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    Corp Law Doctrinal Rulings Part 3 05-05-2020

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    เจียนคาร์โล การ์เซีย
    This document summarizes several Philippine Supreme Court cases related to shareholders' rights: 1) A voting trust agreement separates voting rights from other shareholder rights like receiving dividends or inspecting books. However, voting trusts cannot be used for fraudulent purposes or illegal monopolies. 2) In one case, a creditor acquired company shares not as a trustee but through foreclosure, allowing them to appoint board members and a comptroller under a financing agreement. 3) Directors have the right to inspect corporate books and records at reasonable times, while shareholders cannot demand certified copies of minutes until approved. There are limits to inspections involving secret corporate processes. 4) A corporation cannot wholly deprive shareholders of

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    Corp Law Doctrinal Rulings Part 3 05-05-2020

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    เจียนคาร์โล การ์เซีย
    65 views1 page
    This document summarizes several Philippine Supreme Court cases related to shareholders' rights: 1) A voting trust agreement separates voting rights from other shareholder rights like receiving dividends or inspecting books. However, voting trusts cannot be used for fraudulent purposes or illegal monopolies. 2) In one case, a creditor acquired company shares not as a trustee but through foreclosure, allowing them to appoint board members and a comptroller under a financing agreement. 3) Directors have the right to inspect corporate books and records at reasonable times, while shareholders cannot demand certified copies of minutes until approved. There are limits to inspections involving secret corporate processes. 4) A corporation cannot wholly deprive shareholders of

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    Corporation Law Case Doctrines Part 3

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    This document summarizes several Philippine Supreme Court cases related to shareholders' rights: 1) A voting trust agreement separates voting rights from other shareholder rights like receiving dividends or inspecting books. However, voting trusts cannot be used for fraudulent purposes or illegal monopolies. 2) In one case, a creditor acquired company shares not as a trustee but through foreclosure, allowing them to appoint board members and a comptroller under a financing agreement. 3) Directors have the right to inspect corporate books and records at reasonable times, while shareholders cannot demand certified copies of minutes until approved. There are limits to inspections involving secret corporate processes. 4) A corporation cannot wholly deprive shareholders of

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    65 views1 page

    Corp Law Doctrinal Rulings Part 3 05-05-2020

    Uploaded by

    เจียนคาร์โล การ์เซีย
    This document summarizes several Philippine Supreme Court cases related to shareholders' rights: 1) A voting trust agreement separates voting rights from other shareholder rights like receiving dividends or inspecting books. However, voting trusts cannot be used for fraudulent purposes or illegal monopolies. 2) In one case, a creditor acquired company shares not as a trustee but through foreclosure, allowing them to appoint board members and a comptroller under a financing agreement. 3) Directors have the right to inspect corporate books and records at reasonable times, while shareholders cannot demand certified copies of minutes until approved. There are limits to inspections involving secret corporate processes. 4) A corporation cannot wholly deprive shareholders of

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    © All Rights Reserved
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    of 1

    Lee vs.

    Court of Appeals (205 SCRA 752)


    The right to vote and other rights pertaining to the shares are transferred and registered to the
    trustee by virtue of a voting trust agreement provided that it is not used for purposes of fraud or
    circumventing the law against monopolies and illegal combinations in restraint of trade. By its very
    nature, a voting trust agreement results in the separation of the voting rights of a stockholder from
    his other rights such as the right to receive dividends, the right to inspect the books of the
    corporation, the right to sell certain interests in the assets of the corporation and other rights to
    which a stockholder may be entitled until the liquidation of the corporation.

    NIDC vs. Aquino (163 SCRA 153)


    This is an exception to the rule that trustee must return certificates to shareholder after expiration of
    the voting trust agreement. The acquisition in the present case by PNB-NIDC of the properties in
    question was not made or effected under the capacity of a trustee but as a foreclosing creditor for the
    purpose of receiving on a just and valid obligation of the bank. In this case, a part of the conditions
    mandated in the Financial Agreement entered into by the borrowing corporation with the PNB and
    the NIDC, a VTA was executed over 60% of the outstanding and paid up capital stock of the borrowing
    corporation. The execution of the VTA also facilitated implementation of the condition in the
    Financing Agreement that allowed PNBNIDC to appoint members in the 7-man board of the
    corporation, and the appointment of a comptroller by PNB-NIDC to supervise the financial
    management of the corporation.

    Veraguth vs. Isabela Sugar (57 SCRA 266)


    The court held that directors of a corporation have the unqualified right to inspect the books and
    records of the corporation at all reasonable times. Pretexts may not be put forward by the officers of
    the corporation to keep a director or stockholder from inspecting books and minutes of the
    corporation, and the right of inspection cannot be denied on the grounds that the director or
    stockholder is on unfriendly terms with the officers of the corporation whose records are sought to be
    so inspected. Nevertheless, the Court also held that a director or stockholder has no absolute right to
    secure certified copies of the minutes of a corporation until these minutes have been written up and
    approved by the directors.

    Philpots vs. Phil Manufacturing (40 PHIL 471)


    There are limitations to the stockholder’s right to inspect since there are things which a corporation
    may have keep secret, as in the case where the corporation is engaged in the business of manufacture
    and has acquired a formula or process not generally known. The corporation or its Board of Directors
    may properly adopt measures for the protection of such process from publicity.

    Pardo vs. Hercules (46 PHIL 964)


    It is true that a corporation may deny inspection when sought at unusual hours or under other
    improper conditions, however, the executive officers or the board of directors have no power to
    deprive a stockholder of the right altogether. The general right given by the statute may not be
    lawfully abridged by a by-law unduly restricting the right of inspection based on its skewed
    interpretation of "at reasonable hours." The right may be exercised on reasonable hours on business
    days throughout the year, and not merely during some arbitrary period of a few days chosen by the
    directors, and the motive of the stockholder exercising the right is immaterial.

    Gonzales vs. PNB (122 SCRA 489)


    Stockholder must not have been guilty of using improperly any information secured thru a prior
    examination and that the person asking for such examination must be acting in GF and for a
    legitimate purpose in making his demand. He must also setforth the reasons and purposes for which
    he desires such inspection.

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