Professional Documents
Culture Documents
CONTRARY TO LAW.
Iloilo City, Philippines, November 22,
1991. 3 [Emphasis ours].
The Information, on the other hand, for estafa reads:
The undersigned City Prosecutor accuses RICARDO
SALAS, SALVADOR T. SALAS, SOLEDAD SALASTUBILLEJA, ANTONIO S. SALAS, RICHARD S. SALAS
(whose dates and places of birth cannot be
ascertained) of the crime of ESTAFA, Art. 315, par. 1
(b) of the Revised Penal Code, committed as follows:
That on or about the 1st day of
June, 1986, in the City of Iloilo,
Philippines, and within the
jurisdiction of this Honorable Court,
the above-named accused, being
then the Chairman, Vice-Chairman,
Treasurer, Secretary, and Trustee
(who later became Secretary),
respectively; of the Board of
Trustees of Western Institute of
Technology, Inc., a corporation duly
organized and existing under the
laws of the Republic of the
Philippines, conspiring and
confederating together and
mutually helping one another to
better realize their purpose, did
then and there wilfully, unlawfully
and feloniously defraud the said
corporation (and its stockholders)
in the following manner, to wit:
herein accused, knowing fully well
that they have no sufficient, lawful
authority to disburse let alone
violation of applicable laws and
jurisprudence, disbursed the funds
of the corporation by effecting
payment of their retroactive
salaries in the amount of
P186,470.00 and subsequently
paying themselves every 15th and
30th of the month starting June 15,
1986 until the present, in the
amount of P19,500.00 per month,
as if the same were their own, and
when herein accused were
informed of the illegality of these
disbursements by the minority
stockholders by way of objections
made in an annual stockholders'
meeting held on June 14, 1986 and
every year thereafter, they refused,
and still refuse, to rectify the same
to the damage and prejudice of the
corporation (and its stockholders)
in the total sum of P1,453,970.79
as of November 15, 1991.
CONTRARY TO LAW.
Iloilo City, Philippines, November 22,
1991. 4 [Emphasis ours]
Thereafter, trial for the two criminal cases, docketed as
Criminal Cases Nos. 37097 and 37098, was consolidated. After
a full-blown hearing, Judge Porfirio Parian handed down a
verdict of acquittal on both counts 5 dated September 6, 1993
without imposing any civil liability against the accused
therein.
Petitioners filed a Motion for Reconsideration 6 of the civil
aspect of the RTC Decision which was, however, denied in an
Order dated November 23, 1993. 7
19
[Emphasis ours]
From the foregoing factual findings, which we find to be amply
substantiated by the records, it is evident that there is simply
no basis to hold the accused, private respondents herein,
civilly liable. Section 2(b) of Rule 111 on the New Rules on
Criminal Procedure provides:
Sec. 2. Institution of separate civil action.
xxx xxx xxx
Market
Study
Technica
l Study
Financial
Feasibilit
y Study
PANGANIBAN, J.:
Preparation of pertinent
documentation
requirements for the
application
___________________________
__________________
The Case
This principle is stressed by the Court in rejecting the Petition
for Review of the February 28, 1994 Decision and the October
28, 1994 Resolution of the Court of Appeals in CA-GR CV No.
30670.
In a collection case 1 filed by Stefani Sao against People's
Aircargo and Warehousing Co., Inc., the Regional Trial Court
(RTC) of Pasay City, Branch 110, rendered a Decision 2 dated
October 26, 1990, the dispositive portion of which reads: 3
WHEREFORE, in light of all the foregoing,
Judgment is hereby rendered, ordering
[petitioner] to pay [private respondent] the
amount of sixty thousand (P60,000.00)
pesos representing payment of [private
respondents] services in preparing the
manual of operations and in the conduct of
a seminar for [petitioner]. The Counterclaim
is hereby dismissed.
Aggrieved by what he considered a minuscule award of
P60,000, private respondent appealed to the Court of
Appeals 4 (CA) which, in its Decision promulgated February 28,
1994, granted his prayer for P400,000, as follows: 5
WHEREFORE, PREMISES CONSIDERED, the
appealed judgment is hereby MODIFIED in
that [petitioner] is ordered to pay [private
respondent] the amount of four hundred
thousand pesos (P400,000.00) representing
payment of [private respondent's] services
in preparing the manual of operations and in
the conduct of a seminar for [petitioner].
As no new ground was raised by petitioner, reconsideration of
the above-mentioned Decision was denied in the Resolution
promulgated on October 28, 1994.
The Facts
Petitioner is a domestic corporation, which was organized in
the middle of 1986 to operate a customs bonded warehouse
at the old Manila International Airport in Pasay City. 6
To obtain a license for the corporation from the Bureau of
Customs, Antonio Punsalan Jr., the corporation president,
solicited a proposal from private respondent for the
preparation of a feasibility study. 7 Private respondent
submitted a letter-proposal dated October 17, 1986 ("First
Contract" hereafter) to Punsalan, which is reproduced
hereunder: 8
Dear Mr. Punsalan:
With reference to your request for
professional engineering consultancy
services for your proposed MIA Warehousing
Project may we offer the following outputs
and the corresponding rate and terms of
agreement:
================
================
=======
Project Feasibility Study
consisting of
53,333.0
0
15
March19
87
53,333.0
0
30
March
1987
53,333.0
0
(T)ANTONIO C. PUNSALAN
President
CONFORME & RECEIVED from PAIRCARGO,
the
amount of ONE HUNDRED THOUSAND
PESOS
(P100,000.00), this 17th day of October,
1986
Yours truly,
(T)STEFANI C. SAO
(S)STEFANI C. SAO
(S)STEFANI C. SAO
Industrial Engineering Consultant
(T)STEFANI C. SAO
CONFORME:
President
Dear Mr. Pun[s]alan:
This is to formalize our proposal for
consultancy services to your company the
scope of which is defined in the attached
service description.
