business org finals

8/19/2019 Business Org Finals

1/36

EN BANC

G.R. No. 207161, September 08, 2015

Y-I LEISURE P ILIPPINES, INC., YA!S IN!ERNA!I"NAL L!#. AN# Y-I CLUBS AN# RES"R!S, INC. , Petitioners , v. $A%ES YU , Respondent .

# E C I S I " N

%EN#"&A, J. '

The present case attempts to unravel whether the transfer of all or substantially all the assets of a corporation under Section 40 of the Corporation Code carries with it the assumption of corporate liabilities.

This is a petition for review on certiorari under Rule 45 of the Rules of Court assailing the January 0! "0#" $ecision # and the %pril"&! "0# Resolution " of the Court of %ppeals 'C%(! in C%)*.R. C+ ,o. &-0 -! which affirmed with modification the %ugust #! "0#0$ecision of the Regional Trial Court! ranch /#! ue1on City 'RTC(.

The Facts

2t. %rayat $evelopment Co. 3nc. ' MADCI ( was a real estate development corporation! which was registered 4 on ebruary ! #&&-before the Security and 67change Commission ' SEC (. 8n the other hand! respondent James 9u ' Yu ( was a businessman! interestedin purchasing golf and country club shares.

Sometime in #&& ! 2%$C3 offered for sale shares of a golf and country club located in the vicinity of 2t. %rayat in %rayat! :ampanga!for the price of :550.00 per share. Relying on the representation of 2%$C3;s broect in :ampanga. "# Thus! he signed the 28% on behalf of 93@ and he paid : #.5 millionto subscribe to 2%$C3;s shares! sub>ect to the fulfilment of Sangil;s obligations. "" cralawrednad

Eang further testified that the 28% stipulated that 2%$C3 would e7ecute a special power of attorney in his favor! empowering him tosell the property of 2%$C3 in case of default in the performance of obligations. " $ue to Sangil;s subseBuent default! a deed of absolute sale over the lands of 2%$C3 was eventually e7ecuted in favor of 93CR3! its designated company. "4 Eang also stated that!

1


2/36

aside from its lands! 2%$C3 had other assets in the form of loan advances of its directors. "5 cralawredcralawrednad

The RTC Ruling

3n its %ugust #! "0#0 $ecision! the RTC ruled that because 2%$C3 did not deny its contractual obligation with 9u! it must be liablefor the return of his payments. The trial court also ruled that Sangil should be solidarily liable with 2%$C3 because he used the latteras a mere alter ego or business conduit. The RTC was convinced that Sangil had absolute control over the corporation and he startedselling golf and country club shares under the guise of 2%$C3 even without clearance from S6C.

The RTC! however! e7onerated 93@! 93@:3 and 93CR3 from liability because they were not part of the transactions between 2%$C3 andSangil! on one hand and 9u! on the other hand. 3t opined that 93@! 93@:3 and 93CR3 even had the foresight of protecting the creditors

of 2%$C3 when they made Sangil responsible for settling the claims of refunds of thirds persons in the proprietary shares. Thedecretal portion of the decision readsF ChanRoblesvirtual@awlibrary

E?6R6 8R6! premises considered! >udgment is hereby rendered as followsF ChanRoblesvirtual@awlibrary

#. 8rdering defendants 2t. %rayat $evelopment Corporation! 3nc. and Rogelio Sangil to pay plaintiff James 9u >ointly and severallythe amounts of :-50!000.04 with - legal rate of interest from the filing of the amended complaint until full payment and and:50!000.00 as attorney;s fees.

". $ismissing the instant case against defendant 9)3 @eisure :hilippines! 3nc.! 9%TS 3nternational @imited and 9)3 Clubs and Resorts!3nc.D and

. $ismissing the counterclaims of 9)3 @eisure :hilippines! 3nc.! 9%TS 3nternational @imited and 9)3 Clubs and Resorts! 3nc.

S8 8R$6R6$. "-

3n two separate appeals! the parties elevated the case to the C%.

The CA Ruling

3n its assailed $ecision! dated January 0! "0#"! the C% partl grante! the appeals and "o!ifie! the RTC decision by holding 93@ andits companies! 93@:3 and 93CR3! >ointly and severally! liable for the satisfaction of 9u;s claim.

The C% held that the sale of lands between 2%$C3 and 93@ must be upheld because 9u failed to prove that it was simulated or thatfraud was employed. This did not mean! however! that 93@ and its companies were free from any l iability for the payment of 9u;sclaim.

The C% e7plained that 93@! 93@:3 and 93CR3 could not escape liability by simply invo


3/36

8n September "0! "0# ! respondent 9u filed his Comment. # ?e asserted that the C% correctly applied Calte# in the present case asthe lands sold to the petit ioners were the only assets of 2%$C3. %fter the sale! 2%$C3 became incapable of continuing its business!and its corporate e7istence has >ust remained to this day in a virtual state of suspended animation. Thus! unless the creditors hadagreed to the sale of all the assets of the corporation and had accepted the purchasing corporation as the new debtor! sufficientassets should have been reserved to pay their claims.

8n June #&! "0#4! the petitioners filed their Reply! " reiterating their previous argument that the element of fraud was reBuired inorder for a third party buyer to be liable to the seller;s creditors.

The Cou t!s Ru"#$%

The petition lacect. 9u then demanded the return of his payment! but 2%$C3 could not return it anymore because all its assets hadbeen transferred. Through the acts of 93@! 2%$C3 sold all its lands to 93@:3 and! subseBuently to 93CR3. Thus! 9u now claims that thepetitioners inherited the obligations of 2%$C3. 8n the other hand! the petitioners counter that they did not assume such liabilitiesbecause the transfer of assets was not committed in fraud of the 2%$C3;s creditors.

?ence! the issue at hand presents a comple7 Buestion of law ) whether fraud must e7ist in the transfer of all the corporate assets inorder for the transferee to assume the liabilities of the transferor. To resolve this issue! a review of the laws and >urisprudenceconcerning corporate assumption of liabilities must be undertaudiced as it is not in privity with thecontracts between the transferor corporation and its creditors.

The first e7ception under the ,ell $octrine! where the transferee corporation e7pressly or impliedly agrees to assume the t ransferor;sdebts! is provided under A t#c"e ()*+ 5 of the Civil Code. Ehen a person binds himself solidarity with the principal debtor! then acontract of suretyship is produced. ,ecessarily! the corporation which e7pressly or impliedly agrees to assume the transferor;s debtsshall be liable to the same.

The second e7ception under the doctrine! as to the merger and consolidation of corporations! is well)established under Sect#o$s +,to -) T#t"e / o0 the Co 1o at#o$ Co2e . 3f the transfer of assets of one corporation to another amounts to a merger orconsolidation! then the transferee corporation must ta


4/36

of the sale! the transferor is merely left with its >uridical e7istence! devoid of its industry and earning capacity. ittingly! the properprovision of law that is contemplated by this e7ception would be Sect#o$ *) of the Corporation Code! / whichprovidesF ChanRoblesvirtual@awlibrary

Sec. 40. Sale or other disposition of assets. ) Sub>ect to the provisions of e7isting laws on illegal combinations and monopolies! acorporation may! by a ma>ority vote of its board of directors or trustees! se"" "ease e3cha$%e 4o t%a%e 1"e2%e o othe 5#se2#s1ose o0 a"" o su6sta$t#a""7 a"" o0 #ts 1 o1e t7 a$2 assets #$c"u2#$% #ts %oo25#"" ! upon such terms and conditions and forsuch consideration! which may be money! stoc

,uri$pru!ential recognition of the)u$ine$$-enterpri$e tran$fer

Jurisprudence has held that in a business)enterprise transfer! the transferee is liable for the debts and liabilities of his transferorarising from the business enterprise conveyed. 2any of the application of the business)enterprise transfer have been related by theCourt to the application of the piercing doctrine. 4" cralawrednad

3n A&D& Santo$% Inc& '& +a$.ue/% 4 a ta7i driver filed a suit for wor


5/36

:erhaps the most telling >urisprudence which recogni1ed the business)enterprise transfer would be the assailed case of Calte# . 3nthat case! under an agreement of assumption of obligations! @=ST6+6C8 transferred! conveyed and assigned to respondent :STC allof its business! properties and assets pertaining to its tanudgment debt against @=ST6+6C8! and it sought to enforce the same against:STC. The Court ruled that :STC was bound by its agreement with @=ST6+6C8 and the former assumed all of the latter;s obligationspertaining to such business.

2ore importantly! the Court held that! e'en 0ithout the agree"ent ! :STC was still liable to Calte7! 3nc. based on Section 40! asfollowsF ChanRoblesvirtual@awlibrary

Ehile the Corporation Code allows the transfer of all or substantially all the properties and assets of a corporation! the transfershould not pre>udice the creditors of the assignor. The only way the transfer can proceed without pre>udice to the creditors is to holdthe assignee liable for the obligations of the assignor. The ac8u#s#t#o$ 67 the ass#%$ee o0 a"" o su6sta$t#a""7 a"" o0 the assetso0 the ass#%$o $ecessa #"7 #$c"u2es the assu41t#o$ o0 the ass#%$o !s "#a6#"#t#es ! unless the creditors who did not consent tothe transfer choose to rescind the transfer on the ground of fraud. To allow an assignor to transfer all its business! properties andassets without the consent of its creditors and without reBuiring the assignee to assume the assignor;s obligations will defraud thecreditors. The assignment will place the assignor;s assets beyond the reach of its creditors.

