WEDNESDAY, FEBRUARY 1, 2012 1 At 2:02 P.M., THE PRESIDING OFFICER, SENATE PRESIDENT JUAN PONCE ENRILE, CALLED THE IMPEACHMENT TRIAL OF SUPREME COURT CHIEF JUSTICE RENATO C. CORONA TO ORDER. The Presiding Officer. The continuation of the Impeachment Trial of the Honorable Supreme Court Chief Justice Renato C. Corona is hereby called to order. We shall be led in prayer by the distinguished Senator from Bukidnon, Senator Teofisto Guingona III. Senator Guingona. Mula sa Banal na Kasulatan: “Pinagpala ang mga nagugutom at nauuhaw sa katuwiran sapagkat sila ay bubusugin .” “Blessed are those who hunger and thirst for justice, they shall have their fill.” Samahan Po Ninyo akong manalangin. Ama naming makapangyarihan sa lahat, masdan Po Ninyo ang aming bansa na nauuhaw sa katotohana n, nauuhaw sa katuwiran, nauuh aw sa katarungan. Masdan Po Ninyo ang mga bagay na lalong nagpapatindi ng aming uhaw: ang pagkamakasarili, ang pagkakanya-kanya, ang pag-una sa pansariling interes bago interes ng bansa, ang pagmamagaling, ang kayabangan, ang sinasadyang pagtatago sa katotohanan. Sa araw na ito, naririto naman Po kami sa Bulwagan ng Senado para sikaping mapatid namin ang aming uhaw, ang uhaw para sa katotohanan, para sa katuwiran, para sa k atarungan. Pagpalain Po Ninyo ang paghahanap namin ng pampatid ng pagkauhaw. Paglinawin Po Nin yo ang aming mga isipan para din maging mas malina w sa amin kung alin ang totoo at alin ang k asinungalingan. Paglinawin Po N inyo ang aming mga pag-unawa para maging mas malinaw sa amin kung alin ang tunay na tinig Republic of the Philippines Senate Record of the Senate Sitting As An Impeachment Court W ednesday, February 1, 2012 Pasay City
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ng katotohanan at kung alin ang ingay lamang ng pagmamagaling at paglilinlang.
Paglinawin Po Ninyo ang aming mga puso para sa lahat ng aming gagawin at pag-
uusapan ay mangibabaw ang interes at pagmamahal namin sa aming bayan.
Sa lahat Pong ito, Panginoon, maunawaan Po sana namin na ang paglilitis na
aming ginagawa ay bahagi ng grasya at ng pagbibigay Mo sa amin ng pampatid ng
tumitindi naming uhaw. Huwag Mo Pong payagan itapon at sayangin lamang naminang malamig na tubig ng katotohanan na binibigay Mo sa amin. Mangibabaw Po sana
ang katuwiran sa araw na ito at sa lahat ng araw ng aming buhay.
Ito ang aming hiling sa ngalan ng Inyong Anak na Siyang daan, katotohanan at buhay.
Amen.
The Presiding Officer. Amen.
The Secretary will now please call the roll of Senators.
The Secretary, reading:
Honorable Senator Edgardo J. Angara .............................................. Present
Senator Joker P. Arroyo ................................................................... Present
Senator Alan Peter “Compañero” S. Cayetano ................................. Present
Senator Pia S. Cayetano ................................................................... Present
Senator Miriam Defensor Santiago .................................................... Absent*
Senator Franklin M. Drilon ................................................................ Present
Senator Jinggoy Ejercito Estrada ....................................................... Present
Senator Francis J.G. Escudero .......................................................... Present
Senator Teofisto L. Guingona III ....................................................... Present
Senator Gregorio B. Honasan II ........................................................ Present
Senator Panfilo M. Lacson ................................................................ Present
Senator Manuel “Lito” M. Lapid ....................................................... Present
Senator Loren Legarda ...................................................................... Present
Senator Ferdinand “Bongbong” R. Marcos Jr. .................................. Present
Senator Sergio R. Osmeña III ........................................................... Present
Senator Francis N. Pangilinan ............................................................ Present
Senator Aquilino L. Pimentel III ........................................................ Present
Senator Ralph G. Recto .................................................................... Present
Senator Ramon “Bong” Revilla Jr. ..................................................... Present
Senator Vicente C. Sotto III ............................................................. Present
Senator Antonio “Sonny” F. Trillanes IV........................................... PresentSenator Manny Villar ......................................................................... Present
The Senate President ......................................................................... Present
The Presiding Officer. With 19 Senator-Judges present in the Chamber, the Presiding Officer
declares the presence of a quorum.
The Floor Leader.
Senator Sotto. Mr. President, may I ask the Sergeant-at-Arms to make the proclamation.
Representative Umali. With the permission of this Honorable Court.
The Presiding Officer. Proceed.
Mr. Cuevas. If Your Honor please, if there are other witnesses inside the courtroom who will
not be testifying, may we request that they be temporarily excluded?
The Presiding Officer. If there are witnesses for the Prosecution who are inside the Chamber
as a courtroom, the Chair requests that you go to the waiting room until you are called to come into
this Chamber to testify.
Representative Umali. Thank you, Your Honor. There is none, Your Honor.
Mr. Cuevas. Thank you.
The Presiding Officer. All right, proceed.
Reprsentative Umali. Mr. Witness, will you please state your name and other personal
circumstances?
Mr. Cataran. I am Atty. Benito Cataran, 64 years old, married, resident of Pacita I, San Pedro,
Laguna, and presently the director of the Company Registration and Monitoring Department of the
Securities and Exchange Commission.
Representative Umali. Thank you, Mr. Witness.
Your Honors, we offer the testimony of the witness to prove the following: that he is the director
of the Company Registration and Monitoring Department of the Securities and Exchange Commission;that he has been such director of the said department since 1980; that his department and that the
primary functions thereof include registration of corporations, partnerships and other juridical entities,
monitoring of compliance with government laws, rules and regulations and submission of reportorial
requirements as well as the custody of the records pertaining to corporations and other juridical entities,
particularly the reportorial documents and actions taken on said corporations—
The Presiding Officer. Proceed and qualify your witness by letting him recite those things into
the record as a basis for cross-examination by the Defense, if the Defense so wishes.
Representative Umali. Yes, Your Honor. If I may just continue, Your Honor.
He will testify on the fact of the company called Basa-Guidote Enterprises Inc. being given acorporate franchise. That the enterprise—the corporate franchise of this company was revoked by
SEC in May of 2003.
The Presiding Officer. Counsel, please elicit those facts from the witness to be recorded.
Representative Umali. Yes, Your Honor.
The Presiding Officer. The Counsel is reminded that he is not under oath to testify in these
The Presiding Officer. Proceed to the meat of your questions.
Representative Umali. Before you became director, what positions, if any, have you held in
SEC?
Mr. Cataran. I started as an Analyst I, then Analyst II. Then I was promoted as SupervisingSpecialist, then I became a Division Chief. Then later on, as Director of CRMD.
Representative Umali. Under what department, Mr. Witness?
Mr. Cataran. Under Company Registration and Monitoring Department.
Representative Umali. Considering your vast experience—a total of 32 years in SEC in the
same department which deals mainly on corporation and laws related thereto-would you reasonably say
that you have a fairly substantial knowledge of corporation?
Mr. Cuevas. Very leading, Your Honor.
The Presiding Officer. Counsel.
Mr. Cataran. Yes, Your Honor.
The Presiding Officer. Will the Defense accept the fact that this witness is an official of the
Securities and Exchange Commission in charge of corporate records?
Mr. Cuevas. Although we do not know him personally, Your Honor, we will be willing—just to
expedite the proceedings, we are willing to admit on record.
The Presiding Officer. All right. Proceed from there, Counsel.
Representative Umali. Thank you, Your Honor.
Mr. Witness, you appear today on strength of the subpoena issued by this Honorable Court,
subpoena duces tecum—subpoena ad testificandum et duces tecum, and you were required to bring
with you original and certified true copies of the Articles of Incorporation of Basa-Guidote Enterprises
and its general information sheets and audited financial statements for the years 2000 up to 2010.
First question is, did you bring with you the Articles of Incorporation and its amendments, if any,
of this particular corporation?
Mr. Cataran. I have here only the original copy of the Articles of Incorporation, but we do not
have any copy for the amendments. They did not file any amendments of these articles.
Representative Umali. Will you please hand to this representation this document?
May I manifest, Your Honor, that we have pre-marked this before the Deputy Clerk of Court
yesterday. And witness handed to me the Articles of Incorporation, the original, of Basa-Guidote
Enterprises Inc., earlier marked as Exhibit “WWWWW”, consisting of…
The Presiding Officer. Mark it accordingly. Is that pre-marked?
Representative Umali. Yes, Your Honor, pre-marked…
The Presiding Officer. All right.
Representative Umali. …as Exhibit “WWWWW”, the whole document. The name “Basa-
Guidote Enterprises Inc.” as Exhibit “WWWWW-A”, the subsequent pages thereof as “WWWWW-1” up to “6”, Your Honor?
