Ricafort v. Hon.

Dicdican
G.R. No. 202647, March 9, 2016

Facts

Nationwide Development Corporation (NADECOR) is a domestic corporation which is a holder of a Mining Production
Sharing Agreement with the DENR. Its regular annual stockholders’ meeting (ASM) was held on August 15, 2011 to
elect its Board of Directors and one of the candidates was JG Ricafort.

However, on October 20, 2011, or more than 2 months after the ASM, Corazon, wife of JG along with her children,
claiming to be the stockholders of record, filed a complaint before the RTC to declare null and void the August 15,
2011 ASM of NADECOR including all proceedings taken thereat, all the consequences thereof and all acts carried
our against NADECOR itself, the newly elected members of its BOD. They alleged that they had no knowledge or
prior notice of, and were unable to attend, participate in, and vote at, the said ASM, since they received only the
notice of the ASM the next day. Such late notice is in violation of the three-day notice provided in NADECOR’s By-
Laws. Due to the lack of notice, they failed to attend ASM and exercise their right as stockholders to participate in the
management and control of NADECOR.
They further noted that the notice announced a time and venue different from those set forth in the By-Laws.

On the other hand, the respondents alleged that the plaintiffs have no cause of action because they were duly served
with notice of the said meeting, as shown in the affidavit dated October 13, 2011 of the NADECOR messenger, Mario
S. San Juan (San Juan), who mailed the notices on August 11, 2011 at the Ortigas Post Office to all stockholders of
record of NADECOR, four days prior to the scheduled ASM

Issue: Whether or not there were proper notice given to shareholders? YES.

Held:

As shown in the Affidavit NADECOR's messenger, he mailed the notices for the August 15 ASM to the petitioners'
address at the Ortigas Post Office on August 11, four days prior to the ASM. This was confirmed by Gatmaitan in his
Affidavit dated November 21,2011. It must be noted that under Article I, Section 3 of NADECOR's Amended By-
Laws, what is required is the mailing out of notices by registered mail at least three days before the ASM: The shorter
notice of three days instead of two weeks [now twenty-one days] for stockholders' regular or special meeting is
clearly allowed under Section 50 [49] of the Corporation Code where notice of any meeting may be waived, expressly
or impliedly, by any stockholder or member.

SECTION 50. Regular and Special Meetings of Stockholders or Members. - Regular meetings of stockholders or
members shall be held annually on a date fixed in the by-laws, or if not so fixed, on any date in April of every year as
determined by the board of directors or trustees: Provided, That written notice of regular meetings shall be sent to all
stockholders or members of record at least two (2) weeks prior to the meeting, unless a different period is required
by the by-laws.

Special meetings of stockholders or members shall be held at any time deemed necessary or as provided in the by-
laws: Provided, however, That at least one (1) week written notice shall be sent to all stockholders or members,
unless otherwise provided in the by-laws.

Notice of any meeting may be waived, expressly or impliedly, by any stockholder or member, x x x.

By failing to file their complaint below seasonably, the petitioners must be deemed to have waived their right to notice
of the August 15 ASM. Section 50 provides in effect that failure to give notice of the regular or annual meetings, when
the date thereof is fixed in the by-laws, as in Section 1, Article 1 of the Amended By-Laws of NADECOR, which is "at
twelve thirty P.M., on the THIRD MONDAY OF AUGUST in each year, if not a legal holiday, and if a legal holiday,
then on the first day following which is not a legal holiday," will not affect the validity of the ASM or the proceedings
therein. It is also provided in Section 3, Article 1 of NADECOR's Amended By-Laws:

Sec. 3. x x x. Failure to give notice of annual meeting, or any irregularity in such notice, shall not affect the validity of
such annual meeting or of any proceedings at such meeting (other than proceedings of which special notice is
required by law or by these By-laws),
The Court concludes that the RTC undoubtedly erred in nullifying NADECOR's August 15, 2011 ASM and in not
dismissing SEC Case No. 11-164.