MARUBENI CORPORATION v. FELIX LIRAG, GR No.

Pursuant to the consultancy agreement, respondent

130998, 2001-08-10 claimed a commission of six percent (6%) of the total
contract price, or a total of P6,000,000.00, or in the
Facts: alternative, that he be paid the same amount by way of
damages or as the reasonable value of the services he
Petitioner Marubeni is a foreign corporation organized and
rendered to petitioners, and further claimed twenty
existing under the laws of Japan. It was doing business in
percent (20%) of the amount recoverable as attorney's
the Philippines through its duly licensed, wholly owned
fees and the costs of suit. Petitioners denied the
subsidiary, Marubeni Philippines Corporation. Petitioners
consultancy agreement.
Ryoichi Tanaka, Ryohei Kimura and Shoichi One were
officers of Marubeni assigned to its Philippine branch. Petitioner Ryohei Kimura did not have the authority to
enter into such agreement in behalf of Marubeni. Only Mr.
On January 27, 1989, respondent Lirag filed with the
Morihiko Maruyama, the general manager, upon issuance
Regional Trial Court a complaint for specific performance
of a special power of attorney by the principal... office in
and damages claiming that petitioners owed him the sum
Tokyo, Japan, could enter into any contract in behalf of the
of P6,000,000.00 representing commission pursuant to an
corporation. Mr. Maruyama did not discuss with
oral consultancy... agreement with Marubeni.
respondent Lirag any of the matters alleged in the
Lirag claimed that on February 2, 1987, petitioner Ryohei complaint, nor agreed to the payment of commission.
Kimura hired his consultancy group for the purpose of
Thus, petitioners moved for the dismissal of the complaint.
obtaining government contracts of various projects.
During the pre-trial conferences held on September 18
Petitioners promised to pay him six percent (6%)
and October 16, 1989 and on January 24, March 15 and
consultancy fee based on the total costs of the projects
May 17, 1990, no amicable settlement was reached. Trial
obtained.
on the merits ensued.
The consultancy agreement was not reduced into writing
On April 29, 1993, the trial court promulgated a decision
because of the mutual trust between Marubeni and the
and ruled that respondent is entitled to a commission.
Lirag family.
Respondent was led to believe that there existed an oral
Their close business and personal relationship dates back consultancy agreement. Hence, he performed his part of
to 1960, when respondent's family was engaged in the the agreement and helped petitioners get the project.
textile fabric manufacturing business, in which Marubeni
On May 26, 1993, petitioners interposed an appeal from
supplied the needed machinery, equipment, spare parts
the decision to the Court of Appeals.
and raw materials.
After due proceedings, on October 9, 1997, the Court of
In compliance with the agreement, respondent Lirag made
Appeals promulgated a decision affirming the decision of
representations with various government officials,
the trial court. The Court of Appeals ruled that
arranged for meetings and conferences, relayed pertinent
preponderance of evidence favored the existence of a
information as well as submitted feasibility studies and
consultancy agreement between the parties. It upheld the
project proposals, including pertinent documents required
factual... findings of the trial court
by petitioners.
Issues: WON respondent is entitled to receive a
One of the projects handled by respondent Lirag, the
commission if there was, in fact, a consultancy...
Bureau of Post project, amounting to P100,000,000.00 was
agreement
awarded to the "Marubeni-Sanritsu tandem."
Ruling: We find the appeal meritorious.
Despite respondent's repeated formal verbal demands for
payment of the agreed consultancy fee petitioners did not An assiduous scrutiny of the testimonial and documentary
pay. In response to the first demand letter, petitioners evidence extant leads us to the conclusion that the
promised to reply within fifteen (15) days, but they did not evidence could not support a solid conclusion that a
do so.
consultancy agreement, oral or written, was agreed
between petitioners and respondent.
In civil cases, he who alleges a fact has the burden of
proving it; a mere allegation is not evidence.
He must establish his cause by a preponderance of
evidence which respondent failed to establish in the
instant case.
Assuming for the sake of argument that an oral
consultancy agreement has been perfected between the
parties, respondent Lirag could not still claim fees on the
project that has not been awarded to Marubeni.
Respondent tried to justify his commission of roughly
about P6,000,000.00 in the guise that Marubeni and
Sanritsu are sister corporations, thereby implying the need
to pierce the veil of corporate fiction. Respondent claimed
that Marubeni as the supplier and real contractor of the
project hired and sub-contracted the project to Sanritsu.
To disregard the separate juridical personality of a
corporation, the wrongdoing must be clearly and
convincingly established. It cannot be presumed. The
separate personality of the corporation may be
disregarded only when the corporation is used as a cloak
or cover for fraud or illegality, or to work injustice, or
where necessary for the protection of creditors.