Mr. Cuevas. At this juncture, Your Honor, and for expediency, may we ask permission that it
be marked also as Exhibit “39” for the Defense, Your Honor.
The Presiding Officer. Yes. Just a matter of procedure, we take note of the Defense Counsel.
Counsel, is there a need to mark the pages as exhibits? Why do you not just mark the document
as an exhibit and identify—to identify it? Anyway, you can refer to the page of that exhibit if you want
to refer to a particular page.
Representative Umali. Yes. Actually, Your Honor, we have also pre-marked the pertinentpages thereof in yesterday’s—
The Presiding Officer. All right, proceed so that we can—we do not tarry.
Mr. Cuevas. Exhibit “41”. I am sorry, Your Honor, it is not “39” but “41”. We already have
“39”, Your Honor, for the Defense.
The Presiding Officer. You adopt the same as your exhibit?
Mr. Cuevas. That is correct, Your Honor.
The Presiding Officer. All right. Let it be recorded that this particular document marked asexhibit for the Prosecution and the Defense is marked accordingly as both exhibits for the Prosecution
and the Defense.
Representative Umali. Yes, Your Honor. Thank you, Your Honor.
May we request the Defense to compare the same and manifest that this is a faithful reproduction
of the original?
Mr. Cuevas. We have examined the same, Your Honor, and we are willing to admit on record
that the document now being presented is a faithful reproduction of the original, Your Honor.
The Presiding Officer. Yes. That is an official record. This Court can even call on the custodian
to bring that kind of document. So, that should not be a problem.
Proceed.
Representative Umali. Now, may I also manifest, Your Honor, for the record—may I also
manifest for the record, that we have sub-marked Exhibit “WWWWW-3”, particularly the portion
thereof indicating the original stockholders and of the corporation, as Exhibit “WWWWW3-A”.
The Presiding Officer. Counsel for the Defense, do you accept, do you admit the stockholders
The Presiding Officer. None. Theres no need to put that.
Mr. Cuevas. No. I do not think there is any genuine controversy in connection with the existence
of the corporation and its stockholders, Your Honor.
The Presiding Officer. The document is the best evidence of its content.
Representative Umali. Yes, Your Honor. We would just like to highlight this, for the record,that Cristina Corona is not among the stockholders of this corporation and this is the reason for the
sub-marking, Your Honor.
The Presiding Officer. Why do you not ask the one that brought it to read who are the
stockholders?
Representative Umali. Yes, Your Honor.
The Presiding Officer. And who are the members of the Board of Directors.
Representative Umali. I will go into that, Your Honor.
Showing to you a copy, Mr. Witness, of Exhibit “WWWWW-3”, will you please read to the
record the names of the stockholders and directors of this company.
Mr. Cuevas. I do not think there will be any reason for the reading, Your Honor. We are
admitting—
The Presiding Officer. Let the witness read.
Mr. Cuevas. Thank you.
Mr. Cataran. Based on the Articles of Incorporation of Basa-Guidote Enterprises Inc., these are
the stockholders: Rosario G. vda. de Basa, Mario Basa, Cecilia Basa, Vicente Roco, Asuncion Basa
Roco, Jose Ma. Basa and Raymunda Gorospe Basa.
That is all, Your Honor.
The Presiding Officer. And who are the directors?
Representative Umali. And the directors.
The Presiding Officer. Who are the directors?
Mr. Cataran. The directors, there are seven (7), namely: Rosario G. vda. de Basa, Mario Basa,
Cecilia Basa, Vicente Roco, Asuncion Basa Roco, Jose Maria Basa and Raymunda Gorospe Basa.
The Presiding Officer. All right. Proceed.
Representative Umali. Now, Mr. Witness, what proof, if any, do you have to show that this
corporation was registered with the Securities and Exchange Commission?
Mr. Cuevas. Improper for direct, Your Honor. You already—
The Presiding Officer. That is not a pertinent question. After all, it is a matter of record. It is
registered with the SEC.
Representative Umali. Yes, Your Honor. This is just the Articles of Incorporation, Your Honor.
The SEC registration is different from the Articles of Incorporation.
The Presiding Officer. All right. Proceed. Answer.
Mr. Cataran. I have here the original copy of the Certificate of Registration, Your Honor.
Representative Umali. I am showing to you a copy of the Certificate of Registration No. 1884—
The Presiding Officer. Never mind, Counsel. I suggest that you show it to the witness and the
Court directs the witness to read it into the record.
Representative Umali. Showing to you a copy, Mr. Witness, of this Certificate of Registration,
is this the same document that you mentioned?
Mr. Cataran. Yes, Sir.
Representative Umali. And will you please read into the records this particular exhibit marked
as Exhibit “XXXXX”?
Mr. Cataran. All these?
Representative Umali. The name and the registration number and the date.Mr. Cataran. “To All To Whom This Presence May Come:
Greetings!
“WHEREAS, Articles of Incorporation duly signed and acknowledged for the
organization of Basa-Guidote Enterprises Inc., under and accordance with the provisions, the
Act of Philippine Commission No. 1459”—
Representative Umali. If Your Honor please. Just the name, the date and the registration
number.
Mr. Cataran. The date of registration is 30th day of May 1961 and this is signed by—
The Presiding Officer. What year?
Mr. Cataran. 1961, Your Honor.
The Presiding Officer. 1961.
Mr. Cataran. 1961. This Certificate of Registration was signed by Securities and Exchange
Commissioner Mariano G. Pineda.
Representative Umali. Thank you.
Now, you were also required, Mr. Witness, to bring with you pursuant to the subpoena, theGeneral Information Sheet or GIS of Basa- Guidote Enterprises Inc. for the years 2000 to 2010. Did
you also bring this with you?
Mr. Cataran. We did not receive those reports.
Representative Umali. Will you amplify that point, Mr. Witness?
Mr. Cataran. Since we have no reports on general information and financial statements as you
requested, I just prepared a Certificate of Non-Filing, if this Court will accept.
The Presiding Officer. What reports were requested?
Representative Umali. The reports, Your Honor, covering the General Information Sheet
covering the periods 2000 up to year 2010, Your Honor.
Mr. Cuevas. We would like to know, with the kind permission of the Honorable Court, we would
like to know...
The Presiding Officer. Proceed.Mr. Cuevas. …the materiality, the pertinency and the relevancy of all these documents, Your
Honor. Because up to now we are at a loss in deciphering or defining what is the reason or the
materiality—
The Presiding Officer. Let us proceed and let us see what is the connection of this corporation
with this proceeding.
Mr. Cuevas. Okay. Thank you, Your Honor.
Representative Umali. You mentioned that you executed a Certificate of Corporate Filing
Information. Mr. Witness, what is the relation of this document to the document you mentioned?Mr. Cataran. Just to prove that we did not receive any documents. Meaning, those reports
you requested.
Representative Umali. Meaning, the General Information Sheet for the years 2000 to 2010 are
what, Mr. Witness?
Mr. Cataran. May I read this Certification?
Representative Umali. Yes, please.
Mr. Cataran. “To whom it may concern:
‘This is to certify that the records of Basa-Guidote Enterprises Inc. with SEC No. 18884
on file with this Commission show that said corporation did not file its General Information
Sheet and Financial Statements from 2000 to 2010.”
Then, my signature.
Representative Umali. So you mentioned—May we manifest, Your Honor, that this document
was pre-marked as our Exhibit “EEEEEE”. The name Basa-Guidote Enterprises as Exhibit “EEEEEE-
A,” and the signature of Benito Cataran, Exhibit “EEEEEE-B”. Whose signature is that, Mr. Witness?
Mr. Cataran. This is my signature.
Representative Umali. Thank you, Your Honor.
May I request the Defense to review the documents and compare the same to the original?
Mr. Cuevas. Okay. If the purpose is substitution, Your Honor, we have no objection.
The Presiding Officer. Then it is not objected to. So proceed, Counsel.
Representative Umali. Now, Mr. Witness, when you determined that the documents being
requested were not present in your record, what other actions did you take, if any, to find out
compliance of certain reportorial requirements by this corporation?
The Presiding Officer. As a conclusion of law, do you not think so, Counsel? You are drawing
a conclusion of law.
Representative Umali. Yes, Your Honor. I again will reform, Your Honor.
So what is the present status of Basa-Guidote Enterprises Inc.?
Mr. Cuevas. No basis, Your Honor. Present status simply means that there were processestaken up, and there is no showing that there were. Precisely we are about to object it.
The Presiding Officer. Let the witness answer.
Proceed.
Mr. Cataran. The certificate of registration of Basa-Guidote Enterprises Inc. is already revoked,
Your Honor.
Representative Umali. Do you have any proof of this revocation made on this corporation?
Mr. Cataran. Yes, Sir.
Representative Umali. Will you show me this document, Mr. Witness?
Witness handing to this representation, Your Honor, a copy of the order dated April 22, 2003,
executed by Benito A. Cataran, Director, Company Registration and Monitoring Department,
in the matter of revocation of Certificate of Registration.
What is the relation of this document to what you testified on earlier, Mr. Witness?
The Presiding Officer. Well, please make your question more specific. He testified on so
many things.
