Escolar Documentos
Profissional Documentos
Cultura Documentos
ISSUE: Whether or not the sale made through an agent was ratified.
SERVICES, CO.
Commercial Law Corporation Law Power of the Board Ultra
Directors of DFS never authorized Cruz, Jr. to sell the land. Hence,
FACTS:
void.
Being a void sale, it cannot be ratified even if Cruz, Sr. accepted the
check and made a counter-offer. (Cruz, Sr. returned the check
anyway). Under Article 1409 of the Civil Code, void transactions can
never be ratified because they were void from the very beginning.
However, it appeared that DFS did not authorize Cruz, Jr. to sell the
said land. Nevertheless, Manuel Cruz, Sr. (father) and president of
DFS, accepted the check but modified the offer. He increased the
selling price to P4,000.00 per sq. m. AF Realty, in its response, did
not exactly agree nor disagree with the counter-offer but only said it
is willing to pay the balance (but was not clear at what rate).
DFS ratified the contract when it accepted the check and made a
counter-offer.
[19]
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[20]
charter,
[21]
by-law,
[22]
statutory
general
or
an
agent,
the authority of
the
latter shall be
in
ART. 1409. The following contracts are inexistent and void from
law on agency under the Civil Code takes precedence. This is well
[23]
KASC
xxx
(7) Those expressly prohibited or declared void by law.
[24]
testimony
[26]
provided
that
pending
submission
by
SGV
of
that
is
the
award
of
damages
and
attorney's
fees
KASC
statements.
Court of Makati, one of two causes of action of which was for the
upon
the
signing
of
the
Agreement,
and
after
to
the
adding
the
Minimum
net
worth
Guaranteed
deficiency
Net
Worth
of
of
the
trial
court's
decision.
Inter-Asia's
motion
for
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the corporation should enter into a contract that will bind the
his behalf, the board of directors may validly delegate some of its
perform all acts which are expressly, impliedly and inherently stated
therein.
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question and to have the bank redeem the same under the terms
and conditions of the stock certificates. The bank filed a Motion to
Dismiss 3 private respondents' Complaint on the following grounds:
(1) that the trial court had no jurisdiction over the subject-matter of
the action; (2) that the action was unenforceable under substantive
law; and (3) that the action was barred by the statute of limitations
and/or laches. The bank's Motion to Dismiss was denied by the trial
court in an order dated 16 March 1979. The bank then filed its
Answer on 2 May 1979. Thereafter, the trial court gave the parties 10
RFRDC through its officers then, Adalia F. Robes and one Carlos F.
the full amount of the loan, which is P120,000.00, the Bank lent such
stock certificates numbered 3204 and 3205, each for 400 shares with
a par value of P10.00 per share, or for P4,000.00 each, for a total of
payment. The bank filed the petition for certiorari with the Supreme
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institution
that
would
have
resulted
in
adverse
repercussions, not only to its depositors and creditors, but also to the
banking industry as a whole. The directive, in limiting the exercise of
a right granted by law to a corporate entity, may thus be considered
as an exercise of police power.
KASC
void ab initio, being in effect a donation that was ultra vires and
beyond the powers of the corporate directors to adopt.
Issue: WON the board resolution is an ultra vires act and in effect a
donation from the board of directors?
Held: No. There can be no doubt that the directors of the appellee
Amended Milling Contract for the purpose of making its terms more
starting with the 1920-21 crop, and provided that the resulting
product should be divided in the ratio of 45% for the mill and 55% for
and binding, and whether or not it will cause losses or decrease the
Milling Company is, under the terms of its Resolution of August 20,
herein.
Milling Co., inc., resisted the claim, and defended by urging that the
We agree with appellants that the appealed decisions can not stand.
