Beruflich Dokumente
Kultur Dokumente
SUPREME COURT
Manila
EN BANC
G.R. No. L-20333
June 30, 1967
EMILIANO ACUA, plaintiff-appellant,
vs.
BATAC
PRODUCERS
COOPERATIVE
MARKETING
ASSOCIATION,
INC.,
JUSTINO
GALANO,
TEODORO
NARCISO,
PABLO
BACTIN,
(DR.)
EMMANUEL
BUMANGLAG, VENANCIO DIRIC, MARCOS ESQUIVEL,
EVARISTO CAOILI, FIDEL BATTULAYAN, DAMIAN ROSSINI,
RAYMUNDO BATALLONES, PLACIDO QUIAOIT, and LEON
Q. VERANO defendants-appellees.
Marquez and Marquez for plaintiff-appellant.
Estanislao A. Fernandez for defendants-appellees.
MAKALINTAL, J.:
Appeal taken from the order dated September 10, 1962 of the
Court of First Instance of Rizal, Branch V (Quezon City)
dismissing plaintiff's complaint on the ground that it states no
cause of action, and discharging the writ of preliminary
attachment issued therein. On August 9, 1962, plaintiff Emiliano
Acua filed a complaint, which was later amended on August 13,
against the defendant Batac Producers Cooperative Marketing
Association, Inc., hereinafter called the Batac Procoma, Inc., or
alternatively, against all the other defendants named in the
caption. The complaint alleged, inter alia, that on or about May 5,
1962 it was tentatively agreed upon between plaintiff and
defendant Leon Q. Verano, as Manager of the defendant Batac
Procoma, Inc., that the former would seek and obtain the sum of
not less, than P20,000.00 to be advanced to the defendant Batac
Procoma, Inc., to be utilized by it as additional funds for its
Virginia tobacco buying operations during the current redrying
season; that plaintiff would be constituted as the corporation's
representative in Manila to assist in handling and facilitating its
continuous shipments of tobacco and their delivery to the redrying
plants and in speeding up the prompt payment and collection of
all amounts due to the corporation for such shipments; that for his
services plaintiff would be paid a remuneration at the rate of
P0.50 per kilo of tobacco; that said tentative agreement was
favorably received by the Board of Directors of the defendant
Batac Procoma Inc., and on May 6, 1962 all the defendants named
above, who constituted the entire Board of Directors of said
it was finally agreed between plaintiff and all said Directors that
his remuneration would be P0.30 per kilo (of tobacco); and that
after the agreement was formally executed he was assured by said
Directors that there would be no need of formal approval by the
Board. It should be noted in this connection that although the
contract required such approval it did not specify just in what
manner the same should be given.
On the question of ratification the complaint alleges that plaintiff
delivered to the defendant corporation the sum of P20,000.00 as
called for in the contract; that he rendered the services he was
required to do; that he furnished said defendant 3,000 sacks at a
cost of P6,000.00 and advanced to it the further sum of P5,000.00;
and that he did all of these things with the full knowledge,
acquiescence and consent of each and all of the individual
defendants who constitute the Board of Directors of the defendant
corporation. There is abundant authority in support of the
proposition that ratification may be express or implied, and that
implied ratification may take diverse forms, such as by silence or
acquiescence; by acts showing approval or adoption of the
contract; or by acceptance and retention of benefits flowing
therefrom.
Significantly the very resolution of the Board of Directors relied
upon by defendants appears to militate against their contention. It
refers to plaintiff's failure to comply with certain promises he had
made, as well as to his interpretation of the contract with respect
to his remuneration which, according to the Board, was contrary
to the intention of the parties. The resolution then proceeds to
"disapprove and/or rescind" the said contract. The idea of
conflicting interpretation, or rescission on the ground that one of
the parties has failed to fulfill his obligation under the contract, is
certainly incompatible with defendants' theory here that no
contract had yet been perfected for lack of approval by the Board
of Directors.
Appellants' second assignment of error reads: "Assuming that in
resolving the defendants' motion to dismiss the lower court could
consider the new facts alleged therein and the documents
annexed thereto it committed an error in extending such
consideration beyond ascertaining only if an issue of fact has been
presented and in actually deciding instead such fact in issue."
The assignment is well taken, and is the logical corollary of the
rule that a motion to dismiss on the ground that the complaint
fails to state a cause of action addresses itself to the averments in
the complaint and, admitting their veracity, merely questions their
sufficiency to make out a case on which the court can grant relief.
