Benito Tan, et al. vs. Vicente Yu, et al.

[SEC-SICD * CASE NO. 2712. August 25, 1986.] BENITO TAN, ET AL. , complainants , vs . VICENTE YU, ET AL. , respondents . D E C I S I O N This is a petition for injunction with application, among others, for the issuance of writs of preliminary and/or mandatory injunction seeking to enjoin the herein respondents from: (1) enforcing the resolutions/acts approved in the special meeting of the Board of Directors of Asians' Best Travel & Tours, Inc., (hereinafter referred to as the Corporation) held on November 5, 1984; (2) barring and/or preventing the complainants from entering the premises of the Corporation; (3) preventing the complainants from performing their respective duties and functions as Vice-President and General Manager, Treasurer, Operations Manager and Corporate Secretary; (4) negotiating the Commercial instruments payable to the Corporation and/or issuance of checks, purchase orders and other documents pertaining to the business of the Corporation; and (5) enjoining respondent Albert Tan from performing the functions of a General Manager of the Corporation. LLphil On November 23, 1984, the Commission issued a Temporary Restraining Order, restraining and enjoining the respondents or any person or persons acting upon their instance, direction, control and/or supervision from barring and/or preventing the complainants from entering the premises of the Corporation and their offices and further restraining and enjoining the respondents from preventing the complainants from performing and discharging their functions and duties as directors and such other positions in the Corporation to which they were elected but have not yet been removed. At the hearing of the incident or the application for the injunctive relief, complainant Rose Marie Yulo-Tan testified, among others, that the parties formed the Corporation with her as the Treasurer, Operations Manager and Corporate Secretary and her husband, complainant Benito Tan, as the Vice-President and General Manager and they performed their duties as such; that respondent Vicente Yu has no experience in running the travel and tour business; that on October 18, 1984, she was informed that respondent Mary Yu Tan confiscated the company checks from the office of the accountant upon instruction of respondent Vicente Yu; that on October 23, 1984, her office table was ransacked and everything that can be taken there was confiscated upon instruction of respondent Vicente Yu; that on October 24, 1984, she was refused entrance to the office of the Corporation; that her services were terminated and such termination was published in the Bulletin Today, Daily Express and Times Journal; that on October 31, 1984, she received the notice of special meeting held on November 5, 1984; that a copy of the minutes of said special meeting was sent to her through her brother. After the partial cross-examination, complainant Rose Marie Yulo-Tan did not appear anymore on any of the subsequent hearings despite due notice. Complainants then rested their case. On the other hand, respondents presented the testimonies of respondents Albert Tan, Vicente Yu and Mary Yu Tan together with Tagumpay Santos, a former messenger of the Corporation. These witnesses rebutted and belied the testimonies of complainant Rose Marie Yulo-Tan and revealed several anomalous transactions that resulted in favor of the complainants to the prejudice of the Corporation. Some of these irregularities include the following: collection of P7,000.00 received by complainant Rose Marie Yulo-Tan from Tagumpay Santos and which was not turned over to the Corporation; misrepresentation on the value of a xerox machine purchased from Philippine Fuji Xerox which only cost P36,000.00 but which complainant Rose Marie Yulo-Tan made to appear to be P62,000.00; collection made by complainants from Pennel Commercial Co., Inc. in the amount of P117,030.72 which was never turned over to the Corporation. Respondents likewise show that after the discovery of these anomalies, respondents Alix Y. Yu and Anita Aguilar-Yu requested for a special meeting of the board of directors on November 5, 1984 to discuss the operation and finances of the Corporation. Notice of said meeting was served upon all the members of the board including complainants Benito Tan and Rose Marie Yulo-Tan. In that particular meeting, the services of the complainants Benito Tan and Rose Marie Yulo-Tan as General Manager and Operations Manager/Treasurer, respectively were terminated effective November 6, 1984 due to "loss of confidence" and respondent Albert Tan took over as General Manager on the same date. Respondents Albert Tan, Mary Yu Tan and Elizabeth R. Young were then given authority to sign checks, purchase orders and other documents pertaining to the business of the Corporation. It was likewise testified that complainants are still