CASE 24:

GAMBOA versus TEVES

I.

THE FACTS
This is a petition to nullify the sale of shares of stock of Philippine Telecommunications
Investment Corporation (PTIC) by the government of the Republic of the Philippines, acting
through the Inter-Agency Privatization Council (IPC), to Metro Pacific Assets Holdings, Inc.
(MPAH), an affiliate of First Pacific Company Limited (First Pacific), a Hong Kong-based
investment management and holding company and a shareholder of the Philippine Long Distance
Telephone Company (PLDT).
The petitioner questioned the sale on the ground that it also involved an indirect sale of
12 million shares (or about 6.3 percent of the outstanding common shares) of PLDT owned by
PTIC to First Pacific. With the this sale, First Pacifics common shareholdings in PLDT increased
from 30.7 percent to 37 percent, thereby increasing the total common shareholdings of foreigners
in PLDT to about 81.47%. This, according to the petitioner, violates Section 11, Article XII of the
1987 Philippine Constitution which limits foreign ownership of the capital of a public utility to not
more than 40%.

II.

THE ISSUE
Does the term capital in Section 11, Article XII of the Constitution refer to the total
common shares only, or to the total outstanding capital stock (combined total of common and
non-voting preferred shares) of PLDT, a public utility?

III. THE RULING

[The Court partly granted the petition and held that the term capital in Section 11, Article
XII of the Constitution refers only to shares of stock entitled to vote in the election of directors of a
public utility, or in the instant case, to the total common shares of PLDT.]
Section 11, Article XII (National Economy and Patrimony) of the 1987 Constitution
mandates the Filipinization of public utilities, to wit:
Section 11. No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted except to citizens of the Philippines or to
corporations or associations organized under the laws of the Philippines, at least sixty per
centum of whose capital is owned by such citizens; nor shall such franchise, certificate, or
authorization be exclusive in character or for a longer period than fifty years. Neither shall any
such franchise or right be granted except under the condition that it shall be subject to
amendment, alteration, or repeal by the Congress when the common good so requires. The State
shall encourage equity participation in public utilities by the general public. The participation of
foreign investors in the governing body of any public utility enterprise shall be limited to their
proportionate share in its capital, and all the executive and managing officers of such corporation
or association must be citizens of the Philippines. (Emphasis supplied)
The term capital in Section 11, Article XII of the Constitution refers only to shares of
stock entitled to vote in the election of directors, and thus in the present case only to common
shares, and not to the total outstanding capital stock comprising both common and non-voting
preferred shares [of PLDT].
xxx

xxx

xxx

Indisputably, one of the rights of a stockholder is the right to participate in the control or
management of the corporation. This is exercised through his vote in the election of directors
because it is the board of directors that controls or manages the corporation. In the absence of
provisions in the articles of incorporation denying voting rights to preferred shares, preferred
shares have the same voting rights as common shares. However, preferred shareholders are
often excluded from any control, that is, deprived of the right to vote in the election of directors
and on other matters, on the theory that the preferred shareholders are merely investors in the
corporation for income in the same manner as bondholders. xxx.
Considering that common shares have voting rights which translate to control, as
opposed to preferred shares which usually have no voting rights, the term capital in Section 11,

Article XII of the Constitution refers only to common shares. However, if the preferred shares also
have the right to vote in the election of directors, then the term capital shall include such
preferred shares because the right to participate in the control or management of the corporation
is exercised through the right to vote in the election of directors. In short, the term capital in
Section 11, Article XII of the Constitution refers only to shares of stock that can vote in the
election of directors.
xxx

xxx

xxx

Mere legal title is insufficient to meet the 60 percent Filipino-owned capital required in
the Constitution. Full beneficial ownership of 60 percent of the outstanding capital stock, coupled
with 60 percent of the voting rights, is required. The legal and beneficial ownership of 60 percent
of the outstanding capital stock must rest in the hands of Filipino nationals in accordance with the
constitutional mandate. Otherwise, the corporation is considered as non-Philippine national[s].
xxx

