G.R. No. 93695 February 4, 1992
Lessons Applicable: Voting Trust Agreements (Corporate Law)
FACTS:
- November 15, 1985: a complaint for a sum of money was filed by the International Corporate Bank, Inc. (ICB) against the private respondents
- March 17, 1986: private respondents, in turn, filed a 3rd-party complaint against ALFA and ICB
- September 17, 1987: petitioners filed a motion to dismiss the third party complaint - denied
- July 12, 1988: trial court issued an order requiring the issuance of an alias summons upon ALFA through the DBP
- consequence of the petitioner's letter that ALFA management was transferred to DBP
- July 22, 1988: DBP claimed that it was not authorized to receive summons on behalf of ALFA
- August 4, 1988: trial court issued an order advising the private respondents to take the appropriate steps to serve the summons to ALFA
- September 12, 1988: petitioners filed a motion for reconsideration submitting that Rule 14, section 13 of the Revised Rules of Court is not applicable since they were no longer officers of ALFA and that the private respondents should have availed of another mode of service under Rule 14, Section 16 of the said Rules, i.e., through publication to effect proper service upon ALFA - denied
- January 19, 1989: 2nd motion for reconsideration was filed by the petitioners reiterating their stand that by virtue of the voting trust agreement they ceased to be officers and directors of ALFA
- attached a copy of the voting trust agreement between all the stockholders of ALFA and the DBP whereby the management and control of ALFA became vested upon the DBP
- April 25, 1989: trial court reversed itself by setting aside its previous Order dated January 2, 1989 and declared that service upon the petitioners who were no longer corporate officers of ALFA cannot be considered as proper service of summons on ALFA
- October 17, 1989: trial court (NOT notified of the petition for certiorari) declared final its decision on April 25, 1989
ISSUE: W/N the voting trust agreement is valid despite being contrary to the general principle that a corporation can only be bound by such acts which are within the scope of its officers' or agents' authority
HELD:
- voting trust
- trust created by an agreement between a group of the stockholders of a corporation and the trustee or by a group of identical agreements between individual stockholders and a common trustee, whereby it is provided that for a term of years, or for a period contingent upon a certain event, or until the agreement is terminated, control over the stock owned by such stockholders, either for certain purposes or for all purposes, is to be lodged in the trustee, either with or without a reservation to the owners, or persons designated by them, of the power to direct how such control shall be used (Ballentine's Law Dictionary)
- Sec. 59. Voting Trusts — One or more stockholders of a stock corporation may create a voting trust for the purpose of conferring upon a trustee or trustees the right to vote and other rights pertaining to the share for a period rights pertaining to the shares for a period not exceeding 5 years at any one time: Provided, that in the case of a voting trust specifically required as a condition in a loan agreement, said voting trust may be for a period exceeding 5 years but shall automatically expire upon full payment of the loan. A voting trust agreement must be in writing and notarized, and shall specify the terms and conditions thereof. A certified copy of such agreement shall be filed with the corporation and with the Securities and Exchange Commission; otherwise, said agreement is ineffective and unenforceable. The certificate or certificates of stock covered by the voting trust agreement shall be cancelled and new ones shall be issued in the name of the trustee or trustees stating that they are issued pursuant to said agreement. In the books of the corporation, it shall be noted that the transfer in the name of the trustee or trustees is made pursuant to said voting trust agreement.