Digests

Federated LPG Dealers Association vs. Del Rosario, G.R. No. 202639 November 9, 2016 Facts : Petitioner reported an establishment committing acts violative of Batas Pambansa Blg. 33. Atty. Adarlo wrote the CIDG-AFCCD informing the latter of its confirmation that ACCS Ideal Gas Corporation (ACCS), which allegedly has been refilling branded LPG cylinders in its refilling plant has no authority to refill per certifications from gas companies owning the branded LPG cylinders. Antonio admitted that he was the General Manager of ACCS but denied that the company was engaged in illegal trading and underfilling. He also denied that ACCS has anything to do with the persons allegedly in-charge of refilling activities in the said compound since they were not its employees. Antonio likewise asserted that the herein respondents were merely incorporators of ACCS who have no active participation in the operation of the business of the corporation. Issue: Can respondents, as members of the Board of Directors of ACCS, be criminally prosecuted for the latter's alleged violation/s of BP 33 as amended? Ruling: the application of the legal maxim expressio unius est exclusio alterius, which means the mention of one thing implies the exclusion of another thing not mentioned. If a statute enumerates the thing upon which it is to operate, everything else must necessarily and by implication be excluded from its operation and effect. The fourth officer in the enumerated list is the catch-all 'such other officer charged with the management of the business affairs' of the corporation or juridical entity which is a factual issue which must be alleged and supported by evidence.

AGUIRRE v. FQB+7, INC. G.R. No. 170770; January 9, 2013 FACTS: Vitaliano filed a Complaint for intra-corporate dispute, injunction, inspection of corporate books and records, and damages, against respondents for the usurpation of the management powers and prerogatives of the "real" Board of Directors. The respondents filed a Petition for Certiorari and Prohibition before the CA seeking the annulment of all the proceedings The CA postulated that Section 122 of the Corporation Code allows a dissolved corporation to continue as a body corporate for the limited purpose of liquidating the corporate assets and distributing them to its creditors, stockholders, and others in interest. It does not allow the dissolved corporation to continue its business. That being the state of the law, the CA determined that Vitaliano’s Complaint, being geared towards the continuation of FQB+7, Inc.’s business, should be dismissed because the corporation has lost its juridical personality. ISSUE: Whether the RTC has jurisdiction over an intra-corporate dispute involving a dissolved corporation. HELD: Intra-corporate disputes remain even when the corporation is dissolved. Jurisdiction over the subject matter is conferred by law. R.A. No. 8799 conferred jurisdiction over intra-corporate controversies on courts of general jurisdiction or RTCs, to be designated by the Supreme Court. Thus, as long as the nature of the controversy is intra-corporate, the designated RTCs have the authority to exercise jurisdiction over such cases.

Roy III vs. Herbosa, G.R. No. 207246 November 22, 2016 Facts: On June 28, 2011, the Court issued the Gamboa Decision,... that the term "capital" in Section 11, Article XII of the 1987 Constitution refers only to shares of stock entitled to vote in the election of directors, and thus in the present case only to common shares, and not to the total outstanding capital stock (common and non-voting preferred shares). On May 20, 2013, the SEC, issued SEC-MC No. 8 Section 2. All covered corporations shall, at all times, observe the constitutional or statutory ownership requirement. For purposes of determining compliance therewith, the required percentage of Filipino ownership shall be applied to BOTH (a) the total number of outstanding shares of stock entitled to vote in the election of directors; AND (b) the total number of outstanding shares of stock, whether or not entitled to vote in the election of directors. Issues: whether the SEC gravely abused its discretion in issuing SEC-MC No. 8 in light of the Gamboa Decision and Gamboa Resolution Ruling: SEC did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it issued SEC-MC No. 8. To the contrary, the Court finds SEC-MC No. 8 to have been issued in fealty to the Gamboa Decision and Resolution. Gamboa Decisio "capital" in Section II, Article XII of the I987 Constitution refers only to shares of stock entitled to vote in the election of directors, and thus in the present case only to common shares, and not to the total outstanding capital stock (common and non-voting preferred shares). the Gamboa Resolution

Marc II Marketing, Inc. vs. Joson, G.R. No. 171993 December 12, 2011 Facts: Respondent Alfredo Jason was the General Manager, incorporator, director and stockholder of Marc II Marketing (Petitioner Corporation). Before Petitioner Corporation was officially incorporated, respondent has already been engaged by petitioner Lucila Joson, in her capacity as President of Marc Marketing Inc., to work as General Manager of Petitioner Corporation through a management contract. However, Petitioner Corpration decided to stop and cease its operation wherein respondent’s services were then terminated. Feeling aggrieved, respondent filed a complaint for Reinstatement and Money Claim against petitioners before the Labor Arbiter which ruled in favour of respondent. The National labor of Relations Commision (NLRC) reversed said decision. The Court of Appeals (CA) however, upheld the ruling of the Labor Arbiter Hence, this petition. ISSUE: Whether or not the Labor Arbiter has jurisdiction over the controversy at bar Ruling: Yes. While Article 217(a) 229 of the Labor Code, as amended provides that it is Labor Arbiter who has the original and exclusive jurisdiction over cases involving termination or dismissal of works when the person dismissed or terminated is a corporate officer, the case automatically falls within the province of the Regional Trial Court(RTC). The dismissal of a corporate officer is always regarded as a corporate act and/or an intra-corporate controversy. In conformity with Section 25 of the Corporation Code, whoever are the corporate offers enumerated in the by-laws are the exclusive officers of the corporation and the Board has no power to create other officers without amending first the corporate by-laws. However, the board may create appointive positions other than the positions of the corporate officers, but the persons occupying such positions are not considered as corporate officers within the meaning of Section 25 of the Corporation Code and are not empowered to excessive the functions of the corporate officers, except those funtions lawfully delegated to them. Their functioning and duties are to be determined by the Board of Directors/Trustees. In the case at bar, the respondent was not a corporate officer of Petitioner Corporation because his position as General Manager was not specifically mentioned in the roster of corporate officers in its corporate bylaws.

