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    117 - Florete, Jr. V Florete

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    Maria Francheska Garcia
    The document summarizes a Philippine Supreme Court case regarding a dispute over ownership of shares in People's Broadcasting Service, Inc. The Court held that the suit brought by the Marcelino, Jr. Group against the Rogelio, Sr. Group was not appropriate because they filed in their individual capacities rather than through a derivative suit on behalf of the corporation. A derivative suit is the proper approach when the wrong harmed the corporation as a whole, and certain requisites regarding the plaintiff's status as a shareholder and attempts to resolve the issue within the corporation must be met.

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    117 - Florete, Jr. V Florete

    Uploaded by

    Maria Francheska Garcia
    827 views1 page
    The document summarizes a Philippine Supreme Court case regarding a dispute over ownership of shares in People's Broadcasting Service, Inc. The Court held that the suit brought by the Marcelino, Jr. Group against the Rogelio, Sr. Group was not appropriate because they filed in their individual capacities rather than through a derivative suit on behalf of the corporation. A derivative suit is the proper approach when the wrong harmed the corporation as a whole, and certain requisites regarding the plaintiff's status as a shareholder and attempts to resolve the issue within the corporation must be met.

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    117 - Florete, Jr. v Florete

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    The document summarizes a Philippine Supreme Court case regarding a dispute over ownership of shares in People's Broadcasting Service, Inc. The Court held that the suit brought by the Marcelino, Jr. Group against the Rogelio, Sr. Group was not appropriate because they filed in their individual capacities rather than through a derivative suit on behalf of the corporation. A derivative suit is the proper approach when the wrong harmed the corporation as a whole, and certain requisites regarding the plaintiff's status as a shareholder and attempts to resolve the issue within the corporation must be met.

    Copyright:

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

    117 - Florete, Jr. V Florete

    Uploaded by

    Maria Francheska Garcia
    The document summarizes a Philippine Supreme Court case regarding a dispute over ownership of shares in People's Broadcasting Service, Inc. The Court held that the suit brought by the Marcelino, Jr. Group against the Rogelio, Sr. Group was not appropriate because they filed in their individual capacities rather than through a derivative suit on behalf of the corporation. A derivative suit is the proper approach when the wrong harmed the corporation as a whole, and certain requisites regarding the plaintiff's status as a shareholder and attempts to resolve the issue within the corporation must be met.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    GARCIA, Maria Francheska M.

    Rights of the Shareholders and Corporate Books and Records – Derivative Actions and Other
    Actions of Stakeholders
    117) Florete, Jr.vs. Florete. Gr. No. 174909-177275. January 20, 2016

    FACTS
    People's Broadcasting Service, Inc. (People's Broadcasting) is a private corporation
    authorized to operate, own, maintain, install, and construct radio and television stations in
    the Philippines. In October 1993, People's Broadcasting sought the services of the
    accounting and auditing firm Sycip Gorres Velayo and Co. in order to determine the
    ownership of equity in the corporation. Sycip Gorres Velayo and Co. submitted a report
    detailing the movements of the corporation's shares from November 23, 1967 to December
    8, 1989. Even as it tracked the movements of shares, Sycip Gorres Velayo and Co. declined
    to give a categorical statement on equity ownership as People's Broadcasting's corporate
    records were incomplete. In the meantime, one of the Board of Director’s transferred a
    portion of his shareholdings to his immediate family which included Florete, Jr.

    ISSUE
    Whether or not of the suit of Marcelino, Jr. Group against the Rogelio, Sr. Group may
    prosper?

    HELD
    NO, they should not have brought about the suit in their individual capacity but in place
    of the corporation itself through a derivative suit. A stockholder suing on account of wrongful
    or fraudulent corporate actions (undertaken through directors, associates, officers, or other
    persons) may sue in any of three (3) capacities: as an individual; as part of a group or specific
    class of stockholders; or as a representative of the corporation. However, a derivative suit is
    different from either an individual suit and a representative suit. A derivative suit “is an action
    filed by to enforce a corporate action.” A derivative suit, therefore, concerns “a wrong to the
    corporation itself”. The real party-in-interest is the corporation, not the stockholders filing the
    suit. The stockholders are technically nominal parties but are nonetheless the active persons
    who pursue the action for and on behalf of the corporation. It is not a remedy expressly
    provided for in Philippine statue, Revised Corporation Code and Securities Regulation Code,
    but are “impliedly recognized when the said laws make corporate directors or officers liable
    for damages suffered by the corporation and its stockholders for violation of their fiduciary
    duties”. It the appropriate remedy when the object of the wrong done is the corporation itself
    or “the whole body of its stock and property without any severance or distribution among
    individual holders.” The following requisites must be present:

    1) He was a stockholder or member at the time the acts or transactions subject of


    the action occurred and at the time the action was filed;
    2) He exerted all reasonable efforts, and alleges the same with particularity in the
    complaint, to exhaust all remedies available under the articles of incorporation,
    bylaws, laws or rules governing the corporation or partnership to obtain the relief
    he desires;
    3) No appraisal rights are available for the act or acts complained of; and
    4) The suit is not a nuisance or harassment suit.
    5) The action brought by the stockholder or member must be “in the name of the
    corporation or association”

    In the case at bar, while stockholders in the Marcelino, Jr. Group were permitted to seek
    relief, they should have done so not in their unique capacity as individuals or as a group of
    stockholders but in place of the corporation itself through a derivative suit.

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