480 Phil. 83
CALLEJO, SR., J.:
|Name||Number of Shares||Amount of Subscription|
|ANTONIO L. TAN, JR.||26,500||2,650,000.00|
|JOSE THOMAS BELDIA||5,000||500,000.00|
|Name||Number of Shares||Worth|
ANTONIO L. TAN, JR.
JOSE THOMAS BELDIA
The petitioners also prayed that the respondents be held, jointly and severally, liable to pay damages and attorney’s fees, as follows:
- Declaring the alleged NOTICE FOR ANNUAL STOCKHOLDERS’ MEETING as well as the alleged “ANNUAL STOCKHOLDERS’ MEETING” conducted by the Respondents on 22 September 1997 [at] 10:00 a.m. as NULL and VOID from the very beginning, including the proceedings made therein, to include but not limited to the sham ELECTION of the alleged Members of the Board of Directors and the appointment of the EXTERNAL AUDITOR;
- Declaring the alleged “ORGANIZATIONAL MEETING” of the renegade Board of Directors conducted by the Respondents on 22 September 1997 at 2:00 p.m. as NULL and VOID from the very beginning, including all proceedings made therein, to include but not limited to the sham ELECTION of the alleged Officers of T.F. VENTURES, INC.;
- Declaring any or all acts of the Respondents conducted or made at or proceeding from the alleged “ANNUAL STOCKHOLDERS’ MEETING” conducted by the Respondents on 22 September 1997 at 10:00 [a.m.] and “ORGANIZATIONAL MEETING” of the renegade Board of Directors conducted by the Respondents on 22 September 1997 at 2:00 p.m. as NULL and VOID.
a) the sum of P25,000,000.00 representing the consequential damages suffered by Petitioners;Traversing the material allegations of the amended petition, respondent Matsuura maintained in his answer to the petition that the meeting of the stockholders on September 22, 1997 and the election of the members of the Board of Directors on the said date were valid. He alleged that the petitioners held their own renegade stockholders’ meeting on October 20, 1997 without notifying him as Chairman of the Board. He further alleged that petitioner Tan, whose outstanding shares had been assigned and transferred in his favor as early as January 20, 1997, was present and participated in the said meeting. Respondent Matsuura also alleged that petitioner Tan, then acting as the treasurer, falsely certified in the Treasurer’s Affidavit dated September 29, 1993 that of the increase of P90,000,000 in the authorized capital stock, P40,000,000 was fully paid by the stockholders. He alleged that the original treasurer’s affidavit notarized on September 29, 1997 was replaced under the same Doc. No. 457 in order to reach the required minimum deposit and change the mode of payment of paid-in capital, from “cash” to “offset of liability,” to enable the petitioners to gain control of the corporation at practically zero cash outlay. Thereafter, the “renegade board” headed by petitioner Morato and former stockholder and ex-treasurer petitioner Tan concocted another Board Resolution on April 24, 1997, authorizing the opening of a new and secret account, with petitioner Morato as the sole signatory for the purpose of cashing in loan proceeds from another bank. Previous to that, the respondent further contends that petitioner Tan had already committed several misappropriations of both money and property belonging to the petitioner corporation.
b) the sum of P5,000,000.00 representing moral damages and the sum of P2,000,000.00 as and for exemplary damages;
c) attorney’s fees in the amount of P200,000.00 and expenses of suit in an amount of not less than P100,000.00 plus interest thereof from the date of the judgment;
d) cost of suit; and
e) interest on items (a) and (b) above from the date of filing of the Complaint until full payment thereof.
THE STOCKHOLDERS’ MEETING HELD AT THE PRINCIPAL OFFICE ON SEPTEMBER 22, 1997 IS VALID, LEGAL AND MUST SUBSIST, THE SAME HAVING BEEN CONDUCTED WITH DUE NOTICE TO ALL PARTIES CONCERNED INCLUDING PAID AND UNPAID STOCKHOLDERS OF RECORD.The respondent prayed that, after due proceedings, judgment in his favor be rendered as follows:
IN COMPARISON, THE STOCKHOLDERS’ MEETING OF OCTOBER 20, 1997 SPEARHEADED BY COMPLAINANTS, WHO DID NOT PAY THEIR SUBSCRIPTION, AND WITHOUT NOTICE TO THE CHAIRMAN AND THE PAID-UP SUBSCRIBERS, IS PATENTLY ILLEGAL, VOID AND WITHOUT EFFECT.
