Cols. Benjamin T. Lima and Irineo De Guia vs. Dreamland Phils., Inc., et al.

[SEC-SICD * CASE NO. 1790. December 7, 1990.] Cols. BENJAMIN T. LIMA and IRINEO DE GUIA , petitioners , vs . DREAMLAND PHILS., INC., ET AL. , respondents . D E C I S I O N This is an action for rescission and/or recovery of investment seeking the refund of P10,000.00 representing two Proprietary Membership Certificate (Class B) Nos. 0515 and 0516, respectively, both dated January 9, 1976 plus interest due thereon, computed from January 9, 1976 and indemnification or reimbursement in the sum of P2,500.00 or the equivalent of 25% of the value of the aforesaid proprietary membership certificates. cdlex Respondents having failed to file their answer notwithstanding proper service of summons and the lapse of the reglementary period to do so, they were, upon proper motion, declared in default. Evidence for the petitioners shows that respondents approached the former as early as December, 1975 and represented themselves as one engaged in the business of soliciting, marketing, selling or otherwise dealing in proprietary/membership shares purportedly to develop, improve and beautify real properties, including the putting up of a sports club somewhere in Sta. Maria, Bulacan which respondents promised to develop in a period of two (2) years; that pursuant to said representations, respondents were able to solicit members or investors; that petitioners were induced to pay the sum of FIVE THOUSAND PESOS (P5,000.00) each in exchange for Proprietary Membership Certificates (Class "B") Nos. 0515 (Exh. "A") and 0516 (Exh. "B"), respectively, both dated January 9, 1976 and thus become member of the respondent corporation; that after the lapse of several years up to 1980, respondents failed and still fail to make good their commitments; that on account of such failure, petitioners sent letters (Exhs. "C" and "D") to respondents inquiring from the latter about the current developments of the property located at Sta. Maria, Bulacan and asking for a refund of their investments should there be no developments yet; that a formal demand (Exh. "E") for the refund or return of their investments was made prior to the filing of the instant complaint; that despite petitioners' repeated demands for the refund or restitution of their investments, respondents failed and refused and still fail and refuse to refund and/or return said investments. As heretofore stated, respondents were declared in default; hence, the evidence for the petitioners remain unrefuted. It is clear from the foregoing that respondents were able to solicit and collect the sum of P10,000.00 from the complainants on the strength of the former's representation that they are going to put up and develop a sports club somewhere in Sta. Maria, Bulacan within a period of two years. It is evident, however, that respondents reneged on their promises. Records of this Commission, which can be taken judicial notice of, show that respondents have never been authorized by this Commission to sell and offer its securities to the public in the form of "Proprietary Membership Certificates" considering that they have not registered the same. It would seem, therefore, that respondents committed fraud in issuing the Proprietary Membership Certificates. Equity demands that the amount voluntarily paid by the petitioners to the respondents who went back on their promises should be refunded to the former. Equity will take jurisdiction on the ground of fraud where, by willful or intentional acts, omissions, or concealments, one party takes advantage over another. WHEREFORE, judgment is hereby rendered in favor of the petitioners and against the respondents ordering the latter to return to: 1. Benjamin T. Lima the amount of P5,000.00 with legal interest computed from January 9, 1976; 2. Irineo de Guia the sum of P5,000.00 with legal interest computed from January 9, 1976. No pronouncement as to cost. SO ORDERED. (SGD.) ROLANDO C. MALABONGA Hearing Officer