REPUBLIC BANK v.

MIGUEL CUADERNO

FACTS:
A stockholder of Republic Bank, instituted a derivative suit against the private respondent,
for granting loans to fictitious and non-existing persons and to their close friends who they use as
their dummies on the basis of fictitious or inflated appraised value of real estate properties, in
connivance with other officials. The complaint alleged that the named respondent, acting upon the
complaint and the order of the Monetary Board, ordered an investigation and found violations of the
General Banking Act, but no information was filed until his retirement; Miguel Cuaderno was then
engaged as technical consultant and selected Bienvenido Dizon as Chairman of the Board of the
Bank; that such appointment was done in bad faith and without intention to protect the interest of
the Bank but were only prompted to protect Pablo Roman. The complaint, therefore, prayed for a
writ of preliminary injunction against eh Monetary Board in confirming such appointments, but was
dismissed by the lower court.

ISSUE:

Whether or not the court below erred in dismissing the complaint.

RULING:

Yes, an individual stockholder is permitted to institute a derivative or representative suit on

behalf of the corporation wherein he holds stock in order to protect or vindicate corporate rights,
whenever (1) the officials of the corporation refuse to sue, or (2) are the ones to be sued or (3) hold
the control of the corporation. In such actions, the suing stockholder is regarded as a nominal party,
with the corporation as the real party in interest. He is neither alleging nor vindicating his own
individual interest or prejudice, but the interest of the corporation and the damage caused to it. The
action he has brought is a derivative one, expressly manifested to be for and in behalf of the
Republic Bank, because it was futile to demand action by the corporation, since its Directors were
nominees and creatures of defendant Pablo Roman.

WESTERN INSTITUTE OF TECHNOLOGY, INC. v. SALAS

FACTS:
 Petitioners assert that the motion for reconsideration of the civil aspect of the RTC decision
acquitting respondents is a derivative suit brought by them as minority stockholders of WIT for and
on behalf of the corporation.

ISSUE:

Whether or not the appeal may be considered as a derivative action.

RULING:

No. A derivative suit is an action brought by minority shareholders in the name of the
corporation to redress wrongs committed against it, for which the directors refuse to sue. It is a
remedy designed by equity and has been the principal defense of the minority shareholders against
abuses by the majority. Herein case is not a derivative suit but merely an appeal on the civil aspect
of the attached Criminal Case for estafa and falsification of public document. One of the basic
requirements for a derivative suit is that the minority shareholder who is suing for and on behalf of
the corporation must allege in his complaint before the proper forum that he is suing on a derivative
cause of action on behalf of the corporation and all other shareholders similarly situated who wish to
join. This is necessary to vest jurisdiction upon the tribunal in line with the rule that it is the
allegations in the complaint that vests jurisdiction upon the court or quasi-judicial body concerned
over the subject matter and nature of the action.

SAN MIGUEL CORPORATION v. ERNEST KHAN

FACTS:

Eduardo de los Angeles was a director appointed by PCGG who confiscated the shares of
Andres Soriano III claiming it to belong to Eduardo Conjuangco, a close associate and a bogus
representative of then President Marcos. De los Angeles initiated a derivative suit against herein
respondents, in behalf of SMC, for the revocation of a Board Resolution adopted to assume the
loans incurred by Neptunia Corporation, a foreign company, said to be a wholly- owned subsidiary of
SMC. The action was dismissed by the SEC on the grounds that De los Angeles does not have
adequate shares to represent the interest of the stockholders and that his assumed role as a PCGG
appointed director is inconsistent with his assumed role as a representative of minority stockholders.

ISSUE:
 Whether or not the private petitioner can institute a derivative suit.

RULING:

Yes. The theory that de los Angeles has no personality to bring suit in behalf of the
corporation because his stockholding is minuscule, and there is a "conflict of interest" between
him and the PCGG cannot be sustained. The requisites for a derivative suit are as follows:

a) the party bringing suit should be a shareholder as of the time of the act or transaction
complained of, the number of his shares not being material;

b) he has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of
directors for the appropriate relief but the latter has failed or refused to heed his plea; and

c) the cause of action actually devolves on the corporation, the wrongdoing or harm having
been, or being caused to the corporation and not to the particular stockholder bringing the suit.

