Case Summary (G.R. No. 177066)
Procedural History
Trial court proceedings were temporarily held in abeyance because of the alleged name discrepancy. The trial court conditionally accepted the corrected birth certificate and ordered respondent to answer and the case set for pretrial. On October 11, 2005, the trial court ordered the respondents to allow inspection of corporate books and records from 1962 to present. On appeal, the Court of Appeals (CA) reversed and dismissed the complaint by its October 11, 2006 Decision, and denied reconsideration by Resolution dated March 6, 2007. The Supreme Court denied the petition for review on certiorari and affirmed the CA’s decision and resolution.
Issues Raised by Petitioner
Petitioner principally argued (as stated in his petition): (1) he is entitled to the reliefs sought as an heir of Carlos L. Puno, an incorporator; (2) his filiation to the deceased was duly proven; (3) “Joselito Muno” and “Joselito Puno” refer to the same person and the surname discrepancy is a harmless misspelling; (4) respondent’s motion to dismiss implicitly admitted factual allegations such as petitioner’s heirship; and (5) the CA erred in denying petitioner the right to inspect the corporation’s books.
Controlling Legal Framework and Applicable Law
Applicable constitutional framework: the 1987 Philippine Constitution governs judicial review and civil proceedings. Statutory and procedural authorities applied include the Corporation Code (notably Sections 63, 74, and 75) and the Rules of Court (Rule 45 governing certiorari relief). The Court relied on established jurisprudence regarding proof of paternity and the rights of stockholders and heirs.
Standard on Review of Factual Findings
The Supreme Court reiterated the Rule 45 limitation: in an appeal via certiorari the Court does not reweigh or reassess factual findings of the CA that are supported by substantial evidence. Findings of the Court of Appeals on matters of fact are conclusive and binding on the Supreme Court unless there is a clear showing of lack of substantial evidence.
Proof of Paternity and Competence of Documentary Evidence
The Court held that a certificate of live birth identifying a putative father is not competent evidence of paternity where there is no showing that the putative father assisted in or acknowledged the information recorded; the local civil registrar cannot record paternity based solely on information supplied by a third person. A baptismal certificate may prove administration of a sacrament on a given date but not the veracity of entries regarding paternal filiations. In this case, the CA’s finding that petitioner failed to establish filiation was upheld because entries in the birth certificate were supplied only by the mother, and there was no evidence of acknowledgement by Carlos L. Puno.
Statutory Rights to Inspect Corporate Books and Financial Statements
Under Section 74 of the Corporation Code, the records of business transactions and minutes shall be open to inspection by any director, trustee, stockholder, or member at reasonable hours on business days, and such person may demand copies at their expense. Section 75 requires a corporation to furnish its most recent financial statement to any stockholder upon written request. Those statutory rights are predicated on the requester’s status as a stockholder or member of the corporation.
Nature and Basis of Stockholder Rights
The Court emphasized that the right to inspect corporate books and to obtain financial statements flows from the ownership of shares; these rights exist to enable a stockholder to be intelligently informed and to protect his proprietary interest in corporate assets. Similarly, entitlement to dividends is inherent in share ownership and is limited to stockholders of record.
Effect of Death of a Stockholder and Estate Settlement Requirements
Upon the death of a stockholder, heirs do not automatically become stockholders of record or immediately acquire all rights and privileges of the decedent as a shareholder. The shares must first be distributed to heirs in estate proceedings and the transfer must be recorded in the corporation’s transfer book; Section 63 of the Corporation Code provides that no transfer is valid except as between the parties until recorded in the corporation’s books. During the interim, heirs are equitable owners while the executor or administrator appointed by the court holds legal title and is the one entitled to exercise corporate rights. Thus, exercise of shareholder rights pending settlement of the estate is properly vested in the administrator or executor.
Application of Law to the Present Case
Applying the foregoing principles, the Court concluded that even if petitioner had established filiation, he would not be entitled to inspect corporate books or claim dividend
...continue readingCase Syllabus (G.R. No. 177066)
Court and Decision
- Supreme Court of the Philippines, Third Division; G.R. No. 177066; Decision dated September 11, 2009; reported at 615 Phil. 645.
