Rodolfo P. Evaristo, et al. vs. Ricardo B. Baly, et al.

[SEC-SICD * CASE NO. 3159. August 1, 1990.] RODOLFO P. EVARISTO, ET AL. , petitioners , vs .RICARDO B. BALY, ET AL. , respondents . D E C I S I O N This is an action for mandamus and dissolution of Sealandair Cargo Specialist, Inc.. In their petition, petitioner Rodolfo P. Evaristo alleged that before Sealandair Cargo Specialist, Inc. was organized, he was already engaged in part time messengerial business alone and had been dealing with respondent Baloloy; that since the business was going good, said respondent proposed to herein petitioner that they form a corporation provided that said petitioner should shoulder or advance the capitalization, finances and other costs in the organization and incorporation; that seeing the viability of such proposal, the herein petitioner agreed to form the corporation and provided the money for its capitalization and other expenses in its organization. On September 28, 1982, the said petitioner Evaristo and respondents incorporated and filed the articles of incorporation of Sealandair Cargo Specialist, Inc. which was approved by the Securities and Exchange Commission on April 20, 1983. The corporation had an authorized capital stock of ONE MILLION (P1,000,000.00) PESOS divided into Ten Thousand (10,000) shares with a par value of One Hundred (P100.00) Pesos per share; Further, that the amount of Two Hundred Fifty Thousand (P250,000.00) Pesos was subscribed by the following; No. of Amount Amount Name Shares Subscribed Paid Martin S. Apura 250 P25,000.00 P10,000.00 Rodolfo P. Evaristo 500 50,000.00 20,000.00 Faustino P. Javier, Jr. 250 25,000.00 10,000.00 Leonardo B. Baloloy 500 50,000.00 20,000.00 Ricardo B. Baly 500 50,000.00 20,000.00 Florendo C. Saguirre, Jr. 500 50,000.00 20,000.00 ___ _______ _______ T o t a l 2,500 P250,000.00 P100,000.00 That at the first organizational meeting of the corporation, the following were elected: Name Position Rodolfo P. Evaristo Director/President Leonardo B. Baloloy Director/EVP Finance, Treasurer/Secretary Ricardo B. Baly Director/General Manager Florendo A. Saguirre, Jr. Director/Manager International Operation Fausto P. Javier, Jr. Director/Principal Customs Broker Martin S. Apura Director/Alternate Customs Broker Petitioner Rodolfo S. Evaristo was at that time working with Cado Freight International in Saudi Arabia as Manager and the bulk of the business was coming from Saudi Arabia. Thereupon, the petitioner, as well as respondent Leonardo B. Baloloy as EVP and the other respondents came up with an agreement that respondents would manage the operation of the business of the corporation in the Philippines, while petitioner would solicit clients for the corporation in Saudi Arabia, at the same time with the arrangement that petitioner was to continue and remit advances on whatever amount that may be requested from him by respondent Baloloy as additional investment and for operational expenses of the corporation; that from the time of the operation of the corporation, petitioner, upon request respondent Baloloy either through telexes or letters had been religiously remitting sufficient amount to respondent Baloloy for the purchase of office supplies, payment of salaries, furnitures, office machines, purchase of vehicles for company's use and other related business expenses in estimated amount of P300,000.00. When the petitioner came back to the Philippines, he requested from respondent Baloloy to furnish him the financial report on all business transactions, including accounting of all the cash collections, production of the stock and transfer book, which respondent Baloloy failed to submit as of this date: that when petitioner Evaristo made the demand to render an accounting, respondent Baloloy and his co-respondents abandoned the corporation and left the management to the herein petitioner, that having been left by the respondents, the petitioner, at his own initiative, started to examine and reconstruct the financial records of the corporation and found out that the corporation had long been losing from the time the respondents took over the operation of the corporation and besides, the corporation has not been filing its reportorial requirements since its incorporation, up to the present; that respondents having resented the action made by the petitioner, in conspiracy with one another, held a meeting and passed a resolution removing petitioner as President of the corporation without following the procedures provided for in the by-laws; that under the circumstances, it is inimical to continue the operation and existence of the corporation owing to financial losses, mismanagement, coupled with the fact that the trust and confidence reposed in the respondents pursuant to Section 31 of the Corporation Code have been violated by them as a result thereof. In their answer, respondents denied the material averments of the petition and alleged as an affirmative defense that the petitioners have no cause of action against the respondents because the latter already turned over to the petitioner Evaristo the books of accounts of the corporation, including the corporate funds, facilities, supplies, properties and collectibles of the corporation for his management and administration as early as February 1984 when the corporation was at its post/pre-operation and, just before it started to make collections for the services it had rendered to its customers and tie-ups; that they have no monies or accountables in their hands, nor properties at their disposition for the same are with the petitioner Evaristo who converted the same to his own personal use and benefit but, who refuses to return and/or account for the same. Hearings were conducted wherein the petitioners presented and formally offered their documentary evidence which were admitted. On the other hand, the respondents failed to present their evidence notwithstanding sufficient time and opportunity to do so. Upon motion of counsel for the petitioners, respondents were declared to have waived their right to present evidence and the case was submitted for decision in the Order dated February 6, 1990. On March 29, 1990, respondents thru counsel filed a motion for reconsideration to set aside the Order dated February 6, 1990. On June 11, 1990, an Order was issued denying the said motion for reconsideration. The evidence adduced by petitioner Rodolfo P. Evaristo clearly established his entitlement to an accounting of all the corporate funds, properties and transactions entered into by the respondents. Upon the other hand, since respondents were declared to have waived their right to present evidence, for all legal intents and purposes respondents have no evidence at all and the evidence for the petitioners remain unrebutted. WHEREFORE, judgment is hereby rendered as follows: 1. Commanding the respondents, particularly respondent Leonardo B. Baloloy, as Treasurer and Corporate Secretary, to render an accounting of all the corporate funds, properties and transactions of Sealandair Cargo Specialist, Inc.,since 1982, including all the advances made by petitioner Rodolfo P. Evaristo; to return the funds and properties, as well as the proceeds of any such transaction which may have been misappropriated and/or dissipated; 2. Ordering the dissolution of Sealandair Cargo Specialist, Inc.. Let copy of this Decision be furnished the Records Division, Administrative and Finance Department of the Commission for inclusion in the corporate file. No pronouncement as to costs. SO ORDERED. (SGD.) ENRIQUE L. FLORES, JR., Hearing Officer