The total service you have decided to avail .
. . would be available upon signing of the
conforme below and would come [in] the
amount of FOUR HUNDRED THOUSAND
PESOS (P400,000.00) payable at the
schedule defined as follows (with the
balance covered by post-dated cheques):
Downpayment upon
signing conforme
P80,000.00
15
January
1987
53,333.0
0
30
January
1987
53,333.0
0
15
February
1987
53,333.0
0
28
February
1987
II. . . . [I]n ruling that the subject letteragreement for services was binding on the
corporation notwithstanding the lack of any
board authority since it was the purported
"practice" to allow the president to enter
into contracts of said nature (citing one
previous instance of a similar contract)[;]
and
III. . . . [I]n ruling that the subject letteragreement for services was a valid contract
and not merely simulated.
the power was in fact exercised without any objection from its
board or shareholders. Petitioner had previously allowed its
president to enter into the First Contract with private
respondent without a board resolution expressly authorizing
him; thus, it had clothed its president with apparent authority
to execute the subject contract.
Petitioner rebuts, arguing that a single isolated agreement
prior to the subject contract does not constitute
corporate practice, which Webster defines as "frequent or
custmary action." It cites Board of Liquidators v. Kalaw,26 in
which the practice of NACOCO allowing its general manager to
negotiate and execute contract in its copra trading activities
for and on its behalf, without prior board approval, was
inferred from sixty contract not one, as in present case
previously entered into by the corporation without such board
resolution.
Petitioner's argument is not persuasive. Apparent authority is
derived not merely from practice. Its existence may be
ascertained through (1) the general manner in which the
corporation holds out an officer or agent as having the power
to act or, in other words, the apparent authority to act in
general, with which it clothes him; or (2) the acquiescence in
his acts of a particular nature, with actual or constructive
knowledge thereof, whether within or beyond the scope of his
ordinary powers. 27 It requires presentation of evidence of
similar act(s) executed either in its favor or in favor of other
parties. 28 It is not the quantity of similar acts which
establishes apparent authority, but the vesting of a corporale
officer with the power to bind the corporation.
In the case at bar, petitioner, through its president Antonio
Punsalan Jr., entered into the First Contract without first
securing board approval. Despite such lack of board approval,
petitioner did not object to or repudiate said contract, thus
"clothing" its president with the power to bind the corporation.
The grant of apparent authority to Punsalan is evident in the
testimony of Yong senior vice president, treasurer and
major stockholder of petitioner. Testifying on the First
Contract, he said: 29
A: Mr. [Punsalan] told me
that he prefer[s] Mr. Sao
because Mr. Sao is very
influential with the
Collector of Customs[s].
Because the Collector of
Custom[s] will be the one
to approve our project
study and I objected to
that, sir. And I said it [was
an exorbitant] price. And
Mr. Punsalan he is the
[p]resident, so he [gets]
his way.
Q: And so did the
company eventually pay
this P350,000.00 to Mr.
Sao?
A: Yes, sir.
The First Contract was consummated, implemented
and paid without a hitch.
Hence, private respondent should not be faulted for believing
that Punsalan's conformity to the contract in dispute was also
binding on petitioner. It is familiar doctrine that if a
corporation knowingly permits one of its officers, or any other
agent, to act within the scope of an apparent authority, it
holds him out to the public as possessing the power to do
those acts; and thus, the corporation will, as against anyone
who has in good faith dealt with it through such agent, be
estopped from denying the agent's authority. 30
II
THE APPELLATE COURT COMMITTED GRAVE ERROR OF LAW IN
HOLDING THAT MARQUEZ NEEDED A WRITTEN AUTHORITY
FROM RESPONDENT ETERNIT BEFORE THE SALE CAN BE
PERFECTED.
III
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT
GLANVILLE AND DELSAUX HAVE THE NECESSARY AUTHORITY
TO SELL THE SUBJECT PROPERTIES, OR AT THE VERY LEAST,
WERE KNOWINGLY PERMITTED BY RESPONDENT ETERNIT TO
DO ACTS WITHIN THE SCOPE OF AN APPARENT AUTHORITY,
AND THUS HELD THEM OUT TO THE PUBLIC AS POSSESSING
POWER TO SELL THE SAID PROPERTIES.17
Petitioners maintain that, based on the facts of the case, there
was a perfected contract of sale of the parcels of land and the
improvements thereon for "US$1,000,000.00
plus P2,500,000.00 to cover obligations prior to final
liquidation." Petitioners insist that they had accepted the
counter-offer of respondent EC and that before the counteroffer was withdrawn by respondents, the acceptance was
made known to them through real estate broker Marquez.
