BM1905

ASSIGNMENT ON POWERS OF CORPORATION PT. 4

NAME: SECTION: DATE: SCORE:

ESSAY (2 items x 10 points):

1. A owns 100 out of 10,000 shares in the Manufacturer’s Bank. He filed a suit against B for damages due
to an alleged breach of contract. A secures a favorable judgment against B but fails to obtain full
satisfaction thereof. A receives a tip that B has a big time deposit with Manufacturer’s Bank. B is not
aware that A is a stockholder in the said bank. A goes to the bank and demands the right to inspect the
records of the bank to find out whether B has indeed such a time deposit and how much. The bank
manager refuses to accede to his demand. A threatens to sue him on the ground that as a stockholder of
a corporation, he is given by the Corporation Code the right to inspect all the books of the corporation. Is
A entitled to look at such records? Explain.
Answer:

10 Assignment 1 *Property of STI

Page 1 of 2
2. Philippine Palaces Realty (PPR) had been representing itself as a registered broker of securities, duly
authorized by the Securities and Exchange Commission (SEC). On October 6, 2013, PPR sold to
spouses Leon and Carina one timeshare of Palacio del Boracay for US$7,500.00. However, its
Registration Statement became effective only on February 11, 2014, after the SEC issued a resolution
declaring that PPR was authorized to sell securities, including timeshares.

On March 30, 2014, Leon and Carina wrote PPR rescinding their purchase agreement and demanding
the refund of the amount they paid, because the Palacio del Boracay timeshare was sold to them by
PPR without the requisite license or authority from the SEC. PPR contended that the grant of the SEC
authority had the effect of ratifying the purchase agreement (with Leon and Carina) of October 6, 2013. Is
the contention of PPR correct? Explain.
Answer:

Rubric for grading:

CRITERIA PERFORMANCE INDICATORS POINTS
Content Provided pieces of evidence, supporting details, 7
and factual scenarios
Organization of Expressed the points in clear and logical 3
ideas arrangement of ideas in the paragraph
TOTAL 10