Seneres v.

Comelec
In 1999, Melquiades Robles was elected president and chairperson of BUHAY, a party-list group
duly registered with the Commission on Elections (COMELEC). The constitution of BUHAY
provides for a three-year term for all its party officers, without re-election. BUHAY participated
in the 2001 and 2004 elections, with Robles as its president. All the required Manifestations of
Desire to Participate in the said electoral exercises, including the Certificates of Nomination of
representatives, carried the signature of Robles as president of BUHAY. On January 26, 2007, in
connection with the May 2007 elections, BUHAY again filed a Manifestation of its Desire to
Participate in the Party-List System of Representation. As in the past two elections, the
manifestation to participate bore the signature of Robles as BUHAY president.
Dr. Hans Christian Seeres, on the other hand, filed with the COMELEC a Petition to Deny Due
Course to Certificates. In it, Seeres alleged that he was the acting president and secretarygeneral of BUHAY, having assumed that position since August 17, 2004 when Robles vacated
the position. Seeres also claim that the nominations made by Robles (nominations pertaining as
to who should represent BUHAY in Congress) were, for lack of authority, void owing to the
expiration of the latters term as party president. Furthermore, Seeres asserted that Robles was,
under the Constitution, disqualified from being an officer of any political party, the latter being
the Acting Administrator of the Light Railway Transport Authority (LRTA), a governmentcontrolled corporation. Robles, so Seeres would charge, was into a partisan political activity
which civil service members, like the former, were enjoined from engaging in.
On July 9 and July 18, 2007, respectively, the COMELEC issued two resolutions proclaiming
BUHAY as a winning party-list organization for the May 2007 elections entitled to three (3)
House seats and it also declared Robles as the duly authorized representative of BUHAY.
ISSUE: Whether or not Robles should be disqualified as president of BUHAY.
HELD: No, Robles is not disqualified as the president of BUHAY. His being the chairman of
LRTA and the president of BUHAY, a party-list group, is not compatible. There is no law
prohibiting that the LRTA chair cannot be a president of a party-list group. Further, Robles is not
guilty of electioneering. Robles act of nominating BUHAY representatives to Congress is not
electioneering. The crime electioneering is clearly defined under Section 79 (b) of the Omnibus
Election Code but Robles did not commit any act defined thereunder.
Anent the issue that Robles term as president of BUHAY already expired when he made the
nominations hence the nominations are void, the Supreme Court ruled that the nominations are

valid. This is because of the Hold-Over doctrine under corporation law. As a general rule,
officers and directors of a corporation hold over after the expiration of their terms until such time
as their successors are elected or appointed. The holdover doctrine has, to be sure, a purpose
which is at once legal as it is practical. It accords validity to what would otherwise be deemed as
dubious corporate acts and gives continuity to a corporate enterprise in its relation to outsiders.

Lopez realty v. spouses tanjangco

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.
G.R. No. 154291, 12 November 2014
Lopez Realty, Inc. (LRI) and Asuncion Lopez-Gonzalez initiated a Complaint for annulment of
sale, cancellation of title, reconveyance and damages with prayer for the issuance of temporary
restraining order (TRO) and/or writ of preliminary injunction against the spouses Tanjangco,
Arturo and the Registrar of Deeds of Manila.
Previously, LRI and Dr. Jose Tanjangco (Jose) were the registered co-owners of three parcels of
land and the building erected thereon known as the Trade Center Building Joses one-half
share in the subject properties were later transferred and registered in the name of his son
Reynaldo Tanjangco and daughter-in-law, Maria Luisa Arguelles (spouses Tanjangco).
These were the stockholders of record of LRI at the time material to this case:
1. Asuncion Lopez-Gonzalez (Asuncion, Director & Corporate Secretary) 7,831 shares;
2. Arturo F. Lopez (Arturo) 7,830 shares;
3. Teresita Lopez-Marquez (Teresita) 7,830 shares;
4. Rosendo de Leon (Rosendo, Director) 5 shares
5. Benjamin Bernardino (Benjamin, Director) 1 share;
6. Augusto de Leon (Augusto, Director) 1 share; and
7. Leo Rivera (Leo, Director) 1 share
During a special stockholders meeting held on 27 July 1981, the sale of 1/2 share of LRI in the
Trade Center Building was taken up. While the selling price was at P4 M, the Tanjancos offered
P3.8 M. To this, Asuncion countered with P5 M which was not accepted by the Tanjancos. Thus,
the board agreed to give Asuncion the priority to equal the Tanjanco offer and the same to be