?ere! Calte7 could not enforce the >udgment debt against @=ST6+6C8. The writ of e7ecution could not be satisfied because@=ST6+6C8;s remaining properties had been foreclosed by lienholders. 3n addition! all of @=ST6+6C8;s business! properties andassets pertaining to its tan


6/36

company which acBuired properties in 2agalang! :ampanga to be developed into a golf course. 5/ cralawrednad

The C% found that 2%$C3 had an entire asset consisting of #"0 hectares of land! and that its sale to the petitioners rendered itincapable of continuing its intended golf and country club business. 5& The Court holds that such finding is fully substantiated by therecords of the case. The 28% itself stated that 2%$C3 had #"0 hectares of agricultural land in 2agalang! :ampanga! for thedevelopment of a golf course. -0 2%$C3 had the right of ownership over these properties consisting of & land titles! e7cept for the "titles previous delivered to 93@. -# The #"0)hectare land! however! was then sold to 93@:3! -" and then transferred to93CR3.- cralawrednad

Respondent 9u testified that he verified the landholdings of 2%$C3 with the Register of $eeds in :amapanga and discovered that allits lands were transferred to 93CR3. -4 ecause the properties of 2%$C3 were already conveyed! 9u had no other way of collecting his

refund.-5

cralawrednadSangil also testified that 2%$C3 had no more properties left after the sale of the lands to the petitionersF ChanRoblesvirtual@awlibrary

%tty. ,uguidF %nd after the sale! it has no more propertiesKSangilF That;s right! Sir.

F %nd the business of 2%$C3 was to operate and build golf courseK%F That;s right! Sir.

F %nd because of the sale of all these properties! 2%$C3 was not able to build the golf courseK%F 9es! Sir.

9: A$2 2#2 $ot a$74o e o1e ate as a co 1o at#o$;A: e$ o=e 67 < . Wa$% . -- cralawrednad

IE"pha$i$ Supplie!

%s a witness for the petitioners! Eang testified that 9#@ bought the shares of stoc< of 2%$C3 because it had some interest in thepro>ect involving the development of a golf course. The petitioners then found that 2%$C3 had landholdings in :ampanga which itwould be able to develop into a golf course. - ?ence! the petitioners were fully aware of the nature of 2%$C s business and itsassets! but they continued to acBuire its lands through the designated company! 93CR3. -/ cralawrednad

ased on these factual findings! the Court is convinced that 2%$C3 indeed had assets consisting of #"0 hectares of landholdings in2agalang! :ampanga! to be developed into a golf course! pursuant to its primary purpose. ecause of its alleged violation of the28%! however! 2%$C3 was made to transfer all its assets to the petitioners. ,o evidence e7isted that 2%$C3 subseBuently acBuiredother lands for its development pro>ects. Thus! 2%$C3! as a real estate development corporation! was left without any property todevelop eventually rendering it incapable of continuing the business or accomplishing the purpose for which it was incorporated.

Section 40 must apply.

ConseBuently! the transfer of the assets of 2%$C3 to the petitioners should have complied with the reBuirements under Section 40.,onetheless! the present petition is not concerned with the validity of the transferD but the respondent;s claim of refund of his:-50!000.00 payment for golf and country club shares. oth the C% and the RTC ruled that 2%$C3 and Sangil were liable.

8n the Buestion of whether the petitioners must also be held solidarily liable to 9u! the Court answers in the affirmative.

Ehile the Corporation Code allows the transfer of all or substantially all of the assets of a corporation! the transfer should notpre>udice the creditors of the assignor corporation. -& =nder the business)enterprise transfer! the petitioners have conseBuentlyinherited the liabilities of 2%$C3 because they acBuired all the assets of the latter corporation. The continuity of 2%$C3;s landdevelopments is now in the hands of the petitioners! with all its assets and liabilities. There is absolutely no certainty that 9u can stillclaim its refund from 2%$C3 with the latter losing all its assets. To allow an assignor to transfer all its business! properties and assetswithout the consent of its creditors will place the assignor;s assets beyond the reach of its creditors. Thus! the only way for 9u torecover his money would be to assert his claim against the petitioners as transferees of the assets.

The MOA cannot pre1u!ice re$pon!ent

The 28%! which contains a provision that Sangil undertoo< to redeem 2%$C3 proprietary shares sold to third persons or settle in fullall their claims for refund of payments! should not pre>udice respondent 9u. The C% correctly ruled that such provision constitutednovation under A t#c"e &(?' 0of the Civil Code. Ehen there is a substitution of debtors! the creditor must consent to the sameDotherwise! it shall not in any way affect the creditor. 3n this case! it was established that 9u;s consent was not secured in thee7ecution of the 28%. Thus! insofar as the respondent was concerned! the debtor remained to be 2%$C3. %nd given that the assetsand business of 2%$C3 have been transferred to the petitioners! then the latter shall be liable.

3nterestingly! the same issue on novation was tac$o5"e2%e a$2co$se$t o0 Ca"te3 the A% ee4e$t ca$$ot 1 e@u2#ce Ca"te3 . Thus! the assets that @=ST6+6C8 transferred to :STC inconsideration! among others! of the novation! or the value of such assets! remain even in the hands of :STC sub>ect to e7ecution tosatisfy the >udgment claim of Calte7. #cralawrednad

IE"pha$i$ Supplie!

Free an! 2ar"le$$ Clau$e

The petitioners! however! are not left without recourse as they can invo


7/36

enterprise transfer! it is possible that the t ransferor and the transferee may enter into a contractual stipulation stating that thetransferee shall not be liable for any or all debts arising from the business which were contracted prior to the time of transfer. Suchstipulations are valid! but only as to the t ransferor and the transferee. These stipulations! though! are not binding on the creditors ofthe business enterprise who can still go after the transferee for the enforcement of the liabilities. " cralawrednad

%n e7ample of a free and harmless clause can be observed in the case of PCI Lea$ing '& 3CPB& 3n that case! a claim for damageswas filed against the petitioner therein as the registered owner of the vehicle! even though it was the latter;s lessee that committedan infraction. The Court granted the claim against the petitioner based on the registered)owner rule. 6ven so! the Court statedtherein thatF ChanRoblesvirtual@awlibrary

777 the Court believes that petitioner and other companies so situated are not entirely left without recourse. They may resort tothird)party complaints against their lessees or whoever are the actual operators of their vehicles. 3n the case at bar! there is! in fact!a provision in the lease contract between petitioner and S=*6C8 to the effect that the latter shall indemnify and hold the former freeand harmless from any Gliabilities! damages! suits! claims or >udgmentsG arising from the latter;s use of the motor vehicle. Ehetherpetitioner would act against S=*6C8 based on this provision is its own option.

3n the present case! the 28% stated that Sangil undertoo< to redeem 2%$C3 proprietary shares sold to third persons or settle in fullall their claims for refund of payments. Ehile this free and harmless clause cannot affect respondent as a creditor! the petitionersmay resort to this provision to recover damages in a third)party complaint. Ehether the petitioners would act against Sangil underthis provision is their own option.

WHEREFORE ! the petition is DENIED . The January 0! "0#" $ecision and the %pril "&! "0# Resolution of the Court of %ppeals inC%)*.R. C+ ,o. &-0 - are hereby AFFIRudged petitioner Sheriff Carmelo +. Cachero 'Sheriff Cachero(guilty of indirect contempt with the penalty of a fineD and 'c( the Resolution dated 8ctober "4! "00 of the C% in C%)*.R. S:. ,os.-5 /5 and --4#0! which denied Sheriff Cachero;s motion for reconsideration.

The Facts

Sometime in %pril and 2ay #&& ! respondents unai :hilippines Corporation ' unai( and Spouses %ntonio and Sylvia 9utingco 'Sps.9utingco( obtained loans from Eestmont an< 'Eestmont(! now =nited 8verseas an< :hils.! in the aggregate amount of:#0!000!000.00! secured by several promissory notes / ':,s( with different maturity dates. & The :,s commonly provide that in casethe same are referred to an attorney)at)law or a collection agency! or a suit is instituted in court for collection! Sps. 9utingco will beliable to pay twenty percent '"0 ( of the total amount due as attorney;s fees! e7clusive of costs of suit and othere7penses. #0 cralawrednad

?owever! unai and Sps. 9utingco 'original defendants( defaulted in the payment of the said loan obligations when they fell due! and

ignored Eestmont;s demands for payment.##

?ence! the Eestmont filed a complaint#"

for sum of money! with prayer for the issuanceof a writ of preliminary attachment before the RTC on January #-! #&&/! doc


8/36


9/36

of the additional defendants. - 8n the petition for indirect contempt! the C% found that Sheriff Cachero had prior udgment on the pleadings! on Eestmont;smotion. /" ?ence! other than the hearing on the motion to discharge the attached items! / no full)blown trial was conducted on thecase.

