Aegis Holdings Corporation, et al. vs. Peers Industrial Corp., et al.

[SEC-SICD * CASE NO. 10-99-6440. February 4, 2000.] AEGIS HOLDINGS CORPORATION, MAXIMO T. SIAPUATCO, GERARDO T. SIAPUATCO AND IRENE SIAPUATCO-CASTRO , petitioners , vs .PEERS INDUSTRIAL CORP. AND LORENZO SIAPUATCO , respondents . D E C I S I O N This is a Petition for " Mandamus and/or specific Performance with Damages " seeking to compel the registration of the transfer of 2,250,000 shares of stock of Peers Industrial Corporation and the issuance of new Certificates of Stock, reflecting the same. On October 20, 1999. petitioners Aegis Holdings Corporation, Maximino T. Siapuatco, Gerardo T. Siapuatco and Irene Siapuatco-Castro filed the instant case 1 against Peers Industrial Corporation and its Corporate Secretary, Lorenzo Siapuatco. The Petition contains the following statements of fact: CTcSAE xxx xxx xxx "1. Individual Petitioners Maximino Gerardo and Irene hold a) 753, 542, b) 750,090 and c) 751,336 shares of fully paid and subscribed shares of Peers stock each respectively or an aggregate of 2,254,968 fully paid and subscribed shares in the corporate record books at a par value of P10.00 per share This constitutes nearly fifty percent (50%) of the authorized capital stock; of respondent Peers. 2. Individual petitioners who are siblings, decided to form a holding corporation in order to consolidate their ownership in various corporations including respondent Peers, as well as to look for profitable areas for investment. 3. For this reason they helped form and organize petitioner Aegis, which was incorporated in 28 March 1999. Petitioner Aegis has an authorized capital stock of P30,000,000.00 divided into 300,000 shares. each with a par value of one hundred (P100.00) Pesos. Of this, a total of P7,500,000.00 corresponding to 75,000 shares have been subscribed and P1,875,000.00 have been paid for. Copies of the Certificate of Incorporation and Articles of Incorporation of petitioner Aegis are attached herewith as Annexes "C" and "D" respectively. 4. At present. individual petitioners Maximino, Gerardo and Irene are the majority stockholders of record at petitioner Aegis with each subscribing to 24,900 shares of stock, or an aggregate of 74,700 shares. This represents more than 99.5% of the subscribed shares of stock of respondent Aegis. 5. On 12 July 1999, each individual petitioner assigned to petitioner Aegis 750,000 shares of fully paid and subscribed shares of stock, from their shareholdings in respondent Peers at a par value of P10.00 per share, for a total of 2,250,000 shares. Copies of the Deeds of Assignment evidencing these three (3) transfers are attached herewith as Annexes "E ,"F" and "G" respectively. Copies of the Documentary Stamp Tax Returns evidencing payment of the Documentary Stamps Taxes for these transfers are likewise attached herewith as Annexes "E-1" 'F-1" and "G-1" respectively. 6 These Deeds of Assignment pertinently state: WHEREAS, ASSIGNOR is a registered owner of certain shares of stock, covered by stock certificates issued by Peers Industrial Corporation (PEERS for brevity) with the par value of Ten Pesos (P10.00) per share as follows: A. MAXIMINO T. SIAPUATCO Stock Cert. No. of Shares No. of Shares No. Assigned 97 1,000 1,000 116 140 140 135 3,830 288 156 7,500 7500 157 7530 7,530 169 7,500 7,500 188 33,000 33,000 189 25,000 25,000 197 1,625 1,625 207 140,000 140,000 213 60,000 60,000 218 61,000 61,000 227 100,000 100,000 238 305,417 305,417 Sub-Total: 750,00 B. GERARDO T. SIAPUATCO Stock Cert. No. of Shares No of Shares No. Assigned 190 50,000 50,000 191 33,510 33,500 208 140,000 140,000 214 60,000 60,000 219 61,000 61,000 228 100,000 100,000 239 305,580 305,500 Sub-Total : 750,000 C. IRENE SIAPUATCO-CASTRO Stock No. of Shares No. of Shares Cert. No Assigned 172 1,818 482 192 49,000 49,000 193 33,785 33,785 209 140,000 140,000 215 60,000 60,000 220 61,790 61,790 229 100,000 100,000 240 304,943 304,943 Sub-Total : 750,000 WHEREAS, ASSIGNOR has subscribed to 75,000 shares worth SEVEN MILLION FIVE HUNDRED THOUSAND PESOS (P7,500,000.00) out of the unissued capital stock of ASSIGNEE with par value of ONE HUNDRED PESOS (P100.00) per share: WHEREAS, ASSIGNEE. corporation through its President and its Treasurer, has agreed to accept the assignment, transfer and conveyance of the said 750,000 shares of stock in PEERS, with par value of TEN PESOS (10 00) per share, as stock subscription payment of ASSIGNOR to the capital stock of ASSIGNEE. NOW, THEREFORE, for and in consideration of the foregoing premises and of the mutual covenant and stipulations hereinafter stated, the PARTIES hereto have agreed and, by these presents DO HEREBY AGREE: 1. That ASSIGNOR hereby ASSIGNS TRANSFERS and CONVEYS