SEC Adm. Case No. 07-12-264 Cancellation of the Amended Articles of Incorporation of Allied Coalition of Association of Senior Citizens in the Phils. (SENIOR CITIZENS), Inc.

Securities and Exchange Commission SEC Bldg. EDSA, Greenhills, Mandaluyong City Republic of the Philippines Department of Finance

COMMISSION EN BANC

IN THE MATTER OF:

CITIZENS IN THE PHILS. AMENDED INCORPORATION ASSOCIATION OF SENIOR CANCELLATION (SENIOR ALLIED CITIZENS), COALITION ARTICLES OF INC. THE OF OF OF (SEC CRMD Case No. 12-289) on 11 August 2011 Articles of Incorporation approved SEC En Banc Case No. 07-12-264 Cancellation of the Amended F or :

GODOFREDO V. ARQUIZA Petitioner-Appellee

DECISION

Appellants herein, from the Order of the Company Registration and Monitoring Arsenio B. Alvarez, Marcelo M. Landicho, and Charlito G. Carino, Respondents- Department (CRMD), dated 4 July 2012, in SEC CRMD Case Number 12-289 This resolves the appeal of Francisco G. Datol, Jr., Plutarco E. Vazquez,

BACKGROUND OF THE CASE

Associations of Senior Citizens in the Philippines (Senior Citizens), Inc. ("Senior Citizens", for brevity), a non-stock, non-profit corporation which is registered under SEC Registration Number CN200340764. Petitioner-Appellee Godofredo V. Arquiza is the President of the Coalition of

Associations of Senior Citizens in the Philippines (Senior Citizens), Inc." to "Allied alleging that: (a) the name of the corporation was illegally changed from "Coalition of On 13 February 2012, Petitioner-Appellee filed a complaint with the CRMD,

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Coalition of Associations of Senior Citizens in the Philippines (Senior Citizens), Inc.";" (b) its principal office address was illegally changed from 15 Balungao, Calumpit, Bulacan to S-307, The One Executive Building, Number 5, West Avenue, Quezon City;2 (c) the named Trustees in the "Trustees' Certificate", which was submitted in support of the 5 August 2011 application for amendment, are not legitimate members of the Board of Trustees of Senior Citizens;3 and (d) the Tax Identification Numbers (TIN) of four out of these five persons who represented themselves as Trustees of Senior Citizens were spurious. Petitioner-Appellee prayed Incorporation of the Coalition of Associations of Senior Citizens in the Philippines, Inc. and the reversion to the original name and office address of the corporation. for the cancellation of the issuance of the Certificate of Amended Articles of of Allied Coalition of Association of Senior Citizens in the Phils. (Senior Citizens), Inc. Decision -- In the Matter of Car of the Amended Articles of Incorporatior SEC En Banc Case No. 07-12-264 Page 2 of 16

not substantial to invalidate the whole document;8 and (d) the case is an intra- Sheet (GIS) filed with the SEC on 1 March 2011; (c) the TINs of the named corporate dispute, which is beyond the jurisdiction of the SEC. Vazquez, Arsenio B. Alvarez, Marcelo M. Landicho, and Charlito G. Carino filed their Answer with Motion to Dismiss, raising the following defenses: (a) Petitioner- Appellee is guilty of forum shopping; (b) the amendments to the Articles of Incorporation of Senior Citizens were agreed upon by a majority of the new set of Trustees, although erroneously indicated, were mere typographical errors which are officers of Senior Citizens, whose identities were disclosed in the General Information On 3 April 2012, Respondents-Appellants Francisco G. Datol, Jr., Plutarco E.

before the CRMD as provided by Section 5-1, Rule V of the 2006 Rules of Procedure of the SEC ("2006 Rules", for brevity). It does not appear from the records that a Preliminary Conference was held

the Petition, the CRMD ruled that Petitioner-Appellee's assertion that Respondents- Petitioner-Appellee's assertion that Respondents-Appellants' submission of invalid TINs in support of their application for amendment is a valid ground to revoke an approved application, in view of Section 17 of the Corporation Code and Section 6, paragraph 1, subparagraph 1 of P.D. No. 902-A. Appellants are not members of the Board of Trustees of Senior Citizens is an intra- corporate dispute which is cognizable by the regular courts. However, it upheld On 4 July 2012, the CRMD issued an Order granting the Petition. In resolving

2 Paragraph 3, Petition. 5 Paragraphs I to 5, Answer with Motion to Dismiss, dated 3 April 2012. 7 Paragraph 10, Answer. Paragraphs 14 and 15, Answer. Paragraphs 16 to 17, Answer. ' Paragraph 2, Petition, dated 6 February 2012 Paragraphs 5 to 6, Petition. 4 Paragraph I1, Petition. S Prayer, Petition.

