IMPEACHMENT TRIAL: Wednesday, February 01, 2012

At 2:03 p.m., the hearing was called to order with Senate President Juan Ponce Enrile presiding.

 

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.

(PRAYER BY SEN. GUINGONA)

THE PRESIDING OFFICER.  The Secretary will now please call the roll of Senators.

THE SECRETARY.  The Honorable Senators:  Angara; Arroyo; Cayetano Allan Peter “Companero”; Cayetano, Pia; Defensor Santiago; Drillon; Ejercito, Estrada; Escudero; Guingona; Honasan; Lacson; Lapid; Legarda; Marcos; Osmena; Pangilinan; Pimentel; Recto; Revilla; Sotto; Trillanes; Villar; the Senate President.

THE PRESIDING OFFICER.  With 19 Senator-Judges present in the Chamber, the Presiding Officer declares the presence of a quorum.  Majority Floor Leader.

REP. SOTTO.  Mr. President, may I ask the Sergeant-At-Arms to make the proclamation.

THE PRESIDING OFFICER.  The Sergeant-At-Arms is directed to make the proclamation.

THE SGT-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 SECRETARY.  Case No. 002-2011..IN THE MATTER OF IMPEACHMENT TRIAL OF HONORABLE CHIEF JUSTICE RENATO C.  CORONA.

THE PRESIDING OFFICER.  Appearances.

SEN. SOTTO.  Mr. President.

THE PRESIDING OFFICER.  The Majority Floor Leader.

SEN. 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?  The Chair hears none;  the Journals for the January 30, and January 31, 2012 Senate hearing sitting as an impeachment court is considered approved.

SEN. SOTTO.  We are ready for the appearances, Mr. President.

REP. TUPAS.  Good afternoon, Mr. President, Your Honor.  For the House of Representatives’ prosecution panel, same appearance.

THE PRESIDING OFFICER.  Noted.  The defense.

JUSTICE CUEVAS.  For the defense, Your Honor, the same appearance.

THE PRESIDING OFFICER.  Noted.  Majority Floor Leader.

SEN. 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 evidences.

REP. TUPAS.  Your Honor, we now have our first witness for the day, the name is Mr. Benito Cataran, Director of the Securities and Exchange Commission. And may we request that Congressman Rey Umali be recognized to—He will conduct the direct examination for the prosecution.

THE PRESIDING OFFICER.  Proceed.

THE SECRETARY GENERAL.  Atty. Cataran, please raise your right hand.

Do you swear to tell the truth, the whole truth and nothing but the truth in this impeachment proceeding?

MR. CATARAN.  Yes, ma’am.

THE SECRETARY GENERAL.  So help you God.

REP. UMALI.  With the permission of this honourable court.

THE PRESIDING OFFICER.  Proceed.

JUSTICE CUEVAS.  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 in to this Chamber to testify.

REP. UMALI.  Thank you, Your Honor.  There is none, Your Honor.

JUSTICE CUEVAS.  All right.  Thank you.

REP. 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 1, San Pedro Laguna and presently the Director of the Company Registration and Monitoring Department of the Securities and Exchange Commission.

REP. 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 from the Securities and Exchange Commission.  That he has been such a director of the said department since 1980.  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 wish.

REP. UMALI.  Yes, Your Honor.  If I may just continue, Your Honor.  He may testify on the fact of the company called Basa-Guidote Enterprises Inc. being given a corporate franchise.  That the corporate franchise of this company was revoked by SEC in May of 2003.

THE PRESIDING OFFICER.  Counsel, please elicit those facts from the witness to be recorded.  The counsel is reminded that he is not under oath to testify in this proceedings.  Proceed.

REP. UMALI.  Yes, Your Honor.  And if I—Just to close, Your Honor, to identify and authenticate records pertinent and relevant to his testimony, Your Honor.

THE PRESIDING OFFICER.  Proceed.

REP. UMALI.  Yes.  Mr. Witness, your said you identified yourself as attorney, you are a lawyer by profession?

MR. CATARAN.  Yes, Your Honor.

REP. UMALI.  And since when did you become a lawyer?

MR. CATARAN.  1975.

REP. 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.

REP. UMALI.  Up to the present?

MR. CATARAN.  Yes, Sir.

REP. UMALI.  You stated that you are currently the director of Company Registration and Monitoring Department of SEC.  Since when have you occupied this position?

MR. CATARAN.  Since year 2000.

