Sunday, January 31, 2010

Corpo Samplex Compilation

There's something wrong with scribd. So i'll temporarily upload it here:

Valid/Invalid/Explain the answer

note: The coverage of the midterms is from start until Corporate Powers, and then Financing the Corporation and Consideration for shares. The previous midterms finals would have covered start until Control and Management, thus for 2s, 09-10, some of the questions in the finals have been included in this compilation.

Formation of a Corporation; when Start

The juridical personality and capacity to contract of a corporation cannot be given retroactive effect. (Finals, 2s, 06-07) (Section 1; Section 19; Section 36; McArthur vs. Times Printing; Caram vs. CA)

Unincorporated juridical entities have no capacity to contract (Midterms, 2s, 07-08) (Section 1; Section 19; Section 36…)

Formation of Corporation; when start; Promoters

Explain the extent of services that may be rendered by promoters to: (1) a corporation in the process of incorporation and (2) an incorporated entity which is an on-going business concern. Will the extent of such services affect the resulting obligations deemed assumed by such promoters? (m.1s.09-10)

Promoters, whose services are engaged by a corporate entity in the process of incorporation, shall be deemed to be acting for and in behalf of persons who seek to organize and establish such corporate entity. (m.1s.06-07) (Section 19: commencement of corporate existence; Section 36: memorize catch all provision for powers of corporation; Mc Arthur vs. Times Printing) (style: define what a promoter is; when corporate existence to exercise corporate powers; then cite why corporation liable even for contracts pre-inc)

Contractual arrangements with corporations in the process of incorporation are not automatically binding on such corporations after the same have been issued certificates of registration by the SEC. (m.2s.08-09) (Section 19: start of corporate existence – when capacity to contract; Section 45: ultra vires acts; Section 36: corporate powers; McArthur vs. Times Printing: if ratified, binding upon corp)

formation of a corporation; incorporators

Corporations have no legal right to participate in the organization and incorporation of new corporate entities. (m.1s.08-09) (Sec10: Only natural persons may become incorporators; After incorporation, pede na…)

Formation of a corporation; Foreign ownership

Tim Tinio, an investment banker, obtained from his local and international clients the mandate to organize and establish a corporation which shall be engaged in the businesses of constructing, operating, and maintaining a nation-wide chain of hotels/resorts in the country. Will there be any limitations affecting the equity ownership of the clients of Tim in the corporation? (Midterms, 2s, 07-08) (Consti, Art 12…; JG Summit Case)

Tim Tinio, an investment banker, obtained from his local and international clients the mandate to organize and establish a corporation which shall be engaged in the businesses of constructing, operating, and maintaining a nation-wide chain of hotels/resorts in the country. Will it be advisable for Tim to enter into and conclude w/ third parties contractual arrangements (e.g. acquisition or lease of real property) essential for the pursuit of the business of the corporation, prior to its incorporation? (Midterms, 2s, 07-08) (JG Summit Case)

The 60/40 ration on the extent of foreign equity ownership of corporations imposes a limitation on the businesses that may be pursued by corporations. (m.1s.08-09) (JG Summit Case; Section 17, CC: reject AOI if equity not comply w/ consti; Article 12, Section 11 1987 Section 11. No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate, or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteration, or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines.)

Articles of incorporation; corporate name

The change in the corporate name of the financial institution in the case of PC Javier and Sons Inc is directly attributable to…a change in the ownership of the outstanding shares of stock of the financial institution. (m.2s.08-09) (Section 14: contents of AOI; Section 18: requirements for corporate name; PC Javier & Sons; Philips Export vs CA)

Articles of Incorporation; By Laws

The Articles of Incorporation and By-laws of corporation delineate the nature and extent of the proprietary rights of the stockholders. (m.1.97-98)

Restrictions on the transferability of shares of stock will not be upheld by the proper courts. (m.1s.08-09) (Fleischer vs. Botica Nolasco – was not upheld: can’t restrict rights of SH to transfer property; note: dapat reasonable restrictions…see campos)

SEC Jurisdiction

Sagasa Transp. Corp. (STC), a corporation engaged in the operation of a fleet of taxis had the immediate need to upgrade its vehicles. Although the business of STC generated revenues, the Corporation did not have sufficient capital to pay for the vehicles it wanted to acquire. Mando Rugas, an importer of reconditioned vehicles, confirmed his interest in investing in STC. Mando agreed to convey 60 Coronas for P30M worth of shares, under a swap arrangement. In the event of STC holds in abeyance the issuance of the shares of stock in favor of Mando, does the latter have the right to institute the appropriate action before the SEC to compel the issuance of his stock certificate? (Finals, Unknown date) (SEC Jurisdiction; Abejo vs. CA)

Note: RA 8799 or the Securities Regulation Code transferred the jurisdiction of SEC over intracorporate disputes (formerly Section 5 of PD902-A) to RTC. These acts include:

Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving.

(a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partnership, amounting to fraud and misrepresentation which may be detrimental to the interest of the public and/or of the stockholder, partners, members of associations or organizations registered with the Commission;

(b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders, members, or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership or association and the state insofar as it concerns their individual franchise or right to exist as such entity; and

(c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations.

Primary Purpose Clause

Tim Tinio, an investment banker, obtained from his local and international clients the mandate to organize and establish a corporation which shall be engaged in the businesses of constructing, operating, and maintaining a nation-wide chain of hotels/resorts in the country. Propose a corporate name which can be used by Tim and draft the primary purpose clause of the corporation. (midterms, 2s, 07-08)

Primary Purpose Clause; Corporate Powers; Ultra Vires Acts

The “primary purpose clause” of a corporation delineates and limits the exercise by the corporation of corporate authority as provided under the Code. (Midterms, 2s, 07-08) (Sec14: Contents of AOI; Section 36: Corporate Powers and Capacity; Section 45: Ultra Vire Acts)

The primary purpose clause contained in the Articles of Incorporation limits the exercise by the corporation of its powers and authority under the secondary purpose clauses (m.1s.08-09). (Section 14: contents of AOI; sir: secondary purposes are exercised in the furtherance and pursuit of the primary purpose…)

Bakboy Co. Inc (BCI), a corporation engaged in the business of raising livestock, operate an agro-industrial facility for the breeding and sale of cattle and pigs. BCI received offers for a possible sale to BCI of the following businesses, namely: (1) meat and processing facilities and (2) state-of-the-art slaughterhouses facilities owned by Karnehan Co. and Kalayan, Inc. respectively. Assuming you are a distinguished member of the board of directors of BCI, will you be in a position to justify the acquisition of such businesses.(Midterms, 2s, 07-08) (Section 14; Section 36; Section 45)

After a few more years of operations, the culinary delicacies of the Company attracted hordes of satisfied customers. At the same time, the experts received continuing offers from third parties soliciting the interest of the company to invest in: (1) a raw material commissary/cold storage business and (2) a chain of retail establishments, both business being conducted thru existing corporations.

a. Does the Company have the authority to acquire or invest in the aforementioned businesses?

Parent-Subsidiary

A “parent corporation” inevitably participates directly in the control, management, and supervision of the business of the subsidiary (Sec23: who controls the corporation; Garnett vs. Southern Railway: ownership of stock alone is not automatically an indicia that corp is a parent corporation; Jardine Davies vs. JRB Realty Inc: Control determines if parent. (Midterms, 2s, 07-08)

Stockholders of a parent corporation are not in a position to exercise control and management over the corporate affairs of the subsidiary. (m.1s.97-98)

Under a “parent-subsidiary” corporate relationship, the parent company inevitably exercises control and management over the subsidiary. (.1s.06-07) (m.1s.08-09)(if parent company owns stocks in subsidiary company, then exercises voting rights in the subsidiary company, then it would inevitably exercise control and management) (Sections 23, 24, 6)

A parent corporation exercises control and management of the businesses pursued by it subsidiaries. (m.2s.08-09)

The doctrine of piercing the corporate veil would not have been applied by SC in the case of Koppel vs. Yatco, provided….the domestic corporation directly sold the “train-related products” to the end-users locally…(m.2.08-09) (highlight element of control)

Liability

The corporation and its stockholders may be solidarily liable for the obligations of the corporation (Midterms, 2s, 07-08) (Section 21: Corporation by Estoppel; Piercing corporate veil)

The direct assumption by a SH of the obligations of a corporation negates the separate and distinct personalities of both parties (m.2s.08-09)

Liability; De Facto Corporation

The stockholders of a de facto corporation may be held personally liable for corporate acts in the event quo warranto proceedings are instituted for the purpose of impugning the existence of corporation. (m.1s.97-98)

Incorporator-subscriber of a corporation in the process of incorporation are subsidiarily liable for the obligations of such corporation vis a vis third parties. (m.1s.97-98)

The corporate existence of de facto corporations has a limited term. (m.1s.08-09) (Section 11: Term of corps 50 years max; Section 20: def, end in quo warranto proceedings instituted by OSG – if ruled against corp, corp’s existence would terminate as, Sec2: it is created by law, may be ended by law)

Estate Planning

Pala Sugad, a compulsive gambler, finally hit the jackpot. In a single day, his aggregate winnings from the casinos, horseracs, cockfights and lotto draw amounted to P1B. With his winnings, Pala accumulated choice property and assets. Realizing that his earthly sojourn was going to end soon owing to his lifestyle, Pala wanted to ensure that his largesse would eventually be enjoyed by his designated beneficiaries. A close “gambling buddy” suggested that Pala organize and incorporate a corporate entity which will be used as the vehicle for distribution. Would the suggestion given to Pala have any legal basis Explain your answer briefly. Assuming that the said suggestion is legally feasible, how can the beneficiaries of Pala enjoy what is accruing in their favor? Discuss your answers. (m, 1s.97-98)

Jurisprudence has confirmed the use of a corporate entity as a vehicle for implementing estate planning. Briefly discuss the underlying reasons which justify the aforementioned use. Does such use ensure the full implementation of the desires/wishes of the testator? (m.1s.09-10)

The cases of FL Ceases, Marvel Bldg, and Delpher Trade explain the use of corporations as “vehicles’ for estate planning.

a. With such a corporation, will there be a need for the beneficial owner-testator to execute a will to distribute the latter’s estate?

b. What measures have to be implemented by the beneficial owner-testator to ensure the distribution of the latter’s estate to the proper parties?

c. Would the designated heirs have the option of receiving money or property/assets as their share in the estate?

