G.R. No. 261125 - Marasigan vs. Marasigan, Ganco Resorts and Recreation Inc.

The parties in the original complaint are the children of the late spouses Cesar and Luz Marasigan, except for Cesar Augustine Marasigan III, the grandson.
The Spouses Marasigan acquired several properties, including La Luz Beach Resort in Batangas and the Mabini Street property in San Juan City. Cesar died in 2001, and his estate remains unsettled.
In 2013, Luz and her 13 children incorporated Ganco Resorts & Recreation Incorporated (Ganco), a close corporation, with principal office at the Mabini Street property. Luz subscribed to 3,000 shares; her children subscribed to 200 shares each, totaling 5,600 shares.

Ganco’s Articles of Incorporation (AOI) provide that the corporation’s business “shall be managed by the board of directors who are the stockholders,” a structure reflected in its by-laws.
In 2017, the following officers were elected: Luz as Chairman, Peter Marasigan as President, Benito as Vice President, Regina as Treasurer, and Orlando as Secretary.
Peter Marasigan, President since 2015, took a six-week vacation starting August 2017; Luz died on November 3, 2017, during his leave. Peter returned early on November 5.

The Marasigan children (stockholders) met at Rommel’s office. Eight stockholders were considered present (five physically, three via video conference).
There was no prior notice, agenda, or valid call for the meeting as per Peter.
Orlando declared a quorum; the meeting was tagged as a special board and stockholders meeting.
Benito declared himself Interim President, replacing Peter due to his absence without leave.

November 12, 2017 Meeting: Nine family members discussed estate settlement and the Mabini Street property after Luz’s burial.
May 11, 2018: Orlando issued a notice cancelling the Annual Shareholders’ Meeting pending settlement of Luz’s shares.
May 15, 2018 Meeting:

Attended by Orlando and Regina physically; seven joined via video conference.
Officers elected: Gabriel as Chairman, Regina as President, Peter as Vice President and Secretary, Renato as Treasurer.
New bank signatories were appointed.

Respondents refused to recognize the new officers and refused to turn over control and assets. They allegedly attempted to encash checks and collected resort fees in cash, causing corporate bank accounts to be frozen.
Respondents, joined by two other siblings, filed a Complaint for Declaration of Nullity of Meetings, Board Resolutions and Election of Officers with prayer for Temporary Restraining Order (TRO) and Writ of Preliminary Injunction. They claimed the May 15, 2018 meeting was null and void and asserted their legitimacy as officers.

The RTC denied respondents’ TRO and preliminary injunction for lack of urgency and upon motions dropped some plaintiffs.
RTC Decision (Feb 3, 2021):

Held that due to Luz’s unsettled estate, neither party automatically acquired ownership or control of her shares to constitute quorum or exercise stockholder rights.
Dismissed complaint, reinstating officers elected prior to Luz’s death as hold-over officers due to lack of quorum in November 6, 12, 2017, and May 15, 2018 meetings.

Reversed the RTC. Declared November 6 and 12, 2017 meetings and officer elections valid and ratified.
Declared May 15, 2018 meeting null and void for lack of proper notice and quorum.
Denied prayer for damages and attorney’s fees.

Peter contends Ganco is a close corporation governed primarily by Title XII of the Old Corporation Code (OCC) and thus Section 25 (quorum rules for election of officers) does not apply.
He argues:

Section 25’s quorum minimum is only a floor; AOI or by-laws can provide otherwise.
Ganco’s by-laws provide for stockholders (not directors) to elect officers, as it has no elected board.
The meetings were stockholders’ meetings, not directors’.
Respondents made contradictory statements in another criminal case denying existence of functioning board, inconsistent with their claims here.

The special meetings and election of officers on November 6 and 12, 2017 are valid and ratified.
The meetings were directors’ meetings and not merely stockholders’ meetings.

Whether the respondents made duplicitous or contradictory statements affecting their credibility.