Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

PETER PAUL G. MARASIGAN, G.R. No. 261125

Petitioner,
Present:

- Versus - CAGUIOA, J., *

INTING:; **
GAERLAN,
DIMAAMPAO,*#* and
BENITO G. MARASIGAN, ET SINGH, JJ.
AL.,
Respondents. Promulgated:

July 26, 2023

Mas DOUBT

DECISION

SINGH, J.:

Before the Court is a Petition for Review on Certiorari' under Rule 45

of the Rules of Court assailing the Decision,’ dated December 28, 2021, and
the Resolution,’ dated May 24, 2022, of the Court of Appeals (CA), in CA-
G.R. SP No. 168189. The assailed CA Decision and Resolution reversed and
set aside the Decision,* dated February 3, 2021, of the Regional Trial Court

* On leave.
** Acting Chairperson
*%% On official travel.
"Rollo, Vol. 1, pp. 13-52.
? Id. at 55-72. Penned by Associate Justice Myra V. Garcia-Fernandez and concurred in by Associate
Justices Louis P. Acosta and Bonifacio S. Pascua.
3 Id. at 8-9.
4 1d. at 237-254. Penned by Presiding Judge Elma Rafallo-Lingan. pd
Decision 2 G.R. No. 261125

(RTC), Branch 159, Pasig City which declared that the meetings of the
+ domestic corporation, Ganco Resorts & Recreation Incorporated (Ganco), on
‘November 6 and 12, 2017 and May 15, 2018, lacked the proper quorum due
to the death of its majority stockholder.’

The Petition was filed by Peter Paul Marasigan (Peter), against

respondents Benito, Orlando, and Rommel (ail sumamed Marasigan;
collectively, the respondents). After a review of the records, the Court
resolves to deny the same for failure to sufficiently show that the CA
committed any reversible error to warrant the exercise of the Court's
discretionary appellate jurisdiction.

The Facts

All the parties in the original complaint are children of the late spouses
Cesar Marasigan (Cesar) and Luz Marasigan (Luz) (collectively, the Spouses
Marasigan), save for Cesar Augustine C. Marasigan III (Cesar Augustine),
who is the grandson of the Spouses Marasigan. The Spouses Marasigan
acquired several properties, including La Luz Beach Resort, a private beach
resort in San Juan, Batangas, and their conjugal dwelling in Mabini Street,
Addition Hills, San Juan City (Mabini Street property). Cesar passed away
in 2001, but his estate has not yet been settled.

In 2013, Luz together ‘with her 13 children (Marasigan siblings)

incorporated Ganco, as a close corporation, and established its principal office
at the Mabini Street property. Of the 5,600 total subscribed shares, Luz
subscribed to 3,000 shares, while her children subscribed to 200 shares each,
or 2,600 shares in total.”

Ganco’s Articles of Incorporation® (AOI) provided that the

corporation’s business “shall be managed by the board of directors who are
the stockholders.” This set-up is likewise reflected in its by-laws."

In 2017, the following stockholders were elected as Ganco’s officers:

5 Note that the RTC Decision misstates the date of the second meeting as November 17, 2017, instead of
November 12, 2017. The CA in its Decision, dated December 28, 2021, noted this error on the part of
the RTC.
The defendants in the original Complaint for Declaration of Nullity of Meetings, Board Resolutions and
Election of Officers, are Regina Marasigan-Palileo, Peter Paul G. Marasigan, Renato G. Marasigan,
Gabriel G. Marasigan, Santiago G. Marasigan, Mauricio G. Marasigan, Maria Luz G. Marasigan, and
Cesar Augustine C. Marasigan III.
7 Rollo, Vol. 1, p. 238, RTC Decision.
8 Id. at 353-359.
° Id. at 356.
10 Rollo, Vol. 2, p. 969.
Decision 3 G.R. No. 261125

Chairman of the Board - Luz Marasigan

President - Peter Marasigan
Vice President 2 Benito Marasigan
Treasurer - Regina Marasigan-Palileo
Secretary - Orlando Marasigan!!

Since becoming the President of Ganco in 2015, Peter claimed that he

has not had any vacation. Thus, in August 2017, he requested for an authority
to take a leave of absence for six weeks to visit his daughter in Australia and
to also visit New Zealand. Luz allowed Peter to take a six-week vacation
leave. On November 3, 2017, while Peter was still on vacation, Luz passed
away. He then cut his vacation on November 4, 2017 and returned to Manila
on the following day.!?

On November 6, 2017, the children of the Spouses Marasigan, who are

likewise Ganco’s stockholders, met at the office of Rommel and elected a new
set of officers. Of the then 13 stockholders, eight stockholders were
considered present — only five were physically present at the said meeting, but
they were joined by three others via video conference. '?

According to Peter, the meeting was conducted despite the lack of any
prior notice, agenda, or valid call for a meeting. Then Corporate Secretary
Orlando declared a quorum, and it was tagged as a Special Board and
Stockholders Meeting.'*

In the said meeting, Benito declared that he was assuming the position
of President, as Peter had been on absence without leave. Thus, Peter was
removed and replaced by Benito as Interim President. !®

On November 12, 2017, Luz was buried. After the burial, nine
members of the family gathered and discussed the settlement of the estate,
payment of estate taxes, and the Mabini Street property.!®

On May 11, 2018, Orlando, the Corporate Secretary, issued an official

notice to the stockholders that the Annual Shareholders’ Meeting shall not
proceed as the majority shares of Luz had to be settled and distributed.”

1 Rollo, Vol. 1, p. 16, Petition.

2 1d. at 16-17.
13 Id. at 17.
Mo 1d. at 17-18.
5 Id. at 391, GANCO Minutes of Special Meeting (November 06, 2017).
16 Jd. at 396-405, GANCO Minutes of Special Meeting (November 12, 2017).
17 1d. at 57-58, CA Decision.
Decision 4 G.R. No. 261125

On May 15, 2018, the Annual Stockholders’ Meeting of Ganco was

held. Orlando and Regina were physically present, while seven others joined
via video conference. In the said meeting, the following stockholders of
Ganco were elected as officers:

Chairman of the Board - Gabriel Marasigan

President - Regina Marasigan-Palileo
Vice President - Peter Marasigan
Treasurer - Renato Marasigan
Secretary L Peter Marasigan'®

The new signatories to the Ganco bank accounts, i.e., Regina, Peter,
and Renato, were likewise appointed during the meeting.

