Pacific Basin Securities Co., Inc. v. Equitable Banking Corp.

[SEC-SICD * CASE NO. 4225. December 28, 1995.] PACIFIC BASIN SECURITIES CO.,INC. , petitioner , vs .EQUITABLE BANKING CORPORATION, ET AL. , respondents . D E C I S I O N This is a petition for mandamus filed by petitioner Pacific Basin Securities Co. Inc. ("Pacific Basin" for brevity) against respondents Equitable Banking Corporation, Oriental Petroleum and Minerals Corporation, Mr. Robert Coyiuto, Jr. and Atty. Jose Laureta (hereinafter referred to collectively as "respondents") for the latters failure to perform their ministerial duty of issuing a stock certificate for THREE HUNDRED EIGHT MILLION THREE HUNDRED THOUSAND (308,300,000) Class "A" Oriental Petroleum and Minerals Corporation ("OPMC",for short) shares and the additional shares acquired by Pacific Basin, as a consequence of its availment thru Piedras Petroleum Corporation ("Piedras") the various OPMC Stock Rights Offering in petitioner's name and to record the transaction in the Stock and Transfer Books of OPMC, and thereafter to deliver said stock certificate to Pacific Basin. prLL Based on the evidence presented and the allegations in the petition which were proven by Pacific Basin and not denied by the respondents in their answer, including the facts alleged by respondents in their Proposal for Stipulation of Facts and Requests for Admission of Documents of respondents which were admitted by Pacific Basin with the qualification that the same are not a legal obstacle for the transfer of the 308,300,000 Class "A" OPMC shares, the undisputed facts of the case as follows: On May 31, 1991, Pacific Basin thru the Stock Brokerage firm First Resources Management and Securities Corp. (FRMSC) purchased in the Makati Stock Exchange Three Hundred Eight Million Three Hundred Eight Thousand (P308,300,000) Class "A" OPMC shares of stock (hereinafter referred to as the "subject shares") for a consideration of P.0575 per share totaling Seventeen Million Seven Hundred Twenty seven Thousand Pesos (P17,727,000.00) as evidenced by the FRMSC Buy Invoice No. 14200 dated May 31, 1991. Pacific Basin fully paid said purchase price (TSN, dated May 15, 1992, pp. 25-26 and 38-39 and Exhibit "A").The seller of the shares turned out to be Piedras, a sequestered company controlled by the nominees of the Presidential Commission on Good Government ("PCGG"). On June 11, 1991, Equitable Banking Corporation ("EBC") received a letter dated June 10, 1991 from PCGG Chairman David M. Castro informing EBC the stock and transfer agent of OPMC, that it sold the subject shares thru FRMSC (Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents pp. 1-2 and Annex "A" thereof). EBC sent a letter dated June 18, 1991 to OPMC referring to PCGG Chairman David M. Castro's letter and requesting advice on whether an additional documents which may be required before the transfer of the subject shares may be effected. (Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents, p. 2 and Annex "B" thereof). In response to EBC's above-query, then OPMC Corporate Secretary Atty. Pelagio T. Recalde sent a letter dated June 20, 1991 to EBC and enclosed thereto is a letter opinion of OPMC's external counsel, Hernandez, Valecaria, Vivar and Santiago Law Offices, which required Piedras to submit to OPMC the following: (a) Minutes of Board Meeting authorizing the sales of the subject shares; (b) a Secretary's Certificate of the authorized signatories; (c) the Deed or document of sale; (d) the duly endorsed stock certificates; and (e) a copy of the Articles of Incorporation and By-Laws of Piedras. (Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents, p. 2 and Annexes "C" "D" thereof). On June 20, 1991, EBC wrote a letter to FRMSC and returned the latter's Direct Transfer Letter No. 1498. In the same letter, EBC requested FRMSC to submit the following: (a) Stock Certificates, (b) Board Resolution authorizing the same, (c) Secretary's Certificate of authorized signatures and (d) the Articles of Incorporation and By-Laws of Piedras, EBC promptly communicated its return of FRMC's Direct Transfer Letter to OMPC, (Proposal for Stipulation of Facts and Requests for Admission of Documents of Respondents, p. 2 and Annexes "E" and "F"). On January 28, 1992, FRMSC transmitted Direct Transfer Letter (DTL) No. 1597 (Exhibit "B") and a duly endorsed OPMC Stock Certificates No. 226514 representing 1.5 Billion Class "A" OPMC shares to EBC (Exhibit "B-1"),with the instructions to cancel said certificate and, in lieu thereof, issue a new stock certificate in favor of Pacific Basin for Three Hundred Eight Million Three Hundred Thousand (308,300,000) shares and the balance in favor of Piedras for One Billion One Hundred Ninety One Million Seven Hundred Thousand (1,191,700,000) shares. (TSN dated May 15, 1992, pp. 35-37). Thru a letter dated January 30,1992, EBC informed PCGG Commissioner Mario Jalandoni that it cannot effect the transfer of the subject shares, EBC cited two (2) reason namely: (a) Mr. Clemente