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TitleCapitol Hills vs Sanchez
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Page 1

Capitol Hills vs Sanchez

Facts:

On July 1, 2002, respondent Manuel O. Sanchez (respondent), a stockholder of petitioner Capitol
Hills Golf & Country Club, Inc. (Corporation) filed a petition for the nullification of the annual meeting
of stockholders of May 21, 2002 and the special meeting of stockholders of April 23,
2002.4 Petitioners, along with their co-defendants, filed an Answer with Counterclaims5 and,
thereafter, a Motion for Preliminary Hearing of Defendants’ Affirmative Defenses,6 which was denied
on August 9, 20027 by Hon. Apolinario D. Bruselas, Jr., then Presiding Judge of the RTC of Quezon
City, Branch 93, now a member of the Court of Appeals.

On August 12, 2002, respondent filed a Motion for Production and Inspection of Documents, which
the court granted in an Order dated September 10, 2002

On December 9, 2002, then Presiding Judge Bruselas issued an Order12 denying petitioners’ MR of
the Order dated August 9, 2002 and considered respondent’s omnibus motion as a reiteration of his
earlier motion for inspection and production of documents; thus, the immediate implementation of
the September 10, 2002 Order was simultaneously ordered.

During the January 11, 2007 inspection, the only document produced by the Acting Corporate
Secretary, Atty. Antonio V. Meriz, and one of the staff, Malou Santos, was the Stock and Transfer
Book of the Corporation. They alleged that they could not find from the corporate records the copies
of the proxies submitted by the stockholders, including the tape recordings taken during the
stockholders’ meetings, and that they needed more time to locate and find the list of stockholders as
of March 2002, which was in the bodega of the Corporation.

In order to give both the plaintiff and defendants one last chance to comply with the order dated
September 10, 2002, this Court reiterates the said order:

This Court orders the defendants to strictly comply with this order. Failure of the defendants to
comply with all the requirements of the order dated September 10, 2002 will result in this court citing
all the defendants in contempt of court. This Court shall order defendants solidarily to pay a fine
of P10,000.00 for every day of delay to comply with the order of September 10, 2002 until the
defendants shall have fully and completely complied with the said order.

Anent the argument against the threatened imposition of sanction for contempt of court and the
possible payment of a hefty fine, the CA opined that the case of Dee v. Securities and Exchange
Commission33 cited by petitioners is inapplicable, Before Us, petitioners contend that the "threatened
imminent action" by the RTC to penalize them sua sponte or without regard to the guideline laid
down by the Court in Engr. Torcende v. Judge Sardido37 is not proper and calls for the exercise of Our
power of supervision over the lower courts.

Issue: W/N the imposing of the threatened imminent action of 10,000 peso fine per day and
contempt issued by the RTC is proper.

Issue: W/N they followed the correct procedure in contesting contempt proceedings

Held:

http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt4
http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt37
http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt33
http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt12
http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt7
http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt6
http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt5

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http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt41
http://www.lawphil.net/judjuris/juri2014/feb2014/gr_182738_2014.html#fnt40

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