SEC Case No. 02-13-402ROGELIO M. FLORANTE, Jr., Appellant, - versus - MARCELINO M. FLORANTE, Jr.

SEC Building, EDSA, Greenhills, Mandaluyong City Securities and Exchange Commission Republic of the Philippines Department of Finance

ROGELIO M. FLORETE, Appellant.

MARCELINO M. FLORETE, JR., et al. versus - Appellees. For: Calling of Annual Meeting SEC Case No. 02-13-402

RESOLUTION

portion of the Assailed Decision reads as follows: filed by appellant Rogelio M. Florete, Jr. against appellees Marcelino M. Florete, Jr. and Maria Elena Florete-Muyco on 5 May 2015 assailing the Decision' (Assailed Decision) dated 25 March 2015 issued by the Office of the General Counsel (OGC). The pertinent For the consideration of the Commission En Banc is the Memorandum on Appeal

electing the directors and officers of the corporation, among other things. For this purpose, MARCELINO M. FLORETE, JR. is ordered to send notices of said stockholders' meeting in accordance with the By-Laws of MARSAL & Co., Inc He is likewise authorized to preside at such meeting until at least a majority of the stockholders present have chosen one of their number as presiding officer. "Petitioner MARCELINO M. FLORETE, JR. is hereby authorized to call the Annual Stockholders' Meeting of MARSAL & Co., Inc. for the purpose of

with the Commission on 27 September 1966 under Registry No. 30496. Per records of the Commission, MARSAL & Co., Inc. (MARSAL) was registered

stockholders include their brother, appellant Rogelio M. Florete, their sister, Teresita After the demise of their sister and parents, the appellees allege that no stockholders! MARSAL, and that appellee Marcelino M. Florete, Jr. be authorized to call such meeting. incorporators and stockholders of MARSAL. Florete-Menchavez, and their parents, Marcelino Florete, Sr. and Salome M. Florete. meetings and election of the officers of MARSAL were conducted. Thus, they pray that the Commission issue an order directing the calling of stockholders' meeting of On 15 February 2013, the appellees filed a Petition alleging that they are the They state that the incorporators and

! A copy of which was received by the appellant on 20 April 2015, Memorandum on Appeal, p. 1. 2 Petition dated 14 February 2013, pp. 3, 5 and 7.

Florete v. Florete, et al. Page 2 of s

if the Commission calls for and holds the meeting, and presides over the same. However, appellee Marcelino M. Florete, Jr. should not preside over the said meeting. the duly elected president and chairman of the Board of Directors of MARSAL. MARSAL were held in abeyance due to the number of cases filed by the appellees Moreover, he alleges that the meeting of the Board of Directors and the stockholders of against him with the special commercial court. He states that he interposes no objection On 8 April 2013, the appellant filed his Answer alleging, among others, that he is

M. Florete, Jr. to call and initially preside over the stockholders' meeting of MARSAL. their Memorandum,4 the OGC issued the Assailed Decision directing appellee Marcelino After the conduct of the Preliminary Conference and the filing by appellees of

proper person to call and preside over such meeting since he is the chief executive officer others, that the Decision of the OGC directing appellee Marcelino M. Florete, Jr. to call and preside over the stockholders' meeting of MARSAL is improper. He claims he is the and chairman of the board of the company. On 5 May 2015, the appellant filed his Memorandum on Appeal alleging, among

