Aljie F.
Gallardo
Fiscal Batbatan
Corpo
Bar Questions 2
Question :
X, a German national, was a devout follower of BBB religion. He came to the Philippines
to spread the teachings of BBB religion. He soon gained thousands of followers, and
formed a corporation sole, ABC Corporation, in accordance with Philippine laws. ABC
Corporation, through X, purchased a building where the followers of BBB religion can
perform their rituals and ceremonies. Y, a concerned citizen, assailed the acquisition of
real property by ABC Corporation since its leader, X, is a foreigner. X countered that since
all its members are Filipino citizens, ABC Corporation is qualified to own real property in
the Philippines. Decide with reason(s).
𝗔𝗡𝗦𝗪𝗘𝗥:
I will rule in favor to X because the property was in accordance with PH Law.
Under RCC , to determine the capacity to own a property is determined by its legal
capacity of the corporation not the nationality of the heads. Another way of determination
is the use of grandfather rule in case of doubt and exits in the ownership
In this case, ABC Corporation is a corporation sole duly formed under Philippine laws.
It is considered a domestic corporation with thousands of Filipino followers. Although X,
a German national and foreign investor, provided practically all the funds for the
investment jointly undertaken with Filipino stakeholders to acquire the real property, such
arrangement is permissible under Philippine law. Therefore, ABC Corporation is qualified
to own real property in the Philippines.
BAR QSs 10
On January 5, 2023, A subscribed to 1,000 shares of ABC Corporation with a par value of
PHP 1,000.00 each. She made an initial payment of PHP 400,000.00 for 400 shares. As for
the remaining 600 shares, she undertook to pay the same in installment for three months.
But she never paid for these shares even after the deadline. Thirty days later, the Board of
Directors of ABC Corporation declared A’s shares delinquent. During the election of
directors in July 2023, A wanted to vote on her 400 shares, which she had already paid.
ABC Corporation, however, prohibited her from voting due to her alleged delinquent
account. Is ABC Corporation correct? Reason(s).
ANSWER
Yes, ABC Corporation is correct.
Under RCC, No delinquent stock shall be voted for or be entitled to representation at
any stockholders’ meeting.
Here, While A has paid for 400 shares, her remaining subscription of 600 shares is
delinquent, affecting her right to vote all her subscribed shares.; hence, the delinquency
affects all the shares.
BAR QSs 13
ABC Corporation increased its Authorized Capital Stock by issuing 1,000 additional
shares. X, a shareholder, notified ABC Corporation in writing of her desire to exercise her
pre-emptive right on 100 of the 1,000 additional shares. ABC Corporation, however, did
not respond. Upon learning that ABC Corporation had already sold all the 1,000 additional
shares to new stockholders, X filed a derivative suit on behalf of the corporation to enforce
her pre-emptive right. Is the action proper? Reason(s).
ANSWER
No, a derivative suit is not the proper action in this case.
Under RCC, Pre-emptive right is the right of existing stockholders to subscribe to
new shares issued by the corporation before they are offered to outsiders, in proportion
to their current shareholdings to protect stockholders from dilution of their ownership and
to preserve control and voting power within the existing group of shareholders.
In this case, X is asserting her individual pre-emptive right, not a right of the
corporation. Under these circumstances, the appropriate action is a direct action against
the corporation to enforce her pre-emptive right, not a derivative suit. Thus such, the
derivative suit filed by X is improper.
