National Federation of Sugarcane Planters, Inc. v. Plaridel Surety and Insurance Co., Inc.

[SEC-SICD * CASE NO. 3683. October 11, 1994.] NATIONAL FEDERATION OF SUGARCANE PLANTERS, INC., represented by Congressman ROMEO G. GUANZON , plaintiff, vs . PLARIDEL SURETY AND INSURANCE CO., INC., AND JOHN DOE , respondents . D E C I S I O N This is a verified complaint filed by National Federation of Sugar Cane Planters, Inc., (Federation for short) represented by Congressman Romeo Guanzon against Plaridel Surety and Insurance Co., (Plaridel) which prayed for the following reliefs: (1) to issue a writ of mandatory injunction compelling defendant Plaridel to allow the Federation to inspect and audit its books, more particularly its stock and transfer book, and (2) to issue a restraining order commanding defendant Plaridel not to record any transfer of shares of stock nor issue new certificates of shares of stock before and after trial, (1) to declare the cancellation, sale and transfer of the shares of stock of the Federation as null and void ab initio; (2) ordering defendants Plaridel and John Doe to return the 13,234 shares of stock and to issue the corresponding stock certificates to the Federation; and (3) ordering defendants in solidum to pay plaintiff damages, attorney's fees, litigation expenses and cost of suit. LibLex In its complaint, plaintiff alleged, among others, that it owns 13,234 shares of stock of defendant and was issued shares of stock of Plaridel; that the plaintiffs' shares of stock got lost and could no longer be found; that the fact of loss was reported by the complainant to defendant Plaridel in its letters dated August 10, 31, September 22 and October 25, 1989 (Annexes "B", "C", "D", and "E" of the complaint) and requested for inspection and audit of books, as well as, the stock books of Plaridel; that on October 28, 1989, defendant Plaridel wrote a letter to the plaintiff informing the latter that it never owned at any time 13,234 shares of the defendant; and that plaintiff's total shareholdings with the defendant was only 3,229 shares as of December 31, 1985; that the said shares were surrendered for cancellation which were sold in the early part of 1986, as per defendants Plaridel's letter to the plaintiff (annex "F"); that plaintiff's request for inspection and audit was denied by Plaridel on the ground that the plaintiff ceased to be a stockholder of Plaridel when all its shares were sold and cancelled; that plaintiff never surrendered, endorsed, transferred or sold its shareholdings to any person or entity nor authorized any person to do the same; that plaintiff did not receive any consideration from the alleged sale of its share of stock with defendant per annex "A" of the complaint; that defendant John Doe in conspiracy with co-defendant Plaridel succeeded in having the certificates of shares of stock of plaintiff cancelled and transferred under his name without consent and authority from plaintiff; and by reason of which plaintiff suffered damages; and that to protect itself against unauthorized and illegal acts of defendant, plaintiff had to secure the services of counsel in the amount equivalent to 25% of the value of its shareholdings or attorney's fees as well as other expenses of litigation. On September 26, 1989, defendants filed a motion for bill of particulars which plaintiff opposed. On February 5, 1990, the said motion was denied. Hence the filing of answer which admits and denies generally and specifically material averments in the complaint. And by way of affirmative defenses, defendant Plaridel alleged that the complaint states no cause of action and that plaintiff is guilty of latches, citing reasons therefor. Defendants also interposed a counterclaim which alleged that by reason of instituting clearly unfounded action, the plaintiff has compelled the herein defendant Plaridel to litigate unnecessarily and to engage the services of counsel for which they agreed to pay the sum of P150,000.00 as attorney's fees. A reading of the allegations of the contending parties in their pleadings, as well as, the evidence adduced during hearings will show that the instant complaint was filed by the Federation against Plaridel and John Doe based on the Federation's submission that the former is a stockholder of the latter who claims to own 13,234 shares of stock of Plaridel. Their submission was denied by Plaridel although it admitted that the federation was a stockholder of only 3,229 shares of stock covered by certificate of stock Nos. 341 for 2489 shares and No. 350 for 740 shares until 1985 when the shares were surrendered to defendant Plaridel early 1986. In his testimony Congressman Romeo Guanzon stated that he knows for a fact that the Federation owned more than 13,000 shares of stock in Plaridel when he took over as the Federation's President although he could not find the shares when he looked for them. When asked if the federation has the certificates of shares of stock, he answered in the negative. In the latter part of his direct testimony, Congressman Guanzon was shown a certified true copy of the list of stockholders of defendant Plaridel which shows NFSP as one of the stockholders of Plaridel, and the only objection thereto was that the "NFSP" does not necessarily refer to the plaintiff Federation. LLphil On March 13, 1990, Mr. Angel Severino, Corporate Secretary of the Federation testified that the Federation was issued certificates of stock for 13,234 shares of Plaridel who claimed that said certificates of stock was kept by the Chairman/President of the National Federation, the late Congressman Gustilo (TSN March 13, 1990, p. 8); when asked where the stocks certificates