Case Digest (G.R. No. 15568) Core Legal Reasoning Model
Facts:
This case revolves around W. G. Philpotts, the petitioner and a stockholder of the Philippine Manufacturing Company (PMC), which, along with its secretary, F. N. Berry, served as the respondents. The events took place in the context of a legal proceeding that originated on November 8, 1919, when Philpotts sought a writ of mandamus from the Supreme Court of the Philippines, compelling the respondents to allow him to inspect and examine the company's records dating back to January 1, 1918. Philpotts argued that as a stockholder, he was entitled to review the business records of PMC under the provisions of section 51 of the Corporation Law, which guarantees this right to stockholders. The respondents interposed a demurrer citing a defect of parties and contended that the petitioner could not maintain an action against both the corporation and its secretary without alleging that the secretary was the custodian of said records. They also argued that the right of inspection shoul
Case Digest (G.R. No. 15568) Expanded Legal Reasoning Model
Facts:
- Parties and Procedural Background
- Petitioner: W. G. Philpotts, a stockholder in the Philippine Manufacturing Company.
- Respondents:
- The Philippine Manufacturing Company.
- F. N. Berry, the secretary of the company, named as a codefendant.
- Nature of the Action:
- A petition for a writ of mandamus under Section 515 of the Code of Civil Procedure.
- Seeking to compel the respondents to permit inspection and examination of the business records of the corporation.
- Timeframe of Records:
- The records in question pertain to all business transactions of the company since January 1, 1918.
- Jurisdictional Basis:
- The petition is filed under the authority which grants concurrent jurisdiction to this tribunal and the Court of First Instance in cases where a plaintiff is unlawfully excluded from a right.
- Contentions Raised by the Respondents
- First Ground (Defect of Parties):
- Respondents argued that the action could not be sustained jointly against both the corporation and its secretary without explicitly alleging that the secretary is the custodian of the records.
- Reference to the plain language of Sections 515 and 222 of the Code of Civil Procedure, which primarily focus on the corporation as the necessary party.
- Comparative Reference:
- The Ohio case of Cincinnati Volksblatt Co. vs. Hoffmister where only the corporation was defended.
- Second Ground (Exercise of Inspection Right):
- The controversy concerning whether the inspection right of a stockholder, as provided under Section 51 of the Corporation Law (Act No. 1459), can be exercised in person only or also through a proper agent/attorney.
- Respondents contended that the statute implicitly requires the stockholder to act personally.
- Detailed statutory reference:
- The second paragraph of Section 51, which directs that records be open “to the inspection of any director, member, or stockholder.”
- Legislative and Evidentiary Considerations
- Supporting Statutes and Case Law:
- Mention and reliance on sections 515 and 222 of the Code of Civil Procedure for procedural propriety.
- The provision of Section 51 of Act No. 1459 which guarantees inspection rights.
- Arguments on Proper Representation:
- The petitioner sought to exercise the inspection right either personally or through an “authorized agent or attorney”.
- The contention centered on ensuring that the right retains practical value even when the stockholder may not be personally available.
- Comparative Judicial Authority:
- Referencing United States decisions such as Foster vs. White, Martin vs. Bienville Oil Works Co., and Deadreck vs. Wilson to illustrate that inspection rights may be delegated to properly authorized representatives.
Issues:
- Adequacy and Proper Defendant Identification
- Whether the petition should be limited solely to the corporation as the necessary party or include the corporation’s secretary (or other officers) as codefendants.
- Determining if the inclusion of the secretary is proper on the ground that this person is customarily the custodian of the corporate records.
- Scope of the Right to Inspect Corporate Records
- Whether the inspection right, as granted under Section 51 of Act No. 1459, may be validly exercised by a stockholder through a duly authorized agent or attorney, rather than being restricted to personal inspection.
- The extent to which the statutory provision should be interpreted to allow delegation of the inspection duty, drawing on the general rule that actions performed in person may be conducted through a representative.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)