2004 Rules on Notary Practice

Republic of the Philippines
Supreme Court
Manila
EN BANC
A.M. No. 02-8-13-SC
2004 Rules on Notarial Practice
RESOLUTION
Acting on the compliance dated 05 July 2004 and on the proposed Rules on Notarial Practice of 2004 submitted by the Sub-Committee for the Study, Drafting and Formulation of the Rules Governing the Appointment of Notaries Public and the Performance and Exercise of Their Official Functions, of the Committees on Revision of the Rules of Court and on Legal Education and Bar Matters, the Court Resolved to APPROVE the proposed Rules on Notarial Practice of 2004, with modifications, thus:
2004 RULES ON NOTARIAL PRACTICE
RULE I
IMPLEMENTATION
SECTION 1. Title. - These Rules shall be known as the 2004 Rules on Notarial Practice.
SEC. 2. Purposes. - These Rules shall be applied and construed to advance the following purposes:
(a) to promote, serve, and protect public interest;
(b) to simplify, clarify, and modernize the rules governing notaries public; and
(c) to foster ethical conduct among notaries public.chan robles virtual law library
SEC. 3. Interpretation. - Unless the context of these Rules otherwise indicates, words in the singular include the plural, and words in the plural include the singular.
RULE II
DEFINITIONS
SECTION 1. Acknowledgment. - “Acknowledgment” refers to an act in which an individual on a single occasion:
(a) appears in person before the notary public and presents an integrally complete instrument or document;

(b) is attested to be personally known to the notary public or identified by the notary public through competent evidence of identity as defined by these Rules; and -

(c) represents to the notary public that the signature on the instrument or document was voluntarily affixed by him for the purposes stated in the instrument or document, declares that he has executed the instrument or document as his free and voluntary act and deed, and, if he acts in a particular representative capacity, that he has the authority to sign in that capacity.
SEC. 2. Affirmation or Oath. - The term “Affirmation” or “Oath” refers to an act in which an individual on a single occasion:
(a) appears in person before the notary public;
(b) is personally known to the notary public or identified by the notary public through competent evidence of identity as defined by these Rules; and
(c) avows under penalty of law to the whole truth of the contents of the instrument or document.
SEC. 3. Commission. - “Commission” refers to the grant of authority to perform notarial acts and to the written evidence of the authority.
SEC. 4. Copy Certification. - “Copy Certification” refers to a notarial act in which a notary public:
(a) is presented with an instrument or document that is neither a vital record, a public record, nor publicly recordable;
(b) copies or supervises the copying of the instrument or document;
(c) compares the instrument or document with the copy; and
(d) determines that the copy is accurate and complete.
SEC. 5. Notarial Register. - “Notarial Register” refers to a permanently bound book with numbered pages containing a chronological record of notarial acts performed by a notary public.
SEC. 6. Jurat. - “Jurat” refers to an act in which an individual on a single occasion:
(a) appears in person before the notary public and presents an instrument or document;
(b) is personally known to the notary public or identified by the notary public through competent evidence of identity as defined by these Rules;
(c) signs the instrument or document in the presence of the notary; and
(d) takes an oath or affirmation before the notary public as to such instrument or document.
SEC. 7. Notarial Act and Notarization. - “Notarial Act” and “Notarization” refer to any act that a notary public is empowered to perform under these Rules.
SEC. 8. Notarial Certificate. - “Notarial Certificate” refers to the part of, or attachment to, a notarized instrument or document that is completed by the notary public, bears the notary's signature and seal, and states the facts attested to by the notary public in a particular notarization as provided for by these Rules.
SEC. 9. Notary Public and Notary. - “Notary Public” and “Notary” refer to any person commissioned to perform official acts under these Rules.
SEC. 10. Principal. - “Principal” refers to a person appearing before the notary public whose act is the subject of notarization.
SEC. 11. Regular Place of Work or Business. - The term “regular place of work or business” refers to a stationary office in the city or province wherein the notary public renders legal and notarial services.
SEC. 12. Competent Evidence of Identity. - The phrase “competent evidence of identity” refers to the identification of an individual based on:
(a) at least one current identification document issued by an official agency bearing the photograph and signature of the individual; or
(b) the oath or affirmation of one credible witness not privy to the instrument, document or transaction who is personally known to the notary public and who personally knows the individual, or of two credible witnesses neither of whom is privy to the instrument, document or transaction who each personally knows the individual and shows to the notary public documentary identification.
SEC. 13. Official Seal or Seal. - “Official seal” or “Seal” refers to a device for affixing a mark, image or impression on all papers officially signed by the notary public conforming the requisites prescribed by these Rules.
SEC. 14. Signature Witnessing. - The term “signature witnessing” refers to a notarial act in which an individual on a single occasion:
(a) appears in person before the notary public and presents an instrument or document;
(b) is personally known to the notary public or identified by the notary public through competent evidence of identity as defined by these Rules; and
(c) signs the instrument or document in the presence of the notary public.
SEC. 15. Court. - “Court” refers to the Supreme Court of the Philippines.
SEC. 16. Petitioner. - “Petitioner” refers to a person who applies for a notarial commission.
SEC. 17. Office of the Court Administrator. - “Office of the Court Administrator” refers to the Office of the Court Administrator of the Supreme Court.
SEC. 18. Executive Judge. - “Executive Judge” refers to the Executive Judge of the Regional Trial Court of a city or province who issues a notarial commission.
SEC. 19. Vendor. - “Vendor” under these Rules refers to a seller of a notarial seal and shall include a wholesaler or retailer.
SEC. 20. Manufacturer. - “Manufacturer” under these Rules refers to one who produces a notarial seal and shall include an engraver and seal maker.
RULE III
COMMISSIONING OF NOTARY PUBLIC
SECTION 1. Qualifications. - A notarial commission may be issued by an Executive Judge to any qualified person who submits a petition in accordance with these Rules.
To be eligible for commissioning as notary public, the petitioner:
(1) must be a citizen of the Philippines;
(2) must be over twenty-one (21) years of age;
(3) must be a resident in the Philippines for at least one (1) year and maintains a regular place of work or business in the city or province where the commission is to be issued;
(4) must be a member of the Philippine Bar in good standing with clearances from the Office of the Bar Confidant of the Supreme Court and the Integrated Bar of the Philippines; and
(5) must not have been convicted in the first instance of any crime involving moral turpitude.
SEC. 2. Form of the Petition and Supporting Documents. - Every petition for a notarial commission shall be in writing, verified, and shall include the following:
(a) a statement containing the petitioner's personal qualifications, including the petitioner's date of birth, residence, telephone number, professional tax receipt, roll of attorney's number and IBP membership number;

(b) certification of good moral character of the petitioner by at least two (2) executive officers of the local chapter of the Integrated Bar of the Philippines where he is applying for commission;

(c) proof of payment for the filing of the petition as required by these Rules; and

(d) three (3) passport-size color photographs with light background taken within thirty (30) days of the application. The photograph should not be retouched. The petitioner shall sign his name at the bottom part of the photographs.
SEC. 3. Application Fee. - Every petitioner for a notarial commission shall pay the application fee as prescribed in the Rules of Court.
SEC. 4. Summary Hearing on the Petition. - The Executive Judge shall conduct a summary hearing on the petition and shall grant the same if:
(a) the petition is sufficient in form and substance;
(b) the petitioner proves the allegations contained in the petition; and
(c) the petitioner establishes to the satisfaction of the Executive Judge that he has read and fully understood these Rules.
The Executive Judge shall forthwith issue a commission and a Certificate of Authorization to Purchase a Notarial Seal in favor of the petitioner.
SEC. 5. Notice of Summary Hearing. -
(a) The notice of summary hearing shall be published in a newspaper of general circulation in the city or province where the hearing shall be conducted and posted in a conspicuous place in the offices of the Executive Judge and of the Clerk of Court. The cost of the publication shall be borne by the petitioner. The notice may include more than one petitioner.

