Roque vs. People of the Philippines

The revocation of a corporation's certificate of registration does not automatically extinguish the corporation or its rights and liabilities, including the statutory right of members to examine corporate records under Section 74 of the Corporation Code; consequently, corporate officers who refuse such examination may be prosecuted under Section 144 thereof, and admission of revocation logically implies admission of prior valid existence.

Barangay Mulawin Tricycle Operators and Drivers Association, Inc. (BMTODA) registered with the Securities and Exchange Commission (SEC) on November 17, 1993. Its by-laws provided for a one-year term for officers. In August 2003, Oscar Ongjoco, a member, discovered that association funds were missing and that incumbent officers had served for three years. He requested financial records and membership lists from Secretary Rosalyn Singson and President Alejandro Roque, but both refused. Ongjoco filed a criminal complaint for violation of Sections 74 and 144 of the Corporation Code.

• The Association: Barangay Mulawin Tricycle Operators and Drivers Association, Inc. (BMTODA) became a corporation duly registered with the Securities and Exchange Commission (SEC) on November 17, 1993. Its by-laws provided that officers shall hold office for one year.

• Discovery of Irregularities: In August 2003, Oscar Ongjoco, a member of BMTODA, learned that the association's funds were missing. He also discovered that the incumbent officers, including President Alejandro Roque and Secretary Rosalyn Singson, had been holding office for three years, in violation of the one-year term limit.

• Demands for Inspection: Ongjoco sent a letter dated December 13, 2003 to Roque requesting a copy of the list of members with corresponding franchise body numbers and franchise fees paid. He sent another letter dated August 29, 2004 to Singson requesting copies of association documents pursuant to Section 74 of the Corporation Code. Both Roque and Singson refused to furnish the requested records.

• Criminal Prosecution: Ongjoco filed an Affidavit-Complaint against Roque and Singson for violation of Section 74 in relation to Section 144 of the Corporation Code. The Office of the City Prosecutor found probable cause, and an Information was filed alleging that in December 2004, the accused conspired to fail and neglect to keep official records and refused to allow a member to examine and copy excerpts after written demand.

• Demurrer and Dismissal: After the prosecution rested its case, Roque and Singson filed a Motion for Leave of Court to File Demurrer to Evidence. In an Order dated November 12, 2008, the RTC granted the motion, giving due course to the demurrer and dismissing the case on the ground that the prosecution failed to prove BMTODA's existence as a corporation, rendering the Corporation Code inapplicable.

• Appellate Proceedings: The People filed a Petition for Certiorari with the CA. In its Decision dated August 31, 2012, the CA reversed the RTC, ruling that BMTODA was a duly registered corporation and that the SEC had lifted the revocation of its registration on August 30, 2004. The CA remanded the case for the presentation of defense evidence.

• Corporate Existence: Want of evidence proving that BMTODA was a corporation duly established and organized under the Corporation Code; the prosecution failed to establish the element of corporate existence necessary to apply the penal provisions of the Code.

• Effect of Revocation: BMTODA's registration was revoked on September 30, 2003 prior to the alleged offenses; the corporation ceased to exist, thereby extinguishing the officers' liability under the Corporation Code and stripping members of inspection rights.

• Individual Liability: Singson's refusal was a personal act that did not implicate Roque; Roque could not be held criminally liable for the acts of his co-accused, and the alleged conspiracy was not established.

• Corporate Status: BMTODA was duly registered with the SEC; the SEC lifted the revocation on August 30, 2004, prior to Singson's receipt of the demand letter on September 23, 2004; documentary evidence of the Petition to Lift Order of Revocation and the SEC Order Lifting the Revocation established corporate existence.

• Survival of Rights: Revocation of corporate registration does not automatically extinguish the corporation or its rights and liabilities; members retain statutory rights to inspect records relating to the association notwithstanding subsequent revocation.

• Individual Liability: Roque admitted his own refusal to furnish the membership list; he is liable for his individual act under Section 74 regardless of Singson's separate refusal of a different request.

• Corporate Existence: Whether the prosecution sufficiently proved BMTODA's existence as a registered corporation to warrant application of the Corporation Code's penal provisions.

• Effect of Revocation: Whether the revocation of BMTODA's registration prior to the demands for inspection absolves the petitioner of criminal liability.

• Individual Criminal Liability: Whether the petitioner can be held criminally liable for his individual refusal to furnish records distinct from his co-accused's refusal.

• Corporate Existence: The prosecution sufficiently proved BMTODA's corporate existence; Roque admitted the revocation of registration, which logically presupposes a prior valid registration that could be revoked; the SEC order lifting the revocation on August 30, 2004 confirmed the corporation's active status at the time of Singson's receipt of the demand.

• Effect of Revocation: Revocation of registration does not automatically extinguish the corporation or its rights and liabilities; the letter to Singson was received on September 23, 2004 after reinstatement, and even if received during revocation, the member's right to examine records persists because the termination of corporate life does not cause the extinction of rights and liabilities.

• Individual Criminal Liability: Roque is liable for his own refusal to furnish the membership list; his judicial admission of denial established the elements of the offense under Section 74; Singson's refusal of an entirely different document is immaterial to Roque's separate liability for his own act.

• Effect of Revocation of Corporate Registration — The termination of a corporation's juridical existence does not automatically cause the extinction or diminution of its rights and liabilities or those of its owners and creditors. A corporation may still be held liable for obligations incurred prior to revocation, and members retain statutory rights to inspect corporate records relating to the association.

• Elements of Violation under Section 74 — Liability for refusal to allow examination of corporate records requires: (1) a prior written demand by a director, trustee, stockholder or member; (2) refusal by an officer or agent to allow examination and copying of excerpts; (3) if the refusal is made pursuant to a board resolution, liability attaches to the directors or trustees who voted therefor; and (4) the defense that the demand was improper or not in good faith must be proved by the refusing officer.

• "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 nor those of its owners and creditors." — Articulating the principle that corporate revocation does not extinguish existing rights and obligations.

• "It is logical to presume that a registration precedes the revocation thereof; as any registration cannot be revoked without its valid existence." — Establishing that admission of revocation constitutes admission of prior valid corporate existence.

• Clemente v. Court of Appeals, G.R. No. 82407, March 27, 1995 — Controlling precedent establishing that the termination of corporate existence does not extinguish rights and liabilities; applied to hold that revocation of registration does not strip members of inspection rights under Section 74.

• Flordeliza v. Ang, G.R. No. 178511, December 4, 2008 — Followed for the enumeration of the four elements necessary to establish liability under Section 74 of the Corporation Code.

• Section 74, Corporation Code of the Philippines — Mandates that corporate officers or agents who refuse to allow members to examine and copy excerpts from corporate records shall be liable for damages and guilty of an offense punishable under Section 144; provides that if refusal is pursuant to a board resolution, liability attaches to directors voting therefor, and that it is a defense to show the demanding party acted in bad faith or for an improper purpose.

• Section 144, Corporation Code of the Philippines — Provides penalties for violations of any provision of the Corporation Code.

Presbitero J. Velasco, Jr. (Chairperson), Lucas P. Bersamin, Bienvenido L. Reyes, and Alfredo Benjamin S. Caguioa.