are, Mr. Severino said "we have no knowledge". (TSN March 13, 1990, p. 9), although he claimed to be privy to the discussion about the transaction of the acquisition by the plaintiff of stockholdings of defendant Plaridel. (TSN, March 13, 1990, pp. 23 & 24) During the same hearing on March 13, 1990, Mr. Severino also testified that the plaintiff has not passed any board resolution authorizing any person to surrender and sell its shares of stock with defendant Plaridel. Mr. Romeo Sy, Assistant Operation manager of Plaridel, testified that Plaridel made a statement report of list of stockholders where plaintiff holds 13,234 shares of defendant stockholding. On the alleged assignment of the Federation's shares of stock in Plaridel, covered by the Deed of Assignment dated January 15, 1985, Atty. Dayon testified that he did not notarize the said Deed and that the signature appearing above his name is not his signature. The evidence adduced by the defendants show that plaintiff's stockholdings in the defendant corporation was 3,047 which were covered by certificates of stock No. 341 for 2,489 shares and No. 350 for 740 shares which had already been surrendered by the Federation to Plaridel. Romeo Sy, assistant Operations manager of Plaridel testified that the list of stockholders of Plaridel which was submitted to the Insurance Commission was prepared by Congressman Gustilo wherein the name of plaintiff federation was listed as owner of 13,234 shares in defendant Plaridel. Without counterchecking the list, Romeo Sy signed the list. He also declared in his testimony that he never saw any certificates of stock issued by Plaridel for the said 13,234 shares except the two (2) certificate of stock Nos. 341 and 350. Romeo Sy went further in his testimony to say that it was Congressman Gustilo who said that the statement was correct because he was the one holding the stock and transfer book at that time. (TSN-June 4, 1991, p. 17) He added that it was the Congressman who prepared the list and it was submitted to him (Romeo Sy) for his signature in compliance with the requirement of the Insurance Commission. A careful evaluation of the evidence adduced, as well as, the arguments of the parties in their pleadings will readily show that the issued to be resolved in this case are: (a) whether or not plaintiff Federation owns 13,234 shares of stockholding of defendant Plaridel; and (b) whether or not the Deed of Assignment dated January 15, 1985 is valid and enforceable. It appears that plaintiff's claim to 13,234 shares of stocks in the defendant corporation is evidenced only by list of stockholders of Plaridel appearing in the records of the Insurance Commission. The stock and transfer Book of Plaridel which allegedly was in the possession of Congressman Gustilo could no longer be located and reportedly missing. The Federation's claim that it was issued a certificate of stock for 13,234 shares could not be established as no evidence were presented as regards the acquisition of said shares from Plaridel. Upon the other hand, it was the testimony of Mr. Romeo Sy that he was instructed by the late Congressman Armando Gustilo who also the President of the Federation to include in the list of stockholders of Plaridel to be submitted to the Insurance Commission the name of the plaintiff Federation as holding 13,234 shares. cdll As regards the issue of whether or not the Deed of Assignment dated January 15, 1985 (Exhibit "3") is valid and enforceable, it would appear that it covers the 3,047 of stock of the Federation with Plaridel under certificate No. 341 and 350. Accordingly, Catalino A. Dayon who appears on the face of the document to have notarized it, denies having notarized the same and disowns the signature appearing above his typewritten name. Mr. Romeo Sy who is one of the instrumental witnesses to the Deed of Assignment testified that he was not aware of such document. However, the assignment itself, as well as the signature of the assigner, Armando C. Gustilo, President of the Federation, were never questioned by the plaintiff. In the light of the foregoing considerations, this Hearing Officer is more inclined to sustain the argument of the respondents concerning the claim of the plaintiff to the ownership of 13,234 shares. No evidence whatsoever was adduced to sustain the view of the plaintiff that it owns 13,234 share of stock in Plaridel. The reported shareholdings of the Federation of 13,234 shares appears only in a list submitted to the Insurance Commission which has never been corroborated by any other evidence. The stock and transfer book which was allegedly in the possession of Congressman Gustilo until his death was never produced. Plaridel does not have in its books the stock certificate representing the 13,234 share of stock. The testimony of Mr. Romeo Sy, an officer of Plaridel, that he was merely asked to sign a list of stockholders of Plaridel submitted to the Insurance Commission which shows that the Federation has in its name 13,234 shares of stock in Plaridel. As regards the Assignment of 3,047 shares by the Federation to Plaridel, the fact that the Notary Public disowns the signature appearing above the name, Catalino Dayon did not invalidate the transfer of 3,047 shares by the Federation signed by Mr. Armando Gustilo in favor of Plaridel as the genuineness of the signature of the Assigner is not in question. All told, it would appear that evidence disputing the ownership by the Federation of 13,234 shares in Plaridel is overwhelming. WHEREFORE, judgment is hereby rendered dismissing the complaint for lack of merit. cdll No pronouncement as to costs. SO ORDERED. (SGD.) MANUEL P. PEREA Hearing Officer