CORPORATION LAW

I
FG is an incorporator of VC corporation having subscribed to and fully paid 239,500 shares.
however, no certificate of stock was issued to FG. In 1968, VCP and FG signed a document entitled
“undertaking and indorsement” which states: “undertaking: I, VCP is the owner of the total subscription
of FG with VC corporation in the amount of two hundred thirty-nine thousand five hundred(p239,500.00)
pesos and that FG does not have any liability whatsoever on the subscription agreement in favor of VC
corporation. (sgd) VCP, conforme: (sgd) FG. indorsement: I, FG is indorsing the total amount of two
hundred thirty-nine thousand five hundred(p239,500.00) stocks of VC corporation to VCP. (sgd) FG A.
However, FG remains to be the stockholder in the books of the corporation and it is undisputed
that VC had not made a request upon the corporate secretary of VC corporation to record the alleged
transfer of stocks. in 1996, VCP made a demand for the issuance of certificates of stock in his name. the
demand was denied and VCP filed petition for mandamus for the issuance of the certificates.
A. will the action prosper?
B. In the problem above, VCP argued that it is precisely the duty of the corporate
secretary, when presented with the document of fully paid shares, to effect the transfer
by recording the transfer in the stock and transfer book and to issue stock certificates in
the name of the transferee. Is the contention tenable?
C. Assume that VCp can validly file the petition for mandamus. Can such petition be
dismissed on the ground of prescription considering that it was filed only 24 years after
the execution of the undertaking and indorsement?

II
How does one become a shareholder in a corporation?
III
In a stockholders meeting, Sittie Fairoza dissented from the corporate act converting
preferred voting shares to Non-voting shares. Thereafter, Sittie Fairoza submitted his certificates of
Stock for notation that his shares are dissenting. The next day, Sittie Fairoza Transferred his shares
that are dissenting to Juhana to whom new certificates were issued. Now, Juhana demands from the
corporation the payment of the value of his shares.
Can Juhana exercise the right of appraisal? Explain.

IV
Hanan was employed in MARAWI Corporation. He subscribed to 1,500 shares of the
corporation at P100 per share or a total of P150,000. She made an initial down payment of
P37,500.00. She was appointed President and General Manager. Because of her disagreement with
the BOD, she resigned and demanded payment of her unpaid salaries, her cost-of-living allowance,
her bonus, and reimbursement of her gasoline and representation expenses.
 MARAWI Corporation admits that it owed Hanan P40,000. But told her that this will be
applied to the unpaid balance of her subscription in the amount of P100,000.00 There was no call or
notice for the payment of the unpaid subscription. Hanan questioned the set-off.
1. May MARAWI Corporation set-off the unpaid subscription with Hanan‘s claim for
salaries?
2. Would your answer be the same if indeed there had been a call for the unpaid
subscription?

V
Sometime in April 2004, Malyn learned about Fort Patio Café located in Taguig City and
that its development was undertaken by a new corporation known as Fort Patio, Inc., where both
Schiera and Jaz are directors. Malyn also found that Schiera and Jaz, on behalf of Patio
Investments, had obtained a loan of P500,000.00 from PBCom Bank, for the purpose of opening
Fort Patio Café. This loan was secured by the assets of Patio Investments and personally
guaranteed by Schiera and Jaz. Malyn then filed a corporate Derivative action before the Regional
Trial Court of Makati City against Schiera and Jaz, alleging that the two directors had breached
their fiduciary duties by misappropriating money and assets of Patio Investments in the operation
of Fort Patio Café.
1. Did Schiera and Jaz violate the Principle of corporate opportunity? Explain.
2. Was it proper for Malyn to file a derivative suit with a prayer for injunctive relief? Explain.
3. Assuming that a derivative suit is proper; may the action continue if the corporation is
dissolved during the pendency of the suit?