G.R. No. L-37064
October 4, 1932 I$$UE$5
EUGENIO VERAGUTH, VERAGUTH, Drector !"# $toc%&o'#er o( t&e I)!be'! $*+!r
- hether hether there )as a malicious malicious attempt attempt to keep +irector +irector Veraguth Veraguth
o!"/, I"c., petitioner, I"c., petitioner,
from from atte attend ndin ing g a spec specia iall meet meetin ing g of the the $*+ $*+ at )hic )hich h the the
vs.
compensation of the attorneys of the company )as fi/ed, or )hether
I$AELA $UGAR OAN, IN., GIL ONTILLA, Act"+ re)#e"t,
+irector Veraguth, in a spirit of antagonism, has made this merely a
!"# AGU$TIN . ONTILLA, $ecret!r/ o( t&e )!e
prete/t to cause trouble.
coror!to", respondents. coror!to", respondents. 0 hether a director director has the unualified unualified right to to inspect the books and AT$5
records of the corporation.
The parties to this action are Eugenio Veraguth (director and stockholder of Isabela Sugar Company, Inc., and the Isabela Sugar Company, Inc., !il "ontilla "ontilla (acting (acting president president and #gustin #gustin $. "ontilla "ontilla (secretar (secretary. y. %etition %etitioner er prays&
RULING5 - Speak Speaking ing to the first point point relating relating to the alleged alleged failure failure of the secretary to notify the petitioner of a special meeting, )hether there )as a malicious attempt to keep +irector Veraguth from attending a
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That That the respon responden dents ts be reuir reuired ed )ithi )ithin n five days days from from receipt receipt of
speci special al meetin meeting g of the $*+ at )hich )hich the compen compensat sation ion of the
notice of this petition to sho) cause )hy they refuse to notify the
attorneys of the company )as fi/ed, or )hether +irector Veraguth, in
petitioner, as director, of the regular and special meetings of the
a spirit of antogonism, has made this merely a prete/t to cause
$*+
)!/. This much, &oe8er, &oe8er, can trouble, e trouble, e !re *"!b'e #e("te'/ to )!/. appropriately be stated and is decisive, and this is that t&e eet"+
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That That a fina finall and and abs absol olut ute e )ri )ritt of mandamus be mandamus be issued to each and all
" *e)to" ) " t&e !)t !"#, !"# , therefore, "o ere'/ re)e"t) !"
of the respondents to notify immediately the petitioner )ithin the
!c!#ec *e)to" *e)to" that "o #!!+e !) c!*)e# to Ver!+*t& b/
reglamentary period, of all regular and special meetings of the board
t&e !cto" t!%e" !t t&e )ec!' eet"+ &c& &e ## "ot !tte"# !tte"#,,
of directors of the Isabela Sugar Central Company and
since his interests )ere fully protected by the %hilippine 1ational $ank and that as to meetings in the future it is to be presumed that
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To plac place e at his his disp dispos osal al at reas reason onab able le hours hours the the minu minute tes, s,
the secretary secretary of the company company )ill fulfill fulfill the reuiremen reuirements ts of the
documents documents,, and books of said corporation corporation for his inspection inspection as
resolu resolutio tions ns of the compan company y pertai pertainin ning g to regula regularr and specia speciall
director and stockholder, and to issue immediately, upon payment of
meetings meetings.. It )ill, of course, be incumben incumbentt upon Veraguth Veraguth to give
the fees, certified copies of any documentation in connection )ith
formal notice to the secretary of his post'office address if he desires
said said minu minute tes, s, docu docume ment nts, s, and and the the
notice sent to a particular residence.
corporation.
book books s
of the the
afor afores esai aid d
0 *n the second uestion pertaining to the right of inspection of the books of the company, the Corporation 2a), Section 3-, provides
that&
# director or stockholder can of course make copies, abstracts, and memoranda of documents, books, and papers as an incident to the right of inspection, b*t c!""ot, t&o*t !" or#er o( ! co*rt, be
“All business corporations shall keep and carefully preserve
ertte# to t!%e boo%) (ro t&e o((ce o( t&e coror!to".
a record of all business transactions, and a minute of all meetings of directors, members, or stockholders, in which shall be set forth in detail the time and place of holding the meeting was regular or special, if special its object, those
:e #o "ot co"ce8e, ho)ever, t&!t ! #rector or )toc%&o'#er &!) !"/ !b)o'*te r+&t to )ec*re cert(e# coe) o( t&e "*te) o(
present and absent, and every act done or ordered done at
t&e coror!to" *"t' t&e)e "*te) &!8e bee" rtte" * !"#
the meeting. . . .
!ro8e# b/ t&e #rector). (See 4isher5s %hilippine 2a) of Stock Corporations, sec. -36, and 4letcher Cyclopedia Corporations, vol.
