Corp Case Digests 71712
Content
The Rural Bank of Lipa City Inc., etc. vs. Court of Appeals [GR 124535, 28 September 2001] First Division, Ynares-Santiago !"# 4 $on$%r Facts: Re&na'(o )i''an%eva, Sr*, a sto$+,o'(er o- t,e R%ra' .an+ o- /ipa 0it&, e1e$%te( a Dee( o- 2ssignment, 3,erein ,e assigne( ,is s,ares, as 3e'' as t,ose o- 8 ot,er s,are,o'(ers %n(er ,is $ontro' 3it, a tota' o- 10,445 s,ares, in -avor o- t,e sto$+,o'(ers o- t,e .an+ represente( b& its (ire$tors .ernar(o .a%tista, !aime 0%sto(io an( 6$tavio 7atigba+* Sometime t,erea-ter, Re&na'(o )i''an%eva, Sr* an( ,is 3i-e, 2ve'ina, e1e$%te( an 2greement 3,erein t,e& a$+no3'e(ge( t,eir in(ebte(ness to t,e .an+ in t,e amo%nt o- 84,000,000*00, an( stip%'ate( t,at sai( (ebt 3i'' be pai( o%t o- t,e pro$ee(s o- t,e sa'e o- t,eir rea' propert& (es$ribe( in t,e 2greement* 2t a meeting o- t,e .oar( o- Dire$tors o- t,e .an+ on 15 9ovember 1::3, t,e )i''an%eva spo%ses ass%re( t,e .oar( t,at t,eir (ebt 3o%'( be pai( on or be-ore De$ember 31 ot,at same &ear; ot,er3ise, t,e .an+ 3o%'( be entit'e( to 'i<%i(ate t,eir s,are,o'(ings, in$'%(ing t,ose %n(er t,eir $ontro'* =n s%$, an event, s,o%'( t,e pro$ee(s o- t,e sa'e o- sai( s,ares -ai' to satis-& in -%'' t,e ob'igation, t,e %npai( ba'an$e s,a'' be se$%re( b& ot,er $o''atera' s%--i$ient t,ere-or* >,en t,e )i''an%eva spo%ses -ai'e( to sett'e t,eir ob'igation to t,e .an+ on t,e (%e (ate, t,e .oar( sent t,em a 'etter (eman(ing# 1" t,e s%rren(er o- a'' t,e sto$+ $erti-i$ates iss%e( to t,em; an( 2" t,e (e'iver& o- s%--i$ient $o''atera' to se$%re t,e ba'an$e o- t,eir (ebt amo%nting to 83,344,8:8*54* ?,e )i''an%evas ignore( t,e ban+@s (eman(s, 3,ere%pon t,eir s,ares o- sto$+ 3ere $onverte( into ?reas%r& Sto$+s* /ater, t,e )i''an%evas, t,ro%g, t,eir $o%nse', <%estione( t,e 'ega'it& o- t,e $onversion o- t,eir s,ares* 6n 15 !an%ar& 1::4, t,e sto$+,o'(ers o- t,e .an+ met to e'e$t t,e ne3 (ire$tors an( set o- o--i$ers -or t,e &ear 1::4* ?,e )i''an%evas 3ere not noti-ie( o- sai( meeting* =n a 'etter (ate( 1: !an%ar& 1::4, 2tt&* 2ma(o =gna$io, $o%nse' -or t,e )i''an%eva spo%ses, <%estione( t,e 'ega'it& o- t,e sai( sto$+,o'(ers@ meeting an( t,e va'i(it& oa'' t,e pro$ee(ings t,erein* =n rep'&, t,e ne3 set o- o--i$ers o- t,e .an+ in-orme( 2tt&* =gna$io t,at t,e )i''an%evas 3ere no 'onger entit'e( to noti$e o- t,e sai( meeting sin$e t,e& ,a( re'in<%is,e( t,eir rig,ts as sto$+,o'(ers in -avor o- t,e .an+* 0onse<%ent'&, t,e )i''an%eva spo%ses -i'e( 3it, t,e Se$%rities an( A1$,ange 0ommission SA0", a petition -or ann%'ment ot,e sto$+,o'(ers@ meeting an( e'e$tion o- (ire$tors an( o--i$ers on 15 !an%ar& 1::4, 3it, (amages an( pra&er -or pre'iminar& inB%n$tion SA0 0ase 02-:4-4483C* !oining t,em as $opetitioners 3ere 0ata'ino )i''an%eva, 2n(res GonDa'es, 2%rora /a$erna, 0e'so /a&go, A(gar(o Re&es, 2'eBan(ro ?onogan, an( A'ena Esi* 9ame( respon(ents 3ere t,e ne3'&-e'e$te( o--i$ers an( (ire$tors o- t,e R%ra' .an+, name'&# .ernar(o .a%tista, !aime 0%sto(io, 6$tavio 7atigba+, Fran$is$o 0%sto(io an( !%anita .a%tista* 6n 4 2pri' 1::4, t,e )i''an%evas@ app'i$ation -or t,e iss%an$e o- a 3rit o- pre'iminar& inB%n$tion 3as (enie( b& t,e SA0 Fearing 6--i$er on t,e gro%n( o- 'a$+ o- s%--i$ient basis -or t,e iss%an$e t,ereo-* Fo3ever, a motion -or re$onsi(eration 3as grante( on 14 De$ember 1::4, %pon -in(ing t,at sin$e t,e )i''an%evas@ ,ave not (ispose( ot,eir s,ares, 3,et,er vo'%ntari'& or invo'%ntari'&, t,e& 3ere sti'' sto$+,o'(ers entit'e( to noti$e ot,e ann%a' sto$+,o'(ers@ meeting 3as s%staine( b& t,e SA0* 2$$or(ing'&, a 3rit o- pre'iminar& inB%n$tion 3as iss%e( enBoining .a%tista, et* a'* -rom a$ting as (ire$tors an( o--i$ers o- t,e ban+* ?,erea-ter, .a%tista, et a'* -i'e( an %rgent motion to <%as, t,e 3rit o- pre'iminar& inB%n$tion, $,a''enging t,e propriet& o- t,e sai( 3rit $onsi(ering t,at t,e& ,a( not &et re$eive( a $op& o- t,e or(er granting t,e app'i$ation -or t,e 3rit o- pre'iminar& inB%n$tion* >it, t,e impen(ing 1::5 ann%a' sto$+,o'(ers@ meeting on'& : (a&s a3a&, t,e )i''an%evas -i'e( an 6mnib%s Gotion pra&ing t,at t,e sai( meeting an( e'e$tion o- o--i$ers s$,e(%'e( on 14 !an%ar& 1::5 be
s%spen(e( or ,e'( in abe&an$e, an( t,at t,e 1::3 .oar( o- Dire$tors be a''o3e(, in t,e meantime, to a$t as s%$,* 1 (a& be-ore t,e s$,e(%'e( sto$+,o'(ers meeting, t,e SA0 Fearing 6--i$er grante( t,e 6mnib%s Gotion b& iss%ing a temporar& restraining or(er preventing .a%tista, et a'* -rom ,o'(ing t,e sto$+,o'(ers meeting an( e'e$ting t,e boar( o- (ire$tors an( o--i$ers o- t,e .an+* 2 petition -or 0ertiorari an( 2nn%'ment 3it, Damages 3as -i'e( b& t,e R%ra' .an+, its (ire$tors an( o--i$ers be-ore t,e SA0 en ban$* 6n 5 !%ne 1::5, t,e SA0 en ban$ (enie( t,e petition -or $ertiorari* 2 s%bse<%ent motion -or re$onsi(eration 3as 'i+e3ise (enie( b& t,e SA0 en ban$ in a Reso'%tion (ate( 2: September 1::5* 2 petition -or revie3 3as -i'e( be-ore t,e 0o%rt o- 2ppea's 02-GR S8 38841", assai'ing t,e 6r(er (ate( 5 !%ne 1::5 an( t,e Reso'%tion (ate( 2: September 1::5 o- t,e SA0 en ban$ in SA0 A. 440* ?,e appe''ate $o%rt %p,e'( t,e r%'ing o- t,e SA0* .a%tista, et a'*@s motion -or re$onsi(eration 3as 'i+e3ise (enie( b& t,e 0o%rt o- 2ppea's in an 6r(er (ate( 2: Gar$, 1::4* ?,e ban+, .a%tista, et a'* -i'e( t,e instant petition -or revie3* Issue: >,et,er t,ere 3as va'i( trans-er o- t,e s,ares to t,e .an+* Held: For a va'i( trans-er o- sto$+s, t,ere m%st be stri$t $omp'ian$e 3it, t,e mo(e o- trans-er pres$ribe( b& 'a3* ?,e re<%irements are# a" ?,ere m%st be (e'iver& o- t,e sto$+ $erti-i$ate# b" ?,e $erti-i$ate m%st be en(orse( b& t,e o3ner or ,is attorne&-in--a$t or ot,er persons 'ega''& a%t,oriDe( to ma+e t,e trans-er; an( $" ?o be va'i( against t,ir( parties, t,e trans-er m%st be re$or(e( in t,e boo+s o- t,e $orporation* 2s it is, $omp'ian$e 3it, an& o- t,ese re<%isites ,as not been $'ear'& an( s%--i$ient'& s,o3n* Sti'', 3,i'e t,e assignment ma& be va'i( an( bin(ing on t,e ban+, et a'* an( t,e )i''an%evas, it (oes not ne$essari'& ma+e t,e trans-er e--e$tive* 0onse<%ent'&, t,e ban+ et a'*, as mere assignees, $annot enBo& t,e stat%s o- a sto$+,o'(er, $annot vote nor be vote( -or, an( 3i'' not be entit'e( to (ivi(en(s, inso-ar as t,e assigne( s,ares are $on$erne(* 8arent,eti$a''&, t,e )i''an%evas $annot, as &et, be (eprive( o- t,eir rig,ts as sto$+,o'(ers, %nti' an( %n'ess t,e iss%e o- o3ners,ip an( trans-er o- t,e s,ares in <%estion is reso've( 3it, -ina'it&* Philippine National Bank vs. Andrada Electric En!ineerin! Co. [GR 142:34, 15 2pri' 2002] ?,ir( Division, 8anganiban !"# 3 $on$%r, 1 on o--i$ia' 'eave Facts: 6n 24 2%g%st 1:55, t,e 8,i'ippine nationa' .an+ 89." a$<%ire( t,e assets o- t,e 8ampanga S%gar Gi''s 82SEG=/" t,at 3ere ear'ier -ore$'ose( b& t,e Deve'opment .an+ o- t,e 8,i'ippines D.8" %n(er /6= 311* ?,e 89. organiDe( t,e ationa' S%gar Deve'opment 0orporation 92SEDA06" in September 1:55, to ta+e o3ners,ip an( possession o- t,e assets an( %'timate'& to nationa'iDe an( $onso'i(ate its interest in ot,er 89. $ontro''e( s%gar mi''s* 8rior to 2: 6$tober 1:51, 82SEG=/ engage( t,e servi$es o- t,e 2n(ra(a A'e$tri$ H Angineering 0ompan& 2AA0" -or e'e$tri$a' re3in(ing an( repair, most o- 3,i$, 3ere partia''& pai( b& 82SEG=/, 'eaving severa' %npai( a$$o%nts 3it, 2AA0* 6n 2: 6$tober 1:51, 2AA0 an( 82SEG=/ entere( into a $ontra$t -or 2AA0 to per-orm t,e a" 0onstr%$tion o- a po3er ,o%se b%i'(ing; 3 rein-or$e( $on$rete -o%n(ation -or 3 %nits 350 7> (iese' engine generating sets, 3 rein-or$e( $on$rete -o%n(ation -or t,e 5,000 7> an( 1,250 7> t%rbo generator sets, among ot,ers* 2si(e -rom t,e 3or+ $ontra$t, 82SEG=/ re<%ire( 2AA0 to per-orm e1tra 3or+,