Any agreement entered into because of the actual or
supposed influence which the party has, engaging him to
influence executive officials in the discharge of their
duties, which contemplates the use of personal influence
and solicitation rather than an appeal to the judgment of...
the official on the merits of the object sought is contrary to
public policy.
Consequently, the agreement, assuming that the parties
agreed to the consultancy, is null and void as against
public policy.
Therefore, it is unenforceable before a court of justice.
BORROMEO VS CA
FACTS: Respondent Equitable Savings Bank is a domestic
savings bank corporation with principal office and place of
business at EPCIB Tower in Makati City. At the time the
dispute began, it was a subsidiary of Equitable PCI Bank
(EPCIB), a domestic universal banking corporation with
principal office in Makati City. After the merger of EPCIB
and Banco De Oro (BDO), they have adopted the corporate
name Banco De Oro.
Petitioners were client-depositors of EPCIB for more than
12 years. Petitioners alleged that sometime in mid-1999,
the branch manager of EPCIB offered a loan to the
petitioners under its Own-a-Home Loan
Program. Petitioners applied for a loan of P4,000,000.00
and were informed of the approval of the same. 
 To secure the payment of the loan, petitioners executed
an REM over their land in Quezon City. Petitioners
asserted that even if the loan documents were signed in
blank, it was understood that they executed the REM in
favor of EPCIB.
Respondent Bank then released a total amount
of P3,600,000.00 in four installments, while the balance
of P400,000.00 was not drawn by petitioners . On the other
hand, petitioners started to pay their monthly
amortizations.
Petitioners made repeated requests to EPCIB to furnish
them their copies of the loan documents which were
made verbally and also evidenced by letters from the
petitioner requesting their copies of the loan
documents.  They further claimed that they purposely did
not draw the remaining balance of the loan in the amount
of P400,000.00 and stopped paying their loan
amortizations to protest EPCIBs continued failure to
provide them copies of the loan documents and its
imposition of an interest rate higher than that agreed
upon.
In reply to the petitioners letter, the VP of EPCIB, Gary
Vargas explained that as a matter of practice, their clients
were given original copies of the loan documents only
upon full release of the amount loaned. EPCIB clarified
that since petitioners loan had not been fully released, the
original documents were not yet sent to them. 
In the meantime, respondent, through counsel, also sent
a letter to the petitioners demanding payment for their
obligation amounting to P4,097,261.04, inclusive of
interest and other charges. 
Finally, petitioners received copies of the loan documents
which they had earlier signed in blank.  According to
petitioners, they were surprised to find out that the Loan
Agreement and REM designated respondent ESB as lender
and mortgagor, instead of EPCIB with whom they allegedly
entered into the agreement.
When the petitioners failed to pay for the loan in full by 30
September 2003, respondent sought to extra-judicially
foreclose the REM. However,  petitioners filed with the
RTC a Complaint for Injunction, Annulment of Mortgage
with Damages and with Prayer for Temporary Restraining
Order and Preliminary and Mandatory Injunction against
EPCIB and respondent. The petitioners alleged that the
loan documents failed to reflect the true agreement
between the parties. Firstly, the agreement was between
the petitioners and EPCIB and, consequently, respondent
had no interest in the REM.  they addressed their letter dated 3 August 2003 to the
ISSUE: WHETHER OR NOT THE PRIVATE RESPONDENT
SAVINGS BANK IS THE REAL PARTY-IN-INTEREST.
RULING: The petition is meritorious.
In this case, petitioners rights to their property is restricted
by the REM they executed over it. Upon their default on
the mortgage debt, the right to foreclose the property
would be vested upon the creditor-
mortgagee. Nevertheless, the right of foreclosure cannot
be exercised against the petitioners by any person other
than the creditor-mortgagee or its assigns. According to
the pertinent provisions of the Civil Code:
Art. 1311. Contracts take effect only between the parties,
their assigns and heirs, except in case where the rights and
obligations arising from the contract are not transmissible
by their nature, or by stipulation or by provision of
law. The heir is not liable beyond the value of the property
he received from the decedent.
If a contract should contain some stipulation in favor of a
third person, he may demand its fulfillment provided he
communicated his acceptance to the obligor before its
revocation. A mere incidental benefit or interest of a
person is not sufficient. The contracting parties must have
clearly and deliberately conferred a favor upon a third
person. (Emphasis ours.)
An extrajudicial foreclosure instituted by a third party to
the Loan Agreement and the REM would, therefore, be a
violation of petitioners rights over their property.