Thereafter, the respondents refused to recognize the new officers, and

to turnover possession and control of the assets and records of Ganco to the
newly elected officers.” According to Peter, they allegedly attempted to
encash checks worth millions at Ganco’s depository banks.2

To protect the assets of the corporation, the newly elected officers

informed Ganco’s depository banks that the respondents were no longer
authorized to represent Ganco. The respondents, however, insisted that they
were still the officers of Ganco, causing the banks, to freeze the corporation’s
accounts.?! :

After the Annual Stockholders’ Meeting on May 15, 2018, the

respondents executed a General Information Sheet for Ganco, stating that
there was an Annual Stockholders Meeting on November 12, 2017, and that
they were still the officers of the corporation.

As the corporation’s bank accounts had been frozen, the respondents

allegedly collected fees and payments from guests'of La Luz Beach Resort, in
cash or through their personal bank accounts, and disallowed checks or online
payments?

The respondents, together with stockholders and siblings, Jose and

Gerardo, filed a Complaint for Declaration of Nullity of Meetings, Board
Resolutions and Election of Officers with Prayer for Issuance of a Temporary
Restraining Order (TRO) and/or Writ of Preliminary Injunction. They sought

18 1d. at 468-470, Minutes of the Illegal GANCO Meeting (May 15, 2018).
19 1d. at 58, CA Decision.
20 1d. at 19, Petition.
21 1d. at 58, CA Decision.
2 1d. at 20, Petition.
Decision 5 G.R. No. 261125

to be recognized as the legitimate officers of Ganco and to have the Annual

Stockholders’ Meeting on May 15, 2018 declared null and void.?

The Ruling of the RTC

In its Order, dated June 1, 2018, the RTC denied the TRO prayed for
by the respondents after finding that there was no extreme urgency for the
issuance of the TRO. Similarly, the RTC denied the application for a Writ of
Preliminary Injunction through its Order, dated J anuary 6, 2020.
Additionally, upon the motion of the defendants in the RTC case (Peter, et
al), Jose and Gerardo were dropped as plaintiffs.

In its Decision, dated February 3, 2021, the RTC held that as the estate
of Luz had yet to be settled, both parties did not automatically become owners
or transferees of her shares in Ganco. It noted that they should not be able to
exercise the rights of a stockholder, which is an incident of ownership, for
purposes of a quorum for the conduct of stockholders’ and directors’
meetings, moreso for the election of its officers. The RTC also found, that for
the same reason, Cesar Augustine, cannot be allowed fo exercise the
stockholder rights of his father, Cesar Jr. Thus, it'dismissed the complaint.

WHEREFORE, in view of the foregoing, the instant Complaint is

hereby DISMISSED. Due to lack of quorum in the meetings held on
November 6, 2017, November 17, 2017 [sic] and May 15, 2018, the
following corporate officers of Ganco for year 2017, that were elected
immediately preceding the death of majority stockholder Luz Marasigan,
namely, defendant Peter Paul Marasigan, as President, plaintiff Benito
Marasigan as Vice-President, defendant Regina Marasigan-Palileo as
Treasurer and plaintiff Orlando Marasigan as Corporate Secretary, are
hereby immediately reinstated to their positions in a hold-over capacity until
anew setoff officers are validly elected.

SO ORDERED.

The dismissal prompted the respondents to file a Petition for Review

under Rule 43 with the CA.

Id. docketed as R-PSG-18-01223-CV.

24 1d. at 246-247, RTC Decision.
2 Id. at 237-254.
26 1d. at 254.
Decision 6 G.R. No. 261125

The Ruling of the CA

In a Decision,” dated December 28, 2021, in CA-G.R. SP No. 168189,

the CA reversed and set aside the RTC Decision.

WHEREFORE, the petition is GRANTED. The decision of the

Regional Trial Court of Pasig City, Branch 159 dated February 3, 2021 in
R-PSG-18-01223-CV is REVERSED and SET ASIDE. The special
meeting and election of petitioners as officers of the corporation on
November 12, 2017 are declared valid and ratified. Said officers shall
continue to act as such until regular officers are elected pursuant to law and
by-laws of Ganco. The annual meeting of stockholders and election of
officers held on May 15, 2018, as well as resolutions or actions subsequent
to and arising from said annual meeting and election are declared null and
void. The prayer in the complaint for damages and attorney’s fees i$ denied.

SO ORDERED.”

While the CA agreed with the RTC in so far as it held “that both
petitioners and respondents did not automatically acquire ownership of the
shares of Luz Marasigan in Ganco after her death,” it digressed with respect
to the RTC’s conclusion that the special meetings on November 6, 2017, and
November 12, 2017 are null and void for lack of quorum.?®

The CA held that under Section 25 of the Corporation Code, the quorum
for election of officers is not based on the majority of outstanding capital
stock, but on all members of the board of directors. As such, it found that the
remaining 13 stockholders of Ganco, who are also its directors, may elect their
officers based on a valid quorum of eight stockholders or directors. The CA
also noted that there was no prompt written objection to the meeting or
election, hence, such acts were considered ratified under Section 101 of the
Corporation Code.?

Additionally, the CA ruled that the Annual Stockholders’ Meeting held

on May 15, 2018, is not valid for lack of quorum, which in this case, must be
the majority of the outstanding capital stock. It pointed out that the conduct
of the meeting was also violative of Ganco’s by-laws as there was no notice
sent by the Corporate Secretary; in fact, the Corporate Secretary even sent an
official notice to the stockholders that such meeting will not push through,
pending the settlement of Luz’s estate.?’

271d. at 55-72.
# 1d at 71.
2 1d. at 64-65.
30 Id. at 67-70.
31d. at 70.
Decision 7 G.R. No. 261125

In a Resolution,’? dated May 24, 2022, the CA denied Peter's Motion

for Reconsideration after finding that the arguments therein did not
warrant a
reconsideration or modification of its earlier Decision.

WHEREFORE, the Motion for Reconsideration and Supplemental

Motion for Reconsideration with Motion to Admit are DENIED.

SO ORDERED.»

The CA’s denial prompted Peter to file a Petition for Review on

Certiorari under Rule 45 with the Court.

In the Petition, Peter argues that as Ganco is a close corporation, it

should be primarily governed by Title XII (Close Corporations) of the Old
Corporation Code, Batas Pambansa Bg. 68 (Old Corporation Code), and the
rules on election of officers, under Section 25 thereof, therefore, do not apply
to it. Additionally, Peter argues that Section 25 merely provides for a
minimum requirement, and expressly recognizes that a corporation may
provide otherwise through its AOI or by-laws. In this case, Peter contends
that Ganco’s by-laws provide for a greater maj ority to constitute a quorum.

