Interest Required to Exercise Right to Inspect Corporate Books and Records
Terelay Investment v. Yulo (G.R. No. 160924; 05 August 2015)
Asserting her right as a stockholder, Cecilia Teresita Yulo (YULO) wrote a letter, dated September 14, 1999, addressed to Terelay Investment and Development Corporation (TERELAY) requesting that she be allowed to examine its books and records on September 17, 1999 at 1:30 o’clock in the afternoon at the latter’s office on the 25th floor, Citibank Tower, Makati City. In its reply-letter, dated September 15, 1999, TERELAY denied the request for inspection and instead demanded that she show proof that she was a bona fide stockholder.
On September 16, 1999, Cecilia Yulo again sent another letter clarifying that her request for examination of the corporate records was for the purpose of inquiring into the financial condition of TERELAY and the conduct of its affairs by the principal officers. The following day, Cecilia Yulo received a faxed letter from TERELAY’s counsel advising her not to continue with the inspection in order to avoid trouble.
On October 11, 1999, Cecilia Yulo filed with the Securities and Exchange Commission (SEC), a Petition for Issuance of a Writ of Mandamus with prayer for Damages against TERELAY, docketed as SEC Case No. 10-99-6433.
Following the enactment of Republic Act No. 8799 (The Securities Regulation Code), the case was transferred from the Securities and Exchange Commission to the Regional Trial Court, Branch 142, in Makati City (RTC).
On March 22, 2002, the RTC rendered its judgment granting the application of YULO for inspection of the corporate records of TERELAY.
On appeal, the Court of Appeals (CA) affirmed the RTC. TERELAY sought reconsideration but the CA denied the same.
Whether YULO has the right to inspect and examine the corporate books and records despite her shareholding being a measly .001% interest.
TERELAY’s submission that the respondent’s “insignificant holding” of only .001% of the petitioner’s stockholding did not justify the granting of her application for inspection of the corporate books and records is unwarranted.
The Corporation Code has granted to all stockholders the right to inspect the corporate books and records, and in so doing has not required any specific amount of interest for the exercise of the right to inspect. Ubi lex non distinguit nee nos distinguere debemos. When the law has made no distinction, we ought not to recognize any distinction.