In re Bicutan Express South Transport Jeepney Operators and Drivers Association, Inc. v. Patricio

[SEC-SICD * CASE NO. 02-94-4698. June 13, 1994.] IN THE MATTER OF THE PETITION FOR THE CONDUCT OF THE ANNUAL ELECTION OF OFFICERS OF BICUTAN EXPRESS SOUTH TRANSPORT JEEPNEY OPERATORS AND DRIVERS ASSOCIATION, INC.,PABLO AREVALO, JR.,ET AL. , petitioners , vs .DOMINGO PATRICIO AND RODRIGO SALMORIN , respondent . D E C I S I O N Before this Commission is a Verified Petition for the Conduct of Annual Election of Officers, among other reliefs, filed by Mssrs. Pablo Arevalo, Jr.,Lauro Binaday and Anastacio Sumaway for and in behalf of the Bicutan Express South Transport Jeepney Operators and Drivers Association, Inc. LLphil Petitioners allege in their petition that they are members in good standing of the Bicutan Express South Transport Jeepney Operators and Drivers Association, Inc. (BESTJODAI, for brevity),the same being a corporation duly registered and incorporated with this Commission that the respondents herein are the President, and Secretary respectively of BESTJODAI acting in a hold over capacity; that as per Section 1, Article 1 of the by-laws (Exhibits "C" and "C-1",respectively) it is so provided that BESTJODAI shall conduct an annual meeting every 2nd Sunday of February of each year, for the holding of the elections of the board of directors thereof; that in spite of this provision in the by-laws and as testified to by only witness for the petitioners, Lauro Binaday, respondents have not yet called a meeting for the purpose of elections of directors of the BESTJODAI; that this failure or refusal to conduct elections has been going on for at least two (2) years now, despite the petitioners repeated demands; that because their requests have been repeatedly turned down, petitioner sought reliefs by filing a letter (Exhibit "E") with the Corporate and Legal Department (CLD) of this Commission, seeking that a resolution be issued by the CLD directing the officers of BESTJODAI to conduct an election; that after the filing of the aforesaid letter several conferences were held at the instance of Attys. Francis Salomon and Bayani Delos Reyes of the CLD, for the purpose of compelling both parties herein to agree that an election be held; that these conferences were to no avail as respondents refused to conduct elections of BESTJODAI or accede to petitioners' requests; that thereafter a petition was filed with the Prosecution and Enforcement Department (PED) asking that an election be held by the BESTJODAI, and the said petition was subsequently indorsed to this Department; that when the petition was indorsed to this Department, petitioner withdrew the same sometime in January 1994 with the hope that an election will be held on the second Sunday of February of 1994; and that as shown by petitioner, respondents have still adamantly refused to conduct an election last February 1993 and are still holding on to their positions in a hold-over capacity. Respondents on the other hand, were not able to present any evidence to refute the claims and allegations of the petitioners for reason of their failure to file any answer within the reglementary period as provided for in the summons of the undersigned Hearing Officer dated February 28, 1994. In fact, on April 22, 1994, an Order was issued declaring respondents in defaults. In view of the foregoing, all evidence presented by the petitioners herein are deemed UNCONTROVERTED and hence ADMITTED. After a thorough review of the evidence presented by the petitioners, this Hearing Officer finds just cause to grant their prayers. Respondent's unwarranted and brazen defiance of the petitioners' requests/demands for an election must not be, and shall not be countenanced by this Commission. No Officer of a corporation must be allowed to perpetuate himself in office at the expense and prejudice of the corporation and its membership. The foregoing are not hollow statements, for they find support in the following provision of the Corporation Code, to wit: SECTION 50. Regular and Special Meetings of Stockholders or Members. xxx xxx xxx WHENEVER, FOR ANY CAUSE THERE IS NO PERSON AUTHORIZED TO CALL A MEETING, THE SECURITIES AND EXCHANGE COMMISSION, UPON PETITION OF A STOCKHOLDER OR MEMBER, AND ON THE SHOWING OF GOOD CAUSE THEREFORE, MAY ISSUE AN ORDER TO THE PETITIONING STOCKHOLDER OR MEMBER DIRECTING HIM TO CALL A MEETING OF THE CORPORATION BY GIVING PROPER NOTICE REQUIRED BY THIS CODE OR BY THE BY-LAWS. THE PETITIONING STOCKHOLDER OR MEMBER SHALL PRESIDE THEREAT UNTIL AT LEAST A MAJORITY OF THE STOCKHOLDERS OR MEMBERS PRESENT HAVE CHOSEN ONE OF THEIR NUMBER AS PRESIDING OFFICER (Emphasis Supplied) and in order to effectively implement the above provision, Presidential Decree 902-A also provides as follows: dctai SECTION 6. IN ORDER TO EFFECTIVELY EXERCISE SUCH JURISDICTION THIS COMMISSION SHALL POSSESS THE FOLLOWING POWERS: xxx xxx xxx C) TO COMPEL THE OFFICERS OF ANY CORPORATION OR ASSOCIATION REGISTERED BY IT TO CALL MEETINGS OF STOCKHOLDERS OR MEMBERS THEREOF UNDER ITS SUPERVISION; (Emphasis Supplied) xxx xxx xxx The aforestated provisions are intended to protect the stockholders or members from a situation where no meeting is called due to the absence of any person authorized to call the same, or due to neglect or fraudulent refusal of the directors or trustees to call a meeting for the election of new directors or whenever it is necessary to discuss or act on certain matters. Petitioners herein have sufficiently shown through clear and convincing evidence that respondents have held on dearly to their posts as president and secretary, to the prejudice of BESTJODAI and its membership. These acts should not be tolerated nor given a premium by this Commission. Considering that respondents refusal to vacate their positions and conduct an annual election is abject and has no basis in law, they have now lost standing as directors and officers of BESTJODAI. In view thereof, is shall be considered that under ,there is no person or member authorized to call an election in BESTJODAI. WHEREFORE, in the light of the foregoing premises, DECISION is hereby rendered: (1) enjoining the respondents from exercising and discharging powers, duties and functions appurtenant to their offices as president and treasurer; and, (2) ordering the petitioners herein to conduct an election of the directors and officers of BESTJODAI, for the fiscal year 1994-1995, to be supervised by this Commission, within thirty (30) days from receipt hereof. NO COSTS. prcd SO ORDERED. (SGD.) EDUARDO P. BAROT Hearing Officer