The bona fide ownership by a stockholder of stock in his own right suffices to invest him
with standing to bring a derivative action for the benefit of the corporation. The number of his
shares is immaterial since he is not suing in his own behalf, or for the protection or vindication of his
own particular right, or the redress of a wrong committed against him, individually, but in behalf and
for the benefit of the corporation.

ELTON W. CHASE v. DR. VICTOR BUENCAMINO, SR.

FACTS:

Herein plaintiff-appellant Elton Chase, entered into an agreement with Dr. Buencamino and
William Cranker for the establishment of a factory in Manila called American Machinery Engineering
Parts, Inc. (Amparts), where chase was to transfer his tractor plant, ship his machineries from his
former plant in America to Manila, install said machineries at Amparts plant and he is to be the
production manager of Amparts.

For some time the three maintained harmonious relations until Chase tendered his resignation which
was accepted by Buencamino and Cranker. Chase initially filed a case in California against Cranker
for the recovery of the purchase price of his plant, but this died a natural death. Eventually, he filed
a case before the CFI alleging various acts of frauds allegedly committed by the other two.
ISSUE:

Whether or not the petitioner has the capacity to institute a derivative suit.

RULING:

Yes, Chase was clearly recognized by herein defendants from the very beginning of the suit.
It was acknowledged by them that Chase owns 600 shares representing 1/3 of the entirety of all
shares. It should also be noted that Chase has filed the present case not for his personal benefit,
but for the benefit of the corporation.

CATALINA R. REYES v. HON. BIENVENIDO A. TAN

FACTS:

Several purchases were made by Roxas-Kalaw Textile Mills in New York for raw materials but
were found out to consist of already finished product for which reason the Central Bank of the
Philippines stopped all dollar allocations for raw materials for the corporation which necessarily led
the 823 shares, against which the petitioners filed a motion to dismiss which was denied.

ISSUE:

Whether or not a derivative suit is the proper action that the respondent may file.

RULING:

No. The petitioners contend that the proper remedy of the plaintiffs would be to institute a
derivative suit against the petitioners in the name of the corporation in order to secure a binding
relief after exhausting all the possible remedies available within the corporation. An individual
stockholder is permitted to institute a derivative suit on behalf of the corporation wherein he holds
stock in order to protect or vindicate corporate rights, whenever the officials of the corporation
refuse to sue, or are the ones to be sued or hold the control of the corporation. In such actions, the
suing stockholder is regarded as a nominal party, with the corporation as the real party in interest.
In the case at bar, however, the plaintiffs are alleging and vindicating their own individual interests
or prejudice, and not that of the corporation. At any rate, it is yet too early in the proceedings since
the issues have not been joined. Besides, misjoinder of parties is not a ground to dismiss an action.
JUAN D. EVANGELISTA, et. al., v. RAFAEL SANTOS

FACTS:

Juan D. Evangelista, et. al. are minority stockholders of the Vitali Lumber Company, Inc.,
while Rafael Santos holds more than 50% of the stocks of said corporation and also is and always
has been the president, manager, and treasurer thereof. Santos, in such triple capacity, through
fault, neglect, and abandonment allowed its lumber concession to lapse and its properties and
assets, among them machineries, buildings, warehouses, trucks, etc., to disappear, thus causing the
complete ruin of the corporation and total depreciation of its stocks. Evangelista, et. al. therefore
prays for judgment requiring Santos: (1) to render an account of his administration of the corporate
affairs and assets: (2) to pay plaintiffs the value of their respective participation in said assets on the
basis of the value of the stocks held by each of them; and (3) to pay the costs of suit. Evangelista,
et. al. also ask for such other remedy as may be and equitable. The trial court dismissed the action
on the ground of improper venue and lack of cause of action.

ISSUE:

Whether or not the plaintiffs have a right to bring the action for their benefit.

RULING:

No, the said action was brought up for the damage caused by the mismanagement of the
corporation and the subsequent loss of the value of the stocks. The injury complained of is thus
primarily to that of the corporation, so that the suit for the damages claimed should be by the
corporation rather than by the stockholders. Therefore, they may not directly claim those damages
for themselves for that would result in the appropriation by, and the distribution among them of part
of the corporate assets before the dissolution of the corporation and the liquidation of its debts and
liabilities, something which cannot be legally done in view of section 16 of the Corporation Law. In
the case at bar, the plaintiff stockholders have brought the action not for the benefit of the
corporation but for their own benefit, since they ask that the defendant make good the losses
occasioned by his mismanagement and pay to them the value of their respective participation in the
corporate assets on the basis of their respective holdings. Clearly, this cannot be done until all
corporate debts, if there be any, are paid and the existence of the corporation terminated by the
limitation of its charter or by lawful dissolution in view of the provisions of section 16 of the
Corporation Law.