3n the case at bar! both the RTC and the C% were one in dismissing Eestmont;s %mended and Second %mended Complaints as to theadditional defendants! but differed on the grounds therefor i&e&! the RTC held that said complaints failed to state a cause of action!while the C% ruled that there was no cause of action! as to the additional defendants.

G ailure to state a cause of action and lac< of cause of action are distinct grounds to dismiss a particular action. The former refers tothe insufficiency of the allegations in the pleading! while the latter to the insufficiency of the factual basis for the action. $ismissal forfailure to state a cause of action may be raised at the earliest stages of the proceedings through a motion to dismiss under Rule #-of the Rules of Court! while dismissal for lac< of cause of action may be raised any time after the Buestions of fact have beenresolved on the basis of stipulations! admissions or evidence presented by the plaintiff.G /4 cralawrednad

Considering that! in this case! no stipulations! admissions! or evidence have yet been presented! it is perceptibly impossible to assessthe insufficiency of the factual basis on which Sheriff Cachero asserts his cause of action. ?ence! the ground of lac< of cause ofaction could not have been the basis for the dismissal of this action.

,onetheless! the %mended and Second %mended Complaints are still dismissible on the ground of failure to state a cause of action!as correctly held by the RTC.

G% complaint states a cause of action if it sufficiently avers the e7istence of the three ' ( essential elements of a cause of action!namelyF ' a ( a right in favor of the plaintiff by whatever means and under whatever law it arises or is createdD ' ) ( an obligation on

the part of the named defendant to respect or not to violate such rightD and ' c ( an act or omission on the part of the nameddefendant violative of the right of the plaintiff or constituting a breach of the obligation of defendant to the plaintiff for which thelatter may maintain an action for recovery of damages. 3f the allegations of the complaint do not state the concurrence of theseelements! the complaint becomes vulnerable to a motion to dismiss on the ground of failure to state a cause ofaction.G /5 cralawrednad

Judicious e7aminations of Eestmont;s %mended and Second . %mended Complaints readily show their failure to sufficiently state acause of action as the allegations therein do not proffer ultimate facts which would warrant an action against the additionaldefendants for the collection of the amount due on the sub>ect :,s. 3n imputing liability to the additional defendants! Eestmontmerely alleged in its Second %mended ComplaintF cralawlawlibraryG:anama7! ,go! %lba! 9u! aesa and Resane are impleaded herein for being mere alter egos! conduits! dummies or nominees ofdefendants spouses %ntonio and Sylvia 9utingco to defraud creditors! including herein plaintiff IEestmont .

7 7 7 7

2aria 8rti1 is impleaded herein for being mere alter ego! conduit! dummy or nominee of defendants spouses %ntonio and Sylvia9utingco to defraud creditors! including herein plaintiff IEestmont .G ' 3n!er$coring $upplie! ( /-

The aforecited allegations partaurisdiction. / There is no e7planation or narration of facts that would disclose why the additional defendants are mere alter egos!conduits! dummies or nominees of the original defendants to defraud creditors! contrary to the reBuirement of Section 5! // Rule / ofthe Rules of Court that the circumstances constituting fraud must be stated with particularity! thus! rendering the allegation of fraudsimply an unfounded conclusion of law. 3t must be pointed out that! in the absence of specific averments! the complaint presents nobasis upon which the court should act! or for the defendant to meet it with an intelligent answer /& and must! perforce! be dismissedfor failure to state a cause of action! &0 as what the RTC did.

3t bears to stress that Gwhile the facts alleged in the complaint are hypothetically admitted by the defendant! who moves to dismiss9


10/36

the complaint on the ground of failure to state a cause of action! it must! nevertheless! be remembered that the h71othet#ca"a24#ss#o$ e3te$2s o$"7 to the e"e=a$t a$2 4ate #a" 0acts 5e"" 1"ea2e2 #$ the co41"a#$t as 5e"" as #$0e e$ces 0a# "72e2uct#6"e the e0 o4 .G +erily! the filing of the motion to dismiss assailing the sufficiency of the complaint Gdoes not admit thetruth of mere epithets of fraudD nor allegations of legal conclusionsD nor an erroneous statement of lawD nor mere inferences orconclusions from facts not statedD nor mere conclusions of lawD nor allegations of fact the falsity of which is sub>ect to >udicial noticeDnor matters of evidenceD nor surplusage and irrelevant matterD nor scandalous matter inserted merely to insult the opposing partyDnor to legally impossible factsD nor to facts which appear unfounded by a record incorporated in the pleading! or by a documentreferred toD nor to general averments contradicted by more specific averments.G &"cralawrednad

%nent the award of attorney;s fees! it is relevant to note that the stipulations on attorney;s fees contained in the :,s constitute whatis


11/36

%s a general rule! a corporation has a separate and distinct personality from those who represent it. #3ts officers are solidarily liableonly when e7ceptional circumstances e7ist! such as cases enumerated in Section # of the Corporation Code. " The liability of theofficers must be proven by evidence sufficient to overcome the burden of proof borne by the plaintiff.

This case originated from a Complaint for Collection of Sum of 2oney and $amages filed by :ioneer 3nsurance A Surety Corporation':ioneer( against 2orning Star Travel A Tours! 3nc. '2orning Star( for the amounts :ioneer paid the 3nternational %ir Transport%ssociation under its credit insurance policy. The amounts of :#00!4 &!# #.5& and =SL45 !/ 4.#4 represent 2orning Star;s overdueremittances to the 3nternational %ir Transport %ssociation. 4redarclaw

:ioneer filed this :etition for Review 5 assailing the Court of %ppeals; ebruary "/! "0## $ecision - Gonly insofar as it absolved theindividual respondents of their >oint and solidary liability to petitionerI! G and %ugust #! "0## Resolution / denying reconsideration.

2orning Star is a travel and tours agency with enny Eong! 6stelita Eong! %rsenio Chua! Sonny Chua! and Eong 9an Ta< asshareholders and members of the board of directors. &redarclaw

3nternational %ir Transport %ssociation is a Canadian corporation licensed to do business in the :hilippines Gto promote safe! regularand economical air transport for all people! among others.G #0 redarclaw

3nternational %ir Transport %ssociation appointed 2orning Star as an accredited travel agent. ## 2orning Star GavailIed of the privilegeof getting on credit... air transport ticointly andseverally pay :ioneerF @awlibraryofCR%lawChanRobles+irtualawlibrary

E?6R6 8R6 :R623S6S C8,S3$6R6$! >udgment is hereby rendered in favor of the plaintiff as against the defendants ordering thelatter to >ointly and severally pay the following amountF @awlibraryofCR%law

#. 8ne ?undred 2illion our ?undred Seventy ,ine Thousand 8ne ?undred Seventy 8ne :esos and ifty ,ine':hp#00!4 &!# #.5&( and our ?undred ifty Seven Thousand 6ight ?undred Thirty our $ollars and #4H#00'=SL45 !/ 4.#4(! with interest at #" per annum from September " ! "00 until the sum is fullypaidDchanRoblesvirtual@awlibrary

". :hp#00!000.00 as attorney;s feesD chanRoblesvirtual@awlibrary

. :hp#00!000.00 as e7emplary damagesD chanRoblesvirtual@awlibrary

11


12/36


13/36

The corporate legal structure draws its Geconomic superiorityG -" from udgment ornegligence.G - GI3 t means breach of a

. % sale upon credit by an insolvent debtor.

13


14/36


15/36

and his e7amination of the ISecurities and 67change Commission documents.G /4 redarclaw

:etitioner;s reliance on %tty. Taggueg;s testimony on respondent 2orning Star;s financial statements for previous years fails to clearlyand convincingly establish bad faith by the individual respondents.

+

Second! petitioner failed to substantiate the fifth badge of fraud on the Gtransfer of all or nearly all of his property by a debtor!especially when he is insolvent or greatly embarrassed financially.G /5 redarclaw

2ere allegations that 2orning Star 2anagement +entures Corporation and :ic ;, :ac 2art! 3nc. Gwere doing relatively well during the

time that respondent 2orning Star was incurring huge lossesG/-

do not establish bad faith or fraud by the individual respondents.Such allegations alone do not prove that the individual respondents were transferring respondent 2orning Star;s properties in fraudof its creditors.

,either does the allegation that 2orning Star 2anagement +entures Corporation has title over the land and building where theoffices can be found establish bad faith or fraud. :etitioner did not show that this title was originally in respondent 2orning Star;sname and was later transferred to respondent 2orning Star.