EN BANC
G.R. No. L-5883
November 28, 1953
DOMINGO PONCE AND BUHAY L. PONCE, petitioners,
Vs.
DEMETRIO B. ENCARNACION, Judge of the Court of First
Instance of Manila, Branch I, and POTENCIANO GAPOL,
respondents.
Marcelino Lontok for petitioners.
Zavalla, Bautista and Nuevas for respondents.
PADILLA, J.:
This is a petition for a writ of certiorari to annul an order of the
respondent court granting Potenciano Gapol authority, pursuant to
section 26, Act No. 1459, otherwise known as the Corporation
Law, to call a meeting of the stockholders of the Dagunoy
Enterprises, Inc. and to preside at such meeting by giving proper
notice to the stockholders, as required by law or by laws of the
corporation, until after the majority of the stockholders present
and qualified to vote shall have chosen one of them to act as
presiding officer of the meeting; another order denying a motion
of the petitioners to have the previous order set aside; and a third
order denying a motion to the same effect as the one previously
filed. The petitioners aver that the Daguhoy Enterprises, Inc., was
duly registered as such on 24 June 1948; that on 16 April 1951 at
a meeting duly called, the voluntary dissolution of the corporation
and the appointment of Potenciano Gapol as receiver were agreed
upon and to that end a petitioner Domingo Ponce; that instead of
filing the petition for voluntary dissolution of the of the
corporation as agreed upon, the respondent Potenciano Gapol,
who is the largest stockholder, charged his mind and filed a
complaint in the Court of First Instance of Manila (civil No.
13753) to compel the petitioners to render an accounting of the
funds and assets of the corporation, to reimburse it, jointly and
severally, in the sum of P4,500, the purchase price of a parcel of
land acquired by the corporation; P6,190 loaned to the wife of
petitioner Domingo Ponce; and P8,000 spent by the latter in his
trip to the United States, or a total sum of P18,690, plus interest,
or such sum as may be found after the accounting shall have been
rendered to have been misspent, misapplied, misappropriated and
converted by the petitioner Domingo Ponce to his own use and
benefit; that on 18 May 1951 the plaintiff in that case, the
respondent Potenciano Gapol in this case, filed a motion praying
that the petitioners be removed as members of the board of
directors which was denied by the court; that on 3 January 1952
That the relief granted by the respondent court lies within its
jurisdiction is not disputed. Having the authority to grant the
relief, the respondent court did not exceed its jurisdiction; nor did
it abuse its discretion in granting it. With persistency petitioners
claim that they have been deprived of their right without due
process of law. They had no right to continue as directors of the
corporation unless reflected by the stockholders in a meeting
called for that purpose every even year. They had no right to a
hold-over brought about by the failure to perform the duty
incumbent upon one of them. If they felt that they were sure to be
reelected, why did they fail, neglect, or refuse to call the meeting
to elect the members of the board? Or, why did they not seek their
reelection at the meeting called to elect the directors pursuant to
the order of the respondent court. The alleged illegality of the
election of one member of the board of directors at the meeting
called by the respondent Potenciano Gapol as authorized by the
court being subsequent to the order complained of cannot affect
the validity and legality of the order. If it be true that one of the
directors elected at the meeting called by the respondent
Potenciano Gapol, as authorized by the order of the court
complained of, was not qualified in accordance with the provisions
of the by-laws, the remedy of an aggrieved party would be quo
warranto. Also, the alleged previous agreement to dissolve the
corporation does not affect or render illegal the order issued by
the respondent court.
The petition is denied, with costs against the petitioners.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-23428
November 29, 1968
DETECTIVE & PROTECTIVE BUREAU, INC., petitioner,
vs.
THE HONORABLE GAUDENCIO CLORIBEL, in his capacity
as Presiding Judge of Branch VI, Court of First Instance of
Manila, and FAUSTINO S. ALBERTO, respondents.
Crispin D. Biazas and Associates and Jose S. Sarte for petitioner.
Gaudencio T. Bocobo for respondents.
