Alejandro B. Ty vs. International Realty Corp., et al.

[SEC-SICD * CASE NO. 05-96-5335. November 3, 1999.] ALEJANDRO B. TY , petitioner , vs . INTERNATIONAL REALTY CORP., HEIRS OF THE ESTATE OF LEONARDO K. TY (represented herein by ALEXANDER S. TY and other co-heirs whose present identities are yet to be ascertained), JOHN C. B. GO, NORA T. GO, and MARIANO TORRES , respondents . DECISION Prefatory Statements This case emanated from a Petition filed by Alejandro B. Ty on May 10, 1996, praying' that an order be issued dissolving the corporate personality and existence of International Realty Corporation ("IRC" for brevity), cancelling its certificate of registration, and, as a result thereof, confirming the sole ownership of all the parcels of land and distributing all the corporate assets in favor of petitioner. AIDTHC Respondents IRC and the Heirs of the Estates of Leonardo K. Ty, namely Epifanio Po-Ty, Erlinda Ty, Carlos Ty, Marcelino Ty, Luisa Ty- Cheng, Lourdes Ty-Lim, George Ty, Ofelia Ty-Reyes, Cristina Ty-Say, Mina Ty-Lim, Alexander Ty, Benita Ty-Lim and Lawrence Ty (collectively referred to herein as "Heirs of Leonardo Ty") filed their Answer (with Compulsory Counterclaim) on June 14, 1996. Respondents John C. B. Go and Nora T. Go therein referred to as "Spouses Go") filed their Answer with Compulsory Counterclaim and Cross-claim on June 28, 1996. To both respondents Answers, petitioner filed his consolidated Reply and Answer to the Compulsory Counterclaims. Respondents Spouses Go filed their Rejoinder on August 1, 1996. Summons was served upon respondent Mariano Torres but failed to file his Answer. He never participated in any proceedings of this case. The Petition has three (3) causes of action; namely: 1) the dissolution of IRC and cancellation of its certificate of registration, 2) declaration of the ownership of certain parcels of land registered in IRC's name in favor of the petitioner and 3) distribution of corporate assets also in favor of the petitioner. Allegations of the Parties In his first cause of action, petitioner alleges that sometime in 1958, he (then known as "Ty Bio Suy"), together with deceased Leonardo K. Ty (then known as "Ty Liong Kue"), spouses Macario and Manuela Palanca, Go Pailian, Go Kim Pah and Nicolas Lim Kian Po, formed a group to organize a corporation named as International Realty Corp. for the purpose of engaging in realty business; that the subscribers named in the Articles of Incorporation of IRC are: Name Nationality No of Amount of Amount Shares Capital Stock Paid on Subscribed Subscribed Subscription Macario G. Palanca Filipino 1,000 P100,000.00 P25,000.00 Manuela P. Palanca Filipino 1,000 100,000.00 25,000.00 Ty Bio Suy Filipino 800 80,000.00 20,000.00 Go Kim Pah Filipino 1,000 100,000.00 25,000.00 Go Pailian Filipino 1,000 100,000.00 25,000.00 Ty Liong Kue Chinese 800 80,000.00 20,000.00 Nicolas Lim Kian Po Chinese 400 40,000.00 10,000.00 Total 6,000 P600,000.00 P150,000.00 that no incorporator/subscriber really paid or turned over the subscription payment to the petitioner who, at the time of the alleged incorporation of the company, was the treasurer-designate ; that some of the incorporators managed to procure from Equitable Banking Corporation a cashier's check in the amount of P150,000 payable to IRC, which amount was supposed to represent a loan to the incorporating stockholders from the said bank for the payment of their paid-up subscription to IRC; that, pursuant to the procedure of the Commission, the check was shown as a proof that there were subscriptions paid up by the incorporating stockholders so that IRC could be registered with the SEC; that after registration, the check was neither given nor entrusted to the petitioner as treasurer of the corporation as no such account was ever opened for the purpose; that to the petitioner's knowledge IRC has not opened any bank account at all; that the check was returned to Equitable Banking Corporation without the prior knowledge or consent of petitioner; that no accounting treatment or recording of the supposed loan of the stockholders from the bank was made or entered in the books of IRC and that since nobody ever paid their subscriptions, nobody has ever become stockholders of IRC except petitioner who extended money to IRC, hence its incorporation was void ab initio . As to the second cause of action, petitioner claims inter alia that IRC has not gone to or engaged itself in any business at all, except for the acquisition of certain real properties, using his own personal funds, which he caused to be registered in the name of IRC; that IRC has remained inactive and dormant in that, it has never conducted any business operations at all; that to date, IRC does not have or did not maintain any Stock and Transfer Book duly registered with the Commission, did not open any bank account, it has not hired any employee, has not rented, acquired or maintained any office, has not applied for and acquired any business permit or license, has not dealt in the purchase and sale of any real estate since 1961 and that it has not kept any books of accounts and has not complied-with the reportorial requirements of the Commission since its incorporation up to the present. Petitioner avers, moreover that IRC was issued a show cause order for noncompliance with the Commission's reportorial requirements, which resulted to the admission on the part of IRC through an affidavit executed by deceased Leonardo K. Ty, that, indeed, IRC has not been in operation for the years 1981 to 1992 and that by reason of the continuing failure of IRC to operate and conduct its business as well as to comply with the reportorial requirements of the Commission since 1958 to the present, the Commission is empowered to cancel or revoke IRC's registration, to dissolve and liquidate or distribute its assets conformably to law On his third cause of action, petitioner asserts that deceased Leonardo K. Ty, respondents Spouses Go and Mariano Torres are purportedly representing themselves as the present stockholders and officers of IRC and have allegedly arrogated unto themselves spurious and invalid positions and authority as such stockholders and officers and have been apparently doing irregular and unlawful acts and conduct in IRC in manifest violation of the law and to the damage and prejudice of the petitioner. Allegedly, as between the incorporators shown in the Articles of Incorporation of IRC (Exhibits "1-IRC", Exhibit "I" or Exhibit "A-I) and the General Information Sheet (GIS) as of August 19, 1993 executed by an alleged Acting Secretary, Manuel M. Paredes (Exhibit "L", Exhibit "8" or Exhibit "8-IRC") there are sharp differences or discrepancies namely: a) There are seven (7) stockholders in the original list as shown in Exhibit "A-1" while only five (5) in the GIS; b) Only deceased Leonardo K. Ty (or "Ty Liong Kue") and petitioner (Alejandro B. Ty or Ty Bio Suy) appear both in the two lists or exhibits and that the shareholdings of deceased Leonardo K. Ty could not or did not explain during his lifetime to the petitioner or to the Commission; and c) Macario G. Palanca, Manuela B. Palanca, Go Kim Pah, Go Pailian and Nicolas Lim Kian Po are no longer in the GIS and their stead three (3) names have been listed, namely: John C. B. Go, Nora T. Go and Mariano Torres. dctai Petitioner alleges that the noted changes were never recorded or entered in the books of IRC; these were never communicated either directly or indirectly to the petitioner; and that the Commission has never been informed or apprised of how these changes had been effected in the capital structure and shareholdings of IRC. Petitioner likewise invites the attention of this Commission regarding the changes of the officers of IRC in the GIS as of August 19, 1993 as compared to that as of January 21, 1959 (Exhibit "F") as well as its new set of directors, allegedly without the knowledge of or notice to the petitioner or any stockholder or board meetings. Because of these circumstances, petitioner claims that IRC has no legitimate stockholders, officers and board of directors who should manage its affairs and run its business. Consequently, its certificate of registration has to be cancelled, it's corporate personality dissolved and that the alleged changes produced nothing and transferred nothing, since not being stockholders, the transferors had no share in IRC to transfer. As allegations common to all causes of action, petitioner avers that while IRC had no money as the check worth P150,000.00 representing its paid-up capital was not actually paid to the corporation, but was returned to the bank, he was aware of the economic advantage and significance of acquiring real estate properties which the sellers were allegedly offering. Consequently, petitioner claims that he started to buy lands but placed