Pujalte v. Guevarra

[SEC-SICD * CASE NO. 08-94-4846. January 25, 1995.] ROMEO N. PUJALTE , petitioner , vs .REYNALDO S. GUEVARRA, ET AL. , respondents . D E C I S I O N Petitioner Romeo N. Pujalte, filed on August 1, 1994 with this Commission a verified petition seeking, among other things, the Dissolution and revocation of the Certificate of Registration of the Luis A. Pujalte Memorial Foundation Inc. mainly, on the ground, among others, that the registration thereof was fraudulent and that the same was merely resorted to as a devise or scheme to perpetuate the commission of a fraud by the respondents with the evident purpose of depriving unlawfully the petitioner of the proprietary rights and properties of his deceased father by arrogating unto the respondents all the entire estate to the damage and prejudice of the petitioner, as well as, the beneficiaries thereof. llcd Respondents were required to file their answer to the petition but despite summons duly served on them and the lapse of the reglementary period, respondents failed to file their answer or any responsive pleading without valid reasons. Hence, upon motion of the petitioner, respondents were declared in default in the Commission's Order October 19, 1994. On October 25, 1994, which was the date for the initial presentation of evidence experts for the petitioner, respondent Daniel T. Romana appeared and without observing proper decorum, and without moving to lift the Order of default, either orally or in writing, he assailed the jurisdiction of this Commission and manifested that he allegedly filed with the SEC the following documents, namely Emergency Judicial Notice of Non-Existence of Petitioner Impostor Romeo N. Pujalte dated October 24, 1994, Opposition to the Manifestation of Romeo N. Pujalte dated May 10, 1994, and Motion To Declare Romeo N. Pujalte in Contempt of Court dated July 18, 1994. After his manifestation, respondent Romana immediately left the Commission without waiting for any order or ruling from this Hearing Officer. However, because of the absence of the Petitioner's counsel who was then in Puerto Princesa City attending Court hearing earlier scheduled, the case was postponed and subsequently set for hearing on November 10, 1994. On the date of hearing, Atty. Conrado B. Lagman, counsel for the petitioner appeared and moved that the aforesaid documents allegedly filed by respondent Romana be deleted and expunged from the records on the ground that respondents having been declared in default had no right and personality to file such documents and much less to appear in the case. Thereafter, counsel moved that petitioner be allowed to adduce evidence ex-parte to prove and substantiate the causes of action stated in the petition. The petitioner was the lone witness presented in this case. He testified, among others, the following facts and incidents: That on March 7, 1989 he was adjudged by the intestate Court of Pasig, Metro Manila, RTC Br. 151 as the sole heir and administrator of the intestate estate of his late father, Luis A. Pujalte and submitted in support thereof, a decision of the Court which is final and executory marked as exhibit "G" consisting of five (5) pages. That among the estate of the deceased is a vast tract of agricultural land with an area of 1,265.3605 hectares located at Taytay, Palawan covered by TCT No. 177 in the name of the Pujalte Lumber Co., Inc. owned by his late father and which Corporation had already been dissolved in 1987 when its term of existence expired. That out of this agricultural land, a portion of about 700 hectares were initially acquired by the Department of Agrarian Reform Adjudication Board (DARAB) pursuant to R.A. 6657 valued at P4,347,778.04 (Exhibit "H"). That this area was subsequently increased with the acquisition of an additional 165 hectares making a total aggregate valued at P6,284,006.38 as appearing in (Exhibit "F") ready for release by the Land Bank of the Philippines (LBP). Petitioner further testified that on the evening of April 25, 1994 respondent, Daniel T. Romana, accompanied by his wife, Maria Aleth went to Petitioner's residence at Bgy. Baadera, Tanauan, Batangas. That he was made to drink intoxicating liquor by the aforesaid respondents. That after he got drunk, he was made to sign a ready prepared document (Exhibit "A") the contents thereof was never read to him nor explained by the respondents; that the latter merely told him that the same was for the purpose of running after one Alfonso Enriquez who sold two (2) of the lots of Petitioner located at Greenhills, Mandaluyong City that he failed to give to Petitioner nor to respondent Romana, a single centavo. That he and his wife, Rowena were lured by the respondents to go with them to Manila the following morning allegedly for them to discuss the creation of a Memorial Foundation to be named after his late father and for them to have money. That believing that the creation of the said Foundation as proposed by the respondent would really be for charitable and benevolent purposes and for the benefit of the poor and the deserving, petitioner agreed subject to the conditions that he would review the papers thereof pending its finalization; that he would be the President and his wife be one of the incorporators. That further, the Foundation should cover only those properties located at Greenhills and not the Pujalte properties at Taytay, Palawan which is the subject of acquisition by the DARAB and the LBP as aforestated. That again, he was made to drink liquor and was thereafter told to sign a blank form which Romana said only a "rough draft" of one of the papers needed for incorporation; that said document turned out later to be the last page of a ready form Articles of Incorporation and also of the By-laws thereof (Exhibits "B" and "C"). Petitioner also testified that the aforesaid document (Exhibit "A") which respondent Romana told him to sign while he was drunk and turned out later to be an "Irrevocable Exclusive Power of Attorney with Deed of Assignment which respondents capitalized and took advantage of this document in causing the creation and registration of the LUIS A. PUJALTE MEMORIAL FOUNDATION, INC. and in using this corporation as a tool and scheme to deprive him of his properties. That petitioner went to testify that he revoked and cancelled the said SPA (Exhibit "A") on January 10, 1994 as shown by a Deed of Revocation and Cancellation of Power of Attorney marked as Exhibit "D" and had published the said Deed of Revocation in a newspaper of general circulation as shown by Exhibit "E";that respondent, Romana was thereafter disauthorized by the intestate Court to represent petitioner as his counsel. That likewise, he filed a complaint for Estafa against respondent, Daniel T. Romana and Alfonso Enriquez before the office of the NBI in Manila as shown by Exhibit "I",dated May 16, 1994 and Exhibit "J" dated May 17, 1994. He further testified that despite all these actions, respondent, Romana still pursued his desires to get all the properties of petitioner and had used the Foundation as a scheme and tool to deprive him of his of his proprietary rights as shown by Exhibit "F".Further, petitioner testified that unless this Honorable Commission would issue a restraining order, respondents are determined, by hook or by crook to get all the properties of petitioner and thereafter to oust him from the Foundation as shown by Exhibit "M" which was a resolution passed and approved by the respondents without the consent of the petitioner removing his wife, Rowena as incorporator of the corporation and replacing her by one Emma G. Ty. cdll Basically and indubitably, the dispute at bar is an intra-corporate dispute that has arisen between the petitioner, who is the corporate President and the respondents who are principal incorporators of the LUIS A. PUJALTE MEMORIAL FOUNDATION, INC.. The five grounds set forth in the petition may be summarily reduced to only three namely: (a) Fraud in procuring its certificate of registration, (b) Misuse of corporate powers, and (c) the corporation is just a scheme or device to perpetuate the commission of fraud resulting to his prejudice and that of the beneficiaries of the Foundation. The aforestated grounds are issues ever which this Commission may properly exercise its original and exclusive jurisdiction. They are set forth under Section 5 and 6 of PD 902-A as amended and the rules of Court. It is, therefore, within this jurisdictional ambit that this Commission will resolve these issues and not on matters embraced in the alleged documents submitted by the respondent, Daniel T. Romana which are properly addressed to the ordinary Court. This Commission does not lose sight of the fact that respondents were declared in default. As such, they lost their standing in the case. Atty. Romana's appearance on October 25, 1994 assailing the jurisdiction of this Commission cannot be construed as a desire on his part or on the part of the respondents to participate in the proceedings of the case. Rather, it was an act of disrespect and arrogance and an outright disregard of the power and dignity of this Commission. Respondent should know that in appearing before the Commission, certain rules are to be followed and due respect should always be maintained at all times. Those, the respondents through respondent Romana had totally defied and ignored. Upon other aspects, the evidence show that the Luis A. Pujalte Memorial Foundation was incorporated and registered mainly on account of the SPA marked an Exhibit "A".While it is true that an SPA is a contract between the parties yet, the same cannot be considered so, as it was obtained while petitioner was drunk and therefore not in his proper senses. In short, his consent was vitiated. The contents thereof was not shown to have been read nor explained to him. Consequently, the same is null and void and without any force and effect. Even granting "argumenti" that the same is valid yet, it cannot be considered as an adequate authority for the respondents to create, incorporate and register the aforesaid Foundation. This is so, because nowhere can we find in the said document that respondents were authorized by the petitioner to do so. An express grant is necessary for that purpose. With regards to the alleged assignment of rights/properties in favor of the Luis A. Pujalte Memorial Foundation, Inc. stated therein, this Commission is of the opinion that the same cannot be given valid effect considering that at the time the said document was executed on April 17, 1994 the aforesaid Foundation has not yet been incorporated and therefore, non-existent. Conversely, a non-existing person cannot accept much loss, own properties. Even assuming without admitting that the said properties may be assigned to it, yet under the law, a valid board resolution accepting the same is needed. Nothing to this effect has been presented. Undoubtedly, there being no valid transfer of rights and the Foundation not having been duly authorized to accept assignment, the same cannot be considered as an "assignee" in the legal sense and whatever acts of ownership or legal actions exercised or undertaken by the said Foundation would be clearly on illegal act which would warrant the dissolution of the same. Indeed, all the foregoing incidents are clear indications that the registration of the Foundation was procured thru fraud and misrepresentations and without the consent of the herein petitioner. These facts are enough grounds for the dissolution of the aforesaid Foundation. Petitioner's contention that the Foundation is just a shield or scheme to arrogate unto the respondents all the state of his deceased father more specifically his