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CORPORATION

 LAW  CASE  DIGESTS  


3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

RAMON  LEE  vs.  CA   ISSUE:    


G.R.  No.  93695  –  February  4,  1992   WON   the   execution   of   the   voting   trust   agreement   by   a   stockholder  
  whereby  all  his  shares  to  the  corporation  have  been  transferred  to  the  
FACTS:   trustee   deprives   the   stockholder   of   his   position   as   director   of   the  
A   complaint   for   a   sum   of   money   was   filed   by   the   International   corporation   making   the   latter   authorized   to   receive   service   of  
Corporate   Bank,   Inc.   against   the   private   respondents   (Sacoba   summons  for  and  in  behalf  of  the  private  domestic  corporation.  
Manufacturing   Corp.,   Pablo   Gonzales,   Jr.   and   Tomas   Gonzales)   who,   in    
turn,   filed   a   third   party   complaint   against   ALFA   (Alfa   Integrated   Textile   HELD:    
Mills)  and  the  petitioners  and  the  DBP.  The  trial  court  issued  an  order   YES.   Both   under   the   old   and   the   new   Corporation   Codes   there   is   no  
requiring   the   issuance   of   an   alias   summons   upon   ALFA   through   the   dispute  as  to  the  most  immediate  effect  of  a  voting  trust  agreement  on  
DBP   as   a   consequence   of   the   petitioners'   letter   informing   the  court  that   the  status  of  a  stockholder  who  is  a  party  to  its  execution  —  from  legal  
the   summons   for   ALFA   was   erroneously   served   upon   them   considering   title-­‐holder   or   owner   of   the   shares   subject   of   the   voting   trust  
that   the   management   of   ALFA   had   been   transferred   to   the   DBP.   The   agreement,   he   becomes   the   equitable   or   beneficial   owner.   The  
DBP  claimed  that  it  was  not  authorized  to  receive  summons  on  behalf   penultimate   question,   therefore,   is   whether   the   change   in   his   status  
of   ALFA   since   the   DBP   had   not   taken   over   the   company   which   has   a   deprives   the   stockholder   of   the   right   to   qualify   as   a   director   under  
separate   and   distinct   corporate   personality   and   existence.   Private   section   23   of   the   present   Corporation   Code   which   deletes   the   phrase  
respondents   argued   that   the   voting   trust   agreement   dated   March   11,   "in  his  own  right."  Section  30  of  the  old  Code  states  that:  
1981  did  not  divest  the  petitioners  of  their  positions  as  president  and    
executive   vice-­‐president   of   ALFA   so   that   service   of   summons   upon   "Every  director  must  own  in  his  own  right  at  least  one  
ALFA   through   the   petitioners   as   corporate   officers   was   proper.   share   of   the   capital   stock   of   the   stock   corporation   of  
Petitioners   reiterating   their   stand   that   by   virtue   of   the   voting   trust   which   he   is   a   director,   which   stock   shall   stand   in   his  
agreement  they  ceased  to  be  officers  and  directors  of  ALFA,  hence,  they   name  on  the  books  of  the  corporation.  A  director  who  
could   no   longer   receive   summons   or   any  court  processes   for   or   on   ceases   to   be   the   owner   of   at   least   one   share   of   the  
behalf  of  ALFA.  In  support  of  their  second  motion  for  reconsideration,   capital   stock   of   a   stock   corporation   of   which   is   a  
the   petitioners   attached   thereto   a   copy   of   the   voting   trust   agreement   director   shall   thereby   cease   to   be   a   director   .   .   .."  
between  all  the  stockholders  of  ALFA  (the  petitioners  included),  on  the   (Underlining  supplied)  
one   hand,   and   the   DBP,   on   the   other   hand,   whereby   the   management    
and  control  of  ALFA  became  vested  upon  the  DBP.  Trial  court  reversed   With  the  omission  of  the  phrase  "in  his  own  right"  the  election  
itself   by   setting   aside   its   previous   Order   dated   January   2,   1989   and   of   trustees   and   other   persons   who   in   fact   are   not   the   beneficial  
declared   that   service   upon   the   petitioners   who   were   no   longer   owners   of   the   shares   registered   in   their   names   on   the   books   of  
corporate   officers   of   ALFA   cannot   be   considered   as   proper   service   of   the   corporation   becomes   formally   legalized   (see   Campos   and  
summons   on   ALFA.   In   a   petition   for   certiorari,   the   CA   set   aside   the   Lopez-­‐Campos,  supra,   p.   296).   Hence,   this   is   a   clear  
orders  of  the  respondent  judge  and  respondent  corporation  is  ordered   indication   that   in   order   to   be   eligible   as   a   director,   what   is  
to  file  its  answer  within  the  reglementary  period.   material   is   the   legal   title   to,   not   beneficial   ownership   of,  
  the  stock  as  appearing  on  the  books  of  the  corporation.  
   