the title to the land consisting of thirty four (34) titles with different sizes and locations in the name of IRC and that he was the one who negotiated, bought and paid with his own money the same parcels of land, believing that his companions, the other incorporators and subscribers to the shares of stock of IRC, may soon pay their subscriptions and operate profitably the corporation. Petitioner claims further that his expectations were not to be so for some of the incorporators and subscribers have already died without paying their. subscriptions. Because of these alleged circumstances, petitioner prays that the distribution of corporate assets and properties, including all the real properties in the name of IRC should be made only in his favor as the lone bona fide stockholder under the principle of implied trust Respondents IRC and the Heirs of Leonardo K. Ty counter allege, as special and affirmative defenses in their Answer, that petitioner is estopped from claiming otherwise when he subscribed under oath, in his Treasurer's Affidavit (marked as Exhibit "1-A" which is also part of Exhibit "A-1) that the amount of P150,000.00 in cash representing payment of the 25% subscription, has been actually transferred to him in trust and received by him for the benefit and to the credit of IRC and that such claim is also belied by respondent IRC's Statement of Assets and Liabilities as of December 29, 1958 (marked as Exhibit "2") which petitioner also signed under oath, stating that the asset of IRC was P150,000.00. They claim that respondent IRC started operation and engaged in the real estate business for which it was primarily organized by purchasing parcels of land; that; that petitioner knew and asserted to the changes in the person of the stockholders, in the number of shares and amount of stocks subscribed, as well as the amount paid on subscription considering that as stockholder and member of IRC's board, he has ready access to its records; that petitioner was notified of the board meeting on August 19, 1993 but did not attend the same and that it is highly suspicious as these are being claimed only after the death of Leonardo K. Ty. Anent the IRC's acquisition of 34 parcels of land, respondents IRC and Heirs of Leonardo Ty state that petitioner is barred by estoppel from claiming sole ownership over the said properties on the ground that on August 5, 1980, the deceased Leonardo K. Ty and petitioner already executed an Agreement (marked as Exhibit "3") dividing the real properties consisting of various parcels of land situated in the Province of Cavite on a 60% (Leonardo) 40% (Alejandro) basis; that petitioner is also guilty of laches because for the past 37 years since respondent IRC's incorporation in 1959, he did nothing to assert whatever right he allegedly had in the subject properties registered under the name of respondent IRC. They claim further that petitioner is essentially seeking the reconveyance of the said parcels of land hence, the Commission has no jurisdiction to resolve the issue on the validity of titles of respondent IRC, to order the cancellation thereof and to reconvey the same to petitioner and that the petitioner's certification on Non-Forum Shopping is fatally defective. By way of compulsory counterclaim, respondents IRC and Heirs of Leonardo K. Ty are claiming for moral and exemplary damages as well as attorney's fees. Respondents Spouses Go, on one side, also claim that the petitioner is guilty of estoppel and laches with respect to his first and third causes of action and that allegedly IRC was organized as a 50-50 venture between the Go family (where respondents Spouses Go belong) and the Ty family (where petitioner and respondents Heirs of Leonardo K. Ty belong) for the purpose of acquiring and developing real estate properties in the Province of Cavite; that the real properties mentioned in the Petition was acquired by respondent IRC on various dates using funds and resources belonging to IRC; that petitioner had been an active participant in IRC's affairs performed his duties as treasurer, including acknowledgment of money paid to IRC by the stockholders for their subscription. LLpr Accordingly, the 50-50 sharing was confirmed by the late Leonardo K. Ty in 1986 in a Revised Memorandum of Agreement (marked as Exhibit "6") and that the organizational meeting held on August 19, 1993 was validly held and very well known to the petitioner. Petitioner's execution of the Treasurer's Affidavit and Statement of Assets and Liabilities of IRC supporting its incorporation process bars him, not only on the ground of estoppel, provision of executed contract but more so on the truthfulness of his allegations, respondents Spouses Go further asseverate that if indeed petitioner had used his own money to acquire the real properties that were registered in the name of respondent IRC, then as a prudent businessman he must have closely supervised and is presumed to know what had been going on with the records and affairs of IRC, making a situation that he puts his properties in a corporation but not involved in its management and operation. Accordingly, after having signed the Memorandum of Agreement on August 5, 1980 (cf: Exhibit "3-Go") which states the parties' sharing or division of properties, including those registered in the name of IRC, it becomes unbelievable for petitioner to claim, after 16 long years, that he owns all this real properties after the death of Leonardo K. Ty; that the original 50-50 sharing agreement was confirmed in the Revised Memorandum of Agreement dated May 23, 1986 (Exhibit "6") and that if the basis of petitioners claim is constructive trust, which this Commission has no jurisdiction to adjudicate, his action should have been filed within ten (10) years. By way of compulsory counterclaim, respondents Spouses Go pray for the rectification of the stockholders' structure of IRC by declaring that the shares held by petitioner belong to the spouses and for the payment of damages and attorney's fees. Likewise, by way of cross-claim, they pray that the other individual respondents be ordered to transfer to the Spouses Go enough number of shares of IRC so as to complete their 50% ownership. In replying to the respondents' allegation, petitioner avers that in preparing the Treasurer's Affidavit and Statement of Assets and Liabilities, he was only acting on the basis of the issuance of the cashier's check in the amount of P150,000.00 by the Equitable Banking Corporation, payable to IRC, not knowing at the time that said check was not to be turned over to him as treasurer-designate or deposited to the account of IRC. Allegedly, the meeting held on August 19, 1993 was not valid because respondents Spouses Go and Mariano Torres have never shown that they became stockholders of IRC. As to the alleged agreement executed on August 5, 1980 (Exhibit "3") the same is illegal for being contrary to law, good moral, good customs, public order and public policy for two people can not, between themselves, enter into an agreement dividing the properties in the name of the corporation as there are other stockholders affected and that the action for the declaration of nullity does not prescribe. Furthermore, petitioner alleges that when he bought real properties with his own money putting the title in the name of IRC an implied trust was created. llcd Allegedly, the same grounds apply to the Revised Memorandum of Agreement dated May 23, 1986 (Exhibit "6"). Because of these, petitioner avers that respondents are not entitled to any damages. The Proceedings Thereafter, a preliminary conference was set wherein the parties agreed to proceed on hearing the merits of the case. During the trial, petitioner himself was presented as his lone witness. Respondents presented Nora T. Go, Atty. Manuel Paredes and Atty. Celso delas Alas as theirs. After the ruling on the admission of their evidence and submission of their Memoranda, the case was deemed submitted for decision. ISSUE The issues boil down on whether or not there is a ground to dissolve IRC or a ground to cancel or revoke its Certificate of Registration in accordance with law; corollary thereto or as a consequence thereof, the dissolution, and the distribution of its assets, the parcels of land included, also in accordance with law. The facts of the case On January 8, 1959, IRC was incorporated under SEC Reg. No. 14824. Its Articles of Incorporation was presented for filing with this Commission on December 29 1958. Its primary purpose was "to acquire by purchase, lease or otherwise, lands and interests in land, and to own, hold and improve, develop, manage and subdivide any real estate so acquired, and to erect or cause to be erected on any lands owned, held or occupied by the corporation, buildings, houses and other structures with their appurtenances, and