F. Madarang, the endorser of OPMC Stock Certificate No. 226514, was not among those included in the list of authorized signatories; and (b) no board resolution from Piedras authorizing the sale of the subject shares to Pacific Basin was attached to the DTL. (Proposal for Stipulation of Facts and Request for Admission of Document of Respondents, p. 2 and Annexes "E" and "F" thereof). To remedy the aforementioned defects Piedras thru FRMSC submitted to EBC a Secretary's Certificate confirming the notification of the sale by its board of directors and the authority of Mr. Clemente Madarang to endorse OPMC Stock Certificate No. 226514 in favor of Pacific Basin (TSN dated May 15, 1992 pp. 40-43 and Exhibit "C").This notwithstanding, respondents refused to cancel OPMSC Stock Certificate No. 226514 and issue a new one in favor of Pacific Basin (TSN dated May 15, 1992, pp. 44). On February 3, 1992, EBC received a letter from the law firm Villanueva, Narvasa and Pesigan, advising EBC on the pendency of SEC Case No. 0441 due to the filing of a petition by its client, Mr. Rodolfo Arambulo, a stockholder of Piedras which pray, among others, that EBC and OPMC desist from registering the subject sale. In the said SEC case, Mr. Arambulo questioned the validity of the sale of the subject shares to Pacific Basin. (Proposal for Stipulation of Fact and Request for Admission of Documents of Respondents, p. 3 and Annex "I" thereof). LexLib On February 4, 1992, EBC received a letter from OPMC advising it to refrain from processing the transfer of the subject shares until after SEC Case No. 0441 is finally resolved. (Proposal for Stipulation of Facts and Request for Admission of Documents, p. 3 and Annex "K" thereof). On February 5, 1992, EBC wrote a letter to FRMSC advising the latter about the letter of Villanueva, Narvasa and Pesigan Law Offices and the instruction of OPMC to hold the processing of the transfer of subject shares in view of the pending of SEC Case No. 0441 ,(Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents, p. 4 and Annex "L" thereof). Thru a letter dated March 30, 1992, the Siguion Reyna, Montecillo and Ongsiako Law Offices (hereinafter referred to a "SRMO"),counsel for Pacific Basin, demanded that EBC issue and deliver to Pacific Basin the OPMC stock certificate representing the subject shares. (Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents, p. 5 and Annex "M" thereof and Exhibit). EBC endorsed the above demand letter of Pacific Basin of OPMC. On April 2, 1992, EBC sent another letter to OPMC advising the latter that it has received a copy of the letter dated March 30, 1992 from FRMSC addressed to the chairman of the OPMC (Proposal for Stipulation of Fact and Request for Admission of Documents of Respondents, p. 5 and Annex "N" thereof). Thru a letter dated April 15, 1992, OPMC furnished EBC a copy of an "Urgent Manifestation and Motion" which was filed by Mr. Rodolfo Arambulo in SEC Case No. 0441 .(Proposal for Stipulation of Facts and Requests for Admission of Documents of Respondents p. 4 and Annex "4" thereof). EBC furnished FRMSC a copy of OPMC's a letter dated April 15, 1992. (Proposal for Stipulation of Facts and Requests for Admission of Documents of Respondents, p. 4 and Annex "Q" thereof). On October 22, 1992, EBC received a letter dated October 16, 1992 from SRMO informing it that Mr. Arambulo had withdrawn his objection to Piedras' sale of the subject shares to Pacific Basin, as evidenced by a copy of the Minutes of the Special Meeting of the Stockholders of Piedras dated June 22, 1992 which counsel for Pacific Basin attached in its letter. The minutes of the said Special stockholders Meeting that Mr. Rodolfo Arambulo ratified the sale of the subject shares of Pacific Basin. (Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents, p. 5 and Annex "R" thereof). In a letter dated October 23, 1992, EBC forwarded the SRMO letter to OPMC and requested the letter for instructions on the matter (Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents, p. 5 and Annex "S" thereof). On November 9, 1992, OPMC Corporate Secretary Atty. Jose C. Laureta wrote a letter to EBC directing the latter to hold all request for transfer of OPMC shares of which Piedras is the registered owner pursuant to OPMC Management's decision to that effect. Enclosed with the OPMC letter dated November 9, 1992 is a legal opinion issued to OPMC by the law firm of Chavez Laureta and Diploma which served as a basic for OPMC Management's decision. The said opinion letter of the law firm of Chavez, Laureta and Diploma which was also signed by Atty. Jose C. Laureta cited the possibility of the fact that the subject shares may be part of and involved in behest transactions entered into by the late President of the Philippines Ferdinand E. Marcos and in view of this, said law office will conduct an in-depth study on the matter. (Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents, p. 5 and Annex "T" and "T-1" thereof). On November 10, 1992, EBC