Here are selected September 2009 Philippine Supreme Court decisions on commercial law and tax law:
Corporation; board resolution. The second letter-agreement modified the first one entered into by petitioner, through Atty. Jose Soluta, Jr. In previously allowing Atty. Soluta to enter into the first letter-agreement without a board resolution expressly authorizing him, petitioner had clothed him with apparent authority to modify the same via the second letter-agreement. Associated Bank (now United Overseas Bank [Phils.]) vs. Spouses Rafael and Monaliza Pronstroller/Spouses Eduardo and Ma. Pilar Vaca (Intervenors), G.R. No. 148444, September 3, 2009.
Corporation; board vacancy. After the lapse of one year from his election as member of the VVCC Board in 1996, Makalintal’s term of office is deemed to have already expired. That he continued to serve in the VVCC Board in a holdover capacity cannot be considered as extending his term. To be precise, Makalintal’s term of office began in 1996 and expired in 1997, but, by virtue of the holdover doctrine in Section 23 of the Corporation Code, he continued to hold office until his resignation on November 10, 1998. This holdover period, however, is not to be considered as part of his term, which, as declared, had already expired.
With the expiration of Makalintal’s term of office, a vacancy resulted which, by the terms of Section 29 of the Corporation Code, must be filled by the stockholders of VVCC in a regular or special meeting called for the purpose. Valle Verde Country Club, Inc., et al. Vs. Victor Africa, G.R. No. 151969, September 4, 2009.
Corporation; corporation sole. Even if the transformation of IEMELIF from a corporation sole to a corporation aggregate was legally defective, its head or governing body, i.e., Bishop Lazaro, whose acts were approved by the Highest Consistory of Elders, still did not change. A corporation sole is one formed by the chief archbishop, bishop, priest, minister, rabbi or other presiding elder of a religious denomination, sect, or church, for the purpose of administering or managing, as trustee, the affairs, properties and temporalities of such religious denomination, sect or church. As opposed to a corporation aggregate, a corporation sole consists of a single member, while a corporation aggregate consists of two or more persons. If the transformation did not materialize, the corporation sole would still be Bishop Lazaro, who himself performed the questioned acts of removing Juane as Resident Pastor of the Tondo Congregation. If the transformation did materialize, the corporation aggregate would be composed of the Highest Consistory of Elders, which nevertheless approved the very same acts. As either Bishop Lazaro or the Highest Consistory of Elders had the authority to appoint Juane as Resident Pastor of the IEMELIF Tondo Congregation, it also had the power to remove him as such or transfer him to another congregation. Iglesia Evangelisca Metodista En Las Islas Filipinas (IEMELIF), Inc. vs. Nataniel B. Juane/Nataniel B. Juane Vs. Iglesia Evangelisca Metodista En Las Islas Filipinas (IEMELIF), Inc., G.R. No. 172447, September 18, 2009.
Corporation; stockholders. Upon the death of a shareholder, the heirs do not automatically become stockholders of the corporation and acquire the rights and privileges of the deceased as shareholder of the corporation. The stocks must be distributed first to the heirs in estate proceedings, and the transfer of the stocks must be recorded in the books of the corporation. Section 63 of the Corporation Code provides that no transfer shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation. During such interim period, the heirs stand as the equitable owners of the stocks, the executor or administrator duly appointed by the court being vested with the legal title to the stock. Until a settlement and division of the estate is effected, the stocks of the decedent are held by the administrator or executor. Consequently, during such time, it is the administrator or executor who is entitled to exercise the rights of the deceased as stockholder.
Thus, even if petitioner presents sufficient evidence in this case to establish that he is the son of Carlos L. Puno, he would still not be allowed to inspect respondent’s books and be entitled to receive dividends from respondent, absent any showing in its transfer book that some of the shares owned by Carlos L. Puno were transferred to him. This would only be possible if petitioner has been recognized as an heir and has participated in the settlement of the estate of the deceased. Joselito Musni Puno (as heir of the late Carlos Puno) vs. Puno Enterprises, Inc., represented by Jesusa Puno, G.R. No. 177066, September 11, 2009.
Insurance; health maintenance organizations. Applying the “principal object and purpose test,” there is significant American case law supporting the argument that a corporation (such as an HMO, whether or not organized for profit), whose main object is to provide the members of a group with health services, is not engaged in the insurance business. Philippine Health Providers, Inc. vs. Commissioner of Internal Revenue, G.R. No. 167330, September 18, 2009.
Insurance; subrogation. Based on the applicable jurisprudence, because of the inadequacy of the Marine Cargo Risk Note for the reasons already stated, it was incumbent on respondent to present in evidence the Marine Insurance Policy, and having failed in doing so, its claim of subrogation must necessarily fail.
A marine risk note is not an insurance policy. It is only an acknowledgment or declaration of the insurer confirming the specific shipment covered by its marine open policy, the evaluation of the cargo and the chargeable premium. The Marine Risk Note relied upon by respondent as the basis for its claim for subrogation is insufficient to prove said claim. Eastern Shipping Lines, Inc. vs. Prudential Guarantee and Assurance, Inc., G.R. No. 174116, September 11, 2009.
Rehabilitation; coverage. The claim of petitioners for payment of tuition fees from CAP is included in the definition of “claims” under the Interim Rules.In addiin, the Interim Rules do not provide that a claim arising from a pre-need contract is an exception to the power of the trial court to stay enforcement of allclaims upon the finding that the petition for rehabilitation is sufficient in form and substance. Kei Marie and Bianca Angelica both surnamed Abrera, minors, represented by their parents Evelyn C. Abrera, et al. vs. Hon. Romeo F. Barza, in his capacity as Presiding Judge of Regional Trial Court, Branch 61, Makati City and College Assurance Plan Philippines, Inc. G.R. No. 171681, September 11, 2009.
DST; HMO. A health From the language of Section 185, it is evident that two requisites must concur before the DST can apply, namely: (1) the document must be a policy of insurance or an obligation in the nature of indemnity and (2) the maker should be transacting the business of accident, fidelity, employer’s liability, plate, glass, steam boiler, burglar, elevator, automatic sprinkler, or other branch of insurance (except life, marine, inland, and fire insurance).
Health care agreements are clearly not within the ambit of Section 185 of the NIRC and there was never any legislative intent to impose the same on HMOs like petitioner. Philippine Health Providers, Inc. vs. Commissioner of Internal Revenue, G.R. No. 167330, September 18, 2009.