In Re Petition for The Holding af An Election of The Officers of Tebpa, Inc.

[SEC-SICD * CASE NO. 3920. April 19, 1991.] IN RE PETITION FOR THE HOLDING OF AN ELECTION OF THE OFFICERS OF "TEBPA, INC." (TAMBUNTING ESTATE BLISS PROJECT ASSOCIATION, INC.) VIRGILIO V. VIRAY, JOSE MANAPOL, BENJAMIN BOHOL , petitioners . D E C I S I O N This is a petition filed by Mr. Virgilio V. Viray, Jose Manapol and Benjamin Bohol on December 14, 1990 praying for a calling of an election of corporate officers of Tambunting Estate Bliss Project Association, Inc. (TEBPA, Inc. for brevity) in accordance with Section 50 of the Corporation Code of the Philippines (Batas Pambansa Blg. 68). In support thereof, petitioners alleged that they are all elected Barangay Chairman of Barangay No. 374, 375 and 376, respectively, of Zone 38 of Tambunting, Sta. Cruz, Manila; they are members of TEBPA, Inc., and by virtue of Section 4, Article IX of the Constitution and By-Laws of the said corporation, they are automatically members of the corporation's Board of Directors; that Section 1, Article XV of the aforesaid By-Laws provides that the election of corporate officers shall be held every two (2) years; that the incumbent officers were elected in October, 1987 and an election should have been held in October, 1989 but instead of holding an election as mandated by the aforesaid provision of TEBPA's By-Laws, Felipe J. Madlang-Awa and other members of the Board of Directors passed a resolution dated September 3, 1989 extending their term of office and declaring themselves as "hold-over officers" until the termination of the cases affecting the corporation which are pending with the Regional Trial Courts of Manila, and that, it is necessary under the foregoing circumstances that an election of corporate officers be held in accordance with Section 50 of the Corporation Law. Although the petition was filed pursuant to Section 50 of the Corporation Code, summons was issued to the association on December 26, 1990. At the hearing on January 28, and 29, 1991, petitioners presented their testimonial, as well as documentary evidence, ex-parte in view of the failure of the Tambunting Estate and Bliss Project Association, Inc. to appear despite due notice. From the evidence adduced, it was established that indeed petitioners are members of the TEBPA, Inc.;there are incumbent directors and officers of the corporation albeit in a hold over capacity and there was no election conducted since October, 1989 up to the present. While it has been construed that Section 50 of the Corporation Code applies only where there is no person authorized to call for a meeting and therefore not applicable in this case in view of the fact that there are officers authorized to call the meeting, considering however that the association was duly summoned to answer and appear at the hearing, but failed to do so, this Commission, in the exercise of its supervisory powers over all corporations and associations pursuant to Section 6 (c) of P.D. No. 902-A, as amended is authorized "to compel the officers of any corporation or association registered by it to call meetings of stockholders or members thereof under its supervision." The Resolution of the Board of Directors of the TEBPA, Inc. dated September 3, 1989, extending their term of office and declaring themselves as "hold-over officers" constitutes a violation of Section 24 of the Corporation Code under which the only justification for the postponement of an election of corporate directors is that the meeting at which the election is scheduled fails to obtain a quorum. WHEREFORE, this Hearing Officer, invoking Section 6 (f) of P.D. 902-A, as amended, hereby resolves to direct the proper officers of the TEBPA, Inc. to call for a membership meeting of the association for the purpose of electing its directors and officers within thirty (30) days from finality of this decision. SO ORDERED. (SGD.) ELPIDIO SARMEN SALGADO Hearing Officer