Pre-emptive Right

Section 39 of the Code grants stockholders the right to subscribe to all issuances of stock by the corporation. However, such right can be denied, with the conformity of a 2/3 vote of the stockholders. What would be the justifications which would support the denial of such right? (Finals, 1s,08-09) (Section 39, Corpo Code)

The denial of pre-emptive right to subscribe to any issuance by the corporation of the additional shares of stock is inimical to the proprietary interests of its existing stockholders. (f.1s.07-08) (Section 39)

Pre-emptive Right; Preferential Right

A provision in the by-laws of a corporation requiring a disposing stockholder to offer the latter’s shares of stock to the corporation prior to any disposition may be upheld and favorably considered by the Courts provided…the corporation will be required to exercise the right to purchase the shares w/n a definite period of time (Finals, 1s,08-09) (Fleishcer vs. Botica Nolasco)

Right of first refusal

As explained by the SC in several cases, stockholders of a corporation may grant a continuing and reciprocal “right of first refusal” w/ respect to the shares of stock registered in the respective names of the contracting stockholders. Briefly discuss and explain the obligations and proscriptions arising from such arrangements. (Midterms, 2s, 07-08)

As explained by the SC in several cases, stockholders of a corporation may grant a continuing and reciprocal “right of first refusal” w/ respect to the shares of stock registered in the respective names of the contracting stockholders. Distinguish such arrangements from the “pre-emptive right” to subscribe to additional shares vested in favor of stockholders under Section 39 of the code. (Midterms, 2s, 07-08) (Fleischer vs. Botica Nolasco)

A “right of first refusal” granted in favor of a stockholder ensures the latter of maintaining control and management of the corporation. (Fleischer vs. Botica Nolasco) (perfect score: right of first refusal – right of existing SH to purchase stocks of registered SH who wants to dispose the same to the public)

Financing the corporation

Batong Buhay Inc, a corporation engaged in the business of mining (BBI), contemplates to expand its operations through; (1) the acquisition of additional mining claims owned by Ms. Mia Minera (MM) and (2) the issuance of additional shares of stock. To date, the authorized capital stock of BBI is 500M, divided into 5M CS, with a par value of P100.share, all of which have been subscribed to and are owned equally by Ms. Ganan Sia (GS) and her 4 children. Assuming the mining claims of MM are valued at P3B, what would be the extent of; (1) the increase in the ACS of BBi and (2) the additional subscription and payments that will be made to implement said increase? (f.1s.07-08)

Financing the corporation; creditors; rights

Creditors of a corporation may participate in the management and control of the corporation, inclusive of the use and disposition of corporate assets. (m.1s.06-07) (Indirect: 1. As SH: Sec62: previously incurred debt as consideration for shares; so can be SH; DBP vs. Pioneer, Augusta Trust vs. Augusta; 2. As BOD mem, Sec23: at least 1 stock owned, BOD control corp; 2. Direct: provisions in the loan)

Consideration for shares; previous indebtedness

A secured creditor who subsequently agrees to convert the loan of the corporation to equity assumes greater risks than the other creditors of the corporation. (m.2s.08-09) (Augusta Trust vs. Augusta; preference of credits)

Consideration for Shares

Bakboy Co. Inc (BCI), a corporation engaged in the business of raising livestock, operate an agro-industrial facility for the breeding and sale of cattle and pigs. BCI received offers for a possible sale to BCI of the following businesses, namely: (1) meat and processing facilities and (2) state-of-the-art slaughterhouses facilities owned by Karnehan Co. and Kalayan, Inc. respectively. Will you favorably endorse the purchase by BCI of (1) the outstanding shares of stock of the 2 aforementioned corporate entities or (2) the property and assets of such corporations (Midterms, 2s, 07-08) (Yu vs. NLRC)

Investors who contemplate to acquire an existing and on-going business owned by a corporation have the option to purchase (1) all the property and assets comprising such business or (2) 100% of the outstanding shares of the corporation. A. Will the exercise of both options require the assumption by the investors of obligations and liabilities of the business and the corporation respectively? (b) Which of the options appear to be more beneficial and advantageous to the investor? (m.2s.08-09) (Yu vs. NLRC)

Dina Makakita and Kenneth Sy owned 40% and 20% respectively of the outstanding shares of capital stock of Cine Vision, Inc. the largest producer of local films and videos. As a result of their expertise and perseverance, Dina and Kenneth managed to expand the business of CVI. With the revenues generated by CVI, the corporation had sufficient funds to acquire cinemahouses and theaters for the exhibition of the films of CVI. As counsel of Dina, Kenneth and CVI, would you recommend that: (1) the aforestated cinemahouses be acquired by CVI; (2) CVI organize a wholly-owned subsidiary which will own and operate such cinemahouses Explain your opinion. (m.1s.97-98)

Consideration for shares; pre-incorporation

Prior to the issuance by the SEC of the certificate of registration, the incorporator-subscribers of the corporation would have the right to withdraw their capital contributions. (m.1s.97-98) (Section 61)

The commitment of an incorporator/stockholder to subscribe to the capital stock of a corporation in the process of incorporation is unconditional (m.2s.08-09) (Sec61: GR: irrevocable for 6 months fr. Date of subscription X: all other subscribers consent or incorp fails; X to X: if already w/ SEC)

Consideration for Shares Full Payment; Benefits

Explain the advantages accruing to a stockholder who has made full payment for the latter’s subscription to the shares of stock of a corporation (Finals, 1s,08-09)

Consideration for Shares Full Payment; Benefits; proprietary rights

Stockhlders who have not fully paid, and who paid in full, their subscriptions to the shares of stock of a corporation, respectively, exercise and enjoy the same proprietary rights. (Malabo so not known if what year) (Section 72; Section 43)

Consideration of Shares; 3P; Benefit to the corporation; Benefit to Shareholder

The purchase of outstanding and issued shares of stock of a corporation by a third party from a stockholder does not redound to the benefit of the corporation. (Finals, 2s, 06-07)

The business of PC proved to be extremely lucrative to PC and MD. Owing to the annual revenues realied by PC, Mr. Herbo Laryo (HL), the controlling stockholder of Botica ng Bayan, Inc., the largest drugstore chain in the Country (BBI), offered PP and MD the opportunity to acquire 50% equity interest in BBI. HL disclosed to PP and MD that the unissued and unsubscribed shares of stock of BBI will be earmarked for the subscription of PC, PP, and MD (or the designated party). Would the acceptance of the aforementioned offer redound to the benefit of PC, PP, and MD, respectively? What actions should be implemented to complete said subscription? (Finals, 2s, 06-07)

Payment by a stockholder of the amount due for the latter’s subscription to the shares of capital stock of the corporation redounds to the benefit of the corporation and the other stockholders. (M.1s.08-09) (Corp: directly – increase in subscription ~ increase in pool of assets ~ more resources for financing the corporation; SH indirectly: increase in subscription ~ less liability ~ increase in the value of the investment)

Rights; preferred Shareholders

Holders of preferred cumulative (7% per annum) and mandatorily redeemable shares of stock (redeemable by the issuing corporation) are vested with the same rights accruing in favor of unsecured creditors. (f.1.07-08) (Section 6; Jordan Co. vs. Allen)

Rights; Proprietary Rights; Shareholders; Assets and Property of Corporation; Transfer

Nana Langin appears as the stockholder of record of 60% of the authorized capital stock of Biyaya Corp. Nana executed a Deed of Assignment in favor of her 6 nieces, pro-indiviso, for the latter’s shares of stock covered by a single stock certificate. Both documents (the stock certificate was indorsed by Nana) were surrendered by Nana to the Corporate Secretary. With the execution of the aforestated documents, can the nieces of Nana assert proprietary rights over the shares of stock of Nana? (Finals, 1s,08-09)

The expectancy and inchoate rights of a stockholder in the property and assets of a corporation may not be realized by such stockholder. (Midterms, 2s, 07-08)

Chino Teopaco (CT), the largest stockholder of Telecom Technologies, Co. (TELCO), executed a will designat6ing his only surviving relative, Pablo Job PJ) as sole beneficiary of CT’s property and assets, including the later’s shares in Telco. Such testamentary disposition was not disclosed to PJ. Upon te demise of CT, does PJ have a vested right to (1) the Telco shares; (2) the property and assets of Telco; respectively? (M, 2s, 07-08) (Estate planning cases…)

Rights; Proprietary Rights; Shareholders; Assets and Property of Corporation

The use and disposition of the property and assets of a corporation directly affects the interests of the stockholders. (Midterms, 2s, 07-08)

The extent of the ownership of a stockholder in the property and assets of the corporation is determined by the aggregate value of the shares of stock registered in the name of the stockholder. (m.1s.06-07) (Heirs of Guanzon case, Magsaysay case, Section 2: definition of a corporation – artificial entity separate identity to stock owners…)

Ownership of shares of stock of a corporation does NOT vest in favor of the stockholder any right or interest in the property and assets of the corporation (m.1s.08-09) (Inchoate right: Magsaysay, Heirs of Guanzon)

