various - villanueva final exam corporation law (villanueva)

8/13/2019 VARIOUS - Villanueva Final Exam Corporation Law (Villanueva)

1/8

ATENEO DEMANILA LAW SCHOOL

CORPORATELAW- 2A & 2B Dean CESAR L. VILLANUEVAFINALEXAMINATIONS 30 Mar! 200"# M$n%a

INSTRUCTIONS

T!e E'a()na*)$n $n+)+*+ $, FIVE / Pr$1e(+ $n THREE 3/ ae+. Rea% ea! )*e(are,411. An+5er *!e 64e+*)$n+ SE7UENTIALL8# $n)+e1 an% 1ear1 STARTIN9 EVER8ANSWER ON A SEPARATE RI9HT-HAND PA9E# 4* *!erea,*er $4 (a 5r)*e $n *!e a:ae. D$ n$* reea* *!e 64e+*)$n+ an% MA;E SURE 8OU ADDRESS THE SPECIFIC7UESTIONS AS;ED AT THE END OF EACH PROBLEM. A (ere er 1)**1e re%)*# ), a* a11. Un1e++ $*!er5)+e e're++1+*a*e%# a11 +*a*e(en*+ )n *!e r$1e(+ are a1rea% %ee(e% r$>en *!)+ )+ n$* ane'a()na*)$n )n Evidence/# an% $4r an+5er+ (4+* *a:e *!e ,$r( $, a %e)+)$n $r r41)n $, a

?4%e *!a* %)+$+e+ $, *!e )++4e+ ra)+e%# an% n$* a (ere aa%e() %)+4++)$n.9OOD LUC;@

$O$

FACTSCOMMONTOPROBLEMS# 2 AND3

N)$1a+ Tra%)n C$r. )+ a %$(e+*) $r$ra*)$n )n e')+*ene ,$r *!e 1a+* *enear+# an% !a% a+ )*+ $r))na1 )n$r$ra*$r+ *!e ,$11$5)n )n%)>)%4a1+

N$. $, A($4n* A($4n*S!are+ S4+r)e% Pa)%-U .

N)$1a+ 0#000 P #000#000 P 00#000

Ar*e()$ "#000 "00#000 00#000

W)1,re%$ #000 00#000 00#000

E4+e)$ #000 00#000 00#000

Te$,)1$ #000 00#000 00#000

B$*! *!e ar*)1e+ $, )n$r$ra*)$n an% -1a5+ r$>)%e% ,$r a -(an B$ar% $,D)re*$r+# $, 5!)! *!e )n$r$ra*$r+ !a>e a15a+ e1e*e% *!e(+e1>e+ *$ ,)11-4#5)*! N)$1a+ e1e*e% re41ar1 a+ Pre+)%en*# an% Ar*e()$ a+ C$r$ra*e Sere*ar.T!e -1a5+ a1+$ r$>)%e *!a* *!e B$ar% $, D)re*$r+ (a# )n *!e e'er)+e $, )*+4+)ne++ ?4%(en* )++4e er*),)a*e+ $, +*$: $>er $r*)$n+ $, *!e +4+r)*)$n+*!a* are a)%.

F)>e ear+ a$# ne5 )n>e+*$r+ 5ere )n>)*e% *$ )n>e+* )n *!e $(an a+,$11$5+

S!are+ S4+r)e% Pa)%-U .

T!$(a+ #000 P 00#000 P 00#000W)11)a( #000 00#000 00#000

H)1ar #000 00#000 00#000

O*a>)4+ #000 00#000 00#000

e,,er+$n #000 00#000 00#000

S4+r)*)$n aree(en*+ 5ere e'e4*e% ,$r ea! $, *!e a%%)*)$na1 )n>e+*$r+5!ere )* 5a+ +e),)a11 r$>)%e% *!a* *!e +!are+ +4+r)e% ea! ne5)n>e+*$r +!a11 e er)ner*),)a*e $, +*$: )++4e%. Ea! $, *!e aree(en* r$>)%e% ,$r a(en* 5)*!)n 0ear+# 5)*! )n*ere+* a* 2G .a.# $r ear1)er 5!en re+$14*)$n# *!e B$ar% (a:e+ a

a11.

I* *4rn+ $4* *!a* +)' ear a$ e,$re ne5 )n>e+*$r+ a(e )n/# *!e B$ar% $,D)re*$r+ !a% ,$r(a11 ar$>e% *!e )++4ane $, er*),)a*e+ $, +*$: $>er)n *!een*)re +4+r)*)$n+ $, *!e )n$r$ra*)n +*$:!$1%er+# an% 1a++),)n *!e 4na)%+4+r)*)$n+ ,r$( a1e= *$ a1e+#= ,$r 5!)!


