G.R. No. L-12282; March 31, 1959
THE BOARD OF DIRECTORS AND ELECTION COMMITTEE OF THE SMB WORKERS SAVINGS AND LOAN ASSOCIATION, INC., ET AL., petitioners, vs. HON. BIENVENIDO A. TAN, ETC., ET AL., respondents.

FACTS

On January 17, 1957, John Castillo et al. (respondents) filed a suit in the Court of First Instance of Manila to declare null and void the election of the board of directors of the SMB Workers Savings and Loan Association, Inc., and to order a new election. After the defendants (petitioners) failed to appear at the trial, the court rendered judgment on February 11, 1957, annulling the election, ordering a new one, and sentencing the defendants to pay attorney’s fees. The court later granted immediate execution of this judgment. In compliance, the association’s Election Committee (composed of Quintin Tesalona, Manuel Dumaup, and Jose Capinio Santos) set a meeting for March 28, 1957, to hold the new election. On March 27, 1957, the plaintiffs filed an ex-parte motion, alleging that the same Election Committee that conducted the annulled election would supervise the new one, which they claimed was inequitable. They also alleged that the notice for the March 28 meeting violated the association’s by-laws, which required at least five days’ notice for a special meeting. The plaintiffs prayed for the court to appoint its own representative(s) to supervise the election. On the same day, March 27, the respondent judge issued an order cancelling the March 28 election and appointing a three-member committee (composed of Candido C. Viernes as court-appointed chairman and one representative each from the plaintiffs and defendants) vested with exclusive authority to call, conduct, and supervise the election, with compensation to be paid by the association. The defendants’ motion for reconsideration was denied. The petitioners (the Board and Election Committee) then filed this petition for certiorari, claiming the respondent judge acted without or in excess of jurisdiction or with grave abuse of discretion in issuing the March 27 order.

ISSUE

Whether the respondent judge acted without or in excess of jurisdiction or with grave abuse of discretion in issuing the order of March 27, 1957, which cancelled the scheduled election and appointed a special committee to call, conduct, and supervise the new election for the association’s board of directors.

RULING

The Supreme Court denied the petition for certiorari and dissolved the preliminary injunction. The Court held that the respondent judge did not act without or in excess of jurisdiction or with grave abuse of discretion. The Court found that the notice for the March 28, 1957, special meeting, given only on March 26, violated the association’s constitution and by-laws, which required at least five days’ notice. Therefore, the cancellation of that meeting was proper. Furthermore, the Court ruled that the appointment of a special committee by the respondent judge was within the court’s equity jurisdiction. Citing authorities, the Court stated that a court of equity may, upon a showing of good reason, appoint a master or committee to conduct and supervise an election of directors when it appears that a fair election cannot be otherwise held, such as when the existing committee that conducted an annulled election is allowed to act again, potentially jeopardizing the rights of the parties. The compensation for the committee members, to be paid by the association, was also upheld as within the court’s authority.