Naga Telephone Company
Content
Naga Telephone Company, Inc.
Organized in 1954, the authorized capital was P100K.
Decided to increase its authorized 'capital to P3M.
(Public Service Act) Filed an application for the approval of the increased authorized capital
with the then Board of Communications – APPROVED (3. That the issuance of the shares of
stocks will be for a period of 1 year from the date hereof, 'after which no further issues will be
made without previous authority from this Board.")
Filed its Amended AOI with SEC + the original authorized capital of P100K was already paid.
o Of the increased capital of P2.9M, the subscribers subscribed to P580K of which
P145,000 was fully paid.
o Capital stock of Natelco was divided into 213K common shares and 87K preferred
shares, both at a par value of P10.00 per share.
Entered into a contract with Communication Services, Inc. for the "manufacture, supply,
delivery and installation" of telephone equipment.
o Issued 24K shares of common stocks to CSI on the same date as part of the
downpayment + another 12K
No prior authorization from BOC (now NTC)
Annual stockholders' meeting to elect their seven directors to elect BOD, for the year 19791980.
o CSI was able to gain control of Natelco when the latter's legal counsel, Atty. Luciano
Maggay won a seat in the Board with the help of CSI.
o In the reorganization Atty. Maggay became president
Petitioner Dee
unseated in the election
Filed a petition in the SEC questioning the validity of the elections
Ground: No valid list of stockholders through which the right to vote could be determined
RO issued + officers in hold-over capacity
o Elevated to the SC where the enforcement of the SEC restraining order was
restrained.
o Private respondents replaced the hold-over officers
Maggay Board
Did not reform the contract and entered into another contract with CSI for the supply and
installation of additional equipment but also issued to CSI 113,800 shares of common stock.
Supreme Court
Dismissed: ground that the same was premature and the Commission should be allowed to
conduct its hearing on the controversy.
Resulted in the unseating of the Maggay group from the board of directors of Natelco in a
"hold-over" capacity
SEC
(1) that CSI is a stockholder of Natelco and, therefore, entitled to vote;
(2) that unexplained 16,858 shares of Natelco appear to have been issued in excess to CSI which
should not be allowed to vote;
(3) that 82 shareholders with their corresponding number of shares shall be allowed to vote; and
(4) consequently, ordering the holding of special stockholder' meeting to elect the new members of the
Board of Directors for Natelco based on the findings made in the order as to who are entitled to vote
From the foregoing order dated June 23, 1981, petitioner Dee filed a petition for certiorari/appeal with
the SEC en banc. The petition appeal was docketed as SEC-AC NO. 036. Thereafter, the Commission
en banc rendered a decision on April 5, 1982, the dispositive part of which reads:
"Now therefore, the Commission en banc resolves to sustain the order of the
Hearing Officer; to dismiss the petition/appeal for lack of merit; and order new
elections as the Hearing Officer shall set after consultations with Natelco officers.
For the protection of minority stockholders and in the interest of fair play and justice,
the Hearing Officer shall order the formation of a special committee of three, one
from the respondents (other than Natelco), one from petitioner, and the Hearing
Officer as Chairman to supervise the election.
"It remains to state that the Commission en banc cannot pass upon motions
belatedly filed by petitioner and respondent Natelco to introduce newly discovered
evidence — any such evidence may be introduced at hearings on the merits of SEC
Case No. 1748.
"SO ORDERED." (Rollo, Vol. I, p. 24).
On April 21, 1982, petitioner filed a motion for reconsideration (Rollo, Vol. I, pp. 25-30). Likewise, private
respondent Natelco filed its motion for reconsideration dated April 21, 1982 (Ibid., pp. 32-51).
Pending resolution of the motions for reconsideration, on May 4, 1982, respondent hearing officer
without waiting for the decision of the commission en banc, to become final and executory rendered an
order stating that the election for directors would be held on May 22, 1982 (Ibid., pp. 300-301).
On May 20, 1982, the SEC en banc denied the motions for reconsideration (Rollo, Vol. II, pp. 763-765).
