G.R. Nos. 242353 & 253530. January 22, 2024.
Cecilia Que Yabut, Eumir Carlo Que Camara, and Ma. Corazon Que Garcia, Petitioners, vs. Carolina Que Villongco, Ana Maria Que Tan, Angelica Que Gonzales (now deceased and substituted by her heir Rosa Maria Que Gonzales), Elaine Victoria Que Tan, and Edison Williams Que Tan, Respondents.

FACTS

The consolidated cases involve a familial dispute over the validity of the transfer of 3,140 shares of stock of Phil-Ville Development and Housing Corporation (Phil-Ville) and the validity of subsequent annual stockholders’ meetings. Phil-Ville is a family corporation founded by Geronima Gallego Que. Prior to her death in 2007, a document titled “Sale of Shares of Stocks” dated June 11, 2005, was executed, distributing Geronima’s 3,140 shares among her grandchildren, with Cecilia Que Yabut acting as attorney-in-fact. Respondents (the Villongco Group) filed a complaint asserting this sale was simulated and void. This made the 3,140 shares disputed.
In a prior related case, Villongco v. Yabut, the Supreme Court ruled that for quorum purposes, the total outstanding stocks, including disputed shares, should be considered. However, it affirmed that the January 25, 2014, stockholders’ meeting lacked quorum because petitioners (the Yabut Group) failed to present the stock and transfer book to prove the transfer of the 3,140 shares to them, meaning they could not exercise voting rights for those shares.
Subsequently, petitioners convened annual stockholders’ meetings in 2015 and 2017. Respondents contested these meetings in separate cases (SEC Case No. SEC-15-001-MN and SEC Case No. SEC-17-0001-MN). The Regional Trial Court (RTC) Branch 74 of Malabon City issued orders concerning these meetings. The Court of Appeals (CA) declared the RTC’s January 26, 2016, Order (related to the 2015 meeting) void for failing to state clearly and distinctly the facts and the law on which it was based. The CA also declared the 2015 meeting and the ensuing election invalid for lack of quorum. For the 2017 meeting, the CA declared the RTC’s February 13, 2018, Decision void for the same reason and ordered the remand of the case.

ISSUE

The primary legal issue is the validity of the RTC’s orders and the subsequent annual stockholders’ meetings (particularly 2015 and 2017) convened by petitioners, in light of the prior ruling in Villongco v. Yabut regarding quorum requirements and the validity of the transfer of the disputed 3,140 shares.

RULING

The Supreme Court denied the petitions. It upheld the CA’s findings that the RTC’s January 26, 2016, Order and February 13, 2018, Decision were void for violating the constitutional and statutory requirement that judgments must clearly and distinctly state the facts and the law on which they are based. The Court also affirmed the CA’s declaration that the 2015 annual stockholders’ meeting was invalid for lack of quorum, following the doctrine established in Villongco. Since petitioners again failed to present the stock and transfer book to prove the valid transfer of the disputed 3,140 shares, they could not count these shares for quorum purposes. Regarding the 2017 meeting, the Court found no reversible error in the CA’s decision to void the RTC’s judgment and remand the case for proper proceedings.