(b) The notice shall be substantially in the following form:
NOTICE OF HEARING
Notice is hereby given that a summary hearing on the petition for notarial commission of (name of petitioner) shall be held on (date) at (place) at (time). Any person who has any cause or reason to object to the grant of the petition may file a verified written opposition thereto, received by the undersigned before the date of the summary hearing.
_____________________
Executive Judge
SEC. 6. Opposition to Petition. - Any person who has any cause or reason to object to the grant of the petition may file a verified written opposition thereto. The opposition must be received by the Executive Judge before the date of the summary hearing.
SEC. 7. Form of Notarial Commission. - The commissioning of a notary public shall be in a formal order signed by the Executive Judge substantially in the following form:
REPUBLIC OF THE PHILIPPINES
REGIONAL TRIAL COURT OF ______________
This is to certify that (name of notary public) of (regular place of work or business) in (city or province) was on this (date) day of (month) two thousand and (year) commissioned by the undersigned as a notary public, within and for the said jurisdiction, for a term ending the thirty-first day of December (year)
________________________
Executive Judge
SEC. 8. Period Of Validity of Certificate of Authorization to Purchase a Notarial Seal. - The Certificate of Authorization to Purchase a Notarial Seal shall be valid for a period of three (3) months from date of issue, unless extended by the Executive Judge.
A mark, image or impression of the seal that may be purchased by the notary public pursuant to the Certificate shall be presented to the Executive Judge for approval prior to use.
SEC. 9. Form of Certificate of Authorization to Purchase a Notarial Seal. - The Certificate of Authorization to Purchase a Notarial Seal shall substantially be in the following form:

REPUBLIC OF THE PHILIPPINES
REGIONAL TRIAL COURT OF_____________
CERTIFICATE OF AUTHORIZATION
TO PURCHASE A NOTARIAL SEAL
This is to authorize (name of notary public) of (city or province) who was commissioned by the undersigned as a notary public, within and for the said jurisdiction, for a term ending, the thirty-first of December (year) to purchase a notarial seal.
Issued this (day) of (month) (year).
________________________
Executive Judge

SEC. 10. Official Seal of Notary Public. - Every person commissioned as notary public shall have only one official seal of office in accordance with these Rules.
SEC. 11. Jurisdiction and Term. - A person commissioned as notary public may perform notarial acts in any place within the territorial jurisdiction of the commissioning court for a period of two (2) years commencing the first day of January of the year in which the commissioning is made, unless earlier revoked or the notary public has resigned under these Rules and the Rules of Court.
SEC. 12. Register of Notaries Public. - The Executive Judge shall keep and maintain a Register of Notaries Public in his jurisdiction which shall contain, among others, the dates of issuance or revocation or suspension of notarial commissions, and the resignation or death of notaries public. The Executive Judge shall furnish the Office of the Court Administrator information and data recorded in the register of notaries public. The Office of the Court Administrator shall keep a permanent, complete and updated database of such records.
SEC. 13. Renewal of Commission. - A notary public may file a written application with the Executive Judge for the renewal of his commission within forty-five (45) days before the expiration thereof. A mark, image or impression of the seal of the notary public shall be attached to the application.
Failure to file said application will result in the deletion of the name of the notary public in the register of notaries public.
The notary public thus removed from the Register of Notaries Public may only be reinstated therein after he is issued a new commission in accordance with these Rules.
SEC. 14. Action on Application for Renewal of Commission. - The Executive Judge shall, upon payment of the application fee mentioned in Section 3 above of this Rule, act on an application for the renewal of a commission within thirty (30) days from receipt thereof. If the application is denied, the Executive Judge shall state the reasons therefor.
RULE IV
POWERS AND LIMITATIONS OF NOTARIES PUBLIC
SECTION 1. Powers. - (a) A notary public is empowered to perform the following notarial acts:
(1) acknowledgments;
(2) oaths and affirmations;
(3) jurats;
(4) signature witnessings;
(5) copy certifications; and
(6) any other act authorized by these Rules.
(b) A notary public is authorized to certify the affixing of a signature by thumb or other mark on an instrument or document presented for notarization if:
(1) the thumb or other mark is affixed in the presence of the notary public and of two (2) disinterested and unaffected witnesses to the instrument or document;
(2) both witnesses sign their own names in addition to the thumb or other mark;
(3) the notary public writes below the thumb or other mark: "Thumb or Other Mark affixed by (name of signatory by mark) in the presence of (names and addresses of witnesses) and undersigned notary public"; and
(4) the notary public notarizes the signature by thumb or other mark through an acknowledgment, jurat, or signature witnessing.
(c) A notary public is authorized to sign on behalf of a person who is physically unable to sign or make a mark on an instrument or document if:
(1) the notary public is directed by the person unable to sign or make a mark to sign on his behalf;
(2) the signature of the notary public is affixed in the presence of two disinterested and unaffected witnesses to the instrument or document;
(3) both witnesses sign their own names ;
(4) the notary public writes below his signature: “Signature affixed by notary in presence of (names and addresses of person and two [2] witnesses)”; and
(5) the notary public notarizes his signature by acknowledgment or jurat.
SEC. 2. Prohibitions. - (a) A notary public shall not perform a notarial act outside his regular place of work or business; provided, however, that on certain exceptional occasions or situations, a notarial act may be performed at the request of the parties in the following sites located within his territorial jurisdiction:
(1) public offices, convention halls, and similar places where oaths of office may be administered;
(2) public function areas in hotels and similar places for the signing of instruments or documents requiring notarization;
(3) hospitals and other medical institutions where a party to an instrument or document is confined for treatment; and
(4) any place where a party to an instrument or document requiring notarization is under detention.
(b) A person shall not perform a notarial act if the person involved as signatory to the instrument or document -
(1) is not in the notary's presence personally at the time of the notarization; and
(2) is not personally known to the notary public or otherwise identified by the notary public through competent evidence of identity as defined by these Rules.chan robles virtual law library
SEC. 3. Disqualifications. - A notary public is disqualified from performing a notarial act if he:
(a) is a party to the instrument or document that is to be notarized;
(b) will receive, as a direct or indirect result, any commission, fee, advantage, right, title, interest, cash, property, or other consideration, except as provided by these Rules and by law; or
(c) is a spouse, common-law partner, ancestor, descendant, or relative by affinity or consanguinity of the principal within the fourth civil degree.chan robles virtual law library
SEC. 4. Refusal to Notarize. - A notary public shall not perform any notarial act described in these Rules for any person requesting such an act even if he tenders the appropriate fee specified by these Rules if:
(a) the notary knows or has good reason to believe that the notarial act or transaction is unlawful or immoral;
(b) the signatory shows a demeanor which engenders in the mind of the notary public reasonable doubt as to the former's knowledge of the consequences of the transaction requiring a notarial act; and
(c) in the notary's judgment, the signatory is not acting of his or her own free will.
SEC. 5. False or Incomplete Certificate. - A notary public shall not:
(a) execute a certificate containing information known or believed by the notary to be false.
(b) affix an official signature or seal on a notarial certificate that is incomplete.chan robles virtual law library
SEC. 6. Improper Instruments or Documents. - A notary public shall not notarize:
(a) a blank or incomplete instrument or document; or
(b) an instrument or document without appropriate notarial certification.
RULE V
FEES OF NOTARY PUBLIC
SECTION 1. Imposition and Waiver of Fees. - For performing a notarial act, a notary public may charge the maximum fee as prescribed by the Supreme Court unless he waives the fee in whole or in part.