exercised within ten (10) days. Otherwise, the Tanjanco offer will be deemed accepted. Just a day
after, Teresita died (her estates executor Juanito L. Santos represented her afterwards).
As Asuncion failed to exercise her option to purchase the subject properties, and while she was
abroad, the remaining directors: Rosendo, Benjamin and Leo convened in a special meeting
passing and approving the 17 August 1981 Resolution authorizing Arturo to negotiate and carry
out the complete termination of the sale terms and conditions as embodied in the Resolution of
July 27, 1981, among others. Subsequently, the sale was perfected with payments subsequently
made.
After learning of the sale, Asuncion filed this complaint challenging the validity of the 17 August
1982 Resolution on the ground that she was not notified of the meeting.
HELD: The sale was valid. The 17 August 1981 Board Resolution did not give Arturo the
authority to act as LRIs 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.
As a result, 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 corporations by laws and any action taken on
such meeting may be challenged as a consequence.
Notwithstanding, the actions taken in such a meeting by the directors or trustees may be ratified
expressly or impliedly. In the case of ratification, it means that the principal voluntarily adopts,
confirms and gives sanction to some unauthorized act of its agent on its behalf.
Here, the ratification was expressed through the July 30, 1982 Board Resolution. Regarding
Asuncions claims that the 30 July 1982 Board Resolution did not ratify the 17 August 1981
Resolution due to Juanitos disqualification and Leos negative vote. Asuncion assails the
authority of Juanito to vote because he was not a director and he did not own any share of stock
which would qualify him to be one. On the contrary, Juanito defends his right to vote as the
representative of Teresitas estate. Upon examination of the July 30, 1982 minutes of the
meeting, 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 actsacts which the same director s already approved of beforehand. Hence,
Juanito, as the administrator of Teresitas estate even though not a director, is entitled to vote on
behalf of Teresitas estate as the administrator thereof.

Citing jurisprudence, in stock corporations, shareholders may generally transfer their shares.
Thus, 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.
As there exists no corporate secretarys certification of the minutes of the meeting, only Juanito,
Benjamin and Roseno, whose signature appeared on the minutes, could be considered as to have
ratified the sale to the spouses Tanjangco. As Leo owns only 1 share, the results are the same
against the overwhelming shares who voted in favor of ratification.
In sum, 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. It is of no moment whether Arturo was authorized to merely negotiate or to
enter into a contract of sale on behalf of LRI as all his actions in connection to the sale were
expressly ratified by the stockholders holding 67% of the outstanding capital stock.
Citing jurisprudence, the Court held that 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.
Gokongwei vs. SEC, 89 SCRA 336 (1979)

Facts: Petitioner, stockholder of San Miguel Corp. filed a petition with the SEC for the
declaration of nullity of the by-laws etc. against the majority members of the BOD and San
Miguel. It is stated in the by-laws that the amendment or modification of the by-laws may only
be delegated to the BODs upon an affirmative vote of stockholders representing not less than 2/3
of the subscribed and paid uo capital stock of the corporation, which 2/3 could have been
computed on the basis of the capitalization at the time of the amendment. Petitioner contends that
the amendment was based on the 1961 authorization, the Board acted without authority and in
usurpation of the power of the stockholders n amending the by-laws in 1976. He also contends
that the 1961 authorization was already used in 1962 and 1963. He also contends that the
amendment deprived him of his right to vote and be voted upon as a stockholder (because it
disqualified competitors from nomination and election in the BOD of SMC), thus the amended
by-laws were null and void. While this was pending, the corporation called for a stockholders
meeting for the ratification of the amendment to the by-laws. This prompted petitioner to seek
for summary judgment. This was denied by the SEC. In another case filed by petitioner, he
alleged that the corporation had been using corporate funds in other corps and businesses outside
the primary purpose clause of the corporation in violation of the Corporation Code.

Issue: Are amendments valid?

