Corporation Law: Corporation as a Person

May the corporation be held liable for crimes?

Since a corporation is a mere legal fiction, it cannot be held liable for crimes committed by its officers since it does not have the element of malice. In such case, the responsible officers would be criminally liable.

What if the agents unlawfully acted in the course and scope of their employment?

Because this case involves a bank, imbued with public interest, the banking corporation will also be held liable if the agents acted the unlawful act or omission in the course of their employment.

What is the extent of criminal liability of corporate officers?

Crimes held by corporate officers in line in their corporate duties render them liable. But it does not follow that a corporation cannot be a real party-in-interest for the purpose of bringing a civil action.

What are the possible basis of recovery of a corporation in terms of moral damages?

In ABSCBN versus C.A., the Court stated that the possible basis of recovery of a corporation for moral damages would be under Articles 19, 20 and 21 of the Civil Code, but it will require a clear proof of malice or bad faith.

May the separate entity doctrine be invoked by corporate officers in a criminal case?

In Regasco versus Petron, since the corporate officers have knowledge of the crime, the existence of the corporate entity does not shield them from the unlawful act for them to escape their liability.

What is the ruling in Ching versus Secretary of Justice with respect to P.D. 115?

In a trust receipt, though the entrustee is a corporation, P.D. 115 specifically makes the officers, employees or other officers or persons responsible for the offense, without prejudice to their civil liabilities.

What is the exception laid in Filipinas Broadcasting versus Ago Medical in the corporation's non-entitlement to moral damages?

In this case, a corporation's claim for moral damages arising from libel falls under Article 2219 paragraph 7 of the Civil Code which authorizes recovery of moral damages in libel, slander or other forms of defamation and does not qualify whether plaintiff is a natural or juridical person.

What are the matters pertaining to corporation as a person?

Liability for torts Liability for crimes Constitutional rights Non-entitlement to moral damages Prohibition to practice a profession

May the corporation be entitled to the privilege against self-incrimination?

No. A corporation, being a mere creature of the State, is not entitled to the privilege against self-incrimination.

May a corporation be entitled to moral damages?

No. A corporation, being an artificial person with no feelings, emotions or senses and which cannot experience physical suffering or mental anguish, is not entitled to moral damages.

May the corporation also be impleaded in a criminal case?

No. But while a criminal case may only be filed against its officers, it does not follow that a corporation cannot be real party-in-interest for the purpose of bringing a civil action for malicious prosecution for damages incurred by the corporation because of its officers.

May a corporation practice a profession?

No. Corporate practice of any profession is not allowed since the ethics of any profession is based on individual responsibility, personal accountability and independence.

In the trust receipt executed for the corporation, under Ram's signature are words Vice President Treasurer. By so signing, did the corporate officer make himself personally liable for the trust receipt?

No. Unless he did not undertake to guarantee; debts incurred by directors, officers and employees acting as corporate agents are not their liability but the direct liability of the corporation they represent.

May a corporation be penalized for a crime punishable by imprisonment?

Obviously no. A corporation cannot be arrested and imprisoned hence cannot be penalized for a crime punishable by imprisonment.

What is the extent of criminal liability of stockholders?

Since stockholders do not have a hand in business operations, they are not held liable. However, for them to be liable, it must be shown that they have knowledge of the criminal act and took part in it whether by act or omission.

Who is then generally liable for the criminal acts imputed in the corporation?

Since the management is vested in the Board of Directors, they are then the ones who are responsible for any criminal acts imputed in the corporation.

What does liability for torts or negligence mean?

That a corporation may be held liable for torts committed by its officers for corporate purpose.

What is the ruling in Acebedo Optical versus Court of Appeals regarding corporate practice of a corporation?

That the corporate practice of a profession must never be done based on the policy that the ethical profession is based upon individual responsibility, accountability and independence which are all lost when one acts as an agent, alter ego of unlicensed persons or corporations.

What is the difference between stockholders and directors/ officers?

The "owners" of the corporation are its stockholders. They cannot be charged in their capacities since in a corporation, the management is generally vested in its board of directors, not its stockholders.

What is the general rule for the liability of corporation in the commission of a crime?

The general rule is that since a corporation is a mere legal fiction, it may not be held liable for crimes committed by its officers. Hence, the corporate officers are liable for their criminal acts in line with their corporate duties.

What is the rationale behind P.D. 115 or the Trust Receipt Law for imputing liability to the corporate officers, though the entrustee may be the corporation?

The rationale is that such officers or other employees are vested with the juridical authority and responsibility to devise means necessary to ensure compliance with the law, and, if they fail to do so, they are held criminally accountable.

What are the constitutional rights of a corporation?

The right to due process The equal protection of the law The protection against unreasonable searches and seizures

May the hospital corporation be also liable for the acts committed by its doctor?

While in theory, a hospital corporation may not practice medicine, in reality it utilizes doctors in the conduct of its business. Regardless of its relationship with the doctor, the hospital may be directly liable for the doctor's negligence.

Are there any exceptions to the prohibition against corporate practice of a profession?

Yes, under Republic Act 9266 which allows the registration of architectural professional corporations.

Is the failure committed by a corporation will render the corporate stockholders liable?

Yes. In Naguiat versus NLRC, where the employer failed to grant separation pay in its closure, Clark Field Taxis failed to comply with this obligation, hence, the stockholder actively engaged in management is personally liable.