claim for just compensation (Exhibit "H") in the DARAB and in the LBP finds support by the fact that respondent, Romana's motion (Exhibit "F") asking the court that payment be made instead to the Luis A. Pujalte Memorial Foundation, Inc. and not to the herein petitioner, as well as his demand for a 10% Attorney's Fees, are all clear proof that indeed, respondents desire to deprive the herein petitioner of all his share in the estate of his deceased father. Moreover considering that the rest of the incorporators are of their own choosing respondents can keep themselves in control of the affairs of the Foundation to the detriment of the herein petitioner. They can easily remove or oust the petitioner anytime they please, especially so when all the properties of the petitioner have all been transferred to the Corporation. The passage of Exhibit "M" which purports to be a board resolution replacing petitioner's wife, in an alleged election of officers that had never taken place is a clear indication of this fact. This practice of the respondents is highly improper and irregular. Respondent, Romana being an officer and counsel for the Foundation cannot deemed for Attorney's fees for services rendered to the Corporation in his capacity as officer thereof. Neither can be act in a manner adverse to that of the herein petitioner who is his principal. Well settled is the rule that an Attorney-in-fact in a SPA acts for the benefit of the Principal appointing him and not adverse to him (nor for the benefit of another person adverse to his interest) (Registration of Land Titles and Deeds 1982 Ed by Narciso Pea).Accordingly, Romana who claims to be the Attorney-in-fact of the petitioner by virtue of his SPA (Exhibit "A") cannot therefore ask for the payment of just compensation from the aforesaid Foundation without violating the aforecited principle of law. cdll Let it be stated that petitioner is the sole surviving heir of the late Luis A. Pujalte and administrator of the estate of his deceased father. His status and rights had been established by a Court of competent jurisdiction in a decision which has long attained finality (Exhibit "G") hence, so long as it remains unreversed, it should be conclusive upon the parties and those in privity with them in law or estate (Rural Bank of Salinas v. CA, G.R. No. 96674, June 26, 1992). The DARAB has recognized the petitioner as the sole heir and administrator of the estate of the late Luis A. Pujalte (Exhibit "H"). In fact it was the petitioner who worked all the way for the release of his claim for just compensation for the acquired assets of the Pujalte Lumber Co., Inc. (Exhibit "K") which formed part of the estate of his late father. Never had the respondents much less, Daniel T. Romana any participation in that DARAB Case. It is indeed, highly unfair and unjust that respondents would harvest the fruits of petitioner's labor. Based on the evidence adduced by the petitioner, this Commission is of the considered opinion and so holds that the Luis A. Pujalte Memorial Foundation, Inc. had in fact been registered fraudulently as a devise or scheme of the respondents to perpetuate a fraud designed to enrich themselves to the impoverishment of the herein petitioner, rather than to accomplish the goals and purposes for which the same had been organized. Under paragraph L of Section 6 of Presidential Decree No. 902-A, as amended, it provides among others, that in order to effectively exercise such jurisdiction, the Commission shall possess the following powers. "xxx xxx xxx i) To suspend or revoke ,after proper notice and hearing, the franchise or certificate of registration of corporations, partnership or association, upon any of the grounds provided by law, including the following: 1. Fraud in procuring its certificate of registration ;...(Emphasis supplied) Consequently, the Certificate of Registration of the said Foundation should be revoked and cancelled and its dissolution and liquidation should be ordered in accordance with Section 122 of the Corporation Code of the Philippines. Relative thereto, a liquidation should also be appointed who will be authorized to liquidate the corporate assets of the Foundation, including the authority to receive and accept from the Land Bank of the Philippines for and in behalf of the Pujalte Lumber Co. Inc. which is part of the estate of the late Luis A. Pujalte payment of the just compensation for acquired assets, either in cash or in check with right to encash such check and convert the LBP bonds into cash and to pay and liquidate all valid claims and obligations of the said corporation to creditors, if there are any, pursuant to existing rules or law. WHEREFORE, premises considered, the certificate of registration of Luis A. Pujalte MEMORIAL Foundation, Inc. is hereby REVOKED, and consequently subject corporation is declared DISSOLVED. Accordingly, Atty. Conrado B. Lagman is hereby appointed as Liquidator to liquidate the dissolved subject corporation including the authority to receive and accept from the Land Bank of the Philippines for and in behalf of the dissolved corporation, which is part of the Estate of the late Luis A. Pujalte payment of the just compensation for acquired assets, either in cash or in check with right to encash check and convert the LBP bonds into cash and to pay and liquidate all valid claims and obligations of the said corporation to creditors, if there are any, pursuant to existing rules and/or laws. LibLex Likewise, all contracts, or agreements entered into by the said respondents in behalf of the aforesaid Foundation are hereby declared Null and Void. Let copy of this decision be furnished the Record Division and the Corporate and Legal Department of this Commission for their guidance and information. No pronouncement as to costs. SO ORDERED. (SGD.) JUANITO B. ALMOSA, JR. Hearing Officer