FIRST DIVISION
G.R. No. 190286, January 11, 2018
RAMON E. REYES AND CLARA R. PASTOR, Petitioners, v. BANCOM DEVELOPMENT CORP., Respondent.
D E C I S I O N
SERENO, C.J.:
Before this Court is a Petition for Review on Certiorari1 filed by Ramon E. Reyes and Clara R. Pastor seeking to reverse the Decision2 and the Resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 45959. The CA affirmed the ruling of the Regional Trial Court (RTC) holding petitioners jointly and severally liable to respondent Bancom Development Corporation (Bancom) as guarantors of certain loans obtained by Marbella Realty, Inc. (Marbella).
In this case, it is worth to note that it is an undisputed fact that defendants-appellants failed to make good their alleged obligations under the Promissory Notes and Continuing Guaranty which they issued in favor of BAN[C]OM. [The instruments'] genuineness and due execution are likewise undisputed.Of the individuals comprising the Reyes Group, only petitioners filed a Motion for Reconsideration of the CA Decision.28 They reiterated their argument that the Promissory Notes were not meant to be binding, given that the funds released to Marbella by Bancom were not loans, but merely additional financing. Petitioners also contended that the action must be considered abated pursuant to Section 122 of the Corporation Code. They pointed out that the Certificate of Registration issued to Bancom had been revoked by the Securities and Exchange Commission (SEC) on 31 May 2004, and that no trustee or receiver had been appointed to continue the suit; in fact, even Bancom's former counsel was compelled to withdraw its appearance from the case, as it could no longer contact the corporation.
Defendants-appellants' only defense rests on the allegation that their non-payment of such obligations is justified taking into consideration the terms of the Memorandum of Agreement entered into by and among the plaintiff-appellee and defendants-appellants herein particularly paragraph 13 thereof. Said the appellants in support hereof, since Bancom [which was in full control of the financial affairs of Fereit] failed to cause the release of the aforesaid receivables (P2,800,000) to State Financing by Fereit, Bancom should necessarily suffer the consequences thereof - not the defendants-appellants.
Apparently, the thrust of defendants-appellants' defense points to Fereit's non-compliance with paragraph 13 of the "Memorandum of Agreement." However, records show that defendants-appellants did nothing to formally [assert] their rights against Fereit. Truly, this Court agrees with the trial court's pronouncement that defendants-appellants' failure to avail of the remedies provided by law, such as the filing of a third-party complaint against Fereit, necessarily indicates that they themselves did not seriously consider Fereit's non-compliance as affecting their own liability to BANCOM. This can be done for after all, Fereit is still a different entity with distinct and separate corporate existence from that of BANCOM even granting that BANCOM is in full control of the financial affairs of Fereit.
x x x x
Besides, the terms of the promissory notes and "Continuing Guaranty" x x x are clear and unequivocal, leaving no room [for] interpretation. For not being contrary to law, morals, good customs, public order and public policy, defendants' obligation has the force of law and should be complied with in good faith.27
[I]f the corporation carries out the liquidation of its assets through its own officers and continues and defends the actions brought by or against it, its existence shall terminate at the end of three years from the time of dissolution; but if a receiver or assignee is appointed, as has been done in the present case, with or without a transfer of its properties within three years, the legal interest passes to the assignee, the beneficial interest remaining in the members, stockholders, creditors and other interested persons; and said assignee may bring an action, prosecute that which has already been commenced for the benefit of the corporation, or defend the latter against any other action already instituted or which may be instituted even outside of the period of three years fixed for the officers of the corporation.In subsequent cases, the Court further clarified that a receiver or an assignee need not even be appointed for the purpose of bringing suits or continuing those that are pending.41 In Gelano v. Court of Appeals,42 we declared that in the absence of a receiver or an assignee, suits may be instituted or continued by a trustee specifically designated for a particular matter, such as a lawyer representing the corporation in a certain case. We also ruled in Clemente v. Court of Appeals43 that the board of directors of the corporation may be considered trustees by legal implication for the purpose of winding up its affairs.
For the foregoing considerations, we are of the opinion and so hold that when a corporation is dissolved and the liquidation of its assets is placed in the hands of a receiver or assignee, the period of three years prescribed by section 77 of Act No. 1459 known as the Corporation Law is not applicable, and the assignee may institute all actions leading to the liquidation of the assets of the corporation even after the expiration of three years.
