55 Grace Christian High School Vs

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Laureano Investment and Development Corp. vs CA and Bormaheco Inc.

FACTS:In 1988, Bormaheco, Inc. (Bormaheco) filed an ex-parte petition with the Registry of Deeds of Makati for the issuance ofa writ of possession over various lots that it bought from a bank. Subsequently, a motion for intervention was filed byLIDECO Corporation (Lideco) for certain adverse claims. Bormaheco opposed the motion on the ground that Lideco hasno personality to sue because it is not a juridical entity. Apparently, Lideco is not a corporation registered with theSecurities and Exchange Commission. Bormahecos opposition was granted. Lideco assailed the decision on the groundthat LIDECO is an acronym for Laureano Investment & Development Corporation which is a duly organized corporation.

ISSUE: Whether or not Laureano Investment & Development Corporation can sue Bormaheco, Inc. as LIDECOCorporation.

HELD: No. A corporation cannot sue under a name other than that registered with the SEC. The contention that LaureanoInve stment & Development Corporation merely used the abbreviation is not tenable. Lideco Corporation had nopersonality to intervene since it had not been duly registered as a corporation. If Laureano Investment & DevelopmentCorporation truly wished to intervene, it should have, it should have used its corporate name as the law requires and notanother name which it had not registered. CENON CERVANTES VS. THE AUDITOR GENERAL

FACTS:

Cenon Cervantes was a the General manager of the National Abaca & Other FibersCorporation (NAFCO).NAFCO was created by Commonwealth Act 332 with a capital stock of 20 Million. 51% ofNAFCO is ownedby the governmentand the remainder is offered to the public making NAFCO a GOCC. NAFCO ismanaged by a BODof five members and 1 chairman who would also act as a general manager(Cervantes) andthey were appointedby the president. NAFCO is made subject to the provisions of the corporation law in sofar as they werecompatible with its charter and it enjoys the powers under the corporation law.

RA 51 authorized the president to effect reforms to GOCCs so he enacted EO 93 or theGovernment EnterpriseCouncil which will have a control committee that has the power to pass upon theresolutions of the BOD ofGOCCs such as NAFCO to ensure their efficient and economic operations.

CONTROVERSY:

According to NAFCO's charter its General Manager should receive a salary not exceedingP15, 000 per year.NAFCO through a Board Resolution granted Cervantes quarters allowance amounting to P400per month.The control committee denied such Board Resolution.

ISSUE:

1. WON Executive Order No. 93 exercising control over Government Owned and ControlledCorporations (GOCC)implemented under R.A. No. 51 is valid.

2. WON the quarters allowance should be allowed.

RULING:

1. R.A. No. 51 is constitutional. It is not illegal delegation of legislative power tothe executive as


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argued by petitioner but a mandate for the President to streamline GOCC s operation.Executive Order93 is valid because it was promulgated within the 1 year period given.

2. It is undisputed that NAFCO is a GOCC and is therefore subject to RA 51 and EO 93. Thecontrol committee ofthe Government Enterprise Council has the power to pass upon the resolutions of the BODof GOCCs. It hasthe power to approve or disapprove the BOD resolutions of GOCCs including NAFCO.The additional quarters allowance granted to Cervantes would form part of his additionalcompensation thusit violated NAFCO's charter limiting the annual salary of the GM to P15,000. It is alsobecause NAFCO is ina precarious financial condition at the time.

40 G.R. No. 120138. September 5, 1997

MANUEL A. TORRES, JR., (Deceased), GRACIANO J. TOBIAS, RODOLFO L. JOCSON, JR., MELVIN S. JURISPRUDENCI AUGUSTUS CESAR AZURA and EDGARDO D. PABALAN, petitioners,vs.COURT OF APPEALS, SECURITIES AND EXCHANGE COMMISSION, TORMIL REALTY & DEVELOPMENT CORPORAT

ANTONIO P. TORRES, JR., MA. CRISTINA T. CARLOS, MA. LUISA T. MORALES and DANTE D. MORALES, respondents

KAPUNAN, J.:

First Controversy

FACTSManuel A. Torres Jr. (Judge Torres) was the majority stockholder of Tormil Realty and Development Corporation whileprivate respondents constituted the minority stockholders.In order to make substantial savings in taxes, Judge Torres adopted an estate planning scheme under which he assignedto Tormil Realty and Development Corporation various real properties he owned and his shares of stock in othercorporations in exchange for 225,972 Tormil shares.

