Case Digest (G.R. No. 131394)
Facts:
Jesus V. Lanuza, Magadya Reyes, Bayani Reyes and Ariel Reyes v. Court of Appeals, Securities and Exchange Commission, Dolores Onrubia, Elenita Nolasco, Juan O. Nolasco III, Estate of Faustina M. Onrubia and Philippine Merchant Marine School, Inc., G.R. No. 131394, March 28, 2005, Supreme Court Second Division, Tinga, J., writing for the Court.The dispute arose from the 1952 incorporation of Philippine Merchant Marine School, Inc. (PMMSI) whose articles of incorporation showed an initial capital divided into 1,000 founders shares and 700 common shares (a total of 1,700 shares) but with 776 shares specifically reflected as actually subscribed and outstanding (700 founders + 76 common). The corporation’s stock and transfer book was first registered only in 1978, recording thirty-three (33) common shares as issued and outstanding; subsequent events recorded other shares later, but the stock book never reflected the full 776 shown in the articles.
In 1979 a special stockholders meeting proceeded on the basis of the limited entries in the stock and transfer book. In 1982 the heirs of incorporator Juan Acayan petitioned the Securities and Exchange Commission (SEC) to recognize their title to 120 founders shares and 12 common shares; the SEC hearing officer and later the SEC En Banc ruled in their favor and ordered the recording of those shares in the stock and transfer book. In 1992 a special stockholders meeting was held to elect directors; private respondents later challenged that meeting before the SEC, arguing the quorum should be computed from the capital stock shown in the 1952 articles (776) rather than the incomplete entries in the stock and transfer book (which then reflected 165).
The SEC initially dismissed the challenge but the SEC En Banc reversed, directing the parties to call a stockholders meeting using the shareholdings reflected in the articles of incorporation as the basis for quorum. Petitioners (PMMSI stockholders) filed a petition for review with the Court of Appeals. Another set of stockholders (Rebecca Acayan et al.) filed a separate petition for review on the same SEC En Banc orders; the Court of Appeals consolidated the matters (CA-G.R. SP No. 41473 et al.) and, in a decision promulgated 18 August 1997, held that for transacting corporate business the quorum should be based on the outstanding capital stock reflected in the articles of incorporation. Petitioners sought relief before this Court by petition for review on certiorari, challenging the Court of Appeals’ reliance on the articles rather than the stock and transfer book and contending that the Court of Appeals improperly applied the SEC’s Espejo ruling to benefit private respondents.
Private respondents raised res judicata and forum-shopping defenses, citing the denial with finality of a related petition (G.R. No. 1313...(Subscriber-Only)
Issues:
- Does the doctrine of res judicata or the rule against forum-shopping bar petitioners’ petition to the Supreme Court?
- For purposes of determining quorum and transacting corporate business, should the basis be the stock and transfer book entries or the outstanding capital stock as shown in the art...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)