an( provi(e e'e$tri$a' e<%ipment an( spare parts* 6%t o- t,e tota' ob'igation o- 8555,243*80, 82SEG=/ ,a( pai( on'& 8250,000*00, 'eaving an %npai( ba'an$e, as o- 25 !%ne 1:53, amo%nting to 8525,243*80* 6%t o- sai( %npai( ba'an$e o- 8525,243*80, 82SEG=/ ma(e a partia' pa&ment to 2AA0 o- 814,000*00, in bro+en amo%nts, $overing t,e perio( -rom 5 !an%ar& 1:54 %p to 23 Ga& 1:54, 'eaving an %npai( ba'an$e o- 8513,243*80* 82SEG=/ an( 89., an( no3 92SEDA06, a''ege('& -ai'e( an( re-%se( to pa& 2AA0 t,eir B%st, va'i( an( (eman(ab'e ob'igation ?,e 8resi(ent o- t,e 92SEDA06 is a'so t,e )i$e-8resi(ent o- t,e 89.* 2AA0 beso%g,t sai( o--i$ia' to pa& t,e o%tstan(ing ob'igation o- 82SEG=/, inasm%$, as 89. an( 92SEDA06 no3 o3ne( an( possesse( t,e assets o- 82SEG=/, an( t,ese (e-en(ants a'' bene-ite( -rom t,e 3or+s, an( t,e e'e$tri$a', as 3e'' as t,e engineering an( repairs, per-orme( b& 2AA0"* .e$a%se o- t,e -ai'%re an( re-%sa' o- 89., 82SEG=/ an(Ior 92SEDA06 to pa& t,eir ob'igations, 2AA0 a''ege('& s%--ere( a$t%a' (amages in t,e tota' amo%nt o- 8513,243*80; an( t,at in or(er to re$over t,ese s%ms, 2AA0 3as $ompe''e( to engage t,e pro-essiona' servi$es o$o%nse', to 3,om 2AA0 agree( to pa& a s%m e<%iva'ent to 25J o- t,e amo%nt o- t,e ob'igation (%e b& 3a& o- attorne&@s -ees* 89. an( 92SEDA06 -i'e( a Boint motion to (ismiss on t,e gro%n( t,at t,e $omp'aint -ai'e( to state s%--i$ient a''egations to estab'is, a $a%se o- a$tion against 89. an( 92SEDA06, inasm%$, as t,ere is 'a$+ or 3ant o- privit& o- $ontra$t bet3een t,e t,em an( 2AA0* Sai( motion 3as (enie( b& t,e tria' $o%rt in its 25 9ovember or(er, an( or(ere( 89. na( 92SEDA06 to -i'e t,eir ans3ers 3it,in 15 (a&s* 2-ter (%e pro$ee(ings, t,e ?ria' 0o%rt ren(ere( B%(gment in -avor o- 2AA0 an( against 89., 92SEDA06 an( 82SEG=/; t,e 'atter being or(ere( to pa& Boint'& an( severa''& t,e -ormer 1" t,e s%m o8513,423*80 p'%s interest t,ereon at t,e rate o- 14J per ann%m as $'aime( -rom 25 September 1:80 %nti' -%''& pai(; 2" t,e s%m o- 8102,524*54 as attorne&@s -ees; an(, 3" 0osts* 89. an( 92SEDA06 appea'e(* ?,e 0o%rt o- 2ppea's a--irme( t,e (e$ision o- t,e tria' $o%rt in its (e$ision o- 15 2pri' 2000 02-GR 0) 55410* 89. an( 92SEDA06 -i'e( t,e petition -or revie3* Issue: >,et,er 89. an( 92SEDA06 ma& be ,e'( 'iab'e -or 82SEG=/Ks 'iabi'it& to 2AA0* Held: .asi$ is t,e r%'e t,at a $orporation ,as a 'ega' persona'it& (istin$t an( separate -rom t,e persons an( entities o3ning it* ?,e $orporate vei' ma& be 'i-te( on'& i- it ,as been %se( to s,ie'( -ra%(, (e-en( $rime, B%sti-& a 3rong, (e-eat p%b'i$ $onvenien$e, ins%'ate ba( -ait, or perpet%ate inB%sti$e* ?,%s, t,e mere -a$t t,at t,e 8,i'ippine 9ationa' .an+ 89." a$<%ire( o3ners,ip or management o- some assets o- t,e 8ampanga S%gar Gi'' 82SEG=/", 3,i$, ,a( ear'ier been -ore$'ose( an( p%r$,ase( at t,e res%'ting p%b'i$ a%$tion b& t,e Deve'opment .an+ o- t,e 8,i'ippines D.8", 3i'' not ma+e 89. 'iab'e -or t,e 82SEG=/@s $ontra$t%a' (ebts to 2n(ra(a A'e$tri$ H Angineering 0ompan& 2AA0"* 8ier$ing t,e vei' o- $orporate -i$tion ma& be a''o3e( on'& i- t,e -o''o3ing e'ements $on$%r# 1" $ontro' L not mere sto$+ $ontro', b%t $omp'ete (omination L not on'& o- -inan$es, b%t o- po'i$& an( b%siness pra$ti$e in respe$t to t,e transa$tion atta$+e(, m%st ,ave been s%$, t,at t,e $orporate entit& as to t,is transa$tion ,a( at t,e time no separate min(, 3i'' or e1isten$e o- its o3n; 2" s%$, $ontro' m%st ,ave been %se( b& t,e (e-en(ant to $ommit a -ra%( or a 3rong to perpet%ate t,e vio'ation o- a stat%tor& or ot,er positive 'ega' (%t&, or a (is,onest an( an %nB%st a$t in $ontravention o- p'ainti--@s 'ega' rig,t; an( 3" t,e sai( $ontro' an( brea$, o- (%t& m%st ,ave pro1imate'& $a%se( t,e inB%r& or %nB%st 'oss $omp'aine( o-* ?,e absen$e o- t,e -oregoing e'ements in t,e present $ase pre$'%(es t,e pier$ing o- t,e $orporate vei'* First, ot,er t,an t,e -a$t t,at 89. an( 92SEDA06 a$<%ire( t,e assets o-
82SEG=/, t,ere is no s,o3ing t,at t,eir $ontro' over it 3arrants t,e (isregar( o- $orporate persona'ities* Se$on(, t,ere is no evi(en$e t,at t,eir B%ri(i$a' persona'it& 3as %se( to $ommit a -ra%( or to (o a 3rong; or t,at t,e separate $orporate entit& 3as -ar$i$a''& %se( as a mere a'ter ego, b%siness $on(%it or instr%menta'it& o- anot,er entit& or person* ?,ir(, 2AA0 3as not (e-ra%(e( or inB%re( 3,en 89. an( 92SEDA06 a$<%ire( t,e assets o- 82SEG=/* Fen$e, a't,o%g, t,e assets o- 92SEDA06 $an be easi'& tra$e( to 82SEG=/, t,e trans-er o- t,e 'atter@s assets to 89. an( 92SEDA06 3as not -ra%(%'ent'& entere( into in or(er to es$ape 'iabi'it& -or its (ebt to 2AA0* 9eit,er 3as t,ere an& merger or $onso'i(ation 3it, respe$t to 82SEG=/ an( 89.* ?,e pro$e(%re pres$ribe( %n(er ?it'e =M o- t,e 0orporation 0o(e 5: 3as not -o''o3e(* =n -a$t, 82SEG=/@s $orporate e1isten$e ,a( not been 'ega''& e1ting%is,e( or terminate(* F%rt,er, prior to 89.@s a$<%isition o- t,e -ore$'ose( assets, 82SEG=/ ,a( previo%s'& ma(e partia' pa&ments to 2AA0 -or t,e -ormer@s ob'igation in t,e amo%nt o- 8555,243*80* 2s o- 25 !%ne 1:53, 82SEG=/ ,a( pai( 8250,000 to 2AA0 an(, -rom 5 !an%ar& 1:54 to 23 Ga& 1:54, anot,er 814,000* 9eit,er (i( 89. e1press'& or imp'ie('& agree to ass%me t,e (ebt o- 82SEG=/ to 2AA0* /6= 11 e1p'i$it'& provi(es t,at 89. s,a'' st%(& an( s%bmit re$ommen(ations on t,e $'aims o- 82SEG=/@s $re(itors* 0'ear'&, t,e $orporate separateness bet3een 82SEG=/ an( 89. remains, (espite 2AA0@s insisten$e to t,e $ontrar&* Bank of the Philippine Islands vs. BPI E"ployees #nion$%avao Chapter$&ederation of #nions in BPI #ni'ank, G*R* 9o* 144301* 6$tober 1:, 2011* F20?S# 6n Gar$, 23, 2000, t,e .ang+o Sentra' ng 8i'ipinas approve( t,e 2rti$'es o- Gerger e1e$%te( on !an%ar& 20, 2000 b& an( bet3een .8=, ,erein petitioner, an( FA.?0*[ ?,is 2rti$'e an( 8'an o- Gerger 3as approve( b& t,e Se$%rities an( A1$,ange 0ommission on 2pri' 5, 2000*8%rs%ant to t,e 2rti$'e an( 8'an o- Gerger, a'' t,e assets an( 'iabi'ities o- FA.?0 3ere trans-erre( to an( absorbe( b& .8= as t,e s%rviving $orporation* FA.?0 emp'o&ees, in$'%(ing t,ose in its (i--erent bran$,es a$ross t,e $o%ntr&, 3ere ,ire( b& petitioner as its o3n emp'o&ees, 3it, t,eir stat%s an( ten%re re$ogniDe( an( sa'aries an( bene-its maintaine(* Respon(ent .8= Amp'o&ees Enion-Davao 0,apter - Fe(eration o- Enions in .8= Eniban+ is t,e e1$'%sive bargaining agent o- .8=Ks ran+ an( -i'e emp'o&ees in Davao 0it&* ?,e -ormer FA.?0 ran+-an(-i'e emp'o&ees in Davao 0it& (i( not be'ong to an& 'abor %nion at t,e time o- t,e merger* 8rior to t,e e--e$tivit& o- t,e merger, or on Gar$, 31, 2000, respon(ent Enion invite( sai( FA.?0 emp'o&ees to a meeting regar(ing t,e Enion S,op 0'a%se o- t,e e1isting 0.2 bet3een petitioner .8= an( respon(ent Enion 2-ter t,e meeting $a''e( b& t,e Enion, some o- t,e -ormer FA.?0 emp'o&ees Boine( t,e Enion, 3,i'e ot,ers re-%se(* /ater, ,o3ever, some o- t,ose 3,o initia''& Boine( retra$te( t,eir members,ip* Respon(ent Enion t,en sent noti$es to t,e -ormer FA.?0 emp'o&ees 3,o re-%se( to Boin, as 3e'' as t,ose 3,o retra$te( t,eir members,ip, an( $a''e( t,em to a ,earing regar(ing t,e matter* >,en t,ese -ormer FA.?0 emp'o&ees re-%se( to atten( t,e ,earing, t,e presi(ent o- t,e Enion re<%este( .8= to imp'ement t,e Enion S,op 0'a%se o- t,e 0.2 an( to terminate t,eir emp'o&ment p%rs%ant t,ereto* 2-ter t3o mont,s o- management ina$tion on t,e re<%est, respon(ent Enion in-orme( petitioner .8= o- its (e$ision to re-er t,e iss%e o- t,e imp'ementation o- t,e Enion S,op 0'a%se o- t,e 0.2 to t,e Grievan$e