In the instant case, petitioners assert that their creditor-
mortgagee is EPCIB and not respondent. While ESB claims
that petitioners have had transactions with it, particularly
the five check payments made in the name of ESB, it fails
to categorically state that ESB and not EPCIB is the real
creditor-mortgagor in this loan and mortgage
transaction. This Court finds the position taken by the
petitioners to be more credible. The four Promissory Notes
designate EPCIB as the lender. [39] In a letter dated 19
December 2002, addressed to Home Guaranty
Corporation, EPCIB Vice President Gary Vargas even
specified petitioners loan as one of its housing loans for
which it sought insurance coverage. [40] Records also show
that petitioners repeatedly dealt with EPCIB. When the
petitioners complained of not receiving the loan
documents and the allegedly excessive interest charges,
president of EPCIB.[41] The response, which explained the
loan transactions in detail in a letter dated 27 August 2003,
was written by Gary Vargas, EPCIB Vice President. [42] Of
almost three years amortizations, the checks were issued
by petitioners in the name of EPCIB, except only for five
checks which were issued in respondents name.[43]
Respondent, although a wholly-owned subsidiary of
EPCIB, has an independent and separate juridical
personality from its parent company. The fact that a
corporation owns all of the stocks of another
corporation, taken alone, is not sufficient to justify their
being treated as one entity. If used to perform legitimate
functions, a subsidiarys separate existence shall be
respected, and the liability of the parent corporation, as
well as the subsidiary, shall be confined to those arising
from their respective businesses. A corporation has a
separate personality distinct from its stockholders and
other corporations to which it may be conducted. [44] Any
claim or suit of the parent corporation cannot be pursued
by the subsidiary based solely on the reason that the
former owns the majority or even the entire stock of the
latter.
From a perusal of the records, petitioners did not enter
into a Loan Agreement and REM with
respondent. Respondent, therefore, has no right to
foreclose the subject property even after default, since
this right can only be claimed by the creditor-mortgagor,
EPCIB; and, consequently, the extrajudicial foreclosure of
the REM by respondent would be in violation of
petitioners property rights.
MAMBULAO LUMBER COMPANY V. PNB (G.R. NO. L-
22973)
Facts: Petitioner Mambulao Lumber applied for an
industrial loan with herein respondent PNB and was
approved with its real estate, machinery and equipments
as collateral. PNB released the approved loan but
petitioner failed to pay and was later discovered to have
already stopped in its operation. PNB then moved for the
foreclosure and sale of the mortgaged properties. The
properties were sold and petitioner sent a bank draft to
PNB to settle the balance of the obligation. PNB however
alleges that a remaining balance stands and a foreclosure
sale would still be held unless petitioner remits said
amount. The foreclosure sale proceeded and petitioner’s
properties were taken out of its compound. Petitioner filed
actions before the court and claims among others, moral
damages.
Issue: Whether or not petitioner corporation, who has
already ceased its operation, may claim for moral
damages.
Ruling: NO.
Herein appellant’s claim for moral damages, however,
seems to have no legal or factual basis. Obviously, an
artificial person like herein appellant corporation cannot
experience physical sufferings, mental anguish, fright,
serious anxiety, wounded feelings, moral shock or social
humiliation which are basis of moral damages. A
corporation may have a good reputation which, if
besmirched, may also be a ground for the award of moral
damages. The same cannot be considered under the facts
of this case, however, not only because it is admitted that
herein appellant had already ceased in its business
operation at the time of the foreclosure sale of the
chattels, but also for the reason that whatever adverse
effects of the foreclosure sale of the chattels could have
upon its reputation or business standing would
undoubtedly be the same whether the sale was conducted
at Jose Panganiban, Camarines Norte, or in Manila which is
the place agreed upon by the parties in the mortgage
contract.
REN TRANSPORT CORP vs. NLRC
FACTS: Samahan ng Manggagawa sa Ren Transport
(SMART) is a registered union, which had a five-year
collective bargaining agreement (CBA) with Ren Transport
Corp. (Ren Transport). The 60-day freedom period of the
CBA passed without a challenge to SMART'S majority
status as bargaining agent. SMART thereafter conveyed its
willingness to bargain with Ren Transport, to which it sent
bargaining proposals. Ren Transport, however, failed to
reply to the demand.
Subsequently, two members of SMART wrote to the
Department of Labor and Employment - National Capital
Region (DOLE-NCR). The office was informed that a
majority of the members of SMART had decided to
disaffiliate from their mother federation to form another
union, Ren Transport Employees Association
(RTEA). SMART contested the alleged disaffiliation through
a letter dated 4 April 2005.
During the pendency of the disaffiliation dispute at the
DOLE-NCR, Ren Transport stopped the remittance to
SMART of the union dues that had been checked off from
the salaries of union workers as provided under the
CBA. Further, on 19 April 2005, Ren Transport voluntarily
recognized RTEA as the sole and exclusive bargaining
agent of the rank-and-file employees of their company.
