Bill V. Dion vs. M. T. Santos Company Limited, et al.

[SEC-SICD * CASE NO. 4490. November 16, 1998.] BILL V. DION , petitioner , vs . M. T. SANTOS COMPANY LIMITED, ET AL. , respondents . D E C I S I O N This is an action for nullity of a Deed of Sale, declaration of nullity of the Amended Articles of Partnership, Accounting and Damages. On June 14, 1993 petitioner Bill V. Dion filed this action against respondent Manuel T. Santos, Arnold D. Dorado Action and M T. Santos, Ltd. Co. In his petition, petitioner alleged, inter alia, that M.T. Santos LTD Co. is a limited partnership duly registered with the Securities and Exchange Commission (Exh. "A" to "A- 4") on May 16, 1990 with him as limited partner and Manuel T. Santos, as general partner on 30% 70 sharing of profits, respectively. In a letter dated March 2, 1992 (Exh. "B" "B-1" & "B- 2") petitioner withdraw from M.T. Santos Ltd. Co. subject to his demand for accounting, payment of his share in the partnership profits and a return of his capital contribution amounting to P50,000.00. On March 4, 1992, petitioner was issued Equitable Bank Check Number 0238006908 in the amount of P24,000.00 (Exhibit "C") representing partial payment of petitioners share in the profit of M.T Santos Ltd. Co. for the year ended * of 1991. Upon representation of Manuel Santos that due to petitioner's withdrawal from the partnership, the Articles of Partnership has to be amended. Manuel T Santos caused to be prepared a document entitled Deed of Sales of Capital (Exhs. "D" & "D-11") which was presented to Bill Dion for signature, which the latter signed with the understanding that his capital contribution will be returned and his share in the profits paid after proper accounting. On the strength of the deed of sale of Capital (Exh. "D") respondent Santos caused the amendment of the Articles of Partnership (Exh. "F" submarkings) by the Securities and Exchange Commission, ousting Bill Dion as partner and admitting respondent Arnold Dorado, as partner. Thereafter, petitioner demanded the return of his capital and corresponding share in the profit of the partnership from Manuel T. Santos, but to no avail. Hence, the filing of this case. The issues to be resolved are: (1) Whether or not petitioner was paid the amount of P50,000.00 representing his capital contribution to M.T. Santos Ltd. Co. purportedly under the deed of sale of capital (Exh. "D") and (2) Whether or not petitioner is entitled to and was paid his share in the net profit of the partnership. The evidence for the petitioner consists of the testimonies of the petitioner Bill Dion, Ma. Theresa Gomez, certified public accountant and Arnold Dorado, as adverse party witness, and Exhibit "A" to "H" and submarkings duly identified and formally offered in evidence. Petitioner Bill Dion testified, (TSN, July 27, 1994) substantially follows: That he and respondent Manuel T. Santos are friends, neighbors and former partners in M.T. Santos Limited Co.; that their partnership was duly registered with the Securities and Exchange Commission (Exh. "A" to "A-1"); that the other respondent Arnold Dorado, was Marketing Manager of the partnership; that on March 2, 1992 he wrote a letter (Exh. "B") to respondent Santos withdrawing from the partnership and demanded his share of the profit; that said letter was received by Santos personally, who issued petitioner a check (Exh. "C") for P24,000.00 as advance payment, of his share in the profit; that he was also required by Santos to execute another document a deed of sale (Exh. "D") of his capital contribution in the partnership which purportedly sold his capital in the partnership to Arnold Dorado; that the deed of sale was caused to be prepared by Santos and presented to him in blank for his signature to be able to register the amendment of the Articles of Partnership, that he agreed to sign although he was not paid the P50,000.00 because Santos is his friend, neighbor and partner and was given P24,000.00 as advance payment of his share in the profit but not his capital, that although the deed of sale mentioned Dorado as the buyer, in reality, Dorado is only a nominee or dummy of Santos in order not to dissolve the partnership. That Dorado has never been a partner in M.T. Santos Ltd. Co., but occupies the position of Marketing Manager; that the Deed of Sale consist of only one page when he signed it; that he never appeared before a Notary Public Jose A. de Villa of Makati; that