Peter further posits that per Ganco’s by-laws, it is the stockholders, not
the directors, that shall elect the board officers, as it has no elected board. As
stockholders directly manage the corporate’ business, ‘the scenario
contemplated under Section 25, of an elected board of directors, cannot
pertain to Ganco.*® He further adds that the Revised Corporation Code?” under
the new Section 25 now provides, that notwithstanding any provision of the
AQI or by-laws to the contrary, shares of stock represented at such meeting
and entitled to vote shall constitute a quorum for purposes of conducting an
election.’

As to the nature of the meetings, Peter challenges the CA’s reliance on

Section 101 of the Old Corporation Code, as he claims that the said provision
refers to a directors’ meeting. He asserts that the meetings held on November
6 and 12,2017, and May 15, 2018 are stockholders”, not directors’ meetings.

Finally, Peter claims that the respondents have made duplicitous

statements in a separate but related criminal case pending before the RTC of

321d at 73-74.
3 Id. at 74.
34 Approved on May 1, 1980.
35 Rollo, Vol. 1, 32-34, Petition
3% Id. at 36.
37 Approved on February 20,2019.
3 Rollo, Vol. 1, p. 41.
Id. at 42.
Decision 8 G.R. No. 261125

Pasig City which “makes a mockery of justice.” According to Peter, in the

said criminal case, the respondents have made statements to the effect that
Ganco did not have a functioning board from the time of their mother’s death,
negating their assertions in this case.

The Issues

1. Did the CA err in ruling that the special meeting and election of
petitioners as officers of Ganco on November 6 and 12, 2017 are
valid and that the same had been ratified?

2. Did the respondents make duplicitous statements?

The Court is asked to determine the validity of Ganco’s meetings on

November 6 and 12, 2017 and the acts proceeding therefrom, in particular the
election of its board officers, based on Ganco’s AOI, its by-laws, and the
applicable provisions of the Old Corporation Code, Batas Pambansa Blg. 68,1
which was then in effect.

The nature of the assailed meetings, whether they are stockholders’ or

directors’ meetings, is central to the resolution of this case.

The Ruling of the Court

After a review of the records, the Court holds that the CA made no
reversible error as it correctly reversed and set aside the RTC Decision, dated
February 3, 2021.

As a close corporation, Ganco must

specifically invoke the privileges and
exemptions it opts to exercise in its
AOI

In San Juan Structural and Steel Fabricators, Inc. v. Court of

Appeals,” the Court had occasion to illustrate that a corporation’s
classification as a close corporation rests on whether its AOI has expressly
provided for the requisites under Section 96 of the Corporation Code:

“01d. at 44-48.
41 Approved on May 1, 1980.
42 357 Phil. 631 (1998).
Decision 9 G.R. No. 261125

Section 96 of the Corporation Code defines a close corporation as follows:

SEC. 96. Definition and Applicability of Title. — A close

corporation, within the meaning of this Code, is one whose
articles of incorporation provide that: (1) All of the
corporations issued stock of all classes, exclusive of treasury
shares, shall be held of record by not more than a specified
number of persons, not exceeding twenty (20); (2) All of the
issued stock of all classes shall be subject to one or more
specified restrictions on transfer permitted by this Title; and
(3) The corporation shall not list in any stock exchange or
make any public offering of any of its stock of any class.
Notwithstanding the foregoing, a corporation shall be
deemed not a close corporation when at least two-thirds 2/3)
of its voting stock or voting rights is owned or controlled by
another corporation which is not a close corporation within
the meaning of this Code.

The articles of incorporation of Motorich Sales Corporation does

not contain any provision stating that (1) the number of stockholders shall
not exceed 20, or (2) a preemption of shares is restricted in favor of any
stockholder or of the corporation, or (3) listing its stocks in any stock
exchange or making a public offering of such stocks is prohibited. From its
articles, it is clear that Respondent Motorich is not a close
corporation. Motorich does not become one either, just because Spouses
Reynaldo and Nenita Gruenberg owned 99.866% of its subscribed capital
stock. The [m]ere ownership by a single stockholder or by another
corporation of all or nearly all of the capital stock of a corporation is not of
itself sufficient ground for disregarding the separate corporate
personalities. So too, a narrow distribution of ownership does not, by itself,
make a close corporation.

In the case of Ganco, its AOI indicates that: (1) ownership of its stocks
shall only be held by no more than 14 persons; (2) existing shareholders have
the option to purchase shares of transferring stockholders under the terms
specified therein; and (3) Ganco cannot list in any stock exchange or publicly
offer any of its stocks.** Clearly, the AOI of Ganco satisfies the test laid out
above, leaving no question that the same has been organized as a close
corporation.

The Court has long recognized the importance of close corporations in

the realm of Philippine commerce. In Gala v. Ellice Agro-Industrial
Corporation,” the Court explained that:

[t]he concept of a close corporation organized for the purpose of running a

family business or managing family property has formed the backbone of
Philippine commerce and industry. Through this device, Filipino families

4 1d. at 649-650.
“Rollo, Vol. 1, p. 356.
4 463 Phil. 846 (2003).
Decision 10 G.R. No. 261125

have been able to turn their humble, hard-earned life savings into going
concerns capable of providing them and their families with a modicum of
material comfort and financial security as a reward for years of hard work #6

Unlike regular corporations, stockholders of close corporations are

limited in number, often they are related to if not acquainted with each other.
It has been said that close corporations present a cross between a partnership
and a corporation, whereby among themselves stockholders act and feel like
partners, while availing of the advantages of corporate structure such as the
limitation of their liability for losses to the amount of their investment 47

A close corporation is not simply a corporation; it is essentially

the progeny of a marriage of commercial convenience between the
essence of a partnership and that of a corporation. A close corporation
should be considered a distinct type of business organization embodying
what businessmen perceive to be the best features of a partnership and a
corporation.