Petitioners assert that there was no need for a written
authority from the Board of Directors of EC for Marquez to
validly act as broker/middleman/intermediary. As broker,
Marquez was not an ordinary agent because his authority was
of a special and limited character in most respects. His only
job as a broker was to look for a buyer and to bring together
the parties to the transaction. He was not authorized to sell
the properties or to make a binding contract to respondent
EC; hence, petitioners argue, Article 1874 of the New Civil
Code does not apply.
In any event, petitioners aver, what is important and decisive
was that Marquez was able to communicate both the offer and
counter-offer and their acceptance of respondent ECs
counter-offer, resulting in a perfected contract of sale.
Petitioners posit that the testimonial and documentary
evidence on record amply shows that Glanville, who was the
President and General Manager of respondent EC, and
Delsaux, who was the Managing Director for ESAC Asia, had
the necessary authority to sell the subject property or, at
least, had been allowed by respondent EC to hold themselves
out in the public as having the power to sell the subject
properties. Petitioners identified such evidence, thus:
1. The testimony of Marquez that he was chosen by
Glanville as the then President and General Manager
of Eternit, to sell the properties of said corporation to
any interested party, which authority, as hereinabove
discussed, need not be in writing.
2. The fact that the NEGOTIATIONS for the sale of the
subject properties spanned SEVERAL MONTHS, from
1986 to 1987;
3. The COUNTER-OFFER made by Eternit through
GLANVILLE to sell its properties to the Petitioners;
4. The GOOD FAITH of Petitioners in believing
Eternits offer to sell the properties as evidenced by
the Petitioners ACCEPTANCE of the counter-offer;
5. The fact that Petitioners DEPOSITED the price of
[US]$1,000,000.00 with the Security Bank and that
an ESCROW agreement was drafted over the subject
properties;
6. Glanvilles telex to Delsaux inquiring
"WHEN WE (Respondents) WILL IMPLEMENT ACTION
TO BUY AND SELL";
7. More importantly, Exhibits "G" and "H" of the
Respondents, which evidenced the fact that
Petitioners offer was allegedly REJECTED by both
Glanville and Delsaux.18
(inadvertently referred in the Resolution itself as I.S. 20019234), dated February 26, 2002. The names of petitioners
Manuel C. Espiritu, Jr., Freida F. Espititu, Carlo F. Espiritu,
Rafael F. Espiritu, Rolando M. Mirabuna, Hermilyn A. Mirabuna,
Kim Roland A. Mirabuna, Kaye Ann A. Mirabuna, Ken Ryan A.
Mirabuna, Juanito P. De Castro, Geronima A. Almonite and
Manuel C. Dee are ORDERED excluded from the charge.
SO ORDERED.
G. R. No. 173333
August 13, 2008
LUCIA MAGALING, PARALUMAN R. MAGALING,
MARCELINA MAGALING-TABLADA, and BENITO R.
MAGALING (Heirs of the late Reynaldo
Magaling), petitioners,
vs.
PETER ONG, respondent.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari1 filed
under Rule 45 of the Rules of Court, as amended, seeking the
reversal of the Decision2 and Amended Decision3 both of the
Court of Appeals, dated 31 August 2005 and 28 June 2006,
respectively, in CA-G.R. CV No. 70954, entitled, "Peter Ong v.
Spouses Reynaldo Magaling and Lucia Magaling, and Thermo
Loans and Credit Corporation." The assailed rulings reversed
and set aside the Decision4 of the Regional Trial Court (RTC),
Branch 13, Lipa City, Batangas, which made petitioner Lucia
Magaling, together with her spouse, Reynaldo Magaling,5 and
Termo6 Loans & Credit Corporation, jointly and severally liable
to respondent Peter Ong for the corporate obligation of the
aforenamed corporation as adjudged in the
RTC Decision dated 23 June 1999.
As culled from the record, the antecedent facts of the present
petition are as follows:
On 30 September 1998, respondent Peter Ong (Ong)
instituted with the RTC a Complaint7 for the collection of the
sum of P389,000.00, with interest, attorneys fees and costs
of suit, with prayer for issuance of a writ of preliminary
attachment against the spouses Reynaldo Magaling and Lucila
Magaling (Spouses Magaling) and Termo Loans & Credit
Corporation (Termo Loans). The Complaintalleged that:
3. Defendants Sps. Reynaldo Magaling and Lucila
Magaling are the controlling stockholders/owners of
Thermo (sic) Loans and Credit Corp. and had used
the corporation as mere alter ego or adjunct to evade
the payment of valid obligation;
4. On or about December 1994, defendant Reynaldo
Magaling, (sic) approached plaintiff in his store at
Lipa City and induced him to lend him money and/or
his company Thermo (sic) Loans and Credit Corp.
with undertaking to pay interest at the rate of two
and a half (2 %) percent per month. Defendant
gave assurance that he and his company Thermo
(sic) Loans and Credit Corp. will be able to pay the
loan. Without the assurance plaintiff would not have
lent the money;
5. Based on the assurance and representation of
Reynaldo Magaling, Peter Ong extended loan to
defendants. As of September 1997, the principal loan
extended to defendants stands atP350,000.00. The
interest thereon computed at 2 % per month
is P8,750.00 per month;
6. In acknowledgment of the loan, on or about
September 1997, defendants issued and tendered to
plaintiff series of postdated checks more particularly
described as follows:
Planters Bank
Check No.
