GR 138343; (February, 2001) (Digest)
G.R. No. 138343 February 19, 2001
GILDA C. LIM, WILHELMINA V. JOVEN and DITAS A. LERIOS, petitioners, vs. PATRICIA LIM-YU, in her capacity as a minority stockholder of LIMPAN INVESTMENT CORPORATION, respondent.
FACTS
Limpan Investment Corporation’s board approved issuing 15,515 shares to Gilda Lim as payment for legal services, thereby fully subscribing its authorized capital stock and increasing Lim’s control to 62.5%. Minority stockholder Patricia Lim-Yu filed a complaint with the Securities and Exchange Commission (SEC) against the approving directors, alleging a violation of her preemptive rights. Petitioners moved to dismiss, arguing Lim-Yu lacked legal capacity to sue because she was under a guardianship and was subject to a Supreme Court Temporary Restraining Order (TRO) that enjoined her from acting in a way that would affect family-owned corporations like Limpan. The SEC Hearing Officer held the motion in abeyance, directing the parties to seek clarification from the Supreme Court on the TRO’s scope.
ISSUE
Whether the TRO, which enjoined Patricia Lim-Yu from acting in a manner affecting Limpan Investment Corporation, barred her from filing an action to enforce her preemptive rights against the corporation.
RULING
No. The Supreme Court affirmed the Court of Appeals and held that Lim-Yu’s suit was not barred. The Court clarified that an action to enforce a stockholder’s preemptive right under the Corporation Code is a direct suit, not a derivative suit. A derivative suit is brought by a shareholder on behalf of the corporation to redress a wrong done to the corporation itself. In contrast, a preemptive rights action is prosecuted by the shareholder in their own personal capacity to protect their individual proprietary right to subscribe to new stock issuances in proportion to their shareholding. Since Lim-Yu’s cause of action was personal and direct, the TRO—which was intended to prevent her from binding or affecting the corporation’s interests—did not apply. The TRO’s prohibition pertained to acts done in a representative capacity for the corporation, not to acts undertaken to assert a personal right against it. Therefore, she had the legal capacity to institute the suit as the real party in interest.