PEÑA VS CA CASE DIGEST

G.R. No. 91478             February 7, 1991
ROSITA PEÑA petitioner,
THE COURT OF APPEALS, SPOUSES RISING T. YAP and CATALINA YAP, PAMPANGA BUS CO., INC., JESUS DOMINGO, JOAQUIN BRIONES, SALVADOR BERNARDEZ, MARCELINO ENRIQUEZ and EDGARDO A. ZABAT, respondents.

vs.

CORPORATION LAW; POWER TO SELL OR DISPOSE ASSETS

FACTS:

• Spouses Yap and Lugue, are the registered owners of the lots in question. They sought to recover possession over the subject lands from defendants Peña and Washington Distillery on the ground that  they have have been allegedly in unlawful possession of the lot in question. 

• Defendants Peña and Washington Distillery denied the material allegations of the complaint and asserted that Peña is now the legitimate owner of the subject lands for having purchased the same in a foreclosure proceeding instituted by the DBP against PAMBUSCO and no valid redemption having been effected within the period provided by law.

• It was contended that plaintiffs could not have acquired ownership over the subject properties under a deed of absolute sale executed in their favor by one Marcelino B. Enriquez since the deed of assignment executed was void ab initio for being an ultra vires act of its board of directors and, for being without any valuable consideration, it could not have had any legal effect; 

• Defendants, prayed that the complaint be dismissed; that the deed of assignment executed in favor of Marcelino Enriquez be all declared null and void.

• After trial, a decision was rendered by the court declaring as null and void the following the deed of assignment executed in favor of Marcelino Enriquez pursuant to the resolution referred to in the preceding paragraph. 

• The judgment of the trial court on appeal is REVERSED.

ISSUE:

Whether the court erred in holding that the resolution of respondent PAMBUSCO assigning its right of redemption is not void.

HELD:

• Right of redemption is void. Only 3 out of 5 members of the board of directors of respondent PAMBUSCO convened by virtue of a prior notice of a special meeting. There was no quorum to validly transact business since, under Section 4 of the amended by-laws at least four (4) members must be present to constitute a quorum in a special meeting of the board of directors of respondent PAMBUSCO.

• As a matter of fact, the 3 alleged directors who attended the special meeting were not listed as directors of respondent PAMBUSCO.

• It is also undisputed that at the time of the passage of the questioned resolution, respondent PAMBUSCO was insolvent and its only remaining asset was its right of redemption over the subject properties. Since the disposition of said redemption right of respondent PAMBUSCO by virtue of the questioned resolution was not approved by the required number of stockholders under the law, the said resolution, as well as the subsequent assignment executed on March 8, 1975 assigning to respondent Enriquez the said right of redemption, should be struck down as null and void.

• WHEREFORE, the petition is GRANTED.