G.R. No. L-30874 November 26, 1970
EVENER J. VILLASANTA, REX ROBERTS, EARL T. CONE, JR. and BALER FOREST PRODUCTS, INC., petitioners, vs. PEDRO D. BAUTISTA, RODOLFO BAUTISTA, BENJAMIN ALETA, Councilors JUAN ORTIZ and JUAN ALZATE, of Maria Aurora, and eight others whose names are not presently known, respondents.

FACTS

Petitioners Evener J. Villasanta, Rex Roberts, and Earl T. Cone, Jr., as officers of co-petitioner Baler Forest Products, Inc., holder of Ordinary Timber License No. 039-71, filed an original action for mandamus with preliminary injunction. They alleged that on August 15, 1969, respondent Pedro D. Bautista and his armed companions entered the corporation’s logging area in Maria Aurora, Quezon, and through force and intimidation stopped its logging and export operations, threatening irreparable injury to its equipment and its ability to meet a $190,000 export shipment. The Court issued an ex-parte writ of preliminary injunction. Respondents admitted entering the area but denied force, claiming they requested Cone to desist from managing operations, citing a Bureau of Forestry “letter-policy” dated July 16, 1969, which stated that the purchase of majority shares by an American citizen in the corporation “cannot be allowed.” Respondents contended petitioners were “irregularly elected” and that American citizens Roberts and Cone were legally disqualified from being corporate officers. Petitioners countered that Roberts provided capital under a May 11, 1967 agreement approved by respondent Bautista as then president, making Roberts the 75% controlling stockholder, and that no law prohibits American citizens from exercising corporate powers. They cited a Securities and Exchange Commission ruling validating Roberts’ subscription under the Corporation Law, though it deferred to the Bureau of Forestry on forestry regulation violations. Respondents submitted a Bureau of Forestry opinion dated October 3, 1969, deeming the agreement a virtual transfer of the timber license violating its conditions and the presidential directive of January 7, 1967, and an SEC letter of October 23, 1969, stating that if the Forestry opinion is correct, Roberts’ subscription would be ultra vires.

ISSUE

Whether a writ of mandamus with permanent injunction should be issued to restrain respondents from interfering with the individual petitioners’ exercise of their rights as duly elected officers of the corporation to conduct its logging and export operations, free from physical restraint or force, without prejudice to the resolution of collateral issues regarding the legality of their election and qualifications in the proper forums.

RULING

Yes, the writ is granted. The Court made permanent the preliminary injunction, ordering respondents to desist from interfering with the individual petitioners’ exercise of their corporate offices and the corporation’s logging operations under its timber license. The Court held that the present mandamus action deals solely with the limited issue of whether the individual petitioners may exercise their corporate rights free from physical restraint. The conflicting contentions regarding the alleged irregularity and illegality of the petitioners’ election and their legal disqualifications (involving Roberts’ American citizenship and the agreement’s compliance with forestry rules) raise collateral issues of fact and law that must be duly tried and heard on notice before the proper administrative agencies or in appropriate judicial proceedings (such as quo warranto), not in this collateral attack. The Court found the respondents’ acts of entering the concession with armed men, even if accompanied by municipal policemen and a PC officer for “safety,” constituted a disturbance of the corporation’s peaceful possession and operation, warranting injunctive relief. The Court also noted that the petition’s verification substantially complied with the rules, as Villasanta certified to its truth and attached affidavits of on-scene witnesses. The grant is without prejudice to any administrative, intra-corporate, or judicial remedies respondents may avail regarding the collateral issues. Costs were awarded against respondents.