Vicente V. Asuncion, Jr. vs. Olympia International, Inc., et al.

[SEC-SICD * CASE NO. 1843. April 11, 1980.] VICENTE V. ASUNCION, JR. , complainant , vs .OLYMPIA INTERNATIONAL, INC.,ET AL. , respondents . D E C I S I O N Before this Commission is a verified complaint dated February 11, 1980 for mandamus seeking registration, in the books of respondent Olympia International, Inc.,of the sale of 261,665 common shares of stock of respondent-pledgor Encarnacion C. Tittel to complainant-pledgee Vicente V. Asuncion, Jr. as the new owner thereof and to issue to the latter the corresponding new stock certificate therefor and for the call of a stockholders' meeting by the corporation, Board of Directors, President and Corporate Secretary thereof, with prayer for damages and attorney's fees. LLphil This Commission, in its Order, dated March 24, 1980, declared the herein respondents in default for failure to file their answer to the aforesaid complaint within the reglementary period which expired on March 1, 1980. Accordingly, in the same Order, this Commission granted complainant's prayer to present his evidence ex parte which took place as scheduled on March 31, 1980 at 10:00 o'clock in the morning. In said ex parte hearing, complainant Vicente V. Asuncion, Jr.,after having been duly sworn, testified, among others and along with the presentation of his documentary evidence, that respondent-spouses Juergen Tittel and Encarnacion C. Tittel pledged to him 261,665 common shares of stock of respondent Encarnacion C. Tittel in the Olympia International, Inc.,with a par value of P10.00 per share, to secure their indebtedness to him in the amount of P414,554.00 payable on or before January 15, 1980 with interest thereon at 16% per annum from November 21, 1979 as shown in the promissory note dated December 24, 1979; that as per the pledge agreement, likewise dated December 24, 1979 executed by respondents-spouses Tittel which covered the aforesaid 261,665 common shares, stock certificates Nos. 113 for 112,065 shares, No. 115 for 18,000 shares, No. 116 for 79,000 shares, No. P-040 for 52,500 shares, duly endorsed by Encarnacion C. Tittel were delivered to complainant by respondents-spouses, together with a check for P414,554.00 which was postdated January 15, 1980; that the aforesaid promissory note which stipulates "presentment, demand and notice of dishonor waived" was not paid on January 15, 1980 because the aforesaid check bounced for insufficiency of funds when deposited with the drawee bank, Trader's Royal Bank; that copies of a notice of notarial sale dated January 16, 1980 were duly received by respondents-spouses and respondent Olympia International, Inc.;that on January 21, 1980, at the public auction, complainant was the highest bidder for the subject shares for P427,000.00 as per certificate of notarial sale; that the winning bid of 427,000.00 corresponds to the principal and stipulated interest thereon only as of that date, exclusive of attorney's fees; that the aforesaid notarial sale proceeded as scheduled only after the letter dated January 13, 1980 informing the respondents of the fact of dishonor of the aforesaid check and demanding that they make good the value thereof has been ignored by the addressees; that complainant, through counsel, in both his two letters of February 4 and 6, 1980 (which were both received on the same dates by the respondents) demanded from respondent Olympia International, Inc. and correspondent president and corporate secretary thereof, respectively, to effect the registration and transfer of the subject aforesaid shares of stock to and in the name of the complainant as new owner thereof and to immediately call a special stockholders' meeting, but said demands were both ignored by respondents. The Complainant likewise identified the appointment of Atty. Sabino R. de Leon, Jr. dated January 2, 1979 as notary public for and in the province of Rizal, including the municipality of Makati, as well as the notary public's oath of office. All documents adverted to during the ex parte hearing were duly presented, accordingly marked, admitted, when offered as evidence for the complainant Vicente V. Asuncion, Jr. and now form part of the record of the instant case. While the respondents have been declared in default in the instant case and consequently lost their legal standing or personality to take part in the proceedings therein, Section 1, Rule 18, of the New Rules of Court does not imply a waiver of their rights, except that of being heard and of presenting evidence in their favor. It does not imply admission by the respondents of the facts and causes of action of the complainants, because the codal section likewise requires the latter to adduce his evidence in support of his allegations as indispensable conditions before judgment could be given in his favor. Nor could it be interpreted as an admission by the respondents that the complainant's cause of action finds support in the law or that the latter is entitled to the relief prayed for. From the evidence adduced by the complainant, it was established that he has validly acquired at public auction sale the subject 261,665 common shares of stock on January 21, 1980 which were pledged to him by respondent spouses Juergen Tittel and Encarnacion C. Tittel, and that respondent Olympia International Inc.,together with its co-respondents Board of Directors, President and Corporate Secretary have failed, despite lawful demands of complainant, to cause the registration of the said shares of stock from the former owner, respondent Encarnacion C. Tittel, to the complainant, Vicente V. Asuncion, Jr.,as the new owner thereof. cdll Impliedly, if not expressly, Section 52 of the Corporation Law (Act 1459, as amended) imposes the duty upon a corporation organized under that Act, and upon the officers in charge of the books of the corporation, to provide for the entries and noting upon the books of the corporation of lawful transfers of stock, where the entries of such transfer is lawfully demanded (Hager vs. Bryan, G.R. No. L-6230, March 21, 1911, 19 Phil. 138). Hence, to compel the Secretary and/or president of Olympia International, Inc., the officer/s in charge of the books of the corporation to favorably act upon the lawful demand of the herein complainant would only be to oblige such officer/s to perform their duty under the aforesaid provision of law. WHEREFORE, judgment is hereby rendered, ordering the respondent Olympia International, Inc. its co-respondents Board of Directors, President and Corporate Secretary, to register and cause the transfer immediately upon receipt hereof the subject 261,665 common shares of stock in that corporation of respondent-pledgor Encarnacion C. Tittel to the complainant Vicente V. Asuncion, Jr. as the new owner thereof, and to issue to said complainant the corresponding new stock certificate in his name. Upon issuance of the new stock certificate to the complainant, the foreclosed Stock Certificates Nos. 113, 115, 116 and P-040 of respondent-pledgor Encarnacion C. Tittel should be simultaneously cancelled. Anent the second prayer of the complainant to compel the respondents Olympia International, Inc. its Board of Directors, the President and Corporate Secretary thereof to call a special stockholders' meeting, this Commission finds it unnecessary to make a ruling thereon considering the proximity of the annual stockholders meeting of respondent corporation on April 29, 1980 as provided for in the Amended By-Laws thereof. No pronouncement as to costs. prcd SO ORDERED. (SGD.) ERNESTO T. MENDIOLA Hearing Officer