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Gamboa v. Teves

652 SCRA 690

June 28, 2011

Facts:

In 1969, General Telephone an !le"#ron$"s Corpora#$on %GT!&, an Amer$"an "ompan' an ama(or )*+T s#o"holer, sol 26 per"en# o- #he ou#s#an$n "ommon shares o- )*+T #o

)h$l$pp$ne Tele"ommun$"a#$ons Inves#men# Corpora#$on %)TIC&. In 19//, )r$me ol$ns, In".

%)I& as $n"orpora#e b' several persons. )I be"ame #he oner o- shares o- s#o" o- )TIC b'v$r#ue o- #hree +ees o- Ass$nmen# ee"u#e b' )TIC s#o"holers. %GT! sol $#s s#o"s o-

)*+T #o )TIC hose s#o" $n #urn $s ma(orl' one b' )I&

In 1986, #he 111,315 shares o- s#o" o- )TIC hel b' )I ere se4ues#ere b' #he )res$en#$alComm$ss$on on Goo Governmen# %)CGG&. The )TIC shares, h$"h represen# abou# 36.125

per"en# o- #he ou#s#an$n "ap$#al s#o" o- )TIC, ere la#er e"lare b' #h$s Cour# #o be one

b' #he Republ$" o- #he )h$l$pp$nes. %)Is shares o- )TIC en# #o )h$l$pp$nes&

In 1999, $rs# )a"$-$", a 7ermuare$s#ere, on onbase $nves#men# -$rm, a"4u$re #he

rema$n$n 53 per"en# o- #he ou#s#an$n "ap$#al s#o" o- )TIC. %:AI;G T!: .83/ per"en# o- #he #o#al )*+T ou#s#an$n "ommon shares. )I be"ame

#he oner o- 111,315 )TIC shares or 36.125 per"en# o- #he ou#s#an$n "ap$#al s#o" o- )TIC.

)TIC shares hel b' )I ere se4ues#ere b' #he )CGG, an subse4uen#l' e"lare b' #h$sCour# as par# o- #he $llo##en eal#h o- -ormer )res$en# er$nan :ar"os. The se4ues#ere

)TIC shares ere re"onve'e #o #he Republ$" o- #he )h$l$pp$nes $n a""oran"e $#h #h$s Cour#s

e"$s$on.

)h$l$pp$ne Gov@# e"$e #o sell #he )TIC shares, h$"h represen# 6.3 per"en# o- #he ou#s#an$n

"ommon shares o- s#o" o- )*+T, an es$na#e #he In#erAen"' )r$va#$a#$on Coun"$l %I)C&,

"ompose o- #he +epar#men# o- $nan"e an #he )CGG. Bpon sale, $rs# )a"$-$"s $n#ene

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a"4u$s$#$on o- #he overnmen#s 111,315 )TIC shares resul#$n $n $rs# )a"$-$"s 100 onersh$p

o- )TIC $ll no# v$ola#e #he 30 per"en# "ons#$#u#$onal l$m$# on -ore$n onersh$p o- a publ$"

u#$l$#' s$n"e )TIC hols onl' 1>.83/ per"en# o- #he #o#al ou#s#an$n "ommon shares o- )*+T.

0./ per"en# #o >/ per"en#, an #h$s, "omb$ne $#h

Japanese ;TT +oCo:os "ommon sharehol$ns $n )*+T, oul resul# #o a #o#al -ore$n"ommon sharehol$ns $n )*+T o- 51.56 per"en# h$"h $s over #he 30 per"en# "ons#$#u#$onal

l$m$#.

