-in resolving only the question of who is
the beneficial owner or has beneficial
ownership of each "specific stock" of the
public utility company whose stocks are
under review. If the Filipino has the voting
power of the "specific stock", i.e., he can
vote the stock or direct another to vote for
him, or the Filipino has the investment
power over the "specific stock", i.e., he can
dispose of the stock or direct another to
dispose of it for him, or both, i.e., he can
vote and dispose of that "specific stock" or
direct another to vote or dispose it for him,
then such Filipino is the "beneficial owner"
of that "specific stock." Being considered
Filipino, that "specific stock" is then to be
counted as part of the 60% Filipino
ownership requirement under the
Constitution. The right to the dividends, jus
fruendi - a right emanating from ownership
of that "specific stock" necessarily accrues
to its Filipino "beneficial owner."
-stocks, the voting rights of which have
been assigned or transferred to aliens
cannot be considered held by Philippine
citizens or Philippine nationals.
Even if it could be assumed that the sale of
shares of stock contained in the
photocopies really did happen, such is only
valid as to the parties thereto, but is not
binding on the corporation if the same is
not recorded in the books of the
corporation. Section 63 of the Corporation
Code of the Philippines provides that no
sale of stock shall be valid, except as
between the parties, until it is recorded in
the books of the corporation showing the
names of the parties to the transaction, the
date of, the number of the certificate or
certificates and the number of shares
exchanged. Here, the records show that
the alleged transaction between Tee Ling
Kiat and Dewey Dee has never been
recorded in VIP's corporate books. Thus,
not having been recorded in the corporate
books in accordance with law, it is not valid
or binding as to the corporation or as to
third persons.
a corporation's right to use its corporate
and trade name is a property right, a right
in rem, which it may assert and protect
against the world in the same manner as it
may protect its tangible property, real or
personal, against trespass or conversion.
two requisites must be proven, to wit: (1)
that the complainant corporation acquired
a prior right over the use of such corporate
name; and (2) the proposed name is
either: (a) identical, or (b) deceptively or
confusingly similar to that of any existing
corporation or to any other name already
protected by law; or (c) patently deceptive,
confusing or contrary to existing law.
-In this case, respondents' corporate
names were registered prior to the
petitioners
-second requisite is also satisfied since
there is a confusing similarity between the
names "de la salle" is the dominant phrase
used.
in a merger/consolidation, The surviving or
consolidated corporation shall be
responsible and liable for all the liabilities
and obligations of each of the constituent
corporations in the same manner as if
such surviving or consolidated corporation
had itself incurred such liabilities or
obligations; and any pending claim, action,
or proceeding brought by or against any of
such constituent corporations may be
prosecuted by or against the surviving or
consolidated corporation. The rights of
creditors or liens upon the property of any
of such constituent corporations shall not
be impaired by such merger or
consolidation.
-BPI did not only acquire all the rights,
privileges and assets of BSA but likewise
acquired the liabilities and obligations of
the latter as if BPI itself incurred it.
-BPI' s right to foreclose the mortgage on
petitioner's property depends on the status
of the contract and the corresponding
obligations of the parties originally
involved, that is, the agreement between
its predecessor BSA and petitioner.
-Since BSA incurred delay in the
performance of its obligations and
subsequently cancelled the omnibus line
without petitioners' consent, its successor
BPI cannot be permitted to foreclose the
loan for the reason that its successor BSA
violated the terms of the contract even
prior to petitioners' justified refusal to
continue paying the amortizations.
respondents are only mandated to notify
petitioner by depositing in the mail the
notice of the stockholders' special meeting,
with postage or cost of transmission
provided and the name and address of the
stockholder properly specified. the period
of mailing, that is, at least five (5) days
prior mailing of notice of meeting as
provided in the By-laws of GOODLAND is
reasonable enough for the petitioner
Simny Guy to receive the notice of meeting
prior to the holding of the subject
stockholders' meeting considering the
relative distance of the Post Office
(Meralco Post Office, Pasig City) where
the said notice of meeting was mailed vis-
a-vis the place of residence of petitioner
Simny Guy located at Greenmcadows,
Quezon City. Therefore, petitioner is
considered to have received notice of the
special stockholders' meeting after said
notice was properly mailed by
respondents.