Representative Umali. Of this particular order, Your Honor.
The Presiding Officer. All right.
Representative Umali. I am showing him a document, Your Honor.
Mr. Cuevas. Still vague, Your Honor, and too general.
Representative Umali. I am showing you a document, an order issued by Benito A. Cataran,
Director, Company Registration and Monitoring Department, pertaining to an order issued by you, Mr.
Witness, pertaining to corporations which were required to submit annual reports such as GIS and
financial statement pursuant to Section 141 of the Corporation Code. What is the relation of this to
the statement you made earlier, Mr. Witness?
Mr. Cuevas. The question, Your Honor, is too long. We would not know when to object and
so on. May we request that the question be simplified, Your Honor?
Representative Umali. That is as simple as it could be, Your Honor.
Mr. Cuevas. Because the witness is very intelligent witness, Your Honor.
The Presiding Officer. Let the witness answer.
Mr. Witness, what is Section 141 of the Corporation Law?
Mr. Cataran. This is the particular provision of the Corporation Code which requires the
submission of reports to the Commission.
The Presiding Officer. Which requires?
Mr. Cataran. The submission of General Information Sheet and financial statement.
The Presiding Officer. All right. So, that is the basis of your requirement that a corporation mustsubmit General Information Sheet and financial statements.
Mr. Cataran. Yes, Your Honor.
The Presiding Officer. All right. Proceed.
Mr. Cataran. And with this order, it is stated that because of non-filing of this report,
General Information Sheet and financial statement within a period of at least six (6) years
from the period of 1997 up to 2002, we revoked the Certificate of Registration of Basa-Guidote
Enterprises Inc.
The Presiding Officer. What is that? What is the action taken by your office?
Mr. Cataran. We stated in this order, which I signed, that the corporation has to let—may I read,
Your Honor, the order?
The Presiding Officer. No, just tell us in a nutshell what was the action of your office?
Mr. Cataran. We notified the corporations to submit reports and they have to explain within 30
days why they did not submit the reports. And it says here that after the lapse of 30 days and they
failed to comply with the requirements or to settle—
The Presiding Officer. Of Section 141 of the Corporation Code.
Mr. Cataran. Yes, Sir. We will consider their Certificate of Registration revoked.
The Presiding Officer. All right. Now, the Chair would like to posit this question: What is the
effect of that revocation of registration?
Mr. Cataran. When the corporation failed to file an appeal, it becomes effective and with
the effectivity of this order, its corporate existence is considered as none—no longer exist. Meaning,
with this revocation order—
The Presiding Officer. Wait a minute. You mean, the corporation is dissolved?
Mr. Cataran. Yes, Sir. That is the opinion of the Commission that whenever a corporation—
The Presiding Officer. Wait a minute. Let me clarify this.
Is it not that a corporation exists when it is incorporated as a person?
Mr. Cataran. Yes, Your Honor.
The Presiding Officer. That only the stockholders can dissolve it or the government through a
quo warranto proceeding?
Mr. Cataran. We have the authority—The SEC has the authority to suspend, revoke Articles
The Presiding Officer. Suspend the operation of the corporation but you cannot kill that
corporation.
Mr. Cataran. But we can revoke its registration.
The Presiding Officer. Yes, you can revoke its right to operate. But you cannot kill it, you
cannot make it die, only the stockholders can make it die or the government, through the power of a
quo warranto proceeding, can kill it.
Are there proceedings like this?
Mr. Cataran. At present, our opinion as I mentioned—
The Presiding Officer. Anyway, proceed Counsel.
Senator Legarda. Mr. President?
The Presiding Officer. Yes, what is the pleasure of the gentlelady?
Senator Legarda. The gentlelady, Mr. President. Mr. President, I am present here.
Yes, thank you.
The Presiding Officer. Yes, the gentlelady from the Philippines.
Senator Legarda. Thank you, Mr. President.
May I just seek clarification from your statement regarding the dissolution of a corporation? May
this representation be enlightened whether the revocation of registration of a corporation is synonymous
to its dissolution?
I wonder whether it was answered by the witness. And how many years upon the non-filing of a
GIS would the SEC revoke its registration? And third, what happens to the assets or the propertiesof that corporation since the Presiding Officer said that it does not mean that the revocation of the
Certificate of Registration would actually mean the non-operation of the corporation?
Just for this representation’s enlightenment.
Mr. Cataran. We have issued the opinions. The Commission issued that with respect to
revocation of the corporate franchise, we consider the corporation as dissolved and from the date of
effectivity of revocation, the corporation has to liquidate its asset.
The Presiding Officer. This Court redirects the witness to submit a legal memorandum showing
us the authority of the Securities and Exchange Commission to consider corporation which is non-
compliant with the provision of Section 141 of the Corporation Code is authorized to dissolve it. Andwhat is the procedure of dissolution?
Senator Legarda. Mr. President, thank you for that elucidation.
May I know, Mr. President, whether it is an uncommon practice for corporations after not having
submitted their GIS to eventually have their Certificate of Registrations revoked or suspended or
revoked? And eventually after a few years, when there are corporate activities, for them to just pay
fines before the SEC and to have their corporations in active status again. Is this possible?
Mr. Cataran. There is no mention in the P.D. 902-A as to how many years before we can revoke
the Certificate of Registration of a corporation. The assumption is whether it be after one (1) year of
non-filing or two (2) years but usually as a matter of practice we revoke the registration if the
corporation has not been submitting reports—GIS and FS for at least three (3) years.
The Presiding Officer. With the permission of the lady Senator, I just want to clarify one point.
A corporation whose registration is revoked, can it be revived?
Senator Legarda. That was my question.
Mr. Cataran. Before the finality—
The Presiding Officer. No, I am asking you. Can it be revived?
Mr. Cataran. Yes, Your Honor.
The Presiding Officer. So therefore it is not dissolved because when you dissolve a corporation,
you kill it. You cannot revive it.
Senator Legarda. Which brings me to my question before that, which is exactly the same
question. Is the dissolution of a corporation the same as the revocation of the Certificate of Registration? And what happens to the assets of that corporation during that time after the revocation
of the registration?
Mr. Cataran. What I am saying is that the effect of the revocation of the corporate franchise is
to dissolve the corporation. Meaning it is—
The Presiding Officer. How can you revive a dissolved corporation? Under what authority?
Mr. Cataran. If the revocation order is not yet final and executory, they can be appealed. The
corporation involved can always file an appeal.
The Presiding Officer. I think your office is doing an arbitrary implementation of the Corpora-tion Law.
At any rate, the lady Senator has the floor.
Senator Legarda. Well, I support the position of the Chair, the Presiding Officer, that
perhaps the SEC can provide the Body with a legal memorandum to this effect so that we may fully
understand this.
But my question is, is this an uncommon practice?
Mr. Cataran. No, Your Honor.
Senator Legarda. Many corporations do?
Mr. Cataran. Yes, Your Honor.
Senator Legarda. The Prosecution of course has not finished its direct examination.
Representative Umali. Yes, Your Honor.
Senator Legarda. I just wanted to understand the revocation of the Certificate of Registration of
the Basa Enterprises and the relevance to the SALN or Article II of the Articles of Impeachment. That
was what I wanted to see because in my understanding, the Chief Justice had supposedly borrowed
money from Basa which was supposed to have gone to the purchase of real estate property for which
he paid his cash advances at the time when the corporation was supposed to be not in active status.
Is that my understanding, Mr. Prosecutor? Is my understanding correct?
Representative Umali. Yes.
Senator Legarda. Is that the point you are trying to make?
Representative Umali. Yes, Your Honor. But before that, let me just explain, Your Honors,that in the SALN of Renato C. Corona, which was hesitantly brought before this Honorable Court and
submitted to this Honorable Court pursuant to a subpoena issued by this Honorable Court, as of
December 31, 2003, there appeared in this particular SALN marked as Exhibit “C”, an entry on
liabilities, cash advance from Basa-Guidote Enterprises, Inc., wife’s family corporation in the amount
of P11 million. And likewise, in Exhibit “B”—
Senator Legarda. Thank you for that. Excuse me. That was 2003 when the Chief Justice
supposedly borrowed P11 million from Basa Enterprises?
Representative Umali. That is correct, Your Honor.
Senator Legarda. Yes, just hold there. May we ask from the SEC, during this time was Basa
Enterprises in operation or was it already dissolved using your Board Resolution of the corporation?
Mr. Cataran. We cannot say whether it is still in operation because they are not submitting
reports.
Senator Legarda. They have not been submitting reports and therefore you were not familiar
whether in 2003, when the cash advance of P11 million was made, whether the operation was on-
going of Basa Enterprises?
Mr. Cataran. Yes, Your Honor.
Senator Legarda. Yes, Mr. Prosecutor.
Representative Umali. Yes. Thank you, Your Honor.
Senator Legarda. 2003, P11 million. After which, he declared that there was a decreasing cash
advance until it was paid fully in 2010. Is that what you are trying to say?
Representative Umali. That is correct, Your Honor.
