Shipping Centre Condominium Corporation, et al. vs. Henry Tsai

[SEC-SICD * CASE NO. 12-96-5517. April 14, 1999.] SHIPPING CENTRE CONDOMINIUM CORPORATION and ARTURO V. ROCHA , petitioners , vs . HENRY TSAI , respondent . D E C I S I O N This resolves the petition for mandamus and/ or recovery of personal property with replevin and damages filed by petitioners against respondent. From the pleadings filed and from the evidence submitted, the facts of the instant case are as follows: On March 29, 1996, petitioner Arturo V. Rocha was elected as President and Chairman of the Board of Directors of the Shipping Centre Condominium Corporation. Prior to Rocha's election, respondent was the President and Chairman of the said Corporation from 1988 to March of 1996. When ROCHA assumed the presidency and chairmanship of the Board, he discovered that the financial records and books of account of the said Corporation for the last three (3) years were not in its principal office at the Shipping Centre Building, 707 A. Soriano Avenue, Intramuros, Manila. Thereafter, an inquiry was made and it was found out that the aforesaid books of account and financial records were in the custody of respondent. Accordingly, respondent was requested to turn over the aforesaid books and records. Such request, however, was disregarded by respondent. On April 15, 1996, the corporation, through ROCHA, wrote a letter addressed to respondent reiterating its demand for the return of the aforesaid documents. On August 28, 1996, Atty. Ma. Valentina S. Santana-Cruz, on behalf of the corporation, sent a final demand letter to respondent. Notwithstanding such demands, respondent failed to turn over the financial records and books of account of the corporation for the last three (3) years. Thus, on December 17, 1996, petitioners filed the instant petition for Mandamus and/or Recovery of Personal Property with Replevin and Damages. On February 6, 1997, respondent filed a Motion For Bill of Particulars. On February 25, 1997, the petitioners filed their opposition to the Motion For Bill of Particulars asseverating that the petition sets forth, with definiteness and particularity, the books of accounts and records referred to. In an Order dated April 11, 1997, the Motion for Bill of Particulars was denied. On August 13, 1997, petitioners filed a Motion To Declare Respondent in Default alleging the latter failed to file an Answer despite the lapse of the reglementary period. On August 25, 1997, respondent filed his opposition to the aforesaid Motion. In an Order dated September 19, 1997, respondent was accordingly declared in default. Thus, the presentation of evidence ex-.parte. The petition is impressed with merit. Section 74 of the Corporation Code of the Philippines provides that: "SECTION 74. Books to be kept; stock transfer agent . Every corporation shall, at its principal office, keep and carefully preserve a record of all business transactions, and minutes of all meetings of stockholders or members, or of the board of directors or trustees, in which shall be set forth in detail the time and place of holding the meeting, how authorized, the notice given, whether the meeting was regular or special, if special, its object, those present and absent, and every act clone or ordered done at the meeting. Upon the demand of any director, trustee, stockholder or member, the time when any director, trustee, stockholder, or member entered or left the meeting must be noted in the minutes; and on a similar demand, the yeas and nays must be taken on any motion or proposition, and a record thereof carefully made. The protest of any director, trustee, stockholder or member on any action or proposed action must be recorded in full on his demand." EDCcaS Thus, it is incumbent upon every corporation whether stock or non-stock, to maintain and keep proper books and records at its principal office Corporate books and records are the property of the corporation and not of the officers or directors or stockholders (In Te Wygant 101 Misc 509, 167 NY Supp 369), and therefore the most appropriate place to keep the books, papers and records of the corporation is the principal office or principal place of business of the Corporation (Lopez, the Corporation C od e of the Phils. Annotated, Book 2, 1994 ed., p. 872). In the present case, the financial records and books of account for the last three (3) years of the Corporation were being withheld by the respondent who is no longer the Chairman or President of the Corporation. Clearly, therefore, respondent has no right to possess those documents, much more to withhold them from the Corporation. WHEREFORE, judgment is hereby rendered ordering respondent to deliver and/or turn over to the petitioners, the possession and custody of the financial records and books of account of the Corporation for the last three (3) years. The prayer for the payment of attorney's fees was not proven during the hearing, hence, should be DENIED for lack of merit. HIACEa SO ORDERED. (SGD.) ROSITA R. GUERRERO Hearing Officer