Practice question
A trustee of a nonstock corporation is entrusted in confidence with negotiating acquisition of an asset for its lawful operations. The trustee takes an adverse personal interest and earns profits that would otherwise accrue to the corporation, within Section 30’s express conditions. The trustee says the rule cannot apply because the corporation does not distribute dividends. Which is correct?
- Nonstock status eliminates every fiduciary obligation
- Only dividend-paying firms have entrusted property
- The adverse-interest paragraph covers trustees and protects the corporation’s profits in the stipulated matter; absence of dividends does not supply the claimed immunity.
- The trustee may appropriate every operational asset
- All trustee conduct is automatically ratified
Legal references
- Revised Corporation Code, RA 11232, Sections 30 and 33: https://lawphil.net/statutes/repacts/ra2019/ra_11232_2019.html
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