Alberto V. P. Fenix, Jr., et al. vs. Ernesto Malicsi, et al.

[SEC-SICD * CASE NO. 2163. September 26, 1985.] ALBERTO V. P. FENIX, JR., ET AL. , complainants , vs . ERNESTO MALICSI, ET AL. , respondents . D E C I S I O N On October 20, 1981, Alberto V. P. Fenix, Jr., Reynaldo P. Espino, Paulino F. Cayco, Domingo R. Sioson and Froilan C. Gervacio filed a complaint against Ernesto Malicsi, Pastor Malicsi, Jr., Rizal Malicsi, Angelina Quitoriano, Teresita Gallardo and Rosalinda Cordero praying, among others, that an immediate investigation be conducted to determine the real and true stockholders of Sta. Fe Mining and Industrial Corporation. LLpr Complainants alleged, inter alia, that Sta. Fe Mining and Industrial Corporation is a corporation duly organized and registered with the Securities and Exchange Commission on July 26, 1972; that the said corporation had eighteen (18) original subscribers and/or stockholders; that among these subscribers is Pastor Malicsi, Sr., who is also one of the five incorporators; that through various Deeds of Assignment, Pastor Malicsi, Sr. acquired the shares of stock of almost all the original subscribers/stockholders including the other four (4) incorporators, that on May 18, 1979, Pastor Malicsi, Sr. executed a Deed of Assignment of Subscription/Receivable in favor of the named complainants covering 53,580,000 shares of stock of the corporation for a total consideration of P855,800.00; that respondents who are not stockholders of the corporation held an allegedly illegal stockholders' meeting on December 20, 1980 at which meeting they elected a set of officers; that the said elected officers thereafter entered into an Operating Agreement with C-Square Realty Development, Inc. on December 22, 1980 and likewise filed an Amended Articles of Incorporation and Amended By-Laws with the Securities and Exchange Commission on December 20, 1980. On November 25, 1981, respondents filed their answer with special and affirmative defenses and with counterclaim. Except on the allegations concerning the personal capacities of the parties, the capitalization of the Corporation and the acquisition of shares of the original subscribers by Pastor Malicsi, Sr., respondents vehemently denied the material allegations in the complaint. Among others, respondents denied that complainants are stockholders of Sta. Fe Mining and Industrial Corporation; that the Deed of Assignment of Subscription/Receivables dated May 18, 1979 executed by Pastor Malicsi, Sr. is an absolute nullity being a falsified document. Respondents further alleged in their Special and Affirmative Defenses that complainants have no cause of action against the respondents as the former are total strangers in the Corporation; that respondents are the true and lawful stockholders and officers of the corporation having acquired their respective shares in the corporation validly and legally from Pastor Malicsi, Sr.; that as the duly elected officers of the corporation during the Stockholders' and Directors' meeting of the corporation held on December 20, 1980, they have the power and authority to perform acts for and in behalf of the corporation including but not limited to, the transaction of business with third person, and that the filing of the above-entitled case by the complainants is malicious and merely intended to vex and harass, it being based on a fabricated and unwarranted claim. Hearings were conducted and both parties presented documentary and testimonial. evidence. At the preliminary conference hearing held on January 18, 1982, and as outlined in the Pre-trial Order dated February 15, 1982 respondents admitted the Deed of Assignments (complainants' Exhibits A to Q inclusive) executed by the original subscriber in favor of Pastor Malicsi, Sr. On the other hand, complainants admitted that there was a stockholders' meeting held on December 20, 1980 and the existence of the minutes of the stockholders' and board of Directors' meeting held on October 3, 1981. With the admission, the parties agreed that the only issues left for this Commission to resolve are: (1) Whether or not complainants are true stockholders of Sta. Fe Mining and Industrial Corporation. (2) Whether Exhibit "R", which is the deed of assignment executed by Pastor B. Malicsi, Sr., dated May 18, 1979, in favor of the complainants is valid or not. Considering