Senator Legarda. And so between 2003 and 2010 in the SALN, was Basa Enterprises
operational or you have not received any report again from Basa Enterprises, Mr. SEC?
Mr. Cataran. We did not receive any reports.
Senator Legarda. If there is no report, what does that mean?
Oh, that is my time. Answer please, both the Prosecutor and our witness.
Mr. Cataran. Since the corporation franchise has already been revoked and we consider
that corporation dissolved, we no longer ask for the submission of report.
Senator Legarda. My time is up. I just have one question, Mr. Presiding Officer, only if
Senator Legarda. I just want to see the point of the Prosecutor whether the payment of the cash
advance by the Chief Justice to Basa Enterprise has any relevance to the nondisclosure in the SALN
during that time. It is a corporation of the wife, the wife’s family and I want to see the connection.
But you can proceed.
Representative Umali. For one, if I may just amplify on this point, Your Honors. Our theory
is that there could not have been any transaction made by Basa-Guidote with the Chief Justice RenatoCorona because the corporation has already been—the corporate franchise has already been dissolved
or revoked and therefore, the only action that can be taken by Basa-Guidote is just to liquidate and
wind up the affairs of the corporation and distribute the shares. That is all that it could do at that point
in time. If I may just continue?
The Presiding Officer. Counsel.
Representative Umali. Yes, Your Honor.
The Presiding Officer. When was the revocation issued by the SEC?
Representative Umali. April 22, 2003, Your Honor.
The Presiding Officer. 2003?
Representative Umali. Yes, Your Honor. In addition—
Mr. Cuevas. Your Honor, please.
Representative Umali. I am not through, Your Honor, if I may just continue.
The Presiding Officer. Let the Prosecution.
Representative Umali. If I may just continue, Your Honor, also in the SALN of Renato Corona,
on the dorsals portion of Exhibit “C” is an entry where Cristina R. Corona with its firm name Basa-Guidote Enterprises, Inc., wife’s family corporation declared nature of business interests/financial
connection which is real estate and this does not appear, Your Honor, in the SEC records nor in any
other records submitted in any government agency, Your Honor. That is why, this again has relevance
to the truthfulness and accuracy of the SALN which is also reflected in the SALN for 2004 marked
Because my knowledge of Corporation Law suggests to me that only the stockholders can dissolve
a corporation by shortening its duration under its Articles of Incorporation and/or by quo warranto
proceeding by the State. If it violates any law, what will be the status of a corporation in dissolution?
And after the dissolution, what will be the status of the assets of the corporation? My recollection is
that, in that event, it becomes a matter of co-ownership by the stockholders.
So, anyway, proceed.
Mr. Cuevas. If Your Honor please, may the Defense be heard in connection with this? Since
what was presented on record or put into record is a mere manifestation and it has no probative or
evidentiary value, may we be heard in connection with this issue, Your Honor?
The Presiding Officer. Correct, correct.
Mr. Cuevas. All right. Thank you, Your Honor.
The Presiding Officer. Proceed.
Mr. Cuevas. May I—in SEC Opinion dated May 4, 1995, it is stated: “The SEC has opinedthat even under Section 22 of the Corporation Code, there can be no automatic dissolution of a
corporation after its incorporation has been approved by the SEC. It shall continue to exist as a
juridical entity notwithstanding its non-operational status until its Certificate of Registration is formally
revoked by the SEC after due notice and hearing.”
We have been fed—this Honorable Court had been fed with erroneous presumption, Your Honor,
that the moment there is a Certificate of Revocation, the corporation cannot do any business anymore.
That is not true even in actuality. Supposing that the date of revocation ends up today and there is
a pending case where the corporation is involved, maybe nonpayment of wages or recovery of
properties, and it is still pending, will that mean to say that the corporation may no longer participate?
The Presiding Officer. Anyway, that is a question of law that must be resolved.
Mr. Cuevas. I am just reading from the Opinion, Your Honor.
The Presiding Officer. Yes. Go ahead.
Representative Umali. If Your Honor please, may I also be heard on...
The Presiding Officer. Proceed, proceed.
Representative Umali. ...this point?
Mr. Cuevas. I am just reading from the—
The Presiding Officer. Let the Defense Counsel finish first.
Representative Umali. Yes, Your Honor.
Mr. Cuevas. That is the Opinion of the SEC, Your Honor. I am just reading it for the records
because it is very enlightening on the issue involved in this particular—at this particular instance.
Senator Drilon. Now, you also mentioned that after the Guidote-Basa or Basa-Guidote
Enterprises received this Notice of Revocation, there is nothing on the record which would show that
they asked for a revival of this corporation.
Mr. Cataran. Yes, Your Honor.
Senator Drilon. So, insofar as the records are concerned, this corporation has ceased to operatebecause three years have lapsed since the time of revocation.
Mr. Cataran. Yes, Your Honor.
Senator Drilon. And that is a statement based on the SEC Reorganization Act which authorizes
you, the SEC, to revoke the Certificate of Registration for failure to file the required reports as
required by the SEC.
Mr. Cataran. Yes, Your Honor.
Senator Drilon. That is all, Your Honor.
The Presiding Officer. Thank you.
The gentleman from Pampanga.
Senator Pangilian. Yes, Mr. President. Thank you very much.
Just a clarification to the Prosecution panel. Yesterday, you were trying to prove or you were
proving, with respect to the Statement of Assets and Liabilities, certain properties that were excluded.
That is your argument, hindi ba ...
Representative Umali. Yes, Your Honor.
Senator Pangilian. ... in the SALN? Therefore, for lack of a better term, mayroon mga
unexplained exclusions. In this case, there is an inclusion. Meaning, mayroong loan, may idineklara.
Yung kahapon, may mga hindi idineklara. Ngayon, sinasabi niyo, may mga idineklara subalit
yung mga idineklara, eh, questionable.
Representative Umali. Questionable, Your Honor.
Senator Pangilian. And therefore, it goes again to the issue of the truthfulness of your SALN.
Representative Umali. That is correct, Your Honor.
Senator Pangilian. So, kung kahapon unexplained exclusions, for lack of a better term, ngayon,
ang nais niyong patunayan ay unexplained inclusions.
Representative Umali. Inclusions, yes, Your Honor.
Senator Pangilian. Yun lang po. Salamat po.
The Presiding Officer. Thank you.
The gentleman from Aurora has two (2) minutes.
Senator Angara. Maraming salamat po, Pangulo.
Palagay ko this is all much ado over nothing, eh, sapagkat number one ho, wala namang
disagreement ang Prosecution and Defense on the authenticity of this document so, it is up to us to
draw the proper legal conclusion. So we do not have to debate the conclusion because it is up to
us. Ngayon, angconfusion rito arose from the fact that our Witness made “cancellation” of the
license synonymous with “dissolution” of the corporation.
Mr. President, you and I took Corporation Law and that is our specialty. It is the distinction
between revocation of license to operate. Revocation is entirely separate and distinct from dissolution
of the corporation. Revocation of the license to operate means cancellation of the registration butthat does not automatically result in the extinction of the corporation. Hindi ba? As Senator Drilon
explained, there is still a three-year winding up period. Why? For a very practical reason. If sinabi
mo, “ni-revoke” ko yung lisensiya mo,” patay ka na. Eh, ano ang nangyari sa suweldo ng mga
empleyado? Ano ang nangyari sa mga pautang mo sa suppliers, sa creditors? So, revocation of
registration simply means you cannot do business as usual. Your avowed purpose, corporate purpose,
you can not pursue that anymore. But can you pay out money? Well, as Alan said, you can still pay
out money because that may be part of the distribution of investment or they may have already
satisfied all creditors and they want to distribute their initial investment.
So I think that whole confusion arose from the confusion of “cancellation” and “dissolution,” Mr.
President. That is why it is important that our witness provide us a legal memo because this is, tome,—well, I have not been in practice for almost 30 years, Mr. President. But I was taught a basic
principle in Corporate Law that cancellation of the registration is entirely distinct and separate from
dissolution of a corporation. Dissolution is extinguishing the life and existence of that corporation.
That means talagang wala na. Wala ka nang magagawa.
Salamat po.
The Presiding Officer. Counsel for the Prosecution, proceed.
The gentleman from Makati and Bicol, Senator Arroyo. My senior—equal senior Senator, please.
Senator Arroyo. Thank you, Mr. President.
This is not a question. You know, I once sat at the table of the Prosecutors. If you are not sure
of your evidence, please do not present it. That is all. Like this portion, this evidence, you submitted
Exhibit quintuple whatever—”QQQQQ”, huh, “DDDDD”. It says there that you could—they could still
petition the–what is this? Yes—the decision of the revocation up to sometime in 2010. Now, why did
you mark it? In other words, they could still—So, I do not really want to ask you anything because
you have control on that.
Mr. President, could you—in the legal memorandum, could you please include—for the memorandum
that will be filed by the witness- that if there is a revocation, what happens to the creditors? What
happens to the employees? What happens to the suppliers? I mean—
The Presiding Officer. What happens to the titles of—in the name of the corporation, the funds,
shares of stock and whatever property. What happened to the books of accounts?
