A derivative suit is a suit brought by a stockholder in the name and on behalf of the corporation to

redress the wrongs committed against it or to protect corporate rights whenever the officials of the
corporation refuse to sue or are the ones that are sued. A derivative suit also requires that the
corporation is impleaded as a plaintiff.

In this case, there is a wrong committed against the stockholders. This is because the directors cannot
elect the 2 new directors to fill in the vacancy caused by the resignation of Director A and B. The Revised
Corporation Code requires that such vacancy should be filled upon by election by the stockholders. Thus
there is a wrong committed against the stockholders because the directors violated a right of the
shareholders.

The derivative suit will not prosper. In this case, the derivative suit is filed against the corporation, not in
the name and on behalf of the corporation. Thus, the derivative suit will not prosper. A representative
action/suit or a suit brought by a stockholder in behalf of himself and the other stockholders when a
wrong is committed against a group of stockholders is the proper remedy in this case and not a
derivative suit.
A trustee by legal implication are the Board of Directors or Board of Trustees when there is no receiver
or trustee that is designated and the extended life of the corporation that is undergoing liquidation has
expired. The Board of Directors/Trustees may be permitted to continue as a trustee by legal implication
until the liquidation is terminated.
A. A stockholder's appraisal right is the right of the dissenting stockholder to withddraw from the
corporation and demand the payment of the fair value of his/her shares after dissenting against a
corporate acts involving changes in corporate structure.

B. Teresa cannot exercise the right of appraisal because to exercise the right of appraisal, the
stockholder must be the dissenting stockholder. In this case, Teresa was not the one who dissented the
corporate act of converting preferred voting shares to non-voting shares. It was Sophie who dissented.
Thus, Teresa cannot exercise the right of appraisal.

According to the Supreme Court, transacting business in the Philippines means the foreign corporation
must actually transact or perform specific business transactions in the Philippine territory on a
continuing basis in its own name and its own account. Such actual transaction is necessary so as to
acquire jurisdiction over the foreign corporation and thus require such corporation to get the necessary
Philippine business license. The absence of such actual transaction would mean that we cannot require
the foreign corporation to acquire such business license, meaning we have no jurisdiction to require
such foreign corporation to secure such business license.
A de facto partnership is a partnership which failed to comply with the legal requirements required for
the establishment of such partnership.

As a rule, a de facto partnership cannot exist because partnership is perfected by mere consent.
However, if such de facto partnership contracted obligations against another, the "partner" who
contracted such obligations should be liable for such.
The law provides that an industrial partner cannot engage in business for himself unless the partnership
allowed him to do so.

Joe is an industrial partner as he contributed his labor and industry to the partnership. Applying the law,
since Joe is an industrial partner, he cannot engage in any business for himself, that is to open and
operate a coffee shop, unless he is authorized by the partnership. Doing so, he may be excluded from
the partnership and may be required to pay damages.

Rudy, on the other hand, is a capitalist partner. A capitalist partner cannot engage in the same line of
business as that of the partnership unless such capitalist partner was expressly permitted by the
partnership. In this case, Rudy opened a car accessories store. While it may be related to the business of
the partnership which is car repairs, a car accessories store is not necessarily the same line of business
as to that of car repairs. Thus, Rudy may engage in such business of car accessories.
Angie should be hired by the partnership because both the managing partners Wang and Xhang agreed
to the hiring of Angie. The managing partners are in charge of the administration of partnership affairs.
Thus, since both managing partners agreed to the hiring of Angie, Angie should be hired.

As for Brenda, Brenda cannot be hired by the partnership because although one of the managing
partners Wang agreed to the hiring of Brenda, the other managing partner Xhang disagreed to it. Thus,
we should look into the partner who owns the controlling interest. In this case, Yang has the controlling
interest because he has contributed PHP 50,000 to the partnership (biggest contribution to the common
fund). Thus, since Yang, the partner owning the controlling interest, and Xhang, another managing
partner, opposed to the hiring of Brenda, Brenda cannot be hired by the partnership.
The Revised Corporation Code allows the Directors to attend and to vote at board meetings through
remote communications such as videoconferencing which allows them to participate at such meetings.
Since the Revised Corporation Code already allows such attendance and voting at board meetings
through remote communications, the meeting is valid and the contention of Mr. A should be struck
down.
A joint venture is an association of persons or corporations jointly undertaking a commercial enterprise
to which they contribute assets and share risks. A joint venture is governed by the laws of partnership.

In a partnership, the partners undertake it for the purpose of general business, which contemplates
continuity of business, until they decide to end the partnership affairs.

In a joint venture, the parties undertake a joint venture usually for a single transaction only, which
contemplates that a joint venture is temporary only.

Another distinction is that a corporation can enter into a joint venture but a corporation cannot enter
into a partnership.

The actions of the club concerning the share and membership of Mr. Pogi is warranted because the
Revised Corporation Code allows non-stock corporation to terminate the membership of a member in
accordance with the Articles of Incorporation or its By-Laws. Here, the club had already sent Mr. Pogi 5
letters concerning his delinquent account and requesting his attendance to scheduled conferences
regarding his failure to pay his dues in arrears. Since the termination of membership and sale was done
in accordance with the By-Laws of Village Sports Club, as provided by the Revised Corporation Code, the
actions of the club concerning the share and membership of Mr. Pogi is warranted.