SPI TECHNOLOGIES, INC. V. MAPUA, G.R.
Subsequently,
NO. 191154, [APRIL 7, 2014]
FACTS: Victoria K. Mapua (Mapua) alleged that
she was hired in 2003 by SPI Technologies, Inc.
(SPI) and was the Corporate Development’s
Research/Business Intelligence Unit Head and
Manager of the company. Subsequently in
August 2006, the then Vice President and
Corporate Development Head, Peter Maquera
(Maquera) hired Elizabeth Nolan (Nolan) as
Mapua’s supervisor.
Sometime in October 2006, the hard disk on
Mapua’s laptop crashed, causing her to lose files
and data. Mapua informed Nolan and her
colleagues that she was working on recovering
the lost data and asked for their patience for any
possible delay on her part in meeting deadlines.
On November 13, 2006, Mapua retrieved the lost
data with the assistance of National Bureau of
Investigation Anti-Fraud and Computer Crimes
Division. Yet, Nolan informed Mapua that she
was realigning Mapua’s position to become a
subordinate of co-manager Sameer Raina
(Raina) due to her missing a work deadline.
Nolan also disclosed that Mapua’s colleagues
were “demotivated” [sic] because she was “taking
things easy while they were working very hard,”
and that she was “frequently absent, under
timing, and coming in late every time [Maquera]
goes on leave or on vacation.”
On November 16, 2006, Mapua obtained a
summary of her attendance for the last six
months to prove that she did not have frequent
absences or under time when Maquera would be
on leave or vacation. When shown to Nolan, she
was merely told not to give the matter any more
importance and to just move on.
In December 2006, Mapua noticed that her
colleagues began to ostracize and avoid her.
Nolan and Raina started giving out majority of
her research work and other duties under
Healthcare and Legal Division to the rank-and-
file staff. Mapua lost about 95% of her work
projects and job responsibilities.
Mapua consulted these work problems with
SPI’s Human Resource Director, Lea Villanueva
(Villanueva), and asked if she can be transferred
to another department within SPI.
Villanueva informed Mapua that there is an
intra-office opening and that she would schedule
an exploratory interview for her. However, due to
postponements not made by Mapua, the
interview did not materialize.
On February 28, 2007, Mapua allegedly saw the
new table of organization of the Corporate
Development Division which would be renamed
as the Marketing Division. The new structure
showed that Mapua’s level will be again
downgraded because a new manager will be
hired and positioned between her rank and
Raina’s.
On March 21, 2007, Raina informed Mapua over
the phone that her position was considered
redundant and that she is terminated from
employment effective immediately. Villanueva
notified Mapua that she should cease reporting
for work the next day. Her laptop computer and
company mobile phone were taken right away
and her office phone ceased to function.
Mapua was shocked and told Raina and
Villanueva that she would sue them.
ISSUE: WON THE OFFICERS SHOULD BE
HELD LIABLE SOLIDARILY
HELD: NO. “[i]t is hornbook principle that
personal liability of corporate directors, trustees
or officers attaches only when: (a) they assent to
a patently unlawful act of the corporation, or
when they are guilty of bad faith or gross
negligence in directing its affairs, or when there
is a conflict of interest resulting in damages to
the corporation, its stockholders or other
persons; (b) they consent to the issuance of
watered down stocks or when, having knowledge
of such issuance, do not forthwith file with the
corporate secretary their written objection; (c)
they agree to hold themselves personally and
solidarily liable with the corporation; or (d) they
are made by specific provision of law personally
answerable for their corporate action.”
While the Court finds Mapua’s averments
against Villanueva, Nolan, Maquera and Raina
as detailed and exhaustive, the Court takes
notice that these are mostly suppositions on her
part. Thus, the Court cannot apply the above-
enumerated exceptions when a corporate officer
becomes personally liable for the obligation of a
corporation to this case.
Ching vs. Subic Bay Golf
G.R. No. 174353 September 10, 2014
Petitioners: NESTOR CHING and ANDREW
WELLINGTON,
Respondents: SUBIC BAY GOLF AND
COUNTRY CLUB, INC., HU HO
HSIU LIEN alias SUSAN HU, HU
TSUNG CHIEH alias JACK HU, HU
TSUNG HUI, HU TSUNG TZU and
REYNALD R. SUAREZ
Topic: Right to File a Derivative Suit
Sub-Topic: Derivative Suit Must be Effected
When Board Cannot Properly
Exercise Business Judgment
Doctrine:
A stockholder’s right to institute a
derivative suit is not based on any express
provision of the Corporation Code, or even
the Securities Regulation Code, but it is
impliedly recognized when the said laws
make corporate directors or officers liable
for damages suffered by the corporation and
its stockholders for violation of their
fiduciary duties.
