Feb 1 Senate Impeachment Court Record

WEDNESDAY, FEBRUARY 1, 2012
Republic of the Philippines
Senate
Pasay City
Record of the Senate

Sitting As An Impeachment Court
Wednesday, February 1, 2012
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 katotohanan, nauuhaw sa katuwiran, nauuhaw 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 katarungan. Pagpalain Po Ninyo ang paghahanap namin ng pampatid ng pagkauhaw. Paglinawin Po Ninyo ang aming mga isipan para din maging mas malinaw sa amin kung alin ang totoo at alin ang kasinungalingan. Paglinawin Po Ninyo ang aming mga pag-unawa para maging mas malinaw sa amin kung alin ang tunay na tinig
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 paguusapan 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 namin ang 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 .............................................. Senator Joker P. Arroyo ................................................................... Senator Alan Peter Compaero S. Cayetano ................................. Senator Pia S. Cayetano ................................................................... Senator Miriam Defensor Santiago .................................................... Senator Franklin M. Drilon ................................................................ Senator Jinggoy Ejercito Estrada ....................................................... Senator Francis J.G. Escudero .......................................................... Senator Teofisto L. Guingona III ....................................................... Senator Gregorio B. Honasan II ........................................................ Senator Panfilo M. Lacson ................................................................ Senator Manuel Lito M. Lapid ....................................................... Senator Loren Legarda ...................................................................... Senator Ferdinand Bongbong R. Marcos Jr. .................................. Senator Sergio R. Osmea III ........................................................... Senator Francis N. Pangilinan ............................................................ Senator Aquilino L. Pimentel III ........................................................ Senator Ralph G. Recto .................................................................... Senator Ramon Bong Revilla Jr. ..................................................... Senator Vicente C. Sotto III ............................................................. Senator Antonio Sonny F. Trillanes IV ........................................... Senator Manny Villar ......................................................................... The Senate President ......................................................................... Present Present Present Present Absent* Present Present Present Present Present Present Present Present Present Present Present Present Present Present Present Present Present 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.
___________________ *On sick leave
The Presiding Officer. The Sergeant-at-Arms is directed to make the proclamation. The Sergeant-At-Arms. All persons are commanded to keep silent under pain of penalty while the Senate is sitting in trial on the Articles of Impeachment against Chief Justice Renato C. Corona. The Presiding Officer. The Secretary will please call the case before the Senate sitting as an Impeachment Court. The Senate Secretary. Case No. 002-2011, In the Matter of Impeachment Trial of Honorable Chief Justice Renato C. Corona. Senator Sotto. Mr. President. The Presiding Officer. Appearances. Senator Sotto. Mr. President. The Presiding Officer. The Floor Leader. Senator Sotto. Before that, I move to dispense with the reading of the January 30 and January 31, 2012 Journals of the Senate sitting as an Impeachment Court and consider the same as approved. The Presiding Officer. Any objection? [Silence] The Chair hears none. The Journal for the January 30 and January 31, 2012 Senate hearing sitting as an Impeachment Court is considered approved. Senator Sotto. We are ready for the appearances, Mr. President. Representative Tupas. Good afternoon, Mr. President, Your Honor. For the House of Representatives Prosecution panel, same appearance. The Presiding Officer. Noted. The Defense? Mr. Cuevas. For the Defense, Your Honor, the same appearance. The Presiding Officer. Noted. The Floor Leader? Senator Sotto. Mr. President, we now call on the Prosecution for the continuation of the presentation of evidence on Article II. The Presiding Officer. The Prosecution may now proceed in the presentation of its evidence in chief. Representative Tupas. Your Honor, we now have our first witness for today, the name is Mr. Benito Cataran, Director of the Securities and Exchange Commission. And may we request that Congressman Rey Umali be recognized. He will conduct the direct examination for the Prosecution. The Presiding Officer. Proceed. The Secretary. Director Cataran, please raise your right hand. Do you swear to tell the truth, the whole truth and nothing but the truth in this Impeachment Proceedings?
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Mr. Cataran. Yes, Maam. The Secretary. So help you God.
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 a corporate franchise. That the enterprisethe 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 proceedings. Representative Umali. Yes, Your Honor.
The Presiding Officer. Proceed. Representative Umali. And just to close, Your Honor, to identify and authenticate records and documents pertinent and relevant to his testimony, Your Honor. The Presiding Officer. Proceed. Representative Umali. Mr. Witness, you identified yourself as attorney. You are a lawyer by profession? Mr. Cataran. Yes, Sir. Representative Umali. And since when did you become a lawyer? Mr. Cataran. 1975. Representative Umali. You stated that you are currently employed with the Securities and Exchange Commission. Since when have you been connected with the SEC? Mr. Cataran. July 1980. Representative Umali. Up to the present? Mr. Cataran. Yes, Sir. Representative Umali. You stated that you are currently the director of Company Registration and Monitoring Department of SEC. Mr. Cataran. Yes, Sir. Representative Umali. Since when have you occupied this position? Mr. Cataran. Since year 2000. Representative Umali. And you are still occupying this position to the present time? Mr. Cataran. Yes, Sir. Representative Umali. As director of the Company Registration and Monitoring Department, will you please tell us your functions as director? Mr. Cataran. As director, I manage the department, oversee its operation. The Presiding Officer. Will you please fix your microphone so that your statements are clear? Mr. Cataran. As director, I manage the operation of the department, execute all the circulars being implemented by the Commission. Representative Umali. And what are the specific mandates of the Company Registration and Monitoring Department? Mr. Cataran. Our department is the department which registers corporations and partnerships. We also issue licenses for foreign corporations and licenses for brokers, financing company, lending companies. We also process and approve amendments of Articles of Incorporations. The Presiding Officer. I think that is a matter of law that this Court can take notice of.
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Representative Umali. Thank you, Your Honor. 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 Supervising Specialist, 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 experiencea 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 willingjust 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 tecumsubpoena 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 Mr. Cuevas. Seven (7) pages. Representative Umali. seven (7) pages. Thank you, Your Honor.
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 BasaGuidote Enterprises Inc. as Exhibit WWWWW-A, the subsequent pages thereof as WWWWW1 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 identifyto 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 pertinent pages thereof in yesterdays The Presiding Officer. All right, proceed so that we canwe 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 as exhibit 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 recordmay 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 of this corporation? Mr. Cuevas. Yes, Your Honor.
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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, the General 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?
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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 mentionedMay we manifest, Your Honor, that this document was pre-marked as our Exhibit EEEEEE. The name Basa-Guidote Enterprises as Exhibit EEEEEEA, 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?
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Mr. Cataran. We checked our corporate file to determine if there are other reports submitted by the corporation. The Presiding Officer. Will you please fix your Mr. Cataran. I checked on the corporate file to check if there are other reports submitted by the corporation other than those requested. Representative Umali. And what did you find out, Mr. Witness? Mr. Cataran. We found out that since 1991 the corporation has not been submitting any report, meaning they did not file this General Information Sheet. The Presiding Officer. From what year to what year? Mr. Cataran. From 1991. The Presiding Officer. Witness, from what year to what year? Mr. Cataran. Up to The Presiding Officer. From? Mr. Cataran. 1991 up to 1997. The Presiding Officer. All right. Mr. Cataran. Actually it is notkasi what happened is that The Presiding Officer. Just answer the question please. From what year? Mr. Cataran. We found out that the corporation has not been submitting reports from 1991 up to the time we revoked the Certificate of Registration of such corporation... The Presiding Officer. Okay. Mr. Cataran. in 2003, Your Honor. Representative Umali. Now, you said that they have not been reporting since 1991. Would you have any reports submittedGeneral Information Sheet submitted as existing in your record, Mr. Witness? Mr. Cataran. There are GIS or General Information Sheets on our file. Representative Umali. What is the latest General Information Sheet submitted and recorded in your file? Mr. Cataran. The latest GIS we have on file is that of 1990. Representative Umali. Do you have a copy of this General Information Sheet? Witness handed to me a copy of the General Information Sheet as of July 16, 1990 of Basa-Guidote Enterprises Inc. which, may I manifest for the record, Your Honor, has been marked as Exhibit YYYYY, the names of the directors and trustees thereof as The Presiding Officer. Trustees?
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Representative Umali. Yes, Your Honor, this is what appears in the document, Your Honor. The Presiding Officer. All right, go ahead. Representative Umali. Yes, Your Honor. Will you please read to the record the names of the directors and trustees as appearing in this document? Mr. Cataran. Jose M. Basa III, Randy Basa, Concepcion Basa, Flor Maria Basa, Asuncion B. Roco, Vicente Roco, as directors. Representative Umali. And may The Presiding Officer. Why did they use the term trustees? Mr. Cataran. No. Actually, Sir, this is a form where it is indicated the Board of Directors/ Trustee. They are supposed to cross out the Trustee because trustee refers to non-stock. It so happened that they did not cross the term Trustee. The Presiding Officer. Yes. The Chair asked that because the term Trustee would mean that the corporation is in the process of liquidation. Mr. Cataran. No, no, Sir, kasi this form The Presiding Officer. Or does that mean trustees for non-commercial corporations? Mr. Cataran. Yes, Sir, because these are general forms which non-stock corporations can use. For non-stock, they usually use the term Trustees instead of Directors. So if they have this form and it is a non-stock, all they have to do is to cross the term Director if they are using the term Trustee. But in this case it so happened that The Presiding Officer. Oh, anyway, that is a legal issue. Please proceed. Representative Umali. Will you please also read into the records the names of the corporate officers as appearing in this Exhibit? Mr. Cataran. The corporate officers are: Jose M. Basa, Chairman and President; Randy Basa, Vice President; Mario Basa Jr., Vice President; Melissa Basa, Secretary/Treasurer. Representative Umali. On the dorsal portion of this appears the names of the stockholders. Will you also please read into the records the names of the stockholders appearing therein? Mr. Cataran. Jose M. Basa, Rose Raymunda Basa, Cecilia H. Basa, Concepcion Basa, Flor Maria Basa, Asuncion Basa-Roco and Vicente Roco. Representative Umali. Thank you, Mr. Witness. And may I request, Your Honor, thatmay I propose to stipulate, Your Honor, that this exhibit which was earlier marked as YYYYY, the names of the board of directors as YYYYY-A, the names of the directors bracketed as Exhibit YYYYY-B, the names of the stockholders asthe dorsal portion as Exhibit YYYYY-1 and the names of the stockholders appearing in the dorsal portion of Exhibit YYYYY as Exhibit YYYYY-1-A? And I would like to request the Defense to compare with the original.