to sell, lease or otherwise dispose of any lands or interests in lands and buildings, houses and other structures and other improvements at anytime owned or controlled by the corporation. (Articles of Incorporation of IRC on file with the Commission) IRC has an authorized capital stock of P3 million divided into 30,000 shares, each of the par value of P100.00. Its outstanding capital stock was P600,000.00 (25% of which has been paid) which is broken down as follows No. of Amount Amount Names Shares Subscribed Paid-up Macario G. Palanca 1,000 P100,000.00 P25,000.00 Manuela B. Palanca 1,000 100,000.00 25,000.00 Ty Bio Suy 800 80,000.00 20,000.00 Go Wim Pah 1,000 100,000.00 25,000.00 Go Pailian 1,000 100,000.00 25,000.00 Ty Liong Kue 800 80,000.00 20,000.00 Nicolas Lim Kian Po 400 40,000.00 10,000.00 6,000 P600,000.00 P150,000.00 ======== ======== ======== Ty Bio Suy was elected as Treasurer-in-Trust upon the incorporation of IRC.. As such, he executed the requisite Treasurer's Affidavit and statements of Assets and Liabilities which prompted the approval or issuance of Certificate of Incorporation by the Commission. From 1959 to 1961, real estate properties were acquired by and registered in the name of IRC (Exhibits "H", "H-1" to "H-33", "I" and "I-1" to "I-26"). The Spouses Go paid for the realty taxes of these properties (Exhibits "15" et seq.) but most of the titles (owner's copies) are in the possession of the petitioner. Meanwhile, an Agreement (Exhibit "3") was executed by and between Leonardo K. Ty and Alejandro B. Ty on August 5, 1980 with respect to their 6040 sharing agreement on the properties registered in the name of IRC and other corporations. Another agreement entitled Revised Memorandum of Agreement (Exhibit "6") was executed by and between Leonardo K. Ty and John C. B. Go on May 23, 1986 showing a 50-50 (more or less) sharing of the entire properties of IRC consisting of real estate properties. Subsequently, the Commission, through an Order dated May 16, 1992 issued by its Supervision and Monitoring Department, directed IRC to show cause why its certificate of registration should not be revoked for failure to submit/register the following: Requirements Year Covered General Information Sheet 1981 to 1993 Financial Statements 1985 to 1990 Stock and Transfer Book Two (2) alleged board meetings were held on August 19, 1993 and December 22, 1993 (Exhibits "11" and "12") and an alleged special stockholders and directors' meeting took place on January 13, 1994 (Exhibit "13"). On September 1, 1993 Manuel M. Paredes, as the Acting Corporate Secretary of IRC, wrote a letter (:Exhibit "9-A") to the Commission requesting among others to condone and/or reduce the penalties for failure to comply with the reportorial requirements of the Commission and manifesting a desire to activate and update the records of IRC with the Commission. On October 8, 1993 an Affidavit of Non-Operation executed by Leonardo K. Ty as President/Board Chairman was submitted to the Commission stating that for the years 1981 to 1992 (inclusive), the corporation did not have any business operation and "it is our desire to activate the said corporation and request for condonation or reduction of penalties" (Exhibit "D", 4th par.) On October 11, 1993, a General Information Sheet as of August 19, 1993 (Exhibit "E") was filed. This was signed by a certain Manuel M. Paredes as Acting Corporate Secretary of IRC showing an authorized, subscribed and paid-up capital of P3 million, P600,000.00 and P150,000.00 respectively. Accordingly, its outstanding capital stock is broken down as follows Subscribed Amount Stockholders No. of Shares Amount Paid Leonardo K. Ty 2,800 P280,000.00 P70,000.00 Alejandro Ty 800 80,000.00 20,000.00 John C. B. Go 1,000 100,000.00 25,000.00 Nora T. Go 1,000 100,000.00 25,000.00 Mariano Torres 400 40,000.00 10,000.00 Total 6,000 P600,000.00 P150,000.00 ===== ======== ======= and that its officers were: Names Position Leonardo K. Ty President & Chairman of the Board John C.B. Go Vice President, Board Member Nora T. Go Treasurer, Board Member Mariano Torres Tech. Adv., Board Member Alejandro Ty Board Member Manuel Paredes Secretary & Legal Counsel For violating the rules and regulations of the-Commission for failing to submit General Information Sheet and Financial Statements on time, IRC paid a penalty of P525.00 and was warned in an SMD Order dated October 21, 1993 not to repeat a similar violation in the future; if not, heavier penalty was to be imposed (Exhibit "10"). Since then, no communication was ever made between the Commission and IRC. The records do not likewise show that its Stock and Transfer Book was registered and the corporation did not further comply with the subsequent annual reportorial requirements. Now, the merits of the case : Foremost to resolve is the contention of respondents IRC and Heirs of Leonardo Ty that petitioner is essentially seeking the reconveyance of the said parcels of land, under the guise of a petition for dissolution. Allegedly, the Commission, under its limited authority, has no jurisdiction to resolve the issue on the validity of titles of respondent IRC over the subject properties, order the cancellation thereof, and reconvey the same to the petitioner. This Hearing Officer does not find such arguments tenable. The main cause of action is the revocation or cancellation of the certificate of registration of IRC which has the effect of dissolving it. P. D. 902-A is explicit on this issue. It provides, inter alia, that: xxx xxx xxx SECTION 5. In addition to the regulatory and adjudicative function of the Securities and Exchange Commission over corporations . . . registered with it as expressly granted under existing laws and decrees, it shall have original and exclusive jurisdiction to hear and decide cases involving: xxx xxx xxx "b) Controversies arising out of intra-corporate or partnership relations, between and among stockholders; between any or all of them and the corporation, . . . of which they are stockholders . .; and between such corporation, . . . and the state insofar as it concerns their individual franchise or right to exist as entity; xxx xxx xxx "SECTION 6. In order to effectively exercise such jurisdiction, the Commission shall possess the following powers: xxx xxx xxx "1. To suspend or revoke, after proper notice and hearing, the franchise or certificate of registration of corporations, partnership or associations, upon any of the grounds provided by law, including the following: xxx xxx xxx "4. Continuous inoperation for a period of at least five (5) years. xxx xxx xxx "6. Failure to file required reports on appropriate forms as determined by the Commission within the prescribed period; xxx xxx xxx" Applying this provision of law, it is clear that this Commission has jurisdiction over such kind of cause of action. As regards the other causes of action, petitioner is correct in saying that these are only incidental issues as a result of the revocation or cancellation of the certificate of registration of IRC. The action for dissolution of Freeman (in this case IRC) filed by its minority stockholders is well within the jurisdiction of the SEC to resolve in accordance with PD-902-A (Freeman Inc. vs. SEC, G.R. No. 110265, July 7, 1994). It is a rule of procedure for the court to strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation (Heirs of Crisanta Y. Gabriel-Almoradie vs. CA, G.R. No. 91385, January 4, 1994). A court should always strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation (Gokongwei, Jr. vs. SEC, G.R. No. L-45911, April 11, 1979). When an administrative agency is conferred quasi-judicial functions, all controversies regarding the subject matter falling within its specialization are deemed included, split jurisdiction is not favored (Tejada vs. Homestead Property Corp., G.R. No. 79622, September 29, 1989). Jurisdiction over the subject matter of the case is conferred by law and jurisdiction is determined by the allegation in the complaint (Salas vs. Castro, G.R. No. 100416, December 2, 1992). The nature of an action is determined by the facts alleged in the complaint and not by the facts alleged in the answer or opposition of the adverse parties (Santos vs. CA, G.R. No. 45031, October 21, 1991). The next issue to be resolved is to determine if there is a legal ground to dissolve IRC or to cancel or revoke its certificate of registration. Petitioner, in effect, is claiming that IRC has no paid-up capital by virtue of the alleged return of Equitable Bank check worth P150,000.00 representing its paid-up capital. The check, as he claims, was presented to the Commission when it was incorporated but was subsequently returned back to the bank itself. This has the effect of an inexistent or void ab initio corporation as there is no consideration of the