556 Phil. 130
CHICO-NAZARIO, J.:
In sum, PHC cannot hold its annual stockholders' meeting because its mother companies, PHILCOMSAT and POTC, were also unable to hold their respective annual stockholders' meeting and election of members of the Board of Directors pending resolution of the controversy as to who are the legitimate stockholders of said companies. To address the problem at PHC, the SEC, through its General Counsel, Atty. Vernette G. Umali-Paco (Atty. Umali-Paco), issued an Order, dated 8 July 2004, with the following directive:
- x x x PHC's inability to hold its annual stockholders' meeting in the past years can be attributed to the following: previous attempt of the group of Mesdames Cristina Ilusorio and Sylvia Ilusorio and Mr. Carmelo Africa (for brevity the "Ilusorio Group") to control PHC without legal basis; delay in completion of PHC's audited financial statements for the years 2001, 2002, and 2003 was caused by the Ilusorio Group and the pending dispute as to who between the Ilusorio Group, on one hand, and the group of Ambassador Manuel Nieto, Jr./Philippine Government, on the other, properly constitutes the governing board of directors and officers of the parent companies of PHC, namely Philcomsat and POTC.
Considering the aforesaid pending dispute as to who really controls the mother companies of PHC, it would be advisable and practicable that the annual meetings of the stockholders and the election of directors and officers of Philcomsat and POTC should precede those of PHC. In view thereof, and for practical reasons and good order's sake, it was suggested that perhaps the Commission should direct the holding of the annual stockholders' meetings and election of directors and officers of both Philcomsat and POTC at a date prior or dates prior to those of PHC.[1]
On 26 July 2004, the SEC, through its General Counsel, Atty. Umali-Paco, issued a Clarificatory Order, explicating thus:
- POTC and Philcomsat, their respective board of directors or their duly authorized representatives are hereby directed to constitute, within ten (10) days from date of actual receipt hereof, their COMELEC to be composed of the PCGG nominee/director to act as the neutral party, a representative from the Africa Group and one representative from the Nieto Group to perform any and all acts necessary for the determination of the legitimate stockholders' (sic) of the corporation qualified to vote or be represented in the corporate meetings and ensure a clean, orderly, and credible election of POTC and Philcomsat.
- POTC is likewise directed to conduct its annual stockholders' meeting not later than 5 August 2004 while Philcomsat shall hold its annual stockholders' meeting on or before 12 August 2004. Thereafter, PHC shall call its annual stockholders' meeting not later than August 31, 2004.
- PHC, on the other hand, its board of directors or duly authorized representatives are ordered to submit a revised calendar of activities for the forthcoming 31 August 2004 annual stockholders' meeting within five (5) days from actual receipt of this Order. The said date for the Annual Stockholders' Meeting shall not be postponed on a later date unless with the prior Order of the Commission. A Nomination's Committee (NOMELEC) shall be constituted pursuant to the corporation's Manual on Corporate Governance submitted to this Commission. This Committee shall be composed of three (3) voting members and one (1) non-voting member in the person of the HR Director/Manager pursuant to the section 2.2.2.1 of the section 2.2.2.1 (sic) of the said Manual. One representative each from the Africa Group and the Nieto Group and a nominee/representative of the PCGG (to act as an independent member) shall comprise the three (3) voting members. The committee shall perform the functions outlined in Sections 2.2.2.1.1, 2.2.2.1.2, 2.2.2.1.3, and 2.2.2.1.4 of the Manual in connection with the forthcoming election. Failure to submit the names of the representative of each group within ten (10) days from receipt of this Order shall authorize the Commission to appoint persons to represent each group. Failure or refusal on the part of the corporation to hold the stockholders' meeting on the scheduled date shall authorize the petitioning shareholder to call and preside in the said meeting pursuant to Section 50 of the Corporation Code. All previous orders inconsistent herewith are hereby revoked.
- Let the Corporate Finance Department (CFD) of this Commission be furnished with a copy of this Order for its appropriate action on the matter.