 CORPO  CASE  DIGESTS  3C  &  3S    ||     1  


CORPORATION  LAW  CASE  DIGESTS  
3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

The   facts   of   this   case   show   that   the   petitioners,   by   virtue   of   the   thereby   be   deemed   cancelled   and   new   certificates   of   stock  
voting   trust   agreement   executed   in   1981   disposed   of  all   their   shall  be  reissued  in  the  name  of  the  transferors."  
shares   through   assignment   and   delivery   in   favor   of   the   DBP,   as   On   the   contrary,   it   is   manifestly   clear   from   the   terms   of   the  
trustee.   Consequently,   the   petitioners   ceased   to   own   at   least   voting   trust   agreement   between   ALFA   and   the   DBP   that   the  
one   share   standing   in   their   names   on   the   books   of   ALFA   as   duration   of   the   agreement   is   contingent   upon   the   fulfillment   of  
required  under  Section  23  of  the  new  Corporation  Code.  They   certain  obligations  of  ALFA  with  the  DBP.  
also  ceased  to  have  anything  to  do  with  the  management  of  the    
enterprise.   The   petitioners   ceased   to   be   directors.   Hence,   the   In   view   of   the   foregoing,   the   ultimate   issue   of   whether   or   not  
transfer  of  the  petitioners'  shares  to  the  DBP  created  vacancies   there   was   proper   service   of   summons   on   ALFA   through   the  
in  their  respective  positions  as  directors  of  ALFA.   petitioners  is  readily  answered  in  the  negative.  
  Under  section   13,   Rule   14   of   the   Revised   Rules   of  Court,   it   is  
Considering  that  the  voting  trust  agreement  between  ALFA  and   provided  that:  
the   DBP   transferred   legal   ownership   of   the   stocks   covered   by    
the   agreement   to   the   DBP   as   trustee,   the   latter   became   the   "Sec.   13.Service   upon   private   domestic   corporation   or  
stockholder  of  record  with  respect  to  the  said  shares  of  stocks.   partnership.   —   If   the   defendant   is   a   corporation   organized  
In   the   absence   of   a   showing   that   the   DBP   had   caused   to   be   under   the   laws   of   the   Philippines   or   a   partnership   duly  
transferred   in   their   names   one   share   of   stock   for   the   purpose   registered,   service   may   be   made   on   the   president,   manager,  
of  qualifying  as  directors  of  ALFA,  the  petitioners  can  no  longer   secretary,  cashier,  agent  or  any  of  its  directors."  
be   deemed   to   have   retained   their   status   as   officers   of   ALFA    
which   was   the   case   before   the   execution   of   the   subject   voting   In   view   of   the   foregoing,   the   ultimate   issue   of   whether   or   not  
trust   agreement.   There   appears   to   be   no   dispute   from   the   there   was   proper   service   of   summons   on   ALFA   through   the  
records  that  DBP  has  taken  over  full  control  and  management   petitioners   is   readily   answered   in   the   negative.   Under  section  
of  the  firm.   13,  Rule  14  of  the  Revised  Rules  of  Court,  it  is  provided  that:  
   
There   can   be   no   reliance   on   the   inference   that   the   five-­‐year   "Sec.   13.Service   upon   private   domestic   corporation   or  
period  of  the  voting  trust  agreement  in  question  had  lapsed  in   partnership.   —   If   the   defendant   is   a   corporation   organized  
1986   so   that   the   legal   title   to   the   stocks   covered   by   the   said   under   the   laws   of   the   Philippines   or   a   partnership   duly  
voting  trust  agreement  ipso  facto  reverted  to  the  petitioners  as   registered,   service   may   be   made   on   the   president,   manager,  
beneficial   owners   pursuant   to   the   6th   paragraph   of   section  59   secretary,  cashier,  agent  or  any  of  its  directors."  
of  the  new  Corporation  Code  which  reads:    
    ONG  YONG  vs.  TIU  
"Unless  expressly  renewed,  all  rights  granted  in  a  voting  trust   G.R.  No.  144476  –  February  1,  2002  
agreement   shall   automatically   expire   at   the   end   of   the   agreed    
period,   and   the   voting   trust   certificates   as   well   as   the   FACTS:    
certificates  of  stock  in  the  name  of  the  trustee  or  trustees  shall   The   First   Landlink   Asia   Development   Corporation   (FLADC)   was   fully  
owned   by   the   Tius.   This   commercial   complex,   then   unfinished,   was  