KASC
this was not the case. When the resolution was adopted and the
apart from the main amended milling contract, specially taking into
were not yet obligated by the terms of the printed contract, since they
10, 1936. Before that date, the printed form was no more than a
proposal that either party could modify at its pleasure, and the
20, 1936. That the resolution formed an integral part of the amended
bargain, is further shown by the fact that a copy of the resolution was
that such was also the understanding of appellants herein, and that
the minds of the parties met upon that basis. Otherwise there would
have been no consent or "meeting of the minds", and no binding
contract at all. But the conduct of the parties indicates that they
assumed, and they do not now deny, that the signing of the contract
on September 10, 1936, did give rise to a binding agreement. That
agreement had to exist on the basis of the printed terms as modified
by the resolution of August 20, 1936, or not at all. Since there is no
rational explanation for the company's assenting to the further
concessions asked by the planters before the contracts were signed,
except as further inducement for the planters to agree to the
extension of the contract period, to allow the company now to retract
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Stress is placed on the fact that the text of the Resolution of August
concession that was not yet, and might never be, in effective
20, 1936 was not attached to the printed contract until April 17, 1937.
operation.
order that the memorial of the terms of the agreement should be full
and complete.
one which is lawful in itself, and not otherwise prohibited, is done for
KASC
10
64.2%
for 1952-53;
64.3%
for 1953-54;
64.5%
63.5%
for 1955-56,
have
granted
progressively
Occidental
increasing
KASC
and
to
all
appellants
thereafter
4.2%
for
the
1952-1953
crop
year;
4.3%
for
the
1953-1954
crop
year;
11
for
the
1954-1955
crop
year;
with interest at the legal rate on the value of such differential during
the time they were withheld; and the right is reserved to plaintiffs-
KASC
12
LCP without any challenge from the membership until several years
the Board terminating the services of the LCP business manager and
(SEC). For the first time, the legality of the eleven (11) member
to the LCP Board. The seventh member of the Board is the National
President of the LCP who is elected at large in a national convention
held in October of every even-numbered year.
Aside from the present case, SEC-SICD Case no. 3556 entitled
"Excelsio Hipe, et. al. vs. Thomas Batong, et. al." and SEC-SICD
Case No. 3524, "Domingo Shambu, et. al. vs. Thomas Batong, et.
dividing the North Luzon district (NLD) into two districts: the NLD
thereby increasing the number of directors from seven (7) to nine (9).
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[The members of the Batong group] are the duly elected board of
directors of the LCP at the time of the filing of SEC-SICD Case No.
3857. On the other hand, [the Ao-As group] have served in various
capacities as directors or officers of the LCP.
13
proceedings.
not only (deemed) null and void but have caused irreparable damage
to the corporation such as the termination of all LCP staff and
employee (LCP-BD-29-90); dissolution of LCP Business Office (LCP-
the LCP and the Lutheran Church Missouri Synod which is the major
benefactor and source of funds of LCP (LCP-BD-28-90); forcible
Sixth, the transfer of LCP corporate books from the Sta. Mesa office
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14
premises
considered,
MANAGEMENT
On September 23, 1992, [the Batong group] filed with the SEC En
vires acts, more specifically: (i) to take control of and closing down
which has reached this Court, CA-G.R. No. 34504, it was found that:
"On August 13, 1993, [members of the Ao-As group] Oscar Almazan,
Ao-As.
group] and their families therein and prevented the ingress and
egress thereto. Later the [Batong group] left their houses due to the
alleged intimidation and threats employed by the [Ao-As group].
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15
President
and
Convention Records.
the
17th
LCP
National
Convention,
the
delegates
management committee.
[The Batong group] then filed with the SEC En Banc a Supplemental
officers, namely:
the case which took place after the filing of the original petition on
September 23, 1992.
KASC
16
notices were not sent to several local congregations and even fewer
alleged that the Ao-As group persisted in carrying out ultra vires and
assailed Order dated October 16, 1992, closed the premises of the
its petition for certiorari in the SEC En Banc alleging the supervening
over the management and operations of the said school. The closure
dated June 9, 1993 which enlisted the aid of the Secretary of the
of the Gloria Dei School is the subject of SEC Case No. 05-93-4463.
of P1,000,000.
[The Batong group] then filed a Petition for Mandamus and Damages
Order dated June 1, 1994 ex parte and on June 14, 1994 at around 7
p.m., a certain Rev. Laking, using the Order of the SEC-SIDC dated
buildings.
The Batong group then filed a Petition for Review with the Court of
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17
Code.
