GSIS V. CA (G.R. NO.

183905) The power of the SEC to investigate violations of its rules on proxy
solicitation is unquestioned when proxies are obtained to vote on matters
Facts: unrelated to the cases enumerated under Section 5 of Presidential Decree
GSIS, a major shareholder in Meralco, was distressed over the proxy No. 902-A. However, when proxies are solicited in relation to the election of
validation proceedings and the resulting certification of proxies in favor of corporate directors, the resulting controversy, even if it ostensibly raised
the Meralco Management. The proceedings were presided over by the violation of the SEC rules on proxy solicitation, should be properly seen
Meralcos assistant corporate secretary and chief legal counsel instead of as an election controversy within the original and exclusive jurisdiction of
the person duly designated by Meralcos Board of Directors. Thus, GSIS the trial courts by virtue of Section 5.2 of the SRC in relation to Section 5(c)
moved before the SEC to declare certain proxies, those issued to herein of Presidential Decree No. 902-A.
private respondents, as invalid. Private respondents contend that dispute in
the validity of proxies is an election contest which falls under the trial That the proxy challenge raised by GSIS relates to the election of the
courts jurisdiction. GSIS argues there was no election yet at the time it filed directors of Meralco is undisputed. The controversy was engendered by the
its petition with the SEC, hence no proper election contest over which the looming annual meeting, during which the stockholders of Meralco were to
regular courts may have jurisdiction. elect the directors of the corporation. GSIS very well knew of that fact.

Issue:

Whether or not the proxy challenge is an election contest cognizable by the

regular courts.

Ruling: YES.

Section 2, Rule 6 of the Interim Rules broadly defines the term election
contest as encompassing all plausible incidents arising from the election of
corporate directors, including: (1) any controversy or dispute involving title
or claim to any elective office in a stock or non-stock corporation, (2) the
validation of proxies, (3) the manner and validity of elections and (4) the
qualifications of candidates, including the proclamation of winners.

Under Section 5(c) of Presidential Decree No. 902-A, in relation to the SRC,
the jurisdiction of the regular trial courts with respect to election-related
controversies is specifically confined to controversies in the election or
appointment of directors, trustees, officers or managers of corporations,
partnerships, or associations. Evidently, the jurisdiction of the regular
courts over so-called election contests or controversies under Section 5(c)
does not extend to every potential subject that may be voted on by
shareholders, but only to the election of directors or trustees, in which
stockholders are authorized to participate under Section 24 of the
Corporation Code.
 the full amount thereof. This being so, petitioner cannot set up against
respondent the defense of nullity of the contract of sale between her and
Salas vs CA VMS
G.R. No. 76788 January 22, 1990
JUANITA SALAS, vs. HON. COURT OF APPEALS and FIRST FINANCE & LEASING
CORPORATION

Facts: Juanita Salas (Petitioner) bought a motor vehicle from the Violago
Motor Sales Corporation (VMS) for as evidenced by a promissory note. This
note was subsequently endorsed to Filinvest Finance & Leasing Corporation
(private respondent) which financed the purchase.

Petitioner defaulted in her installments allegedly due to a discrepancy in the

engine and chassis numbers of the vehicle delivered to her and those
indicated in the sales invoice, certificate of registration and deed of chattel
mortgage, which fact she discovered when the vehicle figured in an
accident.

This failure to pay prompted private respondent to initiate an action for a

sum of money against petitioner before the Regional Trial Court.

Issue: WON private respondent is a holder in due course?

Held:

YES. The PN was negotiated by indorsement in writing on the instrument

itself payable to the Order of Filinvest Finance and Leasing Corporation and
it is an indorsement of the entire instrument.

Under the circumstances, there appears to be no question that Filinvest is a

holder in due course, having taken the instrument under the following
conditions: [a] it is complete and regular upon its face; [b] it became the
holder thereof before it was overdue, and without notice that it had
previously been dishonored; [c] it took the same in good faith and for value;
and [d] when it was negotiated to Filinvest, the latter had no notice of any
infirmity in the instrument or defect in the title of VMS Corporation.

Accordingly, respondent corporation holds the instrument free from any

defect of title of prior parties, and free from defenses available to prior
parties among themselves, and may enforce payment of the instrument for
Florentina Lozano vs Judge Antonio Martinez et al the date appearing thereon, for which reason it is dishonored by the drawee
bank.
This case is a consolidation of 8 cases regarding violations of the Bouncing
Checks Law or Batas Pambansa Blg. 22 (enacted April 3, 1979). In one of the Andany person who makes or draws and issues any check on account or
eight cases, Judge David Nitafan of RTC Manila declared the law for value, knowing at the time of issue that he does not have sufficient
unconstitutional. Among the arguments against the constitutionality of the funds in or credit with the drawee bank for the payment of said check in full
law are a.) it is violative of the constitutional provision on non- upon presentment, which check is subsequently dishonored by the drawee
imprisonment due to debt, and b.) it impairs freedom of contract. bank for insufficiency of funds or credit or would have been dishonored for
the same reason had not the drawer, without any valid reason, ordered the
ISSUE: Whether or not BP 22 is constitutional. bank to stop payment.

