Rosita Peña v. The Court of Appeals

Summary

This case involved a dispute over foreclosed properties originally owned by PAMBUSCO. Rosita Peña purchased the properties at a foreclosure sale in 1974. PAMBUSCO's board of directors, with only 3 of 5 members present, passed a resolution assigning redemption rights to former officer Marcelino Enriquez, who then redeemed the properties and immediately sold them to the Yap spouses. The Supreme Court ruled that the board resolution was void for lack of quorum under the corporate by-laws requiring at least 4 directors for special meetings. The Court also found that PAMBUSCO had been dormant since 1949, the alleged directors were not properly listed with the SEC, and the assignment constituted a donation that failed to comply with Civil Code formality requirements. The Court affirmed Peña's ownership rights and nullified all subsequent transactions, emphasizing that corporate by-laws are fundamental law that must be strictly followed and that disposition of substantially all corporate assets requires proper stockholder approval.