Jose A. Bernas v. Jovencio F. Cinco, G.R. Nos. 163356-57/163368-69; July 10, 2015 BERNAS GROUP were among the Members of the Board of Directors and Officers of the Makati Sports Club corporation whose terms were to expire either in 1998 or 1999. CINCO GROUP are the members and stockholders of the corporation who were elected Members of the Board of Directors and Officers of the club during the 17 December 1997 Special Stockholders Meeting. Alarmed with the rumoured anomalies in handling the corporate funds, the MSC Oversight Committee (MSCOC), composed of the past presidents of the club, demanded from the Bernas Group to resign from their respective positions to pave the way for the election of new set of ofUicers. MSCOC called a Special Stockholders' Meeting where in that meeting proceeded wherein the Bernas Group were removed from office and, in their place and stead, Cinco Group were elected. Subsequently, the removal was ratiUied during the Annual Stockholder’s Meeting. ISSUE: WHETHER OR NOT THE 17 DECEMBER 1997 SPECIAL STOCKHOLDERS' MEETING AS RATIFIED BY THE ANNUL STOCKHOLDERS’ MEETING IS VALID RULING: NO, invalid On authority of MSCOC: The removal of the Bernas Group, as well as the election of the Cinco Group, effected by the assembly in that improperly called meeting is void. The MSCOC is neither empowered by law nor the MSC by-laws to call a meeting and the subsequent ratification made by the stockholders did not cure the substantive infirmity, the defect having set in at the time the void act was done. The defect goes into the very authority of the persons who made the call for the meeting. Being void, it cannot be validated through ratification. The power to call a special meeting, solely vested by law and the MSC by-laws on the President or the Board of Directors.

Y-I Leisure Philippines, Inc. vs. Yu G.R. No. 207161 September 8, 2015 Facts: Respondent Yu bought several golf and country club shares from MADCI. Regrettably, the latter did not develop the supposed project. Yu then demanded the return of his payment, but MADCI could not return it anymore because all its assets had been transferred. Through the acts of YIL, MADCI sold all its lands to YILPI and, subsequently to YICRI. Thus, Yu now claims that the petitioners inherited the obligations of MADCI. On the other hand, the petitioners counter that they did not assume such liabilities because the transfer of assets was not committed in fraud of the MADCI's creditors. ISSUE: Whether fraud must exist in the transfer of all the corporate assets in order for the transferee to assume the liabilities of the transferor. Ruling: NO, fraud is not required in Business-Transfer Enterprise. The exception of the Nell doctrine, which finds its legal basis under Section 40, provides that the transferee corporation assumes the debts and liabilities of the transferor corporation because it is merely a continuation of the latter's business. A cursory reading of the exception shows that it does not require the existence of fraud against the creditors before it takes full force and effect. Indeed, under the Nell Doctrine, the transferee corporation may inherit the liabilities of the transferor despite the lack of fraud due to the continuity of the latter's business

Turner vs. Lorenzo Shipping Corporation G.R. No. 157479 November 24, 2010 FACTS The petitioners were stockholders of respondent-corporation. The latter decided to amend its articles of incorporation to remove the stockholders pre-emptive rights to newly issued shares of stock. Aggrieved, the petitioners voted against the amendment and demanded payment of their shares based on its book value. Respondent did not agree on the valuation of stock and led the parties to constitute an appraisal committee. Despite a favorable award to the petitioners, respondent refused to pay the valuation due to lack of retained earnings at the time of the petitioners’ demand. Upon the respondent’s refusal to pay, the petitioners sued the respondent for collection and damages. Respondent moved for a dismissal on the ground that petitioners do not have a cause of action. ISSUE Whether petitioner stockholders have a cause of action to demand payment for the value of their shares HELD No, petitioners’ cause of action was premature. A stockholder who dissents from certain corporate actions has the right to demand payment of the fair value of his or her shares, known as the right of appraisal. It serves the purpose of enabling the dissenting stockholder to have his interests purchased and to retire from the corporation. The limitation imposed by law in the exercise of such right is that no payment shall be made to any dissenting stockholder unless the corporation has unrestricted retained earnings in its books to cover the payment. In this case, respondent did not have unrestricted retained earnings in its books at the time petitioner stockholders commenced the action for collection and thus its legal obligation to pay did not yet arise. The fact that the cause of action accrues after the action is commenced and while it is pending is of no moment. The requirement of unrestricted retained earnings to cover the shares is based on the trust fund doctrine which means that the capital stock, property and other assets of a corporation are regarded as equity in trust for the payment of corporate creditors.