Senator Arroyo. And whether the rules of co-ownership under the Civil Code will now be applied
assuming that it is effectively revoked because that is obviously a family corporation, as Alan said. So
I mean… that is about all that I would like to point out.
Thank you very much, Mr. President.
The Presiding Officer. The lady Senator from Taguig.
Senator Cayetano (P). Mr. President, just a few follow-up questions.
May we ask the witness if he knows or if he does not know, then can he include in the
memorandum—the legal memorandum, the basis for the setting of the deadline to file petition? Is that
based on the Corporation Code? Because as Sen. Ping Lacson pointed out, if it has already been
revoked, then what is this extra life that is being given?
Mr. Cataran. It is not based on the Corporation Code.
Senator Cayetano (P). Okay. So it is just a decision that the SEC made to give life again to a
dead corporation?
Mr. Cataran. Yes, Your Honor.
Senator Cayetano (P). Okay. And then what I would also like to be included in your legal
memorandum, is it not possible that in fact a corporation that has been—whose certification has been
revoked, they continue to conduct business even if they are not allowed. In other words, are there
not—because I was a practicing lawyer at some point and I had so many clients who did not file their
GIS, who received memorandum-circulars from the SEC telling them that they will be revoked. But
meanwhile, all this time they are doing business. So in other words po, hindi man sila kilalanin ng
SEC na buhay sila, eh buhay sila. Sila ho ay may mga ginagawa.
That brings me to my question to the Prosecution: Is it your intention to prove that money, in fact,
did not—exchange of money did not take place? Because it appears that there are many of us who
feel that this whole discussion is irrelevant because even if the legal existence—even if the corporation
has no legal existence, it appears that circulars are being sent to them and there is a life. There is a
window for them to do something. So do you intend to prove? Because then we can continue. But if
you will just prove that this corporation does not exist, then to many of us, it seems like a futile exercise.
Representative Umali. Yes, Your Honors. What we are trying to prove is that precisely this
alleged cash advance is fictitious for so many reasons. And this is the reason why we marked in
evidence the names of the stockholders were read into the records as of the time of the last filing of the GIS in July 16 of 1990, where the name Cristina Corona or even Renato Corona does not appear.
So how can there be advances to somebody who is not even a shareholder in the corporation?
The Presiding Officer. Well, anyway—
Representative Umali. These are things that we are trying to prove, Your Honor, and we are
just trying to lay the predicate, Your Honor, because this is just one of the witnesses that will prove
many other aspects of the fictitious character of this alleged cash advance, Your Honor.
The Presiding Officer. All right. But before I forget, in your memorandum, Mr. Witness, please
indicate whether a corporation whose registration was dissolved can sue or be sued. Because that
is a very important element whether the corporation is really effective, is dissolved, because to sue or
to be sued means an assertion of rights.
Okay. Take note of that.
Mr. Cataran. Yes, Your Honor.
The Presiding Officer. All right. Proceed, Counsel.
Representative Umali. Well, I think we are through with the witness, Your Honor. We have
already established all of these records that are in place in the Securities and Exchange Commission
and we will introduce other evidence on this point at the proper time, Your Honor.
The Presiding Officer. What is the pleasure of the Defense Counsel?
Mr. Cuevas. We will—
Senator Sotto. Mr. President.
The Presiding Officer. The Floor Leader.
Senator Sotto. Yes. Mr. President, may we move to suspend for 15 minutes and may we call
on the other Members of the Court to join the Senate President in the Senators’ Lounge for a short
caucus to take up a small detail in the proceedings of the Impeachment Court before the cross-
examination of the Defense.
Mr. President, I so move.
The Presiding Officer. Trial suspended.
The trial was suspended at 3:34 p.m.
At 4:08 p.m., the trial was resumed.
The Presiding Officer. Hearing resumed.
The Floor Leader.
Senator Sotto. Mr. President, we are ready for the—we are ready for the cross-examination,
Mr. President.
The Presiding Officer. The Defense Counsel may cross-examine the witness.
Mr. Cuevas. Thank you, Your Honor.
With the kind permission of this Honorable Court, Your Honor.
The Presiding Officer. Proceed.
Mr. Cuevas. Now, I would like to be informed, Atty. Cataran—Good afternoon, Attorney.
I would like to be informed whether from the point of view of the SEC there is any difference between
cancellation, meaning revocation of license, and dissolution of the corporation, as my preliminary
question.
Mr. Cataran. We usually use the term “cancellation” with respect to cancellation of license. Let
us say, we issue license to a foreign corporation or to a broker. So we use the term “cancellation.”But with respect to “dissolution,” it refers to corporation. It can be voluntary or involuntary. That
is the difference.
Mr. Cuevas. Yes.
From the standpoint of effect, is there any difference based on the rules and regulation of the SEC?
Mr. Cataran. What do you mean? Come again?
Mr. Cuevas. From the standpoint of effect, is there any difference between a revocation of license
and dissolution? Because cancellation of license is equivalent to revocation, am I right?
Mr. Cuevas. I thought you are objecting because there is no question, I would like to know what
are you objecting.
Representative Umali. The objection is you are awaiting the answer for something of which you
have not raised the question.
Mr. Cuevas. I have yet to see that kind of…
The Presiding Officer. Is the question—
Mr. Cuevas. Hindi pa tapos ako, eh.
The Presiding Officer. Is the question misleading?
Representative Umali. No, Your Honor, vague because he made a statement and then he was
awaiting the—
The Presiding Officer. Well, you can only object in a cross-examination…
Representative Umali. Vague, Your Honor. Vague.
The Presiding Officer. …largely on a misleading question if the Counsel is trying to mislead the
witness of having said something that he did not say. So—
Mr. Cuevas. My question in here, if Your Honor please, is what is the effect of the cancellation
or revocation of the license of this particular corporation, Basa-Guidote Enterprises, on Paragraph B
of Secondary Purposes of the Articles of Impeachment. And I read it in order to inform the witness.
The Presiding Officer. The objection is overruled.
Proceed.
I just want to posit this question to the witness Mr. Witness, if you revoke the Articles of Incorporation of the registration of a corporation, may it increase its capital through a stockholders
action?
Mr. Cataran. No more, Your Honor.
The Presiding Officer. May it be sued by creditors?
Mr. Cataran. If for the purpose of—
The Presiding Officer. May it be sued by creditors? Answer the question.
Mr. Cataran. Yes, Your Honor.
The Presiding Officer. Oh, if it is dead, how it can be sued as a corporation?
Mr. Cataran. Under Section 122, the dissolved corporation has three (3) years within which to
prosecute or defend cases.
The Presiding Officer. Can it pay its employees after you have revoked its registration?
Mr. Cataran. If it is part of liquidation, yes, Your Honor.
The Presiding Officer. If it is not a part of liquidation, it is not liquidated yet?
Mr. Cuevas. No, I am not asking you whether the court will allow. I am asking you based on
your procedure in the SEC. Can it continue appearing in the case whether as plaintiff or defendant?
The answer is no?
Mr. Cataran. Yes, because it is not related to the business. So, what is being stopped is the
operation of the business but litigation is not included.
Mr. Cuevas. Ah, I see. So, if there are activities going on after you issued or before you issued
the order of revocation, it can continue with that.
Mr. Cataran. As long as it is not part of the business of the corporation.
Mr. Cuevas. Eh how can litigation be a part of the business of the corporation? Do you have
any It is not a law office.
Mr. Cataran. That why I said, the litigation can proceed, but the business, it cannot.
Mr. Cuevas. No, but I am not asking you about the business. I gave you a very clear and specific
example. Here is a corporation, it was served with the order of revocation. You said it is not finalbut it is effective. My understanding of it, it can be implemented, right?
Mr. Cataran. Yes.
Mr. Cuevas. All right. But that corporation is engaged in a litigation before a court of justice
in the Republic of the Philippines whether as plaintiff or defendant, so it must cease to participate in
that litigation because your order is effective. Is that right?
Mr. Cataran. I do not think that is the meaning of—what we mean by this effectivity is that as
far as the revocation is concerned, it can no longer do its business for profit. But litigation, I think
it can proceed.
Mr. Cuevas. So, you gave me the impression that there are other matters upon wich the
corporation can continue acting provided it is not in connection with this business.
Mr. Cataran. Yes.
Mr. Cuevas. But in this case, specifically, let us say, loan, this sum of money, some P5 million
which is part of its business, you mean to say, it is stopped from proceeding in that case?
Mr. Cataran. If it is part of its business.
Mr. Cuevas. So, it will have to withdraw that case or have that case dismissed or what?
Mr. Cataran. Well, I do not know with the case but what I am saying is the business.
Mr. Cuevas. I am asking you because you happen to be—you happen to impress us that you
have the authority to act on this. It loaned because it is engaged in lending money as secondary
purpose. Some P5 million had been—or, let us say, P100 million had been extended by loan to another
individual. Accidentally, there is an order of revocation but there is already a pending litigation. The
corporation must stop in that case whether as defendant or plaintiff?