Meanwhile on May 20, 1982 (G.R. No. 63922), petitioner Antonio Villasenor (as plaintiff) filed Civil Case
No. 1507 with the Court of First Instance of Camarines Sur, Naga City, against private respondents and
co-petitioners, de Jesus, Tordilla and the Dees', all defendants therein, which was raffled to Branch I,
presided over by Judge Delfin Vir. Sunga (Rollo, G.R. No. 63922; pp. 25-30). Villasenor claimed that he
was an assignee of an option to repurchase 36,000 shares of common stocks of Natelco under a Deed
of Assignment executed in his favor (Rollo, p. 31). The defendants therein (now private respondents),
principally the Maggay group, allegedly refused to allow the repurchase of said stocks when petitioner
Villasenor offered to defendant CSI the repurchase of said stocks by tendering payment of its price
(Rollo, p. 26 and p. 78). The complaint therefore, prayed for the allowance to repurchase the aforesaid
stocks and that the holding of the May 22, 1982 election of directors and officers of Natelco be enjoined
(Rollo, pp. 28-29).
A restraining order dated May 21, 1982 was issued by the lower court commanding desistance from the
scheduled election until further orders (Rollo, p. 32). LLpr
Nevertheless, on May 22, 1982, as scheduled, the controlling majority of the stockholders of the Natelco
defied the restraining order, and proceeded with the elections, under the supervision of the SEC
representatives (Rollo, Vol. III, p. 985); p. 10; G.R. No. 60502).
On May 25, 1982, the SEC recognized the fact that elections were duly held, and proclaimed that the
following are the "duly elected directors" of the Natelco for the term 1982-1983:
1. Felipa T. Javalera
2. Nilda I. Ramos
3. Luciano Maggay
4. Augusto Federis
5. Daniel J. Ilano
6. Nelin J. Ilano, Sr.
7. Ernesto A. Miguel.
And, the following are the recognized officers to wit:
1. President Luciano Maggay
2. Vice-President Nilda I. Ramos
3. Secretary Desiderio Saavedra
4. Treasurer Felipa Javalera
5. Auditor Daniel Ilano
(Rollo, Vol. I, pp. 302-303)
Despite service of the order of May 25, 1982, the Lopez Dee group headed by Messrs. Justino De
Jesus and Julio Lopez Dee kept insisting no elections were held and refused to vacate their positions
(Rollo, Vol. III, p. 985; p. 11).
On May 28, 1982, the SEC issued another order directing the hold-over directors and officers to turn
over their respective posts to the newly elected directors and officers and directing the Sheriff of Naga
City, with the assistance of PC and INP of Naga City, and other law enforcement agencies of the City or
of the Province of Camarines Sur, to enforce the aforesaid order (Rollo, Vol. II, pp. 577-578). LLphil
On May 29, 1982, the Sheriff of Naga City, assisted by law enforcement agencies, installed the newly
elected directors and officers of the Natelco, and the hold-over officers peacefully vacated their
respective offices and turned-over their functions to the new officers (Rollo, Vol. III, p. 985; pp. 12-13).
On June 2, 1982, a charge for contempt was filed by petitioner Villasenor alleging that private
respondents have been claiming in press conferences and over the radio airlanes that they actually held
and conducted elections on May 22, 1982 in the City of Naga and that they have a new set of officers,
and that such acts of herein private respondents constitute contempt of court (G.R. 63922; Rollo, pp.
35-37).
On September 7, 1982, the lower court rendered judgment on the contempt charge, the dispositive
portion of which reads:
"WHEREFORE, judgment is hereby rendered:
"1. Declaring respondents, CSI, Nilda Ramos, Luciano Maggay, Desiderio
Saavedra, Augusto Federis and Ernesto Miguel, guilty of contempt of court, and
accordingly punished with imprisonment of six (6) months and to pay fine of
P1,000.00 each: and
"2. Ordering respondents, CSI, Nilda Ramos, Luciano Maggay, Desiderio Saavedra,
Augusto Federis and Ernesto Miguel, and those now occupying the positions of
directors and officers of NATELCO to vacate their respective positions therein, and
ordering them to reinstate the hold-over directors and officers of NATELCO, such as
Pedro Lopez Dee as President, Justino de Jesus, Sr., as Vice President, Julio
Lopez Dee as Treasurer and Vicente Tordilla, Jr. as Secretary, and others referred
to as hold-over directors and officers of NATELCO in the order dated May 28, 1982
of SEC Hearing Officer Emmanuel Sison, in SEC Case No. 1748 (Exh. 6), by way
of RESTITUTION, and consequently, ordering said respondents to turn over all
records, property and assets of NATELCO to said hold-over directors and officers."