the Residence Certificate or Community Tax Certificate which purports to be his with number 2897034 issued at Quezon City on April 12, 1992 (Exh. "D-1-e") is fake. His true and correct community or Residence Tax Certificate for 1992 being number 1285108 issued at Kalookan City on February 6, 1992 (Exh. "E" "F" as remarked); that page 2 of the Deed of Sale purports to have been notarized on the 8th day of April 1992 (Exh. "D-1-A") which date is even earlier than the procurement of his fake residence certificate which was allegedly issued only on April 12, 1992 (Exh. "D-1-C"); that Santos promised to give him (Dion) a copy of the deed of sale of capital after it is notarized and pay the P50,000.00 consideration mentioned in the deed of sale; that Santos never gave him a copy of the deed despite demand, but gave only P24,000.00 in consideration for the advance payment of the profit; that he (Dion) was able to secure a copy of the deed of sale of capital only from the Securities and Exchange Commission that the deed of sale was actually signed in the house of Mr. Santos at Pasay City with only him (Dion) and Mr. Santos present; that Dorado, the purported Vendee was not even present and had no participation whatsoever in the execution of the deed of sale; that as a consequence of the deed of sale petitioner Dion found out when he secured a copy of the deed of sale of capital that the original Articles of Partnership of M.T. Santos Ltd. Co. has already been amended (Exh. "E", "E-1" to "E-3", "F" to "F-3", as remarked) with Santos and Dorado as alleged partners; that he again went to Santos and demanded payment of his share in the profit of the partnership and a return of his capital but Santos again promised to pay him, that sometime in September 1991, he read in .the newspaper by way of Notice to the public and advertisement the following: This is to inform the public that Arnold D. Dorado, whose picture appears above is no longer connected with M.T. Santos Limited Company (Dental Division) as Sales (Manager effective September 30, 1992. Any transaction entered into by this person will not be honored by the company (Exhs. "F", "F-1", "G", "G-1", as remarked); that the financial statement (Exhs. "G" to "G-2-B", "H", to "H-6", as remarked of M.T. Santos Limited Company, as of December 31, 1991, prepared by the Company's Certified Public Accountant, Ms. Maria Theresa Gomez, showed a net income after income tax of P966,581.29 (Exh. "G-2--G", "H-2-B", as remarked); that he (Dion) has not been paid his share of the profit except the (P24,000.00) nor his capital returned to the present; and that Dorado, who is supposed to be Santos, new partner, is no longer connected with the partnership when this case was filed. The full testimony of Bill Dion is contained in the transcript of stenographic notes taken by the SEC Stenographer by Ms. Maxima L. Maligayo on July 27, 1994, part of the record of the case The next witness presented by petitioner was Maria Theresa Gomez, a Certified Public Accountant, who prepared the partnership's financial statements for the Fiscal Year ended December 31, 1991. The balance sheet (Exh. "H", as remarked) and statement of income (Exh. "H-2") as remarked) show that as of December 31, 1991 the net income for the period was P595,238.64 out of which petitioner is entitled to 30%, amounting to P178,571.59 (less P24,000.00 given as advanced share of the profit) or .the net amount of P154,571.59 (less P24,000.00 given as advanced share of the profit) or the net amount of P154,571.59, excluding the return of P50,000.00 capital. Added, together, petitioner is entitled to at least P204,571.59 from the partnership. The third and last witness presented by the petition was Arnold Dorado, one of the respondents as adverse party or hostile witness. In unequivocal terms, Dorado admitted that he did not pay Bill Dion the amount of P50,000.00 mentioned in the Deed of Sale of Capital when he appears to be the vendee; that the sale of capital was fictitious and the handiwork of Manuel T; Santos. We beg leave to quote from the transcript of stenographic notes on December 5, 1994 , as follows. Q. Now, Mr. Witness I am showing to you a document entitled Deed of Sale of Capital previously marked by the petitioner as Exhibit "D". Will you please go over this document before I ask you a question. Record: Witness is going over the document. Q. Have you previously seen this document, Mr. Dorado? A. Yes, Sir. Q. Now, there