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May we propose a stipulation on the matter with the Defense? Mr. Cuevas. Very willingly, Your Honor. We admit, Your Honor, that what is being presented is the faithful reproduction of the original. The Presiding Officer. Proceed. Representative Umali. Thank you. Now, Mr. Witness, did you also bring with you, pursuant to the subpoena, the copies of the financial statements of Basa- Guidote Enterprises Inc. for the years 2000 to 2010? Mr. Cataran. We did not receive any financial statements within that period. Representative Umali. So these documents do not exist on your file? Mr. Cataran. Yes, Sir. Representative Umali. Are there documents, financial statements appearing in your files with the Securities and Exchange Commission? Mr. Cataran. None. Representative Umali. And what is the repercussion of this non-filing of the GIS and/or financial statements, Mr. Witness? Mr. Cuevas. That will be asking for an opinion, Your Honor, and the witness has presented Representative Umali. I will withdraw, Your Honor. The Presiding Officer. What is the position of the Representative Umali. I withdraw, Your Honor. I withdraw the question. The Presiding Officer. You are withdrawing the question? Representative Umali. Yes, Your Honor. The Presiding Officer. Proceed. Representative Umali. So when it was revealed that there were no financial statements appearing in your records nor this GIS, what action did your department take in relation to this matter, Mr. Witness? Mr. Cuevas. The question is vague, Your Honor. Because what actually the witness stated is, there is nothing in the record that will show all these things. It was not a revelation, Your Honor. The Presiding Officer. Let the witness answer. He is intelligent. He is in charge of record. Mr. Cuevas. We submit, Your Honor. The Presiding Officer. Proceed. Mr. Cataran. Well, based on the request, as I mentioned and I just presented, I just issued a certification that we did not receive such financial statement. Representative Umali. And so what is the effect when there was no submission of these financial statements, Mr. Witness?
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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 processes taken 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?
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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 must submit 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 letmay 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 noneno 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 authorityThe SEC has the authority to suspend, revoke Articles of Incorporation.
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The Presiding Officer. So therefore, do you consider this corporation as a corporation in liquidation? Mr. Cataran. Well, since we already The Presiding Officer. No, no, I am asking you, because when you say, The corporation is dissolved, this is not the end of the corporation. Mr. Cataran. They can still exist. The Presiding Officer. It goes into a liquidation process. Mr. Cataran. Yes, Sir. They have three years within which to liquidate after the date of revocation. The Presiding Officer. Is that a matter of record that they liquidated the corporation? Mr. Cataran. We do not know, Your Honor. The Presiding Officer. So you do not know whether the corporation is considered as a person for purposes of its creditors and stockholders? Mr. Cataran. We have opinions which say that whenever the corporate franchise is revoked the corporation is considered dissolved. The Presiding Officer. Well, this is a matter of law. Under what authority in the Corporation Code is the SEC authorized to cause the dissolution of a corporation? Mr. Cataran. We can consider this, Your Honor, as an involuntary dissolution of the corporation through an act by the Commission. The Presiding Officer. There is a provision, if I remember correctly in my Corporation Law, there is a provision in the Corporation Law regarding the dissolution and liquidation of a corporation. Mr. Cataran. Yes, Sir. The Presiding Officer. Has that been removed and changed? Mr. Cataran. No, no. There is still a provision, Section 120 of the The Presiding Officer. It is still the same? Mr. Cataran. Yes, Sir. The Presiding Officer. Since the Corporation Law was adopted in the early turn of the last century? Mr. Cataran. Yes, Your Honor. It is still there. The Presiding Officer. So if it has not been changed, will you kindly tell me where the SEC draws its power to dissolve a corporation without complying Mr. Cataran. Your Honor, under P.D. 902-A, the SEC has the authority to suspend and revoke Certificate of Registration
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Suspend the operation of the corporation but you cannot kill that
The Presiding Officer. 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 properties of 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 representations 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 noncompliant with the provision of Section 141 of the Corporation Code is authorized to dissolve it. And what 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
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non-filing or two (2) years but usually as a matter of practice we revoke the registration if the corporation has not been submitting reportsGIS 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 Corporation 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
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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., wifes 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 ongoing 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 you allow. The Presiding Officer. Go ahead.
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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 wifes 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 Renato Corona because the corporation has already beenthe 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 BasaGuidote Enterprises, Inc., wifes 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 as Exhibit E, Exhibit F, Exhibit G, Exhibit H, Exhibit I, Exhibit J, Exhibit K, Exhibit L, all of which are common exhibits, Your Honor. The Presiding Officer. Anyway... Mr. Cuevas. Now, if Your Honor The Presiding Officer. ...proceed, Counsel. Mr. Cuevas. If Your Honor please The Presiding Officer. This will be addressed to the evaluation of the Court... Mr. Cuevas. Yes, Your Honor. The Presiding Officer. ...especially the effect of revocation. And assuming that the SEC has the power to cancelto dissolve a corporation, which I doubt, then I do not want to impose my opinion that is why I am requesting a memorandum from the SEC. I am not imposing my opinion on this although I entertain a great doubt whether it has the authority to dissolve a corporation.
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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 Iin SEC Opinion dated May 4, 1995, it is stated: The SEC has opined that 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 fedthis 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 particularat this particular instance. Thank you, Your Honor. The Presiding Officer. Thank you. What is the pleasure of the Prosecution?
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Representative Umali. Yes, Your Honor. First of all, we take exception to the statement that the Prosecution is feeding erroneous information to this Honorable Court. Mr. Cuevas. Sorry.
Representative Umali. Because 14 years later, Your Honor, in SEC OGC Opinion No. 2409 dated 28 July 2009, the SEC confirmed that the mass revocation orders issued by the SEC are immediately effective. Thus, it ruled: We clarify that an order of revocation is immediately effective. Once the revocation order is issued, a subject corporations existence is terminated at the very instant. SEC Circular No. 4, Series of 2008, Circular No. 4 for brevity, did not suspend the covered revocation orders immediate effect. It only provides an additional period within which a covered corporation may petition the Commission for lifting the revocation order. The phrase final and executory contained in the Circular only means that after the given period, a covered corporation no longer has any further remedy available with the Commission against the respective revocation order. It does not mean that the revocation order is only effective after the lapse of the period for filing the petition to lift. To subscribe to such a view, as you submit, would render the Revocation Order inutile and defeat its very purpose. In short, a covered corporations existence is deemed terminated until the particular Revocation Order is lifted. The Presiding Officer. Anyway, the statement read by the Prosecution answers the question, How can a dead corporation petition for its revival? So let us leave the matter at that. And that will be taken up by this Court after we have finished the hearing. All right. Now, the SEC is directed by this Court to submit a legal memorandum telling this Court the basis of its authority to dissolve a corporation without the action of its own stockholders or a quo warranto proceeding by the State. Thank you. Proceed. Representative Umali. Now, Mr. Witness, after you issued this Revocation Order, what other action of the Securities and Exchange Commission was made in connection with the revocation of the corporate franchise of Basa-Guidote Enterprises Inc.? Mr. Cataran. The Commission issued a circular reminding those covered corporations, those whose Certificate of Registrations were revoked, to file within a period of one (1) year a Petition to Lift the Revocation Order. Representative Umali. I am showing you a copy of SEC Circular No. 15, as you testified, dated November 5, 2009, issued by Chairperson Fe B. Barin, published in Philippine Daily Inquirer, November 9, 2009, and Business Mirror, November 9, 2009, what is the relation of this document to your earlier statement? Mr. Cataran. This indicated the date of revocation of the corporation, that is May 26, 2003. Representative Umali. Which document, Your Honor, we have already previously marked as Exhibit DDDDDD. And the first row of this document from 1936 to 1966 which includes the date mentioned, May 26, 2003, as the date of revocation earlier marked as Exhibit DDDDDD-A. May I request for a stipulation with the Defense Counsel on the authenticity of this document by comparing it with the original? Mr. Cuevas. We have no objection, Your Honor, to the issue of authenticity of the said document. In fact, we are adopting it as our Exhibit 43, Your Honor.
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The Presiding Officer. So, that is it. Counsel, proceed. Representative Umali. Thank you, Your Honor. After this Exhibit DDDDDD was issued by the Securities and Exchange Commission, as far as you know, were there any action taken by Basa-Guidote Enterprises Inc. to revive the corporation? Mr. Cataran. None. The corporation did not file any petition to appeal the Revocation Order. The Presiding Officer. By the way, Counsel, what is the purpose of this line of questioning? What are you trying to prove? Representative Umali. Yes, Your Honor, we are trying to The Presiding Officer. You are trying to prove that this corporation is dead? Representative Umali. Yes, Your Honor. The Presiding Officer. Dissolved and that it cannot lend money? Representative Umali. No, Your Honor. We are just saying that after the Revocation Order was issued, the same became final and no action was taken by the corporation to revive the same, Your Honor. The Presiding Officer. Yes. So, in effect, what is the relevance of that fact to the proceeding? Representative Umali. Then the only matter that can be done by the corporation is just to liquidate the corporation and therefore The Presiding Officer. Yes. So what if it liquidates? What is the relevance of that fact of dissolution to this proceeding? Representative Umali. Then, Your Honor, the corporation can no longer transact business The Presiding Officer. Can no longer advance money to anybody? Representative Umali. Yes, Your Honor. The Presiding Officer. Then go to that point. Yes, Senator from Taguig. The Minority Floor Leader. Senator Cayetano (A). Mr. President, magandang hapon. Can I just pursue your question, kung ano ang relevance? The Presiding Officer. Yes. Senator Cayetano (A). Just to clear things up. Kapagka ang korporasyon ay may ginawa na hindi nila pwedeng gawin, ultra vires iyon di ba, labag sa batas, labag sa kanilang charter? Representative Umali. Yes, Your Honor. Senator Cayetano (A). Kung ang tao pag inutangan mo at patay na ang tao, mapapatunayan mo hindi nagpautang iyong tao na iyon dahil patay na siya eh. It can be his estate or pwedeng isang ano, pero iyong korporasyon pag sinabi ng SEC na patay na, ang sinasabi ninyo hindi na pwedeng magpautang. Hindi ba irrelevant iyon? Kasi ang tanong dito hindi iyong batas ng SEC
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ang pinag-uusapan natin or Corporation Law ang pinag-uusapan natin dito. Ang pinag-uusapan po namin kung tama po, Ginoong Prosecutor, whether or not totoong meron pong P11 million noong 2003; P11 million noong 2004; P10 million noong 2005; P8 million, 2006; 2007, P6.5 million; P5 million noong 2008; at P3 million noong 2009. Meaning, kahit patay na iyong korporasyon kungeh family corporation ito eh. Kung may bank account o may pera sila, pwede pa rin silang magpautang eh. So anong relevance kung buhay pa iyong korporasyon o hindi? Hindi po ba ang dapat nating patunayan dito, kung totoo o hindi na nagpautang iyong corporation? Iyon ang pinupunto natin dito, hindi kung buhay ang korporasyon o hindi. Kasi kahit patay na ang corporation, de facto wise, you can still get the money, can still loan the money out. Can you clarify on that matter, please? Representative Umali. Yes, Your Honor. That is another point. What we are saying here has a relation to the truthfulness of the entries in the Statement of Assets and Liabilities. The Presiding Officer. Kaya nga, Mr. Counsel, ang relevancy noong sinasabi ninyo, what is untruthful if the question is, Did that corporation or body or group of persons lend money that is reflected in the SALN of the Respondent? Representative Umali. Kaya nga po, Your Honors, ang sinasabi po natin dahil ni-revoke na po at ang tanging pwede na lang pong gawin ng korporasyon ay i-liquidate at i-distribute to The Presiding Officer. We will take your opinion in advisement. Representative Umali. Yes, Your Honor. The Presiding Officer. We will take in your opinion into consideration. But you have not established the connection of what you are saying with the present proceeding. Senator Cayetano (A). Mr. President. The Presiding Officer. The gentleman from Taguig has the floor. Senator Cayetano (A). Mr. President, can I yield for a few minutes to Senator Lacson? He wants to interject on this point. The Presiding Officer. Yes, the gentleman from Cavite. Senator Lacson. With the kind permission of the gentleman from Taguig. I just want to be clarified further. Because I have a copy of Exhibit DDDDDD and further DDDDDD-A. Ang nakalagay po rito tama, Date of Revocation, May 26, 2003. Hindi naman po pwedeng sabihing patay ang korporasyon dahil merong naka-indicate sa another column, Deadline to file petition to lift revocation. Representative Umali. Tama po.