xxx

xxx

To construe broadly the term capital as the total outstanding capital stock, including
both common and non-voting preferred shares, grossly contravenes the intent and letter of the
Constitution that the State shall develop a self-reliant and independent national
economy effectively controlled by Filipinos. A broad definition unjustifiably disregards who owns
the all-important voting stock, which necessarily equates to control of the public utility.
We shall illustrate the glaring anomaly in giving a broad definition to the term capital. Let
us assume that a corporation has 100 common shares owned by foreigners and 1,000,000 nonvoting preferred shares owned by Filipinos, with both classes of share having a par value of one
peso (P1.00) per share. Under the broad definition of the term capital, such corporation would
be considered compliant with the 40 percent constitutional limit on foreign equity of public utilities
since the overwhelming majority, or more than 99.999 percent, of the total outstanding capital
stock is Filipino owned. This is obviously absurd.
In the example given, only the foreigners holding the common shares have voting rights
in the election of directors, even if they hold only 100 shares. The foreigners, with a minuscule
equity of less than 0.001 percent, exercise control over the public utility. On the other hand, the
Filipinos, holding more than 99.999 percent of the equity, cannot vote in the election of directors
and hence, have no control over the public utility. This starkly circumvents the intent of the
framers of the Constitution, as well as the clear language of the Constitution, to place the control
of public utilities in the hands of Filipinos. It also renders illusory the State policy of an
independent national economy effectively controlled by Filipinos.
The example given is not theoretical but can be found in the real world, and in fact exists
in the present case.
xxx

xxx

xxx

[O]nly holders of common shares can vote in the election of directors [of PLDT], meaning
only common shareholders exercise control over PLDT. Conversely, holders of preferred shares,
who have no voting rights in the election of directors, do not have any control over PLDT. In fact,
under PLDTs Articles of Incorporation, holders of common shares have voting rights for all
purposes, while holders of preferred shares have no voting right for any purpose whatsoever.
It must be stressed, and respondents do not dispute, that foreigners hold a majority of the
common shares of PLDT. In fact, based on PLDTs 2010 General Information Sheet (GIS), which
is a document required to be submitted annually to the Securities and Exchange
Commission, foreigners hold 120,046,690 common shares of PLDT whereas Filipinos hold only
66,750,622 common shares. In other words, foreigners hold 64.27% of the total number of
PLDTs common shares, while Filipinos hold only 35.73%. Since holding a majority of the
common shares equates to control, it is clear that foreigners exercise control over PLDT. Such
amount of control unmistakably exceeds the allowable 40 percent limit on foreign ownership of
public utilities expressly mandated in Section 11, Article XII of the Constitution.
As shown in PLDTs 2010 GIS, as submitted to the SEC, the par value of PLDT common
shares is P5.00 per share, whereas the par value of preferred shares is P10.00 per share. In
other words, preferred shares have twice the par value of common shares but cannot elect
directors and have only 1/70 of the dividends of common shares. Moreover, 99.44% of the
preferred shares are owned by Filipinos while foreigners own only a minuscule 0.56% of the
preferred shares. Worse, preferred shares constitute 77.85% of the authorized capital stock of

PLDT while common shares constitute only 22.15%. This undeniably shows that beneficial
interest in PLDT is not with the non-voting preferred shares but with the common shares, blatantly
violating the constitutional requirement of 60 percent Filipino control and Filipino beneficial
ownership in a public utility.
The legal and beneficial ownership of 60 percent of the outstanding capital stock must
rest in the hands of Filipinos in accordance with the constitutional mandate. Full beneficial
ownership of 60 percent of the outstanding capital stock, coupled with 60 percent of the voting
rights, is constitutionally required for the States grant of authority to operate a public utility. The
undisputed fact that the PLDT preferred shares, 99.44% owned by Filipinos, are non-voting and
earn only 1/70 of the dividends that PLDT common shares earn, grossly violates the
constitutional requirement of 60 percent Filipino control and Filipino beneficial ownership of a
public utility.
In short, Filipinos hold less than 60 percent of the voting stock, and earn less than 60
percent of the dividends, of PLDT. This directly contravenes the express command in Section 11,
Article XII of the Constitution that [n]o franchise, certificate, or any other form of authorization for
the operation of a public utility shall be granted except to x x x corporations x x x organized under
the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens x
x x.
To repeat, (1) foreigners own 64.27% of the common shares of PLDT, which class of
shares exercises the sole right to vote in the election of directors, and thus exercise control over
PLDT; (2) Filipinos own only 35.73% of PLDTs common shares, constituting a minority of the
voting stock, and thus do not exercise control over PLDT; (3) preferred shares, 99.44% owned by
Filipinos, have no voting rights; (4) preferred shares earn only 1/70 of the dividends that common
shares earn; (5) preferred shares have twice the par value of common shares; and (6) preferred
shares constitute 77.85% of the authorized capital stock of PLDT and common shares only
22.15%. This kind of ownership and control of a public utility is a mockery of the Constitution.
Incidentally, the fact that PLDT common shares with a par value of P5.00 have a current
stock market value of P2,328.00 per share, while PLDT preferred shares with a par value
of P10.00 per share have a current stock market value ranging from only P10.92 to P11.06 per
share, is a glaring confirmation by the market that control and beneficial ownership of PLDT rest
with the common shares, not with the preferred shares.
xxx