Sec. 145. Amendment or repeal.- No right or remedy in favor of or against any corporation, its stockholders, members, directors, trustees, or officers, nor any liability incurred by any such corporation, stockholders, members, directors, trustees, or officers, shall be removed or impaired either by the subsequent dissolution of said corporation or by any subsequent amendment or repeal of this Code or of any part thereof. (Emphasis supplied)As a necessary consequence of the above rule, the corresponding liability of the debtors of a dissolved corporation must also be deemed subsisting. To rule otherwise would be to sanction the unjust enrichment of the debtor at the expense of the corporation.46
It is evident from the foregoing provisions that Bancom extended additional financing to Marbella on the condition that the loan would be paid upon maturity. It is equally clear that the latter obligated itself to pay the stated amount to Bancom without any condition. The unconditional tenor of the obligation of Marbella to pay Bancom for the loan amount, plus interest and penalties, is likewise reflected in the Promissory Notes issued in favor of the latter.52 Marbella, in turn, was granted the right to collect reimbursement from Fereit, an entirely distinct entity. While it was averred that Bancom had complete control of Fereit's assets and activities, we note that no sufficient evidence was presented in support of this assertion.
- Bancom hereby agrees to grant the additional financing requested by Marbella II in the principal amount of TWO MILLION EIGHT HUNDRED TWENTY EIGHT THOUSAND ONE HUNDRED FORTY & 32/100 (P2,828,140.32), Philippine Currency, payable by Marbella II within three (3) years, under such terms and conditions as may be mutually agreed upon by Bancom and Marbella II. The additional financing herein requested by Marbella II shall be payable by Marbella II irrespective of whether Marbella II realizes a net profit after tax on its Marbella II Condominium Project.
- In lieu of the obligations of Fereit under Paragraph 9 and 13 of the Memorandum of Agreement, Fereit hereby agrees to reimburse Marbella II the principal sum of P2,828,140.32 plus interest, fees and other charges which Marbella II shall pay to Bancom in the settlement and/or liquidation of the additional financing. However, penalties, fees and other charges resulting from the default of Marbella II with respect to the additional financing shall be borne by Marbella II.
(a) | P4,300,247.35, representing the principal sum and all interest and penalty charges as of 19 May 1981; |
(b) | legal interest on the principal sum of P3,002,333.84 at the rate of 12% per annum from 19 May 1981, the date of demand, until 30 June 2013, and at the rate of 6% per annum from 1 July 2013, until this Decision becomes final and executory; |
(c) | penalties equivalent to 20% of the obligation; |
(d) | legal interest on the penalty amount at the rate of 12% per annum from 19 May 1981, the date of demand, until30 June 2013, and at the rate of 6% per annum from 1 July 2013, until this Decision becomes final and executory; |
(e) | attorney's fees in the amount of P500,000; and |
(f) | legal interest of 6% per annum on all the foregoing monetary awards from date of finality of this Decision until full payment thereof. |
Endnotes:
* Designated additional member in lieu of Associate Justice Noel Gimenez Tijam, who concurred in the Court of Appeals Decision, per rattle dated 8 January 2018.
1Rollo, pp. 3-22; Petition for Review on Certiorari dated 27 November 2009 and filed under Rule 45 of the Rules of Court.
2 Id. at 24-39; Decision dated 25 June 2009; penned by CA Associate Justice Arturo G. Tayag and concurred in by Associate Justices Noel G. Tijam (now a Member of this Court) and Normandie B. Pizzaro.
3 Id. at 41-42; Resolution dated 9 November 2009.
4 Id. at 107-110; Continuing Guaranty dated March 1979.
5 Promissory Notes issued on 24 May 1979; rollo, pp. 83-89.
6 Promissory Notes issued on 22 August 1979; rollo, pp. 90-94.
7 Promissory Notes issued on 27 November 1979; rollo, pp. 95-100.
8 Promissory Notes issued on 28 February 1980; rollo, pp. 101-106.
9 CA Decision dated 25 June 2009, supra note 2, at 25.
10 Id. at 28.
11 Id.
12 See Memorandum of Agreement dated 16 August 1977; rollo, pp. 43-48; Amendment of Memorandum of Agreement; rollo, pp. 111-114.
13 CA Decision dated 25 June 2009, supra note 2, at 28.
14 Id. at 28-29.
15 Id.
16 Id.
17Rollo, pp. 111-114; Amendment of Memorandum of Agreement dated 16 August 1997.
18 Id. at 29.
19 Id. at 24.
20 Id. at 29.
21 Id. at 29-31.
22 Id. at 76-77; Compliance with Manifestation and, Motion to Withdraw Appearance dated 12 March 2000.
23 Id. at 76.
24 Id. at 76-77.
25 Id. at 82; Resolution dated 1 June 2004.
26 Decision dated 25 June 2009, supra note 2.
27 Id. at 32-35.
28 Id. at 49-62; Motion for Reconsideration dated 17 July 2009.
29 Supplement [to the Motion for Reconsideration dated July 17, 2009]; rollo, pp. 64-66.
30 Certificate of Corporate Filing/Information dated 14 July 2009; rollo, p. 67.
31 Resolution dated 9 November 2009, supra note 3.
32Rollo, p. 268.
