Lao vs. Lim – Period to Serve Notice of Stockholders’ Meeting
G.R. No. 201306; 09 August 2017
By its express terms, the Corporation Code allows the shortening or lengthening of the period within which to send the notice to call a special or regular meeting...
Lydia Lao, Jeffrey Ong, Henry Sy, Sy Tian Tin, Sy Tian Tin, Jr., and Paul Chua, Petitioners, vs. Yao Bio Lim and Philip King, Respondents; G.R. No. 201306; 09 August 2017
On March 15, 2002, a general stockholders’ meeting was held wherein Lao, Ong, Henry- Sy, Sy Tian Tin, Sy Tian Tin, Jr. and Paul Chua (PETITIONERS) were elected as members of the board of directors of Philadelphia School, Inc. (PSI), with Chua Lian as chairman of the board.
On March 26, 2002, Yao Bio Lim and Philip King (RESPONDENTS), both stockholders of PSI, filed a Petition before Branch 90, Regional Trial Court, Quezon City against PETITIONERS.
On March 20, 2007, the trial court rendered its decision in favor of RESPONDENTS.
The Court of Appeals affirmed the Regional Trial Court Decision. The CA nullified the meeting, in part, on the ground that the notice thereof was not sent to the stockholders at least two (2) weeks prior to the meeting as required under Section 50 of the Corporation Code.
Whether the notice was irregularly served.
By its express terms, the Corporation Code allows the shortening or lengthening of the period within which to send the notice to call a special or regular meeting.
Section 50 of Batas Pambansa Blg. 68 reads in part:
Section 50. Regular and Special Meetings of Stockholders or Members. — Regular meetings of stockholders or members shall be held annually on a date fixed in the by-laws, or if not so fixed, on any date in April of every year as determined by the board of directors or trustees: Provided, That written notice of regular meetings shall be sent to all stockholders or members of record at least two (2) weeks prior to the meeting, unless a different period is required by the by-laws.
Under PSI’s by-laws, notice of every regular or special meeting must be mailed or personally delivered to each stockholder not less than five (5) days prior to the date set for the meeting.
Thus, the mailing of the Notice to respondents on March 5, 2002 calling for the annual stockholders’ meeting to be held on March 15, 2002 is not irregular, since it complies with what was stated in PSI’s by-laws.