0ommittee* Fo3ever, t,e iss%e remaine( %nreso've( at t,is 'eve' an( so it 3as s%bse<%ent'& s%bmitte( -or vo'%ntar& arbitration b& t,e parties* =SSEA# >,et,er or not t,e -ormer FA.?0 emp'o&ees t,at 3ere absorbe( b& petitioner %pon t,e merger bet3een FA.?0 an( .8= s,o%'( be $overe( b& t,e Enion S,op 0'a%se -o%n( in t,e e1isting 0.2 bet3een petitioner an( respon(ent Enion* FA/D# 2'' emp'o&ees in t,e bargaining %nit $overe( b& a Enion S,op 0'a%se in t,eir 0.2 3it, management are s%bBe$t to its terms* Fo3ever, %n(er 'a3 an( B%rispr%(en$e, t,e -o''o3ing +in(s o- emp'o&ees are e1empte( -rom its $overage, name'&, emp'o&ees 3,o at t,e time t,e %nion s,op agreement ta+es e--e$t are bona -i(e members o- a re'igio%s organiDation 3,i$, pro,ibits its members -rom Boining 'abor %nions on re'igio%s gro%n(s; emp'o&ees a'rea(& in t,e servi$e an( a'rea(& members o- a %nion ot,er t,an t,e maBorit& at t,e time t,e %nion s,op agreement too+ e--e$t; $on-i(entia' emp'o&ees 3,o are e1$'%(e( -rom t,e ran+ an( -i'e bargaining %nit; an( emp'o&ees e1$'%(e( -rom t,e %nion s,op b& e1press terms o- t,e agreement* AN($ABA)A vs AN( F20?S )ibe''e Gan%-a$t%ring 0orporation an( Genato =nvestments, =n$* are -ami'&-o3ne( $orporations, 3,ere petitioners Ga* .e'en F'or(e'iDa 0* 2ng-2ba&a , !ason 2* 2ng, )in$ent G* Genato, Fanna 2ng an( private respon(ent A(%ar(o G* 2ng A(%ar(o" are s,are,o'(ers, o--i$ers an( members o- t,e boar( o- (ire$tors* 8rior to t,e instant $ontrovers&, )G0, Genato, an( 6riana Gan%-a$t%ring 0orporation 6riana" -i'e( a $ase -or (amages 3it, pra&er -or iss%an$e o- a ?R6 an(Ior 3rit o- pre'iminar& inB%n$tion against A(%ar(o -or a''ege('& $onniving to -ra%(%'ent'& 3rest $ontro'Imanagement o- t,e $orporations* A(%ar(o a''ege('& borro3e( s%bstantia' amo%nts o- mone& -rom t,e sai( $orporations 3it,o%t an& intention to repa&; t,at ,e repeate('& (eman(e( -or in$reases in ,is mont,'& a''o3an$e an( -or more $as, a(van$es $ontrar& to e1isting $orporate po'i$ies; t,at ,e ,arasse( petitioner F'or(e'iDa to trans-er an(Ior se'' $ertain $orporate an( persona' properties in or(er to pa& o-- ,is persona' ob'igations et$* A(%ar(o so%g,t permission to inspe$t t,e $orporate boo+s o- )G0 an( Genato on a$$o%nt opetitionersK a''ege( -ai'%re an(Ior re-%sa' to %p(ate ,im on t,e -inan$ia' an( b%siness a$tivities ot,ese -ami'& $orporations* 8etitioners (enie( t,e re<%est $'aiming t,at A(%ar(o 3o%'( %se t,e in-ormation obtaine( -rom sai( inspe$tion -or p%rposes inimi$a' to t,e $orporationsK interests, $onsi(ering t,at# a" ,e is ,arassing t,e $orporation into 3riting o-- ,is a(van$es; b" ,e is %nB%st'& (eman(ing t,at ,e be given an o--i$eIposition a'rea(& o$$%pie( an( %s%rping $orporate po3ers as 3e'' as ma+ing (eman(s 3it, regar( to $orporate properties* .e$a%se o- petitionersK re-%sa' to grant ,is re<%est to inspe$t t,e $orporate boo+s o- )G0 an( Genato, A(%ar(o -i'e( an 2--i(avit-0omp'aint against petitioners F'or(e'iDa an( !ason, $,arging t,em 3it, vio'ation t3o $o%nts" o- Se$tion 54, in re'ation to Se$tion 144, o- t,e 0orporation 0o(e o- t,e 8,i'ippines*
?,e 0it& 8rose$%tor iss%e( a Reso'%tion re$ommen(ing t,at petitioners be $,arge( 3it, t3o $o%nts o- vio'ation o- Se$tion 54 o- t,e 0orporation 0o(e, b%t (ismisse( t,e $omp'aint against .e'in(a -or 'a$+ o- evi(en$e* 8etitioners -i'e( a 8etition -or Revie3 be-ore t,e D6!, 3,i$, reverse( t,e re$ommen(ation o- t,e 0it& 8rose$%tor* ?,e D6! (enie( A(%ar(oKs Gotion -or Re$onsi(eration* ?,e 0o%rt o- 2ppea's reverse( t,e D6!* =SSEA# >,et,er or not t,e D6! $ommitte( G2D2/A! in reversing t,e reso'%tion o- t,e prose$%tor -in(ing probab'e $a%se against petitioners a-ter pre'iminar& investigation -or vio'ation o- se$tion 54 o- t,e $orporation $o(e o- t,e 8,i'ippines FA/D# 96 =n or(er -or t,e pena' provision %n(er Se$tion 144 o- t,e 0orporation 0o(e to app'& in a $ase o- vio'ation o- a sto$+,o'(er or memberKs rig,t to inspe$t t,e $orporate boo+sIre$or(s as provi(e( -or %n(er Se$tion 54 o- t,e 0orporation 0o(e, t,e -o''o3ing e'ements m%st be present# First* 2 (ire$tor, tr%stee, sto$+,o'(er or member ,as ma(e a prior (eman( in 3riting -or a $op& o- e1$erpts -rom t,e $orporationKs re$or(s or min%tes; Se$on(* 2n& o--i$er or agent o- t,e $on$erne( $orporation s,a'' re-%se to a''o3 t,e sai( (ire$tor, tr%stee, sto$+,o'(er or member o- t,e $orporation to e1amine an( $op& sai( e1$erpts; ?,ir(* =- s%$, re-%sa' is ma(e p%rs%ant to a reso'%tion or or(er o- t,e boar( o- (ire$tors or tr%stees, t,e 'iabi'it& %n(er t,is se$tion -or s%$, a$tion s,a'' be impose( %pon t,e (ire$tors or tr%stees 3,o vote( -or s%$, re-%sa'; an(, Fo%rt,* >,ere t,e o--i$er or agent o- t,e $orporation sets %p t,e (e-ense t,at t,e person (eman(ing to e1amine an( $op& e1$erpts -rom t,e $orporationKs re$or(s an( min%tes ,as improper'& %se( an& in-ormation se$%re( t,ro%g, an& prior e1amination o- t,e re$or(s or min%tes o- s%$, $orporation or o- an& ot,er $orporation, or 3as not a$ting in goo( -ait, or -or a 'egitimate p%rpose in ma+ing ,is (eman(, t,e $ontrar& m%st be s,o3n or prove(* ?,%s, in a $rimina' $omp'aint -or vio'ation o- Se$tion 54 o- t,e 0orporation 0o(e, t,e (e-ense oimproper %se or motive is in t,e nat%re o- a B%sti-&ing $ir$%mstan$e t,at 3o%'( e1onerate t,ose 3,o raise an( are ab'e to prove t,e same* 2$$or(ing'&, 3,ere t,e $orporation (enies inspe$tion on t,e gro%n( o- improper motive or p%rpose, t,e b%r(en o- proo- is ta+en -rom t,e s,are,o'(er an( p'a$e( on t,e $orporation* ?,is being t,e $ase, it 3o%'( be improper -or t,e prose$%tor, (%ring pre'iminar& investigation, to re-%se or -ai' to a((ress t,e (e-ense o- improper %se or motive, given its e1press stat%tor& re$ognition* ?,%s, $ontrar& to A(%ar(oKs insisten$e, t,e sto$+,o'(erKs rig,t to inspe$t $orporate boo+s is not 3it,o%t 'imitations* =t is no3 e1press'& re<%ire( as a $on(ition -or s%$, e1amination t,at t,e one re<%esting it m%st not ,ave been g%i't& o- %sing improper'& an& in-ormation se$%re( t,ro%g, a prior e1amination, or t,at t,e person as+ing -or s%$, e1amination m%st be a$ting in goo( -ait, an( -or a 'egitimate p%rpose in ma+ing ,is (eman(*
