LEE v. CA
LEE v. CA
LEE v. CA
CA,SACOBA MANUFACTURING, GONZALES JR & GONZALEZ o Whereby for the term of years/ period contigent upon an event/ until
G.R. No. 93695 the agreement is terminated = CONTROL OVER THE STOCK OWNED BY
Feb. 4, 1992 THE SH IS TO BE LODGED IN THE TRUSTEE the power to direct how
such control shall be used
DOCTRINE: A VTA separates the voting rights and other rights pertaining to the share of Under Sec. 59 of the New Corporation Code> it recognizes VTA
stock from other attributes of ownership, intended to be irrevocable for a definite period o Sec. 59 Voting trust> one or more SH of a Stock Copr may create a
of time and the purpose of which is to give o the trustee to acquire voting control of the VOTING TRUST
corporation. For the purpose of CONFERRING UPON THE TRUSTEE/S THE
RIGHT TO VOTE AND OTHER RIGHTS PERTAINING TO
FACTS: International Corporate Bank filed a complaint for sum of money against private THE SHARE
respondents Gonzales, who in turn filed a third party complaint against ALFA and For a period not exceeding 5 years at any one time
petitioners Lee and Lacdoa. PROVIDED, in the case of voting trust required as a
Trial court ordered the issuance of an alias summons upon ALFA through DBP. CONDITION in a LOAN AGREEMENT > VT may be for a
However, DBP claimed that it has no authority to receive summons on behalf of ALFA since period exceeding 5 years but it shall automatically expire
DBP had not taken over the company.The Gonzaleses made summon through petitioner upon full payment of the loan
Lee and Lacdao as corporate officers of ALFA. o VT must be
Lee and Lacdao contends that they were no longer officers of ALFA and that the In Writing
respondents Gonzales should have made service of summon through publication. Notarized
On the hand, Gonzales argued that the voting trust agreement did not divest Specify the terms and conditions
Lee and Lacdao of their positions as president and executive vice-president of ALFA so o Certified Copy of the Agreement shall be filed with the Corp and with
that the service of summons upon ALFA through Lee and Lacdao as its corporate officers the SEC
was proper. Otherwise, ineffective and unenforceable
Trial court upheld the service of summons on ALFA through Lee and Lacdoa. But, o Certificate of Stocks covered by VTA shall be cancelled and new ones
Lee and Lacdao still asserts that by virtue of the voting trust agreement they ceased to be shall be issued in the name of the trustee
officers and directors of ALFA, hence they could no longer receive summon for on behalf o Books of Corp> it shall be noted that the transfer in the name of the
of AFLA. In support of this, they attached in their motion for recon the voting trust trustee is made pursuant to VTA
agreement between stockholder of ALFA and DBP whereby the management and control By its nature, VTA results from separation of voting rights of SH from his
of ALFA was vested upon DBP other rights( right to receive dividends, right to inspect books, sell certin
interest and other right SH are entitled until liquidation)
ISSUE: Whether the execution of the voting trust agreement by SH of ALFA whereby DISTINGUISH VTA from Proxies and Other Voting Pools and Agreements: must
all shares have been transferred to the trustee deprives the SH of his position as pass 3 CRITERIA
director 1. Voting Rights are SEPARATED from other rights attributed to
Would no longer be acting or holding any position authorized to receive Ownership
service of summons in behalf of the corporation so that the service of 2. Voting rights are intended to be IRREVOCABLE for a definite
summons is not valid and ineffective period
To maintain that ALFA was properly served its summons through Lee and 3. Principal Purpose is to ACQUIRE VOTING CONTROL of the Corp
Lacdao would be contrary to the general principle that a corporation can Furthermore, it must be noted that Sec. 59 does not only allow the conferment of
only be bound by uch acts which are within the scope of its officers or voting right of SH but also other rights pertaining to the shares
agents’ authority o As long as not entered for the purpose of circumventing the law against
monopolies and illegal combination in restraint of trade or for fraud
HELD: YES. Hence, no proper service of summons upon ALFA Through VTA = (Dichotomy) Separation of Beneficial Ownership and Legal Title
NATURE OF A VOTING TRUST AGREEMENT + CONSEQUENT EFFECT UPON o SH consent to transfer his share to a trustee in order to vest the trustee
ITS CREATION: voting or other rights pertaining to the share for a period not exceeding
According Ballentine Law Dictionary: VOTING TRUST is a trust created 5 years
o by an agreement between SH of corp and Trsutee or Upon fulfillment of terms and conditions in the agreement
o by a group of identical agreements betwee individual Sh and a common
trustee
IN THE INSTANT CASE
The Court rules in favor of petitioner contention. NO question that the immediate
effect of VTA on SH who is a party to its execution is that the SH becomes the
beneficial/equitable owner.
Under Sec. 23, in order to be eligible as a director, what is material is the legal
title to, not beneficial ownership, the stock as appearing in the corporation. A director need
to have at least Clear indication from the deletion of “in his own right” from the old code.
Upon the facts of the case, Lee and Lacdao by virtue of the VTA were disposed of
all their shares through assignment and delivery in favor of DBP as trustee. Thus, they
ceased to own at least one share under their names in the corp books, as required by Sec.
23. They ceased to be directors. Hence the transfer of petitioners’ shares to DBP created
vacancies to their respective positions.
The transfer of legal ownership to DBP, it made DBP the SH of record. And there
is no dispute from the records that DBP has taken over full control and management of the
form
Thus, based on the foregoing, thre was no proper service of summons on ALFA
through Lee and Lacdao. Since they were no longer officers who the corp who may
represent the company, service upon ALFA through them is therefore not valid. To rule
otherwise would contravene the basic principle that a corporation can only be bound by
acts within the scope of its officers or agents authority.
BATANGAS LAGUNA TAYABAS BUS COMPANY, POTENCIANO v. BITANGA, et. al. TRANSFER RECORDED ON THE CORPORATE BOOKS. Until the transfer is
G.R. No. 137934 registered, the transferee is not a SH but an outsider
Aug. 10, 2001
DOCTRINE:
FACTS: BLTB is owned by the Potenciano family. Dolores and other Potencianos entered
into a sale whereby they sold their share of stock in BLTB to BMB Property Holdings,
represented by its President Bitanga. The said share represented the 47.98% of the total
outstanding stock of BLTB.
After a month, Bitanga and Lim were elected as directors replacing the
Potencianos. Biatanga was also elected as Chairman of the Board.
Newly elected directors scheduled the annual SH meeting. But before the
meeting, Michael Potenciano requested for a postponement, in the absence of the 30 days
advance notice. NO response from Bitanga.
On the scheduled date of meeting, Notice of Postponement was published in
Manila Bulletin. 286 SH, representing 87% of shares of stock, arrived and attended the
meeting. Majority of SH rejected the postponement. The Potenciano group was re-elected
to the Board.
Bitanga group refused to relinquished the position and continued to act as
directors.
TWO-FOLD PURPOSE
1. to enable the transferee to exercise all the rights OF an SH, including the right to vote
and be voted > EXERCISE RIGHTS OF SH
2. to inform the corporation to the change in the ownership of share> to ascertain the
persons entitled to the rights > INFORM THE CORP