Hence, this petition, where the Ao-As group brings forth the following
issues to be resolved by this Court:
I.
of the LCP; to enjoin the Ao-As group and/or those officers elected in
their convention from enforcing or implementing the Order dated
October 16, 1992 and the writ of preliminary injunction issued in SEC
and disregarding all the evidence adduced by [the Ao-As group], and
Case 3857."
II.
Whether or not the Court of Appeals reversibly erred in ruling that
SEC-SICD Case No. 3857 is a case of forum shopping.
armed men and there and then padlocked the main gate of the
church. Consequently, Rev. Elmer Baes, the assigned overseer at
said church, was barred from entering the premises on 17
September 1994.
III.
Whether or not the Court of Appeals committed reversible error in
declaring as invalid the manner of elections of the Board of Directors
Laws.
IV.
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18
The Ao-As group claims that the Court of Appeals reversibly erred in
ruling that SEC-SICD Case No. 3857 is a case of forum shopping.
and the Order of the SEC-SIDC in Case No. 3857, the Ao-As group
cases pending at the time the [Ao-As group] instituted the present
controversy.
1. x x x x
2. Declaring the Board of Directors elected at the National
Convention called by the Management Committee on January 25-27,
1993 in Cagayan de Oro as the legitimate members of the Board of
LCP;
4. Ordering the Batong group to return all the properties seized from
the LCP and to refrain from the representing the LCP.
the Caloocan Office was the subject of Civil Case No. 133394-CV
and 131879-CV pending before the Metropolitan Trial Court of
Manila, Branches 20 and 21 and subsequently dismissed in view of
The Ao-As group did not commit willful and deliberate forum
member LCP Board was already the subject matter of SICD Case
shopping would render all the other issues in this petition moot, we
No. 3524 which was appealed to the SEC En Banc and docketed as
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19
action";
considering that the same is one of the incidents in SEC Case No.
3. SEC-SICD Case No. 3556 puts in issue the validity of LCP Board
3857 entitled Rev. Luis Ao-As, et al. vs. Thomas Batong now
Oscar Almazan who is also a co-counsel in the case was the counsel
SEC-SICD Case No. 3857 is a petition for accounting with prayer for
the appointment of a management committee and the issuance of a
writ of injunction. The Ao-As group claims that the issue involved in
the case is whether the Ao-As group is entitled to an accounting and
groups alleged dissipation and waste of the assets of the LCP, and
KASC
20
res judicata and thus would cause the dismissal of the rest. Absolute
Thomas Batong;
multiple suits involving the same parties for the same cause of
action, either simultaneously or successively, for the purpose of
10
committed in three ways: (1) filing multiple cases based on the same
cause of action and with the same prayer, the previous case not
having been resolved yet (litis pendentia); (2) filing multiple cases
based on the same cause of action and the same prayer, the
previous case having been finally resolved (res judicata); and (3)
filing multiple cases based on the same cause of action but with
different prayers (splitting of causes of action, where the ground for
dismissal is also either litis pendentia or res judicata
11
). If the forum
same party against whom another action or actions for the alleged
and deliberate, both (or all, if there are more than two) actions shall
violation of the same right and the enforcement of the same relief
12
is/are still pending. The defense of litis pendentia in one case is a bar
to the other/others; and, a final judgment is one that would constitute
The six grounds originally relied upon by the Ao-As group in SECSICD Case No. 3857 are entirely different from the causes of action
KASC
21
Ao-As group.
3524. It is true that the causes of action in the latter cases were
included as additional grounds in SEC-SICD Case No. 3857 for the
appointment of the management committee and for accounting "of all
funds, properties and assets of LCP which may have come into their
possession during their incumbency as officers and/or directors of
13
14
and the accounting of the funds of the LCP. In fact, as stated by the
reason the SEC-SICD ruled that such motion cannot be given due
Case No. 3857. In effect, the SEC-SIDC had denied the subsequent
KASC
22
group cannot be faulted therefore for not praying for the creation of a
Gonong
17
of
the
Philippines
v.
Hon.
Arsenio
M.