unto ASSIGNEE its successors and assigns the above-mentioned SEVEN HUNDRED FIFTY THOUSAND (750,000) shares of stock in PEERS. valued at SEVEN MILLION FIVE HUNDRED THOUSAND PESOS (P7,500,000 00),in ( illegible portion in SEC files ) THOUSAND (75,000) shares of stock of ASSIGNEE with total subscription price of SEVEN MILLION FIVE HUNDRED THOUSAND PESOS (P7,500,000.00),Philippine Currency; 2. That ASSIGNOR hereby warrants that the shares of stock subject of this assignment are fully paid shares and free from any lien and encumbrances; 3. That ASSIGNEE hereby accepts such assignment, transfer and conveyance of shares of stock in PEERS in exchange for shares of, or in payment on subscription to the capital stock of ASSIGNEE, and ASSIGNEE binds itself to issue corresponding shares of its capital stock to the ASSIGNOR." 7. Conformant to these Deeds of Assignment, petitioners Maximino, Gerardo and Irene endorsed each of the stock certificates representing the shares that were transferred to the name of petitioner Aegis. 8. Pursuant to this, or on 03 August 1999, petitioner Aegis thru counsel, sent a letter to respondent Lorenzo Siapuatco, Peers' Corporate Secretary. Through said letter, respondent Lorenzo was notified of the assignment of shares to petitioner Aegis, and was accordingly requested to record the transfer in Peers' Stock Transfer Book, as well as to issue new Certificates of Stock corresponding to the transferred shares in the name of Aegis Holdings Corporation. A copy of the aforestated letter dated 03 August 1999 is attached herewith as Annex "H". 9. In response to this, Peers, thru counsel, sent a letter dated 18 August 1999 to petitioner Aegis, informing the latter that, due to restrictions on transfer of shares provided for in Article V of the By-Laws of Peers Industrial Corporation, the Secretary cannot register the transfer of shares as well as issue new Certificates of Stock corresponding thereto A copy of Peers By-laws is attached herewith as Annex "I". 10. The letter provides, in part: "We regret to advise that despite, your client's registration of the transfer of shares with the Securities and Exchange Commission, our client's Corporation Secretary CANNOT register to your client's name the transfer of the shares as well as issue new Certificates of Stocks corresponding thereto. Set forth hereunder are the reasons why our client cannot comply with your clients request, to wit: 1. Article V of PEERS INDUSTRIAL CORPORATION's By-laws which states": xxx xxx xxx Stockholders of record shall have preference and preemptive right to purchase fully paid and outstanding shares, additional subscriptions to unsubscribed stock and to any increase in the capital stock of the corporation over any outsider or person not a stockholder of the corporation at the time. No certificate may be sold, donated, transferred unless all the stockholders have expressly waived their rights in writing to the acquisition. of any share through sales, donation, additional subscription or increase in capital stock of the corporation. ..." (Emphasis/underscoring ours) 2. The restriction on disposition of shares existing in the Corporation's By-laws are allowed under the provisions of Section 98 of the Corporation Code of the Philippines, to wit: "SECTION 98. Validity of restriction on transfer of shares ...Said restrictions shall not be more onerous than granting the existing stockholders or corporation the option to purchase the shares of the transferring stockholder with such reasonable terms conditions or period stated therein. If upon the expiration of said period. the existing stockholders or the corporation fails to exercise the option to purchase the transferring stockholder may sell his share to any person." 3. The same provisions were also allowed by the SEC in its Letter Opinion dated February 15, 1993 signed by the Hon. Rosario Lopez, and we quote: "...Reasonable restrictions on the power to transfer shares of stock as imposed in the charter of the corporation are binding upon all stockholders who become stockholder thereof, since they are chargeable with notice. Such provision is essentially contractual in nature between the stockholder and the corporation (12 Fletcher 5461.3). Hence, the provision in the articles and by-laws requiring stockholder desiring to sell their stocks to offer it to the corporation or to the existing stockholders at a given reasonable period before disposing of it to third parties may be considered valid and enforceable. Accordingly the Corporate Secretary may refuse to record and transfer in the corporate books if there is a clear breach of transfer qualifying conditions A valid agreement of this character in the articles of incorporation to which the corporation is a party will be specifically enforced at its instance, and if the stock has already been sold, an action will lie in equity to cancel the sale, and enforce the preference right to purchase, and defaulting stockholder may also be enjoined from transferring any of the capital stock of the corporation except in accordance with the agreement." (Emphasis/underscoring ours) A copy of the letter is attached herewith as Annex "J") . 