2/8

ea! $, *!e( )++4e% $rre+$n%)n r$()++$r n$*e+ aa1e 5)*!)n 0 ear+#5)*! )n*ere+* a* 2G .a.

.

In an4ar $, *!)+ ear# 4n%er a Dee% $, A+$14*e Sa1e# W)1,re%$ +$1% !)+

en*)re +!are!$1%)n+ )n N)$1a+ Tra%)n *$ San Pa1$# an% %41 en%$r+e% an%%e1)>ere% *!e $>er)n +*$: er*),)a*e. A $41e $, %a+ 1a*er# 4n%er an$*!erDee% $, A+$14*e# San Pa1$ a1+$ $4!* *!e en*)re +!are!$1%)n+ $, e,,er+$n.W!en San Pa1$ +$4!* *$ !a>e *!e 4r!a+e% +!are+ re)+*ere% )n *!e $$:+ $,*!e C$(an# N)$1a+ an% Ar*e()$# a+ 1ea%)n $,,)er+# re,4+e% $n *!e r$4n% *!a*4n%er Se*)$n 3 $, *!e C$r$ra*)$n C$%e# e *!a* *!ere 5ere +*)11 4na)% +4+r)*)$n+

$n ea! $, *!e *5$ +e*+ $, +!are!$1%)n+# an% *!a* )n *!e a+e $, e,,er+$n# +)ne*!e +!are+ 5ere +*)11 )n e+r$5# !e !a% n$ r$er* r)!*+ *$ +e11. H$5 5$41% $4r41e $n *!e +4)* De)%e 5)*! rea+$n+. 0G/

SU99ESTEDANSWERS

Insofar as the shares of Wilfredo, having been covered by a stockcertificate, which made the shares conclusively insofar as the corporation isconcerned as fully-paid and non-assessable, the same should be registered inthe name of San Pablo, since his purchase is supported by both a deed and thecovering certificate endorsed and delivered, and the previously registeredstockholder Wilfredo! acknowledging that the shares should be registered in thename of San Pablo"

With respect to the shares in the name of #efferson, even though thesubscription agreements provided the shares to be in escrow, nonetheless, theoperative effect of subscription is the issuance of the shares and the constitutionof #efferson and all the new investors! as shareholders, entitled to all the rightspertaining to such position, including the right to sell or encumber their shares"$onetheless, although #efferson had the right to sell or dispose of his shares, thevalidity and enforceability of the contract of disposition sale! is as between theparties thereto, and cannot be binding on the corporation unless it agrees theretoin accordance with the clear provisions of Section %& of the 'orporation 'ode" In

other words, since a disposition of unpaid shares constitutes a novation bysubstitution of the principal obligor #efferson!, the same is not valid as to theobligee $icolas (rading!, unless done with the consent of the latter" (he sale isvalid as between #efferson and San Pablo, but cannot be binding upon $icolas(rading without the latter)s consent, and which can hold #efferson liable to theoriginal terms of the unpaid subscription" (he remedy of San Pablo is to pay-upthe unpaid subscription due on the shares or to rescind the purchase"

2.

Fa*+ )n Pr$1e( D$ N$* E')+*J W!en *!e $(anK+ $era*)$n+ nee%e%,4r*!er 5$r:)n ,4n%+# *!e B$ar% $, D)re*$r+ a++e% a re+$14*)$n (a:)n a ,$r(a1a11 $n a11 $4*+*an%)n +4+r)*)$n *$ e a)%. I* 5a+ *!en *!a* *!e ne5 )n>e+*$r+#*!r$4! e'a()na*)$n $, $r$ra*e re$r%+# 1earne% *!a* *!e re>)$4+ +4+r)*)$n+$, *!e $r))na1 )n$r$ra*$r+ !a% een $n>er*e% )n*$ r$()++$r n$*e+. W!en *!ene5 )n>e+*$r+ re,4+e% *$ a 4n*)1 *!e $r))na1 +*$:!$1%er+ a1+$ a)% *!e)rr$()++$r n$*e+# *!e B$ar% $, D)re*$r+ $, N)$1a+ Tra%)n r$4!* +4)* *$$11e* $n *!e 4n!ee%e% a11.