Corazon Ricafort, wife of JG Ricafort,
along with their children (co-petitioners)
claiming to be stockholders of record, filed
a complaint before the RTC to declare null
and void the Aug 15, 2011 Annual
Stockholder's Meeting as well as all
consequences thereof, including the
election of new members of the Board of
Directors. They alleged that they were
given notice only on Aug 16, 2011 in
violation of the by-law’s 3 day requirement,
and thus were unable to attend.
1. Notice was validly given to petitioners.
As stated by their By-laws, notice of
annual meetings shall be mailed at least 3
days before, instead of the two weeks in
the Corporation Code, the shortening of
which is allowed under Section 50.
2. the complaint involved an election
contest, since in effect it sought to nullify
the election of the Board of Directors, and
thus should have been filed within 15 days
from such election, or until Aug 30, 2011;
the case is barred by prescription.
2. The real motive of petitioners, as stated
by the SC, was really seeking to hold a
new election for members of the BOD of
NADECOR for FY2011-12. To nullify the
Aug 15, 2011 ASM would have no practical
effect except to void the election of the
BOD.
3. even if they were physically absent, they
were represented by proxy, JG Ricafort,
who not only attended, signed the
attendance sheet as proxy and
participated in the ASM, he is also the true
and beneficial owner of the shares of stock
issued in plaintiffs’ names.
the dispute's concern is not only whether
the petitioners could jointly file the
rehabilitation petition (which the Court
disallowed in Asiatrust), but also whether
the rehabilitation petition was filed in the
proper venue. Notwithstanding our ruling in
Asiatrust, the petitioners beg the Court to
liberally apply the Interim Rules. As
mentioned, they also invoke the 2008
Rules which allow a group of companies to
file a joint rehabilitation petition.
no legal basis to retroactively apply the
2008 Rules. The 2008 Rules took effect on
January 16, 2009. By the time the Court
decided Asiatrust in 2011, the 2008 Rules
were already in effect but the Court saw no
valid reason to retroactively apply these.
More significantly, Rule 9, Section 2 of the
2008 Rules allows the retroactive
application of the 2008 Rules to pending
rehabilitation proceedings only when these
have not yet undergone the initial hearing
stage at the time of the effectivity of the
2008 Rules.
In the present case, the rehabilitation court
conducted the initial hearing on January
22, 2007, and approved the rehabilitation
plan on April 15, 2008 - long before the
effectivity of the 2008 Rules on January
16, 2009. Clearly, the 2008 Rules cannot
be retroactively applied to the rehabilitation
petition filed by the petitioners. On this
basis alone, the Court holds that the
present petition lacks merit.
As already settled, a suit against individual
stockholders is not a suit against the
corporation.
failure to properly implead POTC and
PHILCOMSAT not only violates the latters'
legal personality, but is repugnant on
POTC's and PHILCOMSAT's right to due
process. "[F]ailure to implead these
corporations as defendants and merely
annexing a list of such corporations to the
complaints is a violation of their right to
due process for it would in effect be
disregarding their distinct and separate
personality without a hearing."[25]
Proceeding from the foregoing, as POTC
and PHILCOMSAT were not impleaded,
there is no longer any existing
sequestration on POTC and
PHILCOMSAT.
The Court stressed that a corporation,
either by its board, its by-laws, or the act of
its officers, CANNOT create restrictions in
stock transfers. In transferring stock, the
secretary of a corporation acts in purely
ministerial capacity and does not try to
decide the question of ownership.
Corporation cannot require the surrender
of the certificates of stock before
registration of the transfer is made in the
corporate books.
it can only require surrender of the
certificates of stock to issue new
certificates in its stead in order to cancel
the old certificate.
delivery contemplated in Section 63,
pertains to the delivery of the certificate of
shares by the transferor to the transferee,
that is, from the original stockholder
named in the certificate to the person or
entity the stockholder was transferring the
shares to, whether by sale or some other
valid form of absolute conveyance of
ownership. Shares of stock may be
transferred by delivery to the transferee of
the certificate properly indorsed, and does
not require the delivery of the certificates
to the corporation for registration, only for
the issuance of new certificates of stock.
Rule 43 prescribes the mode of appeal for
corporate rehabilitation cases
Petitioner did not comply with some of
these requirements. First, it did not
implead its creditors as respondents.
Instead, petitioner only impleaded the
presiding judge of the rehabilitation court.
failure of petitioner to implead its creditors
as respondents cannot be cured by
serving copies of the Petition on its
creditors, it deprived them of a fair hearing
as they are unable to receive court orders
prompting them to file the correct
remedies.
