Benguet Consolidated Mining Co. vs. Pineda

Facts:

The petitioner, Benguet Consolidated Mining Company (hereafter Benguet), was organized on June 24, 1903 as a sociedad anonima under the Spanish Code of Commerce with a corporate term fixed at fifty years. In 1906 the Philippine Commission enacted the American-style Corporation Law (Act No. 1459), effective April 1, 1906, which (among other things) contained Secs. 75 and 191 addressing existing sociedades anonimas and Sec. 18 restricting extension of corporate life by amendment.

As Benguet’s original fifty-year term neared expiration, its Board in 1946 adopted a resolution to extend corporate life another fifty years and submitted it for registration; the Securities and Exchange Commissioner denied registration following an adverse opinion of the Secretary of Justice (Op. No. 45, s. 1947). The matter lay dormant until 1953, when shareholders empowered the board to effect an extension of not less than 20 nor more than 50 years either by amending the articles or by reforming and reorganizing under Sec. 75 of Act No. 1459.

Pursuant to that authority, Benguet in June 1953 submitted to the Securities and Exchange Commissioner (respondent Pineda) (1) a certification modifying its articles to extend its life fifty years from June 15, 1953, and (2) articles of incorporation to reform as a corporation under Sec. 75. The Commissioner denied registration (relying on Secretary of Justice Op. No. 180, s. 1953), ruling (a) a sociedad anonima cannot extend its life by amendment after Act No. 1459; and (b) Benguet had already elected to continue as a sociedad anonima under Sec. 75 and thus could not later reform to achieve indirect extension. Consolidated Mines, Inc. intervened in support of the denial.

Benguet appealed the Commissioner’s order by appeal under Rule 43 to the Supreme Court, challenging t...(Pro-only)

Issues:

• Does the prohibition in Section 18 of Act No. 1459 (that the life of a corporation shall not be extended by amendment beyond the time fixed in the original articles) apply to sociedades anonimas that were already formed and existing at the time Act No. 1459 took effect?
• If Section 18 is applicable to pre-existing sociedades anonimas, does its retroactive effect impair vested rights or violate constitutional prohibitions (e.g., impairment of contract, equal protection)?
• Did Benguet, by continuing to do business as a sociedad anonima after the enactment of Act No. 1459, thereby elect under Section 75 to remain a sociedad anonima and preclude later ...(Pro-only)

Ruling:

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Ratio:

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Doctrine:

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