Under a free-market system, businessmen should be at liberty to

adopt a business set-up that they feel is the best medium for the pursuit of
their commercial affairs, so long as the route chosen by them is not contrary
to law, morals, public policy, and public order. The strong juridical
personality, limited liability and right of succession are all features of a
corporate entity that the law upholds, and which businessmen may avail of.
The feature of delectus personae, general management by all partners of
business affairs are atiractive features of a partnership which the law
guarantees and supervise.** (Emphasis supplied)

Additionally, the management of its day-to-day operations likewise

follows a more casual and ad hoc set-up, making it a more convenient choice
for businesses run by families or closely-knit groups. This is markedly the
most distinctive feature of the close corporation — the merger of the ownership
and management rights.*

The nature of close corporations is such that stock ownership is

usually identical with management. Unlike in other corporations where
the members of the board are merely representatives of the body of
stockholders who, due to their bigger number, cannot directly manage
corporate affairs efficiently, close corporation are composed usually of a
smaller number of persons, closely related to each other by blood or other
common interests, and all or most of whom directly participate in
management. Thus, they often find it unnecessary and even
inconvenient to follow all the formal requirements for a board meeting,
or even te hold formal board meetings at all. The Code recognizes this

4% 1d. at 862.
471 JOSE CAMPOS, JR. & MARIA CLARA L. CAMPOS, THE CORPORATION CODE: COMMENTS, NOTES, AND
SELECTED CASES, 10-11, (1990).
48 CESAR L. VILLANUEVA & TERESA S. VILLANUEVA-TIANSAY, PHILIPPINE CORPORATE LAW, pp. 669-670,
(2021).
49 CAMPOS, JR. & CAMPOS, supra, at 12 and 344.

z
Decision 11 G.R. No. 261125

fact and even allows such close corporations to do away with the board
entirely, treating the stockholders as directors. (Emphasis supplied)

The Court is aware that the Old Corporation Code clearly intended to
carve out specific rules for close corporations in recognition of their unique
set-up and composition. These rules have been retained even in the Revised
Corporation Code under Title XII thereof,

Close corporations are thus allowed to provide in its AOIs special

provisions pertaining to prerogatives otherwise not availing in regular
corporations, such as the management of the corporation directly through its
stockholders, and the election or appointment of corporate officers directly by
the stockholders, instead of by the board of directors, under Section 97 of the
Old Corporation Code. It provides:

Section 97. Articles of incorporation. — The articles of incorporation

of a close corporation may provide:

I. For a classification of shares or rights and the qualifications for

owning or holding the same and restrictions on their transfers as may be
stated therein, subject to the provisions of the following section;

2. For a classification of directors into one or more classes, each of

whom may be voted for and elected solely by a particular class of stock;
and

3. For a greater quorum or voting requirements in meetings of

stockholders or directors than those provided in this Code.

The articles of incorporation of a close corporation may provide

that the business of the corporation shall be managed by the
stockholders of the corporation rather than by a board of directors. So
long as this provision continues in effect:

1. No meeting of stockholders need be called to elect directors;

2. Unless the context clearly requires otherwise, the stockholders of

the corporation shall be deemed to be directors for the purpose of applying
the provisions of this Code; and

3. The stockholders of the corporation shall be subject to all

liabilities of directors.

The articles of incorporation may likewise provide that all

officers or employees or that specified officers or employees shall be
elected or appointed by the stockholders, instead of by the board of
directors. (Emphasis supplied)

50 1d. at 345-346.
Decision 12 G.R. No. 261125

A close corporation seeking to have its business managed by its

stockholders must clearly indicate such intention in its AOL The mere
constitution of the corporation as a close corporation does not automatically
make its stockholders the board directors or allow stockholders to directly
elect or appoint the corporation’s board officers.

Just as being a close corporation does not simply attach based on the
concentrated ownership of shares in a single or few stockholders, but must be
pursued through a compliance with the requirements for the establishment of
a close corporation under Section 96 of the Old Corporation Code, so too,
must the privileges or exemptions accorded to close corporations, under
Section 97 or other relevant provisions, be expressly invoked and stipulated
in the corporation’s AOI or by-laws, as they may be required. As the language
of Section 97 is clearly permissive, the general rules applicable to all other
corporations shall apply if the close corporation fails to do so.

Again, the Court cannot overemphasize that a close corporation must

expressly and properly invoke, in the appropriate instrument, the prerogatives
and exemptions which it has been allowed to avail of under the Old
Corporation Code.

Based on its AOI, the management of

Ganco was left to its stockholders
constituted as its board of directors

In a corporation, control and management are exercised along three

levels of control. The Court in Citibank N.A. v. Chua’! explains:

In the corporate hierarchy, there are three levels of control: (1) the
board of directors, which is responsible for corporate policies and the
general management of the business affairs of the corporation; (2) the
officers, who in theory execute the policies laid down by the board, but in
practice often have wide latitude in determining the course of business
operations; and (3) the stockholders who have the residual power over
fundamental corporate changes, like amendments of the articles of
incorporation. However, just as a natural person may authorize another to
do certain acts in his behalf, so may the board of directors of a corporation
validly delegate some of its functions to individual officers or agents
appointed by it.

In Tan v. Sycip,” the Court has aptly illustrated how the rights and
prerogatives of stockholders and members of the board of directors differ. In

31 202-A Phil. 167 (1993).

32 1d. at 178.
3 530 Phil. 609 (2006).

as
Decision 13 G.R. No. 261125

the said case, the Court likewise depicted how the stockholders
relinquish
corporate powers to a duly constituted board of directors who are then charged
with the management and operation of the corporation’s business.

Generally, stockholders’ or members’ meetings are called for the

purpose of electing directors or trustees and transacting some other
business
calling for or requiring the action or consent of the shareholders or
members, such as the amendment of the articles of incorporation and
bylaws, sale or disposition of all or substantially all corporate assets,
consolidation and merger and the like, or any other business that
may
properly come before the meeting.

Under the Corporation Code, stockholders or members periodically

elect the board of directors or trustees, who are charged with the
management of the corporation. The board, in turn, periodically elects
officers to carry out management functions on a day-to-day basis. As
owners, though, the stockholders or members have residual powers over
fundamental and major corporate changes.

While stockholders and members (in seme instances) are

entitled to receive profits, the management and direction of the
corporation are lodged with their representatives and agents — the
board of directors or trustees. In other words, acts of management
pertain to the board; and those of ownership, to the stockholders or
members. In the latter case, the board cannot act alone, but must seek
approval of the stockholders or members. ‘

Conformably with the foregoing principles, one of the most

important rights of a qualified shareholder or member is the right to vote —
either personally or by proxy — for the directors, or trustees who are to
manage the corporate affairs. The right to choose the persons who will
direct, manage and operate the corporation is significant, because it is the
main way in which a stockholder can have a voice in the management of
corporate affairs, or in which a member in a nonstock corporation can have
a say on how the purposes and goals of the corporation may be
achieved. Once the directors or trustees are elected, the stockholders or
members relinquish corporate powers to the board in accordance with law.>*
(Emphasis supplied; citations omitted)

While ownership ultimately pertains to stockholders, normally they

cannot directly intervene in the day-to-day course of operations of the
corporation, precisely because the same has been delegated to the board of
directors, who have been entrusted with the exercise of corporate powers.
However, as earlier discussed, this is not necessarily the case for close
corporations wherein ownership and management usually merge in the same
set of individuals who are both its stockholders and board of directors.

