Luceria B. Mangoma, et al. vs. Ramon Mangoma, et al.

[SEC-SICD * CASE NO. 4069. March 7, 2000.] LUCERIA B. MANGOMA, ET AL. , complainants , vs .RAMON MANGOMA, ET AL. , respondents . D E C I S I O N In their complaint, the complainants pray that the Commission resolve that: a) the scheme and devices employed and the acts committed by the respondents be declared as without valid authority, fraudulent, and detrimental to the interests of complainants; b) the complainants/petitioners be declared as the rightful and lawful officers of the corporation; c) the respondents be sentenced to undo what they have done and restore the corporation to its former position ante their fraud and misrepresentation; or d) if such restoration is no longer possible or feasible, the respondents be sentenced to pay the complainants/petitioners the amount of P946,000.00 to Luceria Mangoma and the sums of P20,000.00 each to Rosario Mangoma and Roldan Cubangbang, exclusive of interests; e) the respondents be likewise sentenced to pay damages, the kind and the amount of which are left to the sound judgment of this Commission; f) the respondents for compelling the petitioners to litigate and engage legal services be also sentenced to pay the sum of P100,000.00 as and by way of attorney's fee; and e) to pay the cost and other litigation expenses. aATHES The complaint which was filed on September 23, 1991 alleges that: Luceria Mangoma is the legal wife and widow of Glicerio Mangoma, Sr.,deceased, who was President of San Jacinto Development Corporation at the time of his death on June 6, 1987; the complainants are stockholders of San Jacinto Development Corporation with Luceria Mangoma owning 840,000 preferred shares, Rosario Mangoma with 20,000 shares and Roldan Cubangbang owning 20,000 preferred shares; the corporation owns a real property at San Jacinto, Pangasinan with an area of 65,513 square meters covered by TCT No. 137709 and said property was mortgaged with the Development Bank of the Philippines, Dagupan Branch, for P150,000.00; the late Glicerio Mangoma owns 20,000 common shares and 193,000 preferred shares; the respondent claiming to be the only heirs of the late Glicerio Mangoma, Sr. adjudicated among themselves the 20,000 common shares and 193,000 preferred of the deceased; the respondents also constituted themselves as the new set of officers and only stockholders of the corporation then sold and convey the corporate property covered by TCT No. 137709 on July 11, 1990 to Ronaldo Hipolito (25,513 square meters) for P24,000.00 and P40,000.00 respectively, and said buyers caused the issuance of a title in their names; that the said total purchase price of P64,000.00 on July 11, 1990 is much less than the mortgage value of P150,000.00 in 1981; that the respondents have appropriated the proceed of the sale which really amounted to P2.5 M to the damage and prejudice of the complainants; that respondents after said disposition of corporate property "dissolved" the corporation; that in the annual election of the stockholders held on January 24, 1988, the complainants were elected members of the Board; that on the same day, the Board elected the complainants to the positions of Treasurer/General Manager, Secretary and Vice President, respectively. In their Answer dated November 3, 1991, the respondents admitted the personal and legal circumstances of the parties; as well as the property registered in the name of the corporation under TCT No. 177709 of the Registry of Deeds of Pangasinan which was mortgaged with the Development Bank of the Philippines, Dagupan Branch, for P150,000.00; that after the death of Glicerio Mangoma they re-constituted themselves as the officers of the corporation in which capacity they transacted with DBP, Dagupan Branch, and transferred the property to third persons in order to pay the unpaid loans. As special and affirmative defense, they aver that respondents Leticia Mangoma-Ortillo and Mercedes Mangoma-Refugia are Secretary and Treasurer, respectively, of the corporation since incorporation; that there is a pending civil case in the RTC of Quezon City over the same subject matter which is still undecided, that respondents are the owners of the property in question which was used as capital stock of San Jacinto Development Corporation and they were never paid for the price of the land; that they voluntarily dissolved the corporation on March 11, 1989 and notice of said dissolution was published in a newspaper of general circulation. As counter claim, the respondents alleged that during the lifetime of Glicerio Mangoma, Sr.,he secured an irrigation pump from NIA on credit which was never paid and that Secretary Leticia Mangoma and Treasurer Refugia as guarantors are now being made to pay by the NIA; that said irrigation pump was taken by and sold for P60,000.00 by complainant Luceria Mangoma, and that by reason of the present action they were forced to seek the services of counsel for a fee of P40,000.00. In their reply dated November 11, 1991, the complainants admitted the existence of Civil Case No. 89-2325 which was filed ahead of this case, but added that the same was solely aimed to stop the respondents from selling the property; that complainant Luceria Mangoma was not a corporate officer entitled to possession of the books and records of the corporation at