Aurelio Palanca vs. Editha Enatsu

[SEC CASE NO. 296. November 2, 1990.] AURELIO PALANCA, ET AL. , petitioners-appellants , vs .EDITHA ENATSU, ET AL., respondents-appellees . O R D E R This is an appeal from the order of the hearing officers dated March 14, 1990 dismissing the petition a quo and the order dated February 28, 1990 denying the petitioners' application for the issuance of a writ of preliminary injunction. In their appeal, appellants prayed that a writ of preliminary injunction be issued commanding respondents-appellees as well as all persons acting under their authority and behalf to cease from acting and carrying out the functions of the board of directors and/or officers of UDMC, that the order dated March 14, 1990 issued by the hearing officers be reversed and set aside and that an order be issued remanding the case to the hearing officer for further proceeding. The antecedent facts culled from records of this case are as follows: Petitioners-appellants Aurelio Palanca and Vidal Villegas, stockholders of record of UDMC, filed a petition on January 24, 1990 praying among others for the issuance of a writ of preliminary injunction to enjoin the respondents who were elected as directors of UDMC on January 16, 1990 as well as other persons acting in their behalf from acting and carrying out the functions of the board of directors and or officers of UDMC; and to declare as null and void the election of the respondents as members of the board. Appellants-Petitioners in their Memorandum of Appeal allege that after respondents have elected themselves as new members of the board of directors of UDMC and thereafter as officers, they proceeded to the business offices of UDMC and carried out acts as announcement of the election of the new board of directors and officers of the corporation; replacement of the existing security guards, forcible opening and searches of the business offices of UDMC; audit of the records and monies of UDMC; padlocked and/or chained the entrances and exits of UDMC; withdrawal of funds from the bank accounts of the corporation and forcible detention of the employees of UDMC. Hearings on the application for the issuance of a writ of preliminary injunction were conducted on January 30 and 31, 1990. After petitioners and respondents submitted their respective memoranda relative to the incident on preliminary injunction, the hearing officers issued on February 28, 1990 an order denying the prayer for the issuance of a writ of preliminary injunction. While the hearing on the preliminary injunction incident was being conducted, respondents on February 9, 1990 filed a motion to dismiss the petition on two grounds: (1) the hearing officers have no jurisdiction to declare the order of the commission en banc of December 29, 1989 as null and void; and (2) the petitioners have no valid cause of action to nullify the election. All the foregoing grounds raised by respondents in their motion to dismiss having been discussed and passed upon, the hearing officers in their order, dismissed the petition a quo. Hence, this appeal. On the first two assignment of errors appellants claimed that the hearing officers erred in not finding the election of the respondents-appellees on January 16, 1990 as null and void for having been implemented and carried out in violation of the terms of the order of the SEC En Banc and that the hearing officers erred in not finding that even assuming arguendo that SEC En Banc order was complied with, the order of the SEC en banc was issued in violation of the Corporation Code. With these, we refer to the provision of Section 6, P.D. 902-A as amended to wit: The decision, ruling or order of any such Commissioner, bodies, boards, committees, and/or officer may be appealed to the Commission sitting en banc within thirty (30) days after receipt by the appellant of such decision, ruling or order. xxx xxx xxx The aggrieved party may appeal the order, decision or ruling of the Commission sitting en banc to the Supreme Court by petition for review in accordance with the pertinent provisions of the Rules of Court. (Sec 6, P.D. 902-A) The Commission en banc therefore in the exercise of its appellate power can review, and or reverse or affirm any orders, rulings, resolutions or decisions of the Hearing officers and not the other way around. To do otherwise would vest in said hearing officers authority to nullify an action of a higher authority, in this case the Commission en banc, which is tantamount to a reversal of judicial pronouncements on matters relating to administrative proceedings. The aforequoted provision spelled out in clear terms, the distinction between the office of the Commission en banc and that of the hearing officers. Besides, it is more in keeping with the intent of the law, to hold that there can never be a case where an order or resolution of the Commission en banc could be reviewed or reversed by the hearing officers. With reference to the second assignment of error, appellants contend that the hearing officers erred in not finding that the order of the SEC EN BANC dated December 29, 1989 was issued in violation of the Corporation Code. This Commission finds the contention without merit because Section 5 of Rule 131 of the Rules of Court provides for a presumption in favor of the validity of the questioned order. It provides "that the following presumptions are satisfactory if uncontradicted, but may be contradicted and overcome by other evidence: xxx xxx xxx (n) That a court or judge acting as such whether in the Philippines or elsewhere was acting within the lawful exercise of his jurisdiction". Moreover this presumption is bolstered in the case of the Phil. British Co., Inc. vs. delos Angeles, G.R. No. L-33720-21, March 10, 1975, where the high court ruled that "in the absence of a showing to the contrary, a judicial proceedings is presumed to be regular, and all steps required by law to be taken before the court may validly render judgment, had been so taken." With the foregoing, the hearing officers simply could not nullify an official action of the higher authority, the Commission en banc, where the issuance of the questioned order is presumed to be a valid exercise of its jurisdiction. In this regard, this Commission quotes with approval the finding of the hearing officers a quo that "it is only the Commission en banc which can reconsider its orders, or the Court of Appeals or the Supreme Court in appropriate proceedings which can declare said order of the Commission en banc null and void." Anent the third assignment of error, this Commission believes that the hearing officers did not err in finding that the petitioners-appellants failed to make a valid cause of action. While appellant-petitioners argue that the case involves rights of minority stockholders to vote their shares which as claimed has been curtailed due to the failure to send personal notices of the special meeting as required by the Corporation Code or the by-laws, we cannot however disregard that fact that this Commission en banc on December 29, 1989 authorized the publication of the notice of the holding of said special stockholders meeting. The notice of said meeting was in fact published in the January 11, 1990 issue of the Manila Bulletin. Even granting that petitioners-appellants did not actually read said notice, they are deemed to have constructive notice thereof. "Unless it may be a notice or advertisement published in accordance with some positive law or legal order the publication of a notice or advertisement, if not seen or read by a person, does not charge him with constructive or implied notice of its contents. " (66 C.J.S. Sec. 13 par. a, 649 citing the case of People, for use of School Dist.,No. 6, Cornejos County v. Schaeffer, 65 p. 699, 100 Colo. 70) Therefore considering that the notice of the special meeting of stockholders of the corporation has been published pursuant to a legal order of the Commission en banc (the order dated December 29, 1989) the petitioners-appellants are deemed to have constructive notice thereof and hence cannot invoke the defense of lack of proper or sufficient notice. Apropos the fourth assignment of error this Commission en banc resolves not to disturb the findings and the order of the hearing officers on February 28, 1990 denying the writ of preliminary injunction not only because the dismissal of this case is sufficient proof that petitioners-appellants are not entitled to the issuance of a writ of preliminary injunction but likewise for having failed to show that the hearing officers acted with grave abuse of discretion. LibLex WHEREFORE premises considered, the order of dismissal appealed from and the order dated February 28, 1990 should be as, they are hereby AFFIRMED. SO ORDERED. (SGD.) ROSARIO N. LOPEZ Chairman (SGD.) GONZALO T. SANTOS, JR. (SGD.) RODOLFO L. SAMARISTA Associate Commissioner Associate Commissioner (did not participate) (SGD.) ARMANDO Z. GONZALES (SGD.) MERLE O. MANUEL Associate Commissioner Associate Commissioner