xxx

xxx

WHEREFORE, we PARTLY GRANT the petition and rule that the term capital in
Section 11, Article XII of the 1987 Constitution refers only to shares of stock entitled to vote in the
election of directors, and thus in the present case only to common shares, and not to the total
outstanding capital stock (common and non-voting preferred shares). Respondent Chairperson of
the Securities and Exchange Commission is DIRECTED to apply this definition of the term
capital in determining the extent of allowable foreign ownership in respondent Philippine Long
Distance Telephone Company, and if there is a violation of Section 11, Article XII of the
Constitution, to impose the appropriate sanctions under the law.

CASE 25:
Republic Planters Bank vs. Agana, Sr. [March 3, 1997]
Rights of Holders of Perferred Shares
Legality of Interest Bearing Shares

1. Private respondent Robes Francisco Realty & Devt Corp. secured a loan from petitioner in the
amount of P120,000.00. As part of the proceeds of the loan, preferred shares of stocks were
issued to private Respondent Corporation.

In other words, instead of giving the legal tender totaling to the full amount of the loan which is
P120,000.00, petitioner lent such amount partially in the form of stock certificates
numbered 3204 and 3205, each for 400 shares with a par value of P10.00 per share, or for
P4,000 each, for a total of P8,000.00.

Said stock certificates were in the name of private respondent Adalia Robes and Carlos Robes,
who, however, subsequently endorsed his shares in favor of Adalia Robes.

Said
certificates
of
stock
bear
the
following
terms
and
conditions:
1.
The right to receive a quarterly dividend of 1%, cumulative and participating.
2. That such preferred shares may be redeemed, by the system of drawing lots, at any time
after 2 years from the date of issue at the option of the Corporation.

Private respondents proceeded against petitioner and filed a complaint anchored on private
respondents alleged rights to collect dividends under the preferred shares in question and to
have petitioner redeem the same under the terms and conditions of the stock certificates.

The trial court ordered the petitioner to pay private respondents the face value of the stock
certificates as redemption price, plus 1% quarterly interest.

Hence this petition.

Issue: W/N respondents have the right to collect dividends and whether they can compel
petitioner to redeem the preferred shares.

Held:

1. A preferred share of stock is one which entitles the holder thereof to certain preferences over
the holders of common stock. The preferences are designed to induce persons to subscribe for
shares of a corporation. Preferred shares take a multiplicity of forms. The most common forms
may be classified into two: (1) preferred shares as to assets; and (2) preferred as to dividends.
The former is a share which gives the holder thereof the preference in the distribution of the
assets of the corporation in case of liquidation; the latter is a share the holder of which is entitled
to receive dividends on said share to the extent agreed upon before any dividends at all are paid
to the holders of common stock. There is no guarantee, however, that the share will receive any
dividends.

2. Preferences granted to preferred stockholders do not give them a lien upon the property of
the corporation nor make them creditors of the corporation, the right of the former being always
subordinate to the latter. Shareholders, both common and preferred are considered risk takers
who invest capital in the business arid who can look only to what is left after corporate debts and
liabilities are fully paid.

3. Redeemable shares are shares usually preferred, which by their terms are redeemable at a
fixed date, or at the option of either issuing corporation, or the stockholder, or both at certain
redemption price; redemption may not be made where the corporation is insolvent or if such
redemption will cause insolvency or inability of the corporation to meet its debts as they mature.

4. While the stock certificates in the case at bar does allow redemption, the option to do so was
clearly vested in the petitioner bank. The redemption is therefore optional.