*


3/8

a/ T!e ne5 )n>e+*$r+ $$+e% *!e +4)* $n *!e r$4n% *!a* *!e r$erre(e% $, *!e B$ar% +!$41% !a>e een a %e1)n64en +a1e 4n%er Se*)$n " $, *!eC$r$ra*)$n C$%e. G/

/ T!e ne5 )n>e+*$r+ ,)1e% a $4n*er1a)( aa)n+* *!e (e(er+ $, *!e B$ar%$, D)re*$r+ ,$r *!e( *$ a1+$ a *$ *!e $r$ra*)$n *!e)r $4*+*an%)n r$()++$r

n$*e+. T!e B$ar% $$+e% *!e $4n*er1a)( $n *!e r$4n%+ *!a* *!e ne5)n>e+*$r+ !a% n$ +*an%)n *$ r)n *!e +a(e +)ne )* er*a)n *$ *!e e'er)+e $,4+)ne++ ?4%(en*. 0G/

/ F4r*!er *!e B$ar% (e(er+ 1a)(e% *!a* 4n1):e *!e ne5 )n>e+*$r+# *!e$r))na1 +*$:!$1%er+ %)% n$* +)n an +4+r)*)$n aree(en* 5!)! *!e5$41% e $4n% an% *!e *er(+ $, *!e r$()++$r n$*e %)% n$* (a:e *!e$1)a*)$n+ *!ere)n %4e an% %e(an%a1e n$r +4?e* *$ a a11. 0G/

%/ H$5 5$41% $4 %e)%e $n *!e +4)* )*+e1,# )n14%)n *!e $4n*er1a)(#e+e)a11 5!en *!e (e(er+ $, *!e B$ar% )n+)+* *!a* $*! *!e $$:+ $, *!e$(an an% *!e 9enera1 In,$r(a*)$n S!ee* ,)1e% 5)*! *!e SEC 1ear1 )n%)a*e*!a* *!e)r +!are!$1%)n+ are ,411 a)%. 0G/

In ea! a+e# $4 (4+* %e)%e 5)*! rea+$n+.

SU99ESTEDANSWERS

2a/. (here is no doubt that based on the formal call made by the +oardof irectors of $icolas (rading, that the unpaid subscriptions of the new investorshad to be paid, or became due and demandable under the terms of thesubscription agreements each of them eecuted" .lthough the company is giventhe right to collect on unpaid subscription based on the delin/uency saleprovided under Section %0 of the 'orporation 'ode, nevertheless this is not theonly remedy afforded to the company" Section 12 provides that $othing in this'ode shall prevent the corporation from collecting by action in a court of proper

3urisdiction the amount due on any unpaid subscription, with accrued interest,costs and epenses" 45!

2/. (here is no merit to the assertion of the +oard that the newinvestors had no standing to bring the counterclaim against them, for beingstockholders by entering into the subscription agreements, under Section 1* ofthe 'orporation 'ode, 6olders of subscribed shares not fully paid which are notdelin/uent shall have all the rights of a stockholder, although a call has beenmade, there has been no declaration of delin/uency" (herefore, since the suitwas originally brought in the name of the corporation by the +oard, then the newinvestors had standing to bring a derivative suit by way of counterclaim in behalf

of the company against the original stockholders, especially so when the reliefsought was not for their benefit but for the benefit of the company" $o previousdemand was necessary on the part of the new investors as relators for thecompany since it was obviously useless clearly shown by the fact that thedirectors themselves are involved and they had made formal position denyingobligation to pay the original unpaid subscription to the corporation" 7ikewise,there were stockholders already of the corporation at the time when the cause ofaction against the +oard members arose a call was made not includingthemselves! and at the time the counterclaim by way of derivative suit was filed"

2/. It may be true that the original incorporators did not sign formal

subscription contracts with the then new company, but it does not mean that theydid not enter into subscription agreements" 8nder Section %2 of the 'orporation'ode, .ny contract for the ac/uisition of unissued stock in an eistingcorporation or a corporation still to be formed shall be deemed a subscriptionwithin the meaning of this (itle, notwithstanding the fact that the parties refer to itas a purchase or some other contract" (here is no re/uirement that for thatsubscription agreement to be valid and enforceable it had to be in writing" In any

&


4/8


5/8

the three &! year period of li/uidation, corporate creditors can still pursue theirclaims against corporate assets against the officers or stockholders who havetaken over the properties of the corporation"