 CORPO  CASE  DIGESTS  3C  &  3S    ||     2  


CORPORATION  LAW  CASE  DIGESTS  
3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

threatened   with   incompletion   when   its   owner   found   it   in   financial   property   contribution;   and   when   David   S.   Tiu   and   Cely   Y.   Tiu   were  
distress   in   the   amount   of   P190,000,000.00   for   being   indebted   to   the   proscribed   from   assuming   and   performing   their   duties   as   Vice-­‐
Philippine  National  Bank.  The  Ongs  were  invited  by  the  Tius  to  invest  in   President   and   Treasurer,   respectively   of   FLADC.   These   became   the  
FLADC   and   the   corresponding   Pre-­‐Subscription   Agreement   was   basis   of   the   Tius'   unilateral   rescission   of   the   Pre-­‐Subscription  
executed   whereby   both   parties   agreed   to   maintain   equal   shareholdings   Agreement  on  February  23,  1996.  
in   FLADC   with   the   Ongs   investing   cash   while   the   Tius   contributing    
property,   which   included   a   parcel   of   land   in   the   name   of   Masagana     On   February   27,   1996,   the   Tius   sought   the   Securities   and  
Telemart,  Inc.   Exchange   Commission   (SEC)   confirmation   of   their   rescission   of   the  
  Pre-­‐Subscription  Agreement.  
The  Ongs:     subscription  of  1  million  shares  of  FLADC  at  a  par      
    value  of  P100.00  per  share.  P100  Million  is  payable  in     SEC  Hearing  Officer  Rolando  G.  Andaya,  Jr.  rendered  a  decision  
    cash.   confirming  the  rescission:  
   
The  Tius:     subscribe   to   549,800   shares   more   of   FLADC   at   a   par   (a)The  cancellation  of  the  1,000,000  shares  subscription  of  the  
value   of   P100.00   per   share   over   and   above   their     individual  defendants  in  FLADC  
previous   subscription   of   450,200   shares   in   order   to    
complete  a  subscription  of  1  million  shares.  Masagana   (b)FLADC   to   pay   the   amount   of   P170,000,000.00   to   the  
Telamart,   Inc.   executed   a   Deed   of   Assignment   over   the   individual   defendants   representing   the   return   of   their  
1,902.30  square  meter  property  in  favor  of  FLADC  and   contribution        for  1,000,000  shares  of  FLADC  
delivered   the   owner's   copy   of   the   transfer   certificate    
of   title   of   the   same   as   well   as   the   possession   thereof   to   (f)The   individual   defendants,   individually   and   collectively,  
the   latter   (pp.   221-­‐226,   Rollo).   Title   over   the   151   their   agents   and   representatives,   to   desist   from   exercising   or  
square   meter   property   was   also   transferred   in   the   performing  any  and  all  acts  pertaining  to  stockholder,  director  
name  of  FLADC.   or   officer   of   FLADC   or   in   any   manner   intervene   in   the  
  management  and  affairs  of  FLADC  
The   P190,000,000.00   loan   from   the   PNB   was   also   settled,   but    
not   quite   in   accord   with   the   provisions   of   the   Pre-­‐Subscription   (g)The  individual  defendants,  jointly  and  severally,  to  return  to  
Agreement.   The   Ongs   had   to   pay   P70,000,000.00   more   aside   from   their   FLADC   interest   payment   in   the   amount   of   P8,866,669.00   and  
P100,000,000.00   subscription   payment,   and   the   Tius   had   to   advance   all   interest   payments   as   well   as   any   payments   on   principal  
P20,000,000.00   in   cash,   which   amount   was   loaned   to   them   by   the   received   from   the   P70,000,000.00   inexistent   loan,   plus   the  
former.   legal   rate   of   interest   thereon   from   the   date   of   their   receipt   of  
The  controversy  between  the  two  parties  arose  when  the  Ongs   such  payment,  until  fully  paid.  
refused   to   credit   the   number   of   FLADC   shares   in   the   name   of   Masagana    
Telamart,   Inc.   commensurate   to   its   1,902.30   square   meter   property     SEC  Hearing  Officer  Manolito  S.  Soller  issued  an  omnibus  order  
contribution;   also   when   they   refused   to   credit   the   number   of   FLADC   and  partially  reconsidered  the  decision:  
shares   in   favor   of   the   Tius   commensurate   to   their   151   square   meter  