5 Id. at 619-620.
Decision 14 G.R. No. 261125

In view of this merger of ownership and management in close

corporations, Section 97 of the Old Corporation Code allows close
corporations to do away with board of directors all together. It provides that
“[t]he articles of incorporation of a close corporation may provide that the
business of the corporation shall be managed by the stockholders of the
corporation rather than by a board of directors.”

A careful reading of Ganco’s AOI and by-laws reveal that the intention
for Ganco is to be managed by a board of directors, comprised of its
stockholders.

ARTICLES OF INCORPORATION OF GANCO RESORTS &

RECREATION INCORPORATED

NINTH. The business of the Corporation shall be managed by the

board of directors who are the stockholders of the Corporation. The
stockholders shall be deemed to be the directors and shall function as such
without need of further election of appointment.>

BY-LAWS OF GANCO RESORTS & RECREATION INCORPORATED

ARTICLE II. MEETINGS OF STOCKHOLDERS

Section 1. Annual Meetings. — The annual meetings of stockholders

shall be held at the principal office of the Corporation on the 15 May of
each year, or if a legal holiday, then on the day following.

Considering that the business of the Corporation shall be managed

directly by the stockholders, being themselves the board of directors, then
the stockholders shall likewise have regular meetings.’

Ganco’s AOI refers to “the board of directors who are the stockholders
of the Corporation,” while its by-laws refers to “the stockholders, being
themselves the board of directors.” This only means the stockholders have
been charged to assume dual roles as stockholders and as directors.

When, as in this case, stockholders are designated as board directors,

each individual stockholder, regardless of the number of shares they own, is
deemed a director, member of the constituted board, entitled to one vote in the
exercise of corporate powers. In the case of Ganco, all of its 14 stockholders
were clothed with corporate powers as a group, wherein each stockholder, no
matter how miniscule his or her ownership of the shares, becomes one voice
alongside 13 other directors.

The decision to designate all of Ganco’s stockholders as the board of

directors carries with it a limitation of the corporate powers that may be

3 Rollo, Vol. 1,p. 356.

% Rollo, Vol. 2, p. 969.
Decision 15 G.R. No. 261125

ascribed to Luz, who in an alternative set-up may wield more control over the
corporation as the majority shareholder with over 50% of its authorized capital
stock. Consequently, such power is dispersed among her children who, by
virtue of their inclusion in the board of directors, are given more say in how
the business of the corporation is run.

Again, the designation of Ganco’s stockholders as its board of directors

clearly does not mean that they simply remain as such stockholders and are
subject only to rules concerning such stockholders even when they perform
acts vested in the board directors. When they assume corporate powers
reserved by law for board directors, they are subject to the rules governing
directors. Their designation in the AOI as board of directors only does away
with the necessity for their election as such board directors, but it does not
exclude them from the operation of rules that necessarily apply to board
directors, including those which govern directors’ meetings. To reiterate, the
second paragraph of Section 97 of the Old Corporation Code, specifies:

The articles of incorporation of a close corporation may provide that

the business of the corporation shall be managed by the stockholders of the
corporation rather than by a board of directors. So long as this provision
continues in effect:

1. No meeting of stockholders need be called to elect directors;

2. Unless the context clearly requires otherwise, the stockholders

of the corporation shall be deemed to be directors for the purpose of
applying the provisions of this Code; and

3. The stockholders of the corporation shall be subject to all

liabilities of directors.

The articles of incorporation may likewise provide that all officers

or employees or that specified officers or employees shall be elected or
appointed by the stockholders, instead of by the board of directors.
(Emphasis supplied)

The CA correctly considered the

special meetings held on November 6
and 12, 2017 as directors’ meetings

When Ganco’s AOI provided that the corporation’s business “shall be

managed by the board of directors who are the stockholders,” it likewise
provided for a single quorum requirement for its meetings — a majority of the
outstanding capital stock. Without distinguishing between stockholders” and
directors’ meetings, the quorum requirement applies to both such meetings.

NINTH. The business of the Corporation shall be managed by

the board of directors who are the stockholders of the Corporation. The
Decision 16 G.R. No. 261125

stockholders shall be deemed to be the directors and shall function as such

without need of further election or appointment.

TENTH. A majority of the outstanding capital stock shall

constitute a quorum for a valid meeting. An affirmative vote of
stockholders representing at least a majority of its outstanding capital stock
of the stockholders present at a meeting at which there is a quorum shall be
necessary for the approval of any transaction which requires the
Corporation’s approval except instances greater votes is required by law.’
(Emphasis supplied)

The same observation can be made with respect to Ganco’s by-laws,

which only contains a section on “Meetings of Stockholders” and glaringly
lacks a separate section on board of directors’ meetings. Nonetheless, from
the language employed, it appears that the quorum requirements set under
Article II, Section 7 of the by-laws was intended to apply to both stockholders’
and directors’ meetings.

ARTICLE II

MEETINGS OF STOCKHOLDERS

Section 1. Annual Meetings — The annual meetings of stockholders

shall be held at the principal office of the Corporation on the 15 May of
each year, or if a legal holiday, then on the day following.

Considering that the business of the Corporation shall be

managed directly by the stockholders, being themselves the board of
directors, then the stockholders shall likewise have regular meetings.

XXXX

Section 7. Quorum — Majority of the outstanding capital stock

as fixed in the Articles of Incorporation shall constitute a quorum for
the transaction of corporate business and every decision of at least a
majority of the outstanding capital stock of the stockholders present at
a meeting at which there is a quorum shall be valid as a corporate act.
If no quorum is constituted, the meeting shall be adjourned until the
requisite amount of stocks shall be represented.’® (Emphasis supplied)

Despite the nuances between the roles of Luz and her children as
stockholders and directors of Ganco, its AOI and by-laws as written failed to
distinguish. Perhaps it was thought to be of no practical value, considering
that the stockholders are themselves the board directors or perhaps, it was a
mere omission. Regardless, there are significant considerations that justify
making the distinction, which the CA correctly made.

57 Rollo, Vol. 1, p. 356.

3 Rollo, Vol. 2, pp. 969-970.
 Decision 17 G.R. No. 261125

For the Marasigan siblings, while their right to corporate profits is

limited by their shares, their right to participate in the management of the
family business is expanded by their express inclusion in the board of
directors. As earlier mentioned, Luz and each of her children, regardless
of
their number of shares, stand as equals when they are acting as directors.