7ately, in Paramount Insurance Corp. v. A.C. Ordoez Corp., 4%; S'>.&*1 *220!, the 'ourt held that issolution or even the epiration of the three-

year li/uidation period should not be a bar to a corporation)s enforcement of itsrights as a corporation" In support of this ruling, Paramount Insurance /uotedfrom Section ;=4 of the 'orporation 'ode which provided that $o right orremedy in favor of or against any corporation " " " shall be removed or impairedeither by the subse/uent dissolution of said corporation or by any subse/uentamendment or repeal of this 'ode or of any part thereof" It should be notedhowever that the provisions of Section ;=4 were primarily for transition forcorporations then in eistence under the terms of the old 'orporation 7aw"

FACTSCOMMONTOPROBLEMS AND

9$1%en Are+ C$r.# a De1a5are $r$ra*)$n enae% )n *!e (an4,a*4rean% %)+*r)4*)$n $, ar)41*4ra1 ,$$% r$%4*+# en*ere% )n*$ a S!are!$1%er+Aree(en* 5)*! De1a Cr4 Tra%)n C$r.# a %$(e+*) $(an re)+*ere% 5)*! *!er)(ar 4r$+e *$ enae )n )%e% *!a* *!e -(an B$ar% $, D)re*$r+ +!a11 e $($+e% $, 2 n$()nee+$, 9$1%en Are+# an% 3 n$()nee+ $, De1a Cr4 Tra%)n an% *!a* *!e C!a)r(an an%C$r$ra*e Sere*ar +!a11 e n$()na*e% Are+ C$r.# 5!)1e *!e Pre+)%en* an%C$r$ra*e Trea+4rer 5$41% e n$()na*e% De1a Cr4 Tra%)n.

One 9$1%en P)n$ 5a+ re)+*ere% 5)*! *!e SEC# a L)en+)n an%D)+*r)4*$r+!) C$n*ra* 5a+ en*ere% )n*$ 5)*! 9$1%en Are+# 5)*! *!e ,$r(ere)n a$)n*e% *!e e'14+)>e %)+*r)4*$r $, a11 $, *!e 1a**erK+ r$%4*+ )n *!eP!)1))ne+# *$ e +$1% )n *!e na(e $, an% 4n%er *!e $n*r$1 $, 9$1%en P)n$# 4*5)*! *!e !4e $+* $, a%>er*)+)n *!r$4!$4* *!e ar!)e1a$ an% *!r$4! a11(e%)a ,$r *!e a$4n* $, 9$1%en Are+.

Aar* ,r$( *!e e64)* $n*r)4*)$n+ )n*$ 9$1%en P)n$# 9$1%en Are+ a1+$e'*en%e% a P0.0 ()11)$n 1$an *$ *!e 1$a1 $(an *$ ,4n% *!e +e**)n-4 $,%)+*r)4*)$n ne*5$r:+ *!r$4!$4* *!e $4n*r.

F)na11# a Manae(en* C$n*ra* 5a+ en*ere% )n*$ e*5een 9$1%en P)n$an% De1a Cr4 Tra%)n# 5!ere *!e 1a**er 5a+ ran*e% $5er *$ (anae *!e%)+*r)4*)$n 4+)ne++ $, 9$1%en P)n$# 5!)! 5$41% en*)*1e De1a Cr4 Tra%)n a(anae(en* ,ee e64)>a1en* *$ "G $, r$++ ($n*!1 ree)*+. T!e *er(+ $, *!eManae(en* C$n*ra* a1+$ a11$5e% 9$1%en P)n$ *$ (a)n*a)n )*+ !ea% $,,)e )n a+eara*e 4)1%)n 5)*!)n *!e $($4n% $, De1a Cr4 Tra%)n.

Mr. Pa*r): Me%)na 5a+ !)re% ,r$( $4*+)%e *$ e$(e *!e Pre+)%en* $, *!e9$1%en P)n$# an% )*+ C!a)r(an rere+en*)n $ne $, *!e *!ree 3/ +$*+ *$ en$()na*e% De1a Cr4# 5)*! *5$ 2/ $*!er (e(er+ $, *!e B$ar% $()n ,r$( *!eV)e-Pre+)%en* ran:+ $, De1a Cr4 5!)1e *!e *5$ 2/ (e(er+ a++)ne% *$ 9$1%enAre+ 5ere $,,)er+ )n De1a5are 5!$ 5$41% $(e re41ar1 *$ *!e P!)1))ne+ *$a**en% B$ar% (ee*)n+.