Held: The validity and reasonableness of a by-law is purely a question of law. Whether the bylaw is in conflict with the law of the land, or with the charter of the corporation or is in legal
sense unreasonable and therefore unlawful is a question of law. However, this is limited where
the reasonableness of a by-law is a mere matter of judgment, and one upon which reasonable
minds must necessarily differ, a court would not be warranted in substituting its judgment instead
of the judgment of those who are authorized to make by-laws and who have exercised authority.
The Court held that a corporation has authority prescribed by law to prescribe the qualifications
of directors. It has the inherent power to adopt by-laws for its internal government, and to
regulate the conduct and prescribe the rights and duties of its members towards itself and among
themselves in reference to the management of its affairs. A corporation, under the Corporation
law, may prescribe in its by-laws the qualifications, duties and compensation of directors,
officers, and employees. Any person who buys stock in a corporation does so with the knowledge
that its affairs are dominated by a majority of the stockholders and he impliedly contracts that the
will of the majority shall govern in all matters within the limits of the acts of incorporation and
lawfully enacted by-laws and not forbidden by law. Any corporation may amend its by-laws by
the owners of the majority of the subscribed stock. It cannot thus be said that petitioners has the
vested right, as a stock holder, to be elected director, in the face of the fact that the law at the
time such stockholder's right was acquired contained the prescription that the corporate charter
and the by-laws shall be subject to amendment, alteration and modification. A Director stands in
a fiduciary relation to the corporation and its shareholders, which is characterized as a trust
relationship. An amendment to the corporate by-laws which renders a stockholder ineligible to be
director, if he be also director in a corporation whose business is in competition with that of the
other corporation, has been sustained as valid. This is based upon the principle that where the
director is employed in the service of a rival company, he cannot serve both, but must betray one
or the other. The amendment in this case serves to advance the benefit of the corporation and is
good. Corporate officers are also not permitted to use their position of trust and confidence to
further their private needs, and the act done in furtherance of private needs is deemed to be for
the benefit of the corporation. This is called the doctrine of corporate opportunity.

Corporate Law Case Digest: Ponce v. Alsons Cement Corp. (2002)

G.R. NO. 139802 December 10, 2002

Lessons Applicable:

Nature of Certificate of Stock (Corporate Law)

Remedy if Registration is Refused (Corporate Law)

FACTS:

February 8, 1968: Vicente C. Ponce and Fausto Gaid, incorporator of Victory Cement
Corporation (VCC), executed a Deed of Undertaking and Indorsement
whereby Gaid acknowledges that Ponce is the owner of the shares and he was therefore
assigning/endorsing it to Ponce

VCC was renamed Floro Cement Corporation (FCC) and then to Alsons Cement
Corporation (ACC)

Up to the present, no certificates of stock corresponding to the 239,500 subscribed and

fully paid shares of Gaid were issued in the name of Fausto G. Gaid and/or the plaintiff.

Despite repeated demands, the ACC refused to issue the certificates of stocks

SEC Hearing Officer Enrique L. Flores, Jr. granted the motion to dismiss

Upon appeal, the Commission En Banc reversed the decision of the Hearing Officer

Ponce, filed a complaint with the SEC for mandamus

CA: mandamus should be dismissed for failure to state a cause of action

in the absence of any allegation that the transfer of the shares was registered in the
stock and transfer book

ISSUE: W/N the cert. of stocks of Gaid can be transferred to Ponce

HELD: NO. petition Denied.

SEC. 63. Certificate of stock and transfer of shares.The capital stock of stock
corporations shall be divided into shares for which certificates signed by the president or

vice-president, countersigned by the secretary or assistant secretary, and sealed with the
seal of the corporation shall be issued in accordance with the by-laws. Shares of stock so
issued are personal property and may be transferred by delivery of the certificate or
certificates indorsed by the owner or his attorney-in-fact or other person legally
authorized to make the transfer. No transfer, however, shall be valid, except as
between the parties, until the transfer is recorded in the books of the corporation so
as to show the names of the parties to the transaction, the date of the transfer, the
number of the certificate or certificates and the number of shares transferred.
No shares of stock against which the corporation holds any unpaid claim shall be
transferable in the
books of the corporation.