By not declaring its former employees as
creditors in the Amended Petition for
Corporate Rehabilitation and by not
notifying the same employees that an
appeal had been filed, petitioner
consistently denied the due process rights
of these employees.This court cannot be a
party to the inequitable way that
petitioner's employees were treated.
liberality in corporate rehabilitation
procedure only generally refers to the trial
court, not to the proceedings before the
appellate court.
The Interim Rules of Procedure on
Corporate Rehabilitation covers petitions
for rehabilitation filed before the Regional
Trial Court. Thus, Rule 2, Section 2 of the
Interim Rules of Procedure on Corporate
Rehabilitation, which refers to liberal
construction, is limited to the Regional Trial
Court.
The Regional Trial Court correctly
dismissed petitioner's rehabilitation plan. It
found that petitioner's assets are non-
performing. other part of the rehabilitation
plan entails selling properties of
petitioner's sister company. As pointed out
by the Regional Trial Court, this plan
requires conformity from the sister
company. Even if the two companies have
the same directorship and ownership, they
are still two separate juridical entities.
On the other hand, the plan to purchase
new vessels sacrifices the corporation's
cash flow. This is contrary to the goal of
corporate rehabilitation, which is to allow
present value recovery for creditors. The
plan to buy new vessels after selling the
two vessels it currently owns is neither
sound nor workable as a business plan. so
corp rehab cannot be allowed.
Rule 43 of the Rules of Court prescribes
the procedure to assail the final orders and
decisions in corporate rehabilitation cases
filed under the Interim Rules of Procedure
on Corporate Rehabilitation.[1] Liberality in
the application of the rules is not an end in
itself. It must be pleaded with factual basis
and must be allowed for equitable ends.
There must be no indication that the
violation of the rule is due to negligence or
design. Liberality is an extreme exception,
justifiable only when equity exists.
where the 60-40 Filipino- foreign equity
ownership is not in doubt, the Grandfather
Rule will not apply.
Existence of doubt. The assertion of
petitioners that “doubt” only exists when
the stockholdings are less than 60% fails
to convince this Court. DOJ Opinion No.
20, which petitioners quoted in their
petition, only made an example of an
instance where “doubt” as to the
ownership of the corporation exists. It
would be ludicrous to limit the application
of the said word only to the instances
where the stockholdings of non-Filipino
stockholders are more than 40% of the
total stockholdings in a corporation. The
corporations interested in circumventing
our laws would clearly strive to have “60%
Filipino Ownership” at face value. It would
be senseless for these applying
corporations to state in their respective
articles of incorporation that they have less
than 60% Filipino stockholders since the
applications will be denied instantly. Thus,
various corporate schemes and layerings
are utilized to circumvent the application of
the Constitution.
Stockholders are not owners of the
corporate property. They do not have a
cause of action to seek a quieting of title
over corporate properties.
While a share of stock represents a
proportionate or aliquot interest in the
property of the corporation, it does not vest
the owner thereof with any legal right or
title to any of the property, his interest in
the corporate property being equitable or
beneficial in nature. Shareholders are in no
legal sense the owners of corporate
property, which is owned by the
corporation as a distinct legal person.
In the case at bar, there is no allegation,
much less any proof, that the corporate
existence of RISCO has ceased and the
corporate property has been liquidated and
distributed to the stockholders. The
records only indicate that, as per
Securities and Exchange Commission
(SEC) Certification 27 dated June 18,
1997, the SEC merely suspended
RISCO's Certificate of Registration
beginning on September 5, 1988 due to its
non-submission of SEC required reports
and its failure to operate for a continuous
period of at least five years. Verily, Aznar,
et al., who are stockholders of RISCO,
cannot claim ownership over the properties
at issue in this case on the strength of the
Minutes which, at most, is merely evidence
of a loan agreement between them and the
company. There is no indication or even a
suggestion that the ownership of said
properties were transferred to them which
would require no less that the said
properties be registered under their
names. For this reason, the complaint
should be dismissed since Aznar, et al.,
have no cause to seek a quieting of title
over the subject properties.