Mr. Cataran. I do not think it will be allowed by the court. So—
Mr. Cuevas. I am not asking you whether it will be allowed by the court. I can take care of
Mr. Cuevas. So you never came to know about these transactions I am referring to?
Mr. Cataran. Yes.
Mr. Cuevas. Now, after you were subpoenaed and you came to know already that you will be
asked to testify in connection with this corporation, you did not bother to go deeper and determine,meron nga bang karapatan itong corporation na ito na magpahiram ng 10 million—11 million,
because apparently that is the gist of your being presented here.
Mr. Cataran. No. I did not—
Mr. Cuevas. Hindi po.
Mr. Cataran. Yes.
Mr. Cuevas. You are totally bankrupt of any knowledge about this transaction?
Mr. Cataran. Well, I read the newspaper but I did not see anything in the records.Mr. Cuevas. No, no. That is not my question again, otherwise I will be compelled to ask the
Honorable Court to direct you to—
My question, you are totally bankrupt of any information relative to the expropriation of the
property of this corporation for which it was paid P34 million something?
Representative Umali. Already asked and answered.
Mr. Cuevas. What is the answer?
Representative Umali. The answer is that he read in the papers, Your Honor.
Mr. Cuevas. I touched that a while ago. We submit, Your Honor.
The Presiding Officer. The tendency of the question is to test the competency of this witness
to testify on the matters involved in this case.
Mr. Cuevas. Because in cross-examination, Your Honor, a witness may be—
The Presiding Officer. Witness may answer.
Mr. Cuevas. Thank you, Your Honor.
Mr. Cataran. No.
Mr. Cuevas. That is all with the witness, Your Honor.
The Presiding Officer. Redirect.
Representative Umali. Just a few redirect, Your Honor.
Mr. Cuevas. May we request, Your Honor, that the check we confronted the witness be marked
as Exhibit “44”.
Thank you.
The Presiding Officer. What is the request of the Counsel for the Defense?
Representative Umali. Secondary franchise. That is what—
The Presiding Officer. There is no secondary franchise. Primary purpose, secondary purpose.
Representative Umali. Precisely, Your Honor. This is why I want to clarify, Your Honor.
Because this is the question asked by the Defense Counsel. The primary franchise and the secondaryfranchise. So I would like to—
The Presiding Officer. Witness may answer. All right.
Mr. Cataran. Secondary franchise refers to the license to Operate. Let us say, it is a business,
we issue a separate certificate other than Certificate of Registration. That is the secondary franchise.
Representative Umali. The secondary franchise is akin to the primary and secondary purposes.
Is that what you mean, Mr. Witness?
The Presiding Officer. What is the relationship of the franchise that you are talking about with
the purposes of the corporation?
Mr. Cataran. The primary franchise refers to the life of the corporation. But as to secondary
franchise, refers to the right of the corporation to operate. Let us say, we can grant this primary
franchise, meaning, we can incorporate so that a corporation, let us say a school, can have a juridical
personality. Right after registration, the SEC, since there is already a juridical person, before it can
operate as a school, it has to secure a secondary franchise from DepEd. That Is the meaning.
The Presiding Officer. Under what portion of the Corporation Law is that authorized practice?
Is it not that the incorporation gives the corporation the personality? It is a recognition and
authorization for the corporation to exist as a person so that it can contract, it can own property, it can
sue and be sued, it can do anything like an ordinary human being in commercial business. Is it not?
Mr. Cataran. Yes, Your Honor. But with respect to the business, you need a secondary
franchise. For example, if you put up— let us say you register an insurance company with the SEC,
we can approve it. We can grant the Certificate of Registration, meaning it now has the first primary
franchise but it cannot just engage in insurance without securing anything or license or authority from
the Insurance Commission. Just like a bank. You register with the SEC as a bank, you can already
open—no, I think, you have to secure authority from BSP. That is the difference between a primary
and secondary franchise.
The Presiding Officer. But ordinarily, a corporation like the one we are discussing is an ordinary
corporation. Once the Articles of Incorporation are approved and a Certificate of Registration isissued, it can operate its primary purpose, is it not?
Mr. Cataran. Yes, Your Honor, because—
The Presiding Officer. Then, if it wants to operate any of its secondary purposes, then it must
ask permission from the Securities and Exchange Commission. Is it not?
Mr. Cataran. From the SEC, no. But I do not know with respect to other government agency,
they might—
The Presiding Officer. We are talking of this corporation. We are not talking of general—of
other corporations. This corporation involved in this proceeding.
Senator Sotto. Mr. President, may we recognize Senator Francis Escudero.
The Presiding Officer. The gentleman from Sorsogon.
Senator Escudero. Thank you, Mr. President.
Ilang katanungan lamang po sa testigo.
Ginoong Testigo, kung ako po at apat o lima kong kaibigan nagdesisyon na mag-negosyo,
bumili ng lupa o magpautang, kailangan ko ho bang magpa-rehistro sa inyo?
Mr. Cataran. Kung gusto niyong magkaroon ng juridical personality—
Senator Escudero. Ibig sabihin po ng juridical personality hindi po ba kapag dinemanda iyong
kumpanya, hindi puwedeng habulin hanggang salawal o brief ko, puwede lamang habulin iyong
in-invest ko, shareholding ko sa kumpanya?
Mr. Cataran. Opo.
Senator Escudero. Tinanong ko po iyon dahil kanina niyo pa po sinasabing hindi na puwede
mag-negosyo o mag-engage sa primary purpose iyong kumpanya.
Liliwanagin ko po. As a corporation, it can no longer do that but as an association or co-
ownership, it can do that?
Mr. Cataran. Of course.
Senator Escudero. Hindi po ba mayroon ding mga SEC Resolution—noon pa ho ‘to, hindi
ko alam kung napalitan na ninyo, noong kami’y nasa eskuwelahan pa—na kapagka ang isangkorporasyon ay hindi na rehistrado sa SEC , ito ay nagiging isang asosasyon na lamang governed
by the rules of co-ownership sa ilalim ng Civil Code?
Mr. Cataran. Opo. Kasi—maliban na lang kung mag-register uli sila as an association. Pero
kung hindi mag-register, ordinary association lang pero walang juridical personality.
Senator Escudero. Ang pinupunto ko nga po iyong binabanggit niyo kaninang bawal silang
mag-negosyo, bawal nila gawin iyong primary purpose, bawal gawin iyong secondary purpose in
connection with being a corporation. But they can still do it as an association governed by the rules
of co-ownership after your order of cancellation. But this time around, wala na ho iyong protection
ng batas na hindi sila puwedeng idemanda in their individual capacity. Ngayon ho puwede na
silang habulin hanggang personal nilang ari-arian?
Mr. Cataran. Opo.
Senator Escudero. Ngayon, kaugnay po nung secondary franchise na nabanggit po ninyo,
iyong secondary franchise hindi po ba ini-issue lamang ‘yan sa mga specific na negosyo na nire-
require ng batas na mabigat ang regulasyon at superbisyon ng SEC?
Mr. Cataran. Opo.
Senator Escudero. Hindi po ‘yan sa lahat ng korporasyon at mga negosyong ordinaryo
Mr. Ginez. We manifest, Your Honor, that the witness handed to this representation a Buyer
Information Sheet, Your Honor, which is on an extended long bond paper, Your Honor.
The Presiding Officer. What is the date of that document?
Mr. Ginez. It seems that there is no date, Your Honor, but I would like to read for the record:The project name is “The Columns.” The principal buyer is “Corona Renato Coronado” and
the spouse, Your Honor, is “Corona, Cristina Roco.” The employment information, Your Honor,
of the principal buyer, “Associate Justice, Supreme Court of the Philippines, Padre Faura, Manila,”
and there appear signatures above or beside the name “Renato C. Corona” and above the printed
name “Cristina R. Corona.” The photocopy of this document has been pre-marked, Your Honor,
as our Exhibit “MMM”.
May I request the Defense, Your Honor, to compare that the photocopy is a faithful reproduction
of the original?
Mr. Cuevas. No objection, Your Honor, to the proposed substitution. We admit that thexeroxed copies are faithful reproduction of the respective originals, Your Honor.
Mr. Ginez. Thank you, Justice.
The Presiding Officer. Proceed, Counsel.
Mr. Ginez. We have no other direct examination questions, Your Honor.
The Presiding Officer. You want to discharge–Is there any cross-examination?
Mr. Cuevas. May we request, Your Honor, that we be allowed to conduct the cross-examination
tomorrow?The Presiding Officer. Motion granted.
Next witness, Mr. Prosecution Panel.
The witness is discharged.
Mr. Cuevas. If Your Honor please.
The Presiding Officer. What is the pleasure of the Defense Counsel?
Mr. Cuevas. May we request that Atty. Esguerra be recognized for the Defense, Your Honor.
The Presiding Officer. So cross?
Mr. Cuevas. No, Your Honor. Only a short manifestation.
The Presiding Officer. Atty. Esguerra…
Atty. Esguerra. One sentence, Your Honor.
The Presiding Officer. …is recognized.