Memorandum (Motion to Dismiss) stating, among others, that the appeal of the appellant Jr., who is the petitioning stockholder, to call and preside over the stockholders' meeting the Commission dismiss the appeal.c did not include a notice of appeal, payment of docket fee and a certificate of non-forum shopping. Moreover, the decision of the OGC directing appellee, Marcelino M. Florete, is in accordance with Section 50 of the Corporation Code. Thus, the appellees pray that In response, the appellees filed their Motion to Dismiss and/or Reply

to include the certificate of non-forum shopping since it is an appeal of the Decision of in the total amount of Two Thousand Four Hundred pesos (Php 2,400.00) for the that the reason he failed to pay the docket fee is that he relied on the Rules of the Commission dated 1996 and 1999. Moreover, the appellant argues that there is no need the OGC and such appeal is not an initiatory pleading. Further, the appellant requests his part to default in such payment. The appellant attached two (2) postal money orders payment of the docket fees. Thus, the appellant prays that the Motion to Dismiss be denied, and the Commission accept the belated payment of docket fees. that the Commission not strictly apply the Rules since there was no deliberate intent on On 18 May 2015, the appellant filed an Opposition to Motion to Dismiss stating

6 Motion to Dismiss and/or Reply Memorandum dated 12 May 2015 and filed on 14 May 2015, pp. 1, 6, 7 4 Memorandum filed on 29 May 2014 by the appellees pursuant to a Preliminary Conference Order dated 3 Answer dated 1 April 2013, pars. 2, 4 and 7. Memorandum on Appeal, p. 4. Opposition to Motion to Dismiss dated 19 May 2015, pp. 1, 2 and 4. 16 April 2014 directing both parties to submit the same. 9

Florete v. Florete, et al. Page 3 of 5

Motion to Authorize [Appellee] Marcelino M. Florete, Jr. To Appoint an Interim or Marcelino M. Florete, Jr. to appoint an interim or acting corporate secretary of Appoint, the appellees pray that the Commission issue an order authorizing appellee MARSAL. Acting Corporate Secretary (Motion to Appoint) filed by the appellees. In the Motion to Thereafter, the appellees filed an additional pleadinga and motions,' including a

be resolved is whether or not the Memorandum of Appeal should be dismissed since the appellant failed to include the payment of docket fee and certificate of non-forum shopping therein. Before proceeding to the substantial issue in this appeal, the preliminary issue to

appeal of a decision of the OGC, to wit: Section 11-2 of the 2006 Rules of Procedure (Rules) provides the procedure of an

"Appeal may be taken upon the adverse party and filing with the Commission En Banc within fifteen (15) days from notice of Decision x x x, a NOTICE OF APPEAL and a' Memorandum on Appeal and PAYING THE due course unless it includes a CERTIFICATE OF NON-FILING OF MULTIPLE PETITIONS AND COMPLAINTS provided for in Section 3-5 CORRESPONDING DOCKET therefor. Provided, no appeal shall be given hereof."

to wit: Section 11-3 of the Rules provides for procedure for the perfection of an appeal.

period provided for in these Rules." "The appeal shall be deemed perfected upon filing of the Memorandum on Appeal and PAYMENT OF THE REQUIRED DOCKET FEE within the

jurisdictional. Moreover, the court stated that an appeal is not a right, but a mere the full amount of the docket fee is an indispensable step for the perfection of an appeal.io statutory privilege. Without such payment, the appeal is not perfected.The payment of that the payment of the docket fee within the prescribed period is both mandatory and In the case of Gipa, et al. v. Southern Luzon Institute, the Supreme Court stated

8 Reply (to Opposition to Motion to Dismiss) dated 22 May 2015 and filed on 27 May 2015. Ex Parte Motion for Early Resolution of Motion to Dismiss Appeal dated 26 May 2015 and filed on 29 to G.R.No. 177425, 18 June 2014. Parte Motion for Early Resolution dated 9 September 2015 and filed on 15 September 2015. May 2015; Ex Parte Motion for Early Resolution dated 22 June 2015 and filed on 25 June 2015; Third (3r) Ex-Parte Motion for Early Resolution dated 21 July 2015 and filed on 24 July 2015; Fourth (4th) Ex- Parte Motion for Early Resolution dated 10 August 2015 and filed on 20 August 2015; and Fifth (5th) Ex-