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Respondents-Appellants filed their Notice of Appeal and Memorandum of Appeal. On 17 July 2012, and within the reglementary period for filing the appeal. of Allied Coalition of Association of Senior Citizer Decision -- In the Matter of Ca theAt SEC En Banc Case No. 07-12-264 in the Phils. (Senior Citizens), Inc. en ded Articles of Incorporation Page 3 of 16

on 22 August 2012 when Petitioner-Appellee filed his Reply Memorandum. Order. Petitioner-Appellee received the Order on 25 July 2012. However, it was only Appellee to file his Reply Memorandum within ten (10) days from receipt of the On 23 July 2012, the Commission issued an Order directing Petitioner

August 2012. On 21 September 2012, Respondents-Appellants filed their Counter- Manifestation with 2nd Motion for Early Resolution, supposedly in reply to the Manifestation filed by Petitioner-Appellee. It must be noted, however, that it was only on 1 October 2012 when the OGC received a copy of Petitioner-Appellee's Manifestation, dated 17 September 2012, through an endorsement made by the of the appeal). They filed a Manifestation with Motion for Early Resolution on 31 CRMD on the same date. On 27 July 2012, Respondents-Appellants filed their Manifestation (In support

ISSUES

Appeal: The following issues were raised in Respondents-Appellants' Memorandum of

a. That Petitioner-Appellee violated the rules on forum shopping when he Incorporation of Respondents-Appellants; filed his second complaint for cancellation of the amended Articles of

b. That Respondents-Appellants did not commit fraud by providing invalid TINs in procuring their Amended Certificate of Registration;

c. That the CRMD failed to hold a preliminary conference, in violation of the 2006 Rules;

d. That Petitioner-Appellee came to the Commission with dirty hands;

e. That Respondents-Appellants had substantially complied with the basic requirements of the SEC in applying for the amendment of the Articles of Incorporation of Senior Citizens; and

f.That Petitioner-Appellee had filed a wrong pleading.

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DECISION

Memorandum of Appeal, we shall first discuss the procedural issues raised therein, to wit: In view of the numerous errors designated in Respondents-Appellantsj

1. That Petitioner-Appellee violated the rules on forum shopping when he filed his second complaint for Respondents-Appellants. cancellation of the amended Articles of Incorporation of

2. That the CRMD failed to comply with the mandatory rule on preliminary conference.

3. That Petitioner-Appellee filed the wrong pleading

A. That Petitioner-Appellee violated the rules on forum shopping when he filed his second complaint for cancellation of the amended Articles of Incorporation of Respondents- Appellants.

acts to be undertaken by this group. x x x"10 The letter was treated as a complaint and Incorporation of the Allied Coalition of Association of Senior Citizens of the docketed as SEC CRMD Case No. 11-236.11 Chairperson Teresita J. Herbosa complaining of illegal amendments on the Articles of Philippines. The letter alleged, among others, that "[t]he group which caused the said amendment has been trying very hard, through illegal means, to illegitimately take over of the Senior Citizens. The amendment may be the first of a series of criminal On 1 September 2011, Petitioner-Appellee sent a letter addressed to SEC

Case No. 11-236, stating that: In its Decision, dated 4 November 2011, the CRMD dismissed SEC CRMD

subject matter of the case because the principal issue involves an intra-corporate dispute or a controversy arising out of intra- corporate relations between and among members and in the "The Commission does not have jurisdiction over the

1: Paragraphs 28 to 30 Page 4, 4 November 2011 Decision of CRMD in SEC CRMD' Case No. 11-236. I Paragraph 21, Page 3, Letter of Rep. Godofredo V. Arquiza, dated 31 August 2011, addressed to Hon. Teresita J. Herbosa.

