Beltran v. Laoag

[SEC-SICD * CASE NO. 04-94-4748. January 12, 1996.] CARLOS G. BELTRAN, ET AL. , petitioners , vs . JULIANA B. LAOAG, ET AL. , respondents . D E C I S I O N This is a petition for mandamus filed by the herein named petitioners against respondents to compel the latter to turn over to the former all the records of Teachers Association of Pangasinan (TAP for brevity) and to pay the cost of suit. LLpr In their petition, petitioners allege that they (petitioners) and respondents are members of the petitioner TAP; that they (petitioners) are the members of the Board of Directors of TAP since December 30, 1993 with petitioner Carlos Beltran as President; that respondents are previous members of the Board of Directors of petitioner association whom petitioner Carlos Beltran, et al., succeeded except respondent Camilio T. Soria who was the Corporate Secretary, Violeta Castro, who was the Treasurer, and Susan Costales, who was the Bookkeeper; that when they (petitioners) assumed their respective position they found out that records of the previous board (headed by respondents Laoag; et al.), such as minutes of the meetings and financial records, cannot be found in the office that, further, upon their investigation, there were even real properties allegedly sold or disposed by the petitioner association during the incumbency of respondents Laoag, et al.; that being members and former officers/directors of the petitioner association, respondents Laoag, et al. have the duty to turn over and surrender all pertinent records of the association; that records of the petitioner association are indispensable to determine its present condition and to be apprised of any impending problems or matters that transpired before; that earnest efforts were made to avoid filing of the instant petition but petitioners have no alternative as respondents Laoag, et al. still failed to turn over the records of petitioner association particularly those referring to financial matters; that there is no other plain, speedy and adequate remedy in the ordinary course of law to immediately enjoin respondents to surrender and turn over the records of the petitioner association except this action. LibLex In their answer the respondents allege, among others, that there are no missing or unaccounted records and properties of the association; that from the time of their assumption to office, the records of the corporation have been religiously kept and are available; that the conduct of election on December 30, 1993, where the petitioners were elected was characterized by massive and rampant irregularities and anomalies, hence, should be declared as null and void and of no legal effect; that the respondents are still the incumbent members of the board of directors, hence, they have no duty to turn over any document to the petitioner. The parties submitted their respective preliminary conference briefs and during the preliminary conference of this case, the issues were defined as follows: a) Whether or not petitioners have the right to compel respondents to turn over to them (petitioners) the records of the corporation; and b) Whether the petitioners have the personality to file this instant petition. The petitioners presented two (2) witnesses, namely: the petitioner Carlos Beltran and a certain Rodolfo Manuel. The respondents, on the other hand, presented one witness, namely: Francisco Quilang. Mr. Napoleon Peralta testified in direct on October 25, 1994 but his testimony was stricken off the records, there being no proffer of evidence before he testified. He testified again on subsequent hearings but this was not terminated because the respondents manifested that they were not presenting further evidence and will just move to dismiss the case. For this purpose, a motion to dismiss was filed by respondents alleging that the petitioners lost their personality to represent the corporation since an election of a new board of directors was conducted on December 17, 1994. The petitioners opposed the aforesaid motion on the ground that the petitioners were re-elected as members of the board, hence, retained their personality to prosecute the case. This Office, in an Order dated January 12, 1995, which has become final, denied the motion. Despite repeated opportunities given to the respondents to continue the presentation of their evidence, they failed to do so. In an order dated May 23, 1995, they were, therefore, declared to have waived their right to present further evidence, and the case deemed submitted for resolution. The issues which deal with the core of petition itself, will be resolved jointly, being closely interwoven. Rule 65, Section 3 of the Revised Rules of Court is explicit that: "SECTION 3. Petition for Mandamus . When any tribunal, corporation, board, or person unlawfully neglects the performance of an act; which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy, and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant, immediately or at some other specified time, to do the act, required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant." This has been interpreted in a long line of cases to mean that: ". . . . For a writ of mandamus to issue, the petitioner should, on the one hand, have a clear legal right to the thing demanded, and there should be, upon the other hand, an imperative duty of respondent to perform the act sought to be mandated. . . . (Ocampo vs. Carale, G.R. No. 110687, December 15, 1993, see also Canonizado vs. Benitez, G.R. No. L-49315 & 60966, February 20, 1984 ; Taboy vs. CA, G.R. No. L-47472, July 24, 1981; Province of Pangasinan vs. Reparations Commission, G.R. No. L-27448, November 29, 1977; Ocampo vs. Subido, G.R. No. L-28344, August 27, 1976 ; Gervacio vs. Cuano 220 SCRA 12)." With the foregoing