contract that was entered into between and among the stockholders of IRC which is the Articles of Incorporation. In his testimony, as contained in an Affidavit executed on July 17, 1996, marked as Exhibit "AZ", Alejandro Ty said that: "4) While the Articles of Incorporation filed with the SEC purportedly showed that the subscribers paid on their subscription a total of P150,000.00 no incorporator/subscriber really paid nor turned over any subscription payment to me, who, at the time of the incorporation of the company, was the treasurer-designate; 5) Some of the incorporators, who were connected with the Equitable Banking Corporation, managed to procure from the Equitable Bank a cashier's check in the amount of P150,000.00 payable to IRC which amount was supposed to represent a loan to the incorporating stockholders from the said bank for the payment of their paid-up subscriptions; "6) Pursuant to and by virtue of the then existing procedure at the SEC in 1958, the check aforementioned was shown to the Examining Division of the SEC by the Corporate Secretary (Atty. Floro Carpio) of International Realty Corporation (IRC) as proof that there were subscriptions paid-up by the incorporating stockholders so that the Articles of Incorporation of IRC could be registered with the SEC. "7) However, the above-mentioned check was not turned over to me as treasurer of IRC and was not deposited to the account of the corporation, as in fact, IRC has never opened any bank account. Instead, that check was returned to Equitable Banking Corporation and had never been used by IRC. xxx xxx xxx And when cross-examined by .Atty. Gavino F; Reyes, the petitioner revealed the following: "Q. Mr. Ty, you alleged in your affidavit that there was really no actual payment to you of the P150,000.00 by the other stockholders, is that correct? TAaHIE A. The P150,000.00 was shown to me, I see the check P150,000.00 paid to IRC, Inc. Q. And you alleged, Mr. Ty, that there was really no payment to you? A. The check was presented to me, showed to me and bring back by the corporate secretary for registration and the check was not returned back to me. Q. As treasurer or trustee of the respondent corporation, did you, at any time, file a report or complaint prior to this case? Did you, at any time, file a report or complaint with the SEC regarding your claim on the alleged unpaid subscriptions by the other stockholders? A. No., I have only demand the payment for the amount to stockholders that the P150,000.00 was not paid to me. Q. When you made that demand did the other stockholders comply with your demand? A. No. Q. And when they failed to heed your demand did you report or complain with the SEC about this matter? A. No. xxx xxx xxx Q. So are you telling us, Mr. Witness, that from 1958 up to at least 1995 you did not file a report or any complaint with the SEC about this alleged non-payment of subscription? Do not look at your Counsel, Mr. Ty. A. No." (TSN, December 5, 1996, pp. 42-44) This situation kept this Hearing Officer wondering. Normally, when an irregularity happens, one has to immediately complain or report it to the proper forum. Though it may be delayed, but may not normally reach to the extent of more than 30 years. Also when cross-examined, the petitioner as witness said that he can not file anything against his brother, (TSN December 10, 1996 p.21) on the ground that as a family tradition, the elder or eldest is given the complete trust and confidence on whatever action he may want to pursue for the family. cdphi This Hearing Officer is not persuaded by such kind of argument. The petitioner is already of legal age, he is a Filipino (TSN December 19, 1996 p. 28) and has been in the Philippines for quite a long time now as he is engaged in business. As such he is bound to comply with all laws of the Philippines. When an Articles of Incorporation of a stock corporation is presented for registration with this Commission, it is mandatorily accompanied with a Treasurer's Affidavit as required by law. And the wordings of the Affidavit, which was signed under oath by the petitioner himself, is to the effect that the paid-up capital had been actually transferred to him in trust and received by him for the benefit and to the credit of the corporation . Likewise, in the Statement of Assets and Liabilities of IRC as of December 29, 1998 which accompanied its Articles of Incorporation, it is shown therein that IRC's capital consisted of cash in the amount of P150,000.00 This was again signed under oath by herein petitioner a.k.a. Ty Bio Suy. The excuse of the petitioner that he signed these documents without reading them as these are just standard forms (TSN, December 5, 1996, pp. 36-40) is untenable. If the Commission upholds such contention, then nobody would believe the credibility of the informations that can be culled from the records or files of this Commission as most of them are made in standard format. This is precisely the reason why such requirements should be signed under oath so that if the affiant is not telling the truth, he should then be held liable for perjury. Another evidence showing the existence of IRC is Exhibit "7" which is a letter requesting the change of principal office from 453 Echague St., Quiapo, Manila to R-1001 Ermita Center Bldg., 1350 Roxas Blvd., Ermita, Manila. This was requested by petitioner himself. Interestingly, the petitioner, who was the treasurer-in-trust, is also a subscriber of IRC. He appears to have contributed the amount of P20,000.00 which is part of the P150,000.00 paid up capital (Exhibit "A"). The petitioner is claiming the entire P150,000.00 to have been returned back to the bank. It may appear though that this is a declaration against one's own interest when he said that IRC has no paid up capital, but analyzing it well, it is in his favor. The Articles of Incorporation showing such itemized paid-up capital by the subscribers was duly acknowledged before a notary public, meaning that the parties therein, petitioner included, appeared before and declared that they were all known by the notary public and that they acknowledged that they executed and signed the same freely and voluntarily. Petitioner is even saying that he used the corporation when he acquired the real estate properties which he is claiming to be his own as these were in IRC's name. And the unilateral deeds which conveyed the ownership of the land from the sellers to IRC almost uniformly provide that IRC was the buyer without mentioning any authorized representative or agent. It is ,thus, the conclusion of this Hearing Officer that, for all legal intents and purposes, there was no legal impediment in the incorporation of IRC. In fact, the corporation, as it is, is legally and validly existing. It is not a void ab initio corporation. However, the question here is whether or not there is a ground to revoke the certificate of registration of IRC. Section 6 i) of P.D. 902-A * provides that among the grounds in revoking the certificate of registration of corporations are: 1. Continuous inoperation for a period of at least five (5) years and 2. Failure to file required reports on appropriate forms as determined by the Commission within the prescribed period. The policy of the Commission which this Hearing Officer is taking judicial notice of, is that a stock corporation has to submit/comply with the following requirements within the stated period, to wit: Requirements Due Date Registration of Stock & Transfer Book within 30 days from the date of issuance of Certificate of Incorporation General Information Sheet within 30 days from the date of the actual meeting Notice of Postponement of at least 10 days before the Annual Meeting date of the annual meeting. Financial Statements within 120 days after the end of the fiscal year Affidavit of Non-Operation/Cessation within 125 days after the end Of Business Operation of the fiscal year A. close scrutiny of the evidence presented reveals that IRC submitted only the following requirements: Period Reportorial Requirements Covered Date Submitted General Information Sheet 1959 March 16, 1959 General Information Sheet 1993 October 11, 1993 Affidavit of Non-Operation in lieu of Financial Statement 1981-1992 October 8, 1993 By virtue of the Order of this Commission, through the Supervision and Monitoring Department, dated October 21, 1993 (Exhibit "10"), the documents required to be submitted for the period 1981 to 1993 was effectively obliterated. The evidence implies that IRC did not submit its General Information Sheet for 1994 to 1996 and financial statements for 1993 to 1996; and that it did not register its Stock and Transfer Book (Exhibit "9"). However, these are only with respect to the reportorial requirements. The issue is: Did IRC not operate for a period of at least five (5) years? Exhibit "9" (the