To ensure protection of the interest of all outstanding capital stocks, including minority shareholders, Attys. Nicanor P. Patricio Jr. and Myla Gloria A. Amboy are hereby designated as SEC representatives to attend and supervise the said Annual Stockholders' Meeting.[2]
First. The SEC Order of 8 July 2004 which states in part:Providing an update on the actions taken by the parties pursuant to its foregoing orders, the SEC, through its General Counsel, Atty. Umali-Paco, issued a third Order, dated 20 August 2004, in which it noted that:"POTC is likewise directed to conduct its annual stockholders' meeting not later than 5 August 2004 while Philcomsat shall hold its annual stockholders' meeting on or before 12 August 2004. Thereafter, PHC shall call its annual stockholders' meeting not later than August 31, 2004."should be interpreted to mean that the stockholders' meetings of POTC, Philcomsat and PHC shall be held successively, in the order mentioned, that is, POTC first, then Philcomsat, and lastly, PHC. This was the intention of the Commission in issuing the said Order (8 July 2004).
To further clarify and ensure that the meetings shall be conducted on specific dates, the Order of July 8, 2004 is hereby modified and the dates of the meetings are hereby scheduled as follows:
1. For POTC - July 28, 2004
2. For Philcomsat - August 12, 2004
3. For PHC -August 31, 2004
x x x x
Accordingly, POTC, Philcomsat and Philcomsat Holdings Corporation (PHC) are hereby reminded to strictly adhere to the scheduled dates of meetings of the said corporations set forth in this Order. POTC, Philcomsat and PHC are further reminded to also comply with the manner of the conduct of their respective meetings as provided in the Order of the Commission dated July 8, 2004.[3]
On separate dates, the group of Atty. Victor Africa ("Africa group") and the group of Ambassador Nieto ("Nieto group") conducted their respective annual stockholders' meetings. The Africa group held successive meetings for POTC and Philcomsat on July 28, 2004, while the Nieto group held similar meetings for POTC and Philcomsat on August 5 and August 9, respectively. On all these meetings, where the SEC representatives were present (except the Philcomsat meeting of the Africa group), the Commission noted the following observations:
| Africa Group | Nieto Group |
1. POTC meeting | 1. no COMELEC was constituted 2. no validation of proxies 3. the list of stockholders and the stock and transfer were not presented during the meeting 4. As per Atty. Africa, the Meeting was not called by the SEC but rather by the board of directors voluntarily | 1. A COMELEC was constituted composed of Mr. Locsin and Atty. Lokin (and 3rd position supposedly for the representative of the Africa group was vacant because the group did not submit their nominee) 2. the proxies and the list of stockholders prepared by the Asst. Corp. Sec. were presented during the meeting. 3. the Presiding Officer declared that the meeting was called pursuant to the Order of the Commission. |
2. Philcomsat | 1. No SEC representative | 1. A COMELEC was constituted composed of Mr. Locsin, and Atty. Lokin 2. the proxies and the list of stockholders prepared by the Asst. Corp. Sec. were presented during the meeting. 3. the Presiding Officer declared that the meeting was called pursuant to the Order of the Commission |
In light of the foregoing, the Commission hereby upholds the validity of the stockholders' meetings conducted by the Nieto Group in view of the clear compliance by the said group with the conditions set forth by the Commission in its Orders of July 8 and 26, 2004.By virtue of the afore-quoted Order, the SEC validated the stockholders' meetings of POTC and PHILCOMSAT conducted by the Nieto group. Having already gained control of the mother companies POTC and PHILCOMSAT, the Nieto group would undoubtedly also dominate the subsequent stockholders' meeting and election for the new members of the Board of Directors of PHC.
Meanwhile, the PHC meeting shall proceed as scheduled on August 31, 2004. The Officers and Directors of PHC are hereby reminded to strictly conform to the conditions stated in the July 8 and 26 Orders.
The President and the Corporate Secretary of PHC and its Stock and Transfer Agent are hereby ordered to submit to the Commission the certified list of stockholders and the stock and transfer book of PHC on or before August 25, 2004.