SEC. 2. Travel Fees and Expenses. - A notary public may charge travel fees and expenses separate and apart from the notarial fees prescribed in the preceding section when traveling to perform a notarial act if the notary public and the person requesting the notarial act agree prior to the travel.
SEC. 3. Prohibited Fees. – No fee or compensation of any kind, except those expressly prescribed and allowed herein, shall be collected or received for any notarial service.
SEC. 4. Payment or Refund of Fees. - A notary public shall not require payment of any fees specified herein prior to the performance of a notarial act unless otherwise agreed upon.
Any travel fees and expenses paid to a notary public prior to the performance of a notarial act are not subject to refund if the notary public had already traveled but failed to complete in whole or in part the notarial act for reasons beyond his control and without negligence on his part.
SEC. 5. Notice of Fees. - A notary public who charges a fee for notarial services shall issue a receipt registered with the Bureau of Internal Revenue and keep a journal of notarial fees. He shall enter in the journal all fees charged for services rendered.
A notary public shall post in a conspicuous place in his office a complete schedule of chargeable notarial fees.
RULE VI
NOTARIAL REGISTER
SECTION 1. Form of Notarial Register. - (a) A notary public shall keep, maintain, protect and provide for lawful inspection as provided in these Rules, a chronological official notarial register of notarial acts consisting of a permanently bound book with numbered pages.
The register shall be kept in books to be furnished by the Solicitor General to any notary public upon request and upon payment of the cost thereof. The register shall be duly paged, and on the first page, the Solicitor General shall certify the number of pages of which the book consists.
For purposes of this provision, a Memorandum of Agreement or Understanding may be entered into by the Office of the Solicitor General and the Office of the Court Administrator.
(b) A notary public shall keep only one active notarial register at any given time.
SEC. 2. Entries in the Notarial Register. - (a) For every notarial act, the notary shall record in the notarial register at the time of notarization the following:
(1) the entry number and page number;
(2) the date and time of day of the notarial act;
(3) the type of notarial act;
(4) the title or description of the instrument, document or proceeding;
(5) the name and address of each principal;
(6) the competent evidence of identity as defined by these Rules if the signatory is not
personally known to the notary;
(7) the name and address of each credible witness swearing to or affirming the person's identity;
(8) the fee charged for the notarial act;
(9) the address where the notarization was performed if not in the notary's regular place of work or business; and
(10) any other circumstance the notary public may deem of significance or relevance.
(b) A notary public shall record in the notarial register the reasons and circumstances for not completing a notarial act.
(c) A notary public shall record in the notarial register the circumstances of any request to inspect or copy an entry in the notarial register, including the requester's name, address, signature, thumbmark or other recognized identifier, and evidence of identity. The reasons for refusal to allow inspection or copying of a journal entry shall also be recorded.
(d) When the instrument or document is a contract, the notary public shall keep an original copy thereof as part of his records and enter in said records a brief description of the substance thereof and shall give to each entry a consecutive number, beginning with number one in each calendar year. He shall also retain a duplicate original copy for the Clerk of Court.
(e) The notary public shall give to each instrument or document executed, sworn to, or acknowledged before him a number corresponding to the one in his register, and shall also state on the instrument or document the page/s of his register on which the same is recorded. No blank line shall be left between entries.
(f) In case of a protest of any draft, bill of exchange or promissory note, the notary public shall make a full and true record of all proceedings in relation thereto and shall note therein whether the demand for the sum of money was made, by whom, when, and where; whether he presented such draft, bill or note; whether notices were given, to whom and in what manner; where the same was made, when and to whom and where directed; and of every other fact touching the same.
(g) At the end of each week, the notary public shall certify in his notarial register the number of instruments or documents executed, sworn to, acknowledged, or protested before him; or if none, this certificate shall show this fact.
(h) A certified copy of each month's entries and a duplicate original copy of any instrument acknowledged before the notary public shall, within the first ten (10) days of the month following, be forwarded to the Clerk of Court and shall be under the responsibility of such officer. If there is no entry to certify for the month, the notary shall forward a statement to this effect in lieu of certified copies herein required.
SEC. 3. Signatures and Thumbmarks. - At the time of notarization, the notary's notarial register shall be signed or a thumb or other mark affixed by each:
(a) principal;
(b) credible witness swearing or affirming to the identity of a principal; and
(c) witness to a signature by thumb or other mark, or to a signing by the notary public on behalf of a person physically unable to sign.
SEC. 4. Inspection, Copying and Disposal. - (a) In the notary's presence, any person may inspect an entry in the notarial register, during regular business hours, provided;
(1) the person's identity is personally known to the notary public or proven through competent evidence of identity as defined in these Rules;
(2) the person affixes a signature and thumb or other mark or other recognized identifier, in the notarial register in a separate, dated entry;
(3) the person specifies the month, year, type of instrument or document, and name of the principal in the notarial act or acts sought; and
(4) the person is shown only the entry or entries specified by him.
(b) The notarial register may be examined by a law enforcement officer in the course of an official investigation or by virtue of a court order.
(c) If the notary public has a reasonable ground to believe that a person has a criminal intent or wrongful motive in requesting information from the notarial register, the notary shall deny access to any entry or entries therein.
SEC. 5. Loss, Destruction or Damage of Notarial Register. - (a) In case the notarial register is stolen, lost, destroyed, damaged, or otherwise rendered unusable or illegible as a record of notarial acts, the notary public shall, within ten (10) days after informing the appropriate law enforcement agency in the case of theft or vandalism, notify the Executive Judge by any means providing a proper receipt or acknowledgment, including registered mail and also provide a copy or number of any pertinent police report.
(b) Upon revocation or expiration of a notarial commission, or death of the notary public, the notarial register and notarial records shall immediately be delivered to the office of the Executive Judge.
SEC. 6. Issuance of Certified True Copies. - The notary public shall supply a certified true copy of the notarial record, or any part thereof, to any person applying for such copy upon payment of the legal fees.
RULE VII
SIGNATURE AND SEAL OF NOTARY PUBLIC
SECTION 1. Official Signature. – In notarizing a paper instrument or document, a notary public shall:
(a) sign by hand on the notarial certificate only the name indicated and as appearing on the notary's commission;
(b) not sign using a facsimile stamp or printing device; and
(c) affix his official signature only at the time the notarial act is performed.
SEC. 2. Official Seal. - (a) Every person commissioned as notary public shall have a seal of office, to be procured at his own expense, which shall not be possessed or owned by any other person. It shall be of metal, circular in shape, two inches in diameter, and shall have the name of the city or province and the word “Philippines” and his own name on the margin and the roll of attorney's number on the face thereof, with the words "notary public" across the center. A mark, image or impression of such seal shall be made directly on the paper or parchment on which the writing appears.
(b) The official seal shall be affixed only at the time the notarial act is performed and shall be clearly impressed by the notary public on every page of the instrument or document notarized.
(c) When not in use, the official seal shall be kept safe and secure and shall be accessible only to the notary public or the person duly authorized by him.
(d) Within five (5) days after the official seal of a notary public is stolen, lost, damaged or other otherwise rendered unserviceable in affixing a legible image, the notary public, after informing the appropriate law enforcement agency, shall notify the Executive Judge in writing, providing proper receipt or acknowledgment, including registered mail, and in the event of a crime committed, provide a copy or entry number of the appropriate police record. Upon receipt of such notice, if found in order by the Executive Judge, the latter shall order the notary public to cause notice of such loss or damage to be published, once a week for three (3) consecutive weeks, in a newspaper of general circulation in the city or province where the notary public is commissioned. Thereafter, the Executive Judge shall issue to the notary public a new Certificate of Authorization to Purchase a Notarial Seal.
(e) Within five (5) days after the death or resignation of the notary public, or the revocation or expiration of a notarial commission, the official seal shall be surrendered to the Executive Judge and shall be destroyed or defaced in public during office hours. In the event that the missing, lost or damaged seal is later found or surrendered, it shall be delivered by the notary public to the Executive Judge to be disposed of in accordance with this section. Failure to effect such surrender shall constitute contempt of court. In the event of death of the notary public, the person in possession of the official seal shall have the duty to surrender it to the Executive Judge.
SEC. 3. Seal Image. - The notary public shall affix a single, clear, legible, permanent, and photographically reproducible mark, image or impression of the official seal beside his signature on the notarial certificate of a paper instrument or document.
SEC. 4. Obtaining and Providing Seal. - (a) A vendor or manufacturer of notarial seals may not sell said product without a written authorization from the Executive Judge.
(b) Upon written application and after payment of the application fee, the Executive Judge may issue an authorization to sell to a vendor or manufacturer of notarial seals after verification and investigation of the latter's qualifications. The Executive Judge shall charge an authorization fee in the amount of PhP 4,000 for the vendor and PhP 8,000 for the manufacturer. If a manufacturer is also a vendor, he shall only pay the manufacturer's authorization fee.
(c) The authorization shall be in effect for a period of four (4) years from the date of its issuance and may be renewed by the Executive Judge for a similar period upon payment of the authorization fee mentioned in the preceding paragraph.
(d) A vendor or manufacturer shall not sell a seal to a buyer except upon submission of a certified copy of the commission and the Certificate of Authorization to Purchase a Notarial Seal issued by the Executive Judge. A notary public obtaining a new seal as a result of change of name shall present to the vendor or manufacturer a certified copy of the Confirmation of the Change of Name issued by the Executive Judge.
(e) Only one seal may be sold by a vendor or manufacturer for each Certificate of Authorization to Purchase a Notarial Seal.
(f) After the sale, the vendor or manufacturer shall affix a mark, image or impression of the seal to the Certificate of Authorization to Purchase a Notarial Seal and submit the completed Certificate to the Executive Judge. Copies of the Certificate of Authorization to Purchase a Notarial Seal and the buyer's commission shall be kept in the files of the vendor or manufacturer for four (4) years after the sale.
(g) A notary public obtaining a new seal as a result of change of name shall present to the vendor a certified copy of the order confirming the change of name issued by the Executive Judge.
RULE VIII
NOTARIAL CERTIFICATES
SECTION 1. Form of Notarial Certificate. - The notarial form used for any notarial instrument or document shall conform to all the requisites prescribed herein, the Rules of Court and all other provisions of issuances by the Supreme Court and in applicable laws.
SEC. 2. Contents of the Concluding Part of the Notarial Certificate. – The notarial certificate shall include the following:
(a) the name of the notary public as exactly indicated in the commission;
(b) the serial number of the commission of the notary public;
(c) the words "Notary Public" and the province or city where the notary public is commissioned, the expiration date of the commission, the office address of the notary public; and
(d) the roll of attorney's number, the professional tax receipt number and the place and date of issuance thereof, and the IBP membership number.
RULE IX
CERTIFICATE OF AUTHORITY OF NOTARIES PUBLIC
SECTION 1. Certificate of Authority for a Notarial Act. - A certificate of authority evidencing the authenticity of the official seal and signature of a notary public shall be issued by the Executive Judge upon request in substantially the following form:
CERTIFICATE OF AUTHORITY FOR A NOTARIAL ACT
I, (name, title, jurisdiction of the Executive Judge), certify that (name of notary public), the person named in the seal and signature on the attached document, is a Notary Public in and for the (City/Municipality/Province) of the Republic of the Philippines and authorized to act as such at the time of the document's notarization.
IN WITNESS WHEREOF, I have affixed below my signature and seal of this office this (date) day of (month) (year).
_________________
(official signature)
(seal of Executive Judge)
RULE X
CHANGES OF STATUS OF NOTARY PUBLIC
SECTION 1. Change of Name and Address. -
Within ten (10) days after the change of name of the notary public by court order or by marriage, or after ceasing to maintain the regular place of work or business, the notary public shall submit a signed and dated notice of such fact to the Executive Judge.