11. On 20 August 1999, petitioner Aegis thru counsel, served another letter dated 16 August 1996 addressed to respondent Lorenzo, this time giving the latter no more than three (3) days from receipt thereof to record the transfer of shares to Aegis' name in the Stock Transfer Book, and to issue new Certificates of Stock corresponding in petitioner Aegis' name not later than (7) days from registration of the transfer. 12. Simultaneous to this Aegis physically surrendered to respondent Lorenzo, for cancellation, the original Certificates of Stock covering Peers shares assigned to Aegis. Copies of the letter dated 16 August 1999, as well as Acknowledgment Receipt evidencing the surrender of the Certificates of Stock and signed by respondent Lorenzo are attached herewith as Annexes "K" to "K-1". 13. To date, however, or after the expiration aforestated periods respondents have not yet performed their duty under the law and comply with petitioner Aegis' demand. Hence this petition for Specific Performance and/or Mandamus, with prayer for damages." (Petition, pp. 2-7) Respondents were served summons on 8 November 1999. On 19 November 1999, respondents, through counsel filed an Appearance and Urgent Motion for Extension of Time to File Answer and/or other Responsive Pleading" praying that they be given twenty (20) days from November 28 1999 or until 26 December 1999 within which to plead. Reacting thereto petitioners filed an "Ex-parte Manifestation" dated 8 December 1999 stating that the New Rules of Procedure of the Securities and Exchange Commission prohibits the filing of a Motion for Extension of Time to File Pleadings. Respondents subsequently filed their Answer on 14, December 1999 alleging therein the following Special and Affirmative Defenses: "7. The denial by the Corporate Secretary of the Registration of the transfer of the shares of stock, has basis in fact and law as the purported transfer were made in violation of the preemptive right of stockholders of record. 8. The aforementioned preemptive right is very clear in the Article V of the Corporate By-laws, which the Corporate Secretary is duty bound to protect and enforce. It states: Stockholders of record shall have preference and preemptive right to purchase fully paid any outstanding shares ,additional subscriptions to unsubscribed stock and to any increase in the capital stock of the corporation over any outsider or person not a stockholder of the corporation at the time. No certificate may be sold, donated, transferred unless all the stockholders have expressly waive their rights in writing to the acquisition, of any share through sales, donation, additional subscription or increase in capital stock of the corporation . (emphasis ours) 9. The validity of the above provision is premised on the provisions of the Corporation Code of the Philippines, particularly Section 98 of the Corporation Code of the Philippines, which states: "SECTION 98. Validity of restriction on transfer of shares ...Said restriction shall not be more onerous than granting the existing stockholders or corporation the option to purchase the shares of the transferring stockholder with such reasonable terms, conditions or period stated therein. If upon the expiration of said period, the existing stockholders or the corporation fails to exercise the option to purchase, the transferring stockholder may sell his share to any person." 10. The same provisions were also allowed by the SEC in its letter opinion dated February 15, 1993 by the Hon. Rosario N. Lopez and we quote: "...Reasonable restrictions on the power to transfer shares of stock as imposed in the charter of the corporation are binding upon all stockholders who become stockholder thereof, since they are chargeable with notice. Such provision is essentially contractual in nature between the stockholder and the corporation.(12 Fletcher 5461.3). Hence, the provision in the articles and by-laws requiring stockholders desiring to sell their stocks to offer it to the corporation or to the existing stockholders at a given reasonable period before disposing of it to third parties may be considered valid and enforceable. Accordingly the Corporate Secretary may refuse to record and transfer in the corporate books if there is a clear breach of transfer qualifying conditions. A valid agreement of this character in the articles of incorporation to which the corporation is a party will be specifically enforced at its instance, and if the stock has already been sold, an action will lie in equity to cancel the sale, and enforce the preference right to purchase, and defaulting stockholder may also be enjoined from transferring any of the capital stock of the corporation except in accordance with the agreement."