REFLECTION IN

October, 2019 LEGAL ASPECTS OF

BUSINESS
Submitted to: Dr. Mayling Capuno
Submitted by: Kim Nicole M. Reyes, CPA MBM - BA
PARTIES INVOLVED:
Felipe B. Ollada, etc., petitioner
vs
Central Bank of the Philippines, respondent

FACTS:
Felipe B. Ollada is a certified public accountant, having passed the examination given by
the Board of Accountancy. On July 22, 1952, his name was placed in the rolls of certified public
accountants. In December 1955, by reason of a requirement of the Import-Export Department of
Bank of the Philippines of said bank that CPAs submit to an accreditation under oath before
they could certify financial statements of their clients applying for import dollar allocations with
its office, Ollada’s previous accreditation was nullified.

CONTENTION OF PARTY:
The main contention of the petitioner, Mr. Ollada, is that assailing the said accreditation
requirement is an unlawful invasion of the jurisdiction of the Board of Accountancy; in excess of
the powers of the Central Bank and unconstitutional in that it unlawfully restrained the legitimate
pursuit of one’s trade.

The main contention of the respondent, the Central Bank of the Philippines is that it has the
responsibility of administering the Monetary Banking System of the Republic and is authorized
to prepare and issue, through its Monetary Board, rules and regulations to make effective the
discharge of such responsibility which is the accreditation requirement in the exercise of such
power and authority.

OWN RESOLVE TO THE CONFLICT

The petition has no merit. Yes, the Central Bank of the Philippines can promulgate internal rules
and regulations necessary to carry out its purpose pursuant to the charter creating it, provided
that such rules and regulations are not contrary to law, public morals or public policy. In this
case, the Central Bank is not in anyway regulating the practice of accountancy through requiring
accreditation of CPAs in the transactions of import-export, as one of the functions of the Board
of Accountancy, but is only maintaining control and regulation in the daily operations of its
business in terms of import and export transactions.
PARTIES INVOLVED:
J.A. Sison, petitioner
vs
The Board of Accountancy and Robert Orr Ferguzon, respondent

FACTS:
The Board of Accountancy issued certificates as public accountants without examination, to Mr.
Robert Orr Ferguzon and nine more British accountants, chartered accountants in the British
Empire, with an English nationality, to practice their profession in the Philippines. This certificate
was granted on January 14, 1939. Upon final examination by the Board of Accountancy, it was
shown that there was no reciprocity between the accountancy law of the British Empire and the
accountancy law in the Philippines, thereby having their licenses revoked. However, the
Secretary of Justice intervened saying that the revocation is against Section 13 of Act No. 3105
and that revocation of certificates of license can only be done by the Board in cases of
unprofessional conduct of the holder or other sufficient cause. Having no reciprocity between
the accountancy laws in the Philippines and in England is deemed by the court not to have a
sufficient cause. Therefore, this instant petition of the petitioner for the case whether or not the
certificates of license of Mr. Robert Orr Ferguzon and company must be revoked due to grounds
of alleged nonexistence of reciprocity.

CONTENTION OF THE PARTIES:

The main contention of the petitioner is that Mr. Robert Orr Ferguzon and company should not
be issued certificates of license as certified public accountants in the Philippines without
examination because under the law, such aliens may only be given the license if reciprocity
exist between the Philippines and the country of their origin.

The main contention of the respondents, the Board of Accountancy and Robert Orr Ferguzon is
that the said respondent had been admitted in this country to the practice of his profession as
certified public accountant on the strength of his membership of the Institute of Accountants and
Actuaries in Glasgow (England), incorporated by the Royal Charter of 1855. The question of his
entitlement to admission to the practice of his profession in this jurisdiction, does not, therefore,
come under reciprocity, as this principle is known in International Law, but it is included in the
meaning of comity.
OWN RESOLVE OF THE CONFLICT
The petition has no merit.
According to jurisprudence, the British Minister sent two notes to the Philippines in answer to
the queries about the reciprocity of the accountancy profession in Great Britain. In one of the
notes, it is stated that United Kingdom has maintained that a number of private corporations
restricts the membership in the profession to those who passed in different professional
examination and not base on nationality. In another note, the Prime Minister clarified that in the
United Kingdom, qualified Philippine citizens are allowed to practice the profession of
accountancy including income tax accounting. With this fact, even if there is an absence of rules
showing reciprocity in the practice of accounting, this mere statement of the Prime Minister
representing the royal authority of Great Britain, is already proof of the treaty of friendship and
commerce, thereby raising no doubt as to the sincerity of the nations. This such facts comes
from the realm of comity, as contemplated by our laws. Therefore, Mr. Robert Orr Ferguzon and
company may retain the certificates of licenses given to them by the Board of Accountancy.