Due to the failure of the Africa group to nominate their representative to the PHC NOMELEC (sic), Atty. Victoria De Los Reyes is hereby designated as the representative of the Africa group in the forthcoming August 31, 2004 PHC meeting.
The Corporation Finance Department is hereby directed to monitor PHC's compliance with the laws, rules and regulations relative to the calling of the stockholders' meeting and to make the necessary action to ensure such compliance.
The Order of 8 July 2004 and 26 July 2004 insofar as not inconsistent with this Order shall remain in full force and effect. [4]
WHEREFORE, premises considered, it is respectfully prayed that this Honorable Court immediately issue a temporary restraining order and a writ of preliminary injunction enjoining:The Court of Appeals, acting on Africa's Petition, issued a Resolution, dated 31 August 2004,[7] ordering therein respondents to file their Comments within ten days from notice, and therein petitioners to file their Reply within five days from receipt of respondents' Comments. The same Resolution grants Africa's prayer for a TRO, in this wise:Further it is respectfully prayed that this instant Petition be granted by this Honorable Court consequently annulling and setting aside the aforementioned Orders and the proceedings of the Securities and Exchange Commission docketed as SEC Case No. 12-03-03 which relate to herein petitioners and by issuing writs of certiorari and prohibition to permanently enjoin the Securities and Exchange Commission, its officers, agents and representatives including its General Counsel, respondent Vernette G. Umali-Paco, from enforcing such Orders and continuing to act against petitioners in SEC Case No. 12-03-03 or any other case involving the same issues.
- the Securities and Exchange Commission, its officers, agents and representatives including its General Counsel, respondent Vernette G. Umali-Paco, from enforcing the Orders dated 8 July 2004, 26 July 2004 and 20 August 2004, and from continuing to act against petitioners in the SEC Case No. 12-03-03 or on any other case involving the same issue:
- Manuel H. Nieto, Jr., Luis K. Lokin, Jr., Alma Kristina O. Alobba, their principals, agents and any person acting on their behalf, from executing the August 20 Order of respondents SEC and Paco as regards the supposed validity of their meeting, from taking control of the management, operations and office premises of petitioners POTC and PHILCOMSAT and from doing any act that would tend to disrupt the operations of petitioners.
Other reliefs just and equitable are likewise prayed for.[6]
In the meantime, since the petition questions the jurisdiction of public respondents [SEC and Atty. Umali-Paco] in issuing the assailed Orders dated July 8, 2004, July 26, 2004 and August 20, 2004, and the implementation of the same will render moot and academic any and all orders, resolutions and decision of this Court, this Court hereby TEMPORARILY RESTRAINS respondents, their officers, agents and other persons acting for and in their behalf, from enforcing, implementing and executing the aforesaid assailed Orders within a period of sixty (60) days or until sooner revoked.Thereafter, the following developments took place in CA-G.R. SP No. 85959:
Without waiting for the Comment of the SEC and Atty. Umali-Paco on Africa's Petition, still due on 24 November 2004, the Court of Appeals already issued a Resolution, dated 25 October 2004, in which it ruled that there was no forum shopping on the part of Africa, for there was no identity of parties and issues between the civil cases before the Makati City RTCs and CA-G.R. SP No. 85959. Thus, it resolved to:
- The SEC and Atty. Umali-Paco filed successive motions for extension of time to file their Comment on Africa's Petition, which were granted by the Court of Appeals in its Resolutions, dated 20 September 2004, 12 October 2004, and 23 November 2004.[8] By virtue of the latest grant of extension, the SEC and Atty. Umali-Paco had until 24 November 2004 to file their Comment. Nieto also filed a motion for extension of time to file his Comment on the Petition, but before acting thereon, the appellate court required him to remit the required legal fees for his motion.