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CORPORATION  LAW  CASE  DIGESTS  
3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

…partially  reconsidered  only  insofar  as   (d) The  Tius  are  hereby  ordered  to  pay  the  amount  of  
the   investment   amounting   to   P70   P20,000,000.00  loaned  them  by  the  Ongs  upon  the  
million   which   is   hereby   declared   not   finality  of  this  decision.  
as   premium   on   capital   stock   but   a    
liability   of   FLADC   or   advances   of   the   1st  ISSUE:   WON     rescission   is   not   applicable   when   "rights"   over  
defendants   made   in   favor   of   FLADC,   the   subject   matter   of   the   rescission   have   been  
and   that   the   interest   paid   on   account   acquired  by  third  persons.  
thereof   is   hereby   declared   legal   and    
valid.     The   Ongs   argue   that   the   payment   on   subscription   of  
  P100   million   by   the   Ongs   is   not   to   the   Tius   and   the  
SEC  en  banc:     payment  of  P54.98  million  by  the  Tius  is  not  to  the  Ongs,  
…Confirms   the   rescission   of   the   Pre-­‐ but   to   FLADC,   the   corporation,   which   is   distinct   and  
Subscription   Agreement   and   separate   from   the   Ongs   and   the   Tius   notwithstanding  
REVERSING  the  same  insofar  as  it  held   the  fact  that  they  may  be  the  only  stockholders.  
that   the   seventy   million   (P70   M)   paid    
by   the   Ong   Group   over   and   above   the   RULING:   Applicable.  FLADC  is  not  a  third  person  in  relation  to  
par   value   of   the   one   million   the  Pre-­‐Subscription  Agreement  though  not  named  as  
(1,000,000)   shares   of   stocks   of   FLADC   a  party.  FLADC  is  deemed  a  party  to  the  agreement  by  
which   they   had   subscribed   as   loan   virtue   of   stipulations   pour   autrui   clearly   and  
and  not  premium.   deliberately  conferring  on  it  a  favor  or  benefit  which  it  
  subsequently   accepted.   (Art.   1311,   Civil   Code)   12   Such  
Court  of  Appeals:  Affirmed  with  modification  the  appealed  decision.   benefit   was   in   the   form   of   the   payments   made   by   the  
parties   for   their   subscription   to   shares   of   stock   in  
(a) The   Ong   and   Tiu   Groups   are   ordered   to   liquidate   FLADC,  which  FLADC  accepted.  
First   Landlink   Asia   Development   Corporation   in    
accordance   with   the   following   cash   and   property   2nd  ISSUE:   WON   the   Ongs   violated   the   "Pre-­‐Subscription  
contributions  of  the  parties  therein.   Agreement"   when   it   prevented   the   Tius   from  
(b) The   remaining   assets   of   First   Landlink   Asia   assuming   the   duties   and   responsibilities   of   the   Vice-­‐
Development   Corporation   shall   be   transferred   to   President   and   Treasurer   of   FLADC   by   not   providing  
the  Tius.   them  with  adequate  offices.  
(c) First   Landlink   Asia   Development   Corporation   is    
hereby   ordered   to   pay   the   amount   of   RULING:   YES.   The   Pre-­‐Subscription   Agreement   provides   that  
P70,000,000.00  that  was  advanced  to  it  by  the  Ong   the   position   of   Vice-­‐President   and   Treasurer   of   FLADC  
Group  upon  the  finality  of  this  decision.   shall   be   nominated   from   the   Tiu   Group.   Despite   the  
provision   in   the   agreement   turning   over   the  
management  and  administration  of  FLADC  to  the  Ong  

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CORPORATION  LAW  CASE  DIGESTS  
3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