On 6 July 2005, SMART filed with the labor arbiter a
complaint for unfair labor practice against Ren Transport.
LA RULING: Ren Transport is guilty of acts of unfair labor
practice.
NLRC RULING: affirmed the labor arbiter's finding of unfair
labor practice on the part of Ren Transport. Union dues
were ordered remitted to SMART.
The NLRC also awarded moral damages to SMART, saying
that Ren transport's refusal to bargain was inspired by
malice or bad faith. The precipitate recognition of RTEA
evidenced such bad faith, considering that it was done
despite the pendency of the disaffiliation dispute at the
DOLE-NCR.
CA RULING: deleted the award of moral damages to
SMART, but affirmed the NLRC decision on all other
matters. The CA ruled that SMART, as a corporation, was
not entitled to moral damages.
ISSUE: WON SMART is entitled to moral damages.
RULING: SMART is not entitled to an award of moral
damages.
Indeed, a corporation is not, as a general rule, entitled to
moral damages. Being a mere artificial being, it is
incapable of experiencing physical suffering or sentiments
like wounded feelings, serious anxiety, mental anguish or
moral shock.
Although this Court has allowed the grant of moral
damages to corporations in certain situations, it must be
remembered that the grant is not automatic. The claimant
must still prove the factual basis of the damage and the
causal relation to the defendant's acts.[37] In this case,
while there is a showing of bad faith on the part of the
employer in the commission of acts of unfair labor
practice, there is no evidence establishing the factual basis
of the damage on the part of SMART.
Bache & Co Inc vs. Ruiz GR L-32409, 27 February 1971
Facts: On 24 February 1970, Misael P. Vera, Commissioner
of Internal Revenue, wrote a letter addressed to Judge
Vivencio M. Ruiz requesting the issuance of a search
warrant against Bache & Co. (Phil.), Inc. and Frederick E.
Seggerman for violation of Section 46(a) of the National
Internal Revenue Code (NIRC), in relation to all other
pertinent provisions thereof, particularly Sections 53, 72,
73, 208 and 209, and authorizing Revenue Examiner
Rodolfo de Leon to make and file the application for
search warrant which was attached to the letter.
In the afternoon of the following day, De Leon and his
witness, Arturo Logronio, went to the Court of First
Instance (CFI) of Rizal. They brought with them the
following papers: Vera’s letter-request; an application for
search warrant already filled up but still unsigned by De
Leon; an affidavit of Logronio subscribed before De Leon; a
deposition in printed form of Logronio already
accomplished and signed by him but not yet subscribed;
and a search warrant already accomplished but still
unsigned by Judge. At that time the Judge was hearing a
certain case; so, by means of a note, he instructed his
Deputy Clerk of Court to take the depositions of De Leon
and Logronio.
After the session had adjourned, the Judge was informed
that the depositions had already been taken. The
stenographer, upon request of the Judge, read to him her
stenographic notes; and thereafter, the Judge asked
Logronio to take the oath and warned him that if his
deposition was found to be false and without legal basis,
he could be charged for perjury.
The Judge signed de Leon’s application for search warrant
and Logronio’s deposition. Search Warrant 2-M-70 was
then signed by Judge and accordingly issued. 3 days later
(a Saturday), the BIR agents served the search warrant to
the corporation and Seggerman at the offices of the
corporation on Ayala Avenue, Makati, Rizal.
The corporation’s lawyers protested the search on the
ground that no formal complaint or transcript of testimony
was attached to the warrant. The agents nevertheless
proceeded with their search which yielded 6 boxes of
documents.
On 3 March 1970, the corporation and Seggerman filed a
petition with the Court of First Instance (CFI) of Rizal
praying that the search warrant be quashed, dissolved or
recalled, that preliminary prohibitory and mandatory writs
of injunction be issued, that the search warrant be
declared null and void, and that Vera, Logronio, de Leon,
et. al., be ordered to pay the corporation and Seggerman,
jointly and severally, damages and attorney’s fees.
After hearing and on 29 July 1970, the court issued an
order dismissing the petition for dissolution of the search
warrant. In the meantime, or on 16 April 1970, the Bureau
of Internal Revenue made tax assessments on the
corporation in the total sum of P2,594,729.97, partly, if
not entirely, based on the documents thus seized.
The corporation and Seggerman filed an action for
certiorari, prohibition, and mandamus.
Issue: Whether the corporation has the right to contest
the legality of the seizure of documents from its office.