informed FRMSC and SRMO of OPMC's above mentioned instruction to hold all request for transfer of OPMC shares of which Piedras is the owner of record. (Proposal for Stipulation of Facts and Request for Admission of Documents of Respondents, p. 5 and Annex "U" and "V" thereof). On October 31, 1991, Pacific Basin thru Piedras purchased an additional 154,150,000 Class "A" OPMC shares by virtue of OPMC Stock Rights Offering in 1991. (TSN dated May 15, 1992, pp. 48-49) Pacific Basin's right to avail of the additional OPMC shares arose from its beneficial ownership of the subject shares and in which case entitled Pacific Basin to all the fruits thereof. Pacific Basin has fully paid the OPMC shares it acquired thru Piedras by virtue of the 1991 OPMC Stock Right Offering. (TSN dated August 17, 1994, pp. 8-13 and Exhibit "G" and "H") This Commission notes that respondents have the propensity of changing their defenses and/or reasons for refusing the transfer of the subject shares to Pacific Basin at a drop of a pin. Initially, respondents alleged that they cannot transfer the subject shares to Pacific Basin due to the pendency of SEC Case No. 0441 .(Respondents Motion To Dismiss dated May 15, 1992). When SEC Case No. 0441 became moot and academic in the light of the ratification of the sale of the subject shares by Mr. Rodolfo Arambulo, the petitioner therein, as evidenced by the minutes of the Special Meeting of the Stockholders' of Piedras dated June 22, 1992 (Annex "A" of Pacific Basin's Supplemental Petition dated March 3, 1993),respondents raised in its Annexes dated April 2, 1993 another reason why it cannot effect the transfer of the subject shares. In its Answer dated April 2, 1993, respondents alleged, among others, that it cannot effect the transfer of the subject shares due to the issuance of a Temporary Restraining Order by the Supreme Court in G.R. No. 108368 entitled "Republic of the Philippines vs. Sandiganbayan, Roberto S. Benedicto, et al.," which enjoined the implementation of the Compromise Agreement between Amb. Roberto S. Benedicto and the PCGG. The petition was filed by the PCGG on behalf of the Republic of the Philippines on the ground that said Agreement is contrary to law. In the light of the Temporary Restraining Order, respondents alleged that the subject shares are part of the properties surrendered by Amb. Roberto S. Benedicto to the government by virtue of the Compromise Agreement. Thus, the transfer of the subject shares to Pacific Basin would violate the Supreme Court's Injunction Order and expose them to contempt proceedings. The aforementioned reason cited by respondents was rendered moot by the Supreme Court's En Banc Resolutions dated January 10, 1993 and January 18, 1994 dismissing the petition and denying the Motion For Reconsideration files by the PCGG in G.R. No. 108368 which this office can take judicial notice of. Finally, after seeing the mootness of their defense regarding the Supreme Court's TRO, respondents now allege that the subject shares are part of behest transactions which incidentally has also been rendered moot when the Supreme Court affirmed the validity of the aforementioned Compromise Agreement. (Annex "T-1" of respondents Proposal for Stipulation of Facts and Request for Admission of Document). Notwithstanding the ever changing defenses and allegations of respondents, a close perusal of the allegation of the parties would show that their respective positions are relatively simple. It is basic position of Pacific Basin that the defenses raised by respondents are not a legal obstacle for the transfer of the subject shares, including the fruits thereof, to Pacific Basin. On the other hand, it is basically the position of respondents that they may refuse to transfer the subject shares in favor of Pacific Basin on the ground that the effectuation of said transfer of shares is not a mere ministerial duty on their part and they may refuse to transfer said shares by questioning the validity of the transfer of the subject shares to Pacific Basin. Thus, the issue of the present case is whether the issuance of the stock certificate of fully paid shares to an innocent purchaser for value and the registration of the transfer in the corporate books is a ministerial duty of the corporation (OPMC),its officers (in this case respondent Robert Coyiuto, Jr. and Atty. Jose Laureta who are the corporate officers authorized to sign the stock certificate of (OPMC shares) and EBC the stock and transfer agent. After a judicious consideration of the evidence and arguments of the parties, We rule in favor of the petitioner. Under Section 63 of the Corporation Code of the Philippines, it provides: SECTION 63. Certificate of Stock and Transfer of Shares . The capital stock of corporations shall be divided into shares for which certificates signed by the President or Vice-President, countersigned by the secretary or assistant secretary, and sealed and the seal of the corporation shall be issued in accordance with the by-laws. Shares