At most, what Aznar, et al., had was
merely a right to be repaid the amount
loaned to RISCO. Unfortunately, the right
to seek repayment or reimbursement of
their contributions used to purchase the
subject properties is already barred by
prescription.
the doctrine of piercing the corporate veil
has no application here because the
Commissioner of Customs did not
establish that Oilink had been set up to
avoid the payment of taxes or duties, or for
purposes that would defeat public
convenience, justify wrong, protect fraud,
defend crime, confuse legitimate legal or
judicial issues, perpetrate deception or
otherwise circumvent the law. It is also
noteworthy that from the outset the
Commissioner of Customs sought to
collect the deficiency taxes and duties from
URC, and that it was only on July 2, 1999
when the Commissioner of Customs sent
the demand letter to both URC and Oilink.
That was revealing, because the failure of
the Commissioner of Customs to pursue
the remedies against Oilink from the outset
manifested that its belated pursuit of Oilink
was only an afterthought.
To hold a director or officer personally
liable for corporate obligations, two
requisites must concur: (1) it must be
alleged in the complaint that the director or
officer assented to patently unlawful acts
of the corporation or that the officer was
guilty of gross negligence or bad faith; and
(2) there must be proof that the officer
acted in bad faith.
Fernandez was the Head of the Academic
Services Group of the EMD, and petitioner
directly reported to him at the time; his
position enabled him to pursue a course of
action with petitioner that Jacob was
largely unaware of. A corporation, as a
juridical entity, may act only through its
directors, officers and employees.
Obligations incurred as a result of the
directors’ and officers’ acts as corporate
agents, are nottheir personal liability but
the direct responsibility of the corporation
they represent. As a rule, they are only
solidarily liable with the corporation for the
illegal termination of servicesof employees
if they acted with malice or bad faith.
Here, the writ of sequestration issued
against the assets of the Palm Companies
is not valid because the suit in Civil Case
No. 0035 against Benjamin Romualdez as
shareholder in the Palm Companies is not
a suit against the latter. The Court has
held, contrary to the assailed
Sandiganbayan Resolution in G.R. No.
173082, that failure to implead these
corporations as defendants and merely
annexing a list of such corporations to the
complaints is a violation of their right to
due process for it would be, in effect,
disregarding their distinct and separate
personality without a hearing. Furthermore,
while the writ of sequestration was issued
on October 27, 1986, the Palm Companies
were impleaded in the case only in 1997,
or already a decade from the ratification of
the Constitution in 1987, way beyond the
prescribed period.
Since the Republic did not originally
include the Palm Companies in Civil Case
No. 0035, the Sandiganbayan issued a
Resolution ordering said companies to be
impleaded, which was affirmed by the
Court in G.R. No. 90667 on November 5,
1991. The Court declared in said case that
the Palm Companies are real parties-in-
interest in Civil Case No. 0035, because
they still appear to be the registered owner
of the remaining disputed shares. That
Romualdez is considered as their true or
real owner is just a claim that still needs to
be proved in court.
OCWD and Subic Water are two separate
and different entities.
The petitioner practically suggests that
since Subic Water took over OCWD’s
water operations in Olongapo City, it also
acquired OCWD’s juridical personality,
making the two entities one and the same.
This argument is devoid of merit. Subic
Water clearly demonstrated that it was a
separate corporate entity from OCWD.
OCWD is just a ten percent (10%)
shareholder of Subic Water. As a mere
shareholder, OCWD’s juridical personality
cannot be equated nor confused with that
of Subic Water.
This argument is devoid of merit. Subic
Water clearly demonstrated that it was a
separate corporate entity from OCWD.
OCWD is just a ten percent (10%)
shareholder of Subic Water. As a mere
shareholder, OCWD’s juridical personality
cannot be equated nor confused with that
of Subic Water.
It is basic in corporation law that a
corporation is a juridical entity vested with
a legal personality separate and distinct
from those acting for and in its behalf and,
in general, from the people comprising it.
Under this corporate reality, Subic Water
cannot be held liable for OCWD’s
corporate obligations in the same manner
that OCWD cannot be held liable for the
obligations incurred by Subic Water as a
separate entity. The corporate veil should
not and cannot be pierced unless it is
clearly established that the separate and
distinct personality of the corporation was
used to justify a wrong, protect fraud, or
perpetrate a deception.
petitioners may be compelled to submit to
the arbitration proceedings in accordance
with Shangri-La and BF Corporation's
agreement, in order to determine if the
distinction between Shangri-La's
personality and their personalities should
be disregarded. This jurisdiction adopts a
policy in favor of arbitration.