Held: The legality of a seizure can be contested only by the
party whose rights have been impaired thereby, and that
the objection to an unlawful search and seizure is purely
personal and cannot be availed of by third parties. In
Stonehill, et al. vs. Diokno, et al. (GR L-19550, 19 June
1967; 20 SCRA 383) the Supreme Court impliedly
recognized the right of a corporation to object against
unreasonable searches and seizures; holding that the
corporations have their respective personalities, separate
and distinct from the personality of the corporate officers,
regardless of the amount of shares of stock or the interest
of each of them in said corporations, whatever, the offices
they hold therein may be; and that the corporate officers
therefore may not validly object to the use in evidence
against them of the documents, papers and things seized
from the offices and premises of the corporations, since
the right to object to the admission of said papers in
evidence belongs exclusively to the corporations, to whom
the seized effects belong, and may not be invoked by the
corporate officers in proceedings against them in their
individual capacity.
The distinction between the Stonehill case and the present
case is that: in the former case, only the officers of the
various corporations in whose offices documents, papers
and effects were searched and seized were the petitioners;
while in the latter, the corporation to whom the seized
documents belong, and whose rights have thereby been
impaired, is itself a petitioner.
On that score, the corporation herein stands on a different
footing from the corporations in Stonehill. Moreover,
herein, the search warrant was void inasmuch as First,
there was no personal examination conducted by the
Judge of the complainant (De Leon) and his witness
(Logronio).
The Judge did not ask either of the two any question the
answer to which could possibly be the basis for
determining whether or not there was probable cause
against Bache & Co. and Seggerman. The participation of
the Judge in the proceedings which led to the issuance of
Search Warrant 2-M-70 was thus limited to listening to the
stenographer’s readings of her notes, to a few words of
warning against the commission of perjury, and to
administering the oath to the complainant and his witness.
This cannot be consider a personal examination.
Second, the search warrant was issued for more than one
specific offense. The search warrant was issued for at least
4 distinct offenses under the Tax Code. The first is the
violation of Section 46(a), Section 72 and Section 73 (the
filing of income tax returns), which are interrelated. The
second is the violation of Section 53 (withholding of
income taxes at source).
The third is the violation of Section 208 (unlawful pursuit
of business or occupation); and the fourth is the violation
of Section 209 (failure to make a return of receipts, sales,
business or gross value of output actually removed or to
pay the tax due thereon). Even in their classification the 6
provisions are embraced in 2 different titles: Sections
46(a), 53, 72 and 73 are under Title II (Income Tax); while
Sections 208 and 209 are under Title V (Privilege Tax on
Business and Occupation).
Lastly, the search warrant does not particularly describe
the things to be seized. Search Warrant No. 2-M-70 tends
to defeat the major objective of the Bill of Rights, i.e., the
elimination of general warrants, for the language used
therein is so all-embracing as to include all conceivable
records of the corporation, which, if seized, could possibly
render its business inoperative. Thus, Search Warrant 2-M-
70 is null and void.
Bataan Shipyard VS. PCGG
GR NO. 75885, MAY 27, 1987
Facts: BASECO describes itself in its petition as "a ship
repair and ship building company incorporated as a
domestic private corporation on Aug. 30, 1972 by a
consortium of Filipino ship owners and shipping
executives. Its main office is at Engineer Island, Port Area,
Manila, where its Engineer Island Shipyard is housed, and
its main shipyard is located at Mariveles Bataan."
Its Articles of Incorporation disclose that its authorized
capital stock is Php60,000,000.00 divided into 60,000
shares, of which 12,000 shares with a value of
Php12,000,000.00 have been subscribed, and on said
subscription, the aggregate sum of Php3,035,000.00 has
been paid by the incorporators.
The same articles identify the incorporators, numbering
fifteen. By 1986, however, of these fifteen incorporators,
six had ceased to be stockholders. As of 1986, there were
twenty stockholders listed in BASECO's Stock and Transfer
Book.
When EO 1 & 2 was promulgated by Pres. Corazon
Aquino and respectively the sequestration, takeover and
other orders in relation to the EO done by the PCGG to the
alleged Marcos controlled corporation which is BASECO.
The problem arose when the sequestration order was
initiated. The sequestration order was directed to 3
commissioners of the PCGG directing them to sequester
the following:
1. Bataan Shipyard and Engineering Co., Inc. (Engineering
Island Shipyard and
Mariveles Shipyard)
2. Baseco Quarry
3. Philippine Jai-Alai Corporation
4. Fidelity Management Co., Inc.
5. Romson Realty, Inc.
6. Trident Management Co.
7. New Trident Management
8. Bay Transport
9. And all affiliate companies of Alfredo "Bejo" Romualdez
And were ordered to do the following:
1. To implement this sequestration order with a minimum
disruption of these companies' business activities.
