Splitting Legal Personality
Christian Andrew Labitoria Gallardo[1]
A 17th century philosopher once remarked that a heart has its reasons which reason knows nothing of. This Blaise Pascal quote was made famous among lawyers and law students however when it was quoted in a Supreme Court decision[2] regarding the illegal termination of a 30-year old teacher who fell in love with her 16-year old grade six student. While indeed passion and sentiments are wonderful phenomena, the mind has its own complexities that are beyond human understanding as of the moment.
One of such confounding complexity is a mental health condition called Dissociative Identity Personality, commonly known as Multiple Personality Disorder. Under which, one body may associate itself with two or more identities, each of which has its own personal history, traits and character.[3] This is pretty much the one commonly depicted in psychological thriller films, where an innocent-looking character, which may even be the protagonist himself, turns out to be the perpetrator of a grave crime which he knows nothing about because it was committed by one of his several identities. A more interesting study however reveals that one identity may have a different health condition with another identity occupying the same human body.[4] These physiological changes reveal the intense power of the mind over the human body.
If an acute health condition can be cured by altering one’s identity, can a legal action be bypassed by changing one’s legal personality? Well, as of now, there is no law or court decision recognizing the legal personality of each identity within the same human body. The law however recognizes the concept of a “separate juridical personality” among corporations.
Corporations defined
Okay, the intro has been quite long, but in this article we shall discuss the concept of a corporation as well as its several attributes, including the notable principle of a “separate juridical personality”. First of, what is a corporation?
Commonly, corporations are famous (or infamous) for being a multi-million tool for the greedy to solicit twice its capital. However, the Revised Corporation Code even removes the minimum paid-up capital for corporations.[5] This means that aside from the administrative fees for registration, one can make a corporation even without paying anything. Under the law, a corporation is an artificial being created by law with the power of succession, and with powers, attributes and properties expressly authorized by law or incidental to its existence.[6] That sounds fairly complicated, but I believe we can understand how corporations work better by examining its two main attributes: (I) Separate juridical personality with its incidental power of succession and (II) Centralized management under the tenets of the law.
I. Separate Juridical Personality
A corporation has a separate juridical personality which is different from its stockholders. This means that it is an entity independently recognized by law. The repercussion of having a separate identity recognized by law can stretch one’s imagination. Corporations can sue or be sued on its own, and it can own and manage properties under its own name. Moreover, it has the “right of succession”, meaning that it can survive beyond the lifetime of its incorporators and stockholders.
Given that it can be sued on its own, can it then be used as a shield for fraudulent or illegal activities? Obviously not. Stay in touch to know more about the concept of “piercing the veil of corporate fiction”.
Photo by Mille Sanders from unsplash.com
[1] Christian Andrew Labitoria Gallardo is a recent graduate of the Ateneo School of Law with a Juris Doctor degree, and is currently an associate of the Sangalang and Gaerlan, Business Lawyers, a law firm specializing in labor, corporate and business law. You may reach him through a phone call or message (09157042132) or via email (andrew.gallardo@paladinslaw.org) [2] Chua-Cua v Clave, G.R. No. 49549 (1990). [3] Peter Reuell, The Harvard Gazette, A Story that Doesn’t Add Up, accessible at https://news.harvard.edu/gazette/story/2012/08/a-story-that-doesnt-hold-up/ (2012). [4] Daniel Goleman, The New York Times, Probing the Enigma of Multiple Personality, accessible at https://www.nytimes.com/1988/06/28/science/probing-the-enigma-of-multiple-personality.html (1988). [5] Section 12, RA 11232, Revised Corporation Code of the Philippines. [6] Section 2, RA 11232.