Rights; Proprietary Rights; Shareholders; Dissolution; Co-ownership

Upon dissolution, and after settlement of the obligations of the corporation, the remaining property and assets of the corporation shall be co-owned by the stockholders prior to subsequent distribution of the same. (Finals, 2s, 06-07; M.1s.08-09) (Sec2: corp defined; Heirs of Guanzon Case)

The dissolution of a corporation results in the return of the investments made by its stockholders. (m.1s.08-09)

Rights; Proprietary Rights; Shareholders; Dividends; Transfer

Nana Langin appears as the stockholder of record of 60% of the authorized capital stock of Biyaya Corp. Nana executed a Deed of Assignment in favor of her 6 nieces, pro-indiviso, for the latter’s shares of stock covered by a single stock certificate. Both documents (the stock certificate was indorsed by Nana) were surrendered by Nana to the Corporate Secretary. In the event dividends were declared by Biyaya Corp. prior to the conveyance by Nana of her shares of stock, would Nana have the right to receive such dividends? Would the conveyance by Nana of her original shares of stock to her nieces deem to include the said dividends? (Finals, 1s,08-09)

Rights; Management Rights; Shareholders

Not all the corporate acts referred to under Section 6 of the Code require the approval of all stockholders for validity. (m.1s.97-98)

Stockholders have the right to delineate the nature and extent of the powers and authority of the board of directors of the corporation. (m.1s.06-07) (Sec6: acts which all SH should vote at…including amendment and adaption of AOI and Bylaws; relate to stuff to be included in the AOI, Section 14, Section 17 on contents of AOI- when rejected)…

Rights; Management Rights; Shareholders; Transfer

Nana Langin appears as the stockholder of record of 60% of the authorized capital stock of Biyaya Corp. Nana executed a Deed of Assignment in favor of her 6 nieces, pro-indiviso, for the latter’s shares of stock covered by a single stock certificate. Both documents (the stock certificate was indorsed by Nana) were surrendered by Nana to the Corporate Secretary. Considering the shares conveyed to the nieces cover a controlling interest in Biyaya Corp. and will command a premium, how do you preserve and maintain such control and value among nieces? (Finals, 1s,08-09)

The business of PC proved to be extremely lucrative to PC and MD. Owing to the annual revenues realied by PC, Mr. Herbo Laryo (HL), the controlling stockholder of Botica ng Bayan, Inc., the largest drugstore chain in the Country (BBI), offered PP and MD the opportunity to acquire 50% equity interest in BBI. HL disclosed to PP and MD that the unissued and unsubscribed shares of stock of BBI will be earmarked for the subscription of PC, PP, and MD (or the designated party). After considering the opportunities arising from the offer of HL, PP and MD seek your learned counsel on the following points, namely: (1) who would you recommend as the appropriate party/ies who will subscribe to the shares of stock of BBI? (2) what will be the payment for such subscription and (3) with such investment, how will you ensure that PP and MD participate in the control and management of PC and BBI? (Finals, 2s, 06-07)

Rights; Transfer

The rights and title vested in favor of transferees of stock certificates indorsed in blank are not dependent on the rights and title of their immediate predecessors in interest (unknown date, mukhang finals) (Section 9, NIL: if indorsed in blank, payable to bearer; Section 34, NIL: Indorsement in blank specifies no indorsee…payable to bearer, negotiated by delivery; Section 63, CC; Sta Maria vs. HKSB)

Transferees of shares of stock are not automatically vested with the proprietary rights inherent in the ownership of such shares. (f.1.07-08) (Section 63…)

Any sale or transfer of more than a majority of the outstanding capital stock of a corporation may directly affect the corporation as an on-going business concern and its stockholders. (m.1s.08-09) (change in majority ownership ~ change in control; Majority SH – control over BOD – control over corp; Sec24: majority mems entitled to vote – if receive highest # of votes, wins as Director, may affect the on going concern status by affecting policies of the corp – Section 23)

The disposition by a majority stockholder of the later’s shares in the corporation will not affect the on-going business of the corporation (m.2s.08-09) (see above, plus Abejo vs. dela Cruz)

Rights; Management Rights; Proprietary Rights; Shareholders; Extent

The extent of the amount of investment of a stockholder determines the latter’s participation in (i) the control and management of the corporation; (ii) the profits realized from such investment (Finals, 2s, 06-07)

Closed Corporation; Management Rights; Shareholders; Liability

Stockholders of a “closed corporation” under the Code, who directly participate in the control and management of the corporation, are solidarily liable for the obligations of the corporation. (Midterms, 2s, 06-07) (Sec96: Definition; Section 97: AOI of closed corp may even provide for SH to be managers; Section 26: BOD control exclusively corp; note: always put the rationale behind close corp)

Stockholders of a closed corporatin who participate in the management of the corporation assume personal liability. (m.1s.08-09) (Section 96: Def; Section 2: def. of a corp – has separate existence from SH/BOD so GR: not liable; X: Section 100.5: only for corporate torts + actively engaged)

Consideration for Shares; Property; Corporate Actions; Control and Management

Sagasa Transp. Corp. (STC), a corporation engaged in the operation of a fleet of taxis had the immediate need to upgrade its vehicles. Although the business of STC generated revenues, the Corporation did not have sufficient capital to pay for the vehicles it wanted to acquire. Mando Rugas, an importer of reconditioned vehicles, confirmed his interest in investing in STC. Mando agreed to convey 60 Coronas for P30M worth of shares, under a swap arrangement. What corporate actions have to be implemented by STC for the purpose of acquiring the vehicles of Mando? (Finals, unknown date) (Section 62; Section 39)

No samplex, but there’s answers…topics:

Indorsement/Transfer of shares: Section 63

Director Requirement: Section 23 – at least 1 share of stock

Friday, January 29, 2010

IPL Lecture: January 30

Refer to blog: http://batangmataba.blogspot.com/2009/11/law-on-copyrightsir-amador.html (notes of sir on Copyright)

Pivot Point Intern: "conceptual separability"

-there is an author w/c created a small statuette of a lady w/a lantern, holding it up. It's intended to work as a lantern, but it is also considered a sculptural work because of the design on the lantern itself. Question is WON the sculpture should be protected by copyright.

H: Based on Mazer vs. Stein (?): conceptual separability applies. The functional feature is considered comparable to the ornamental design. Protect both ornamental and artistic function of the lantern.

Original works derived from public domain materials

Public domain: free for all

-not copyright-protected anymore

-DISTINGUISHABLE VARIATION: but can protect by copyright if author, through skill and effort, contributed distinguishable variation from the older works which is substantial (not merely trivial)

Original Compilation of Facts

-bare facts never copyrightable because they have no author to speak of

-but if author arranged the facts in such a way that it could be easily comprehended by his readers, not mere compilation but selection of particular data based on his own discretion, copyrightable

Hodge Mason Case: case where Hodge Mason made a tri-dimensional map. He selected which facts he should include…copyrightable even if based on certain facts only because Hodge Mason made certain choices which are very novel at the time (1st one who introduced such illustrative map).

Computer Programs

-treated as literary works under the current convention

Judicial Opinions

-works of government are not copyrightable

-and these works of government must be disseminated to the public, we're even required to read them (Ignorance of the law excuses no one) = public policy element

…Judges usually compile all the decisions they have made throughout their tenure. Sabi ni sir these books are not subject to copyright. Even the headnotes, syllabi are not copyrightable

Law Reports (SCRA, Phil)

-can be copyrightable IFF the reporters took great pains to write the syllabi (not like now where just cut and paste)

-what about lex libris? Sabi ni sir non-copyrightable ung written form, neither should the digital form!

News stories, History, Biography

-copyright extends not only to literal phrasing…but also to author's original narrative style and arrangements of facts

-author makes decisions on what to say

Derivative works

-can't claim any copyright for derivative works w/o authorization from the author of the original work from which the derivative work was derived or else copyright infringement

...similar to the Underlying Work

-new work must be more than inspired by the earlier work

Adaptation of OLD Play

-play may be itself a common property (because it's old), but copyright may be still secured

-sir: there must still be a license from author of old work

Abridgments of Literary Works

e.g. Reader's digest

-protected because the person making the abridgment makes choices on what to include in his work

Derivative Works of the Visual arts

Visual arts: photographs, figurine, fabric design....

-should have distinguishable nontrivial variation over the work

-deny if minor alterations which consumers would ordinarily overlook

-grant if change work's actual appearance to consumers

Derivative Musical works

-higher standard of distinguishable, non-trivial variation: musical vocabulary constrain original and expressive contributions in musical contributions

-Pretty Woman case-parody (Campbell vs. Acuff Rose Music)

-Suntrust Bank vs. Houghton Mifflin

-NY Times vs. Tasini: digital publications

Collective Works

-A & B creates a work at initiative of C, with understanding that C would attribute the work to himself and no identification of A & B.

-e.g. Encyclopedia. A & B would be the contributors who would be paid by C to make the articles in the encyclopedia. A & B's right to attribution is deemed waived unless expressly provided (Section 196?)

