Jose v. Hi-Way 54 Pateros Drivers' Association

[SEC-SICD * CASE NO. 4427. April 15, 1999.] BEMINDO JOSE, ET AL. , complainants , vs .HI-WAY 54 PATEROS DRIVERS' ASSOCIATION, ET AL. , respondents . D E C I S I O N This ,treats of the complaint filed by Bemindo Jose, Federico Marzan, Eriberto Narra and Jaime Romeo against Hi-Way 54-Pateros Drivers' Association, Inc. and its Officers namely: Cresencio Pagueran, Francisco Melan, and Rosendo San Andres, for violation of the Corporation Code and SEC Laws. The complaint, alleges the following, to wit that as members of the corporation the complainants have daily dues of five pesos (P5 00) and daily savings deposits plus P1.00 for a monthly contribution of P69.00 more or less, per individual members; that per Board Resolution of 1987 the excess of dual members; that per Board Resolution of 1987 the excess of the fund for operations shall be returned to them every end of the year; that they want to be informed of the operation of the corporation, thus, they have been requesting the officers to furnish them with Audited Financial Statement for the year ending December 31, 1990, 1991 and 1992; that the officers, however, submitted only the Audited Cash Statement for the year ending December 31, 1991 and 1992 with the Audited Balance Sheet and Income Statement; that they have been requesting the officers, more particularly the Treasurer/Secretary of the Corporation, to allow them to inspect the records of all business transactions of the corporation and the minutes of the meeting; that these officers, however, refused to allow them without justifiable legal grounds their requests to inspect the records. cdre Complainants in their prayer, ask respondents to: (a) submit complete audited financial statements of the corporation for the year ending December 31, 1990, 1991 and 1992; (b) allow the complainants to inspect the records of the corporation and the minutes of the meeting of the members and/or board of directors; (c) to pay the sum of P8,000.00 plus other litigation expenses. In their answer, the respondents alleged in their affirmative and special defenses that they are adopting, incorporating and repleading all the material allegations in their pleadings and documentary evidence relative to their opposition to the Motion for Receivership and also the grounds and arguments raised by them in their Motion to Dismiss. The said pleadings mentioned have the following arguments and discussion material to this case, as follows; The four (4) complainants are but a minuscule clique in the association who are perennial losers in the election of the officers of the association gathering votes embarrassing to mention; that they are using this Commission as a cheap strategy and springboard to harass and tarnish the reputation of the respondents with the end in view of gaining support and sympathy from the other members in the association in order to take over its leadership during the next election; that win or loss in this case the complainants will be able to inflict the intended damage to the respondents; that the expulsion of the respondents from the association is justified as their by-laws authorized it. In the course of the proceedings complainant Bemindo Jose and Federico Marzan withdrew from the case leaving only Eriberto Narra and Jaime Romero. of the two (2) left, only Narra continued to appear and testified. Nothing was heard about Romero. During the hearing, only complainant Eriberto Narra testified substantially on the allegations in the complaint. When complainant Narra testified the following were elicited from him during the cross-examination; ATTY. LAZARO: That will be all the witness, your Honor. HEARING OFFICER: Re-cross? HEARING OFFICER: Proceed Q: Mr. Narra, did you or did you not ask formally in writing the association for a copy of a document you were requesting him to be furnished to you? A: Alin po ang .... ATTY. DEFANTE: I will make it simpler for you. Q: Your request that you be furnished the financial statement by the association was not done in writing, am I correct, it was verbally made? A: Yes, sir. Q: And at that time you were instituting the creation of the rival drivers group that would ply Pateros and Guadalupe, am I correct? A: Yes, sir. Q: And you got hold of a copy of a xerox copy of the Articles of Incorporation from a member of the association who was your friend, I mean xerox copy of the financial statement? A: Yes, sir. Q: He was not representing officially the association when he gave a copy of that financial statements, is that correct? WITNESS: Pakiulit lang po Sir. Q: That friend of yours, the officer of the association who gave you a copy of that financial statement, gave you a copy of his own and he was not representing the official act of the association, am I correct? A: Yes, sir. Q: Now, you were reinstated according to you "pinakagat ka lang",is it not a fact that; the reason you were not admitted as an officer of the association again is because the term of that officer who appointed you also expired. Am I correct? A: Hindi pa naeexpired noong tinanggal kami. Q: So, you were terminated by the same officer who appointed you to the position? A: Yes, sir. Q: No reason at all? A: None, sir. Q: Is it not a fact that you were at that time drawing allowances as officer of the association during your time that you were appointed as an officer of the association? A: Opo, kinuha ko po dahil ..." (TSN Oct. 23, 1997, pp. 14-17; Emphasis Supplied) Complainant Narra in his testimony admitted that his request was made verbally; that at that time he was instituting the creation of the rival-drivers group that would ply Pateros and Guadalupe; that he was reinstated by the association and re-expelled; that as an officer of the association he likewise drew allowances from the association. With this categorical admissions, this Commission believes that the denial by respondent of the verbal request by the complainants was valid and reasonable. Section 75 of the Corporation Code, provides, to wit: "SECTION 75. Right to Financial Statement within ten (10) days from receipt of a written request of any stockholders or member, the corporation shall furnish to him its most recent financial statement, ...." For want of formal demand complainant prematurely filed the complaint and therefore failed to exhaust all extra-judicial remedy, which is essential in this case. WHEREFORE, premises considered, the case is hereby DISMISSED for lack of merits. The counterclaim of respondent is likewise dismissed for failure to present any evidence relative thereto. No pronouncement as to cost. EIcSTD SO ORDERED. (SGD.) SIMEON P. BADILLO Hearing Officer