however that Exhibit "R" is the basis of the complainants in claiming that they are stockholders of Sta. Fe Mining and Industrial Corp., it is but proper and logical to discuss the two issues all together. Complainants maintained that they are the true stockholders of Sta. Fe Mining and Industrial Corporation as they own 53,580,000 total number of shares of the corporation, broken down as follows: Paulino F. Cayco 18,760,000 shares Alberto V.P. Fenix, Jr. 13,561,000 shares Reynaldo P. Espino 13,161,000 shares Froilan C. Gervacio 3,849,000 shares Domingo R. Sioson 4,249,000 shares dctai In support of their contentions, they presented in evidence the Deed of Assignments of Subscription/Receivables (Exhibit "R") executed by Pastor Malicsi, Sr. in favor of the herein complainants dated May 18, 1979. This Deed of Assignment was subsequently recorded in the stock and transfer book of the corporation (Exhibits "S" and S-1"). Complainants likewise presented testimonial evidence in the persons of Atty. Reynaldo Espino, Dr. Alberto V.P. Fenix, Jr. and Mr. Honorato Ocampo. All these three witnesses testified in common that the Deed of Assignments of Subscription/Receivables (Exh. "R") was validly and legally executed by the Assignor, Pastor Malicsi, Sr. on May 18, 1979 Testifying in particular the circumstances surrounding the existence of Exh. "R", complainant Reynaldo Espino for his part stated that he and Pastor Malicsi, Sr. went to the office of Minerals Processing and Supply at Makati on May 18, 1979 (T.S.N. Feb. 15, 1982 p. 6); that the purpose of Pastor Malicsi, Sr. in going there was to transfer his shares of stock in Sta. Fe Mining and Industrial Corp.; that Pastor Malicsi, Sr. signed the document (Exh. "R") together with the transferees on May 18, 1979 (T.S.N. Ibid, p. 8); that after the signing they went to the office of Atty. Constantino at the City Hall of Manila where they had the document (Exh. "R") notarized (Ibid, p. 10). During his cross-examination, he clarified that Exh. "R" was not yet ready when they arrived at the Minerals Processing Office in Makati; that he saw Exhibit "R" being typed by one of the typists (Ibid, p. 28); that they arrived at the office before lunch and it was already afternoon when the typist finished typing the document (Ibid, pp. 37-38); that it was Dr. Fenix who did the actual computations (Ibid, p. 44); that Exh. "R" is the final form of the document, although he does not know if it was drafted several times (Ibid, p. 51); that when he returned after lunch, he found Messrs. Cayco, Gervacio, Sioson, and Fenix still in the office and that he was then given the final form (Ibid, pp. 52-53); that Exhibit "R" was already signed by the other assignees when he and Pastor Malicsi, Sr. came back after lunch and they then affixed their signatures after which the witnesses signed (Ibid, pp. 57-58); that when they could not find a notary public in the Bureau of Mines, Pastor Malicsi, Sr. suggested that they go to the City Hall of Manila (Ibid, p. 64). On March 17, 1982, Alberto Fenix, Jr. testified that Pastor Malicsi, Sr. and Reynaldo Espino arrived at his office in Makati late in the morning of May 18, 1979, (T.S.N. March 17, 1982 p. 43); that the members of their group, the complainants, discussed the sharing among them of the shares to be assigned before the document was prepared (Ibid, p. 45); that Atty. Sioson made the draft and that after the draft had been passed around among the members of the group and everyone had agreed, the final document was then prepared ( Ibid, pp. 45-46) that the document was typed on his typewriter ( Ibid, p. 47 ); that when he returned after lunch, the document was already finished, (Ibid, pp. 47-48); that he saw Pastor Malicsi, Sr. signed the document in his presence (Ibid, p. 48); that he does not remember if Mr. Gervacio and Mr. Cayco were still there when Malicsi signed the document (Ibid, p. 48); that he thinks Espino and Malicsi arrived a bit later, after he had the other members of the group had signed the document (Ibid, p. 49); that he and the other members of the group signed the document simultaneously (Ibid, p. 49); that at the time Exhibit "R" was prepared, and even before its preparation, it was already decided that only the five (5) complainants will be the assignees under that document (Ibid, p. 78); that even before the