Affidavit of Non-Operation of IRC executed by Leonardo Ty) is an express admission on this issue. LLjur In fact, the testimony of Manuel M. Paredes (respondents' witness)as contained in his Affidavit confirms this, to wit: "2. The former Corporate Secretary of the Corporation, Atty. Floro D. Carpio, had been dead for quite sometime before I became acting corporate secretary, for which reason, the corporation, which has been inoperational for quite sometime, had failed to comply with the reportorial requirements of the SEC for several years" (Exhibits "18", second declaration thereof) and that Nora T. Go likewise testified and confirmed IRC's long period of non-operation (Exhibit "17", Third declaration thereof; TSN, 23 June 1997 pp. 6 and 14) No testimony was mentioned that IRC has reactivated or started its operation. This Hearing Officer is not unmindful of the acquisition of real estate properties located in the Province of Cavite which were registered in the name of IRC. But even assuming that these constitute some sort of its operation, as stated earlier, these transpired during the years 1958 to 1961. What happened then after those years up to the present? Obviously, more than five (5) years have elapsed without any operation to speak of. This is a clear ground to dissolve a corporation by revoking its franchise or certificate of registration. Here comes the next issue which is the consequence of the revocation of the franchise of IRC. This means that since IRC is to be dissolved, necessarily the assets in its name must be distributed. And the issue to be resolved here is: to whom should its assets be distributed or conveyed? Petitioner claims that everything should be given to him because there is no money or paid up capital of IRC making it incapable to acquire the land in its name and that he bought the land with his own money and placed the titles in the name of IRC (Affidavit of Alejandro B. Ty, pp 3 & 4, which served as his direct testimony). Petitioner admits and declares that there are approximately thirty four (34) parcels of land registered in the name of IRC but the titles are in his possession, some of which have been lost or misplaced. The real property registered in the name of IRC are as follows: TCT No. Lot-Block/Subd. Plan/GLRO Rec. No. Area Location T-1222 6799/Fls-1270-D/Rec. No. 8843 60,026 Sq.m. Dasmarias, Cavite T-1577 7600/Fls-2287/Rec. No. 8843 13,245 Sq.m. Dasmarias, Cavite T-1578 7605/Fls-2287/Rec. No. 8843 31,518 Sq.m. Bacoor, Cavite T-890 6561/Fls-404-D/Rec. No. 8843 43,763 Sq.m. Bacoor, Cavite T-1038 5730-A/Rec. No. 8843 61,199 Sq.m. Imus, Cavite T-1054 1-A-7/Psd-19955/Rec. No. 20852 140,000 Sq.m. Silang/Carmona Cavite. T-1056 6619-N/Fls-2422/Rec. No. 8843 24,093 Sq.m. Dasmarias, Cavite T-1057 7608/Fls-2287/Rec. No. 8843 65,547 Sq.m. Dasmarias, Cavite T-1059 6577/Fls-458-D/Rec. No. 8843 30,000 Sq.m. Bacoor, Cavite T-1061 6542/Fls-436-D/Rec. No. 8843 13,748 Sq.m. Imus, Cavite T-1063 8319/Psd 29504/Rec. No. 8843 25,382 Sq.m. Dasmarias, Cavite T-1064 6594/Rec. No. 8843 119,117 Sq.m. Dasmarias, Cavite T-1220 8320/Psd 29504/Rec. No. 8843 15,087 Sq.m. Dasmarias, Cavite T-1424 8095/Rec. No. 8843 22,015 Sq.m. Imus, Cavite T-1507 6558/Fls 404-D/Rec. No. 8843 33,929 Sq.m. Bacoor, Cavite T-1508 5759/Fls 1270-D/Rec. No. 8843 40,000 Sq.m. Dasmarias, Cavite T-1509 6956/Fls 1848/Rec. No. 8843 50,991 Sq.m. Bacoor, Cavite T-1510 5799/Plan A-15/Rec. No. 8843 69,791 Sq.m. Bacoor, Cavite T-1511 5743/Psd-2198/Rec. No. 8843 115,726 Sq.m. Bacoor, Cavite T-1520 7048/Fls-2248/Rec. No. 8843 55,609 Sq.m. Dasmarias, Cavite T-3407 5801/Fls-1847/Rec. No. 8843 47,122 Sq.m. Bacoor, Cavite T-3431 7153/Fls-2288/Rec. No. 8843 55,279 Sq.m. Bacoor, Cavite T-3465 7447/Fls 2303/Rec. No. 8843 55,617 Sq.m. Bacoor, Cavite T-3480 7771/Fls 2422/Rec. No. 8843 15,610 Sq.m. Dasmarias, Cavite T-3549 6616/Fls 2422/Rec. No. 8843 42,623 Sq.m. Dasmarias, Cavite T-3601 7471/Fls 2292/Rec. No. 8843 7,801 Sq.m. Bacoor, Cavite T-3826 6950/Fls 1848/Rec. No. 8843 51,313 Sq.m. Imus, Cavite T-888 5810/Rec. No. 8843 44,447 Sq.m. Bacoor, Cavite T-889 7078/Fls 2247/Rec. No. 8843 34,457 Sq.m. Bacoor, Cavite T-932 7032/Fls 2230/Rec. No. 8843 37,451 Sq.m. Dasmarias, Cavite T-936 7047/Rec. No. 8843 80,873 Sq.m. Dasmarias, Cavite T-983 7011/Fls-2230/Rec. No. 8843 31,298 Sq.m. Dasmarias, Cavite T-1055 5821/Fls 1819/Rec. No. 8843 39,360 Sq.m. Bacoor, Cavite T-1219 7470/Fls 2292/Rec. No. 8843 42,253 Sq.m. Bacoor, Cavite (Exhibits "H", "H-1" to "H-33", inclusive) As discussed earlier, IRC was validly incorporated. Thus, it has stockholders or shareholdings to speak of. Corollary thereto, it is likewise necessary to determine the validity of IRC's alleged board meetings held on August 19, 1993, December 22, 1993 and January 13, 1994. The minutes consistently show Leonardo K. Ty, Mr. John C. B. Go, Nora T. Go, and Atty. Mariano P. Torres as members of the board. Mr. Alejandro B. Ty, the petitioner herein, is shown as director but was absent on the August 19, 1993 meeting (Exhibits "11", "12" & "13"). Worth noting is the observation of petitioner regarding the changes made in the composition of the directors and officers of IRC. In the General Information Sheet (GIS) as of January 21, 1959 (Exhibit "F"), the following are shown: Names Shown as Macario G. Palanca President, Director Go Kim Pah Vice-President, Director Go Pailian Gen. Manager, Director Ty Bio Suy Treasurer, Director Floro D. Carpio Secretary Manuela D. Palanca Director On the other hand, the 1993 GIS (Exhibit "E") shows the following: Names Shown as Leonardo K. Ty President, Chairman of the Board John C. G. Bo Vice-President, Director Nora T. Go Treasurer, Director Mariano Torres Tech. Adv., Director Alejandro Ty Director Manuel M. Paredes Legal Counsel These, when compared with the Minutes of Meetings, show disparity of the board membership. Only the petitioner is shown as director both in 1959 and 1993. Leonardo K. Ty, John C. B. Go, Nora T. Go and Mariano Torres who were shown as directors in 1993 were not shown as directors in 1959. During the cross-examination of Nora T. Go on June 23, 1997, the following transpired: Petitioner's counsel cross-examining "xxx xxx xxx Q. So you are not stockholders. You only represent the Go family in the corporation? A. In a way, yes, we are representing the Go family. Q. And you represented the Go family in International Realty Corporation in 1993? xxx xxx xxx A. No. since 1980. Q. But in your Affidavit you said that you became registered stockholders which means that you became representatives of the Go family in 1993. Atty. Buyco: Even before that the Go family, Your Honor, are already stockholders. It is in the record. xxx xxx xxx Atty. Ferrer: xxx xxx xxx Q. So you said in your own understanding that you became registered stockholders only in 1993? A. Yes, sir. Q. Before 1993 your were not considering yourselves as stockholders? A. We were not stockholders, my husband and I were not stockholder of the International Realty Corporation because at that time the corporation was non operational. We became stockholders of the corporation when Mr. Ty decided to revive the operations of the corporation. Hearing Officer: How were you able to become a stockholder of the corporation? A. We were, in a way, invited by Mr. Ty. He said to us that for us to sit in the board we should own some shares of stock and since the Go family owns 50% of the properties and the names registered in the corporation under Go Kim Pah and Go Pailian showed only 2,000 shares. . . Hearing Officer: So they assigned to you? A. So the understanding was for Mr. Ty to assign the remaining of the 50%. Hearing Officer: Was there an assignment? A. No, there was none. Actually, they only changed our names, they only changed the names of Go Kim Pah and Go Pailian to John Go and Nora Go. There was no . . . . .the lawyer, Atty. Paredes, I mean the group of Leonardo K. Ty, so there it does not show any increase in our holdings at all. So actually, there is nothing to show how we became stockholders. There is no difference at all, our holdings remain the same, except that the names of my brother-in-law were taken out and in place they put in the names of my husband and myself. xxx xxx xxx (TSN, 23 June 1997, pp. 11-15, emphasis supplied) When Manuel Paredes, the allegedly elected Corporate Secretary on August 19, 1993 and the one who executed the 1993 GIS said in his cross-examination that he never encountered or possessed any documents where John Go, Nora Go and Mariano Torres acquired the Stocks of IRC from the original stockholders. The cross examination is quoted as follows: xxx xxx xxx Q. And also up to the present you have not seen any deed of assignment, transfer of shares or deed of sale of the shares of stock of Macario Palanca and his wife Manuel Palanca in favor of Leonardo Ty? A. I have not seen