At the time of the assignments and exchange, only 225,000 Tormil shares remained unsubscribed and all of which wereduly issued to and received by Judge Torres.

Due to the insufficient number of shares of stock issued to Judge Torres and the alleged refusal of private respondents toapprove the needed increase in the corporation authorized capital stock, he revoked the 2 deed of assignment coveringthe properties in Makati and Pasay. This prompted private respondent to file a complaint with the SEC to compel JudgeTorres to deliver the subject property and to cause the registration of the titles in the name of Tormil

ISSUEWON the revocation of the assignment of the property should be declared null and void?

RULING Yes. Rescission of a contract will not be permitted for a slight or carnal breach, but only for substantial and fundamentalbreach as would defeat the very object of the parties in making the agreement.The shortage of 972 shares definitely is not substantial and fundamental breach as would defeat the very object of theparties in entering into contract.Moreover the shortage of shares should not have affected the assignment of the Makati and Pasay City properties whichwere executed in July 13 and 14 and the consideration of which have been duly paid or fulfilled but should have beenapplied logically to the last assignment of property Ayala Fund Shares which was executed on August 29, 1984.

Second Controversy

FACTSPursuant to the scheduled election of directors of Tormil Corporation held on March 25, 1987, Judge Torres assigned oneshare each to petitioners Tobias, Jocson, Jurisprudencia, Azura and Pabalan. These assigned shares were in the nature ofqualifying shares, for the sole purpose of meeting the legal requirement to be able to elect them to the BOD as Tor resnominees.The reason behind the aforestated action was to remedy the inequitable lopsided set-up obtaining in the corporation,


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circulation devoted to the publication of general news at the place where the principal office of thecorporation is established or located, and by written notice deposited in the post-office, postage pre-paid, addressed to each stockholder, or, if there be no stockholders, then to each member, at hislast known place of residence. If there be no newspaper published at the place where the principaloffice of the corporation is established or located, a notice of the election of directors shall be postedfor a period of three weeks immediately preceding the election in at least three public places, in theplace where the principal office of the corporation is established or located. (Emphasis added)

The present Corporation Code (B.P. Blg. 68), which took effect on May 1, 1980, similarly provides:

23. The Board of Directors or Trustees . Unless otherwise provided in this Code, the corporatepowers of all corporations formed under this Code shall be exercised, all business conducted and allproperty of such corporations controlled and held by the board of directors or trustees to be electedfrom among the holders of stocks, or where there is no stock, from among the members of thecorporation, who shall hold office for one (1) year and until their successors are elected andqualified. (Emphasis added)

These provisions of the former and present corporation law leave no room for doubt as to their meaning: the boardof directors of corporations must be elected from among the stockholders or members. There may be corporationsin which there are unelected members in the board but it is clear that in the examples cited by petitioner theunelected members sit as ex officio members, i .e ., by virtue of and for as long as they hold a particular office. But in

the case of petitioner, there is no reason at all for its representative to be given a seat in the board. Nor doespetitioner claim a right to such seat by virtue of an office held. In fact it was not given such seat in the beginning. Itwas only in 1975 that a proposed amendment to the by-laws sought to give it one.

65 GR No. 122452 January 29, 2001

TAM WING TAK, petitioner,vs.HON. RAMON P. MAKASIAR (in his Capacity as Presiding Judge of the RegionalTrial Court of Manila, Branch 35)

and ZENON DE GUIA (in his capacity as ChiefState Prosecutor), respondents.

Facts:On November 11, 1992, petitioner, as a director of Concord-World PropertiesInc., filed a complaint affidavit charging Vic Ang Siong for

violation of BP 22 in the QCProsecutors Office. It was alleged in the said affidavit that the check issued by the latterto the company wasdishonored when presented for encashment. Ang Siong moved todismiss the said case on the ground that petitioner had no authority to file

the said caseand that he and the company had agreed to settle amicably after paying partially thedishonored check. On March 23, 1994, the

City Prosecutor dismissed the said case on thegrounds given by Ang Sio ng. The Chief State Prosecutor denied petitioners appeal andMotion for

Reconsideration; hence he filed a civil case for mandamus in the RTC of QCto compel the Chief State Prosecutor to file the information

charging Ang Siong forviolating BP 22. The trial court also dismissed the case for lack of merit, thus the petitionfor review on certiorari in the

SC.

Issue:Whether or not the petitioner had the personality to file the said case.

