Validación de expertos. Método Delphi

(a) Public corporation (Asked in ‘04) – One formed or organized for the government of a portion of the state. Its purpose is for the general good and welfare [Sec. 3, Act 1456].

Polytechnic University of the Phils. v. Court of Appeals (2001): Beyond cavil, a government-owned and controlled corporation has a personality of its own, distinct and separate from that of the government, and the intervention in a transaction of the Office of the President through the Executive Secretary does not change the independent existence of a government entity as it deals with another government entity.

Boy Scouts of the Philippines v. COA (2011):

Not all corporations, which are not government owned or controlled, are ipso facto to be considered private corporations as there exists another distinct class of corporations or chartered institutions which are otherwise known as

“public corporations.” These corporations are treated by law as agencies or instrumentalities of the government which are not subject to the tests of ownership or control and economic viability but to different criteria relating to their public purposes/interests or constitutional policies and objectives and their administrative relationship to the government or any of its Departments or Offices.

 As presently constituted, the BSP is a public corporation created by law for a public purpose. It is not a private corporation which is required to be owned or controlled by the government and be economically viable to justify its existence under a special law.

(b) Private corporation (Asked in ‘04) – One formed for some private purpose, benefit, aim or end [Sec. 3, Act 1456]; it may be either stock or non-stock, government-owned or controlled or quasi-public.

Baluyot v. Holganza (2000): The TEST to determine whether a corporation is government-owned or –controlled, or private in nature, is if a corporation is created by its own charter for the exercise of a public function, or by incorporation under the general corporation law.

(c) Close corporation - One whose articles of incorporation provide that: (1) All the corporation's issued stock of all classes, exclusive of treasury shares, shall be held of record by not more than a specified number of persons, not exceeding twenty (20); (2) all the issued stock of all classes shall be subject to one or more specified restrictions on transfer permitted by this Title; and (3) The corporation shall not list in any stock exchange or make any public offering of any of its stock of any class.

Notwithstanding the foregoing, a corporation shall not be deemed a close corporation when at least two-thirds (2/3) of its voting stock or voting rights is owned or controlled by another corporation which is not a close corporation within the meaning of this Code.

[Sec. 96]

(d) Educational corporation – One organized for educational purposes [Sec. 106].

(e) Religious corporations

Corporation sole is one formed for the purpose of administering and managing, as trustee, the affairs, property and temporalities of any religious denomination, sect, or church, by the chief archbishop, bishop, priest, rabbi, or other presiding elder of such religious denomination, sect or church [Sec.110]

Roman Catholic Apostolic, etc v. Register of Deeds of Davao City (1957): A corporation sole has no nationality but for the purpose of applying nationalization laws, nationality is determined not by the nationality of its presiding elder but by the nationality of its members constituting the sect in the

Philippines. Thus, the Roman Catholic Church can acquire lands in the Philippines even if it is headed by the Pope.

Corporation aggregate is a religious corporation incorporated by more than one person.

(f) Eleemosynary corporation– One organized for a charitable purpose

(g) Domestic corporation– One formed, organized, or existing under the laws of the Philippines.

(h) Foreign corporation – One formed, organized or existing under any laws other than those of the Philippines and whose law allows Filipino citizens and corporations to do business in its own country and state (Sec.

123).

(i) Corporation created by special laws or charter - Corporations which are governed primarily by the provisions of the special law or charter creating them. Corporation Code has suppletory application. [Sec. 4]

(j) Subsidiary corporation – One in which control, usually in the form of ownership of majority of its shares, is in another corporation (the parent corporation).

(k) Parent corporation – Its control lies in its power, directly or indirectly, to elect the subsidiary’s directors thus controlling its management policies.

 Holding company – a parent company which has no other business aside from the holding of the shares of its subsidiaries which it controls

 Investment company – a parent company which holds shares in other corporations not for the purpose of controlling them but merely to invest therein

(l) Corporation De Jure – A corporation organized in accordance with the requirements of the law.

(m) De facto corporation – A corporation where there exists a flaw in its incorporation.

Rule on De Facto Corporations - The due incorporation of any corporation claiming in good faith to be a corporation under this Code, and its right to exercise corporate powers, shall not be inquired into collaterally in any private suit to which such corporation may be a party. Such inquiry may be made by the Solicitor General in a quo warranto proceeding (Sec. 20).

Grant of juridical personality is an exercise of State power and not a matter of private affair. Consequently, under the de facto corporation doctrine, the defect in the juridical personality of a corporation cannot be inquired into by private individuals, much less used as a defense to avoid claims, except in quo warranto proceedings brought on behalf of the State where the main action is to question the validity or existence of such juridical personality (Villanueva).

Requisites of De Facto Corporation:

(1) There is an apparently valid statute under which the corporation may be formed;

(2) There has been colorable compliance with the legal requirements in good faith;

and

(3) There has been user of corporate powers, i.e. the transaction of business as if it were a corporation. [Campos, 1990]

Hall v. Piccio (1950): An association of persons cannot claim to be a corporation if it has not been issued a certificate of incorporation since it cannot claim good faith compliance with the requirements of the law.

(k) Corporation by estoppel – Where a group of persons misrepresent themselves as a corporation, they are subsequently estopped from claiming lack of corporate life in order to avoid liability; also, a third party who had dealt with an unincorporated association as a corporation is precluded from denying its corporate existence on a suit brought by the alleged corporation on the contract.

Sec. 21. All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all debts, liabilities and damages incurred or arising as a result thereof. Provided, however, That when any such ostensible corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such, it shall not be allowed to use as a defense its lack of corporate personality.

One who assumes an obligation to an ostensible corporation as such, cannot resist performance thereof on the ground that there was in fact no corporation.

International Express Travel v. CA (2000): The doctrine of estoppel applies to a third party only when he tries to escape liability on a contract from which he has benefited on the irrelevant ground of defective incorporation.

It does not apply to a third party who is not trying to escape liability from the contract but rather is the one claiming from the contract.

De Facto Corporation vs. Corporation by Estoppel

 Where all the requisites of a De Facto corporation are present, the defectively formed corporation will have the status of a De Jure corporation in all cases brought by or against it, except only as to the State in a direct proceeding.

 If any of the requisites is absent, then the Estoppel doctrine can apply but ONLY IF under the circumstances of the particular case then before the court, either (a) the defendant association is estopped from defending on the ground of its lack of capacity to be sued, or (b) the defendant third party had dealt with the plaintiff as a corporation and is deemed to have admitted its existence.

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