COROLLARILY, ALL BOARD RESOLUTIONS PASSED BY THE UNPAID SUBSCRIBERS AMONG THEMSELVES, WITHOUT NOTICE TO THE CHAIRMAN AND THE OFFICIAL CORPORATE SECRETARY ON RECORD, ARE VOID AND UNENFORCEABLE. THEREFORE, THE SAME MUST BE STRICKEN OUT.
MOST IMPORTANTLY, THE APPROVAL FOR THE APPLICATION FOR INCREASED CAPITALIZATION IN THE AMOUNT OF P100,000,000.00 MUST BE RECALLED FOR FAILURE OF CONSIDERATION (OF STOCKHOLDERS TO PAY THEIR SUBSCRIPTIONS).
a) To UPHOLD the VALIDITY of the stockholders’ meeting held on September 22, 1997 at the principal office of T.F. VENTURES, INC., and, consequently, lift the temporary restraining order initially granted to complainants.On October 14, 1997, Hearing Officer Manolito S. Soller issued an Order granting a temporary restraining order prayed for by the petitioner. On November 12, 1997, an Order was issued granting the writ of preliminary injunction prayed for by the petitioners on a bond of P400,000.
b) To DECLARE the stockholders’ meeting subsequently held by complainants on October 20, 1997 as NULL AND VOID, as well as all Board Resolutions certified by one Dennis Manicad as “Corporate Secretary” for being false, sham and consisting of ultra vires acts.
c) To RECALL and NULLIFY the approval of application for increased capitalization in the amount of P100,000,000.00 due to failure of consideration.
d) To ISSUE a TEMPORARY RESTRAINING ORDER against the private complainants from further issuing board resolutions and any alleged corporate acts in behalf of T.F. VENTURES, INC. and, thereafter, to issue a permanent WRIT OF PRELIMINARY INJUNCTION against complainants.
e) To order complainants to pay MORAL DAMAGES in an amount not less than ONE MILLION PESOS, Actual or Compensatory and Exemplary Damages as may be determined by the Honorable Investigator, plus interests.
f) To order private complainants/petitioners to pay ATTORNEY’S FEES amounting to P200,000.00 and LITIGATION EXPENSES amounting to P100,000.00, plus interest.
The undersigned Chairman of the Board of T.F. VENTURES, INC., in his capacity as such and as a stockholder, with the assistance of Counsel, most respectfully requests that a reexamination of the basis for capital increase of T.F. VENTURES, INC. be conducted in view of several anomalous transactions and spurious documents that were unearthed only recently. The planned increase of the authorized shares to P100 Million was approved in principle sometime in 1993, however, since only the undersigned and Mr. Masao Ogura paid their increased shares, the plan was aborted. Whatever advances were given by the Japanese investors, including Mr. Tanaka later on, were agreed to be treated as credit of T.F. VENTURES, INC. It was discovered lately that a recommendation for approval by Mr. Remigio Santiago was issued on August 3, 1996, a copy is attached hereto as ANNEX “A,” used as basis in approving the P100 Million capital increase.The matter was docketed as CSI Case No. 97-11-31. The letter was later forwarded by the SEC to the Prosecution and Enforcement Department (PED) which redocketed the matter as PED Case No. 98-2231.
Relative to [the] above recommendation, your attention is invited to verify the following documents and bank certifications, to wit:
WHEREFORE, after verification of the foregoing, it is most respectfully requested of this Honorable Office to SET ASIDE the approval of the P100 Million capital increase for failure of consideration, and REVERT to the status quo, which has an undisputed P10 Million authorized capital stock.