The notary public shall not notarize until:
(a) he receives from the Executive Judge a confirmation of the new name of the notary public and/or change of regular place of work or business; and

(b) a new seal bearing the new name has been obtained.
The foregoing notwithstanding, until the aforementioned steps have been completed, the notary public may continue to use the former name or regular place of work or business in performing notarial acts for three (3) months from the date of the change, which may be extended once for valid and just cause by the Executive Judge for another period not exceeding three (3) months.
SEC. 2. Resignation. - A notary public may resign his commission by personally submitting a written, dated and signed formal notice to the Executive Judge together with his notarial seal, notarial register and records. Effective from the date indicated in the notice, he shall immediately cease to perform notarial acts. In the event of his incapacity to personally appear, the submission of the notice may be performed by his duly authorized representative.
SEC. 3. Publication of Resignation. - The Executive Judge shall immediately order the Clerk of Court to post in a conspicuous place in the offices of the Executive Judge and of the Clerk of Court the names of notaries public who have resigned their notarial commissions and the effective dates of their resignation.
RULE XI
REVOCATION OF COMMISSION AND DISCIPLINARY SANCTIONS
SECTION 1. Revocation and Administrative Sanctions. - (a) The Executive Judge shall revoke a notarial commission for any ground on which an application for a commission may be denied.
(b) In addition, the Executive Judge may revoke the commission of, or impose appropriate administrative sanctions upon, any notary public who:
(1) fails to keep a notarial register;
(2) fails to make the proper entry or entries in his notarial register concerning his notarial acts;
(3) fails to send the copy of the entries to the Executive Judge within the first ten (10) days of the month following;
(4) fails to affix to acknowledgments the date of expiration of his commission;
(5) fails to submit his notarial register, when filled, to the Executive Judge;
(6) fails to make his report, within a reasonable time, to the Executive Judge concerning the performance of his duties, as may be required by the judge;
(7) fails to require the presence of a principal at the time of the notarial act;
(8) fails to identify a principal on the basis of personal knowledge or competent evidence;
(9) executes a false or incomplete certificate under Section 5, Rule IV;
(10) knowingly performs or fails to perform any other act prohibited or mandated by these Rules; and
(11) commits any other dereliction or act which in the judgment of the Executive Judge constitutes good cause for revocation of commission or imposition of administrative sanction.
(c) Upon verified complaint by an interested, affected or aggrieved person, the notary public shall be required to file a verified answer to the complaint. If the answer of the notary public is not satisfactory, the Executive Judge shall conduct a summary hearing. If the allegations of the complaint are not proven, the complaint shall be dismissed. If the charges are duly established, the Executive Judge shall impose the appropriate administrative sanctions. In either case, the aggrieved party may appeal the decision to the Supreme Court for review. Pending the appeal, an order imposing disciplinary sanctions shall be immediately executory, unless otherwise ordered by the Supreme Court.
(d) The Executive Judge may motu proprio initiate administrative proceedings against a notary public, subject to the procedures prescribed in paragraph (c) above and impose the appropriate administrative sanctions on the grounds mentioned in the preceding paragraphs (a) and (b).
SEC. 2. Supervision and Monitoring of Notaries Public. - The Executive Judge shall at all times exercise supervision over notaries public and shall closely monitor their activities.
SEC. 3. Publication of Revocations and Administrative Sanctions. - The Executive Judge shall immediately order the Clerk of Court to post in a conspicuous place in the offices of the Executive Judge and of the Clerk of Court the names of notaries public who have been administratively sanctioned or whose notarial commissions have been revoked.
SEC. 4. Death of Notary Public. - If a notary public dies before fulfilling the obligations in Section 4(e), Rule VI and Section 2(e), Rule VII, the Executive Judge, upon being notified of such death, shall forthwith cause compliance with the provisions of these sections.
RULE XII
SPECIAL PROVISIONS
SECTION 1. Punishable Acts. - The Executive Judge shall cause the prosecution of any person who:
(a) knowingly acts or otherwise impersonates a notary public;
(b) knowingly obtains, conceals, defaces, or destroys the seal, notarial register, or official records of a notary public; and
(c) knowingly solicits, coerces, or in any way influences a notary public to commit official misconduct.
SEC 2. Reports to the Supreme Court. - The Executive Judge concerned shall submit semestral reports to the Supreme Court on discipline and prosecution of notaries public.
RULE XIII
REPEALING AND EFFECTIVITY PROVISIONS
SECTION 1. Repeal. - All rules and parts of rules, including issuances of the Supreme Court inconsistent herewith, are hereby repealed or accordingly modified.
SEC. 2. Effective Date. - These Rules shall take effect on the first day of August 2004, and shall be published in a newspaper of general circulation in the Philippines which provides sufficiently wide circulation.
Promulgated this 6th day of July, 2004.
Davide, Jr. C.J., Puno, Vitug, Panganiban, Quisumbing, Ynarez-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna and Tinga, JJ.

Ammendment to 2004 Rules on Notary Practice

Republic of the PhilippinesSUPREME COURTManila
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of the Court En Banc dated February 19, 2008.
"A.M. No. 02-8-13-SC-Re: 2004 Rules on Notarial Practice. ? The Court Resolved, upon the recommendation of the Sub Committee on the Revision of the Rules Governing Notaries Public, to AMEND Sec. 12 (a). Rule II of the 2004 Rules on Notarial Practice, to wit:
Rule II
DEFINITIONS
xxx
"Sec. 12. Component Evidence of Identity. The phrase "competent evidence of identity" refers to the identification of an individual based on:
(a) at least one current identification document issued by an official agency bearing the photograph and signature of the individual, such as but not limited to, passport, driver?s license, Professional Regulations Commission ID, National Bureau of Investigation clearance, police clearance, postal ID, voter?s ID, Barangay certification, Government Service and Insurance System (GSIS) e-card, Social Security System (SSS) card, Philhealth card, senior citizen card, Overseas Workers Welfare Administration (OWWA) ID, OFW ID, seaman?s book, alien certificate of registration/immigrant certificate of registration, government office ID, certification from the National Council for the Welfare of Disable Persons (NCWDP), Department of Social Welfare and Development (DSWD) certification; or
(b) xxxx."
Quisumbing, J., on official leave. Ynares-Santiago, J., on leave.

Notary Public

LEGAL NOTESNotary Public
By Judge Gabriel T. InglesCebu Daily NewsFirst Posted 02:06pm (Mla time) 04/29/2008
There is no doubt that respondent violated the Code of Professional Responsibility and the Notarial Law when he failed to include a copy of the Deed of Sale in his Notarial Report, and for failing to require the parties to the deed to exhibit their respective community tax certificates. Doubts were cast as to the existence and due execution of the subject deed, thus undermining the integrity and sanctity of the notarization process and diminishing public confidence in notarial documents since the subject deed was introduced as an annex to the Affidavit of Title/Right of Possession of Third Party Claimant relative to NLRC Case No. RAB-CAR-12-0672-00.
A notary public is empowered to perform a variety of notarial acts, most common of which are the acknowledgment and affirmation of a document or instrument. In the performance of such notarial acts, the notary public must be mindful of the significance of the notarial seal as affixed on a document. The notarial seal converts the document from private to public, after which it may be presented as evidence without need for proof of its genuineness and due execution. Thus, notarization should not be treated as an empty, meaningless, or routinary act.
As early as Panganiban v. Borromeo, we held that notaries public must inform themselves of the facts which they intend to certify and to take no part in illegal transactions. They must guard against any illegal or immoral arrangements. It cannot be overemphasized that notarization of documents is not an empty, meaningless or routinary act. It is invested with substantive public interest, such that only those who are qualified or authorized may act as notaries public. It is through the act of notarization that a private document is converted into a public one, making it admissible in evidence without need of preliminary proof of authenticity and due execution. Indeed, a notarial document is by law entitled to full faith and credit upon its face, and for this reason, notaries public must observe utmost care in complying with the elementary formalities in the performance of their duties. Otherwise, the confidence of the public in the integrity of this form of conveyance would be undermined.
Canon 1 of the Code of Professional Responsibility requires every lawyer to uphold the Constitution, obey the laws of the land and promote respect for the law and legal processes. Moreover, the Notarial Law and the 2004 Rules on Notarial Practice require a duly commissioned notary public to make the proper entries in his Notarial Register and to refrain from committing any dereliction or act which constitutes good cause for the revocation of commission or imposition of administrative sanction. Unfortunately, respondent failed in both respects. — Agagon vs. Bustamante, A.C. No. 5510, December 20, 2007

Legal Ethics Digests

CRISTETA D. ORFILA vs. ESTIFANA S. ARELLANO, H.R.M.O. II, respondent.