Date
0473400
0473401
0473402
0473403
0473404
0473405
0473406
For its part, Termo Loans failed to file an Answer; thus, upon
Ongs motion, the RTC declared said corporation in default
and allowed Ong to present evidence ex parte.
Pursuant to the writ of preliminary attachment earlier issued,
and evidenced by the Sheriffs Return16dated 27 November
1998, the Sheriff17 of RTC, Br. 13 of Lipa City, caused the
attachment of two (2) parcels of land covered by Transfer
Certificates of Title No. T-109347 and No. T-75559, both in the
names of the Spouses Magaling.
The Spouses Magaling expectedly moved for the
reconsideration of the 7 October 1998 Order of the RTC
granting the writ of preliminary attachment, arguing that:
The Writ of Preliminary Attachment x x x was
improperly or irregularly issued as there is no
existing ground to support the issuance of an
attachment.
Plaintiff nakedly alleged that the individual
defendants are guilty of fraud in contracting the
obligation. Nevertheless, a perusal of the Amended
Complaint and the annexes thereto readily reveals
that the obligation subject of the present case is
corporate in character and not personal obligations
of the individual defendants.18
In an Order19 dated 19 February 1999, the RTC found that
Spouses Magalings Motion to Discharge Attachment 20 was
impressed with merit based on the following reasons:
FIRSTLY, it appears that the obligation was incurred
by Termo Loans and Credit Corporation x x x. It is
therefore a corporate liability and not the personal
obligation of herein movants. As correctly stated by
the movants, a corporation has a personality
separate and distinct from that of the stockholders
and officers.
SECONDLY, the checks which bounced do not bear
the signatures of herein movants. It is indeed
implausible that movants will give assurances
concerning checks they did not sign.
THIRDLY, the obligation appears to have been
incurred in 1994 x x x. "Fraud" was alleged in
connection with the checks that bounced, and which
appear to have been issued only in 1998 by way of
renewal of plaintiffs money placement. It appears
therefore that if there was indeed fraud, the same
was not committed simultaneously with the inception
of the obligation.
On 23 June 1999, the RTC promulgated the first of two
decisions in this case. Ruling in favor of Ong, and against
Termo Loans, the dispositive portion reads:
WHEREFORE, the Court finds for the plaintiff and
against the defendant-corporation and hereby orders
the latter to pay the former the following amounts:
1. The sum of P350,000.00 representing principal
obligation;
2. Interest at the rate of 2.5% per month from date of
default until full payment (sic)
3. P20,000.00 as and for attorneys fees;
4. The expenses of litigation; and
5. The cost of suit.21
On 11 August 1999, Ong filed a motion22 for execution of the
above, which the RTC granted23 on 18 October 1999. The Writ
of Execution24 was subsequently issued by the RTC on 1 March
2000. On 26 April 2000, the Sheriffs Return25 was filed before
the RTC manifesting that the Writ of Execution earlier issued
was being returned unsatisfied in view of the fact that Termo
Loans had ceased to exist or had been dissolved.
In a parallel development, trial on the merits concerning
Ongs cause of action against the Spouses Magaling ensued.
On 5 February 2001, in complete contrast to its first decision,
the RTC promulgated its second decision holding the Spouses
Magaling free and clear of any obligation or liability with
respect to the sum of money claimed by Ong. The trial court
ruled in this wise:
Q.
1998. How about this First Solid Lending
Corporation, when was this put up?
A.
I cannot remember also when it started
operating, sir.
COURT:
Q.
So, when did you first realize that you have
difficulty in receiving payments from borrowers?
A.
In the later part of .
Q.
19 ..?
A.
In 1998, Your Honor.
Q.
And in 1998 you did not tell Peter Ong that
there was difficulty in receiving payments from the
borrowers?
A.
He knew about it, Your Honor.
Q.
You cannot presume that the investor knows
that you have difficulty. You have to tell the investor.
Did you tell him?
A.
It was told to him by our manager, what was
happening, Your Honor.
Q.
Your Manager. But you, yourself did not tell
him?
A.
I cannot remember, Your Honor.
COURT:
Q.
So, there was absolutely no occasion for you to
tell him even in passing in his store that there is
danger in the P300,000.00 investment?
A.
No, Your Honor.
Q.
How about the other investors? Did you not also
tell them of such a situation that you were in in your
company?
A.
No, Your Honor.
Q.
Why not?
A.
I did not tell that to investors, what is
going on for fear that they might be afraid of
what is happening, Your Honor.51
xxxx
ATTY. NG:
Q.
Mr. Witness, was there a formal bankruptcy
proceedings filed in dissolving the company?
xxxx
WITNESS:
A.
I do not know, sir.
ATTY. NG:
Q.
Being the President, you do not know or you
refused to know?
A.
No, sir. I resigned at that time in 1998, sir.
COURT:
Q.
And who took over as President?
A.
Nobody took over, Your Honor.
Q.
How about the investors? Did they get all their
money?
WITNESS:
A.
I do not know, Your Honor.
ATTY. NG:
Q.
As of the time that you were still the President,
were there other investors in the company, is it not,
aside from Peter Ong?
A.
Yes, sir.
Q.
Do you know how much was the investment of
the other persons aside from Peter Ong?
xxxx
WITNESS:
A.
