G.R. No. 152542 - Monfort HermaNo.Agricultural Development Corp. vs. Monfort III

Case Summary (G.R. No. 152542)

Petitioners and Respondents

Petitioners

Monfort Hermanos Agricultural Development Corporation (Ma. Antonia M. Salvatierra)
Ramon H. Monfort (in his personal capacity)
Respondents
Antonio B. Monfort III, Ma. Luisa Monfort Ascalon, Ildefonso B. Monfort, Alfredo B. Monfort, Carlos M. Rodriguez, Emily Francisca R. Doliquez, Encarnacion Cecilia R. Paylado, Jose Martin M. Rodriguez
Court of Appeals

Key Dates

October 16, 1996: Alleged corporate board election
March 31, 1997: Board Resolution authorizing Salvatierra and/or Ramon H. Monfort to represent the Corporation
April 10 & 21, 1997: Filing of replevin (Civil Case No. 506-C) and forcible entry (Civil Case No. 534-C) complaints
August 14, 1998: MTC decision dismissing forcible entry complaint
May 4, 1998: RTC denial of motion to dismiss replevin complaint
October 5, 2001 & June 7, 2002: Court of Appeals decisions on forcible entry and replevin cases
July 8, 2004: Supreme Court decision

Applicable Law

1987 Philippine Constitution (case decided post-1990)
Corporation Code (B.P. Blg. 68), particularly Section 26 on reporting elections and changes in corporate officers to the SEC
Rules on corporate capacity to sue and be sued

Property Ownership and Alleged Usurpation

Monfort Hermanos ADC is the registered owner of four Haciendas (San Antonio II, Marapara, Pinanaoag, Tinampa-an), a motor vehicle, and two tractors. Ramon H. Monfort maintained fighting cocks at Hacienda San Antonio. In 1997, the group of Antonio B. Monfort III allegedly forced out the Corporation’s possession of all these assets.

Procedural History of Replevin Case (Civil Case No. 506-C)

April 10, 1997: Complaint for delivery of vehicle, tractors, and 378 fighting cocks filed before RTC Branch 60.
Motion to dismiss based on lack of Salvatierra’s capacity to sue; RTC denied motion on May 4, 1998.
Petition for certiorari to the Court of Appeals; appellate court dismissed it on June 7, 2002 without ruling on corporate capacity.
Petition for review filed with the Supreme Court as G.R. No. 155472.

Procedural History of Forcible Entry Case (Civil Case No. 534-C)

April 21, 1997: Complaint for forcible entry and preliminary injunction filed before Municipal Trial Court of Cadiz City.
Group of Antonio B. Monfort III raised Salvatierra’s lack of capacity; MTC dismissed complaint on February 18, 1998.
RTC reversed and remanded for further proceedings; Court of Appeals set aside the RTC judgment and dismissed the complaint on October 5, 2001 for lack of capacity.
Petition for review filed with the Supreme Court as G.R. No. 152542 (consolidated with G.R. No. 155472).

Central Issue: Legal Capacity to Sue

Whether Ma. Antonia M. Salvatierra was validly authorized by a duly constituted board of directors to represent the Corporation in both actions, given that the March 31, 1997 Board Resolution was allegedly signed by persons not appearing in the 1996 SEC-filed General Information Sheet.

Corporate Authority and SEC Reporting Requirements

Under Section 26 of the Corporation Code, a corporation must report to the SEC, within 30 days after election of directors and officers, the names and residences of those elected. Any change—death, resignation, or cessation of office—must be reported within 15 days. Corporate power to sue is exercised only by the board of directors or officers duly authorized and reflected in SEC records.

Discrepancies in Board Composition

The six signatories to the March 31, 1997 resolution were Salvatierra (President), Ramon H. Monfort (Executive Vice President), and four individuals (Paul M. Monfort, Yvete M. Benedicto, Jaqueline M. Yusay, Ester S. Monfort) not listed in the 1996 General Information Sheet, which named six different board members. Four board members named in the 1996 sheet had died between 1984 and 1987, yet no timely notice of their deaths or replacements was filed with the SEC.

Precedent on Corporate Capacity to Sue

In Premium Marble Resources, Inc. v. Court of Appeals, the Supreme Court held that authority to sue must be granted by a board whose composition is duly reported to the SEC. Failure to prove valid SEC-reported election and board resolution warrants dismissal of the complaint for lack of corporate capacity.

Failure to Prove Valid Election and Notice

The Corporation belatedly informed the SEC on November 11, 1998 of the alleged October 16, 1996 election—well beyond the 30-day requirement—and only after Salvatierra’s capacity was challenged in 1997. The Minutes of the October 16, 1996 meeting were submitted in 1999, without proof

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