Group,  there  is  nothing  in  the  agreement  which  states   assets   of   FLADC   and   the   management   thereof,   the  
that   the   elected   Vice-­‐President   and   Treasurer   of   same   is   but   an   inevitable   consequence   of   the  
FLADC   cannot   or   must   not   be   allowed   to   assume   the   rescission   of   the   Pre-­‐Subscription   Agreement.  
responsibilities   of   their   respective   office.   The   Ongs   Restoration   of   the   parties   to   status   quo   ante   dictates  
have   reduced   the   positions   of   Vice-­‐President   and   that   the   building   constructed   on   the   two   (2)   existing  
Treasurer  of  FLADC  to  mere  figure  heads.   lots   of   FLADC,   the   remaining   asset   of   FLADC,   be  
  transferred   to   the   Tiu   Group.   The   status   quo   ante  
3rd  ISSUE:   WON     the   Court   of   Appeals   erred   in   ordering   the   immediately   prior   to   the   execution   of   the   Pre-­‐
transfer   to   the   Tiu   Group   whatever   remains   of   the   Subscription   Agreement   was   that   the   Tius,   then   wholly  
assets   of   the   FLADC   and   the   management   thereof,   owning   FLADC,   had   control   and   custody   over   this  
upon  the  return  to  each  group  of  their  respective  cash   remaining  asset.  
and  property  contribution.  
  G.R.  No.  144629  -­‐  Petition  of  the  Tius  
The   Ongs   further   cite   Sec.   122   of   the   Corporation   Code   1st  ISSUE:   WON   the   Court   of   Appeals   erred   in   ordering   the  
to   support   their   claim   that   the   order   of   the   Court   of   liquidation   of   FLADC   instead   of   merely   ordering   the  
Appeals   for   the   return   of   the   parties'   contribution   restitution  of  the  parties'  respective  investments.  
(distribution  of  FLADC  assets,  in  the  words  of  the  Ongs)    
is  prohibited,  thus:   RULING:   NO.  Restoration  of  the  parties  to  their  relative  position  
  which  they  would  have  occupied  had  no  contract  ever  
"Sec.   122.Corporate   Liquidation.   —   .   .   ."Except   by   been  made  is  not  practicable  nor  possible  because  we  
decrease   of   capital   stock   and   as   otherwise   allowed   by   cannot   turn   back   the   hands   of   time   when   the   mall   was  
this   Code,   no   corporation   shall   distribute   any   of   its   only  "nearing  completion"  in  1994,  when  the  mall  was  
assets   or   property   except   upon   lawful   dissolution   and   not  fully  tenanted  yet  and  they  had  an  existing  loan  of  
after  payment  of  all  its  debts  and  liabilities."   P190   million   with   PNB   with   an   interest   of   19%   per  
  annum.   But   the   Masagana   Citimall   is   now   completely  
RULING:   NO.   As   a   legal   consequence   of   rescission,   the   order   of   constructed/finished,   the   P190   million   loan   fully   paid  
the   Court   of   Appeals   to   return   the   cash   and   property   without  their  having  to  pay  enormous  interest,  and  the  
contribution   of   the   parties   is   based   on   law,   hence,   Tius   cannot   deny   that   the   Ongs   are   partly   to   be  
cannot   be   considered   an   act   of   misappropriation.   For   credited  for  the  success  of  the  venture.  What  the  Tius  
how   can   the   rescission   of   the   Pre-­‐Subscription   want  the  Court  to  order  would  have  been  fair  and  just  
Agreement   be   implemented   without   returning   to   the   had   there   been   no   fault   on   their   part   and   had   they  
two   groups   whatever   they   delivered   to   the   come  to  Court  with  clean  hands  because  he  who  comes  
corporation  in  accordance  with  the  Agreement?   to   Court   must   come   with   clean   hands.   If,   as   the   Tius  
  espouse,  the  Court  would  simply  order  the  return  of  
With   regard   to   the   order   of   the   Court   of   Appeals   the  P190  million  of  the  Ongs,  then,  the  Tius  would  be  
transferring  to  the  Tiu  Group  whatever  remains  of  the   unjustly  enriched  at  the  expense  of  the  Ongs.  Under  