- TREASURER’S AFFIDAVIT dated September 29, 1993 signed by Antonio Tan, Jr. who originally attested that out of the increased capital stock of P90 Million, P40 Million has been subscribed and fully paid “by way of cash,” a copy is attached hereto as ANNEX “A-1.” Undersigned was led to believe that all stockholders subscribing to additional shares would, indeed, pay in cash, at the time the Memorandum of Agreement was drawn. However, Mr. Tan erased and substituted the same Affidavit later on to reflect that said increase in capital stock “has been actually paid-in by way of offset of liabilities,” the latter words having been superimposed, a copy is attached hereto as ANNEX “A-2,” under the same notarial register.
- In the second paragraph of ANNEX “A,” on Verification and Comments, it was stated therein that “cash received from the said subscribers were deposited on various dates with the corporation’s accounts with China Banking Corporation under SA # 103-07033-1-8 and (Dollar) $ account # 103311-1; and United Coconut Planters bank under SAQ # 103-123370-5, $ account # 01-103-300364-0 and Unified Trust Placement.” Upon verification with China Bank, however, said Dollar Acct # 103311-1 is non-existent, the only dollar account is #103-703171-1, as shown in the attached letter of the undersigned, ANNEX “A-3” and the Certification of China Bank as ANNEX “A-4.”
- Moreover, in the same verification, the mention of “Unified (sic) Trust Placement” pertained to P20 Million proceeds of loan from Masao Ogura for use in company operations / construction, as shown in UCPB bank certification attached hereto as ANNEX “A-5.” The rights of Masao Ogura having been transferred to Yusuke Fukuzumi, the latter filed a criminal complaint for ESTAFA against the stockholders who claimed aforesaid proceeds as their “paid in capital.” A copy of the demand letter of Mr. Fukuzumi and the memorandum of criminal investigation is (sic) attached hereto as ANNEXES “A-6” and “A-7.”
- In furtherance of their interest, then Treasurer Antonio Tan, Jr. coerced a newly hired accountant to switch records, reclassify account names from “Buyers Deposit” to “Deposit for Future Subscriptions” and sign spurious certificate to make it appear that the unpaid subscribers have paid their subscriptions out of “Advances from Stockholders” for the purpose of getting SEC approval. However, knowing the criminal consequence of his acts, said Accountant Mr. Nestor Pangan, swore under oath that he executed the false certificate under threat and intimidation, a copy of which is attached hereto as ANNEX “B” and the admittedly false certificate submitted to this Office as ANNEX “B-1.” And finally, the approval by SEC on October 8, 1996 of the capital increase based on the admittedly spurious documents, is attached hereto as ANNEX “B-2,” described in paragraph 17 of said Accountant’s Affidavit.
- Verily, then Treasurer Antonio Tan [Jr.] filed a G.I.S. “as of September 1996” declaring P10 Million authorized capital stock, adopting the same stand as the last G.I.S. filed on March 1, 1994, except that he falsely claimed full payment of subscribed capital stock and he miscomputed the shares of Alexander Poblador by placing P500,000, instead of only P300,000. Notably, the 1996 G.I.S. was notarized on September 22, 1997 and filed only on September 23, 1997, together with the 1997 G.I.S. declaring P100 Million authorized capital, purposely to defeat the general stockholders’ meeting called on September 22, 1997 by the Corporate Secretary Alexander Poblador with due notice to all stockholders concerned. A copy of the March 1, 1994 G.I.S. is attached hereto as ANNEX “C,” the September 1996 G.I.S. as ANNEX “C-1,” and the 1997 G.I.S. as ANNEX “C-2.”
- Stressworthy is the fact that as of January 1997, then Treasurer Antonio Tan [Jr.] had already transferred all his shares to the undersigned, a copy of the Deed of Trust is attached hereto as ANNEX “D.” Effectively therefore, he had no longer any personality to act as a Director of the corporation and the 1997 G.I.S. reflecting P100 Million capitalization is sham, illegal and void for lack of consideration; the same must be cancelled.
We note that the petitioners designated their recourse to this Court as an “appeal by way of petition for review under Rule 45 and/or Rule 65 of the 1997 Rules of Civil Procedure, as amended.” We find the same to be highly irregular. The petitioners are mandated to state categorically in their petition the Rule under which the same is filed, and not merely leave the matter for the Court’s determination. It must be borne in mind that the remedies under Rules 45 and 65 of the Rules of Court cannot be interchanged, for as we ruled in National Irrigation Administration v. Court of Appeals:
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED AND ABUSED ITS DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN NOT DECLARING THAT PRIVATE RESPONDENT IS GUILTY OF FORUM SHOPPING.
