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    Angeles Vs Santos

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    sexy_lhanz017507
    This document summarizes a court case between minority and majority stockholders of Parañaque Rice Mill, Inc. The minority stockholders (plaintiffs) filed suit against the majority stockholders and directors (defendants), alleging the defendant president took control of corporate funds and records in violation of bylaws and appropriated ₱10,000 for personal use. The court ruled in favor of the plaintiffs, finding the board of directors occupies a trusteeship role for both majority and minority stockholders. It appointed a receiver for the corporation, establishing that minority stockholders may file suit on behalf of the corporation if intracorporate remedies fail and the majority commits breaches of trust or illegal acts.

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    Angeles Vs Santos

    Uploaded by

    sexy_lhanz017507
    310 views1 page
    This document summarizes a court case between minority and majority stockholders of Parañaque Rice Mill, Inc. The minority stockholders (plaintiffs) filed suit against the majority stockholders and directors (defendants), alleging the defendant president took control of corporate funds and records in violation of bylaws and appropriated ₱10,000 for personal use. The court ruled in favor of the plaintiffs, finding the board of directors occupies a trusteeship role for both majority and minority stockholders. It appointed a receiver for the corporation, establishing that minority stockholders may file suit on behalf of the corporation if intracorporate remedies fail and the majority commits breaches of trust or illegal acts.

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    Angeles vs Santos

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    This document summarizes a court case between minority and majority stockholders of Parañaque Rice Mill, Inc. The minority stockholders (plaintiffs) filed suit against the majority stockholders and directors (defendants), alleging the defendant president took control of corporate funds and records in violation of bylaws and appropriated ₱10,000 for personal use. The court ruled in favor of the plaintiffs, finding the board of directors occupies a trusteeship role for both majority and minority stockholders. It appointed a receiver for the corporation, establishing that minority stockholders may file suit on behalf of the corporation if intracorporate remedies fail and the majority commits breaches of trust or illegal acts.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    310 views1 page

    Angeles Vs Santos

    Uploaded by

    sexy_lhanz017507
    This document summarizes a court case between minority and majority stockholders of Parañaque Rice Mill, Inc. The minority stockholders (plaintiffs) filed suit against the majority stockholders and directors (defendants), alleging the defendant president took control of corporate funds and records in violation of bylaws and appropriated ₱10,000 for personal use. The court ruled in favor of the plaintiffs, finding the board of directors occupies a trusteeship role for both majority and minority stockholders. It appointed a receiver for the corporation, establishing that minority stockholders may file suit on behalf of the corporation if intracorporate remedies fail and the majority commits breaches of trust or illegal acts.

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    G.R. No.

    L-43413

    August 31, 1937

    HIGINIO ANGELES, JOSE E. LARA and AGUEDO BERNABE,


    as stockholders for an in behalf and for the benefit of the corporation, Paraaque Rice Mill, Inc. and
    the other stockholders who may desire to join, plaintiffs-appellees,
    vs.
    TEODORICO B. SANTOS, ESTANISLAO MAYUGA, APOLONIO PASCUAL, and BASILISA
    RODRIGUEZ,defendant-appellants.
    Facts: The plaintiff and the defenant are all stockholders and member of the board of directors of the "Paraaque
    Rice Mill, Inc., "a corporation organized for the purpose of operating a rice mill in the municipality of Paraaque,
    Province of Rizal. The plaintiffs are stockholders and constitute the minority and the defendants are also
    stockholers and constitute the majority of the board of directors of the Paraaque Rice Mill, Inc.;
    On February 21, 1932, the stockholders appointed an investigation committee of which the plaintiff Jose de Lara
    was chairman and the stockholers Dionisio Tomas and Aguedo Bernabe were members, to investigate and
    determine the properties, operations, and losses of the corporation as shown in the auditor's report corresponding
    to the year 1931.
    That the defendant Teodorico B. Santos, in violation of the by-laws of the corporation, had taken possession of the
    books, vouchers, and corporate records as well as of the funds and income of the Paraaque Rice Mill, Inc., all of
    which, according to the by-laws, should be under the exclusive control and possession of the secretary-treasurer.He
    was also accused of appropriating to his own benefit properties, funds and income of the corporation in the sum of
    P10,000.
    The trial court ruled in favor of the plaintiffs-appellees and appointed Emilio Figueroa, as receiver of the
    corporation, after giving a bond in the amount of P2,00
    Issue: W/N minority stockholders may file a suit for and in behalf of the corporation
    Ruling: Yes. The board of directors of a corporation is a creation of the stockholders and controls and directs the
    affairs of the corporation by allegation of the stockholders. But the board of directors, or the majority thereof, in
    drawing to themselves the power of the corporation, occupies a position of trusteeship in relation to the minority of
    the stock in the sense that the board should exercise good faith, care and diligence in the administration of the
    affairs of the corporation and should protect not only the interest of the majority but also those of the minority of
    the stock.
    Where a majority of the board of directors wastes or dissipates the funds of the corporation or fraudulently
    disposes of its properties, or performs ultra vire sacts, the court, in the exercise of its equity jurisdiction, and upon
    showing that intra-corporate remedy is unavailing, will entertain a suit filed by the minority members of the board
    of directors, for and in behalf of the corporation, to prevent waste and dissipation and the commission of illegal
    acts and otherwise redress the injuries of the minority stockholders against the wrongdoing of the majority.
    Where corporate directors are guilty of a breach of trust not of mere error of judgment or abuse of discretion
    and intracorporate remedy is futile or useless, a stockholder may institute a suit in behalf of himself and other
    stockholders and for the benefit of the corporation, to bring about a redress of the wrong inflicted directly upon the
    corporation and indirectly upon the stockholders.

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