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    Legaspi Towers 300, Inc., Et Al. V. Amelia Muer, Et Al

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    Ivee Ong
    The Supreme Court ruled that a derivative suit was not proper in this case for the following reasons: 1) A derivative suit requires the corporation to be the real party in interest and for reliefs to benefit the corporation. However, in this case the reliefs sought were to nullify an election and protect individual shareholder voting rights, not benefit the corporation. 2) For a derivative suit, the shareholder must have tried to exhaust intra-corporate remedies by making a demand on the board which was refused. This did not occur in this case. 3) For a derivative suit, the cause of action must devolve to the corporation due to harm caused to it, not individual shareholders. But in

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    Legaspi Towers 300, Inc., Et Al. V. Amelia Muer, Et Al

    Uploaded by

    Ivee Ong
    76 views1 page
    The Supreme Court ruled that a derivative suit was not proper in this case for the following reasons: 1) A derivative suit requires the corporation to be the real party in interest and for reliefs to benefit the corporation. However, in this case the reliefs sought were to nullify an election and protect individual shareholder voting rights, not benefit the corporation. 2) For a derivative suit, the shareholder must have tried to exhaust intra-corporate remedies by making a demand on the board which was refused. This did not occur in this case. 3) For a derivative suit, the cause of action must devolve to the corporation due to harm caused to it, not individual shareholders. But in

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    Legaspi Towers 300

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    The Supreme Court ruled that a derivative suit was not proper in this case for the following reasons: 1) A derivative suit requires the corporation to be the real party in interest and for reliefs to benefit the corporation. However, in this case the reliefs sought were to nullify an election and protect individual shareholder voting rights, not benefit the corporation. 2) For a derivative suit, the shareholder must have tried to exhaust intra-corporate remedies by making a demand on the board which was refused. This did not occur in this case. 3) For a derivative suit, the cause of action must devolve to the corporation due to harm caused to it, not individual shareholders. But in

    Copyright:

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

    Legaspi Towers 300, Inc., Et Al. V. Amelia Muer, Et Al

    Uploaded by

    Ivee Ong
    The Supreme Court ruled that a derivative suit was not proper in this case for the following reasons: 1) A derivative suit requires the corporation to be the real party in interest and for reliefs to benefit the corporation. However, in this case the reliefs sought were to nullify an election and protect individual shareholder voting rights, not benefit the corporation. 2) For a derivative suit, the shareholder must have tried to exhaust intra-corporate remedies by making a demand on the board which was refused. This did not occur in this case. 3) For a derivative suit, the cause of action must devolve to the corporation due to harm caused to it, not individual shareholders. But in

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    Legaspi Towers 300, Inc., et al.

    V.
    Amelia Muer, et al.
    G.R. No. 170783
    January 18, 2012

    Facts:
    Pursuant to the by-laws of Legaspi Towers 300, Inc. petitioners Lilia Marquinez Palanca,
    Rosanna D. Imai, Gloria Domingo and Ray Vincent, the incumbent Board of Directors, set the
    annual meeting of the members of the condominium corporation and the election of the new
    Board of Directors. The Committee on Elections of Legaspo Towers 300, Inc., however, found
    most of the proxy notes, at its face value, irregular, thus, questionable; and for lack of time to
    authenticate the same, petitioners adjourned the meeting for lack of quorum. Despite
    petitioner’s insistence that no quorom was obtained during the annual meeting, respondents
    pushed through with the scheduled election and elected new Board of Directors and officers,
    subsequently they submitted a General Information Sheet to the Securities and Exchange
    Commission. Petitioners Lilia Marquinez Palanca, Rosanna D. Imai, Gloria Domingo and Ray
    Vincent sought to nullify the election of the Board of Directors, and to protect and enforce their
    individual right to vote. The appellate court, however, held that as the right to vote is a
    personal right of a stockholder of a corporation, such right can only be enforced through direct
    action; hence, Legaspi Towers, Inc. cannot be impleaded as plaintfiff in this case.

    Issue: Whether or not the Doctrine of Derivative Suit is proper in this case.

    Ruling: No.

    Since it is the corporation that is the real party-in-interest in a derivative suit, then the
    reliefs prayed for must be for the benefit or interest of the corporation. When the reliefs
    prayed for do not pertain to the corporation, then it is an improper derivative suit. The
    requisites for a derivative suit are as follows: a) the party bringing suit should be a shareholder
    as of the time of the act or transaction complained of, the number of his shares not being
    material; b) he has tried to exhaust intra-corporate remedies, i.e., has made a demand on the
    board of directors for the appropriate relief but the latter has failed or refused to heed his plea;
    and c) the cause of action actually devolves on the corporation, the wrongdoing or harm having
    been, or being caused to the corporation and not to the particular stockholder bringing the suit.
    In this case, petitioners complaint seek to nullify the election of the newly-elected members of
    the Board, questioning the validity of the election as it was allegedly marred by lack of quorum.
    Petitioners as stockholders are, thus, the injured party or party-in-interest, who wield such right
    to vote and the cause of action devolves on them, not the condominium corporation, which did
    not have the right to vote.

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