Morning Breeze Subdivision Tricycle Operators & Drivers Association, Inc. v. Carcha

[SEC-SICD * CASE NO. 09-95-5150. October 1, 1998.] MORNING BREEZE SUBDIVISION Tricycle Operators & Drivers Association, Inc.,represented by TOMAS PIZZARO, ET AL. , petitioners , vs .ALFREDO CARCHA, ET AL. , respondents . D E C I S I O N This is a petition to declare the election held by respondent on July 18, 1995 as null and void and at the same time to declare the election held by petitioners on August 6, 1995 as valid. By the Order of July 10, 1996 both parties were given five (5) days to file their respective formal offer of documentary exhibits. While petitioners filed their formal offer of evidence on July 29, 1996, respondents, on the other hand, failed until now to formally submit their documentary exhibits despite repeated orders of the Commission to file the same. The facts of this case as culled from the evidence available and offered from the pleadings themselves are as follows: The petitioner Morning Breeze Subdivision Tricycle Operators and Drivers Association Inc. (MBS TODA for brevity) is a non-stock corporation duly organized and registered with the Securities and Exchange Commission. It is represented in this case by the then incumbent officers, certain Tomas Pizarro, Lope Panis, Armando Belarmino and Rolando Capalad who, together with all the respondents, are members of petitioner MBS TODA. Sometime on November 15, 1994, respondents (as petitioners) filed with the Commission SEC Case No. 11-94-4915 against Tomas Pizarro, Alfredo Padin Resurreccion Azusano, Joseph Sarabia, and Joseph Manreza as respondents, praying, among others, that a general election be held to elect new sets of officers (Exh. "A"). Upon a joint motion of both parties in that case, however, the case was dismissed and that a general/annual membership meeting of the association was agreed to be held on July 18, 1995 for the election of the members of the Board of Directors (Exh. "B").Copies of this Order were posted at the Association's terminals (TSN June 28, 1996 page 20). On June 28, 1995 herein petitioners (respondents in SEC Case No. 11-94-4915) moved to reconsider the Order of June 15, 1995 which dismissed the case and ordered the holding of the July 10, 1995 annual election. This was however denied by the Order of July 19, 1995 by Hearing Officer Sescon (pars. 6 and 7 of the answer). Thereafter, but before the agreed holding of the annual election of July 18, 1995, herein respondents sought the cooperation of herein petitioner Tomas Pizarro who, despite the Order of June 15, 1995 and the fact that he was the incumbent President of MBS TODA, did not want to hold and conduct the said July 18, 1995 election. Herein respondents likewise sought the intervention of certain Barangay Captain Trinidad (being the Adviser of the Association) in order to get the cooperation of the then incumbent President of the Association, petitioner Tomas Pizarro, who, despite repeated requests for a meeting before said Barangay Captain likewise failed to appear. Respondent likewise sought the advice of the then hearing Officer Sescon who advised to proceed with the July 18, 1995 annual election. On July 5, 1995 an Election Committee was constituted by Tomas Pizarro by appointing certain Reynaldo Villariza as the chairman thereof (Exh. "D"). The July 18, 1995 annual election as scheduled in the By-laws was held and because of the absence of an Election Committee, the same was supervised by the adviser Barangay Captain Trinidad together with the other four (4) Barangay Captains in the area covered by the MBS TODA (Exh. "G" and TSN of June 28, 1996). There were two groups of candidates who run for elective positions in this election (Exh. "G"). LLpr Those who were voted and proclaimed as officers and members of the Board of Directors of MBS TODA in this election were respondents Alfredo Carcha as President; Pichie Ricasio as Vice President; Porfirio Ursales as Secretary; Carlos Buluran as Treasurer; Bernardo Enteng as Assistant Treasurer; Savino Rigor as Auditor Mr. Perez as PRO and Mr. Tatuan, Mr. Oligo, Mr. Ortiz, and Mr. Locsin as members of the Board. (TSN, June 28, 1996, pages 49 to 51).They thereafter assumed office and functioned as such immediately thereafter (par. 12 of the petition). Having refused to participate in the July 18, 1995 election, Tomas Pizarro and his group called and led another election of officers and members of the Board of MBS TODA on August 6, 1995. This was conducted by the Election Committee which was constituted by Mr. Tomas Pizarro on July 5, 1995 with said Reynaldo Villariza as chairman. Those who were allegedly elected in the August 6, 1995 special election were: Tomas Pizarro as President; Lope Panis as Vice President; Armando Belarmino as Secretary; Rolando Capalad as Treasurer; Antonio Guanzon as Auditor; Eduardo Ocampo as PRO. Jessie Maruraza, Romeo Capalad, and Ernesto Brios as Sergeants-at-arms and Carlito Borlaza, Romeo Lorenzo Resurreccion Azusano, and Antonio Agnes as members of the Board (par. 10 of the petition and Exh. "E"). In this election, out of 381 members of the MBS TODA (Exh. "I-3" and "I-4") 176 members appeared to have voted (Exh. "F" to "F-4"). On September 21, 1995, the instant petition was filed to question the validity of the supposed annual or regular election of July 18, 1995 where respondents