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RICHARD K. TOM v. SAMUEL N. RODRIGUEZ

FACTS:

This case involves a motion for reconsideration filed by respondent Samuel N. Rodriguez seeking the reconsideration of the Court's decision and the dissolution of the writ of preliminary injunction. In the Court's previous decision, it found that the issuance of the injunction was warranted to enjoin the Regional Trial Court from implementing its orders in a specific performance case. The orders placed the management and control of Golden Dragon International Terminals, Inc. (GDITI) to Rodriguez. The Court upheld the rule that a corporation exercises its powers through its board of directors, unless the Corporation Code requires stockholders' approval for certain specific acts. Rodriguez claims that the execution of a Memorandum of Agreement (MOA) among himself, petitioner Richard Tom, and another party renders the injunction moot and academic. He argues that the elements requiring the injunction no longer exist and that GDITI's interests are already protected as it filed a motion for intervention in the case. However, the Court finds that the MOA is contrary to law and does not affect the previous decision. Lastly, the Court notes that Tom is no longer the President of GDITI but was elected as Treasurer during the stockholders meeting, but this does not affect the Court's stance in the case. The Motion for Reconsideration is denied with finality.

ISSUES:

  1. Whether or not the execution of the Memorandum of Agreement (MOA) renders the preliminary injunction moot and academic.

  2. Whether or not the interests of GDITI are already protected by its Motion for Intervention in Civil Case No. 1043.

RULING:

  1. No, the execution of the MOA does not render the preliminary injunction moot and academic. The court upheld the rule that a corporation can only exercise its powers and transact its business through its board of directors and authorized officers and agents. As the MOA directly contravenes this principle, its execution cannot affect or render the court's previous disquisitions moot and academic. The MOA is contrary to law and therefore, the preliminary injunction must stand.

  2. The court did not directly rule on whether the interests of GDITI are already protected by its Motion for Intervention in Civil Case No. 1043. However, it can be inferred that the court did not find GDITI's intervention as sufficient to protect its interests, considering that it upheld the preliminary injunction.

PRINCIPLES:

  • A corporation can only exercise its powers and transact its business through its board of directors and authorized officers and agents. Declarations of an individual director not in the course of or connected with authorized duties are not binding on the corporation.

  • Contracts or acts of a corporation must be made by the board of directors or by a corporate agent duly authorized by the board.

  • The execution of a Memorandum of Agreement that contradicts the principles and rules governing corporate powers does not render previous disquisitions moot and academic.