FACTS: Philippine
Associated Smelting and Refining Corporation (hereafter PASAR) is a corporation
duly organized and existing under the laws of the Philippines and is engaged in
copper smelting and refining. On the other hand, Pablito Lim, Manuel Agcaoili
and Consuelo Padilla (collectively referred to as petitioners) were former
senior officers and presently shareholders of PASAR holding 500 shares each.
An Amended Petition for Injunction and Damages with prayer
for Preliminary Injunction and/or Temporary Restraining Order, dated February
4, 2004 was filed by PASAR seeking to restrain petitioners from demanding
inspection of its confidential and inexistent records.
On February 23, 2004, petitioners moved for the dismissal
of the petition on the following grounds: 1) the petition states no cause of
action; 2) the petition should be dismissed on account of litis pendentia; 3) the petition is a nuisance or harassment suit;
and 4) the petition should be dismissed on account of improper venue.
ISSUE: Was the
injunction proper to prevent respondents the right to inspect corporate
records?
HELD: No. For an
action for injunction to prosper, the applicant must show the existence of a
right, as well as the actual or threatened violation of this right provided
under Rule 58, Section 3. An injunctive remedy may only be resorted to when
there is a pressing necessity to avoid injurious consequences which cannot be
remedied under any standard compensation. The possibility of irreparable damage
without proof of an. actual existing right would not justify injunctive relief
in his favor. Thus, an injunction must fail where there is no clear showing of
both an actual right to be protected and its threatened violation, which calls
for the issuance of an injunction.
The Corporation Code provides that a stockholder has the
right to inspect the records of all business transactions of the corporation
and the minutes of any meeting at reasonable hours on business days. The
stockholder may demand in writing for a copy of excerpts from these records or
minutes, at his or her expense as provided under Section 74 of the Corporation
Code. In this case, petitioner invokes its right to raise the limitations
provided under Section 74 of the Corporation Code.
However, petitioner provides scant legal basis to claim
this right because it does not raise the limitations as a matter of defense.
The petition is a pre-emptive action unjustly intended to impede and restrain
the stockholders' rights. If a stockholder demands the inspection of corporate
books, the corporation could refuse to heed to such demand. When the
corporation, through its officers, denies the stockholders of such right, the
latter could then go to court and enforce their rights. It is then that the
corporation could set up its defenses and the reasons for the denial of such
right. Thus, the proper remedy available for the enforcement of the right of
inspection is undoubtedly the writ of mandamus to be filed by the stockholders
and not a petition for injunction filed by the corporation.
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