator of Perkins estate. A
dispute arose between the Tayag and the domiciary administrator of New York as to
who was entitled to possession of the stock certificates.
January 27, 1964; the CFI of Manila ordered the domiciary administrator, County
Trust Company, to produce and deposit the stock certificates with the CFI or clerk
of court. The domiciary did not comply. Tayag then filed a petition to issue an order
declaring the certificate or certificates of stocks in question to be declared or
considered lost. The lower court granted the petition.
Respondents opposed the petition because the certificates are in existence and in
the possession of the County Trust Company. Moreover it would allege that there
was failure to observe certain requirements of its by-laws before new stock
certificates could be issued.
WON the order to provide Tayag with new certificates of stock is wrong
WON new certificates may be granted considering that the said certificates
were not lost
WON there is a violation of the respondents by-laws
As to first issue, appellant Benguet Consolidated, Inc. did not dispute the power of
the appellee ancillary administrator to gain control and possession of all assets of the
decedent within the jurisdiction of the Philippines. It would follow then that the
authority of the probate court to require that ancillary administrator's right to "the
stock certificates must be respected.
"It is often necessary to have more than one administration of an estate. When a
person dies intestate owning property in the country of his domicile as well as in a
foreign country, administration is had in both countries. That which is granted in the
jurisdiction of decedent's last domicile is termed the principal administration, while
any other administration is termed the ancillary administration. The reason for the
latter is because a grant of administration does not ex proprio vigore have any effect
beyond the limits of the country in which it is granted. Hence, an administrator
appointed in a foreign state has no authority in the [Philippines]. The ancillary
administration is proper, whenever a person dies, leaving in a country other than that
of his last domicile, property to be administered in the nature of assets of the
deceased liable for his individual debts or to be distributed among his heirs."
As to the second issue, respondent would argue that "lower court could not "consider
as lost" the stock certificates in question when, as a matter of fact, his Honor the trial
Judge knew, and does know, and it is admitted by the appellee, that the said stock
certificates are in existence and are today in the possession of the domiciliary
administrator in New York."
There may be an element of fiction in the above view of the lower court. That
certainly does not suffice to call for the reversal of the appealed order. Since there is
a refusal, persistently adhered to by the domiciliary administrator in New York, to
deliver the shares of stocks of appellant corporation owned by the decedent to the
ancillary administrator in the Philippines, there was nothing unreasonable or arbitrary
in considering them as lost and requiring the appellant to issue new certificates in
lieu thereof. Thereby, the task incumbent under the law on the ancillary administrator
could be discharged and his responsibility fulfilled.
According to Frankfurter, "that fictions which the law may rely upon in the pursuit of
legitimate ends have played an important part in its development."
What cannot be disputed, therefore, is the at times indispensable role that fictions as
such played in the law. There should be then on the part of the appellant a further
refinement in the catholicity of its condemnation of such judicial technique. If ever an
occasion did call for the employment of a legal fiction to put an end to the anomalous
situation of a valid judicial order being disregarded with apparent impunity, this is it.
What is thus most obvious is that this particular alleged error does not carry
persuasion.
As to the third issue, respondents by-laws provide the procedure to be followed in
case of lost, stolen, or destroyed stock certificates; it would stress that in the event of
a contest or the pendency of an action regarding ownership of such certificate or
certificates of stock allegedly lost, stolen or destroyed, the issuance of a new
certificate or certificates would await the "final decision by [a] court regarding the
ownership [thereof]."
Such reliance is misplaced. In the first place, there is no such occasion to apply such
by-law. It is admitted that the foreign domiciliary administrator did not appeal from the
order now in question. Moreover, there is likewise the express admission of appellant
that as far as it is concerned, "it is immaterial ... who is entitled to the possession of
the stock certificates ..." Even if such were not the case, it would be a legal absurdity
to impart to such a provision conclusiveness and finality. Assuming that a contrariety
exists between the above by-law and the command of a court decree, the latter is to
be followed.
As to Philippine Jurisprudence, a corporation is a creature without any existence until
it has received the imprimatur of the state according to law. It is logically
inconceivable therefore that it will have rights and privileges of a higher priority than
that of its creator. More than that, it cannot legitimately refuse to yield obedience to
acts of its state organs, certainly not excluding the judiciary, whenever called upon to
do so.
To assert that it can choose which court order to follow and which to disregard is to
confer upon it not autonomy which may be conceded but license which cannot be
tolerated. It is to argue that it may, when so minded, overrule the state, the source of
its very existence; it is to contend that what any of its governmental organs may
lawfully require could be ignored at will. So extravagant a claim cannot possibly merit
approval.
It is infinitely worse if through the absence of any coercive power by our courts over
juridical persons within our jurisdiction, the force and effectivity of their orders could
be made to depend on the whim or caprice of alien entities. It is difficult to imagine of
a situation more offensive to the dignity of the bench or the honor of the country.



G.R. No. 119002 October 19, 2000
INTERNATIONAL EXPRESS TRAVEL & TOUR SERVICES, INC.,
vs.