any document although he said that belongs to him. Q. Actually, all your knowledge on this alleged acquisition of shares of stock of John C. B. Go, Nora T. Go and Mariano Torres and the acquisition of stock by Leonardo Ty from Macario Palanca and Manuela Palanca were all on the basis of information relayed to you by Mr. Leonardo Ty? A. Yes, Sir? Q. In a General Information Sheet dated August 19, 1993, marked Exhibit "8" that you submitted to the Securities and Exchange Commission you reported as stockholders Leonardo Ty, Alejandro Ty, John C. B. Go, Nora T. Go and Mariano Torres. Do we understand from your own knowledge the original stockholders Mariano G. Palanca, Manuela B. Palanca, Go Kim Pah, Go Pailian and Nicolas Lim Kian Po had all been replaced by these stockholders listed in Exhibit "8" A. Yes, sir, as per instructions of Mr. Leonardo Ty. xxx xxx xxx Q. Aside from Mr. Leonardo Ty was there any other person who told you that the corporation, International Realty Corporation, was owned on a 50-50 basis by the Ty family and the Go family? A. I think there was some insinuations from the spouses to that effect because they are a party to that participation. Q. When you said Go spouses you refer to John Go and Nora Go. A. Yes sir. Q. Do you know Go Pailian personally? A. No sir, Q. Do you know Go Kim Pah personally? A. No sir, I just heard their names. Q. And these two never talked to you about International Realty Corporation? Witness: Who? Atty. Ferrer: Go Kim Pah and Go Pailian. A. No, No, I never met them in connection with this matter. Q. They had never told you that their shares should be transferred to John Go and Nora Go? A. No sir. xxx xxx xxx Q. And Macario Palanca and Manuela Palanca have never told you that they have assigned their shares of stock in International Realty Corporation to Mr. Leonardo Ty? A. No sir, I have not met them . . ." (TSN 12 August 1997 pp. 22-30 and 38) Likewise, when witness Nora T. Go was cross-examined, she answered the following questions, to wit: "xxx xxx xxx Q. You replaced the names of Go Kim Pah and Go Pailian as stockholders. Did they execute in your favor deed of assignment? A. No, I am not aware of that. As of now I don't have the knowledge, but I know that all this was done by Mr. Leonardo Ty. Q. So, on your own, you really do not know why you became a stockholder but all these were done by Mr. Leonardo Ty? A. In a way, yes. LibLex xxx xxx xxx" (TSN, June 30, 1997 pp. 42) Basic is the corporate principle that a person must own at least one (1) share of stock of a corporation before being qualified as its director. Stated differently, a person could not legally be a director in a corporation if he does not own at least one (1) share in its capital stock. Likewise observed is the absence of evidence that there was a stockholders' meeting in which the 1993 board of directors were elected. One can not be a director without being nominated and elected in a stockholders' meeting or in a directors' meeting if quorum still exists. The inescapable conclusion then is that only Alejandro Ty, among the alleged 1993 directors, is the legitimate director of IRC and the effect is that the August 19, 1993 and December 22, 1993 alleged meetings of the board of directors are null and void considering that there was actually and legally no quorum during said directors' meeting. The January 13, 1994 meeting is labeled as minutes of "stockholders' and directors' meetings". However, the minutes, although it shows that more than 86% of the outstanding shares were duly represented, does not show that there was an election of the members of the board of directors. It merely states the approval, confirmation and ratification of the alleged minutes of previous meeting held on December 22, 1993 as well as all previous acts of the directors, officers, stockholders and management (Exhibit "13"). Again, on the basis of these circumstances, there were no valid changes in the membership of the IRC's 1959 board of directors. Also, all the pieces of evidence presented show that there was no valid transfer of shares of IRC since its incorporation. The provision of the Corporation Code is enlightening on when shares of stock in a corporation could be validly said to have been legally transferred. "SECTION 63. Certificate of Stock and Transfer of Shares . . . . shares of stock so issued are personal and may be transferred by delivery of the certificate or certificates indorsed by the owner or his attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation so as to show the names of the parties to the transaction, the date of the transfer, the number of the certificate or certificates and the number of shares transferred. No shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation." Relative to such provision, this Hearing Officer is taking judicial notice of the policy of the Commission that partially paid shares of stocks could not be transferred or assigned unless accompanied by a board resolution of the issuing corporation approving such transfer. prLL The requirements are not present in the alleged transfer of shares of IRC. This is aside from the fact that the assignees are claiming the subject shares of stock of IRC without showing proof of assignment duly signed by the assignors. Obviously, the transfer should be in writing because the law speaks of endorsement and one cannot endorse without writing it. The Special Power of Attorney (Exhibit "6-D") executed by Go Pailian, a named stockholder in the articles of incorporation of IRC specifically appointed, named and constituted John C. B. Go as the representative of the former in connection with this case. This being so, the stockholders of IRC as well as their shareholdings are still those enumerated in its Articles of Incorporation. However, with the evidence presented that several parcels of land have been registered in the name of IRC and the conclusion arrived at that there is a ground to revoke IRC's franchise, to whom then should the said properties registered in its name be transferred, distributed or conveyed' This Hearing Officer is confronted with conflicting claims: one by petitioner that the money used to buy the properties came from his own pocket and the other by respondents Spouses Go who claim that they contributed one half for the acquisition. Worth reiterating are the real estate properties registered in the name of IRC, together with relevant informations such acquisition, date when the title was issued to IRC, and the purchase price to wit: Date TCT Date Deed Purchase TCT No Was issued Date of Deed was notarized Price T-1222 March 24, 1960 June 16, 1958 June 16, 1958 P4,802 T-1577 June 17, 1960 June 26, 1958 June 26, 1958 900 T-1578 June 17, 1960 June 26, 1958 June 26, 1958 2,000 T-890 January 27, 1960 Dec. 30, 1958 January 27, 1960 4,376 T-1038 Feb. 29, 1960 Feb. 10, 1959 February 29, 1960 6,120 T-1054 March 2, 1960 April 10, 1959 April 13, 1959 14,000 T-1056 March 2, 1960 Feb. 26, 1959 February 29, 1960 2,409 T-1057 March 2, 1960 Feb. 17, February 29, 1960 6,554 T-1059 March 2, 1960 May 7, 1959 May 7, 1959 1,800 T-1061 March 2, 1960 April 6, 1959 February 29, 1969 1,374 T-1063 March 2, 1960 May 2, 1959 March 2, 1960 1,776 T-1064 March 2, 1960 March 2, 1960 March 2, 1960 10,000 T-1220 March 24, 1969 Mar. 24, 1960 March 24, 1960 1,056 T-1424 May 13, 1960 April 18, 1959 April 18, 1959 2,201 T-1507 May 30, 1960 (Illegible) (Illegible) 3,000 T-1508 May 30, 1960 (Illegible) (Illegible) 1,000 T-1509 May 30, 1960 (Illegible) (Illegible) 4,000 T-1510 May 30, 1960 May 30, 1960 May 30, 1960 6,000 T-1511 May 30; 1960 May 30, 1960 May 30, 1960 9,000 T-1520 June 2, 1960 May 15, 1959 June 29, 1959 5,004 T-3407 July 28, 1961 July 28, 1961 July 28, 1961 4,712 T-3431 August 2, 1961 May 18, 1959 July 9, 1959 5,527 T-3465 August 9, 1961 Aug. 9, 1961 August 9, 1961 3,893 T-3480 August 11, 1961 June 2, 1959 June 2, 1959 1,561 T-3549 August 31, 1961 June 2, 1959 June 2, 1959 4,262 T-3601 September 8, 1961 Jan. 29, 1959 Jan. 29, 1959 780 T-3826 October 17, 1961 Mar. 24, 1960 March 24, 1960 5,131 T-888 T-888 January 27, 1960 (The deed, which is the basis of this data is T-889 January 27, 1960 not available) T-932 February 4, 1960 " T-936 February 4, 1960 " T-983 February 16, 1960 " T-1055 March 2, 1960 " T-1219 March 24, 1960 " (Exhibits "H", "H-1" to "H-33" and "I", "I-1" to "I-26", inclusive) It may be observed that, indeed, as petitioner claims, the land acquisition started way back before IRC was incorporated on January 8, 1959 (Exhibit "A"). However, all of the subject properties were registered in the name of IRC after it was incorporated. The logical conclusion then after weighing the claims of the contending parties is that IRC was incorporated as a reenactment of the joint venture agreement of the parties in engaging in the real estate business