Gonzalo B. Callanta, et al. vs. Alejandro A. Mañuva, et al.

[SEC-SICD * CASE NO. 1915. April 2, 1990.] GONZALO B. CALLANTA, ET AL. , complainants , vs . ALEJANDRO A. MAUVA, ET AL. , respondents . D E C I S I O N This is a complaint instituted by Gonzalo B. Callanta, Lorna P. Callanta, Elizabeth P. Callanta and Juliana P. Callanta (hereinafter referred to as the Callanta group) against Alejandro A. Mauva, Justina J. Mauva and Norma Mauva (also referred to as the Mauva group) for alleged mismanagement of FER-BERT T-SHIRT FACTORY, INC. and for accounting of corporate funds, with prayer for the issuance of a writ of preliminary injunction. llcd Complainants alleged, among others, that complainants and respondents together with one Jaime A. Carreon, organized a private corporation, denominated as FER-BERT T-SHIRT FACTORY, INC., with factory and office address located at 285 B Serrano Avenue, Cubao, Quezon City; that although business operations started on September 16, 1978, said corporation was duly registered only on November 14, 1978; that on September 16, 1978, complainant Gonzalo B. Callanta, out of his personal fund, deposited Fifty Thousand Pesos (P50,000.00) Philippine Currency, with the Pacific Banking Corporation, Cubao Branch, Quezon City, in trust as paid-up capital of the corporation; that among the irregularities, mismanagement and wrongful acts perpetrated by the respondents are (1) refusal and/or failure to account for the Fifty Thousand Pesos (P50,000.00); (2) that corporate funds are withdrawn thru checks and/or withdrawal slips by the General Manager alone Justina J. Mauva, in gross violation of a board resolution, dated October 14, 1978 and that respondent Justina J. Mauva closed the corporate account of the corporation with its depository bank by herself without prior notice or consent of the board; (3) that respondent Justina J. Mauva refused or failed to render a report to the Board, SEC and to the BIR, particularly the annual financial statements of the corporation; (4) that respondent Justina Mauva unilaterally stopped the business operation of the corporation without again prior notice, much less a consent of the board, although she actually and continuously operated the business, utilizing the business name, equipments, machineries materials, assets and facilities of the corporation for respondents' sole benefit but to the prejudice and damage of complainants; (5) that a Ford Fierra vehicle, other machineries and properties acquired and paid for with corporate funds were all registered in the respondents' name and not in the name of the corporation; (6) that she likewise unilaterally, without prior notice or consent of the board, withdrew and/or cancelled the loan application of the corporation with the Development Bank of the Philippines thereby forfeiting the filing fee and all other expenses incurred by the corporation relative to the loan application to the damage and prejudice of the corporation. Thus, the filing of the instant complaint. Hearings on the complainants' application for the issuance of a writ of preliminary injunction were conducted but later on suspended after respondents made an open court undertaking that they will desist from using the corporate name, properties and assets of the corporation while the case is still pending with the Commission. In the meantime, on August 19, 1980, this Hearing Officer issued an order creating a three-man committee, composed of Mr. Licinio Coronel of the Commission, as Chairman and Atty. Gonzalo Callanta and Atty. Ricardo V. Lardizabal, representing the complainants and respondents, respectively, as members for the purpose of determining the assets and liabilities of the corporation. Because of some problems the committee encountered in performing its assigned task or duty, it was not able to submit a final report, except one denominated as Progress Report on the examination dated January 5, 1980, submitted by the Chairman, Licinio A. Coronel. On March 24, 1982, because of the failure of the respondents to comply with their undertaking not to continue the business operation and use of the properties and assets of corporation, this Hearing Officer, upon motion, issued an Order enjoining respondents from using the corporate name Fer-Bert T-Shirt Factory, Inc. and from using the properties and assets of the corporation until further Orders from the Commission. In their answer dated September 24, 1980, respondents denied the material allegations in the complaint and maintained that they never committed any acts of