Held:No, it is not disputed in the instant case that Concord, a domestic corporation, was the payee of the bum check, not petitioner. Therefore,it is Concord, as payee of the bounced check, which is the injured party. Since petitioner was neither a payee nor a holder of the bad check, he

had neither the personality to sue nor cause of action against Vic Ang Siong. Under Section 36 of the Corporation Code, in relation to Section

23, it is clear that where a corporation is an injured party, its power to sue is lodged with its board of directors or turstees. Note that petitioner

failed to show any proof that he was authorized or deputized or granted specific powers by Concord's board of director to sue Victor And Siong

for and on behalf of the firm. Clearly,petitioner as a minority stockholder and member of the board of directors had no such power or authority

to sue on Concord's behalf. Nor uphold his act as a derivative suit. For a derivative suit to prosper, it is required that the minority stockholder

suing for and on behalf of the corporation must allege in his complaint that he is suing on a derivative cause of action on behalf of the

corporation and all other stockholders similarly situated who may wish to join him in the suit. There is no showing that petitioner has complied

with the foregoing requisites. It is obvious that petitioner has not shown any clear legal right which would warrant the overturning of the


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decision of public respondents to dismiss the complaint against Vic Ang Siong. A public prosecutor, by thenature of his office, is under no

compulsion to file a criminal information where no clearlegal justification has been shown, and no sufficient evidence of guilt nor prima

faciecase has been presented by the petitioner. No reversible error may be attributed to thecourt a quo when it dismissed petitioner's special

civil action for mandamus.

CASE 66/ TOPIC: POWER TO INCREASE OR DECREASE CAPITAL STOCK

G.R. No. L-48237 June 30, 1987

MADRIGAL & COMPANY, INC. vs.HON. RONALDO B. ZAMORA, SEC OF LABOR, and MADRIGAL CENTRAL OFFICE EMPLOYEES UNION

No. L-49023 June 30, 1987MADRIGAL & COMPANY, INC. vs.HON. MINISTER OF LABOR and MADRIGAL CENTRAL OFFICE EMPLOYEES UNION

FACTS: MADRIGAL was engaged in the management of Rizal Cement Co., Inc. The petitioner and Rizal Cement are sistercompanies. Both are owned by the same stockholders. The Madrigal Union, sought for the renewal of its CBA with thepetitioner. UNION proposed a wage increase of P200/month, an allowance of P100/month, and other economic benefits.MADRIGAL however, requested for a deferment in the negotiations.

By an alleged resolution of its stockholders, MADRIGAL reduced its capital stock from 765,000 shares to 267,366 shares.This was effected through the distribution of the marketable securities owned by the petitioner to its stockholders inexchange for their shares in an equivalent amount in the corporation.By yet another alleged stockholders' action, the petitioner reduced its authorized capitalization from 267,366 shares to110,085 shares, again, through the same scheme.

After petitioner's failure to sit down with the union, the latter, commenced with the NLRC a complaint for ULP. Thepetitioner alleged operational losses. The petitioner informed the SOLE that Rizal Cement "from which it derives income""as the General Manager or Agent" had "ceased operating temporarily. In addition, in order to prevent further losses, ithad to reduce its capital stock on two occasions. It averred that the Madrigal Inc. is without substantial income,necessitating a retrenchment, of its employees.

The petitioner then requested that it "be allowed to effect said reorganization gradually considering all the circumstances,

by phasing out in at least 3 stages, or in a manner the Company deems just, equitable and convenient to all concerned.The DOLE took no action on the petitioner's request because the letter was not verified.

The LA rendered a decision granting a general wage increase of P200/month plus a monthly living allowance of P100monthly in favor of the petitioner's employees. The LA found that the petitioner "had been making substantial profits inits operation". MADRIGAL appealed.

The petitioner applied for clearance to terminate the services of a number of employees pursuant supposedly to itsretrenchment program. The union went to the DOLE to complain of illegal lockout against the petitioner. Acting on thiscomplaint, the SOLE found the dismissals "to be contrary to law" and ordered the petitioner to reinstate some 40employees, 37 of them with backwages. The petitioner then moved for reconsideration, which the Acting Labor Secretarydenied.

MADRIGAL filed an appeal to the Office of the President. The respondent, the Presidential Assistant on Legal Affairs,affirmed with modification the Labor Department's decision.

The petitioner appealed to SC. Meanwhile, the NLRC rendered a decision affirming the labor arbiter's judgment. Thepetitioner appealed to the SOLE which dismissed the appeal. Petitioner appealed to SC.

