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2204 G3 Case Digest

The Borgoa siblings filed a case against Abra Valley Colleges, Inc. to assert their rights as shareholders following their father's death, which was contested by their half-brother Francis. The Supreme Court ruled that the siblings were entitled to inspect the company's records and recognized them as shareholders based on evidence, despite the absence of stock certificates in their names. The court emphasized the importance of corporate transparency and the right of stakeholders to access corporate records.

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KRISTINA CASSANDRA CUEVAS
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20 views1 page

2204 G3 Case Digest

The Borgoa siblings filed a case against Abra Valley Colleges, Inc. to assert their rights as shareholders following their father's death, which was contested by their half-brother Francis. The Supreme Court ruled that the siblings were entitled to inspect the company's records and recognized them as shareholders based on evidence, despite the absence of stock certificates in their names. The court emphasized the importance of corporate transparency and the right of stakeholders to access corporate records.

Uploaded by

KRISTINA CASSANDRA CUEVAS
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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GRACE BORGOÑA INSIGNE, DIOSDADO BORGOÑA, OSBOURNE BORGOÑA,

IMELDA BORGOÑA RIVERA, AND ARISTOTLE BORGOÑA, PETITIONERS, VS. ABRA


VALLEY COLLEGES, INC. AND FRANCIS BORGOÑA, RESPONDENTS.
G.R. No. 204089, July 29, 2015
I. FACTS OF THE CASE
Borgoa siblings, Imelda Insigne, Diosdado Borgoa, Osbourne Borgoa, Grace Borgoa, Borgoa Rivera,
and Aristotle Borgoa, initiated an action in the Regional Trial Court (RTC) against Abra Valley
Colleges, Inc. for the right to inspect the company's records, on the basis of their claim as
shareholders.
They argued that, following the death of their father, Pedro Borgoa, the founder and majority
shareholder of the company, they were entitled to be shareholders, a status contested by their
halfbrother, Francis Borgoa, the current president of the Abra Valley. Initially, the RTC ruled in favor
of the petitioners due to Abra Valley’s procedural lapses but the case was remanded by the Court of
Appeals (CA) for further proceedings.
The appellants submitted copies of the certificates in their favour, but Abra Valley and Francis Borgoa
raised objections to the petitioner's status as a stockholder due to the absence of the certificates in their
names. Citing non-compliance, the RTC dismissed the case, a decision upheld by the CA.

II. ISSUES INVOLVED IN THE CASE


A. Whether or not the petitioners were legitimate Abra Valley Colleges shareholders.
B. Whether or not a stock certificate must be present to demonstrate ownership of stock in a
company.
C. Whether or not the petitioners could exercise their right to inspect Abra Valley's corporate
books, records and minutes of meetings, and be furnished with financial statements

III. SUPREME COURT RULING


A. Revised Corporation Code Section 63: The court referenced Section 63 to underscore that
stock transfers must be recorded in the Stock and Transfer Book (STB) to be recognized
by the corporation. However, the petitioners argued they could not prove their stock purchases
were recorded in the STB because it was not in their possession, leading them to file a motion
to compel its production. In the case at hand, the Supreme Court ruled that the petitioners
were entitled to demand the production of the STB of Abra Valley Colleges. The court made a
decision to recognize the petitioners as shareholders based on the evidence provided which
included a certification from Abra Valley Colleges, Inc.'s secretary confirming their status.

B. Revised Corporation Code Section 74. The records of all business transactions of the
corporation and the minutes of any meetings shall be open to inspection by any director,
trustee, stockholder, or member of the corporation at reasonable hours on business days and
he may demand, in writing, for a copy of excerpts from said records or minutes, at his
expense. The Court reaffirmed that this right is a substantive one that is meant to ensure that
stakeholders may effectively oversee corporate governance and encourage openness.

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