You are on page 1of 3

G.R. No.

L-37064 October 4, 1932 1) Whether there was a malicious attempt to keep Director Veraguth from
attending a special meeting of the BOD at which the compensation of the
EUGENIO VERAGUTH, Director and Stockholder of the Isabela Sugar Company, attorneys of the company was fixed, or whether Director Veraguth, in a
Inc., petitioner, spirit of antagonism, has made this merely a pretext to cause trouble.
ISABELA SUGAR COMPANY, INC., GIL MONTILLA, Acting President, and AGUSTIN 2) Whether a director has the unqualified right to inspect the books and
B. MONTILLA, Secretary of the same corporation, respondents. records of the corporation.

The parties to this action are Eugenio Veraguth (director and stockholder of Isabela 1) Speaking to the first point relating to the alleged failure of the secretary to
Sugar Company, Inc.), and the Isabela Sugar Company, Inc., Gil Montilla (acting notify the petitioner of a special meeting, whether there was a malicious
president) and Agustin B. Montilla (secretary). Petitioner prays: attempt to keep Director Veraguth from attending a special meeting of the
BOD at which the compensation of the attorneys of the company was
- That the respondents be required within five days from receipt of notice of fixed, or whether Director Veraguth, in a spirit of antogonism, has made
this petition to show cause why they refuse to notify the petitioner, as this merely a pretext to cause trouble, we are unable definitely to say.
director, of the regular and special meetings of the BOD; This much, however, can appropriately be stated and is decisive, and this is
that the meeting in question is in the past and, therefore, now merely
- That a final and absolute writ of mandamus be issued to each and all of the presents an academic question; that no damage was caused to Veraguth
respondents to notify immediately the petitioner within the reglamentary by the action taken at the special meeting which he did not attend, since
period, of all regular and special meetings of the board of directors of the his interests were fully protected by the Philippine National Bank; and that
Isabela Sugar Central Company; and as to meetings in the future it is to be presumed that the secretary of the
company will fulfill the requirements of the resolutions of the company
- To place at his disposal at reasonable hours the minutes, documents, and pertaining to regular and special meetings. It will, of course, be incumbent
books of said corporation for his inspection as director and stockholder, upon Veraguth to give formal notice to the secretary of his post-office
and to issue immediately, upon payment of the fees, certified copies of any address if he desires notice sent to a particular residence.
documentation in connection with said minutes, documents, and the
books of the aforesaid corporation. 2) On the second question pertaining to the right of inspection of the books
of the company, the Corporation Law, Section 51, provides that:

and every (See Fisher's Philippine Law of Stock Corporations. vol. a request should be made to the president of Isabela Sugar Company. the petitioner and the individual respondents memoranda of documents. those present and absent. member. 4. of the President of the corporation previously obtained in each case. so far as we are aware. since the minutes of the meeting in question had not been signed by the directors present. providing for inspection of the books and the taking of copies "by authority Petition denied with costs. and that while so much of the last resolution of the BOD as provides corporation. It appears that the board of directors adopted a resolution We rule that the petitioner has not made out a case for relief by mandamus. “All business corporations shall keep and carefully preserve a record of all business transactions. if special its object. Dakanay gets finicky): do not think that anything improper occurred when the secretary declined  Pretexts may not be put forward by officers of corporations to keep a to furnish certified copies of minutes which had not been approved by the director or shareholder from inspecting the books and minutes of the BOD. and that this is a family dispute. stockholders. that resolution. Chap. that a test case between the petitioner and inspection. Occidental Negros involving hundreds of thousands of pesos. and papers as an incident to the right of belonging to the same family. abstracts. . sec. and the right of inspection is not to be denied on the ground for prior approval of the president of the corporation before the books of that the director or shareholder is on unfriendly terms with the officers the corporation can be inspected puts an illegal obstacle in the way of a of the corporation whose records are sought to be inspected. it should be said  A director or stockholder can of course make copies. but cannot.” the secretary answered stating that.) The record of all business transactions of the corporation and the  When Veraguth telegraphed the secretary. . 153. and a minute of all meetings of  We do not conceive. asking the latter to forward a minutes of any meeting shall be open to the inspection of any certified copy of the resolution of the BOD concerning the payment of director. that a director or stockholder has any directors. books. members. 45." We NOTES (In the event Atty. without an order of a court. . In addition. has not been enforced to the detriment of anyone. Cyclopedia Corporations. be permitted to take the respondents has not been begun in the Court of First Instance of books from the office of the corporation. in which shall be set forth in absolute right to secure certified copies of the minutes of the corporation detail the time and place of holding the meeting was regular or until these minutes have been written up and approved by the directors. hours. or stockholders. a certified copy Directors of a corporation have the unqualified right to inspect the books could not be furnished and that as to other proceedings of the and records of the corporation at all reasonable times. and Fletcher act done or ordered done at the meeting. stockholder or director. special. and that the . or stockholder of the corporation at reasonable attorney's fees in a certain case against Isabela Sugar Company and others. however.

as shown by the notices. J. In any event the directors had adopted An extraordinary meeting of the directors of the corporation was held at Isabela. The post-office address of the plaintiff at BUTTE. that time was Pulupandan. but the notice was not received by him until a later date. reported for approval at the next meeting. that this notice was addressed to Isabela instead of Pulupandan for the purpose of depriving the plaintiff of an opportunity of attending the meeting. although the and as director. Such are solution DISSENTING OPINIONS: was a part of the secretary's minutes of the meeting. opportunity to examine said resolution. therefore. The record shows clearly that the officers and It is clear. Veraguth as a director of the Occidental Negros. It does not appear that there was any necessity for the directors to sign the resolution in question. J. receive copies of any and all of the books and papers of the corporation pertaining to the conduct of its business. illegal conditions upon the Taking into consideration the relations existing between the parties. The refusal of the secretary of the corporation to allow Veraguth to read the resolution during the meeting on the ground that it had not been signed by the . because the letter was addressed to the plaintiff at Isabela. and this fact was known to the I concur in the foregoing dissent insofar as it relates to the actions of the defendant officers of the corporation. and whether it was to be signed or not. letter. that no notice of the meeting was given to Veraguth. appellate court should not intrude its views to give an advantage to either directors. Occidental Negros. I am satisfied petitioner's exercise of the said right. the rights which statutes confer upon him to examine and make or notice were dated three days prior to the dates when they were mailed. the resolution. this respect and imposed for the future. he would be in no better position than he is at the present time. which would ordinarily be VICKERS. A notice of this meeting was sent to Veraguth by registered corporation had a right to see it. because these respondent corporation and its officers in denying to the petitioner. It is obvious that if the officers should again fail to notify Veraguth of any meeting of the board of directors. Veraguth was clearly within his rights in demanding tha the be given an party. as stockholder notices were not mailed until the day of the respective meetings. Veraguth seeks the protection of his right to a notice of all meetings of the board of directors. Under the theory of the majority opinion Veraguth would have no redress. by resolution. and prays that the officers impleaded be required to perform their duties in accordance with the law. remaining directors have adopted a policy of obstruction toward the petitioner in because the notice of said meeting was sent to Isabela instead of Pulupandan.