FACTS:
A heated argument ensued between Orfila and Arellano. Arellano slapped Orfila on her left cheek. Atty. Buendia, the Assistant Clerk of Court, was not present when the incident took place but learned of the same through a text message she received while she was on her way to the office. When she arrived, Atty. Maningas relayed to her what she had witnessed and instructed her verbally, and through a subsequent memorandum, to conduct an investigation on the matter. Atty. Maningas inhibited herself therefrom as Arellano was her kumadre. The Arellanos accused Orfila of falsification of public documents. The Arellanos further charged Orfila with the nonpayment of her loan and of conniving with Atty. Maningas and Atty. Buendia in harassing Arellano in order to evade payment of her obligation. Orfila denied the charges.
Meanwhile, complainants-spouses charged Atty. Maningas and Atty. Buendia of conspiracy, corruption and abuse of position.
HELD:
The conduct and behavior of everyone connected with the office charged with the administration of justice must at all times be characterized by propriety and decorum. The court will not tolerate misconduct committed by court personnel, particularly during office hours within the premises of the court. Such misconduct shows lack of respect for the court, and erodes the good image of the judiciary in the eyes of the public.
Although the slapping may not be work-related, the brazenness of her act is totally unacceptable and should not be countenanced. So is the lending of money by subordinates to superior officers. The same is punishable as a light offense under Section 22, Rule XIV of the Omnibus Rules implementing the Civil Service Law, as amended, and for which Arellano must likewise be penalized. Borrowing money from a subordinate is punishable as a light offense under Civil Service Law. Being the Clerk of Court of the RTC Manila, she was expected to know the Civil Service Law by heart as she had the duty to implement the same among her subordinates. For failing to measure up to the exacting standards of conduct required of her, she must be correspondingly penalized.
The Arellanos have not shown any positive and convincing evidence of conspiracy among Orfila, Atty. Maningas and Atty. Buendia to frame her up and to delay and/or deprive her of her retirement benefits.




REPUBLIC OF THE PHILIPPINES vs. HON. HENRICK F. GINGOYON
[G.R. No. 166429. December 19, 2005.]

FACTS:
The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was conceived, designed and constructed to serve as the country's show window to the world. Despite the apparent completion of the terminal complex way back it has not yet been operated.
The case was raffled to the Pasay City RTC, presided by respondent judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). Rep. Act No. 8974 applies in this case, particularly insofar as it requires the immediate payment by the Government of at least the proffered value of the NAIA 3 facilities to PIATCO and provides certain valuation standards or methods for the determination of just compensation. RTC erroneously applied the provisions of Rule 67 of the Rules of Court, instead of Rep. Act No. 8974, in ascertaining compliance with the requisites for the issuance of the writ of possession. The Government filed a Motion for Inhibition of Hon. Gingoyon. The RTC denied these motions in an Omnibus Order.
Hence, this Petition for Certiorari and Prohibition for the nullification of the RTC orders and for the inhibition of Hon. Gingoyon from taking further action on the expropriation case.
HELD:
As a general rule, repeated rulings against a litigant, no matter how erroneous and vigorously and consistently expressed, are not a basis for disqualification of a judge on grounds of bias and prejudice. Extrinsic evidence is required to establish bias, bad faith, malice or corrupt purpose, in addition to the palpable error which may be inferred from the decision or order itself.
This court has an inherent power to reverse itself, especially when in its honest opinion it has committed an error or mistake in judgment, and that to adhere to its decision will cause injustice to a party litigant. Incompetence may be a ground for administrative sanction, but not for inhibition, which requires lack of objectivity or impartiality to sit on a case.
The mere vehemence of the Government's claim of bias does not translate to clear and convincing evidence of impairing bias. There is no sufficient ground to direct the inhibition of Hon. Gingoyon from hearing the expropriation case. There is no basis for the Court to direct the inhibition of Hon. Gingoyon.

PUBLIC INTERNATIONAL LAW

PUBLIC INTERNATIONAL LAW

• Branch of public law which regulates the relations of stats and of other entities which have been granted an international law.
  Rules based on the natural moral law and on common consent, which govern the relations of sovereign states and other international persons.
  

INTERNATIONAL LEGAL SYSTEMS CONSIST OF:

• Natural moral law principles
  Set of generally agreed-upon norms of conduct
  and certain authoritative processes for enacting and changing these aforementioned norms.

BASIS OF INTERNATIONAL LAW

1. NATURAL LAW SCHOOL- This theory postulates the natural moral law as the basis of PILA. The natural moral law may be said to b the voice of conscience, a rule of human conduct implanted by God in the very nature of man. Thru this law, a man is supposed to do whatever is right and to avoid whatever is evil. Thus, laws not in conformity with the moral nature cannot b binding on sovereign states.
2. POSITIVIST SCHOOL- Insists that the only basis of PILA is the common consent of states. This common consent, can be found in acquiescence to customs.
3. ECLECTIC SCHOOL- Maintains that PILA is premised both on natural moral law and on common consent.

PAQUETE HABANA

• In this case, Two fishing vessels, which during the Spanish and American war, while regularly engaged in fishing in Cuban coast, were seized by U.S. Navy. In Florida, to which they have been brought, they were considered by a U.S. district as prize of war. They appealed to the Supreme Court of US. They were exempted from such capture because of an international custom.
• International law is part of our law, and must be ascertained and administered by courts of justice of appropriate jurisdiction. For this purpose, where there is no treaty and no controlling executive or legislative act or judicial decision, resort must be had to the customs and usages of civilized nations; and as evidence of these, to the works of jurists and commentators who by years of labor, research, and experience have made themselves peculiarly well acquainted with the subjects of which thy treat.
  

WEST RAND CENTRAL GOLD MINING CO. LTD VS. THE KING

• Government officials of Republic of South Africa allegedly seized two parcels of gold owned by West Rand. Subsequently, the Republic was conquered by Great Britain. The company filed a suit against Great Britain to recover said parcels, on th ground that as conqueror it had the duty to assume obligations of the conquered South African Republic.
  
• In this case, particular doctrine alleged had not been adequately proved. Thus, it was held that Great Britain is not bound by the obligations of the Republic of South Africa. Although it is true that whatever has received the common consent of civilized nations must have received assent of Great Britain. But any doctrine so invoked must be one really accepted as binding among nations.
  
• The mere opinions of jurists, however eminent or learned, that it ought to be so recognized are not in themselves sufficient. They must have received the express sanction of international agreement or gradually have grown to be part of international law by their frequent practical recognition in dealing between various nations.

Q: Is International Comity a source of international law?

A: NO. It is distinctly the contrast to the law of nations. But there can be no doubt that many a rule which formerly was a rule of international comity only is nowadays a rule of international law.

Q: What is the difference between SUBJECT and OBJECT of International Law?

A: SUBJECT is an entity directly possessed of rights and obligations in the international legal order. While as an OBJECT is merely indirectly vested with rights and obligations in the international sphere.
Q: Are Private Individuals regarded as OBJECT of International law?

A: No. They are SUBJECT. But while an individual is a subject of international law, his capacity as such is different from that of his state. Thus, he cannot make treaties and cannot possess belligerent rights. But it is clear that he can commit war crimes and piracy, and crimes against humanity and foreign sovereigns; he can own property which international law protects for acts arising ex contractu or ex delicto. He may not be able to pursue his claims and take action to protect his property without intervention of his own State, but it is still his claim and still his interest which the machinery of enforcement is designed to facilitate.

THE NUREMBERG JUDGMENT

• One of the defenses raised by the war criminals in Germany was that they themselves are mere individuals were not directly liable for their acts; that they were merely carrying out the orders of Hitler and that individuals have no international duties.
• International law punishes not only states but also individuals. This rule has long been recognized. Crimes against international law are committed by MEN, not by abstract entities, and only by punishing individuals who commit such crimes can the provisions of international law be enforced.