This court has held that the Ge7istence of interlocustification topierce the veil of corporate fiction in the absence of fraud or other public policy considerations.G / redarclaw

+3

Third! petitioner also failed to substantiate the si7th badge of fraud that Gthe transfer is made between father and son! when thereare present other of the above circumstances.G // redarclaw

:etitioner submits thatF @awlibraryofCR%lawChanRobles+irtualawlibrary3t would be the height of in>ustice to allow individual respondents to get away with their gross negligence to the pre>udice ofpetitioner! especially since there is now another travel agency in the name of 2orning Star Tour :lanners! 3nc. operating at therespondent 2orning Star;s former principal place of business at #-00 J. ocobo St. corner :edro *il 2alate! 2anila. . . .

. . . .

Curiously! among the stocority or complete stoc< control! but complete domination! not only of finances but of policy and businesspractice in respect to the transaction attacury or un>ust loss complained of.

The records do not show that the individual respondents controlled 2orning Star Tour :lanners! 3nc. and that such control was usedto commit fraud against petitioner. ,either does this suspicion support petitioner;s position that the individual respondents were inbad faith or gross negligence in directing the affairs of respondent 2orning Star.

inally! pursuant to this court;s pronouncement in (acar '& 6aller Fra"e$ !&" the interest rate should be - per annum on theamount owing to petitioner representing respondent 2orning Star;s unpaid air transport tic


16/36

ASSET PRIVATI ATION TRUST Petitioner ! '& HYDRO RESOURCES CONTRACTORS CORPORATION Re$pon!ent .

G.R. NO. &,+,)'

DEVELOP


17/36

thereof! and the latter 4 . %s of September "4! #&/4! all the members of ,23C;s oard of $irectors! namely! 2essrs. Jose Tengco!Jr.! Rolando 2. Oosa! Ruben %ncheta! *eraldo %gulto! and austino %gbada are either from $ : or :, '67hibits G3)5G! G3)5)CG! G3)5)$G(.

The business of ,23C was then also being conducted and controlled by both $ : and :, . 3n fact! it was Rolando 2. Oosa! then*overnor of $ :! who was signing and entering into contracts with third persons! on behalf of ,23C.

3n this >urisdiction! it is well)settled that Gwhere it appears that the business enterprises are owned! conducted and controlled by thesame parties! both law and eBuity will! when necessary to protect the rights of third persons! disregard legal fiction that two '"(corporations are distinct entities! and treat them as identical.G ':hil. +eterans 3nvestment $evelopment Corp. vs. C%! #/# SCR%

--&(.

rom all indications! it appears that ,23C is a mere ad>unct! business conduit or alter ego of both $ : and :, . Thus! the $ : and:, are >ointly and severally liable with ,23C for the latter;s unpaid obligations to plaintiff. " chanroblesvirtualawlibrary

?aving found $ : and :, solidarily liable with ,23C! the dispositive portion of the $ecision of the trial courtreadsF chanroblesvirtualawlibrary

E?6R6 8R6! in view of the foregoing! >udgment is hereby rendered in favor of the plaintiff ?9$R8 R6S8=RC6S C8,TR%CT8RSC8R:8R%T38, and against the defendants ,8,8C

23,3,* %,$ 3,$=STR3%@ C8R:8R%T38,! $6+6@8:26,T %,P 8 T?6 :?3@3::3,6S and :?3@3::3,6 ,%T38,%@ %,P! ordering theaforenamed defendants! to pay the plaintiff >ointly and severally! the sum of :/! 0!& 4. 4 plus legal interest thereon from date of

demand! and attorney;s fees eBuivalent to "5 of the >udgment award.

The complaint against %:T is hereby dismissed. ?owever! %:T! as trustee of ,8,8C 23,3,* %,$ 3,$=STR3%@ C8R:8R%T38, isdirected to ensure compliance with this $ecision. "4 chanroblesvirtualawlibrary

$ : and :, filed their respective appeals in the Court of %ppeals. oth insisted that it was wrong for the RTC to pierce the veil of,23C;s corporate personality and hold $ : and :, solidarily liable with ,23C. "5 chanroblesvirtualawlibrary

The Court of %ppeals rendered the $ecision dated ,ovember 0! "004! affirmed the piercing of the veil of the corporate personalityof ,23C and held $ :! :, ! and %:T solidarily liable with ,23C. 3n particular! the Court of %ppeals made the followingfindingsF chanroblesvirtualawlibrary

3n the case before =s! it is indubitable that I,23C was owned by appellants $ : and :, to the e7tent of 5 and 4

respectivelyD that said two '"( appellants are the only stocust debt! would be the height of in>ustice and iniBuity. Surely that could not have beenthe intendment of the law with respect to corporations. 7 7 7. " chanroblesvirtualawlibrary

The dispositive portion of the $ecision of the Court of %ppeals readsF chanroblesvirtualawlibrary

E?6R6 8R6! premises considered! the $ecision appealed from is hereby 28$3 36$. The >udgment in favor of appellee ?ydroResources Contractors Corporation in the amount of :/! 0!& 4. 4 with legal interest from date of demand is hereby % 3R26$! butthe dismissal of the case as against %ssets :rivati1ation Trust is R6+6RS6$! and its successor the :rivati1ation and 2anagement8ffice is 3,C@=$6$ as one of those >ointly and severally liable for such indebtedness. The award of attorney;s fees is $6@6T6$.

%ll other claims and counter)claims are hereby $3S23SS6$.

Costs against appellants. "/ chanroblesvirtualawlibrary

The respective motions for reconsideration of $ :! :, ! and %:T were denied. "&chanroblesvirtualawlibrary

?ence! these consolidated petitions. 0chanroblesvirtualawlibrary

%ll three petitioners assert that ,23C is a corporate entity with a >uridical personality separate and distinct from both :, and $ :.They insist that the ma>ority ownership by $ : and :, of ,23C is not a sufficient ground for disregarding the separate corporatepersonality of ,23C because ,23C was not a mere ad>unct! business conduit or alter ego of $ : and :, . %ccording to them! the

17

http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt23http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt24http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt25http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt26http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt27http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt28http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt29http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt30http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt23http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt24http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt25http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt26http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt27http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt28http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt29http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt30


18/36

application of the doctrine of piercing the corporate veil is unwarranted as nothing in the records would show that the ownership andcontrol of the shareholdings of ,23C by $ : and :, were used to commit fraud! illegality or in>ustice. 3n the absence of evidencethat the stoc< control by $ : and :, over ,23C was used to commit some fraud or a wrong and that said control was thepro7imate cause of the in>ury sustained by ?RCC! resort to the doctrine of Gpiercing the veil of corporate entityG ismisplaced. #chanroblesvirtualawlibrary

$ : and :, further argue that! assuming they may be held solidarily liable with ,23C to pay ,23C;s e7clusive and separatecorporate indebtedness to ?RCC! such liability of the two banudged liability is included among the liabilities assigned and transferred by $ : and :, in favor of the,ational *overnment.

?RCC counters that both the RTC and the C% correctly applied the doctrine of Gpiercing the veil of corporate fiction.G 3t claims that,23C was the alter ego of $ : and :, which owned! conducted and controlled the business of ,23C as shown by the followingcircumstancesF ,23C was owned by $ : and :, ! the officers of $ : and :, were also the officers of ,23C! and $ : and :,financed the operations of ,23C. ?RCC further argues that a parent corporation may be held liable for the contracts or obligations ofits subsidiary corporation where the latter is a mere agency! instrumentality or ad>unct of the parentcorporation . 4chanroblesvirtualawlibrary

2oreover! ?RCC asserts that the %:T was properly held solidarily liable with $ :! :, ! and ,23C because the %:T assumed theobligations of $ : and :, as the successor)in)interest of the said banust an alter ego of a person or of another corporation. or reasons of public policy and in the interest of >ustice! the corporate veilwill >ustifiably be impaled only when it becomes a shield for fraud! illegality or ineBuity committed against thirdpersons . 4 chanroblesvirtualawlibrary

?owever! the rule is that a court should be careful in assessing the milieu where the doctrine of the corporate veil may be applied.8therwise an in>ustice! although unintended! may result from its erroneous application. 44 Thus! cutting through the corporate coverreBuires an approach characteri1ed by due care and cautionF chanroblesvirtualawlibrary

?ence! any application of the doctrine of piercing the corporate veil should be done with caution. % court should be mindful of themilieu where it is to be applied. 3t must be certain that the corporate fiction was misused to such an e7tent that in>ustice! fraud! orcrime was committed against another! in disregard of its rights. The wrongdoing must be clearly and convincingly establishedD itcannot be presumed. 7 7 7. 45 ' E"pha$e$ $upplie! D citations omitted.(

Sarona v. ,ational @abor Relations Commission 4- has defined the scope of application of the doctrine of piercing the corporateveilFchanroblesvirtualawlibrary

The doctrine of piercing the corporate veil applies only in three ' ( basic areas! namelyF #( defeat of public convenience as when thecorporate fiction is used as a vehicle for the evasion of an e7isting obligationD "( fraud cases or when the corporate entity is used to >ustify a wrong! protect fraud! or defend a crimeD or ( alter ego cases! where a corporation is merely a farce since it is a mere alterego or business conduit of a person! or where the corporation is so organi1ed and controlled and its affairs are so conducted as tomaunct of another corporation. 'Citation omitted.(

?ere! ?RCC has alleged from the inception of this case that $ : and :, 'and the %:T as assignee of $ : and :, ( should be heldsolidarily liable for using ,23C as alter ego . 4 The RTC sustained the allegation of ?RCC and pierced the corporate veil of ,23Cpursuant to the alter ego theory when it concluded that ,23C Gis a mere ad>unct! business conduit or alter ego of both $ : and

18

http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt31http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt34http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt34http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt35http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt36http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt36http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt37http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt38http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt39http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt40http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt41http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt42http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt43http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt43http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt44http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt45http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt46http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt47http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt47http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt47http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt31http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt34http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt35http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt36http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt37http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt38http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt39http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt40http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt41http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt42http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt43http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt44http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt45http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt46http://www.chanrobles.com/cralaw/2013marchdecisions.php?id=234#fnt47


19/36

:, .G 4/ The Court of %ppeals upheld such conclusion of the trial court. 4& 3n other words! both the trial and appellate courts relied onthe alter ego theory when they disregarded the separate corporate personality of ,23C.