?,e serio%s a''egations against A(%ar(o are s%pporte( b& o--i$ia' an( ot,er (o$%ments, s%$, as boar( reso'%tions, treas%rerKs a--i(avits an( 3ritten $omm%ni$ation -rom t,e respon(ent A(%ar(o ,imse'-, 3,o appears to ,ave 3it,,e'( ,is obBe$tions to t,ese $,arges* Fis si'en$e virt%a''& amo%nts to an a$<%ies$en$e* ?a+en toget,er, a'' t,ese serve to B%sti-& petitionersK a''egation t,at A(%ar(o 3as not a$ting in goo( -ait, an( -or a 'egitimate p%rpose in ma+ing ,is (eman( -or inspe$tion o- t,e $orporate boo+s* 6t,er3ise state(, t,ere is 'a$+ o- probab'e $a%se to s%pport t,e a''egation t,at petitioners vio'ate( Se$tion 54 o- t,e 0orporation 0o(e in re-%sing respon(entKs re<%est -or e1amination o- t,e $orporation boo+s* Lee vs. Court of Appeals [GR :34:5, 4 Febr%ar& 1::2] ?,ir( Division, G%tierreD !r* !"# 4 $on$%r Facts: 6n 15 9ovember 1:85, a $omp'ainant -or s%m o- mone& 3as -i'e( b& t,e =nternationa' 0orporate .an+, =n$* against Sa$oba Gan%-a$t%ring 0orp*, 8ab'o GonDa'es !r*, an( ?omas GonDa'es 3,o, in t%rn, -i'e( a t,ir( part& $omp'aint against 2'-a =ntegrate( ?e1ti'e Gi''s 2/F2", Ramon 0* /ee 2/F2@s presi(ent" an( 2ntonio DG* /a$(ao 2/F2@s vi$e presi(ent" on 15 Gar$, 1:84* 6n 15 September 1:85, /ee an( /a$(ao -i'e( a motion to (ismiss t,e t,ir( part& $omp'aint 3,i$, t,e Regiona' ?ria' 0o%rt o- Ga+ati, .ran$, 58 (enie( in an 6r(er (ate( 25 !%ne 1:88* 6n 18 !%'& 1:88, /ee an( /a$(ao -i'e( t,eir ans3er to t,e t,ir( part& $omp'aint* Gean3,i'e, on 12 !%'& 1:88, t,e tria' iss%e( an or(er re<%iring t,e iss%an$e o- an a'ias s%mmons %pon 2/F2 t,ro%g, t,e D.8 as a $onse<%en$e o- /ee an( /a$(ao@s 'etter in-orming t,e $o%rt t,at t,e s%mmons -or 2/F2 3as erroneo%s'& serve( %pon t,em $onsi(ering t,at t,e management o- 2/F2 ,a( been trans-erre( to t,e D.8* =n a mani-estation (ate( 22 !%'& 1:88, t,e D.8 $'aime( t,at it 3as not a%t,oriDe( to re$eive s%mmons on be,a'- o- 2/F2 sin$e t,e D.8 ,a( not ta+en over t,e $ompan& 3,i$, ,as a separate an( (istin$t $orporate persona'it& an( e1isten$e* 6n 4 2%g%st 1:88, t,e tria' $o%rt iss%e( an or(er a(vising Sa$oba Gan%-a$t%ring, et* a'* to ta+e t,e appropriate steps to serve t,e s%mmons to 2/F2* 6n 14 2%g%st 1:88, Sa$oba Gan%-a$t%ring, et* a'* -i'e( a Gani-estation an( Gotion -or t,e De$'aration o- 8roper Servi$e oS%mmons 3,i$, t,e tria' $o%rt grante( on 15 2%g%st 1:88* 6n 12 September 1:88, /ee an( /a$(ao -i'e( a motion -or re$onsi(eration s%bmitting t,at t,e R%'e 14, se$tion 13 o- t,e Revise( R%'es o- 0o%rt is not app'i$ab'e sin$e t,e& 3ere no 'onger o--i$ers o- 2/F2 an( Sa$oba Gan%-a$t%ring, et* a'* s,o%'( ,ave avai'e( o- anot,er mo(e o- servi$e %n(er R%'e 14, Se$tion 14 o- t,e sai( R%'es, i*e*, t,ro%g, p%b'i$ation to e--e$t proper servi$e %pon 2/F2* 6n 2 !an%ar& 1:8:, t,e tria' $o%rt %p,e'( t,e va'i(it& o- t,e servi$e o- s%mmons on 2/F2 t,ro%g, /ee an( /a$(ao, t,%s, (en&ing t,e 'atter@s motion -or re$onsi(eration an( re<%iring 2/F2 to -i'e its ans3er t,ro%g, /ee an( /a$(ao as its $orporate o--i$ers* 6n 1: !an%ar& 1:8:, a se$on( motion -or re$onsi(eration 3as -i'e( b& /ee an( /a$(ao reiterating t,eir stan( t,at b& virt%e o- t,e voting tr%st agreement t,e& $ease( to be o--i$ers an( (ire$tors o- 2/F2, ,en$e, t,e& $o%'( no 'onger re$eive s%mmons or an& $o%rt pro$esses -or or on be,a'- o- 2/F2* =n s%pport o- t,eir se$on( motion -or re$onsi(eration, /ee an( /a$(ao atta$,e( t,ereto a $op& o- t,e voting tr%st agreement bet3een a'' t,e sto$+,o'(ers o- 2/F2 /ee an( /a$(ao in$'%(e(", on t,e one ,an(, an( t,e D.8, on t,e ot,er ,an(, 3,ereb& t,e management an( $ontro' o- 2/F2 be$ame veste( %pon t,e D.8* 6n 25 2pri' 1:8:, t,e tria' $o%rt reverse( itse'- b& setting asi(e its previo%s 6r(er (ate( 2 !an%ar& 1:8: an( (e$'are( t,at servi$e %pon /ee an( /a$(ao 3,o 3ere no 'onger $orporate o--i$ers o- 2/F2 $annot be $onsi(ere( as proper servi$e o- s%mmons on 2/F2* 6n 15
Ga& 1:8:, Sa$oba Gan%-a$t%ring, et* a'* move( -or a re$onsi(eration o- t,e 6r(er 3,i$, 3as a--irme( b& t,e $o%rt in is 6r(er (ate( 14 2%g%st 1:8: (en&ing Sa$oba Gan%-a$t%ring, et* a'*@s motion -or re$onsi(eration* 6n 18 September 1:8:, a petition -or $ertiorari 3as be'ate('& s%bmitte( b& Sa$oba Gan%-a$t%ring, et* a'* be-ore t,e 0o%rt o- 2ppea's 3,i$,, nonet,e'ess, reso've( to give (%e $o%rse t,ereto on 21 September 1:8:* 6n 15 6$tober 1:8:, t,e tria' $o%rt, not ,aving been noti-ie( o- t,e pen(ing petition -or $ertiorari 3it, t,e appe''ate $o%rt iss%e( an 6r(er (e$'aring as -ina' t,e 6r(er (ate( 25 2pri' 1:8:* Sa$oba Gan%-a$t%ring, et* a'* in t,e sai( 6r(er 3ere re<%ire( to ta+e positive steps in prose$%ting t,e t,ir( part& $omp'aint in or(er t,at t,e $o%rt 3o%'( not be $onstraine( to (ismiss t,e same -or -ai'%re to prose$%te* S%bse<%ent'&, on 25 6$tober 1:8: Sa$oba Gan%-a$t%ring, et* a'* -i'e( a motion -or re$onsi(eration on 3,i$, t,e tria' $o%rt too+ no -%rt,er a$tion* 6n 1: Gar$, 1::0, a-ter /ee an( /a$(ao -i'e( t,eir ans3er to Sa$oba Gan%-a$t%ring, et* a'*@s petition -or $ertiorari, t,e appe''ate $o%rt ren(ere( its (e$ision, setting asi(e t,e or(ers o- tria' $o%rt B%(ge (ate( 25 2pri' 1:8: an( 14 2%g%st 1:8:* 6n 11 2pri' 1::0, /ee an( /a$(ao move( -or a re$onsi(eration o- t,e (e$ision o- t,e appe''ate $o%rt 3,i$, reso've( to (en& t,e same on 10 Ga& 1::0* /ee an( /a$(ao -i'e( t,e petition -or $ertiorari* =n t,e meantime, t,e appe''ate $o%rt ina(vertent'& ma(e an entr& o- B%(gment on 14 !%'& 1::0 erroneo%s'& app'&ing t,e r%'e t,at t,e perio( (%ring 3,i$, a motion -or re$onsi(eration ,as been pen(ing m%st be (e(%$te( -rom t,e 15-(a& perio( to appea'* Fo3ever, in its Reso'%tion (ate( 3 !an%ar& 1::1, t,e appe''ate $o%rt set asi(e t,e a-orestate( entr& o- B%(gment a-ter -%rt,er $onsi(ering t,at t,e r%'e it re'ie( on app'ies to appea's -rom (e$isions o- t,e Regiona' ?ria' 0o%rts to t,e 0o%rt o- 2ppea's, not to appea's -rom its (e$ision to t,e S%preme 0o%rt p%rs%ant to t,e S%preme 0o%rt@s r%'ing in t,e $ase o- Re-ra$tories 0orporation o- t,e 8,i'ippines v* =nterme(iate 2ppe''ate 0o%rt, 154 S0R2 53: [1:8:]* Issue [1]: >,et,er t,e e1e$%tion o- t,e voting tr%st agreement b& /ee an( /a$(ao 3,ereb& a'' t,eir s,ares to t,e $orporation ,ave been trans-erre( to t,e tr%stee (eprives t,e sto$+,o'(er ot,eir positions as (ire$tors o- t,e $orporation* Held [1]: /ee an( /a$(ao, b& virt%e o- t,e voting tr%st agreement e1e$%te( in 1:81 (ispose( oa'' t,eir s,ares t,ro%g, assignment an( (e'iver& in -avor o- t,e D.8, as tr%stee* 0onse<%ent'&, /ee an( /a$(ao $ease( to o3n at 'east one s,are stan(ing in t,eir names on t,e boo+s o- 2/F2 as re<%ire( %n(er Se$tion 23 o- t,e ne3 0orporation 0o(e* ?,e& a'so $ease( to ,ave an&t,ing to (o 3it, t,e management o- t,e enterprise* /ee an( /a$(ao $ease( to be (ire$tors* Fen$e, t,e trans-er o- t,eir s,ares to t,e D.8 $reate( va$an$ies in t,eir respe$tive positions as (ire$tors o2/F2* ?,e trans-er o- s,ares -rom t,e sto$+,o'(ers o- 2/F2 to t,e D.8 is t,e essen$e o- t,e s%bBe$t voting tr%st agreement* 0onsi(ering t,at t,e voting tr%st agreement bet3een 2/F2 an( t,e D.8 trans-erre( 'ega' o3ners,ip o- t,e sto$+s $overe( b& t,e agreement to t,e D.8 as tr%stee, t,e 'atter be$a%se t,e sto$+,o'(er o- re$or( 3it, respe$t to t,e sai( s,ares o- sto$+s* =n t,e absen$e o- a s,o3ing t,at t,e D.8 ,a( $a%se( to be trans-erre( in t,eir names one s,are osto$+ -or t,e p%rpose o- <%a'i-&ing as (ire$tors o- 2/F2, /ee an( /a$(ao $an no 'onger be (eeme( to ,ave retaine( t,eir stat%s as o--i$ers o- 2/F2 3,i$, 3as t,e $ase be-ore t,e e1e$%tion o- t,e s%bBe$t voting tr%st agreement* ?,ere is no (isp%te -rom t,e re$or(s t,at D.8 ,as ta+en over -%'' $ontro' an( management o- t,e -irm* Issue [2]: >,et,er t,e -ive-&ear perio( o- t,e voting tr%st agreement in <%estion ,a( 'apse( in 1:84 so t,at t,e 'ega' tit'e to t,e sto$+s $overe( b& t,e sai( voting tr%st agreement ipso -a$to