(Ibid., Rollo, p. 49).
The trial judge issued an order dated September 10, 1982 directing the respondents in the contempt
charge to "comply strictly, under pain of being subjected to imprisonment until they do so" (Ibid., p. 50).
The order also commanded the Deputy Provincial Sheriff, with the aid of the PC Provincial Commander
of Camarines Sur and the INP Station Commander of Naga City to "physically remove or oust from the
offices or positions of directors and officers of NATELCO, the aforesaid respondents (herein private
respondents) x x x and to reinstate and maintain, the hold-over directors and officers of NATELCO
referred to in the order dated May 28, 1982 of SEC Hearing Officer Emmanuel Sison." (Ibid.).
Private respondents filed on September 17, 1982, a petition for certiorari and prohibition with preliminary
injunction or restraining order against the CFI Judge of Camarines Sur, Naga City and herein
petitioners, with the then Intermediate Appellate Court which issued a resolution ordering herein
petitioners to comment on the petition, which was complied with, and at the same time temporarily
refrained from implementing and or enforcing the questioned judgment and order of the lower court
(Rollo, p. 77, Decision of CA, p. 2).
On April 14, 1983, the then Intermediate Appellate Court, rendered a decision, the dispositive portion of
which reads:
"WHEREFORE, judgment is hereby rendered as follows:
"1. Annuling the judgment dated September 7, 1982 rendered by respondent judge
on the contempt charge, and his order dated September 10, 1982, implementing
said judgment;
"2. Ordering the 'hold-over' directors and officers of NATELCO to vacate their
respective offices;
"3. Directing respondents to restore or re-establish petitioners (private respondents
in this case) who were ejected on May 22, 1982 to their respective offices in the
NATELCO, . . .;
"4. Prohibiting whoever may be the successor of respondent Judge from interfering
with the proceedings of the Securities and Exchange Commission in SEC-AC No.
036;
xxx xxx xxx
(Rollo, p. 88).
The order of re-implementation was issued, and, finally, the Maggay group has been restored as the
officers of the Natelco (Rollo, G.R. No. 60502, p. 985; p. 37).
Organized in 1954, the authorized capital was P100K.
Decided to increase its authorized 'capital to P3M.
(Public Service Act) Filed an application for the approval of the increased authorized capital
with the then Board of Communications – APPROVED (3. That the issuance of the shares of
stocks will be for a period of 1 year from the date hereof, 'after which no further issues will be
made without previous authority from this Board.")
Filed its Amended AOI with SEC + the original authorized capital of P100K was already paid.
o Of the increased capital of P2.9M, the subscribers subscribed to P580K of which
P145,000 was fully paid.
o Capital stock of Natelco was divided into 213K common shares and 87K preferred
shares, both at a par value of P10.00 per share.
Entered into a contract with Communication Services, Inc. for the "manufacture, supply,
delivery and installation" of telephone equipment.
o Issued 24K shares of common stocks to CSI on the same date as part of the
downpayment + another 12K
No prior authorization from BOC (now NTC)
Annual stockholders' meeting to elect their seven directors to elect BOD, for the year 19791980.
o CSI was able to gain control of Natelco when the latter's legal counsel, Atty. Luciano
Maggay won a seat in the Board with the help of CSI.
o In the reorganization Atty. Maggay became president
Petitioner Dee
unseated in the election
Filed a petition in the SEC questioning the validity of the elections
Ground: No valid list of stockholders through which the right to vote could be determined
RO issued + officers in hold-over capacity
o Elevated to the SC where the enforcement of the SEC restraining order was
restrained.
o Private respondents replaced the hold-over officers
Maggay Board
Did not reform the contract and entered into another contract with CSI for the supply and
installation of additional equipment but also issued to CSI 113,800 shares of common stock.
Supreme Court
Dismissed: ground that the same was premature and the Commission should be allowed to
conduct its hearing on the controversy.