ZALDIVAR, J.:
The complaint, in Civil Case No. 56949 of the Court of First
Instance of Manila, dated May 4, 1964, filed by Detective and
Protective Bureau, Inc., therein plaintiff (petitioner herein)
against Fausto S. Alberto, therein defendant (respondent herein),
plaintiff filed with this Court the instant petition for certiorari,
praying that a writ of preliminary injunction enjoining defendant
Fausto S. Albert from exercising the functions of managing
director be issued, and that the order dated August 5, 1964 of
respondent Judge approving the counter-bond and lifting the writ
of preliminary injunction he had previously issued be set aside and
declared null and void. The Court gave due course to the petition
but did not issue a preliminary injunction. In his answer, now
respondent Fausto S. Alberto traversed the material allegations of
the petition, justified the order complained of, and prayed for the
dismissal of the petition. From the pleadings, it appears that the
only issue to be resolved is whether the order of respondent Judge
dated August 5, 1964, admitting and approving the counter-bond
of P5,000 and setting aside the writ of preliminary injunction
granted in his order dated June 18, 164, was issued contrary to
law and with grave abuse of discretion. Now petitioner contends
that the setting aside of the order granting the writ was contrary
to law and was done with a grave abuse of discretion, because: (1)
the motion to admit defendant's counter-bond was not supported
by affidavits showing why the counter-bond should be admitted, as
required by Section 6 of Rule 58; (2) the preliminary injunction
was not issued ex-parte but after hearing, and the admission of
the counter-bond rendered said writ ineffective; (3) the writ was
granted in accordance with Rule 58 of the Rules of Court and
established precedents' (4) public interest required that the writ
be not set aside because respondent had arrogated unto himself
all the powers of petitioning corporation, to the irreparable
damage of the corporation; and that (5) the counter-bond could
not compensate petitioner's damage.
1. The first reason given by petitioner in support of its contention
that the dissolution of the writ of preliminary injunction was
contrary to law is that the motion to admit respondent's counterbond for the dissolution of the writ was not supported by affidavits
as required by section 6 of Rule 58 of the Rules of Court. The
controverted motion, however, does not appear in the record.
However, the record shows that respondent Alberto had filed a
verified answer to the complaint and a verified opposition to the
issuance of the writ of preliminary injunction. Regarding the
necessity of verification of the motion for dissolution of a writ of
preliminary injunction, this Court has ruled that the requirement
of verification is not absolute but is dependent on the
circumstances obtaining in a particular case. In the case of Sy
Sam Bio, et al. vs. Barrios and Buyson Lampa,1 the only question
raised was whether the respondent Judge exceeded his
and Andres Soriano from San Miguel International, Inc. and/or its
successors-in- interest, the Petition to produce and inspect the
same is hereby DENIED, as petitioner-movant is not a stockholder
of San Miguel International, Inc. and has, therefore, no inherent
right to inspect said documents;
3. In view of the Manifestation of petitioner-movant dated
November 29, 1976, withdrawing his request to copy and inspect
the management contract between San Miguel Corporation and A.
Soriano Corporation and the renewal and amendments thereof for
the reason that he had already obtained the same, the
Commission takes note thereof; and
4. Finally, the Commission holds in abeyance the resolution on the
matter of production and inspection of the authority of the
stockholders of San Miguel Corporation to invest the funds of
respondent corporation in San Miguel International, Inc., until
after the hearing on the merits of the principal issues in the
above-entitled case.
This Order is immediately executory upon its approval.
Dissatisfied with the foregoing Order, petitioner moved for its
reconsideration.