.De1,)n# $ne $, *!e ()n$r)* +*$:!$1%er+ $, De1a Cr4 Tra%)n# %e(an%e%

,r$( *!e B$ar% $, D)re*$r+ *!a* *!e aan%$n *!e >ar)$4+ aree(en*+ *!een*ere% )n*$ 5)*! 9$1%en Are+ an% 9$1%en P)n$ ,$r e)n 4n1a5,41 !a>)n eene,,e*e% *!r$4! (ere B$ar% re+$14*)$n+ 5)*!$4* +*$:!$1%er+K ar$>a1. He a1+$%e(an%e% an e'a()na*)$n an% $)n $, a11 $r$ra*e re$r%+ $, 9$1%en P)n$.W!en *!e De1a Cr4 B$ar% re,4+e% *$ !ee% !)+ %e(an% $n *!e r$4n%+ *!a* *!e

4


6/8

r$?e* an% *!e 4n%er1)n aree(en* 5ere 5)*!)n *!e 4+)ne++ ?4%(en* $, *!eB$ar%# an% *!a* De1,)n !a% n$ +*an%)n *$ e'a()ne *!e $$:+ $, 9$1%en P)n$ $,5!)! !e )+ n$* a +*$:!$1%er $, re$r%# De1,)n r$4!* e,$re *!e RTC +e)a1$((er)a1 $4r*

a/ See:)n an $r%er %)re*e% *$ De1a Cr4 an% 9$1%en P)n$

a11$5)n !)( *$ e'a()ne an% $ *!e re$r%+ $, 9$1%en P)n$er*a)n)n *$ )*+ $r$ra*e re)+*ra*)$n an% $n *!e %)+*r)4*)$nr$?e*. I+ De1,)n en*)*1e% *$ *!e re1)e, +$4!* G/

/ A %er)>a*)>e +4)* *$ !a>e De1a Cr4 Tra%)nK+ )n>e+*(en* )n*$*!e 9$1%en P)n$ r$?e* e %e1are% 4n1a5,41# )n14%)n *!ee'e4*)$n $, *!e S*$:!$1%er+K Aree(en*. 0G/

/ T$ !a>e *!e Manae(en* Aree(en* %e1are% 4n1a5,41 an%>$)%. 0G/

De)%e ea! $, *!e *!ree a4+e+ $, a*)$n 5)*! rea+$n+.

SU99ESTEDANSWERS

a/. elfin has legal standing to eamine and copy, at his own cost, thecorporate records of :olden Pinoy" It may be true that elfin is not a stockholderof record of :olden Pinoy, and the right to inspect corporate records onlypertains to stockholders of record, nevertheless, being a stockholder of record ofthe parent company, ela 'ru? (rading, Inc", it has been held in Gokongwei v.Securities and Ec!ange Commission, 0< S'>. &&% ;

/.+eing a stockholder of record, and having made former demandwhich were not heeded, the filing of the derivative suit in behalf of ela 'ru?(rading was properly laid, since the cause of action and relief sought arepurportedly to protect the interest of ela 'ru? (rading"

.ll investments made by the corporation that are pursuant to or necessaryfor the fulfillment of the primary purpose fall within the business discretion of the+oard under Section *& of the 'orporation 'ode" Stockholders) ratificatoryapproval is re/uired under Section =* of the 'orporation 'ode only to

investments on a business enterprise outside of the primary purpose areindicated in the articles of incorporation, and the same section is careful enoughto declareA (hat where the investment by the corporation is reasonablenecessary to accomplish its primary purpose as stated in the articles ofincorporation, the approval of the stockholders or members shall not benecessary" Since ela 'ru? (rading is registered with the primary purpose ofcommercial trading in all sorts of goods and products then it is clear that itscontrolling investment in a domestic company engaged in the distribution offoodstuffs is consistent with its primary purpose and does not re/uirestockholders) ratification to be valid" 'onse/uently, the eecution of theStockholders .greement in pursuant of the investment and the pro3ect is valid, by

mere board resolution and without the need for stockholders) ratificatoryapproval"

/.(he @anagement 'ontract grants to ela 'ru? (rading the power tomanage the distribution business of :olden Pinoy, which constitutes its main andonly business undertaking, and would fall within the coverage of Section == ofthe 'orporation 'ode that re/uires that the same to be valid, must be approvedseparately by each of the +oards of irectors of ela 'ru? (rading and :olden

%


7/8

Pinoy, but also ratified separately by their stockholdersA in the case of ela 'ru?,by a ma3ority of its outstanding capital stock, in the case of :olden Pinoy, by two-thirds *B&! of its outstanding capital stock" Without such stockholders) approval,the management contract would be deemed not merely voidable, but void forlacking the essential element of complete consent"

.