the time of Glicerio Mangoma's death; that the dissolution of the corporation by the respondents was not in accordance with legal requirements; and that Luceria Mangoma did not acquire and sell the irrigation pump. After the issues were joined, the parties, in an Order dated November 13, 1991, were required to file not later than November 25, 1991 their respective preliminary conference briefs with the warning that any party who shall fail to attend the preliminary conference or to submit a preliminary conference brief may be non-suited or declared as in default. ITcCSA Only the complainants submitted the required preliminary conference brief. An order was issued on December 10, 1991 declaring all respondents as in default for failure to file the required preliminary conference brief. The presentation of complainants' evidence ex parte was set on January 24, 1992. The "motion for issuance of order/notice to preserve status quo" praying that no further transaction be permitted on TCT No. 175394 (formerly TCT No. 137709) of San Jacinto Development Corporation) was denied by this Commission for lack of merit. Meanwhile, an "urgent motion to lift the order of default" dated January 21, 1992 was filed by the respondents. After due consideration, however, the motion to lift order of default was denied for respondents' "failure to file up to the present their preliminary conference brief" in an order dated March 12, 1992. The complainants presented three (3) witness, namely, Luceria Mangoma, Rosario Mangoma and Ronaldo Cubangbang. Exhibits A to Q, inclusive, and their submarkings, were formally offered and admitted in an order dated June 24, 1992. From the pleadings submitted by the parties, it is quite evident that the complaint involves a controversy between and among the stockholders of San Jacinto Development Corporation, a corporation registered with this Commission on February 12, 1980 with Registration Certificate No. 91166, arising out of intra-corporate relations, including that of the election or appointment of the corporate officers who, in this case, are being accused by the complainants as having employed devices or schemes amounting to fraud and misrepresentation which are detrimental to their interest. Therefore, the instant case is one that falls squarely within the exclusive jurisdiction of the Commission. It is shown by the evidence on record that the real property consisting of 65,513 square meters situated in San Jacinto, Pangasinan was registered in the name of the corporation under Transfer Certificate of Title No. 137709 of the Registry of Deeds of Pangasinan (Exh. D and D-5);thus, it is no longer disputed that said parcel of land is a corporate property. That it was mortgaged with the Development Bank of the Philippines on August 26, 1981 by Mr. Glicerio Mangoma, Sr. who was duly authorized by the Board to secure the loan of the corporation in the amount of P150,000.00 (Exh. D-1-A) is also uncontroverted; thus, confirming the conclusion that the real property is corporate asset. acHDTE In a meeting of the Board of Directors of the San Jacinto Development Corporation held on February 11, 1988, Luceria Mangoma, duly elected Treasurer and General Manager of the corporation, was empowered and authorized by the Board to negotiate with DBP for the release of mortgage of the San Jacinto lot; to appoint any person of her choice in the follow up of all paper requirements with DBP; to mortgage/sell any and all properties of the corporation, real or personal, to generate funds and pay for the overdue accounts of the corporation; to open current and savings account with any banking institution, (Exh. O) which authority was duly inscribed on page A of TCT No. 137709 as entry No. 694402 (Exh D-2);thus, serving to the whole world notice of such authority given to the grantee, Luceria Mangoma, by the corporation. On the other hand, the respondents in a move subsequent to that of the meeting of February 11, 1988 freely disposed of the property covered by TCT No. 137709 to Bobby Wenceslao Castillo on February 20, 1989 as shown by entry No. 719717 on Page A of TCT No. 137709 and to Ronaldo F. Hipolito on February 27, 1989 (Exh D-2-A) by misrepresenting themselves to be the authorized legitimate officers of the corporation. The alleged consideration were P40,000.00 (Exh D-3-A) and P24,000.00 (Exh D-2-A).respectively, or a total of P64,000.00 which price was way below the P150,000.00 mortgage value of the property in August, 1991 (Exh D-1-A);thus, it may be conclusively presumed that the transfers to the buyers were done in bad faith and attended by fraud. We note also with serious concern that despite the entries annotated in TCT No. 137709 of secretary Rosario Mangoma (Entry No. 6944027),Affidavit of Adverse Claim and Notice of lis pendens, the respondents rammed through the sales transactions to Castillo and Hipolito in total disregard of the rights of the complainants. At the time of the sale, the prevailing price of the property in the locality was P50.00 per square meter; hence, the true price that was paid by the Vendees and received by the Vendors was more than P3,200,000.00 (TSN, April 24, 1992, p. 7) or at least P2M (TSN, March 24, 1992, p. 20; also TSN, April 24, 1992 pp. 6-7) which value, we rule, to be more realistic considering the strategic location of