Senator Lacson. So ang tanong ko po sa SEC, ano po ang status nung korporasyon between May 26, 2003 and May 26, 2010, ito po ba ay patay na? Kasi pwedeng i-resuscitate eh. Deadline to file petition to lift revocation, 2010, so pwede pong ma-revive ito? Mr. Cataran. Yes, Your Honor. Senator Lacson. So active po yung corporation. Pwedeng maging active. Buhay pa po, pwedeng naka-suwero pero buhay.
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Mr. Cataran. But based on our opinion, when we revoke, it is already effective. Kasi otherwise what is the use of revoking if it is alive, say Senator Lacson. But why do you have to give a deadline to file petition to lift revocation kung sinasabi ninyong dead na? Mr. Cataran. So that we can finalize the order but it is already effective. Senator Lacson. Thank you, Mr. President. Thank you, Senator Cayetano. Senator Cayetano, (A). The Presiding Officer. Just to continue and finish Thank you, Your Honor.
Senator Cayetano (A). May I ask the SEC director one question? The Presiding Officer. Please proceed. Senator Cayetano (A). Yung pong deadline hanggang 2010? Mr. Cataran. Yes, Your Honor. Senator Cayetano (A). Pwede po silang mag-liquidate? Mr. Cataran. If they will not file an appeal. Senator Cayetano (A). No, but they can liquidate theirthe assets of the corporation. Mr. Cataran. It is up to them. Senator Cayetano (A). So is cash advances not a form of liquidation? Mr. Cataran. I do not think so, Your Honor. Senator Cayetano (A). Hindi, di ba kung sampu kayo sa korporasyon, may sampung milyon iyong korporasyon, pare-pareho ang number of shares nyo, so ibig sabihin pag wala na kayong ibang utang, ibabalik ang tig-isang milyon sa sampung shareholders. So instead nung final na hatian, ang ibig sabihin ng cash advance, ibinigay mo na in advance iyong hati niya. Mr. Cataran. Kung iyon po siguro ang ano nila na to liquidate, it is up to them. Senator Cayetano (A). Anyway, my time is up. Mr. President, I just like to say, if these questions are preliminary and the Prosecution is going into proving whether or not may utang talaga or kung may pera or fictitious iyong pera, I can see the relevance there. But if the point of all of these is simply to point out na patay na iyong korporasyon, we are wasting our time because it is irrelevant. Kasi kahit patay na ang korporasyon, that does not mean na de facto, they could have not given money to the spouses Corona. Thank you, Mr. President. Senator Drilon. Mr. President. The Presiding Officer. The gentleman from Cavite.
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Senator Lacson. Thank you, Mr. President.
Lalo po kaming nalabuan doon sa sagot ninyo dahil sabi ninyo effective na iyong kamatayan, ano, sabi ninyo, revoked eh. Pero sino yung sinulatan ninyo na mag-file ng petition before the deadline imposed? Kung patay na, kanino ninyo ini-address? No, I am just talking practical terms, ano. Mr. Cataran. Kasi ano po iyon eh. When we revoke, it means that it has no longer corporate existence. That is the effect since we revoked. That is already effective. But we give the corporation the chance to appeal the Revocation Order because it is not yet final. This is the reason for this Circular. Senator Lacson. Iyon nga po, doon nga kami naguguluhan, ako particularly, kasi ano po ang status nga ng korporasyon na iyon between those two periods or within the period, I mean? I yield to Senator Drilon. The Presiding Officer. The gentleman from Iloilo. Senator Drilon. Can I have two (2) minutes, Your Honor? The Presiding Officer. You have two (2) minutes. Senator Drilon. All right. Mr. Witness, when a corporations license is revoked, am I correct in my understanding that under Section 122 of the Corporation Code and the SEC regulations, this means that it can no longer operate except for purposes of winding up its affairs? Is that correct? Mr. Cataran. Yes, Your Honor. Senator Drilon. All right. And the corporation is given three years to wind up its affairs. Is that correct? Mr. Cataran. Yes, Your Honor. Senator Drilon. And therefore, it cannot continue in its regular business during the three-year period? Mr. Cataran. Yes, Your Honor. Senator Drilon. Now, that corporation cannot enter into a new business or perform acts in furtherance of the business during the period of winding up. Is that correct? Mr. Cataran. Yes, Your Honor. Senator Drilon. And the affairs of the corporation should be limited to those which would have a bearing to its liquidation. Is that correct? Mr. Cataran. Yes, Your Honor. Senator Drilon. Now, in the case of Basa Enterprises, when you revoked the certificate on May 26, 2003, it only meant that from May 26, 2003, for three years thereafter, it can no longer perform its regular business but should only perform acts pursuant to a liquidation. Is that correct? Mr. Cataran. Yes, Your Honor.
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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 operate because 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
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draw the proper legal conclusion. So we do not have to debate the conclusion because it is up to us. Ngayon, ang confusion 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 but that 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, to me,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 seniorequal 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 whateverQQQQQ, huh, DDDDD. It says there that you couldthey could still petition thewhat is this? Yesthe decision of the revocation up to sometime in 2010. Now, why did you mark it? In other words, they could stillSo, I do not really want to ask you anything because you have control on that. Mr. President, could youin the legal memorandum, could you please includefor 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 ofin 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.
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May we ask the witness if he knows or if he does not know, then can he include in the memorandumthe 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 beenwhose certification has been revoked, they continue to conduct business even if they are not allowed. In other words, are there notbecause 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 notexchange 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 existenceeven 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.
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Senator Sotto. Mr. President.
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 crossexamination 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 thewe 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. CataranGood 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?
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Mr. Cataran. There is a difference. If we revokelet us say, we revoke the secondary license, meaning, the authority to operate, the primary franchise will not be affected. Mr. Cuevas. I see. So the corporationwith the revocation, the corporation is still there only it cannot function. Am I right in understanding you that way? Mr. Cataran. You use the term revocation. What is being revoked, the secondary license or the Mr. Cuevas. The secondary. Mr. Cataran. The secondary, it has no effect. It cannot operate. Mr. Cuevas. Correct. Mr. Cataran. But it still exists because it has still its primary franchise. Mr. Cuevas. Correct. So much so that if the corporation, based on the purpose of its creation, allows it to construct buildings or other structures on a land, with the revocation issued by your office, it can still continue with a construction, am I right? Mr. Cataran. Revocation of the primary franchise? Mr. Cuevas. No, cancellation. Mr. Cataran. Cancellation. Oh, yes. Mr. Cuevas. So that it can carry on the purposes of the corporation whether it consists of lending money or constructing buildings, am I right? Mr. Cataran. It depends on the authority given on the license. Meaning, if you have the license to, let us say, to lend, that is supposed to be the secondary license. If we cancel that, you can no longer operate your business but the corporation remains. But as to that business, no Mr. Cuevas. All right. Mr. Cataran. because you have no license. Mr. Cuevas. Now, may I direct your attention to the secondary purposes of this corporation known as Basa-Guidote Enterprises Inc., it states, To lend and advance money or give credit to such persons, firms or companies under such terms as it may thought fit, and in particular to customers, persons and firms and companies dealing with the company and to give guarantees or become surety for any such persons, firms or companies. Mr. Cataran. Have we issued a license for that purpose? Mr. Cuevas. Well, I am referring to a very specific and particular case, the Guidote Enterprise. In fact, this is covered by Exhibit WWWWWW, and that particular portion as WWWWWW-B, Atty. Cataran. Representative Umali. Objection, Your Honor. The question is vague, there is no question, Your Honor. Mr. Cuevas. Oh, so what is being objected to if there is no question? My golly! (Laughter) Representative Umali. You are asking the witness to answer without a question so
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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. Cataran. Then it is not.
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The Presiding Officer. I think you are misinterpreting the Corporation Law. SupposeI will give you an example. Suppose a corporation is engaged in insurance or, let us say, in lending money and it does not comply with your reporting requirements and you revoked the registration and it continues to perform its business in defiance of your order, what is your remedy? Mr. Cataran. Well, as far as the SEC The Presiding Officer. What is your remedy? Mr. Cataran. We already revoked the The Presiding Officer. How? Mr. Cataran. None, because we already revoked the The Presiding Officer. Can you close the corporation, the premises? Mr. Cataran. No, Your Honor. The Presiding Officer. Is it not your remedy will be quo warranto proceeding? Mr. Cataran. No, Your Honor. The Presiding Officer. Ah, ano, ah? Mr. Cataran. No, Your Honor. The Presiding Officer. You will not institute quo warranto proceeding? Mr. Cataran. No, unless there is a complaint, but we never encounter such case or complaint The Presiding Officer. Precisely. I am sorry to tell you, I am teaching you Corporation Law. If the corporation defies your orders, what is your remedy? Close all the offices? A bank will not comply with its corporate responsibilities under the SEC, will you physically close the corporation? Mr. Cataran. No, Your Honor. The Presiding Officer. Then what? Proceed, Mr. Counsel. Mr. Cuevas. All right. With the kind permission of the Honorable Court. May I direct your attention to SEC Circular No. 15, which had been marked as Exhibit DDDDD, kindly go over the same before I ask you any question. The Presiding Officer. Just to complete my question. Can a corporation whose registration was revoked by you sue to recover money, to recover property or to enforce his rights? Mr. Cataran. Yes, Your Honor. The Presiding Officer. Okay. You proceed, Counsel. Mr. Cuevas. Okay then, Your Honor. Thank you.
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I have a pending question. Kindly go over it before I ask you. Mr. Cataran. Opo, opo. Mr. Cuevas. Are you through reading it, Atty. Cataran? Mr. Cataran. Yes, Sir.