Like me, I have invested, sir.
ATTY. NG:
Q.
How much?
A.
P1.8 Million, sir.
Q.
That is your share in the company?
A.
No. That is not a share, sir.
Q.
So, that is your investment in the company?
A.
That is my investment, sir.
Q.
How about the other persons who also invested
money with your company?
A.
I do not know that, sir.
Q.
Can you produce the financial statement of
Thermo (sic) Loans, Mr. witness?
A.
(No answer).
COURT:
Q.
So, as President, you do not know who are the
other investor?
A.
I know the Directors, but the other investors, I
do not know, Your Honor.
Q.
Who is in-charged (sic) of the company?
A.
As of now, Your Honor?
Q.
As of now?
A.
Our manager, Your Honor.
ATTY. NG:
Q.
But because you were the President, you also
supervised your manager, is it not?
A.
Yes, sir.
Q.
To your knowledge, can you name some of the
other persons who also invested in your company, if
you know?
A.
Yes, sir.
Q.
Can you name them?
A.
The Directors listed there, sir.
Q.
How much did the Directors invest in this
company?
A.
That I do not know, sir.
COURT:
Q.
Upon insolvency, the fact that Thermo (sic)
Loans became insolvent in 1998, did all the investors
get their money?
A.
Many are saying that they will get their money,
Your Honor.
Q.
But did they actually get their money
investment?
A.
The others were not able to get back, Your
Honor.
Q.
Did they file a case against you?
A.
No charges were filed against me, Your Honor.
Q.
How about Thermo (sic) Loans?
A.
I do not know, Your Honor.
Q.
So, this is the only case filed by an investor
against Thermo (sic) Loans?
A.
Yes, Your Honor.
ATTY. NG:
Q.
Mr. Witness, going back to your relationship
with Mr. Peter Ong, were you the one who convinced
Peter Ong to invest in your company, the Thermo
(sic) Loans?
A.
I do not remember that, sir.
COURT:
Q.
But you talked to him about the interest and the
principal?
A.
Yes, Your Honor.
Q.
But you did not mention to him that you have
other lending companies?
A.
In that matter, I do not remember, Your
Honor.
ATTY. NG:
Q.
Mr. Witness, when this company, Thermo (sic)
Loans pulled (sic) it up, "nagsarado," it was a de
facto, there was no. who got hold of the assets of
the company?
A.
I do not know that, sir.
Q.
Why?
A.
Because I am not only attending to that
company, I have so many other companies, sir.
COURT:
Q.
You did not go after your P1.8 Million?
A.
Nomore (sic), Your Honor, because "akoy
kinukunsensya rin ng aking sarili, bilang
Katolikoy ayaw ko nang makasali pa sa ibang
bagay na sa banda rooy pera lang ho iyon."
Q.
"Nakukunsiyensya ka" but you were not being
bothered for the money of the other investors? How
can that be? Your conscience bothers you?
A.
If I will think about it, I might get sick. I
did not bother to run after my investment for
reason of health x x x.
ATTY. NG:
Q.
Okay, Mr. Witness, considering that you are a
businessman engaged in similar lines of lending
company and being the President, the former
President of Themo (sic) Loans, you had . you were
furnished with final. with financial statement of the
company was it not?
A.
I do not remember that, sir.
COURT:
Q.
You did not call a meeting of the Directors and
other stock holders that your company is going
down?
A.
No more, Your Honor, because no Directors
attended the meeting.
Q.
But you called a meeting?
A.
Yes, Your Honor. I called a meeting but nobody
attended the meeting.
ATTY. NG:
Q.
Where are now the financial records of the
company?
A.
That I do not know, sir.
Q.
How about your own personal records? Your
personal copy of the financial statement of the
company, considering that your classification in
Rotary Club is financial services?
A.
I do not know where it was placed, sir.
Q.
So, you are telling this Court that you cannot
produce anymore the financial statement related to
this company, is it?
A.
No, sir. Not like that.
Q.
Where you tried to retrieve or will you try to
retrieve the financial statement of this company?
A.
I gave all the responsibilities to the
manager, sir.52
Reynaldo Magalings very own testimony gave reason for the
appellate courts finding of gross negligence on his part.
Instead of the intended effect of refuting the supposition that
Termo Loans was assiduously managed, Reynaldo Magalings
foregoing testimony only convincingly displayed his gross
negligence in the conduct of the affairs of Termo Loans. From
our standpoint, his casual manner, insouciance and
nonchalance, nay, indifference, to the predicament of the
distressed corporation glaringly exhibited a lackadaisical
attitude from a top office of a corporation, a conduct totally
abhorrent in the corporate world.
Reynaldo Magaling is not a novice in the field of commerce.
He is a seasoned businessman running several lending
companies. During his cross- examination, he admitted that
COURT:
Q.
And Peter Ong could have not parted with the
Three Hundred Thousand pesos (P300,000.00)
investment if he did not talk to you?
A.
He talked to me, Your Honor.
ATTY. NG:
Q.
He talked to you? Now, that you admitted .
COURT:
Q.
Who was the one who made the offer for him to
invest? Was he the one who voluntarily invested the
money or you were the one who convinced him to
invest the P300,000.00 money to Thermo Loans
Lending and Credit Corporation?
A.