5. The redemption of said shares cannot be allowed. The Central Bank made a finding that said
petitioner has been suffering from chronic reserve deficiency, and that such finding resulted in the
directive prohibiting the petitioner bank from redeeming any preferred share, on the ground that
said redemption would reduce the assets of the Bank to the prejudice of its depositors and
creditors. Redemption of preferred shares was prohibited for a just and valid reason.

6. Interest bearing stocks, on which the corporation agrees absolutely to pay interest before
dividends are paid to common stockholders, is legal only when construed as requiring payment of
interest as dividends from net earnings or surplus only.

CASE 26:
CIR versus CA
301 SCRA 152 Business Organization Corporation Law Trust Fund Doctrine
Don Andres Soriano (American), founder of A. Soriano Corp. (ASC) had a total shareholdings of
185,154 shares. Broken down, the shares comprise of 50,495 shares which were of original issue
when the corporation was founded and 134,659 shares as stock dividend declarations. So in
1964 when Soriano died, half of the shares he held went to his wife as her conjugal share (wifes
legitime) and the other half (92,577 shares, which is further broken down to 25,247.5 original
issue shares and 82,752.5 stock dividend shares) went to the estate. For sometime after his
death, his estate still continued to receive stock dividends from ASC until it grew to at least
108,000 shares.
In 1968, ASC through its Board issued a resolution for the redemption of shares from Sorianos
estate purportedly for the planned Filipinization of ASC. Eventually, 108,000 shares were
redeemed from the Soriano Estate. In 1973, a tax audit was conducted. Eventually, the
Commissioner of Internal Revenue (CIR) issued an assessment against ASC for deficiency
withholding tax-at-source. The CIR explained that when the redemption was made, the estate
profited (because ASC would have to pay the estate to redeem), and so ASC would have
withheld tax payments from the Soriano Estate yet it remitted no such withheld tax to the
government.
ASC averred that it is not duty bound to withhold tax from the estate because it redeemed the
said shares for purposes of Filipinization of ASC and also to reduce its remittance abroad.
ISSUE: Whether or not ASCs arguments are tenable.
HELD: No. The reason behind the redemption is not material. The proceeds from a redemption is
taxable and ASC is duty bound to withhold the tax at source. The Soriano Estate definitely
profited from the redemption and such profit is taxable, and again, ASC had the duty to withhold
the tax. There was a total of 108,000 shares redeemed from the estate. 25,247.5 of that was
original issue from the capital of ASC. The rest (82,752.5) of the shares are deemed to have been
from stock dividend shares. Sale of stock dividends is taxable. It is also to be noted that in the
absence of evidence to the contrary, the Tax Code presumes that every distribution of corporate
property, in whole or in part, is made out of corporate profits such as stock dividends.
It cannot be argued that all the 108,000 shares were distributed from the capital of ASC and that
the latter is merely redeeming them as such. The capital cannot be distributed in the form of
redemption of stock dividends without violating the trust fund doctrine wherein the capital
stock, property and other assets of the corporation are regarded as equity in trust for the payment
of the corporate creditors. Once capital, it is always capital. That doctrine was intended for the
protection of corporate creditors.

CASE 27:
Ong Yiung versus Tiu

Lessons Applicable: Pre-incorporation Subscription (Corporate Law)

FACTS:

1994: construction of the Masagana Citimall in Pasay City was threatened with stoppage,
when its owner, the First Landlink Asia Development Corporation (FLADC), owned by the
Tius, became heavily indebted to the Philippine National Bank (PNB) for P190M

To save the 2 lots where the mall was being built from foreclosure, the Tius invited Ong
Yong, Juanita Tan Ong, Wilson T. Ong, Anna L. Ong, William T. Ong and Julia Ong Alonzo
(the Ongs), to invest in FLADC.

Pre-Subscription Agreement: Ongs and the Tius agreed to maintain equal shareholdings
in FLADC

Ongs: subscribe to 1,000,000 shares

Tius: subscribe to an additional 549,800 shares in addition to their already

existing subscription of 450,200 shares

Tius: nominate the Vice-President and the Treasurer plus 5 directors

Ongs nominate the President, the Secretary and 6 directors (including the chairman) to
the board of directors of FLADC and right to manage and operate the mall.

