Cases-corpo.docx

SECTION 17 CORPORATE NAME Philips Export v. CA The statutory prohibition cannot be any clearer. To come within its scope, two requisites must be proven, namely: 1. that the complainant corporation acquired a prior right over the use of such corporate name; and 2. the proposed name is either: a) Deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law; or b) Identical; or c) Patently deceptive, confusing or contrary to existing law. Lyceum vs CA Secondary Meaning – although originally the word is generic, it has become appropriable by petitioner to the exclusion of other institutions. -

A word or phrase although originally incapable of exclusive appropriation with reference to an article on the market, because geographically or otherwise descriptive, might nonetheless have been used so long and so exclusively by one producer with reference to his article that, in that trade, and to that branch of the purchasing public, the word or phrase has come to mean that the article was his product.

GSIS v BPI The overriding consideration in determining whether a person, using ordinary care and discrimination, might be misled is the circumstance that both petitioner and respondent are engaged in the same business of banking. "The likelihood of confusion is accentuated in cases where the goods or business of one corporation are the same or substantially the same to that of another corporation SECTION 20 CORPORATION BY ESTOPPEL/DE FACTO Lozano vs Hon. De Los Santos -The grant of jurisdiction to the SEC must be viewed in the light of its nature and function under the law. This jurisdiction is determined by a concurrence of two elements: 1. The status or relationship of the parties; And 2. The nature of the question that is the subject of their controversy. -Consolidation becomes effective not upon mere agreement of the members but only upon issuance of the certificate of consolidation by the SEC -Jurisdiction is fixed by law and is not subject to the agreement of the parties. It cannot be acquired through or waived, enlarged or diminished by, any act or omission of the parties, neither can it be conferred by the acquiescence of the court.

International Express Travel vs CA 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. The application of the doctrine of estoppel applies to a third party only when he tries to escape liability on a contract from which he has benefited on the irrelevant ground of defective incorporation

Lee vs CA -A voting trust agreement may confer upon a trustee not only the stockholder's voting rights but also other rights pertaining to his shares as long as the voting trust agreement is not entered "for the purpose of circumventing the law against monopolies and illegal combinations in restraint of trade or used for purposes of fraud -The law simply provides that a voting trust agreement is an agreement in writing whereby one or more stockholders of a corporation consent to transfer his or their shares to a trustee in order to vest in the latter voting or other rights pertaining to said shares for a period not exceeding five years upon the fulfillment of statutory conditions and such other terms and conditions specified in the agreement. The five year-period may be extended in cases where the voting trust is executed pursuant to a loan agreement whereby the period is made contingent upon full payment of the loan.

Filipinas Port Services vs Go Section 34 Unfortunately, the bylaws of the corporation are silent as to the creation by its board of directors of an executive committee. Under Section 35 of the Corporation Code, the creation of an executive committee must be provided for in the bylaws of the corporation. Notwithstanding the silence of Filports bylaws on the matter, we cannot rule that the creation of the executive committee by the board of directors is illegal or unlawful. One reason is the absence of a showing as to the true nature and functions of said executive committee considering that the executive committee, referred to in Section 35 of the Corporation Code which is as powerful as the board of directors and in effect acting for the board itself, should be distinguished from other committees which are within the competency of the board to create at anytime and whose actions require ratification and confirmation by the board.[16] Another reason is that, ratiocinated by both the two (2) courts below, the Board of Directors has the power to create positions not provided for in Filports bylaws since the board is the corporations governing body, clearly upholding the power of its board to exercise its prerogatives in managing the business affairs of the corporation. Derivative Suit GR: Under the Corporation Code, where a corporation is an injured party, its power to sue is lodged with its board of directors or trustees. XPN: But an individual stockholder may be permitted to institute a derivative suit in behalf of the corporation in order to protect or vindicate corporate rights whenever the officials of the corporation refuse to sue, or when a demand upon them to file the necessary action would be futile because they are the ones to be sued, or because they hold control of the corporation. In such actions, the corporation is the real party-in-interest while the suing stockholder, in behalf of the corporation, is only a nominal party