3n this connection! case law lays down a three)pronged test to determine the application of the alter ego theory! which is also ury suffered or the damage incurred by the plaintiff should be established.The plaintiff must prove that! unless the corporate veil is pierced! it will have been treated un>ustly by the defendant;s e7ercise ofcontrol and improper use of the corporate form and! thereby! suffer damages. -0 chanroblesvirtualawlibrary

To summari1e! piercing the corporate veil based on the alter ego theory reBuires the concurrence of three elementsF control of thecorporation by the stoc

Ehile ownership by one corporation of all or a great ma>ority of stoc


20/36

with ,23C;s stocustice in such cases asfraud that may wor< ineBuities among members of the corporation internally! involving no rights of the public or third persons. 3nboth instances! there must have been fraud! and proof of it. or the separate >uridical personality of a corporation to be disregarded!the wrongdoing must be clearly and convincingly established. 3t cannot be presumed.

%s regards the third element! in the absence of both control by $ : and :, of ,23C and fraud or fundamental unfairnessperpetuated by $ : and :, through the corporate cover of ,23C! no harm could be said to have been pro7imately caused by $ :and :, on ?RCC for which ?RCC could hold $ : and :, solidarily liable with ,23C.

Considering that! under the deeds of transfer e7ecuted by $ : and :, ! the liability of the %:T as transferee of the rights! titles andinterests of $ : and :, in ,23C will attach only if $ : and :, are held liable! the %:T incurs no liability for the >udgmentindebtedness of ,23C. 6ven ?RCC recogni1es that Gas assignee of $ : and :, ;s loan receivables!G the %:T simply Gstepped intothe shoes of $ : and :, with respect to the latter;s rights and obligationsG in ,23C. / %s such assignee! therefore! the %:T incursno liability with respect to ,23C other than whatever liabilities may be imputable to its assignors! $ : and :, .

6ven under Section ".0" of the respective deeds of transfer e7ecuted by $ : and :, which ?RCC invoudgment against it. The %:T itselfac


21/36

E?6R6 8R6! the petitions are hereby *R%,T6$.

The complaint as against $evelopment an< of the :hilippines! the :hilippine ,ational an

SO ORDERED .

SPECIAL THIRD DIVISION

G.R. No. &? -) Ja$ua 7 (- ()&

NARRA NIC EL


22/36

interest! as the corporate layering employed by petitioners was evidently designed to circumvent the constitutional caveat allowingonly ilipino citi1ens and corporations -0 )owned by ilipino citi1ens to e7plore! develop! and use the countryQs natural resources.

Thir! ! the facts of the case! involving as they do a web of corporate layering intended to go around the ilipino ownershipreBuirement in the Constitution and pertinent laws! reBuire the establishment of a definite pr inciple that will ensure that theConstitutional provision reserving to ilipino citi1ens or corporations at least si7ty per centu" of whose capital is owned by suchciti1ens be effectively enforced and complied with. The case! therefore! is an opportunity to establish a controlling principle that will

guide the bench! the bar! and the public.

@astly! the petitionersQ actions during the lifetime and e7istence of the instant case that gave rise to the present controversy arecapable of repetition yet evading review because! as shown by petitionersQ actions! foreign corporations can easily utili1e dummy

ilipino corporations through various schemes and stratagems to s


23/36

I$ the case o0 a 4u"t# t#e e2 co 1o at#o$ the stoc> att #6ut#o$ u"e 4ust 6e a""o5e2 to u$ co$t#$uous"7 a"o$% the cha#$o0 o5$e sh#1 u$t#" #t 0#$a""7 eaches the #$2#=#2ua" stoc>ho"2e s. Th#s #s #$ co$so$a$ce 5#th the % a$20athe u"eMa2o1te2 #$ the Ph#"#11#$es u$2e Sect#o$ ?, o0 the Co 1o at#o$ Co2e ' atas :ambansa lg. -/( which provides thatnotwithstanding the fact that all the issued stoc< of a corporation are held by not more than twenty persons! among others! acorporation is nonetheless not to be deemed a close corporation when at least two thirds of its voting stoc< or voting rights is ownedor controlled by another corporation which is not a close corporation.

3n S6C)8*C 8pinion ,o. #0) # dated $ecember &! "0#0 'S6C 8pinion #0) #(!the S6C applied the *randfather Rule even if thecorporation engaged in mining operation pa$$e$ the 78-98 re.uire"ent of the Control Te$t ! vi1FchanRoblesvirtual@awlibrary

9ou allege that the structure of 22@Qs ownership in :?3@S%*% is as followsF '#( 22@ owns 40 eBuity in 26$C! while the -0 isostensibly owned by :hilippine individual citi1ens who are actually 22@Qs controlled nomineesD '"( 26$C! in turn!owns -0 eBuity in28?C! while 22@ owns the remaining 40 D ' ( @astly! 28?C owns -0 of :?3@S%*%! while 22@ owns the remaining 40 . 9ouprovide the following figure to illustrate this structureF chanRoblesvirtual@awlibrary

7 7 7 7

Ee note that the Constitution and the statute use the concept :hilippine citi1ens. %rticle 333! Section # of the Constitution provideswho are :hilippine citi1ensF 7 7 7 This enumeration is e7haustive. 3n other words! there can be no other :hilippine citi1ens other thanthose falling within the enumeration provided by the Constitution. 8bviously! only natural persons are susceptible of citi1enship.Thus! for purposes of the Constitutional and statutory restrictions on foreign participation in the e7ploitation of mineral resources! acorporation investing in a mining >oint venture can never be considered as a :hilippine citi1en.

The Supreme Court 6n anc confirms this Iin U :edro R. :alting! vs. San Jose :etroleum I3nc. . The Court held that a corporationinvesting in another corporation engaged in a nationali1ed activity cannot beconsidered as a citi1en for purposes of the Constitutionalprovision restricting foreign e7ploitation of natural resourcesF chanRoblesvirtual@awlibrary

7 7 7 7

%ccordingly! we opine that we must loo< into the citi1enship of the individual stocect corporations ostensibly have satisfied the -0)40 ilipino eBuity reBuirement. TheS6C en )anc held that to atta#$ the Co$st#tut#o$a" o6@ect#=e o0 ese =#$% to F#"#1#$os the ut#"# at#o$ o0 $atu a"

esou ces one should not stop where the percentage of the capital stoc2 is "3. ThusF chanRoblesvirtual@awlibrary

D ou6t 5e 6e"#e=e e3#sts #$ the #$sta$t case 6ecause the 0o e#%$ #$=esto


24/36

#. Can a :hilippine corporation with 0 eBuity owned by foreigners enter into a mining service contract with a foreign companygranting the latter a share of not more than 40 from the proceeds of the operationsK

7 7 7 7

y law! a 4#$#$% "ease 4a7 6e % a$te2 o$"7 to a F#"#1#$o c#t# e$ o to a co 1o at#o$ o 1a t$e sh#1 e%#ste e2 5#th theSEC at "east ,) o0 the ca1#ta" o0 5h#ch #s o5$e2 67 F#"#1#$o c#t# e$s and possessing 7 7 7. The s#3t7 1e ce$t Ph#"#11#$e

e8u#t7 e8u# e4e$t #$ 4#$e a" esou ce e31"o#tat#o$ 7 7 7 #s #$te$2e2 to #$su e a4o$% othe 1u 1oses the co$se =at#o$o0 #$2#%e$ous $atu a" esou ces 0o F#"#1#$o 1oste #t7 7 7 7. 3 thin< it is implicit in this provision! even if it refers merely toownership of stoc< in the corporation holding the mining concession! that 6e$e0#c#a" o5$e sh#1 o0 the #%ht to 2#s1ose e31"o#tut#"# e a$2 2e=e"o1 $atu a" esou ces sha"" 1e ta#$ to F#"#1#$o c#t# e$s a$2 that the $at#o$a"#t7 e8u# e4e$t #s $ot

sat#s0#e2 u$"ess F#"#1#$os a e the 1 #$c#1a" 6e$e0#c#a #es #$ the e31"o#tat#o$ o0 the cou$t 7 s $atu a" esou ces . Thiscriterion of beneficial ownership is tacitly adopted in Section 44 of :.$. ,o. 4- ! above)Buoted! which limits the service fee in servicecontracts to 40 of the proceeds of the operation! thereby implying that the -0)40 benefit)sharing ration is derived from the -0)40eBuity reBuirement in the Constitution.

