Professional Documents
Culture Documents
Fontecha
Gr. No. 76801, August 11, 1995
Facts:
Lopez Realty, Inc., is a corporation engaged in real estate business. Petitioner
Asuncion Lopez Gonzales is one of its majority shareholders. Sometime in 1978,
Arturo Lopez submitted a proposal relative to the distribution of certain assets of
Petitioner Corporation among its three main shareholders. The proposal had 3
aspects which are:(1) the sale of assets of the company to pay for its obligations;
(2) the transfer of certain assets of the company to its three (3) main shareholders,
while some other assets shall remain with the company; and (3) the reduction of
employees with provision for their gratuity pay. The proposal was deliberated upon
and approved in a special meeting of the board of directors held on April 17, 1978.
However, petitioner Asuncion Lopez Gonzales was still abroad. While she was
still out of the country, she sent a cablegram to the corporation, objecting to certain
matters taken up by the board in her absence, such as the sale of some of the
assets of the corporation.
Issue:
1. Whether the subject resolutions requires stockholders
approval to be valid.
2. Was it an were ultra vires for lack of notice?
Held:
Ist: Yes, 2nd: No. Jurisprudence tells us that an action of the board of directors
during a meeting, which was illegal for lack of notice, may be ratified either
expressly, by the action of the directors in subsequent legal meeting, or impliedly,
by the corporation's subsequent course of conduct.
In the case at bench, it was established that petitioner corporation did not
issue any resolution revoking nor nullifying the board resolutions granting gratuity
pay to private respondents. Instead, they paid the gratuity pay, particularly, the first
2 installments thereof to some employees.
The assailed resolutions before us cover a subject which concerns the benefit
and welfare of the company's employees. To stress, providing gratuity pay for its
employees is one of the express powers of the corporation under the Corporation
Code, hence, petitioners cannot invoke the doctrine of ultra vires to avoid any
liability arising from the issuance the subject resolutions.
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
corporation and businesses outside the primary purpose clause of the corporation in
violation of the Corporation Code.
Issue:
Whether the use of corporate fund in other corporation or
business outside the primary purpose clause of the corporation is in
violation of the Corporation Code
Held:
No. Section 17-1/2 (Sec. 40) of the Corporation Law allows a corporation to
"invest its funds in any other corporation or business or for any purpose other than
the main purpose for which it was organized" provided that its Board of Directors
has been so authorized by the affirmative vote of stockholders holding shares
entitling them to exercise at least two-thirds of the voting power. If the investment
is made in pursuance of the corporate purpose, it does not need the approval of the
stockholders. It is only when the purchase of shares is done solely for investment
and not to accomplish the purpose of its incorporation that the vote of approval of
the stockholders holding shares entitling them to exercise at least two-thirds of the
voting power is necessary.
As stated by respondent corporation, the purchase of beer manufacturing
facilities by SMC was an investment in the same business stated as its main
purpose in its Articles of Incorporation, which is to manufacture and market beer.
Besides, the investment was for the purchase of beer manufacturing and
marketing facilities which is apparently relevant to the corporate purpose. The mere
fact that respondent corporation submitted the assailed investment to the
stockholders for ratification at the annual meeting of May 10, 1977 cannot be
construed as an admission that respondent corporation had committed an ultra
vires act, considering the common practice of corporations of periodically
submitting for the gratification of their stockholders the acts of their directors,
officers and managers.
Dela Rama v. Ma-ao Sugar
Gr. No. L-17504 & l-17506, February 28, 1969
Facts:
In 1950 the MSCCI (MA-AO SUGAR CENTRAL CO., INC.) through its
President, Amado, subscribed for P300k worth of capital stock of the Philippine Fiber
Processing Co., Inc. (PFPC). Payments of the subscription were made on 3
installments, but at the time the first two payments were made there was no board
resolution authorizing the investment; and that it was only on November 26, 1951,
that J. Amado was so authorized by the BOD, by the way, making the third payment
made in March 1952 authorized.
Issue:
Held:
Yes. The law requiring the votes does not apply in the case because of
MSCCIs contention that since said PFPC was engaged in the manufacture of sugar
bags it was perfectly legitimate for MSCCI either to manufacture sugar bags or
invest in another corporation engaged in said manufacture.