546 Phil. 54
AUSTRIA-MARTINEZ, J.:
WHEREFORE, the Commission so holds that complainants cannot be awarded the reliefs prayed for in reinstating Nectarina S. Raniel as secretary and administrator.Dissatisfied, petitioners filed a petition for review with the CA.
The corporation acting thru its Board of Directors can validly remove its corporate officers, particularly complainant Nectarina S. Raniel as corporate secretary, treasurer and administrator of the Dialysis Clinic.
Also, the Commission cannot grant the relief prayed for by complainants in restraining the respondents from interfering in the administration of the Dialysis Clinic owned by the corporation and the use of corporate funds.
The administration of the Dialysis Clinic of the corporation and the use of corporate funds, rightfully belong to the officers of the corporation, which in this case are the respondents.
The counterclaim of respondents to return or assign back the complainants' shares in favor of respondent Paul Jochico or his nominee is hereby denied for lack of merit.
The respondents failed to show any clear and convincing evidence to rebut the presumption of the validity and truthfulness of documents submitted to the Commission in the grant of corporate license.
The claim for attorney's fees and damages of both parties are likewise denied for lack of merit, as neither party should be punished for vindicating a right, which he/she believes should be protected or enforced.
SO ORDERED.[2]
WHEREFORE, in light of the foregoing discussions, the appealed decision of the Securities and Exchange Commission is hereby AFFIRMED with the MODIFICATION that the renewal of petitioners as directors of Nephro is declared valid.Respondents filed a Manifestation and Motion to Correct Typographical Error, stating that the term "renewal" as provided in the CA Decision should be "removal."[4] Petitioners, on the other hand, filed the present petition for review on certiorari.
SO ORDERED.[3]
SEC. 23. The Board of Directors or Trustees. Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees x x x.a corporation's board of directors is understood to be that body which (1) exercises all powers provided for under the Corporation Code; (2) conducts all business of the corporation; and (3) controls and holds all property of the corporation. Its members have been characterized as trustees or directors clothed with a fiduciary character. [12] Moreover, the directors may appoint officers and agents and as incident to this power of appointment, they may discharge those appointed.[13]
In the instant complaint, do respondents have sufficient grounds to cause the removal of Raniel from her positions as Corporate Secretary, Treasurer and Administrator of the Dialysis Clinic? Based on the facts proven during the hearing of this case, the answer is in the affirmative.The SEC also correctly concluded that petitioner Raniel was removed as an officer of Nephro in compliance with established procedure, thus:
Raniel's letter of January 26, 1998 speaks for itself. Her request for an indefinite leave, immediately effective yet without prior notice, reveals a disregard of the critical responsibilities pertaining to the sensitive positions she held in the corporation. Prior to her hasty departure, Raniel did not make a proper turn-over of her duties and had to be expressly requested to hand over documents and records, including keys to the office and the cabinets (Exh. 15).
x x x x
Since Raniel occupied all three positions in Nephro, it is not difficult to foresee the disruption that her immediate and indefinite absence can inflict on the operations of the company. By leaving abruptly, Raniel abandoned the positions she is now trying to reclaim. Raniel's actuation has been sufficiently proven to warrant loss of the Board's confidence.[14]
The resolutions of the Board dismissing complainant Raniel from her various positions in Nephro are valid. Notwithstanding the absence of complainants from the meeting, a quorum was validly constituted. x x x.Petitioners Raniel and Pag-ong's removal as members of Nephro's Board of Directors was likewise valid.
x x x x
Based on its articles of incorporation, Nephro has five directors - two of the positions were occupied by complainants and the remaining three are held by respondents. This being the case, the presence of all three respondents in the Special Meeting of the Board on February 2, 1998 established a quorum for the conduct of business. The unanimous resolutions carried by the Board during such meeting are therefore valid and binding against complainants.
It bears emphasis that Raniel was given sufficient opportunity to be heard. Jochico's letters of January 26, 1998 and January 27, 1998, albeit adversarial, recognized her right to explain herself and gave her the chance to do so. In fact, Raniel did respond to Jochico's letter on January 28, 1998 and took the occasion to voice her opinions about Jochico's alleged "practice of using others for your own benefit, without cost." (Exh. 14). Moreover, the Special Meeting of the Board could have been the appropriate venue for Raniel to air her side. Had Raniel decided to grace the meeting with her presence, she could have explained herself before the board and tried to convince them to allow her to keep her posts.[15]
SEC. 28. Removal of directors or trustees. -- Any director or trustee of a corporation may be removed from office by a vote of the stockholders holding or representing at least two-thirds (2/3) of the outstanding capital stock, or if the corporation be a non-stock corporation, by a vote of at least two-thirds (2/3) of the members entitled to vote: Provided, that such removal shall take place either at a regular meeting of the corporation or at a special meeting called for the purpose, and in either case, after previous notice to stockholders or members of the corporation of the intention to propose such removal at the meeting. A special meeting of the stockholders or members of a corporation for the purpose of removal of directors or trustees or any of them, must be called by the secretary on order of the president or on the written demand of the stockholders representing or holding at least a majority of the outstanding capital stock, or if it be a non-stock corporation, on the written demand of a majority of the members entitled to vote. x x x Notice of the time and place of such meeting, as well as of the intention to propose such removal, must be given by publication or by written notice as prescribed in this Code. x x x Removal may be with or without cause: Provided, That removal without cause may not be used to deprive minority stockholders or members of the right of representation to which they may be entitled under Section 24 of this Code. (Emphasis supplied)Petitioners do not dispute that the stockholders' meeting was held in accordance with Nephro's By-Laws. The ownership of Nephro's outstanding capital stock is distributed as follows: Jochico - 200 shares; Steffens - 100 shares; Viriya - 100 shares; Raniel - 75 shares; and Pag-ong - 25 shares,[17] or a total of 500 shares. A two-thirds vote of Nephro's outstanding capital stock would be 333.33 shares, and during the Stockholders' Special Meeting held on February 16, 1998, 400 shares voted for petitioners' removal. Said number of votes is more than enough to oust petitioners from their respective positions as members of the board, with or without cause.