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election or appointments of trustees and officers. Jurisdiction over such intra-corporate cases pertains to the regular courts." of Allied Coalition of Association of Senior Citizens in the Phils. (Senior Citizens), Inc. Decision -- In the Matter of Cancellatior of the Amended Articles of Incorporation SEC En Banc Case No. 07-12-264 Page 5 of 16

2011. Thus, it is clear that there is existing board of trustees/officers squabble." to the composition of its board of trustees and officers that corporation submitted two GIS for the year 2011, one for the group of Cong. Arquiza submitted on June 1, 2011 and the other was submitted by the group of Mr. Datol on March 1. approved the subject amendments. Records also shows that the "It is worth noting that this case involves claims pertaining.

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or one of the parties presented strong and credible claims, still the Commission may not arrogate upon itself the jurisdiction to adjudicative powers of the regular courts to decide the parties regarding their claim that they are the legitimate board of trustees/officers of the corporation. Even assuming that both decide the same. This is in order not to interfere with the controversy." "Thus, we need not belabor upon the allegations of both

persons were spurious14. He attached a Verification/Certification to the Petition, Incorporation of Senior Citizens on 13 February 2012. The petition, which is the Board of Trustees of the corporation13 and that the TINs of four out of five of these paragraph 3 which states: CRMD.12 Instead, he filed a petition for cancellation of the Amended Articles of subject of this appeal, was docketed as SEC CRMD Case No. 12-289. Petitioner- Appellee alleged therein, among others, that the persons who caused the amendment to the Articles of Incorporation of Senior Citizens are not legitimate members of the Petitioner-Appellee did not appeal the 4 November 2011 Decision of the

that a similar action has been filed, I undertake to report the action, involving similar parties, and with similar cause'of other tribunal, or agency, and to the best of my knowledge. Appeals, Court or tribunal or agency, and if I should learn action in the Supreme Court, Court of Appeals, or in_any no such action is pending in the Supreme Court, Court of "I hereby certify that I have not commenced any similar

I2 Paragraph 4, Page 2, Petitioner's Reply Memorandum, dated 21 August 2012. I Paragraph 6, Petition. I Paragraph i1, Petition. "2

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said fact into this Honorable Commission within 5 days therefrom." (Emphasis supplied) of Allied Coalition of Association of Senior Citizens in the Phils. (Senior Citizens), Inc. Decision -- In the Matter of Ca Haty Amended Articles of Incorporation SEC En Banc Case No. 07-12-264 Page 6 of 16

forum shopping; hence, the petition (SEC CRMD Case No. 12-289) should have been reiterated in their Memorandum of Appeall6 that, by failing to state in his CRMD Case No. 11-236), Petitioner-Appellee submitted a false certification against dismissed. Verification/Certification that he had filed a previous case before the SEC (SEC Respondents-Appellants alleged in their Answer with Motion to Dismiss15 and

fact that he had filed a previous case in his Certification against Forum Shopping, the Supreme Court ruled, that: In the case of Young vs. Seng1", where the respondent failed to disclose the

the verificationrequirement .is a formal,not . a means that essentially, no case was filed, because the Complaint was fatally defective on its face. Hence, its jurisdictional, requirement. Moreover, the ground for the dismissal of the First Case was lack of cause of action, which dismissal was not determinative of the Second Case. (Emphasis supplied) we hold that substantial justice requires the resolution of the present controversy on its merits. It must be noted that "Nonetheless, strengthening our ruling on the First Issue,

Second Case, even if he failed to disclose in his certification of cause of action. It was thus a dismissal without prejudice; respondent was not barred from filing a new suit against petitioner involving the same facts, but raising a cause of that he had commenced the First Case against the same inexpensive disposition of actions and proceedings on their action arising therefrom. In fact, respondent actually filed the defendant, herein petitioner. Furthermore, we must bear in mind that, whenever possible and feasible, procedural rules should be liberally construed to ensure the just, speedy and merits." (Emphasis supplied) "We repeat: the First Case was dismissed because of lack

forum shopping was designed to promote and facilitate the "In Loyola v. Court of Appeals, we said that the rule on non.