of stock so issued are personal property and may be transferred by delivery of the certificate or certificates endorsed by the owner or his attorney-in-fact or other person legally authorized to make the transfer. No transfer, however, shall be valid, except as between the parties, until the transfer is recorded in the books of the corporation so as to show the name of the parties to the transaction the date of the certificate of certificates and the numbers of shares transferred. No shares of stocks against which the corporation holds any unpaid claim shall be transferable in the books of the corporation". On the other hand, Section 1 of Article I of the Amended by-laws of OPMC provides: "Certificate of stock shall be issued to each holder of fully paid stock in numerical order from the stock certificate book, and shall be signed by the President and countersigned by the Secretary and sealed with the corporate seal. A record of each certificate issued shall be kept on the stub thereof and upon the stock register of the company" Based on the foregoing, the corporation has the obligation to issue a certificate of stock in favor of a transferee of fully paid shares. This conclusion is supported by the clear and categorical terms of Section 63 of the Corporation Code and Section 1 of Article I of OPMC's by-laws. In the present case, the subject shares have been fully paid by Pacific Basin. It necessarily follows that OPMC have no unpaid claim against the subject shares. Thus, under the premises, the issuance of a certificate of stock and transfer of the fully paid subject shares to Pacific Basin therefore a mere ministerial duty of respondents. The Supreme Court has defined the term "ministerial duty" as: "A duty is ministerial when the law exacting its discharge prescribes and defines a time, mode and occasion of its performance with such certainty that nothing remains for judgment or discretion (Gonzales vs. Securities and Exchange Commission, SP-03247, August 26, 1985". Based on Section 64 of the Corporation Code and the by-laws of OPMC, the transfer of shares in the corporate books and the issuance of a stock certificate in favor of a transferee is subject to the condition that the said shares have been fully paid by the transferee. In the present case, Pacific Basin satisfies the above condition when it fully paid the purchase price of the subject shares as evidenced by the FRMSC Buy Invoice No. 14200 dated May 31, 1991 (Exhibit "A") and all the other additional shares it acquired virtue of the Stock Rights Offering of OPMSC (Exhibit "H").Thus, Pacific Basin has the right to demand from respondents for the issuance of the stock certificate of the subject shares in each name and register the transaction in the corporate books. In the case of Hager vs. Bryan, G.R. No. L-6230, March 21, 1911, (19 Phil. 138) the Supreme Court held that. . . ...statute, if not expressly at least, impliedly, imposes the duty upon a corporation organized under Act No. 1458 and the officer in charge of the books of such corporation to provide for the entry and noting down upon the books of the corporation and lawful transfer of stocks when the entry of such transfer is lawfully demanded". U.S. Jurisprudence on the matter which is in pari materia ,likewise, supports the doctrine that the issuance of stock certificates representing fully paid shares by a corporation is a mere ministerial duty on its part. In the case of Hertz Drive-Urself System, Inc. of Colorado vs. Dsook 200 the U.S. Supreme Court held: "The duty of corporate officers to issue stock certificates to those entitled thereto is a ministerial duty enforceable by mandamus" In fact a transferee of shares has the right to have them transferred into his name on the books of the company, and a new certificate issued to him, and this is especially true where such certificate states that it is transferable. (12 Fletcher 389). In the light of the corporation's ministerial duty to transfer the shares and issue new stock certificates to the transferee, this Commission cannot sustain respondents position that it can refuse to transfer the subject shares by questioning the authority of the Piedras Board to sell the subject shares. A corporation cannot inquire into or pass upon the legality of the transaction by which its shares are transferred from one person to another. The corporation is a neutral party in such a controversy as that .