Mr. Cuevas. Kindly go to Page 2 and there is this name Fe B. Barin, Chairperson. Did you notice that? Mr. Cataran. Yes, Sir. Mr. Cuevas. All right. Fe B. Barin was once upon a time the chief or the highest official of the SEC, am I right? Mr. Cataran. Yes, Sir, correct. Mr. Cuevas. All right. Now, according to this circular, it states, Failure to file petitions to set aside the order of revocation with the Commission within period cited above shall render the Revocation Order final and executory. This does not agree with the opinion you have mentioned a while ago that the moment an Order of Revocation is issued, that is final and executory. Am I right? Mr. Cataran. Yes. Mr. Cuevas. So it is your opinion over the opinion of the SEC Mr. Cataran. It says here, failure to file. But if they file, it is not final. Mr. Cuevas. No. That is not my question. My question is, there is an Order of Revocation because of failure to comply with your financial reporting, Your Honor. Mr. Cataran. Yes. Mr. Cuevas. Now, the way I understood your statement on direct examination, you made me understood that that is already final and executory or that is not correct? You wanted to correct that? Mr. Cataran. That is not correct. Representative Umali. Objection, Your Honor. The question is misleading. Mr. Cuevas. I am asking him whether my understanding is correct or not. It is only yes or no. How could it The Presiding Officer. The witness may answer. Mr. Cataran. No. Mr. Cuevas. It is not immediately executory? Mr. Cataran. Will you kindly repeat your question? Mr. Cuevas. Meaning, you have issued a revocation order Mr. Cataran. Yes.
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Mr. Cuevas. because of noncompliance with the reportorial requirements, is that right? Mr. Cataran. Yes. Mr. Cuevas. Can you follow? Mr. Cataran. Yes. Mr. Cuevas. All right. That is not immediately executory? Mr. Cataran. Yes. Because they still have the right to appeal. Mr. Cuevas. All right. So it may not be immediately enforceable? Mr. Cataran. Let meI said beforeit is not final but it is effective. Mr. Cuevas. What do you mean final but Mr. Cataran. Effective, meaningwhen you say revoked, the revocation order is already is effective. We can already implement. That is the meaning of revocation. But it is not final in a sense that they can still file a petition to lift the revocation order. Mr. Cuevas. In the meanwhile it is given effect although it is not final. Is that what you wanted the Court to understand? Mr. Cataran. Yes. Yes, Your Honor. Mr. Cuevas. So, the corporation cannot act anymore, whether it is in connection with this business authorized under the Articles of Incorporation or not. Mr. Cataran. Yes. Mr. Cuevas. Is that understanding correct? Mr. Cataran. Yes. As I said Mr. Cuevas. All right. So that if the corporation is engaged in a litigation, let us say recovery of money or damages against another corporation, it may no longer act pursuant to your statement now because it is effective immediately. Am I right? Mr. Cataran. No. Mr. Cuevas. What do you mean, no? Mr. Cataran. If we allow such kind of act, then what will happen? I think the case will still proceed. Mr. Cuevas. Kindly understand my question. The way I understood you, based on your answer in your answer now, the order of revocation is not final but it is effective. Mr. Cataran. Yes. Mr. Cuevas. So that if a corporation upon which corporation the order of revocation is engaged in a litigation whether as a defendant or plaintiff, it must stop participating in that case because your order is already final, is executory even if not final. Is my understanding correct? Mr. Cataran. I do not think the court will allow that.
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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 final but 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 ofwhat 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 beyou 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 beenor, 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 that but I wanted to have your opinion.
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Mr. Cataran. Yes. Mr. Cuevas. Because apparently you have testified with Mr. Cataran. Well, that is my opinion. I think it will not be allowed. Mr. Cuevas. So, it will not be allowed to continue. Mr. Cataran. No. It can continue. Mr. Cuevas. Ah, it can continue. So it is clear now that there are acts, there are transactions and there are events that can continue notwithstanding the fact that there is an order of revocation. Mr. Cataran. As long as it is not part of the business of the corporation. Mr. Cuevas. That is your answer. All right. Now in this particular case, you made me understood that you have examined the records of this corporation. Will you kindly tell the Honorable Court what is the extent of that examination that you conducted? Mr. Cataran. I just checked whether-as to the reports submitted. Mr. Cuevas. Only. Mr. Cataran. Yes, that is being asked whether we have to submitin the subpoena I received Mr. Cuevas. I am not referring to the subpoena, with due respect. Mr. Cataran. I checked. Mr. Cuevas. When you examined, how far did your examination go? Did it go deeper than examining the papers you are asked to produce by the subpoena? Mr. Cataran. No, I just checked as to the records. That is all. Mr. Cuevas. All right. Did you happen to come across the statement or a fact that this corporation had properties subject of eminent domain by the City of Manila? Mr. Cataran. I did not notice any document to that Mr. Cuevas. You did not. All right. So, you have no reason to deny that the properties of this corporation were expropriated by the City of Manila sometime in June 2000? Representative Umali. Witness is incompetent to answer, Your Honor. The Presiding Officer. Let the witness answer. Mr. Cataran. I did not notice any document. I do not know. Mr. Cuevas. But you are not denying or contradicting that the properties of this corporation had been expropriated by the City of Manila?
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Mr. Cataran. I do not know. I have not seen such document. Mr. Cuevas. You do not know anything about that? Mr. Cataran. Yes.
Mr. Cuevas. I have with me a photocopy of a check paid to Cristina Corona, care of BASA Guidote Enterprises, in the amount of P34,703,800.00. You do not know anything about this? Representative Umali. If Your Honor please, objection. May we register our continuing objection, Your Honor? The Presiding Officer. The witness is only being asked if he knows about that. Mr. Cataran. I do not know about it. Mr. Cuevas. May we ask the witness to examine the xeroxed copy of the check? Hindi niyo alam yan? Mr. Cataran. No. Mr. Cuevas. You did not have an inkling about the payment in terms of the check relative to the expropriation proceedings I mentioned in my cross-examination? Mr. Cataran. No, I have no knowledge Mr. Cuevas. All right. Now, did you ascertain whether this payment of the lots belonging to the corporation, subject matter of your testimony, is true or not? Mr. Cataran. I do not know. I have not seen Mr. Cuevas. So, no investigation was made by you Representative Umali. Your Honor Mr. Cuevas. Kindly allow me to finish? And also you have never examined any aspect of this alleged expropriation proceeding of the property of this corporation against whom you have issued an order of revocation because of failure to comply with the reportorial requirements? Mr. Cataran. Yes. I just checked as to the reports. But I have not seen such document. Mr. Cuevas. All right. But my question to you now is, after you were subpoenaed, did you take the pain of going deeper into the affairs of this corporation because this corporation is dealing in millions and apparently it had not complied with the reportorial requirement, did your examination or investigation go that far? Mr. Cataran. No, because we already revoked the Certificate of Registration in 2003. Mr. Cuevas. That is not my question to you. My question to you is, did you go any deeper The Presiding Officer. Just answer the question.
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Mr. Cataran. No. 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 million11 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?
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Mr. Cuevas. We are merely asking that it be marked, Your Honor, as exhibit for the The Presiding Officer. All right. Mark it accordingly. Representative Umali. If, Your Honor please, what is being presented is just a xeroxed copy of a check, Your Honor. Mr. Cuevas. We made a The Presiding Officer. You should have objected at the very instance, Your Honor, with respect to the character of the evidence presented. Representative Umali. Yes, Your Honor. Mr. Cuevas. Besides, we only have it identified and marked. We are not yet offering it. For all you know, we may not offer it at all. Representative Umali. Provisional marking, Your Honor, perhaps. But that is all that there is, Your Honor. The Presiding Officer. The Chair rules that let this xeroxed copy remain as an exhibit for the Defense for the record. Representative Umali. If I may proceed, Your Honor? The Presiding Officer. Proceed. Representative Umali. Mr. Witness, you made mention earlier on cross-examination when asked of the primary franchise of BGEI. Can you clarify what do you mean by primary franchise? Mr. Cuevas. Witness is incompetent, Your Honor. The Presiding Officer. Sustained. Mr. Cuevas. I did not ask him on his knowledge. The Presiding Officer. The best evidence is the Articles of Incorporation. Representative Umali. No, Your Honor. I am asking just to explain what is meant by primary franchise. The Presiding Officer. What is the relevance of that information to this proceeding? Representative Umali. I would like to know, Your Honor, what he meant by this is the primary purpose, Your Honor. If that is equivalent to a primary purpose. The Presiding Officer. All right. Okay. You may answer. Para wala nang maraming salitaan. Mr. Cataran. Primary franchise refers to the juridical personality of the corporation. When we issue the primary franchise, meaning, the Certificate of Registration, it is a juridical person. That is the primary franchise. Representative Umali. And what do you mean by a secondary franchise? Mr. Cataran. It is an authority to operate.
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The Presiding Officer. Secondary what? 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 secondary franchise. 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 openno, 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 is issued, 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 generalof other corporations. This corporation involved in this proceeding.
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Mr. Cataran. We do not issue secondary franchise for this kind of corporation. The Presiding Officer. Does it have any secondary purpose? Mr. Cataran. Yes, Your Honor. The Presiding Officer. Has it asked for the use of any of its secondary purposes? Mr. Cataran. No. We have no record on that. The Presiding Officer. Precisely. So what are you talking about secondary franchise and primary franchise? Mr. Cataran. I already answered the question of the Prosecutor to explain what is the difference between a primary and secondary franchise. The Presiding Officer. Qualify your question to your witness. Representative Umali. Yes, Your Honor. Your Honor, I think it has been sufficiently explained. We are through with the witness, Your Honor. Mr. Cuevas. No re-cross, Your Honor, for the Defense. Thank you, Atty. Cataran. The Presiding Officer. The Floor Leader. Senator Sotto. Mr. President, Senator Lito Lapid wishes to be recognized. The Presiding Officer. The gentleman from Pampanga is recognized. Senator Lapid. Oh, bat tumatawa na naman kayo dyan? [Laughter]. Thank you po, Mr. Senate President. Sa Prosekyusyon, may ano lang po ako dito, may katanungan lang po ako. Mr. President, nakalagay po sa SALN ni Justice Corona na nag-cash advance siya ng P11 million. Ano po ang diperensya, ang pagkakaiba ng cash advance, loan o utang? The Presiding Officer. Sino ang tinatanong ninyo? Senator Lapid. Prosecution po. The Presiding Officer. Ginoong Testigo, ang tinatanong ng Senator Lapid. Hindi po. Hindi po. Wala pong kinalaman dito ang testigo. The Presiding Officer. Who is being asked to answer?