(Emphasis ours) 11. Petitioner's contention that the restriction in Article V of the Corporate By-laws is a consent restriction is an interpretation of their own. 12. Respondent Corporate Secretary, in denying the transfer of shares only intended that the pre-emptive right of existing shareholders of record to be implemented and respected. Assuming that no one is interested in purchasing the said shares no prohibition whatsoever in transferring the subject shares was nor shall be further implemented. 13. The allegation in paragraph 22 of the Petition is likewise an interpretation of their own as there is no provision in the Corporate By-laws prescribing for a "written consent of all stock holders" before a transfer is made. 14. It is an elementary rule that "he who comes to court must come with clean hands". Herein petitioners are guilty of violating the aforesaid rules since they ignored Article V. of the By-laws of the Corporation when they transferred the shares of stock without offering the same to the stockholders of record. 15. Damages incurred, if any is a result of their own wrong doings and hence should be held responsible to themselves and to no one else. cEaSHC 16. The Corporate Secretary, in denying registration simply performed his functions and duties in defending and implementing the By-laws of the Corporation." (Answer pp. 2-4) While the Petition contains a Joint-Affidavit 2 of the petitioners, no affidavit was attached to the Answer. On 22 December 1999 petitioner filed a "Motion for Summary Judgment" praying that the case be deemed submitted for resolution on the basis of the pleadings, affidavits and other documents submitted by the parties. Respondents opposed the said motion in their "Opposition to Petitioner's Motion for Summary Judgment" filed on 28, December 1999. The motion was heard and submitted for resolution 3 on 4 January 2000. Finding the same to be meritorious, the Motion for Summary Judgment is hereby GRANTED. RULE 35, Section 3 of the Rules of Court 4 provides in part that "the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits depositions, and admissions on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Without necessarily conceding the propriety of its admission to the records, we hold that the allegations in the Answer do not raise any genuine issue of fact as they constitute general denials amounting to an admission of the facts alleged. 5 We shall nonetheless deal with the matters denied in the Answer. First, respondents deny for lack of knowledge sufficient to form a belief as to the truth of the allegations in the Petition regarding the personal circumstances of individual petitioner Maximino Siapuatco, Gerardo Siapuatco and Irene Siapuatco-Castro, their respective positions in petitioner Aegis Holdings Corporation and their being stockholders of record in respondent Peers Industrial Corporation. 6 Respondents however cannot be deemed to have denied the allegations that individual petitioners are stockholders of respondent Peers as these are matters within their knowledge, having in their custody the company's Stock and Transfer Book. The rule is that a denial for "lack of sufficient knowledge" is unavailing where the facts as to which want of knowledge is asserted is so plainly and necessarily within the defendant's knowledge that his averment of ignorance must be palpably untrue. 7 Such cases constitute an ineffective denial and are thus treated as admission. 8 Respondents similarly deny for reason of "lack of sufficient knowledge",the assignment by individual petitioners of Peers shares of stock to petitioner Aegis as well as the endorsement by the said individual petitioners of the certificates of stock covering the shares transferred. Such denial does not generate an issue of fact considering respondent's admissions in paragraph 4 of the Answer 9 that (1) they were notified of the said assignment of shares and (2) that Aegis physically surrendered the endorsed certificates of stocks to the respondent Corporate Secretary. For reasons stated above, respondents may again be deemed to have admitted such allegations of fact. Moreover, this particular denial by respondents also illustrates how the issues raised in the Answer may be easily determined from the pleadings and the documents attached thereto, thus justifying summary judgment. 