FACTS:
Petitioners Nestor Ching and Andrew Wellington
filed a Complaint with the RTC of Olongapo City
on behalf of the members of Subic Bay Golf and
Country Club, Inc. (SBGCCI) against the said
country club and its Board of Directors and
officers. The Subic Bay Golfers and Shareholders
Incorporated (SBGSI), a corporation composed of
shareholders of the defendant corporation, was
also named as plaintiff. The officers impleaded
as defendants were the following: (1)
itsPresident, Hu Ho Hsiu Lien alias Susan Hu;
(2) its treasurer, Hu Tsung Chieh alias Jack Hu;
(3) corporate secretary Reynald Suarez; and (4)
directors Hu Tsung Hui and Hu Tsung Tzu.
The complaint stemmed out when the subject
Corporation amended their Articles of
Incorporation (AOI) without the knowledge of the
petitioners. The original AOI states that though
there will be no dividends to be distributed to
the stockholders, shareholders shall be entitled
only to a pro-rata share of the assets of the Club
at the time of its dissolution or liquidation.
However, in the amendments made, the
shareholders shall not have proprietary rights or
interests over the properties of the Club. Hence,
it effectively makes the shares non-proprietary,
as it takes away the right of the shareholders to
participate in the pro-rata distribution of the
assets of the corporation after its dissolution.
According to petitioners, this is in fraud of the
stockholders who only discovered the
amendment when they filed a case for injunction
to restrain the corporation from suspending
their rights to use all the facilities of the club.
Furthermore, petitioners alleged that the Board
of Directors and officers of the corporation did
not call any stockholders’ meeting from the time
of the incorporation, neither did the defendant
directors and officers furnish the stockholders
with the financial statements of the corporation
nor the financial report of the operation of the
corporation. Petitioners also claim that on
August 15, 1997, SBGCCI presented to the SEC
an amendment to the By-Laws of the corporation
suspending the voting rights of the shareholders
except for the five founders’ shares. Said
amendment was allegedly passed without any
stockholders’ meeting or notices to the
stockholders in violation of Section 48 of the
Corporation Code. In addition, the complaint
furthermore enumerated several instances of
fraud in the management of the corporation
allegedly committed by the Board of Directors
and officers of the corporation. The petitioners
also claim that the stockholders suffered
damages as a result of the fraudulent
mismanagement of the corporation, hence, the
filing of this complaint.
The RTC dismissed the complaint as it held that
the action is a derivative suit so the stockholders
and members may bring an action in the name
of the corporation or association provided that
he (the minority stockholder) exerted all
reasonable efforts and alleged the same with
particularity in the complaint to exhaust of all
remedies available under the articles of
incorporation, by-laws or rules governing the
corporation or partnership to obtain the reliefs
he desires to which the petitioners failed to do.
The CA affirmed RTC’s decision, hence this
petition.
ISSUE:
Whether or not the complaint filed by the
petitioner is a derivative suit.
HELD: the corporation refuse to sue orare the ones to
YES. be sued or hold the control of the corporation. In
such actions, the suing stockholder is regarded
A derivative suit must be differentiated from as the nominal party, with the corporation as
individual and representative or class suits, the party in interest."
thus:
It should be noted that the Complaint in
"Suits by stockholders or members of a question appears to have been filed only by the
corporation based on wrongful or fraudulent two petitioners, namely Nestor Ching and
acts of directors or other persons may be Andrew Wellington, who each own one stock in
classified into individual suits, class suits, and the respondent corporation SBGCCI. While the
derivative suits. Where a stockholder or member caption of the Complaint also names the "Subic
is denied the right of inspection, his suit would Bay Golfers and Shareholders Inc. for and in
be individual because the wrong is done to him behalf of all its members," petitioners did not
personally and not to the other stockholders or attach any authorization from said alleged
the corporation. Where the wrong is done to a corporation or its members to file the Complaint.
group of stockholders, as where preferred Thus, the Complaint is deemed filed only by
stockholders’ rights are violated, a class or petitioners and not by SBGSI.
representative sui twill be proper for the
protection of all stockholders belonging to the
same group. But where the acts complained of
constitute a wrong to the corporation itself, the
cause of action belongs to the corporation and
not to the individual stockholder or member.
Although in most every case of wrong to the
corporation, each stockholder is necessarily
affected because the value of his interest therein
would be impaired, this fact of itself is not
sufficient to give him an individual cause of
action since the corporation is a person distinct
and separate from him, and can and should
itself sue the wrongdoer. Otherwise, not only
would the theory of separate entity be violated,
but there would be multiplicity of suits as well
as a violation of the priority rights of creditors.
Furthermore, there is the difficulty of
determining the amount of damages that should
be paid to each individual stockholder.

However, in cases of mismanagement where the

wrongful acts are committed by the directors or
trustees themselves, a stockholder or member
may find that he has no redress because the
former are vested by law with the right to decide
whether or notthe corporation should sue, and
they will never be willing to sue themselves. The
corporation would thus be helpless to seek
remedy. Because of the frequent occurrence of
such a situation, the common law gradually
recognized the right of a stockholder to sue on
behalf of a corporation in what eventually
became known as a "derivative suit." It has been
proven to be an effective remedy of the minority
against the abuses of management. Thus, an
individual stockholder is permitted to institute a
derivative suit on behalf of the corporation
wherein he holds stock in order to protect or
vindicate corporate rights, whenever officials of