G.R. No. 153413 - Raniel vs. Jochico

Petitioners Nectarina S. Raniel (Raniel) and Ma. Victoria R. Pag-ong (Pag-ong) were incorporators, directors, and corporate officers of Nephro Systems Dialysis Center (Nephro). Raniel served also as Corporate Secretary and Administrator.
Respondents Paul Jochico (Jochico), John Steffens, and Surya Viriya were likewise incorporators and directors of Nephro.

The dispute arose in December 1997 when petitioners questioned respondents' plan to enter into a joint venture with Butuan Doctors’ Hospital and College, Inc.
Respondents allegedly attempted to compel petitioners to waive and assign their shares in Nephro, which petitioners refused.

Raniel sought an indefinite leave of absence due to stress, which was disapproved by Jochico, Nephro’s President.
Raniel did not report for work, prompting Jochico to demand an explanation why she should not be removed as administrator and corporate secretary. Raniel responded, expressing dissatisfaction over the denial of her leave and the joint venture.

On January 30, 1998, Jochico issued a Notice of Special Board Meeting scheduled for February 2, 1998, which petitioners received but did not attend.
The Board, in the February 2 meeting, ratified the disapproval of Raniel’s leave, dismissed her as Administrator, declared the Corporate Secretary position vacant, appointed Otelio Jochico as Corporate Secretary, and called for a Special Stockholders’ Meeting on February 16, 1998 to remove petitioners as directors.
Notices for the stockholders' meeting were received by petitioners but they again did not attend.
The stockholders present removed petitioners as directors.

Petitioners filed SEC Case No. 02-98-5902 for declaration of nullity of illegal acts, damages, and injunction.
On October 27, 2000, the Securities and Exchange Commission (SEC) ruled that petitioners’ removal as directors and officers was valid and denied requested reliefs of reinstatement and damages, ruling that the Board had sufficient grounds and followed due procedure.
Petitioners appealed to the Court of Appeals (CA), which on April 30, 2002 affirmed the SEC decision but corrected the term “renewal” to “removal” of petitioners as directors.

Petitioners filed a Petition for Review on Certiorari before the Supreme Court, arguing that their removal was invalid.
Both the SEC and CA had concluded that the removal of Raniel and Pag-ong was valid, including the Board meeting and the Special Stockholders’ meeting proceedings.

Whether the removal of petitioners as directors and corporate officers of Nephro was valid.
Whether the Special Board Meeting of February 2, 1998 and Special Stockholders’ Meeting of February 16, 1998 held validly and in accordance with law and corporate by-laws.
Whether petitioners were accorded due process in their removal as officers and directors.
Whether petitioners had sufficient cause for invalidating the removal based on alleged procedural or substantive irregularities.