GR 215764; (July, 2016) (Digest)
G.R. No. 215764 . July 13, 2016. RICHARD K. TOM, Petitioner, vs. SAMUEL N. RODRIGUEZ, Respondent.
FACTS
This case involves a Motion for Reconsideration filed by respondent Samuel Rodriguez, seeking to dissolve a writ of preliminary injunction issued by the Supreme Court. The injunction restrained Rodriguez from exercising management and control over Golden Dragon International Terminals, Inc. (GDITI). The injunction was originally granted to enjoin the implementation of Regional Trial Court orders that had placed GDITI under Rodriguez’s control, based on the fundamental corporate law principle that a corporation’s powers are exercised by its board of directors.
Rodriguez argued that the Supreme Court’s Decision had been rendered moot by a subsequent Memorandum of Agreement (MOA) dated May 25, 2015. This MOA was signed by Rodriguez, petitioner Richard Tom, and another individual, Cezar Mancao. It allocated operational control of various ports managed by GDITI among the three signatories, effectively bypassing the corporate board structure. Rodriguez contended that with this private agreement in place, the grounds for the injunctive writ no longer existed.
ISSUE
Whether the execution of a private Memorandum of Agreement among some shareholders/individuals renders moot and academic the Supreme Court’s injunction, which was based on the doctrine of centralized corporate management under the board of directors.
RULING
The Supreme Court denied the Motion for Reconsideration and upheld the writ of preliminary injunction. The Court ruled that the MOA did not render its prior Decision moot. The legal foundation for the injunction was Section 23 of the Corporation Code, which mandates that corporate powers shall be exercised by the board of directors. Business can only be conducted by the board or through officers and agents duly authorized by board resolution.
The MOA, being a private arrangement that directly contravened this statutory rule by allocating corporate control to individuals without board authority, was declared “clearly and in all respects, contrary to law.” Consequently, an illegal agreement cannot supersede or nullify a court order upholding a fundamental legal principle. The Court emphasized that the MOA’s execution could not change its earlier disquisitions on corporate law. The writ of injunction was necessary to preserve the legal corporate structure pending the resolution of the main case. The Court also noted a manifestation regarding Tom’s change in corporate position but found it irrelevant to the core legal issue. The injunction remained in force.