HON. COURT OF APPEALS, HENRI KAHN, PHILIPPINE FOOTBALL FEDERATION,
June 30 1989; petitioner International Express Travel and Tour Services, Inc.,
through its managing director, wrote a letter to the Philippine Football Federation
(Federation), through its president private respondent Henri Kahn, wherein the
former offered its services as a travel agency to the latter.
Petitioner secured the airline tickets to the SEA Games in Kuala Lumpur and various
trips to China and Brisbane amounting to P449,654.83. the Federation made 2 partial
payments on September 1989 in the amount of P176,467.50.
October 4, 1989; petitioner wrote the Federation to pay the P265,894.33. October
30, 1989; Federation paid P31,603. December 27, 1989; Henri Kahn issued a check
for P50k for the outstanding balance of the Federation. Thereafter, no further
payments were made despite demands.
Petitioner filed a civil case in the RTC of Manila, suing Kahn and the Federation for
the balance. Kahn argues that he cannot be sued because he merely acted as an
agent of the Federation, having a separate and distinct personality.
The RTC ruled for petitioner saying: the defendant Henri Kahn has adduced any
evidence proving the corporate existence of the defendant Federation. A voluntary
unincorporated association, like defendant Federation has no power to enter into, or
to ratify, a contract. The contract entered into by its officers or agents on behalf of
such association is not binding on, or enforceable against it. The officers or agents
are themselves personally liable.
On appeal to the CA, the decision was reversed. The CA recognized the juridical
existence of the Federation. It rationalized that since petitioner failed to prove that
Henri Kahn guaranteed the obligation of the Federation, he should not be held liable
for the same as said entity has a separate and distinct personality from its officers.
WON the federation has judicial personality
The appellate court recognized the existence of the Federation. In support of this, the
CA cited Republic Act 3135, otherwise known as the Revised Charter of the
Philippine Amateur Athletic Federation, and Presidential Decree No. 604 as the laws
from which said Federation derives its existence.
RA 3135, Section 14;
SEC. 14. Functions, powers and duties of Associations. - The National Sports'
Association shall have the following functions, powers and duties:
1. To adopt a constitution and by-laws for their internal organization and government;
2. To raise funds by donations, benefits, and other means for their purposes.
3. To purchase, sell, lease or otherwise encumber property both real and personal,
for the accomplishment of their purpose;
4. To affiliate with international or regional sports' Associations after due consultation
with the executive committee;
13. To perform such other acts as may be necessary for the proper accomplishment
of their purposes and not inconsistent with this Act.
PD 604, Section 8:
SEC. 8. Functions, Powers, and Duties of National Sports Association. - The
National sports associations shall have the following functions, powers, and duties:
1. Adopt a Constitution and By-Laws for their internal organization and government
which shall be submitted to the Department and any amendment thereto shall take
effect upon approval by the Department: Provided, however, That no team, school,
club, organization, or entity shall be admitted as a voting member of an association
unless 60 per cent of the athletes composing said team, school, club, organization,
or entity are Filipino citizens;
2. Raise funds by donations, benefits, and other means for their purpose subject to
the approval of the Department;
3. Purchase, sell, lease, or otherwise encumber property, both real and personal, for
the accomplishment of their purpose;
4. Conduct local, interport, and international competitions, other than the Olympic
and Asian Games, for the promotion of their sport;
5. Affiliate with international or regional sports associations after due consultation
with the Department;
13. Perform such other functions as may be provided by law.
The above powers and functions granted to national sports associations clearly
indicate that these entities may acquire a juridical personality. The powers to
purchase, sell, lease and encumber property are acts, which may only be done by
persons, whether natural or artificial, with juridical capacity. However, while we agree
with the appellate court that national sports associations may be accorded corporate
status, such does not automatically take place by the mere passage of these laws.
Before a corporation may acquire juridical personality, the State must give its
consent either in the form of a special law or a general enabling act. We cannot
agree with the view of the appellate court and the private respondent that the
Philippine Football Federation came into existence upon the passage of these laws.
Nowhere can it be found in R.A. 3135 or P.D. 604 any provision creating the
Philippine Football Federation. These laws merely recognized the existence of
national sports associations and provided the manner by which these entities may
acquire juridical personality.
Before an entity may be considered as a national sports association, such entity
must be recognized by the accrediting organization, the Philippine Amateur Athletic
Federation under R.A. 3135, and the Department of Youth and Sports Development
under P.D. 604. This fact of recognition, however, Henri Kahn failed to substantiate.
In attempting to prove the juridical existence of the Federation, Henri Kahn attached
to his motion for reconsideration before the trial court a copy of the constitution and
by-laws of the Philippine Football Federation. Unfortunately, the same does not
prove that said Federation has indeed been recognized and accredited by either the
Philippine Amateur Athletic Federation or the Department of Youth and Sports
Development. Accordingly, we rule that the Philippine Football Federation is not a
national sports association within the purview of the aforementioned laws and does
not have corporate existence of its own.
Thus being said, it follows that private respondent Henry Kahn should be held liable
for the unpaid obligations of the unincorporated Philippine Football Federation. It is a
settled principal in corporation law that any person acting or purporting to act on
behalf of a corporation, which has no valid existence, assumes such privileges and
becomes personally liable for contract entered into or for other acts performed as
such agent.