COUNT BERNADOTTE CASE

• Count Bernadotte was assassinated, while working as part of a United Nations Commission in Israel. The General Assembly requested the International Court of Justice to render an advisory opinion as to whether or not the UN can bring an international claim against the government responsible for the killing.
  It was held that the UN can bring such a claim. Competence to bring an international claim is the capacity to resort to the customary methods recognized by international law for the establishment, the presentation, and the settlement of claims. Among these methods may be mentioned:
  1. protest
  2. request for an inquiry
  3. negotiation
  4. and request for submission to an arbitral tribunal or to the World Court insofar as this may be authorized by its Statute.
• The UN was clearly intended by the Charter to exercise and enjoy functions, and rights which can only be explained on the basis of the possession of a large measure of international personality and the capacity to operate upon an international plane. It must be acknowledged that its members, by entrusting certain functions to it, with the attendant duties and responsibilities, have clothed it with the necessary competence. According, the court has come to the conclusion that the UN is an international person and may bring an international claim even against a non-member, considering that the UN represents the vast majority of the members of the international community.

DEPENDENT STATES

They are subject to the control and sovereignty of some other “superior” states in the conduct of their external and foreign relations. They may be allowed some control in foreign matters they are considered as international persons; if they have no authority whatsoever on this point, their personality is restricted. They may not even be accorded any status as international entities.

TWO KINDS OF DEPENDENT STATES:

PROTECTORATE
SUZERAINTY


PROTECTORATE STATE

Possesses all competence in international affairs which it has not expressly and specifically waived or renounced. The protectorate, to a certain degree may be said to be possessed of an international personality.

SUZERAINTY STATE

Has only such competence as has been specifically conferred upon it by the suzerain. In other words, suzerainty is MORE DEPENDENT than a protectorate, and for exactly this reason, the relationship between the suzerainty and the suzerain is much closer than that existing between the protectorate and its protector.
Only suzerain has been accorded international status. The suzerainty is generally only vassal or tributary in character.


BELLIGERENT COMMUNITIES

When insurgency reaches serious proportions, the rebels, instead of being merely insurgents, may properly be called “belligerents” and their community a “belligerent community” provided the following conditions all concur:

The end must be POLITICAL in character;
The hostilities must be of the CHARACTER OF WAR, and must be carried on in accordance with the laws of war;
The proportions of the revolt must be such as to render the issue uncertain and to make its continuance for a considerable time possible;
The conduct of the hostilities and general government of the revolting community must be in the hands of a responsible organization.

Has been recognized and accorded a certain status in the international order, insofar does it possess an international personality – but only for a limited period.


INSURGENTS COMMUNITIES

Insurgents or rebels may be said to be organized groups who for PUBLIC POLITICAL purposes are in a STATE OF ARMED HOSTILITY towards an established government. As such, they have no rights under international law, but if the civil strife threatens to interfere with the autonomy of foreign intercourse, and has assumed such proportions as to jeopardize the sovereignty of the state over the insurgent community, certain insurgent rights may be tacitly admitted.
No insurgent rights arise, if the ends are not political and are obviously private in character.
Even if a foreign state admits the existence of insurgent rights, the parent state would still be liable for acts committed by the insurgent community within the jurisdiction of said parent state.
In case of hostile acts committed by the insurgents against foreign state, the latter may choose to punish them, or turn them over to the parent state.
A foreign state ought in general to refrain from interfering in the hostilities between the parent state and the insurgent community. Interning of the insurgents may however be allowed. At the discretion of the foreign state, it may of course grant temporary entry or asylum.
Just because an insurgent community has been given certain insurgent rights, it does not necessarily follow that the community has acquired the status of a belligerent. Neither is there an official recognition of the insurgents as a belligerent community as contra-distinguished from a mere insurgent community.


Q: Are Colonies, dependencies, and possessions considered as states?

A: No. They are part and parcel of the territory to which they may belong, and cannot therefore be a state. However, international legal orders grants them in a very restricted degree some international personality.


COLONY

Is a dependent political community, consisting of a number of citizens of the same country who have migrated therefrom to people of another country, but remain subject to the mother state.

DEPENDENCIES

Is a territory distinct from the country in which the supreme sovereign power resides, but belonging rightfully to it, and subject to the laws and regulations which the sovereign may think proper to prescribe.


Q: How does a dependency distinguish from a colony and possession?

A: Dependency is said to be distinguished from a colony in that the former is not necessarily settled by the citizens of the sovereign or mother state, and from a possession in that it is held by a title other than of mere physical conquest.


MANDATES


Were former territorial possessions of the states defeated in the First World War; they were placed under the control of the League of Nations and the so-called Mandatories. After the Second World War, many of these mandates became trust territories under the supervision of the UN, the Trusteeship Council, and the so-called Administering Authorities.
They were created to afford a chance for them to be developed economically and socially by more advanced nations.


TRUST TERRITORY


Is a qualified or quasi-international personality in the sense that it has some rights and obligations in the international order;
However, he Administering Authority exercises the power of sovereignty over them, although of course they cannot be ceded to others without the approval of the UN inasmuch as they do not form part of the territory of the Administering Authority.
The inhabitants of the trust territory do not become nationals or citizens of the Administering Authorities;
They are not generally affected by treaties concluded by the Administering Authorities. It shall be the duty of the Administering Authority to ensure that the trust territory shall play its part in the maintenance of international peace and security.
The Administering Authority may make use of volunteer forces, facilities, and assistance from the trust territory in carrying out the obligations towards the Security Council undertaken in this regard by the Administering Authority, as well as for local defense, and the maintenance of law and order within the trust territory.


PRIVATE CORPORATION

Usually fall under the domain of private international law, particularly where their rights are involved;
However, they are discussed also in public international law when in time of war, their property and other rights are impaired, or when, whether in time of peace or of war, maritime law has been infringed.


PUBLIC CORPORATION

Have delegated political powers and assume quasi-international status.
While usually restricted by the functions enumerated in their respective charters, these companies often performed acts not warranted by said charter. Their home government sanctioned their actuations, and so in time, they more or less were invested with certain powers of sovereignty; like the power to govern, and the power to enter into and conclude wars.

SCHROEDER VS. BISSEL COLLECTOR

• Under Sec. 447 of the American Tariff Act of 1922, it is unlawful for any ship to upload any part of its cargo of goods at a place other than a port of entry. An English vessel unloaded part of its cargo at a place 19 miles away from the coast of the US, whereupon it was seized by the American coast guard. It was alleged that the seizure violated the tenets of international law because it had been made beyond the territorial or maritime zone of the US.
• It was held that the seizure us valid despite the alleged violation. What is important is that a statute of the US has been violated.
• International law is law in so far as we adopt it, and like all common or statute law, it bends to the will of Congress, even if the act may contravene recognized principles of international comity.
  
  

ACT OF STATE DOCTRINE

• Is the doctrine that a state should not inquire into the legal validity of the public acts of another state done within the territory of the latter.
• “Every sovereign state is bound to respect the independence of every other sovereign state, and the courts of one country will not sit in judgment on the acts of Redress of grievances by reason of such acts must be obtained through the means open to be availed of by sovereign powers as between themselves.

Q: Is the “Act of State Doctrine” a principle of International Law?

A: No. Failure to apply the doctrine does not constitute a breach of international obligation, but neither does international law forbid the application of the rule.


Q: What is the usual remedy of the citizen aggrieved by an act of state of a foreign country?

A: It is not for the citizen to go to the courts of his own country, but for him to exhaust the local remedies in the foreign country and failing in this, to repair to the executive authorities of his own state to persuade them to champion his claim in diplomacy on or before an international tribunal.


THE SABBATINO CASE

BANCO NACIONAL DE CUBA VS. SABBATINO

• An American broker entered into a contract with a Cuban Corporation for the sale of Cuban Sugar.
  Because of antagonism between US Government and Cuban Government, The latter “expropriated” the properties and rights of the corporation.
• To make sure that the sugar would be shipped to the US, the broker entered into a contract with Cuban Government instrumentality, promising to make payment to the latter.
• The governmental instrumentality then assigned its rights to another Cuban governmental entity, Banco Nacional de Cuba.
• The bank subsequently instructed its New York agent to deliver the necessary documents to the broker, who in turn was supposed to turn over the payment to the New York agent.
• The agent turned over the documents to the broker, but the broker refused to give the money.
• The Bank then brought this action to recover the payment for the broker, as well as to prevent Sabbatino from making use of said purchase price.
• The first court ruled against the Cuban bank, stating that inasmuch as there was a violation of international law, the act of state doctrine could not be applied.
• CA affirmed the decision.
• On appeal to the US SC, the court held that the “act of state” doctrine can be applied for while this is not a recognized principle of international law, neither dos international law prohibits its application.