18
15
33-70 which stated that "all actions taken by LCP in convention can
16
of
LCP
Books
of
Account. Respondent
Batong,
1. The alleged anomaly concerning the sale of the land and the
security guards allegedly barged into the premises of the LCP in Old
Sta. Mesa, Manila, and removed all of the official records and
1990.
KASC
23
Missouri Synod; and (ii) the transfer of corporate books from the Sta.
Mesa Office to Caloocan City.
All of the grounds relied upon by [the Ao-As group] pertain to past
the corporate funds . . . in the name of some person other than the
cash advances and other funds which constitutes the four causes
(2) of the LCP Board members to liquidate past cash advances and
other transactions involving corporate property and funds.
by Dr. Thomas Batong "(in varying amounts) for personal, travel and
Significantly, the SEC En Banc even pointed out that: "the question
of whether or not the [Batong group] have to account for all funds,
properties and assets of LCP which may come into their possession
KASC
24
committee."
It further asseverates:
20. The acts constituting [the Ao-As groups] six causes of action in
19
Committee was, therefore, perfectly legal and justified. And the ruling
group "have not positively shown that the said funds are
unaccounted for,"
20
As
illustrate
group
to
the
unaccounted
funds
were
21
21. In addition, the CA Decision also declared that "in any event, the
past anomalies were only done by some of the Batong group." This
is erroneous. Under the By-Laws of the LCP, the Board of Directors
around P4.8 million, and claim that if the Court of Appeals "had only
KASC
25
and assets by the Batong group. If [the Ao-As group] were to avail of
these so-called available remedies then by the time a decision is to
b. The President together with two other members of the LCP Board
the LCP would have indubitably been lost forever since the
dissipation, loss and wastage were then, and still is, an on going
process. Consequently, it is clearly unreasonable for respondent
Court of Appeals to declare that the [Ao-As group] should have first
availed of these so-called remedies.
23
LCP.
that the facts as they appear to us now do not warrant the creation of
a management committee.
of all the LCP Properties and may initiate special auditing at any
time."
22. From the foregoing, it is clear that respondent Batong did not act
alone, but in concert with the other members of the LCP Board. The
creation of the management committee was therefore justified.
are
mandamus.
other
24
adequate
remedies,
such
as
writ
of
not a ground for the appointment of a receiver where there are one
23. The CA Decision also noted that since there were other remedies
or more adequate legal action against the officers, where they are
KASC
25
26
26
The fact that the President of the LCP needs the concurrence of only
The Court notes that the LCP By-Laws provide for a special
procedure for the election of its directors. This was the procedure
followed by both the [Batong group] and the [Ao-As group].
"Section 2. Composition of the Board of Directors of LCP.
man board. Neither does the fact that the Board of Directors of the
LCP prepares the annual budget and the annual auditing of
properties of the LCP justify the conclusion that the alleged acts of
There should have been evidence that such dissipation took place
are elected."
27
As it is the obligation
of one who alleges bad faith to prove it, so should he prove that such
bad faith was shared by all persons to whom he attributes the same.
The last resort remedy of replacing the entire board, therefore, with a
management committee, is uncalled for.
It is clear from Section 24 that in the election of the trustees of a nonstock corporation, it is necessary that at least "a majority of the
being violative of Section 24. (SEC Opinions, Jan. 30, 1969, April 1,
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27
28
As argued by the Ao-As group, however, the validity of the LCP ByLaws providing for a special procedure in the election of the LCP
Board of Directors was never put in issue, either by the Ao-As group
or the Batong group. The Court of Appeals, therefore, should have
refrained from passing upon such issue, motu propio. According to
Rule 51, Section 8 of the Rules of Court, which pertains to matters
which may be decided on appeal:
Sec. 8. Questions that may be decided. No error which does not
affect the jurisdiction over the subject matter or the validity of the
judgment appealed from or the proceedings therein will be
considered unless stated in the assignment of errors, or closely
related to or dependent on an assigned error and properly argued in
the brief, save as the court may pass upon plain errors and clerical
errors.
