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A shareholder’s derivative suit seeks to recover for the benefit of the corporation and its
whole body of shareholders when injury is caused to the corporation that may not otherwise be
redressed because of failure of the corporation to act. Thus, ‘the action is derivative, i.e., in the
corporate right, if the gravamen of the complaint is injury to the corporation, or to the whole body of
its stock and property without any severance or distribution among individual holders, or it seeks to
recover assets for the corporation or to prevent the dissipation of its assets.’
The RTC dismissed the complaint saying that the action is a derivative suit.
Ching and Wellington argued that the complaint was not a derivative suit. They
claim that they filed the suit in their own right as stockholders against the officers
and Board of Directors of the SBGCCI. However the SBGCCI claimed by way of
defense that Ching and Wellington failed to show that it was authorized by SBGSI
to file the Complaint on its behalf as well as the requisites for filing a derivative suit.
ISSUES:
1. Is the petition filed by Nestor Ching and Andrew Wellington a derivative suit?
2. Does being minor stockholders of SBGSI give them personality to file a
complaint against SBGSI?
RULING: