*February 23 PRIL Lecture

CHOICE OF LAW AFFECTING CORPORATIONS AND OTHER JURIDICAL ENTITLES
WHO ARE PERSONS:
1. Natural
2. Juridical persons - corporations
Legal effect of being considered a person -
1. Capacity to act
2. Capacity to be subject to legal relations
3. Capacity to own property
Corporations organize outside our state are more restricted
Personal law of a corporation
Domestic corporation: incorporated in RP
Foreign corporation: established under the laws of another country (as defined in the Corporation Code)
---tests:
US: where incorporated
Civil law country? : where principal activities are conducted (law of central administration/place of business)
…in RP, though we inherited civil law, we follow place where corporations was incorporated (though the common distinction is that civil law applies to private law and common law to public/political law)
Personal law - the law of the place where a corporation is incorporated
GRAY v. INSULAR LUMBER F: Gray, a SH of Insular Lumber which is incorporated in NY but has license to do business in RP, is not a holder of 3% stocks. He wanted to inspect the books and records of the company. So he filed case before TC to compel corp to allow him to inspect.
H: NY law applied though it was doing business in RP (and Corpo code allows it) because it was not earlier allowed as basis of COA for inspection of books + no showing that his intent to inspect the books was necessary to protect his interest and for a specific or honest purpose.
-here, RP conferred upon him a right; but NY law does not. Lesson of this case: law which will govern is the corporation's personal law - NY Law!  
ANGLO-AMERICAN LEGAL THEORY ON CORPORATION
BANK OF AUGUSTA V. EARLE
1. Corporation, being a creature of law, has no legal status beyond the bounds of the sovereignty w/n which it was created
-no legal status outside place of incorporation
-territorial
-if we follow this as an absolute rule: difficult for corporations to transacts with other corporations outside the state - globalization would be impossible
--in the case, it allowed the corporation to sue so it implicitly allowed the status of the corporation as a legal entity
-legal existence outside the state of incorporation is dependent on consent of the other state through comity (see #3)
2. Can't exercise powers not granted by its corporate charter/laws of the state of incorporation
Can't add privileges or restrictions that are not provided by the law of the state of incorporation
3. State cannot be compelled to recognize comity (neither an obligation nor mere courtesy or whim)
COMITY: same privileges granted by State A may be granted by State B
Restrictions: not allowed in the State wanted to have comity recognized
4. State not obliged to grant to foreign corporation the privileges and immunities common to the citizen of that state
-A foreign corporation is a person, but not a citizen which is entitled to privileges given to citizens
-if recognize a foreign corporation as a person, not necessarily give status as a citizen
CITIZEN (can vote, can fill out public officers - in San Jose Petroleum case)
EXCEPTIONS TO THE RULE ON INCORPORATION
1. Statutory and constitutional limitations
CONSTI - see Art. 12
-constitution provides that when it comes to the Exploitation, development and utilization of natural resources, Filipino citizens are given priority if not sole power to exercise it
-if not, foreigners may be allowed to buy all our natural resources - how would RP exercise sovereignty over it???
PALTING V. SAN JOSE PETROLEUM INC
F: SJP wanted to register the sale of shares of its capital stock in exchange of voting trust certificate, for the financing of SJO. It was opposed.
H: NOT VALID contract, can't be registered
1. Owned by Panamanian corporation
2. NOT INDIRECTLY OWNED BY US CITIZENS
3. NO evidence that …
-since no showing of reciprocity/comity, it's useless
-it's impossible to go down infinitum
2. Control test during war
-citizenship of corp based on the nationality/citizenship of the controlling SH of the corporation
FILIPINAS COMPANIA DE SEGUROS V. CHRISTERN, HUENEFELD & CO
F:
-why is it that during the times of war, incorporation test is followed and not the incorporation test?
DAIMLER V CONTINENTAL TIRE: company incapable of loyalty or enmity so the qualities of its SH would be made basis (during times of war, the corporation takes the characteristics of the SH who are running and controlling it)
-business transactions cannot be subjected to whims and caprices of the SH who controls the corporation
DOMICILE OF A FOREIGN CORPORATION
Art 51, NCC  
STATE INVESTMENT HOUSE V. CITIBANK NA
-can a foreign corporation acquire a different domicile from place of incorporation? YES How about domicile?
IN NCC: if not stated, the domicile may be the residence of the corporation (place where it is doing business)
For Thursday: we finish the chapter then additional cases for recognition and enforcement of foreign judgment

*sorry kulang...sabaw...:((