Patrocinio Sta. Ana vs. Omnimart Industrial Sales, et al.

[SEC-SICD * CASE NO. 2630. August 8, 1985.] PATROCINIO STA. ANA , petitioner , vs . OMNIMART INDUSTRIAL SALES, ET AL. , respondents . D E C I S I O N This petition is for mandamus to compel the respondents Omnimart Industrial Sales Corporation and Mr. Alfredo Cabiles, Jr., as President and General Manager, to recognize the petitioner as a stockholder of record and therefore entitled to all the rights and privileges as one, namely: to furnish him with a copy of the financial statements of the corporation for the taxable year 1983; to furnish him with the annual report of the business affairs and operations of the corporation for the year 1983 and subsequent months thereafter; to produce the books of accounts and records of all business transactions of the corporations and open the same for the inspection of the petitioner; and to serve prior notice upon him of all stockholders' meetings. LLphil Respondent corporation is duly organized and existing under and by virtue of Philippine laws with principal office at 5417 General Luna St., Makati, Metro Manila, with Mr. Alfredo Cabiles, Jr., co-respondent, as president and general manager. The petitioner is allegedly a bonafide stockholder of respondent Omnimart Industrial Sales Corporation, who owns one thousand four hundred (1,400) shares of the capital stock thereof. His ownership is evidenced by stock certificate No. 20 issued on February 1, 1983. Originally, he held four thousand four hundred (4,400) shares of the capital stock of the corporation. He allegedly sold three thousand (3,000) shares covered by stock certificate No. 19 to the corporation at a total cost of forty thousand (P40,000.00) pesos and indorsed and delivered the stock certificate upon his receipt of its payment. Payment thereof consisted of eight (8) post-dated TPBC checks at five thousand pesos (P5,000.00) each paid to and duly received by petitioner as shown in Omnimart Industrial Sales Corporation Sales Voucher No. 9344 dated September 16, 1983 (Exh. 3). And so he claims, as aforestated, that he is still a stockholder by reason of the remaining one thousand four hundred (1,400) shares he still owns in the corporation. Respondents countered by claiming that the entire four thousand four hundred (4,400) shares of capital stock have been sold by petitioner and paid for. The secretary's certificate, dated July 3, 1984, (Exh. 2) approved and confirmed acceptance of the offer of petitioner to sell his entire shareholdings in the Omnimart Industrial Sales Corporation (OISC) at an agreed price of forty thousand (P40,000.00) pesos. The Board meeting which passed the resolution to this effect was held on August 6, 1983. Previously in a board meeting held in May 1983, the petitioner presented his formal letter, dated May 24, 1983, (Exh. C) signifying ". . . my intention of selling out my shares of stocks since December 1982 Board Meeting . . . . To date I have not received from you gentlemen any concrete plan or agreement regarding my formal offer . . .". This letter made no mention of the number of shares to be sold and quoted no selling price for such "formal offer". The board resolution during the August 6, 1983 board meeting was allegedly in response to this offer. However, petitioner professed no knowledge of such board meeting and if ever there was, he was not notified. This brought about the issue on whether the petitioner is still a stockholder of the Omnimart Industrial Sales Corporation or not. If he is, then all the benefits/privileges of a stockholder must be accorded him. The petitioner in his letter dated December 3, 1983, (Exh. B) offered his remaining shares of one thousand four hundred (1,400) for sale to the corporation at their par value of ten pesos (P10.00) per share and asserted his rights to all the benefits and privileges as a stockholder until such time as his shares are fully paid. His letter dated April 27, 1984, reiterated this stand and requested that he be furnished a copy of the financial statement of the corporation for the taxable year 1983. Demand for the right to notice of stockholders' meetings was also reiterated by his counsel to which respondents' counsel replied that full payment of all his shares has already been duly received by him, thus he is no longer a stockholder much less a director of the corporation as a result of this transaction. That a strained relationship exists between the parties is evident. Discrepancies are noted on the reasons why but the fact remains that it is far from cordial. prLL For lack of a deed