TECSON vs.
CA made a trustee for the other incorporators who were pilots and thus had
PEOPLE vs. ISLA
PEOPLE OF THE PHILIPPINES, plaintiff & appellee, vs. WILLIAM H.
QUASHA, defendant & appellant [1953]
o Quasha, a lawyer, was entrusted w/the preparation & registration of articles
of incorporation of Pacific Airways Corp, a domestic corporation engaged as
a common carrier business. Articles of Incorporation were registered w/the
Securities & Exchange Commission.
o Quasha made it appear in the articles of incorporation that Arsenio Baylon,
Filipino, owned 60.005% of the corporation’s subscribed capital stock
(amounting to P200k) when in fact the American citizens named as co-
subscribers of Baylon owned it. The articles stipulated that Baylon had
1,145 preferred shares & 6,500 common shares while the American
subscribers had 200 preferred shares & 59k common shares. But Baylon
still didn’t have the controlling vote due to the difference in voting power
between the preferred & common shares.
o Purpose in making Baylon appear as the owner: to circumvent the
constitutional provision w/c mandates that at least 60% capital stock of a
corporation operated as a public utility in the RP must be owned by
Filipinos.
o Corporation was registered & issued a certificate of incorporation.
o Although Baylon did pay his subscription, the money used did not belong to
him but to the American subscribers. Quasha testified that Baylon was
difficulty in getting together & deciding their respective share holdings.
o Quasha was charged w/falsification of a public & commercial document
under Art. 172.11 in connection Art. 171.42 of the RPC.
o CFI: guilty
Issues & Ratio:
1. WON Quasha is guilty as charged. – NO.
o J. Albert commentary: requisites for perversion of truth in the narration of
facts:
a. wrongful intent of injuring a 3rd person
b. offender has legal obligation to disclose the truth
o Falsification imputed to Quasha: not disclosing in the articles of
incorporation that Baylon was a mere trustee w/c in effect gave the
impression that he owned the shares subscribed to by him.
o Lower court based its decision on the alleged circumvention of the
constitutional provision aforementioned. But such provision prohibits
granting of franchise/other form of authorization for the operation of a public
utility to a corporation already in existence but w/o the requisite Filipiono
capital proportion. It does not prohibit mere formation of a public utility corp
w/o the proper Filipino capital proportion as wrongly interpreted by the CFI.
The formation of the corporation is not necessarily an indispensable
preparatory step to the to the subversion of the constitutional provision. A
corporation may be entirely owned by aliens & it is entitled to operate as a
public utility. It may subsequently change the nationality of its capital by
transferring the shares to Filipino citizens & thus, entitled to the
franchise/authorization to operate as a public utility.
o Thus, Quasha can’t be held to have the legal obligation to disclose the truth
that Baylon was only a trustee at the time of the formation of the
corporation. Such duty only arose upon the application for franchise or
authorization to operate. Since Quasha had no obligation to disclose the
truth & he had no alleged wrongful intent, he can’t be legally convicted of
the crime charged.
2. WON Quasha should at least be held liable for an impossible crime. –
NO.
o He could not have intended to circumvent the constitutional provision w/c
was still inexistent at the time he committed alleged acts.
o Besides, the Parity Amendment placed Americans in equal footing as
Filipinos WRT the rt to operate public utilities in the country, thus doing
away w/the invoked constitutional prohibition. (Meaning, the Americans also
had the rt to operate public utilities in the country.)
1
Punishes a private individual who commits any act of falsification in any public/official document or
letter of exchange or any other kind of commercial document.
2
Punishes making untruthful statement in a narration of facts.
Holding: Quasha acquitted.