G.R. No. L-6055 June 12, 1953
Lessons Applicable: Public Utilities (Corporate Law)
FACTS:
- William H. Quasha
- a member of the Philippine bar, committed a crime of falsification of a public and commercial document for causing it to appear that Arsenio Baylon, a Filipino citizen, had subscribed to and was the owner of 60.005 % of the subscribed capital stock of Pacific Airways Corp. (Pacific) when in reality the money paid belongs to an American citizen whose name did not appear in the article of incorporation,
- to circumvent the constitutional mandate that no corp. shall be authorize to operate as a public utility in the Philippines unless 60% of its capital stock is owned by Filipinos.
- Found guilty after trial and sentenced to a term of imprisonment and a fine
- Quasha appealed to this Court
- Primary purpose: to carry on the business of a common carrier by air, land or water
- Baylon did not have the controlling vote because of the difference in voting power between the preferred shares and the common shares
- ART. 171. Falsification by public officer, employee, or notary or ecclesiastic minister. — The penalty of prision mayor and a fine not to exceed 5,000 pesos shall be imposed upon any public officer, employee, or notary who, taking advantage of his official position, shall falsify a document by committing any of the following acts:
- ART. 172. Falsification by private individuals and use of falsified documents. — The penalty of prision correccional in its medium and maximum period and a fine of not more than 5,000 pesos shall be imposed upon:
article in any public or official document or letter of exchange or any other kind of commercial
document.
ISSUE: W/N Quasha should be criminally liable
HELD: NO. Acquitted.
- falsification consists in not disclosing in the articles of incorporation that Baylon was a mere trustee ( or dummy as the prosecution chooses to call him) of his American co-incorporators, thus giving the impression that Baylon was the owner of the shares subscribed to by him
- For the mere formation of the corporation such revelation was not essential, and the Corporation Law does not require it
- The moment for determining whether a corporation is entitled to operate as a public utility is when it applies for a franchise, certificate, or any other form of authorization for that purpose.
- that can be done after the corporation has already come into being and not while it is still being formed
- so far as American citizens are concerned, the said act has ceased to be an offense within the meaning of the law, so that defendant can no longer be held criminally liable therefor.