Case Digest (G.R. No. 261125)
Facts:
Petitioner PETER PAUL G. MARASIGAN sought review of the Court of Appeals' reversal of the RTC decision that declared the Ganco Resorts & Recreation Incorporated (Ganco) meetings of November 6 and 12, 2017 and May 15, 2018 lacked quorum after the death of majority shareholder Luz Marasigan. The CA held the November meetings valid and ratified the election of officers, declared the May 15, 2018 election void, and the Supreme Court denied the petition, affirming the CA Decision and Resolution.
Issues:
- Did the Court of Appeals err in ruling that the special meetings and election of officers on November 6 and 12, 2017 were valid and ratified?
- Did the respondents make duplicitous statements warranting relief?
Ruling:
The Court denied the Petition for Review on Certiorari and affirmed the CA Decision and Resolution. The Court agreed that the November 6 and 12, 2017 meetings were valid directors' meetings that produced a valid election of officers, and that the May 15, 2018 meeting and its elections were invalid; the Court declined to further pursue the claim of duplicitous statements.
Ratio:
Ganco was organized as a close corporation, but its AOI expressly designated the stockholders as the board of directors and set a uniform quorum provision; nevertheless, close-corporation privileges must be expressly invoked in the AOI. Under Section 25, Old Corporation Code, the quorum for directors' meetings and the vote required for election of officers is based on the number of directors fixed in the AOI, unless a greater majority is properly provided, and Section 97, Old Corporation Code does not permit relocating the substance of what constitutes a quorum from directors to share capital absent an AOI provision so stating; applying these rules, eight of fourteen directors constituted a valid quorum for the November meetings and produced the requisite votes, whereas the May 15, 2018 meeting failed for lack of proper notice, timely objections, and the required board-majority vote.
Doctrine:
- A close corporation must expressly invoke in its Articles of Incorporation the privileges or exemptions it intends to exercise.
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