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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
G.R. No. 181571 [2009]
Article 155 of the Intellectual Property Code identifies
the acts constituting infringement of trademark, viz.:
Section 155. Remedies; Infringement. Any person
who shall, without the consent of the owner of the
registered mark:
155.1. Use in commerce any reproduction,
counterfeit, copy, or colorable imitation of a
registered mark or the same container or a dominant
feature thereof in connection with the sale, offering
for sale, distribution, advertising of any goods or
services including other preparatory steps necessary
to carry out the sale of any goods or services on or in
connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably
imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit,
copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in
connection with the sale, offering for sale,
distribution, or advertising of goods or services on or
in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be
liable in a civil action for infringement by the
registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the
moment any of the acts stated in Subsection 155.1 or
this subsection are committed regardless of whether
there is actual sale of goods or services using the
infringing material.
The seized Fundador brandy, when compared with
the genuine product, revealed several characteristics
of counterfeiting, namely: (a) the Bureau of Internal
Revenue (BIR) seal label attached to the confiscated
products did not reflect the word tunay when he
flashed a black light against the BIR label; (b) the
"tamper evident ring" on the confiscated item did not
contain the word Fundador; and (c) the word
Fundador on the label was printed flat with sharper
edges, unlike the raised, actually embossed, and finely
printed genuine Fundador trademark.
There is no question, therefore, that Batistis exerted
the effort to make the counterfeit products look
genuine to deceive the unwary public into regarding
the products as genuine. The buying public would be
easy to fall for the counterfeit products due to their
having been given the appearance of the genuine
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products, particularly with the difficulty of detecting
whether the products were fake or real if the buyers
had no experience and the tools for detection, like
black light. He thereby infringed the registered
Fundador trademark by the colorable imitation of it
through applying the dominant features of the
trademark on the fake products, particularly the two
bottles filled with Fundador brandy. His acts
constituted infringement of trademark as set forth in
Section 155, supra.
G.R. No. 157049. August 11, 2010
Unquestionably, the petitioner, being a banking
institution, had the direct obligation to supervise very
closely the employees handling its depositors'
accounts, and should always be mindful of the fiduciary
nature of its relationship with the depositors. Such
relationship required it and its employees to record
accurately every single transaction, and as promptly as
possible, considering that the depositors' accounts
should always reflect the amounts of money the
depositors could dispose of as they saw fit, confident
that, as a bank, it would deliver the amounts to
whomever they directed. If it fell short of that
obligation, it should bear the responsibility for the
consequences to the depositors, who, like the
respondent, suffered particular embarrassment and
disturbed peace of mind from the negligence in the
handling of the accounts.
G.R. No. 157479. November 24, 2010
A stockholder who dissents from certain corporate
actions has the right to demand payment of the fair
value of his or her shares. This right, known as the right
of appraisal, is expressly recognized in Section 81 of the
Corporation Code, to wit:
Sec. 81. Instances of appraisal right. - Any stockholder
of a corporation shall have the right to dissent and
demand payment of the fair value of his shares in the
following instances:
1. In case any amendment to the articles of
incorporation has the effect of changing or restricting
the rights of any stockholder or class of shares, or of
authorizing preferences in any respect superior to
those of outstanding shares of any class, or of
extending or shortening the term of corporate
existence;
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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
2. In case of sale, lease, exchange, transfer, mortgage,
pledge or other disposition of all or substantially all of
the corporate property and assets as provided in the
Code; and
3. In case of merger or consolidation.
Clearly, the right of appraisal may be exercised when
there is a fundamental change in the charter or articles
of incorporation substantially prejudicing the rights of
the stockholders. It does not vest unless objectionable
corporate action is taken. It serves the purpose of
enabling the dissenting stockholder to have his
interests purchased and to retire from the corporation.
G.R. No. 157479. November 24, 2010
A corporation can purchase its own shares, provided
payment is made out of surplus profits and the
acquisition is for a legitimate corporate purpose. In the
Philippines, this new rule is embodied in Section 41 of
the Corporation Code, to wit:
Sec. 41. Power to acquire own shares. - A stock
corporation shall have the power to purchase or
acquire its own shares for a legitimate corporate
purpose or purposes, including but not limited to the
following cases: Provided, That the corporation has
unrestricted retained earnings in its books to cover the
shares to be purchased or acquired:
1. To eliminate fractional shares arising out of stock
dividends;
2. To collect or compromise an indebtedness to the
corporation, arising out of unpaid subscription, in a
delinquency sale, and to purchase delinquent shares
sold during said sale; and
3. To pay dissenting or withdrawing stockholders
entitled to payment for their shares under the
provisions of this Code.
G.R. No. 157479. November 24, 2010
The Corporation Code defines how the right of
appraisal is exercised, as well as the implications of the
right of appraisal, as follows:
1. The appraisal right is exercised by any stockholder
who has voted against the proposed corporate action
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by making a written demand on the corporation within
30 days after the date on which the vote was taken for
the payment of the fair value of his shares. The failure
to make the demand within the period is deemed a
waiver of the appraisal right.
