Catague Cortez-Catague & Cortez Law Accounting & Realty Firm | Davao City, Philippines

Validity of Notice of Stockholders’ Meeting Sent Within the Prescribed Period Not Affected by Date of Receipt

Simny G. Guy, as Minority Stockholder and for and in behalf of Goodland Company, Inc., petitioner, vs. Gilbert G. Uy, Alvin Agustin T. Ignacio and John and/or Jane Does, respondents.

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Under the law, one of the requirements for a stockholders’ special meeting to be valid is a previous written notice sent to the stockholders at least one week prior to the scheduled meeting, unless a different period is provided in the by-laws. Is this requirement satisfied even if the notice was actually received by the stockholder several days  after the meeting was held? Is this requirement covered by the provision on completeness of service under the Rules of Court?

SIMNY G. GUY, AS MINORITY STOCKHOLDER AND FOR AND IN BEHALF OF GOODLAND COMPANY, INC., PETITIONER, VS. GILBERT G. GUY, ALVIN AGUSTIN T. IGNACIO AND JOHN AND/OR JANE DOES, RESPONDENTS.

G.R. No. 184068; 19 April 2016

Facts:

Petitioner Simny Guy is a stockholder of record of Goodland Company, Inc. (GCI). Under GCI’s by-laws, the notice of meeting is required to be sent not less than five days prior to the date set for the meeting. For a special meeting to be held on 7 September 2004, a notice was sent to petitioner on 2 September 2004. Petitioner, however, received the notice on 22 September 2004, fifteen days after the special meeting was held, as shown in the registry return card.

Petitioner claims that the requirement that a previous written notice be sent prior to the date of the meeting was not satisfied. He avers that to achieve the intent of the law, the notice must be actually received, and not just sent, prior to the date of the meeting. Petitioner cites the provision on “completeness of service” under the Rules of Court, which states that service by registered mail is deemed complete upon actual receipt by the addressee or after five (5) days from the date of receipt of the first notice of the postmaster, whichever date is earlier.

Issue:

Whether the requirement that a previous written notice be sent to the petitioner (a stockholder) was satisfied.

Ruling:

Yes.

The law only requires the sending/mailing of the notice of a stockholders' meeting to the stockholders of the corporation. Had the lawmakers intended to include the stockholder's receipt of the notice, they would have clearly reflected such requirement in the law...

Section 50 of the Corporation Code and the by-laws of GCI only require the sending/mailing of the notice of a stockholders’ meeting to the stockholders of the corporation. Sending/mailing is different from filing or service under the Rules of Court. Had the lawmakers intended to include the stockholder’s receipt of the notice, they would have clearly reflected such requirement in the law. Absent that requirement, the word “send” should be understood in its plain meaning:

“Send” means to deposit in the mail or deliver for transmission by any other usual means of communication with postage or cost of transmission provided for and properly addressed and in the case of an instrument to an address specified thereon or otherwise agreed, or if there be none, to any address reasonable under the circumstances. The receipt of any writing or notice within the time at which it would have arrived if properly sent has the effect of a proper sending. (U.C.C. Sections 1-201 [38]).

Clearly, respondents are only mandated to notify petitioner by depositing in the mail the notice of the stockholders’ special meeting, with postage or cost of transmission provided and the name and address of the stockholder properly specified.

Thus,  the requirement that a previous written notice be sent to the petitioner (a stockholder) was satisfied.

 

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