(Berl vs. Virginia Production Co.,19 Del Ch. 227, 166 Alt. 402). Moreover, respondents do not have the personality to question the transfer of the shares of stocks on the ground that only parties to the transaction, namely, the vendor or vendee may impugn or question the validity of the same. In the case of Wolfson vs. Estate of Martinez, G.R. No. 5970, October 13, 1911, 20 Phil. 340, the Supreme Court held: "One who is not a party to a contract has no right under such contract. ..its nullity can only be asserted only by one who is party thereto. .." At this point this Commission cannot help but emphasize that the rights of an innocent purchaser of shares of stocks cannot be prejudiced and has to be protected especially when the purchase of the shares are coursed thru the Stock Market (in this case the Makati Stock Exchange).An investor when purchasing publicly listed shares of stock in the Stock Market has every right to presume that the shares of a publicly listed corporation being traded in the Stock Market are free from any defect; and that upon purchased of the said shares, it will be registered in his name in the corporate books. To rule otherwise would be froth with dangerous consequences. The investing public's confidence in purchasing and investing in shares of stocks thru the Stock Market will erode and become a tedious and burdensome transaction for the buying or selling of shares of stock of publicly listed corporation. An investor who invests good money in shares in the stock market necessarily expects that the said shares will be registered in his name upon payment of the full value thereof. Instead of building investor's confidence and encourage investment in publicly listed shares in the Stock Market, every investors will have second thoughts in investing as they will be purchasing shares in the Stock Market subject to a caveat that there is no guaranty share they buy are good or transferable to his name. Thus, every potential investor, prior to his purchase of shares of stock in the Stock Market, will have to investigate each and every share he intends to purchase to make sure that it is free from any defect and that said shares may be registered in his name after he purchases the same. prcd Granting for the sake of arguments that the respondents can refuse registration and transfer of subject shares by questioning the validity of the sale by Piedras Board to Pacific Basin, such contention has also become academic considering that the Ombudsman on June 8, 1995 in Ombudsman Case No. 0-92-1383, entitled "Remember Evio vs. Mario V. Jalandoni, et al.,",which this Commission takes judicial notice, in approving the dismissal of the graft case filed by Mr. Evio made a finding, among others, that "the sale of the 308,3000,000 OPMC, shares, the same shares subject of the present case, by the Board of Directors of Piedras (a Board controlled by the nominees of the Presidential Commission on Good Government) is valid on the ground that the PCGG merely acted in accordance with the functions and responsibilities accorded it by Executive Order No. 1 and subsequent laws issued by then President Corazon C. Aquino under her revolutionary powers". The records would appear that respondents acted in bad faith and conspired one another to prevent the transfer of the subject shares to Pacific Basin. From one shallow excuse to another, respondents succeeded in frustrating the right of Pacific Basin to exercise dominion right over the subject shared by refusing to transfer the same to the latter. In fact the last defense raised by respondents is the unwarranted opinion of its corporate secretary, herein respondent Jose Laureta (Chavez Laureta Diploma letter dated November 4, 1992, Exhibit 18),signing the said letter opinion as OPMC's external counsel, that the subject shares are part of behest transactions. It is noteworthy that while respondent Jose Laureta stated in the aforementioned letter that an in-depth study will be conducted by his law firm the "Chavez Laureta & Diploma" for the recovery of the OPMC shares involved in the behest transactions, no evidence was presented by respondents to prove that in depth study was in fact ever conducted. The failure to present the aforementioned in-depth study of OPMC's external counsel only confirms the conclusion of this Commission that said legal opinion has no basis but was only issued to give respondents an excuse to prevent the transfer of the subject shares to Pacific Basin. During the trial of this case, Ms. Vicky Chan, Vice President of Pacific Basin, testified that Pacific Basin acquired additional OPMC shares thru Piedras by virtue of its availment of the Stock Right Offering of OPMC. (TSN dated May 15, 1992, pp. 48-49).This was corroborated and confirmed by another witness presented by Pacific Basin, Atty. Cesar P. Manalaysay, who testified that Pacific Basin was able and willing to pay for the balance of the Stock Rights Offering when it issued an RCBC Check No. 566102 in favor of respondent OPMC (TSN dated August 17, 1994, pp. 7-11 and Exhibit "G";TSN dated July 20, 1994, 7-10). With regard to the additional OPMC shares acquired by Pacific Basin, Pacific Basin is entitled to the issuance of a stock certificate for the said additional OPMC shares. The acquisition of the additional shares by Pacific Basin necessarily arose from its ownership over the subject shares. Thus, whatever right or privilege was granted by OPMC to its shareholders regarding the acquisition of additional shares such as a Stock Right Offering necessarily accrues in favor of Pacific Basin for as long as the latter