Andres de Jesus, et al. vs. Manuel de Jesus, et al.

[SEC-SICD * CASE NO. 1664. February 6, 1981.] ANDRES DE JESUS, ET AL. , petitioners , vs . MANUEL DE JESUS, ET AL. , respondents . D E C I S I O N This is a petition for injunction, accounting and damages with prayer for the issuance of a preliminary injunction and/or restraining order to enjoin respondents from acting and representing themselves as directors and officers of Roxas de Jesus Optical Corporation. LLphil The petitioners as well as the respondents except for respondent Crisologo Villanueva whose shareholding is being questioned, are stockholders of the Roxas de Jesus Optical Corporation, a close corporation whose principal stockholder is the intestate estate of Bibiana R. de Jesus. Petitioners alleged that the corporation has a total outstanding shares of 1000 shares broken down into 500 class A shares, 499 class B and 1 class C share; that the 500 class A shares (with voting rights belong to the estate of Bibiana R. de Jesus; that in February 1976 respondent Manuel R. de Jesus was appointed by the intestate court as the administrator of the estate until June 18, 1976 when petitioner Andres de Jesus was appointed in his stead; that on March 6, 1977 pursuant to the corporate by-laws, the annual stockholders' meeting was held and presided by petitioner Andres de Jesus during which all the herein petitioners were elected as directors; that without legal right and despite demands, respondent refused to turn over the control of the office, records, books of accounts and funds of the corporation; that respondents have misappropriated corporate funds and misrepresented to the public that they are directors and officers to the prejudice of the petitioners. Pending the filing of the respondents' answer, the incident on preliminary injunction was set for hearing. Its consideration was however deferred per Order dated July 17, 1979 because of a pendency of a Motion for reconsideration of the Order of the Probate Court dated June 4, 1979, the resolution of which will directly affect the matter before the Commission. Instead of a responsive pleading, the respondents, on December 4, 1978 filed a motion to dismiss the petition on the ground among others, that the Commission has no jurisdiction over the subject matter. After due hearing, the Commission resolved the same conceding the exclusive jurisdiction of the Probate Court over the properties and liabilities of the estate but not the issues raised herein which are: whether or not there was a valid stockholders' meeting held on March 6, 1977 and, whether or not the petitioners were duly elected as directors/officers, so as to entitle them to the management of the corporation. Another ground raised in the Motion to Dismiss is that the petition states no cause of action because the 250 class A voting shares allegedly owned by the Estate of Bibiana de Jesus is the subject of an appeal with the Court of Appeals and has yet to be resolved by the court which acquired prior jurisdiction. Although we saw no legal impediment for the Commission to rule on the ownership of said shares of stock independent of the Special Proceedings No. 81503 treating the intestate Estate of Bibiana de Jesus, we found it more prudent and rational not to disturb the findings of the Court declaring that the 250 shares belong to the Estate per its Orders dated October 1, 1976 and April 15, 1977. It appears that the appeal adverted to has not been duly perfected because the record on appeal has not as yet been approved, hence, the Motion to Dismiss was denied in the Order of the Commission dated October 9, 1979. On November 26, 1979, the respondents filed their responsive pleading admitting and denying certain averments in the petition. By way of special and affirmative defenses, they contend that on March 6, 1976, respondent Manuel de Jesus in fulfillment of his duties as Administrator of the intestate estate of his parents Andres de Jesus and Bibiana de Jesus, caused the passing of a Memorandum to all stockholders setting the annual stockholders' meeting on March 7, 1976, for which a meeting was actually held on said date electing Manuel de Jesus, Carlos de Jesus, Pedro de Jesus, Rosa Sumaria, Salve de Jesus and Crisologo Villanueva as members of the Board of Directors; that by virtue of their election, the respondents have legitimate rights to take active part in the management of the corporation; that respondent Manuel de Jesus and his late mother Bibiana de Jesus are the only subscribers to the 500 class A voting shares with 250 shares each; and that since one half of the entire voting shares could not be voted upon as its status is still pending consideration with the Court, there could be no valid stockholders' meeting held. At the preliminary conference set on March 5, 1979, only the petitioners appeared. The same was however reset to March 21, 1979 and again neither the respondents nor their counsel appeared for the conference, whereupon they were declared in default and the petitioners were allowed to present their evidence ex-parte . On motion of the petitioners, the evidence they adduced in the hearing on the preliminary injunction were adopted as evidence in the main case. No other evidence was presented by counsel and the case was subsequently submitted for decision. We should note that the main points to consider are the ownership of the 250 class A voting shares wherein the issues on the validity of the stockholders' meeting of March 6, 1977 and the legality of the election of the petitioners as directors rest and the alleged mismanagement being committed by the respondents. It appearing that the probate court has taken jurisdiction over the issue of ownership of the 250 of the total of 500 class A voting shares, the same being part of the estate of Bibiana de Jesus, which is pending probate proceedings before the Court of First Instance of Manila, Branch XXI, we are leaving the matter with said court for its final determination. Consequently, the issue on the validity of the stockholders' meeting and the legality of the election of the members of the board could not as yet be determined without first resolving the question of ownership by the probate court. This being the case we move on to the issue on the alleged mismanagement committed by the respondents. Regrettably, the petitioners failed to show or introduce any evidence relative to the averments on mismanagement. It should be remembered that when the respondents were declared in default and the petitioners were allowed to proceed with the presentation of their evidence ex-parte , no evidence was presented other than those presented during the hearing on the incident which relates mainly on the issue of the validity of the annual stockholders' meeting. In the light of the foregoing, the allegation that the respondents are guilty of mismanagement has not been substantiated to warrant imposition of any penalty. WHEREFORE, the instant petition is hereby DISMISSED without prejudice to the outcome of the probate proceedings relative to the ownership of the questioned 250 class A voting shares. No pronouncement as to costs. SO ORDERED. (SGD.) DAISY CAUTON-BARCELONA Hearing Officer Securities Investigation and Clearing Department