Resulted in the unseating of the Maggay group from the board of directors of Natelco in a
"hold-over" capacity
SEC
(1) that CSI is a stockholder of Natelco and, therefore, entitled to vote;
(2) that unexplained 16,858 shares of Natelco appear to have been issued in excess to CSI which
should not be allowed to vote;
(3) that 82 shareholders with their corresponding number of shares shall be allowed to vote; and
(4) consequently, ordering the holding of special stockholder' meeting to elect the new members of the
Board of Directors for Natelco based on the findings made in the order as to who are entitled to vote
From the foregoing order dated June 23, 1981, petitioner Dee filed a petition for certiorari/appeal with
the SEC en banc. The petition appeal was docketed as SEC-AC NO. 036. Thereafter, the Commission
en banc rendered a decision on April 5, 1982, the dispositive part of which reads:
"Now therefore, the Commission en banc resolves to sustain the order of the
Hearing Officer; to dismiss the petition/appeal for lack of merit; and order new
elections as the Hearing Officer shall set after consultations with Natelco officers.
For the protection of minority stockholders and in the interest of fair play and justice,
the Hearing Officer shall order the formation of a special committee of three, one
from the respondents (other than Natelco), one from petitioner, and the Hearing
Officer as Chairman to supervise the election.
"It remains to state that the Commission en banc cannot pass upon motions
belatedly filed by petitioner and respondent Natelco to introduce newly discovered
evidence — any such evidence may be introduced at hearings on the merits of SEC
Case No. 1748.
"SO ORDERED." (Rollo, Vol. I, p. 24).
On April 21, 1982, petitioner filed a motion for reconsideration (Rollo, Vol. I, pp. 25-30). Likewise, private
respondent Natelco filed its motion for reconsideration dated April 21, 1982 (Ibid., pp. 32-51).
Pending resolution of the motions for reconsideration, on May 4, 1982, respondent hearing officer
without waiting for the decision of the commission en banc, to become final and executory rendered an
order stating that the election for directors would be held on May 22, 1982 (Ibid., pp. 300-301).
On May 20, 1982, the SEC en banc denied the motions for reconsideration (Rollo, Vol. II, pp. 763-765).
Meanwhile on May 20, 1982 (G.R. No. 63922), petitioner Antonio Villasenor (as plaintiff) filed Civil Case
No. 1507 with the Court of First Instance of Camarines Sur, Naga City, against private respondents and
co-petitioners, de Jesus, Tordilla and the Dees', all defendants therein, which was raffled to Branch I,
presided over by Judge Delfin Vir. Sunga (Rollo, G.R. No. 63922; pp. 25-30). Villasenor claimed that he
was an assignee of an option to repurchase 36,000 shares of common stocks of Natelco under a Deed
of Assignment executed in his favor (Rollo, p. 31). The defendants therein (now private respondents),
principally the Maggay group, allegedly refused to allow the repurchase of said stocks when petitioner
Villasenor offered to defendant CSI the repurchase of said stocks by tendering payment of its price
(Rollo, p. 26 and p. 78). The complaint therefore, prayed for the allowance to repurchase the aforesaid
stocks and that the holding of the May 22, 1982 election of directors and officers of Natelco be enjoined
(Rollo, pp. 28-29).
A restraining order dated May 21, 1982 was issued by the lower court commanding desistance from the
scheduled election until further orders (Rollo, p. 32). LLpr
Nevertheless, on May 22, 1982, as scheduled, the controlling majority of the stockholders of the Natelco
defied the restraining order, and proceeded with the elections, under the supervision of the SEC
representatives (Rollo, Vol. III, p. 985); p. 10; G.R. No. 60502).
On May 25, 1982, the SEC recognized the fact that elections were duly held, and proclaimed that the
following are the "duly elected directors" of the Natelco for the term 1982-1983:
1. Felipa T. Javalera
2. Nilda I. Ramos
3. Luciano Maggay
4. Augusto Federis
5. Daniel J. Ilano
6. Nelin J. Ilano, Sr.
7. Ernesto A. Miguel.
And, the following are the recognized officers to wit:
1. President Luciano Maggay
2. Vice-President Nilda I. Ramos
3. Secretary Desiderio Saavedra
4. Treasurer Felipa Javalera
5. Auditor Daniel Ilano
(Rollo, Vol. I, pp. 302-303)
Despite service of the order of May 25, 1982, the Lopez Dee group headed by Messrs. Justino De
Jesus and Julio Lopez Dee kept insisting no elections were held and refused to vacate their positions
(Rollo, Vol. III, p. 985; p. 11).