: Paragraphs I to 5, Answer. It Paragraphs 9 to 19 Memorandum of Appeat. 17 G.R. No. 143464. 5 March 2003. "25

orderly administration of justice and, therefore, should not be interpreted literally at all times." of Allied Coalition of Association of Senior Citizens in the Phils. (Senior Citizens), Inc Decision -- In the Matter of Cancellar Amended Articles of Incorporation SEC En Banc Case No. 07-12-264 Page 7 of 16

it cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial complied with merely underscores its mandatory nature in that compliance with circumstances." "The fact that the Circular requires that it be strictly itsprovisions under justifiable

Supreme Court in the aforementioned case of Young vs. Seng, the interest of justice case (SEC CRMD Case No. 11-236) seeking the same relief of cancellation of the end to the controversy between the parties involved. Hence, it was proper for the Petitioner-Appellee's attachment of a defective Verification/Certification against because Petitioner-Appellee failed to disclose the fact that he had previously filed a Amended Articles of Incorporation of the corporation. However, as pointed out by the would be best served by the resolution of the case on the merits, which shall put an CRMD to have taken cognizance of and decided the case on the merits despite forum shopping. Applying strict procedural rules, the Petition should have been dismissed

cancellation of the amended Articles of Incorporation of Senior Citizens18. The only is another instance of forum shopping on the part of Petitioner-Appellee. Respondents-Appellants further alleged that the subject matter of SEC CRMD Case No. 11-236 and SEC CRMD Case No. 12-289 are the same, i.e., the revocation or difference between the two complaints, allegedly, is that the second complaint added the ground of submission of alleged invalid TINs19. For Respondents-Appellants, this Aside from the submission of a false certification against forum shopping.

rules on forum shopping and warrants the adjudication of this case on the merits. in essence both actions are between the same parties similarly seeking to nullify CRMD, whereas SEC CRMD Case No. 12-289, which is the subject of this appeal, relies upon Respondents-Appellants' non-compliance with documentary requirements. The inclusion of the issue of non-compliance with documentary requirements in SEC CRMD Case No. 12-289 justifies the liberal construction of the and/or cancel subject corporation's Amended Articles of Incorporation approved on 11 August 2011, the grounds relied upon in each action are different. SEC CRMD Case No. 11-236 is intra-corporate in nature and was properly dismissed by the We disagree. As explained by the CRMD in its 4 July 2012 Decision, although

I Paragraphs lI to 12, Memorandum of Appeal. I Paragraph 13, Memorandum of Appeal. *2E

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where the ground for dismissal is also either litis pendentia or res judicata).20 committed in three ways: (1) filing multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved yet (where the cause of action and the same prayer, the previous case having been finally resolved the same cause of action, but with different prayers (splitting of causes of action, ground for dismissal is litis pendentia); (2) filing muitiple cases based on the same (where the ground for dismissal is res judicata); and (3) filing multiple cases based on Is Petitioner-Appellee, then, guilty of forum shopping? Forum shopping can be

compliance with the documentary requirements in SEC Case No. 12-289. first category, considering that the first complaint, which was docketed as SEC CRMD Case No. 11-236, was already dismissed when Petitioner-Appellee filed the second petition, which was docketed. as SEC CRMD Case No. 12-289. Petitioner-Appellee's in the two cases: an intra-corporate dispute in SEC Case No. 11-236 and non- filing of a second action likewise would not fall under the third category of forum shopping. As previously discussed, Petitioner-Appellee had different causes of action Petitioner-Appellee's alleged act of forum shopping does not fall within the

in the case of Chu, et al. vs. Spouses Cunanan, et al2', thus: The Supreme Court clarified the doctrine of res judicata as applied to forum shopping Did Petitioner-Appellee commit forum shopping under the second category?

decree on the merits rendered by a court of competent jurisdiction is conclusive of the rights of the parties or their should be conclusive upon the parties and those in privity with privies in all later suits and on all points and matters which the doctrine rests is that the parties ought not to be permitted to litigate the same issue more than once; that when a of competent jurisdiction, so long as it remains unreversed, determined in the previous suit. The foundation principle upon right or fact has been judicially tried and determined by a court them in law or estate." "Under the doctrine of res judicata, a final judgment or

a subsequent action, the following requisites must concur:-- (a) the former judgment must be final; (b) it must have been rendered by a court having jurisdiction of the subject matter and the parties: (c) it must be a _judgment on the merits: and (d) there must be between the first and second "Yet, in order that res judicata may bar the institution of

2 Chua, et al. vs. Metropolitan Bank & Trust Company, et al. G.R. No. 182311. 19 August 2009. 2G.R.No156185.12September 2012