the stock and transfer book is the basis for ascertaining the persons entitled to the rights
and subject to the liabilities of a stockholder

Where a transferee is not yet recognized as a stockholder, the corporation is under

no specific legal duty to issue stock certificates in the transferees name.

in a case such as that at bar, a mandamusshould not issue to compel the secretary of a
corporation to make a transfer of the stock on the books of the company

unless it affirmatively appears that he has failed or refused so to do, upon the
demand either of the person in whose name the stock is registered, or of some
person holding a power of attorney for that purpose from the registered owner of
the stock.

mere indorsee of a stock certificate, claiming to be the owner, will not

necessarily be recognized as such by the corporation and its officers, in the
absence of express instructions of the registered owner to make such
transfer to the indorsee, or a power of attorney authorizing such transfer

mandamus - proper remedy to make him the rightful owner and holder of a stock
certificate to be issued in his name

SOUTH COTABATO COMMUNICATIONS CORPORATION and GAUVAIN J. BENZONAN

vs. HON. PATRICIA A. STO. TOMAS, SECRETARY OF LABOR AND EMPLOYMENT, et.
al.,
G.R.
No.
173326,
December
15,
2010

D
E
LEONARDO-DE

S
CASTRO,

N
J.:

x.

Anent the first procedural issue, the Court had summarized the jurisprudential principles on the
matter in Cagayan Valley Drug Corporation v. Commissioner of Internal Revenue.[15] In said
case, we held that a President of a corporation, among other enumerated corporate officers and
employees, can sign the verification and certification against of non-forum shopping in behalf of
the said corporation without the benefit of a board resolution. We quote the pertinent portion of
the
decision
here:

It must be borne in mind that Sec. 23, in relation to Sec. 25 of the Corporation Code, clearly
enunciates that all corporate powers are exercised, all business conducted, and all properties
controlled by the board of directors. A corporation has a separate and distinct personality from its
directors and officers and can only exercise its corporate powers through the board of directors.
Thus, it is clear that an individual corporate officer cannot solely exercise any corporate power
pertaining to the corporation without authority from the board of directors. This has been our
constant
holding
in
cases
instituted
by
a
corporation.

In a slew of cases, however, we have recognized the authority of some corporate officers to sign
the verification and certification against forum shopping. In Mactan-Cebu International Airport
Authority v. CA, we recognized the authority of a general manager or acting general manager to
sign the verification and certificate against forum shopping; in Pfizer v. Galan, we upheld the
validity of a verification signed by an employment specialist who had not even presented any
proof of her authority to represent the company; in Novelty Philippines, Inc. v. CA, we ruled that
a personnel officer who signed the petition but did not attach the authority from the company is
authorized to sign the verification and non-forum shopping certificate; and in Lepanto

Consolidated Mining Company v. WMC Resources International Pty. Ltd. (Lepanto), we ruled
that the Chairperson of the Board and President of the Company can sign the verification and
certificate against non-forum shopping even without the submission of the boards authorization.

In sum, we have held that the following officials or employees of the company can sign the
verification and certification without need of a board resolution: (1) the Chairperson of the Board
of Directors, (2) the President of a corporation, (3) the General Manager or Acting General
Manager, (4) Personnel Officer, and (5) an Employment Specialist in a labor case.

While the above cases do not provide a complete listing of authorized signatories to the
verification and certification required by the rules, the determination of the sufficiency of the
authority was done on a case to case basis. The rationale applied in the foregoing cases is to
justify the authority of corporate officers or representatives of the corporation to sign the
verification or certificate against forum shopping, being in a position to verify the truthfulness
and correctness of the allegations in the petition.[16] (Emphases supplied.)