SABBATINO AMENDMENT

• Requires American Courts to decide a case on the merits if there is an alleged violation of the principles of international law in connection with expropriation or confiscation by a foreign state of private properties.
• An important exception is made in any case with the President determines that application of the act of state doctrine is required in that particular case by the foreign policy interests of the US , and a suggestion to this effect is filed on his behalf in that case with the court.
• Constitutional and can be given retroactive effect.
  

CORPORATION LAW part II

CORPORATION BY ESTOPPEL

• The doctrine of corporation by estoppel is based on equitable consideration and resorted to in fairness to all concerned. It applies against a third party dealing with the ostensible corporation "only when tries to escape liability on a contract from which he has benefited on the irrelevant ground of defective incorporation.
• The rule that a third party cannot deny the corporate existence of the association because it had contracted and dealt with it in such a manner as to recognize and in effect admit its existence does not apply if the third party "is not trying to escape liability from the contract but rather is the one claiming from the contract" ( INTERNATIONAL EXPRESS TRAVEL AND TOURS VS. CA)

SEC. 21

Corporation by estoppel - All persons who assume to act as a corporation knowing it to be without authority to do so shall be liable as general partners for all debts, liabilities and damages incurred or arising as a result thereof; Provided, however, that when any such ostensible corporation is sued on any transaction entered by it as a corporation or on any tort committed by it as such it shall not be allowed to use as a defense its lack of corporate personality.

QUALIFICATION OF DIRECTORS

1. Must own at least 1 shares of capital stocks of the corporation of which he is a director
2. Standing in his name in the books of corporation

Sec. 25

Every director must own at least 1 share of the capital stock of the corporation of which he is a director, which share shall stand in his name in the books of the corporation. Any director who ceases to be the owner of at least 1 share of the capital stock of the corporation of which he is a director xxx

• Apparent from the provision is that a director who ceases to be an owner of a share of stock becomes automatically disqualified to be and act as a director. Thus, if he assigns his shares and the same is recorded in the books of the corporation, he can not act for and in behalf of the corporation despite the fact that he may remain the beneficial owner of the shares assigned or transferred. Whoever is the registered owner as "appearing in the books" of the corporation has the right to vote or be voted for.

Q: Can a transferor in the VTA still be qualified to be a director?

A: No. The immediate effect of VTA is that the transferor becomes a beneficial owner, thus, he becomes disqualified or ineligible to be a director. Under the NCC, which ommitted the phrase "in his own right", what is material is the legal title to, not the beneficial ownership of the stocks as appearing in the books of the corporation. That is whoever owns the shares as appearing in the books of corporation, becomes eligible to be elected and act as a director. (LEE VS. CA)

Q: What is the purpose of VTA?

A: The purpose of VTA is to confer upon the trustee the right to vote and other rights pertaining to shares, for a period not exceeding 5 years.

Q: What is the effect of VTA?

A: The certificate of stock is cancelled and a new one will be issued to the transferee. Thereafter, it shall be noted in the books of corporation. Once entered into VTA, the transferor ceases to be owner of at least 1 share of stocks standing in his name in the books of corporation. He becomes a mere beneficial owner. He ceases to have anything to do with the management of the enterprise. He ceases to become a director or becomes ineligible to as such.

Q: When does VTA expires?

A: Upon full payment of the loan.

Q: What are the conditions or requirements of VTA?

A: It must be in writting and notarized, specifying theterms and conditions. The certificate of agreement must be filed with the corporation and the SEC.

Q: What is the effect if the certificate is not filed?

A: It becomes ineffective and unenforceable.

SERVICE OF SUMMONS

Q: To whom summons may be served if the defendant is a corporation, partnership or association, organized under the laws of the Philippines with a juridical personality?

A: Service of summons may be made upon;

1. President
2. Managing Partner
3. General Manager
4. Corporate Secretary
5. Treasurer
6. In-house Counsel

Q: Can liberal construction be invoked or utilized as to the service of summons?

A: No. Strict compliance is necessary to confer jurisdiction. Service must be made to the one who is named in the statute. (E.B VILLAROSA & PARTNERS CO.LTD VS. BENITO)

COMPENSATION OF DIRECTORS

• In the absence of any provision in the by-laws fixing their compensation, the directors shall not receive any compensation, as such director, except for reasonable per diems xxx

" AS SUCH DIRECTORS"

• Western Institute of Technology vs. Salas, explains the phrase "as such director" when SC held valid the questioned resolution, which was passed by the Board of directors, who are themselves the Chairman, Vice Chairman, Secretary and Treasurer, granting compensation for their services. The compensation was for the services rendered by them as officers of the corporation and not as such directors.

LIABILITY OF DIRECTORS/ TRUSTEES AND OFFICERS

• As a General Rule, Corporate Directors, Officers and Agents are not liable for obligations incurred by corporation through their acts if they did so within the scope of their authority in good faith.

Q: When can they be held liable?

A: Personal liability of corporate directors, trustees or officers with the corporation may validly attach, as a rule only when;

1. He ASSENTS to a patently unlawful act of the corporation; for bad faith or gross negligence in directing its affairs; or for conflict of interest resulting in damages to the corporation, its stockholders or other persons.
2. He CONSENTS to the issuance of watered stocks, or who having knowledge, thereof, does not file his written objection thereto.
3. He AGREES to hold himself personally and secondarily liable to the corporation.
4. He IS MADE BY SPECIFIC PROVISION OF LAW to personally answer for the corporate action.

Llamado vs. Ca

• In this case, the Corporate Secretary and the Treasurer issued and signed checks with ISF. The court held them personally liable. This is because corporate officers are made so liable as such under Sec. 1 of BP. 22, which provides that;
• " Where a check is drawn by a corporation, company or entity, the person or persons who actually signed the checks in behalf of such drawer shall be liable under this act."

Uichico vs. CA

• In this case, the court held corporate directors and officers liable for the termination of its employees for the feigned ground of serious business losses.
• In Labor cases, corporate directors and officers are solidarily liable with the corporation for termination of employees done with malice or bad faith.

DOCTRINE OF SECONDARY MEANING

• A word or phrase originally incapable of exclusive appropriation with reference to an article in the market, because of geographically or otherwise descriptive might nevertheless have been used so long and so exclusively by one producer with reference to his acrticle that, in that trade and to that branch of purchasing public, the word or phrase has become to mean that the article was his product.

DOCTRINE OF CORPORATE OPPORTUNITY

• Rest fundamentally on unfairness, in particular circumstances of an officer/director taking advantage of an opportunity for his own personal profit when the interest of the corporation justly calls for protection.

CORPORATE ENTITY THEORY

• As a legal entity, the corporation is possessed with a personality seperate and distinct from the individual stockholders/members and is not affected by the personal rights obligations or transactions of the latter.

PIERCING THE VEIL OF CORPORATE FICTION

• Notion of corporate legal entity is not at all times respected. Corporate entity theory is confined to legitimate transactions and is subject to equitable limitations to prevent its being used as a cloak or cover for fraud or illegality, or to work an injustice.
• It is a fundamental principle in corporation law that a corporation is an entity seperate and distinct from its stockholders or members and from other corporation to which it may be connected. But when the notion of legal entity is being used to defeat public convenience, justify wrong, protect fraud or defend crime, the law will regard the corporation as a mere association of persons, or in the case of two corporations, merge them into one, the one being merely regarded as part or instrumentality of the other. Same is true when a corporation is a mere dummy and serves no business purpose and is intended only as a blind, or an alter-ego or business conduit for the sole benefit of the stockholders.

INSTRUMENTALITY RULE

• States that when one corporation is so organized and controlled and its affairs are conducted so that in fact a mere instrumentality or adjunct of the other, the fiction of corporate entity of the instrumentality may be disregarded. The control necessary is to invoked the rule is not majority or complete stock control but such domination of finances, policies and practices that the controlled corporation has, so to speak, no seperate mind, will or existence of its own and is but a conduit for its principal. The control and the breach of duty must proximate cause the the injury or loss for which the complaint is made.

TEST IN DETERMINING THE APPLICABILITY OF THE RULE:

1. Control, not merely majority but complete control and domination not only of finances but of policies and practices so that the corporate entity so controlled has no seperate mind, will or existence of its own.
2. Such control was used to commit fraud or wrong to perpetuate the violation of a statutory or positive duty, or dishonest or unjust act in contravention to plaintiff's legal rights; and
3. Said control and breach of duty must proximately cause the injury or loss complained of.

***Absent any one, piercing the veil of corporate fiction will not be justified.

"IN HIS OWN RIGHT" vs. "STAND IN HIS NAME ON THE BOOKS OF CORP"- with regard to qualification of director/trustee

• The phrase "in his own right" was already deleted under Sec. 23 with regard to the qualification of a director or trustee. Hence, there is a clear indication that in order to be eligible as director, what is material is the LEGAL TITLE, not the BENEFICIAL OWNERSHIP, of stock as appearing on the books.

