Reynaldo Bondoc, et al. vs. Antonio V. Mariano, et al.

[SEC-SICD * CASE NO. 03-94-4731. September 23, 1999.] REYNALDO BONDOC, ET AL. , complainants , vs .ANTONIO V. MARIANO, ET AL. , respondents . D E C I S I O N This is a complaint for accounting which requires the respondents to specifically (1) bring before this Commission their association's membership book and books of account, statement of cash receipts and disbursement and information about tax returns for the period 1986 to the present; (2) account all funds received by them like membership fees, "butaw",and other collections during the same period; and (3) remove them as directors or officers of the association or to criminally prosecute them as may be warranted by law, if they fail to account. As alleged in the pleadings and confirmed by evidence during the proceedings, it is established that at the time this case was filed, all of the parties were members of Samahan Ng May-Ari At Tsuper Ng Jeepney Ng Plaridel-Malolos Inc. (Samahan for brevity),a corporation duly registered with the Commission; that respondents Antonio V. Mariano, Danilo G. Guellas, and Domingo Valenzuela, beside being members of the Board, were also the President, Secretary and Treasurer respectively; that the Samahan had a total membership of 438 persons; that during the incumbency of said respondents or from 1986 to 1994, they collected membership fees from members-operators in the amounts of P3,000.00 and P4,000.00 per unit and on the basis of whether the jeepney is an eight-seater or less and a nine-seater or more; that not all said operators-members had already paid in full their membership fees; that for the same period respondents also collected membership fees from member-drivers in the amount of P200.00; that they also collected daily dues or "butaw" from 80 to 100 jeepney members that were actually hired on a given day; that the amount of the "butaw" was P1.00, although the same was gradually increased to P2.00 in 1992, then to P3.00 in 1993, and to P5.00 in 1994; that subsequent to an election where they lost, complainants repeatedly demanded respondents to account the funds and operation of the Samahan but the latter failed, hence the former sought the assistance of a counsel who sent a written demand and thereafter filed this case; and that prior to the filing of this case, both parties even sought the assistance of the Supervision and Monitoring Department of this Commission in arriving at a settlement but to no avail. Moreover, the then Hearing Officer Rogelio Sescon issued a 20-day Temporary Restraining Order (TRO) which enjoined respondents from disbursing, releasing and paying out corporate funds. The same Hearing Officer thereafter heard the application for a writ of preliminary injunction and although the complainants had completed the presentation of their evidence therefor, respondents, on the other hand, deliberately delayed the proceeding by repeated requests for postponement and failure to attend hearing which, thus, prompted then Hearing Officer Abillar to, upon motions, strike out respondents' Magkasamang Sinumpaang Salaysay and to have this case decided on the merit (Orders of April 16, and November 13, 1996),hence this decision. The lone issue raised is basically on complainants' right and entitlement to accounting of funds. LLpr Complainants' proven allegations to the effect that they are members of the Samahan who requested respondents officers in writing to account for the funds of the Samahan though the same was denied; and that said respondents were collecting fees and/or daily dues or "butaw" from members regardless of the amount, are sufficient basis for this Hearing Officer to resolve the aforesaid issue in the affirmative. The fact that membership fees are not yet fully paid and that complainants' total computation of the daily "butaw" is based on assumption do not exempt respondents, being the responsible officers of the Samahan, from their obligations of rendering an accounting to the general members in accordance with the generally accepted principles of accounting and/or to furnish petitioners with audited financial statements upon written demand, wherein said statements, a balance sheet, profit or loss statement details of the Samahang's assets and liabilities or the result of its operation are included and reasonably shown. The complainants as members of the Samahan have a right to demand an accounting from the respondents who, for their being officers, have also that corresponding legal obligation to render an accounting to the general membership during the period that they were officers of the Samahan. These respective right and obligation of the parties are quite explicit and provided for in Sections 75 and 141 of the Corporation Code, which state: "SECTION 75. Right to financial statements . Within ten (10) days from receipt of a written receipt of any stockholders as member, the corporation shall furnish to him its most recent financial statement which shall include a balance sheet as of the end of the last taxable year and a profit or loss statement for said taxable year, showing in reasonable detail its assets and liabilities and the result of its operations. At the regular meeting of stockholders or members, the board of directors or trustees shall present to such stockholders or members a financial report of the operations of the corporation for the preceding year, which include financial statements, duly signed and certified by an independent certified public accountant. xxx xxx xxx "SECTION 141. Annual reports of corporations . Every corporation, domestic or foreign lawfully doing business in the Philippines shall submit to the Securities and Exchange Commission an annual reports of its operations, together with a financial statement of its assets and liabilities, certified by any independent certified public accountant in appropriate cases, covering the preceding fiscal year and such other requirements as the Securities and Exchange Commission may require. ...." WHEREFORE, premises considered, judgment is hereby rendered, as follows: 1. Directing the-herein respondents to render an accounting of the funds and financial condition of the Samahan ng May-ari at Tsuper ng Jeepney Ng Plaridel-Malolos, Inc. for and covering the period from 1986 to the present and to furnish each of the complainants with the supposed financial statements during the said period immediately upon receipt hereof; and 2. Thereafter and if said accounting rendered and/or financial statements furnished by respondents do not appear satisfactory to the complainants, ordering the audit of the funds of the Samahan for the same period stated in No. 1 above by the external auditor of the association, if any, or if there is none, by an independent auditor designated by the Commission from a list of four (4) certified public accountants or accounting offices that shall be proposed by both parties, at the expense of the respondents. No pronouncement as to damages and costs of suits. TADaES SO ORDERED. (SGD.) PAULINO Q. GALLEGOS Hearing Officer