Rebus Sic Stantibus

The contract can only be valid if the conditions prevailing at the time of contracting continue to exist at the time of performance. If the conditions have changed that it becomes manifestly beyond the intention of the parties, the obligor may be released. This applies whether the change happens in whole or in part. Requisites: […]

Semper Praesumitur Pro Matrimonio

means “the law always presume marriage”. Semper = “always”; Praesumitur = presume; pro matrimony = “for marriage” In Perido vs. Perido, the children of Lucio Perido and Marcelina are presumed to be legitimate and within a valid marriage because the law presumes marriage. The testimony of Leonora Perido that she did not witness any wedding […]

“Yamashita Standard”

Also known as “Command Line Responsibility” or “Command Responsibility, is when the law of war imposes on an army commander a duty to take such appropriate measures as are within his power to control the troops under his command for the prevention of acts that are violations of the law of war and which are […]

Business Judgment Rule

The will of the majority of the Board members control corporate affairs and contracts intra vires and the courts will not interfere unless such contracts are unconscionable and oppressive amounting to destruction of rights of minority. – Ingersoll vs. Malabon Sugar and Lucia Magaling vs. Peter Ong

Trust Fund Doctrine

Trust Fund Doctrine considers the subscribed capital as a trust fund for the payment of debts of the corporation to which the creditors may look for satisfaction. (NTC vs. CA) How can Trust Fund Doctrine be violated in declaring dividends? If dividends are declared out of capital. Dividends must be declared out of retained earnings […]

Dividends

These are surplus corporate profits (coming from unrestricted retained earnings) which are [SDD] set apart, declared, and ordered to be distributed to stockholders. Profits are not dividends. As long as a profit is not set apart, declared, and distributed, it shall never be considered dividends. No matter how big is the profit, if the directors […]

Treasury Shares

Treasury shares are those previously issued by the company and fully paid by subscribers but are subsequently reacquired by the issuing corporation through PDFRL (purchase, donation, forfeiture, redemption, or lawful means) Nature of treasury shares they are not original shares or subscription shares not an asset because a corporation may not be counted as a […]

Bad Faith

It is factual and evidentiary. It does not mean bad judgment or negligence because it imports a dishonest purpose or some moral obliquity and conscious wrongdoing. It means breach of a known duty through some ill motive or interest. It partakes of the nature of fraud. Inability to pay obligation is not synonymous with fraud. […]

Gross Negligence

From the Court’s standpoint, the defendant’s casual manner, insouciance and nonchalance, nay, indifference, to the predicament of the distressed corporation glaringly exhibited a lackadaisical attitude from a top office of a corporation, a conduct totally abhorrent in the corporate world, considering the fact that he is not a novice, but a seasoned businessman in his […]

Doctrine of Apparent Authority

The Doctrine of Apparent Authority is applied when a corporation knowingly permits one of its officers or agent to act within the scope of apparent authority. This doctrine is present when the corp. holds the agent out to the public as someone who possesses the power to do such acts. As a consequence, the corporation […]