Florete v. Florete, et al. Page 4 of 5

forum shopping is a requisite for the perfection of an appeal.1! In fact, in another Supreme Court case, the court stated that the certificate of non-

appeal. It is of no moment that the appellant belatedly submitted the postal money orders period for filing an appeal, or only on 18 May 2015. include the payment of docket fees and the certificate of non-forum shopping therein. Without the payment of docket fees, the Commission cannot assume jurisdiction over the for such payment since the said money orders were submitted beyond the reglementary In the case at bar, the appeal has not been perfected since the appellant failed to

meritorious reason. intent on his part to default in the payment of docket fees considering he relied on the old the application of the rule have the burden of proving the existence of exceptionally meritorious reason warranting such departure. Clearly, the appellant has not established an exceptionally meritorious reason to warrant such departure considering that his alleged inadvertent reliance of the old Rules cannot constitute an exceptionally Rules. However, in the case of Gipa, the Court stated that the liberal interpretation of the rules of procedure should be based on an effort on the part of the party invoking liberality to adequately explain his failure to abide by the rules. Those who seek exemption from strictly, as to the requirements for the perfection of appeal since there is no deliberate Next, the appellant requests that the Commission refrain from applying the Rules

stockholder or member shall preside thereat UNTIL at least a majority of the docket fees and certificate of non-forum shopping, the appeal still is without merit. Section 50 of the Corporation Code explicitly provides that the Commission, upon petition of a stockholder on a showing of good cause therefor, may issue an order to the petitioning stockholder directing him to call a meeting of the corporation. The petitioning stockholders or members present have chosen one of their number as presiding officer Further, even if the appellant perfected his appeal by including the payment of

(or the stockholder who filed the Petition with the OGC praying that the Commission meeting. preside at the stockholders' meeting of MARSAL since he is the petitioning stockholder. issue such order). Contrary to the appellant's assertion, Section 50 of the Corporation Code clearly does not state that the Commission shall direct the chief executive officer and chairman of the board of the company to call and preside at the stockholders In this case, appellee Marcelino M. Florete, Jr. should be directed to call and

Marcelino M. Florete, Jr. to appoint an interim or acting corporate secretary of MARSAL. Unfortunately, considering that the jurisdiction of intra-corporate Lastly, the appellees pray that the Commission issue an order authorizing appellee

I1 Mandaue Galleon Trade, Inc., et al. v. Isidto, et al., G.R. No. 18 1051, 5 July 2010.

controversies12 has been transferred to the trial court, 13 the Commission cannot authorize into an intra-corporate controversy, if the appellant were to question such appointment, the appellee to appoint an interim or acting corporate secretary since the matter may ripen under Section l(a)(3) of the Interim Rules of Procedure for Intra-Corporate Controversies, to wit: Florete v. Florete, et al Page 5 of 5

X. "Controversies in the election or appointment of x x x officers x x x of corporations x x

appellant Rogelio M. Florete, Jr. to perfect the same within the prescribed period. WHEREFORE, premises considered, the appeal is DISMISSED for the failure of

SO ORDERED.

Mandaluyong City, 20 October 2015

TERESITA J. HERBOSA Chairperson

MANUE Commissioner RTO B. GAITE ANTONIETA F. IBE Commissioner

EPHYRO LUIS B. AMATONG Commissioner W BLAS/JAMES G. VITERBO as OMeA Commissioner MoE

* Inhibit

I12 In order for there to be an intra-corporate controversy, there must be two elements present: (1) there is 13 Originally, the Commission had the power to resolve intra-corporate controversies but such power has controversy or dispute between a stockholder and a corporation, among others; and (2) the controversy or Distributing Corp., et al. v. Court of Appeals, G.R. No. 149351, 2004). been transferred to the Regional Trial Court on 8 August 2000 under Section 5.2 of the 'Securities Regulation Code (SRC). dispute among the parties be intrinsically connected with the regulation of the corporation (Speed