Joselin G. Fragada vs. P.J. Electrical Supply Co., Inc., et al.

[SEC-SICD * CASE NO. 09-94-4877. December 21, 1999.] JOSELIN G. FRAGADA , petitioner , vs .P.I. ELECTRICAL SUPPLY CO.,INC.,ET AL. , respondents . D E C I S I O N In an action for mandatory injunction, specific performance and damages, with the application for a provisional remedy of a Preliminary Writ of Mandatory Injunction and a Temporary Restraining Order (TRO) filed on 21 September 1999, herein petitioner prays that respondents be directed to register in the respondent corporation's corporate books the transfer of 1,954 shares in his favor of petitioner; that respondents to furnish the petitioner copies of the latest financial statements, list of stockholders with their respective shareholdings, the paid-in capital and the minutes of board and stockholders' meeting since 1993, and that respondents be ordered to pay petitioner actual compensatory, moral and exemplary damages. No TRO was issued. On 14 October 1994, respondents. by counsel filed a Motion to Dismiss and Opposition to Petitioner's application for a Writ of Preliminary Injunction anchored on the Commission's lack of jurisdiction. On 24 October 1994, petitioner filed an Opposition/Reply to the Opposition to the Motion. On 19 October 1994, petitioner moved to have respondents be declared in default for failure to file a responsive pleading, and that the respondents' Motion to Dismiss was filed beyond the reglementary period to file an answer. On 31 January 1995, the respondents' Motion to Dismiss was denied by Hearing Officer Elpidio S. Salgado, as well as, the petitioner's Motion to Declare Respondents in Default. On 29 August 1996, due to the repeated non-appearance of respondents and/or counsel in the hearings of the Writ of Preliminary Injunction, the petitioner's Motion for Reconsideration/Motion to Resolve application for Preliminary Writ of Mandatory Injunction dated 21 March 1999 was granted. On 15 May 1998, Hearing Officer Manolito Soller denied the application for Writ of Preliminary Injunction. On 15 July 1999, the case was again re-raffled to a Hearing Panel. An Order was then issued wherein the respondents were declared to have waived their right to present evidence due to their failure to appear in the many hearings set. The case was submitted for resolution. Parties were directed to file their mandatory draft decision. On 9 August 1999, petitioner, through counsel filed a draft decision. Respondents and counsel, however, did not comply with the Order dated 15 July 1999. We rule in favor of the petitioner. The evidence adduced before us remained unrebutted. It showed indubitably that the petitioner on 02 February 1994, acquired a total of 1,954 shares of stock of respondent P.I. Electrical Supply Co.,Inc. under a Deed of Sale from vendor-stockholder Andrew C. Tan; that this Deed of Sale was executed and acknowledged before a Consul of the Republic of the Philippines in Los Angeles, California; that the documentary stamp and the capital gains taxes were duly paid; that the shares of stock, Stock Certificate No. 65, in the name of Andrew Tan, was duly endorsed and delivered to petitioner; that notice of the transfer and demand for the issuance of a new shares of stock in the name of the petitioner was coursed to the respondent corporation and its acting corporate secretary, Myrna Almonte; and that the respondents ignored and refused to heed petitioner's demand. We find that respondents' unjustified refusal to recognize a valid transaction between petitioner and vendor-stockholder Andrew Tan constitutes a grave and clear contravention of petitioner's substantive rights under the Corporation Code. Considering the proper endorsement of the stock certificate and delivery thereof by the vendor-stockholder Andrew Tan, the title over the corresponding amount of shares, therefore, has passed and is now vested upon the petitioner. Respondent officers, and/or the respondent corporation itself cannot, on any pretext, refuse to take cognizance of valid transfer. It need not be duly stressed here that on matters presently on dispute in the case at bar, the respondent officers only have a ministerial duty to perform, and that is to register the transfer in the books of the corporation. The law does not require more. r In fine, petitioner is entitled to the relief of registration prayed for. On the issue of whether damages are to be adjudged against respondents, we find no pertinent evidence nor testimony to persuade us to rule favorably on the amount or degree of actual or moral damages that petitioner has sustained by virtue of the respondent corporation's refusal to register the transfer. Where there are no moral or compensatory damages, certainly, no exemplary damages can be awarded (Art. 2234, Civil Code). WHEREFORE, judgment is hereby rendered directing respondent corporation, P.I. Electrical Supply Co.,Inc.,to register in its corporate books the transfer of 1,954 shares in said corporation in favor of petitioner Joselin G. Fragada from stockholder Andrew Tan. Respondent P.I. Electrical and its officers are hereby MANDATED to issue a new stock certificate covering the 1,954 shares in the name of the petitioner. No award as to damages and costs. L SO ORDERED. (SGD.) YSOBEL S. YASAY-MURILLO (SGD.) SUZETTE A. NER Hearing Officer Hearing Officer