- Nieto filed an Urgent Manifestation[9] calling the attention of the Court of Appeals to the "badges of deliberate forum shopping" committed by Africa and his group. Nieto informed the appellate court that Africa had previously filed the following: (a) Complaint for Injunction with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction, docketed as Civil Case No. 04-935, with Branch 133 of the Makati City Regional Trial Court (RTC); (b) Petition for Injunction, docketed as Civil Case No. 01-555, with Branch 61 of the Makati City RTC; and (c) Letter for reconsideration of the assailed Orders in SEC Case No. 12-03-03 with the SEC. Upon being required by the Court of Appeals,[10] Africa filed his Comment[11] on Nieto's Urgent Manifestation.
- Nieto and Attys. Lokin and Alobba filed with the Court of Appeals their Joint Comment (With Grounds for Immediate Dismissal and Opposition to the Issuance of TRO and/or Preliminary Injunction).[12]
- On the other hand, Africa filed with the Court of Appeals a Motion to Resolve Application for the Issuance of a Writ of Preliminary Injunction; and a Reply to the Joint Comment of Nieto and Attys. Lokin and Alobba, with a motion to have the latter declared in contempt for insisting on executing, enforcing and implementing the assailed SEC Orders despite the TRO issued by the appellate court.
(a) | | NOTE private respondent Nieto's Urgent Manifestation; |
| | |
(b) | | DIRECT private respondents [Nieto and Attys. Lokin and Alobba] to SHOW CAUSE within ten (10) days from notice why they should not be held in contempt for not honoring the temporary restraining order issued on August 31, 2004; and |
| | |
(c) | | ISSUE a writ of preliminary injunction against the respondents [SEC and Atty. Umali-Paco; Nieto and Attys. Lokin and Alobba], their agents, officers, representatives and other persons acting for and in their behalf from executing, enforcing and implementing the assailed orders dated July 8, 2004, July 26, 2004 and August 20, 2004 upon the filing of a bond in the amount of ONE MILLION ( |
WHEREFORE, premises considered, it is respectfully prayed that the Honorable Court:Nieto's Petition was first dismissed by this Court for lack of sufficient showing that the questioned judgment was tainted with grave abuse of discretion;[16] but acting favorably on Nieto's Motion for Reconsideration,[17] this Court reinstated his Petition and required herein private respondents to file their respective Comments.[18]Other just and equitable reliefs are likewise prayed for.[15]
- GIVE DUE COURSE to the instant Petition;
- ISSUE a Temporary Restraining Order:
- ENJOINING the respondent Court of Appeals, the herein private respondents, their agents, alter-egos and other persons possessing any interest, or who shall benefit from and/or are interested in sustaining the assailed Resolutions, from implementing and executing the Resolutions dated October 25, 2004 and December 13, 2004, and the Writ of Preliminary Injunction dated November 9, 2004 issued pursuant thereto;
- SUSPENDING/ENJOINING the proceedings in CA-G.R. No. 85959 pending the final resolution of the instant petition.
- After notice and hearing, ISSUE the Writ of Preliminary Injunction:
- ENJOINING the respondent Court of Appeals, the herein private respondents [Africa and the John/Jane Does], their agents, alter-egos and other persons possessing any interest, or who shall benefit from and/or are interested in sustaining the assailed Resolutions, from implementing and executing the Resolutions dated October 25, 2004 and December 13, 2004, and the Writ of Preliminary Injunction dated November 9, 2004 issued pursuant thereto;
- SUSPENDING/ENJOINING the proceedings in CA-G.R. No. 85959 pending the final resolution of the instant petition.
- ANNUL AND SET ASIDE the assailed Resolution dated October 25, 2004 and Resolution dated December 13, 2004 rendered by the respondent Court of Appeals, for having been issued with grave abuse of discretion amounting to lack of jurisdiction, and making the aforesaid temporary restraining order and/or preliminary injunction PERMANENT; and
- DISMISS CA-G.R. No. 85959 on the ground of deliberate multiple forum shopping and take appropriate action relative thereto.
In his Comment[26] on the afore-quoted motion, Africa confirmed that the reasons stated therein for withdrawal of the petition are in accordance with the agreement between Nieto, on one hand, and Africa and the people the latter represents, on the other. Inasmuch as the withdrawal of the petition shall pave the way for the settlement of the feud among all the parties concerned, Africa has no objection to the withdrawal of the petition and joins Nieto in praying for the immediate dismissal of the same.