ISSUE: WON MADRIGAL INCs ACT of DECREASING ITS CAPITAL STOCK is VALID

SC DISCUSSIONs:There is no merit in these 2 petitions.We do not subscribe to appellant's argument that by reducing its capital, it is made evident that it is phasing out itsoperations. On the contrary, whatever may be the reason behind such reductions, it is indicative of an intention to keep


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the company a going concern. So much so that until now almost 4 years later, it is still very much in existence andoperational as before.

In support of such assertion, the company points that the profits reflected in its yearly Statement of Income andExpenses are dividends from security holdings. We, however reject as puerile its suggestion to dissociate the dividends itreceived from security holdings on the pretext that they belong exclusively to its stockholders. The dividends received bythe company are corporate earnings arising from corporate investment which no doubt are attended to by the employeesinvolved in this proceedings.

What clearly emerges from the recorded facts is that the petitioner, awash with profits from its business operations butconfronted with the demand of the union for wage increases, decided to evade its responsibility towards the employeesby a devised capital reduction. While the reduction in capital stock created an apparent need for retrenchment, it was, byall indications, just a mask for the purge of union members, who, by then, had agitated for wage increases. In the face ofthe petitioner company's piling profits, the unionists had the right to demand for such salary adjustments. The dividendsreceived by the company are corporate earnings arising from corporate investment.

Moreover, it is incorrect to say that such profits in the form of dividends are beyond the reach of the petitioner'screditors since the petitioner had received them as compensation for its management services in favor of the companies itmanaged as a shareholder thereof. As such shareholder, the dividends paid to it were its own money, which may then beavailable for wage increments. It is not a case of a corporation distributing dividends in favor of its stockholders, in whichcase, such dividends would be the absolute property of the stockholders and hence, out of reach by creditors of thecorporation. Here, the petitioner was acting as stockholder itself, and in that case, the right to a share in such dividends,by way of salary increases, may not be denied its employees.

A clear scrutiny of the financial reports of MADRIGAL reveals that it had been making substantial profits in the operation.

EXAMPLE: 1972, when it still had 765,000 common shares, the respondent made a net profit of P2,403,211.58. Its totalassets were P70,821,317.81.In 1973, based on the same capitalization, its profit increased to P2,724,465.33. Its total assets increased toP83,240,473.73.

Accordingly, this court is convinced that the petitioner's capital reduction efforts were, a subterfuge, a deception as itwere, to camouflage the fact that it had been making profits, and consequently, to justify the mass layoff in its employeeranks, especially of union members. They were nothing but a premature and plain distribution of corporate assets to

obviate a just sharing to labor of the vast profits obtained by its joint efforts with capital through the years. Surely, wecan neither countenance nor condone this. It is an unfair labor practice.

Retrenchment can only be availed of if the company is losing or meeting financial reverses in its operation, whichcertainly is not the case at bar.

***NOTES***:Section 38. Power to increase or decrease capital stock; incur, create or increase bonded indebtedness. No corporation shall increase or decrease its capital stock or incur, create or increase any bonded indebtedness unlessapproved by a majority vote of the board of directors and, at a stockholders meeting duly called for the purpose, two -thirds (2/3) of the outstanding capital stock shall favor the increase or diminution of the capital stock, or the incurring,creating or increasing of any bonded indebtedness. Written notice of the proposed increase or diminution of the capitalstock or of the incurring, creating, or increasing of any bonded indebtedness and of the time and place of the

stockholders meeting at which the proposed increas e or diminution of the capital stock or the incurring or increasing ofany bonded indebtedness is to be considered, must be addressed to each stockholder at his place of residence as shownon the books of the corporation and deposited to the addressee in the post office with postage prepaid, or servedpersonally.

A certificate in duplicate must be signed by a majority of the directors of the corporation and countersigned by thechairman and the secretary of the stockholders meeting, setting forth: (1) That the requirements of this section have been complied with;(2) The amount of the increase or diminution of the capital stock;(3) If an increase of the capital stock, the amount of capital stock or number of shares of no-par stock thereof actuallysubscribed, the names, nationalities and residences of the persons subscribing, the amount of capital stock or number ofno-par stock subscribed by each, and the amount paid by each on his subscription in cash or property, or the amount of


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capital stock or number of shares of no-par stock allotted to each stock-holder if such increase is for the purpose ofmaking effective stock dividend therefor authorized;(4) Any bonded indebtedness to be incurred, created or increased;(5) The actual indebtedness of the corporation on the day of the meeting;(6) The amount of stock represented at the meeting; and(7) The vote authorizing the increase or diminution of the capital stock, or the incurring, creating or increasing of anybonded indebtedness.

