In re Cebu Development Co., Inc.

January 15, 2008 SEC EN BANC CASE NO. 09-07-0211 IN THE MATTER OF CEBU DEVELOPMENT COMPANY, INC. (S.E.C. REG. NO. 14553) , petitioner. FOR: SETTING ASIDE ORDER OF REVOCATION DECISION For consideration of the Commission en banc is the Petition dated 30 August 2007 praying that the Order of Revocation issued against the petitioner be set aside. CTDHSE The facts of the case as culled from the records are narrated below. Petitioner, a stock corporation registered with the Commission on 16 October 1958, 1 was organized to engage in real estate transactions. 2 Based on petitioner's Articles of Incorporation, the following are the incorporators and at the same time named directors: 1. Marcelo B. Fernan; 2. Eloisa N. Fernan; 3. Margarita H. Fernan; 4. Francisco M. Fernan; and 5. Florencio O. Fernan. On 26 May 2003, petitioner's Certificate of Registration No. 14553 was revoked by virtue of SEC Order dated 22 April 2003 for non-compliance with the Commission's reportorial requirements. Said revocation order was published in the 25 April 2003 issue of the Philippine Daily Inquirer and quoted as follows: TEcCHD "WHEREAS, all corporations are required to submit annual reports such as the General Information Sheet and Financial Statements pursuant to Sec. 141 of the Corporation Code of the Philippines; WHEREAS, the records of the Securities and Exchange Commission (SEC) show that there are many corporations who failed to submit the abovementioned reports for the last six (6) consecutive years, i.e. for period 1997-2002; WHEREFORE, notice is hereby given that those corporation registered from 1936 to 1966 who failed to submit the reports are directed to appear within thirty (30)-days from the date of publication of this Order before the Law and Regulation Division, Company Registration and Monitoring Department of this Commission at the 3rd Floor, SEC Building, EDSA, Mandaluyong City during office hours and show cause why their Certificates of Registration should not be revoked. After the lapse of the said thirty (30)-day period and the said delinquent corporations have not updated their files, as well as, settled their corresponding fine or penalty, their Certificate of Registration shall be deemed revoked. Let this Order be published once in a newspaper of general circulation. DcaECT SO ORDERED. Mandaluyong City. April 22, 2003" Petitioner filed the instant petition on 25 September 2007 seeking reconsideration of the Order revoking petitioner's registration on the following grounds: 1. the continued existence and operation of the corporation will greatly help the government in expanding employment opportunities for citizens in the country; 2. it will significantly contribute to national industrialization in the country considering that the corporation is engaged in real estate transaction and development; and 3. it can be an effective partner of the government in spreading the benefits of capitalism for the social and economic growth of the nation. DTSaIc Petitioner likewise alleged in its petition that it paid the amount of Five Thousand Two Hundred Pesos (Php5,200.00) as evidenced by Official Receipt No. 5479209 for its failure to file its reportorial requirements. 3 The issue now is whether there is a valid ground to set aside the order revoking petitioner's certificate of registration with this Commission. We deny the petition. A careful review of the records and other papers pertaining to the petitioner, which were filed with the Commission, would show that a Certificate of Dissolution of petitioner dated 24 May 1961 was signed by then directors: 1. Marcelo B. Fernan; 2. Eloisa N. Fernan; 3. Margarita B. Fernan; and 4. Francisco N. Fernan. The said certificate was countersigned by then corporate secretary Florencio C. Fernan. The Resolution of Voluntary Dissolution was filed with this Commission and the certificate of filing thereof was signed by then Deputy Securities and Exchange Commissioner Ner C. Reodica on 07 November 1962. SICDAa It is worthy to point out that at the time petitioner filed for a voluntary dissolution, Act No. 1459 (or the old Corporation Law) was in effect. Under the old Corporation Law, a corporation may be dissolved by filing an application for a dissolution, which must be resolved upon, if a stock corporation, by the affirmative vote of the stockholders holding or representing two-thirds of all shares of stock issued or subscribed. 4 The application for dissolution must be signed by a majority of the board of directors or other officers having the management of the affairs of the corporation and must be verified by the president or secretary or clerk or some director of the corporation. 5 The resolution approving the dissolution must be filed with this Commission, which in turn, shall issue a Certificate of Filing of Resolution of Voluntary Dissolution. The date of the certification shall be the effective date of the dissolution of a corporation. 6 The Commission also had the occasion to opine that the issuance of the certificate of filing of voluntary dissolution was sufficient to dissolve the corporation. 7 Inevitably, a dissolved corporation can no longer be revived. Those interested, however, may reincorporate by filing a new articles of incorporation and by-laws. aSACED In the instant case, the petitioner complied with all the requirements for its voluntary dissolution. As previously stated, the petitioner filed a Certificate of its Dissolution dated 24 May 1961 and attached therewith is an Affidavit of the editor of a newspaper of general circulation stating that a Notice of Dissolution of petitioner was published in the newspaper Bag-ong Adlaw in its issues of February 12, 19, 26, March 5, 12 & 19, 1961. At the time petitioner' was issued a Certificate of Filing of Voluntary Dissolution, its legal personality is terminated since a corporation ceases to exist except to wind up its affairs within a period of three (3) years therefrom. Thus, for all intents and purposes, petitioner is bereft of any legal personality to enter into any contractual relations or even to file the instant petition to revive its existence. With respect to the fine assessed upon and paid by petitioner, the amount of Five Thousand Two Hundred Pesos (Php5,200.00) must be refunded to the petitioner considering that it (petitioner) is a dissolved corporation, which is not required to file reportorial requirements. Thus, petitioner should not be penalized for not filing the required reports. Based on the foregoing premises, the instant petition is hereby DENIED. Let a copy of this Decision be furnished the Company Registration and Monitoring Department, the Economic Research and Information Department and the Financial Management Department of this Commission for their appropriate action. HScAEC SO ORDERED. Mandaluyong City. January 15, 2008. (SGD.) FE B. BARIN Chairperson (SGD.) MA. JUANITA E. CUETO Commissioner (SGD.) JESUS ENRIQUE G. MARTINEZ Commissioner (SGD.) RAUL J. PALABRICA Commissioner (SGD.) THADDEUS E. VENTURANZA Commissioner Footnotes 1. Petitioner's Certificate of Registration marked as Annex "F" of the Petition. 2. Second Article, Petitioner's Articles of Incorporation. 3. Petition, Annex "B". 4. Act No. 1459, Section 63. 5. Ibid, Section 64. 6. SEC Opinion addressed to Atty. Isidro T. Bangayan dated 06 February 1964 citing Justice Fisher. 7. Ibid.