G.R. No. 182738 : February 24 2014

FACTS: Respondent Sanchez, a stockholder of petitioner Capitol Hills Golf & Country Club, Inc. (Corporation), filed a petition for the nullification of the annual meeting of stockholder and the special meeting of stockholders. Petitioners, along with their co–defendants, filed an Answer with Counterclaims. A Motion for Preliminary Hearing of Defendants’ Affirmative Defenses was denied. Respondent’s Motion for Production and Inspection of Documents was granted. MR was filed by petitioners, but was denied, and considered respondent’s omnibus motion as a reiteration of his earlier motion for inspection and production of documents; thus, the immediate implementation of the Order. Petitioners elevated the Case to CA which was denied. MR was likewise denied. Supposed inspection did not push through as defendants again moved for its deferment. Corporate Secretary of the Corporation was, however, out of town, and Petitioner Roman showed no willingness to conform with the directive (Order). This was reported to trial court. When the inspection finally happened, the only document produced by the Acting Corporate Secretary was the Stock and Transfer Book of the Corporation. They alleged that they could not find from the corporate records the copies of the proxies submitted by the stockholders, including the tape recordings taken during the stockholders’ meetings, and that they needed more time to locate and find the list of stockholders which was in the bodega of the Corporation. This prompted respondent to file a Manifestation with Omnibus Motion praying that an order be issued in accordance with Section 3, Paragraphs (a) to (d) of Rule 29 of the Rules of Court, in relation to Section 4, Rule 3 of the Interim Rules of Procedure Governing Intra–Corporate Controversies under Republic Act No. 8799. The same was granted. The same was affirmed by CA.

ISSUE: Whether or not the procedure with respect to contempt cases was correctly followed? No.

HELD: NO. The proceedings for indirect contempt have not been initiated. To the Court’s mind, the September 3, 2007 Resolution could be treated as a mere reiteration of the September 10, 2002 Order. It is not yet a “judgment or final order of a court in a case of indirect contempt” as contemplated under the Rules. The penalty mentioned therein only serves as a reminder to caution petitioners of the consequence of possible non–observance of the long–overdue order to produce and make available for inspection and photocopying of the requested records/documents. In case of another failure or refusal to comply with the directive, the court or respondent could formally initiate the indirect contempt proceedings pursuant to the mandatory requirements of the Rules and existing jurisprudence.