DELTA MOTOR SALES CORPORATION v. HON. JUDGE IGNACIO MANGOSING

FACTS:

Herein respondent Pamintuan initiated an action against petitioner Delta Motors for the
alleged defective Toyota car sold to him and for failure to fulfill the warranty obligation by not
repairing the car. The summons were served on Dionisia Miranda, employee of the petitioner. Delta
Motors failed to answer the complaint and was declared in default and evidence was presented and
a decision was rendered against herein petitioner. Petitioner filed a motion to lift the order of default
and to set aside the judgment and for new trial, which was denied.

ISSUE:

Whether or not there was proper service of summons.

RULING:
No. A strict compliance with the mode of service is necessary to confer jurisdiction of the
court over a corporation. The officer upon whon service is made be one who is named in the
statute; otherwise the service is insufficient. So, where the statute required that in the case of a
domestic corporation summons should be served on "the president or head of the corporation
secretary treasurer, cashier or managing agent thereof", service of summons on the secretary's wife
did not confer jurisdiction over the corporation in the foreclosure proceeding against it. Hence, the
the decree of forclosure and the deficiency judgment were void and should be vacated. According to
Rule 14, Section 13 of the Rules of Court: Service upon private domestic corporation or partnership.
If defendant is a corporation organized under the laws of the Philippines or a partnership duly
registered, service may be made on the president, manager, secretary, cashier, agent, or any of its
directors.

E.B. VILLAROSA & PARTNER CO., LTD., v. HON. HERMINIO I. BENITO

FACTS:

Petitioner and private respondent executed a Deed of Sale with Development Agreement
wherein the former agreed to develop certain parcels of land located at Cagayan de Oro belonging
to the latter into a housing subdivision for the construction of low cost housing units. They further
agreed that in case of litigation regarding any dispute arising therefrom, the venue shall be in the
proper courts of Makati. Private respondent, as plaintiff, filed a Complaint for Breach of Contract and
Damages against petitioner, as defendant, before the RTC Makati for failure of the latter to comply
with its contractual obligation in that, other than a few unfinished low cost houses, there were no
substantial developments therein. Summons, together with the complaint, were served upon the
defendant, through its Branch Manager at the stated address at Cagayan de Oro City but the
Sheriff's Return of Service stated that the summons was duly served "upon defendant E.B. Villarosa
& Partner Co., Ltd. thru its Branch Manager Engr. at their new office Villa Gonzalo, Nazareth,
Cagayan de Oro City, and evidenced by the signature on the face of the original copy of the
summons. Defendant filed a motion to dismiss on the ground of improper service of summons which
was denied.

ISSUE:

Whether or not the court acquired jurisdiction.

RULING:

No. A strict compliance with the mode of service is necessary to confer jurisdiction of the
court over a corporation. The officer upon whom service is made must be one who is named in the
statute; otherwise the service is insufficient. The purpose is to render it reasonably certain that the
corporation will receive prompt and proper notice in an action against it or to insure that the
summons be served on a representative so integrated with the corporation that such person will
know what to do with the legal papers served on him. In other words, "to bring home to the
corporation notice of the filing of the action." The liberal construction rule cannot be invoked and
utilized as a substitute for the plain legal requirements as to the manner in which summons should
be served on a domestic corporation. Hence, under the new provisions of the Rules of Court, service
of summons upon an agent of the corporation is no longer authorized.

LUNETA MOTOR COMPANY v. A.D. SANTOS, INC. et. al.,

FACTS:

Nicolas Concepcion executed a chattel mortgage covering a certificate of public convenience

grnted to him to operate taxicab service of 27 units in Manila, in favor of petitioner, to secure a loan
evidenced by a promissory note guaranteed by Concepcion and one Placido Esteban. Concepcion
mortgaged the same certificate to cover a second loan with Rehabilitation Finance. Petitioner filed
an action to foreclose the mortgage. While it was pending, RF also foreclosed the second chattel
mortgage where the certificate was sold at a public auction in favor of AD Santos who applied for
the approval of the sale which was granted by the Public Service Commission. Later on, the CFI
rendered a judgment in favor of petitioner, where the certificate was sold at a public auction in favor
of the petitioner who immediately filed for approval with the Commission. AD Santos Inc., recipient
of the certificate from AD Santos, opposed the application for approval.