Senator Lapid. Prosecution po. The Presiding Officer. Ah, the Prosecution. Please answer. Representative Umali. With the permission of this Honorable Court. Iyon nga po ang inaalam namin na cash advance. Hindi po namin maintindihan dahil wala
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namanghindi naman po shareholder si Chief Justice Corona, maging si Cristina Corona. Pero nagka-cash advance po sila dito, kaya iyon po ang hindi namin maintindihan. At ito po ay nakalagay kaya po itoy piniprisinta namin at nililinaw po namin ngayon. Senator Lapid. Hindi na po siguro mahalaga kung nagsarado iyong kumpanya o hindi. Nangutang ba? Representative Umali. Kasi po sa korporasyon dapat po ay mayroong board approval, mayroon pong prosesong dinadaanan po ito. Dapat po ay may board resolution. Pero wala pong lahat ito dahil po ang sabi nga po ng Securities and Exchange Commission, itong lisensiyang ito ay revoked na. Hindi po nagko-comply ito pamula pa po noong 1991 hanggang sa kasalukuyan. Senator Lapid. So, ibig niyo pong sabihin, kanina tanong kayo nang tanong at ilang oras na tayo dito iyan lang ang gusto niyong palabasin, iyong P11 million kung inutang o in-advance o ni-loan? Representative Umali. Marami pa po. Iyong P11 million na nag-reflect ho iyan sa SALN from 2003 hanggang 2009. Tapos po iyong doon po sa dorsal portion nung mga exhibits ng SALN na ito ay lumalabas po doon na si Cristina Corona ay engaged sa real estate business pero sa kanya pongwala naman po siyangwala naman pong record sa SEC, wala rin pong record sa BIR, wala pong record sa lahat. Kanya po ito po ay nakapagtataka kung saan po nanggaling ito. And this isito po ang tinatanong po namin, ito po ine-establish namin, ito po ay unexplained wealth. Senator Lapid. Iyon lang po. Maraming salamat.
Mr. Cuevas. If that is the purpose Representative Umali. Unexplained source. Mr. Cuevas. With the kind permission of the I thought there is a resolution Senator Sotto. The Defense wishes to be recognized, Mr. President. Mr. Cuevas. There is already a resolution of this Court, Your Honor, both verbal and written, denying the Prosecution from presenting evidence of unexplained wealth, Your Honor, very clearly. Senator Sotto. Anyway, Mr. President Representative Umali. Nondisclosure po ang isang nais ko pong... Mr. Cuevas. Tukuyin.
Representative Umali. ...linawin sa bagay na ito, Your Honor. Mr. Cuevas. Thank you. Senator Sotto. Mr. President, may we The Presiding Officer. May I caution everybody to respect the rulings of this Court. We have already ruled that Paragraph 2.4 is not permissible to receive any proof. So, kindly adhere to the rules of this Court.
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Representative Umali. Sorry po, Your Honor. The Presiding Officer. So ordered.
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 coownership, it can do that? Mr. Cataran. Of course. Senator Escudero. Hindi po ba mayroon ding mga SEC Resolutionnoon pa ho to, hindi ko alam kung napalitan na ninyo, noong kamiy nasa eskuwelahan pana kapagka ang isang korporasyon 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. Kasimaliban 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 nirerequire 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 naman? Nabanggit niyo po kanina insurance...
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Mr. Cataran. Opo. Senator Escudero. ...siguro banking kailangan din secondary franchise? Mr. Cataran. Opo. Senator Escudero. Pero kung ang benta at sangla ng lupa o awto o pagpapa-utang, hindi na po kailangan ng secondary purpose? Mr. Cataran. Opo. Senator Escudero. Secondary franchise, rather. Mr. Cataran. Opo. Senator Escudero. In fact, ni hindi po kailangan rehistrado sa inyo kaya nga lang, puwede ho silang habulin at idemanda sa personal nilang kapasidad? Mr. Cataran. Opo. Senator Escudero. Thank you, Mr. President. The Presiding Officer. The Floor Leader. Senator Sotto. Thank you, Mr. President. We are ready to discharge the witness. The Presiding Officer. Any objection? [Silence] Witness is discharged. The Floor Leader. Senator Sotto. Mr. President, the Prosecution. Representative Tupas. Thank you, Your Honor. We will call now our second witness. The name is Ms. Nerissa Josef, the Vice President of the Ayala Land Inc. And may we request, Your Honor, that Atty. Winston Ginez be recognized to conduct the direct examination. The Presiding Officer. Let the witness come to the floor of this Court, take the witness stand and be sworn in. And the named Counsel for the Prosecution, Representative Tupas. Atty. Ginez, Your Honor. The Presiding Officer. Atty. Ginez will make the direct examination. Mr. Ginez. Thank you, Your Honor. The Presiding Officer. Welcome. The Secretary. Ms. Josef, please raise your right hand? Do you swear to tell the truth, the whole truth and nothing but the truth in this Impeachment Proceeding? Ms. Josef. Yes, Maam.
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The Secretary. So, help you God. Mr. Ginez. May I first qualify, Your Honor, the witness? The Presiding Officer. Proceed.
Mr. Ginez. Madam Witness, please state your name and other personal circumstances? Ms. Josef. My name is Nerissa Josef. I am the Assistant Vice President of Ayala Land, I am of legal age, I am single and I reside in Marikina. Mr. Ginez. Thank you, Madam Witness. Your Honors, the Prosecution is respectfully offering the testimony of the witness for the following purposes The Presiding Officer. Under what Article? Mr. Ginez. Article II, Your Honor. She will testify under Paragraph 2.3 of the Verified Complaint. The Presiding Officer. All right. Mr. Cuevas. With the kind permission of the Honorable Court. I heard the statement qualify the witness. Are we made to believe that the witness is an expert witness or she is being presented only as an ordinary witness? If she is merely an ordinary witness, no need to qualify her. That is elementary. Mr. Ginez. No, Your Honor. The qualification is as to the name and personal circumstances of the witness. The Presiding Officer. technical matter. Only with respect to the personal circumstances. That is a very
Mr. Cuevas. Because there are a lot of people witnessing thislaw students, law professors, Your Honor. And we wanted to put the record clearly and succinctly, Your Honor. The Presiding Officer. So, let the witness now proceed Mr. Cuevas. As an ordinary witness, Your Honor. The Presiding Officer. As an ordinary witness. Mr. Cuevas. Thank you, Your Honor. Mr. Ginez. Thank you, Your Honor. Again, Your Honor, we are offering the testimony of the witness for the following purposes: No. 1, she will produce, identify and testify on the documents she brought pursuant to the Subpoena issued by this Honorable Court in connection with the purchase of Honorable Chief Justice Renato C. Corona and Mrs. Cristina R. Corona of Unit 31-B with one parking slot located at The Columns, Ayala Avenue in Makati City; No. 2, she will testify that in her capacity as the authorized signatory of Community Innovations Inc., she signed the Contract to Sell, dated January 2004, and Deed of Absolute Sale, dated October 1, 2004, covering the subject condominium unit, Your Honor.
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The Presiding Officer. Proceed. Mr. Ginez. She will also testify, Your Honor, that Honorable Chief Justice Renato C. Corona and Mrs. Corona had already paid 95 percent of the purchased price as of December 31, 2003 but the same was not declared in his Statement of Assets and Liabilities as of December 31, 2003, Your Honor. She will also testify, Your Honor, that on March, 2004, the Deed of Absolute Sale was executed between Community Innovations Inc. and Chief Justice Renato C. Corona and Mrs. Corona but again as of December 31, 2004, 2005, 2006, 2007, 2008 and 2009, this property was not declared in the Statement of Assets and Liabilities and Net Worth of the Honorable Chief Justice Renato C. Corona. May I proceed, Your Honor? The Presiding Officer. Proceed. Mr. Ginez. Madam Witness, you said that you are presently employed as an Assistant Vice President of Ayala Land Inc. Ms. Josef. Yes, Sir. Mr. Ginez. Since when have you been employed with Ayala Land Inc., Madam Witness? Ms. Josef. I have been with Ayala Land Inc. since 1992, Sir. Mr. Ginez. Would it be correct to say then, Madam Witness, that you have been an employee of Ayala Land Inc. for 20 years, more or less? Ms. Josef. Yes, Sir. Mr. Ginez. Madam Witness, if you could still recall, what was your position at Ayala Land Inc. in 2004? Ms. Josef. In 2004, Sir, I was a Project Development Manager. Mr. Ginez. What were your duties and responsibilities as Project Development Manager of Ayala Land Inc. in 2004, Madam Witness? Ms. Josef. As project development manager, I was tasked or I was assigned to manage and oversee the development of projects that were assigned to me. At that time in 2004, I was assigned to Community Innovations Inc. In addition, in Community Innovations Inc., I was also assigned to be an authorized signatory of sales contracts involving residential units of Community Innovations Inc. Mr. Ginez. Thank you, Madam Witness. You mentioned a company by the name Community Innovations Inc. What is the relation of Community Innovations Inc. with Ayala Land Inc., if you know, Madam Witness? Ms. Josef. Community Innovations Inc. is a 100-percent owned company of Ayala Land Inc. Mr. Ginez. Madam Witness, why did you appear in todays hearing of the Honorable Impeachment Court? Ms. Josef. I am here, Sir, because I received a subpoena from this Honorable Impeachment Court.
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Mr. Ginez. In the subpoena issued by the Honorable Court, Madam Witness, one of the documents you were required to bring is the original of the Contract to Sell or Deed of Conditional Sale in connection with a purchase of the condominium unit covered by Condominium Certificate of Title No. 85716 in the name of Cristina R. Corona, married to Renato C. Corona. Question, Madam Witness, is: what document did you bring, if any, in connection with the said directive of the Honorable Court? Ms. Josef. I brought the original copy of the Contract to Sell dated January 20, 2004, Sir. Mr. Ginez. May I approach the witness, Your Honor? The Presiding Officer. Proceed. Mr. Ginez. We would like to manifest for the record, Your Honor, that the witness handed to this representation the original of the Contract to Sell dated January 20, 2004 entered into by and between Community Innovations Inc.; Cristina R. Corona. The project involved, Your Honor, is The Columns Ayala Avenue; the unit purchased in Paragraph 2, Your Honor, is Unit 31B, one bedroom, Tower 1, 48 square meters, more or less, with one parking lot. And the purchase price, Your Honor, is P3,588,931.82. Madam Witness, there appears a signature on the signing page of this Contract to Sell, particularly, Madam Witness, seller by Efren L. Tan; Nerissa N. Josef, attorney-in-fact, and Cristina R. Corona, purchaser. Madam Witness, I direct your attention to the signature above the printed name Nerissa N. Josef, do you know whose signature is that? Ms. Josef. Yes, Sir. Tha is my signature. Mr. Ginez. May I manifest, Your Honor, that this Contract to Sell had been previously marked during the pre-marking as Exhibit NNN and its Exhibits A, B and C as Exhibits NNN-1, NNN-2 and NNN-3. The Presiding Officer. What is the date of that document? Mr. Ginez. January 20, 2004, Your Honor. The Presiding Officer. Proceed. Mr. Ginez. At this point, may I request, Your Honor, Counsel of the Defense to manifest whether or not the photocopy is a faithful reproduction, Your Honor. The Presiding Officer. Is that document covered by a notarial registry? Mr. Ginez. Yes, Your Honor. It is a notarized document, Your Honor. The Presiding Officer. Yes, proceed. Mr. Ginez. I am waiting for the stipulation, Your Honor, that it is a faithful reproduction. Mr. Cuevas. We stipulate or admit, Your Honor, that the documents being identified are faithful reproduction of their respective original. Mr. Ginez. Thank you, Justice. Madam Witness, may I direct you to Annex C of this Contract to Sell which was marked for identification purposes as Exhibit NNN-3, entitled Purchase Price and Manner of Payment, Your Honors.
