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This case involves a dispute over stock certificates owned by Idonah Slade Perkins in the Philippine corporation Benguet Consolidated, Inc. Upon her death, Renato Tayag was appointed ancillary administrator in the Philippines to satisfy local creditors. The court ordered the domiciliary administrator in New York, Country Trust Company, to surrender the stock certificates, but Country Trust refused. The court then ordered Benguet Consolidated to declare the stocks lost and issue new certificates. Benguet Consolidated appealed, arguing the court order violated its bylaws regarding lost stock certificates. The court affirmed that as a Philippine corporation, Benguet Consolidated must obey lawful court orders and cannot ignore them based on its
This case involves a dispute over stock certificates owned by Idonah Slade Perkins in the Philippine corporation Benguet Consolidated, Inc. Upon her death, Renato Tayag was appointed ancillary administrator in the Philippines to satisfy local creditors. The court ordered the domiciliary administrator in New York, Country Trust Company, to surrender the stock certificates, but Country Trust refused. The court then ordered Benguet Consolidated to declare the stocks lost and issue new certificates. Benguet Consolidated appealed, arguing the court order violated its bylaws regarding lost stock certificates. The court affirmed that as a Philippine corporation, Benguet Consolidated must obey lawful court orders and cannot ignore them based on its
This case involves a dispute over stock certificates owned by Idonah Slade Perkins in the Philippine corporation Benguet Consolidated, Inc. Upon her death, Renato Tayag was appointed ancillary administrator in the Philippines to satisfy local creditors. The court ordered the domiciliary administrator in New York, Country Trust Company, to surrender the stock certificates, but Country Trust refused. The court then ordered Benguet Consolidated to declare the stocks lost and issue new certificates. Benguet Consolidated appealed, arguing the court order violated its bylaws regarding lost stock certificates. The court affirmed that as a Philippine corporation, Benguet Consolidated must obey lawful court orders and cannot ignore them based on its
Emergency Recit: Idonah Slade Perkins died in New York City. Renato Tayag was appointed ancillary administrator. CFI ordered domiciliary administrator County Trust Company of New York to surrender to Tayag 33,002 shares of stock certificates owned by Perkins in a Philippine corporation, Benguet Consolidated, Inc., to satisfy the legitimate claims of local creditors. When County Trust Company of New York refused the court ordered Benguet Consolidated, Inc. to declare the stocks lost and required it to issue new certificates in lieu thereof. Appeal was taken by Benguet Consolidated, Inc. alleging the failure to comply with its by-laws setting forth the procedure to be followed in case of a lost, stolen or destroyed so it cannot issue new stock certs. W/N Benguet Consolidated, Inc. can ignore a court order because of its by-laws. NO. CFI Affirmed. Fear of contigent liability by not following by-laws obedience to a lawful order = valid defense. Benguet Consolidated, Inc. is a Philippine corporation owing full allegiance and subject to the unrestricted jurisdiction of local courts. Assuming that a contrariety exists between the above by-law and the command of a court decree, the latter is to be followed. A corporation is an artificial being created by operation of law...."It owes its life to the state, its birth being purely dependent on its will. Cannot ignore the source of its very existence FACTS: Idonah Slade Perkins died in 1960 with Country Trust & Co. of New York as her domiciliary administrator and left, among others, 2 stock certificates covering 33,002 shares of stock of appellant Benguet Consolidated, Inc. Renato Tayag, as ancillary administrator in the Philippines, requested Contry Trust to surrender to him the stock certificates to satisfy the legitimate claims of local creditors. Country Trust refused. The lower court ruled that: The stock certificates be considered lost for all purposes of admin. & liquidation of the Philippine estate of Perkins Said certificates be cancelled Directing said corporation to issue new certificates in lieu thereof to be delivered to either Tayag or the court clerk. An appeal was made, not by Country Trust as domiciliary administrator, but by Benguet Consolidated on the ground that the certificates are existing and in the possession of Country Trust. They also assert that there was a failure to observe certain requirements of its by-laws before new stock certificates could be issued. ISSUE: Whether or not Benguet Consolidated, Inc. can ignore a court order because of its by-laws. NOPE RATIO: Benguet Consolidated, Inc. did not dispute the power of the appellee ancillary administrator to gain control and possession of all assets of the decedent within the jurisdiction of the Philippines. Nor could it. Such a power is inherent in his duty to settle her estate and satisfy the claims of local creditors. The ancillary administration is proper, whenever a person dies, leaving in a country other than that of his last domicile, property to be administered in the nature of assets of the deceased liable for his individual debts or to be distributed among his heirs. The appeal cannot prosper. The challenged order represents a response and expresses a
policy, to paraphrase Frankfurter, arising out of a specific problem, addressed to the
attainment of specific ends by the use of specific remedies, with full and ample support from legal doctrines of weight and significance. Since there is a refusal, persistently adhered to by the domiciliary administrator in New York, to deliver the shares of stocks of appellant corporation owned by the decedent to the ancillary administrator in the Philippines, there was nothing unreasonable or arbitrary in considering them as lost and requiring the appellant to issue new certificates in lieu thereof. Benguet Consolidated is a Philippine corporation owing full allegiance and subject to the unrestricted jurisdiction of local courts. Its shares of stock cannot therefore be considered in any wise as immune from lawful court orders. Benguet Consolidated, Inc. would seek to bolster the above contention by its invoking one of the provisions of its by-laws which would set forth the procedure to be followed in case of a lost, stolen or destroyed stock certificate; it would stress that in the event of a contest or the pendency of an action regarding ownership of such certificate or certificates of stock allegedly lost, stolen or destroyed, the issuance of a new certificate would await the "final decision by [a] court regarding the ownership [thereof]. Assuming that a contrariety exists between the above by-law and the command of a court decree, the latter is to be followed. It would be most highly unorthodox, however, if a corporate by-law would be accorded such a high estate in the jural order that a court must not only take note of it but yield to its alleged controlling force. We start with the undeniable premise that, "a corporation is an artificial being created by operation of law...." It owes its life to the state, its birth being purely dependent on its will. The well-known authority Fletcher could summarize the matter thus: "A corporation is not in fact and in reality a person, but the law treats it as though it were a person by process of fiction, or by regarding it as an artificial person distinct and separate from its individual stockholders.... It owes its existence to law. It is an artificial person created by law for certain specific purposes, the extent of whose existence, powers and liberties is fixed by its charter." A corporation as known to Philippine jurisprudence is a creature without any existence until it has received the imprimatur of the state according to law. It is logically inconceivable therefore that it will have rights and privileges of a higher priority than that of its creator. More than that, it cannot legitimately refuse to yield obedience to acts of its state organs, certainly not excluding the judiciary, whenever called upon to do so. WHEREFORE, the appealed order of the Honorable Arsenio Santos, the Judge of the Court of First Instance, dated May 18, 1964, is affirmed. With costs against oppositor-appelant Benguet Consolidated, Inc.
Jose Remo, JR., Petitioner, vs. The Hon. Intermediate Appellate Court and E.B. Marcha Transport Company, Inc., Represented by Apifanio B. Marcha, Respondents.
JESUS V. LANUZA, MAGADYA REYES, BAYANI REYES and ARIEL REYES vs. COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION, DOLORES ONRUBIA, ELENITA NOLASCO, JUAN O. NOLASCO III, ESTATE OF FAUSTINA M. ONRUBIA, PHILIPPINE MERCHANT MARINE SCHOOL, INC.
G.R. NO. 131394 March 28, 2005