ISSUE:

Whether or not petitioner may acquire the certificate of public convenience.

RULING:

No. The Articles of Incorporation of the said corporation only states that they are a
corporate entity primarily engaged in water-related transportation. Therefore the contention of said
corporation that they are entitled to a certificate of public convenience to operate land-based
vehicles is of no avail. Such land transportation is an entirely different line of business from that
previously declared in their articles of incorporation. The issuance of a certificate of public
convenience would therefore go against the provisions of the law.

GOVERNMENT v. EL HOGAR FILIPINO

FACTS:

the directors of El Hogar Filipino erected a modern reinforced concrete office building at the
site of its old building. The acquisition of the lot and the construction of the new office building
thereon is not the subject of the second cause of action for being ultra vires on the part of the
corporation.

ISSUE:

Whether or not the erection of the building was reasonable.

RULING:

Under the Corporation Code of the Philippines, every corporation has the power to purchase,
hold and lease such real property as the transaction of the lawful business of the corporation may
reasonably and necessarily require. A different ruling on this point would compel important
enterprises to conduct their business exclusively in leased offices a result which could serve no
useful end but would retard industrial growth and be inimical to the best interests of society.

THE DIRECTOR OF LANDS v. THE HONORABLE COURT OF APPEALS and IGLESIA NI

CRISTO

FACTS:

Private respondent Iglesia Ni Cristo applied with the CFI of Cavite for registration of a parcel
of land which it claimed to have acquired by virtue of a Deed of Absolute Sale from Aquelina de la
Cruz, alleging that the applicant and its predecessors-in-interest have been in actual, continuous,
public, peaceful and adverse possession and occupation of the said land for more than 30 years,
which was opposed by the Government as represented by the Director of Lands. The CFI and the CA
ruled in favor of INC.

ISSUE:

Whether or not the corporation may acquire the land in question.

RULING:

Yes. If such ruling was then issued prior to the termination of the use of the 1973
Constitution, which states that juridical person, private respondent in particular, is disqualified from
applying for registration in its name alienable public land, as such land ceases to be public land "only
upon the issuance of title to any Filipino citizen claiming it under section 48[b]" of Commonwealth
Act No. 141, as amended. The Supreme Courts newly adopted ruling in this matter is stated as
follows: alienable public land held by a possessor, personally or through his predecessors-in-
interest, openly, continuously and exclusively for the prescribed statutory period [30 years under the
Public Land Act, as amended] is converted to private property by mere lapse or completion of said
period, ipso jure." The crucial factor to be determined therefore is the length of time private
respondent and its predecessors-in-interest had been in possession of the land in question prior to
the institution of the instant registration proceedings. Such lengthy possessory requirement was met
by the corporation.

REPUBLIC v. ACOJE MINING COMPANY, INC.

FACTS:

A post office branch was opened in herein respondents mining camp at Sta. Cruz Zambales,
at its request, where Hilario M. Sanchez, an employee of such company, was the postmaster. Prior
to the opening the company, at the request of the Bureau of Posts, adopted a resolution that the
former would assume full responsibility for all cash received by the postmaster. On May 11, 1954,
the postmaster went on a three day leave but never returned. As a result, an action was brought by
the government to recover P13,867.24, the amount of shortage in the accounts of the postmaster,
from the company.

ISSUE:

Whether or not the subject resolution is within the powers of the company to adopt.

RULING:

Yes. The resolution covers a subject which concerns the benefit, convenience and welfare of
the companys employees and their families. There are certain corporate acts that may be
performed outside of the scope of the powers expressly conferred if they are necessary to promote
the interest or welfare of the corporation. Thus, it has been held that although not expressly
authorized to do so a corporation may become a surety where the particular transaction is
reasonably necessary or proper to the conduct of its business, and here it is undisputed that the
establishment of the local post office is a vital improvement in the living condition of its employees
and laborers who came to settle in it mining camp which is far removed from the postal facilities or
means of communication accorded to people living in a city or municipality.