The practice of the Marasigan siblings, as reflected in the Minutes of

their November 6 and 12, 2017 meetings, is quite telling. The
Minutes clearly
indicate that despite the ambiguity in the language of Ganco’s AOI and by-
laws as regards the quorum requirement for directors’ meetings,
the number
of directors present is considered in the determination of the quorum.

VI. Meeting Proper

1. Determination of quorum
a. Having 8 members present representing majority of shares
and of board members, the Secretary declares that there is
quorum.” (Emphasis supplied)

Therefore eight of the 14 stockholders (Luz and her 13 children) were

stated to represent the majority of the stockholders, and validly constitute a
quorum.

Further, the agenda of the special meeting held on November 6, 2017

included an item on the “Status of the President and a call for a vote on the
said position.”® The Minutes of the special meeting clearly captured the
understanding of the directors that it was a special board and stockholders
meeting?’ The nature of the said meeting as such was discussed therein,
thereby contradicting the assertion of Peter that it was only intended as a
stockholders meeting, or that there was such a distinction. The Minutes also
showed how Peter, who was then the President, was removed and an Interim
President installed in his stead upon the vote of the directors.

The Minutes of the special meeting on November 6, 2017 was silent on

‘whether it was meant to be a stockholders meeting, a directors meeting, or
both. However, during this special meeting, the directors elected a new set of
board officers — the Chairperson, President, Vice President, Treasurer, and
Secretary.® The election of board officers clearly pertains to the prerogative
of the board of directors and is a practice observed in Ganco.

* Rollo, Vol. 1, pp. 391 & 396.

Id. at 391.
61 Id. at 392-393.
2 Id. at 393.
© 1d. at 403-404.
Decision 18 G.R. No. 261125

Section 25 of the Old Corporation Cede expressly refers to the election

of officers by the board of directors. Thus, when its stockholders are electing
their President, Vice President, Treasurer, and Secretary, who are their board
officers, the Marasigan siblings are clearly acting as directors and not as
stockholders.

Section 25. Corporate officers, quorum. — Immediately after their

election, the directors of a corporation must formally organize by the
election of a president, who shall be a director, a treasurer who may or may
not be a director, a secretary who shall be a resident and citizen of the
Philippines, and such other officers as may be provided for in the bylaws.
Any two (2) or more positions may be held concurrently by the same person,
except that no one shall act as president and secretary or as president and
treasurer at the same time. The directors or trustees and officers to be elected
shall perform the duties enjoined on them by law and the by-laws of the
corporation. Unless the articles of incorporation or the by-laws provide for
a greater majority, a majority of the number of directors or trustees as fixed
in the articles of incorporation shall constitute a quorum for the transaction
of corporate business, and every decision of at least a majority of the
directors or trustees present at a meeting at which there is a quorum shall be
valid as a corporate act, except for the election of officers which shall
require the vote of a majority of all the members of the board. Directors
or trustees cannot attend or vote by proxy at board meetings. (Emphasis
supplied)

At this point, it is worth highlighting that among the privileges afforded

to close corporations is the election or appointment of corporate officers
directly by the stockholders. The last paragraph of Section 97 provides that
“[t]he articles of incorporation may likewise provide that all officers or
employees or that specified officers or employees shall be elected or
appointed by the stockholders, instead of by the board of directors.”

There would have been no need to make the distinction herein as to

whether the November 6 and 12, 2017 Meetings are stockholders’ or
directors’ meetings had there been such a provision in Ganco’s AOI allowing
the direct election or appointment of the corporate officers by the
stockholders. Unfortunately, such a provision only appears in its by-laws,
failing to satisfy the requirement under Section 97 of the Old Corporation
Code that the same must be made in the AOI. Without a specific authority for
the election or appointment of board officers directly by the stockholders
themselves in its AOI, the general rule that they ought to be elected by the
board of directors remains applicable to Ganco.

% Article 1V, Officers. Section 1. Election/Appointment. — The stockholders shall formally organize the
Corporation by the election of the President, Vice-President, the Treasurer, and the Secretary at said
meeting.

&
Decision 19 G.R. No. 261125

The election of Ganco’s officers was clearly made by the stockholders

sitting as its board of directors, and the meetings wherein such election took
place were aptly directors” meetings subject to the rules governing directors’
meetings.

The CA cannot thus be faulted for considering the meetings on

November 6 and 12, 2017 as directors’ meetings, as this conclusion is
inevitable from the facts of this case.

However, the Court must point out that it cannot agree with the CA’s
reliance on Article IV, Section 1 of Ganco’s by-laws, which allows its
stockholders “to appoint such officers as it may determine necessary or
proper,” in justifying the validity of the election of Ganco’s officers during
the November 6 and 12 meetings. As earlier discussed, there is no similar
provision in Ganco’s AOI, where it must be indicated pursuant to Section 97
of the Old Corporation Code. While the CA’s argument arrives at the same
conclusion, that the elections of the officers are in fact valid, it is not consistent
with its holding that the two meetings are directors’ and not stockholders’
meetings.

With this settled, the Court shall now discuss the applicable quorum
requirement for such directors’ meetings.

The CA correctly relied on Section 25

of the Old Corporation Code in
determining the quorum for election of
Ganco'’s officers

Section 52 of the Old Corporation Code provides that the quorum for
stockholders’ meetings shall “consist of the stockholders representing a
majority of the outstanding capital stock.”

Meanwhile, the quorum requirement for directors’ meetings is set under

Section 25 of the Old Corporation Code which provides that “a majority of
the number of directors or trustees as fixed in the articles of incorporation
shall constitute a quorum for the transaction of corporate business.” The same
provision likewise provides that a corporation’s AOI or by-laws may provide
for a greater majority.

Section 25 also requires for decisions to be supported by, at least, the

majority of the directors present at a meeting at which there is a quorum, and
it further sets the requirement for election of officers to “the vote of the
majority of all members of the board.”
Decision 20 G.R. No. 261125

As applied to Ganco, the default minimum quorum for stockholders’

meetings shall be a majority of its outstanding capital stock represented or
2,801 out of 5,600, while the quorum for directors’ meetings shall be the
attendance of eight out of its 14 directors. For the validity of its corporate
acts, it will only need the majority of five, should the meeting be only attended
by a minimum of eight directors. However, the election of its officers shall
require the vote of, at least, eight directors.