Meanwhile, on December 10, 1976, while the petition was yet to
be heard, respondent corporation issued a notice of special
stockholders' meeting for the purpose of "ratification and
confirmation of the amendment to the By-laws", setting such
meeting for February 10, 1977. This prompted petitioner to ask
respondent Commission for a summary judgment insofar as the
first cause of action is concerned, for the alleged reason that by
calling a special stockholders' meeting for the aforesaid purpose,
private respondents admitted the invalidity of the amendments of
September 18, 1976. The motion for summary judgment was
opposed by private respondents. Pending action on the motion,
petitioner filed an "Urgent Motion for the Issuance of a Temporary
Restraining Order", praying that pending the determination of
petitioner's application for the issuance of a preliminary injunction
and/or petitioner's motion for summary judgment, a temporary
restraining order be issued, restraining respondents from holding
the special stockholder's meeting as scheduled. This motion was
duly opposed by respondents. On February 10, 1977, respondent
Commission issued an order denying the motion for issuance of
temporary restraining order. After receipt of the order of denial,
respondents conducted the special stockholders' meeting wherein
the amendments to the by-laws were ratified. On February 14,
1977, petitioner filed a consolidated motion for contempt and for
nullification of the special stockholders' meeting. A motion for
which to file their answer, and set the case for hearing on April 29
and May 3, 1977. Respondents issued notices of the annual
stockholders' meeting, including in the Agenda thereof, the
following:
6. Re-affirmation of the authorization to the Board of Directors by
the stockholders at the meeting on March 20, 1972 to invest
corporate funds in other companies or businesses or for purposes
other than the main purpose for which the Corporation has been
organized, and ratification of the investments thereafter made
pursuant thereto. By reason of the foregoing, on April 28, 1977,
petitioner filed with the SEC an urgent motion for the issuance of
a writ of preliminary injunction to restrain private respondents
from taking up Item 6 of the Agenda at the annual stockholders'
meeting, requesting that the same be set for hearing on May 3,
1977, the date set for the second hearing of the case on the
merits. Respondent Commission, however, cancelled the dates of
hearing originally scheduled and reset the same to May 16 and
17, 1977, or after the scheduled annual stockholders' meeting. For
the purpose of urging the Commission to act, petitioner filed an
urgent manifestation on May 3, 1977, but this notwithstanding, no
action has been taken up to the date of the filing of the instant
petition. With respect to the afore-mentioned SEC cases, it is
petitioner's contention before this Court that respondent
Commission gravely abused its discretion when it failed to act
with deliberate dispatch on the motions of petitioner seeking to
prevent illegal and/or arbitrary impositions or limitations upon his
rights as stockholder of respondent corporation, and that
respondent are acting oppressively against petitioner, in gross
derogation of petitioner's rights to property and due process. He
prayed that this Court direct respondent SEC to act on collateral
incidents pending before it. On May 6, 1977, this Court issued a
temporary restraining order restraining private respondents from
disqualifying or preventing petitioner from running or from being
voted as director of respondent corporation and from submitting
for ratification or confirmation or from causing the ratification or
confirmation of Item 6 of the Agenda of the annual stockholders'
meeting on May 10, 1977, or from Making effective the amended
by-laws of respondent corporation, until further orders from this
Court or until the Securities and Ex-change Commission acts on
the matters complained of in the instant petition. On May 14,
1977, petitioner filed a Supplemental Petition, alleging that after a
restraining order had been issued by this Court, or on May 9,
1977, the respondent Commission served upon petitioner copies
of the following orders:
(1) Order No. 449, Series of 1977 (SEC Case No. 1375); denying
petitioner's motion for reconsideration, with its supplement, of the
order of the Commission denying in part petitioner's motion for
production of documents, petitioner's motion for reconsideration
of the order denying the issuance of a temporary restraining order
denying the issuance of a temporary restraining order, and
petitioner's consolidated motion to declare respondents in
contempt and to nullify the stockholders' meeting;
(2) Order No. 450, Series of 1977 (SEC Case No. 1375), allowing
petitioner to run as a director of respondent corporation but
stating that he should not sit as such if elected, until such time
that the Commission has decided the validity of the bylaws in
dispute, and denying deferment of Item 6 of the Agenda for the
annual stockholders' meeting; and
(3) Order No. 451, Series of 1977 (SEC Case No. 1375), denying
petitioner's motion for reconsideration of the order of respondent
Commission denying petitioner's motion for summary judgment;
It is petitioner's assertions, anent the foregoing orders, (1) that
respondent Commission acted with indecent haste and without
circumspection in issuing the aforesaid orders to petitioner's
irreparable damage and injury; (2) that it acted without
jurisdiction and in violation of petitioner's right to due process
when it decided en banc an issue not raised before it and still
pending before one of its Commissioners, and without hearing
petitioner thereon despite petitioner's request to have the same
calendared for hearing , and (3) that the respondents acted
oppressively against the petitioner in violation of his rights as a
stockholder, warranting immediate judicial intervention It is
prayed in the supplemental petition that the SEC orders
complained of be declared null and void and that respondent
Commission be ordered to allow petitioner to undertake discovery
proceedings relative to San Miguel International. Inc. and
thereafter to decide SEC Cases No. 1375 and 1423 on the merits.
