Yujuico vs Quiambao

YUJUICO VS QUIAMBAO GR No. 180416 June 2, 2014

During the annual stockholder’s meeting of STRADEC, petitioner Yujuico was Facts: elected as president and chairman of the company. Yujuico replaced Quiambao, the respondent. STRADEC appointed Sumbilla as Treasurer and Blando as Corporate Secretary. During the stockholders’ meeting, Yujuico demanded Quiambao for the turnover of the corporate records of the company, particularly the accounting files, ledgers, journals and other records of the corporation’s corporation’s business. Quiambao refused and caused the removal of the corporate records of STRADEC from the company’s principal office. Blando likewise demanded Pilapil, the previous corporate secretary, for the turnover of the stock a nd transfer book of STRADEC. Pilapil Pi lapil refused. Thus, the petitioners filed a complaint against respondents for the violation of Section 74 in relation to Section 144 of the Corporation Code.

Issue: Whether the respondents can be held liable under Section 74 in relation to Section 144 of the Corporation Code

Ruling: No. A criminal action based on the violation of a stockholder’s right to examine or inspect the corporate records and the stock and transfer book of a corporation under the 2nd and 4th paragraphs of Section 74 of the Corporation Code can only be maintained against corporate officers or any other persons acting on behalf of such corporation. Violations of the 2nd and 4th paragraphs of Sec. 74 contemplates a situation wherein a corporation, acting thru one of its officers or agents, denies the right of any of its stockholders to inspect the records, minutes and the stock and transfer book of such corporation. The petitioner’s petitioner’s complaint failed to establish that respondents were acting on behalf of STRADEC. Instead, it was revealed that respondents are merely outgoing officers of STRADEC who, for some reason, withheld and refused to turn-over the company records of STRADEC, and that STRADEC is actually merely trying to recover custody of the withheld records. Thus, petitioners are not actually invoking their right to inspect the records and the stock and transfer book of STRADEC under Sec. 74. What they seek to enforce is the proprietary right of STRADEC to be in possession p ossession of such records and  book. Such right, though certainly legally le gally enforceable by other means, cannot be enforced by a criminal prosecution based on a violation of the 2nd and 4th paragraphs of Sec. 74. Therefore, the criminal case is dismissed for lack of probable cause.