Premium Marble vs. CA Facts of the Case: 1. Premium Marble Resources filed an action against International Corporate Bank.

2. On or about August to October 1982, former officers of the plaintiff corporation headed by Saturnino G. Belen Jr., without any authority whatsoever from the plaintiff deposited the above-mentioned checks to the current account of his conduit corporation, Intervest Merchant Finance, which the latter maintained with the defendant bank. 3. Although the checks were clearly payable to the plaintiff corporation, defendant bank accepted the checks to be deposited to the current account of Intervest and thereafter presented the same for collection from the drawee bank which subsequently cleared the same thus allowing Intervest to make use of the funds. 4. The plaintiff has demanded upon the defendant to restitute the amount representing the value of the checks but defendant refused and continue to refuse to honor plaintiffs demand up to the present. 5. In its Answer International Corporate Bank held that Premium has no capacity/personality/authority to sue. 6. Premium filed a motion to dismiss on the ground that the filing of the case was without authority from its duly constituted board of directors as shown by the excerpt of the minutes of the Premiums board of directors meeting. 7. Premium thru Atty. Dumadag contended that the persons who signed the board resolution are not directors of the corporation and were allegedly former officers and stockholders of Premium who were dismissed for various irregularities and fraudulent acts. 8. Petitioner submitted its Articles of Incorporation dated November 6, 1979 with the following as directors: Zavalla, Celso, Gan, Pengson, and Silva. 9. However, it appears form the GIS and the certification issued by the SEC on August 19, 1986 that as of March 4, 1981, the officers and members of the board of directors of the Premium Marble Resources were Nograles, Hilario, Galace, Reyes, Aguilar, and Belen Jr. 10.While the Minutes of the Meeting of the Board on April 1, 1982 states that the newly elected officers for the year 1982 were Gan, Zavalla, Yujuico, and Rodolfo Millare petitioner failed to show proff that this election was reported

to the SEC. In fact, the last entry in their General Information Sheet with the SEC, as of 1986 appears to be the set of officer elected in March 1981.

Issue: Whether or not the filing of the case for damages against private respondent was authorized by a duly constituted Board of Directors of the petitioner corporation?

The Court Held: By the express mandate of the Corporation Code (Section 26), all corporation duly organized pursuant thereto are required to submit within the period therein stated (30 days) to the SEC the names, nationalities, and residences of the directors, trustees, and officers elected.

The claim, therefore, of petitioners as represented by Atty. Dumadag, that Zaballa, et al are the incumbent officers of Premium has not been fully substantiated. In the absence of an authority form the board of directors, no person, not even the officers of the corporation, can validly bind the corporation.

Central Textile Mills Inc. vs National Wags and Productivity Commission

Facts of the Case:

1. On December 20, 1990, respondent Regional Tripartite Wages and Productivity Board NCR issued a Wage Order which took effect January 9, 1991. The wage order mandated a P12.00 increase in the minimum daily wage of all employees and workers in the private sector in the NCR, but exempted from its application distressed employers whose capital has been impaired by at least 25% in the preceding year. 2. By virtue of these provisions, petitioner filed an application for exemption from compliance due to financial losses. 3. The Board did not approve for exemption. 4. The Board also noted that petitioner did not file with the SEC the August 15, 1990 resolution of its Board of Directors, concurred in by its stockholders representing at least two-thirds of its outstanding capital stock, approving an

increase in petitioners authorized capital stock. Neither did it file any petition to amend its AOI brought about by such increase in its capitalization. 5. The Petitioner maintains in the instant action that its authorized capital stock, not its unauthorized paid-up capital should be used in arriving at its capital impairment for 1990.

The Court Held: The guidelines on exemption specifically refer to paid-up capital, not its authorized capital stock as the basis for impairment for exemption under the wage order. The records reveal that petitioner included in its total paid-up capital payments on advance subscriptions, although the proposed increase in its capitalization had not yet been approved by the SEC. There was likewise no petition to amend its Articles of Incorporation by reason of the increase in its capitalization filed by the same.

Payments cannot as yet be deemed part of petitioners paid-up capital, technically speaking, because its capital stock has not yet been legally increased.

Pena vs. CA

Facts of the Case:

1. PAMBUSCO mortgaged the a lot to DBP. The mortgaged was foreclosed. 2. Rosita Pena became the highest bidder and a Certificate of Sale was issued to her. 3. On November 1974, the board of directors of PAMBUSCO (3 out 5 directors) resolved to assign its right of redemption over the aforesaid lots. 4. Atty. Briones executed a Deed of Assignment of PAMBUSCOs right of redemption over the subject lots in favor of Marcelino Enriquez. 5. Enriquez then redeemed the said properties and certificate of redemption was issued in his favor by the Sheriff after payment of an amount to the Office of Provincial Sheriff of Pampanga.

6.

A day after the aforesaid certificate was issued, Enriquez executed a deed of absolute sale of the subject properties in favor of plaintiffs-appellants, the spouses Yap for the sum of Php140,000.00.

7. Pena wrote the Sheriff notifying him that the redemption was not valid as it was made under a void deed of assignment. She then requested the recall of the said redemption and a restraint on any registration or transaction regarding the lots in question. 8. The approval of the Board was apparently voided given that the meeting did not have the requisite quorum as specified in its by-laws.

Issue: Is the deed of assignment valid?

The Court Held:

The by-laws of a corporation are its own private laws which substantially have the same effect as the laws of the corporation. They are in effect, written, into the charter. In this sense they become part of the fundamental law of the corporation with which the corporation and its directors and officers must comply.

Only 3 out 5 members of the Board of Directors of respondent PAMBUSCO convened on November 19, 1974 by virtue of a prior notice of a special meeting. There was no quorum to validly transact business since, under Section 4 of the amended bylaws hereinabove reproduced at least 4 members must be present to constitute a quorum in a special meeting of the board of director PAMBUSCO.