Section 97 of the Old Corporation Code provides that a close

corporation can provide for “greater quorum or voting requirements in
meetings of stockholders or directors” in its AOL

As earlier discussed, Ganco’s AOI not only provided that the

corporation’s business shall be managed by the board of directors who are its
shareholders, but it likewise provided for a single quorum requirement for its
meetings — a majority of the outstanding capital stock.

With the uniform quorum requirement, Ganco merely adopted what is

provided in the Old Corporation Code with respect to stockholders’ meetings
— a majority of the outstanding capital stock. However, with respect to
directors’ meetings, Ganco’s AOI and by-laws diverged from the Old
Corporation Code when the quorum requirement was changed from the
originally provided “majority of its board of directors” to “a majority of the
outstanding capital stock.”

Peter argues that in doing so, Ganco’s AOI and by-laws simply
provided for a greater majority.

The Court cannot agree.

It is a fundamental rule that a statute clear and unambiguous on its face

need not be interpreted, but simply applied.® In H. Villavica Pawnshop, Inc.
v. Social Security Commission,’® the Court had occasion to reiterate this
precept and emphasize its duty to uphold laws by applying their literal
meaning when they are clear and suffer from no ambiguity.

It is the duty of the Court to apply the law the way it is worded. Basic
is the rule of statutory construction that when the law is clear and
unambiguous, the court is left with no alternative but to apply the same
according to its clear language. The courts can only pronounce what the law
is and what the rights of the parties thereunder are. Fidelity to such a task
precludes construction or interpretation, unless application is impossible or

5 See Barcellanov. Bafias, 673 Phil. 177, 187 (2011).

% 824 Phil. 613 (2018).
Decision 21 G.R. No. 261125

inadequate without it. Thus, it is only when the law is ambiguous or of

doubtful meaning may the court interpret or construe its true intent.

Parenthetically, the “plain meaning rule” or verba legis in statutory

construction enjoins that if the statute is clear, plain and free from
ambiguity, it must be given its literal meaning and applied without
interpretation. This rule of interpretation is in deference to the plenary
power of Congress to make, alter and repeal laws as this power is an
embodiment of the People’s sovereign will. Accordingly, when the words
of a statute are clear and unambiguous, courts carmot deviate from the
text
of the law and resort to interpretation lest they end up betraying their solemn
duty to uphold the law and worse, violating the constitutional
principle of
separation of powers.5’

In this case, the Court must insist on a plain reading of the provisions
of the Old Corporation Code as they apply to Ganco, given that the pertinent
provisions are clear and unambiguous.

Section 25 sets the minimum requirement for a quorum in directors’

meetings and election of officers, and only provides for an exception when
the AOIls/by-laws provide for a greater majority as provided in Section 97.
The word greater is used as a comparative of the word great and is plainly
understood as more.

Moreover, the word greater is used in conjunction with the word

majority, which is clearly described in the Old Corporation Code. After the
mention of the greater majority exception in Section 25, the Old Corporation
Code clarified what is meant by the majority, by referring to the majority of
the directors as fixed in the AOL. Considering the provision in its entirety,
and in its plain meaning, the use of greater majority simply refers to more
than a majority or more than 50% of the number of directors as fixed in the
AQ], or 50% plus one.

Thus, the phrase greater majority can only mean more than the majority
referred to. It depicts a quantitative and not a qualitative change.

Necessarily, while Section 97 allows close corporations, such as Ganco,

to adopt a greater majority with respect to a quorum for both stockholders’
and directors’ meetings, as well as voting requirements for certain acts, it does
not authorize close corporations to altogether change what comprises such
majority. Close corporations may increase the required majority for stocks
represented for stockholders’ meetings, or the required majority for directors’

7 1d. at 628-629.
Decision 22 G.R. No. 261125

attendance and voting in directors’ meetings, but they cannot change the very
substance of what must comprise the quorum.

A close corporation can opt to set stockholders’ meeting quorum to 2/3

of its outstanding capital stock, but it cannot arbitrarily set the quorum of its
stockholders’ meetings to a majority of its board of directors, even if it
requires 100% attendance of its board directors. Conversely, a close
corporation can opt to increase its quorum requirement for directors’ meetings
and election of its officers from a simple majority, to 2/3 or even 80% of its
board of directors, but it cannot set the same to be a majority of its outstanding
capital stock.

While the logical absurdity of such switching is readily apparent with

respect to regular corporations, wherein there are separate stockholders and
board directors, it easily gets effaced in the case of close corporations wherein
there is a similarity if not outright identity of stockholders and board directors.
However, the distinction must be maintained, as even though there may be
identity of ownership and management in a close corporation, the exercise of
powers pertaining to ownership and management remain different.

As Ganco’s AOI and by-laws failed to specify a greater majority than

what is provided in the Old Corporation Code; Section 25 thus remains
applicable.

Therefore, the CA, in its contested Decision, was correct in

disregarding the AOI and by-laws of Ganco, and in holding that the quorum
for the directors’ meetings must perforce adhere to Section 25 which provides
for a quorum of a majority of Ganco’s board directors for the election of
Ganco’s officers.

Notwithstanding the above provisions in the By-laws, Sec. 25 of the

Corporation Code provides that the quorum for election of officers is not
based on majority of the outstanding capital stock but majority of all the
members of the board. Directors cannot attend or vote by proxy at board
meetings. In other words, with the death of Luz Marasigan, the
remaining thirteen (13) stockholders who are also directors of GANCO
may elect their officers based on a valid quorum of eight (8)
stockholders/directors present in the meeting.®® (Emphasis supplied)

$8 Rollo, Vol. 1, p. 69, CA Decision.

 Decision 23 G.R. No. 261125

The meeting held on May 15, 2018 is

not a stockholders’ but a directors’
meeting

Even as the same is not in issue, it is worthy of clarification that the CA

incorrectly held that the meeting held on May 15, 2018, is a shareholders’
meeting. Verily, Ganco’s by-laws clearly states that “the annual meetings of
stockholders shall be held at the principal office of the Corporation on May
15 of each year, or if a legal holiday, then on the following day.”® Ostensibly,
the meeting on May 15, 2018 thereby appears to be a stockholders’ meeting.

However, a closer look at the agenda of the said meeting, as reflected

in the Minutes, will indubitably show that the said meeting was actually a
directors’ meeting as its main purpose was the election of Ganco’s board
officers.” Therefore, the reasoning that the said meeting is invalid for failing
to meet the quorum requirement of the majority of Ganco’s outstanding
capital stock, the quorum requirement for stockholders’ meetings, is
. unavailing. Nonetheless, despite being a directors’ meeting, the May 15, 2018
meeting was correctly held to be invalid, and as such the election of officers
conducted during the said meeting cannot be recognized.