10 Lastly respondents again deny on the ground of "lack of sufficient knowledge" the allegations regarding the juridical circumstances of petitioner Aegis and the respective stock ownership of the individual petitioners therein. We, however, can properly take judicial notice of the organization and existence of Petitioner Aegis as it Articles of Incorporation and Certificate of Incorporation are public documents easily cognizable by this office by reason of its specialized knowledge on the formation and registration of corporations. 11 In fine, the respondent's bare and general denials of the allegations the petition on the ground of "lack of sufficient knowledge'',and their failure to allege facts supporting their own position, resulted in a failure to raise any material issue of fact. As stated by one commentator, "mere denials, unaccompanied by any fact which would be admissible in evidence at a hearing, are not sufficient raise a genuine issue of fact sufficient to defeat a motion for summary judgment". 12 In this regard, note that respondents are barred by our rules from presenting any witness considering their failure to attach the required affidavits in their Answer. 13 In addition to its failure to raise a genuine issue of fact, the Answer was also filed out of time. Rule III Section 10 of the New Rules of Procedure of the Securities and Exchange Commission provides as follows: "SECTION 10. Effect of Failure to Answer .Should the defendant fail to answer the complaint within the period above provided. he shall be considered in default. The Hearing Officer shall motu proprio, proceed to render judgment granting the plaintiff such relief as his pleading may warrant, unless the hearing Officer in his discretion requires the plaintiff to submit evidence which shall be received ex parte ." Respondents only had until 28 November 1999 within which to file their Answer. Instead of filing, an Answer within the said period they file an Urgent Motion for Extension of Time to File Answer and/or Other Responsive Pleading. an expressly prohibited motion under Rule III, section 4 of our New Rules of Procedure which provides: TIESCA SECTION 4. Prohibited Pleadings The following pleadings, motions, or petitions shall not be allowed in the cases covered by these Rules: xxx xxx xxx C. Motions for extension of time to file pleadings, affidavits or any other paper; xxx xxx xxx Having filed their Answer on December, 14 1999 respondents are therefore considered in default. The rendition of judgment without need of further proceedings is thus clearly justified. We are aware of jurisprudence imploring trial courts to exercise their discretion liberally in matters concerning the acceptance of late answers or the lifting of orders of default. Such liberality, however, cannot be exercised in this case. In Gachon v. De Vera, Jr, G.R. No. 116695, June 20, 1997, 14 the Supreme Court strictly upheld the mandatory nature of the provisions in the Rules on Summary Procedure regarding failure to answer within the prescribed period as well as that on prohibited pleadings and motions. The decision was based on the principle that the Rule on Summary Procedure was promulgated for the purpose of achieving "an expeditious and inexpensive determination of cases." It was further held that to admit a late answer "is to put premium on dilatory maneuvers the very mischief that the Rule seeks to redress." In Gachon the Supreme Court upheld the disallowance of an answer filed six (6) days late. Our New Rules of Procedure, promulgated in the interest of a speedy and inexpensive determination of disputes and claims, also provides for summary procedure. 15 In fact, the provisions in the New SEC Rules on prohibited pleadings and effect of failure to file Answer are virtual adaptations of those found in the Rules of Summary Procedure. The ruling therefore in the Gachon case equally, if not, more emphatically, applies in this case where the Answer was filed 15 days out of time. We now come to the relief that may be granted to petitioners. In Rural Bank of Salinas, Inc. vs. Court of Appeals, G.R. No. 96674, June 26, 1992, 16 the court characterized the corporation's obligation to register transferred shares of stock as ministerial. The court has consequently held that the corporation or the officers thereof who refuse registration of such transfer of stock may be compelled to do so through appropriate proceedings. 17 The foregoing rule, however presupposes compliance with certain legal requirements for the registration of the transfer, to wit: 1. there must be a delivery of the stock certificates; 18 2. the certificate must be indorsed by the owner or his attorney-in-fact or other person legally authorized to make the transfer; 19 3. there are no unpaid claims against the stock by the corporation; 20 4. payment of documentary stamp taxes; 21 and 5. surrender of the original certificate of stock to the corporation. 