Angeles P. Balinghasay v. Cecilia Castillo

Summary

This intra-corporate dispute involved MCPI directors who invested in and operated an ultrasound unit within the medical center under a contested MOA. Minority stockholders filed a derivative suit claiming directors violated Corporation Code Section 31 by acquiring interests adverse to the corporation. The RTC initially dismissed the case applying the business judgment rule and finding implied ratification. However, the CA reversed, ruling the MOA invalid due to lack of proper quorum since conflicted directors were necessary for quorum but couldn't validly vote on the matter. The CA found no valid ratification by stockholders and noted MCPI had sufficient funds to purchase the equipment itself. The Supreme Court affirmed the CA's decision, emphasizing that the issues were factual rather than legal, and applied principles against unjust enrichment while allowing the investors to retain equipment ownership since they funded its purchase.