I cannot remember, Your Honor, because due to
the lapse of time. It was in 1994.54
xxxx
COURT:
Q.
So, what you are saying now is that, your
manager and Peter Ong made preliminary talks
about Peter Ong investing in Thermo Loans and
Credit Corporation and thereafter, you also talked
with Peter Ong about Peter Ongs investing in
Thermo Loans?
A.
Yes, Your Honor.
Q.
What about after that?
A.
After four (4) years that investment was in
1994 up to 1998, Your Honor, and this last in the
year 1999, the corporation became insolvent, Your
Honor.55
xxxx
ATTY. NG:
xxxx
Q.
What happened when Mr. witness, how did
Thermo Loans become bankrupt?
A.
The reason is that, the borrowers did not pay,
sir.56
Accordingly, the Court of Appeals observed correctly when it
succinctly stated that, "[c]learly, Reynaldo Magaling was
grossly negligent in directing the affairs of Thermo (sic) Loans
without due regard to the plight of its investors and thus
should be held jointly and severally liable for the corporate
obligation of Thermo (sic) Loans to appellant Peter Ong."
On the propriety of the RTCs discharge of the preliminary
attachment, we hew to the provisions of the law and
jurisprudence.
A writ of preliminary attachment is a provisional remedy by
virtue of which a plaintiff or other proper party may, at the
commencement of the action or at any time thereafter, have
the property of the adverse party taken into the custody of
the court as security for the satisfaction of the judgment that
may be recovered.57 The chief purpose of the remedy of
attachment is to secure a contingent lien on defendants
property until plaintiff can, by appropriate proceedings, obtain
a judgment and have such property applied to its satisfaction,
or to make some provision for unsecured debts in cases where
the means of satisfaction thereof are liable to be removed
beyond the jurisdiction, or improperly disposed of or
concealed, or otherwise placed beyond the reach of
creditors.58
For the provisional remedy to issue, Sec. 1, Rule 57 of the
Rules of Court, as amended, provides that:
SECTION 1. Grounds upon which attachment may
issue. At the commencement of the action or at any
time before entry of judgment, a plaintiff or any
proper party may have the property of the adverse
party attached as security for the satisfaction of any
judgment that may be recovered in the following
cases:
(a) In an action for the recovery of a specified
amount of money or damages, other than moral and
Unremitted Amount
P 453,845.78
P 10,856.85
(3
DECISION
GARCIA, J.:
Assailed and sought to be set aside in this petition for review
under Rule 45 of the Rules of Court is theResolution dated
November 26, 20011 of the Court of Appeals (CA) in CA-G.R.
SP No. 67702, dismissing the petition for certiorari thereat
filed by the herein petitioners on the ground that the
Verification and Certification on Non-Forum Shopping was
defective because co-petitioner Peter C. Maligro was not a
signatory thereto, as reiterated in its subsequent Resolution
of July 16, 2002,2 denying the petitioners' motion for
reconsideration.
The facts:
Petitioner Petron Corporation (Petron), a corporation duly
organized and existing under the laws of the Philippines, is
engaged in the refining, sale and distribution of petroleum
and other related products, while its co-petitioner Peter C.
Maligro was the former Visayas Operations Assistant Manager
of Petron's Visayas-Mindanao District Office at Lahug, Cebu
City.
On May 15, 1990, Petron, through its Cebu District Office,
hired the herein private respondent Chito S. Mantos, an
Industrial Engineer, as a managerial, professional and
technical employee with initial designation as a Bulk Plant
Engineering Trainee. He attained regular employment status
on November 15, 1990 and was later on designated as a Bulk
Plant Relief Supervisor, remaining as such for the next five
years while being assigned to the different plants and offices
of Petron within the Visayas area.
It was while assigned at Petron's Cebu District Office with
petitioner Peter Maligro as his immediate superior, when
Mantos, thru a Notice of Disciplinary Action dated October 29,
1996,3 a copy of which was received by him on November 18,
1996,4 was suspended for 30 days from November 1 to 30,
1996 for violating company rules and regulations regarding
Absence Without Leave (AWOL), not having reported for work
during the period August 5 to 27, 1996.
Subsequently, in a notice Termination of Services bearing date
November 20, 19965 and received by him on November 25,
1996,6 Mantos' services were altogether terminated effective
December 1, 1996, by reason of his continued absences from
August 28, 1996 onwards, as well as for
Insubordination/Discourtesy for making false accusations
against his superior.
Meanwhile, on November 8, 1996, contending that he has
been constructively dismissed as of August 5, 1996, Mantos
filed with the National Labor Relations Commission, Regional
Arbitration Branch (NLRC-RAB), Cebu City, a complaint for
illegal dismissal and other monetary claims against Petron
and/or Peter C. Maligro. The case was docketed as NLRC RABVII Case No. 11-1439-96.
In his complaint, Mantos made the following allegations:
xxx He had an unblemished record in his service with
[Petron]. Intrigues and professional jealousies,
however, have prevailed over the work atmosphere
in [Petron]. This became more particularly true in
regard to his close relationship with Jaime "Boy"
Tamayo, then the VISMIN Operations Manager who
later left the company to migrate to Canada. His
closeness to Tamayo has caused problems with his
relationship with Peter Maligro, Visayas Operations
Assistant Manager, who has been after his neck for
Separation Pay:
P15,420.00 x 6 years
b.