the land and the existing improvements thereon as well as the various uses to which it was devoted at that time (TSN, March 24, pp 25-26). Considering that the sale of the only property of the corporation was a disposition of all or substantially all of the corporation's property and assets, the alienation must be in accordance with Section 40 of the Corporation Code which prescribes that the sale must be passed by a majority vote of the directors and approved by the vote of stockholders representing 2/3 of the outstanding stock in a meeting duly called for the purpose. There is no compliance with these requirements of the law. Moreover, there is no showing that the sale of the property was in the legitimate furtherance of corporate purposes (Section 36, Corporation Code). On the contrary, the sale "to any interested person" is "for (the) reason (that) the same is no longer being used by the corporation" and that it "shall be for the interest of all concerned". (Exh D-2, Entry No. 719717) to our mind particularly for the respondents, are not the valid ground contemplated by the Code. Consequently, the disposition must be declared unauthorized, invalid and without force and effect. Yet the other stockholders, including the complainants were left empty handed (TSN March 24, 1992, pp. 20, 23-24) despite the sale for P2 M (TSN, April 24, 1992, pp. 6-7). It appears further that after the disposition of the property the respondents "voluntarily dissolved" the corporation (Par VII, Special and Affirmative Defense in Answer) in order "to cover up the tracks of their illegal deeds" (par. 13, Complaint). However, the present complaint seasonably filed on September 23, 1991 which is well within the three (3) years period from the voluntary dissolution on March 11, 1989, serve as the deterrent to the respondents from escaping the consequences of their illegal acts (Section 122, Corporation Code). The deeds of absolute sale in favor of Castilllo and Hipolito were executed by Ramon Mangoma, Glicerio Mangoma, Jr.,Mercedes Refugia and Leticia Ortillo (Exhs. D-2, D-2-A and D-3-A) who posed as the authorized "stockholders, officers/directors" of the Corporation. These are the same persons against whom the instant complaint was instituted and they were identified by complainant Luceria Mangoma (TSN, March 24, 1992, pp. 13-14);thus, answerable and responsible for the deeds performed in contravention of law. Out of more than one million shares issued by the corporation (TSN March 24, 1992, p. 12) complainant Luceria Mangoma is the owner of 670,000 preferred shares with a par value of P1.00 represented by stock certificates Nos. 033, 034, 035, 036, 043, and 047 (Exhs. B, B-1 to b-5). Likewise, she is the assignee of 170,000 preferred shares represented by stock certificates Nos. 003, 024, 025, 026 and 027 (Exhs. B-6 to B-10). Complainant Rosario Mangoma and Ronaldo Cubangbang are owners of 20,000 shares each (TSN, March 24, 1992, pp. 12-13). At the time of Glicerio's, (Luceria's husband) death, Luceria was the owner of 20,000 common shares and 193,000 preferred shares represented by stock certificate Nos. 01, 001, 002, 010, 011, 012, 013, 015, 016, 017 and 037 also with a par value of P1.00 (Exhs. C, C-1 to C-10). Having shown the existence of a valid marriage (Exh. A; TSN, March 24, 1992, pp. 6-7) and assuming that the property relations between the spouses Mangoma was that of conjugal partnership of gains (Art. 119, NCC),complainant Luceria Mangoma is entitled to at least one-half of the total holdings of her deceased husband. Consequently, she constitutes the majority shareholder of San Jacinto Development Corporation with a total number of 946,500 shares out of the outstanding stock of more than one million issued by the corporation. AaHDSI By-and large, the complainants' cause of action were shown by substantial evidence which this Commission found sufficient to merit a judgment in their favor. WHEREFORE, in view of all the foregoing, judgment is hereby rendered as follows: 1 Declaring all the acts of respondents in constituting themselves as officers of San Jacinto Development Corporation, by selling and conveying the corporate property consisting of 65,513 square meters of land in San Jacinto, Pangasinan to Ronaldo Hipolito and Bobby Wenceslao Castillo, and in dissolving the corporation, as done in fraud of the complainant; 2 Ordering the respondents, jointly and severally, to pay: a. Luceria Mangoma the sum of P946,500.00 representing all her shareholdings in the corporation; b. Rosario Mangoma the sum of P20,000.00 and c. Ronald Cubangbang the amount of P20,000.00 in settlement of their claims; d. Moral damages in the amount of P50,000.00 and exemplary damages, to serve as an example for the public good, in the sum of P50,000.00; and the further amount of; e. P20,000.00 as and by way of attorney's fee for compelling the complainants to sue and litigate thereby engaging legal counsel for a fee; f. Cost of suit and litigation expenses. This is without prejudice to any action for annulment of the transfer to third persons of the land covered by former Transfer Certificate of Title No. 137709, Registry of Deeds, Pangasinan, should herein complainants decide to frontally attack the validity, thereof, as an alternative remedy. cADTSH SO ORDERED. (SGD.) JULIETO F. FABRERO Hearing Officer