Batjak then requested the turn-over and transfer of all Batjak
30. NATIONAL INVESTMENT AND DEVELOPMENT
CORPORATION VS. AQUINO
(G.R. No. L-34192, June 30, 1988)
DOCTRINE: A voting trust agreement, confers to the trustee only voting
rights, separated from the other rights of a stockholder over his shares.
FACTS
Batjak (Basic Agricultural Traders Jointly Administered
Kasamahan) manufactures coconut oil and copra cake for export.
In 1965, their financial condition deteriorated to the point of
bankruptcy.
Batjak mortgaged its three coco-processing mills to several private
banks. In need of additional operating capital, Batjak applied to
PNB for additional financial assistance.
PNBs Board of Directors approved the request, one of the
conditions is:
o That a voting trust agreement for five years over 60% of
the outstanding paid up and subscribed shares shall be
executed by Batjaks stockholders in favor of NIDC.
Note: NIDC was a wholly-owned PNB subsidiary, its the
reason why theyre part of this case.
Forced by the insolvency of Batjak, PNB instituted extrajudicial
foreclosure proceedings against the three oil mills of Batjak. PNB
bought the two mills at auction and the third was bought by NIDC.
PNB transferred the two mills to NIDC. Hence, NIDC now owned
all three mills.
Three years later, Batjak sent a letter to NIDC asking if they would
like to renew the Voting Trust Agreement between them. Batjak
sent another letter a month after stating that they safely assume
NIDC was no longer interested in renewal of the agreement.
assets, properties, management, and operations. NIDC replied and
refused to comply with Batjaks demands.
Note: Batjak clearly wanted the three mills returned, stating as
basis the fact that the voting trust agreement ended, so NIDC
must return Batjaks assets.
LOWER COURT
Batjak filed an exparte motion for mandamus, to return the three
mills, and the CFI judge issued a restraining order preventing
NIDC from doing anything to the three mills. Hence this petition.
ISSUE
WON Batjak has a right to recover the three mills from NIDC because their
Voting Trust Agreement had expired? NO.
HELD
The SC ruled in favor of NIDC.
It is clear that the mortgages over the three mills were foreclosed
by PNB, NIDC acquired the mills, and Batjak failed to exercise its
right of redemption. Thus, the mills rightfully belong to NIDC.
What was assigned to NIDC was ONLY the power to vote the
shares of stock of the stockholders of Batjak, representing 60% of
Batjaks OCS. Nowhere in the agreement is mention made of any
transfer of Batjaks assets to NIDC.
Note: NIDC was a mere trustee, who only acquired voting
rights.
The acquisition by PNB-NIDC of the properties was not made
under the capacity of a trustee but as a foreclosing creditor for the
purpose of recovering on a just and valid obligation of Batjak.
PETITION GRANTED