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For the record, Madam Witness, can you kindly read for the record how the purchase price of P3,588,931.82 be paid by the purchaser of this unit? Ms. Josef. Based on Annex C, Sir, there is an attached schedule of payment. The deposit of P25,000 was paid on January 29, 2003; downpayment of P543,181.82, plus a value-added tax of P56,818.18 and these were paid on March 28, 2003. And the monthly installment schedule, the first installment of P1,113,033.18 and the value-added tax of P111,303.32, and both were paid on April 28, 2003. Second installment of P1,728,270.23 and value-added tax of P172,827.02 were paid on October 10, 2003. The final installment of P179,446.59 and the value-added tax of P17,944.66 would have been paid upon advice. Mr. Ginez. Thank you, Madam Witness. The Presiding Officer. or annually? How many installments are thoseis that monthly, semi-annually
Ms. Josef. It was varied, sir. The first installment was on April 28, 2003; the second installment was paid on October 10, 2003, Your Honor; and the final payment of the third installment was paid upon advice which based on our official receipts were paidif I may refer to the official receipt The Presiding Officer. The installments are covered in one year? Ms. Josef. Yes, Sir. The Presiding Officer. All right. Mr. Ginez. May I proceed, Your Honor? The Presiding Officer. Proceed. Mr. Ginez. Madam Witness, you had so far testified that according to you the deposit, the downpayment, first, second installments were paid all in one year. And you also said that the third installment, payable upon advice was also paid according to you. What proof, if any, Madam Witness, do you have that all these installment payments were indeed paid by Mrs. Corona? Ms. Josef. I have with me, sir, the original duplicate copy of the Official Receipts. Mr. Ginez. May I approach again the witness, Your Honor? The Presiding Officer. Proceed. Mr. Ginez. We would like to manifest, Your Honor, that the witness handed to this representation various receipts, Your Honor, which were previously marked during the pre-marking conducted by the Honorable Deputy Clerk of Court as Exhibits OOO to OOO-5, inclusive, Your Honor. And I am referring, Your Honor, to Official Receipt No. 2093, dated January 29, 2003, in payment of the P25,000 issued to Corona, Cristina R. The Presiding Officer. Who was the issuing entity? Mr. Ginez. Community Innovations Inc., Your Honor. The Presiding Officer. Proceed.
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Mr. Ginez. Official Receipt No. 2813 which was previously marked as Exhibit OOO-1, dated March 28, 2003, issued to Renato Corona in the amount of P600,000, representing the deposit, Your Honor. Witness also handed to this representation, Your Honor, Official Receipt No. 3109, previously marked as Exhibit OOO-2, dated April 28, 2003, issued to Corona, Cristina/Renato, in the amount of P1,224,336.50, Your Honor. Official Receipt No. 5197, previously marked as Exhibit OOO-3, dated October 20, 2003, issued to Cristina Corona in the total amount of P1,901,096.75. And Official Receipt No. 5198 previously marked as Exhibit OOO-4 issued to Cristina Corona in the amount of P0.50, Your Honor. And lastly, Exhibit OOO-5 referring to Official Receipt No. 7621 dated March 8, 2004 representing the full payment of the said condominium unit and one parking slot issued to Cristina Corona in the amount of P290,922.37, Your Honor, which includes, if I manifest to the record, the registration fee in the amount of P17,721.46; Documentary Stamp Tax in the amount of P53,835.00; Transfer Tax in the amount of P17,974.66 as well as Service Fee and issuance of title in the amount of P4,000. As I have previously said, Your Honor, the photocopies of these were previously marked. And may I now request Defense Counsel, Your Honor, to compare that the photocopies are faithful reproduction of the original. [Counsels Examining the Document] Mr. Cuevas. If the purpose is substitution, Your Honor, we have no objection, Your Honor. Mr. Ginez. Thank you, Your Honor. The Presiding Officer. Proceed. Mr. Ginez. Madam Witness, you have so far again testified that Honorable Chief Justice Renato Corona and Mrs. Cristina Corona had fully paid the subject condominium unit as of March of 2004. What happened next, Madam Witness, after they had made the full payment? Mr. Cuevas. At this point, Your Honor, we will object to the basis of the question. There is nothing in any of these documents that the Renato Corona being referred to is Chief Justice Corona. What the document merely says is Renato. Mr. Ginez. We will reform, Your Honor. I am just making a very respectfulto Honorable Chief Justice, the respondent in this case, Your Honor. Mr. Cuevas. But we are dealing with the documents that is why I said there is no basis, Your Honor. The Presiding Officer. Well, just let the document speak for itself. Mr. Ginez. Thank you, Your Honor. What happened next, Madam Witness, after Renato Corona and Cristina Corona had made full payment of the purchase price? Mr. Cuevas. Question, too general, Your Honor, What happened? They may have celebrated their 50th anniversary or what. [Laughter] That was too broad.
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The Presiding Officer. Let us consider that as a preliminary question. You may answer. The witness may answer. Mr. Ginez. Thank you, Your Honor. Ms. Josef. After full payment, Sir, we executed the Deed of Absolute Sale. Mr. Ginez. Madam Witness, one of the documents you were asked to bring to this Honorable Court is the Deed of Absolute Sale. What document did you bring, if any, in connection with that directive, Madam Witness? Ms. Josef. Sir, I brought with me an original copy of the Deed of Absolute Sale dated October 1, 2004. Mr. Ginez. Your Honor, we would like to manifest that the witness handed to this representation the Deed of Absolute Sale dated October 1, 2004 between Community Innovations Inc. and Cristina R. Corona married to Renato C. Corona with three annexes, Your Honor, Annex A, B, and C, which for identification purposes had been previously marked as Exhibit PPP, PPP-1, PPP-2, PPP-3, respectively. Again, Madam Witness, I would like to direct your attention on Page 2 of this Deed of Absolute Sale seller. And on the signatures, there appears a signature of the printed name Nerissa N. Josef, Attorney-in-Fact. Do you know whose signature is this, Madam Witness? The Presiding Officer. Just a minute. What is the date of that Deed of Sale? Mr. Ginez. Your Honor, the date is October 1, 2004. The Presiding Officer. Proceed. Mr. Ginez. I have a pending question, Your Honor. The Presiding Officer. Yes, go ahead. Ms. Josef. Yes. The Presiding Officer. Answer the question. Ms. Josef. Yes, that is my signature, Sir. Mr. Ginez. There is also a signature above the printed name Grace Evangeline E.F. Manankil-Sta. Ana. Do you know whose signature is this, Madam Witness? Ms. Josef. Yes, Sir. That is the signature of Grace Evangeline F. Manankil-Sta Ana. Mr. Ginez. Why do you know that that is her signature? Ms. Josef. I am familiar with her signature, Sir. I have been working with her in Community Innovations for five (5) years. Mr. Ginez. Thank you, Madam Witness. May I request, Your Honor, the Defense Counsel to manifest that the photocopy of the Deed of Absolute Sale is a faithful reproduction of the original, Your Honor. [Counsels Examining the Document]
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May I request, Your Honor, the Defense Counsel to manifest if it is a faithful reproduction? Mr. Cuevas. It is, Your Honor. Mr. Ginez. Thank you, Justice. The Presiding Officer. Proceed. Mr. Ginez. Madam Witness, based on the documents that you brought with you in accordance with the subpoena issued by this Honorable Court, do you know when was subject condominium unit turned over to the purchaser, Cristina R. Corona, married to Renato C. Corona? Ms. Josef. Based on our record, Sir, it was deemed accepted on June 7, 2008. Mr. Ginez. Madam Witness, may we be given that copy of the letter, Madam Witness? We manifest for the record, Your Honor, that the witness handed to this representation a letter under the heading Community Innovations dated June 11, 2008, addressed to Cristina Corona, which says, Your Honor, and I would like to quote, on the last paragraph: However, we seek your understanding that this should not tender you from accepting your unit. As stated in our previous letter to you, the computation of real property tax will be based upon the date of your acceptance of your unit which should be on or before June 7, 2008. Should you fail to personally accept or send a representative to accept the unit, we will nevertheless deem the unit accepted and delivered on June 7, 2008. This has not been pre-marked, Your Honor, so may I request that the photocopy thereof, which I will request the Defense to compare, Your Honor, will later on be marked as our Exhibit PPP-4, Your Honor. May I request that the photocopy of the said document be compared with the original? [Counsels Examining the Document] May we request for the stipulation, Your Honor, that the photocopy is a faithful reproduction of the original? The Presiding Officer. Defense may stipulate, if they want. Mr. Cuevas. We have no objection, Your Honor. Mr. Ginez. Thank you, Justice. We request again that it be marked as our PPP-4, Your Honor. One of the documents that you were Mr. Cuevas. Wait, wait, wait. We are checking the document. May we request, if Your Honor please, that this Exhibit PPP-4 of the Prosecution be marked as Exhibit 45, Your Honor, for the Defense. The Presiding Officer. Mark it accordingly. Mr. Ginez. I will be on my last part, Your Honor. One of the documents that were also pre-marked, Madam Witness, is a Buyer Information Sheet. Did you bring the original copy of the said document, Madam Witness?
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Ms. Josef. Yes, Sir. 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 the xeroxed 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 dischargeIs 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 handwritten note dated 7 June 2008
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The Presiding Officer. 2000 Mr. Esguerra. 08, Your Honor. The Presiding Officer. 08.
Mr. Esguerra. CoveringIt 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 ourthis 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 you agree.
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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 discharged the 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. The Presiding Officer. All right, proceed.