 CORPO  CASE  DIGESTS  3C  &  3S    ||     5  


CORPORATION  LAW  CASE  DIGESTS  
3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

the   law,   no   one   shall   unjustly   enrich   himself   at   the   with   the   commensurate   number   of   shares,   subject  
expense   of   another.   "Niguno   non   deue   enriquecerse   only   to   the   Tius'   payment   of   the   expenses   for   the  
tortizamente   condano   de   otro.   (In   short,   transfer   of   the   title   in   the   name   of   FLADC.   So,   too,   in  
magmumukhang  milking  cows  lang  yung  mga  Ongs   the   case   of   the   151   sq.   m.   property,   the   fact   that   the  
kapag  ibabalik  lang  yung  investment  nila)   Deed   of   Assignment   between   the   Lichaucos   and   the  
  FLADC  was  executed  prior  to  the  execution  of  the  Pre-­‐
2nd  ISSUE:   WON   the   Tiu   Group   cannot   be   credited   with   the   Subscription   Agreement   does   not   prejudice   the   Ongs.  
number   of   shares   commensurate   to   the   value   of   said   Therefore,   the   Tius   should   be   credited   with   49,800  
lot  (indicated  below).   shares   in   FLADC   for   this   property   contribution,  
  pursuant  to  the  Pre-­‐Subscription  Agreement.  
  According   to   CA,   "Under   the   Pre-­‐Subscription    
Agreement,   the   Tius   were   obliged   to   execute   a   Deed   of   3rd  ISSUE:   WON   the   P70   million   paid   by   the   Ongs   in   excess   of   the  
Assignment  over  a  151  square  meter  parcel  of  land   actual   par   value   of   one   million   shares   they   acquired  
in   favor   of   FLADC   as   payment   of   49,800   shares   from   FLADC   was   a   premium   on   capital   and   not   an  
thereof   at   a   par   value   of   P100.00   per   share.   While   advance.  
there   is   on   record   a   Deed   of   Assignment   thereon   in    
favor   of   FLADC,   said   Deed   of   Assignment   was   not   RULING:   NO,   it   is   an   advance.   "The   Pre-­‐Subscription   Agreement  
executed   by   the   Tius   in   favor   of   FLADC.   The   Deed   of   is   explicit   in   its   terms   —that   the   Ongs   agreed   to   pay  
Assignment  was  executed  by  the  Lichaucos  in  favor  of   P100,000,000.00   only   for   1   million   shares   in   FLADC   at  
FLADC.   If   ever   somebody   has   to   be   credited   with   the   a  par  value  of  P100.00  per  share.  FLADC's  application  
number   of   shares   commensurate   to   the   value   of   the   151   for   an   increase   in   capital   stock   shows   that   the   par  
square   meter   property,   it   will   not   be   the   Tius   but   the   value   of   each   of   its   shares   is   P100.00   only.   The   same  
Lichaucos.   application   also   shows   that   the   Ongs   subscribed   to   1  
  million  shares  of  FLADC  at  a  par  value  of  P100.00  per  
RULING:   NO,   They   must   be   credited.   The   Lichaucos   are   not   share  (Ibid).  There  is  nothing  in  the  application  which  
parties   to   the   Pre-­‐Subscription   Agreement   and   are   not   shows  that  FLADC's  shares  are  to  be  sold  at  a  premium  
even   demanding   that   they   be   credited   with   such   or   at   an   amount   higher   than   the   stated   par   value   per  
shares  in  exchange  for  the  said  property.  Just  like  this   share.  
property,   the   1,902.30   sq.   m.   parcel   of   land   in   the        
name   of   Masagana   Telamart,   Inc.   (also   a   corporation     "The   Tius   also   claim   that   the   P70,000,000.00   cannot  
owned   by   the   Tius),   was   also   acquired   by   the   Tius   be  treated  as  an  advance  because  there  was  no  board  
before   the   execution   of   the   Pre-­‐Subscription   resolution   authorizing   FLADC   to   incur   such   an  
Agreement.  The  fact  that  the  1,902.30  sq.  m.  property   obligation.   As   pointed   out   by   SEC   Hearing   Official  
was   acquired   by   the   Tius   beforehand   does   not   Soller,   the   fact   that   no   board   resolution   was   passed  
prejudice   the   Ongs,   as   shown   by   the   Ongs'   non-­‐ allowing   FLADC   to   incur   such   an   obligation   is  
objection   to   crediting   the   Masagana   Telamart,   Inc.   immaterial,   it   appearing   that   there   was   also   no   board  

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CORPORATION  LAW  CASE  DIGESTS  
3C  &  3S  –  ATTY.  CARLO  BUSMENTE  

resolution   authorizing   FLADC   to   secure   a  


P20,000,000.00   advance   from   the   Tius.   What   matters  
then   and   now   is   that   the   P190,000,000.00   loan   from  
PNB  was  finally  settled  in  order  for  FLADC  to  resume  
its   business   without   fear   of   foreclosure   of   its  
properties.  
 

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