7 7 7 7

3t is obvious that while payments to a service contractor may be >ustified as a service fee! and therefore! properly deductible fromgross proceeds! the se =#ce co$t act cou"2 6e e41"o7e2 as a 4ea$s o0 %o#$% a6out o c# cu4=e$t#$% the co$st#tut#o$a""#4#t o$ 0o e#%$ e8u#t7 1a t#c#1at#o$ a$2 the o6=#ous co$st#tut#o$a" 1o"#c7 to #$su e that F#"#1#$os eta#$ 6e$e0#c#a"o5$e sh#1 o0 ou 4#$e a" esou ces . Thus! every service contract scheme has to be evaluated in its entirety! on a case to casebasis! to determine reasonableness of the total service fee 7 7 7 li o $o$ stoc> co 1o at#o$M '8p. ,o. # /! s. #& 4(. %s statedin the Register of $eeds vs. =ng Sui Si Temple '& :hil. 5/(! obviously to insure that corporations and associations allowed to acBuire

agricultural land or to e7ploit natural resources shall be controlled by ilipinos. %ccordingly! a$7 a a$%e4e$t 5h#ch atte41ts to2e0eat the co$st#tut#o$a" 1u 1ose shou"2 6e esche5e2 '8p. ,o # 0! s. #&/5(.

Ee are informed that in the registration of corporations with the IS6C ! compliance with the si7ty per centum reBuirement is beingmonitored by S6C under the *randfather Rule a method by which the percentage of ilipino eBuity in corporations engaged innationali1ed andHor partly nationali1ed areas of activities provided for under the Constitution and other national laws is accuratelycomputed! and the diminution if said eBuity prevented 'S6C 2emo! S. #& -(. The G a$20athe Ru"eM #s a11"#e2 s1ec#0#ca""7 #$cases 5he e the co 1o at#o$ has co 1o ate stoc>ho"2e s 5#th a"#e$ stoc>ho"2#$%s othe 5#se #0 the u"e #s $ot a11"#e2the 1 ese$ce o0 such co 1o ate stoc>ho"2e s cou"2 2#4#$#sh the e00ect#=e co$t o" o0 F#"#1#$os.

%pplying the *randfather Rule in the instant case! the result is as followsF 777 the total foreign eBuity in the investing corporationis 5/ while the ilipino eBuity is only 4" ! in the investing corporation! sub>ect of your Buery! is disBualified from investing in realestate! which is a nationali1ed activity! as it does not meet the -0 )40 ilipino) oreign eBuity reBuirement under the Constitution.

This pairing of the concepts beneficial ownership and the situs of control in determining what constitutes capital has been

adopted by this Court in ?eirs of 6a")oa '& Te'e$ .#0

3n its 8ctober &! "0#" Resolution! the Court clarified!thusF chanRoblesvirtual@awlibrary

This is consistent with Section of the 3% which provides that where #00 of the capital stoc< is held by a trustee of funds forpension or other employee retirement or separation benefits! the trustee is a :hilippine national if at least si7ty percent '-0 ( ofthe fund will accrue to the benefit of :hilippine nationals. @i


25/36

citi1ens. No$ethe"ess the Cou t 0ou$2 the 1 o1osa" $o$ co41"#a$t 5#th the Co$st#tut#o$a" e8u# e4e$t o0 F#"#1#$oo5$e sh#1 as the proposed structure would give more than -0 of the ownership of the common shares of ayantel to the foreigncorporations! vi1F chanRoblesvirtual@awlibrary

3n its Rehabilitation :lan! among the material financial commitments made by respondent ayantel is that its shareholders shallrelinBuish the agreed)upon amount of common stocs 5h#ch ha=e =ot#$%

#%hts. I0 5e #$2u"%e 1et#t#o$e s o$ the# 1 o1osa" the O4$#6us C e2#to s 5h#ch a e 0o e#%$ co 1o at#o$s sha"" ha=eco$t o" o=e ++.+ o0 Ba7a$te" a 1u6"#c ut#"#t7 co41a$7. Th#s #s 1 ec#se"7 the sce$a #o 1 osc #6e2 67 the F#"#1#$# at#o$1 o=#s#o$ o0 the Co$st#tut#o$. Therefore! the Court of %ppeals acted correctly in sustaining the 40 debt)to)eBuity ceiling onconversion. 'emphasis supplied(

%s shown by the Buoted legislative enactments! administrative rulings! opinions! and this CourtQs decisions! the *randfather Rule notonly finds basis! but more importantly! it implements the ilipino eBuity reBuirement! in the Constitution.

A11"#cat#o$ o0 the G a$20atheRu"e 5#th the Co$t o" Test.

%dmittedly! an ongoing Buandary obtains as to the role of the *randfather Rule in determining compliance with the minimum ilipinoeBuity reBuirement vis)V)vis the Control Test. This confusion springs from the erroneous assumption that the use of one methodforecloses the use of the other.

%s e7emplified by the above rulings! opinions! decisions and this CourtQs %pril "#! "0#4 $ecision! the Control Test can be! as it hasbeen! applied 1ointl 0ith the *randfather Rule to determine the observance of foreign ownership restriction in nationali1ed economicactivities. The Co$t o" Test a$2 the G a$20athe Ru"e are not! as it were! incompatible ownership)determinant methods that canonly be applied alternative to each other. Rather! these methods ca$ #0 a11 o1 #ate 6e use2cu4u"at#=e"7 #$ the 2ete 4#$at#o$

o0 the o5$e sh#1 a$2 co$t o" o0 co 1o at#o$s e$%a%e2 #$ 0u""7 o 1a t"7 $at#o$a"# e2 act#=#t#es as the mining operationinvolved in this case or the operation of public utilities as in 6a")oa or Ba antel&

The *randfather Rule! standing alone! should not be used to determine the ilipino ownership and control in a corporation! as it couldresult in an otherwise foreign corporation rendered Bualified to perform nationali1ed or partly nationali1ed activities. ?ence! #t #so$"7 5he$ the Co$t o" Test #s 0# st co41"#e2 5#th that the G a$20athe Ru"e 4a7 6e a11"#e2 . :ut in another manner! if thesub>ect corporationQs ilipino eBuity falls below the threshold -0 ! the corporation is immediately considered foreign)owned! in whichcase! the need to resort to the *randfather Rule disappears.

8n the other hand! a co 1o at#o$ that co41"#es 5#th the ,) *) F#"#1#$o to 0o e#%$ e8u#t7 e8u# e4e$t ca$ 6e co$s#2e e2 aF#"#1#$o co 1o at#o$ if there is no doubt as to 5ho has the 6e$e0#c#a" o5$e sh#1M a$2 co$t o"M o0 the co 1o at#o$. I$that #$sta$ce the e #s $o $ee2 0o a dissection or further inBuiry on the ownership of the corporate shareholders in both theinvesting and investee corporation o the a11"#cat#o$ o0 the G a$20athe Ru"e. #" %s a corollary rule! even if the -0)40 ilipino toforeign eBuity ratio is apparently met by the sub>ect or investee corporation! a eso t to the G a$20athe Ru"e #s $ecessa 7#0doubt e3#sts as to the "ocus o0 the 6e$e0#c#a" o5$e sh#1M a$2 co$t o".M 3n this case! a further investigation as to thenationality of the personalities with the beneficial ownership and control of the corporate shareholders in both the investing and

investee corporations is necessary.

%s e7plained in the %pril "#! "0#" $ecision! the doubt that demands the application of the *randfather Rule in addition to or intandem with the Control Test is not confined to! or more bluntly! does not refer to the fact that the apparent ilipino ownership of thecorporationQs eBuity falls below the -0 threshold. Rather! 2ou6tM e0e s to =a #ous #$2#c#a that the 6e$e0#c#a" o5$e sh#1Ma$2 co$t o"M o0 the co 1o at#o$ 2o $ot #$ 0act es#2e #$ F#"#1#$o sha eho"2e s 6ut #$ 0o e#%$ sta>eho"2e s. %s provided in$8J 8pinion ,o. #-5! Series of #&/4! which applied the pertinent provisions of the %nti)$ummy @aw in relation to the minimum

ilipino eBuity reBuirement in the Constitution! significant indicators of the dummy status have been recogni1ed in view of reports that some ilipino investors or businessmen are being utili1ed or Iare allowing themselves to be used as dummies by foreigninvestors specifically in >oint ventures for national resource e7ploitation. These indicators areF chanRoblesvirtual@awlibrary

#. That the foreign investors provide practically all the funds for the >oint investment undertaect corporation.

7 7 7 77 7 7 I3 n this respect we find no error in the assailed order made by the 6:$. The 6:$ did not err when it did not ta


26/36

incorporation.