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matter, and (iii) identity of cause of action." (Emphasis ours) actions (i) identity of parties, (i) identity of the subject of Allied Coalition of Association of Senior Citizens in the Phils. (Senior Citizens), Inc. Decision -- In the Matter of Can I the Amended Articles of Incorporation SEC En Banc Case No. 07-12-264 Page 9 of 16

with documentary requirements. Clearly, then, the decision in SEC CRMD Case No. 289 and make Petitioner-Appellee liable for forum shopping. Petitioner-Appellee and Respondents-Appellants, and the same subject matter, i.e., the cancellation of the amendments to the Articles of Incorporation of Senior Citizens. rendered precisely for lack of jurisdiction. As a necessary consequence of the causes of action are different: SEC CRMD Case No. 11-236 involved purely intra- corporate issues while SEC CRMD Case No. 12-289 also involved non-compliance No. 11-236 has become final. SEC CRMD Case No. 11-236 and SEC CRMD Case No. 12-289, which is the 'subject of this appeal, also involved the same parties, However, the 4 November 2011 Decision in SEC CRMD Case No. 11-236 was dismissal for lack of jurisdiction, there was no judgment on the merits. Finally, the 11-236 does not constitute res judicata to bar the filing of SEC CRMD Case No. 12- Admittedly, the 4 November 2011 Decision of the CRMD in SEC CRMD Case

B. That SEC-CRMD failed.to comply with the mandatory rule on preliminary conference.

Section 5-1, Rule V of the 2006 Rules provides in part:

concerned, the Hearing Panel or Officer shall, in compliance rejoinder mentioned therein. x x x" (Emphasis supplied) upon assignment by the Director of the Operating Department with the existing rules on alternative dispute resolution, set pleading allowed under Section 3-13 is filed or upon expiration of the period within which to file the reply or the case for conference within ten (10) days after the last "SEC. 5-1. Preliminary Conference. -- In any action and

there been a preliminary conference on the instant case, the CRMD would have been] enlightened on the alleged existence of fraud22 and the alleged violation of the rule on forum shopping in the case at bar23. In their Memorandum of Appeal, Respondents-Appellants alleged that had

preliminary conference would nullify the proceedings before the CRMD. A preliminary conference is held to consider the possibility of an amicable settlement, because of the verb "shall", it does not necessarily follow that the absence of a Although it appears that the holding of a preliminary conference is mandatory

23 Paragraph 39, Memorandum of Appeal. 22 Paragraph 38, Memorandum of Appeat. 22

speedy disposition of the case.2 the simplification of the issues, and such other matters that may aid in the just and of Allied Coalition of Association of Sen Decision -- In the Matter of Car nior Citizens in the Phils. (Senior Citizens), Inc. SEC En Banc Case No. 07-12-264 Amended Articles of Incorpo Page 10 of 16 afior

just and speedy disposition of the case. decision rendered by the CRMD. It must be noted that the issues raised by the parties of Incorporation of Senior Citizens were authorized to do so; and (b) whether the amendment of the Articles of Incorporation of Senior Citizens was valid in view of the submission of invalid TINs. The parties did not disagree over these issues and instead chose to present arguments in support of their claims. Finally, despite the absence of a preliminary conference, the parties were able to discuss exhaustively substantial prejudice to Respondents-Appellants. Neither did it impair in any way the were fairly simple: (a) whether the persons who caused the amendment of the Articles their respective arguments by filing their respective pleadings, which resulted in the More importantly, the absence of a preliminary conference did not cause

C. That Petitioner-Appellee filed the wrong pleading.

the 4 November 2011 CRMD Decision in SEC CRMD Case No. 11-236 to the Commission En Banc instead of filing another complaint.25 Respondents-Appellants assert that Petitioner-Appellee should have appealed

i.e., the cancellation of the Amended Articles of Incorporation for non-compliance case of Mellon Bank, N.A. vs. Hon. Magsino, et al,26 vis: Incorporation. Plaintiff-Appellee cannot be compelled to flog a dead horse, so to with documentary requirements, which he correctly pursued. This is in accordance with the doctrine of election of remedies, as explained by the Supreme Court in the not the legitimate members of the corporation's Board of Trustees, the second petition raised an additional issue of submission of false TINs, which, by itself, constitutes a separate cause of action for the cancellation of the Amended Articles of speak, by requiring him to appeal the 4 November 2011 Decision of the CRMD in SEC CRMD Case No. 11-236. Another remedy was available to Plaintiff-Appellee, who procured the amendment of the Articles of Incorporation of Senior Citizens were Although in both cases Petitioner-Appellee raised the issue that the persons

is regarded as an application of the law of estoppel, upon the doctrine of election of remedies is not to prevent recourse to any remedy, but to prevent double redress for a single wrong. It "As a technical rule of procedure, the purpose of the