A consequence of a corporation's separate
personality is that consent by a corporation
through its representatives is not consent
of the representative, personally. Its
obligations, incurred through official acts of
its representatives, are its own. Petitioners
are also correct that arbitration promotes
the parties' autonomy in resolving their
disputes. This court recognized in Heirs of
Augusto Salas, Jr. v. Laperal Realty
Corporation that an arbitration clause shall
not apply to persons who were neither
parties to the contract nor assignees of
previous parties. The provision to submit to
arbitration any dispute arising therefrom
and the relationship of the parties is part of
that contract and is itself a contract. As a
rule, contracts are respected as the law
between the contracting parties and
produce effect as between them, their
assigns and heirs. Clearly, only parties to
the Agreement . . . are bound by the
Agreement and its arbitration clause as
they are the only signatories thereto.
A director or officer shall only be personally
liable for the obligations of the corporation,
if the following conditions concur:
(1) the complainant alleged in the
complaint that the director or officer
assented to patently unlawful acts of the
corporation, or that the officer was guilty of
gross negligence or bad faith; and
(2) the complainant clearly and
convincingly proved such unlawful acts,
negligence or bad faith.
In the present case, the respondents failed
to show the existence of the first requisite.
They did not specifically allege in their
complaint that Rana and Burgos willfully
and knowingly assented to the petitioner's
patently unlawful act of forcing the
respondents to sign the dubious
employment contracts in exchange for
their salaries. The respondents also failed
to prove that Rana and Burgos had been
guilty of gross negligence or bad faith in
directing the affairs of the corporation.
petitioner Santos entered into a contract
with respondent in her capacity as the
President and Chief Executive Officer of
Arco Pulp and Paper. She also issued the
check in partial payment of petitioner
corporation's obligations to respondent on
behalf of petitioner Arco Pulp and Paper.
This is clear on the face of the check
bearing the account name, "Arco Pulp &
Paper, Co., Inc." Any obligation arising
from these acts would not, ordinarily, be
petitioner Santos' personal undertaking for
which she would be solidarily liable with
petitioner Arco Pulp and Paper.
We find, however, that the corporate veil
must be pierced.
Petitioner Santos cannot be allowed to
hide behind the corporate veil. When
petitioner Arco Pulp and Paper's obligation
to respondent became due and
demandable, she not only issued an
unfunded check but also contracted with a
third party in an effort to shift petitioner
Arco Pulp and Paper's liability. She
unjustifiably refused to honor petitioner
corporation's obligations to respondent.
These acts clearly amount to bad faith. In
this instance, the corporate veil may be
pierced, and petitioner Santos may be held
solidarily liable with petitioner Arco Pulp
and Paper.
This Court agrees with the petitioners that
there is no need to pierce the corporate
veil. Respondent failed to substantiate her
claim that Mancy and Sons Enterprises,
Inc. and Manuel and Jose Marie
Villanueva are one and the same. She
based her claim on the SSS form wherein
Manuel Villanueva appeared as employer.
However, this does not prove, in any way,
that the corporation is used to defeat
public convenience, justify wrong, protect
fraud, or defend crime, or when it is made
as a shield to confuse the legitimate
issues, warranting that its separate and
distinct personality be set aside. Also, it
was not alleged nor proven that Mancy
and Sons Enterprises, Inc. functions only
for the benefit of Manuel Villanueva, thus,
one cannot be an alter ego of the other.
they were not able to show that manuel
and jose villanueva caused the non-
remittance of the salary deductions
intended to be paid to the SSS.
Forest Hills was not authorized under its
articles of incorporation and by-laws to
collect new membership fees for the
replacement nominees of Gardpro. There
was an inconsistency between the by-laws
of Forest Hills and the affidavit of Albert as
to the amounts of the membership fees of
corporate members. On one hand, Section
13.7 of the by-laws stated that the
membership fee of P45,000.00 for
corporate members must be paid by the
applicant; on the other, Albert’s affidavit
alleged that each nominee shall pay the
P75,000.00 membership fee. To resolve
the inconsistency, the by-laws should
prevail because they constituted the
private statutes of the corporation and its
members and must be strictly complied
with and applied to the letter. In construing
and applying the provisions of the articles
of incorporation and the by-laws of Forest
Hills, the plain meaning rule embodied in
Article 1370 of the Civil Code, to the effect
that if the terms of the contract are clear
and leave no doubt upon the intention of
the contracting parties, the literal meaning
of its stipulations shall control.