ULTRA-VIRES ACTS- Doctrine of Limited Capacity

• Those that can not be executed or performed by a corporation because they are not within its express, inherent or implied powers as defined by its charter or articles of incorporation. It allows collateral attack upon the authority of corporation to engage in such particular endeavor. May not be necessarily illegal but merely beyond the power of the corporation to perform.

Q: May ultra-vires acts which are not illegal per se become binding and enforceable?

A: Yes. Mere ultra-vires acts or those which are not illegal per se and void ab initio, but are not merely within the scope of AOI are voidable and may become binding and enforceable when ratified by the stockholders. Unless, thepublic or third parties are therby prejudiced. ( PRIVANO, ET AL VS. DE LA RAMA STEAMSHIP CO.)

Q: May ultra-vires acts which are illegal be subject to ratification?

A: No.

Q: Does the liability of an accomodation party apply in a corporation?

A: No. An accomodation party liable on the instrument to a holder for value although such holder at the time of taking the instrument knew him to be only an a accomodation party, does not include nor apply to corporation which is an accomdation party. This is because the issue or indorsement of negotiable paper by a corporation without consideration and for the accomodation of another is ultra-vires. Hence, one who has taken the instrument with knowledge of the accomodation nature thereof can not recover against a corporation. Except, when an officer or agent of a corporation execute or indorse it with authority.

Q: Do President and Vice President have the power to execute for mere accomodation a negotiable instrument of corporation for ther individual debts or transactions arising from or in relation to matters in which the corporation has no legitimate concern?

A: None. In fact, it can not be enforced against corporation, escpecially since it is not involved in any aspect of the corporate business or operations. Signatories thereof shall be primarily liable therefor, as well as the consequences arising from their acts in connection therewith. (CRISOLOGO-JOSE VS. CA)

CONSEQUENCES OF ULTRA VIRES ACT:

1. ON CORPORATION ITSELF

• May suspend or revoke, after proper notice and hearing, the franchise or certificate of registration of corporation for serious misrepresentation as to what the corporation can do or is doing to the great damage or prejudice of general public.

2. ON THE RIGHTS OF STOCKHOLDERS

• Stockholder may bring either an individual or derivative suit to enjoin a threatened ultra-vires act or contract.
• If act or contract has already been performed, a derivative suit for damages against the directors may be filed, but their liability will depend on whether they acted in good faith and with reasonable diligence in entering into the contract.

3. ON THE IMMEDIATE PARTIES

• If the contract is fully executed on both sides, the contract is effective and the courts will not interfere to deprive either party of what has been under it;
• If the contract is executory on both sides, as a rule, neither party can maintain an action for its non-performance; and,
• Where the contract is executory on one side only and has been fully performed on the other, the courts differ as to whether an action will lie on the contract against the party who has received benefits of performance under it. Majority of the courts, however, hold that the party who has received benefits from the performance is "estopped" to set up that the contract is ultra vires to defeat an action on the contract. This is more in conformity with the doctrine that no person shall be allowed to enrich himself at the expense of the other.

BY-LAWS

• Rules and ordinance made by a corporation for its own government to regulate the conduct and define the duties of the stockholders or members towards the corporations and among themselves.
• Express power granted to all corporations registered under the corporation code.

Q: Is the adoption of By-Laws mandatory?

A: Yes.

Q: When should the by-laws be adopted?

A:

1. PRIOR TO THE INCORPORATION - The same must be signed by all incorporators without the need of affirmative vote of the majority of the outstanding capital stock or the majority of the members in case of a non-stock corporation
2. AFTER INCORPORATION - Stockholder's or member's consent or approval would be required. In such case, it must be signed by the stockholders or members voting for them. The corporation must adopt with in a period of one month after receipt of notice of its due incorporation.

Q: What will happen if adopted/filed not in accordance with the provisions of Sec. 14?

A: Failure to comply may result to suspension or revocation of its corporate franchise after proper notice and hearing.

Q: Will it result to automatic dissolution?

A: No outright demise of corporate existence. The incorporators must be given a chance to explain their neglect or omission. (LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOC., INC. VS. CA)

Q: When do by-laws become effective?

A: Upon approval of the SEC.

Q: What if the SEC failed to act within the period of 6 months, does its inaction result to effectivity?

A: No. Last paragraph of Sec. 16 with regard to the inaction of SEC within 6 months applies only to Articles of Incorporation. Still, approval of SEC is necessary for the effectivity of by-laws.

TWO MODES OF AMENDING OR REPEALING BY-LAWS/ADOPTING A NEW ONE:

1. MAJORITY VOTE of the directors or trustees and majority vote of outstanding capital stock or members in a non-stock corporation at a regular or special meeting duly called for the purpose.
2. DELEGATION to the board of directors or trustees the power to amend or repeal any by-laws or adopt a new one.

Q: Who may delegate to the board of directors or trustees such powers?

A: The owners of 2/3 of outstanding capital stock or 2/3 of members in a non-stock corporation.

Q: Can the BOD/BOT by itself amend the by-laws?

A: Yes.

Q: Are stockholders presumed to know the provisions of by-laws?

A: Yes. Conclusively presumed. ( FLEISCHER VS. BOTICA NOLASCO, INC.)

Q: What about third parties?

A: They are not presumed to know the by-laws.

ELEMENTS OF A VALID BY-LAWS - CIGIR

1. Must not contrary to lae, public policy or morals.
2. Must not be inconsistent with the Articles of Incorporation.
3. Must be general and uniform in its effect or applicable to all alike or those similarly situated.
4. Must not impair obligations and contracts or vested rights.
5. Must be reasonable.

Q: May the provision of by-laws provides meeting be held anywhere in the Philippines?

A: No. Contrary to the Law (Sec. 51). Meeting which may be held anywhere in the Philippines applies only to a non-stock corporation.

Q: May by-laws provide non-member be a President?

A: No. Contrary to law. ( GOKONGWEI VS. SEC )

Q: May the provision of by-laws provide for continuing compensation even after their service?

A: No. Contrary to law. ( BARETTO VS. LA PREVISORA FILIPINO )

Q: In case of discrepancy between AOI and by-laws, what should govern?

A: Articles of Incorporation.

MEETINGS

• Applies to every duly convened assembly either of stockholders, members, directors or trustees, managers, etc. for any legal purposes, or the transaction of business of common interest.

STOCKHOLDER'S REGULAR MEETING

• Those held ANNUALLY on a date fixed in by laws, or if not so fixed, on any date of April of every year as the BOD/BOT may determine.

STOCKHOLDER'S SPECIAL MEETING

• Shall be held any time deemed necessary or as provided in the by-laws.

Q: May the notice of any meeting be waived?

A: Yes. It may be waived expressly or impliedly by the stockholder or member.

Q: What is the notice requirement in meeting?

A: 2 weeks prior if Regular Meeting/ 1 week prior if Special Meeting.

Q: May sending of notices be shortened or extended?

A: Yes. By-laws may extend or shorten notice whether for Regular or Special Meetings.

REQUIREMENTS FOR VALID STOCKHOLDER'S MEETING:

1. Held on the date fixed in the by-laws or in accordance with law.
2. Prior notice must be given
3. Must be held at the proper place
4. Must be called by proper party
5. Quorom and voting requirements must be met.

Q: Where should stockholder's meetings shall be held?

A: Must at all times, be held in the city or municpality where the principal office of the corporation is located. However, Non-stock members are given privelege to hold their meetings anywhere in the Philippines, provided proper notice is sent to all membersindicating the date, time and place of meeting which shall be within the Philippines.

Q: Who presides at the meeting of directors?

A: President

PERSON OR PERSONS WHO MAY CALL THE MEETING:

1. Person or persons authorized under a by-law provision;
2. Absent of any provision in the by-laws, it may be called by the president;
3. By the secretary on order of the President or on written demand of the stockholders representing or holding at least a majority of the outstanding capital stock or majority of the members entitled to vote in a non-stock corporation, or the stockholder or member making the demand if there is or secretary if he refuses to do so, under Sec.28; and
4. On order of the SEC pursuant to Sec. 50 of the code.

Q: Who may call a meeting if there is no person authorized to do so?

A: For any cause, the SEC, upon petition of a stockholder or member, and on showing of "good cause" therefor, may issue an order to the petitioning stockholder or member directing him to call a meeting of the corporation by giving proper notice required by this code or by the by-laws.

Q: In such case, who shall preside?

A: The petitioning stockholder or member shall preside thereat until at least a majority of the stockholders or members present have chosen one of their number as presiding officer.