Eizmendi, Jr. v. Fernandez

Facts: In a petition before this Court, Valle Verde points out that it is not challenging the validity of proxies, but merely the respondents’ unlawful misrepresentation of corporate office. It stresses that the election did not take place since the annual meeting was already adjourned prior to the respondents’ declaration as winners in the “election.” Consequently, its complaint is not an election contest as there were actually no winning candidates on February 23, 2013. It also argues that it is a real party-in-interest in this case because the respondents’ misrepresentation causes confusion among its members and employees, and disrupts its operations.

Issue: Whether or not the proxies and the manner of election are valid.

Held: Section 2, Rule 6 of the Interim Rules on Intra-Corporate Controversies defines an election contest as “any controversy or dispute involving title or claim to any elective office in a stock or non-stock corporation, the validation of proxies, the manner and validity of elections, and the qualifications of candidates, including the proclamation of winners, to the office of director, trustee or other officer directly elected by the stockholders in a close corporation or by members of a non-stock corporation where the article of incorporation or by-laws so provide.”

The present complaint falls under the definition of election contest because it raises the issues of the validation of proxies, and the manner and validity of elections. Furthermore, a reading of Valle Verde’s allegations, as well as its prayers in the complaint, shows that the complaint is essentially for the nullification of the election on the ground that the election was unlawfully conducted due to the adjournment of the meeting for lack of quorum.

The determination of the validity of the proxies and of the manner and validity of elections is necessary in adjudicating whether the respondents are the lawful directors and officers of Valle Verde. Consequently, Valle Verde cannot claim that it did not raise these factual issues because no election was conducted last February 23, 2013 due to the adjournment of the meeting for lack of quorum. Valle Verde’s assertion that there was no election is merely an effect of the declaration of the nullity of the election if the current petition would be found meritorious.