361 Phil. 1022; 96 OG No. 13, 1866 (March 27, 2000)
AUSTRIA-MARTINEZ, J.:
“WHEREFORE, the petition for mandamus is hereby GRANTED, and respondent Securities and Exchange Commission is ordered to cause the amendment of the Writ of Execution of June 1, 1995 for it to conform to the final judgment of the then CFI-Lanao del Norte, Iligan City, Branch 2, in Civil Case No. II-73 (1276) of August 7, 1975, as affirmed with modification by the Supreme Court in its decision in G.R. No. 95067 of July 23, 1992, in that it should order respondents Capitol College of Iligan, Inc. (CCII) and spouses Sesenio and Laurena Rosales to:The antecedents of this case may be stated as follows:
“1) Cause the issuance in favor of the petitioners spouses Gerardo and Felina Aranas the certificates of stock corresponding to the cash investments made by them in respondent CCII, in the amount of P5,730.00 as of May 1964;
“2) Submit all records/books of accounts of respondent corporation from 1964 up to the present for inspection for the purpose of determining whether profits have indeed been earned by the corporation and whether herein petitioners have been unjustly deprived of their share therein;
“3) Deliver to petitioners spouses Aranas their unrealized profits and/or dividends by virtue of their investments from May, 1964 up to the present; and
“4) Pay the amount of P5,000.00 as moral damages.”[2]
“There is, true enough, no indication that right after 11 March 1976 when PD 902-A was promulgated, herein private respondents moved for the transfer of the proceedings to the SEC, hence, they can be deemed to have acquiesced to the proceedings before the court a quo and to be bound thereby; however, execution and subsequent incidents will have to be transferred to the jurisdiction of the Securities and Exchange Commission. This appears to be the clear intent of the law, PD 902-A.Pursuant to the above-quoted decision of this Court, the SEC took cognizance of the case and, on April 26, 1994, the SEC Hearing Officer, Alberto P. Atas, issued an order[10] directing the issuance of a writ of execution, the tenor of which was in accordance with the final disposition of the Court of Appeals in CA-G.R. SP No. 04028 and CA-G.R. No. 18137, as affirmed by this Court in G.R. No. 95067. Consequently, a writ of execution[11] was issued ordering the examination of the books of the petitioner to determine whether or not dividends have been declared since 1964. On February 23, 1995, the SEC En Banc confirmed the provisions of the writ of execution issued by Hearing Officer Alberto Atas.
“The Securities and Exchange Commission is ordered to cause the execution of the final judgment, dated 7 July 1975, of the RTC of Lanao del Norte, Branch I, Iligan City in Civil Case No. 1276. This will include, among others, the issuance of certificate of stock in favor of petitioners, inspection of the books of accounts of respondent corporation for the purpose of determining whether profits have indeed been earned by the corporation and whether herein petitioners have been unjustly deprived of their share therein.”[9]
“WHEREFORE, pursuant to the authority vested in the Commission and the decision of the Regional Trial Court in Civil Case No. 11-73 (1267), as modified by the Court of Appeals in AC-G.R. No. 95067, the above-named respondents are hereby directed to comply with the final and executory judgment consisting of the examination of the respondent corporation to determine whether or not dividends have been declared by the College since 1964.x x x”[12]On February 21, 1996, private respondents filed a petition for mandamus with the Court of Appeals (docketed as CA-G.R. SP No. 39876 praying that petitioner be ordered to: (a) issue certificates of stocks in favor of private respondents in the amount of P5,730.00; (b) submit all records/books of account from 1964 to 1990 and 1993 for verification and inspection with the purpose of determining petitioner’s profits; (c) pay private respondents’ share in the profits for 1991-92 in the amount of P5,647,870.00 pursuant to the writ of execution dated May 17, 1993; (d) pay private respondents’ share in the profits discovered after inspection/examination for 1964-90; and (e) pay moral damages of not less than P200,000.00, exemplary damages of P100,000.00, litigation expenses of P50,000.00 and attorney’s fees.[13]
The petition is partly meritorious.
1. The respondent court erred in ordering the SEC to cause the issuance of certificates of stocks to private respondents corresponding to their cash investment with the petitioner, Capitol College of Iligan, Inc., in the amount of P5,730.00 as of May 1964.2. The respondent court erred in ordering petitioners to pay the amount of P5,000.00 as moral damages.3. The respondent court erred in ordering the petitioner to submit to the SEC for inspection all its records/books of account dating back in 1964 to the present, for the purpose of determining whether profits have been earned by petitioner and whether private respondents have been unjustly deprived of their share therein.4. The respondent court erred in ordering the petitioner to deliver to private respondents their unrealized profits and/or dividends.
“x x x x x x x x xThus, the respondent court exceeded its jurisdiction when it revived the award of P5,000.00 moral damages in favor of private respondents in its now-assailed decision.
“After considering the argument of both parties, the Court see no cogent reason to reconsider its decision on the merits.
“However, going over the last issue on moral damages, the Court resolves to eliminate the award of moral damages, it appearing that bad faith was not clearly established.
“WHEREFORE, the decision is reiterated with the modification that the amount of P5,000.00 as moral damages is eliminated.”[15] (Underscoring supplied)
“The Securities and Exchange Commission is ordered to cause the execution of the final judgment, dated 7 July 1975, of the RTC of Lanao del Norte, Branch I, Iligan City in Civil Case No. 1276. This will include, among others, the issuance of certificate of stock in favor of petitioners, inspection of the books of accounts of respondent corporation (now petitioner) for the purpose of determining whether profits have indeed been earned by the corporation and whether herein petitioners (now private respondents) have been unjustly deprived of their share therein.Based on the above-quoted ruling of this Court, it is clear that the purpose of the inspection of petitioner’s books of account is not only to determine whether dividends have been declared by the petitioner but also to ascertain whether profits have been earned by the latter and whether private respondents have been unjustly deprived of their share therein. Such determination is possible only after factual examination by the board of directors of petitioner of the existence of such profits and their declaration of dividends.
“WHEREFORE, the decision appealed from is AFFIRMED. Let this case be remanded to the Securities and Exchange Commission for disposition in accordance with the pronouncements in this decision. The entire records of Civil Case No. 1276 are ordered transferred to the SEC.
“SO ORDERED.” (Underscoring supplied)