Case Digest (G.R. No. 223321) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Rogelio M. Florete, Sr. et al. v. Marcelino M. Florete, Jr. and Ma. Elena F. Muyco (G.R. No. 223321, April 2, 2018), Marsal & Co., Inc. was organized on October 7, 1966 as a close family corporation by Marcelino Sr., Salome, Rogelio, Marcelino Jr., Ma. Elena, and Teresita Florete. Its Articles of Incorporation had been amended several times to increase authorized capital from ₱500,000 to ₱5,000,000, but Paragraph 7, prescribing a written notice to the Board of Directors and a ten-day period for existing stockholders to exercise preemptive rights, remained unchanged. As of June 1, 1982, Teresita held 3,464 of the total shares. Upon her death on September 19, 1989, her husband Ephraim was appointed special administrator in 1992 and, with the consent of opposing counsel (who also represented Marsal and was spouse of one respondent), entered into a Compromise Agreement and Deed of Assignment transferring her shares to Rogelio. This agreement was approved by the Probate Court in F Case Digest (G.R. No. 223321) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Organization of Marsal & Co., Inc.
- Incorporated on October 7, 1966 by Marcelino Sr., Salome, Rogelio, Marcelino Jr., Ma. Elena, and Teresita; Articles of Incorporation (AOI) amended several times to increase authorized capital from ₱500,000 to ₱5,000,000; Paragraph 7 prescribed procedure for any stockholder’s sale (written notice to Board of Directors, Board’s notice to all stockholders within five days, ten-day preemptive right exercise period, nullity for noncompliance).
- Capital profile as of June 1, 1982: Marcelino Sr. – 7,569 shares; Rogelio – 3,489; Ma. Elena – 3,489; Marcelino Jr. – 3,489; Teresita – 3,464.
- Intestate proceedings of Teresita F. Menchavez
- Teresita died September 19, 1989; 1992 – husband Ephraim filed Petition for Letters of Administration over her estate; opposition by Rogelio and Marsal (represented by Rogelio’s counsel, Atty. Raul Muyco); Ephraim appointed administrator.
- 1995 – Compromise Agreement and Deed of Assignment (CADA) between Ephraim and Rogelio assigning all Teresita’s inherited shares—including 3,464 Marsal shares—and interests; Probate Court approved CADA on February 14, 1995.
- Intestate proceedings of Marcelino M. Florete, Sr.
- Marcelino Sr. died October 3, 1990; Rogelio appointed administrator of his estate; project of partition filed.
- May 16, 1995 Order approved partition, adjudicated shares among Rogelio, Ma. Elena, and Marcelino Jr.; noted sale of all Teresita’s inherited shares (including Marsal shares) to Rogelio.
- Annulment case in the Regional Trial Court (RTC)
- February 21, 2012 – Marcelino Jr. and Ma. Elena filed SCC Case No. 12-049 for annulment/rescission of sale of shares, exercise of preemptive rights, and damages against Rogelio and Teresita’s heirs; alleged violation of AOI Paragraph 7, void ab initio sale.
- April 26, 2013 – RTC dismissed the complaint: sale to an existing stockholder not subject to restriction; laches and estoppel barred respondents’ claim.
- Proceedings in the Court of Appeals (CA)
- CA-G.R. SP No. 07673 – respondents appealed; August 3, 2015 Decision reversed RTC, declared the conveyance of 3,464 shares null and void for breach of Paragraph 7; held action imprescriptible and laches inapplicable.
- February 19, 2016 – CA denied motion for reconsideration.
- Petition for review in the Supreme Court (SC)
- Petitioners raised seven assignments of error challenging CA’s invalidation clause, applicability of Corporation Code provisions on close corporations, prescription, laches, estoppel, and res judicata.
- SC’s jurisdiction limited to errors of law; factual reevaluation warranted due to misapprehension of facts by CA.
Issues:
- Whether the sale of Teresita’s 3,464 Marsal shares to Rogelio violated Paragraph 7 of Marsal’s AOI, rendering it null and void.
- Whether respondents waived or consented to the procedural requirements of Paragraph 7, thereby curing any violation of the transfer restriction.
- Whether the CA committed error of law or fact in annulling the share transfer and in applying laches, prescription, and estoppel defenses.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)