Smith, Bell & Co. vs. Nathaniel

Smith, Bell & Co. vs.
Nathaniel
Facts:
Smith, Bell & Co. is a corporation organized under the laws of the Philippines, majority of the
stockholders are British; owner of a motor vessel known as the BATO. It was brought to Cebu for
purposes of transporting merchandise of the said corporation. The application for registration was made
at Cebu at the Collector of Customs was denied because they were not citizens of US/Philippines.
Smith, Bell contended that Act No. 2671 deprives the corporation of its property without due process of
law because by the passaged of the law, the company was automatically deprived of every beneficial
attributeof ownership of the BATO.
Issue:
Whether or not Smith, Bell were denied of the due process of law by the eactment of Act No. 2671
Held:
Yes. Petitioner being an alien stockholders is entitled to the protection afforde by the due process f law
and equal protection clause, nevertheless, Act No. 2671, in denying to corporations the right to register
vessels in the Philippines does not belong to the viscious species of class legislation which must always
be condemned, but does not fll within the authorized exceptions, notably, within the purvieww of the
police power, and so does not offend against the constitutional provision.
Stonehill vs. Diokno
Facts:
Respondents made the issuance of 42 search warrants against the petitioner and corporation to search
persons and premises of several personal properties due to an alleged violation of Central Bank laws,
tarriff and custom laws, IRC and RPC. As a result searches and seizure were conducted in both the
residence of petitioner and corporation's premises. Petitioner's contended that the search warrants are
null and void as their issuance violated the constitution and rules of court for being general warrants.
Petitioner filed a petition with the Supreme Court for certiorari, prohibition, injunction to prevent the
seized effects.
Issue:
Whether or not petitioner can assail the legality of seach and seizure
Held:
No. Petitioner can only assail the search conducted in the residences but not those done in corporation
premises. The petitioner has no cause of action since a corporation has a personality separate and
distinct from the personality of its officer. Only the party whose right had been impaired can validly
object the legality of seizure.
Bataan Shipyard & Engineering Co. Inc. vs. PCGG
Facts:
PCGG was formed in order to recover the ill gotten wealth acquired by Marcoses. Aquino issued two
executive order and pursuant thereto a sequestration and takeover order were issued against BASECO.
Baseco was alleged to be owned and controlled by the Marcoses through Romualdez family and in turn
through the dummy stockholders. Baseco was required to produce corporate records from 1973 to
1986. Baseco assails the order and avers that it is against their right against self incrimination and
unreasonable searches and seizure.
Issue:
Whether or not Baseco is correct
Held:
The court held that the right againt self incrimination has no applications to corporations. The
corporation is a creature of the State. It is presumed to be incorporated for the beenfit of the public. It
receives certain special privileges and franchises and holds them subject to the laws of the State and the
limitation of its charter. While an individual may lawfully refuse to answer incriminating questions
unless protected by an immunity statute, it does not follow that a corporation, vested with special
privileges, and franchise may refuse to show its hand when charged with an abuse of suvh privileges.
Therefore, PCGG has the right to require the production of such documents pursuant to the power
granted to it.
National Development Company vs. Philippine Veterans Bank
Facts:
PD 1717 ordered the rehabilitation of Agrix Group of Companies to be administered by National
Development Company. Under Sec. 4 of PD 1717, all mortgages and other liens presently attaching to
any of the assets of the dissolved corporations are hereby extinguished. Before the issuance of PD
1717, Agrix had executed in favor of the Philippine Veterans Bank a real estated mortgage over three
parcels of land. During the existence of the mortgage, Agrix went bankrupt. New Agrix invoking Sec.
4, filed a petition for the cancellation of the mortgage lien in favor of PVB. PVB extrajudicially
foreclosed said mortgage. The court annulled PD 1717 on the grounds that the presidential execise of
legislative power was a violation of the principle of the separation of powers; that the law impaired the
obligation of contracts; and the decree violated the equal protection clause.
Issue:
Whether or not New Agrix was validly constituted as a new corporation, being neither owned nor
controlled by the government, should have been created by general and not special law.
Held:
New Agrix was created by special decree notwithstanding the provision of Sec. 4, Art. XIV of the 1973
Constitution, the Batasan Pambansa shall not, except by general law, provide for the formation,
organization, regulation of private corporations, unless such corporations are owned or controlled by
the government. The New Agrix is neither owned or controlled by the government. New Agrix is
entirely private and so should have been organized under the Corporation Law in accordance with
abovementioned constitutional provision.
Alfafara vs. Acebedo Optical
Facts:
Petitioner alleged that respondent opened several optical shops in Cebu and announced to the public the
availability of ready to wear eye glasses for sale with free services by optometrists in such outlets. They
claimed that respondent had been engaging in the practice of optometry, examining the human eye,
analyzing the ocular functions, and conducting ocular excercises, visual training and other preventive
measures for the aid, correction of human eye without any license to do so. They contended that such
acts of respondents were done in violation of Optometry law and the Code of Ethics for optometrists.
Issue:
Whether or not a corporation can engage in the practice of profession
Held:
Court held that Acebedo is a juridical person and only natural persons can engage in the practice of
optometry. A corporation engaged in the selling of eyeglasses that hires optometrists is not engaged in
the practice of optometry. Acebedo is merely in the business of selling optical products, not in the
practice of optometry, whether directly or indirecty, through its hired optometrists. While the
optometrists are employees of Acebedo, their practice of optometry is separate and distinct from the
business of Acebedo of selling optical products. They are personally liable for the acts done in the
course of their practice.

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