Tius: contribute to FLADC a 4-storey building P20M (for 200K shares)and 2 parcels of
land P30M (for 300K shares) and P49.8M (for 49,800 shares)

Ongs: paid P190M to settle the mortgage indebtedness of FLADC to PNB (P100M in
cash for their subscription to 1M shares)

February 23, 1996: Tius rescinded the Pre-Subscription Agreement

February 27, 1996: Tius filed at the Securities and Exchange Commission (SEC) seeking
confirmation of their rescission of the Pre-Subscription Agreement

SEC: confirmed recission of Tius

Ongs filed reconsideration that their P70M was not a premium on capital stock but
an advance loan

SEC en banc: affirmed it was a premium on capital stock

CA: Ongs and the Tius were in pari delicto (which would not have legally entitled them to
rescission) but, "for practical considerations," that is, their inability to work together, it was
best to separate the two groups by rescinding the Pre-Subscription Agreement, returning the
original investment of the Ongs and awarding practically everything else to the Tius.
ISSUE: W/N Specific performance and NOT recission is the remedy

HELD: YES. Ongs granted.

did not justify the rescission of the contract

providing appropriate offices for David S. Tiu and Cely Y. Tiu as Vice-President and
Treasurer, respectively, had no bearing on their obligations under the Pre-Subscription
Agreement since the obligation pertained to FLADC itself

failure of the Ongs to credit shares of stock in favor of the Tius for their property
contributions also pertained to the corporation and not to the Ongs

the principal objective of both parties in entering into the Pre-Subscription Agreement in
1994 was to raise the P190 million

law requires that the breach of contract should be so "substantial or fundamental" as to

defeat the primary objective of the parties in making the agreement

since the cash and other contributions now sought to be returned already belong to
FLADC, an innocent third party, said remedy may no longer be availed of under the law.

Any contract for the acquisition of unissued stock in an existing corporation or a

corporation still to be formed shall be deemed a subscription within the meaning of this Title,
notwithstanding the fact that the parties refer to it as a purchase or some other contract

allows the distribution of corporate capital only in three instances: (1) amendment of the
Articles of Incorporation to reduce the authorized capital stock, 24 (2) purchase of redeemable
shares by the corporation, regardless of the existence of unrestricted retained earnings, 25 and
(3) dissolution and eventual liquidation of the corporation.

They want this Court to make a corporate decision for FLADC.

The Ongs' shortcomings were far from serious and certainly less than substantial; they
were in fact remediable and correctable under the law. It would be totally against all rules of
justice, fairness and equity to deprive the Ongs of their interests on petty and tenuous
grounds.

Case 28
Lanuza vs. CA

Facts:
Petitioners seek to nullify the Court of Appeals Decision in CAG.R. SP No.
414731 promulgated on 18 August 1997, affirming the SEC Order dated 20 June 1996, and
the Resolution2 of the Court of Appeals dated 31 October 1997 which denied petitioners motion
for reconsideration.
In 1952, the Philippine Merchant Marine School, Inc. (PMMSI) was incorporated, with seven
hundred (700) founders shares and seventy-six (76) common shares as its initial capital stock
subscription reflected in the articles of incorporation
Onrubia et. al, who were in control of PMMSI registered the companys stock and transfer book
for the first time in 1978, recording thirty-three (33) common shares as the only issued and
outstanding shares of PMMSI.
In 1979, a special stockholders meeting was called and held on the basis of what was
considered as a quorum of twenty-seven (27) common shares, representing more than two-thirds
(2/3) of the common shares issued and outstanding.
In 1982, Juan Acayan, one of the heirs of the incorporators filed a petition for the registration of
their property rights was filed before the SEC over 120 founders shares and 12 common shares
owned by their father
SEC Hearing Officer: heirs of Acayan were entitled to the claimed shares and called for a
special stockholders meeting to elect a new set of officers.
SEC en banc: affirmed the decision
As a result, the shares of Acayan were recorded in the stock and transfer book.
On May 6, 1992, a special stockholders meeting was held to elect a new set of directors
Onrubia et al filed a petition with SEC questioning the validity of said meeting alleging that the
quorum for the said meeting should not be based on the 165 issued and outstanding shares as
per the stock and transfer book, but on the initial subscribed capital stock of seven hundred
seventy-six (776) shares, as reflected in the 1952 Articles of Incorporation
Petition was dismissed
SC en banc: shares of the deceased incorporators should be duly represented by their
respective administrators or heirs concerned. Called for a stockholders meeting on the basis of
the stockholdings reflected in the articles of incorporation for the purpose of electing a new set of
officers for the corporation
Lanuza, Acayan et al, who are PMMSI stockholders, filed a petition for review with the CA,
raising the following

ISSUES:
1.