2. If the withdrawing stockholder and the corporation
cannot agree on the fair value of the shares within a
period of 60 days from the date the stockholders
approved the corporate action, the fair value shall be
determined and appraised by three disinterested
persons, one of whom shall be named by the
stockholder, another by the corporation, and the third
by the two thus chosen. The findings and award of the
majority of the appraisers shall be final, and the
corporation shall pay their award within 30 days after
the award is made. Upon payment by the corporation
of the agreed or awarded price, the stockholder shall
forthwith transfer his or her shares to the corporation.
3. All rights accruing to the withdrawing stockholder's
shares, including voting and dividend rights, shall be
suspended from the time of demand for the payment
of the fair value of the shares until either the
abandonment of the corporate action involved or the
purchase of the shares by the corporation, except the
right of such stockholder to receive payment of the fair
value of the shares.
4. Within 10 days after demanding payment for his or
her shares, a dissenting stockholder shall submit to the
corporation the certificates of stock representing his
shares for notation thereon that such shares are
dissenting shares. A failure to do so shall, at the option
of the corporation, terminate his rights under this Title
X of the Corporation Code. If shares represented by the
certificates bearing such notation are transferred, and
the certificates are consequently cancelled, the rights
of the transferor as a dissenting stockholder under this
Title shall cease and the transferee shall have all the
rights of a regular stockholder; and all dividend
distributions that would have accrued on such shares
shall be paid to the transferee.
5. If the proposed corporate action is implemented or
effected, the corporation shall pay to such stockholder,
upon the surrender of the certificates of stock
representing his shares, the fair value thereof as of the
day prior to the date on which the vote was taken,
excluding any appreciation or depreciation in
anticipation of such corporate action.
Notwithstanding the foregoing, no payment shall be
made to any dissenting stockholder unless the
corporation has unrestricted retained earnings in its
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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
books to cover the payment. In case the corporation
has no available unrestricted retained earnings in its
books, Section 83 of the Corporation Code provides
that if the dissenting stockholder is not paid the value
of his shares within 30 days after the award, his voting
and dividend rights shall immediately be restored.
G.R. No. 157479. November 24, 2010
The trust fund doctrine backstops the requirement of
unrestricted retained earnings to fund the payment of
the shares of stocks of the withdrawing stockholders.
Under the doctrine, the capital stock, property, and
other assets of a corporation are regarded as equity in
trust for the payment of corporate creditors, who are
preferred in the distribution of corporate assets. The
creditors of a corporation have the right to assume that
the board of directors will not use the assets of the
corporation to purchase its own stock for as long as the
corporation has outstanding debts and liabilities. There
can be no distribution of assets among the
stockholders without first paying corporate debts.
Thus, any disposition of corporate funds and assets to
the prejudice of creditors is null and void.
G.R. No. 157802. October 13, 2010
Where the complaint for illegal dismissal concerns a
corporate officer, however, the controversy falls under
the jurisdiction of the Securities and Exchange
Commission (SEC), because the controversy arises out
of intra-corporate or partnership relations between
and among stockholders, members, or associates, or
between any or all of them and the corporation,
partnership, or association of which they are
stockholders, members, or associates, respectively;
and between such corporation, partnership, or
association and the State insofar as the controversy
concerns their individual franchise or right to exist as
such entity; or because the controversy involves the
election or appointment of a director, trustee, officer,
or manager of such corporation, partnership, or
association. Such controversy, among others, is known
as an intra-corporate dispute.
Effective on August 8, 2000, upon the passage of
Republic Act No. 8799, otherwise known as The
Securities Regulation Code, the SEC's jurisdiction over
all intracorporate disputes was transferred to the RTC,
pursuant to Section 5.2 of RA No. 8799.
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COMPILED BY ATTY. R.A.L. CASABAR
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G.R. No. 157802. October 13, 2010
Section 25 of the Corporation Code provides:
Sec. 25. Corporate officers, quorum. - Immediately
after their election, the directors of a corporation must
formally organize by the election of a president, who
shall be a director, a treasurer who may or may not be
a director, a secretary who shall be a resident and
citizen of the Philippines, and such other officers as
may be provided for in the by-laws. Any two (2) or more
positions may be held concurrently by the same
person, except that no one shall act as president and
secretary or as president and treasurer at the same
time.
The directors or trustees and officers to be elected
shall perform the duties enjoined on them by law and
the by-laws of the corporation. Unless the articles of
incorporation or the by-laws provide for a greater
majority, a majority of the number of directors or
trustees as fixed in the articles of incorporation shall
constitute a quorum for the transaction of corporate
business, and every decision of at least a majority of
the directors or trustees present at a meeting at which
there is a quorum shall be valid as a corporate act,
except for the election of officers which shall require
the vote of a majority of all the members of the board.
Directors or trustees cannot attend or vote by proxy at
board meetings.