Besides, the requisites before a derivative suit can be filed by a stockholder are present in this case, to wit: a)

The party bringing suit should be a shareholder as of the time of the act or transaction complained of, the number of his shares not being material b) The has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of directors for the appropriate relief but the latter has failed or refused to heed his plea; and c) The cause of action actually devolves on the corporation, the wrongdoing or harm having been, or being caused to the corporation and not to the particular stockholder bringing the suit Business Judgment Rule If the cause of the losses is merely error in business judgment, not amounting to bad faith or negligence, directors and/or officers are not liable. For them to be held accountable, the mismanagement and the resulting losses on account thereof are not the only matters to be proven; it is likewise necessary to show that the directors and/or officers acted in bad faith and with malice in doing the assailed acts. Bad faith does not simply connote bad judgment or negligence; it imports a dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of a known duty through some motive or interest or illwill partaking of the nature of fraud.

Abbot Lab vs Alcaraz Directors could not be liable except Personal liability of corporate directors, trustees or officers attaches only when: a)

they Assent to a patently unlawful act of the corporation, or when they are guilty of bad faith or gross negligence in directing its affairs, or when there is a conflict of interest resulting in damages to the corporation, its stockholders or other persons; b) they Consent to the issuance of watered down stocks or when, having knowledge of such issuance, do not forthwith file with the corporate secretary their written objection; c) they Agree to hold themselves personally and solidarily liable with the corporation; or d) they are Made by specific provision of law personally answerable for their corporate action.

Valle Verde vs Africa The holdover period is not part of the term of office of a member of the board of directors Under the Corporation Code, the board of directors shall hold office for one (1) year until their successors are elected and qualified. The provision was construed by the Court to mean that the term of the members of the board of directors shall be only for one year; their term expires one year after election to the office. The holdover period that time from the lapse of one year from a member’s election to the Board and until his successor’s election and qualification is not part of the director’s original term of office, nor is it a new term; the holdover period, however, constitutes part of his tenure. Corollary, when an incumbent member of the board of directors continues to serve in a holdover capacity, it implies that the office has a fixed term, which has expired, and the incumbent is holding the succeeding term.

G2 Associated Bank vs. Spouses Fronstroller The doctrine of apparent authority, with special reference to banks, had long been recognized in this jurisdiction. Apparent authority is derived not merely from practice. Its existence may be ascertained through 1) The general manner in which the corporation holds out an officer or agent as having the power to act, or in other words, the apparent authority to act in general, with which it clothes him; or 2) The acquiescence in his acts of a particular nature, with actual or constructive knowledge thereof, within or beyond the scope of his ordinary powers G5 Lintonjua vs. Litonjua Exercise reasonable diligence. If it is not a bank, the 3rd persons must be more diligent, Board of Resolution must be asked to be produced. H1 Lopez Realty vs NLRC Ultra Vires Act Act which refers to one which is not within the corporate powers conferred by the Corporation Code or articles of incorporation or not necessary or incidental in the exercise of the powers so conferred. * It is well settled that questions not raised in the lower courts cannot, be raised for the first time on appeal H8 Benito vs. SEC and Jamiatul Philippine-Al Islamia Inc Section 39 -> Pre-emptive right may be denied Types of Increase Increase in Peso Amount Increase in Total Amount of Shares Increase in Both As long as the increase is from the original unissued portion, pre-emptive right will not apply. General rule is that pre-emptive right is recognized only with respect to new issue of shares, and not with respect to additional issues of originally authorized shares. This is on the theory that when a corporation at its inception offers its first shares, it is presumed to have offered all of those which it is authorized to issue. An original subscriber is deemed to have taken his shares knowing that they form a definite proportionate part of the whole number of authorized shares. When the shares left unsubscribed are later re-offered, he cannot therefore claim a dilution of interest.