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED AND ABUSED (SIC) DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN DISREGARDING THE SETTLED RULE ON COUNTERCLAIM VIS A VIS THE QUESTION OF JURISDICTION IN A GIVEN CASE.
THE RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE MOTION FOR SUSPENSION AND/OR CONSOLIDATION FILED BEFORE THE PUBLIC RESPONDENT IS PROPER AND PROCEDURALLY SANCTIONED.
The appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Rules of Court, now Rule 45 and Rule 65, respectively, of the 1997 Rules of Civil Procedure. Rule 45 is clear that decisions, final orders or resolutions of the Court of Appeals in any case, i.e., regardless of the nature of the action or proceedings involved, may be appealed to this Court by filing a petition for review, which would be but a continuation of the appellate process over the original case.Prescinding from the petitioners’ procedural lapse, we shall treat the petition as one filed under Rule 45 of the Rules of Court.
SECTION 6. The Prosecution and Enforcement Department shall have, subject to the Commission’s control and supervision, the exclusive authority to investigate, on complaint or motu propio, any act or omission of the Board of Directors/Trustees of corporations, or of partnerships, or other associations, or of their stockholders, officers or partners, including any fraudulent devices, schemes or representations, in violation of any law or rules and regulations administered and enforced by the Commission; to file and prosecute in accordance with law and rules and regulations issued by the Commission and in appropriate cases, the corresponding criminal or civil case before the Commission or the proper court or body upon prima facie finding of violation of any laws or rules and regulations administered and enforced by the Commission; and to perform such other powers and functions as may be provided by law or duly delegated to it by the Commission.Prosecution under this Decree or any Act, Law, Rules and Regulations enforced and administered by the Commission shall be without prejudice to any liability for violation of any provision of the Revised Penal Code.
Clearly, the PED had jurisdiction to investigate said increase in capitalization allegedly with failure of consideration and to determine whether or not the corporation and its responsible officers are liable, criminally and administratively, for violating the Corporation Code. The investigation conducted by the PED Hearing Officer Badillo in PED Case No. 98-2231 can proceed independently from the SICD case SEC Case No. 10-97-5778 as the issues to be resolved are different. Whatever findings that may result from said investigation may or may not result to the filing of the appropriate civil and criminal action before the proper courts or tribunal; and may, likewise, result to the suspension or revocation of the corporation’s certificate of registration if the allegations of failure of consideration in the increase in capitalization is found to be true. These are all within the exclusive jurisdiction of the PED.The ruling of the SEC En Banc is an affirmation of the following reply of Chairman Yasay:
In this regard, please be informed that the issue under SICD Case No. 10-97-5778 which calls for the declaration of the alleged Notice for Annual Stockholders’ Meeting and the Annual Stockholders’ Meeting and Organizational Meeting of the Board of Directors conducted on September 22, 1997 as NULL and VOID, is an intra-corporate dispute which falls under the jurisdiction of the SICD, while the investigation being conducted by the PED is the alleged anomalous transaction and spurious documents used in the increase in capital of T.F. Ventures, Inc., which is separate and distinct from each other.It is true that in his answer with counterclaim in SEC Case No. 10-97-5778, the respondent raised the matter of the sufficiency of consideration for the increase in the petitioner corporation’s capitalization. He even alleged that the petitioners were engaged in schemes and devices, and were guilty of culpable acts and omissions in violation of pertinent rules and laws. However, such allegation was made only for the purpose of defending the legality of the September 22, 1997 stockholders’ meeting and the election of the Board of Directors, as well as the nullity of the October 20, 1997 meeting spearheaded by the petitioners. By so doing, the respondent did not thereby submit the matters complained of in his letter-petition in PED Case No. 98-2231 to the SICD for resolution, since the latter has no jurisdiction to investigate and resolve the same, or prosecute those guilty of such violations. In any event, if the respondent failed to raise such matters in his answer to the amended petition of the petitioners, he would have waived the said defenses. As provided for in Section 13, Rule IV of the 1993 SEC Revised Rules of Procedure, defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived.