Conformably with Section 25, a position must be
expressly mentioned in the By-Laws in order to be
considered as a corporate office. Thus, the creation of
an office pursuant to or under a By-Law enabling
provision is not enough to make a position a corporate
office. The only officers of a corporation were those
given that character either by the Corporation Code or
by the By-Laws; the rest of the corporate officers could
be considered only as employees or subordinate
officials.
G.R. No. 157802. October 13, 2010
An "office" is created by the charter of the corporation
and the officer is elected by the directors or
stockholders. On the other hand, an employee
occupies no office and generally is employed not by the
action of the directors or stockholders but by the
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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
managing officer of the corporation who also
determines the compensation to be paid to such
employee.
In this case, respondent was appointed vice president
for nationwide expansion by Malonzo, petitioner's
general manager, not by the board of directors of
petitioner. It was also Malonzo who determined the
compensation package of respondent. Thus,
respondent was an employee, not a "corporate
officer." The CA was therefore correct in ruling that
jurisdiction over the case was properly with the NLRC,
not the SEC (now the RTC).
This interpretation is the correct application of Section
25 of the Corporation Code, which plainly states that
the corporate officers are the President, Secretary,
Treasurer and such other officers as may be provided
for in the By-Laws. Accordingly, the corporate officers
in the context of PD No. 902-A are exclusively those
who are given that character either by the Corporation
Code or by the corporation's By-Laws.
A different interpretation can easily leave the way open
for the Board of Directors to circumvent the
constitutionally guaranteed security of tenure of the
employee by the expedient inclusion in the By-Laws of
an enabling clause on the creation of just any corporate
officer position.
Moreover, the Board of Directors of Matling could not
validly delegate the power to create a corporate office
to the President, in light of Section 25 of the
Corporation Code requiring the Board of Directors
itself to elect the corporate officers. Verily, the power
to elect the corporate officers was a discretionary
power that the law exclusively vested in the Board of
Directors, and could not be delegated to subordinate
officers or agents. The office of Vice President for
Finance and Administration created by Matling's
President pursuant to By Law No. V was an ordinary,
not a corporate, office.
G.R. No. 157802. October 13, 2010
In order that the SEC (now the regular courts) can take
cognizance of a case, the controversy must pertain to
any of the following relationships:
a) between the corporation, partnership or association
and the public;
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COMPILED BY ATTY. R.A.L. CASABAR
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b) between the corporation, partnership or association
and its stockholders, partners, members or officers;
c) between the corporation, partnership or association
and the State as far as its franchise, permit or license to
operate is concerned; and
d) among the stockholders, partners or associates
themselves.
The fact that the parties involved in the controversy are
all stockholders or that the parties involved are the
stockholders and the corporation does not necessarily
place the dispute within the ambit of the jurisdiction of
SEC. The better policy to be followed in determining
jurisdiction over a case should be to consider
concurrent factors such as the status or relationship of
the parties or the nature of the question that is the
subject of their controversy. In the absence of any one
of these factors, the SEC will not have jurisdiction.
Furthermore, it does not necessarily follow that every
conflict between the corporation and its stockholders
would involve such corporate matters as only the SEC
can resolve in the exercise of its adjudicatory or quasi-
judicial powers.
G.R. No. 157802. October 13, 2010
The criteria for distinguishing between corporate
officers who may be ousted from office at will, on one
hand, and ordinary corporate employees who may only
be terminated for just cause, on the other hand, do not
depend on the nature of the services performed, but
on the manner of creation of the office. In the
respondent's case, he was supposedly at once an
employee, a stockholder, and a Director of Matling.
The circumstances surrounding his appointment to
office must be fully considered to determine whether
the dismissal constituted an intra-corporate
controversy or a labor termination dispute. We must
also consider whether his status as Director and
stockholder had any relation at all to his appointment
and subsequent dismissal as Vice President for Finance
and Administration.
G.R. No. 159108
"Where the main purpose in forming the corporation
as to e ade o es su sidia lia ilit fo da ages i a
criminal case, the corporation may not be heard to say
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that it has a personality separate and distinct from its
members, because to allow it to do so would be to
sanction the use of fiction of corporate entity as a
shield to further an end subversive of justice. The
Supreme Court can even substitute the real party in
interest in place of the defendant corporation in order
to avoid multiplicity of suits and thereby save the
parties unnecessary expenses and delay.
G.R. No. 177438
The notice of dishonor required by Batas Pambansa
Blg. 22 to be given to the drawer, maker or issuer of a
check should be written. If the service of the written
notice of dishonor on the maker, drawer or issuer of
the dishonored check is by registered mail, the proof of
service consists not only in the presentation as
evidence of the registry return receipt but also of the
registry receipt together with the authenticating
affidavit of the person mailing the notice of dishonor.
Without the authenticating affidavit, the proof of giving
the notice of dishonor is insufficient unless the mailer
personally testifies in court on the sending by
registered mail.
