Premium Marble v. CA Digested

PREMIUM MARBLE RESOURCES, INC. vs.
THE COURT OF APPEALS and

INTERNATIONAL CORPORATE BANK
G.R. No. 96551 November 4, 1996
DOCTRINE:
The objective sought to be achieved by Section 26 is to give the public information, under
sanction of oath of responsible officers, of the nature of business, financial condition and
operational status of the company together with information on its key officers or managers so
that those dealing with it and those who intend to do business with it may know or have the
means of knowing facts concerning the corporation's financial resources and business
responsibility.
FACTS:
1. Premium Marble Resources, Inc., assisted by Atty. Arnulfo Dumadag as counsel, filed
an action for damages against International Corporate Bank. Allegedly, former officers of
the plaintiff corporation headed by Saturnino G. Belen, Jr., without any authority
whatsoever from the plaintiff deposited checks to the current account of his conduit
corporation, Intervest Merchant Finance.
Although the checks were clearly payable to the plaintiff corporation and crossed on their
face and for payee's account only, defendant bank accepted the checks to be deposited
to the current account of Intervest and thereafter presented the same for collection from
the drawee bank which subsequently cleared the same thus allowing Intervest to make
use of the funds to the prejudice of the plaintiff.
2. The plaintiff has demanded upon the defendant to restitute the amount representing the
value of the checks but defendant refused and continue to refuse to honor plaintiff's
demands up to the present;
3. Meantime, the same corporation, Premium, but this time represented by Siguion Reyna,
Montecillio and Ongsiako Law Office as counsel, filed a motion to dismiss on the ground
that the filing of the case was without authority from its duly constituted board of
directors as shown by the excerpt of the minutes of the Premium's board of directors'
meeting.
4. Premium thru Atty. Dumadag contended that the persons who signed the board
resolution are not directors of the corporation and were allegedly former officers and
stockholders of Premium who were dismissed for various irregularities and fraudulent
acts.
5. On the other hand, Siguion Reyna Law firm as counsel of Premium asserted that it is the
general information sheet filed with the Securities and Exchange Commission, among
others, that is the best evidence that would show who are the stockholders of a
corporation and not the Articles of Incorporation since the latter does not keep track of
the many changes that take place after new stockholders subscribe to corporate shares
of stocks.
ISSUE:
Whether the filing of the case for damages against private respondent was authorized by a duly
constituted Board of Directors of the petitioner corporation.
RULING:
No, the case was not authorized by the corporation’s Board of Directors.
While the Minutes of the Meeting of the Board on April 1, 1982 states that the newly elected
officers for the year 1982 were Oscar Gan, Mario Zavalla, Aderito Yujuico and Rodolfo Millare,
petitioner failed to show proof that this election was reported to the SEC. In fact, the last entry in
their General Information Sheet with the SEC, as of 1986 appears to be the set of officers
elected in March 1981.
In the absence of /any board resolution from its board of directors the authority to act for and in
behalf of the corporation, the present action must necessarily fail. The power of the corporation
to sue and be sued in any court is lodged with the board of directors that exercises its corporate
powers. Thus, the issue of authority and the invalidity of plaintiff-appellant 's subscription which
is still pending, is a matter that is also addressed, considering the premises, to the sound
judgment of the Securities & Exchange Commission."
By the express mandate of the Corporation Code (Section 26), all corporations duly organized
pursuant thereto are required to submit within the period therein stated (30 days) to the
Securities and Exchange Commission the names, nationalities and residences of the directors,
trustees and officers elected.
Evidently, the objective sought to be achieved by Section 26 is to give the public information,
under sanction of oath of responsible officers, of the nature of business, financial condition and
operational status of the company together with information on its key officers or managers so
that those dealing with it and those who intend to do business with it may know or have the
means of knowing facts concerning the corporation's financial resources and business
responsibility.
The claim, therefore, of petitioners as represented by Atty. Dumadag, that Zaballa, et al., are the
incumbent officers of Premium has not been fully substantiated. In the absence of an authority
from the board of directors, no person, not even the officers of the corporation, can validly bind
the corporation.

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PREMIUM MARBLE RESOURCES, INC. vs.

THE COURT OF APPEALS and

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