Compilation of Works w/o License

-so this is infringement

-there should be license or assignment for use of the copyrighted work

Uncopyrightable Subject Matter

-idea, procedure, system, method or operation, concept, principle, discovery or mere data

Works of Goverment

GR: No copyright

X: when there's a necessary exploitation of work for profit w/ prior approval of the government agency - may impose payment of royalties

...sir: this is a dead-letter law: why would you make one for profit if these things are not really copyrightable

RULES on COPYRIGHT OWNERSHIP

-Sec 178

-author of work: natural person + created the work = owns the copyright

*joint ownership (several authors of a single work): co-authors shall be the original authors of the copyright. Right governed by rules of co-ownership

e.g. if a group decided to write a treatise in intellectual property, this would be considered a joint ownership of the group. ALl those who participated would be considered owners of the copyright

-but if the parts are separable, his part would be owned by him (copyright over his work be attributed to him)

*works created during course of employment

-works not in the course of employment: own copyright

-works in the course of employment: ER owns copyright

-commissioned works: person who commissioned the work owns the work BUT the maker owns the copyright, unless there's a stipulation to the contrary

-audiovisual work: considered multifarious work

...the individuals whose works are incorporated in the audiovisual work owns copyright that corresponds to their work

...copyright exercised by producer to an extent required for exhibition of the work

X: for the right to collect performing license fees for musical compositions w/c may be incorporated into the work

*Letters: writer owns the copyright

Joint Authorship Test:

*De Minimis Test: very minimum participation ~ limited contribution ~ impact on claim to copyright

Copyrightable matters test: appears to be favored by the courts: performer contributes copyrightable matter to the performance

-Sec172: co-authors original authors of copyright

*Rules on Co-Ownership

-you cannot file suit vs your co-owner because as co-owners each has a right to the exploitation of your work.

*anonymous works

-publishers deemed to represent the authors with pseudonyms, unless contrary agreement

ECONOMIC RIGHTS in Copyright (PERA!!!!)
Sec 177. carry-out, authorize, prevent…

*reproduction of the work: primary source of author's economic right ("the bedrock")

-copies are material objects

*dramatization, translation, adaptation, abridgment, arrangement or other TRANSFORMATION OF WORK (right of adaptation - derivative work)

-first public distribution (transfer of ownership)

-infringement: merely by transfer of copies of the work, WON lawfully or unlawfully made

…buyer acquires a copy, not the copyright. You can lend the copy of the book, and this is permissible, you can even sell it

*Rental of the original…audiovisual or cinematographic work, computer program, compilation of data…irrespective of ownership of original or copy which is the subject of the rental (RENTAL RIGHTS)

-TRIPS agreement contain rental rights

*Public display of the original work

DISPLAY: show a copy of it, directly or by means of any other device or process

*public performance right: show immages in any sequence…

*other communication to the public

-copyrights rights may be transferred in whole or in part (assignment), subject to payment to the original holder

e.g. novel - right to adaptation may be assigned to a movie maker

-transfer must be clear in WRITTEN instrument

-assignee has standing to sue for infringement of the right assigned to him

-in this case, assignee and not the author benefit

SEC 180.3: submission to a publication of copyrightable work is limited only to single publication UNLESS a greater right is expressly granted

-di kasama ung published online in newspapers

LIMITATIONS ON COPYRIGHT

...

*LAWFUL ACTIVITIES - PD 49
Making Quotations - if compatible w/ fair use and if for the purpose, provided the name of author mentioned (cite in references, footnotes…)

Reproduction of communications to public…

-as long as you publish the source

Lawful inclusion of a work if inclusion is made by way of illustration for teaching purposes + compatible w/ fair use

e.g. knowledge channel…

Recording made in schools…included in broadcast for use of such schools

-provided: recording must be deleted w/n a reasonable period after they were first broadcasted

Making of ephemeral recordings by broadcasting organization by means of own facilities

-ephemeral recordings: they just retain recordings for short period of time, then delete it from facilities

Performance of a work in a free performance

-charitable, educational purposes

Thursday, January 28, 2010

Specpro Notes for January 30

*Pa-print naman po. Wala ako USB or printer eh. Please. Padala po tomorrow. Thanks. :)

D-7. Inventory and Appraisal. Provision for Support of Family

RULE 83. Inventory and Appraisal. Provision for Support of Family

Section 1. Inventory and appraisal to be returned within three months. -

Within three (3) months after his appointment

every executor or administrator shall return to the court

a true inventory and appraisal

of all

...real

and

...personal estate of the deceased

which has come into his possession or knowledge.

In the appraisement of such estate,

the court may order one or more of the inheritance tax appraisers

to give his or their assistance.

Section 2. Certain article not to be inventoried. -

The wearing apparel of the surviving husband or wife and minor children,

the marriage bed and bedding,

and such provisions and other articles

as will necessarily be consumed in the subsistence of the family of the deceased,

under the direction of the court,

shall not be considered as assets,

nor administered as such,

and shall not be included in the inventory.

Section 3. Allowance to widow and family. -

The widow

and minor or incapacitated children

of a deceased person,

during the settlement of the estate,

shall receive therefrom,

under the direction of the court,

such allowance as are provided by law.

Title IX. - SUPPORT (NCC)

Art. 290. Support is everything

that is indispensable for

...sustenance,

...dwelling,

...clothing and

...medical attendance,

according to the social position of the family.

Support also includes the

education of the person entitled to be supported

until he completes his education or training for some

...profession,

...trade or

...vocation,

even beyond the age of majority. (124a)

Art. 291. The following are obliged to support each other

to the whole extent set forth in the preceding article:

(1) The spouses;

(2) Legitimate ascendants and descendants;

(3) Parents and acknowledged natural children and the legitimate or illegitimate descendants of the latter;

(4) Parents and natural children by legal fiction and the legitimate and illegitimate descendants of the latter;

(5) Parents and illegitimate children who are not natural.

Brothers and sisters owe their legitimate and natural brothers and sisters, although they are only of the half-blood, the necessaries for life,

when by a physical or mental defect,

or any other cause not imputable to the recipients,

the latter cannot secure their subsistence.

This assistance includes, in a proper case,

expenses necessary for elementary education

and for professional or vocational training. (143a)

Art. 292. During the proceedings for legal separation,

or for annulment of marriage,

the spouses and children, shall be supported from the conjugal partnership property.

After the final judgment of legal separation,

or of annulment of marriage,

the obligation of mutual support between the spouses ceases.

However, in case of legal separation,

the court may order that the guilty spouse

shall give support to the innocent one,

the judgment specifying the terms of such order. (n)

Art. 293. In an action for legal separation

or annulment of marriage,

attorney's fees

and expenses for litigation

shall be charged to the conjugal partnership property,

unless the action fails. (n)

Art. 294. The claim for support,

when proper and two or more persons are obliged to give it,

shall be made in the following order:

(1) From the spouse;

(2) From the descendants of the nearest degree;

(3) From the ascendants, also of the nearest degree;

(4) From the brothers and sisters.

Among descendants and ascendants

the order in which they are called to the intestate succession of the person

who has a right to claim support shall be observed. (144)

Art. 295. When the obligation to give support

falls upon two or more persons,

the payment of the same shall be divided between them

in proportion to the resources of each.

However, in case of

...urgent need and

...by special circumstances,

the judge may order only one of them to furnish the support provisionally,

without prejudice to his right to claim from the other obligors the share due from them.

When two or more recipients at the same time

claim support from one and the same person legally obliged to give it,

and the latter should not have sufficient means to satisfy all,

the order established in the preceding article shall be followed,

unless the concurrent obligees should be the spouse and a child subject to parental authority,

in which case the latter shall be preferred. (145)

Art. 296. The amount of support,

in the cases referred to in the five numbers of article 291,

shall be in proportion to the resources

or means of the giver and to the necessities of the recipient. (146a)

Art. 297. Support in the cases referred to in the preceding article

shall be reduced or increased proportionately,

according to the reduction or increase of the needs of the recipient

and the resources of the person obliged to furnish the same. (147)

Art. 298. The obligation to give support shall be demandable

from the time the person who has a right to receive the same needs it for maintenance,

but it shall not be paid

except from the date it is extrajudicially demanded.

Payment shall be made monthly in advance,

and when the recipient dies,

his heirs shall not be obliged to return what he has received in advance. (148a)

Art. 299. The person obliged to give support may,

at his option,

fulfill his obligation either

...by paying the allowance fixed, or

...by receiving and maintaining in his house the person who has a right to receive support.

The latter alternative cannot be availed of in case there is a moral or legal obstacle thereto. (149a)

Art. 300. The obligation to furnish support ceases

upon the death of the obligor,

even if he may be bound to give it in compliance with a final judgment. (150)

Art. 301. The right to receive support cannot be renounced;

nor can it be transmitted to a third person.

Neither can it be compensated with what the recipient owes the obligor.

However, support in arrears may be compensated and renounced,

and the right to demand the same may be transmitted by onerous or gratuitous title. (151)

Art. 302. Neither the right to receive legal support

nor any money or property obtained as such support

or any pension or gratuity from the government

is subject to attachment or execution. (n)

Art. 303. The obligation to give support shall also cease:

(1) Upon the death of the recipient;

(2) When the resources of the obligor have been reduced to the point

where he cannot give the support

without neglecting his own needs

and those of his family;

(3) When the recipient may engage in a

...trade,

...profession,

...or industry,

or has obtained work,

or has improved his fortune in such a way

...that he no longer needs the allowance for his subsistence;

(4) When the recipient,

be he a forced heir or not,

has committed some act which gives rise to disinheritance;

(5) When the recipient is

...a descendant,

...brother

...or sister of the obligor

and the need for support is caused

...by his or her bad conduct or

...by the lack of application to work,

so long as this cause subsists. (152a)

Art. 304. The foregoing provisions shall be applicable to other cases where,

in virtue of this Code

or of any other law,

by will,

or by stipulation

there is a right to receive support,

save what is stipulated,

ordered by the testator

or provided by law for the special case. (153a)

Sebial vs. Sebial (1975)

On R83.1: The 3-month period provided is not mandatory and the court retains jurisdiction even if the inventory is filed after said period, but such delay, if not satisfactorily explained, may be a ground for the removal of the administrator under R82.2

Short summary: child from decedent's second family filed for settlement of estate of her dad and prayed that she be made the administratrix 17 years after death of dad. Child from 1st marriage opposed, saying that the estate was already partitioned among heirs and that they had already disposed of the said properties in favor of 3P and that the estate's value was small that it can be settled amicably. CFI ruled in favor of the petitioner 2nd family child making her the administratrix, even ordering that the 3P and the children of the 1st marriage to deliver the property to the administratrix appointed. Court held that 1st, even if the appointed administratrix filed the inventory more than 3 months from appointment, the court still had jurisdiction. 2nd, it ruled that the trial court should first determine the value of the estate, receiving evidence for it, and the ownership of the said properties covered by the estate, it being argued that 3P already own it. It being unsure of WON the properties still belonged to the heirs of the decedent, it was improper for the TC to order the delivery of said properties to the administratrix.