Mr. Esguerra. There is an accompanying note and we would request the witness that this
Mr. Esguerra. Covering—It is a cover note in connection with the 11 June 2008 letter of
Community Innovations to Mrs. Cristina Corona. I would request, Your Honor, that this be preserved,this particular handwritten note of Mrs. Tina Corona. And in the meantime as provisional marking—
The Presiding Officer. Are you going to preserve that as an exhibit?
Mr. Esguerra. Yes, Your Honor, just provisional, for purposes of the cross-examination
tomorrow.
The Presiding Officer. Yes.
Mr. Esguerra. Because we do not want this to be tampered with, Your Honor.
May we request that this exhibit be marked as our—this document, a handwritten note, “7 June
2008 with the letterhead ‘Community Innovations,’ signed by one “Mrs. Tina Corona” be marked as
our, provisionally, Exhibit “46”, Your Honor.
The Presiding Officer. The Presiding Officer directs that that note be initialed by both the
Prosecution Counsel and the Defense Counsel so that there will be no tampering.
Mr. Ginez. Your Honor, I will go further than that, Your Honor. I would request the witness
if she could submit that original, Your Honor, to the Secretariat, Your Honor. If the witness will be
allowed, Your Honor.
The Presiding Officer. Better still, have it initialed by both sides.
Mr. Ginez. Thank you, Your Honor.
Representative Tupas. Okay. Can I discharge now the witness, Mr. President, Your Honor?
Senator Sotto. If there is no—
Mr. Esguerra. We will conduct further cross-examinations tomorrow, Your Honor.
The Presiding Officer. Is there any further question on the witness?
Representative Tupas. No, Your Honor.
The Presiding Officer. So there being none, the witness is discharged.
Representative Tupas. May we call now on our next witness, Your Honor.
The Presiding Officer. Please proceed.
Representative Tupas. Thank you.
Our third witness for the day is Mr. Greg Gregorio.
The Presiding Officer. Before we tackle the second witness, may I propose to both sides that
in the case of this documentary evidence, pre-mark them together so that we will not waste time in the
process of the proceeding in marking and stipulating about these documents. If that is possible and if
Mr. Ginez. Yes, Your Honor. In fact it was our request to the Defense Counsels, Your Honor,
that during the pre-marking we already made a comparison that the photocopies are faithful
reproduction. But all along and time and again, Your Honor, they said that they will make their
stipulation in the floor, Your Honor. So that is why we are constrained to make the comparison when
we are presenting the witness. But if the Court will direct the Defense Counsels now to make this
comparison and manifestation during the marking, we will be able---we welcome that, Your Honor.
The Presiding Officer. What is the pleasure of the Defense?
Mr. Esguerra. That is not completely true, Your Honor. Insofar as the birth certificates of the
children of the Coronas, we stipulated on that to the extent that there is actually no basis for us not
to stipulate. We agreed with them, Your Honor. So that is not entirely true. I am so sorry to disagree
with the good Counsel from the Prosecution.
Your Honor, may I clarify something insofar as the witness who just testified?
The Presiding Officer. Please proceed.
Mr. Esguerra. Your Honor, we just provisionally marked a memorandum, handwritten one,which we caused to be marked as our Exhibit “46”. But we are not done with the cross-examination
of that witness, Your Honor. So that witness must come back tomorrow for our cross-examination,
Your Honor.
The Presiding Officer. So the Prosecution is hereby ordered to produce the witness that was
earlier discharged by this Court to come back tomorrow for cross-examination.
Mr. Ginez. Yes, Your Honor.
The Presiding Officer. Okay.
Mr. Esguerra. Your Honor, I am so sorry. My understanding is we temporarily dischargedthe witness…
The Presiding Officer. Yes.
Mr. Esguerra. … for further cross-examination tomorrow hoping that there will be no other
witness. If there is going to be another witness, we might as well call this witness and we finish the
cross-examination.
Representative Tupas. Okay with us.
That is fine with us, Your Honor.
Mr. Esguerra. Precisely. So, if she is still here, may we call her back to the stand, Your Honor?
The Presiding Officer. Who is being called to the stand?
Senator Sotto. Mr. President, may we call back the previous witness?
The Presiding Officer. All right. The previous witness is being recalled to the witness stand.
For what purpose?
Senator Sotto. For the cross-examination, Mr. President, of the Defense.
Mr. Esguerra. So that value you just read is smaller?
Ms. Josef. Yes, Sir.
Mr. Esguerra. [Off-mike] Can I borrow the document, please?
Earlier, you identified a letter and I heard the word or phrase “deemed accepted.” What is that
letter you are referring to, an exhibit that was marked by the Prosecution?
Ms. Josef. It was a letter, Sir, that we sent on June 11, 2008 to our buyer, Ms. Cristina Corona.
Mr. Esguerra. And there is a covering note which I saw and caused to be provisionally marked
as our Exhibit “45”-Defense. Can you please state for the record what that—”46,” I am sorry—what
that note is all about?
Ms. Josef. It is a note, Sir, if I may read, dated June 7, 2008. It says:
Dear Carmina,
This is Mrs. Corona, I have been following up with your office, with Sharlyn Pangilinanand Edge Fajardo about the originals of our Tax Declaration and our RPT receipt for 2008,
pro-rated, so I can settle my payables and accept my unit, Columns Tower I, Unit 31B.
Please give me an update, ASAP.
Thank you.
Mrs. Tina Corona
Mr. Esguerra. We will request that the marking, Your Honor, be retained as our permanent
marking at this particular exhibit.
The Presiding Officer. Mark it.
Mr. Esguerra. Ms. Josef, who is Carmina being addressed here by Mrs. Tina Corona?
Ms. Josef. Sir, she is our Client Relations Manager at that time.
Mr. Esguerra. Is she still connected with Community Innovations?
Ms. Josef. Yes, Sir, she is still connected with Community Innovations.
Mr. Esguerra. When the reference is made to “pro-rated for 2008,” would you know what this
means?
Ms. Josef. Sir, the RPT is usually pro-rated based on the time that the unit is turned over to ourbuyer. For example, if it is turned over at the middle of the year, the pro-rated amount would be half
the amount that was paid for the entire year.
Mr. Esguerra. And that would mean that even if according to you the documents, the Contract
to Sell and the Deed of Absolute Sale were executed in 2004, the acceptance of this unit, on the basis
of the documents you have marked as Exhibit “PPP-4”, and this particular note took place sometime
in 2008.
Ms. Josef. Yes, Sir, it is 2008, Sir.
Mr. Esguerra. Were there issues about the unit, if you know, Ms. Josef?
Ms. Josef. Based on our records, we have a series of letters, actually, leading to this letter, and
there was previous communication with the buyer, Sir.
Mr. Esguerra. So there were issues on the basis of the letters you are holding now concerning
this unit?
Ms. Josef. Yes, Sir, there were some communications.
Mr. Esguerra. You have the letters with you?
Ms. Josef. Yes, Sir.
Mr. Esguerra. May we see those letters please?
The Presiding Officer. While Counsel is examining the letters, let us recess the trial for
one minute.
The Trial was suspended at 5:31 p.m.
At 5:35 p.m., the trial was resumed.
The Presiding Officer. Trial resumed.
Proceed, Counsel.
Mr. Esguerra. With the permission of the Honorable Court once more.
The Presiding Officer. Proceed.
Mr. Esguerra. Ms. Josef, you have given to me again another letter dated 4 June 2008 addressed
to one Cristina Corona, signed purportedly by one Carmina A. Cruz. You have also handed to me
two (2)—what appears to me to be two (2) copies of one (1) letter dated 26 February 2008 addressed
to one Cristina Corona, consisting of two (2) pages, again, appearing to me to have been signed byone Carmina A. Cruz on the second page. Actually, there are two (2) copies also of that same letter
I referred to of—dated 4 June 2008.
Now I note, Ms. Josef, that in this letter of 4 June 2008, there is mention in the second paragraph—
I will hand this letter to you, “We shall already deem and consider the unit as having been delivered
and accepted as of June 2008.” Can you go over this and confirm if I read that particular entry in
that letter correctly?
Ms. Josef. Yes, Sir. It says here, “However, acceptance of the said unit should be on or before
June 7, 2008. Should the unit still not be accepted by then, we shall already deem and consider the
unit as having been delivered and accepted as of June 7, 2008.”
Mr. Esguerra. Thank you.
This other letter of 26 February 2008 also mentions—and if I may read and please confirm if I am
reading it right, “The unit has been deemed delivered and accepted as of February 28, 2008.” I am
showing this letter again to you which you have produced. And read the first paragraph thereof, insofar
as that particular portion that I have read for the record.
Ms. Josef. Yes, Sir. “As we have written in our notice last October 17, 2006, please—Attached
copy—regarding the final reinspection of your unit, we would like to inform you that the unit has been
deemed delivered and accepted as of February 28, 2008. This is pursuant to Section 7 of the Contract
to Sell, which reads—” Shall I read the rest, Sir?
Mr. Esguerra. On the basis of that letter, there was a pre-inspection made, am I right?
Ms. Josef. Yes, there is a mention of a final reinspection of the unit, Sir.
Mr. Esguerra. Final reinspection.
Ms. Josef. Yes, Sir.