HELD: Yes, BP 22 is constitutional. Congress was able to determine at that time that the issuance of worthless
checks was a huge problem. The enactment of BP 22 is a declaration by the
The Supreme Court first discussed the history of the law. The SC explained legislature that, as a matter of public policy, the making and issuance of a
how the law on estafa was not sufficient to cover all acts involving the worthless check is deemed public nuisance to be abated by the imposition
issuance of worthless checks; that in estafa, it only punishes the fraudulent of penal sanctions.
issuance of worthless checks to cover prior or simultaneous obligations but
not pre-existing obligations. Checks are widely used due to the convenience it brings in commercial
transactions and confidence is the primary basis why merchants rely on it
BP 22 is aimed at putting a stop to or curbing the practice of issuing checks for their various commercial undertakings. If such confidence is shaken, the
that are worthless, i.e. checks that end up being rejected or dishonored for usefulness of checks as currency substitutes would be greatly diminished or
payment. The practice is proscribed by the state because of the injury it may become nil. Any practice therefore tending to destroy that confidence
causes to public interests. should be deterred for the proliferation of worthless checks can only create
havoc in trade circles and the banking community. Thus, the Congress,
BP 22 is not violative of the constitutional prohibition against imprisonment through their exercise of police power, declared that the making and
for debt. The debt contemplated by the constitution are those arising issuance of a worthless check is deemed a public nuisance which can be
from contracts (ex contractu). No one is going to prison for non-payment of abated by the imposition of penal sanctions.
contractual debts.
The Supreme Court however also explained that (regardless of their
However, non-payment of debts arising from crimes (ex delicto) is previous explanation on ex delicto debts) the non-payment of a debt is not
punishable. This is precisely why the mala prohibita crime of issuing the gravamen of the violations of BP 22. The gravamen of the offense
worthless checks as defined in BP 22 was enacted by Congress. It is a valid punished by BP 22 is the act of making and issuing a worthless check or a
exercise of police power. check that is dishonored upon its presentation for payment. It is not the
non-payment of an obligation which the law punishes. The law is not
Due to the insufficiency of the Revised Penal Code, BP 22 was enacted to intended or designed to coerce a debtor to pay his debt. The thrust of the
punish the following acts: any person who, having sufficient funds in or law is to prohibit, under pain of penal sanctions, the making of worthless
credit with the drawee bank when he makes or draws and issues a check, checks and putting them in circulation. Because of its deleterious effects on
shall fail to keep sufficient funds or to maintain a credit to cover the full the public interest, the practice is proscribed by the law. The law punishes
amount of the check if presented within a period of ninety (90) days from the act not as an offense against property, but an offense against public
order.
Far East Bank and Trust Co. (FEBTC) vs. Querimit [G.R. No. without requiring the surrender of the certificates of deposit. The subject
certificates of deposit until now remain unendorsed, undelivered and
148582, Jan. 16, 2002] unwithdrawn by respondent Estrella Querimit.
Facts:
Petitioner FEBTC thus failed to exercise that degree of diligence required by
the nature of its business.
Respondent Estrella Querimit opened a dollar savings account in FEBTC for
which she was issued 4 Certificates of Deposit. In 1989, respondent
accompanied her husband to the US for medical treatment. In 1993, her
husband died and Estrella Querimit returned to the Philippines. She went to
petitioner FEBTC to withdraw her deposit but she was told that her husband
had withdrawn the money in deposit. Respondent demanded payment
including interests earned. Respondent filed a complaint upon refusal of
petitioner to pay.

The trial court rendered its judgment in favor of respondent. Petitioner

appealed but the CA affirmed the trial courts decision. It ruled that FEBTC
failed to prove that the certificates of deposit had been paid out of its
funds.

Issue:

Whether or not petitioner bank is liable in paying the certificates of deposit

without the production of such certificates.

Held:

Yes. A certificate of deposit is defined as a written acknowledgement by a

bank or banker of the receipt of a sum of money on deposit which the bank
or banker promises to pay to the depositor, to the order of the depositor, or
to some other person or his order, whereby the relation
of debtor and creditor between the bank and the depositor is created. The
principle that payment, in order to discharge a debt, must be made to
someone authorized to receive it is applicable to the payment of certificates
of deposit.

In this case, the certificates of deposit were clearly marked payable to

bearer, which means to the person in possession of an instrument,
document of title or security payable to bearer or indorsed in blank.
Petitioner should not have paid respondents husband or any third party