Facts:

Intestate decedent: Gelacio Sebial (1943)

-2 wives

1st marriage: w/ Leoncia Manikis (died 1919)

-Had 3 children:

· Roberta

· Balbina

· Juliano

2nd marriage: w/ Dolores Enad (allegedly married, 1927)

-had 6 children:

· Benjamina

· Valentina

· Ciriaco

· Gregoria

· Esperanza

· Luciano

1960: BENJAMINA filed verified petition for settlement of Gelacio's estate

-prayed that she be made Administratrix

>>ROBERTA OPPOSED:

1. Gelacio's estate already partitioned

2. If ever administration proceedings necessary, Roberta was qualified and not Benjamina

Roberta	Benjamina
1st family	2nd family
Resident of Guimbawian, remote town of Pinamungajan where the decedent's estate was supposedly located	Housemade working at Talisay, Cebu (70km from Pinamungajan)

3. Benjamina's only remedy was to rescind the partition

TC: appointed BENJAMINA (so granted the petition of Benjamina)

1. Decedent left an estate consisting of lands21 ha, valued at more than P6k

2. The alleged partition was invalid and ineffective

>>>letters of administration issued to BENJAMINA (January 19, 1961)

>>>notice to creditors issued

>>>Roberta et. Al filed MR:

1. Estate already partitioned on August 1945

2. Action to rescind the partition already prescribed

>>>MR denied

-Roberta filed MOTION TO TERMINATE ADMIN PROCEEDING

1. Estate valued at less than P6k

2. Estate already partitioned so no necessity for administration proceeding

APRIL 27, 1961: BENJAMINA filed inventory and appraisal of decedent's estate

-7 unregistered parcels of land w/ total value of P9k, all located in Guimbawian, Pinamungajan

OPPOSITORS: registered opposition to inventory: 7 parcels of land enumerated NO LONGER formed part of decedent's estate

MAY 1961: administratrix filed MOTION to require Rematado, Demetrio Camillo and Roberta Sebial and spouse to deliver some of the parcels of land covered in the inventory

JUNE 1961: PROBATE court suspended action for possibility of amicable settlement, ordered parties to submit own inventories

NOV 1961: OPPOSITORS filed own inventory

-Gelacio and Leoncia (1st wife) acquired 2 parcels of land in 1912 and 1915

-the conjugal estate of Gelacio and Dolores consisted only of 1 parcel of land of 7 hectares, and this property was even bought from the conjugal assets of the 1st marriage. This land was also already bought by Cortado

-2 parcels of land already partitioned among children: 3/4 to children of 1st marriage while 1/4 to children of 2nd marriage

-3P already bought some of the portions of land in the estate

-TC required administratrix to submit new inventory NOVEMBER 17, 1961

>>>amended inventory: included 2 houses allegedly valued at P8k - approved: prima facie evidence that 7 parcels of land and the 2 houses belonged to the decedent's estate then later ordered the delivery of certain parcels of land to the administratrix and the claimants should not disturb her in possession and administration of the same

-the oppositors filed a motion for revision of partition but was not granted

-ROBERTA filed for MR:

1. Court had NO JURISDICTION: inventory filed beyond 3-m period fixed in R84.1

2. Inventory is not supported by documentary evidence

3. The 2 houses included in the amended inventory were already demolished during the Japanese invasion and the materials for it were already appropriated by the children of 2nd marriage

4. Valuation in the inventory was fake (it should be P3,080 instead of P17k)

5. Since value of estate is small, it should be settled summarily as provided in R74.2

6. Ordinary action to recover lands in possession of 3P should be resorted to by child of 2nd marriage

…but w/o waiting for resolution of the MR, they filed a notice of appeal w/ CA

CA: certified case to SC because it involves legal issues

1. WON COURT LOST ITS JURISDICTION TO APPROVE THE INVENTORY WHICH WAS FILED MORE THAN 3 MONTHS FROM DATE OF APPOINTMENT OF ADMINISTRATRIX? NO

-here: 2nd inventory was filed November 17 but administratrix appointed January 19.

*The three-month period prescribed in section 1, Rule 83 (formerly Rule 84) of the Rules of Court is not mandatory. After the filing of a petition for the issuance of letters of administration and the publication of the notice of hearing, the proper Court of First Instance acquires jurisdiction over a decedent's estate and retains that jurisdiction until the proceeding is closed. The fact that an inventory was filed after the three-month period would not deprive the probate court of jurisdiction to approve it. However, an administrator's unexplained delay in filing the inventory may be a ground for his removal (Sec. 2, Rule 82, Rules of Court).

2. WON THE SETTLEMENT OF THE ESTATE SHOULD BE DONE SUMMARILY IN ACCORDANCE W/ R74.2? Not yet sure

-here, the lower court FAILED TO ASCERTAIN by preponderance of evidence THE ACTUAL VALUE OF THE ESTATE, and if there is still an estate to be administered

…approval of the amended inventory is not such administration: such a determination is only PROVISIONAL in character and w/o prejudice to a judgment in a separate action on the issue of title or ownership

…probate court should proceed summarily and expeditiously to terminate the proceedings - should strive for an AMICABLE SETTLEMENT (using Article 222, NCC: note however that in the case of Vda de Manalo vs. CA, it was held that there was no need for effort to settle in settlement of estate because said condition precedent was only needed for ordinary civil actions

3. WON THE ORDER TO DELIVER PROPERTIES IN QUESTION TO ADMINISTRATRIX WAS PROPER? NO

-lower court did not receive evidence to determine who really owns the properties in question!

*GR: if parties are ALL HEIRS, optional to submit to probate question of ownership and so probate may pass judgment on said question

X: if 3P would be prejudiced

-if fraudulent conveyance: these 3P may be examined under oat as to how they came into possession BUT still, a separate action would be necessary to recover said assets

…here, there are 3P who allegedly already bought the said parcels of land

Chua Tan v. Del Rosario (1932)

Short summary: there are 2 cases involved, the first being a suit by the administratrix of the father against the administratrix of the adoptive son for the accounting of certain funds alleged to have been delivered IN TRUST to the adopted sun, and the 2nd suit by the presumptive heirs of the father against the same administratrix of the adoptive son for partition of the same funds. SC held that since there was substantial identity of parties, identity of subject matter and COA, there was res judicata so the second proceeding was alredy barred.

Facts:

-allegedly, Chua Piaco (father) delivered in trust to the adoptive son Chua Toco, funds. These funds were allegedly used by the adoptive son to purchase a land in Antonio Rivera Street w/c Manila Railroad Co expropriated.

FIRST CASE
-apparently the adoptive son died first so that during the settlement of the estate of the father, the administratrix was being impleaded to account for the funds allegedly belonging partly to the father.

-1st case held that the funds were exclusively owned by the adoptive son.

SECOND CASE

-now the PRESUMPTIVE HEIRS of the father, the surviving spouse and other heirs of Chua Piaco, sues the administratrix of the adoptive son for partition of the funds, arguing that the same set of funds were partly of the estate of the father. The court dismissed it based on res judicata.

-presumptive heirs appealed the case.

WON THERE WAS RES JUDICATA HERE? YES

BAR BY PRIOR JUDGMENT VS. RES JUDICATA

Res judicata	Bar by prior judgment
Same parties Same COA Same issues which was heard on the merits	Same parties Same issue actually and directly passed upon and determined by a competent court Even if COA are totally different
Absolute bar to a subsequent action, not only as to matters offered and received but also as to any other admissible matter which might have been offered for that purpose	Estoppel only as to those matters in issue or points controverted upon the determination of wich the finding or judgment was rendered

HERE:

(1) While there is no identity between the plaintiff in the former case and the plaintiffs in the present case, there is the relation of representation between them;

(2) there is identity of cause of action;

(3) there is identity of subject matter; and

(4) there is identity of issue, upon which depends the granting or denial of the relief sought in each of said cases, and this issue has been impliedly decided in the former case. Therefore, all the elements of res judicata in accordance with the aforecited legal provisions are present.

	1st case	2nd case
Identity of parties	Plaintiff: Benedicta Santa Juana (judicial administratrix of intestate estate of Chua Piaco) Defendant: Lucia del Rosario (administratrix of intestate estate of Chua Toco)	Plaintiff: Presumptive heirs of Chua Piaco Defendant: Lucia del Rosario (same capacity)
Identity of Subject Matter	Rendering of an accounting of certain FUNDS ALLEGED TO HAVE BEEN DELIVERED IN TRUST by the father to the adopted son	Partition of the SAME FUNDS AND FRUITS
Identity of COA	Allegation of trust	Allegation of trust
Relief sought	Render an accounting	Partition

-As to identity of parties: Court held that since the administratrix of the estate of Chua Piaco was the legal representative not only of the estate but also of its creditors and heirs, and that the 1st case was rendered against her, the said judgment is binding upon the heirs who are suing in the 2nd case

It is the duty of the administrator of the testate or intestate estate of a deceased to present an inventory of the real estate of a deceased to present an inventory of the real estate and all goods, chattels, rights, and credits of the deceased which have come into his possession or knowledge, in accordance with the provisions of section 668 of the Code of Civil Procedure, and to manage them according to section 643 of the same Code; and in order that he may have in his power and under his custody all such property, section 702 of the aforesaid Code authorizes him to bring such actions for the purpose as he may deem necessary. Section 642 in providing for the appointment of an administrator where there is no will or the will does not name an executor, seeks to protect not only the estate of the deceased but also the rights of the creditors in order that they may be able to collect their credits, and of the heirs and legatees in order that they may receive the portion of the inheritance or legacy appertaining to them after all the debts and expenses chargeable against the deceased's estate have been paid. Under the provisions of the law, therefore, the judicial administrator is the legal representative not only of the testate or intestate estate, but also of the creditors, and heirs and legatees, inasmuch as he represents their interest in the estate of the deceased.

