Federation of Antipolo Jeepney Drivers and Operators vs. Dionisio Perez, Jr.

[AC NO. 306. October 1, 1991.] FEDERATION OF ANTIPOLO JEEPNEY DRIVERS AND OPERATORS, INC. ET AL. , petitioners-appellants , vs . DIONISIO PEREZ, JR., ET AL. , respondents - appellees . D E C I S I O N This is an appeal from the order in SEC Case No. 3696 of Feb. 14, 1990 denying petitioners' application for a writ of preliminary injunction to enjoin respondents from representing themselves as directors and officers of petitioner Federation of Antipolo Jeepney Drivers and Operators, Inc. ("FAJDOI") and collecting membership dues from the members. LLjur The facts are simple. On Nov. 28, 1989 petitioner Rowena dela Cruz ("Cruz") filed a petition ( SEC Case No. 03681 ; Exhibit A) requesting the Securities and Exchange Commission ("Commission") to call an election of directors and officers of petitioner FAJDOI alleging that the president respondent Dionisio Perez, Jr. ("Perez") and other officers failed to call the annual general membership meeting in violation of the By-Laws which requires the holding of election on the first Sunday of January each year (Exh. 11). On Dec. 11, 1989 the Commission authorized Cruz to call a membership meeting to elect the directors of FAJDOI. On Dec. 17, 1989, an election was held in which 15 directors were elected including Cruz. At the organizational meeting that followed, Cruz was elected president. Inasmuch as respondents continued to act as officers and collect dues from the members, Cruz filed the instant action seeking to enjoin respondents from representing themselves as members of the board of directors of FAJDOI and collecting membership dues from the members and to render an accounting of FAJDOI funds. A temporary restraining order was issued but the petition for the issuance of a preliminary injunction was denied on Feb. 14, 1990 on the ground that there was no showing that those who attended the meeting on Dec. 17, 1989 that saw the election of Cruz and others constituted the majority of the members. On the same Order of Feb. 14, 1990, the SEC also annulled the election of Perez and his group on Jan. 7, 1990 for the same reason that it declared the election of Cruz and her group as void. Likewise in the same Order, the SEC ordered the creation of (a) a management committee to manage the assets of FAJDOI and call a special membership to elect the directors for 1990-1991 and (b) an election/accreditation committee to determine who are the members of good standing who shall be allowed to vote. The dispositive part of the Order reads: "Likewise, respondents Dionisio Perez, Jr. group cannot manage the affairs of the Federation consistent with our findings of the January 7, 1990 election, coupled with the fact that their term of office have ( sic ) already expired. Accordingly, a special membership meeting for the election of directors for the year 1990-1991 is hereby directed to be called within thirty (30) days from receipt hereof, unless the parties will mutually agree for an extension of such period. Accordingly, a Management Committee of Three (3) composed of Atty. James Abugan of this Commission, as Chairman; Rowena dela Cruz, as representative of the petitioners; and Dionisio ( sic ) Perez, Jr., as representative of the respondents, is hereby created, to manage the affairs of the Federation during the interim, i.e. . . . . from receipt of this Order until after the new set of directors and officers shall have been elected and qualified. The functions and duties of the Management Committee shall be the following: 1. Set the date of the special membership meeting for the election of directors and officers of the Federation for 1990-1991. 2. Send notices with the agenda of the meeting to the members in accordance with the by-laws of the Federation. 3. See to it that both groups (Perez and dela Cruz) shall equally use the terminals of the Federation in Antipolo and particularly in Cubao Commercial Center, Quezon City. LLphil 4. Determining ( sic ) all the expenses of holding of the special meeting, which will be shouldered equally by both groups. 5. Adopt such other rules and regulations relative to the effective management of the Federation. Relative thereto, an Election/Accreditation Committee is hereby created, composed of Atty. Trinidad Dabbay of the Commission as Chairman, and two (2) representatives each from the petitioners and respondents, as members. The functions of the Election/Accreditation Committee are as follows: 1. determine the members of good standing who are qualified to vote and be voted for; 2. determine the cut-off date for payment of membership fees and other dues; 3. validate proxies, if the same are allowed; 4. conduct a clean and orderly election; and 5. adopt such other rules and regulations in accordance with the Amended by-laws of the Federation and the provisions of the Corporation Code, in order to ensure clean and orderly election of the board of directors and officers." A motion for reconsideration having been denied, Cruz appealed to the Commission En Banc. The evidence show that neither the members of the group of Cruz nor Perez constitute a majority of the membership of FAJDOI since the total membership has not been actually ascertained. Under Section 6 (d) of Presidential Decree No. 902-A as amended by Presidential Decree No. 1758, "the Commission may create or appoint a management committee, board or body upon petition or motu propio to undertake the management of corporations, partnerships or other associations not supervised or regulated by other government agencies in appropriate cases when there is imminent danger of dissipation, loss, wastage or destruction of assets or other properties or paralyzation of business operations of such corporations or entities which may be prejudicial to the interest of minority stockholders, parties-litigants or the general public . . ." The said law sufficiently empowers the Commission to create a management committee to oversee the affairs of petitioner FAJDOI. However, the Commission feels that for simplicity and economy there should be only one committee charged with the management of FAJDOI and conduct of the election for the purposes stated in the Order appealed from. IN VIEW OF THE FOREGOING, the Order of Feb. 14, 1990 is hereby affirmed except that: The purpose of the election shall be to elect directors and officers for the year 1991-1992; There shall be only one committee to perform the functions of the Management and the Election/Accreditation Committees whose chairman shall be petitioner Rowena dela Cruz and respondent Dionisio Perez, Jr. and The said Committee shall, before conducting the election, promulgate guidelines to insure a free, honest and orderly election consistent with the By-Laws of FAJDOI and the Corporation Code. Without pronouncement as to costs. prcd (SGD.) ROSARIO N. LOPEZ Chairman (SGD.) RODOLFO L. SAMARISTA (SGD.) ARMANDO Z. GONZALES Associate Commissioner Associate Commissioner (SGD.) MERLE O. MANUEL (SGD.) FE ELOISA C. GLORIA Associate Commissioner Associate Commissioner