of sale or any clear agreement between the parties over this transaction, petitioner's insistence as a stockholder and respondents' repeated denial clashed head-on. The former holds OISC stock certificate No. 20 against the latter's Secretary's Certificate dated July 3, 1984, confirming the resolution of the Board on August 6, 1983, to accept the offer of petitioner herein to sell his entire shareholdings of four thousand four hundred (4,400) shares at an agreed price of forty thousand pesos (P40,000.00). To break this deadlock, the Commission resorted to an examination of the antecedent facts. Noted, among others, is the lack of proper demand by respondents for the delivery of stock certificate nos. 19 and 20, purportedly fully paid for. It seems most unlikely for the corporation to let a matter like this be overlooked for some time without demanding for the indorsement/delivery of that which was paid for. It must be recalled at this point that payment for this transaction was in eight (8) equal installments at five thousand pesos (P5,000.00) TPBC post-dated checks. The last payment fell due on December 23, 1983. Again it is quite irregular to allow encashment of these checks within a period of three (3) months and not stopping payment thereafter for failure by petitioner to indorse/deliver the stock certificates paid for. Respondents were rather negligent which calls to mind, in this connection, that the directors of a corporation are held liable not only for willful dishonesty but also for negligence. If due to their fault or negligence the assets of the corporation are lost, each of them may be held responsible for any amount of loss which may have been caused by his wrongful acts or omissions. (Notes and Selected cases in Corporation Law, Jose Campos, Jr., 1969 Edition, p. 470). Fortunately in this case, if stock certificate No. 19 is lost as the same is claimed no longer in the possession of the petitioner, respondents can effectuate its transfer to the books of the corporation for what remains disputed is the sale and transfer of stock certificate No. 20. Article VI, Transfer of shares of stock, By-Laws of the Corporation , provides: "A stock certificate may be transferred, sold, assigned, or pledged by written indorsement on the back and the delivery thereof by the transferor to the transferee, but the corporation shall continue to consider the person in whose name the certificate was issued, as owner thereof until the certificate shall have been surrendered to the Secretary for Cancellation and to be replaced by a new certificate in the name of the transferee, . . . ." (emphasis supplied) From the foregoing, it is quite clear that the presumption of ownership is in petitioner's favor over stock certificate no. 20. In fact he has assiduously taken all precautions to assert his rights over his ownership of the shares covered by stock certificate no. 20. He had written demand letters to the corporation. The corporation had not bothered to stop payment of the installments due despite alleged non-delivery of stock certificates Nos. 19 and 20 by petitioner. On the other hand, respondents rely on the secretary's certificate dated July 3, 1984. However, petitioner's claim that he is not aware of any board meeting held on August 6, 1983, has cast doubt on the authenticity of such certificate. Petitioner was still a director at that time and should have been notified of said meeting. For how can a director, who was not present during said board meeting, have "agreed" to a price of forty thousand pesos (P40,000.00) for his entire shareholdings of four thousand four hundred (4,400) shares of capital stock? Hence, in the absence of other supporting documents to show that he was present at that meeting or may have waived his presence, the Commission holds the view that the presumption of ownership is not overcome by both the testimonial and documentary evidence presented by respondents. WHEREFORE, judgment is hereby rendered in favor of the petitioner: 1) declaring that he is a stockholder of the Omnimart Industrial Sales Corporation who is entitled to all the rights, privileges and benefits as such stockholder; 2) directing respondents to furnish petitioner copy of the 1983 financial statements as well as the annual report of the business affairs and operations of the corporation for the year 1983 and thereafter; 3) directing respondents to allow/open for inspection the books of accounts and records of all business transactions of the corporations. No pronouncement as to costs. SO ORDERED. (SGD.) MINVILUZ C. ASTUDILLO Hearing Officer