Intestate Estate of The Late Johnny Chong vs. Lily Chong, et al.

[SEC-SICD * CASE NOS. 2840, 2841 & 2842. August 25, 1986.] INTESTATE ESTATE OF THE LATE JOHNNY CHONG, represented by its Administratrix, AIDA CHONG , petitioner , vs .LILY CHONG, ET AL. , respondents . D E C I S I O N Petitioner herein is the duly appointed administratrix of the intestate estate of the late Johnny Chong who owned 80 shares representing a 20% equity in the Action Hardware, Incorporated; 950 shares representing 20% equity in the Donhill Chemical Corporation; and 200 shares representing 20% shares in the New Q.C. International Hardware, Inc.,all corporations are existing under the laws of the Republic of the Philippines. In these three (3) cases filed separately, only respondents Lily Chong, Joan Chong and Lourdes Chong Sumera of the New Q.C. International Hardware, Inc. filed an answer but failed to attend the pre-trial conference held on September 23, 1985, despite receipt of notice. Respondents Lily Chong, Joan Chong and Antonio Sumera of the Donhill Chemical Corporation and Joan Chong, Danilo Chong and Pedro Quadra of Action Hardware failed to file their answers to the petition and the petitioner moved that they all be declared in default which the Commission granted on November 5, 1985. Hearing on all three (3) cases proceeded ex-parte. The Commission also granted the petitioner's urgent motion to consolidate SEC Case Nos. 2840 and 2841 which were jointly heard considering that SEC Case No. 2842 was then already submitted for decision. However, considering the identical causes of action in all three (3) cases, the decisions are consolidated into one. prLL Mrs. Aida San Pedro Chong is the widow of the late Johnny Chong. She was appointed Administratrix of her late husband's estate on May 11, 1984, upon order of the Hon. Rodolfo A. Ortiz, Presiding Judge, RTC Branch LXXXIX, Quezon City (Exh. B) which appointment was questioned in a petition for certiorari at the Intermediate Appellate Court. She alleged that upon the death of her husband, the officers of these three (3) corporations assumed their respective positions as officers without holding any election. In the answer of respondents in Q.C. International Hardware, Inc.,they claimed that there was an election held on January 7, 1984, after the death of Johnny Chong, and that subsequent elections for 1984 and 1985 have also been held; that copies of the financial statement of assets and liabilities have also been filed with the Commission for the calendar years 1983 and 1984. Petitioner, on the other hand, insisted that if ever there was an election, as an administratrix she was not notified. (TSN, p. 13, November 5, 1985) An examination of the corporate files also yielded no minutes submitted pertaining to the holding of an annual election from incorporation to the present and likewise no election of the board of directors. (TSN, pp. 9, 10, 11, 20 & 21, November 25, 1985).Statements of assets and liabilities on file are for the years ending March 1, 1984 for Action Hardware Incorporated; December 8, 1981 for Donhill Chemical Corporation and the only one filed by New Q.C. International Hardware, Inc. was that on January 15, 1974. Quoted hereunder are Secs. 55 and 75 of the Corporation Code of the Philippines: "SECTION 55. Right to vote of pledgors, mortgagors, and administratrix . ... Executors, administratrix, receivers, and other legal representatives duly appointed by the court may attend and vote in behalf of the stockholders or members without need of any written proxy. (27a)" "SECTION 75. Right to financial statements . Within ten (10) days from receipt of a written request of any stockholder or member the corporation shall furnish to him its most recent financial statement which shall include a balance sheet as of the end of the last taxable year and a profit and loss statement for the said taxable year, showing in reasonable detail its assets and liabilities and the result of its operations. ..." Until such time as the Intermediate Appellate Court has ruled against the appointment of the petitioner as administratrix of the intestate estate of the late Johnny Chong, she is entitled to the exercise of the rights of the above mentioned. In fact this holds true whether the administrator is the petitioner or not. LLphil WHEREFORE, in view of the foregoing, respondents Lily Chong, Joan Chong, Antonio Sumera of the Donhill Chemical Corporation; Joan Chong, Danilo Chong and Pedro Quadra of the Action Hardware Incorporated; and Lily Chong, Joan Chong and Lourdes Chong Sumera of the New Q.C. International Hardware, Inc. are hereby ordered to: 1) call a meeting of the stockholders of the above-mentioned corporations for the purpose, among others, of electing the members of their board as well as their officers, with proper notice to the petitioner; 2) furnish the petitioner with the corporations' financial statements for the years 1983, 1984 and 1985; 3) comply and update the reportorial requirements of the Commission, all within thirty (30) days after this decision has become final. No pronouncements as to costs. SO ORDERED. (SGD.) MINVILUZ C. ASTUDILLO Hearing Officer