The incorporation of IRC is a spontaneous manifestation of the joint venture agreement among the incorporators. IRC was used as a vehicle in their intention to acquire real properties as future investments. Petitioner supports his claim that he alone paid and negotiated these parcels of land by presenting the corresponding titles (Exhibits "H" to "H- 33) and deeds of conveyance (Exhibits "I" to "I-26"). The rest of his evidence are his own testimony. Respondents Spouses Go, on the other hand, presented the agreement between Alejandro Ty and Leonardo Ty dated 5 August 1980 (Exhibit "3"), deeds of sale (Exhibits "4", "4-A" et. seq.), letter of Alejandro Ty to Leonardo Ty dated 31 May 1990 (Exhibit "5"), Agreement between Leonardo Ty on one hand, and respondent John Go and Peter Go Pailian, on the other hand, dated May 23, 1968 (Exhibit "6"), General Information Sheet as of 19 August 1993 (Exhibit "8") receipts on the payment of realty taxes (Exhibits "15", "15-A" et. seq.) and tax declaration sheets (Exhibits "16", "16-A" et seq.) to support their claim that they own 50% of the properties registered in the name of IRC. These are aside from the testimony of Nora T. Go, Manuel R. Paredes and Celso de las Alas. The Transfer Certificates of Title (Exhibit "H", "H-1", et seq.) presented by petitioner as one of his evidence show that the registered owner is IRC. There is no showing that the real properties have been registered in favor of IRC as the trustee of the petitioner, not even an annotation or inscription on the titles to this effect. The petitioner's other documentary evidence are the Deeds of Conveyance (Exhibits "I", "I-1", et seq.). All of these deeds show that the buyer of the subject lots was IRC and that IRC was the one which paid the purchase prices thereof. Nowhere in the deeds will one find the name or even the participation of herein petitioner. Thus, petitioner's testimony could not belie the fact stated in the deed, which are public documents, that IRC was the buyer of said properties. A recital in a public document celebrated with all the legal formalities under the safeguard of a notarial certificate is evidence against the parties and a high degree of proof is necessary to overcome the presumption that such recital is true. In the present case, the biased, interested testimony of plaintiff can not overcome the evidentiary force of the provisional contract of lease which was ratified before a notary public and hence a public document (Francisco, Evidence, Vol. VII, Part II 1991 Ed pp. 355-358) Here, this Hearing Officer is not convinced of the petitioner's claim that he was the one who purchased the subject real properties using his own money. Petitioner did not present any concrete and convincing ,documentary evidence or other witnesses to corroborate his claim. It is well settled that uncorroborated testimony of an interested witness is not sufficient to overcome a public document (Francisco, Evidence, Vol. VII Part-II 1991 Ed, pp 356) The other evidence presented are that of the respondents, one of which is an agreement (Exhibit "3") dated August 5, 1980 executed by and between Leonardo K. Ty and herein petitioner wherein both parties who called themselves as "co-owners of various parcels of land situated in the province of Cavite," registered in the name of corporations and individuals agreed to divide the same land or real properties, including those registered in the name of IRC on a 60-40 basis. Of the thirty-four (34) titles subject of this case, only six (6) were supposed to be the share of petitioner. During the trial held on December 10, 1996, petitioner admitted having executed and signed said agreement with Leonardo K. Ty, to wit: "xxx xxx xxx Atty. Reyes: May we allow first the witness to confirm whether or not he executed such an agreement. Do not look at your counsel, Mr. Witness. Hearing Officer: Witness may answer. A. You know, may I explain? Atty. Reyes: No, Mr. Witness, you are only asked whether you executed. . . A. What do I say, yes or no or do I explain later? . . . Atty. Reyes: You just answer yes or no, no explanation. A. Yes. Q. And if you are shown an original copy of said agreement, will you be able to identify the same? A. I can identify my signature. Q. Mr. Witness, I am . showing you this agreement consisting of 7 pages and duly notarized before Atty. Ernesto R. Javalera on August 5, 1980. Kindly examine this and tell this Honorable Commission if this is the agreement you executed with your late brother Leonardo K. Ty wherein you agreed to divide properties consisting of real and personal on a 60-40 basis? A. You know, I cannot refuse my brother, whenever he wants me something to do I do. I signed this not on my own will because my brother pressured me because at that time I always obey my brother, not only limited to this matter, to my other companies, Manila Paper Mills. . . . Atty. Reyes: May I remind the witness, Your Honor, to just state whether this is the agreement that he executed without interposing any other explanation. Kindly examine this, Mr. Witness, and tell this Honorable Commission if this is the agreement that you executed. A. Yes, this is the agreement. xxx xxx xxx" (TSN, December 10, 1996. pp 10-13) The explanation of petitioner that he executed the agreement because he could not refuse, or that he was pressured by his brother whenever his brother would like him to do something is a thought that came after the signing of the document. It could not overcome the very provisions of the agreement which was later on acknowledged before a Notary Public. The self serving and interested testimony of the petitioner could not prevail over the very provisions of a public instrument. However, the effect of the execution of such agreement is discussed below. Another document which also shows that petitioner is not the lone owner of the subject real properties is the Revised Memorandum of Agreement (Exhibit "6" and "6-IRC"') dated May 23, 1996 between Leonardo K. Ty and respondent John Go. In this agreement, the parties agreed to divide the real properties and distribute between themselves, as far as practicable share and share alike, pending the formal dissolution of IRC. The division of properties consists of two (2) groups. Group I which allegedly belongs to Leonardo K. Ty, includes 18 lots with a total area of 89.3006 hectares, more or less, while Group II which allegedly belongs to John C. B. Go, includes 19 lots with a total area of 88.7503 hectares, more or less. This agreement appears to have been executed on May 23, 1986 and had been acknowledged before a Notary Public. Exhibit "6" was executed later than Exhibit "3" and the common party to these agreements is Leonardo K. Ty. The real properties covered by Exhibit "6" include the coverage of Exhibit "3". Exhibit "6" specifically mentions or covers the properties that are the subject of this case. Another inviting provision of Exhibit "6" is that it accordingly "supersedes and cancels the verbal and/or written agreement heretofore executed by the parties." (par. 6 of page 4, supra) As a general rule, when one claims ownership of real estate property, he has to pay the corresponding realty taxes. In this case, some of the realty taxes were paid not by petitioner and that the covering tax declarations are not in his possession. These are collaborating evidence that belie petitioner's claim that he is the lone owner. Still another document which effectively admits that petitioner is not the lone owner of the subject real properties is the letter of the petitioner .himself to Leonardo K. Ty dated 31 May 1990 marked as Exhibit "5" and "5-IRC". In this letter petitioner was asking that the properties registered in the name of IRC be divided into three equal parts for "you, myself and John". (Exhibit "5-B") Exhibit "5-B" is quoted as follows: "First of all, there are only three surviving directors today, namely you, myself and John. Among the three of us, John is the youngest and I shall presume that he will survive us both. It is therefore important that we have to take the necessary action now so that our interests will be preserved. In the event that both of us are no longer here and this matter has not yet been settled John and his family will definitely get all. "Being the majority of the directors, it is but natural that we take the initiative regarding this matter and that our position be carried out. Since both Palanca and Kian Po got already their respective shares in the company, I propose that all the land properties of International Realty Corporation be divided equally into three (3) parts, this is one part each for you, myself and John. This sharing, I honestly feel, is fair and beneficial to everybody concerned." When cross-examined about this Exhibit "5", petitioner answered the following questions as