Case Summary (G.R. No. 15568)
Petitioner’s Request
W. G. Philpotts, a stockholder in the Philippine Manufacturing Company, initiated proceedings seeking a writ of mandamus. The objective of the writ was to compel the respondents to allow him, or a duly authorized agent or attorney, to inspect and examine the records of business transactions conducted by the company since January 1, 1918. The petition was filed under Section 515 of the Code of Civil Procedure, which grants concurrent jurisdiction with the Court of First Instance over cases where a corporation unlawfully excludes a stockholder from exercising their rights.
Respondents' Defense
The respondents filed a demurrer, contesting the sufficiency of the petition. One argument presented was the alleged defect of parties, contending that the action could not be maintained against both the corporation and its secretary without explicitly stating that the secretary was the custodian of the records. The court noted, however, that under the provisions of the law, the corporation was the necessary party to the proceeding, thereby making the inclusion of the secretary as co-defendant justifiable, but not essential.
Right of Inspection by Stockholders
A key issue before the court was whether the right of a stockholder to inspect corporate records could be exercised through an authorized agent or attorney, in addition to being exercised personally. Respondents acknowledged that stockholders possess the right to examine records under Section 51 of the Corporation Law, yet they asserted that this right must be exercised in person.
Judicial Interpretation of Statutory Rights
The court interpreted the provisions of Section 51 of Act No. 1459, affirming that the right to inspect corporate records can be exercised by a stockholder themselves or by a properly authorized representative. The court reasoned that allowing an agent to conduct the inspection aligns with principles of agency law, where one may act through another in exercising rights. The court emphasized that any restriction on this right would contravene the purpose of stockholder inspections, which is to ensure accountability and transparency in corporate governance.
Comparison with U.S. Precedents and Conclusion
The ruling was supported by a review of U.S. case law, which generally affirms that rights to inspect records are liberally construed to include actions via authorized represe
...continue readingCase Syllabus (G.R. No. 15568)
Case Overview
- Case Citation: 40 Phil. 471 [ G.R. No. 15568. November 08, 1919 ]
- Petitioner: W. G. Philpotts, a stockholder of the Philippine Manufacturing Company.
- Respondents: Philippine Manufacturing Company and its secretary, F. N. Berry.
- Legal Context: The petitioner seeks a writ of mandamus to inspect the company's records from January 1, 1918, invoking Section 515 of the Code of Civil Procedure.
Procedural Background
- The petition is filed directly in the Supreme Court based on concurrent jurisdiction with the Court of First Instance.
- Respondents filed a demurrer contesting the action's validity, claiming a defect of parties and arguing that the right to inspect records must be exercised personally by the stockholder.
Issues Presented
- Defect of Parties: Whether the action can be maintained against both the corporation and its secretary without alleging that the secretary is the custodian of the records.
- Right of Inspection: Whether a stockholder's right to inspect corporate records can be delegated to an agent or attorney.
Judicial Reasoning
- The Court discusses the relevant provisions of the Code of Civil Procedure, specifically Sections 515 and 222, which allow actions against corporations.
- The Co