G.R. No. 159213
Article 2207 of the Civil Code is founded on the well-
settled principle of subrogation. If the insured property
is destroyed or damaged through the fault or
negligence of a party other than the assured, then the
insurer, upon payment to the assured, will be
subrogated to the rights of the assured to recover from
the wrongdoer to the extent that the insurer has been
obligated to pay. Payment by the insurer to the assured
operates as an equitable assignment to the former of all
remedies which the latter may have against the third
party whose negligence or wrongful act caused the loss.
The right of subrogation is not dependent upon, nor
does it grow out of, any privity of contract or upon
written assignment of claim. It accrues simply upon
payment of the insurance claim by the insurer.
In legal contemplation, subrogation is the "substitution
of another person in the place of the creditor, to whose
rights he succeeds in relation to the debt;" and is
"independent of any mere contractual relations
between the parties to be affected by it, and is broad
enough to cover every instance in which one party is
required to pay a debt for which another is primarily
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COMPILED BY ATTY. R.A.L. CASABAR
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answerable, and which in equity and conscience ought
to be discharged by the latter."
G.R. No. 157943
Under the Negotiable Instruments Law, this type of
check was payable to the bearer and could be
negotiated by mere delivery without the need of an
indorsement.
G.R. No. 158649
A trust receipt is "a security transaction intended to aid
in financing importers and retail dealers who do not
have sufficient funds or resources to finance the
importation or purchase of merchandise, and who may
not be able to acquire credit except through utilization,
as collateral, of the merchandise imported or
purchased." It is a security agreement that "secures an
indebtedness and there can be no such thing as
security interest that secures no obligation."
G.R. No. 158649
Under Section 4 of the Trust Receipts Law, the sale of
goods by a person in the business of selling goods for
profit who, at the outset of the transaction, has, as
against the buyer, general property rights in such
goods, or who sells the goods to the buyer on credit,
retaining title or other interest as security for the
payment of the purchase price, does not constitute a
trust receipt transaction and is outside the purview
and coverage of the law, to wit:
Section. 4. What constitutes a trust receipt
transaction. A trust receipt transaction, within the
meaning of this Decree, is any transaction by and
between a person referred to in this Decree as the
entruster, and another person referred to in this
Decree as the entrustee, whereby the entruster, who
owns or holds absolute title or security interests over
certain specified goods, documents or instruments,
releases the same to the possession of the entrustee
upo the latte s e e utio a d deli e to the
entruster of a signed document called a "trust receipt"
wherein the entrustee binds himself to hold the
designated goods, documents or instruments in trust
for the entruster and to sell or otherwise dispose of
the goods, documents or instruments with the
obligation to turn over to the entruster the proceeds
thereof to the extent of the amount owing to the
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entruster or as appears in the trust receipt or the
goods, documents or instruments themselves if they
are unsold or not otherwise disposed of, in
accordance with the terms and conditions specified in
the trust receipt, or for other purposes substantially
equivalent to any of the following:
1. In the case of goods or documents, (a) to sell the
goods or procure their sale; or (b) to manufacture or
process the goods with the purpose of ultimate
sale: Provided, That, in the case of goods delivered
under trust receipt for the purpose of manufacturing
or processing before its ultimate sale, the entruster
shall retain its title over the goods whether in its
original or processed form until the entrustee has
complied fully with his obligation under the trust
receipt; or (c) to load, unload, ship or tranship or
otherwise deal with them in a manner preliminary or
necessary to their sale; or
2. In case of instruments x x x.
The sale of goods, documents or instruments by a
person in the business of selling goods, documents or
instruments for profit who, at the outset of the
transaction, has, as against the buyer, general property
rights in such goods, documents or instruments, or
who sells the same to the buyer on credit, retaining
title or other interest as security for the payment of the
purchase price, does not constitute a trust receipt
transaction and is outside the purview and coverage of
this Decree.
G.R. No. 158649
There are two obligations in a trust receipt
transaction. The first is covered by the provision that
refers to money under the obligation to deliver it
(entregarla) to the owner of the merchandise sold.
The second is covered by the provision referring to
merchandise received under the obligation to return it
(devolverla) to the owner. Thus, under the Trust
Receipts Law, intent to defraud is presumed when (1)
the entrustee fails to turn over the proceeds of the
sale of goods covered by the trust receipt to the
entruster; or (2) when the entrustee fails to return the
goods under trust, if they are not disposed of in
accordance with the terms of the trust receipts.
In all trust receipt transactions, both obligations on the
part of the trustee exist in the alternative the return
of the proceeds of the sale or the return or recovery of
the goods, whether raw or processed. When both
parties enter into an agreement knowing that the return
of the goods subject of the trust receipt is not possible
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COMPILED BY ATTY. R.A.L. CASABAR
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even without any fault on the part of the trustee, it is
not a trust receipt transaction penalized under Section
13 of P.D. 115; the only obligation actually agreed upon
by the parties would be the return of the proceeds of
the sale transaction. This transaction becomes a mere
loan, where the borrower is obligated to pay the bank
the amount spent for the purchase of the goods.
