Conpharm Industries, Inc. vs. Alfredo A. Santillana

[SEC CASE NO. 3210. October 21, 1987.] CONPHARM INDUSTRIES, INC., ET AL. , petitioners , vs . ALFREDO A. SANTILLANA , respondent . ORDER Submitted for resolution are: 1) the Motion For Reconsideration dated September 11, 1987, filed by the counsel for the respondent; and 2) the Motion to Require Respondent to Turn Over the Office and Records of Conpharm to the Petitioner Ney S. Chua dated September 12, 1987 filed by the petitioners as well as the respective oppositions and the replies filed thereto. IaHAcT We have gone over the arguments as adduced by both parties in all the pleadings filed both in support and in opposition to the motion of respondent seeking to reconsider the order of this commission dated September 7, 1987, and upon consideration of the same, we find no justifiable reason to warrant the reversal of the order sought to be reconsidered. The respondent's arguments as advanced therein are the same arguments which were duly considered by this Commission on the questioned order. The motion for reconsideration, therefore is hereby DENIED. IcSHTA Anent the motion to require respondent to turn over the office and records of Conpharm to petitioner Ney S. Chua, petitioners alleged that notwithstanding the Order dated September 7, 1987, enjoining the respondent from exercising the Office of President and General Manager of Conpharm, the latter failed to turn over the office and records of the corporation despite repeated demands made by the petitioner Ney S. Chua; that likewise, the management of the building where Conpharm has its office, has refused petitioners entry into the office of the corporation all because it was advised by respondent not to recognize anyone other than the respondent; that the actuations of the respondent is in defiance of the Order of September 7, 1987 and the delay in the turn over of the office and records of Conpharm to petitioner Ney S. Chua would cause incalculable harm and tremendous losses to the corporation because of the closure of the office; and that if the order of September 7, 1987 is to be given full legal effect, it is absolutely necessary that respondent should make an orderly turn over of the records and office of Conpharm to allow the corporation to resume its normal operations for the interest of the stockholders of the corporation. Hence, the instant motion. Upon the other hand, respondent maintain that apart from the fact that the Order dated September 7, 1987 is not yet final and executory, it being the subject of a pending motion for reconsideration and that the same is illegal for having been issued in excess of and with grave abuse of discretion, its implementation would render moot and academic the issue on the merits, namely, the total absence of a board meeting held to relieve respondent of his position as President and General Manager of Conpharm; that respondent has nothing to do with the refusal of the owner of this building being rented by Conpharm to let petitioner Ney S. Chua entry thereat; that the refusal may be justified because Conpharm has not been able to pay the rentals to said building due to the advice made to the banks of Conpharm to freeze the corporation's funds; that respondent is not defying the Order of this Honorable Commission, he is merely protecting his rights as well as the rights of the other stockholders and the corporation itself; that if he relinquish on this matter now, he would in effect be waiving all his rights, defenses and counterclaims against petitioners regarding the matter in controversy; that the damage that has been caused and will further be caused to Conpharm is due not to any act of the respondent but to those of petitioners who have illegally padlocked five doors of the office and warehouse of the corporation; and that the turn over to petitioner Ney S. Chua of the position and function of President and General Manager will only give premium to illegal acts of fabrication and manipulation and allow defraudation of the corporation and its stockholder through the application of its assets to purposes purely personal to petitioner Ney S. Chua. The decisive tone and manner that respondent argues of preferential right to the position of President and General Manager of Conpharm Industries, Inc. is, to us, not sanctioned by the Corporation Code and a downright interference with the rights and prerogatives of the stockholders representing or holding the majority of the shares in Conpharm Industries, Inc. Respondent has absolutely no right to expect that he has a monopoly over the positions in questioned as there is no such thing as a vested right in an office. From the perspective of actual corporate practice, it cannot be doubted that the majority members of the board of directors of Conpharm Industries, Inc. have decided to remove respondent as President and General Manager of the aforesaid corporation and as a matter of policy, we cannot permit to inquire into the wisdom of such a decision being part of the internal affairs of the said corporation. Respondent's argument that the Order dated September 7, 1987 is not yet final and executory, it being subject of a motion for reconsideration and therefore, cannot be implemented, to our mind, is not even worth considering in view of a line of cases wherein it was held that in an action for injunction, the judgment granting, dissolving or denying an injunction is immediately operative, unless otherwise ordered by the court and such judgment shall not be stayed after its rendition and before an appeal is taken or during the pendency of the appeal. (Dimaunahan vs. Aranas, 74 Phil. 455). Again, time and again, respondent kept saying that the Order dated September 7, 1987 is illegal it having been issued in excess of and with grave abuse of discretion. We consider such an allegation as a mere opinion on the part of the respondent but until reversed by higher authorities said order of September 7, 1987 remain in full force and effect and we believe that respondent has no other alternative but to comply with whatever is being mandated in the aforesaid Order. An injunction duly issued must be obeyed, however, erroneous the action of the Court may be, until its decision is overruled by itself or by a higher court. The motion to Require Respondent To Turn Over The Office and Records of Conpharm To petitioner Ney S. Chua should be as it is hereby GRANTED. SEIacA WHEREFORE, the Motion For Reconsideration dated September 11, 1987 should be, as it is hereby DENIED. The respondent is hereby directed to turn over the office and records of Conpharm Industries, Inc. to Petitioner Ney S. Chua. SO ORDERED. THADEI (SGD.) ALBERTO P. ATAS Hearing Officer