Rolando T. Parce vs. Guimaras Shipping Corporation, et al.

[SEC-SICD * CASE NO. 05-98-5987. March 15, 2000.] ROLANDO T. PARCE , plaintiff, vs . GUIMARAS SHIPPING CORPORATION, ANNABELLE C. DELFIN AND/OR JAIME C. ABAN , defendants . D E C I S I O N From the incorporation documents of Guimaras Shipping Corporation (hereinafter referred to as the Corporation), it appears that it was incorporated on November 16, 1994. It has an authorized capital of Five Million (P5,000,000.00) Pesos and a subscribed capital of One Million Two Hundred Fifty Thousand (P1,250,000.00) Pesos and a paid up capital of One Million (P1,000,000.00) Pesos. (Plaintiff's Annex "A"; Defendants' Annex "I"). Among the incorporators-subscribers listed in its Articles of Incorporation is plaintiff Rolando T. Parce. He subscribed to Two Hundred Thousand (200,000) shares worth Two Hundred Thousand Pesos and paid Two Hundred Thousand (P200,000.00) Pesos. Defendant Annabelle C. Delfin, the Treasurer of the corporation at the time of its incorporation, attested to the receipt from the subscribers One Million Pesos (P1,000,000.00) representing the total paid-up capital of the corporation. (Treasurer's Affidavit attached to plaintiff's Annex "A") With these antecedent undisputed facts, plaintiff in his complaint demands from the defendants the issuance of certificate of stock corresponding to his fully paid subscription with damages. IHSTDE In their answer, defendants claim that plaintiff paid Twenty Thousand Pesos (P20,000.00) only and not Two Hundred Thousand Pesos (P200,000.00) and that they demanded from the plaintiff the full payment of the subscription under pain of removal for being a delinquent subscriber (Annex "6" to defendants' answer). Defendants also contend that plaintiff had withdrawn P11,167.00) from his alleged paid-up capital of only P20,000.00. The contention of the defendants in their answer and position paper that the plaintiff did not fully pay his subscription at the time of the incorporation of defendant corporation, is negated in defendant Delfin's Treasurer's Affidavit. And assuming that defendant Delfin executed a false affidavit, the Articles of Incorporation should have been disapproved or the certificate of incorporation revoked, if one had been issued. A false Treasurer's Affidavit is a ground for disapproving the registration of the Articles of Incorporation of a corporation. (Section 17, Corporation Code of the Philippines). If the falsity be discovered after incorporation, the Securities and Exchange Commission may either suspend or revoke the certificate of registration on the ground of fraud in procuring the certificate of registration (P.D. 902-A Section 6 (1) (2). * The defenses of the defendants are not supported by the factual background and are also contradictory to the findings of the Prosecution and Enforcement Department of the Commission in PED Case No. 95-1923 entitled "In the Matter of Guimaras Shipping Corporation." In that case, Rolando T. Parce prayed that the certificate of incorporation of Guimaras Shipping Corporation be revoked on the ground that its paid-up capital was withdrawn prior to incorporation. The investigator in that case concluded that the withdrawal of the paid-up capital of the corporation was justified. The investigator found that "evidence presented by the corporation would show that the early withdrawal of the paid-up capital in the amount of One Million (P1,000,000.00) Pesos was due to the eagerness of the corporation to start its business wherein part of the amount withdrawn was used in renting one office, buying office equipment and supplies, paying filing fee and license fees, cash and surety bond at POEA amounting to Four Hundred Thousand (P400,000.00) Pesos, more or less, and the remaining amount of Six Hundred Thousand (P600,000.00) Pesos was later transferred to other bank in the name of the corporation." (page 3, Order dated June 5, 1996, PED Case 95-1923 ) The order of November 24, 1995 of the Prosecution and Enforcement Department revoking the Certificate of Registration of Guimaras Shipping Corporation was thus reconsidered and set aside in the PED order of June 5, 1996. No fraud in securing the certificate of registration of Guimaras Shipping Corporation had been established by the PED, therefore the statement of incorporating treasurer Annabelle Delfin is true and correct for all intents and purposes concerning her receipt of the full payment of plaintiff's subscription. Under Section 64 of the Corporation Code, a stockholder who has fully paid the amount of his subscription is entitled to the issuance of certificate of stock. The corporate by-laws of the corporation also provides a similar provision. Thus, Article 1, Section 2 thereof states: "Each stockholder shall be entitled to one or more certificates for such fully paid stock subscription in his name in the books of the corporation." Evidence presented by the plaintiff substantially proved that he fully paid his subscription in the amount of Two Hundred Thousand (P200,000.00) Pesos and the findings of the investigator in PED Case No. 95-1923 showed that even if the total paid-up capital of the corporation was withdrawn, it was done for justifiable reasons. It has been established that plaintiff is entitled to the issuance of certificate of stock for the full payment of his subscription. WHEREFORE, defendants are directed to issue in the name of the plaintiff certificate of stock corresponding to Two Hundred Thousand (200,000) shares. No award of damages. aAHDIc SO ORDERED. (SGD.) NATIVIDAD P.QUERIJERO Hearing Officer * Copied verbatim from documents obtained directly from the Securities and Exchange Commission .