- Decision authored by Justice Nachura; concurrence by Ynares‑Santiago (Chairperson), Chico‑Nazario, Velasco, Jr., and Peralta, JJ.
- Petition for review on certiorari from the Court of Appeals (CA) Decision dated October 11, 2006 and CA Resolution dated March 6, 2007 in CA‑G.R. CV No. 86137.
Parties
- Petitioner: Joselito Musni Puno, appearing as heir of the late Carlos L. Puno.
- Respondent: Puno Enterprises, Inc., represented by Jesusa Puno.
- Deceased relevant to the claim: Carlos L. Puno, an incorporator of respondent corporation, who died on June 25, 1963.
Case Origin and Nature of Action
- Nature of suit: Complaint for specific performance filed by petitioner seeking inspection of corporate books, accounting of corporation transactions from 1962, and recovery of profits, earnings, dividends or income pertaining to shares of Carlos L. Puno.
- Petition filed in the Supreme Court is a petition for review on certiorari from the CA decision dismissing petitioner’s complaint.
Chronology of Key Events
- June 25, 1963: Death of Carlos L. Puno.
- March 14, 2003: Petitioner Joselito Musni Puno filed the complaint for specific performance against Puno Enterprises, Inc.
- Petitioner’s initial birth certificate bore the name "Joselito Musni Muno"; respondent moved to dismiss for lack of legal personality to sue and sought judicial declaration of identity.
- Petitioner submitted a corrected birth certificate naming him "Joselito M. Puno," certified by the Civil Registrar of the City of Manila, together with a Certificate of Finality.
- Trial court conditionally admitted the corrected birth certificate as genuine and authentic, ordered respondent to file an answer within fifteen days, and set the case for pretrial.
- October 11, 2005: Trial court rendered a Decision ordering Jesusa Puno and/or Felicidad Fermin to allow petitioner to inspect corporate books and records from 1962 to present and to furnish financial statements; costs of copying to be borne by plaintiff; defendant’s expenses to be the subject of a bill of costs.
- October 11, 2006: Court of Appeals reversed and dismissed the complaint.
- March 6, 2007: Court of Appeals denied petitioner’s motion for reconsideration via Resolution.
- September 11, 2009: Supreme Court issued the decision denying the petition and affirming the CA Decision and Resolution.
Facts as Alleged and Established in Record
- Petitioner averred he is the son of the deceased Carlos L. Puno and his common‑law wife, Amelia Puno, and as surviving heir claimed entitlement to the rights and privileges of his late father as a stockholder of Puno Enterprises, Inc.
- Reliefs sought by petitioner: inspection of corporate books, accounting of all transactions since 1962, and recovery of profits/dividends attributable to the shares of Carlos L. Puno.
- Respondent’s motion to dismiss asserted lack of legal personality because petitioner’s birth certificate named him "Joselito Musni Muno," necessitating judicial declaration that "Joselito Musni Puno" and "Joselito Musni Muno" are the same person.
- Trial court initially held proceedings in abeyance upon respondent’s motion, reasoning that the birth certificate alone was no proof of paternity or relation to Carlos L. Puno.
- Petitioner later produced a corrected birth certificate (“Joselito M. Puno”) certified by the Civil Registrar of Manila, and a Certificate of Finality; the trial court conditionally admitted this corrected birth certificate to expedite the case.
- The CA found that petitioner failed to establish paternity/filiation because the birth certificate was prepared without the intervention or participatory acknowledgment of Carlos L. Puno; petitioner’s proof did not show that Carlos L. Puno acknowledged petitioner as his son.
- The CA held that petitioner was not a stockholder of record and that his action for specific performance was premature since the proper remedy was to prove paternity/filiation in estate settlement proceedings.
Issues Raised by Petitioner (as stated in the petition)
- Whether the CA erred in not ruling that Joselito Puno is entitled to the reliefs demanded as heir of the late Carlos Puno, an incorporator of respondent corporation.
- Whether the CA erred in ruling that petitioner’s filiation is not duly proven or established.
- Whether the CA erred in not ruling that "Joselito Muno" and "Joselito Puno" refer to the same person.
- Whether the CA erred in treating the disputed surname (a misspelling) as fatal when respondent’s motion to dismiss allegedly deemed factual allegations (e.g., petitioner’s rights as heir) admitted hypotheticall