Be advised further that under PD 902-A, as amended, ”the Prosecution and Enforcement Department shall have, subject to the Commission’s control and supervision, the exclusive authority to investigate, on complaint or motu proprio, any act or omission of the Board of Directors/Trustees of corporations, or of partnerships, or of other associations, or of their partnerships or of other associations, (sic) or of their stockholders, officers or partners, including any fraudulent devices, schemes or representations, in violation of any law or rules and regulations administered and enforced by the Commission, to file and prosecute in accordance with law and rules and regulations issued by the Commission and in appropriate case, file the corresponding criminal or civil case before the Commission or the proper court or body upon prima facie finding of violation of any laws or rules regulations (sic) administered and enforced by the Commission; and to perform such other powers and functions as may be provided by law or duly delegated to it by the Commission.”
In view thereof, the PED, pursuant to the mandate of the law, can proceed with the investigation, considering that the issues are different from the ones raised in the SICD case.
5.2. The Commission’s jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional Trial Court branches that shall exercise jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases involving intra-corporate disputes submitted for final resolution which should be resolved within one (1) year from the enactment of this Code. The Commission shall retain jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June 2000 until finally disposed.Among the powers and functions of the SEC which were transferred to the RTC include the following: (a) jurisdiction and supervision over all corporations, partnerships or associations who are the grantees of primary franchises and/or a license or permit issued by the Government; (b) the approval, rejection, suspension, revocation or requirement for registration statements, and registration and licensing applications; (c) the regulation, investigation or supervision of the activities of persons to ensure compliance; (d) the supervision, monitoring, suspension or take over the activities of exchanges, clearing agencies and other SROs; (e) the imposition of sanctions for the violation of laws and the rules, regulations and orders issued pursuant thereto; (f) the issuance of cease-and-desist orders to prevent fraud or injury to the investing public; (g) the compulsion of the officers of any registered corporation or association to call meetings of stockholders or members thereof under its supervision; and, (h) the exercise of such other powers as may be provided by law as well as those which may be implied from, or which are necessary or incidental to the carrying out of, the express powers granted the Commission to achieve the objectives and purposes of these laws.
(1) Devices or schemes employed by, or any act of, the board of directors, business associates, officers or partners, amounting to fraud or misrepresentation which may be detrimental to the interest of the public and/or of the stockholders, partners, or members of any corporation, partnership, or association;However, Section 8 of P.D. No. 902-A, as amended, has already been repealed, as provided for in Section 76 of Rep. Act No. 8799:
(2) Controversies arising out of intra-corporate, partnership, or association relations, between and among stockholders, members, or associates; and between, any or all of them and the corporation, partnership, or association of which they are stockholders, members, or associates, respectively;
(3) Controversies in the election or appointment of directors, trustees, officers, or managers of corporations, partnerships, or associations;
(4) Derivative suits; and
(5) Inspection of corporate books.
(b) Prohibition against nuisance and harassment suits. – Nuisance and harassment suits are prohibited. In determining whether a suit is a nuisance or harassment suit, the court shall consider, among others, the following:(1) The extent of the shareholding or interest of the initiating stockholder or member;In case of nuisance or harassment suits, the court may, motu proprio or upon motion, forthwith dismiss the case.
(2) Subject matter of the suit;
(3) Legal and factual basis of the complaint;
(4) Availability of appraisal rights for the act or acts complained of; and
(5) Prejudice or damage to the corporation, partnership, or association in relation to the relief sought.
SEC. 76. Repealing Clause. – The Revised Securities Act (Batas Pambansa Blg. 178), as amended, in its entirety, and Sections 2, 4 and 8 of Presidential Decree 902-A, as amended, are hereby repealed. All other laws, orders, rules and regulations, or parts thereof, inconsistent with any provision of this Code are hereby repealed or modified accordingly.Thus, under the new law, the PED ceased to exist. However, the SEC retains jurisdiction to continue with its investigation of the letter-petition of respondent Matsuura.