2. To ensure the continuity of these companies as going
concerns, the care and maintenance of these assets until
such time that the Office of the President through the
Commission on Good Government should decide
otherwise.
3. To report to the Commission on Good Government
periodically.
Further, you are authorized to request for
Military/Security Support from the
Military/Police authorities, and such other acts essential to
the achievement of this sequestration order.
Thereafter, the corporation was ordered by the PCGG to
produce certain documents such as:
1. Stock Transfer Book
2. Legal documents, such as:
2.1. Articles of Incorporation
2.2. By-Laws
2.3. Minutes of the Annual Stockholders Meeting from
1973 to 1986
2.4. Minutes of the Regular and Special Meetings of the
Board of Directors from
1973 to 1986
2.5. Minutes of the Executive Committee Meetings from
1973 to 1986
2.6. Existing contracts with suppliers/contractors/others.
3. Yearly list of stockholders with their corresponding
share/stockholdings from 1973 to 1986 duly certified by
the Corporate Secretary.
4. Audited Financial Statements such as Balance Sheet,
Profit & Loss and others from 1973 to December 31, 1985.
5. Monthly Financial Statements for the current year up to
March 31, 1986.
6. Consolidated Cash Position Reports from January to
April 15, 1986.
7. Inventory listings of assets up dated up to March 31,
1986.
8. Updated schedule of Accounts Receivable and Accounts
Payable.
9. Complete list of depository banks for all funds with the
authorized signatories for withdrawals thereof.
10. Schedule of company investments and placements.
Petitioner now prays to the Court to:
1) declare unconstitutional and void Executive Orders
Numbered 1 and 2;
2) annul the sequestration order dated April- 14, 1986, and
all other orders subsequently issued and acts done on the
basis thereof, inclusive of the takeover order of July 14,
1986 and the termination of the services of the BASECO
executives.
3) the production of certain document infringed the right
against self-incrimination
4) and that PCGG unduly interfered with its management
and affairs and right of dominion.
Argument of BASECO: First, no notice and hearing was
accorded to it before its properties and business were
taken over; Second, the PCGG is not a court, but a purely
investigative agency and therefore not competent to act
as prosecutor and judge in the same cause; Third, there is
nothing in the issuances which envisions any proceeding,
process or remedy by which petitioner may expeditiously
challenge the validity of the takeover after the same has
been effected; and Fourthly, being directed against
specified persons, and in disregard of the constitutional
presumption of innocence and general rules and
procedures, they constitute a Bill of Attainder."
Issues:
1. Whether or not the order of production of documents
would be self-incriminating to BASECO
2. Whether or not a corporation can avail the right against
self-incrimination
Held: ISSUES 1 & 2:
The Court held that the right against self-incrimination has
no application to corporations. Every corporation is a
direct creature of the law and receives an individual
franchise from the State. But a partnership, although is
deemed to be a juridical person by grant of the State,
becomes a juridical person through a private contract of
partnership between and among the partners, without
needing to register its existence with the State or any of its
organs. More importantly, the partnership “person” is a
fiction of law given more for the convenience of the
partners, and thus can be dissolved by the will of the
partners or by the happening of an event that would
constitute the termination of the contractual relationship,
whereas, no corporation can be dissolved without the
consent of the State, and only after due notice and
hearing. Likewise, the other features of the partnership,
mainly mutual agency, delectus personae and unlimited
liability on the part of the partners, that places a close
identity between the persons of the partners and that of
the partnership. This is unlike in corporate setting, where
the stockholders do not own corporate properties, have
no participation in management of corporate affairs, and
enjoy personal immunity from the debts and liabilities of
the corporation, and where basically the corporation “is its
own person,” and acts through a professional group of
managers and agents called the Board of Directors.
While therefore it is understandable that a corporation,
that has no heart, feels pain, and has no soul that can be
damned, cannot be expected to be entitled to the
constitutional right against self-incrimination, it is quite
different in the case of the partnership, since its person is
merely an extension of the group of partners, who having
come together in business, and acting still for such
business enterprise, could not be presumed to have
waived their individual rights against self-incrimination.
 PNB vs CA
Facts: Rita Tapnio owes PNB an amount of P2,000.00. The
amount is secured by her sugar crops about to be
harvested including her export quota allocation worth
1,000 piculs. The said export quota was later dealt by
Tapnio to a certain Jacobo Tuazon at P2.50 per picul or a
total of P2,500. Since the subject of the deal is mortgaged
with PNB, the latter has to approve it. The branch manager
of PNB recommended that the price should be at P2.80
per picul which was the prevailing minimum amount
allowable. Tapnio and Tuazon agreed to the said amount.