It must be stressed, however, that the Cagayan ruling qualified that the better procedure is still to
append a board resolution to the complaint or petition to obviate questions regarding the
authority
of
the
signatory
of
the
verification
and
certification.[17]

Nonetheless, under the circumstances of this case, it bears reiterating that the requirement of the
certification of non-forum shopping is rooted in the principle that a party-litigant shall not be
allowed to pursue simultaneous remedies in different fora, as this practice is detrimental to an
orderly judicial procedure. However, the Court has relaxed, under justifiable circumstances, the
rule requiring the submission of such certification considering that, although it is obligatory, it is
not jurisdictional. Not being jurisdictional, it can be relaxed under the rule of substantial
compliance.[18]

In the case at bar, the Court holds that there has been substantial compliance with Sections 4 and

5, Rule 7 of the 1997 Revised Rules on Civil Procedure on the petitioners part in consonance
with our ruling in the Lepanto Consolidated Mining Company v. WMC Resources International
PTY LTD.[19] that we laid down in 2003 with the rationale that the President of petitionercorporation is in a position to verify the truthfulness and correctness of the allegations in the
petition. Petitioner Benzonan clearly satisfies the aforementioned jurisprudential requirement
because he is the President of petitioner South Cotabato Communications Corporation.
Moreover, he is also named as co-respondent of petitioner-corporation in the labor case which is
the subject matter of the special civil action for certiorari filed in the Court of Appeals.

Clearly, it was error on the part of the Court of Appeals to dismiss petitioners special civil action
for certiorari despite substantial compliance with the rules on procedure. For unduly upholding
technicalities at the expense of a just resolution of the case, normal procedure dictates that the
Court of Appeals should be tasked with properly disposing the petition, a second time around, on
the
merits.

The Court is mindful of previous rulings which instructs us that when there is enough basis on
which a proper evaluation of the merits can be made, we may dispense with the time-consuming
procedure in order to prevent further delays in the disposition of the case.[20] However, based on
the nature of the two remaining issues propounded before the Court which involve factual issues
and given the inadequacy of the records, pleadings, and other evidence available before us to
properly resolve those questions, we are constrained to refrain from passing upon them.

After all, the Court has stressed that its jurisdiction in a petition for review on certiorari under
Rule 45 of the Rules of Court is limited to reviewing only errors of law, not of fact, unless the
findings of fact complained of are devoid of support by the evidence on record, or the assailed
judgment
is
based
on
the
misapprehension
of
facts.[21]

WHEREFORE, the petition is PARTIALLY GRANTED. The assailed Resolutions of the Court
of Appeals are REVERSED and SET ASIDE. The case is REMANDED to the Court of Appeals
for proper disposition of CA-G.R. SP No. 00179-MIN.

Lanuza vs. CA
GR No. 131394 | March 28, 2005

Facts:

Petitioners seek to nullify the Court of Appeals Decision in CAG.R. SP No.

414731 promulgated on 18 August 1997, affirming the SEC Order dated 20 June 1996, and
the Resolution2 of the Court of Appeals dated 31 October 1997 which denied petitioners motion
for reconsideration.

In 1952, the Philippine Merchant Marine School, Inc. (PMMSI) was incorporated, with
seven hundred (700) founders shares and seventy-six (76) common shares as its initial capital
stock subscription reflected in the articles of incorporation

Onrubia et. al, who were in control of PMMSI registered the companys stock and transfer
book for the first time in 1978, recording thirty-three (33) common shares as the only issued and
outstanding shares of PMMSI.

In 1979, a special stockholders meeting was called and held on the basis of what was
considered as a quorum of twenty-seven (27) common shares, representing more than two-thirds
(2/3) of the common shares issued and outstanding.

In 1982, Juan Acayan, one of the heirs of the incorporators filed a petition for the
registration of their property rights was filed before the SEC over 120 founders shares and 12
common shares owned by their father

SEC Hearing Officer: heirs of Acayan were entitled to the claimed shares and called for a
special stockholders meeting to elect a new set of officers.

SEC en banc: affirmed the decision

As a result, the shares of Acayan were recorded in the stock and transfer book.

