Republic of the Philippines

SUPREME COURT
SECOND DIVISION
G.R. No. 142474. August 18, 2005
R.N. SYMACO TRADING CORPORATION and/or NORMA SYMACO, ESTATE OF MARIANO GUISON,
Petitioners,
vs.
LUISITO T. SANTOS, for and in behalf of the MALABON FISH BROKERS ASSOCIATION, INC.,
Respondent.

Facts:
Respondent (MFBAI) is a non-stock corporation engaged in the business of buying and selling fish and
other marine products. MFBAI executed a contract of lease with Mariano Guison as lessor for a period of
ten years, renewable on such terms as agreed upon the parties. Upon the death of Mariano Guison,
Norma Symaco who was also a member of the MFBAI Board of Directors, and the President and Chairman
of the Board of Directors of petitioner executed an unnotarized contract of lease over the property
previously leased to MFBAI.
Respondent Santos as an MFBAI member and as a nominal party filed a complaint for the annulment of the
Contract of Lease between the Hrs of Mariano Guison and defendant Symaco in behalf of the MFBAI. In
their answer to the complaint, petitioners alleged that Santos was has no standing to file the complaint in
behalf of the corporation.
Issue:
Whether or not plaintiff Santos cannot bring a derivative suit for and in behalf of the MFBAI?
Ruling:
The court agreed with the petitioners contention that Santos is not a legitimate MFBAI member. The
evidence on record showing the he paid the membership fee and his monthly dues and certification issued
by Lino Buhain that he is a member is not sufficient to qualify him as such member under the By-laws of
respondent MFBAI.
One of the requisites of a derivative suit is that the party bringing the suit should be a stockholder/member
at the time of the action or transaction complained of. The right to sue derivatively is an attribute of
corporate ownership which, to be exercised, requires that the injury alleged be indirect as far as the
stockholders/members are concerned, and direct only insofar as the corporation is concerned. The whole
purpose of the law authorizing a derivative suit is to allow the stockholder/member to enforce rights which
are derivative (secondary) in nature. A derivative action is a suit by a shareholder/member to enforce a
corporate cause of action.

It is enough that a member or a minority of such members file a derivative suit for and in behalf of the
corporation. After all, the members/stockholders who filed a derivative suit are merely nominal parties, the
real party-in-interest being the corporation itself for and in whose behalf the suit is filed. Any monetary
benefits under the decision of the court shall pertain to the corporation.