G.R. No. 158649
An indorsement "with recourse" of a note, for instance,
makes the indorser a general indorser, because the
indorsement is without qualification. Accordingly, the
term with recourse confirms the obligation of a general
indorser, who has the same liability as the original
obligor. As the assignor "with recourse" of the Trust
Agreement executed by B participating in the Special
Credit Scheme, therefore, A made herself directly liable
to C for the value of the inputs delivered to the B.
G.R. No. 170942
The Ba ks lia ilit as ot ased o its pu hase of
loan agreement with NHFC but on Article 20 and
Article 1170 of the Civil Code, viz:
Article 20. Every person who, contrary to law, willfully
or negligently causes damage to another, shall
indemnify the latter for the same.
Article 1170. Those who in the performance of their
obligations are guilty of fraud, negligence, or delay,
and those who in any manner contravene the tenor
thereof, are liable for damages.
Based on the provisions, a banking institution like CCC
Bank is obliged to exercise the highest degree of
diligence as well as high standards of integrity and
performance in all its transactions because its business
is imbued with public interest.
G.R. No. 180677 February 18, 2013
Section 155 of R.A. No. 8293 defines the acts that
constitute infringement of trademark, viz:
Remedies; Infringement. Any person who shall,
without the consent of the owner of the registered
mark:
155.1. Use in commerce any reproduction,
counterfeit, copy, or colorable imitation of a
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registered mark or the same container or a dominant
feature thereof in connection with the sale, offering
for sale, distribution, advertising of any goods or
services including other preparatory steps necessary
to carry out the sale of any goods or services on or in
connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive; or
155.2. Reproduce, counterfeit, copy or colorably
imitate a registered mark or a dominant feature
thereof and apply such reproduction, counterfeit,
copy or colorable imitation to labels, signs, prints,
packages, wrappers, receptacles or advertisements
intended to be used in commerce upon or in
connection with the sale, offering for sale,
distribution, or advertising of goods or services on or
in connection with which such use is likely to cause
confusion, or to cause mistake, or to deceive, shall be
liable in a civil action for infringement by the
registrant for the remedies hereinafter set forth:
Provided, That the infringement takes place at the
moment any of the acts stated in Subsection 155.1 or
this subsection are committed regardless of whether
there is actual sale of goods or services using the
infringing material.
G.R. No. 180677 February 18, 2013
The elements of the offense of trademark
infringement under the Intellectual Property Code are,
therefore, the following:
1. The trademark being infringed is registered in the
Intellectual Property Office;
2. The trademark is reproduced, counterfeited,
copied, or colorably imitated by the infringer;
3. The infringing mark is used in connection with the
sale, offering for sale, or advertising of any goods,
business or services; or the infringing mark is applied
to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used
upon or in connection with such goods, business or
services;
4. The use or application of the infringing mark is likely
to cause confusion or mistake or to deceive
purchasers or others as to the goods or services
themselves or as to the source or origin of such goods
or services or the identity of such business; and
5. The use or application of the infringing mark is
without the consent of the trademark owner or the
assignee thereof.
G.R. No. 180677 February 18, 2013
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As can be seen, the likelihood of confusion is the
gravamen of the offense of trademark infringement.
There are two tests to determine likelihood of
confusion, namely: the dominancy test, and the
holistic test. The contrasting concept of these tests
was explained in Societes Des Produits Nestle, S.A. v.
Dy, Jr., thus:
x x x. The dominancy test focuses on the similarity of
the main, prevalent or essential features of the
competing trademarks that might cause confusion.
Infringement takes place when the competing
trademark contains the essential features of another.
Imitation or an effort to imitate is unnecessary. The
question is whether the use of the marks is likely to
cause confusion or deceive purchasers.
The holistic test considers the entirety of the marks,
including labels and packaging, in determining
confusing similarity. The focus is not only on the
predominant words but also on the other features
appearing on the labels.
G.R. No. 180677 February 18, 2013
As to what test should be applied in a trademark
infringement case, we said in McDonalds Corporation
v. Macjoy Fastfood Corporation that:
In trademark cases, particularly in ascertaining
whether one trademark is confusingly similar to
another, no set rules can be deduced because each
case must be decided on its merits. In such cases,
even more than in any other litigation, precedent
must be studied in the light of the facts of the
particular case. That is the reason why in trademark
cases, jurisprudential precedents should be applied
only to a case if they are specifically in point.
G.R. No. 180677 February 18, 2013
The holistic test is applicable here considering that the
herein criminal cases also involved trademark
infringement in relation to jeans products.
A o di gl , the jea s t ade a ks of Le is Philippi es
and Diaz must be considered as a whole in
determining the likelihood of confusion between
them. The maong pants or jeans made and sold by
Le is Philippi es, hi h i luded LEVIS 5 , e e
very popular in the Philippines. The consuming public
k e that the o igi al LEVIS 5 jea s e e u de a
foreign brand and quite expensive. Such jeans could
be purchased only in malls or boutiques as ready-to-
RESEARCHED BY J. MANINGDING

Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
wear items, and were not available in tailoring shops
like those of Diazs as ell as ot a ui ed o a
"made-to-order" basis. Under the circumstances, the
consuming public could easily discern if the jeans
were origi al o fake LEVIS 5 , o e e
manufactured by other brands of jeans.