Whether the basis the outstanding capital stock and accordingly also for determining the
quorum at stockholders meetings it should be the 1978 stock and transfer book or if it should be
the 1952 articles of incorporation
(They contended that the basis is the stock and transfer book, not articles of incorporation in
computing the quorum)
2.
Whether the Espejo decision (decision of SEC en banc ordering the recording of the shares of
Jose Acayan in the stock and transfer book) is applicable to the benefit of Onrubia et al

CA decision:
1.
For purposes of transacting business, the quorum should be based on the outstanding capital
stock as found in the articles of incorporation
2.
To require a separate judicial declaration to recognize the shares of the original incorporators
would entail unnecessary delay and expense. Besides. the incorporators have already proved
their stockholdings through the provisions of the articles of incorporation.

Appeal was made by Lanuza et al before the SC

Lanuza et al contention:
a.
1992 stockholders meeting was valid and legal
b.
Reliance on the 1952 articles of incorporation for determining the quorum negates the
existence and validity of the stock and transfer book Onrubia et al prepared
c.
Onrubia et al must show and prove entitlement to the founders and common shares in a
separate and independent action/proceeding in order to avail of the benefits secured by the heirs
of Acayan

Onrubia et als contention, based on the Memorandum: petition should be dismissed on the
ground of res judicata
Another appeal was made
Lanuza et als contention: instant petition is separate and distinct from G.R. No. 131315, there
being no identity of parties, and more importantly, the parties in the two petitions have their own
distinct rights and interests in relation to the subject matter in litigation
Onrubia et als manifestation and motion: moved for the dismissal of the case
Issue: What should be the basis of quorum for a stockholders meetingthe outstanding capital
stock as indicated in the articles of incorporation or that contained in the companys stock and
transfer book?

Ruling:
Articles of Incorporation
Defines the charter of the corporation and the contractual relationships between the State and
the corporation, the stockholders and the State, and between the corporation and its
stockholders.
Contents are binding, not only on the corporation, but also on its shareholders.
Stock and transfer book
Book which records the names and addresses of all stockholders arranged alphabetically, the
installments paid and unpaid on all stock for which subscription has been made, and the date of
payment thereof; a statement of every alienation, sale or transfer of stock made, the date thereof
and by and to whom made; and such other entries as may be prescribed by law
necessary as a measure of precaution, expediency and convenience since it provides the only
certain and accurate method of establishing the various corporate acts and transactions and of
showing the ownership of stock and like matters
Not public record, and thus is not exclusive evidence of the matters and things which ordinarily
are or should be written therein
In this case, the articles of incorporation indicate that at the time of incorporation, the
incorporators were bona fide stockholders of 700 founders shares and 76 common shares.
Hence, at that time, the corporation had 776 issued and outstanding shares.
According to Sec. 52 of the Corp Code, a quorum shall consist of the stockholders
representing a majority of the outstanding capital stock. As such, quorum is based on the totality
of the shares which have been subscribed and issued, whether it be founders shares or common
shares
To base the computation of quorum solely on the obviously deficient, if not inaccurate stock and
transfer book, and completely disregarding the issued and outstanding shares as indicated in the
articles of incorporation would work injustice to the owners and/or successors in interest of the
said shares.
The stock and transfer book of PMMSI cannot be used as the sole basis for determining the
quorum as it does not reflect the totality of shares which have been subscribed, more so when
the articles of incorporation show a significantly larger amount of shares issued and outstanding
as compared to that listed in the stock and transfer book.
One who is actually a stockholder cannot be denied his right to vote by the corporation merely
because the corporate officers failed to keep its records accurately. A corporations records are
not the only evidence of the ownership of stock in a corporation.
It is no less than the articles of incorporation that declare the incorporators to have in their
name the founders and several common shares. Thus, to disregard the contents of the articles of
incorporation would be to pretend that the basic document which legally triggered the creation of
the corporation does not exist and accordingly to allow great injustice to be caused to the
incorporators and their heirs
WHEREFORE, the petition is DENIED and the assailed Decision is AFFIRMED. Costs against
petitioners