reverte( to /ee an( /a$(ao as bene-i$ia' o3ners p%rs%ant to t,e 4t, paragrap, o- se$tion 5: ot,e ne3 0orporation 0o(e* Held [2]: ?,e 4t, paragrap, o- se$tion 5: o- t,e ne3 0orporation 0o(e rea(s t,at NEn'ess e1press'& rene3e(, a'' rig,ts grante( in a voting tr%st agreement s,a'' a%tomati$a''& e1pire at t,e en( o- t,e agree( perio(, an( t,e voting tr%st $erti-i$ates as 3e'' as t,e $erti-i$ates o- sto$+ in t,e name o- t,e tr%stee or tr%stees s,a'' t,ereb& be (eeme( $an$e''e( an( ne3 $erti-i$ates o- sto$+ s,a'' be reiss%e( in t,e name o- t,e trans-erors*N Fo3ever, it is mani-est'& $'ear -rom t,e terms o- t,e voting tr%st agreement bet3een 2/F2 an( t,e D.8 t,at t,e (%ration o- t,e agreement is $ontingent %pon t,e -%'-i''ment o- $ertain ob'igations o- 2/F2 3it, t,e D.8* Fa( t,e -ive-&ear perio( o- t,e voting tr%st agreement e1pire( in 1:84, t,e D.8 3o%'( not ,ave trans-erre( an its rig,ts, tit'es an( interests in 2/F2 Ne--e$tive !%ne 30, 1:84N to t,e nationa' government t,ro%g, t,e 2sset 8rivatiDation ?r%st 28?" as atteste( to in a 0erti-i$ation (ate( 24 !an%ar& 1:8: o- t,e )i$e 8resi(ent o- t,e D.8@s Spe$ia' 2$$o%nts Department ==* =n t,e same $erti-i$ation, it is state( t,at t,e D.8, -rom 1:85 %nti' 1:8:, ,a( ,an('e( s a$$o%nt 3,i$, in$'%(e( 2/F2@s assets p%rs%ant to a management agreement b& an( bet3een t,e D.8 an( 28?* Fen$e, t,ere is evi(en$e on re$or( t,at at t,e time o- t,e servi$e o- s%mmons on 2/F2 t,ro%g, /ee an( /a$(ao on 21 2%g%st 1:85, t,e voting tr%st agreement in <%estion 3as not &et terminate( so t,at t,e 'ega' tit'e to t,e sto$+s o- 2/F2, t,en, sti'' be'onge( to t,e D.8* Issue [3]: >,et,er t,ere 3as proper servi$e o- s%mmons on 2/F2 t,ro%g, /ee an( /a$(ao, to bin( 2/F2* Held [3]: =t is a basi$ prin$ip'e in 0orporation /a3 t,at a $orporation ,as a persona'it& separate an( (istin$t -rom t,e o--i$ers or members 3,o $ompose it* ?,%s, t,e ro'e on servi$e o- pro$esses on a $orporation en%merates t,e representatives o- a $orporation 3,o $an va'i('& re$eive $o%rt pro$esses on its be,a'-* 9ot ever& sto$+,o'(er or o--i$er $an bin( t,e $orporation $onsi(ering t,e e1isten$e o- a $orporate entit& separate -rom t,ose 3,o $ompose it* ?,e rationa'e o- t,e r%'e is t,at servi$e m%st be ma(e on a representative so integrate( 3it, t,e $orporation s%e( as to ma+e it a priori s%pposab'e t,at ,e 3i'' rea'iDe ,is responsibi'ities an( +no3 3,at ,e s,o%'( (o 3it, an& 'ega' papers serve( on ,im* Ferein, /ee an( /a$(ao (o not -a'' %n(er an& o- t,e en%merate( o--i$ers* ?,e servi$e o- s%mmons %pon 2/F2, t,ro%g, /ee an( /a$(ao, t,ere-ore, is not va'i(* ?o r%'e ot,er3ise 3i'' $ontravene t,e genera' prin$ip'e t,at a $orporation $an on'& be bo%n( b& s%$, a$ts 3,i$, are 3it,in t,e s$ope o- t,e o--i$er@s or agent@s a%t,orit&*
s%spen(e( or ,e'( in abe&an$e, an( t,at t,e 1::3 .oar( o- Dire$tors be a''o3e(, in t,e meantime, to a$t as s%$,* 1 (a& be-ore t,e s$,e(%'e( sto$+,o'(ers meeting, t,e SA0 Fearing 6--i$er grante( t,e 6mnib%s Gotion b& iss%ing a temporar& restraining or(er preventing .a%tista, et a'* -rom ,o'(ing t,e sto$+,o'(ers meeting an( e'e$ting t,e boar( o- (ire$tors an( o--i$ers o- t,e .an+* 2 petition -or 0ertiorari an( 2nn%'ment 3it, Damages 3as -i'e( b& t,e R%ra' .an+, its (ire$tors an( o--i$ers be-ore t,e SA0 en ban$* 6n 5 !%ne 1::5, t,e SA0 en ban$ (enie( t,e petition -or $ertiorari* 2 s%bse<%ent motion -or re$onsi(eration 3as 'i+e3ise (enie( b& t,e SA0 en ban$ in a Reso'%tion (ate( 2: September 1::5* 2 petition -or revie3 3as -i'e( be-ore t,e 0o%rt o- 2ppea's 02-GR S8 38841", assai'ing t,e 6r(er (ate( 5 !%ne 1::5 an( t,e Reso'%tion (ate( 2: September 1::5 o- t,e SA0 en ban$ in SA0 A. 440* ?,e appe''ate $o%rt %p,e'( t,e r%'ing o- t,e SA0* .a%tista, et a'*@s motion -or re$onsi(eration 3as 'i+e3ise (enie( b& t,e 0o%rt o- 2ppea's in an 6r(er (ate( 2: Gar$, 1::4* ?,e ban+, .a%tista, et a'* -i'e( t,e instant petition -or revie3* Issue: >,et,er t,ere 3as va'i( trans-er o- t,e s,ares to t,e .an+* Held: For a va'i( trans-er o- sto$+s, t,ere m%st be stri$t $omp'ian$e 3it, t,e mo(e o- trans-er pres$ribe( b& 'a3* ?,e re<%irements are# a" ?,ere m%st be (e'iver& o- t,e sto$+ $erti-i$ate# b" ?,e $erti-i$ate m%st be en(orse( b& t,e o3ner or ,is attorne&-in--a$t or ot,er persons 'ega''& a%t,oriDe( to ma+e t,e trans-er; an( $" ?o be va'i( against t,ir( parties, t,e trans-er m%st be re$or(e( in t,e boo+s o- t,e $orporation* 2s it is, $omp'ian$e 3it, an& o- t,ese re<%isites ,as not been $'ear'& an( s%--i$ient'& s,o3n* Sti'', 3,i'e t,e assignment ma& be va'i( an( bin(ing on t,e ban+, et a'* an( t,e )i''an%evas, it (oes not ne$essari'& ma+e t,e trans-er e--e$tive* 0onse<%ent'&, t,e ban+ et a'*, as mere assignees, $annot enBo& t,e stat%s o- a sto$+,o'(er, $annot vote nor be vote( -or, an( 3i'' not be entit'e( to (ivi(en(s, inso-ar as t,e assigne( s,ares are $on$erne(* 8arent,eti$a''&, t,e )i''an%evas $annot, as &et, be (eprive( o- t,eir rig,ts as sto$+,o'(ers, %nti' an( %n'ess t,e iss%e o- o3ners,ip an( trans-er o- t,e s,ares in <%estion is reso've( 3it, -ina'it&* Philippine National Bank vs. Andrada Electric En!ineerin! Co. [GR 142:34, 15 2pri' 2002] ?,ir( Division, 8anganiban !"# 3 $on$%r, 1 on o--i$ia' 'eave Facts: 6n 24 2%g%st 1:55, t,e 8,i'ippine nationa' .an+ 89." a$<%ire( t,e assets o- t,e 8ampanga S%gar Gi''s 82SEG=/" t,at 3ere ear'ier -ore$'ose( b& t,e Deve'opment .an+ o- t,e 8,i'ippines D.8" %n(er /6= 311* ?,e 89. organiDe( t,e ationa' S%gar Deve'opment 0orporation 92SEDA06" in September 1:55, to ta+e o3ners,ip an( possession o- t,e assets an( %'timate'& to nationa'iDe an( $onso'i(ate its interest in ot,er 89. $ontro''e( s%gar mi''s* 8rior to 2: 6$tober 1:51, 82SEG=/ engage( t,e servi$es o- t,e 2n(ra(a A'e$tri$ H Angineering 0ompan& 2AA0" -or e'e$tri$a' re3in(ing an( repair, most o- 3,i$, 3ere partia''& pai( b& 82SEG=/, 'eaving severa' %npai( a$$o%nts 3it, 2AA0* 6n 2: 6$tober 1:51, 2AA0 an( 82SEG=/ entere( into a $ontra$t -or 2AA0 to per-orm t,e a" 0onstr%$tion o- a po3er ,o%se b%i'(ing; 3 rein-or$e( $on$rete -o%n(ation -or 3 %nits 350 7> (iese' engine generating sets, 3 rein-or$e( $on$rete -o%n(ation -or t,e 5,000 7> an( 1,250 7> t%rbo generator sets, among ot,ers* 2si(e -rom t,e 3or+ $ontra$t, 82SEG=/ re<%ire( 2AA0 to per-orm e1tra 3or+,
an( provi(e e'e$tri$a' e<%ipment an( spare parts* 6%t o- t,e tota' ob'igation o- 8555,243*80, 82SEG=/ ,a( pai( on'& 8250,000*00, 'eaving an %npai( ba'an$e, as o- 25 !%ne 1:53, amo%nting to 8525,243*80* 6%t o- sai( %npai( ba'an$e o- 8525,243*80, 82SEG=/ ma(e a partia' pa&ment to 2AA0 o- 814,000*00, in bro+en amo%nts, $overing t,e perio( -rom 5 !an%ar& 1:54 %p to 23 Ga& 1:54, 'eaving an %npai( ba'an$e o- 8513,243*80* 82SEG=/ an( 89., an( no3 92SEDA06, a''ege('& -ai'e( an( re-%se( to pa& 2AA0 t,eir B%st, va'i( an( (eman(ab'e ob'igation ?,e 8resi(ent o- t,e 92SEDA06 is a'so t,e )i$e-8resi(ent o- t,e 89.* 2AA0 beso%g,t sai( o--i$ia' to pa& t,e o%tstan(ing ob'igation o- 82SEG=/, inasm%$, as 89. an( 92SEDA06 no3 o3ne( an( possesse( t,e assets o- 82SEG=/, an( t,ese (e-en(ants a'' bene-ite( -rom t,e 3or+s, an( t,e e'e$tri$a', as 3e'' as t,e engineering an( repairs, per-orme( b& 2AA0"* .e$a%se o- t,e -ai'%re an( re-%sa' o- 89., 82SEG=/ an(Ior 92SEDA06 to pa& t,eir ob'igations, 2AA0 a''ege('& s%--ere( a$t%a' (amages in t,e tota' amo%nt o- 8513,243*80; an( t,at in or(er to re$over t,ese s%ms, 2AA0 3as $ompe''e( to engage t,e pro-essiona' servi$es o$o%nse', to 3,om 2AA0 agree( to pa& a s%m e<%iva'ent to 25J o- t,e amo%nt o- t,e ob'igation (%e b& 3a& o- attorne&@s -ees* 89. an( 92SEDA06 -i'e( a Boint motion to (ismiss on t,e gro%n( t,at t,e $omp'aint -ai'e( to state s%--i$ient a''egations to estab'is, a $a%se o- a$tion against 89. an( 92SEDA06, inasm%$, as t,ere is 'a$+ or 3ant o- privit& o- $ontra$t bet3een t,e t,em an( 2AA0* Sai( motion 3as (enie( b& t,e tria' $o%rt in its 25 9ovember or(er, an( or(ere( 89. na( 92SEDA06 to -i'e t,eir ans3ers 3it,in 15 (a&s* 2-ter (%e pro$ee(ings, t,e ?ria' 0o%rt ren(ere( B%(gment in -avor o- 2AA0 an( against 89., 92SEDA06 an( 82SEG=/; t,e 'atter being or(ere( to pa& Boint'& an( severa''& t,e -ormer 1" t,e s%m o8513,423*80 p'%s interest t,ereon at t,e rate o- 14J per ann%m as $'aime( -rom 25 September 1:80 %nti' -%''& pai(; 2" t,e s%m o- 8102,524*54 as attorne&@s -ees; an(, 3" 0osts* 89. an( 92SEDA06 appea'e(* ?,e 0o%rt o- 2ppea's a--irme( t,e (e$ision o- t,e tria' $o%rt in its (e$ision o- 15 2pri' 2000 02-GR 0) 55410* 89. an( 92SEDA06 -i'e( t,e petition -or revie3* Issue: >,et,er 89. an( 92SEDA06 ma& be ,e'( 'iab'e -or 82SEG=/Ks 'iabi'it& to 2AA0* Held: .asi$ is t,e r%'e t,at a $orporation ,as a 'ega' persona'it& (istin$t an( separate -rom t,e persons an( entities o3ning it* ?,e $orporate vei' ma& be 'i-te( on'& i- it ,as been %se( to s,ie'( -ra%(, (e-en( $rime, B%sti-& a 3rong, (e-eat p%b'i$ $onvenien$e, ins%'ate ba( -ait, or perpet%ate inB%sti$e* ?,%s, t,e mere -a$t t,at t,e 8,i'ippine 9ationa' .an+ 89." a$<%ire( o3ners,ip or management o- some assets o- t,e 8ampanga S%gar Gi'' 82SEG=/", 3,i$, ,a( ear'ier been -ore$'ose( an( p%r$,ase( at t,e res%'ting p%b'i$ a%$tion b& t,e Deve'opment .an+ o- t,e 8,i'ippines D.8", 3i'' not ma+e 89. 