On May 28, 1982, the SEC issued another order directing the hold-over directors and officers to turn
over their respective posts to the newly elected directors and officers and directing the Sheriff of Naga
City, with the assistance of PC and INP of Naga City, and other law enforcement agencies of the City or
of the Province of Camarines Sur, to enforce the aforesaid order (Rollo, Vol. II, pp. 577-578). LLphil
On May 29, 1982, the Sheriff of Naga City, assisted by law enforcement agencies, installed the newly
elected directors and officers of the Natelco, and the hold-over officers peacefully vacated their
respective offices and turned-over their functions to the new officers (Rollo, Vol. III, p. 985; pp. 12-13).
On June 2, 1982, a charge for contempt was filed by petitioner Villasenor alleging that private
respondents have been claiming in press conferences and over the radio airlanes that they actually held
and conducted elections on May 22, 1982 in the City of Naga and that they have a new set of officers,
and that such acts of herein private respondents constitute contempt of court (G.R. 63922; Rollo, pp.
35-37).
On September 7, 1982, the lower court rendered judgment on the contempt charge, the dispositive
portion of which reads:
"WHEREFORE, judgment is hereby rendered:
"1. Declaring respondents, CSI, Nilda Ramos, Luciano Maggay, Desiderio
Saavedra, Augusto Federis and Ernesto Miguel, guilty of contempt of court, and
accordingly punished with imprisonment of six (6) months and to pay fine of
P1,000.00 each: and
"2. Ordering respondents, CSI, Nilda Ramos, Luciano Maggay, Desiderio Saavedra,
Augusto Federis and Ernesto Miguel, and those now occupying the positions of
directors and officers of NATELCO to vacate their respective positions therein, and
ordering them to reinstate the hold-over directors and officers of NATELCO, such as
Pedro Lopez Dee as President, Justino de Jesus, Sr., as Vice President, Julio
Lopez Dee as Treasurer and Vicente Tordilla, Jr. as Secretary, and others referred
to as hold-over directors and officers of NATELCO in the order dated May 28, 1982
of SEC Hearing Officer Emmanuel Sison, in SEC Case No. 1748 (Exh. 6), by way
of RESTITUTION, and consequently, ordering said respondents to turn over all
records, property and assets of NATELCO to said hold-over directors and officers."
(Ibid., Rollo, p. 49).
The trial judge issued an order dated September 10, 1982 directing the respondents in the contempt
charge to "comply strictly, under pain of being subjected to imprisonment until they do so" (Ibid., p. 50).
The order also commanded the Deputy Provincial Sheriff, with the aid of the PC Provincial Commander
of Camarines Sur and the INP Station Commander of Naga City to "physically remove or oust from the
offices or positions of directors and officers of NATELCO, the aforesaid respondents (herein private
respondents) x x x and to reinstate and maintain, the hold-over directors and officers of NATELCO
referred to in the order dated May 28, 1982 of SEC Hearing Officer Emmanuel Sison." (Ibid.).
Private respondents filed on September 17, 1982, a petition for certiorari and prohibition with preliminary
injunction or restraining order against the CFI Judge of Camarines Sur, Naga City and herein
petitioners, with the then Intermediate Appellate Court which issued a resolution ordering herein
petitioners to comment on the petition, which was complied with, and at the same time temporarily
refrained from implementing and or enforcing the questioned judgment and order of the lower court
(Rollo, p. 77, Decision of CA, p. 2).
On April 14, 1983, the then Intermediate Appellate Court, rendered a decision, the dispositive portion of
which reads:
"WHEREFORE, judgment is hereby rendered as follows:
"1. Annuling the judgment dated September 7, 1982 rendered by respondent judge
on the contempt charge, and his order dated September 10, 1982, implementing
said judgment;
"2. Ordering the 'hold-over' directors and officers of NATELCO to vacate their
respective offices;
"3. Directing respondents to restore or re-establish petitioners (private respondents
in this case) who were ejected on May 22, 1982 to their respective offices in the
NATELCO, . . .;
"4. Prohibiting whoever may be the successor of respondent Judge from interfering
with the proceedings of the Securities and Exchange Commission in SEC-AC No.
036;
xxx xxx xxx
(Rollo, p. 88).
The order of re-implementation was issued, and, finally, the Maggay group has been restored as the
officers of the Natelco (Rollo, G.R. No. 60502, p. 985; p. 37).