29
Even the Batong group agrees with the Ao-As group on the validity
of the by-laws provision concerning the election of the directors by
districts:
[The Batong group] respectfully submit[s] that the matter of how the
directors or other leaders of a church shall be chosen is a matter of
ecclesiastical law or custom which is outside the jurisdiction of civil
courts. Hence, even assuming arguendo, that the mode of election of
the LCP is not strictly in accordance with the Corporation Code, it
was improper for the Securities and Exchange Commission to apply
the provisions of the said Code to the LCP.
30
32
The
KASC
28
FACTS:
KASC
29
qualified.
remaining BOD
Makalintal's term should have expired after 1996 there
Respondent Africa (Africa), a member of VVCC, questioned the
void
KASC
30
RULING:
YES.
Section 23of the Corporation Code declares that "the board
of directors shall hold office for one (1) year until their successors are
elected and qualified," we construe the provision to mean that the
term of the members of the board of directors shall be only for one
year; their term expires one year after election to the office. The
holdover period that time from the lapse of one year from a
members election to the Board and until his successors election
and qualification is not part of the directors original term of office,
nor is it a new term; the holdover period, however, constitutes part of
his tenure. Corollary, when an incumbent member of the board of
directors continues to serve in a holdover capacity, it implies that the
office has a fixed term, which has expired, and the incumbent is
holding the succeeding term.
After the lapse of one year from his election as member of
the VVCC Board in 1996, Makalintals term of office is deemed to
have already expired. That he continued to serve in the VVCC Board
in a holdover capacity cannot be considered as extending his term.
This holdover period, however, is not to be considered as part of his
term, which, as declared, had already expired.
KASC
remaining
directors
of
corporations
Board,
still
31
FACTS:
whose members have stood for election, and who have actually
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32
20017
AUSTRIA-MARTINEZ, J.:
Assailed in the present Petition for Review on Certiorari is the
ISSUE:
Decision
Whether or not Marc II Marketing Inc.s Board of Directors
[1]
affirming
modification
the
Decision
dated October
27,
which held as valid the removal of petitioners Ma. Victoria R. Pagong (Pag-ong)
RULING: YES.
director
as
high-ranking
position.
Accordingly,
respondents
director
and
corporate
as
officer
and
directors
of
Nephro,
were
as
absence
due
to
stress,
but
this
was
denied
by Jochico,
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33
The corporation acting thru its Board of Directors can validly remove
Butuan venture.
Clinic.
petitioners did not attend the board meeting. In said meeting, the
the
position
of
Corporate Secretary
vacant,
of Nephro.
attend the meeting. The stockholders who were present removed the
No. 02-98-5902.
27,
2000,
the
SEC
rendered
its
Decision,
enforced.
SO ORDERED.
[2]
KASC
34
held that the Special Board Meeting held on February 2, 1998 was
valid and the resolutions adopted therein are binding on petitioners.
The CA upheld the SEC's conclusions, adding further that the special
stockholders' meeting on February 16, 1998 was likewise validly
held. The CA also ruled that Pag-ong's removal as director of Nephro
was justified as it was due to her undenied delay in the release of
Nephro's medical supplies from the warehouse of the Fly-High
[3]
Brokerage where she was an officer, on top of her and her coRespondents
filed
Manifestation
and
Motion
to
Correct
[4]
[7]
[5]
[8]
great respect but even finality, and are binding upon this Court,
unless
it
is
shown
that
it
had
arbitrarily
disregarded
or
contrary
conclusion
[9]
had
such
evidence
been
properly
appreciated.
valid. For its part, the SEC ruled that the Board of Directors had
KASC
[10]
35
does not present any argument which convinces the Court that the
SEC and the CA made any misappreciation of the facts and the
[11]
on the facts proven during the hearing of this case, the answer is in
the affirmative.
Raniel's letter of January 26, 1998 speaks for itself. Her request for
an indefinite leave, immediately effective yet without prior notice,
reveals a disregard of the critical responsibilities pertaining to the
sensitive positions she held in the corporation. Prior to her hasty
departure, Raniel did not make a proper turn-over of her duties and
had to be expressly requested to hand over documents and records,
as
fiduciary
trustees
character.