22 Compliance with these requirements was fully demonstrated by petitioners in their Petition thereby establishing the existence of their right to have the transfers registered. Both constructive and actual delivery of the stocks certificates were respectively shown by the notarized Deeds of Assignment attached as Annexes "E","F" and "G" of the petition and the allegation that Aegis surrendered physical possession of the said certificates to the respondent Corporate Secretary. 23 The petition states that shares assigned were fully paid 24 and that the certificates representing them were indorsed by individual petitioners. 25 In fact, we view the statement that the share were fully paid as a superfluity as the presence of a certificate of stock in itself proves full payment of the shares represented therein. 26 Payment of the Documentary Stamp Taxes was established by validated Documentary Stamp Tax Returns and bank official receipts attached as Annexes "E-1"."F-1" and "G-1" of the petition. Lastly, the Petition properly alleged that the indorsed original certificates of stock were surrendered to the respondent corporation, together with final demand to register their transfer and to issue new stock certificates (Ibid. pars. 11 to 12, Annexes "K" and "K-1") The Petition likewise sufficiently substantiated respondent's refusal to register the subject transfer of shares 27 which constitutes the delict made in violation of their rights. Even the respondents admit such fact. 28 Their cause of action having been property established, petitioners are entitled to the principal relief consisting of the registration of the transfer of shares, the cancellation of the old certificates of stock; and the issuance of new stock certificates reflecting the relative post-transfer shareholdings of all the herein petitioners. While we need not consider the Answer, we deem it proper to address the lone legal issue raised therein. a It is clear from paragraphs 7 to 16 Of the Answer that the only legal issue raised by the respondents is whether Article V of the By-laws of respondent Peers provides a valid restriction on the transfer of shares of stock. The said By-law provision states: Stockholders of record shall have preference and pre-emptive right to purchase fully paid and outstanding shares. additional subscriptions to unsubscribed stock and to any increase in the capital stock of the corporation over any outsider or person not a stockholder of the corporation at the time. No certificate may be sold, donated, transferred unless all the stockholders have expressly waived their rights in writing to the acquisition, of any share through sales, donation, additional subscription or increase in capital stock of the corporation .(Emphasis supplied) We hold that the above-provision is a prohibited consent restriction on the transfer of shares. As clearly held in Rural Bank of Salinas, Inc. vs. Court of Appeals, G.R. No. 96674, June 26, 1992, supra, a corporation, either by its board, its by-laws, or the act of its officer cannot create restrictions in stock transfers, the reason being that restrictions in the transfer of stocks must have their source in legislative enactment. An example of a restriction on transfer of shares provided by law is SECTION 98 of the Corporation Code imposing an option restriction in cases of close corporations. The said provision reads: "SECTION 98. Validity of restriction on transfer of shares Restrictions on the right to transfer shares must appear in the articles of incorporation and in the by-laws as well as in the certificate of stock; otherwise, the same shall not be binding on any purchaser thereof in good faith. Said restrictions shall not be more onerous than granting the existing stockholders or corporation the option to purchase the shares of the transferring stockholder with such reasonable terms, conditions or period stated therein. If upon the expiration of said period, the existing stockholders or the corporation fails to exercise the option to purchase, the transferring stockholder may sell his share to any person." In this regard we hold that respondents' reliance on Section 98 is bereft of merit as respondent Peers was never alleged to be a close corporation. Moreover, respondents never alleged, let alone prove that restrictions on transfer are found in the Articles of Incorporation and Certificates Of Stock; of respondent Peers as required by the above-quoted provision. In fact, we have reviewed the Articles of Incorporation of respondent Peers on file