accomplish said purpose, . . . [Sec. 3 (1) of Rep. Act No. 6395, as amended.]
In determining whether or not an NPC act falls within the purview of the above provision, the Court must decide whether or not a logical
and necessary relation exists between the act questioned and the corporate purpose expressed in the NPC charter. For if that act is one which is lawful
in itself and not otherwise prohibited, and is done for the purpose of serving corporate ends, and reasonably contributes to the promotion of those
ends in a substantial and not in a remote and fanciful sense, it may be fairly considered within the corporation's charter powers [Montelibano v.
Bacolod-Murcia Milling Co., Inc., G.R. No. L-15092, May 18, 1962, 5 SCRA 36.]
In the instant case, it is an undisputed fact that the pier located at Calaca, Batangas, which is owned by NPC, receives the various shipments of coal
which is used exclusively to fuel the Batangas Coal-Fired Thermal Power Plant of the NPC for the generation of electric power. The stevedoring
services which involve the unloading of the coal shipments into the NPC pier for its eventual conveyance to the power plant are incidental and
indispensable to the operation of the plant The Court holds that NPC is empowered under its Charter to undertake such services, it being reasonably
necessary to the operation and maintenance of the power plant.
#59: THE GOVERNMENT OF THE PHILIPPINE ISLANDS (on relation of the Attorney-General), plaintiff, vs. EL HOGAR FILIPINO,
defendant.
G.R. No. L-26649 July 13, 1927
STREET, J.:
This is a quo warranto proceeding instituted originally in this court by the Government of the Philippine Islands on the relation of the Attorney-
General against the building and loan association known as El Hogar Filipino, for the purpose of depriving it of its corporate franchise, excluding it
from all corporate rights and privileges, and effecting its final dissolution, due to alleged violations committed by said corporation.
ISSUE: WON the corporation must be dissolved on the grounds enumerated by the Government.
First cause of action: alleged illegal holding by the respondent of the title to real property for a period in excess of five years after the property had
been bought in by the respondent at one of its own foreclosure sales.
In 1920, respondent El Hogar Filipino was the holder of a recorded mortgage upon a tract of land in the San Clemente, Tarlac, as security for a loan
to its shareholders who were the owners of said property. The borrowers having defaulted in their payments, respondent foreclosed the mortgage and
purchased the land at the foreclosure sale on November 18, 1920, and the deed conveying the property to respondent was executed and delivered
December 22, 1920. Respondent sent the deed to the register of deeds of the Province of Tarlac, with the request that the certificate of title then
standing in the name of the former owners be cancelled and that a new certificate of title be issued in its name. The certificate of title to the land was
issued on May 7, 1921.
In 1921, El Hogar Filipino authorized agents to find a buyer of the said land but since they did not succeed in finding one, the land was advertised for
sale. The first offer was made by one Alcantara and the board accepted the offer in 1926. Upon Alcantara’s failure to pay, however, respondent
treated the contract with him rescinded. It was only on July 30, 1926, when the property was finally sold to Felipa Alberto.
HELD: The Attorney-General points out that the respondent acquired title on December 22, 1920, when the deed was executed and delivered, by
which the property was conveyed to it as purchaser at its foreclosure sale, and this title remained in it until July 30, 1926, when the property was
finally sold to Felipa Alberto. The interval between these two conveyances is thus more than five years.
It has been held by this court that a purchaser of land registered under the Torrens system cannot acquire the status of an innocent purchaser for value
unless his vendor is able to place in his hands an owner's duplicate showing the title of such land to be in the vendor. It results that prior to May 7,
1921, El Hogar Filipino was not really in a position to pass an indefeasible title to any purchaser. In this connection it will be noted that section 75 of
the Act of Congress of July 1, 1902, and the similar provision in section 13 of the Corporation Law, allow the corporation "five years after receiving
the title," within which to dispose of the property. A fair interpretation of these provisions would seem to indicate that the date of the receiving of the
title in this case was the date when the respondent received the owner's certificate, or May 7, 1921, for it was only after that date that the respondent
had an unequivocal and unquestionable power to pass a complete title. The failure of the respondent to receive the certificate sooner was not due in
any wise to its fault, but to unexplained delay on the part of the register of deeds. For this delay the respondent cannot be held accountable.
It is urged for the respondent that the period between March 25, 1926, and April 30, 1926, should not be counted as part of the five-year period. This
was the period during which the respondent was under obligation to sell the property to Alcantara, prior to the rescission of the contract by reason of
Alcantara's failure to make the stipulated first payment. Upon this point the contention of the respondent is, in our opinion, well founded. The
acceptance by it of Alcantara's offer obligated the respondent to Alcantara; and if it had not been for the default of Alcantara, the effective sale of the
property would have resulted.
The evident purpose behind the law restricting the rights of corporations with respect to the tenure of land was to prevent the revival of the entail
(mayorazgo) or other similar institution by which land could be fettered and its alienation hampered over long periods of time. In the case before us
the respondent corporation has in good faith disposed of the piece of property which appears to have been in its hands at the expiration of
the period fixed by law, and a fair explanation is given of its failure to dispose of it sooner. Under these circumstances the destruction of the
corporation would bring irreparable loss upon the thousands of innocent shareholders of the corporation without any corresponding benefit to the
public. The discretion permitted to this court in the application of the remedy of quo warranto forbids so radical a use of the remedy.
Second cause of action: the respondent owns and holds a business lot, with the structure thereon, in the financial district of Manila in excess of its
reasonable requirements and in contravention of subsection 5 of section 13 of the corporation Law. (Contention: that the construction of the new