2 Paragraph 56. Page 21, Memorandum of Appeal. 24 Section 5-1, Rule V, 2006 Rules of Procedure of the Securities and Exchange Commission. 26 G.R. No. 71479. 18 October 1990. 1: 261

until the judicial proceedings has gone to judgment on the theory that a party cannot, in the assertion of his right occupy remedies: However, when a certain state of facts under the law entitles a party to alternative remedies, both founded merits." inconsistent positions which form the basis of his respective shall reach the stage of final adjudication or unless by the detriment_or change of situation to the other. It must be pointed out that ordinarily, election of remedies is not made upon_the identical state of facts, these remedies are _not considered inconsisteut..remedies. In such .case..the invocation of one remedy is not an election which will bar the other,_unless the suit upon the remedy first invoked invocation of the remedy first sought to be enforced, the plaintiff shall have gained an advantage thereby or caused of Allied Coalition of Association of Senior Citizens in the Phils. (Senior Citizens), Inc. Decision -- In the Matter of Cancellat Amended Articles of Incorporation SEC En Banc Case No. 07-12-264 Page l1 of i6

compliance with documentary requirements. cancellation of the Amended Articles of Incorporation of Senior Citizens for non- To reiterate, Petitioner-Appellee had the alternate remedy of seeking the

D. That Petitioner-Appellee filed his Reply to the Memorandum of Appeal out of time.

Nonetheless, the Commission En Banc shall address the same to finally put to rest the procedural issues in this case. This omission was not raised in the Answer or in the Memorandum of Appeal.

observance by the parties of the procedural rules.27 instead of encouraging Petitioner-Appellee and/or his counsel to .comply with the 2006 Rules of Procedure, such leniency has emboldened Petitioner-Appellee and/or his counsel to disregard the provisions of the 2006 Rules of Procedure. In this vein, party. Public order and our system of justice are well served by a conscientious receipt thereof. It was only on 22 August 2012 - thirteen (13) days from his deadline of 9 August 2012 -- when Petitioner-Appellee filed his Reply Memorandum of an incorrect Verification/Certification against forum shopping has been treated with much leniency in the interest of substantial justice. It appears, however, that Petitioner-Appellee and his counsel are reminded that procedural rules should not be disdained as mere technicalities. They may not be ignored to suit the convenience of a Commission requiring him to file a Reply Memorandum within ten (10) days from without presenting any justifiable ground therefor. Petitioner-Appellee's submission On 25 July 2012, Petitioner-Appellee received the 23 July 2012 Order of this

27 Po vs. Dampal. G.R. No. 173329. 21 December 2009. "2g

Petitioner-Appellee's Reply Memorandum and Manifestation relative to the appeal are hereby expunged. The appeal shall be based on Respondents-Appellantsj Memorandum of Appeal, the documents attached in support thereof, and the documents submitted in the original case. Pursuant to Section 11-5, Rule XI of the 2006 Rules of Procedure2 of Allied Coalition of Association of Senior Citizens in the Phils. (Senior Citizens), Inc. Decision -- In the Matter of Cancellation of t Amended Articies of Incorporatior SEC En Banc Case No. 07-12-264 Page 12 of 16

and discovered by the Commission En Banc on appeal, we shall now proceed to the resolution of the substantive issues raised on appeal, to wit: Having disposed of the procedural issues raised by Respondents-Appellants

1. That Respondents-Appellants did not. commit fraud in procuring their Amended Certificate of Registration for giving invalid TINs;

2. That Respondents-Appellants substantially complied with the basic requirements of the SEC in applying for the amendment of the Articles 'of Incorporation of Senior Citizens; and

3. That petitioner came to the Commission with dirty hands.

A. That Respondents-Appellants did not commit fraud in procuring their Amended Certificate of Registration for giving invalid TINs.

inaccurate. In their typographical errors.2 Respondents-Appellants did not deny that the TINs that they submitted were 29 defense, they alleged that the inaccuracies were mere

