Case Summary (G.R. No. 91925)
Facts of the Case
In two petitions filed by the Cojuangco brothers and Abello (G.R. No. 91925 and G.R. No. 93005), the principal issue was whether the PCGG had the authority to vote sequestered shares of SMC and elect members to its board of directors. In the annual meetings held in 1989 and 1990, the PCGG was permitted to vote on sequestered shares totaling over 27 million and 108 million respectively, which the petitioners claimed were illegally represented. The petitions argued that this interference deprived them of their rights as shareholders.
Legal Considerations
Both cases raised significant legal issues regarding the PCGG's authority and the shareholders' rights under the 1987 Philippine Constitution. Central to the petitions was the assertion that the right to vote on corporate matters rests solely with the legitimate shareholders and that the PCGG, acting as a conservator of sequestered assets, cannot perform acts of ownership, including voting.
Court's Findings
The Supreme Court ruled decisively that the PCGG cannot exercise ownership over sequestered shares; it is limited to acting as a conservator and administrator. The voting of such shares is a fundamental right of the actual shareholders, not the PCGG. The Court established that the act of voting in corporate elections represents ownership, which the PCGG cannot claim over shares it merely administers.
Limits of PCGG's Authority
The Court clarified that while the PCGG is empowered to manage sequestered assets to prevent their dissipation, it must refrain from voting on corporate governance matters. The Court emphasized that such inclusion in management or board decisions would contradict the principles of due process and the protection of property rights enshrined in the Constitution.
Remedies and Future Actions
The ruling necessitated that elections for the board of directors should allow the actual shareholders to vote their shares, setting aside any prior elections where the PCGG's vote had dominated the outcome. The Court ordered a new election to ensure compliance with shareholder rights, thereby reinforcing the necessi
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Case Overview
- The case involves two petitions (G.R. No. 91925 and G.R. No. 93005) concerning the voting rights over sequestered shares of stock in the San Miguel Corporation (SMC).
- Petitioners Eduardo M. Cojuangco, Jr., Manuel M. Cojuangco, and Rafael G. Abello contend that the Presidential Commission on Good Government (PCGG) unlawfully voted on sequestered shares, which they argue should rightfully be voted by the actual shareholders.
Background Facts
- In G.R. No. 91925, the petitioners are stockholders of SMC holding a total of 24,725 shares, out of 140,849,970 shares outstanding during the annual meeting held on April 18, 1989.
- The PCGG claimed the right to vote sequestered shares belonging to various corporations, totaling 27,211,770 shares, which were allowed to be represented at the meeting.
- The election resulted in the declaration of new board members favored by PCGG, which petitioners argued was illegitimate due to the illegal casting of their shares by PCGG.
Legal Issues Presented
- The core legal issue is whether the PCGG has the authority to vote the sequestered shares of stock in SMC and thereby affect the outcome of the election for the board of directors.
- Petitioners assert that the right to vote belo