Jesus P. Bernardo vs. Henri s. Khan and/or Shape Centre, Inc.

[SEC-SICD * CASE NO. 3284. May 2, 1990.] JESUS P. BERNARDO , petitioner , vs .HENRI S. KHAN and/or SHAPE CENTRE, INC. , respondents . D E C I S I O N This refers to the amended petition praying for the creation of a management body/appointment of a receiver and, after hearing, judgment be rendered ordering 1) reinstatement of the petitioner to his position as Director, Vice President and General Manager of the respondent corporation, 2) payment of back wages from December 6, 1986, 3) payment of damages and expenses of litigation, and 4) Henri S. Khan to call a meeting to elect a new board of directors. LLpr In support thereof, petitioner alleged, inter alia, that respondent Henri S. Khan, with grave abuse of discretion and in violation of petitioner's right, unlawfully terminated petitioner's services on December 2, 1986 as Director, Vice President and General Manager of the respondent corporation; that respondent Henri S. Khan effectively barred petitioner from entering the premises of the respondent corporation; that respondent Henri S. Khan is reported to have authorized questionable and seemingly illegal transactions which if not enjoined may dissipate the assets and properties of the respondent corporation; and that since the initial meeting wherein the first set of board of directors was elected, no annual meeting was called and held for the purpose of electing the board of directors. On July 13, 1988, respondents filed their comment to the petitioner's application for the creation of a management body/the appointment of receiver stating that petitioner failed to indicate the particular illegal transactions allegedly committed by Henri S. Khan and that there is likewise no showing that there was imminent danger of dissipation, loss and destruction of the corporate assets and properties to warrant the appointment of a receiver/the creation of a management body. On August 8, 1988, respondents filed their answer to the amended petition with counterclaim denying the material averments in the amended petition and by way of affirmative defenses alleged, among others, that the removal of the petitioner as Director and Vice President was the result of the re-organization of the respondent corporation and the designation of new members thereof by virtue of the Memoranda dated November 5, 1986 and March 13, 1987 (Annexes "A" and "B" of the Answer) issued by the Deputy Executive Secretary and OIC of the Ministry of Human Settlements; that the petitioner was not removed as General Manager but resigned as such as evidenced by his resignation letter dated November 28, 1986; that the take-over of the respondent corporation is now the subject of controversy in civil case No. 54947 entitled "Pamantasan ng Bagong Lipunan Foundation, Inc. et al. vs. The University of Life Fact Finding Committee, et al." in the Regional Trial Court of Pasig, Branch 163 and C.A. G.R. Sp. No. 14016 entitled Pamantasan ng Bagong Lipunan Foundation, Inc. et al. vs. The Honorable Judge Eduardo C. Abaya, et al, in the Court of Appeals, Eighth Division. The hearing on the petitioner's application for the creation of a management body/the appointment of a receiver was scheduled for October 28, 1988 but only counsel for the petitioner appeared. For failure of counsel for the respondents to appear, the hearing was reset to November 16, 1988. However, on the scheduled hearing on November 16, 1988, only counsel for the respondents appeared notwithstanding due notice to both parties, thus forcing the cancellation of the hearing and its resetting to December 7, 1988. When neither of the parties appeared on December 7, 1988, an Order was issued on July 11, 1989 directing the parties to advise the Commission if they are still interested in pursuing the case. In a manifestation and ex-parte motion to set the case for hearing, petitioner manifested that he is still very much interested to pursue the case and prayed that the case be set for hearing on July 27, 1989. As prayed for, the hearing was set on July 27, 1989, at 9:00 o'clock in the morning. When the case was called for hearing on July 27, 1989, only counsel for the petitioner appeared, who manifested and prayed that the case be considered submitted for resolution based on the pleadings filed by the parties. On November 3, 1989, both parties were directed to submit their respective memorandum within ten (10) days from receipt thereof but both parties failed to comply with the directive. Hence, this decision. After a careful perusal of the arguments of the contending parties in their pleadings, as well as the annexes thereto, filed with this Commission, this Hearing Officer finds the petitioner's application for the creation of management body or the appointment of a receiver to be without solid factual basis to stand on. Petitioner's allegation that respondent Henri S. Khan is reported to have authorized questionable and seemingly illegal transactions which if not enjoined may dissipate and result in total loss of respondent corporation's assets and properties is an empty accusation, unsubstantiated and based purely on conjectures as correctly stated by the respondents, which cannot be made the basis for the creation of a management body or the appointment of a receiver. Furthermore, petitioner also failed to prove that the corporate assets and properties are in danger of being dissipated. Under the rules, the party applying for appointment of a receiver should have an interest in the property which is the subject of the action, and that such property is in danger of being lost, removed or materially injured unless a receiver be appointed to guard and preserve it. (Section 1 (b), Rule 59, Revised Rules of Court of the Philippines) On the matter of reinstatement to the position of Director and Vice President of the respondent corporation, respondents argued that while the services of the petitioner as such were in fact terminated, it was the result of a re-organization of the respondent corporation and that its take-over by the new board of directors and officers is the subject of controversies in the regular courts. As a result of which, this Commission could not make a ruling thereon without the risk of being accused of unwarranted interference with the regular courts' judicial processes. As regard petitioner's prayer for reinstatement as General Manager, his resignation from the position as evidenced by his letter of resignation dated November 28, 1986 (Annex "C" of the Answer) belied his allegation of illegal termination as General Manager of the respondent corporation. It also appears that the matter is the subject of NLRC Case No. 1-190-87 which is now on appeal. On the petitioner's claim for damages and attorney's fees, the power or jurisdiction of this Commission to award damages and attorney's fees is merely incidental to the principal cause of action and, therefore, cannot be considered or resolved separately or apart from it. Petitioner's prayer to order the calling of a meeting to elect a new Board of Directors is intertwined or intimately connected with the issue of legality of termination of his services as Director and Vice President as well as the legality of the take-over of the respondent corporation which is now the subject of controversies in the regular courts. In the light of the foregoing, the instant petition is hereby considered dismissed without prejudice. LexLib SO ORDERED. (SGD.) MANUEL P. PEREA Hearing Officer