stockholders and directors of the Corporation, that while they were prevented from performing the duties of General Manager and Operations Manager/Treasurer, they were not, however, banned from entering the premises of the Corporation as stockholders or directors; that complainant Benito Tan did not regularly report to the office; that the board of directors of the Corporation has decided to stop its business operation and is no longer operating. At the middle of the presentation of evidence by the respondents, counsel for the complainants withdrew his appearance and requested the Commission to send the subsequent notices of hearings directly to the complainants which the Commission did. On September 18, 1985, the Commission issued an Order denying the complainants' application for the issuance of writs of preliminary and/or mandatory injunction and also set the case for preliminary conference. At the preliminary conference, however, complainants failed to appear despite due notice and they were, upon proper motion by the respondents, declared non-suited. Respondents then manifested that they are adopting all their evidence, oral and documentary, in support of their opposition to complainants' application for the issuance of writs of preliminary and/or mandatory injunction, as their evidence in chief in the main case and thereafter submitted the case for decision. As could readily be seen, the main question is whether or not the complainants are entitled to the injunctive relief being prayed for. Complainants are not entitled to injunctive relief. An applicant for the injunctive remedy is entitled to relief whenever he could show that (1) he seeks the intervention of the court with "clean hands"; (2) he has a right or interest in the title or property subject matter of the controversy; (3) that there is an injurious invasion of such right or interest in the title or property in controversy; (4) which will result in threatened, actual or substantial damage so that on equitable grounds such injurious invasion should be restrained. (Commentaries and Jurisprudence on Injunction, by Laureta and Nolledo, p. 19). These requisites must be substantially complied with. Absence of any of these requirements would result to the denial of the prayer for injunctive relief. In the instant case, it appears that complainants did not go to court with clean hands. There were anomalies discovered by respondent such as the misrepresentation made by complainants on the value of the xerox machine and her failure to turn over to the Corporation huge sum of money collected. The witnesses and documents (affidavits) presented by the respondents tended to show the frauds and anomalies perpetrated by the complainants and these documents became the bases for the termination of the latter's services as General Manager and Operations Manager/Treasurer. Since their services as General Manager and Operations Manager/Treasurer had been terminated due to loss of confidence, and their successors have already been appointed, it is thus evident that complainants have no more clear and certain rights to said positions. Hence, there is no injurious invasion of such right or interest in the title or property in controversy to speak of which will result in threatened, actual or substantial damage. The Corporation, through its board, cannot be faulted from removing petitioners since the power to remove an officer for cause inheres in every corporation as a part of its being. In fact, the board of directors has authority to remove all officers appointed by them. Besides, if the directors or trustees can be removed with or without cause, as provided under Section 28 of the Corporation Code of the Philippines, then the removal of herein complainants from said positions with cause is not but logical. Moreover, the by-laws of the corporation provides that the general manager "shall hold office at the pleasure of the board." Anent the resolutions/acts approved in the special meeting of the board of directors of the Corporation held on November 5, 1984, the enforcement of the same is binding upon its stockholders and members of the board considering that said meeting was validly called and held in accordance with the provisions of the by-laws of the Corporation. Likewise, complainants' claim that they were prevented from entering the premises of the corporation is belied by the testimonies of respondents Albert Tan and Mary Yu Tan and by the checks they signed on October 24, 29, 30 and 31, 1984 at the office of the Corporation. Respondents Albert Tan and Mary Yu Tan had likewise testified that as a result of the frauds and anomalies committed by the complainants against the Corporation, the latter had become bankrupt and had ceased operation after January, 1985. WHEREFORE, the complaint is hereby dismissed for lack of merit. No costs. SO ORDERED. (SGD.) ROLANDO C. MALABONGA Hearing Officer