G.R. No. 216146, 24 August 2016


Joselyn was a stockholder of Chua Tee Corporation of Manila. Alfredo was the president and chairman of the board, while Tomas was the corporate secretary and also a member of the board of the same corporation. Mercedes was the accountant/bookkeeper tasked with the physical custody of the corporate records.

On or about August 24, 2000, Joselyn invoked her right as a stockholder pursuant to Section 74 of the Corporation Code to inspect the records of the books of the business transactions of the corporation, the minutes of the meetings of the board of directors and stockholders, as well as the financial statements of the corporation. She hired a lawyer to send demand letters to each of the petitioners for her right to inspect to be heeded. However, she was denied of such right to inspect. She likewise hired the services of Mr. Velayo from the accounting firm of Guzman Bocaling and Company to assist her in examining the books of the corporation.

In the Complaint-Affidavit, Joselyn alleged that despite written demands, the petitioners conspired in refusing without valid cause the exercise of her right to inspect Chua Tee Corporation of Manila’s (CTCM) business transactions records, financial statements and minutes of the meetings of both the board of directors and stockholders.c In their Counter Affidavits, the petitioners denied liability arguing that the custody of the records sought to be inspected by Joselyn did not pertain to them. Besides, the physical records were merely kept inside the cabinets in the corporate office. Further, they did not prevent Joselyn from inspecting the records. What happened was that Mercedes was severely occupied with winding up the affairs of CTCM after it ceased operations. Joselyn and her lawyers then failed to set up an appointment with Mercedes. Joselyn, through counsel, then sent demand letters to inspect the records. Not long after, Joselyn filed two cases, one of which was civil and the other, criminal, against the petitioners.

An Informationindicting the petitioners for alleged violation of Section 74, in relation to Section 144, of the Corporation Code was filed before the MeTC of Quezon City.

The petitioners filed before the MeTC a Motion to Quash the Information filed against them arguing that CTCM had ceased to exist as a corporate entity since May 26, 1999. Consequently, when the acts complained of by Joselyn were allegedly committed in August of 2000, the petitioners cannot be considered anymore as responsible officers of CTCM. Thus, assuming for argument’s sake that the petitioners actually refused to let Joselyn inspect corporate records, no criminal liability can attach to an omission to perform a duty, which no longer existed. The MeTC, however, denied the petitioners’ Motion to Quash.

The MeTC rendered its Judgment15 convicting the petitioners as charged, sentencing them to suffer the penalty of 30 days of imprisonment, for violating Section 74 of the Corporation Code. The petitioners filed an appeal, which the RTC denied in the Decision. On appeal, the CA outrightly dismissed the petition on technical grounds. Pending resolution of the motion, Rosario Sui Lian Chua (Rosario), mother of the now deceased Joselyn, filed an Affidavit of Desistance. The CA issued the second assailed Resolution30 denying the petitioners’ motion for reconsideration.


Whether there is propriety of their conviction for alleged violation of Section 74, in relation to Section 144, of the Corporation Code.


The petitioners reiterate their stance that since CTCM had ceased business operations prior to Joselyn’s filing of her complaint before the MeTC, there was no longer any duty pertaining to corporate officers to allow a stockholder to inspect the records.32

The Court affirms the conviction but directs the payment of fine, in lieu of the penalty of imprisonment imposed by the, courts a quo.

Despite the expiration of CTCM’s corporate term in 1999, duties as corporate officers still pertained to the petitioners when Joselyn’s complaint was filed in 2000.

Yu, et al. v. Yukayguan, et al.48 instructs that:

[T]he corporation continues to be a body corporate for three (3) years after its dissolution for purposes of prosecuting and defending suits by and against it and for enabling it to settle and close its affairs, culminating in the disposition and distribution of its remaining assets. x x x The termination of the life of a juridical entity does not by itself cause the extinction or diminution of the rights and liabilities of such entity x x x nor those of its owners and creditors. x x x

Further, as correctly pointed out by the OSG, Sections 122 and 145 of the Corporation Code explicitly provide for the continuation of the body corporate for three years after dissolution. The rights and remedies against, or liabilities of, the officers shall not be removed or impaired by reason of the dissolution of the corporation. Corollarily then, a stockholder’s right to inspect corporate records subsists during the period of liquidation. Hence, Joselyn, as a stockholder, had the right to demand for the inspection of records. Lodged upon the corporation is the corresponding duty to allow the said inspection.

From the foregoing, it is apparent that a complete examination of CTCM’s records did not occur resulting to an effective deprivation of Joselyn’s right as a stockholder. However, from Joselyn and Velayo’s testimonies, it can be inferred that permission to view the records was granted, albeit not fully effected. The petitioners, on their part, explained in the Counter-Affidavit filed before the Quezon City Prosecution Office that they never prevented Joselyn from exercising her right of inspection, but when the latter made her request, Mercedes was too occupied in winding up the affairs of CTCM.

While a cloud of doubt is cast upon the existence of criminal intent on the part of the petitioners, it is jurisprudentially settled that proof of malice or deliberate intent (mens rea) is not essential in offenses punishable by special laws, which are mala prohibita.

In the case at bar, the petitioners were charged with violations of Section 74, in relation to Section 144, of the Corporation Code, a special law. Accordingly, since Joselyn was deprived of the exercise of an effective right of inspection, offenses had in fact been committed, regardless of the petitioners’ intent. The Corporation Code provides for penalties relative to the commission of offenses, which cannot be trivialized, lest the public purpose for which they are crafted be defeated and put to naught.

No exceptional grounds exist justifying the reversal of the conviction previously rendered by the MeTC, RTC and CA. However, in lieu of the penalty of 30 days of imprisonment, the Court finds it more just to impose upon each of the petitioners a fine of Ten Thousand Pesos (P10,000.00) considering the reasons below. First. Malicious intent was seemingly wanting. Permission to check the records was granted, albeit not effected. Second. Joselyn had predeceased Alfredo and Tomas, her uncles, who are in their twilight years. Third. Joselyn’s mother, Rosario, had executed an Affidavit of Desistance stating that the filing of the complaint before was “merely the result of [a] serious misunderstanding anent the management and operation of [CTCM], which had long ceased to exist as a corporate entity even prior to the alleged commission of the crime in question, rather than by reason of any criminal intent or actuation on the part of the [petitioners].”

*Case Digest by Nikki P. Ebillo, JD-4, Andres Bonifacio Law School, SY 2019-2020