[12]
or directors
[13]
clothed
with
KASC
[14]
36
procedure, thus:
[16]
three are held by respondents. This being the case, the presence of
meeting called for the purpose, and in either case, after previous
[15]
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37
[17]
16,
1998,
400
shares
voted
for
petitioners'
8 April 2003
FACTS:
In 1994, the construction of the Masagana Citimall in Pasay
City was threatened with stoppage and incompletion when its owner,
the First Landlink Asia Development Corporation (FLADC), which
was owned by David S. Tiu, Cely Y. Tiu, Moly Yu Gow, Belen See
Yu, D. Terence Y. Tiu, John Yu and Lourdes C. Tiu (the Tius),
encountered dire financial difficulties. It was heavily indebted to the
Philippine National Bank (PNB) for P190 million. To stave off
foreclosure of the mortgage on the two lots where the mall was being
built, the Tius invited Ong Yong, Juanita Tan Ong, Wilson T. Ong,
Anna L. Ong, William T. Ong and Julia Ong Alonzo (the Ongs), to
petition.
entered into, the Ongs and the Tius agreed to maintain equal
KASC
38
RULING:
1. YES.
another P70 million 3 to FLADC and P20 million to the Tius over and
above their P100 million investment, the total sum of which (P190
of FLADC to PNB. The business harmony between the Ongs and the
accused the Ongs of (1) refusing to credit to them the FLADC shares
and Cely Y. Tiu from assuming the positions of and performing their
duties as Vice-President and Treasurer, respectively, and (3)
refusing to give them the office spaces agreed upon. The
controversy finally came to a head when the case was commenced
by the Tius on 27 February 1996 at the Securities and Exchange
Commission (SEC), seeking confirmation of their rescission of the
Pre-Subscription Agreement.
ISSUE:
2. YES.
FLADC was originally incorporated with an authorized capital stock
of 500,000 shares with the Tius owning 450,200 shares representing
the paid-up capital. When the Tius invited the Ongs to invest in
FLADC as stockholders, an increase of the authorized capital stock
became necessary to give each group equal (50-50) shareholdings
as agreed upon in the Pre-Subscription Agreement. The authorized
capital stock was thus increased from 500,000 shares to 2,000,000
shares with a par value of P100 each, with the Ongs subscribing to
KASC
39
million for 1,000,000 shares of stock was, from the viewpoint of the
law, one between the Ongs and FLADC, not between the Ongs and
the Tius.
FACTS:
Clemente G. Guerrero, President of the Rural Bank of
Salinas, Inc., executed a Special Power of Attorney in favor of his
wife, private respondent Melania Guerrero, giving and granting the
latter full power and authority to sell or otherwise dispose of and/or
mortgage 473 shares of stock of the Bank registered in his name
(represented by the Bank's stock certificates nos. 26, 49 and 65), to
execute the proper documents therefor, and to receive and sign
receipts for the dispositions. On February 27, 1980, and pursuant to
said Special Power of Attorney, private respondent Melania
Guerrero, as Attorney-in-Fact, executed a Deed of Assignment for
472 shares out of the 473 shares, in favor of private respondents Luz
Andico (457 shares), Wilhelmina Rosales (10 shares) and Francisco
Guerrero, Jr. (5 shares).Almost four months later, or two (2) days
before the death of Clemente Guerrero on June 24, 1980, private
respondent Melania Guerrero, pursuant to the same Special Power
of Attorney, executed a Deed of Assignmentfor the remaining one (1)
share of stock in favor of private respondent Francisco Guerrero, Sr.
KASC
40
private
respondent
Melania
Guerrero
such power, cannot ordinarily inquire into or pass upon the legality of
ISSUE:
based.
YES.
Section 5 (b) of P.D. No. 902-A grants to the SEC the
original and exclusive jurisdiction to hear and decide cases involving
intracorporate controversies. An intra-corporate controversy has
been defined as one which arises between a stockholder and the
corporation. There is neither distinction, qualification, nor any
exception whatsoever. The case at bar involves shares of stock, their
registration, cancellation and issuances thereof by petitioner Rural
Bank of Salinas. It is therefore within the power of respondent SEC
to adjudicate.
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41
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42