appears a signature on top of the typewritten name Arnold B. Dorado, Vendee, whose signature is that? A. It is mine. Q. Now, who caused you to sign this document,Exhibit "D") ? A. Mr. Santos. . Q. Was Mr. Dion present when Mr. Santos required you to sign this document? A. He is not present. Q. And by Mr. Santos, you are referring to Mr. Manuel T. Santos of M.T. Santos Co. Ltd.? A. Yes, Sir: , Q. Now, the document mentioned Mr. Dorado that you allegedly paid Mr. Dion the sum of P50,000.00 Philippine Currency as consideration for this document. Did you pay Mr. Dion the amount of P50,000.00? A. I don't pay him because according to Mr. Santos, he will be the one to pay. Hearing Officer: Say it in Tagalog, Binayaran ka ba? A. Sabi ho ni Mr. Santos siya na raw ho ang bahala. Q. You did not pay Mr Dion P50,000.00. A. Hindi po Q. Contrary to what is stated in the document. A. Hindi ko po binayaran. Q. Now, do you know whether Mr. Santos because Mr. Santos said that he is going to be the one to pay Mr. Dion, Do you know whether Mr. Santos pay, Mr. Dion the P50,000.00 after you signed this? A. I don't have any idea Sir. The petitioner also intended to present respondent Mr. Santos, himself, as adverse party witness, but was not able to do so because in a Manifestation and Motion filed by his counsel on May 20, 1994, it was admitted as per certification attached thereto, Mr. Santos was sick and "that, Mr. Manuel T. Santos is presently confined at the NARCOM-DRC, Bicutan, Taguig, Metro Manila, undergoing treatment and rehabilitation program and is not allowed to go out from the center at this moment, to avoid interruption of the program as provided for in the Rules and Regulations of the Center". As a matter of fact, even the Special Power of Attorney purportedly executed by Santos in favor of his counsel which was presented to the Hearing Officer turned out to be a forgery, actually signed allegedly by his wife, in his behalf. These two prevarications were brought to the attention of the Hearing Officer in a "Comment or Manifestation & Motion, etc", filed by petitioner's counsel stated in said comment "petitioner states for the record that this fact should not be overlooked in the evaluation of the evidence in the resolution of this case, considering that this petition, among other things, precisely alleges fraud, manipulation and deceit as having been exercised upon the petitioner by respondent Santos where he was made to sign the deed of sale of his interest in the partnership in favor of Dorado, but was not paid the consideration stated therein, and or the basis of the absolutely simulated document, Santos secured an amendment of the Articles of Partnership of M.T. Santos LTD partnership, resulting in the exclusion of petitioner from said partnership without receiving full payment of his share of the profit and a return of his Capital." As aptly contended by the petitioner, respondent M.T. Santos' drug addiction clearly and demonstrably his lack of adherence to the truth and a propensity to falsehood, even attempt to mislead this Honorable Commission. Respondents presented two (2) witnesses in their defense, namely: Benedicto Clavio, bookkeeper, who is totally incompetent to testify on the documents presented. He was not even an employee yet of the partnership when the exhibits were executed or prepared. He has no personal knowledge of their preparation much less, their contents. The other witness, Lorena Mabalin, who claimed to be a Secretary at M.T. Santos, can only testify that she typed some of the documentary exhibits, but not as to the veracity of their contents, contrary to the conclusions and purpose which her testimony is offered. After a careful and judicious consideration of the evidence by the parties both oral and documentary this Commission finds that petitioner had proved his case by a clear preponderance of evidence WHEREFORE, premises considered, judgment is hereby rendered as follows: 1. Declaring the Amended Articles of Partnership of M.T. Santos Ltd. Co. as null and void. 2. Declaring the Deed of Sale between Mr. Santos and Mr. Dizon null and void. 3. Ordering the respondents to jointly and severally pay the petitioner the amount of P204,571.59, as his net share in the partnership net profit for 1991 and a return of his capital in the amount of P50,000.00, plus the sum of P25,000.00, as attorney's fees. SO ORDERED. (SGD.) JUANITO B. ALMOSA Hearing Officer