'iab'e -or t,e 82SEG=/@s $ontra$t%a' (ebts to 2n(ra(a A'e$tri$ H Angineering 0ompan& 2AA0"* 8ier$ing t,e vei' o- $orporate -i$tion ma& be a''o3e( on'& i- t,e -o''o3ing e'ements $on$%r# 1" $ontro' L not mere sto$+ $ontro', b%t $omp'ete (omination L not on'& o- -inan$es, b%t o- po'i$& an( b%siness pra$ti$e in respe$t to t,e transa$tion atta$+e(, m%st ,ave been s%$, t,at t,e $orporate entit& as to t,is transa$tion ,a( at t,e time no separate min(, 3i'' or e1isten$e o- its o3n; 2" s%$, $ontro' m%st ,ave been %se( b& t,e (e-en(ant to $ommit a -ra%( or a 3rong to perpet%ate t,e vio'ation o- a stat%tor& or ot,er positive 'ega' (%t&, or a (is,onest an( an %nB%st a$t in $ontravention o- p'ainti--@s 'ega' rig,t; an( 3" t,e sai( $ontro' an( brea$, o- (%t& m%st ,ave pro1imate'& $a%se( t,e inB%r& or %nB%st 'oss $omp'aine( o-* ?,e absen$e o- t,e -oregoing e'ements in t,e present $ase pre$'%(es t,e pier$ing o- t,e $orporate vei'* First, ot,er t,an t,e -a$t t,at 89. an( 92SEDA06 a$<%ire( t,e assets o-
82SEG=/, t,ere is no s,o3ing t,at t,eir $ontro' over it 3arrants t,e (isregar( o- $orporate persona'ities* Se$on(, t,ere is no evi(en$e t,at t,eir B%ri(i$a' persona'it& 3as %se( to $ommit a -ra%( or to (o a 3rong; or t,at t,e separate $orporate entit& 3as -ar$i$a''& %se( as a mere a'ter ego, b%siness $on(%it or instr%menta'it& o- anot,er entit& or person* ?,ir(, 2AA0 3as not (e-ra%(e( or inB%re( 3,en 89. an( 92SEDA06 a$<%ire( t,e assets o- 82SEG=/* Fen$e, a't,o%g, t,e assets o- 92SEDA06 $an be easi'& tra$e( to 82SEG=/, t,e trans-er o- t,e 'atter@s assets to 89. an( 92SEDA06 3as not -ra%(%'ent'& entere( into in or(er to es$ape 'iabi'it& -or its (ebt to 2AA0* 9eit,er 3as t,ere an& merger or $onso'i(ation 3it, respe$t to 82SEG=/ an( 89.* ?,e pro$e(%re pres$ribe( %n(er ?it'e =M o- t,e 0orporation 0o(e 5: 3as not -o''o3e(* =n -a$t, 82SEG=/@s $orporate e1isten$e ,a( not been 'ega''& e1ting%is,e( or terminate(* F%rt,er, prior to 89.@s a$<%isition o- t,e -ore$'ose( assets, 82SEG=/ ,a( previo%s'& ma(e partia' pa&ments to 2AA0 -or t,e -ormer@s ob'igation in t,e amo%nt o- 8555,243*80* 2s o- 25 !%ne 1:53, 82SEG=/ ,a( pai( 8250,000 to 2AA0 an(, -rom 5 !an%ar& 1:54 to 23 Ga& 1:54, anot,er 814,000* 9eit,er (i( 89. e1press'& or imp'ie('& agree to ass%me t,e (ebt o- 82SEG=/ to 2AA0* /6= 11 e1p'i$it'& provi(es t,at 89. s,a'' st%(& an( s%bmit re$ommen(ations on t,e $'aims o- 82SEG=/@s $re(itors* 0'ear'&, t,e $orporate separateness bet3een 82SEG=/ an( 89. remains, (espite 2AA0@s insisten$e to t,e $ontrar&* Bank of the Philippine Islands vs. BPI E"ployees #nion$%avao Chapter$&ederation of #nions in BPI #ni'ank, G*R* 9o* 144301* 6$tober 1:, 2011* F20?S# 6n Gar$, 23, 2000, t,e .ang+o Sentra' ng 8i'ipinas approve( t,e 2rti$'es o- Gerger e1e$%te( on !an%ar& 20, 2000 b& an( bet3een .8=, ,erein petitioner, an( FA.?0*[ ?,is 2rti$'e an( 8'an o- Gerger 3as approve( b& t,e Se$%rities an( A1$,ange 0ommission on 2pri' 5, 2000*8%rs%ant to t,e 2rti$'e an( 8'an o- Gerger, a'' t,e assets an( 'iabi'ities o- FA.?0 3ere trans-erre( to an( absorbe( b& .8= as t,e s%rviving $orporation* FA.?0 emp'o&ees, in$'%(ing t,ose in its (i--erent bran$,es a$ross t,e $o%ntr&, 3ere ,ire( b& petitioner as its o3n emp'o&ees, 3it, t,eir stat%s an( ten%re re$ogniDe( an( sa'aries an( bene-its maintaine(* Respon(ent .8= Amp'o&ees Enion-Davao 0,apter - Fe(eration o- Enions in .8= Eniban+ is t,e e1$'%sive bargaining agent o- .8=Ks ran+ an( -i'e emp'o&ees in Davao 0it&* ?,e -ormer FA.?0 ran+-an(-i'e emp'o&ees in Davao 0it& (i( not be'ong to an& 'abor %nion at t,e time o- t,e merger* 8rior to t,e e--e$tivit& o- t,e merger, or on Gar$, 31, 2000, respon(ent Enion invite( sai( FA.?0 emp'o&ees to a meeting regar(ing t,e Enion S,op 0'a%se o- t,e e1isting 0.2 bet3een petitioner .8= an( respon(ent Enion 2-ter t,e meeting $a''e( b& t,e Enion, some o- t,e -ormer FA.?0 emp'o&ees Boine( t,e Enion, 3,i'e ot,ers re-%se(* /ater, ,o3ever, some o- t,ose 3,o initia''& Boine( retra$te( t,eir members,ip* Respon(ent Enion t,en sent noti$es to t,e -ormer FA.?0 emp'o&ees 3,o re-%se( to Boin, as 3e'' as t,ose 3,o retra$te( t,eir members,ip, an( $a''e( t,em to a ,earing regar(ing t,e matter* >,en t,ese -ormer FA.?0 emp'o&ees re-%se( to atten( t,e ,earing, t,e presi(ent o- t,e Enion re<%este( .8= to imp'ement t,e Enion S,op 0'a%se o- t,e 0.2 an( to terminate t,eir emp'o&ment p%rs%ant t,ereto* 2-ter t3o mont,s o- management ina$tion on t,e re<%est, respon(ent Enion in-orme( petitioner .8= o- its (e$ision to re-er t,e iss%e o- t,e imp'ementation o- t,e Enion S,op 0'a%se o- t,e 0.2 to t,e Grievan$e
0ommittee* Fo3ever, t,e iss%e remaine( %nreso've( at t,is 'eve' an( so it 3as s%bse<%ent'& s%bmitte( -or vo'%ntar& arbitration b& t,e parties* =SSEA# >,et,er or not t,e -ormer FA.?0 emp'o&ees t,at 3ere absorbe( b& petitioner %pon t,e merger bet3een FA.?0 an( .8= s,o%'( be $overe( b& t,e Enion S,op 0'a%se -o%n( in t,e e1isting 0.2 bet3een petitioner an( respon(ent Enion* FA/D# 2'' emp'o&ees in t,e bargaining %nit $overe( b& a Enion S,op 0'a%se in t,eir 0.2 3it, management are s%bBe$t to its terms* Fo3ever, %n(er 'a3 an( B%rispr%(en$e, t,e -o''o3ing +in(s o- emp'o&ees are e1empte( -rom its $overage, name'&, emp'o&ees 3,o at t,e time t,e %nion s,op agreement ta+es e--e$t are bona -i(e members o- a re'igio%s organiDation 3,i$, pro,ibits its members -rom Boining 'abor %nions on re'igio%s gro%n(s; emp'o&ees a'rea(& in t,e servi$e an( a'rea(& members o- a %nion ot,er t,an t,e maBorit& at t,e time t,e %nion s,op agreement too+ e--e$t; $on-i(entia' emp'o&ees 3,o are e1$'%(e( -rom t,e ran+ an( -i'e bargaining %nit; an( emp'o&ees e1$'%(e( -rom t,e %nion s,op b& e1press terms o- t,e agreement* AN($ABA)A vs AN( F20?S )ibe''e Gan%-a$t%ring 0orporation an( Genato =nvestments, =n$* are -ami'&-o3ne( $orporations, 3,ere petitioners Ga* .e'en F'or(e'iDa 0* 2ng-2ba&a , !ason 2* 2ng, )in$ent G* Genato, Fanna 2ng an( private respon(ent A(%ar(o G* 2ng A(%ar(o" are s,are,o'(ers, o--i$ers an( members o- t,e boar( o- (ire$tors* 8rior to t,e instant $ontrovers&, )G0, Genato, an( 6riana Gan%-a$t%ring 0orporation 6riana" -i'e( a $ase -or (amages 3it, pra&er -or iss%an$e o- a ?R6 an(Ior 3rit o- pre'iminar& inB%n$tion against A(%ar(o -or a''ege('& $onniving to -ra%(%'ent'& 3rest $ontro'Imanagement o- t,e $orporations* A(%ar(o a''ege('& borro3e( s%bstantia' amo%nts o- mone& -rom t,e