Ching v. Subic
Ching v. Subic
Ching v. Subic
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No profit shall inure to the exclusive benefit of any of its shareholders, hence, no dividends shall between Subic Bay Metropolitan Authority and The Universal International Group of Taiwan,
be declared in their favor. Shareholders shall be entitled only to a pro-rata share of the assets of where the golf course and clubhouse component thereof was assigned to the Club, the
the Club at the time of its dissolution or liquidation. shareholders shall not have proprietary rights or interests over the properties of the Club.
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No profit shall inure to the exclusive benefit of any of its shareholders, hence, no dividends shall
be declared in their favor. In accordance with the Lease and Development Agreement by and
alleged lack of qualification to manage a golf course. Contrary to (4) The suit is not a nuisance or harassment suit.
the arguments of petitioners, Presidential Decree No. 902-A, which is 6. The RTC dismissed the Complaint for failure to comply with the
entitled REORGANIZATION OF THE SECURITIES AND EXCHANGE second and fourth requisites above.
COMMISSION WITH ADDITIONAL POWERS AND PLACING THE 7. Upon a careful examination of the Complaint, this Court finds that the
SAID AGENCY UNDER THE ADMINISTRATIVE SUPERVISION OF same should not have been dismissed on the ground that it is a
THE OFFICE OF THE PRESIDENT, does not grant minority nuisance or harassment suit. Although the shareholdings of petitioners
stockholders a cause of action against waste and diversion by are indeed only two out of the 409 alleged outstanding shares or
the Board of Directors, but merely identifies the jurisdiction of 0.24%, the Court has held that it is enough that a member or a minority
the SEC over actions already authorized by law or jurisprudence. of stockholders file a derivative suit for and in behalf of a corporation.
It is settled that a stockholder's right to institute a derivative suit 8. With regard, however, to the second requisite, we find that petitioners
is not based on any express provision of the Corporation Code, failed to state with particularity in the Complaint that they had exerted
or even the Securities Regulation Code, but is impliedly all reasonable efforts to exhaust all remedies available under the
recognized when the said laws make corporate directors or articles of incorporation, by-laws, and laws or rules governing the
officers liable for damages suffered by the corporation and its corporation to obtain the relief they desire. The Complaint contained
stockholders for violation of their fiduciary duties. no allegation whatsoever of any effort to avail of intra-corporate
4. At this point, we should take note that while there were allegations in remedies. Indeed, even if petitioners thought it was futile to exhaust
the Complaint of fraud in their subscription agreements, such as the intra-corporate remedies, they should have stated the same in the
misrepresentation of the Articles of Incorporation, petitioners do not Complaint and specified the reasons for such opinion. Failure to do so
pray for the rescission of their subscription or seek to avail of their allows the RTC to dismiss the Complaint, even motu proprio, in
appraisal rights. Instead, they ask that defendants be enjoined from accordance with the Interim Rules. The requirement of this allegation
managing the corporation and to pay damages for their in the Complaint is not a useless formality which may be disregarded
mismanagement. Petitioners' only possible cause of action as minority at will.
stockholders against the actions of the Board of Directors is the
common law right to file a derivative suit. The legal standing of minority DISPOSITION
stockholders to bring derivative suits is not a statutory right, there WHEREFORE, the Petition for Review is hereby DENIED. The Decision of the
being no provision in the Corporation Code or related statutes Court of Appeals in CA-G.R. CV No. 81441 which affirmed the Order of the
authorizing the same, but is instead a product of jurisprudence based Regional Trial Court (RTC) of Olongapo City dismissing the Complaint filed
on equity. However, a derivative suit cannot prosper without first thereon by herein petitioners is AFFIRMED.
complying with the legal requisites for its institution.
5. Section 1, Rule 8 of the Interim Rules of Procedure Governing Intra-
Corporate Controversies imposes the following requirements for
derivative suits:
(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, by-laws, 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