Eith this in mind! we find it proper for the 6:$ to investigate the sub>ect corporation. The 6:$ is advised to avail of theCommissionQs subpoena powers in order to gather sufficient evidence! and file the necessary complaint.

%s will be discussed! even if at first glance the petitioners comply with the -0)40 ilipino to foreign eBuity ratio! 2ou6t e3#sts #$ the1 ese$t case that gives rise to a reasonable suspicion that the ilipino shareholders do not actually have the reBuisite number ofcontrol and beneficial ownership in petit ioners ,arra! Tesoro! and 2c%rthur. ?ence! a further investigation and dissection of thee7tent of the ownership of the corporate shareholders through the *randfather Rule is >ustified.

:arenthetically! it is advanced that the application of the *randfather Rule is impractical as tracing the shareholdings to the pointwhen natural persons hold rights to the stocect of this recourse! the Court applied the *randfather Rule to determine the matter of true ownership andcontrol over the petitioners as doubt e7ists as to the actual e7tent of the participation of 2 23 in the eBuity of the petitioners andtheir investing corporations.

Ee considered the following membership and control structures and li


27/36

application of the *randfather Rule is clearly called for! and as shown below! the ilipinosQ control and economic benefits in petitionerTesoro 'through Sara 2arie( fall below the threshold -0 ! vi1F chanRoblesvirtual@awlibrary

F#"#1#$o 1a t#c#1at#o$ #$ 1et#t#o$e Teso o: *).)&--.- ' ilipino eBuity in Sara 2arie( 75&.& 'Sara 2arieQs share in Tesoro( W '?.?-#00

&.&/ X .0 'shares of individual ilipino shareholders IS?s in Tesoro(W*).)& WWWWW

Fo e#%$ 1a t#c#1at#o$ #$ 1et#t#o$e Teso o: ?.??

. ' oreign eBuity in Sara 2arie( 7 5&.& 'Sara 2arieQs share in Tesoro( W &?.??#00

#&.&& X &.&/ '2 23Qs direct participation in Tesoro( X .0" 'shares of foreign individual S?s in Tesoro(W ?.?? WWWWW

Eith only 40.0# ilipino ownership in petitioner Tesoro! as compared to 5&.&& foreign ownership of its shares! it is clear thatpetitioner Tesoro does not comply with the minimum ilipino eBuity reBuirement imposed in Sec. "! %rt. 33 of the Constitution.?ence! the appellate courtQs observation that Tesoro is a foreign corporation not entitled to an 2:S% is apt.

os 2ining Corporation '2adride>os(! while &.&/ belonged to the Canadian 2 23.

Na4e Nat#o$a"#t7 Nu46e o0 Sha es

A4ou$tSu6sc #6e2

A4ou$t Pa#2

2adride>os 2ining Corporation ilipino 5!&& :5!&& !000.00 :/"5!000.00osQ share in 2c%rthur( W #&.&&#00

27


28/36

#&.&& X &.&/ '2 23Qs direct participation in 2c%rthur( X .0" 'shares of foreign individual S?s in 2c%rthur(W ?.?? QQQQQ

%s with petitioner Tesoro! with only 40.0# ilipino ownership in pet itioner 2c%rthur! as compared to 5&.&& foreign ownership ofits shares! it is clear that petitioner 2c%rthur does not comply with the minimum ilipino eBuity reBuirement imposed in Sec. "! %rt.

33 of the Constitution. Thus! the appellate court did not err in holding that petitioner 2c%rthur is a foreign corporation not entitled toan 2:S%.

Na a

%s for petitioner ,arra! 5&.& of its shares belonged to :atricia @ouise 2ining A $evelopment Corporation ':@2$C(! while Canadian2 23 held &.&/ of its shares.

Na4e Nat#o$a"#t7 Nu46e o0 Sha es

A4ou$tSu6sc #6e2

A4ou$t Pa#2

:atricia @ousie 2ining and $evelopmentCorp.

ilipino 5!&& :5!&& !000.00 :#!- !000.00


29/36

3t must be noted that the foregoing determination and computation of petitionersQ ilipino eBuity composition was based ontheir common shareholdings# not preferred or redeemable shares. Section - of the Corporation Code of the :hilippines e7plicitlyprovides that no share may be deprived of voting rights e7cept those classified as YpreferredQ or YredeemableQ shares. urther! asJustice @eonen puts it! there is no indication that any of the shares 7 7 7 do not have voting rights! Ithus it must be assumed thatall such shares have voting rights. "" 3t cannot therefore be gainsaid that the foregoing computation hewed with the pronouncementsof 6a")oa% as implemented by S6C 2emorandum Circular ,o. /! Series of "0# ! 'S6C 2emo ,o. /( " Section " of whichstatesF chanRoblesvirtual@awlibrary

Section ". %ll covered corporations shall! at all times! observe the constitutional or statutory reBuirement. or purposes ofdetermining compliance therewith! the reBuired percentage of ilipino ownership shall be applied to 8T? 'a( the total outstanding

shares of stoc< entitled to vote in the election of directorsD %,$ 'b( the total number of outstanding shares of stoc

3n fact! there is no indication that herein petitioners issued any other class of shares besides the #0!000 common shares. ,either is itsuggested that the common shares were further divided into voting or non)voting common shares. ?ence! for purposes of this case!items a( and b( in S6C 2emo ,o. / both refer to the #0!000 common shares of each of the petitioners! and there is no need toseparately apply the -0)40 ratio to any segment or part of the said common shares.

%%%. %n mining disputes# the (7& has jurisdiction to pass upon the nationality

of applications for M(S&s

:etitioners also scoffed at this CourtQs decision to uphold the >urisdiction of the :anel of %rbitrators ':8%( of the $epartment of6nvironment and ,atural Resources '$6,R( since the :8%Qs determination of petitionersQ nationalities is supposedly beyond itslimited >urisdiction! as defined in 6on/ale$ '& Cli"a# Mining Lt! . "4 and Phile# Mining Corp& '& ;al!i'ia . "5 chanroblesvirtuallawlibrary

The %pril "#! "0#4 $ecision did not dilute! much less overturn! this CourtQs pronouncements in either 6on/ale$ or Phile# Mining that:8%Qs >urisdiction is limited only to mining disputes which raise Buestions of fact! and not >udicial Buestions cogni1able by regularcourts of >ustice. ?owever! to properly recogni1e and give effect to the >urisdiction vested in the :8% by Section of the :hilippine2ining %ct of #&&5! "- and in parallel with this CourtQs ruling in Cele$tial (ic*el Mining E#ploration Corporation '& Macroa$ia Corp&% " theCourt has recogni1ed in its $ecision that in resolving disputes involving rights to mining areas and involving mineral agreementsor permits! the :8% has >urisdiction to maudication regarding ownership of thereal property involved is allowed! but only for purposes of ruling on the determinative issue of material possession.

The present case arose from petitionersQ 2:S% applications! in which they asserted their respective rights to the mining areas eachapplied for. Since respondent Redmont! itself an applicant for e7ploration permits over the same mining areas! filed petitions for thedenial of petitionersQ applications! it should be clear that there e7ists a controversy between the parties and it is :8%Qs >urisdiction toresolve the said dispute. :8%Qs ruling on RedmontQs assertion that petitioners are foreign corporations not entitled to 2:S% is but anecessary incident of its disposition of the mining dispute presented before it! which is whether the petitioners are entitled to 2:S%s.

3ndeed! as the :8% has >urisdiction to entertain disputes involving rights to mining areas! it necessarily follows that the :8%liudgment be made in due course.

SO ORDERED.

4D70'8%N 76 S+ S'&N'%&: 07M(:&%N0 5

SECOND DIVISION

G.R. No. &?'*() Octo6e &* ()&

+&)+ ISLANDS PUBLISHING INC. ! Petitioner ! '& THE HOUSE PRINTERS CORPORATION !Re$pon!ent .

D E C I S I O N

BRION J. :

This petition for review on certiorari see


30/36

8n # %ugust "00-! 2anuel S. :aguyo! Sheriff 3+! served the summons and a copy of the complaint on #0 :ublishing through itsChief %ccountant @aarni 2ilan. Sheriff :aguyo e7plained on his return that the :resident and the in)house counsel were not at theoffice when he arrived so he served the summons on the highest ranustified in dismissing its petition for certiorari fornonpayment of the reBuired fees because of the court personnel;s refusal to accept its tender of payment on four separate occasions.The petitioner begs this Court to brush aside any procedural barriers and give due course to its petition.

3n its Comment dated #- 2ay "0##! the respondent maintainsF '#( that the petitioner did not suffer any undue pre>udice from theservice of summons on its accountantD and '"( that the petitioner failed to substantiate its allegations that court personnel refusedhis tender of payment four times.