were elected and at the same time to request that the special election of August 6, 1995 be upheld as valid. Likewise, while the petition was pending trial, another annual election was held on July 18, 1996. cdll The issues to be resolved in this case are: 1. Whether the annual/regular election of July 18, 1995 was contrary to the By-laws, hence accordingly void; 2. Whether the special election held on August 6, 1995 was in accord with the By-laws and whether those voted therein were the duly constituted officers and members of the Board of MBSTODA; and 3. Whether petitioners are entitled to Attorney's fees. With regard to the first issue, it is the contention of the petitioners that the annual election held on July 18, 1995 was a nullity because it was in violation of the By-laws. They argued that (1) the election of July 18, 1995 was conducted without the supervision of an Election Committee but by a group of Barangay Captains; (2) the incumbent officers (petitioners) were not given notice about the said election; (3) non-members of MBSTODA were allowed to vote; and (4) only the Board can call the said election and therefore respondents cannot do so. The respondents, on the other hand, argued that it was not true that petitioner Tomas Pizarro and his group, being then the incumbent officers before the July 18, 1995 questioned election and being also the respondents in SEC Case No. 11-94-4915, were not notified of the July 18, 1995 annual election because (1) they themselves also received a copy of June 15, 1995 Order of the Commission which dismissed the said case and order the holding of the July 18, 1995 election; (2) they in fact moved to reconsider the said order but the same was denied; (3) that respondents had exhausted their effort to get the cooperation of Tomas Pizarro and his group; (4) that for this purpose, respondents even sought the assistance of Barangay Captain Trinidad (then Association's Adviser) in setting a meeting with Tomas Pizarro (then incumbent President) on matter relative to the July 18, 1995 election but the latter simply refused to attend; and (5) that the election was generally peaceful and orderly though supervised by Barangay Captains. From the facts of the case, it has been clearly established that the July 18, 1995 annual or regular election of MBS TODA officers and members of the Board of Directors had not been supervised by the Election Committee that was constituted on July 5, 1995 but by the adviser of the Association, who happened to be the Barangay Captain and with the assistance of four other Barangay Captains within the vicinity where the-MBSTODA operates. It was not, however, clearly established by evidence that the then incumbent officers consisting of herein petitioners were not notified of the July 18, 1995 annual election. In fact these petitioners cannot deny the fact that they received the June 15, 1995 Order which confirmed the holding of the July 18, 1995 annual meeting. Moreover, being the incumbent officers, petitioners should be estopped from contesting the validity of the July 18, 1995 election because it was their duty to do the sending of notices to members and they should not blame respondents if ever there was no notice given to them with regard to the annual election of July 18, 1995. Likewise this being annual election as provided in the By-laws, it is presumed that every incumbent officer must have knowledge of it. Similarly, there was not a single evidence to sufficiently show that there was a non-member who voted in said election. Respondents had not named a single person who was not a member but who voted in said election. Furthermore, petitioners' contention that the July 18, 1995 election is void because the same was called by respondents who had no authority to call it is also without merit. While it may be true that respondents, being just members, cannot call an election, the July 18, 1995 election, being an annual election, need not necessarily be called by anyone else. It was necessary to conduct the same every year on such a date as provided in the By-laws. The incumbent officers cannot simply postpone or adjourn the holding thereof by obstinate refusal to call, initiate, prepare and convene the required committees for the conduct of the same. While an annual election may be postponed on valid grounds, there must be prior official notice of postponement. Relative to the July 18, 1995 annual election of MBSTODA there was no postponement. Herein petitioners, who were incumbent officers and therefore duty-bound to prepare and conduct such election, simply refused to participate and thereafter conducted another election of their own on August 6, 1995. The incumbent officers cannot extend their term of office indefinitely by refusing to conduct the annual election (Alabana, Walsh vs. State, 199 Ala 486, 74 80 45; Nathan V. Thompkins, 82 Ala. 437 2 80 747). Accordingly the only question that needs consideration is: Whether the July 18, 1995 annual election can be nullified on account that it was not supervised by an Election Committee as provided in the By-laws. The opinion of this Commission is in the negative. Petitioners shall likewise be estopped and should not be heard questioning the validity of the July 18, 1995 annual election upon a ground (absence of an Election Committee to supervise) which was their duty under the By-laws