TESLA ELECTRIC AND POWER CO., INC. v. P.S.C.

FACTS:

Respondent Filipinas Cement Corporation filed an application with herein respondent PSC for
a certificate of public convenience to install, maintain and operate an electric plant in Teresa, Rizal
for the purpose of supplying electric power and light to its cement factory and its employees living
within its compound. Herein petitioner, operating an electric plant in Teresa Rizal filed an opposition
claiming that Filipinas is not authorized to operate the proposed electric plant under its articles of
incorporation. PSC decided in favor of Filipinas.
ISSUE:

Whether or not Filipinas is authorized to operate and maintain an electric plant.

RUING:

Yes. Paragraph 7 of the Articles of Incorporation of Filipinas provides for authority to secure
from any governmental, state, municipality, or provincial, city or other authority, and to utilize and
dispose of in any lawful manner, rights, powers, privileges, franchises and concessions obviously
necessary or at least related to the operation of its cement factory. Moreover, said AOI also provide
that the corporation may generally perform any and all acts connected with the business of
manufacturing Portland cement or arising therefrom or incidental thereto. It cannot be denied that
the operation of an electric light, heat and power plant is necessarily connected with the business of
manufacturing cement. If in the modern world where we live today electricity is virtually a necessity
for our daily needs, it is more so in the case of industries like the manufacture of cement.

NPC v. VERA

FACTS:

Private Respondent Sea Lion International Port Terminal Services Inc. filed a complaint for
prohibition and mandamus with damages against petitioner NPC and Philippine Ports Authority after
NPC did not renew its Contract for Stevedoring Services for coal-handling of NPCs plant and in
taking over its stevedoring services.

ISSUE:

Whether or not NPC may embark in stevedoring and arrastre services.

RULING:

Yes. The NPC was created and empowered not only to construct, operate and maintain
power plants, reservoirs, transmission lines and other works, but also to exercise such powers and
do such things as may be reasonably necessary to carry out the business and purposes for which it
was organized, or which, from time to time, may be declared by the Board to be necessary, useful,
incidental or auxiliary to accomplish said purpose. In the case at bar, it is an undisputed fact that
NPC, receives various shipment of coal which is used exclusively to fuel the Batangas Coal-Fired
Thermal Power Plant of the NPC for the generation of electric power. The stevedoring services which
involve the unloading of the coal shipments into the NPC pier for its eventual conveyance to the
power plant are incidental and indispensable to the operation of the plant. The Court holds that NPC
is empowered under its Charter to undertake such services, it being reasonably necessary to the
operation and maintenance of the power plant.

POWERS v. MARSHALL

FACTS:

Fourteen (14) plaintiffs, all associate members of the International School, Inc. brought an
action for injunction against 10 members of the Board of Trustees, after a letter of Donal Marshall,
president of the board, was sent stating that the school would be collecting a development fee of
P2,625 per enrollee for the purpose of constructing new buildings and remodel existing ones to
accommodate the increasing enrollment in the school which would need P35M. The CFI of Manila
dismissed the complaint.

ISSUE:

Whether or not the imposition of the development fee is within the powers of the school.

RULING:

Yes. Section 2(b) of PD No. 732 granting certain rights to the sch0ol, expressly authorized
the Board of Trustees upon consultation with the Secretary of Education and Culture to determine
the amount of fees and assessments which may be reasonably imposed upon its students, to
maintain or conform to the schools standard of education. Such consultation complied with and the
Secretary expressed his conformity with the reasonableness of the assessment. The lower court
observed that: "the expansion of the school facilities, which is to be done by improving old buildings
and/or constructing new ones, is an ordinary business transaction well within the competence of the
Board of Trustees to act upon. Xxx Being directly related to the purpose of elevating and
maintaining the schools standard of instruction, which is ordained in fact by PD 732, the expansion
cannot result in any radical or fundamental change in the kind of activity being conducted by the
school that might require the consent of the members composing it.