sai( $orporations 3it,o%t an& intention to repa&; t,at ,e repeate('& (eman(e( -or in$reases in ,is mont,'& a''o3an$e an( -or more $as, a(van$es $ontrar& to e1isting $orporate po'i$ies; t,at ,e ,arasse( petitioner F'or(e'iDa to trans-er an(Ior se'' $ertain $orporate an( persona' properties in or(er to pa& o-- ,is persona' ob'igations et$* A(%ar(o so%g,t permission to inspe$t t,e $orporate boo+s o- )G0 an( Genato on a$$o%nt opetitionersK a''ege( -ai'%re an(Ior re-%sa' to %p(ate ,im on t,e -inan$ia' an( b%siness a$tivities ot,ese -ami'& $orporations* 8etitioners (enie( t,e re<%est $'aiming t,at A(%ar(o 3o%'( %se t,e in-ormation obtaine( -rom sai( inspe$tion -or p%rposes inimi$a' to t,e $orporationsK interests, $onsi(ering t,at# a" ,e is ,arassing t,e $orporation into 3riting o-- ,is a(van$es; b" ,e is %nB%st'& (eman(ing t,at ,e be given an o--i$eIposition a'rea(& o$$%pie( an( %s%rping $orporate po3ers as 3e'' as ma+ing (eman(s 3it, regar( to $orporate properties* .e$a%se o- petitionersK re-%sa' to grant ,is re<%est to inspe$t t,e $orporate boo+s o- )G0 an( Genato, A(%ar(o -i'e( an 2--i(avit-0omp'aint against petitioners F'or(e'iDa an( !ason, $,arging t,em 3it, vio'ation t3o $o%nts" o- Se$tion 54, in re'ation to Se$tion 144, o- t,e 0orporation 0o(e o- t,e 8,i'ippines*
?,e 0it& 8rose$%tor iss%e( a Reso'%tion re$ommen(ing t,at petitioners be $,arge( 3it, t3o $o%nts o- vio'ation o- Se$tion 54 o- t,e 0orporation 0o(e, b%t (ismisse( t,e $omp'aint against .e'in(a -or 'a$+ o- evi(en$e* 8etitioners -i'e( a 8etition -or Revie3 be-ore t,e D6!, 3,i$, reverse( t,e re$ommen(ation o- t,e 0it& 8rose$%tor* ?,e D6! (enie( A(%ar(oKs Gotion -or Re$onsi(eration* ?,e 0o%rt o- 2ppea's reverse( t,e D6!* =SSEA# >,et,er or not t,e D6! $ommitte( G2D2/A! in reversing t,e reso'%tion o- t,e prose$%tor -in(ing probab'e $a%se against petitioners a-ter pre'iminar& investigation -or vio'ation o- se$tion 54 o- t,e $orporation $o(e o- t,e 8,i'ippines FA/D# 96 =n or(er -or t,e pena' provision %n(er Se$tion 144 o- t,e 0orporation 0o(e to app'& in a $ase o- vio'ation o- a sto$+,o'(er or memberKs rig,t to inspe$t t,e $orporate boo+sIre$or(s as provi(e( -or %n(er Se$tion 54 o- t,e 0orporation 0o(e, t,e -o''o3ing e'ements m%st be present# First* 2 (ire$tor, tr%stee, sto$+,o'(er or member ,as ma(e a prior (eman( in 3riting -or a $op& o- e1$erpts -rom t,e $orporationKs re$or(s or min%tes; Se$on(* 2n& o--i$er or agent o- t,e $on$erne( $orporation s,a'' re-%se to a''o3 t,e sai( (ire$tor, tr%stee, sto$+,o'(er or member o- t,e $orporation to e1amine an( $op& sai( e1$erpts; ?,ir(* =- s%$, re-%sa' is ma(e p%rs%ant to a reso'%tion or or(er o- t,e boar( o- (ire$tors or tr%stees, t,e 'iabi'it& %n(er t,is se$tion -or s%$, a$tion s,a'' be impose( %pon t,e (ire$tors or tr%stees 3,o vote( -or s%$, re-%sa'; an(, Fo%rt,* >,ere t,e o--i$er or agent o- t,e $orporation sets %p t,e (e-ense t,at t,e person (eman(ing to e1amine an( $op& e1$erpts -rom t,e $orporationKs re$or(s an( min%tes ,as improper'& %se( an& in-ormation se$%re( t,ro%g, an& prior e1amination o- t,e re$or(s or min%tes o- s%$, $orporation or o- an& ot,er $orporation, or 3as not a$ting in goo( -ait, or -or a 'egitimate p%rpose in ma+ing ,is (eman(, t,e $ontrar& m%st be s,o3n or prove(* ?,%s, in a $rimina' $omp'aint -or vio'ation o- Se$tion 54 o- t,e 0orporation 0o(e, t,e (e-ense oimproper %se or motive is in t,e nat%re o- a B%sti-&ing $ir$%mstan$e t,at 3o%'( e1onerate t,ose 3,o raise an( are ab'e to prove t,e same* 2$$or(ing'&, 3,ere t,e $orporation (enies inspe$tion on t,e gro%n( o- improper motive or p%rpose, t,e b%r(en o- proo- is ta+en -rom t,e s,are,o'(er an( p'a$e( on t,e $orporation* ?,is being t,e $ase, it 3o%'( be improper -or t,e prose$%tor, (%ring pre'iminar& investigation, to re-%se or -ai' to a((ress t,e (e-ense o- improper %se or motive, given its e1press stat%tor& re$ognition* ?,%s, $ontrar& to A(%ar(oKs insisten$e, t,e sto$+,o'(erKs rig,t to inspe$t $orporate boo+s is not 3it,o%t 'imitations* =t is no3 e1press'& re<%ire( as a $on(ition -or s%$, e1amination t,at t,e one re<%esting it m%st not ,ave been g%i't& o- %sing improper'& an& in-ormation se$%re( t,ro%g, a prior e1amination, or t,at t,e person as+ing -or s%$, e1amination m%st be a$ting in goo( -ait, an( -or a 'egitimate p%rpose in ma+ing ,is (eman(*
?,e serio%s a''egations against A(%ar(o are s%pporte( b& o--i$ia' an( ot,er (o$%ments, s%$, as boar( reso'%tions, treas%rerKs a--i(avits an( 3ritten $omm%ni$ation -rom t,e respon(ent A(%ar(o ,imse'-, 3,o appears to ,ave 3it,,e'( ,is obBe$tions to t,ese $,arges* Fis si'en$e virt%a''& amo%nts to an a$<%ies$en$e* ?a+en toget,er, a'' t,ese serve to B%sti-& petitionersK a''egation t,at A(%ar(o 3as not a$ting in goo( -ait, an( -or a 'egitimate p%rpose in ma+ing ,is (eman( -or inspe$tion o- t,e $orporate boo+s* 6t,er3ise state(, t,ere is 'a$+ o- probab'e $a%se to s%pport t,e a''egation t,at petitioners vio'ate( Se$tion 54 o- t,e 0orporation 0o(e in re-%sing respon(entKs re<%est -or e1amination o- t,e $orporation boo+s* Lee vs. Court of Appeals [GR :34:5, 4 Febr%ar& 1::2] ?,ir( Division, G%tierreD !r* !"# 4 $on$%r Facts: 6n 15 9ovember 1:85, a $omp'ainant -or s%m o- mone& 3as -i'e( b& t,e =nternationa' 0orporate .an+, =n$* against Sa$oba Gan%-a$t%ring 0orp*, 8ab'o GonDa'es !r*, an( ?omas GonDa'es 3,o, in t%rn, -i'e( a t,ir( part& $omp'aint against 2'-a =ntegrate( ?e1ti'e Gi''s 2/F2", Ramon 0* /ee 2/F2@s presi(ent" an( 2ntonio DG* /a$(ao 2/F2@s vi$e presi(ent" on 15 Gar$, 1:84* 6n 15 September 1:85, /ee an( /a$(ao -i'e( a motion to (ismiss t,e t,ir( part& $omp'aint 3,i$, t,e Regiona' ?ria' 0o%rt o- Ga+ati, .ran$, 58 (enie( in an 6r(er (ate( 25 !%ne 1:88* 6n 18 !%'& 1:88, /ee an( /a$(ao -i'e( t,eir ans3er to t,e t,ir( part& $omp'aint* Gean3,i'e, on 12 !%'& 1:88, t,e tria' iss%e( an or(er re<%iring t,e iss%an$e o- an a'ias s%mmons %pon 2/F2 t,ro%g, t,e D.8 as a $onse<%en$e o- /ee an( /a$(ao@s 'etter in-orming t,e $o%rt t,at t,e s%mmons -or 2/F2 3as erroneo%s'& serve( %pon t,em $onsi(ering t,at t,e management o- 2/F2 ,a( been trans-erre( to t,e D.8* =n a mani-estation (ate( 22 !%'& 1:88, t,e D.8 $'aime( t,at it 3as not a%t,oriDe( to re$eive s%mmons on be,a'- o- 2/F2 sin$e t,e D.8 ,a( not ta+en over t,e $ompan& 3,i$, ,as a separate an( (istin$t $orporate persona'it& an( e1isten$e* 6n 4 2%g%st 1:88, t,e tria' $o%rt iss%e( an or(er a(vising Sa$oba Gan%-a$t%ring, et* a'* to ta+e t,e appropriate steps to serve t,e s%mmons to 2/F2* 6n 14 2%g%st 1:88, Sa$oba Gan%-a$t%ring, et* a'* -i'e( a Gani-estation an( Gotion -or t,e De$'aration o- 8roper Servi$e oS%mmons 3,i$, t,e tria' $o%rt grante( on 15 2%g%st 1:88* 6n 12 September 1:88, /ee an( /a$(ao -i'e( a motion -or re$onsi(eration s%bmitting t,at t,e R%'e 14, se$tion 13 o- t,e Revise( R%'es o- 0o%rt is not app'i$ab'e sin$e t,e& 3ere no 'onger o--i$ers o- 2/F2 an( Sa$oba Gan%-a$t%ring, et* a'* s,o%'( ,ave avai'e( o- anot,er mo(e o- servi$e %n(er R%'e 14, Se$tion 14 o- t,e sai( R%'es, i*e*, t,ro%g, p%b'i$ation to e--e$t proper servi$e %pon 2/F2* 6n 2 !an%ar& 1:8:, t,e tria' $o%rt %p,e'( t,e va'i(it& o- t,e servi$e o- s%mmons on 2/F2 t,ro%g, /ee an( /a$(ao, t,%s, (en&ing t,e 'atter@s motion -or re$onsi(eration an( re<%iring 2/F2 to -i'e its ans3er t,ro%g, /ee an( /a$(ao as its $orporate o--i$ers* 6n 1: !an%ar& 1:8:, a se$on( motion -or re$onsi(eration 3as -i'e( b& /ee an( /a$(ao reiterating t,eir stan( t,at b& virt%e o- t,e voting tr%st agreement t,e& $ease( to be o--i$ers an( (ire$tors o- 2/F2, ,en$e, t,e& $o%'( no 'onger re$eive s%mmons or an& $o%rt pro$esses -or or on be,a'- o- 2/F2* =n s%pport o- t,eir se$on( motion -or re$onsi(eration, /ee an( /a$(ao atta$,e( t,ereto a $op& o- t,e voting tr%st agreement bet3een a'' t,e sto$+,o'(ers o- 2/F2 /ee an( /a$(ao in$'%(e(", on t,e one ,an(, an( t,e D.8, on t,e ot,er ,an(, 3,ereb& t,e management an( $ontro' o- 2/F2 be$ame veste( %pon t,e D.8* 6n 25 2pri' 1:8:, t,e tria' $o%rt reverse( itse'- b& setting asi(e its previo%s 6r(er (ate( 2 !an%ar& 1:8: an( (e$'are( t,at servi$e %pon /ee an( /a$(ao 3,o 3ere no 'onger $orporate o--i$ers o- 2/F2 $annot be $onsi(ere( as proper servi$e o- s%mmons on 2/F2* 6n 15
