Tayag vs Benguet (Corparation Law)

Tayag vs. Benguet consolidated INC 26 SCRA 242

Facts: Idonah Slade Perkins died in New York on March 1960, the domestic administrator in New York refused to give the Stock Certificates owned by Perkins in the Benguet Consolidated Inc. to the Ancillary administrator here in the Philippines for the purpose of satisfying the legitimate claims of local creditors. The Court of First Instance of Manila decided that the Stock Certificates was considered lose because of the refusal of the domestic administrator in New York to give such certificates to the ancilliary administrator here in the Philippines and ordered Benguet Consolidated Inc to issue New Stock Certificates to the Ancilliary administrator. Benguet refuses to obey the order of the CFI of Manila on the ground that it is in violation of the Corporation By Laws. Issue: Whether or not the Benguet Consolidated Inc is covered by the orders of the COURT. Held:

The Supreme Court Held 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”. 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. It is not immune to judicial control in those instances, where a duty under the law as ascertained in an appropriate legal proceeding is cast upon i t. 2. Ang Pue & Co vs. Secretary of Commerce Facts: Ang Pue and Tan Siong organized organized a partnership for a term of 5 years. Their agreement provides that they can extend the partneship for another 5 years by mutual consent.

In 1954, RA 1180 was enacted to regulate the retail business. Said law provided that, after its enactment, a partnership not wholly formed by Filipinos could continue to engage in the retail business until the expiration of its term so registration of said Ang was refused on the ground that the extension was in violation of the aforesaid Act. Plaintiff Company filed a petition for declaratory relief contending their original articles of partnership provided that they could extend the term of their partnership; that it constitutes a property right of which the partners can not be deprived without due process or without their consent; and that the provisions of RA 1180 cannot adversely affect them. Lower court dismissed their petition. Plaintiff Co. interposed an appeal. Issue: WON extension of the partnership established before the enactment of RA 1180, is in violation of the said act. Held: The SC ruled that organizing a corporation is not a matter of right but a me re privilege which may be enjoyed under the

terms provided by state / law. When When the partners amended the articles of partnership, the provisions of RA 1180 were already in force, and so the right claimed by plaintiff -appellants to extend the original term of their partnership to another five years would be in violation of the clear intent and purpose of the said law