Lewis College, others, ordered to vacate, deliver possession of land to ACBSU, Inc. | BICOL TODAY

Lewis College, others, ordered to vacate, deliver possession of land to ACBSU, Inc.

The Lewis College. Photo from FB


By Felix ‘Boy’ Espineda, Jr.

SORSOGON City – In a sixteen-page decision, Judge Maximo Ables of RTC Branch 52 of Sorsogon City ordered the Lewis College, Lewis Land Corporation, and others to immediately vacate the properties and to deliver possession to Annunciation College of Bacon Sorsogon Unit, Inc.  (ACBSUI). The order was released June 5, 2018.

On April 5, 1999, ACBSUI, together with Engr. Jose Dino, Dr. Isidoro Dino and three of the original members of the Board of Trustees of Annunciation College, namely Alice Dino, Magdalena Dino-Ortiz and Divinagracia Dino Barcelo filed this case as plaintiff against China Banking Corporation, Lewis Collge, Lewis Land Corporation, Mercedita Nicolas. Libertas Dino, Belen Dellosa, and Flordelinda Dino Venzon as defendants.

The case docketed as Civil Case No.1999-6563 prayed for the Nullification of Void AB Initio Board Resolution, Recovery of Property, Reconveyance, Damages and Injunctive Writ with Cautionary Notice filed by Jose Dino, Et. Al., against the defendants. Lewis Land Inc. and Merceditas Nicolas were impleaded in the re-amended complaint for the court found out that they are not buyers in good faith for value.

Allegations of Plaintiff

Records stated that plaintiff considered the promissory notes and mortgage executed by Annunciation College, Inc. (ACI), Fr. Dino, Dr. Libertas Dino and Dr. Belen A. Dellosa, relative to the loan with ChinaBank did not bind them for the loan was fraudulently and illegally entered into by ACI and ChinaBank, hence, void ab initio.

Issue at Bar

The Court noted that the issue of the case boils down to the validity or invalidity of the Mortgage executed by Annunciation College, Inc., in favor of China Banking Corporation.

Facts

On January 21, 2000, defendants represented by Flordelinda Venzon were declared in default, neither did the said defendants file their answer to the Second Re-amended complaint despite proper summons, said the Court.

ChinaBank on its part alleged that the loan obtained and the Mortgage executed by ACI were duly authorized by Board Resolution No. 10 series of 1994 of September 5, 1994, and the Secretary’s Certificate of June 17, 1996, thus valid.

Defendant Lewis Land Inc., and Mercedita Nicolas argued in their answer that they are buyers in good faith and for value.

Annunciation College formerly Annunciation College of Bacon Sorsogon Unit, Inc. went about with the management of the affairs of the corporation under the complete control of Rev. Fr. Isidoro Dino, despite the absence of a By-Laws, court records revealed.

On July 5, 1993 majority of the Board of Trustees of ACBSUI, namely Fr. Isidoro Dino, Dr. Libertas M. Dino, Flordelina Dino Venzon, Marites Dino-Carreon, Divinagracia Dino Barcelo and Alice Dino adopted an Amended Articles of Incorporation and Amended By-Laws increasing the Trustees to nine approved by SEC  on September 25, 1996.

On July 25, 1996 SEC Legazpi Extension Office informed the trustees of ACBSUI that they have no formal By-Laws which they complied by submitting an adopted By-Laws for ACBSUI, approved by the extension office on July 31, 1996, resulting to the two sets of Board of Trustees Annunciation College was used by the plaintiff and Annunciation College, Inc. was use by the defendants. This started the power struggle for the control of ACBSUI and trouble started in March 1995 when Fr. Dino became bedridden.

ChinaBank

On August 24, 1995, Annunciation College, Inc. through Fr. Dino and Libertas Dino was granted a five million peso loan from ChinaBank. Securing the prompt and full payment of the loan, Fr. Dino, Dr. Libertas Dino and Dr. Belen A. Dellosa, representing ACI signed and delivered a mortgage using TCT Nos. 27002 registered in the name of Annunciation College and T-33497 registered in the name of Fr. Isidoro Dino as mortgage document but eventually defaulted. ChinaBank extra judicially foreclose the mortgage. At a public auction of the mortgaged property, ChinaBank was the highest bidder and a certificate of sale was issued in favor of the bank on December 29, 1997.

ACI failing to redeem, the bank consolidated the titles on its name and after taxes was issued TCT Nos. T-52244 and T-52245 by the Register of Deeds of the Province of Sorsogon in the name of China Banking Corporation.

On March 31, 1999, China Banking Corporation executed a Contract to Sell the foreclosed properties with Lewis Land Inc. and on March 8, 2002, sold the same properties by way of Deed of Absolute Sale to Lewis Land Inc.

Lewis Land Inc. and Merceditas Nicolas

Both alleged that they are buyers of good faith and for value. The court, however, sees otherwise.

The court defines that a buyer of good faith and for value is one who buys the property with the well-founded belief that the person from whom he receives the thing had title to the property and capacity to convey it. That at the time of such purchase or before he has notice of the claim or interest of some other persons in the property. There is good faith when there is an honest intention to abstain from taking any unconscientious advantage of another. It said that good faith is the opposite of fraud and it refers to the state of mind which is manifested by the acts of individual concerned.