33 Id. at 269.
34 Resolution dated 19 January 2011; rollo, p. 276.
35 Section 122 provides in relevant part:Section 122. Corporate Liquidation. Every corporation whose charter expires by its own limitation or is annulled by forfeiture or otherwise, or whose corporate existence for other purposes is terminated in any other manner, shall nevertheless be continued as a body corporate for three (3) years after the time when it would have been so dissolved, for the purpose of prosecuting and defending suits by or against it and enabling it to settle and close its affairs. to dispose of and convey its property and to distribute its assets, but not for the purpose of continuing the business for which it was established.36Gelano v. Court of Appeals, 190 Phil. 814 (1981) citing Fisher, 1929 ed., p. 386.
At any time during said three (3) years, said corporation is authorized and empowered to convey all of its property to trustees for the benefit of stockholders, members, creditors, and other persons in interest. From and after any such conveyance by the corporation of its property in trust for the benefit of its stockholders, members, creditors and others in interests, all interests which the corporation had in the property terminates, the legal interest vests in the trustees, and the beneficial interest in the stockholders. members, creditors or other persons in interest.
37 See Sumera v. Valencia, 67 Phil. 721 (1939).
38 Id.
39 See Gelano v. Court of Appeals, supra note 36; Clemente v. Court of Appeals, 312 Phil. 823 (1995).
40 Supra note 37, at 727.
41Reburiano v. Court of Appeals, 361 Phil. 294 (1999).
42 Supra note 39.
43 Id.
44See Certificate of Corporation Filing/Information dated 14 July 2009, supra note 30.
45 See Clemente v. CA, supra note 39.
46Knecht v. United Cigarette Corp., 433 Phil. 380 (2002); Celano v. Court of Appeals, supra note 36.
47 Decision dated 25 June 2009, supra note 2, at 32.
48 Memorandum of Agreement dated 16 August 1977, supra note 12.
49 Amendment of Memorandum of Agreement, supra note 17.
50 Supra notes 5, 6, 7, and 8.
51 Section 2 of the Continuing Guaranty (supra note 4, at 107) states:Section 2. Liability of the Guarantor. - If any of the Guaranteed Obligations is not fully or duly paid or performed on due date thereof (whether of a stated maturity, by acceleration or otherwise) the Guarantor shall, without need for any notice, demand or any act or deed, immediately become liable therefor, and the Guarantor shall, upon demand, fully and duly pay and perform the same, together with any and all interests, penalties and other fees and charges thereon then accrued and outstanding at the time of payment.52 The Promissory Notes dated 28 February 1980, executed by Marbella in favor of Bancom uniformly, state:For value received in the amount of ..., ("Maker") promise[s] to pay to the order of Bancom Development Corporation ("Payee") the sum of ... at its principal offices located at Pasay Road, Makati, Metro Manila on the maturity date stated above.53 The definition of "Guaranteed Obligations" under Section 1 of the Continuing Guaranty (rollo, p. 107) includes [a]ll the obligations of the issuer under: (i) the Notes and the Agreement; (ii) any and all instruments or documents issued upon the renewal, extension, amendment or novation of the Notes and the Agreement, irrespective of whether such obligations as renewed, extended, amended or novated are in the nature of new, separate or additional obligations; (iii) any and all instruments or documents issued pursuant to the Notes and the Agreement;
Demand and Dishonor waived. In case of default in the payment of this Note, interest on the principal sum at the rate of TWELVE (12%) per annum shall accrue from the date immediately following due date thereof. It is further agreed that if this Note is not paid within FORTY EIGHT (48) hours from maturity date, the Maker shall pay a penalty equivalent to percent (20%) of the unpaid balance of this Note and said penalty shall, in addition to the interest on the unpaid principal earn interest at the highest rate permitted by law from maturity date until fully paid.
If this Note is placed in the hands of an attorney for collection, the Maker shall pay as and for attorney's fees a sum equal to TEN percent (10%) of the principal and interest then due thereon plus cost of collection in case of suit. The Maker further agrees that any action accruing from this Note shall be instituted in the proper courts of the (sic). (Emphases supplied)
54Rollo, pp. 101-106; Promissory Notes issued on 28 February 1980.
55 Section 5 of the Continuing Guaranty states:Section 5. When Guarantor is in Default. - For purposes of this Guaranty, the Guarantor is in default, without need for any notice to or consent of the Guarantor for any other act or deed if the lssuer/Guarantoir is in default within the meaning of the Agreement; and/or if the Guarantor fails, as required in Section 2 hereof, to fully and duly pay and perform any or all of the outstanding Guaranteed Obligations (together with any and all interests, penalties and other fees and charges thereon accrued and outstanding), upon demand on the Guarantor.