And so the bank manager recommended the agreement to
the vice president of PNB. The vice president in turn
recommended it to the board of directors of PNB.
However, the Board of Directors wanted to raise the price
to P3.00 per picul. This Tuazon does not want hence he
backed out from the agreement. This resulted to Tapnio
not being able to realize profit and at the same time
rendered her unable to pay her P2,000.00 crop loan which
would have been covered by her agreement with Tuazon.
Eventually, Tapnio was sued by her other creditors and
Tapnio filed a third party complaint against PNB where she
alleged that her failure to pay her debts was because of
PNB’s negligence and unreasonableness.
ISSUE: Whether or not Tapnio is correct.
HELD: Yes. In this type of transaction, time is of the
essence considering that Tapnio’s sugar quota for said
year needs to be utilized ASAP otherwise her allotment
may be assigned to someone else, and if she can’t use it,
she won’t be able to export her crops. It is unreasonable
for PNB’s board of directors to disallow the agreement
between Tapnio and Tuazon because of the mere
difference of 0.20 in the agreed price rate. What makes it
more unreasonable is the fact that the P2.80 was
recommended both by the bank manager and PNB’s VP
yet it was disapproved by the board. Further, the P2.80
per picul rate is the minimum allowable rate pursuant to
prevailing market trends that time. This unreasonable
stand reflects PNB’s lack of the reasonable degree of care
and vigilance in attending to the matter. PNB is therefore
negligent.
In failing to observe the reasonable degree of care and
vigilance which the surrounding circumstances reasonably
impose, petitioner is consequently liable for the damages
caused on private respondents. Under Article 21 of the
New Civil Code, “any person who wilfully causes loss or
injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter
for the damage.” The afore-cited provisions on human
relations were intended to expand the concept of torts in
this jurisdiction by granting adequate legal remedy for the
untold number of moral wrongs which is impossible for
human foresight to specifically provide in the statutes. 
A corporation is civilly liable in the same manner as natural
persons for torts, because “generally speaking, the rules
governing the liability of a principal or master for a tort
committed by an agent or servant are the same whether
the principal or master be a natural person or a
corporation, and whether the servant or agent be a
natural or artificial person. All of the authorities agree that
a principal or master is liable for every tort which it
expressly directs or authorizes, and this is just as true of a
corporation as of a natural person, a corporation is liable,
therefore, whenever a tortious act is committed by an
officer or agent under express direction or authority from
the stockholders or members acting as a body, or,
generally, from the directors as the governing body.”
Time Inc. vs. Judge Reyes
Facts: In Time’s Asian Edition Magazine, Manila Mayor
Antonio Villegas was accused of having coffers containing
“far more pesos than seemed reasonable in the light of his
income.” Juan Ponce Enrile was dragged onto the article
because he allegedly lent Villegas 30,000 pesos as he was
his compadre and at that time, Enrile was the Secretary of
Finance.
Villegas and Enrile sought to recover damages from Time
Magazine, an American Corporation, so they filed a
complaint in the CFI of Rizal.
Petitioner received the summons and a copy of the
complaint at its offices in New York on 13 December 1967
and, on 27 December 1967, it filed a motion to dismiss the
complaint for lack of jurisdiction and improper venue,
relying upon the provisions of Republic Act 4363.
The judge deferred the proceedings for the reason that
"the rule laid down under Republic Act. No. 4363,
amending Article 360 of the Revised Penal Code, is not
applicable to actions against non-resident defendants, and
because questions involving harassment and
inconvenience, as well as disruption of public service do
not appear indubitable.
Issue/s: 1. WON under the provisions of Republic Act No.
4363 the respondent Court of First Instance of Rizal has
jurisdiction to take cognizance of the civil suit for damages
arising from an allegedly libelous publication, considering
that the action was instituted by public officers whose
offices were in the City of Manila at the time of the
publication; if it has no jurisdiction, whether or not its
erroneous assumption of jurisdiction may be challenged by
a foreign corporation by writ of certiorari or prohibition. –
NO and YES
2. WON Republic Act 4363 is applicable to action against a
foreign corporation or non-resident defendant – NO
Ruling: GRANTED.
