Case Summary (G.R. No. 22442)
Petition and Respondents' Answer
Petitioner seeks a writ of mandamus compelling the respondents to allow him and his authorized representative to examine the company’s records. The respondents admit some allegations but defend the refusal primarily on the grounds that company by-laws and board resolutions restrict the timeframe in which stockholders may inspect such records.
Right to Inspection Under Act No. 1459
It is implicitly admitted that petitioner is a stockholder entitled under Section 51 of Act No. 1459 to inspect corporate books. The court referenced a prior ruling affirming that a stockholder’s right to inspect may be exercised personally or through a duly authorized agent.
Respondents' Defense: Time Restrictions on Inspection
The respondents rely on a by-law limiting examination rights to certain days stipulated annually by the board of directors and a specific resolution fixing March 15 to 25, 1924, as the only inspection period that year. They argue that because petitioner did not inspect during this timeframe, his right to inspection is forfeited.
Court’s Rejection of Time Restriction Defense
The court held that the statutory right to inspect books cannot be curtailed by by-laws or resolutions imposing restrictive time limits. While inspection may be denied for unreasonable hours or improper conditions, a complete denial or overly restrictive regulations infringe upon the stockholder’s legal rights. The court cited authoritative precedents establishing that unduly restrictive by-laws are invalid.
Reasonable Hours and Business Days Interpretation
The court clarified that “reasonable hours” as stated in the statute means reasonable hours on business days throughout the year, not just during an arbitrarily designated period. This implies continuous availability for inspection and not just selective windows dictated by the board.
Irrelevance of Petitioner’s Motive for Inspection
Respondents alleged ulterior mot
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Facts of the Case
- Antonio Pardo, petitioner and stockholder in the Hercules Lumber Company, Inc., seeks a writ of mandamus.
- The purpose of the writ is to compel the respondents to permit him and his authorized representative access to examine the company’s records and business transactions.
- Respondents, including Ignacio Ferrer, acting secretary of the company, admit certain allegations but refuse access to the records at the petitioner's requested times.
- The dispute centers on the refusal to permit inspection despite Pardo’s status as a stockholder.
Legal Issue Presented
- Whether a stockholder and his authorized agent have the right to examine the company's records and business transactions at reasonable times.
- Whether the company’s by-law and board resolution restricting inspection to certain predetermined dates and hours constitute valid limitations on the stockholder’s statutory right of inspection.
- Whether the petitioner’s motive in seeking inspection, allegedly for competitive or preparatory litigation purposes, can justify denial of inspection rights.
Relevant Statutory and Jurisprudential Provisions
- Section 51 of Act No. 1459 grants stockholders the right to examine corporate records.
- Previous ruling in Philpotts vs. Philippine Manufacturing Co. and Berry (40 Phil., 471) affirms that inspection rights can be exercised personally or via authorized representatives.
- Statutory right to inspection can be exercised at reasonable hours.
Respondents’ Arguments and Defenses
- Respondents rely heavily on Article 10 of the company’s by-laws: shareholders may examine company books only on days annually fixed by the board of directors.
- On February 16, 1924, the board resolved to allow book examination only from March 15 to 25.
- Respondents argue that this resolution lawfully restricts the statutory right to