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Mr. Esguerra. With the permission of the Honorable Presiding Officer and the Honorable Members of the Impeachment Court. I did not get your name correctly, Madam Witness. What is your name again? Ms. Josef. My name is Nerissa Josef. Mr. Esguerra. Nerissa Josef. Ms. Josef. Yes, Sir. Mr. Esguerra. And did I hear you right that you are still single? Ms. Josef. Yes, Sir. Mr. Esguerra. Ms. Josef, the transaction, according to you, based on the Contract to Sell and even the Deed of Absolute Sale which have been marked already as exhibits for the Prosecution, took place sometime in 2004? Ms. Josef. Yes, Sir, that is correct. Mr. Esguerra. Which came first? The Contract to Sell was executed first, of course. Ms. Josef. Yes, Sir. It was executed on January 20, 2004, Sir. Mr. Esguerra. And the Deed of Sale was executed when? Ms. Josef. It was executed on October 1, 2004, Sir. Mr. Esguerra. All right. When did you pay thewas there a Capital Gains Tax ever paid by Community Innovations here for purposes of the transfer being the seller? Ms. Josef. We paid our creditable withholding tax. Mr. Esguerra. Not any Capital Gains Tax on that transaction? The Presiding Officer. Counsel. Mr. Esguerra. Your Honor. The Presiding Officer. My understanding is that this selling corporation is engaged in real estate business, and so these are ordinary assets not subject to Capital Gains Tax. Mr. Esguerra. We understand that, Your Honor. But the good Commissioner, Commissioner Henares, identified the Certificate of Authorization to Register. And I would like to find out from the witness whether or not they paid the taxesI mean, if they paid taxes, if any. The Presiding Officer. Yes. Well, the witness may answer. Ms. Josef. Based on our records, Sir, we did paywe do have a Certificate Authorizing Registration, plus we also havewhich indicates that we have paid our taxes, Sir, in order to transfer the title. Mr. Esguerra. Do you have a copy of that with you, Madam Witness? Ms. Josef. Yes I have, Sir.
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The Presiding Officer. Are you given an authority to register this kind of property by the Bureau of Internal Revenue? I am directing this question to the Witness because only capital assets in real estate nature are covered by that requirement under the Internal Revenue Code. Because ordinary assets, real estate subdivision properties are stock in trade in ordinary course of business and they are not capital assets. They are ordinary assets subject tonot subject to Capital Gains but ordinary Income Tax. Ms.Josef. Yes, Your Honor, that is correct. I am not aware that ifthat we have paid Capital Gains Tax on this property. You are correct, Sir, we have paid ordinary Income Taxes. The Presiding Officer. Well, anyway, that is beside the point. I cannot understand. I am just trying to clarify this because the only real estate transaction that requires a Capital Gains Tax are capital real estate in the nature of capital assets, not ordinary assets of an operating company, especially a corporation that engages in buying and selling real property. Proceed. Mr. Esguerra. Thank you, Your Honor. Do you have that Certificate Authorizing Registration with you? May I borrow it momentarily? Ms. Josef, I have here with me a photocopy of the same document previously marked for the Prosecution as Exhibit LLL. May I show this to you and just confirm for the record that this is a copy of that particular document, the duplicate original of which you have shown to the Court? Ms. Josef. Yes, Sir, it appears to be the same. Mr. Esguerra. Thank you. Ms. Josef. A faithful reproduction, Sir. Mr. Esguerra. May we request, Your Honor, that the photocopy, said to be a faithful reproduction of the duplicate original copy testified on by the witness, be marked as our Exhibit 47, Your Honor. The Presiding Officer. Mark it accordingly. Mr. Esguerra. May I proceed, Your Honor, so as to save time. The Presiding Officer. Proceed. Mr. Esguerra. Ms. Josef, you have the duplicate original with you? Ms. Josef. Yes, Sir. Mr. Esguerra. Is there any indication there about the assessed value of the property covered by this particular document? Ms. Josef. There is a selling price here, Sir. Under that, it is P3,588,931.82, Sir. Mr. Esguerra. How about an entry concerning assessed value? Voice. [Off-mike] Wala, wala, wala ng assessed value; market value meron. Ms. Josef. Sir, there is a market zonal value. Is that what you wereit says here P2,880,000, Sir, for the Unit 31B; and for the parking, there is a P250,000, Sir.
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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 that46, I am sorrywhat 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 Pangilinan and 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 our buyer. 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?
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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 by one Carmina A. Cruz on the second page. Actually, there are two (2) copies also of that same letter I referred to ofdated 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 mentionsand 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, pleaseAttached copyregarding 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?
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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 secondI 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 acan you confirmI 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 developers 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 are concerned, actually subsidize the dues for these unsold units? Ms. Josef. For unsold units, Sir, since the owner will beif 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.
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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 any record 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 Prosecutions 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 thatwhere we had enclosed a copy of the Tax Declaration which is in the name of the buyer.
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Mr. Esguerra. We manifest, Your Honor, that that letter referred to by the witness has been previously marked as our exhibit PPP-4, Your Honor. The Presiding Officer. Let it be recorded as manifested. Mr. Esguerra. The tax declaration also, Your Honor, we would like to be marked as our Exhibit 48, Your Honor. The Presiding Officer. Mark it accordingly. Mr. Esguerra. 49, I am sorry. It is 49, Your Honor. The Presiding Officer. Mark it accordingly as corrected. Mr. Esguerra. Ms. Josef, if you know, when were the keys to the unit actually given to Ms. Corona, the buyer? Ms. Josef. I do not know, Sir. Mr. Esguerra. You do not know. And because you do not know, is it safe for me to say, correct me if I am wrong, that there was actuallythere was no actual turnover of the unit? Ms. Josef. Based on our records, we have no record, Sir, of physical turnover of the unit. Mr. Esguerra. Thank you. And you do not also know when the keys to the unit were delivered by Community Innovations to Ms. Corona? Ms. Josef. I would not know, Sir. Mr. Esguerra. Are you aware of any complaint or complaints brought to the attention of Community Innovations Inc. by the buyer, Ms. Corona? Ms. Josef. I am not personally aware, Sir, but based on the letters there appears to be some communications regarding that. Mr. Esguerra. What would those communications indicate? And you can refer to your documents. Ms. Josef. Sir, in the letter dated February 26, there is an indication of a final reinspection, which I would think would mean that there was a previous inspection and there was an inspection again so Mr. Esguerra. Why would there beTell me, if you know, why would there be an inspection, a reinspection and a final reinspection? Ms. Josef. I am not really aware of what happened in this unit but normally, during the first inspection we would have a punch list and if there were any rectifications or changes made, then we will invite the buyer for a reinspection if those changes have, indeed, been made. Mr. Esguerra. When you talk of rectification, that means that there was something wrong with the unit? Would that be a safe conclusion, Ms. Josef? Ms. Josef. It depends, Sir, on the circumstances of the buyer. I am not familiar with the situation of the buyer, Sir.
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Mr. Esguerra. And you were not able to confirm, therefore, what those problems with the unit that you have alluded to on the basis of your testimony now? Ms. Josef. Yes, Sir, I am not aware of what changes were made. Mr. Esguerra. Now The Presiding Officer. May I request the Witness to please fix your microphone so that your words are clearer? Mr. Esguerra. So you would not be aware that there was an inspection where the unit was found to be made or used as a storage room by Community Innovations? Ms. Josef. I am not aware, Sir. Mr. Esguerra. You will not be also aware that at the time of that inspection the unit was full of debris from other units? Ms. Josef. I am not aware, Sir. Mr. Esguerra. You will not also be aware that the electric wirings were undersized and not fit for the use of the unit? Ms. Josef. I am not aware, Sir. Mr. Esguerra. You will not also be aware that the roofs were leaking and the floors were damaged? Ms. Josef. I am not aware, Sir. Mr. Esguerra. You would not also be aware that the windows were unfinished? Ms. Josef. I would not be aware, Sir. Mr. Esguerra. Would that meanjust so I can conclude this examination, Ms. Josef, would that mean that you have never examined the unit itself? Ms. Josef. No, Sir, I have not been to the unit. Mr. Esguerra. I think that will be all for the witness, Your Honor. Mr. Ginez. I have a redirect, Your Honor, if I may be allowed. The Presiding Officer. Proceed. Mr. Ginez. Thank you, Your Honor. Madam Witness, you were shown a copy or in fact you were asked to produce the Certificate Authorizing Registration involving the sale of this particular condominium unit. And this Certificate Authorizing Registration states and I would like to quote, The taxes due thereon have been paid as indicated below and accordingly the Register of Deeds and other concerned officers may effect transfer of the properties. Madam Witness, my question to you is, based on the records that you have and that you brought before the Honorable Court, do you know whether or not title of this condominium unit was already transferred to Cristina R. Corona married to Renato C. Corona?
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The Presiding Officer. Do you not think the title would be the best evidence on that? Mr. Ginez. Yes, Your Honor. We would like to manifest, Your Honor The Presiding Officer. All right, the witness may answer if she knows. Ms. Josef. Yes, Sir, the title was transferred in the name of the buyer. Mr. Ginez. I would like to show to you, Madam Witness, Condominium Certificate of Title No. 85716 for Unit No. 31-B, one (1) Bedroom Type with the area of 48 square meters located on the 31st Floor with parking lot, Columns, Ayala Avenue, issued in the name of Cristina R. Corona married to Renato C. Corona, both of legal age, Filipinos. Can you kindly go over the same and tell us if this was the title that was issued to the purchaser of this particular unit, Madam Witness? Mr. Cuevas. Improper for redirect, Your Honor. We have never touched on this title in our cross-examination. The Presiding Officer. Sustained. Mr. Ginez. Well, may I ask for a reconsideration, Your Honor? The Certificate Authorizing Registration was touched on redirect, Your Honor, and I had premised my question on the issuance of the title based on the CAR that was shown to the witness because the title will be issued, Your Honor, as a subsequent result of the issuance of the CAR, Your Honor. Mr. Cuevas. That is your conclusion. Mr. Ginez. That is the provision of the law, Your Honor, and there was a directive under the CAR, Your Honor, that the Register of Deeds may effect the transfer. So my question, that was not objected to a while ago, Your Honor, is whether the title was issued pursuant thereto, Your Honor. Mr. Cuevas. No, Your Honor. The Presiding Officer. That is why the Chair ruled that let the title speak for itself because there is no showing that the registeredthe purported registered owner participated in the act of registration. Mr. Ginez. We submit, Your Honor. The Presiding Officer. The objection is sustained. Mr. Ginez. We would like then just to manifest for the record, Your Honor, as the Condominium Certificate of Title has been previously marked as Exhibit JJJ and this was brought to this Honorable Court and authenticated by the Register of Deeds of Makati City and this was issued, Your Honor, in the City of Makati on November 3, 2004, Your Honor. The Presiding Officer. Are you making a tender Mr. Cuevas. Your Honor please The Presiding Officer. I do not think this is the time to do that but anyway, let the manifestation stay. There is no showing that the named buyer in the title participated in the issuance of the CAR and in the actual registration of the unit. There is a dispute with respect to the unit and we do not know what it is so far.