Diaz used the trademark "LS JEANS TAILORING" for the
jeans he produced and sold in his tailoring shops. His
trademark was visually and aurally different from the
trademark "LEVI STRAUSS & CO" appearing on the
pat h of o igi al jea s u de the t ade a k LEVIS 5 .
The word "LS" could not be confused as a derivative
from "LEVI STRAUSS" by virtue of the "LS" being
connected to the word "TAILORING", thereby openly
suggesting that the jeans bearing the trademark "LS
JEANS TAILORING" came or were bought from the
tailoring shops of Diaz, not from the malls or boutiques
selli g o igi al LEVIS 5 jea s to the o su i g
public.
G.R. No. 180677 February 18, 2013
What essentially determines the attitudes of the
purchaser, specifically his inclination to be cautious, is
the cost of the goods. To be sure, a person who buys a
box of candies will not exercise as much care as one
who buys an expensive watch. As a general rule, an
ordinary buyer does not exercise as much prudence in
buying an article for which he pays a few centavos as
he does in purchasing a more valuable thing. Expensive
and valuable items are normally bought only after
deliberate, comparative and analytical investigation.
But mass products, low priced articles in wide use, and
matters of everyday purchase requiring frequent
replacement are bought by the casual consumer
without great care.
G.R. No. 180677 February 18, 2013
More credit should be given to the "ordinary
purchaser." Cast in this particular controversy, the
ordinary purchaser is not the "completely unwary
consumer" but is the "ordinarily intelligent buyer"
considering the type of product involved.
There, the "ordinary purchaser" was defined as one
"accustomed to buy, and therefore to some extent
familiar with, the goods in question. The test of
fraudulent simulation is to be found in the likelihood of
the deception of some persons in some measure
To have knowledge, you must first have reverence for the Lord. (Proverbs 1:7)
COMPILED BY ATTY. R.A.L. CASABAR
8
acquainted with an established design and desirous of
purchasing the commodity with which that design has
been associated. The test is not found in the deception,
or the possibility of deception, of the person who
knows nothing about the design which has been
counterfeited, and who must be indifferent between
that and the other. The simulation, in order to be
objectionable, must be such as appears likely to
mislead the ordinary intelligent buyer who has a need
to supply and is familiar with the article that he seeks
to purchase.
G.R. No. 184622
It is settled that there is an intra-corporate
controversy when the dispute involves any of the
following relationships, to wit:
(a) between the corporation, partnership or
association and the public;
(b) between the corporation, partnership or
association and the State in so far as its franchise,
permit or license to operate is concerned;
(c) between the corporation, partnership or
association and its stockholders, partners, members
or officers; and
(d) among the stockholders, partners or associates
themselves.
G.R. No. 184622
Upon the enactment of Republic Act No. 8799 (The
Securities Regulation Code), effective on August 8,
2000, the jurisdiction of the SEC over intra-corporate
controversies and the other cases enumerated in
Section 5 of P.D. No. 902-A was transferred to the
Regional Trial Court pursuant to Section 5.2 of the law.
G.R. No. 184622
Interim Rules of Procedure for Intra-Corporate
Controversies under Republic Act No. 8799 in A.M.
No. 01-2-04-SC, effective on April 1, 2001, whose
Section 1 and Section 2, Rule 6 state:
Section 1. Cases covered. The provisions of this rule
shall apply to election contests in stock and non-stock
corporations.
Section 2. Definition. An election contest refers to any
controversy or dispute involving title or claim to any
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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
elective office in a stock or non-stock corporation, the
validation of proxies, the manner and validity of
elections, and the qualifications of candidates,
including the proclamation of winners, to the office of
director, trustee or other officer directly elected by the
stockholders in a close corporation or by members of a
non-stock corporation where the articles of
incorporation or by-laws so provide.
G.R. No. 161759
A corporation, upon coming into existence, is invested
by law with a personality separate and distinct from
those of the persons composing it as well as from any
other legal entity to which it may be related. For this
reason, a stockholder is generally not made to answer
for the acts or liabilities of the corporation, and vice-
versa.
G.R. No. 161759
The separate and distinct personality of the
corporation is, however, a mere fiction established by
law for convenience and to promote the ends of
justice. It may not be used or invoked for ends that
subvert the policy and purpose behind its
establishment, or intended by law to which the
corporation owes its being.
This is true particularly when the fiction is used to
defeat public convenience, to justify wrong, to protect
fraud, to defend crime, to confuse legitimate legal or
judicial issues, to perpetrate deception or otherwise
to circumvent the law.
This is likewise true where the corporate entity is being
used as an alter ego, adjunct, or business conduit for
the sole benefit of the stockholders or of another
corporate entity. In such instances, the veil of
corporate entity will be pierced or disregarded with
reference to the particular transaction involved.