Mr. Esguerra. May we have this second—I mean, only one of the two letters, that last one that
from where you read, that particular portion be marked as our Exhibit “48” consisting of two (2) pages,
if Your Honors please.
Can you state for the record then just to clarify this matter so I can leave this point, Ms. Josef, when
was the actual acceptance by Mrs. Corona of the unit in question?
Ms. Josef. We have no record, Sir, of Mrs. Corona signing an acceptance form, Sir.
Mr. Esguerra. What will be the significance if any of that statement of yours that you have no
record of Mrs. Corona accepting the unit?
Ms. Josef. Based on our records, we have only on record that it has been deemed accepted
based on the provisions of our Contract to Sell.
Mr. Esguerra. So, you want us to understand, and this Court to understand, that there was no
actual acceptance, except that “deemed acceptance” that you were referring to.
Ms. Josef. Based on our record, Sir, yes.
Mr. Esguerra. There is a—can you confirm—I have here a letter of 6 April 2011 addressed to
the board of directors, The Columns Ayala Avenue Condominium Corporation, it is handwritten. I just
have a machined copy, the original must be with you, if you have it, please confirm. May I show this
to you and ask you whether or not you have seen this letter before?
The letter is being shown to the witness.
Ms. Josef. No, Sir, I have not seen this before.
Mr. Esguerra. Would you know, if after the “deemed acceptance” of the unit by Mrs. Corona,
Mrs. Corona or a representative of hers, for that matter, paid the association dues?
Ms. Josef. Sir, the dues are paid to the condominium corporation which is not part of the
developer’s responsibility already. So we have no records of the payments of Ms. Corona to the
condominium corporation.
Mr. Esguerra. Ordinarily, Ms. Josef, is it not that a developer, insofar as the unsold units areconcerned, actually subsidize the dues for these unsold units?
Ms. Josef. For unsold units, Sir, since the owner will be—if it is still in the name of Community
Innovations, then Community Innovations pays its condominium corporation dues like any other
member of the condominium corporation.
Mr. Esguerra. Would that mean, but correct me if I am wrong, would that mean that the
Community Innovations Inc. will be a member of The Columns Ayala Avenue Condominium
Corporation, the association?
Ms. Josef. Sir, if there had been units at that time, yes, Sir.
Mr. Esguerra. And who would be in the best position—
The Presiding Officer. Just a minute. “If there were units at that time,” what do you mean by
that? Units unsold and unaccepted?
Ms. Josef. Once the unit has been transferred, Sir, to the buyer, then the buyer is now the owner
of the unit.The Presiding Officer. Those units not yet sold and not yet accepted actually by the buyer are
still subject to the responsibility of the condominium developer with the association.
Ms. Josef. Sir, our reckoning point is the transfer of the ownership of the condominium. So once
the condominium is already transferred in the name of the buyer, then the buyer becomes an automatic
member of the condominium corporation.
The Presiding Officer. Counsel.
Mr. Esguerra. Thank you, Your Honor.
Ms. Josef, was there delivery based on the record you brought here to this Court, is there anyrecord of the delivery to the buyer of the unit, in this case, Ms. Corona, of a copy of the Tax
Declaration of the unit involved?
Ms. Josef. We have a copy of the Tax Declaration in the name of Ms. Corona, Sir.
Mr. Esguerra. When was this copy of the Tax Declaration delivered based on your records?
Witness, for the record, is examining two letters.
Ms. Josef. Sir, there is a date here of 6-29-2007, Sir.
Mr. Esguerra. 2000?
Ms. Josef. 2007, Sir.
Mr. Esguerra. Okay. Thank you.
Mr. Ginez. May we request, Your Honor, that the said Tax Declaration produced by the witness
be marked, Your Honor, as “For Prosecution’s Exhibit PPP-5".
The Presiding Officer. Mark it accordingly.
Mr. Esguerra. Is there a covering letter, Ms. Josef? Is there a covering letter of that Tax
Declaration?
Ms. Josef. We have a copy of the Tax Declaration, Sir.
Mr. Esguerra. Was there a covering letter delivering that—
Ms. Josef. Ah, during the delivery, Sir?
Mr. Esguerra. No. A covering letter of that Tax Declaration addressed to Ms. Corona?
The Presiding Officer. Kindly answer the question whether there is or there is none.
Ms. Josef. We have a covering letter, Sir. It is dated June 11, 2008 where we said that—where
we had enclosed a copy of the Tax Declaration which is in the name of the buyer.
Senator Escudero. Thank you, Mr. President. I will be very brief.
Ms. Josef, tama po ba ako pag sinabi ko na iyong sequence ng events: negotiation para bilhin
ang isang unit o bahay, tapos Contract to Sell, tama po ba?
Ms. Josef. Opo.
Senator Escudero. Tapos Deed of Sale?
Ms. Josef. Opo.
Senator Escudero. Tapos CAR?
Ms. Josef. Yes, Sir.
Senator Escudero. Tapos CCT or TCT?
Ms. Josef. Yes, Sir.
Senator Escudero. Tapos turnover?
Ms. Josef. Yes, Sir.
Senator Escudero. Tapos acceptance, ganoon po ba iyon?
Ms. Josef. Yes, Sir.
Senator Escudero. So the final act is acceptance?
Ms. Josef. In this case, Sir, yes.
Senator Escudero. Pag tinanggap na iyong unit, tapos na, wala na kayong kailangang pag-
usapan, bahala na siya sa buhay niya?
Ms. Josef. Yes, Sir.
Senator Escudero. Mr. President, that is all for the witness actually. But may I ask with the
leave of this Presiding Officer just to put in proper place and perspective what both sides seem to be—
well, they seem to be trying to imply or prove para lang maintindihan din natin at nung mga
sumusubaybay nito.
Tama ba ang teorya ng Prosecution, Attorney? Pag in-execute iyong Deed of Sale, ang teorya
ninyo dapat nilagay na sa SALN? Is that your position?
Mr. Ginez. Our position—That is correct, Your Honor. Tama po iyon dahil ang Deed of
Absolute Sale ayon po sa ating Kodigo Sibil ay naita-transfer na po ang ownership pag mayroongpublic instrument delivering the property, and that is called “constructive”—
Senator Escudero. And that is your theory?
Mr. Ginez. Yes, Your Honor.
Senator Escudero. I presume the theory of the Defense is acceptance as you have been trying
to harp on.
Mr. Cuevas. Oh, yes, Your Honor. Definitely, yes, because it is a statement made under oath
Senator Escudero. Mr. President, I do not want to belabor that point and cause the parties to
argue really.
May I ask that they submit a memorandum on the matter so that we can get their position on this
because it seems that this is a continuing line of questioning for both the Prosecution and the Defense,
the date of the sale and the date of the acceptance. Can we get authorities to support—
Mr. Ginez. Yes, Your Honor. I am ready to cite, Your Honor, the authority.
Mr. Cuevas. Willingly, Your Honor.
The Presiding Officer. Wait a minute.
Senator Escudero. No, just to submit a memorandum, Mr. President.
The Presiding Officer. This is so ordered.
Senator Escudero. Thank you, Mr. President.
The Presiding Officer. This is a question of law and so the parties are required to submit theirrespective memorandum to convince this Court which side is the correct side.
Senator Escudero. Thank you, Mr. President. That will be all, Mr. President.
The Presiding Officer. So ordered.
Mr. Cuevas. Thank you, Your Honor.
Senator Sotto. Senator Drilon, Mr. President.
The Presiding Officer. The Gentleman from Iloilo has the floor.
Senator Drilon. Madam Witness, iyong susi ba ng apartment nasaan, iyong susi ngApartment 31-B?
Ms. Josef. Right now, I am not aware, Sir, right now.
Senator Drilon. Okay. Iyong susi ba kinuha na ng mga Corona? Hawak na ba nila
iyong susi?
Ms. Josef. As far as I know, Sir, they are—
Senator Drilon. Huh?
Ms. Josef. As far as I know, Sir, they are already in possession of the unit.
Senator Drilon. Ah, as far as you know, they are already in possession of the unit.
Ms. Josef. Yes, Sir.
Senator Drilon. Would you know when they had possession of the unit per your recollection?
Ms. Josef. It wass in 2008, Sir. I have no exact date.
Senator Drilon. They had possession in 2008 although you do not have the exact date.
and the date of the transfer of title? And, finally, to include the Master Deed of the Bellagio I Condo
Corporation which includes attached floor plans or the condo layout plan.
Thank you very much, Mr. Chairman.
The Presiding Officer. The Clerk of Court is ordered to prepare the subpoena as requested by
the distinguished Senator from Cebu for final action by the Chair.Senator Sotto. Mr. President, may we ask the Sergeant-at-Arms to make an announcement?
The Presiding Officer. Proceed.
The Sergeant-at-Arms. Please all rise.
All persons are commanded to remain in their places until the Senate President and the Senators
have left the Session Hall.
Senator Sotto. Mr. President, I move to adjourn until two o’clock in the afternoon of Thursday,
February 2, 2012.
The Presiding Officer. Is there any objection? [Silence]