Federico Carandang, et al. vs. Valley Golf Club, Inc., et al.

[SEC CASE NO. 3047. August 31, 1987.] FEDERICO V. CARANDANG, ETC. , petitioner , vs . VALLEY GOLF CLUB, INC., ET AL. , respondents . O R D E R Submitted for resolution is respondent Valley Golf Club, Inc.'s Motion For Reconsideration, dated June 22, 1987, as well as petitioner's Opposition thereto. TAcSaC In their Motion for Reconsideration of the Omnibus Order of June 17, 1987, denying the disqualification of the undersigned Hearing Officer, as well as the disqualification of the petitioner's counsel, respondent Valley Golf Club, Inc. (Valley Golf, for short) insists and theorizes: A) That the Hearing Officers (the undersigned) have shown partiality in favor of petitioner, and foremost of these occasions was when the said hearing officers issued a restraining order, prohibiting the enforcement of a particular section of herein corporation's by-laws on September 14, 1986, when what was and is alleged in the petition for injunction is that herein petitioner was going to enforce that on September 15, 1986. B) That it is erroneous that petitioner's counsel should not be disqualified from appearing against herein respondent corporation who used to be lawyers of respondent corporation on the ground that the case at bar happened to be a mere squabble between the officers and stockholders of the herein respondent. The fact is that herein respondent corporation is a respondent against whom petitioner filed the suit. What is being enjoined is not the by-laws of any particular stockholder or officer but of herein respondent. Besides, the herein respondent has a counterclaim against petitioner where the herein respondent is the one and only claimant. Surely, on this score alone the herein respondent cannot be said to be a mere nominal party. Petitioner, in his opposition to the Urgent Motion For Reconsideration dated June 22, 1987 countered: a) That the said motion is devoid of merit. If securing a restraining order is a badge of bias on the part of the hearing officers who issued it, then all hearing officers of this Commission have been biased at one time or another. Judicial notice can be taken of the fact that party litigants have been able to secure restraining orders from this Commission. And this include counsel for respondents in the case. b) That respondent Valley Golf is just a nominal party to this case. It has, therefore, no reason to be "more popish than the pope". If the respondent-directors have found no reason to move to reconsider the Omnibus Orders, why should respondent Valley Golf? c) That the Order pinpointed "September 14, as the second Sunday is merely to conform to the Calendar. The By-Laws of Valley Golf is part of the records of the Commission. After a careful and thorough perusal of the arguments of the parties, the Commission finds that the aforesaid Motion For Reconsideration is without merit. Respondent Valley Golf's assertion that on several occasion, foremost of which was the issuance of restraining order prohibiting the enforcement of a particular section of herein respondent's by-laws on September 14, 1986 when what was and is alleged in the petition for injunction is that herein petitioner was going to enforce that on September 15, 1986 meeting, the undersigned Hearing Officers (Attys. Abugan and Almosa) have shown partiality in favor of the petitioner, has no basis at all. It did not believe the explanations and reasons of the undersigned's order of June 17, 1987. It, further, insists and maintains that the undersigned Hearing Officers did not get a copy or duplicate copy of the corporate records on file with the Commission, because as check from the record section, disclosed that the original of the by-laws was never borrowed by the undersigned Hearing Officers, while the duplicate thereof was borrowed only on March 26, 1986. Respondent Valley Golf's maliciously implied that the date September 15, 1986, instead of September 14, 1986, as alleged in the petition was furnished, at most through a copy of the by-laws provided by the petitioner. While it is true that in the ordinary course of transactions in the Commission, the borrowing of corporate records, are supposed to be recorded in the Record Division, there are cases wherein corporate records are already in the different departments of the Commission, which for some reasons or another finds its way in these departments. Probably it has stayed there for quite a time for some pending actions, particularly corporate files of corporations, which are always subject of frequent intra-corporate disputes (like respondent corporation) for which they always find its way with this department (SICD). The records Division missed some of its up-to-date recording of these kind of corporate files. Precisely, the Commission from time to time, has to conduct an inventory of corporate records in the different department because our Record Division has lost track of them. Records show, that at least four (4) or five (5) cases of intra corporate disputes involving subject corporation (respondent Valley Golf) has been filed in this Commission. Perhaps, at least the same number of time also, that subject corporate file has been borrowed by this Department (SICD). In one time or another, because of some intricacies, said corporate file has been with this department and has not been returned to the Record Division. In all probability the "Corporate File" of respondent corporation was still with the department (SICD) when the undersigned Hearing Officers were resolving the propriety of the issuance of a restraining order on September 15, 1986. With all candor and sincerity, the undersigned Hearing Officers were guided by the corporate by-laws of respondent corporation on file with the Commission determining the questioned date of the restraining order, and not from anybody else, much less from the petitioners' copy. CTEDSI Respondent corporation's accusation that the undersigned Hearing Officer were not using the copy of its by-laws on file with the Commission and instead insinuated that it was furnished by petitioners' copy thereof, was only a product of a mere impression, if not the result of unfounded presumption. For one, as a matter of practice, we do not actually accept or consider the gospel truth of any by-laws referred to us by contending parties to a case, for obvious reason, until comparing the same with the records of the Commission, especially so in the matter of determining the actual date of the annual stockholders meeting of a corporation. As regards to the denial of the disqualification of petitioners' counsel from appearing against herein respondent's corporation because said lawyers used to be lawyers of herein respondent's corporation on the ground that the case at bar happened to be a mere corporate squabble between the officers and stockholders of herein respondent corporation, the same needs no further discussion considering that the matter has been extensively discussed in Order of June 17, 1987. It is however, emphasized that the present petition is a derivative suit, wherein the outcome of the same would be for the benefit and interest of subject corporation. We are, however, surprised on the insistence of respondent Valley Golf's counsel to disqualify the herein undersigned Hearing Officers and petitioners' counsels considering that respondent Valley Golf is only a nominal party, while respondents' members of the present Board of Directors, who are supposed to take the cudgel of respondent's corporation have remained to go along with the proceedings of this case, by not joining the Motion and Motion for Reconsideration of the disqualification of the undersigned Hearing Officers, as well as the disqualification of the petitioners' counsel, filed by counsel for respondent's Valley Golf. Respondent Valley Golf should not be "more popish than the pope". To sum it all, it can be safely deduced that the intention of respondent Valley Golf is merely to delay the proceeding of this case. WHEREFORE, there being no cogent reason to disturb the Order of June 17, 1987, the Motion For Reconsideration dated June 22, 1987, should be, as it is hereby DENIED, for lack of merit. SETaHC SO ORDERED. (SGD.) JUANITO B. ALMOSA, JR. Hearing Officer (SGD.) JAMES K. ABUGAN (SGD.) NAPOLEON M. TUMAMAO Hearing Officer Hearing Officer