-As to identity of subject matter: same

- As to identity of COA: Same, predicted on one and the same alleged right to action arising out of an alleged trust, and the same general denial and special defense.

-As to difference in relief sought: the relief sought in the 2nd proceeding necessarily involves the main question of ownership of the funds and its fruits, which , in the first case, was already ruled to be the property of the adoptive son

De Leon vs. CA (2002)

Short summary: One of the children of the decedent contests the inventory made by his sister who is also the administratrix of the estate, saying that some properties of the decedent were excluded from the inventory and should thus be collated. The TC ordered the collation of said properties, but the owners (the administratrix and other siblings) contested, saying that these properties were sold to them by their father during the latter's lifetime for a consideration. CA held that the order of including these properties in the collation is already final and unappealable. SC held that the said order was merely an interlocutory order, which does not touch upon the issue of ownership of the said properties, and thus, collation is still premature. The said order is merely an order for inclusion in the inventory of the decedent's estate of the properties in question and not the final order contemplated in R90.2.

Facts:

Father: Rafael (+)

Mother: Salud (+)

Children:

*Teresita de leon (administratrix of estate of father, Rafael)

*Estrellita Vizconde

*Antonio Nicolas (+) - represented by surviving spouse Zenaida Nicolas and the heirs)

*RAMON NICOLAS: oppositor

-RAMON filed MOTION FOR COLLATION: Rafael Nicolas given some of the properties to his children (including him) during his lifetime by gratuitous title and administratrix Teresita failed to include it in the inventory

>RTC: ORDER directing Ramon to submit pertinent documents of the alleged transfer , set his motion for hearing w/ notice to present registered owners to show cause why their properties should not be included in the collation

-Ramon filed amended motion for collation, adding several other lands that were allegedly not included in the inventory (additional lots allegedly received by Antonio)

>RTC (Nov11, 1994 order): granted that some of the properties be included in the collation and the inventory

>>Teresita filed MR: Properties subject to the Order were already titled in the names of the children a few years ago (for a consideration) and may not be collaterally attacked in a motion for collation >>>DENIED

>>>Teresita filed MR of the denial, opposed by Ramon

>>>TC: ordered Ramon to prove that the disposition made by Rafael during his lifetime was gratuitously made and not for consideration

-TC ordered (Nov4, 1996 Order) Teresita's removal as administratrix: CONFLICT of INTEREST

-Teresita contested order:

a. Prayed that she be maintained as administratrix

b. Properties that Ramon wanted for collation be declared as exclusive properties of registered owners and not subject to collation

>>>TC denied; appealed to CA
CA: Affirmed

WON THE NOVEMBER 11, 1994 ORDER ORDERING THE INCLUSION OF THE PROPERTIES IN QUESTION IN THE INVENTORY OF THE ADMINISTRATRIX IS FINAL? NO

-it's merely an interlocutory order, not final and ultimate in nature as to ownership of said properties; Any aggrieved party, or a third person for that matter, may bring an ordinary action for a final determination of the conflicting claims

-Garcia vs. Garcia: The court which acquires jurisdiction over the properties of a deceased person through the filing of the corresponding proceedings, has supervision and control over the said properties, and under the said power, it is its inherent duty to see that the inventory submitted by the administrator appointed by it contains all the properties, rights and credits which the law requires the administrator to set out in his inventory. In compliance with this duty the court has also inherent power to determine what properties, rights and credits of the deceased should be included in or excluded from the inventory. Should an heir or person interested in the properties of a deceased person duly call the court’s attention to the fact that certain properties, rights or credits have been left out in the inventory, it is likewise the court’s duty to hear the observations, with power to determine if such observations should be attended to or not and if the properties referred to therein belong prima facie to the intestate, but no such determination is final and ultimate in nature as to the ownership of the said properties

-Probate court can only pass upon questions of title provisionally, because:

(1) limited jurisdiction

(2) questions of title or ownership, which result in inclusion or exclusion from the inventory of the property, can only be settled in a separate action

-JIMENEZ V. CA: All that the said court could do as regards said properties is determine whether they should or should not be included in the inventory or list of properties to be administered by the administrator. If there is a dispute as to the ownership, then the opposing parties and the administrator have to resort to an ordinary action for a final determination of the conflicting claims of title because the probate court cannot do so.

WON R90.2 MAKES THE DETERMINATION OF THE COURT AS TO ADVANCEMENTS MADE BINDING ON PERSON RAISING THE QUESTION AND ON THE HEIR? The order involved here is merely an interlocutory order so merely provisional. The order merely includes subject properties to the inventory

-VDA DE RODRIGUEZ VS. CA: the order of exclusion (or inclusion) is not a final order; that it is interlocutory in the sense that it did not settle once and for all the title to the subject lots; that the prevailing rule is that for the purpose of determining whether a certain property should or should not be included in the inventory, the probate court may pass upon the title thereto but such determination is not conclusive and is subject to the final decision in a separate action regarding ownership which may be instituted by the parties. Ruling on inclusion or exclusion in the inventory is not the same as collation, which is premature at that time

-R90.2 should be interpreted in context of R90.1

-the order allegedly including properties for collation is merely an ORDER OF INCLUSION IN THE INVENTORY OF THE ESTATE which is merely an interlocutory order

-issue on collation still premature: no indication that the debts of the decedents spouses have been paid and the net remainder of the conjugal estate have already been determined, and the estates of the deceased spouses at the time filing of the motion for collation were ready for partition and distribution.

EVEN GRANTING THAT THE ORDER WAS FOR COLLATION, IS IT STILL APPEALABLE FOR FAILING TO STATE THE LAW AND THE FACTS UPON WHICH IT WAS BASED? YES

-Consti (ArtVIII.14) provides that the decision should be rendered expressly stating the law and the facts upon which it was based. Since the decision here did not comply with the consti provision, it should be appeable

-what TC forgot:

No reasons for ordering collation

Did not declare the properties enumerated were given gratuitously to the children

Even if Ramon presented his witnesses, their testimonies were not even mentioned in the assailed order

-making it unappealable is a violation of DUE PROCESS: A void judgment is not entitled to the respect accorded to a valid judgment, but may be entirely disregarded or declared inoperative by any tribunal in which effect is sought to be given to it. Petitioner would have been deprived of due process as they would be divested of the opportunity of being able to point out in a motion for reconsideration or on appeal, any errors of facts and/or law considering that there were no facts or laws cited in support of the assailed Order of collation.

WON THE ORDER REMOVING TERESITA AS ADMINISTRATRIX IS APPEALABLE? YES

-in fact CA ordered TC to give due course to the notice of appeal

WON IT IS PROPER TO ELEVATE THE RECORDS OF THE SPECPRO TO CA FOR APPEAL FROM ORDER REMOVING THE ADMINSITRATRIX IS NECESSARY? No

-unnecessary where a record on appeal is allowed under the Rules of Court. The court a quo loses jurisdiction over the subject of the appeal upon the approval of the record on appeal and the expiration of the time to appeal of the other parties; but retains jurisdiction over the remaining subject matter not covered by the appeal.

Ruiz vs. CA (1996)

Short Summary: Hilario Ruiz left a holographic will wherein he named as his heirs his only son, his adoptive daughter and his grandchildren from his only son. His only son was also named executor of the will. Upon his death, the only son did not petition for the probate of said will, and even opposed the probate of the will. The probate court ordered that support be given to the grandchildren, and that the titles to the two apartments being rented out be released to the heirs. Court held that as to the support to be given, the rules of court provides that ONLY CHILDREN of the deceased (as well as the surviving spouse) are entitled to support, not the grandchildren. As to the release of the titles, court held that it was too early to release the titles yet as the estate has not yet been inventoried and appraised, the charges upon the estate has not yet been paid, and there is still an issue as to the intrinsic validity of the will which the court should proceed to determine first. Finally, court held that right to possession of Executor is not absolute, only as it is necessary for the payment of debts and expenses of administration.