As it was a board meeting, the applicable quorum requirement is a

majority of the number of directors. In this case, there was no proper notice,
and in fact, Orlando, the Corporate Secretary, sent an email notice to all
stockholders that the meeting cannot proceed pending the settlement of Luz’s
estate. Nonetheless, out of Ganco’s remaining 13 directors, nine directors
were deemed present, which included eight directors and Cesar Augustine
representing his late father, Cesar, Jr.

Of the nine present, Orlando, the Corporate Secretary, expressed his

objection during the meeting and thereafter labeled the minutes of the said
meeting as “Minutes of the Illegal GANCO Meeting.” Further, Orlando, as
well as Benito and Rommel, who were not present, registered their written
objections on the conduct of the said meeting. 7!

Section 101 of the Old Corporation Code provides that actions in

improperly held board meetings may be deemed valid if “[a]ll directors have
actual or implied knowledge of the action and make no prompt objection
thereto in writing.” Thus, actions in an improperly held board meeting where
directors seasonably registered their objections cannot be deemed valid.

8 Rollo, Vol. 2, p. 969, by-laws of Ganco.

"Rollo, Vol. 1, p. 468, Minutes of the Ganco Illegal Meeting.
71 1d. at 70, CA Decision.
Decision 24 G.R. No. 261125

Here, the CA found that Benito, Orlando, and Rommel filed written
objections. Moreover, the Minutes of the May 15, 2018 meeting clearly
recorded the Corporate Secretary’s continuing objection on the conduct of the
said meeting. While their objection partly hinges on the lack of quorum given
the pendency of the settlement of Luz’s estate, their objection likewise pointed
out the conduct of the meeting despite the lack of due notice and the notice of
cancellation issued by the Corporate Secretary.

It should likewise be noted that the elections conducted on May 15,

2018, failed to meet the voting requirement laid down under Section 25 of the
Old Corporation Code, which provides that the “the election of officers
[which] shall require the vote of a majority of all the members of the board.”
Among the attendees to the meeting was Cesar Augustine, who the RTC
correctly held cannot validly represent his father, Cesar, Jr. There being only
eight actual directors present, with one director, Orlando, questioning the
validity of the meeting, it cannot be said that the elected officers were able to
meet the prescribed threshold of eight votes, or a majority of Ganco’s board
of directors. By the same logic, it also cannot be said that there was a quorum
in the said meeting, considering that of the eight directors present, only seven
were amenable to holding the meeting; thus, there was no majority of directors
needed to transact business.

Based on the foregoing, even as the meeting held on May 15, 2018 was
incorrectly tagged as a stockholders’ meeting, the same was aptly declared as
invalid.

A final word

The Court recognizes that the imposition of higher voting and quorum
requirements is one of the means by which the veto power of the minority may
be enhanced.” In such a case, the majority must hurdle a higher threshold in
order to steer corporate policies and decisions. This is true for both close and
widely-held corporations.

It may be particularly useful as a democratizing tool in widely-held

corporations, but even in the context of close corporations, the imposition of
more onerous voting and quorum requirements may facilitate cordiality and
consensus building, which are critical for business operations run by families
or closely-knit groups.

2 See CAMPOS, JR. & CAMPOS, supra note 47, at 632 and VILLANUEVA & VILLANUEVA-TIANSAY, supra
note 48, at 878.
Decision 25 G.R. No. 261125

With such purpose in mind, the Court cannot allow a watering down of
the quorum or voting requirements in the guise of an imposition of a greater
majority, a real risk when the Court allows the modification from number of
outstanding capital stock to board of directors, and vice versa.

As a final point of clarification, the fact that Ganco was organized as a

close corporation to leverage the structure’s unique characteristics for the
management of the businesses of the Marasigan family is not lost on the Court.

It is conceded that Section 97 of the Old Corporation Code allows close

corporations to completely do away with a board of directors entirely. In such
a case, the AOI may simply state that the business of the corporation shall be
managed by the stockholders directly, without so much of a mention that the
stockholders shall be the corporation’s board of directors.

In that scenario, while the stockholders may be deemed as the board of

directors for the purposes of applying the provisions of the Corporation Code,
the imposition of a single set of quorum requirements in the AQI and by-laws,
only pertaining to stockholders’ meetings and voting requirements, may very
well be justified to achieve a true merger of ownership and management in a
close corporation. However, here, Ganco decided to designate its
stockholders as its board of directors.

Additionally, Section 97 also allows a close corporation’s stockholders

to directly elect or appoint corporate officers. However, instead of indicating
the same in the AQI, the said provision only appears in Ganco’s by-laws,
contrary to the requirement in the Old Corporation Code.

Thus, based on a different set of facts, the result would have been
different, and the Court would have supported the close corporation in its bid
to maximize the advantages of its unique corporate form. But absent a
showing of such faithful compliance with the statutory requirements for the
availment of such privileges, the Court must insist on the application of rules
governing regular corporations.

Therefore, the CA, through its assailed Decision and Resolution, did
not commit a reversible error to warrant the exercise of the Court’s
discretionary appellate jurisdiction.

In view of the foregoing discussions, there is no need for the Court to

further delve on the other issue raised in the Petition.
 Decision 26 G.R. No. 261125

WHEREFORE, the Petition for Review on Certiorari is DENIED.

The Decision, dated December 28, 2021, and the Resolution, dated May 24,
2022, of the Court of Appeals in CA-G.R. SP No. 168189 are AFFIRMED.

SO ORDERED.

p N

FILOMENA D. SINGH
rd Associate Justice
WE CONCUR: yd
rd

od
(on leave)
ALFREDO BENJAMIN S. CAGUIOA
Associate Justice

1/427) Teg ——
weld J UL B. INTING SAMUEL H. GAERLAN
Associate Justice Associate Justice

(on official travel)

JAPAR B. DIMAAMPAO
Associate Justice

ATTESTATION

1 attest that the conclusions in the above Decision had been reached in
© consultation before the case was assigned to the writer of the opinion of the
Court’s Division.

| Ny)
HENRI N14.
Associate Justice
Acting Chairperson, Third Division
Decision 27 G.R. No. 261125

CERTIFICATION

Pursuant to Section 13, Article VII of the Constitution and the Division
Acting Chairperson’s Attestation, I certify that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.

np G. GESMUNDO
hief Justice