background, we now tackle whether or not the petitioners have complied with the requisites for issuance of the writ prayed for. On the first requirement, that is that the petitioners should have a clear legal right to the thing demanded, that is, the turn over to them of the corporate records of the petitioner association, the undersigned finds that this has been complied with. It has been established that there was an election conducted by the petitioner association on December 30, 1993 to elect the members of its board of directors to serve as such for one (1) year, commencing on January 1, 1994 up to December 31, 1994. In said election the following were elected as directors: LLphil 1. Rodrigo Aquino 2. Renato Viray 3. Adelina Caragan 4. Purificacion Ignacio 5. Marcelo Sison 6. Patricio Bautista 7. Manuel Codiamat 8. Rolando Gloria 9. Andres Casaclang 10. Araceli Morales 11. Carlos Beltran 12. Rodolfo Jucutan 13. Emedgio Ibasan 14. Silverio Malicdem In respondents' Motion to Dismiss dated December 20, 1994, they had occasion to mention of SEC Case No. 01-94-4665 entitled "Leila Gonzaga, et al. vs. Adelina Caragan, et al.", pending before this Office. A scrutiny of the records therein reveals that said case pertains to a petition to nullify the results of the election of the board of directors of the petitioner association held on December 30, 1993. The same records further reveal that the aforesaid petition was dismissed with finality for having been rendered moot and academic with the election of a new board of directors on December 17, 1994, to serve as such from January 1, 1995 to December 31, 1996. In the election on December 17, 1994, the following were elected as members of the board of directors: LLpr 1. Carlos Beltran 2. Renato Viray 3. Rodrigo Aquino 4. Purificacion Ignacio 5. Manuel Codiamat 6. Rolando Gloria 7. Andres Casaclang 8. Araceli Morales 9. Emedgio Ibasan 10. Silverio Malicdem 11. Leila Gonzaga 12. Abraham Soriano 13. Alejandro Quintos 14. Luz Quintos 15. Ariel Torio From the foregoing, it is clear that as the new members of the board of directors of the petitioner association, to serve from January 1, 1995 to December 31, 1996, the petitioners are entitled to, among others, control and hold all property of the corporation. This finds support in Section 23 of the Corporation Code of the Philippines which provides: "SECTION 23. The Board of Directors or Trustees . Unless otherwise provided in this Code, the corporate powers of all corporation formed under this Code shall be exercised, all business conducted and all property of such corporation controlled and held by the board of directors or trustees to be elected from among the holders of stock, or where there is no stock, from among the members of the corporation, who shall hold office for one (1) year and until their successors are elected and qualified." Such "property" of the corporation includes a record of all business transactions and minutes of all meetings of stockholders or members, or of the board of directors, which are required to be kept and carefully preserved (Section 74, Corporation Code of the Philippines). The corporation is also required to prepare a financial statement every year to be presented to the stockholders (Section 75, Ibid. ) and submitted to this Commission (Section 141, Ibid. ). The respondents have admitted in their answer dated June 3, 1994, among others, that there are no missing or unaccounted records and properties of the petitioner association (paragraph 5, page 2) and that from 1989 up to 1993, records of the petitioner association have been religiously kept and are available (paragraph 3, page 2). These admissions indicate that these records sought by the petitioners are in their (respondents) custody. It should also be noted that the only ground of the respondents in refusing to turn over and surrender the records of the petitioner association to the petitioners is their assertion that they are still the incumbent members of the board of directors of the petitioner association (paragraph 5, page 5, Answer), because the elections on December 30, 1993, electing the petitioners as members of the board of directors, were allegedly characterized by massive and rampant irregularities and anomalies (paragraphs 10 to 13, pages 3-4, Ibid). As mentioned earlier, however, the action to annul the results of the election on December 30, 1993 (SEC Case No. 4665) has already been dismissed with finality. It stands to reason, therefore, that since there was no nullification of such election, the same was valid, and so was the election on December 17, 1994 (for a term commencing on January 1, 1995 and ending on December 31, 1996), which replaced the directors for 1994 (although all directors for 1994 were re-elected for 1995-1996). In other words, the respondents have the burden to show that the election on December 30, 1993 was invalid, and this they have failed to do. The second requisite for the issuance of a writ of mandamus, that is, imperative duty of respondents to perform the act sought to be mandated has, thus, been likewise duly established. All told, since the elections on December 30, 1993 and December 17, 1994 have not been declared null and void, they have remained valid. And since in those elections the respondents have been replaced as directors of the petitioner association, they are duty bound to turn over all corporate records to their successors in interest, the petitioners herein. Wherefore, premises considered, the instant petition is hereby granted. Let a writ of mandamus issue directing the respondents to immediately turn over to the petitioners all corporate records and properties of the petitioner association, Teachers Association of Pangasinan. NO COST. SO ORDERED. (SGD.) ROGELIO C. SESCON Hearing Officer