GR L 15568; (November, 1919) (Digest)
G.R. No. L-15568; November 8, 1919
W. G. PHILPOTTS, petitioner, vs. PHILIPPINE MANUFACTURING COMPANY and F. N. BERRY, respondents.
FACTS:
The petitioner, W. G. Philpotts, a stockholder of the respondent Philippine Manufacturing Company, filed a petition for a writ of mandamus to compel the respondents to allow him, either personally or through an authorized agent or attorney, to inspect and examine the company’s business records from January 1, 1918. The respondents demurred, arguing that the action was defective for misjoinder of parties and that the right of inspection under the Corporation Law must be exercised by the stockholder in person, not through an agent.
ISSUE:
1. Whether the corporation’s secretary was properly joined as a respondent.
2. Whether a stockholder’s right to inspect corporate records under Section 51 of Act No. 1459 (the Corporation Law) may be exercised through an agent or attorney.
RULING:
1. On the joinder of parties: The Court held that the corporation is the necessary party under Sections 515 and 222 of the Code of Civil Procedure. However, joining the secretary as a co-respondent is proper, as he is customarily the custodian of corporate records and would be the person to effectuate the court’s order. The demurrer on this ground was overruled.
2. On the right of inspection through an agent: The Court ruled that the right of inspection granted to a stockholder under Section 51 of the Corporation Law may be exercised either personally or through a duly authorized representative or attorney. This aligns with the general principle that what a person may do personally, they may do through another. The provision is to be liberally construed, and the right would often be futile if the stockholder could not employ an expert or counsel to conduct a meaningful examination. The Court noted that corporations may protect legitimate secrets (e.g., proprietary formulas), but no such issue was raised in the petition.
The demurrer was overruled, and a writ of mandamus was ordered to issue unless the respondents answered within five days.