follows: "xxx xxx xxx Q. This is a letter dated May 31, 1990 Mr. Ty. This is addressed to my dear brother. You only have one brother? A. Yes. Q. And that is the late Leonardo K. Ty, right? A. Yes. Q. And there is a signature at the bottom on top of the printed name Alejandro which looks like your signature? A. Yes. xxx xxx xxx" (TSN, 21 January 1997, pp. 27-28) Although petitioner denies having known one named "John" as stockholder of IRC but he did not deny having written the same letter. (TSN, 21 January 1997 p. 31). Strange as it may seem but this Hearing Officer is not persuaded. The "John referred to in Exhibit "5" is clearly John C. B. Go whose family or connections helped in financing the acquisition of the subject properties. It is true that there is no "John" named as stockholder of IRC but petitioner could not deny the fact that Go Pailian, an admitted stockholder, authorized certain John C. B. who perforce must be the respondent in this case to represent Go Pailian. Exhibit "5" was executed way back February of 1985 while petitioner's letter was dated 31 May 1990. And so "John" here really is not a stockholder of IRC but only authorized representative of Go Pailian, an admitted stockholder. It is becoming clearer that petitioner was not alone when the properties registered in IRC's name were purchased. And the old time maxim that no one shall enrich himself at the expense of another is squarely applicable in this case. The letter is akin to a declaration which is of the highest evidentiary value being one against the declarant's own interest. Petitioner could not have written this letter unless it is true and correct or that he could have corrected himself if this is not correct by repudiating or recanting or renouncing, among others, the said letter. No convincing explanation was given why the letter should given due weight. Petitioner's answer "I do not know, I did not read it" to a question about the contents of Exhibit "5" in a hearing held on January 21, 1997 is not credible. After identifying that the signature that appears in Exhibit "5" is his, petitioner can not deny that he does not know the contents of the same letter. This is not a form letter and so he could not say that he just signed it. There was no evidence presented to the effect that he was forced to sign it. All of these documentary evidence, when taken together, show that petitioner is not the lone owner of the subject real properties covered by the thirty-four (34) titles. And even assuming that petitioner was the one who paid the purchase price of these properties, he did nothing to protect and assert whatever claim he has in the same properties for more than thirty (30) years since their acquisition and registration in the name of IRC. This Hearing Officer agrees with respondents IRC and the Heirs of Leonardo K. Ty that relief will be denied to a litigant whose claim or demand has become "stale", or who has acquiesced for an unreasonable length of time or to one who has not been vigilant or who has slept on his right, either by negligence, folly or inattention (Joson vs. Nable, G.R. No. L-3450, September 19, 1950, 87 Phil. 337) This Hearing Officer also agrees with the petitioner that two (2) individuals could not divide between the two of them the properties of a certain corporation. The properties of a corporation are not the properties of the stockholders and the stockholders as individuals could not just dispose of corporate properties. The stockholders have no proprietary rights over the specific assets belonging to the corporation (Stockholders of Guanzon & Sons Inc. vs. Register of Deeds of Manila, G.R. No. L-18216, October 30, 1962). A corporation is a juridical person separate and distinct from its stockholders while shares of stock constitute personal property, they do not represent property of the corporation (Nelson vs. Owen, 113 Ala., 372, 21 So 75) and the distribution of corporate assets on the basis of Exhibits "3" and "6" would create injustice on the part of the other stockholders. The documentary evidence presented by the respondents Exhibits "3" and "6") treat of the division or distribution of the assets of IRC. Nobody among the parties herein presented documentary evidence to the effect that they were indeed the one who paid for the real properties in the name of IRC. This being the case, it is but logical to apply the presumption of regularity of the transactions that were entered into by IRC with the different sellers of the real properties in acquiring the same properties. What happened in this case is that only the three (3) groups exerted efforts and spent their money in the acquisition of the subject properties, namely, the petitioner, Alejandro B. Ty, the Heirs of Leonardo Ty and the Go family represented herein by John C. B. Go. The rest of the stockholders have been stated by petitioner in Exhibit "5" to have received their share in IRC. Nobody contradicted or refuted this statement. And so it is but proper that the same properties be distributed to said three (3) groups. Section 122 of the Corporation Code on corporate liquidation provides that: "xxx xxx xxx Any time during said three (3) years, said corporation is authorized and empowered to convey all of its property to trustees for the benefit of stockholders, members, creditors and other persons in interest. From and after any such conveyance by the corporation of its property in trust for the benefit of its stockholders, members, creditors and others in interest, all interest which the corporation had in the property terminates, the legal interest vests in the trustees and the beneficial interest in the stockholders, members, creditors or other persons in interest. "Upon winding up of the corporate affairs, any asset distributable to any creditor or stockholder or member who is unknown or cannot be found shall be escheated for the city of municipality where such assets are located. ". . ., no corporation shall distribute any of its assets or property except upon lawful dissolution and after payment of all its debts and liabilities." This Hearing Officer has no recourse but to apply the most equitable way of distribution of IRC's assets. And this is based on the letter of the petitioner (Exhibit "5") wherein petitioner is estopped to deny its content. Whenever a party has by his declaration, act or omission, intentionally and deliberately led the other to believe a particular thing true, and to act upon such belief, he cannot, in any litigation arising out of such declaration act or omission be permitted to falsify it (De Castro vs. Ginete, G.R. No. L-30058, March 28, 1969). The doctrine of estoppel is based upon the grounds of public policy, fair dealing, good faith and justice and its purpose is to forbid one to speak against his own act, representations or commitments to the injury of one to whom they were directed and who reasonably relied upon (PNB vs. CA, G.R. No. L-30831 & L-31176, November 21, 1979). The doctrine of estoppel springs from equitable principle and equities in the case. It is designed to aid the law in the administration of justice where without its aid, injustice might result. It has been applied by the Supreme Court wherever and whenever special circumstances of a case so demand. (Kalalo vs. Luz, G.R. No. L-27782, July 31, 1970) WHEREFORE, premises considered, judgment is hereby rendered: 1. revoking the Certificate of Registration of International Realty Corporation issued by this Commission on January 8, 1959 and dissolving its corporate existence; 2. ordering that the legal transferees or recipients of the subject parcels of land or real properties herein-above described and enumerated, as a result of the revocation and dissolution of International Realty Corporation, are Alejandro B. Ty, 1/3 share; Heirs of Leonardo K. Ty, 1/3 share; and Go Kim Pah and Go Pailian, 1/3 share, in each of the thirty-four (34) titles covering the same subject real properties and all other assets/properties in the name of IRC; 3. ordering the Register of Deeds of the Province of Cavite to convey unto said recipients or transferees all of the subject real properties covered by thirty-four (34) titles in accordance with the above stated sharing. Each of them shall pay the necessary expenses to effect the said transfer pro-rata or in accordance with the same, sharing; 4. All counter claims of all respondents against petitioner as well as the cross-claim of respondents Spouses Go against the Heirs of Leonardo K. Ty are hereby DISMISSED for lack of merit. CScTED Let a copy of this Decision be furnished the Records Division, Administrative & Finance Department of this Commission in order to update its file. SO ORDERED. (SGD.) MANOLITO S. SOLLER Hearing Officer * Copied verbatim from documents obtained directly from the Securities and Exchange Commission .