Trustees' Certificate3o Certification from the Bureau of Internal Revenue (BIR), dated 25 November 2011 : The following are the TINs of Respondents-Appellees as stated in the and compared with the TINs verified by the BIR31 the

2s "SEC. I1-5. Reply Memorandum. - The appelle shall file seven (7) copies of the reply memorandum with the Commission 3 Annex "B" of the Petition. 31 Annexes "" to "M", Memorandum of Appeal. En Banc, furnishing copies thereof to the appellant within ten (10) days from receipt of the Order to file reply memorandum." 2 Paragraph 14, Page 5, Answer. tme "Failure to file the reply memorandum within the prescribed period in the Order shall be construed as a waiver to file the

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4. Plutarco E. Vazquez 2. Arsenio B. Alvarez 3. Charlito Carino 5. Marcelo Landicho 1. Francisco G. Datol, Jr. NAME TIN AS APPEARING IN CERTIFICATE TRUSTEES 113-362-466 107-175-662 302-054-521 907-110-400 138-932-69 TIN AS VERIFIED BY BIR/APPEARING IN CERTIFICATION ISSUED BY BIR 107-175-66232 907-110-406 209-200-510 138-932-692 113-362-466

and Charlito Carifo are mere typographical errors. However, there is no satisfactory explanation for the invalid TINs of Arsenio B. Alvarez and Marcelo M. Landicho. It appears that, indeed, the inaccuracies in the TINs of Francisco G. Datol, Jr.

reliance in good faith on a number -- which he believed was his TIN -- found on a Scrap of paper in his wallet.33 This defense is self-serving. Arsenio B. Alvarez should his TIN, considering that the same was needed in a document that is required by the acts of Arsenio B. Alvarez display gross negligence amounting to fraud, if not have been more prudent and checked his Taxpayer's Idenitification Card to ascertain Government. Instead, he merely relied on a scrap of paper which may contain several outright fraud. numbers that may yield innumerable combinations for identification purposes. The Arsenio B. Alvarez attributed the error in his TIN to his old age and his

that the TIN which was stated in the Trustees' Certificate as Marcelo Landicho's belonged to a certain Isabelita De la Cruz Landicho. Section 236(j) of the National Internal Revenue Code provides: As for Marcelo Landicho, the 25 November 2011 BIR Certification reflects

make, render or file a return, statement or other document shall be supplied with or assigned a Taxpayer Identification Number document filed with the Bureau of Internal Revenue for his proper identification for tax purposes, and which he shall (TIN) which he shall indicate in such return, statement or indicate in certain documents, such as, but not limited to the following: ."Any person required under the authority of this Code to

% Affidavit, dated 12 July 2012,of Arsenio B. AIvarez. Annex "M-1" to the Memorandum of Appeal. 32 Same as TIN of Isabelita De la Cruz Landicho ** 2EE

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Exchange Commission. "(5) Documents to be registered with the Securities and

be assigned to a taxpayer, Any person who shall secure more than one Taxpayer Identification Number shall be criminally liable under the .provision of Section 275 on Violation of Other Provisions of this Code or. Regulations in General'." (Emphasis supplied) "Only one Taxpayer Identification Number (TIND shal]

Landicho constitutes willful misrepresentation that would justify the cancellation of 5.i.1 of Presidential Decree Number 902-A.34 the Amended Articles of Incorporation of Senior Citizens in accordance with Section Marcelo Landicho's use of the TIN belonging to Isabelita De la Cruz

faith, the cancellation of the Amended Articles of Incorporation of Senior Citizens is articles of incorporation under Section 17.1 of the Corporation Code35. Mere non- compliance with the form prescribed is a ground for such rejection or disapproval. In line therewith, SEC Memorandum Number 22, Series of 1999 provides: still warranted. Fraud is not an essential element in the rejection or disapproval of the Even if the errors made in the designation of the TINs were made in good

be accepted by the Commission unless the Tax Identification person acting in behalf of the corporation and partnership are indicated in the following registration forms/documents filed Number (TIN) of the corporation, partnership; incorporators, with this Commission: stockholders, members, partners, directors and officers or any "Section 1. No application for registration or licensing shall