Total
Minus
Net Award
SO ORDERED. 9
Explains the Labor Arbiter in his decision:
It is an established fact that for his absences from
August 5 to August 27, 1996, complainant was
imposed the penalty of suspension for thirty (30)
days from November 1 to 30, 1996 per the letter of
respondent Maligro to complainant dated October 29,
1996 (Annex "D"). From respondents' Annex "6"
which is a memorandum of November 19, 1996
containing the report of the Investigation Committee
it is shown therein that the summons in this case was
received by respondents on November 14, 1996. The
following day, November 15, 1996, the Committee
met to determine the factual basis of the charges of
absence without leave and insubordination against
complainant. The Committee was convened seven
(7) days after the filing of the complaint herein on
November 8, 1996.
We find that the foregoing factual milieu militates
badly against the cause for the respondents. It
appears that the Investigation Committee was
belatedly constituted as an afterthought after the
respondents received the summons in this case. For
his AWOL, complainant was already sufficiently
penalized by suspension for thirty (30) days, the
maximum penalty authorized by law. In fact,
complainant was still serving his suspension when
the Committee was convened and issued the
memorandum of November 19, 1996 recommending
his dismissal for AWOL and insubordination. The
insubordination aspect stemmed from complainant's
accusation in his complaint for constructive dismissal
and withholding of his stock certificates. The
imposition of the penalty of dismissal smacks of a
desire to get even for complainant's filing of a
complaint against the respondents. Anyway, the
penalty of dismissal was too harshly and
[d]isproportionately imposed on the complainant
considering his length of service.
Furthermore, there is in an (sic) unrebutted evidence
for the complainant that earlier while being assigned
directly under respondent Maligro at the Cebu
District Office, with the designation as Operations
Engineer, he was assigned only menial tasks like
recopying errands, digging up files, drafting and
redrafting memoranda and other clerical works.
We find that respondents' act was tantamount to
constructive dismissal xxx Under such
circumstances, the continuance of complainant's
employment with respondent corporation has been
rendered impossible, unreasonable and unlikely.
There exists also a demotion in rank.
xxx xxx xxx
We find therefore that complainant was illegally
dismissed from the service. He should have been
reinstated to his former position without loss of
seniority rights. We find however, that the filing of
this complaint has spawned strained relationship
between the parties. Hence, reinstatement is no
longer practical and feasible. Instead complainant
should be awarded his separation pay equivalent to
one (1) month pay per year of service. He is not
however entitled to backwages. He is not completely
dant
Total Amount
4,800,000
As of 06 December
1999, MSCI Club Shares
"A" and "B" were selling
at PhP650,000 and
PhP700,000,
respectively.136
2,000,000137 Atty. Pe
the win
in the a
togethe
creditor
Roberto
Atty. Ra
85,000,000 Interve
purchas
condom
the auc
P1M ea
of P10
A 155 sqm.
condominium unit,
Makati City (CCT No.
57697) 141
12,400,000
A 12.5 sqm.
condominium parking
space (Parking Three,
Unit P-46) in Makati
City (CCT No.
57698)143
500,000
35,572,350
Notice
Executi
1,000,000 Persona
dated 2
2000148
500,000
870,000
As of 06 December
1999, MSCI Club Shares
"A" and "B" were selling
at PhP650,000 and
PhP700,000
respectively.154
650,000
Real Property155
No estimate available on
record.
1,077,000
2,000,000
Notice
Executi
4,000,000 Persona
dated 2
2000158
611,700
Inc.163
Real Property190
2,000
40 Shares of stock in
D. C. Gonzales, Jr.,
Inc.165
450,000
As of 06 December
1999, one share was
selling at least
P870,000.173
870,000
15,750,000
2,000,000
1,000,000
500,000
60,757 Shares of
stock in EQL
Properties, Inc.186
1,214,140
40 Shares of stock in
EQL Properties, Inc. 187
2,000
5,050,000
zon
100,000
Real Property189
4,000,000
No estimated value.
TOTAL VALUE
No estimated value.
181,919,190
xxx
xxx
xxx
xxx
xxx
xxx
days within which to file their answer, and set the case for
hearing on April 29 and May 3, 1977.
Respondents issued notices of the annual stockholders'
meeting, including in the Agenda thereof, the following:
6. Re-affirmation of the authorization to the
Board of Directors by the stockholders at
the meeting on March 20, 1972 to invest
corporate funds in other companies or
businesses or for purposes other than the
main purpose for which the Corporation has
been organized, and ratification of the
investments thereafter made pursuant
thereto.
By reason of the foregoing, on April 28, 1977, petitioner filed
with the SEC an urgent motion for the issuance of a writ of
preliminary injunction to restrain private respondents from
taking up Item 6 of the Agenda at the annual stockholders'
meeting, requesting that the same be set for hearing on May
3, 1977, the date set for the second hearing of the case on
the merits. Respondent Commission, however, cancelled the
dates of hearing originally scheduled and reset the same to
May 16 and 17, 1977, or after the scheduled annual
stockholders' meeting. For the purpose of urging the
Commission to act, petitioner filed an urgent manifestation on
May 3, 1977, but this notwithstanding, no action has been
taken up to the date of the filing of the instant petition.