Issue:=he#her #he sale o- "ommon shares #o -ore$ners $n e"ess o- 30 per"en# o- #he en#$resubs"r$be "ommon "ap$#al s#o" v$ola#es #he "ons#$#u#$onal l$m$# on -ore$n onersh$p o- a

publ$" u#$l$#'

Held:

Des. An' "$#$en or (ur$$"al en#$#' es$r$n #o opera#e a publ$" u#$l$#' mus# #here-ore mee# #hem$n$mum na#$onal$#' re4u$remen# pres"r$be $n Se"#$on 11, Ar#$"le ?II o- #he Cons#$#u#$on.

en"e, -or a "orpora#$on #o be ran#e au#hor$#' #o opera#e a publ$" u#$l$#', a# leas# 60 per"en# o-

$#s E"ap$#alF mus# be one b' $l$p$no "$#$ens.

;a#urall', one o- #he un$spu#able r$h# o- !!RD shareholer $s a r$h# #o vo#e. oever, $n #he

absen"e o- prov$s$ons $n #he ar#$"les o- $n"orpora#$on en'$n vo#$n r$h#s #o pre-erre shares,

pre-erre shares have #he same vo#$n r$h#s as "ommon shares. oever, pre-erre shareholersare o-#en e"lue -rom an' "on#rol #ha# $s, epr$ve o- #he r$h# #o vo#e $n #he ele"#$on o-

$re"#ors an on o#her ma##ers, on #he #heor' #ha# #he pre-erre shareholers are merel' $nves#ors

$n #he "orpora#$on -or $n"ome $n #he same manner as bonholers. In -a"#, uner #he Corpora#$onCoe onl' pre-erre or reeemable shares "an be epr$ve o- #he r$h# #o vo#e.

Cons$er$n #ha# "ommon shares have vo#$n r$h#s h$"h #ransla#e #o "on#rol, as oppose #opre-erre shares h$"h usuall' have no vo#$n r$h#s, #he #erm E"ap$#alF $n Se"#$on 11, Ar#$"le ?II

o- #he Cons#$#u#$on re-ers onl' #o "ommon shares.

oever, $- #he pre-erre shares also have #he r$h# #o vo#e $n #he ele"#$on o- $re"#ors, #hen #he#erm E"ap$#alF shall $n"lue su"h pre-erre shares be"ause #he r$h# #o par#$"$pa#e $n #he "on#rol or

manaemen# o- #he "orpora#$on $s eer"$se #hrouh #he r$h# #o vo#e $n #he ele"#$on o- $re"#ors.

In shor#, #he #erm E"ap$#alF $n Se"#$on 11, Ar#$"le ?II o- #he Cons#$#u#$on re-ers onl' #o shares o-s#o" #ha# "an vo#e $n #he ele"#$on o- $re"#ors.

As reveale $n #he el$bera#$ons o- #he Cons#$#u#$onal Comm$ss$on, E"ap$#alF re-ers #o #he vo#$ns#o" or controlling interesto- a "orpora#$on. or s#o"s #o be eeme one an hel b'

)h$l$pp$ne "$#$ens or )h$l$pp$ne na#$onals, mere leal #$#le $s $nsu--$"$en# #o mee# #he 60 per"en#

$l$p$noone "ap$#al re4u$re $n #he Cons#$#u#$on. ull bene-$"$al onersh$p o- 60 per"en# o-

#he ou#s#an$n "ap$#al s#o", "ouple $#h 60 per"en# o- #he vo#$n r$h#s, $s re4u$re. The leal

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an bene-$"$al onersh$p o- 60 per"en# o- #he ou#s#an$n "ap$#al s#o" mus# res# $n #he hans o-

$l$p$no na#$onals $n a""oran"e $#h #he "ons#$#u#$onal mana#e. 5./>. S$n"e hol$n a

ma(or$#' o- #he "ommon shares e4ua#es #o "on#rol, $# $s "lear #ha# -ore$ners eer"$se "on#rol over

)*+T. Su"h amoun# o- "on#rol unm$s#aabl' e"ees #he alloable 30 per"en# l$m$# on -ore$nonersh$p o- publ$" u#$l$#$es epressl' mana#e $n Se"#$on 11, Ar#$"le ?II o- #he Cons#$#u#$on.