On May 6, 1992, a special stockholders meeting was held to elect a new set of directors

Onrubia et al filed a petition with SEC questioning the validity of said meeting alleging
that the quorum for the said meeting should not be based on the 165 issued and outstanding
shares as per the stock and transfer book, but on the initial subscribed capital stock of seven
hundred seventy-six (776) shares, as reflected in the 1952 Articles of Incorporation

Petition was dismissed


SC en banc: shares of the deceased incorporators should be duly represented by their
respective administrators or heirs concerned. Called for a stockholders meeting on the basis of
the stockholdings reflected in the articles of incorporation for the purpose of electing a new set of
officers for the corporation

Lanuza, Acayan et al, who are PMMSI stockholders, filed a petition for review with the
CA, raising the following issues:
1.
whether the basis the outstanding capital stock and accordingly also for determining the
quorum at stockholders meetings it should be the 1978 stock and transfer book or if it should be
the 1952 articles of incorporation
(They contended that the basis is the stock and transfer book, not articles of incorporation in
computing the quorum)
2.
whether the Espejo decision (decision of SEC en banc ordering the recording of the shares
of Jose Acayan in the stock and transfer book) is applicable to the benefit of Onrubia et al

CA decision:

1.
For purposes of transacting business, the quorum should be based on the outstanding
capital stock as found in the articles of incorporation
2.
To require a separate judicial declaration to recognize the shares of the original
incorporators would entail unnecessary delay and expense. Besides. the incorporators have
already proved their stockholdings through the provisions of the articles of incorporation.

Appeal was made by Lanuza et al before the SC

Lanuza et al contention:
a. 1992 stockholders meeting was valid and legal
b. Reliance on the 1952 articles of incorporation for determining the quorum negates the
existence and validity of the stock and transfer book Onrubia et al prepared
c. Onrubia et al must show and prove entitlement to the founders and common shares in a
separate and independent action/proceeding in order to avail of the benefits secured by
the heirs of Acayan

Onrubia et als contention, based on the Memorandum: petition should be dismissed on the
ground of res judicata

Another appeal was made


Lanuza et als contention: instant petition is separate and distinct from G.R. No. 131315,
there being no identity of parties, and more importantly, the parties in the two petitions have their
own distinct rights and interests in relation to the subject matter in litigation

Onrubia et als manifestation and motion: moved for the dismissal of the case

Issue: What should be the basis of quorum for a stockholders meetingthe outstanding capital
stock as indicated in the articles of incorporation or that contained in the companys stock and
transfer book?

Ruling:

Articles of Incorporation

Defines the charter of the corporation and the contractual relationships between the State
and the corporation, the stockholders and the State, and between the corporation and its
stockholders.

Contents are binding, not only on the corporation, but also on its shareholders.
Stock and transfer book

Book which records the names and addresses of all stockholders arranged alphabetically,
the installments paid and unpaid on all stock for which subscription has been made, and the date
of payment thereof; a statement of every alienation, sale or transfer of stock made, the date
thereof and by and to whom made; and such other entries as may be prescribed by law
necessary as a measure of precaution, expediency and convenience since it provides the
only certain and accurate method of establishing the various corporate acts and transactions and
of showing the ownership of stock and like matters
Not public record, and thus is not exclusive evidence of the matters and things which
ordinarily are or should be written therein

In this case, the articles of incorporation indicate that at the time of incorporation, the
incorporators were bona fide stockholders of 700 founders shares and 76 common shares.
Hence, at that time, the corporation had 776 issued and outstanding shares.

According to Sec. 52 of the Corp Code, a quorum shall consist of the stockholders
representing a majority of the outstanding capital stock. As such, quorum is based on the totality
of the shares which have been subscribed and issued, whether it be founders shares or common
shares


To base the computation of quorum solely on the obviously deficient, if not inaccurate
stock and transfer book, and completely disregarding the issued and outstanding shares as
indicated in the articles of incorporation would work injustice to the owners and/or successors in
interest of the said shares.

The stock and transfer book of PMMSI cannot be used as the sole basis for determining
the quorum as it does not reflect the totality of shares which have been subscribed, more so when
the articles of incorporation show a significantly larger amount of shares issued and outstanding
as compared to that listed in the stock and transfer book.

One who is actually a stockholder cannot be denied his right to vote by the corporation
merely because the corporate officers failed to keep its records accurately. A corporations
records are not the only evidence of the ownership of stock in a corporation.

It is no less than the articles of incorporation that declare the incorporators to have in their
name the founders and several common shares. Thus, to disregard the contents of the articles of
incorporation would be to pretend that the basic document which legally triggered the creation of
the corporation does not exist and accordingly to allow great injustice to be caused to the
incorporators and their heirs

WHEREFORE, the petition is DENIED and the assailed Decision is AFFIRMED. Costs against
petitioners