BUSORG2 OUTLINE 6 (2019)

Prof. M.I.P. Romero

Xl. CORPORATE POWERS

1) Express, Implied, Inherent - Sections 35 to 44

Y-1 Leisure v, Yu GR 207161; Sept. 8, 2015

2) Ultra Vires Doctrine --- Sec. 44; Legal Consequences

a) illegal vs. ultra vires
b) legal consequences of ultra vires acts
- if fully executed by both parties
- if executory on both ends
- if partially executed
c) intra vires but not authorized/ lacking in formalities

Pirovano, et al v. De la Rama 96 Phil. 335 (1954)

Carlos v. Mindoro Sugar Corp. GR L-36207; Oct. 26, 1932
Rep. v. Acoje Mining 7 SCRA 631 (1963)
Gokongwei Jr. v. SEC, et al. 89 SCRA 336 (1979)

XlI. CONTROL & MANAGEMENT

1) Board of Directors/Trustees; Independent Directors

a) Sections 22, 26

Boyer-Roxas v. CA 211 SCRA 470

b) Non-stock corp. – Sec. 91

c) Close corp. - Secs. 96, Sec.103

d) Special corporations – Educational --- Sec. 106

Religious – Sec. 108-111, Sec. 114 (f)

e) Meetings – Sec. 48, 52, 53

 -- Close corp. – Sec. 96 (c), 100

Expert Travel & Tours v. CA 459 SCRA 147

f) Election of DIR/TEES - Sec. 23, 25, 26

Stock and non-stock corp – manner of voting

f.1) straight voting
f.2) cumulative voting

Removal – Sec. 27
Vacancy – Sec. 28; 109 (d); 112

Rev. Ao-as v. CA June 20, 2006

Tan v. Sycip G.R. 153468 (Aug.17, 2006)
Valle Verde v. Africa Sept. 4, 2009

2) Officers – Sec. 24, 25, 26;

91 (par. 3) – non-stock;
96 (last par.) – close corp.

Yu Chuck v. Kong Li Po 46 Phil 608 (1924)

Woodchild Holdings v. Roxas Electric 436 SCRA 235
People’s Air Cargo v. CA Oct. 7, 1998
Marc ll v. Joson Dec. 12, 2011
E.B. Villarosa v. Benito Aug. 6, 1999
Cagayan Valley Drug v. CIR Feb. 13, 2008

3) Executive, Mgt. and other special committees - Sec. 34

Filipinas Port Services, Inc. v. Go Mar. 16, 2007

4) Stockholders –
a) Sec. 23 and other provisions requiring SHs’ action
b) Meetings – Sec. 48 - 50; sec. 53
Quorum – sec. 51

Tan v. Sycip Aug.17, 2006

c) Deadlocks in close corps – Sec. 103; provisional director

 5) Members – Sec. 88 - 90

Lim v. Moldex Land, Inc. Jan. 25, 2017

XIlI. DUTIES OF DIRECTORS & CONTROLLING STOCKHOLDERS

Three - fold duty of directors --- Diligence, Loyalty, Obedience

Sec. 21 of NCC;

1) Compensation of directors – Sec. 29

Western Institute of Technology v. Salas 278 SCRA 216

2) Duty of diligence/Business Judgment Rule – Sec. 22 (par. 1); Sec. 30

Board of Liquidators v. Kalaw 20 SCRA 987

Benguet Electric Coop. v. NLRC 209 SCRA 55

3) Self-dealing directors- Sec. 31 (NOTE error in revision)

Prime White Cement v. IAC 220 SCRA 103

4) Interlocking directors – Sec. 32

Gokongwei v. SEC et al. 89 SCRA 336

5) Doctrine of Corporate Opportunity – Sec. 33

6) Duty to stockholders - Special Facts Doctrine

Strong v. Repide 41 Phil. 947

7) Duty to creditors – Steinberg v. Velasco 52 Phil. 953

8) Watered Stocks - Sec. 64

9) Duty of shareholders in close corps. – Sec. 96 (par. 2);

- Sec. 99 (d and e)