G.R. No. 208844 - F and S Velasco Co., Inc. vs. Madrid

F & S Velasco Company, Inc. (FSVCI) was organized and registered on June 8, 1987 with incorporators Francisco O. Velasco, Simona J. Velasco, Angela V. Madrid (respondent Dr. Rommel L. Madrid’s mother), Rommel L. Madrid, and Saturnino O. Velasco.
Upon the deaths of Simona (June 12, 1998) and Francisco (June 22, 1999), their shares passed to Angela, giving her control of 70.82% of the 24,000 authorized shares. As of May 11, 2009, share distribution was:

Angela died intestate and without issue on September 20, 2009 while serving as FSVCI Chairman of the Board.
On October 8, 2009, Madrid, as surviving spouse, executed an Affidavit of Self-Adjudication claiming Angela’s entire estate—including her FSVCI shares—and later filed for letters of administration, eventually recognized by the Regional Trial Court of Makati as sole heir and special administrator.

On November 6, 2009, Seva (corporate secretary) called an “emergency” meeting attended by Saturnino, Seva, and Sunico; they recognized Saturnino as director and elected him president, and Scribner as vice-president (Saturnino Group).
In preparation for Madrid’s planned meeting, he assigned one share each to Vitaliano B. Ricafort and to Peter P. L. Danao, Maureen R. Labalan, and Manuel L. Arimado (Madrid Group). On November 18, 2009, Madrid convened a Special Stockholders’ and Re-Organizational Meeting, ousted the existing board (except himself), and elected the Madrid Group as directors and officers.

The Saturnino Group filed a petition for nullity of corporate election with preliminary injunction before the RTC of Legazpi City (Branch 5). The RTC denied injunctive relief but conducted trial.
In its Decision (March 3, 2010), the RTC declared both the November 6 and November 18, 2009 meetings null and void:

The November 6 meeting lacked quorum and exceeded authorized board size.
The November 18 meeting was invalid because Madrid’s equitable interest pending probate did not permit exercise of shareholder rights.

The Madrid Group appealed to the CA (CA-G.R. SP No. 113279). The Saturnino Group did not challenge the November 6 meeting.
The CA Decision dated March 1, 2013 modified the RTC:

Declared the November 18 meeting valid, finding Madrid’s affidavit and GIS filing with the SEC conferred full ownership and voting rights.
Ordered the appointment of a management committee to manage FSVCI affairs.

The CA denied the Saturnino Group’s motion for reconsideration in its August 7, 2013 Resolution.

Whether the November 18, 2009 Special Stockholders’ and Re-Organizational Meeting called by Madrid was legal and valid.
Whether a management committee should be appointed or constituted to take over the corporate and business affairs of FSVCI.