OUR RULING

Ee deny the petition for lac< of merit. Rule #4 of the Rules of Court providesF

S6C. ##. Ser'ice upon !o"e$tic pri'ate 1uri!ical entit & ) Ehen the defendant is a corporation! partnership or association organi1edunder the laws of the :hilippines with a >uridical personality! service may be made on the 1 es#2e$t 4a$a%#$% 1a t$e %e$e a"4a$a%e co 1o ate sec eta 7 t easu e o #$ house cou$se" . 'emphasis supplied( ChanRobles+irtualawlibrary

Ee have long established that this enumeration is an e7clusive list under the principle of e#pre$$o uniu$ e$t e#clu$io alteriu$ . / =nderthe present Rules of Court! the rule of substantial compliance invo


31/36

the enumeration under the new rule is restricted! limited and e7clusive! following the rule in statutory construction that e#pre$$iounio$ e$t e#clu$io alteriu$ . ?ad the Rules of Court Revision Committee intended to l iberali1e the rule on service of summons! we said!it could have easily done so by clear and concise language. %bsent a manifest intent to liberali1e the rule! we stressed strictcompliance with Section ##! Rule #4 of the #&& Rules of Civil :rocedure.

,either can herein petitioners invo> Del Ca$tillo% Men!o/a% and Leonen% ,,& ! concur.

eha6#"#tat#o$ 1"a$M

FIRST DIVISION

G.R. No. () *,? oining properties commenced! with Sps. Rodil contributingpersonal funds as initial capital for the pro>ect which was estimated to cost at least :#00!000!000.00. - To finance the costs of

31


32/36

construction! S22C3 applied for a loan with petitioner :3 amily Savings an

3n the meantime! after suffering financial losses due to problems with the first building contractor! #" Sps. Rodil temporarilydeferred the original construction plans for the ##)storey hospital building and! instead! engaged the services of anothercontractor for the completion of the remaining structural wor

32


33/36

". 8bligations to other creditors such as the suppliers and lenders can be serviced at once. *iven theperformance of the hospital! the undersigned reasonably believes that these obligations can be settled inne7t three ' ( years. These accounts can be paid proportionately provided that IS22C3 should be allowedto re)structure these accounts to allow for longer and more convenient payment terms.

. IS22C3 should be allowed to spend for the improvement of the building but not necessarily continuing withthe planned ##)storey building. 3t should maustified its approvalF '#( the Rehabilitation :lan is endorsed by theRehabilitation Receiver sub>ect to certain recommendationsD '"( the plan ensures preservation of assets and orderly paymentof debtsD ' ( the plan provides for recovery rates on operating mode as opposed to liBuidation valuesD '4( it contains detailsfor a business plan which will restore profitability and solvency of petitionerD '5( the pro>ected cash flow can support thecontinuous operation of the debtor as a going concernD '-( the plan did not as< for a waiver of the principalD ' ( the planpreserves the security of the secured creditorD '/( the plan has provisions to ensure that future income will inure to thebenefit of the creditorsD and '&( the rehabilitation of the debtor benefits its employees! creditors! stoc


34/36

Section 4. Definition of Ter"$ . Z %s used in this %ct! the termF

7 7 7 7

'gg( Reha)ilitation shall refer to the esto at#o$ o0 the 2e6to to a co$2#t#o$ o0 success0u" o1e at#o$ a$2 so"=e$c7 ! ifit is shown that its continuance of operation is economically feasible and its creditors can recover by way of the present valueof payments pro>ected in the plan! more if the debtor continues as a going concern than if it is immediately liBuidated. chanrobleslaw

7 7 7 7 '6mphasis supplied( cralawlawlibrary

3n other words! eha6#"#tat#o$ assu4es that the co 1o at#o$ has 6ee$ o1e at#o$a" 6ut 0o so4e easo$s "#>eeco$o4#c c #s#s o 4#s4a$a%e4e$t ha2 6eco4e 2#st esse2 o #$so"=e$t !i&e&% that it is generally unable to pay itsdebts as they fall due in the ordinary course of business or has liability that are greater than its assets. 45 Thus! the basicissues in rehabilitation proceedings concern the viability and desirability of continuing the business operations of thedistressed corporation! 4- all with a view of effectively restoring it to a state of solvency or to its former healthy financialcondition through the adoption of a rehabilitation plan.

3n this case! it cannot be said that the petitioning corporation! S22C3! had been in a position of successful operation andsolvency at the time the Rehabilitation :etition was filed on %ugust ##! "0#0. Ehile it had indeed commenced businessthrough the preparatory act of opening a credit line with :3 amily to finance the construction of a new hospital building forits future operations! S22C3 itself admits that it has not formally operated nor earned any income since its incorporation.This simply means that there e7ists no viable business concern to be restored. :erforce! the remedy of corporaterehabilitation is improper! thus rendering the dispositions of the courts a .uo infirm. chanroblesvirtuallawlibrary

II.

3n fact! for the same reasons! the Court observes that S22C3 could not have even complied with the form and substance of aproper rehabilitation petition! and submit its accompanying documents! among others! the reBuired financial statements of agoing concern. Section "! Rule 4 of the "00/ Rules of :rocedure on Corporate Rehabilitation 4 'Rules(! which were in force atthe time S22C3Qs rehabilitation petition was filed on %ugust ##! "0#0! pertinently providesF chanRoblesvirtual@awlibrary

S6C. ". Content$ of Petition& )

7 7 7 7

'b( The petition shall be accompanied by the following documentsF

'#( %n audited financial statement of the debtor at the end of its last fiscal yearD ChanRobles+irtualawlibrary

'"( 3nterim financial statements as of the end of the month prior to the filing of the petitionD ChanRobles+irtualawlibrary

7 7 7 7 cralawlawlibrary

,ote that this defect is not negated by the submission of the financial documents pertaining to St. 2ichael ?ospital! which isa separate and distinct entity from S22C3. Ehile the C% gave considerable weight to St. 2ichael ?ospitalQs supposed

profitability! as e7plicated in its own financial statements! as well as the feasibility study conducted by 2rs. %libangbang! 4/ in affirming the RTC! it has unwittingly lost sight of the essential fact that S22C3 stands as the sole petitioning debtor in thiscaseD as such! its rehabilitation should have been primarily e7amined from the lens of its own financial history. Ehile S22C3claims that it would absorb St. 2ichael ?ospitalQs operations! there was dearth of evidence to show that a merger wasalready agreed upon between them. %ccordingly! St. 2ichael ?ospitalQs financials cannot be utili1ed as basis to determine thefeasibility of S22C3Qs rehabilitation.

,ote further that while it appears that Sps. Rodil effectively owned and e7ercised control over the two entities! such fact doesnot! by and of itself! warrant their singular treatment for to do so would only confuse the ob>ective of the proceedings whichis to ascertain whether the petitioning corporation! and not any other entity related thereto 'e7cept if >oining as a co)petitioning debtor(! may be rehabilitated. ,either is the proceeding the proper forum to pierce the corporate fictions of bothentities for it involves no creditor claiming to be a victim of fraud! an essential reBuisite for the application of suchdoctrine. 4&cralawred

3n fine! the petition should not have been given due course! nor should a Stay 8rder have been issued.

333.

To compound its error! the C% even disregarded the fact that S22C3Qs Rehabilitation :lan! an indispensable reBuisite incorporate rehabilitation proceedings! failed to comply with the fundamental reBuisites outlined in Section #/! Rule of theRules! particularly! that of a material financial commitment to support the rehabilitation and an accompanying liBuidationanalysis! all of the petitioning debtorF chanRoblesvirtual@awlibrary

SEC. &- . Reha)ilitation Plan& ) The rehabilitation plan shall include 'a( the desired business targets or goals and the durationand coverage of the rehabilitationD 'b( the terms and conditions of such rehabilitation which shall include the manner of itsimplementation! giving due regard to the interests of secured creditors such as! but not limited! to the non)impairment oftheir security liens or interestsD 'c( the 4ate #a" 0#$a$c#a" co44#t4e$ts to su11o t the eha6#"#tat#o$ 1"a$ D 'd( themeans for the e7ecution of the rehabilitation plan! which may include debt to eBuity conversion! restructuring of thedebts! !acion en pago or sale e7change or any disposition of assets or of the interest of shareholders! partners or membersD'e( a "#8u#2at#o$ a$a"7s#s sett#$% out 0o each c e2#to that the 1 ese$t =a"ue o0 1a74e$ts #t 5ou"2 ece#=e u$2ethe 1"a$ #s 4o e tha$ that 5h#ch #t 5ou"2 ece#=e #0 the assets o0 the 2e6to 5e e so"2 67 a "#8u#2ato 5#th#$ as#3 4o$th 1e #o2 0 o4 the est#4ate2 2ate o0 0#"#$% o0 the 1et#t#o$ D and 'f( such other relevant information to enable areasonable investor to ma


35/36

%. @ac< of 2aterial inancial Commitmentto Support the Rehabilitation :lan.

% material financial commitment becomes significant in gauging the resolve! determination! earnestness and good faith ofthe distressed corporation in financing the proposed rehabilitation plan. This commitment may include the =o"u$ta 7u$2e ta>#$%s of the stoc


36/36

SO ORDERED. cralawlawlibrary

business org finals

Documents