preparation of Exhibit "R" they already knew definite the names of the persons from whom Malicsi acquired the shares which where in turn to be assigned to the complainants (Ibid, p. 79). Honorato Ocampo, who was one of the witnesses of the document (Exhibit "R"), was likewise presented by complainants during the rebuttal on December 6, 1983 and testified, among others, that he was the one who typed Exhibit "R" on May 18, 1979 (T.S.N. Dec. 6, 1983 p. 5); that he was instructed by Dr. Fenix to type the document, leaving spaces for the names of stockholders in the first, second and third pages (Ibid, p. 7); that after the blank spaces had been filled out he, Pastor Malicsi, Alonto Herames and Atty. Espino took the document to the notary public who notarized it (Ibid, p. 8); that Mr. Malicsi signed Exhibit "R" in front of the Notary Public at the Manila City Hall (Ibid, p. 8); that the complainants signed Exh. "R" at the office after he had finished typing the document (Ibid, p. 13). When cross-examined, Mr. Ocampo clarified that he was given a handwritten draft by Mr. Fenix who instructed him to leave some blank spaces (Ibid, pp. 32-33); that he used the same typewriter (Ibid, p. 36); that he is very sure that the handwritten draft was given to him by Mr. Fenix after lunch; that from the handwritten draft of Mr. Fenix, he typed the final form of Exhibit "R" (Ibid p. 37); that he is absolutely sure that when he re-inserted Exh. "R" in the typewriter in order to fill out the blanks, he use the same carbon papers because he had clipped them together with Exh. "R" when he pulled the document out of the typewriter (Ibid, pp. 43-44); that all the typewritten words in page 3 were typed the first time he inserted the paper into the typewriter (Ibid, p. 45); that he is absolutely sure that he saw the notary public enter the document in his notarial register (Ibid, pp. 48-50); that Malicsi was present when the complainants all started signing the document at about 3:00 p.m. (Ibid, p. 53); that Atty. Espino was the one who knew Atty. Constantino and that he, Mr. Herames, Mr. Malicsi and Atty. Espino, signed Exh. "R." at the office of the Notary Public (Ibid, pp. 64-65). Respondents disproved complainants' contentions by also presenting documentary and testimonial evidence Among those who testified were Pastor Malicsi, Sr., NBI Expert Mr. Arcadio Ramos, Atty. Cesar Javier, Assistant Clerk of Court of the Court of First Instance of Manila, Ernesto Malicsi and Angelina Quitoriano. On June 22, 1983, Pastor Malicsi, Sr. who is the alleged assignor, testified that he has acquired the shares of almost, all the stockholders of Sta. Fe Mining and Industrial Corporation under various Deeds of Assignment Exh. "A" to "Q"; that he subsequently assigned his shares of stock including those shares he acquired from other stockholders to his sons and daughter (Exh. 13 to 14 ) but never to the complainants herein. Pastor Malicsi further testified that the Deed of Assignment of Subscription/Receivables dated May 18, 1979 (Exh. "R") is a falsified document because although he acknowledged signing a blank and incomplete Deed of Assignment of Subscription/Receivables (now filled out and completed and marked as Exh. "R" complainants), he never authorized anybody nor the complainants to complete the same. Furthermore, he categorically testified that when he was about to leave for Saudi Arabia, one or two days before April 23, 1980, Atty. Espino who is his compadre and counsel, went to his house in Olongapo City with a blank and incomplete Deed of Assignment of Subscription/Receivable (now filled out and completed and marked as Exhibit "R" for the complainants), and ask him to sign the same; that at first he refused to sign the document, but Atty. Espino assured him that the document would not be used and would merely serve as security for his (Pastor Malicsi) debt amounting to about P50,000.00 to P60,000.00 pesos in favor of Espino; that because of the entreaties and firm assurances of Espino, he finally signed the blank and incomplete document; that the time he signed it, the middle portion of page 1 which now contain the names of former stockholders of Sta. Fe Mining and Industrial Corp. from whom Pastor Malicsi, Sr., acquired the shares of stock together with the number of shares acquired from each was blank, the upper portion of page 