G.R. No. 161759
Circumstances that are useful in the determination of
whether a subsidiary is a mere instrumentality of the
parent-corporation, viz:
1. Control, not mere majority or complete control, but
complete domination, not only of finances but of
To have knowledge, you must first have reverence for the Lord. (Proverbs 1:7)
COMPILED BY ATTY. R.A.L. CASABAR
9
policy and business practice in respect to the
transaction attacked so that the corporate entity as to
this transaction had at the time no separate mind, will
or existence of its own;
2. Such control must have been used by the
defendant to commit fraud or wrong, to perpetrate
the violation of a statutory or other positive legal
duty, or dishonest and, unjust act in contravention of
plaintiff's legal rights; and
3. The aforesaid control and breach of duty must
proximately cause the injury or unjust loss complained
of.
In applying the "instrumentality" or "alter ego"
doctrine, the courts are concerned with reality, not
form, and with how the corporation operated and the
individual defendant's relationship to the operation.
Consequently, the absence of any one of the foregoing
elements disauthorizes the piercing of the corporate
veil.
G.R. No. 187581
Rehabilitation proceedings have a two-pronged
purpose, namely:
(a) to efficiently and equitably distribute the assets of
the insolvent debtor to its creditors; and
(b) to provide the debtor with a fresh start.
Rehabilitation proceedings in our jurisdiction have
equitable and rehabilitative purposes. On the one
hand, they attempt to provide for the efficient and
equitable distribution of an insolvent debtor's
remaining assets to its creditors; and on the other, to
provide debtors with a "fresh start" by relieving them
of the weight of their outstanding debts and permitting
them to reorganize their affairs. The purpose of
rehabilitation proceedings is to enable the company to
gain a new lease on life and thereby allow creditors to
be paid their claims from its earnings. Consequently,
the basic issues in rehabilitation proceedings concern
the viability and desirability of continuing the business
operations of the petitioning corporation.
G.R. No. 159979
Anent the security deposit, Section 203 of
the Insurance Code provides as follows:
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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
Every domestic insurance company shall, to the extent
of an amount equal in value to twenty-five per
centum of the minimum paid-up capital required
under section one hundred eighty-eight, invest its
funds only in securities, satisfactory to the
Commissioner, consisting of bonds or other evidences
of debt of the Government of the Philippines or its
political subdivisions or instrumentalities, or of
government-owned or controlled corporations and
entities, including the Central Bank of the
Philippines: Provided, That such investments shall at
all times be maintained free from any lien or
encumbrance; and Provided, further, That such
securities shall be deposited with and held by the
Commissioner for the faithful performance by the
depositing insurer of all its obligations under its
insurance contracts. The provisions of section one
hundred ninety-two shall, as far as practicable, apply
to the securities deposited under this section.
Except as otherwise provided in this Code, no
judgment creditor or other claimant shall have the
right to levy upon any securities of the insurer held on
deposit under this section or held on deposit pursuant
to the requirement of the Commissioner.
The forthright text of provision indicates that the
security deposit is exempt from levy by a judgment
creditor or any other claimant.
G.R. No. 159979
The securities are held as a contingency fund to answer
for the claims against the insurance company by all its
policy holders and their beneficiaries. This step is taken
in the event that the company becomes insolvent or
otherwise unable to satisfy the claims against it. Thus,
a single claimant may not lay stake on the securities to
the exclusion of all others. The other parties may have
their own claims against the insurance company under
other insurance contracts it has entered into.
G.R. No. 159979
The right to claim against the security deposit is
dependent on the solvency of the insurance company,
and is subject to all other obligations of the insurance
company arising from its insurance contracts.
Accordingly, the respondent's interest in the security
deposit could only be inchoate or a mere expectancy,
and thus had no attribute as property.
To have knowledge, you must first have reverence for the Lord. (Proverbs 1:7)
COMPILED BY ATTY. R.A.L. CASABAR
10
G.R. No. 160924
The Corporation Code has granted to all stockholders
the right to inspect the corporate books and records,
and in so doing has not required any specific amount
of interest for the exercise of the right to inspect.
The right of the shareholder to inspect the books and
records of the petitioner should not be made subject
to the condition of a showing of any particular dispute
or of proving any mismanagement or other occasion
rendering an examination proper, but if the right is to
be denied, the burden of proof is upon the corporation
to show that the purpose of the shareholder is
improper, by way of defense.
G.R. No. 160924
Among the purposes held to justify a demand for
inspection are the following:
(1) To ascertain the financial condition of the
company or the propriety of dividends;
(2) the value of the shares of stock for sale or
investment;
(3) whether there has been mismanagement;
(4) in anticipation of shareholders' meetings to obtain
a mailing list of shareholders to solicit proxies or
influence voting;
(5) to obtain information in aid of litigation with the
corporation or its officers as to corporate
transactions.
Among the improper purposes which may justify
denial of the right of inspection are:
(1) Obtaining of information as to business secrets or
to aid a competitor;
(2) to secure business "prospects" or investment or
advertising lists;
(3) to find technical defects in corporate transactions
in order to bring "strike suits" for purposes of blackmail
or extortion.