The record of all business transactions of the corporation
7, Chap. 73.
and the minutes of any meeting shall be open to the inspection of any director, member, or stockholder of the corporation at reasonable hours.”
hen Veraguth telegraphed the secretary, asking the latter to for)ard a certified copy of the resolution of the $*+ concerning the
Drector) o( ! coror!to" &!8e t&e *"*!'(e# r+&t to ")ect t&e boo%) !"# recor#) o( t&e coror!to" !t !'' re!)o"!b'e te).
payment of attorney5s fees in a certain case against Isabela Sugar Company and others, the secretary ans)ered stating that, since the minutes of the meeting in uestion had not been signed by the directors present, a certified copy could not be furnished and that as
e rule that the petitioner has not made out a case for relief by mandamus.
to other proceedings of the stockholders, a reuest should be made
%etition denied )ith costs.
to the president of Isabela Sugar Company. It appears that the board of directors adopted a resolution providing for inspection of the books
NOTE$ (In the event Atty. Dakanay gets finicky) 5
and the taking of copies 8by authority of the %resident of the
%rete/ts may not be put for)ard by officers of corporations to keep a
corporation previously obtained in each case.8 e do not think that
director or shareholder from inspecting the books and minutes of the
anything improper occurred )hen the secretary declined to furnish
corporation, and t&e r+&t o( ")ecto" ) "ot to be #e"e# o" t&e
certified copies of minutes )hich had not been approved by the
+ro*"# t&!t t&e #rector or )&!re&o'#er ) o" *"(re"#'/ ter)
$*+, and that )hile so much of the last resolution of the $*+ as
t& t&e o((cer) o( t&e coror!to" &o)e recor#) !re )o*+&t to
provides for prior approval of the president of the corporation before
be ")ecte#.
the books of the corporation can be inspected puts an illegal obstacle in the )ay of a stockholder or director, that resolution, so far
as )e are a)are, has not been enforced to the detriment of anyone.
ob8o*) t&!t ( t&e o((cer) )&o*'# !+!" (!' to "ot(/ Ver!+*t& o( !"/
In addition, it should be said that this is a family dispute, the
eet"+ o( t&e bo!r# o( #rector), &e o*'# be " "o better o)to"
petitioner and the individual respondents belonging to the same
t&!" &e ) !t t&e re)e"t te. 9nder the theory of the ma:ority opinion
family that a test case bet)een the petitioner and the respondents
Veraguth )ould have no redress.
has not been begun in the Court of 4irst Instance of *ccidental 1egros involving hundreds of thousands of pesos, and that the
The refusal of the secretary of the corporation to allo) Veraguth to read the
appellate court should not intrude its vie)s to give an advantage to
resolution during the meeting on the ground that it had not been signed by
either party.
the directors, Veraguth )as clearly )ithin his rights in demanding tha the be given an opportunity to e/amine said resolution. It #oe) "ot !e!r t&!t
DI$$ENTING OINION$5
t&ere !) !"/ "ece))t/ (or t&e #rector) to )+" t&e re)o'*to" "
VI;ER$, J.
*e)to". $*c& !re )o'*to" !) ! !rt o( t&e )ecret!r/<) "*te) o( t&e
#n e/traordinary meeting of the directors of the corporation )as held at
eet"+, &c& o*'# or#"!r'/ be reorte# (or !ro8!' !t t&e "e=t
Isabela, *ccidental 1egros. # notice of this meeting )as sent to Veraguth by
eet"+. In any event the directors had adopted the resolution, and )hether
registered letter, but the notice )as not received by him until a later date,
it )as to be signed or not, Veraguth as a director of the corporation had a
because the letter )as addressed to the plaintiff at Isabela. The post'office
right to see it.
address of the plaintiff at that time )as %ulupandan, *ccidental 1egros, and this fact )as kno)n to the defendant officers of the corporation, as sho)n by
UTTE, J.
the notices, because these notices )ere not mailed until the day of the
I concur in the foregoing dissent insofar as it relates to the actions of the
respective meetings, although the notice )ere dated three days prior to the
respondent corporation and its officers in denying to the petitioner, as
dates )hen they )ere mailed.
stockholder and as director, the rights )hich statutes confer upon him to e/amine and make or receive copies of any and all of the books and papers
It ) c'e!r, t&ere(ore, t&!t "o "otce o( t&e eet"+ !) +8e" to
of the corporation pertaining to the conduct of its business. The record sho)s
Ver!+*t&, bec!*)e t&e "otce o( )!# eet"+ !) )e"t to I)!be'!
clearly that the officers and remaining directors have adopted a policy of
")te!# o( *'*!"#!". Taking into consideration the relations e/isting
obstruction to)ard the petitioner in this respect and imposed for the future,
bet)een the parties, I ! )!t)(e# t&!t t&) "otce !) !##re))e# to
by resolution, illegal conditions upon the petitioner5s e/ercise of the said right.
I)!be'! ")te!# o( *'*!"#!" (or t&e *ro)e o( #er8"+ t&e '!"t(( o( !" oort*"t/ o( !tte"#"+ t&e eet"+.
Ver!+*t& )ee%) t&e rotecto" o( &) r+&t to ! "otce o( !'' eet"+) o( t&e bo!r# o( #rector), !"# r!/) t&!t t&e o((cer) 'e!#e# be re*re# to er(or t&er #*te) " !ccor#!"ce t& t&e '!. It )