2 now containing the names of complainants together with the corresponding amounts of shares and consideration allegedly paid, up to the small letter "X'S" was likewise blank, and page 3 was likewise blank except for the acknowledgment; that on May 15, 1979 he went to Catanduanes and returned to Manila only during the first week of June, 1979; that he did not sign Exhibit "R" in Makati or in the office of the Notary Public on May 18, 1979 as alleged by the complainants and their witnesses because he was then in Catanduanes vacationing and attending a baptismal rites; that he never appeared before Atty. Jose Constantino to acknowledge Exhibit "R"; that as a matter of fact, he has a residence certificate for the year 1979, that is residence certificate No. A-155703004, issued on Jan. 8, 1979 at Olongapo City (Exh. "20") and he would have given this to the notary public, instead of his 1978 residence certificate if he really appeared before Atty. Constantino on May 18, 1979 as alleged by complainants (T.S.N. June 22, 1983). When Pastor Malicsi, Sr. was cross-examined on June 27 and 29, 1983, he reiterated his earlier statement that Exh. "R" had blank portions when he signed it one or two days before he left for Saudi Arabia on April 23, 1980. He further declared that at the suggestion of Atty. Espino, his compadre and close friend, he kept some of the papers pertaining to Sta. Fe Mining and Industrial Corp. in a cabinet at the office of Atty. Espino. (T.S.N. June 27/83): that some of the money he used in buying the shares of the other stockholders under Exhibits "A to Q" inclusive, came from his brother who was then working in Vietnam, while some were borrowed from Atty. Espino; that he agreed to the suggestion of Atty. Espino for him to keep his papers at the Espino's office because he usually travel and most of the time nobody is left at his house in Olongapo City; that Atty. Romulo Chua is the corporate secretary of Sta. Fe Mining and Industrial Corporation and the signatures appearing in Exhibit "S" are not those of Atty. Romulo Chua (T.S.N. June 29/83) prLL Respondents' contention that Exh. "R" is a falsified document, as also testified to by the alleged assignor, Pastor Malicsi, Sr., was further collaborated or strengthened by the testimonies of two other neutral witnesses namely; the NBI Expert, Mr. Arcadio Ramos and Atty. Cesar P. Javier, Acting Assistant Clerk of Court of the Court of First Instance of Manila. Mr. Arcadio Ramos on his part testified that, upon request of the respondents, he examined the original copy of Exh. "R" and after examination he made a written report of the results and findings of his examination of the documents. The report marked "Exh. 9" by respondents which is labeled as the Questioned Documents Report No. 454-1081 dated December 21, 1981 disclosed, among others, that the typewritten or questioned entries found on page 1 and 2 of Exh. "R" were not typed at the same setting and/or occasion with the basic entries and that the typewritten or questioned entries, Reynaldo Espino and acknowledgment appearing on page 3 were not likewise typed at the same setting and/or occasion with the other typewritten entries of the said questioned Deed of Assignment (Note; the witness demonstrated and/or illustrated to this Commission during the hearing on May 31, 1982 how he came up and/or arrived at the findings now contained in Exh. 9 of the respondents). On the May 3, 1982 hearing, Atty. Cesar Javier testified and confirmed that he issued a certification, Exh. "7" dated 8th of October, 1981 which reads and quote: "REPUBLIC OF THE PHILIPPINES Court of First Instance of Manila Sixth Judicial District To Whom It May Concern: This is to certify that, according to the records of this office, no copy is on file of that document described as Doc. No. 114; Page No. 23, Book II, Series of 1979 (relating to a Deed of Assignment of Subscription/Receivables executed by Pastor B. Malicsi in favor of Paulino R. Cayco, Reynaldo R. Espino, Alberto V.B. Felix, Jr., Froilan C. Gervacio and Domingo R. Sioson dated May 18, 1979), notarized by Atty. Jose T. Constantino), Notary Public for and in the City of Manila. It is further certified that, according to the same records, Doc. No. 114, Page No. 23, Book No. II, of Atty. Jose T. Constantino, Notary Public for and in the City of Manila, is a Release