G.R. No. 123553 - Bitong vs. Court of Appeals

Mr. & Ms. Publishing Co., Inc. (“Mr. & Ms.”) was incorporated on October 29, 1976 to publish a weekly magazine. Its original shareholders were JAKA Investments Corporation (“JAKA”), Luis Villafuerte, Ramon Siy, Jose A. Apostol and Ex Libris Publishing Co., Inc.
Petitioner Nora A. Bitong alleged she was Treasurer, Director and registered owner of 1,000 out of 4,088 shares from incorporation until April 11, 1989. Private respondents include spouses Eugenia D. Apostol (President/Chairperson) and Jose A. Apostol (Director), Letty J. Magsanoc, Adoracion G. Nuyda, and Mr. & Ms.

From 1983 to 1987, Eugenia Apostol allegedly entered into transactions with Philippine Daily Inquirer (PDI) without board or stockholder resolutions, advancing ₱3.276 million without proper documentation or interest in some cases.
The Apostols, Magsanoc and Nuyda subscribed to PDI shares (₱150,000 total) purportedly paid by Mr. & Ms. but never reimbursed; all respondents held positions in both companies, creating alleged conflicts.

On July 5, 1989, Bitong filed SEC Case No. 03604, seeking injunctions, accountings, damages, appointment of a management committee, and other reliefs for the benefit of Mr. & Ms.
December 6, 1990: SEC Hearing Panel issued a preliminary injunction, finding petitioner a real party-in-interest for purposes of the injunction; denied management committee.
March 25, 1991: private respondents’ motion to amend pleadings to allege JAKA was real party-in-interest was denied.
August 3, 1993: Hearing Panel on merits dismissed the suit for lack of serious mismanagement and questioned petitioner’s capacity but allowed her to prosecute to resolve the real issues.

January 24, 1994: SEC En Banc reversed the Hearing Panel, ordered respondents to account for and return all improperly diverted funds, cease and desist managing Mr. & Ms., and voided the August 19, 1993 sale of PDI shares to Edgardo B. Espiritu.
Respondents appealed to the Court of Appeals (CA). On August 31, 1995, the CA reversed the SEC En Banc, held petitioner was not a shareholder and thus not real party-in-interest, dismissed her complaint, and annulled SEC orders.
Petitioner’s motion for reconsideration was denied on January 18, 1996.

Whether petitioner had the legal personality (real party-in-interest) to file and maintain a derivative suit on behalf of Mr. & Ms.
Whether petitioner validly acquired and held 997 (or 1,000) shares of Mr. & Ms. since July 1983, entitling her to stand in judgment for the corporation.
Whether private respondents committed fraud, mismanagement, conflict of interest or other wrongful acts warranting equitable relief.
Whether interlocutory rulings of the SEC Hearing Panel estopped respondents from contesting petitioner’s legal capacity.
Whether the requirements under Section 63 of the Corporation Code for issuance and transfer of stock certificates were complied with.