- After meeting to discuss their differences and misgivings, petitioner [Nieto] and other stockholders deemed it best to settle amicably the issues/disputes that prompted the filing of the Petition in the above-entitled case;
- Under the settlement, petitioner [Nieto] and other stockholders have agreed to hold stockholders meetings of the Philippine Overseas Telecommunications Corporation (POTC) and the Philippine Communications Satellite Corporation (PHILCOMSAT) to exercise the stockholders' rights during the meetings to be held by electing a common slate of directors they have chosen for a lasting, peaceful and efficient management and operations of the said corporations for the benefit of stockholders and not for strangers and interlopers in the corporation;
- With the amicable settlement of the disputes and/or issues that sired the filing of the instant petition, there is no more dispute or controversy to be resolved or adjudicated by this Honorable Court. All issues presented by movant has been satisfactorily settled and, therefore, the petition would now be moot and academic.
- To implement the settlement forged by the petitioner [Nieto] and other stockholders, petitioner agrees to voluntarily withdraw any and all cases he had earlier filed in various courts and offices. Hence, the petitioner-movant [Nieto] hereby withdraws the instant petition to implement the amicable settlement forged for the peace and the enjoyment of the stockholders.
P R A Y E R
WHEREFORE, premises considered, it is respectfully prayed of this Honorable Court that the instant Petition be considered withdrawn and/or dismissed for the reasons adverted to.
SECTION 1. Who may intervene. - A person who has a legal interest in the matter in litigation, or in the success of either of the parties, or an interest against both, or is situated as to be adversely affected by a distribution or other disposition of property in the custody of the court or of an officer thereof may, with leave of court, be allowed to intervene in the action. The court shall consider whether or not the intervention will unduly delay or prejudice the adjudication of the rights of the original parties, and whether or not the intervenor's rights may be fully protected in a separate proceeding.The nature of intervention proceedings had been clearly and comprehensively defined by this Court in Garcia v. David,[32] to wit:
Intervention is a proceeding in a suit or action by which a third person is permitted by the court to make himself a party, either joining plaintiff in claiming what is sought by the complaint, or uniting with defendant in resisting the claims of plaintiff, or demanding something adversely to both of them; the act or proceeding by which a third person becomes a party in a suit pending between others; the admission, by leave of court, of a person not an original party to pending legal proceedings, by which such person becomes a party thereto for the protection of some right or interest alleged by him to be affected by such proceedings. (33 C.J., 477.) Fundamentally, therefore, intervention is never an independent action, but is ancillary and supplemental to the existing litigation. Its purpose is not to obstruct nor unnecessarily delay the placid operation of the machinery of trial, but merely to afford one not an original party, yet having a certain right or interest in the pending case, the opportunity to appear and be joined so he could assert or protect such right or interest. The law on intervention in this jurisdiction, is found in section 121 of the Code of Civil Procedure, which is a verbatim copy of section 387 of the Code of Civil Procedure of the State of California. x x x:Applying herein the relevant rules and jurisprudence, this Court finds no basis for granting Atty. Alobba's Motion for Leave to Intervene and for giving due course to her Petition-in-Intervention.
x x x x
A cursory examination of the above provision will show three important elements: (1) That only a person having a legal interest in the subject matter of the litigation or in the success of either of the parties or an interest against both, may intervene; (2) that therefore a mere intruder or stranger who has no legal interest and whose presence would only make the proceeding complicated, expensive and interminable may not be allowed to intervene; (3) that the permissive tenor of the legal provision evinces the intention of the lawmaker to give to the judge, considering a motion for intervention, the full measure of discretion in permitting or disallowing said motion.
SO ORDERED.
- DENY the Motion for Leave to Intervene and DISMISS the Petition-in-Intervention filed by Atty. Alma Kristina O. Alobba; and
- GRANT the Motion to Withdraw Petition filed by petitioner Manuel H. Nieto, Jr. with the conformity of private respondent, Victor A. Africa, and DISMISS the present Petition for Certiorari.