On May 17, 1977, respondent SEC, Andres M. Soriano, Jr. and
Jose M. Soriano filed their comment, alleging that the petition is
without merit for the following reasons:
(1) that the petitioner the interest he represents are engaged in
business competitive and antagonistic to that of respondent San
Miguel Corporation, it appearing that the owns and controls a
greater portion of his SMC stock thru the Universal Robina
Corporation and the Consolidated Foods Corporation, which
corporations are engaged in business directly and substantially
competing with the allied businesses of respondent SMC and of
corporations in which SMC has substantial investments. Further,
... A person cannot serve two hostile and adverse masters, without
detriment to one of them. A judge cannot be impartial if
personally interested in the cause. No more can a director. Human
nature is too weak -for this. Take whatever statute provision you
please giving power to stockholders to choose directors, and in
none will you find any express prohibition against a discretion to
select directors having the company's interest at heart, and it
would simply be going far to deny by mere implication the
existence of such a salutary power.
... If the by-law is to be held reasonable in disqualifying a
stockholder in a competing company from being a director, the
same reasoning would apply to disqualify the wife and immediate
member of the family of such stockholder, on account of the
supposed interest of the wife in her husband's affairs, and his
suppose influence over her. It is perhaps true that such
stockholders ought not to be condemned as selfish and dangerous
to the best interest of the corporation until tried and tested. So it
is also true that we cannot condemn as selfish and dangerous and
unreasonable the action of the board in passing the by-law. The
strife over the matter of control in this corporation as in many
others is perhaps carried on not altogether in the spirit of
brotherly love and affection. The only test that we can apply is as
to whether or not the action of the Board is authorized and
sanctioned by law. . .
These principles have been applied by this Court in previous
cases.
AN AMENDMENT TO THE CORPORATION BY-LAW 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
It is a settled state law in the United States, according to Fletcher,
that corporations have the power to make by-laws declaring a
person employed in the service of a rival company to be ineligible
for the corporation's Board of Directors. ... (A) n amendment
which renders ineligible, or if elected, subjects to removal, a
director if he be also a director in a corporation whose business is
in competition with or is antagonistic to the other corporation is
valid." This is based upon the principle that where the director is
so employed in the service of a rival company, he cannot serve
both, but must betray one or the other. Such an amendment
"advances the benefit of the corporation and is good." An
exception exists in New Jersey, where the Supreme Court held
that the Corporation Law in New Jersey prescribed the only
Art. 186.
Monopolies and combinations in restraint of trade.
The penalty of prision correccional in its minimum period or a
fine ranging from two hundred to six thousand pesos, or both,
shall be imposed upon:
1. Any person who shall enter into any contract or agreement or
shall take part in any conspiracy or combination in the form of a
trust or otherwise, in restraint of trade or commerce or to prevent
by artificial means free competition in the market.
2. Any person who shag monopolize any merchandise or object of
trade or commerce, or shall combine with any other person or
persons to monopolize said merchandise or object in order to alter
the price thereof by spreading false rumors or making use of any
other artifice to restrain free competition in the market.
3. Any person who, being a manufacturer, producer, or processor
of any merchandise or object of commerce or an importer of any
merchandise or object of commerce from any foreign country,
either as principal or agent, wholesale or retailer, shall combine,
conspire or agree in any manner with any person likewise
engaged in the manufacture, production, processing, assembling
or importation of such merchandise or object of commerce or with
any other persons not so similarly engaged for the purpose of
making transactions prejudicial to lawful commerce, or of
increasing the market price in any part of the Philippines, or any
such merchandise or object of commerce manufactured,
produced, processed, assembled in or imported into the
Philippines, or of any article in the manufacture of which such
manufactured, produced, processed, or imported merchandise or
object of commerce is used. There are other legislation in this
jurisdiction, which prohibit monopolies and combinations in
restraint of trade. Basically, these anti-trust laws or laws against
monopolies or combinations in restraint of trade are aimed at
raising levels of competition by improving the consumers'
effectiveness as the final arbiter in free markets. These laws are
designed to preserve free and unfettered competition as the rule
of trade. "It rests on the premise that the unrestrained interaction
of competitive forces will yield the best allocation of our economic
resources, the lowest prices and the highest quality ...." They
operate to forestall concentration of economic power. The law
against monopolies and combinations in restraint of trade is
aimed at contracts and combinations that, by reason of the
inherent nature of the contemplated acts, prejudice the public
interest by unduly restraining competition or unduly obstructing
the course of trade. The terms "monopoly", "combination in
restraint of trade" and "unfair competition" appear to have a well-