Ga& 1:8:, Sa$oba Gan%-a$t%ring, et* a'* move( -or a re$onsi(eration o- t,e 6r(er 3,i$, 3as a--irme( b& t,e $o%rt in is 6r(er (ate( 14 2%g%st 1:8: (en&ing Sa$oba Gan%-a$t%ring, et* a'*@s motion -or re$onsi(eration* 6n 18 September 1:8:, a petition -or $ertiorari 3as be'ate('& s%bmitte( b& Sa$oba Gan%-a$t%ring, et* a'* be-ore t,e 0o%rt o- 2ppea's 3,i$,, nonet,e'ess, reso've( to give (%e $o%rse t,ereto on 21 September 1:8:* 6n 15 6$tober 1:8:, t,e tria' $o%rt, not ,aving been noti-ie( o- t,e pen(ing petition -or $ertiorari 3it, t,e appe''ate $o%rt iss%e( an 6r(er (e$'aring as -ina' t,e 6r(er (ate( 25 2pri' 1:8:* Sa$oba Gan%-a$t%ring, et* a'* in t,e sai( 6r(er 3ere re<%ire( to ta+e positive steps in prose$%ting t,e t,ir( part& $omp'aint in or(er t,at t,e $o%rt 3o%'( not be $onstraine( to (ismiss t,e same -or -ai'%re to prose$%te* S%bse<%ent'&, on 25 6$tober 1:8: Sa$oba Gan%-a$t%ring, et* a'* -i'e( a motion -or re$onsi(eration on 3,i$, t,e tria' $o%rt too+ no -%rt,er a$tion* 6n 1: Gar$, 1::0, a-ter /ee an( /a$(ao -i'e( t,eir ans3er to Sa$oba Gan%-a$t%ring, et* a'*@s petition -or $ertiorari, t,e appe''ate $o%rt ren(ere( its (e$ision, setting asi(e t,e or(ers o- tria' $o%rt B%(ge (ate( 25 2pri' 1:8: an( 14 2%g%st 1:8:* 6n 11 2pri' 1::0, /ee an( /a$(ao move( -or a re$onsi(eration o- t,e (e$ision o- t,e appe''ate $o%rt 3,i$, reso've( to (en& t,e same on 10 Ga& 1::0* /ee an( /a$(ao -i'e( t,e petition -or $ertiorari* =n t,e meantime, t,e appe''ate $o%rt ina(vertent'& ma(e an entr& o- B%(gment on 14 !%'& 1::0 erroneo%s'& app'&ing t,e r%'e t,at t,e perio( (%ring 3,i$, a motion -or re$onsi(eration ,as been pen(ing m%st be (e(%$te( -rom t,e 15-(a& perio( to appea'* Fo3ever, in its Reso'%tion (ate( 3 !an%ar& 1::1, t,e appe''ate $o%rt set asi(e t,e a-orestate( entr& o- B%(gment a-ter -%rt,er $onsi(ering t,at t,e r%'e it re'ie( on app'ies to appea's -rom (e$isions o- t,e Regiona' ?ria' 0o%rts to t,e 0o%rt o- 2ppea's, not to appea's -rom its (e$ision to t,e S%preme 0o%rt p%rs%ant to t,e S%preme 0o%rt@s r%'ing in t,e $ase o- Re-ra$tories 0orporation o- t,e 8,i'ippines v* =nterme(iate 2ppe''ate 0o%rt, 154 S0R2 53: [1:8:]* Issue [1]: >,et,er t,e e1e$%tion o- t,e voting tr%st agreement b& /ee an( /a$(ao 3,ereb& a'' t,eir s,ares to t,e $orporation ,ave been trans-erre( to t,e tr%stee (eprives t,e sto$+,o'(er ot,eir positions as (ire$tors o- t,e $orporation* Held [1]: /ee an( /a$(ao, b& virt%e o- t,e voting tr%st agreement e1e$%te( in 1:81 (ispose( oa'' t,eir s,ares t,ro%g, assignment an( (e'iver& in -avor o- t,e D.8, as tr%stee* 0onse<%ent'&, /ee an( /a$(ao $ease( to o3n at 'east one s,are stan(ing in t,eir names on t,e boo+s o- 2/F2 as re<%ire( %n(er Se$tion 23 o- t,e ne3 0orporation 0o(e* ?,e& a'so $ease( to ,ave an&t,ing to (o 3it, t,e management o- t,e enterprise* /ee an( /a$(ao $ease( to be (ire$tors* Fen$e, t,e trans-er o- t,eir s,ares to t,e D.8 $reate( va$an$ies in t,eir respe$tive positions as (ire$tors o2/F2* ?,e trans-er o- s,ares -rom t,e sto$+,o'(ers o- 2/F2 to t,e D.8 is t,e essen$e o- t,e s%bBe$t voting tr%st agreement* 0onsi(ering t,at t,e voting tr%st agreement bet3een 2/F2 an( t,e D.8 trans-erre( 'ega' o3ners,ip o- t,e sto$+s $overe( b& t,e agreement to t,e D.8 as tr%stee, t,e 'atter be$a%se t,e sto$+,o'(er o- re$or( 3it, respe$t to t,e sai( s,ares o- sto$+s* =n t,e absen$e o- a s,o3ing t,at t,e D.8 ,a( $a%se( to be trans-erre( in t,eir names one s,are osto$+ -or t,e p%rpose o- <%a'i-&ing as (ire$tors o- 2/F2, /ee an( /a$(ao $an no 'onger be (eeme( to ,ave retaine( t,eir stat%s as o--i$ers o- 2/F2 3,i$, 3as t,e $ase be-ore t,e e1e$%tion o- t,e s%bBe$t voting tr%st agreement* ?,ere is no (isp%te -rom t,e re$or(s t,at D.8 ,as ta+en over -%'' $ontro' an( management o- t,e -irm* Issue [2]: >,et,er t,e -ive-&ear perio( o- t,e voting tr%st agreement in <%estion ,a( 'apse( in 1:84 so t,at t,e 'ega' tit'e to t,e sto$+s $overe( b& t,e sai( voting tr%st agreement ipso -a$to
reverte( to /ee an( /a$(ao as bene-i$ia' o3ners p%rs%ant to t,e 4t, paragrap, o- se$tion 5: ot,e ne3 0orporation 0o(e* Held [2]: ?,e 4t, paragrap, o- se$tion 5: o- t,e ne3 0orporation 0o(e rea(s t,at NEn'ess e1press'& rene3e(, a'' rig,ts grante( in a voting tr%st agreement s,a'' a%tomati$a''& e1pire at t,e en( o- t,e agree( perio(, an( t,e voting tr%st $erti-i$ates as 3e'' as t,e $erti-i$ates o- sto$+ in t,e name o- t,e tr%stee or tr%stees s,a'' t,ereb& be (eeme( $an$e''e( an( ne3 $erti-i$ates o- sto$+ s,a'' be reiss%e( in t,e name o- t,e trans-erors*N Fo3ever, it is mani-est'& $'ear -rom t,e terms o- t,e voting tr%st agreement bet3een 2/F2 an( t,e D.8 t,at t,e (%ration o- t,e agreement is $ontingent %pon t,e -%'-i''ment o- $ertain ob'igations o- 2/F2 3it, t,e D.8* Fa( t,e -ive-&ear perio( o- t,e voting tr%st agreement e1pire( in 1:84, t,e D.8 3o%'( not ,ave trans-erre( an its rig,ts, tit'es an( interests in 2/F2 Ne--e$tive !%ne 30, 1:84N to t,e nationa' government t,ro%g, t,e 2sset 8rivatiDation ?r%st 28?" as atteste( to in a 0erti-i$ation (ate( 24 !an%ar& 1:8: o- t,e )i$e 8resi(ent o- t,e D.8@s Spe$ia' 2$$o%nts Department ==* =n t,e same $erti-i$ation, it is state( t,at t,e D.8, -rom 1:85 %nti' 1:8:, ,a( ,an('e( s a$$o%nt 3,i$, in$'%(e( 2/F2@s assets p%rs%ant to a management agreement b& an( bet3een t,e D.8 an( 28?* Fen$e, t,ere is evi(en$e on re$or( t,at at t,e time o- t,e servi$e o- s%mmons on 2/F2 t,ro%g, /ee an( /a$(ao on 21 2%g%st 1:85, t,e voting tr%st agreement in <%estion 3as not &et terminate( so t,at t,e 'ega' tit'e to t,e sto$+s o- 2/F2, t,en, sti'' be'onge( to t,e D.8* Issue [3]: >,et,er t,ere 3as proper servi$e o- s%mmons on 2/F2 t,ro%g, /ee an( /a$(ao, to bin( 2/F2* Held [3]: =t is a basi$ prin$ip'e in 0orporation /a3 t,at a $orporation ,as a persona'it& separate an( (istin$t -rom t,e o--i$ers or members 3,o $ompose it* ?,%s, t,e ro'e on servi$e o- pro$esses on a $orporation en%merates t,e representatives o- a $orporation 3,o $an va'i('& re$eive $o%rt pro$esses on its be,a'-* 9ot ever& sto$+,o'(er or o--i$er $an bin( t,e $orporation $onsi(ering t,e e1isten$e o- a $orporate entit& separate -rom t,ose 3,o $ompose it* ?,e rationa'e o- t,e r%'e is t,at servi$e m%st be ma(e on a representative so integrate( 3it, t,e $orporation s%e( as to ma+e it a priori s%pposab'e t,at ,e 3i'' rea'iDe ,is responsibi'ities an( +no3 3,at ,e s,o%'( (o 3it, an& 'ega' papers serve( on ,im* Ferein, /ee an( /a$(ao (o not -a'' %n(er an& o- t,e en%merate( o--i$ers* ?,e servi$e o- s%mmons %pon 2/F2, t,ro%g, /ee an( /a$(ao, t,ere-ore, is not va'i(* ?o r%'e ot,er3ise 3i'' $ontravene t,e genera' prin$ip'e t,at a $orporation $an on'& be bo%n( b& s%$, a$ts 3,i$, are 3it,in t,e s$ope o- t,e o--i$er@s or agent@s a%t,orit&*