Any increase or decrease in the capital stock or the incurring, creating or increasing of any bonded indebtedness shallrequire prior approval of the Securities and Exchange Commission.

One of the duplicate certificates shall be kept on file in the office of the corporation and the other shall be filed with theSecurities and Exchange Commission and attached to the original articles of incorporation. From and after approval by theSecurities and Exchange Commission and the issuance by the Commission of its certificate of filing, the capital stock shallstand increased or decreased and the incurring, creating or increasing of any bonded indebtedness authorized, as thecertificate of filing may declare: Provided, That the Securities and Exchange Commission shall not accept for filing anycertificate of increase of capital stock unless accompanied by the sworn statement of the treasurer of the corporationlawfully holding office at the time of the filing of the certificate, showing that at least twenty-five (25%) percent of suchincreased capital stock has been subscribed and that at least twenty-five (25%) percent of the amount subscribed hasbeen paid either in actual cash to the corporation or that there has been transferred to the corporation property thevaluation of which is equal to twenty-five (25%) percent of the subscription: Provided, further, That no decrease of thecapital stock shall be approved by the Commission if its effect shall prejudice the rights of corporate creditors.

Non-stock corporations may incur or create bonded indebtedness, or increase the same, with the approval by a majorityvote of the board of trustees and of at least two-thirds (2/3) of the members in a meeting duly called for the purpose.Bonds issued by a corporation shall be registered with the Securities and Exchange Commission, which shall have theauthority to determine the sufficiency of the terms thereof. (17a)

69 GR 59114 18 March 1991Jose Ricafort et al v. Hon Judge Felix Moya et alFACTS:The case stemmed from a deed of absolute sale executed on April 18 1978 between Daniel Aguinaldo as vendor andRicaforte and Calalang as vendees. Both had failed to fulfil their obligations in the deed which worsened as cases havebeen filed against each party. After a number of suits filed, Ricafort et al filed for Preliminary injunction against Aguinaldoto prohibit him from representing himself as controlling stockholder of NADECOR and attempting to sell that corporationsso-called Kingking Mining claims. This was granted by the Court. Ricafort and Calalang believed that they and SAICOR are

to be excluded by Aguinaldo and group from the management of NADECOR as Aguinaldo had refused to convoke thestockholders annual meeting for the year 1981 which should have been called on third Monday of August, in the by-laws.Stockholders elected as directors Calalang, Ricafort and 5 others. The stockholders rejected the aforesaid operatingagreement in March 25 1981 between NADECOR as represented by Aguinaldo and the consortium of Black Mountain Corpet al and instead approved the proposed operating agreement with Benguet Corporation. The Certificate attesting tothese events was filed with SEC. NADECOR, represented by new officers entered into an Operating Agreement withBenguet Corporation for the operation by the latter of the KINGKING MINES.ISSUE: Whether the Operating Agreement with the Black Mountain Consortium of March 25, 1981 is validRULING:NO.The Operating Agreement with the Black Mountain Consortium was never ratified by the NADECOR stockholders; indeed,it was explicitly rejected by said stockholders. Considering that the Kingking Mines comprise all or substantially the assetsof NADECOR, the operating agreement of March 25 1981 had to be ratified by the stockholders in order to be valid andeffective. This, in accordance with Section 44 of the Corporation Code. That no such ratification was ever givenconstitutes yet another reason to invalidate such.The agreement executed on March 25 1981 was entered into in defiance of valid orders of a court of competent

jurisdiction and was in fact subsequently nullified by it; it was entered into against the wishes of the majority of thestockholders and directors and in truth, was not only not ratified by the majority of the said stockholders as required bythe Corporation Code, but explicitly rejected and disowned by them at a meeting duly convoked, said stockholdersthereafter approving an operation agreement with Benguet Corporation; the agreement was sought to be vindicated andenforced by individuals who no longer represented the majority of the stockholders of NADECOR, over the objection andagainst the wishes of the legitimate majority; the authority granted to the consortium to implement the agreement ofMarch 25 1981 was rescinded and revoked by the Office of the President and one of the companies in said consortium isnow no longer capable on account of bankruptcy of complying with its contractual commitments-it is impossible to accordthe agreement any validity or effect whatsoever.