of Claim allegedly executed by Gregorio Dumaguing on May 9, 1979. This certification is issued upon written request of Mrs. Teresita G. Gallardo, Asst. Secretary, whose address is at 121 Ermin Garcia St., Cubao, Quezon City, this 8th day of October, 1981. (Signed) CESAR P. JAVIER Actg. Asst. Clerk of Court" This certification in effect proves and/or supports the contention of Pastor Malicsi, Sr. that he did not appear before Notary Public, Atty. Jose Constantino, to acknowledge Exh. "R" and likewise proves the respondents', contention that Atty. Jose Constantino never or did not notarize Exh. "R" on May 18, 1979. The strongest evidence of petitioners in support of their stand are the Deed of Assignment of Subscription/Receivables dated May 18, 1979 (Exhibit "R") of which the signature of the assignor, Pastor Malicsi, Sr. has been admitted by the respondents and the evidence (Exhibits S and S-1) that the Deed of Assignment was properly recorded in the stock and transfer book of the corporation. Nevertheless, as correctly pointed out by the respondents, the inconsistencies of the testimonies of petitioners' witnesses surrounding the birth of Exh. "R" and the inherent improbabilities found in the version of complainants would not only weakened or rendered their testimonies incredible but also disproved the contention of petitioners that all the material contents in the Deed of Assignment (Exh. "R") in questioned were actually and freely executed by Pastor Malicsi, Sr. On the contrary, the testimonial and documentary evidence of the respondents convincingly support their contention that petitioners are strangers and not stockholders of Sta. Fe Mining and Industrial Corporation and that Exhibit "R" which is the source and authority of the petitioners in claiming that they are stockholders of subject corporation is presumed to be a spurious, fake and invalid document. It would not be of less importance to state here the above-mentioned inconsistencies of the testimonies of petitioners' witnesses: First, as to the time Exh. "R" was being typed. As testified to by Atty. Espino, the typing of Exhibit "R" started before lunch and was finished after lunch. Dr. Fenix, for his part, stated that when he returned after lunch the document was already finished. Honorato Ocampo, who claims that he was the one who typed Exh. "R" testified that the handwritten draft was given by Dr. Fenix to him after lunch and it was then only that he started typing. Second, as to when and where Exh. "R" was signed by the parties. Atty. Espino says that when he and Pastor Malicsi, Sr. returned after lunch, the others (complainants except Atty. Espino) had already signed the document and that, thereafter, he, Pastor Malicsi, Sr. and the two (2) witnesses signed the document at the office in Makati. Dr. Fenix on his part claims that he was present when Pastor Malicsi signed the document at his office. Honorato Ocampo, however, insists that Pastor Malicsi was present when the complainants signed the document in Makati and that, thereafter, he, together with Atty. Espino, Pastor Malicsi and Herames went to the City Hall of Manila to have Exh. "R" notarized and that they all signed Exh. "R" at the office of the Notary Public. There is, therefore, no doubt that these glaring inconsistencies seriously affect the credibility of the petitioners' witnesses. Apart from the inconsistencies of the testimonies shown by the petitioners' witnesses, the Commission likewise observed some inherent and/or apparent improbabilities in the version of the complainants which render it untenable, namely: First: If it is really true that Honorato Ocampo saw the notary public enter the questioned document (Exh. "R") in his notarial register as he claims, why is it that "Exh. R" is not reflected in the leaf of the notarial register of Atty. Constantino covering documents he notarized on May 18, 1979 (Exh. "7-A"). This established fact only strengthened the contention of Pastor Malicsi, Sr. that he never appeared before Atty. Constantino to acknowledge Exhibit "R" and the contention of the respondents that Atty. Constantino never notarized the same and on the other hand it proves that this particular witness is lying or not telling the truth. Second: If it is really true that Exhibit "R" was typed in one and the same typewriter on May 18, 1979 by the typist, Honorato