Amerasia Mining and Development Corporation vs. Avelino P. Aventura

[SEC-SICD * CASE NO. 3712. May 29, 1991.] AMERASIA MINING AND DEVELOPMENT CORPORATION, ET AL. , petitioners , vs .AVELINO P. AVENTURA, ET AL. , respondents . D E C I S I O N This is an action filed by the petitioners to declare null and void the stockholders' meeting last February 8, 1990 and the election of the respondents as members of the board of directors of Amerasia Mining and Development Corporation. In support thereof, petitioners alleged inter alia, that sometime in February 8, 1990 petitioner Mariano Q. Valerio received information that the annual stockholders meeting of Amerasia Mining and Development Corporation was held at Max's Restaurant in Quezon City; that in the said meeting, respondent Avelino Aventura represented himself to be the President of the corporation and the other respondents conspiring and cooperating with each other, without a quorum elected themselves as members of the board of directors of the said corporation; that in the list of stockholders of record as of June 30, 1988, the total outstanding capital stock is 509,080,000; that the respondents who attended and voted in the said meeting represent only a total of 143,750,000 shares which are less than the quorum required by the Corporation Code and by-laws of the corporation. Petitioners contend that the purported election of the respondents is null and void being in violation of Section 3 Article VII of the by-laws of the corporation which expressly provide that "no stockholders meeting shall be competent to decide any matter or transact any business unless the majority of outstanding capital stock is present or represented thereat; that due to respondents' deliberate violation of the aforecited provision of the by-laws, the petitioners were deprived of exercising their rights as stockholders particularly their right to elect a representative to the board of directors. Moreover, petitioners prayed for the issuance of a writ of preliminary injunction to enjoin respondent Avenilo Aventura from misrepresenting himself as the President of Amerasia Mining and Development Corporation, and all the respondents to cease and desist from further misrepresenting themselves as the newly elected members of the board of directors and from discharging their functions and assuming control and management over the properties, office and other assets of the corporation. cdlex Respondents filed their answer and alleged among other things, that the stockholders' and directors' meeting held on February 8, 1990 at Max's Restaurant, Quezon City was duly constituted wherein a quorum was present; that respondent Dr. Avenilo P. Aventura was duly elected as President and Chairman of the Board in its meeting last July 23, 1988 as shown in the Secretary's Certificate and General Information Sheet as of July 23, 1988 duly signed and sworn to by petitioner Fructuoso R. Capco. Respondents asserted that notices were sent to the stockholders of record of the corporation that despite due notice, petitioners refused to attend and that the stockholders' meeting on February 8, 1990 was attended by 649,249,860 shares in person or by proxies out of the total outstanding capital stock of 976,100,000 shares; that the allegation of the petitioners that the outstanding capital stock of the corporation which is 509,090,000 shares only is not consistent with the list of stockholders of the corporation with total shares of 809,080,000 as of April 28, 1989 which was verified and sworn to by petitioner Fructuoso Capco. During the hearing last September 27, 1990, the parties agreed that the only issue to be resolved is the determination of the actual outstanding capital stock of Amerasia Mining and Development Corporation, whether it is FIVE HUNDRED NINE MILLION EIGHTY THOUSAND (509,080,000) as claimed by the petitioner or NINE HUNDRED SEVENTY SIX MILLION ONE HUNDRED THOUSAND (976,100,000) according to the respondents. Moreover, it was agreed that if the actual outstanding capital stock is 509,090,000 then the election held on February 8, 1990 is null and void and another election will be conducted. However, in the event that the outstanding capital stock is 976,100,000 consequently, the election is valid. For this purpose, the parties mutually agreed that this Hearing Officer should appoint a Commissioner to determine the actual outstanding capital stock of the corporation to be assisted by a representative from the petitioners and respondents whose function shall only be limited to the presentation of documents. On October 30, 1990, an order was issued appointing Mrs. Fe Garcia, CPA, as the Commissioner to determine the true and correct outstanding capital stock of Amerasia Mining and Development Corporation, assisted by Mr. Fructuoso Capco and Hely Tuburan representing the petitioners and respondents respectively. The findings of the Commissioner shall be binding upon the parties. LexLib On May 17, 1991, Mrs. Fe Garcia, submitted her audit report on the actual outstanding capital stock of Amerasia Mining and Development Corporation. It was reported that there were no changes in the number of shares of the issued and paid-up capital stock of the corporation from February 8, 1990 to December 31, 1990 and based on the list of stockholders with their corresponding number of shares and total shares, the total issued and paid-up totalled 976,100,000. Considering the findings of the appointed Commissioner in her audit report that the total issued and paid-up shares of stocks of Amerasia Mining and Development Corporation is 976,100,000 and pursuant to the agreement of the parties during the hearing last September 27, 1990 the stockholders' meeting and the election held on February 8, 1990 are hereby declared valid. However, it appearing that the term of office of the respondents have already expired, this Hearing Officer hereby directs that a new election be called pursuant to the by-laws of the corporation within fifteen (15) days from receipt hereof. Moreover, the Management Committee created pursuant to the Order dated February 27, 1991 is hereby dissolved. Accordingly, the petitioners' urgent motion for reconsideration of the said Order creating the Management Committee has been rendered academic. llcd WHEREFORE, in the light of the foregoing, the petitioners' application for a writ of preliminary injunction is hereby DENIED, and this case should be, as it is hereby DISMISSED. No pronouncement as to costs. (SGD.) ENRIQUE L. FLORES. JR., Hearing Officer