irregularities or mismanagement in the affairs of the corporation. On January 17, 1984, respondents filed a motion to dismiss complaint on the ground that the Commission has no jurisdiction over the case. After the complainants filed their opposition, an order dated February 10, 1984 was issued denying the respondents' motion and in the same Order, set the case for hearing on the merits. Subsequent Orders addressed to the respondents' counsel and to the respondents themselves were returned unserved on the ground that both counsel and respondents are no longer holding office/residing at their respective addresses. Neither the respondents and counsel notified the Commission of their new addresses or whereabouts. Upon motion, an Order dated August 6, 1984 was issued allowing complainants to present their evidence ex-parte. Based on the pleadings presented, the only issue to be resolved is whether or not respondents committed acts of irregularities, anomalies and mismanagement in managing the affairs of the corporation. From the evidence submitted by the petitioners, it was clearly established that (1) at the time Fer-Bert T-Shirt Factory, Inc. was registered with the Securities and Exchange Commission on November 14, 1978, the corporation had one (1) million capitalization with a paid-up capital stock of Fifty Thousand Pesos (P50,000.00), which amount was deposited in the Pacific Banking Corporation, Cubao Branch, Quezon City; (2) the officers and members of the Board of Directors of the Corporation are as follows: LLphil Gonzalo B. Callanta Chairman Alejandro A. Mauva President Justina J. Mauva Vice President and General Manager Elizabeth P. Callanta Corporate Secretary and Member of the Board Norma Mauva Treasurer and Member of the Board Juliana P. Callanta Auditor and Member of the Board Jaime A. Carreon Board Member Lorna P. Callanta Board Member and Secretary to Assistant General Manager (3) that all funds and checks payable to the corporation are deposited in its depository bank, Pacific Banking Corporation, Cubao, Quezon City; (4) that all funds deposited are to be withdrawn by the treasurer countersigned by the President or in their absence, the General Manager countersigned by the Chairman of the Board (Exh. "B" and Exh. "B-1"); (5) that respondent Justina J. Mauva, who is the general manager and vice president of the corporation, was the one who personally run the business or managed the affairs of the corporation; (6) that respondents Justina Mauva unilaterally stopped or ceased the business operation of the corporation in February, 1980 without the authority or consent from the Board of Directors and Stockholders (Exh. "E", "E-1", TSN page 30 of July 23, 1980). Apart from the foregoing established facts, petitioners likewise were able to prove that despite repeated demands from them, respondents failed and refused to account for the funds of the corporation, including the P50,000.00 initial paid-up capital of the corporation. They also discovered that respondent Justina Mauva withdrew all the funds of the corporation alone until the corporations bank account became zero balance and finally closed the said account without the knowledge and consent of the petitioners in blatant violation of the Board Resolution dated October 14, 1978 (Exhibits "B" and "C" and TSN pages 13 and 14 of August 13, 1984). Further, petitioners were denied by the respondents of their right to inspect or be furnished with corporate records, including the financial statements of the corporation (Exh. "D" and TSN pages 15 and 16 July 13, 1984). Furthermore, petitioners also established the fact that despite the stoppage of the business operation of the corporation, respondent Justina Mauva continued operating the corporation for their own satisfaction and benefit using the assets and property of the corporation (Exh. "F" and TSN pages 20 and 21, August 13, 1984). Viewed from the foregoing established facts, there is no doubt that respondents particularly Justina Mauva committed irregularities and/or acts of mismanagement which if it remained unchecked, would not only prejudice and damage the interest of the petitioners but also the corporation as a whole. WHEREOF, respondents are hereby ordered: (1) to render an accounting of all the funds of the corporation, as well as to have an inventory of all the assets of the corporation and (2) to account for and restitute to herein complainants the P50,000.00 pesos disbursed by complainant Gonzalo Callanta out of his present funds. SO ORDERED. (SGD.) JAMES K. ABUGAN Hearing Officer