Facts:

Hilario Ruiz left holographic will making the ff his heirs:

· Edmond Ruiz (ONLY SON) - also named executor

· Maria Pilar Ruiz Montes (adopted daughter)

· Maria Cathryn (Edmond's daughter)

· Candice Albertine (Edmond's daughter)

· Maria Angeline (Edmond's daughter)

-Hilario died. Cash component of the estate distributed among the heirs in accordance with the will

-4 years after Hilario's death, Maria Pilar filed petition for probate and approval of Hilario's will + issuance of letters testamentary to Edmond

>>>EDMOND OPPOSED: will was executed under undue influence

…pending this, the Valle Verde house bequethed to the daughters of Edmond were leased by Edmond to 3Ps

-PROBATE COURT JAN 19, 1993 ORDER: Edmond deposit rental deposit and payments for 1 yr lease of Valle Verde property (worth P540k)

>>>Edmond turned over only P348,583.56 (deducted expenses for repair and maintenance)

-Edmond moved for RELEASE OF P50k to pay the REAL ESTATE TAX - approved only P7,722

-Edmond w/drew Opposition to probate of will

MAY 18, 1993 ORDER:

1. WILL ADMITTED TO PROBATE

2. Edmond Ruiz issued letters testamentary (finally issued June 23, 1993), conditioned upon filing of P50k bond

EX-PARTE MOTION FOR RELEASE OF FUNDS filed by Testate Estate of Hilario Ruiz, w/ Edmond as executor: prayed for release of rent payments deposited w/ Branch Clerk

>>>OPPOSED by Montes (adopted daughter); filed MOTION FOR RELEASE OF FUNDS TO CERTAIN HEIRS + MOTION FOR ISSUANCE OF CERTIFICATE OF ALLOWANCE OF PROBATE WILL: prayed for

1. Release of rent payments to the daughters of Edmond (note: the property rented out by Edmond was bequeathed to his daughters)

2. Distribution of testator's properties in accordance w/ the holographic will

*PROBATE COURT:

1. Denied Edmond's motion for release of rent payments

2. Granted Montes' motion for release of the rent to the daughters instead

3. Granted the delivery of the titles to and possession of the Valle Verde and Blue Ridge properties to the 3 granddaughters and to Montes, upon filing of P50k bond

>>>MR by Edmond…

PROBATE COURT (DEC 22, 1993 ORDER):

1. Release funds to Edmond only as may be necessary to cover the expenses of administration and allowances for support of the testator's 3 granddaughters, subject to collation and deductible from their share in the inheritance

2. Release of titles to respondents held in abeyance until lapse of 6 months from date of first publication of notice to creditors

>>>Edmond filed MR for GADALEJ

CA: dismissed petition, affirmed Probate court

1. WON IT WAS PROPER FOR THE PROBATE COURT TO GRANT ALLOWANCE FROM THE FUNDS OF THE ESTATE FOR THE SUPPORT OF THE TESTATOR'S GRANDCHILDREN? NO

-R83.3 (see CODAL)

-Edmond argues:

a. Provision only gives the WIDOW and MINOR or INCAPACITATED CHILDREN of deceased the right to receive allowances for support

b. 3 GRANDCHILDREN does not qualify

i. Not incapacitated

ii. Not minors: of legal age, married, and gainfully employed

iii. Not the "children" stated in the provision

-HELD:

a. Children in R83.3 not limited to MINOR or INCAPACITATED CHILDREN, following A188, NCC: during the liquidation of the conjugal partnership, the deceased's legitimate spouse and children, regardless of their age, civil status or gainful employment, are entitled to provisional support from the funds of the estate. The law is rooted on the fact that the right and duty to support, especially the right to education, subsist even beyond the age of majority.

b. GRANDCHILDREN are not entitled to provisional support from the funds of decedent's estate. Law is clear.

2. WON IT WAS PROPER FOR PROBATE COURT TO ORDER THE RELEASE OF THE TITLES TO CERTAIN HEIRS? NO

-order releasing titles to properties of the estate = advance distribution of the estate

-when advance distribution of estate's properties allowed:

(1) after all the debts, funeral charges, expenses of administration, allowance to the widow, and estate tax have been paid; or

(2) before payment of said obligations only if the distributees or any of them gives a bond in a sum fixed by the court conditioned upon the payment of said obligations within such time as the court directs, or when provision is made to meet those obligations.

-HERE:

· probate court only gave NOTICE to creditors, not payment of debts and obligations

· Estate tax not yet paid, much less ascertained

· Estate has not yet been inventoried and appraised

· Though will was already probated (and the probate of the will is conclusive as to its due execution, extrinsic validity, and capacity of testator to make a will, questions as to intrinsic validity and efficacy of the provisions of the will, legality of any devise or legacy may still be raised so it's too early to order the release of the titles. Here, Edmond contests the distributive shares of the devisees and legatees as his father's will included estate of his mother, allegedly impairing his legitime as intestate heir of mother. So probate court could proceed to hear and decide the same as in ordinary cases

3. WON THE ORDER OF THE COURT DEPRIVED HIM OF HIS RIGHT TO TAKE POSSESSION AND MANAGEMENT OF ALL PROPERTIES OF THE ESTATE AS THE EXECUTOR OF THE WILL? NO

-The right of an executor or administrator to the possession and management of the real and personal properties of the deceased is not absolute and can only be exercised "so long as it is necessary for the payment of the debts and expenses of administration (R84.3)

-he should first submit an accounting of the necessary expenses for administration before he be released any more money:

· he was already granted release of funds for the repair and maintenance expenses and payment of real estate taxes, w/o rendering accounting for the same.

· He only deposited a portion of 1-year rental income from the Valle Verde property, but not the succeeding rents. Also no accounting of such funds

-Petitioner must be reminded that his right of ownership over the properties of his father is merely inchoate as long as the estate has not been fully settled and partitioned.

*As executor, he is a mere trustee of his father's estate. The funds of the estate in his hands are trust funds and he is held to the duties and responsibilities of a trustee of the highest order.

*He cannot unilaterally assign to himself and possess all his parents' properties and the fruits thereof without first submitting an inventory and appraisal of all real and personal properties of the deceased, rendering a true account of his administration, the expenses of administration, the amount of the obligations and estate tax, all of which are subject to a determination by the court as to their veracity, propriety and justness.

D-8. General Powers and Duties of Executors and Administrators

RULE 84 General Powers and Duties of Executors and Administrators

Section 1. Executor or administrator to have access to partnership books and property. How right enforced. -

The executor or administrator of the estate of a deceased partner

shall

at all times

...have access to,

...and may examine

...and take copies of,

books and papers relating to the partnership business,

...and may examine

...and make invoices of the property belonging to such partnership;

and the surviving partner or partners,

on request,

shall exhibit to him all such books, papers, and property in their hands or control.

On the written application of such executor or administrator,

the court having jurisdiction of the estate

may order any such surviving partner or partners

...to freely permit the exercise of the rights, and

...to exhibit the books, papers, and property, as in this section provided,

and may punish any partner failing to do so for contempt.

Section 2. Executor or administrator to keep buildings in repair. -

An executor or administrator

shall maintain in tenantable repair

the houses

and other structures

and fences

belonging to the estate,

and deliver the same in such repair

to the heirs or devisees

when directed so to do by the court.

Section 3. Executor or administrator to retain whole estate to pay debts, and to administer estate not willed. -

An executor or administrator

shall have the right to the

possession

and management of the

...real as well as the

...personal estate of the deceased

so long as it is necessary for the payment of

...the debts and

...the expenses of administration.

Caro vs. CA (1982)

Short Summary: Property was co-owned by 3 brothers, one of which predeceased the others. His estate was administered by the surviving wife and his father. One of the co-owners sold his 1/3 undivided portion to a RP. Although the other co-owners did not want to redeem the property, the widow of the deceased co-owner (who was also 1 of the administrators of his estate) wanted to exercise such right. Court held that an administrator cannot exercise the right of legal redemption.

Facts:

-Sorsogon property (2 parcels of land) co-owned by:

· Alfredo Benito

· Mario Benito (+)

· Benjamin Benito

-Mario died. Surviving wife Basilia Lahorra and father Saturnino Benito appointed as joint administrators of Mario's estate

-Benjamin sold through DEED OF ABSOLUTE SALE of 1/3 undivided portion to LUZ CARO, for P10k. Registered sale.

-Subdivision title issued to Luz Caro, with consent of Alfredo and Saturnino (as administrator) - both executed affidavits

-almost 6 years after, Caro filed a pleading (not sure - as claimant/creditor? ) in the SPECPRO that she bought 1/3 of the property co-owned. Only then did Basilia found out about it.

-Basilia offered to redeem the said share but was ignored

-Basilia then intervened in case of Rosa Amador vda De Benito vs. Luz Caro for annulment of sale and mortgage and cancellation of the annotation of the sale and mortgage involving same parcels of land - PRINCIPAL CASE dismissed for failure to prosecute and to pay docket fees

-Basilia then filed this independent case for legal redemption: no notice of the sale as required under A1620 and 1623 of NCC (no notice to her as administrator of the estate of a co-owner)

>La Luz presented secondary evidence of service of written notice to possible redemptioners (written notice sent to Alfredo and Saturnino - the best evidence - cannot be presented because they were already dead when the complaint for legal redemption brought):

· Affidavit of Benjamin Benito, ante lite motam, attesting to the fact that the possible redemptioners were formally notified in writing of his intention to sell his undivided share

· Deposition of Saturnino's widow (bale mother in law ni Basilia): testified that she received and gave Saturnino the written notice of intended sale and Saturnino expressed disinterest in buyingproperty

>>Complaint for legal redemption DISMISSED

a. Administratrix of co-owner does not have the power to exercise right of legal redemption

b. Seller co-owner substantially complied w/ written notice requirement to possible redemptioners

…MR denied, appealed to CA (with additional contention that Judge should have inhibited himself, his son being an associate/member of law office of Caro's lawyer

CA: for Basilia

1. It is w/n the judge's discretion to disqualify himself, besides, no showing that Basilia asked for the Judge's disqualification

2. Right to redeem arose after death of Mario, so it's not part of the hereditary estate but a personal right of the heirs (which would include Basilia)

3. The deed of sale statement of the seller saying that the other co-owners declined to buy was a unilateral statement, not a proof of notice required by law

4. Registration of deed of sale did not erase right to redeem of other heirs who did not receive notice

5. Affidavits attesting to notice would not show that there was clear notice given. Saturnino's unilateral act as co-administrator can't bind his co-administrator who has right to redeem personally as heir