In *!e $4r+e $, *!e $era*)$n+ $, *!e 4+)ne++ en*err)+e $, 9$1%en P)n$#+$(e $, *!e +41)er+ 5ere n$* a)%# an% %4e *$ *!e e$n$() %$5n*4rn# *!e$(an ea(e )n+$1>en*# an% )*+ $era*)$n+ +!4* %$5n er(anen*1. Ter(aanS41)e+# In.# $ne $, *!e 4na)% +41)er+# ,)1e% +4)* e,$re *!e 1$a1 $4r* aa)n+*9$1%en P)n$# De1a Cr4 Tra%)n# an% 9$1% Are+ *$ e 1)a1e ,$r *!e 4na)% re%)*.Ser>)e $, +4(($n+ 5a+ (a%e 4$n *!e r$er $,,)er+ $, 9$1%en P)n$ an% De1aCr4# an% $ne $, *!e %)re*$r+ $, 9$1%en Are+ %4r)n !)+ >)+)* )n *!e P!)1))ne+.

a/ De1a Cr4 Tra%)n $$+e% *!e +4)* *!a* +$4!* *$ (a:e )* 1)a1e ,$r ana$4n* *!a* 5a+ $*a)ne% %)re*1 )n *!e na(e $, 9$1%en P)n$# 5)*! +*r$n

$+)*)$n *!a* De1a Cr4 Tra%)n ann$* e (a%e e een $(()**e% De1a Cr4 Tra%)n )n *!e (a**er. 0G/

/ 9$1%en Are+# $4n+e1# 5!$ $n1 en*ere% 4n%er er )*+ er+$n. In $$+)n *!e($*)$n *$ %)+()++# Ter(aan $+)*+ *!a* ,r$( *!e ,a*+ $, *!e a+e i.e.# $(($n,a*+ are %ee(e% r$>en/# )* )+ 1ear *!a* 9$1%en Are+ 5a+ enae% )n 4+)ne++)n *!e P!)1))ne+ 5)*!$4* a 1)en+e# an% *!ere,$re an e >a1)%1 +4e% e,$re 1$a1$4r*+. 0G/

De)%e *!e a+e 5)*! r$er an% ,411 rea+$n)n.

SU99ESTEDANSWERS

a/With :olden Pinoy without assets to cover its outstanding debts, it isclear that ela 'ru? (rading may be held liable for the subsidiary)s obligation, notunder fraud piercing since there was no proof thereof, but under alter-egopiercing" .lthough it may be true that ma3ority control in the e/uity of acorporation does not by itself authori?ed the application of the piercing doctrine,however, when this is coupled by other factors which clearly indicate that acorporation is merely being used as a conduit or an alter ego, then there wouldbe proper application of the piercing doctrine to merge two corporations as one

and make them liable for the debt of the other" .side from ma3ority e/uity, thema3ority of the members of the +oard of :olden Pinoy were designated and evenofficers of ela 'ru? (radingC the head office of :olden Pinoy was located withinthe same compound owned by ela 'ru? (radingC and more importantly, theentirety of the business enterprise and operations of :olden Pinoy were underthe control of ela 'ru? (rading under the @anagement 'ontract" (here is morethan enough evidence to support the fact that :olden Pinoy was merely operatedas a conduit or alter ego of ela 'ru? (rading"

/.lthough it may be true that :olden .cres does not have a license todo business in the Philippines, it does not mean that it is susceptible of beingsued in local courts, unless it is shown that it has engaged in business in thePhilippines" +oth 3urisprudence and prevailing rules and regulations provide thate/uity investment by itself in any business in the Philippines, no matter howsignificant in amount, does not by itself constitute doing businessC nor does theeercise of the e/uity rights, such as election of directors into the +oard,constitute doing business" (here is nothing in the facts proven to show that:olden .cres was nothing but a passive foreign investor in the :olden Pinoypro3ect, much less were there unduly restrictive terms in the licensingBdistribution

1


8/8

agreement that would indicate that :olden Pinoy was merely reduced to aconduit or agent of :olden .cres, or that ela 'ru? (rading was acting merelyas an agent of :olden .cres in the Philippines" (he fact that :olden .cres wasbound to undertake epensive advertising campaign in the Philippines for itsproduct do not constitute doing business in the Philippines as epressly so

provided under the implementing rules and regulations of the Doreign Investment.cts of ;

various - villanueva final exam corporation law (villanueva)

Documents