Beruflich Dokumente
Kultur Dokumente
May 7, 1921 – The cert. of title to the land was received by EHF American jurisprudence supports contention: “corporation whose
business may properly be conducted in a populous center may acquire
1921 to 1926 – EHF actively advertised for sale the land an appropriate lot and construct thereon an edifice with facilities in
Mar 1926 – first offer received from Alcantara, but he wasn’t able excess of its own immediate requirements.”
to pay the downpayment in time so the contract was rescinded.
July 30, 1926 – land finally sold to Doña Felipa for P6k. Third cause of action:
Govt: EHF acquired title in Dec 22, 1920 but only sold it in Jul 30, 1926, Overview: engaging in activities foreign to the purposes for which the
which is more than 5 years, in violation of the law (see above) and corporation was created and not reasonably necessary to its legitimate
therefore warrants the corporation’s dissolution. end.
EHF: (1) Period should start running in May when the certificate was 3 Activities involved.
delivered and (2) the period between March to April when it was initially
sold to Alcantara should also not be counted 1. administration of the offices in the El Hogar building not used
by the respondent itself and the renting of such offices
Issue: WON failure to get rid of the land within 4 years is such a
violation as should warrant a dissolution (No, it doesn’t) Court: already discussed in 2nd cause of action (see above)
Art 93 - directors to carry funds to a Special Reserve, whenever in their earlier case of Lopez v El Hogar Filipino: it was questioned WON
judgment it is advisable to do so, provided annual dividend in the year EHF violated the law and departed from its fundamental purposes
in which funds are carried to special reserve exceeds 8%. when it granted a loan upon the security of a mortgage upon
agricultural land. The conclusion was that the loan was valid and could
Govt: maintenance of reserve funds is not necessary in the case of be lawfully enforced by a nonjudicial foreclosure in conformity with the
building and loan associations, and at any rate the keeping of reserves terms of the contract between the association and the borrowing
is inconsistent with section 188 of the Corporation Law member.
practice of regularly declaring 10% dividend is in effect a guaranty
of a fixed dividend which is contrary to the intention of the statute.
Sixteenth cause of action:
Court: no reason to doubt the right of the respondent to maintain these
reserves. It is true that the Corporation Law does not expressly grant Overview: various loans now outstanding have been made by the
this power, but we think it is to be implied. respondent to corporations and partnerships, and that these entities
have in some instances subscribed to shares in the respondent for the
Fluctuations in the dividend rate are highly detrimental to any fiscal sole purpose of obtaining such loans
institutions, while uniformity in the payments of dividends, continued
over long periods, supplies the surest foundation of public confidence. Of the 5,826 shareholders, 28 are juridical entities, with 14 loans made
in total to them
Also provided in Sec188 that he profits and losses shall be
determined by the board of directors; and this means that they shall Court: Corporation Law Sec 173 provides "any person" may become
exercise the usual discretion of good businessmen in allocating a a stockholder in building and loan associations. The word "person"
portion of the annual profits to purposes needful to the welfare of the appears to be here used in its general sense, and there is nothing in
association. the context to indicate that the expression is used in the restricted
sense of "natural person." It should therefore be taken to include both
It is no proper function of the court ,to arrogate to itself the control natural and artificial persons, as indicated in Administrative Code,
of administrative matters which have been confided to the discretion Sec2.
of the board of directors.
no reason is seen why the phrase may not be taken in its proper
broad sense of either a natural or artificial person.
Thirteenth cause of action:
the question whether these loans and the attendant subscriptions
were properly made involves a consideration of the power of the
subscribing corporations and partnerships to own the stock and take
the loans; and it is not alleged in the complaint that they were without
power in the premises
DISPOSITIVE:
In conclusion, the respondent is enjoined in the future from
administering real property not owned by itself, except as may be
permitted to it by contract when a borrowing shareholder defaults in
his obligation. In all other respects the complaint is dismissed, without
costs. So ordered.