Ocampo, why is it that the defect in the small letter "o", as testified to by the NBI expert, appears only in the questioned entries and not in the basic entries? This revelation of fact only shows that a long time had elapsed between the typing of the basic entries and the insertion of the questioned entries. Generally, it takes a long time before defects in particular letter appear. Thirdly: If it is really true that Exhibit "R" was typed in one and the same typewriter on May 18, 1979 including the questioned entries, why is it that the color of the questioned entries is lighter than that of the basic entries? And if it is true that Exhibit "R" was typed on May 18, 1979, and that Honorato Ocampo used the very same carbon papers in typing both the basic and the questioned entries; why is it that the questioned entries are lighter in color (in the duplicate originals) as compared to basic entries? Again, these facts only prove the contention of the respondents, as testified and reported to by the NBI Expert, that the questioned entries were typed long after that of the basic entries. It could not be denied that typewriter ribbons and carbon papers give lighter colored prints after using them for a long period of time. Finally, if it is really true, as testified, to by Dr. Fenix that even before the preparation of Exhibit "R" it was already decided that only the five (5) complainants will be the assignees under the document and they likewise already knew definitely the names of the persons from whom Pastor Malicsi, Sr. acquired the shares which where in turn to be assigned to the complainants (T.S.N. March 17, 1982 pp. 78-79); why is it that they first have to leave blank spaces in the first and second pages of Exhibit "R" the first time it was inserted into the typewriter instead of directly typing the questioned entries? If, as claimed, they already knew that only complainants will be the assignees under Exh. "R", why is it that they have to leave a big blank space on the second page of Exh. "R" the first time it was inserted into the typewriter such that they had to put small letter "X'S" on the remaining blank portion? These baffling questions could be safely answered by saying that Pastor Malicsi, Sr. signed the document in blank or with blank portions and that complainants later filled out said blank portions without the knowledge, authority and consent of Pastor Malicsi, Sr. It must be recalled that Pastor Malicsi, Sr. was about to leave for Saudi Arabia on April 23, 1980 and he had still outstanding obligations with Atty. Espino amounting to P50,000.00 or P60,000.00 pesos and Atty. Espino demanded a security for the debt and asked him to sign a document with a firm assurance that the document would not be used except as a security for the debt. Under the given circumstances, knowing fully well that he has still an obligation to Atty. Espino and considering further that the latter is his close friend and compadre being the Godfather of his son and daughter, it would be an unwise decision and most unfair for Atty. Espino if Malicsi, Sr. would refuse to sign the document or not to accede to the pleas of his compadre. Based on the given set of facts and circumstances, the Commission, therefore, is inclined to believe that Pastor Malicsi, Sr. really and finally affixed salto the Commission is of the opinion that the testimony of Pastor Malicsi, Sr. regarding the existence of Exh. "R" and on how he was able to affix his signature especially so when viewed in the light of the testimonies of the NBI Expert, Mr. Arcadio Ramos, and Atty. Cesar Javier and other existing evidence, is deserving of full credit. In view of all the foregoing, the Commission is convinced that the Deed of Assignment of Subscriptions/Receivables (Exh. "R") dated May 18, 1979 when presented to Pastor Malicsi, Sr. by Atty. Reynaldo Espino for signature was an incomplete document with blank portions and later on, its blank spaces filled out and completed by somebody without the knowledge, authority and consent of the Assignor, Pastor Malicsi, Sr. WHEREFORE, judgment is hereby rendered in favor of respondents as against complainants, declaring that respondents are the true stockholders of the Sta. Fe Mining and Industrial Corporation. No pronouncement as to cost and attorney's fees. llcd (SGD.) JAMES K. ABUGAN Hearing Officer