Lim v. Moldex Land, Inc. Jan.

25, 2017

Section 90 of the Corporation Code states that membership in

a non-stock corporation and all rights arising therefrom are
personal and non-transferable, unless the articles of
incorporation or the by-laws otherwise provide.

Western Institute of Technology v. Salas 278 SCRA 216

The phrase as such directors is not without significance for it

delimits the scope of the prohibition to compensation given to them
for services performed purely in their capacity as directors or
trustees. The unambiguous implication is that members of the
board may receive compensation, in addition to reasonable per
diems, when they render services to the corporation in a capacity
other than as directors/trustees.

Board of Liquidators v. Kalaw 20 SCRA 987

The board of directors of a corporation holds the duty to

act for the corporation according to their best judgment, and
in so doing it cannot be controlled in the reasonable
exercise and performance of such duty. So long as it act
in good faith its orders are not reviewable by the court

Benguet Electric Coop. v. NLRC 209 SCRA 55

Directors or trustees who willfully and knowingly vote for or assent to

patently unlawful acts of the corporation or who are guilty of gross
negligence or bad faith in directing the affairs of the corporation or acquire
any personal or pecuniary interest in conflict with their duty as such
directors or trustees shall be jointly liable and severally for all damages
resulting therefrom suffered by the corporation, its stockholders or
members and other persons
 Prime White Cement v. IAC 220 SCRA 103

A director's contract with his corporation is not in all instances void

or voidable. If the contract is fair and reasonable under the
circumstances, it may be ratified by the stockholders provided a
full disclosure of his adverse interest is made.

Gokongwei v. SEC et al. 89 SCRA 336

Where the two competing firms control a substantial segment of

the market this could lead to collusion and combination in restraint
of trade. Reason and experience point to the inevitable conclusion
that the inherent tendency of interlocking directorates between
companies that are related to each other as competitors is to blunt
the edge of rivalry between the corporations, to seek out ways of
compromising opposing interests, and thus eliminate competition.

Strong v. Repide 41 Phil. 947

The ordinary relations between directors and shareholders in

a business corporation are not of such a fiduciary nature as
to make it the duty of a director to disclose to a
shareholder the general knowledge which he may possess
regarding the value of the shares of the company before he
purchases any from a shareholder, yet there are cases
where, by reason of the special facts, such duty exists. The
purchaser of corporate stock cannot escape liability for his
fraud in concealing facts affecting its value which he was in
good faith bound to disclose, on the theory that, because of
the insistence of the seller that her agent was not
authorized to make the sale, there had never been any
consent on her part, obtained by fraud or otherwise, where
the court finds that the agent's authority was sufficient.
 Steinberg v. Velasco 52 Phil. 953

The creditors of a corporation have the right to assume that

so long as there are debts and liabilities, the board of
directors of the corporation will not use its assets to
purchase its own stock or to declare dividends to its
stockholders when the corporation is insolvent