6. Basilia can still redeem

>Caro appealed

WON RIGHT OF REDEMPTION COULD STILL BE EXERCISED WHEN THE PROPERTY SOUGHT TO BE REDEEMED IS NOT CO-OWNED ANYMORE (on the theory that through the other co-owner and one of the administrators of the estate of the other co-owner already agreed to subdivide the property)

1. On the theory that there is no longer co-ownership, with partition of the property:

-CARAM vs. CA - though this case refers to conveyance made after partition:Once a property is subdivided and distributed among the co-owners, the community has terminated and there is no reason to sustain any right of legal redemption (purpose is to reduce the number of participants until the community is done away with

-no difference w/ respect to conveyance before partition agreement. Basta may partition na, can't exercise right to redeem

-on allegation of fraud: fraud in securing the registration of titles to the land should be supported by clear and convincing evidence

-since subdivision title issued, and 1 year from date of entry of subdivision of title no claim for redemption, the Certificate of Title becomes indivisible, cannot be indirectly attacked

2. On the assumption that there is still co-ownership and right of legal redemption still exists

-as administratrix, no personality to exercise right

…BUTTE vs. UY AND SONS: "While under Sec. 3, Rule 85, Rules of Court, the administrator has the right to the possession of the real and personal estate of the deceased, so far as needed for the payment of the expenses of administration, and the administrator may bring and defend action for the recovery or protection of the property or right of the deceased (Sec. 2, Rule 88), such right of possession and administration do not include the right of legal redemption of the undivided share sold to a stranger by one of the co-owners after the death of another, because in such case, the right of legal redemption only came into existence when the sale to the stranger was perfected and formed no part of the estate of the deceased co-owner; hence, that right cannot be transmitted to the heir of the deceased co-owner."

-not discuss WON she could bring action as heir of a co-owner because her pleading specifically stated that she brought the action in her capacity as administratrix

WON action for enforcement of right of redemption already expired? Moot and academic

-Caro argues that the tender of payment w/n 30 d from written notice of sale by co-owner already prescribed, and such being a condition precedent to file action for enforcement of right, it already prescribed

-court did not rule on it, saying issue was already moot and academic

Estate of Olave vs. Reyes (1983)

Short Summary: Administrators of estate of decedent entered into an amicable settlement with a creditor company who wanted to collect from the estate of the decedent in a separate proceeding. This was done w/o prior approval of the probate court. SC held that prior approval of the probate court needed because (1) the claim of the creditors is a claim against the estate; and (2) probate court already acquired exclusive jurisdiction over the case, to the exclusion of the other court)

Facts

-there's already a special proceeding for the settlement of the estate of Amadeo Matute Olave in the Manila court. There's an order from this court providing that the co-administrators should first secure the probate court's approval before entering into any transaction involving the 17 titles of the estate

-Southwest Agricultural Marketing Corporation (SAMCO) filed Civil case for collection of debt and attorney's fees in Davao court against the co-administrators of the estate of Amadeo Olave

-even after order from the probate court to secure first its approval, SAMCO and the co-administrators entered into an AMICABLE SETTLEMENT wherein one of the 17 titles of the estate was ceded to SAMCO as payment for its claim. This was done w/o notice and approval of the probate court

-DAVAO COURT: approved amicable settlement

WON SAMCO PROPERLY FILED CLAIM IN A SEPARATE PROCEEDING? NO

1. R87.1: "no action upon a claim for the recovery of money or debt or interest thereon shall be commenced against the executor or administrator; . . ."

2. Claim of Samco could only be pursued by filing it in the administration proceedings and w/n the prescribed period, or else barred forever

3. Why present claims in the probate court: to protect the estate of deceased persons. That way, the executor or administrator will be able to examine each claim and determine whether it is a proper one which should be allowed. Further, the primary object of the provisions requiring presentation is to apprise the administrator and the probate court of the existence of the claim so that a proper and timely arrangement may be made for its payment in full or by pro-rata portion in the due course of the administration, inasmuch as upon the death of a person, his entire estate is burdened with the payment of all of his debts and no creditor shall enjoy any preference or priority; all of them shall share pro-rata in the liquidation of the estate of the deceased.

4. Manila Probate court already has exclusive jurisdiction over the proceeding and the properties claimed: R73.1

5. The law is clear that where the estate of the deceased person is already the subject of a testate or intestate proceeding, the administrator cannot enter into any transaction involving it without prior approval of the probate court.

MANANQUIL V. VILLEGAS

Short Summary: Disbarment case against the lawyer of the administrator for entering into a lease agreement with the estate he's working for, allegedly for a minimal fee and w/o court approval. Court held that no court approval is necessary for the administrator to enter into a lease agreement. But there is still sufficient grounds for disciplinary sanction, as he is prohibited under the civil code to enter into any transaction regarding the property which he is supposed to litigate.

Facts:

-Felomina Zerna died. Administration proceedings initiated, w/ Felix Leong appointed as administrator . Atty. Mananquil served as Leong's lawyer

-Lease contract was executed between Leong (administrator) and the Heirs of Jose Villegas (to which Atty. Mananquil belonged), represented by brother in law of Atty. Mananquil involving sugar lands

-2 years after, Hijos De Jose Villegas was formed among the heirs of Jose Villegas. Another lease contract entered between Leong and Hijos De Jose Villegas

-as representative brother in law already dead, Atty. Mananquil was appointed manager

-lease contract again renewed, but now Atty. Mananquil was the representative of the Hijos De Jose Villegas. He signed for the partnership for at least 3 times.

1. WON ATTY. MANANQUIL SHOULD HAVE 1ST SECURED THE APPROVAL OF THE COURT IN SPECPRO TO THE VARIOUS LEASE CONTRACTS? NO

-a judicial executor or administrator has the right to the possession and management of the real as well as the personal estate of the deceased so long as it is necessary for the payment of the debts and the expenses of administration. He may, therefore, exercise acts of administration without special authority from the court having jurisdiction of the estate. For instance, it has long been settled that an administrator has the power to enter into lease contracts involving the properties of the estate even without prior judicial authority and approval

2. WON ATTY. MANANQUIL SHOULD STILL BE SUBJECTED TO DISCIPLINARY SANCTION? YES

-violated Art 1646, NCC and Art 1491: prohibited from leasing, either in person or through mediation of another, …

(4) Public officers and employees, the property of the State or of any subdivision thereof, or of any government owned or controlled corporation, or institution, the administration of which has been intrusted to them; this provision shall apply to judges and government experts who, in any manner whatsoever, take part in the sale;

(5) Justices, judges, prosecuting attorneys, clerks of superior and inferior courts, and other officers and employees connected with the administration of justice, the property or rights in litigation or levied upon on execution before the court within whose jurisdiction or territory they exercise their respective functions; this prohibition includes the act of acquiring by assignment and shall apply to lawyers, with respect to the property and rights which may be the object of any litigation in which they may take part by virtue of their profession.

-prohibited because of the fiduciary relationship involved, or the peculiar control exercised by these individuals over the properties

-Thus, even if the parties designated as lessees in the assailed lease contracts were the "Heirs of Jose Villegas" and the partnership HIJOS DE JOSE VILLEGAS, and respondent signed merely as an agent of the latter, the Court rules that the lease contracts are covered by the prohibition against any acquisition or lease by a lawyer of properties involved in litigation in which he takes part. To rule otherwise would be to lend a stamp of judicial approval on an arrangement which, in effect, circumvents that which is directly prohibited by law. For, piercing through the legal fiction of separate juridical personality, the Court cannot ignore the obvious implication that respondent as one of the heirs of Jose Villegas and partner, later manager of, in HIJOS DE JOSE VILLEGAS stands to benefit from the contractual relationship created between his client Felix Leong and his family partnership over properties involved in the ongoing testate proceedings.

-on alleged lack of knowledge: impossible that he would not have knowledge of transactions of his family partnership, he even participated in some of the lease contracts

-on alleged acquiescence and consent of the heirs: even with that, still prohibited from having any interest in the properties under litigation under Art 1491 and 1646, NCC, and as a lawyer, should uphold the laws of the land…

-on Tuason vs. Tuason (allegedly ruled that renewal of contracts do not fall w/n NCC prohibition): can't infer from that case that contracts of sale or lease where vendee/lessee is a partnership, of which a lawyer is a member, over a property involved in a litigation in which he takes part by virtue of his profession, are not covered by the prohibition under Articles 1491 and 1646.

>>>SUSPENDED FOR 4 months

Estate of Ruiz vs. CA, supra

WON THE ORDER OF THE COURT DEPRIVED HIM OF HIS RIGHT TO TAKE POSSESSION AND MANAGEMENT OF ALL PROPERTIES OF THE ESTATE AS THE EXECUTOR OF THE WILL? NO

-he should first submit an accounting of the necessary expenses for administration before he be released any more money:

· he was already granted release of funds for the repair and maintenance expenses and payment of real estate taxes, w/o rendering accounting for the same.

· He only deposited a portion of 1-year rental income from the Valle Verde property, but not the succeeding rents. Also no accounting of such funds

-Petitioner must be reminded that his right of ownership over the properties of his father is merely inchoate as long as the estate has not been fully settled and partitioned.

*As executor, he is a mere trustee of his father's estate. The funds of the estate in his hands are trust funds and he is held to the duties and responsibilities of a trustee of the highest order.

Nerdy Mode

Sunday, January 31, 2010

Corpo Samplex Compilation

Valid/Invalid/Explain the answer

Friday, January 29, 2010

IPL Lecture: January 30

Thursday, January 28, 2010

Specpro Notes for January 30

D-7. Inventory and Appraisal. Provision for Support of Family

D-8. General Powers and Duties of Executors and Administrators

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