Case Digest (G.R. No. 225022)
Facts:
Carolina Que Villongco, Ana Maria Que Tan, Angelica Que Gonzales, Elaine Victoria Que Tan and Edison Williams Que Tan v. Cecilia Que Yabut, Eumir Carlo Que Camara and Ma. Corazon Que Garcia, G.R. Nos. 225022 and 225024, February 05, 2018, First Division, Tijam, J., writing for the Court. The petitions assail the Court of Appeals (CA) Decision dated September 4, 2015 and Amended Decision dated June 8, 2016 in CA-G.R. SP No. 134666, which voided an annual stockholders’ meeting for lack of quorum and declared acts that flowed therefrom ultra vires.The dispute arises from Phil‑Ville Development and Housing Corporation, a family real estate corporation whose authorized capital stock was P20,000,000 divided into 200,000 shares. Foundress Geronima Gallego Que owned 3,140 shares; the rest were held by her six children and, on the death of one child, by that child’s issue. A June 11, 2005 document entitled “Sale of Shares of Stocks,” purportedly executed by Cecilia Que as attorney‑in‑fact for Geronima, redistributed Geronima’s 3,140 shares among various grandchildren. Those allocations later appeared in Phil‑Ville’s 2010–2011 General Information Sheets.
Tensions over the validity of those transfers culminated in competing actions. In January 2013, Cecilia, Eumir Carlo Que Camara and Ma. Corazon Que Garcia (collectively, Cecilia et al.) circulated notices for an annual stockholders’ meeting. A majority of Phil‑Ville’s board (Carolina, Ana Maria and Angelica) held an emergency meeting and, by consensus, postponed the meeting pending resolution of the disputed 3,140 shares; notice of postponement was sent and the SEC informed. Despite this, Cecilia et al. proceeded with a meeting later claimed to have been held on January 25, 2014 at Max’s Restaurant, where they purportedly elected themselves as directors and officers.
Before and after these events, Carolina et al. filed (1) an action for annulment of sale/distribution of the 3,140 shares and injunctions, and (2) on February 10, 2014, an intra‑corporate election contest before the Regional Trial Court (RTC) of Malabon (SEC Case No. SEC14‑001‑MN) asking the RTC to declare the January 25, 2014 elections void for lack of quorum and to void all acts emanating from that meeting. Cecilia et al. filed a Motion for Additional Time to file Answer on March 7, 2014, which the RTC denied as untimely under Section 5, Rule 6 of the Interim Rules of Procedure for Intra‑Corporate Controversies. The RTC rendered judgment on March 14, 2014 declaring the election and subsequent organizational acts null and void for lack of quorum, finding only 98,428 voting shares represented out of 200,000.
On appeal, the CA in its September 4, 2015 Decision declared the RTC’s decision void for failing to comply with Section 14, Article VIII of the Constitution (failure to state clearly and distinctly the facts and law), but entered judgment itself declaring the January 25, 2014 stockholders’ meeting invalid for lack of quorum and striking the resulting elections as void. On June...(Pro-only)
Issues:
- Did the Court of Appeals correctly hold that the RTC decision violated Section 14, Article VIII of the Constitution for failing to state clearly and distinctly the facts and law on which it was based?
- Should the presence of a quorum at the January 25, 2014 stockholders’ meeting be determined by reference to the total outstanding capital stock or only to the undisputed shares (i.e., excluding the 3,140 shares allegedly transferred from Geronima)?
- Did the filing of a Motion for Extension of Time to file Answer by Cecilia et al. constitute a voluntary appearance that cured any defect in service and thereby bar them...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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