Premium Marble vs. CA264 SCRA 11 (1996)
FACTS:
On July 18,
1986, Premium Marble Resources, Inc., assisted by Atty. Arnulfo Dumadag as
counsel, filed an action for damages against International Corporate Bank on
the ground that the latter allowed the checks issued to petitioner to be
deposited to the account of the Intervest Merchant Finance, a conduit
corporation of the former officers of the plaintiff corporation.
In its
Answer, International Corporate Bank alleged, inter alia, that Premium has no
capacity/personality/authority to sue in this instance and the complaint
should, therefore, be dismissed for failure to state a cause of action.
A few days
after Premium filed the said case, Printline Corporation, a sister company of
Premium also filed an action for damages against International Corporate Bank
docketed as Civil Case No. 14444. Thus, the case were consolidated.
Meantime,
the same corporation, i.e., Premium, but this time represented by Siguion
Reyna, Montecillo and Ongsiako Law Office as counsel, filed a motion to dismiss
on the ground that the filing of the case was without authority from its duly
constituted board of directors as shown by the excerpt of the minutes of the
Premium’s board of directors’ meeting.
In its
opposition to the motion to dismiss, Premium thru Atty. Dumadag contended that
the persons who signed the board resolution, namely, Belen, Jr., Nograles &
Reyes, are not directors of the corporation and were allegedly former officers
and stockholders of Premium who were dismissed for various irregularities and
fraudulent acts; that Siguion Reyna Law Office is the lawyer of Belen and
Nograles and not of Premium and that the Articles of Incorporation of Premium
shows that Belen, Nograles and Reyes are not majority stockholders.
On the
other hand, Siguion Reyna Law Firm as counsel of Premium in a rejoinder,
asserted that it is the general information sheet filed with the Securities and
Exchange Commission, among others, that is the best evidence that would show
who are the stockholders of a corporation and not the Articles of Incorporation
since the latter does not keep track of the many changes that take place after
new stockholders subscribe to corporate shares of stocks.
The lower
court concluded that the officers represented by Atty. Dumadag do not yet have
the legal capacity to sue for and in behalf of the plaintiff corporation
considering that the officers (directors) of plaintiff corporation enumerated
in the Articles of Incorporation, filed on November 9, 1979, were ‘to serve
until their successors are elected and qualified’ and considering further that
as of March 4, 1981, the officers of the plaintiff corporation were Alberto
Nograles, Fernando Hilario, Augusto Galace, Jose L.R. Reyes, Pido Aguilar and
Saturnino Belen, Jr., who presumably are the officers represented by the
Siguion Reyna Law Firm.
ISSUE:
whether or
not the filing of the case for damages against private respondent was
authorized by a duly constituted Board of Directors of the petitioner
corporation
RULING:
It appears
from the general information sheet and the Certification issued by the SEC on
August 19, 1986 that as of March 4, 1981, the officers and members of the board
of directors of the Premium Marble Resources, Inc. were:
·
Alberto
C. Nograles—President/Director
·
Fernando
D. Hilario—Vice President/Director
·
Augusto
I. Galace—Treasurer
·
Jose
L.R. Reyes—Secretary/Director
·
Pido
E. Aguilar—Director
·
Saturnino
G. Belen, Jr.—Chairman of the Board
While the
Minutes of the Meeting of the Board on April 1, 1982 states that the newly
elected officers for the year 1982 were Oscar Gan, Mario Zavalla, Aderito
Yujuico and Rodolfo Millare, petitioner failed to show proof that this election
was reported to the SEC. In fact, the last entry in their General Information
Sheet with the SEC, as of 1986 appears to be the set of officers elected in
March 1981.
The SC
agrees with the finding of the CA, that “in the absence of any board resolution
from its board of directors the
authority to act for and in behalf of the corporation, the present
action must necessarily fail. The power of the corporation to sue and be sued
in any court is lodged with the board of directors that exercises its corporate
powers. Thus, the issue of authority and the invalidity of
plaintiff-appellant’s subscription which is still pending, is a matter that is
also addressed, considering the premises, to the sound judgment of the
Securities & Exchange Commission.”
By the
express mandate of the Corporation Code (Section 26), all corporations duly
organized pursuant thereto are required to submit within the period therein
stated (30 days) to the Securities and Exchange Commission the names,
nationalities and residences of the directors, trustees and officers elected.
Sec. 26 of
the Corporation Code provides, thus:
“Sec. 26. Report of election of directors,
trustees and officers.—Within thirty (30) days after the election of the
directors, trustees and officers of the corporation, the secretary, or any
other officer of the corporation, shall submit to the Securities and Exchange
Commission, the names, nationalities and residences of the directors, trustees
and officers elected. x x x”
Evidently,
the objective sought to be achieved by Section 26 is to give the public
information, under sanction of oath of responsible officers, of the nature of
business, financial condition and operational status of the company together
with information on its key officers or managers so that those dealing with it
and those who intend to do business with it may know or have the means of
knowing facts concerning the corporation’s financial resources and business
responsibility.
The claim,
therefore, of petitioners as represented by Atty. Dumadag, that Zaballa, et
al., are the incumbent officers of Premium has not been fully substantiated. In
the absence of an authority from the board of directors, no person, not even
the officers of the corporation, can validly bind the corporation.
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