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NOTA BENE (not all facts stated herein)On April 18, 1978, a deed of sale was executed by Daniel Aguinaldo and DR Aguinaldo Corporation (DRACOR) as vendors,and Jose Ricafort and Conrado Calalang as vendees.In the deed, Aguinaldo and DRACOR sold to Ricafort and Calalang all their shares of stocks and subscriptions in threecorporations: ADECOR (Aguinaldo Devt Corp), MARBLECORP(Phil. Marble Corp) and NADECOR (Nationwide Devt Corp)

Aguinaldo bound himself to convey 9 parcels of rice land in Saug, Davao del Norte held in trust by him, to the real orbeneficial owner ADECORRicafort and Calalang pledged to Aguinaldo all shares of stocks in the 3 corporations subject of sale and the 9 Saug lots

as security for payment of balance price August 18 1980- Shareholders of NADECOR elected Aguinaldo, Aytona, Calalang, Ricafort and 5 others as directors. Aytona, Aguinaldo and Borsoto as Chairman, President and Secretary respectivelySept 26 1980- Aguinaldo executed a deed of reconveyance of 9 Saug lots in favour of ADECOR as called for by the April18 1978 stipulation which was not complied with by Ricafort and Calalang (on the mortgaged lots) because the deed ofreconveyance of the Saug lots executed by Aguinaldo in favour of ADECOR was fatally defective as it did not bear thesignature of Aguinaldos wife, Helen Leontovich. No remedy done to the omission until controversy between parties hasworsened.FIRST CASE: Oct 6 1980Ricafort and Calalang filed before the CFI of Rizal due to breach o f contract of April 18 1978 by Aguinaldos failure totransfer the 9 Saug lots with prayer that Aguinaldos obligation to make conveyance be deemed waived and that Ricafortand Calalang be discharged from their obligation

Aguinaldo reacted by instructing a notary public, Neis to conduct Auction Sale of pledged stock of DRACOR, ADECOR ANDNADECORRicafort and Calalang brought suit against Aguinaldo and Neis to be stopped from proceeding with the auction sale andapplied for preliminary injunctionTRO issued by Judge Maddela enjoining the auction sale.Three more amendments were made by RicafortReformation of contract of sale to include all stocks in NADECOR of Aguinaldo and DRACORPreliminary injunction against Aguinaldo to prohibit him from representing himself as controlling stockholder of NADECORand attempting to sell that corporations so -called Kingking Mining claims.

Allowed by court orderThird amendment added averments of fraud relative to the transfer by Aguinaldo to himself of ADECOR shares in aforeign company.Preliminary injunctions by Manila CFI

Injunctive orders issued against Aguinaldo and his group by the trial court as regards Kingkings mining claims andOperating Agreement involving Kingking between Aguinaldo in representation of NADECOR and a consortium made up ofBlack Mountain Inc, Tetra Management Corp, and Energy CorporationCourt enjoined NADECOR in ratifying the Operating ManagementCourt stopped the auction sale which was rescheduled by Neis and; Aguinaldo in representing himself as controllingstockholder of NADECOR offering its Kingking claims for saleCourt order prohibiting Aguinaldo from selling the ADECOR shares in Sawyer-Adecor International Corporation(SAICOR)which he had caused to be transferred in his nameRicafort and Calalang believed that they and SAICOR are to be excluded by Aguinaldo and group from the managementof NADECOR as Aguinaldo had refused to convoke the stockholders annual meeting for the year 1981 which should havebeen called on third Monday of August, in the by-laws.Stockholders elected as directors Calalang, Ricafort and 5 others. The stockholders rejected the aforesaid operatingagreement in March 25 1981 between NADECOR as represented by Aguinaldo and the consortium of Black Mountain Corp

et al and instead approved the proposed operating agreement with Benguet Corporation. The Certificate attesting tothese events was filed with SECNADECOR, represented by new officers entered into an Operating Agreement with Benguet Corporation for the operationby the latter of the KINGKING MINES.SEC CASE: NADECOR, represented by its newly elected directors and officers filed against Aguinaldo and group forcontinuingly fraudulently representing themselves as the legitimate officers of NADECOR.CIVIL CASE no. 143: the consortium of Black Mountain Inc et al filed a complaint against Benguet Corporation andNADECOR and the directors of NADECOR (Ricafort and Calalang included) enjoining them from interfering with BlackMountains possession of NADECORs Kingking Mines a nd recover damages.Ricafort et al moved to dismiss the complaint for failure to state a cause of action, that NADECORs agreement with BlackMountain Inc for the operation of the Kingking mining claims had never been approved by the NADECOR stockholders


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owning the majority of the capital stock.The trial court denied the motion to dismiss

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