complies with the terms and conditions of said Stock Right Offering which in the present case, it did. The records would disclose that the defenses raised by respondents to justify their refusal to transfer the subject shares to Pacific Basin were mostly unfounded and more importantly were not a legal obstacle to effect such transfer. Under the premises, respondents maliciously prevented the transfer of the subject shares to prevent Pacific Basin from using said shares to prevent Pacific Basin from using said shares against Mr. Robert Cayiuto, Jr. in the OPMC Proxy Fight and in the process, caused Pacific Basin to incur losses. Finding that respondents acted in bad faith when it refused to transfer the subject shares to Pacific Basin, they should all be jointly and severally liable for all damages or losses incurred to the non-performance of its ministerial duty. Art. 2201 of the Civil Code provides: "ARTICLE 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen at the time the obligation was constituted. In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation". This Commission takes judicial notice of the fact that the current prices of OPMC shares have considerable dropped to almost one fourth compared to its prices sometime in January 1993, Wherein said OPMC shares were being traded in the Stock Market for a price of .0825 per share. In order to prove damages which it incurred due to respondents refusal to transfer the subject shares, Pacific Basin presented its Vice-President, Ms. Vicky Chan, who testified that if Pacific Basin had possession of the stock certificates of the subject shares in January, 1993 when the prices of the said shares were very high, Pacific Basin would have sold the same and made a net profit of about P20,000,000.00 (TSN dated July 20, 1994, pp. 4-12).Considering that the testimony of Ms. Vicky Chan was consistent and said witness remained consistent and did not waiver despite being thoroughly cross examined by respondents counsel, this Commission finds the same credible. Thus, Pacific Basin failed to obtain such profit due to respondents unjust refusal to issue the stock certificate in its favor. Under the premises, respondents should, therefore be liable to Pacific Basin for damages due to loss of profit. Art. 2200 of the Civil Code provides: "ARTICLE 2200. Indemnification damages shall comprehend not only the value of the loss suffered, but also that of the profits which the obligee failed to obtained." The award for damages against respondents is further justified by the fact that Pacific Basin purchased the subject shares at P.0575 per share on May 31, 1991, as evidenced by the FRMSC Buy Invoice No. 14200 (Exhibit "A"),which is more than twice the current trading price of OPMC shares of P.022 per share. Thus, even if OPMC issued the stock certificate of the subject shares to Pacific Basin today, the said issuance will not rectify the substantial losses that Pacific Basin has incurred. In view of the foregoing, respondents should be liable to Pacific Basin for the amount of P20,000,000.00 representing actual damages, including loss of profit due to respondents unjustified refusal to issue the stock certificate of the subject shares which prevented Pacific Basin from selling the same at a profit. Furthermore, in order to prevent respondents from committing the same wanton and oppressive acts in future, respondents are jointly and severally liable to Pacific Basin for exemplary damages in the amount of P300,000.00. With regard to Attorney's fees and cost of the suit, this Commission awards the same in favor of Pacific Basin considering that it was forced to litigate to protect its rights which were trampled upon by respondents without any valid or justifiable reason. Respondents should therefore, be jointly and severally liable to Pacific Basin for damages in the amount of P300,000.00 representing attorney's fees and P50,000.00 representing litigation expenses and cost of the suit which were proven by Pacific Basin during the trial of the present case (TSN dated August 17, 1994, p. 14). WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Respondents are hereby directed/ordered to issue and deliver to Pacific Basin: a. An OPMC Class "A Stock Certificate for 308,300,000 shares; b. An OPMC Class "A" stock certificate for 154,150,000 shares representing the OPMC shares acquired by Pacific Basin thru Piedras by virtue of the Stock Rights Offering in 1991; c. All other additional OPMC shares acquired by Pacific Basin thru Piedras by virtue of the various other OPMC Stock Rights Offering; 2. To jointly and severally pay Pacific Basin the following amounts: a. TWENTY MILLION (P20,000,000.00) PESOS representing actual damages; b. THREE HUNDRED THOUSAND (P300,000.00),PESOS representing exemplary damages; c. THREE HUNDRED THOUSAND (P300,000,.00),PESOS representing Attorney's fees; and d. FIFTY THOUSAND (P50,000.00)PESOS representing cost and expenses of the suit. SO ORDERED. (SGD.) JUANITO B. ALMOSA, JR. Hearing Officer