Case Digest (G.R. No. 163356-57) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
Makati Sports Club, Inc. (MSC) is a domestic corporation organized to provide social, cultural, recreational, and athletic activities for its members. Prior to the events in question, the Bernas Group, composed of Jose A. Bernas, Cecile H. Cheng, Victor Africa, Jesus Maramara, Jose T. Frondoso, Ignacio T. Macrohon, Jr., and Paulino T. Lim, served as directors whose terms were to expire in 1998 or 1999. Alarmed by alleged fund anomalies, certain stockholders and the MSC Oversight Committee (MSCOC) called a Special Stockholders’ Meeting on December 17, 1997, purportedly removing the Bernas Group and electing the Cinco Group—Jovencio F. Cinco, Ricardo G. Librea, Alex Y. Pardo, and others—in their stead. The Bernas Group filed SEC Case No. 5840, arguing that under Section 28 of the Corporation Code only the corporate secretary, upon order of the president or written demand of stockholders representing a majority of the outstanding capital stock, could call such a meeting. Meanwhile, Case Digest (G.R. No. 163356-57) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Corporate Structure
- Makati Sports Club, Inc. (MSC) is a domestic non-stock corporation organized for social, cultural, recreational, and athletic activities.
- Two factions emerged within MSC:
- Bernas Group – Jose A. Bernas, Cecile H. Cheng, Victor Africa, Jesus B. Maramara, Jose T. Frondoso, Ignacio T. Macrohon Jr., Paulino T. Lim (incumbent directors/officers, terms expiring 1998–1999).
- Cinco Group – Jovencio F. Cinco, Ricardo G. Librea, Alex Y. Pardo (newly elected at disputed meeting).
- 17 December 1997 Special Stockholders’ Meeting
- Triggered by stockholder complaints of anomalies; MSC Oversight Committee (MSCOC) called the meeting at the request of stockholders representing at least 100 shares.
- Notices were sent; meeting proceeded in absence of injunctive relief. The Bernas Group was removed and the Cinco Group, alongside other individuals, was elected.
- The Bernas Group filed SEC Case No. 5840 seeking nullification on grounds that only the Corporate Secretary, the President, or board‐authorized persons could call a special meeting under Section 28 of the Corporation Code and MSC by-laws.
- Subsequent Proceedings and Meetings
- After investigations and SEC orders, three Annual Stockholders’ Meetings (April 20, 1998; April 19, 1999; April 17, 2000) ratified the December 1997 meeting’s acts, including removal and expulsion of Bernas, and approved other corporate actions.
- SEC Securities and Investigation Clearing Department (SICD) initially held the 1997 meeting and the first two annual meetings invalid; SEC En Banc reversed for the 1998 and 1999 meetings but validated the special meeting.
- Court of Appeals (CA) declared the 1997 special meeting invalid but upheld all acts at the 1998–2000 annual meetings except the ratification of removal and share sale.
- Both groups filed separate Petitions for Review on Certiorari before the Supreme Court.
Issues:
- Whether the Court of Appeals erred in declaring the 17 December 1997 Special Stockholders’ Meeting invalid.
- Whether the Court of Appeals erred in upholding the Annual Stockholders’ Meetings of April 1998, April 1999, and April 2000.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)