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Mr. Ginez. Yes, Your Honor. May we proceed, Your Honor? The Presiding Officer. Yes. Proceed. Mr. Ginez. Madam Witness, during cross-examination you were also asked extensively on the issue of whether or not the title was accepted by the purchaser and you said that it was deemed accepted in June of 2008. And you mentioned about it is based on provisions of the contract. Ms. Josef. Yes, Sir. Mr. Ginez. Can you tell us what contract you are referring to, Madam Witness, is it the Deed of Absolute Sale or the Deed of Contract to Sell, Madam Witness? Mr. Cuevas. Your Honor please, we are compelled to object, Your Honor, because decidedly this has no basis. What the letters that were produced, Your Honor, show is that there was a complaint, there was a refusal on the part of the buyer to accept delivery. And the delivery they are speaking of is constructive delivery. All the while we have been referring to actual turnover possession of the property, Your Honor, material possession. Mr. Ginez. May I be allowed to make a rebuttal, Your Honor. The Presiding Officer. Proceed. Mr. Ginez. The Witness said, Your Honor, during her cross- examination that the provisions of the contract will justify why Community Innovations, Your Honor, decided that Mrs. Corona had deemed accepted the unit, Your Honor. She said provisions of the contract, and my memory is still fresh, Your Honor. So I am now on re-direct asking her, Your Honor, what provisions of the contract will be the basis for this deemed acceptance or, as Justice said, Your Honor, constructive acceptance, Your Honor. Mr. Cuevas. The same objection, Your Honor. And we do not want to burden this Honorable Court by a repetition of our objection, Your Honor. The Presiding Officer. I think the objection is proper. There is no showing that in any way there is an implied acceptance by the buyer with respect to the issuance of the CAR, the issuance of the title and everything is just the act and supposition of the selling parties. So I have to sustain the objection. Mr. Ginez. We submit, Your Honor, and we have no further re-direct, Your Honor. The Presiding Officer. Okay. Mr. Cuevas. No re-cross, Your Honor.
Senator Sotto. Mr. President. The Presiding Officer. Let us dispose the witness first. Senator Sotto. Yes. We were about tobut there are two Members of the Court who wish to pose questions to the panels and also to the witness. So may we recognize Senator Francis Escudero and Senator Franklin Drilon, in that order, Mr. President. And then Senator Francis Pangilinan and Senator Pimentel. The Presiding Officer. Senator Escudero has the floor.
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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 pagusapan, 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 positionThat 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 mayroong public 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 by the declarant, your Honor.
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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 their respective 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. Apartment 31-B? Madam Witness, iyong susi ba ng apartment nasaan, iyong susi ng
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. Ms. Josef. Yes, Sir.
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Senator Drilon. You know, I would like to seek the help of both Prosecution and Defense. I have been trying to look at these exhibits on the SALN. Saan po ba rito iyong unit na pinaguusapan natin? What is the description? Because this unit is in Makati and I do not see any Makati condo here, except in Exhibit M which is the SALN of Chief Justice Renato Corona as of December 31, 2010, and this is the first time that there is an entry Condo under the column Kind; and then Location, Makati; Year Acquired, 2003; Mode of Acquisition, Installment; Assessed Value, 726,000; Current Fair Market Value, 1,210,000. Ito po ba iyong ating pinag-uusapan? Aling ba ditto ang condominium ang ating pinag-uusapan dito? Mr. Ginez. We confirm, Your Honor, for the Prosecution that this is the condominium unit, Your Honor, the No. 3 entry in the Statement of Assets and Liabilities as of December 31, 2010, marked previously as Exhibit N for the Prosecution, Your Honor. So, it was first disclosed only in 2010, Your Honor. Senator Drilon. My problem is that the year acquired is 2003 and from what I recall, the witness is saying this was paid for in 2004. That is why I am a little bit confused as to which unit we are talking about. So, this is the unit. Is this the unit which is described as acquired or purchased in 2004? Mr. Ginez. If I may, Your Honor, the reason it was stated and I am just supposing, Your Honor, Year Acquired because the purchaser began paying the installment in 2003 and made the full payment in March of 2004 and the Deed of Absolute Sale in October of 2004. So, the reason maybe, that is why they put Year Acquired, 2003, because it was on that year that they paid the deposit and subsequent installment. And as of December 31, 2003, Your Honor, 95 percent of the purchase price was already paid. Senator Drilon. I see. Okay. So, well, I am more confused. Anyway, just to make clear, this is the entry that we are talking about. Mr. Ginez. Yes, Your Honor, because this is the only property that we know of as of now, Your Honor, of Chief Justice Corona in Makati City. Thank you. Senator Sotto. Senator Francis Pangilinan, Mr. President. The Presiding Officer. The Senator from Pampanga, Senator Pangilinan. Senator Pangilinan. Thank you, Mr. President. May we have a clarification from the Defense. Because, well, my understanding is the Defense is saying that there was no acceptance of this property, actual acceptance. And therefore there was no transfer of ownership. Is that myjust to Mr. Cuevas. The burden of proof is on their part. They are questioning the validity, the correctness and the accuracy of the entries in this particular document, Your Honor. I do not think we have to plead our case yet unless they have made a prima facie case of the violation of the law involving SALN, Your Honor. Senator Pangilinan. Okay, I understand that. And therefore, well, just as a clarification, the condo unityou may or may not reply, Justice Cuevas no. So, it is just my understanding therefore that the condo unit in Makati that was acquired in 2003, according to the SALN, by installment, is now subject to discussion or debate as to whether it was actually acquired or transferred or not. This is now where I ambut I suppose when the Defense comes to their turn and they will be able to
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Mr. Cuevas. It is our humble submission, if Your Honor please, that the burden of proving what this unit is, when it was acquired and so on and why, is on the part of the Prosecution because we enjoy the presumption of innocence, Your Honor, and the burden of proof is not shifted to us unless there is a prima facie case. All they stated there was a purchase. Okay. There was transfer. The burden of proof is still on their part, Your Honor. I think every member of the Bar will agree with us that these are matters that should be proven by them and not merely speculate, not merely report this on. Mr. Ginez. May I be allowed, Your Honor? Mr. Cuevas. That is our humble submission, Mr. Senator. The Presiding Officer. Anywayjust a minute. If theres no more question from the witness, let the witness be discharged. Is there any question Mr. Ginez. Your Honor, I just want to make a counter- manifestation because that is a manifestation, Your Honor. The Presiding Officer. Wait a minute. Let us dispose first with the discharge of Senator Sotto. Mr. President, Senator Osmea wishes to ask the witness. The Presiding Officer. Okay. All right, proceed. Let the witness stay. Senator Osmea. Just a couple of short questions, Mr. President. Madam Witness, the Ayala Land or Creative Innovations Condominium Development at the end of Ayala Avenue, almost on the corner of Buendia is called The Columns. Ms. Josef. Yes, Your Honor. Senator Osmea. How many buildings or towers constitute The Columns? Ms. Josef. There are three (3) towers, Your Honor. Senator Osmea. And what is the total number of units in all three towers, more or less? Ms. Josef. There are about 800 units. Senator Osmea. Eight hundred (800) units? Ms. Josef. Yes, Sir. Senator Osmea. When did construction start? Ms. Josef. The construction started 2003, Your Honor. Senator Osmea. This is on the old Zuellig lot? Are you familiar with that or close to the Zuellig property? Ms. Josef. Yes, Sir. It is close to the Zuellig property. Senator Osmea. All right. Can you tell us the type of discounts Ayala Land gave on The Columns?
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Ms. Josef. It depends, Sir, on the buyer but we would have discounts based on the payment schemes of the buyers. Senator Osmea. Just on the payment scheme? Ms. Josef. Yes, sir. Senator Osmea. Would this range from 5 percent to 15 percentwhat would be the maximum amount of discounts you would give for a sale at a cash buyer? Ms. Josef. At that time, Sir, it will probably range at about 10 percent, Sir. Senator Osmea. Ten percent. Did any of the units sell at a 30- or 40-percent discount? Ms. Josef. Not that I know of, Sir. Senator Osmea. All right. Just please check that so that you can confirm and notify the Court if any sold even at 20, 30 or 40 percent discount. Thank you very much. Senator Sotto. No more. Mr. President, he has withdrawn. Senator Pimentel has withdrawn. We are now ready to discharge the witness, Mr. President. Mr. Ginez. May I be allowed, Your Honor, to make my counter- manifestation to Justice Cuevas manifestation, Your Honor? The Presiding Officer. Proceed. Mr. Ginez. Your Honor, Justice Cuevas, our esteemed colleague in the profession, had said that we have not discharged our burden of proof, Your Honor. Witness and the public had already witnessed, Your Honor, that we have proven so far that there was full payment, a Deed of Absolute Sale was executed, a title was issued. So our brethren in the profession will agree with me, Your Honor, and the Supreme Court will also agree with me. I have here an en banc decision, Your Honor, which says, That upon execution of a Deed of Absolute Sale, there is a constructive delivery of the thing sold and that ownership is sold upon execution of the Deed of Absolute Sale which in this case, Your Honor, was made as of October 1, 2004. So it was the duty then of the Chief Justice, Your Honor, to put this into his SALN as of December 31 and subsequent years, Your Honor. That is all, Your Honor. The Presiding Officer. Anyway, this is a disputed legal issue. You are required to submit your memoranda, your respective memorandum on this particular issue, if I recall what was suggested by the gentleman from Sorsogon. So include all of these arguments including the jurisprudence and let it be resolved by the Court. Mr. Ginez. We will, Your Honor. We will submit the same on Monday, Your Honor. The Presiding Officer. Submit it. How long do you want to submit the memorandum?
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Mr. Ginez. Monday, Your Honor. The Presiding Officer. Huh? Mr. Ginez. Next Monday, Your Honor. The Presiding Officer. Monday? Mr. Ginez. Yes, Your Honor. The Presiding Officer. All right. Mr. Ginez. Thank you, Your Honor. The Presiding Officer. You are ordered to submit your respective memorandum on Monday. The Presiding Officer. Senator Pimentel has the floor. Senator Pangilinan. Senator Pangilinan. Yes. Just that they may include in the memorandum, Mr. Senate President, a clarificatory question. The SALN for 2010 admits to a condo unit that was acquired in 2003 by installment. So if there is an admission in the SALN of an acquisition of a property by installment in 2003, what is this issue of whether or not ownership has been transferred or not? So, just include it, please, in the memorandum. Mr. Ginez. Thank you, Your Honor. Mr. Cuevas. Thank you, Your Honor. Senator Sotto. Mr. President, as I said, we are ready to discharge the witness. The Presiding Officer. The witness is discharged. No other matter being asked from this witness? Senator Sotto. No other matter, Mr. President. The Presiding Officer. All right. You are discharged. Senator Sotto. Mr. President, Mr. Noli Hernandez of Megaworld, who testified yesterday, was asked by the Court to submit certain documents. He has filed a written request for additional time not later than 10 February 2012 to search for and voluntarily submit whatever documents are available. Will we grant the request, Mr. President? The Presiding Officer. The request is reasonable and the Chair grants the request. Senator Sotto. Additional request from Senator Osmea on this matter, Mr. President. The Presiding Officer. The gentleman from Cebu has the floor. Senator Osmea. Thank you, Mr. President. In addition, may we request the Court to subpoena, along with the date of turnover of Unit No. 38-B or the penthouse to Justice Corona, the date of Justice Coronas acceptance of 38-B
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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 oclock in the afternoon of Thursday, February 2, 2012. The Presiding Officer. Is there any objection? [Silence] The motion of the Floor Leader is approved. The trial was adjourned at 6:15 p.m.

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