Ratio:
1. Art 360, RA 4363 reads in part: The criminal and civil
action for damages in cases of written defamations as
provided for in this chapter, shall be filed simultaneously
or separately with the court of first instance of the
province or city where the libelous article is printed and
first published or where any of the offended parties
actually resides at the time of the commission of the
offense;
Provided, however, That where one of the offended
parties is a public officer whose office is in the City of
Manila at the time of the commission of the offense, the
action shall be filed in the Court of First Instance of the
City of Manila or of the city or province where the libelous
article is printed and first published, and in case such
public officer does not hold office in the City of Manila, the
action shall be filed in the Court of First Instance of the
province or city where he held office at the time of the
commission of the offense or where the libelous article is
printed and first published and in case one of the offended
parties is a private individual, the action shall be filed in
the Court of First Instance of the province or city where he
actually resides at the time of the commission of the
offense or where the libelous matter is printed and first
published;
Provided,further, That the civil action shall be filed in the
same court where the criminal action is filed and vice
versa;
Provided, furthermore, That the court where the criminal
action or civil action for damages is first filed, shall acquire
jurisdiction to the exclusion of other courts; And provided
finally, That this amendment shall not apply to cases of
written defamations, the civil and/or criminal actions
which have been filed in court at the time of the effectivity
of the law…
2. The complaint lodged in the court of Rizal by
respondents does not allege that the libelous article was
printed and first published in the province of Rizal and,
since the respondents-plaintiffs are public officers with
offices in Manila at the time of the commission of the
alleged offense, it is clear that the only place left for them
wherein to file their action, is the Court of First Instance of
Manila.
3. The intent, of the law is clear: a libeled public official
might sue in the court of the locality where he holds office,
in order that the prosecution of the action should interfere
as little as possible with the discharge of his official duties
and labors. The only alternative allowed him by law is to
prosecute those responsible for the libel in the place
where the offending article was printed and first
published. Here, the law tolerates the interference with
the libeled officer's duties only for the sake of avoiding
unnecessary harassment of the accused. Since the
offending publication was not printed in the Philippines,
the alternative venue was not open to respondent Mayor
Villegas of Manila and Undersecretary of Finance Enrile,
who were the offended parties.
4. That respondents-plaintiffs could not file a criminal case
for libel against a non-resident defendant does not make
Republic Act No. 4363 incongruous of absurd, for such
inability to file a criminal case against a non-resident
natural person equally exists in crimes other than libel. It is
a fundamental rule of international jurisdiction that no
state can by its laws, and no court which is only a creature
of the state, can by its judgments or decrees, directly bind
or affect property or persons beyond the limits of the
state. Not only this, but if the accused is a corporation, no
criminal action can lie against it, whether such corporation
or resident or non-resident. At any rate, the case filed by
respondents-plaintiffs is case for damages.
5. 50 Am. Jur. 2d 659 differentiates the "multiple
publication" and "single publication" rules (invoked by
private respondents) to be as follows: The common law
rule as to causes of action for tort arising out of a single
publication was to the effect that each communication of
written or printed matter was a distinct and separate
publication of a libel contained therein, giving rise to a
separate cause of action. This rule ('multiple publication'
rule) is still followed in several American jurisdictions, and
seems to be favored by the American Law Institute. Other
jurisdictions have adopted the 'single publication' rule
which originated in New York, under which any single
integrated publication, such as one edition of a
newspaper, book, or magazine, or one broadcast, is
treated as a unit, giving rise to only one cause of action,
regardless of the number of times it is exposed to different
people.
6. These rules are not pertinent in the present scheme
because the number of causes of action that may be
available to the respondents-plaintiffs is not here in issue.
The court is confronted by a specific venue statute,
conferring jurisdiction in cases of libel against Public
officials to specified courts, and no other. The rule is that
where a statute creates a right and provides a remedy for
its enforcement, the remedy is exclusive; and where it
confers jurisdiction upon a particular court, that
jurisdiction is likewise exclusive, unless otherwise
provided. Hence, the venue provisions of Republic Act No.
4363 should be deemed mandatory for the party bringing
the action, unless the question of venue should be waived
by the defendant, which was not the case here. Only thus
can the policy of the Act be upheld and maintained. Nor is
there any reason why the inapplicability of one alternative
venue should result in rendering the other alternative, also
inapplicable.

7. Petitioner's failure to aver its legal capacity to institute

the present petition is not fatal, for A foreign corporation
may, by writ of prohibition, seek relief against the
wrongful assumption of jurisdiction. And a foreign
corporation seeking a writ of prohibition against further
maintenance of a suit, on the ground of want of
jurisdiction in which jurisdiction is not bound by the ruling
of the court in which the suit was brought, on a motion to
quash service of summons, that it has jurisdiction.

8. It is also advanced that the present petition is

premature, since respondent court has not definitely ruled
on the motion to dismiss, nor held that it has jurisdiction,
but only argument is untenable. The motion to dismiss
was predicated on the respondent court's lack of
jurisdiction to entertain the action; and the rulings of this
Court are that writs of certiorari or prohibition, or both,
may issue in case of a denial or deferment of action on
such a motion to dismiss for lack of jurisdiction.