The sale was valid. The 17 August 1981
Board Resolution did not give Arturo the
authority to act as LRI’s representative in
the sale “as the meeting of the board of
directors where such was passed was
conducted without giving any notice to
Asuncion.” This is in violation of Section 53
of the Corporation Code which requires
sending of notices for regular or special
meetings to every director.
“a meeting of the board of directors is
legally infirm if there is failure to comply
with the requirements or formalities of the
law or the corporation’s by-laws and any
action taken on such meeting may be
challenged as a consequence.”
it can be deduced that the meeting is a
joint stockholders and directors’ meeting.
The Court takes into account that majority
of the board of directors except for
Asuncion, had already approved of the
sale to the spouses Tanjangco prior to this
meeting. As a consequence, the power to
ratify the previous resolutions and actions
of the board of directors in this case lies in
the stockholders, not in the board of
directors. It would be absurd to require the
board of directors to ratify their own acts—
acts which the same director s already
approved of beforehand. Hence, Juanito,
as the administrator of Teresita’s estate
even though not a director, is entitled to
vote on behalf of Teresita’s estate as the
administrator thereof.”
on the death of a shareholder, the executor
or administrator duly appointed by the
Court is vested with the legal title to the
stock and entitled to vote it. Until a
settlement and division of the estate is
effected, the stocks of the decedent are
held by the administrator or executor.”
whatever defect there was on the sale to
the spouses Tanjangco pursuant to the
August 17, 1981 Board Resolution, the
same was cured through its ratification in
the July 30, 1982 Board Resolution.
by virtue of ratification, the acts of the
board of directors become the acts of the
stockholders themselves, even if those
acts were, at the outset, unauthorized.”
Violations of the 2nd and 4th paragraphs
of Sec. 74 contemplates a situation
wherein a corporation, acting thruone of its
officers or agents, denies the right of any
of its stockholders to inspect the
records,minutes and the stock and transfer
book of such corporation. The petitioner’s
complaint failed to establish that
respondents were acting on behalf of
STRADEC. Instead, it was revealed that
respondents are merely outgoing officers
of STRADEC who, for some reason,
withheld and refused to turn-over the
company records of STRADEC, and that
STRADEC is actually merely trying to
recover custody of the withheld records.
Thus, petitioners are not actually invoking
their right to inspect the records and the
stock and transfer book of STRADEC
under Sec. 74. What they seek to enforce
is the proprietary right of STRADEC to be
in possession of such records and book.
Such right, though certainly legally
enforceable by other means, cannot be
enforced by acriminal prosecution based
on a violation of the 2 nd and 4th
paragraphs of Sec. 74. Therefore, the
criminal case is dismissed for lack of
probable cause.
a derivative suit cannot prosper without
first complying with the legal requisites for
its institution:
Interim Rules Governing Intra-Corporate
Controversies.
Petitioners failed to comply with second
requisite: “…exerted all reasonable efforts,
and alleges the same with particularity in
the complaint, to exhaust all remedies
available under the articles of
incorporation, by-laws, laws or rules
governing the corporation or partnership to
obtain the relief he desires…”
Thus, a complaint which contained no
allegation whatsoever of any effort to avail
of intra-corporate remedies allows the
court to dismiss it, even motu proprio.
Indeed, even if petitioners thought it was
futile to exhaust intra-corporate remedies,
they should have stated the same in the
Complaint and specified the reasons for
such opinion. The requirement of this
allegation in the Complaint is not a useless
formality which may be disregarded at will.
Balmores did not bring the action for the
benefit of the corporation. Instead, he was
alleging that the acts of PPC’s directors,
specifically the waiver of rights in favor of
Villamor’s law firm and their failure to take
back the MC Home Depot checks from
Villamor, were detrimental to his individual
interest as a stockholder. In filing an
action, therefore, his intention was to
vindicate his individual interest and not
PPC’s or a group of stockholders’.
He failed to exhaust all available remedies
to obtain the reliefs he prayed for. Though
he tried to communicate with PPC’s
directors about the checks in Villamor’s
possession before he filed an action with
the trial court, respondent Balmores was
not able to show that this comprised all the
remedies available under the articles of
incorporation, bylaws, laws, or rules
governing PPC.