Evidence

The Court found one of the documents submitted by ACI to ChinaBank when it applied for a loan is the Amended Articles of Incorporation adopted on July 5, 1993 notarized on December 14, 1979 or fourteen years earlier which is the same as that of the original articles of incorporation adopted and executed by Annunciation College of Bacon Sorsogon Unit of the same date when it was originally registered with the SEC on February 27, 1980. The document was submitted by ACI, Fr. Dino, Dr. Libertas Dino and Belen Dellosa to make it appear that ACI was a duly organized corporation and the name of the corporation during the time that ACI applied for a loan with ChinaBank. This is falsification, was the opinion of the court.

The Amended By-Laws submitted by ACI to ChinaBank to support the loan application was adopted by ACI on July 5, 1993, the Amended By-Laws, however, shows that it was signed by the members of the Board of Trustees on July 1, 1964, which is 29 years earlier. It also shows that Felicisimo dino, Estela Dino Dionglay, three of the five signatories on the amended By-Laws, are not incorporators nor members of the Board of Trustees of ACI, but were incorporators of the Annunciation Academy of Bacon Sorsogon. Also, the amended By-Laws submitted to the bank was not acknowledge before a notary public. Submitting it, said the court, is to make it appear that ACI had a valid By-Laws when it applied for a loan with ChinaBank, when in fact it had none. The Court said this is also falsification.

The judge said that the Articles of Incorporation and the By-laws are documents that prove the juridical personality of a corporation. This is required by banking institution before an application for a loan by a corporation is processed and granted, these are two of the documents falsified by ACI, Fr. Dino, Dr. Libertas Dino and Dr. Belen Dellosa and submitted to the bank when they applied for a loan. The documents were accepted by ChinaBank, processed and approved the loan application and released the proceeds to ACI.

The change of the name of Annunciation College to Annunciation College, Inc. as a de facto corporation was only on September 25, 1996, Annunciation College to Annunciation College Inc., until July 16, 2001 after the decision of SEC Case No. 1-97-5535, where the certificate of filing of the Amended Articles of Incorporation and certificate of filing of the amended By-Laws were declared null and void.

The SEC decisions reads as follows: “Consequently the Amended By-Laws filed by the Venzon group on September 23, 1996 by the Security and Exchange Commission (Head Office) is null and void and should be expunged from the records, is appearing that there could not have been any Amended By-Laws of the corporation considering that at the time of the filing of the supposed amendment on August 12, 1993, ACBSUI had no By-Laws so to speak of, and therefore nothing to amend.”

The Court’s opinion

After forty-six hearings, the Court said that the Mortgage and the promissory notes executed and signed by Fr. Isidoro Dino, Dr. Libertas Dino, and Dr. Belen Dellosa, having been entered into with the use of falsified documents are illegal. Being illegal, it cannot be ratified.

Saying further that the falsified Amended Articles of Incorporation and the falsified Amended By-Laws submitted by ACI in support of the loan application produced an illegal mortgage which is not binding upon the plaintiffs. Board Resolution No. 10 s. 1994, being void, produced the void mortgage between ACI and ChinaBank. The subsequent acts of foreclosure and auction sale having been anchored on an illegal and void Mortgage are likewise illegal and void, hence not binding on the plaintiffs.

Chiding ChinaBank the Court said that it should not have relied on the documents submitted by ACI without verifying it, quoting the Supreme Court it said…. The banking institution is” impressed with public interest” such that the public’s faith is of “paramount importance”, Thus, banks are required to exercise the highest degree of diligence in their transactions. xxxx In China Banking Corporation v. Lagon, this Court found that bank was not a mortgagee in good faith for its failure to question the due execution of a Special Power of Attorney that was presented to it in relation to a mortgage contract. Verily banks are expected to exercise greater care and prudence than others in their dealings because their business is impressed with public interest. Their failure to do so constitute a negligence on their part.xxxx

Judgment Rendered:

The Court DECLARED that the Mortgage entered into by Annunciation College Inc., Fr. Isidoro Dino, Dr. Libertas Dino, Dr. Belen A. Dellosa and China Banking Corporation as Null and Void;

It further DECLARED the Foreclosure of the aforementioned Mortgage and all proceedings relative thereto as Null and Void;

It also DECLARED that the Writ of Possession issued in favor of China Banking Corporation and all proceedings relative thereto as Null and Void;

Further DECLARING that the Deed of Absolute Sale executed by and between China Banking Corporation and Lewis Land, Inc. on March 8, 2002, as Null and Void;

ORDERING That Lewis Land Inc. to immediately vacate the properties subject of this case and to deliver possession to plaintiff, ANNUNCIATION COLLEGE OF BACON SORSOGON UNIT, INC.

ORDERING the Register of Deeds of the Province of Sorsogon to cancel TCT Nos. T- 52244 and T-52245 in the name of China Banking Corporation and to issue in lieu thereof, Transfer Certificate of Titles in the name of ANNUNCIATION COLLEGE and Fr. Isidoro Dino respectively;

DECLARING, the loan of Fr. Isidoro Dino, Dr. Libertas Dino and Belen A. Dellosa from China Banking Corporation, as valid indebtedness of Annunciation College of Bacon Sorsogon Unit Inc., demandable in accordance with the stipulation pertaining to it;

ORDERING the defendants to jointly and severally pay plaintiffs the amount of litigation expenses and appearance fees in the amount of 207,000 pesos.

As of press time, Lewis Land Corporation, Lewis College, and the other defendants are yet to issue a statement regarding the court order. [BicolToday.com]

Posted by on July 31, 2018. Filed under Bicol News,Headlines. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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