G.R. No. 160924
Under Section 74, third paragraph, of the Corporation
Code, the only time when the demand to examine and
copy the corporation's records and minutes could be
refused is when the corporation puts up as a defense
to any action that "the person demanding" had
"improperly used any information secured through any
prior examination of the records or minutes of such
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Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman
corporation or of any other corporation, or was not
acting in good faith or for a legitimate purpose in
making his demand."
G.R. No. 204089
Sections 50, 74 and 75 of the Corporation Code, to
wit:
Section 50. Regular and special meetings of
stockholders or members. Regular meetings
of stockholders or members shall be held annually on
a date fixed in the by-laws, or if not so fixed, on any
date in April of every year as determined by the board
of directors or trustees: Provided, That written notice
of regular meetings shall be sent to all stockholders or
members of record at least two (2) weeks prior to the
meeting, unless a different period is required by the
by-laws.
Section 74. Books to be kept; stock transfer agent. x
xx
The records of all business transactions of the
corporation and the minutes of any meetings shall be
open to inspection by any director,
trustee, stockholder or member of the corporation at
reasonable hours on business days and he may
demand, in writing, for a copy of excerpts from said
records or minutes, at his expense.
xxxx
Section 75. Right to financial statements. Within ten
(10) days from receipt of a written request of
any stockholder or member, the corporation shall
furnish to him its most recent financial statement,
which shall include a balance sheet as of the end of
the last taxable year and a profit or loss statement for
said taxable year, showing in reasonable detail its
assets and liabilities and the result of its operations.
G.R. No. 204089
A stock certificate is prima facie evidence that the
holder is a shareholder of the corporation, but the
possession of the certificate is not the sole
dete i i g fa to of o es sto k o e ship. A
certificate of stock is merely:
x x x the paper representative or tangible evidence of
the stock itself and of the various interests
therein. The certificate is not stock in the corporation
but is merely evidence of the holder's interest and
To have knowledge, you must first have reverence for the Lord. (Proverbs 1:7)
COMPILED BY ATTY. R.A.L. CASABAR
11
status in the corporation, his ownership of the share
represented thereby, but is not in law the equivalent of
such ownership. It expresses the contract between the
corporation and the stockholder, but it is not essential
to the existence of a share in stock or the creation of
the relation of shareholder to the corporation.
G.R. No. 204089
In determining the validity of the transfer of shares
through purchase, we resort to Section 63 of
the Corporation Code, which pertinently provides:
Section 63. Certificate of stock and transfer of shares.
x x x Shares of stock so issued are personal property
and may be transferred by delivery of the certificate
or certificates indorsed by the owner or his attorney-
in-fact or other person legally authorized to make the
transfer. No transfer, however, shall be valid, except
as between the parties, until the transfer is recorded
in the books of the corporation showing the names of
the parties to the transaction, the date of the transfer,
the number of the certificate or certificates and the
number of shares transferred.
No shares of stock against which the corporation
holds any unpaid claim shall be transferable in the
books of the corporation.
G.R. No. 204089
A transfer of shares of stock not recorded in the stock
and transfer book of the corporation is non-existent as
far as the corporation is concerned. As between the
corporation on the one hand, and its shareholders and
third persons on the other, the corporation looks only
to its books for the purpose of determining who its
shareholders are. It is only when the transfer has been
recorded in the stock and transfer book that a
corporation may rightfully regard the transferee as one
of its stockholders. From this time, the consequent
obligation on the part of the corporation to recognize
such rights as it is mandated by law to recognize arises.
G.R. No. 204089
A stock and transfer book, like other corporate books
and records, is not in any sense a public record, and
thus is not exclusive evidence of the matters and
things which ordinarily are or should be written
therein. In fact, it is generally held that the records
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 12

Ponencia by Justice Lucas P. Bersamin, 2017 Bar Chairman

and minutes of a corporation are not conclusive even

against the corporation but are prima facie evidence
only, and may be impeached or even contradicted by
other competent evidence. Thus, parol evidence may
be admitted to supply omissions in the records or
explain ambiguities, or to contradict such records.

G.R. No. 154069

Under Section 63 of the Corporation Code, no transfer

of shares of stock shall be valid, except as between
the parties, until the transfer is recorded in the books
of the corporation so as to show the names of the
parties to the transaction, the date of the transfer, the
number of the certificate or certificates and the
number of shares transferred. Hence:

[A] transfer of shares of stock not recorded in the stock

and transfer book of the corporation is non-existent as
far as the corporation is concerned. As between the
corporation on the one hand, and its shareholders and
third persons on the other, the corporation looks only
to its books for the purpose of determining who its
shareholders are. It is only when the transfer has been
recorded in the stock and transfer book that a
corporation may rightfully regard the transferee as one
of its stockholders. From this time, the consequent
obligation on the part of the corporation to recognize
such rights as it is mandated by law to recognize arises.

To have knowledge, you must first have reverence for the Lord. (Proverbs 1:7)

COMPILED BY ATTY. R.A.L. CASABAR RESEARCHED BY J. MANINGDING