PHILIPPINE TRUST COMPANY v. RIVERA

FACTS:

Cooperativa Naval Filipina adopted a resolution to the effect that the capital should be
reduced by 50% and the subscribers be released from the obligation to pay their unpaid balance.
The company then became insolvent and fell into the hands of Philippine Trust Company (Philtrust),
as assignee in bankruptcy, and by it this action was instituted to recover 12 of the stock
subscription of herein defendant who subscribed to 450 of the 1,000 authorized capital stock. It
does not appear that the formalities under the Corporation Code for the reduction of capital stock
were observed and in particular it does not appear that any certificate was at any time filed in the
Bureau of Commerce and Industry, showing such reduction. Respondent judge ruled in favor of
Philtrust and directed respondent to pay 12 of the subscription price of his shares.

ISSUE:

Whether or not the reduction is valid and proper.

RULING:

No. A corporation has no power to release an original subscriber to its capital stock from the
obligation of paying for his shares, without a valuable consideration for such release; and as against
creditors a reduction of the capital stock can take place only in the manner and under the conditions
prescribed by the statute or the charter or the AOI. Moreover, strict compliance with the statutory
regulations is necessary. In the case before us, the resolution releasing the shareholders from their
obligation to pay 50% of their respective subscriptions was an attempted withdrawals of so much
capital from the fund upon which the companys creditors were entitled ultimately to rely and,
having been effected without compliance with the statutory requirements, was wholly ineffectual.

MADRIGAL & COMPANY v. ZAMORA

FACTS:

The Madrigal Central Office Employees Union sought for the renewal of its CBA, proposing a
P200 wage increase and an allowance of P100 a month. Petitioner company requested for the
deferment of its negotiation. Meanwhile, the company effected two reductions of its capital stock by
issuing marketable securities owned by petitioner in exchange for shareholders shares. After the
petitioners failure to sit down with the respondent union, the latter commenced a case with the
NLRC for unfair labor practice. In due time, petitioner filed its position paper, alleging operating
losses. The Labor Arbiter rendered a decision in favor of respondent Union.
ISSUE:

Whether or not the decrease in capital stock is valid and binding.

RULING:

No. What clearly emerges from the recorded facts is that the petitioner, awash with profits
from its business operations but confronted with the demand of the union for wage increase,
decided to evade its responsibility towards the employees by a devised capital reduction. While the
reduction in capital stock created an apparent need for retrenchment, it was, by all indications, just
a mask for the purge of union members, who, by then, had agitated for wage increases. In the face
of the petitioner companys piling profits, the unionists had the right to demand for such salary
adjustments. The petitioners capital reduction efforts were, to begin with, a subterfuge, a deception
as it were, to camouflage the fact that it had been making profits, and consequently, to justify the
mass layoff in it employee ranks, especially the union members. They were nothing but a premature
and plain distribution of corporate assets to obviate a just sharing to labor of the vast profits
obtained by its joint efforts with capital through the years.

BENITO v. SEC

FACTS:

Respondent Jamiatul Philippines Al Islamia, Inc. was incorporated with P2,000,000

authorized capital stock divided into 20,000 shares, of which 460 belong to herein petitioner. In a
stockholders meeting, an increase of the authorized capital stock to P1,000,000 was approved,
where the previously unissued shares were all issued. Petitioner Datu Tagoranao Benito filed a
petition with herein respondent SEC alleging that the additional issue of previously unissued shares
was made in violation of his pre-emptive right and that the increase of capital stock was illegal
considering that the stockholders on record were not notified, and that such issuance be cancelled.
Benito is not entitled to pre-emptive right with respect to the original unsubscribed shares, but can
exercise such right with regards the increase capitalization, said SEC.

ISSUE:

Whether or not the ruling by SEC is correct.

RULING:

Yes. The issuance of the unsubscribed portion of the capital stock or P110,980 is valid even
if assuming that it was made without notice to the stockholders as claimed by petitioner. The power
to issue shares of stocks in a corporation is lodged in the bard of directors and no stockholders
meeting is necessary to consider it because such issuance does not need approval of stockholders.
The general rule is that pre-emptive right is recognized only with respect to new issue of shares,
and not with respect to additional issues of originally authorized shares. This is on theory that when
a corporation, at its inception offers its first shares, it is presumed to have offered all of those which
it is authorized to issue. An original subscriber is deemed to have taken his shares knowing that they
form a definite proportionate part of the whole number of authorized shares. When the shares left
unsubscribed are reoffered, he cannot therefore claim a dilution of interest.