with this Commission and found no such restriction. It is proper to note that this Commission previously reviewed Article V of the By-laws of respondent Peers and has already rendered an opinion 29 on the matter, which we favorably adopt as our own.. Based on said Opinion and other relevant documents filed before this Commission, we found that Article V of the Peers By-laws is a restriction clause as it absolutely prohibits the sale or transfer of stock without the consent of the Board of Directors and/or all stockholders in violation of the general law on free alienability of shares of stock as personal property. Needless to state, such opinion is entitled to great respect and weight from regular courts for having been rendered by the very agency tasked to implement and apply the Corporation Code and other related laws. 30 Our declaration considering the respondents in default notwithstanding, we deny petitioners' prayer for moral and exemplary damages and attorney's fee as none of the grounds for their award was duly demonstrated in the petition. WHEREFORE, judgment is hereby rendered in favor of petitioners against respondents: 1. Directing the latter, particularly the Corporate Secretary of respondent Peers Industrial Corporation, to register in the Stock and Transfer Book the transfer of 2,250,000 shares of stock of respondent Peers; to cancel the Certificates of Stock listed below and to issue new Certificates of Stock in favor of petitioner Aegis, as follows. A. MAXIMINO T. SIAPUATCO Stock Cert. No. of Shares No. of Shares No. Assigned 97 1,000 1,000 116 140 140 135 3,830 288 156 7,500 7,500 157 7,530 7,530 169 7,500 7,500 188 33,000 33,000 189 25,000 25,000 197 1,625 1,625 207 140,000 140,000 213 60,000 60,000 218 61,000 61,000 227 100,000 100,000 238 305,417 305,417 Sub-Total: 750,000 B. GERARDO T. SIAPUATCO Stock Cert. No. of Shares No. of Shares No. Assigned 190 50,000 50,000 191 33,510 33,500 208 140,000 140,000 214 60,000 60,000 219 61,000 61,000 228 100,000 100,000 239 305,580 305,500 Sub-Total : 750,000 C. IRENE SIAPUATCO Stock Cert. No. of Shares No. of Shares No. Assigned 172 1,818 482 192 49,000 49,000 193 33,785 33,785 209 140,000 140,000 215 60,000 60,000 220 61,790 61,790 229 100,000 100,000 240 304,943 304,943 Sub-Total: 750,00 2. To record in the corporate books and issue new certificates of Stock corresponding to the retained shares in the name of Maximino Siapuatco (3,542, shares),Gerardo Siapuatco (90 shares),and Irene Siapuatco (1,818 shares),respectively. No pronouncement as to cost . SO ORDERED (SGD.) J. ERMIN ERNEST LOUIE R. MIGUEL Hearing Officer Footnotes 1. Petition dated October 19, 1999. 2. Annex "B" Petition. 3. By agreement of the parties. 4. The Rules of Court may apply in a suppletory manner in proceeding before the Commission (Rule I, Section 4, New Rules of Procedure of the Securities and Exchange Commission). 5. Paragraphs 1 and 3 of the Answer states: "1. Respondent lacks ( sic ) knowledge or information sufficient to form a belief as to truth of the allegations contained in paragraphs (1),(2),(3),and (4) of the PETITION and therefore DENIES the same." "3. Respondent has no knowledge or information sufficient to form a belief as to the truth of the allegations contained in paragraphs (1),(2),(3),(4),(5),(6) and (7) and therefore DENIES the same." 6. "Paragraphs 2 and 3 of the subheading "The Parties" and paragraph 1 of the subheading "Statement of Material Facts". 7. Philippine National Bank vs. Utility Assurance & Surety Co.,Inc. 177 SCRA 208. 8. Gutierrez vs. Court of Appeals .74 SCRA 127. 9. Paragraph 4 of the Answer reads "Respondent admit the allegations contained in paragraphs (8),(9),(10),(11) and (12). 10. Clemente vs. Pascua, 25 SCRA 422. 11. See Al-Manah Islamic Investment Bank of the Phils. vs. Civil Service Commission, 207 SCRA 801. 12. Regalado, REMEDIAL LAW COMPENDIUM Vol. 1, 6th Revised Ed.,p. 364. 13. RULE III, Section 12, New Rules of Procedure of the SEC. 14. 274 SCRA 540. 15. Rule I, Section 4. 16. 210 SCRA 510. 17. Torres Jr. vs. Court of Appeals, 278 SCRA 793. 18. Corporation Code, Section 63 which provides in part: ..Shares of stock so issued are personal property 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 shares of stock against which the corporation holds any unpaid claim shall be transferable in the books of the corporation." 19. Ibid. 20. Ibid. 21. Tax Reform Act of 1997, section 201. 22. Bitong vs. Court of Appeals, 292 SCRA 503, 523. 23. Petition, par. 12. 24. Petition, par. 5. 25. Ibid, par. 7. 26. Section 64, Corporation Code. 27. Ibid, par. 13, Annex "J". 28. Paragraphs 7, 12 and 16, Answer. 29. Opinion, May 24, 1999 (Annex "L",Petition). 30. Nestle Philippines, Inc. vs. Court of Appeals, 203 SCRA 504.