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3 -Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and Exchange Commission over corporations, original and exclusive jurisdiction to hear and decide cases involving: Exchange Commission may reject the articles of incorporation or disapprove any amendment thereto if the same is not in compliance with the requirements of this Code: Provided, That the Commission shall give the incorporators a reasonable time within which to correct or modify the objectionable portions of the articles or amendment. The following are grounds for such partnerships and other forms of associations registered with it as expressly granted under existing laws and decrees, it shall have 35 -Sec. 17. Grounds when articles of incorporation or amendment may be rejected or disapproved. -- The Securities and rejection or disapproval: partnerships or associations, upon any of the grounds provided by law, including the following: i) To suspend; or revoke, after proper notice and hearing, the franchise or certificate of registration of corporations, That the articles of incorporation or prescribed herein; x x x Fraud in procuring its certificate of registration x x x" YY ndment thereto is not substantially in accordance with the form

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registration/approval. H. Any document submitted for

Number 22, Series of 1999 in relation to Section 236(J)(5) of the National Internal Revenue Code, Respondents-Appellees' Amended Articles of Incorporation must be cancelled for non-compliance with the requirement of submission of valid TINs. Thus, applying Section 17.1 of the Corporation Code and SEC Memorandum

B. That Respondents-Appellants substantially SEC in applying for the amendment of the complied with the basic requirements of the Articles of Incorporation of Senior Citizens.

in SEC CRMD Case No. 11-236 which states that the Amended Articles of Incorporation are compliant with the requirements of Section 16 of the Corporation Code. Respondents-Appellants rely on the 4 November 2011 Decision of the CRMD

invalid TINs was not raised as an issue in SEC CRMD Case No. 11-236. On the other hand, it was one of the main issues in SEC CRMD Case No. 12-289. It was only at Respondents-Appellants were invalid. The CRMD should not be bound by its previous findings in the previous case but, instead, should be given an opportunity to correct itself in view of the presentation of additional issues and evidence in support pronouncements in SEC CRMD Case No. 11-236 that Respondents-Appellants had Incorporation of Senior Citizens upon perusal of the TINs of Respondents- Respondents-Appellants and discovered that, indeed, some of the TINs provided by thereof. Consequently,. the CRMD was correct in overturning its previous this point when the CRMD was able to scrutinize in detail the TINs submitted by substantially complied with the requirements for the amendment of the Articles of Appellants, which revealed the submission of invalid TINs. It must be noted, however, that Respondents-Appellants' submission of

C. That petitioner came to the Commission with dirty hands.

Petitioner himself and his allies provided invalid TINs in Petitioner's Trustees' Certificate, which was attached to the Petition. Respondents-Appellants claim that the Petition should be dismissed because

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Respondents-Appellants submitted invalid TINs. Petitioner-Appellee presented a disprove Petitioner-Appellee's contention shifts upon Respondents-Appellants. Unfortunately, however, Respondents-Appellants were not able to substantially disprove the claim. Certification from the Bureau of Internal Revenue to this effect. Thus, the burden to This allegation is immaterial. The issue raised in the Petition is whether of Allied Coalition of Association of Senic Decision -- In the Matter of Cancella tizens in the Phils. (Senior Citizens), Inc. f the Amended Articles of Incorporation SEC En Banc Case No. 07-12-264 Page 16 of 16

inaccurate TINs. Neither can this justify a collateral attack on the validity of the 2011 dated 10 February 2012 and the General Information Sheet for the Year 2011 submitted by Petitioner-Appellee and the other alleged members of the Board of Trustees of Senior Citizens are invalid as certified by the BIR.36 It is unfortunate that this will not detract from the fact that Respondents-Appellants themselves submitted GIS submitted by Petitioner-Appellee and his allies. The law provides Respondents- Appellants with numerous remedies to address this matter; unfortunately, this appeal is not one of those remedies. We note that ALL of the SEVEN (7) signatories to the Trustees Certificate

WHEREFORE, premises considered, the APPEAL is hereby DISMISSED. SO ORDERED

Mandaluyong City, 6 December 2012.

TERESITA J. HERBOSA Chairperson

C 0 MA. JUANITA E. CUETO Commissioner MANUEL HUBERTO B. GAITE* Commissioner

Ft Ommissioner M M. JALA ANTONIETA F. IBE Wmis hatu Commissioner

*On official leave.

36 Certification, dated 13 July 2012. Annex "N" of Memorandum of Appeal.

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