An allegation that appraisal rights were
not available for the acts complained of is
another requisite for filing derivative suits
under Rule 8, Section 1(3) of the Interim
Rules.
the RTC and not the Sandiganbayan which
has jurisdiction over cases which do not
involve a sequestration-related incident but
an intra-corporate controversy.
Section 5 of Presidential Decree (P.D.) No.
902-A vested the original and exclusive
jurisdiction over cases involving the
following in the SEC, to wit:
the complaint concerns PHILCOMSAT’s
demand to exercise its right of inspection
as stockholder of PHC but which
petitioners refused on the ground of the
ongoing power struggle within POTC and
PHILCOMSAT that supposedly prevents
PHC from recognizing PHILCOMSAT’s
representative (Africa) as possessing such
right or authority from the legitimate
directors and officers. Clearly, the
controversy is intra-corporate in nature as
they arose out of intra-corporate relations
between and among stockholders, and
between stockholders and the corporation.
The dispute concerns acts of the board of
directors claimed to amount to fraud and
misrepresentation which may be
detrimental to the interest of the
stockholders, or is one arising out of intra-
corporate relations between and among
stockholders, or between any or all of them
and the corporation of which they are
stockholders.
Moreover, the jurisdiction of the
Sandiganbayan has been held not to
extend even to a case involving a
sequestered company notwithstanding that
the majority of the members of the board
of directors were PCGG nominees.
the time during which the corporation,
through its own officers, may conduct the
liquidation of its assets and sue and be
sued as a corporation is limited to three
years from the time the period of
dissolution commences; but there is no
time limit within which the trustees must
complete a liquidation placed in their
hands. It may be found impossible to
complete the work of liquidation within the
three-year period or to reduce disputed
claims to judgment.
In the instant case, there is no dispute that
petitioner's corporate registration was
revoked on May 26, 2003. It had three
years, or until May 26, 2006, to prosecute
or defend any suit by or against it. The
subject complaint, however, was filed only
on October 19, 2006, more than three
years after such revocation. It is likewise
not disputed that the subject complaint
was filed by petitioner corporation and not
by its directors or trustees.
The trustee of a corporation may continue
to prosecute a case commenced by the
corporation within three years from its
dissolution until rendition of the final
judgment, even if such judgment is
rendered beyond the three-year period
allowed by Section 122 of the Corporation
Code. However, there is nothing in the said
cases which allows an already defunct
corporation to initiate a suit after the lapse
of the said three-year period.
Here, Bancommerce and TRB remained
separate corporations with distinct
corporate personalities. What happened is
that TRB sold and Bancommerce
purchased identified recorded assets of
TRB in consideration of Bancommerce’s
assumption of identified recorded liabilities
of TRB including booked contingent
accounts. There is no law that prohibits
this kind of transaction especially when it is
done openly and with appropriate
government approval. Indeed, the
dissenting opinions of Justices Jose Catral
Mendoza and Marvic Mario Victor F.
Leonen are of the same opinion. In strict
sense, no merger or consolidation took
place as the records do not show any plan
or articles of merger or consolidation. More
importantly, the SEC did not issue any
certificate of merger or consolidation.
Indubitably, it is clear that no merger took
place between Bancommerce and TRB as
the requirements and procedures for a
merger were absent. A merger does not
become effective upon the mere
agreement of the constituent corporations.
All the requirements specified in the law
must be complied with in order for merger
to take effect. Section 79 of the
Corporation Code further provides that the
merger shall be effective only upon the
issuance by the Securities and Exchange
Commission (SEC) of a certificate of
merger.
No de facto merger took place in the
present case simply because the TRB
owners did not get in exchange for the
bank’s assets and liabilities an equivalent
value in Bancommerce shares of stock.
Bancommerce and TRB agreed with BSP
approval to exclude from the sale the
TRB’s contingent judicial liabilities,
including those owing to RPN, et al.
common law has no application in this
jurisdiction where existing statutes
governing the situation are in place.
Since there had been no merger,
Bancommerce cannot be considered as
TRB’s successor-in-interest and against
which the Court’s Decision of October 10,
2002 in G.R. 138510 may been forced.
Bancommerce did not hold the former
TRBs assets in trust for it as to subject
them to garnishment for the satisfaction of
the latter’s liabilities to RPN, et al.
Bancommerce bought and acquired those
assets and thus, became their absolute
owner.