With respect to the afore-mentioned SEC cases, it is
petitioner's contention before this Court that respondent
Commission gravely abused its discretion when it failed to act
with deliberate dispatch on the motions of petitioner seeking
to prevent illegal and/or arbitrary impositions or limitations
upon his rights as stockholder of respondent corporation, and
that respondent are acting oppressively against petitioner, in
gross derogation of petitioner's rights to property and due
process. He prayed that this Court direct respondent SEC to
act on collateral incidents pending before it.
On May 6, 1977, this Court issued a temporary restraining
order restraining private respondents from disqualifying or
preventing petitioner from running or from being voted as
director of respondent corporation and from submitting for
ratification or confirmation or from causing the ratification or
confirmation of Item 6 of the Agenda of the annual
stockholders' meeting on May 10, 1977, or from Making
effective the amended by-laws of respondent corporation,
until further orders from this Court or until the Securities and
Ex-change Commission acts on the matters complained of in
the instant petition.
On May 14, 1977, petitioner filed a Supplemental Petition,
alleging that after a restraining order had been issued by this
Court, or on May 9, 1977, the respondent Commission served
upon petitioner copies of the following orders:
(1) Order No. 449, Series of 1977 (SEC Case No. 1375);
denying petitioner's motion for reconsideration, with its
supplement, of the order of the Commission denying in part
petitioner's motion for production of documents, petitioner's
motion for reconsideration of the order denying the issuance
of a temporary restraining order denying the issuance of a
temporary restraining order, and petitioner's consolidated
motion to declare respondents in contempt and to nullify the
stockholders' meeting;
(2) Order No. 450, Series of 1977 (SEC Case No. 1375),
allowing petitioner to run as a director of respondent
corporation but stating that he should not sit as such if
elected, until such time that the Commission has decided the
validity of the bylaws in dispute, and denying deferment of
Item 6 of the Agenda for the annual stockholders' meeting;
and
(3) Order No. 451, Series of 1977 (SEC Case No. 1375),
denying petitioner's motion for reconsideration of the order of
I
Whether or not amended by-laws are valid is purely a legal
question which public interest requires to be resolved
It is the position of the petitioner that "it is not necessary to
remand the case to respondent SEC for an appropriate ruling
on the intrinsic validity of the amended by-laws in compliance
with the principle of exhaustion of administrative remedies",
considering that: first: "whether or not the provisions of the
amended by-laws are intrinsically valid ... is purely a legal
question. There is no factual dispute as to what the provisions
are and evidence is not necessary to determine whether such
amended by-laws are valid as framed and approved ... ";
second: "it is for the interest and guidance of the public that
an immediate and final ruling on the question be made ... ";
third: "petitioner was denied due process by SEC" when
"Commissioner de Guzman had openly shown prejudice
against petitioner ... ", and "Commissioner Sulit ... approved
the amended by-laws ex-parte and obviously found the same
intrinsically valid; and finally: "to remand the case to SEC
would only entail delay rather than serve the ends of justice."
Respondents Andres M. Soriano, Jr. and Jose M. Soriano
similarly pray that this Court resolve the legal issues raised by
the parties in keeping with the "cherished rules of procedure"
that "a court should always strive to settle the entire
controversy in a single proceeding leaving no root or branch
to bear the seeds of future ligiation", citingGayong v.
Gayos. 3 To the same effect is the prayer of San Miguel
Corporation that this Court resolve on the merits the validity
of its amended by laws and the rights and obligations of the
parties thereunder, otherwise "the time spent and effort
exerted by the parties concerned and, more importantly, by
this Honorable Court, would have been for naught because
the main question will come back to this Honorable Court for
final resolution." Respondent Eduardo R. Visaya submits a
similar appeal.
It is only the Solicitor General who contends that the case
should be remanded to the SEC for hearing and decision of
the issues involved, invoking the latter's primary jurisdiction
to hear and decide case involving intra-corporate
controversies.
It is an accepted rule of procedure that the Supreme Court
should always strive to settle the entire controversy in a
single proceeding, leaving nor root or branch to bear the
seeds of future litigation. 4 Thus, in Francisco v. City of
Davao, 5 this Court resolved to decide the case on the merits
instead of remanding it to the trial court for further
proceedings since the ends of justice would not be subserved
by the remand of the case. In Republic v. Security Credit and
Acceptance Corporation, et al., 6 this Court, finding that the
main issue is one of law, resolved to decide the case on the
merits "because public interest demands an early disposition
of the case", and in Republic v. Central Surety and Insurance
Company, 7 this Court denied remand of the third-party
complaint to the trial court for further proceedings, citing
precedent where this Court, in similar situations resolved to
decide the cases on the merits, instead of remanding them to
the trial court where (a) the ends of justice would not be
subserved by the remand of the case; or (b) where public
interest demand an early disposition of the case; or (c) where
the trial court had already received all the evidence presented
by both parties and the Supreme Court is now in a position,
based upon said evidence, to decide the case on its
merits. 8 It is settled that the doctrine of primary jurisdiction
has no application where only a question of law is
involved. 8a Because uniformity may be secured through
review by a single Supreme Court, questions of law may
appropriately be determined in the first instance by
courts. 8b In the case at bar, there are facts which cannot be
denied, viz.: that the amended by-laws were adopted by the
Board of Directors of the San Miguel Corporation in the
21
it was