to have it convened and functioned as such during the election. The pertinent provision of the MBSTODA By-laws on election of officers and members of the Board is Article VII which reads: "SECTION 1. There shall be an annual election of officers and members of the board for every anniversary of the association on the 18th July when the association was founded." cdll "SECTION 2. Only members or their designated proxies of association shall be allowed to vote. Casting of vote must be kept secret." "SECTION 3. There shall be an election committee composed of four members of good standing to be appointed by the President with the approval of the Board of directors. ..." "SECTION 4. The Committee On Election shall have general supervision over the election of the officers and members of the Board of the association including the powers to pass upon qualifications of candidates. It shall have the power to deputize any officer or member of the association to help in ensuring a clean, orderly and honest election." While it is clear from the foregoing provisions that the annual election of July 18, 1995 had to be supervised by an Election Committee to be appointed in this particular case by the petitioners themselves, hence they have effective control over its convening, said election may not be simply nullified, as it appears from the act of the case that the mere supervision of the July 18, 1995 annual election by a group of Barangay Captains (one of whom was the adviser of the MBSTODA) did not affect the substantial rights of the general membership of MBSTODA. (Magill v. North American Refractories Co.,36 Del Ch. 305, 129 A 2d 411, citing Fletcher Cyc. corp. Perm. Ed. 2024) It appears further that the only role of the Barangay Captains was simply to keep the said election peaceful and orderly. prcd Moreover, the proximate cause for the absence of an Election Committee to supervise the election and which in turn compelled respondents to seek the assistance of Barangay Captain Trinidad who was the Association's adviser was due to petitioners' obstinate refusal and evident bad faith to hold and conduct the July 18, 1995 annual election which should have been their duties and obligations as incumbent officers under the By-laws. In other words, petitioners should be estopped from questioning the validity of the annual election of July 18, 1995 upon a ground that emanate from their own acts and misfeasance. Be that as it may, the petition may even be dismissible on account that it, being an election case was filed beyond the reglementary period or two (2) months from the actual holding of the election that is being contested. (Sec. 3, letter a (l) of the SEC Summary Procedure In Election Cases). Moreover, considering that it had been clearly shown in the records of the case to the effect that, during the trial on the merits, there was another annual election that was held on July 18, 1996, this petition to annul the annual election of July 18, 1995 and/or to affirm the validity of the special election held by petitioners on August 6, 1995 has been rendered moot and academic. There is no more practical relief to be granted. Hence the Court ruled: "...It is well-settled rule that Courts will not determine a moot question or abstract proposition nor express an opinion in a case in which no practical relief can be granted." (Lomo v. Mabelin, G.R. No. L-68649, December 29, 1986) With respect to the second issue, the Commission likewise finds no sufficient evidence to show that the special election held by petitioners on August 6, 1995 can be affirmed as valid. Neither there were evidence to show that there was an actual call by the corresponding officers nor there were notices that were served to members. What is merely apparent is the fact that petitioner simply conducted their own August 6, 1995 election without the involvement of the then newly elected officers during the annual election. It must be noted that at the time petitioners conducted their election on August 6, 1995, their term of office as then incumbent officers had already been terminated by the holding of the annual election on July 18, 1995 where respondents appeared to have been duly elected as officers. Hence, it follows that the August 6, 1995 special election was not duly called either in accord with the By-laws or the Corporation Code. LLpr Likewise, where each of two rival factions assumes to conduct an election, the first regular and formal proceeding or election will be recognized by the courts as valid. The redress of any person aggrieved by such election is to be sought through the courts and not by holding another subsequent election at once, and those who participated in the subsequent election who refused to participate in the regular election cannot have the regular election set aside. ( se 1412C 1267). Accordingly, the Commission does not have that clear basis in affirming the validity of the August 6, 1995 special election held by petitioners vis-a-vis the annual election held on July 18, 1995 which is still presumed at this point in time to have been regularly conducted. With respect to relief on Attorney's fees, the same is accordingly without basis. WHEREFORE, premises considered, the instant petition is hereby DISMISSED for lack of merit. No pronouncement as to costs. IDATCE SO ORDERED. (SGD.) PAULINO Q. GALLEGOS Hearing Officer