REP. UMALI.  And you are still occupying this position to the present time?

MR. CATARAN.  Yes, Sir.

REP. 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.

REP. UMALI.  And what are the specific mandate of the Company Registration and Monitoring Department?

MR. CATARAN.  Our department is the department which register corporations and partnerships.

We also issue licenses for foreign corporations and licenses for brokers, financing companies, lending companies.

We also process and approve amendments of articles of incorporation.

THE PRESIDING OFFICER.  I think that is a matter of law that this court can take notice of.

Proceed to the meat of your questions.

REP. 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 to a supervising specialist, then, I became a division chief, then later on, as director of CRMD.

REP. UMALI.  Under what department, Mr. Witness?

MR. CATARAN.  Under company registration and monitoring department.

REP. UMALI.  Considering your vast experience, a total of 32 years in SEC, in the same department, which deals mainly on corporation and laws related thereto, would you reasonably say that you have a fairly substantial knowledge of corporation law?

JUSTICE CUEVAS.  Very leading, Your Honor.

THE PRESIDING OFFICER.  Counsel, counsel.

REP. UMALI.  Mr. 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?

JUSTICE CUEVAS.  Although we do not know him personally, Your Honor, we will be willing—just to expedite the proceedings, we are willing to admit on record…

THE PRESIDING OFFICER.  Alright, proceed from there, counsel.

REP. UMALI.  Thank you, Your Honor.

Mr. Witnes, you appeared today on strength of the subpoena issued by this honorable court, subpoena duces tecum et–subpoena ad testificandum et duces tecum, and you were required to bring with you original and certified true copies of the articles of incorporation of Basa, Guidote Enterprises and its general information sheets and audited financial statements for the years 2000 up to 2010.

First question is, did you bring with you the articles of incorporation and its amendments, if any, of this particular corporation?

MR. CATARAN.  I have here only the original copy of the articles of incorporation, but we do not have any copy for the amendments.  They did not file any amendments of this articles.

REP. 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 …

JUSTICE CUEVAS.  Seven pages.

REP. UMALI.  Seven pages, thank you, Your Honor.

THE PRESIDING OFFICER.  Mark it accordingly.  Is that pre-marked?

REP. UMALI.  Yes, Your Honor, pre-marked as Exhibit WWWWW.  The whole document, the name Basa, Guidote Enterprises Inc., as Exhibit WWWWW-A.  The subsequent pages thereof as WWWWW-1 up to 6, Your Honor.

JUSTICE CUEVAS.  At this juncture, Your Honor, 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 don’t you just mark the document as an exhibit and identify—to identify it, anyway, you can refer to the page …

REP. UMALI.  Yes.

THE PRESIDING OFFICER.  … to the page of that exhibit if you want to refer to a particular page.

REP. UMALI.  Yes.  Actually, Your Honor, we have also pre-marked the pertinent pages thereof in yesterday’s …

THE PRESIDING OFFICER.  All right.  Proceed so that we do not tarry.

JUSTICE 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?

JUSTICE 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 are marked accordingly as both exhibit for the prosecution and the defense.

REP. 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.

JUSTICE 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.  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.

REP. UMALI.  May I also manifest, Your Honor, for the record that we have sub-marked Exhibit WWWWW-3, particularly the portion thereof indicating the original stockholders of the corporation as Exhibit WWWWW-3-A.

THE PRESIDING OFFICER.  Counsel for the defense, do you admit the stockholders of this corporation?

JUSTICE CUEVAS.  Yes, Your Honor.

THE PRESIDING CUEVAS.  So, there is no need to …

JUSTICE CUEVAS.  I do not think there is a 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.

REP. 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 …

THE PRESIDING OFFICER.  Why don’t you ask the one that brought it to read who are the stockholders

REP. UMALI.  Yes, Your Honor.

THE PRESIDING OFFICER.  And who are the members of the board of directors.

REP. UMALI.  I am going to 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.

JUSTICE CUEVAS.  I do not think there will be any reason for the reading, Your Honor.

THE PRESIDING OFFICER.  Let the witness read.

ATTY. 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.

REP. UMALI.  And the directors?

THE PRESIDING OFFICER.  And who are the directors?

ATTY. CATARAN.  The directors, there are seven, namely: Rosario G. Vda. De Basa, Mario Basa, Cecilia Basa, Vicente Roco, Asuncion Basa Roco, Jose Ma. Basa, and Raymunda Gorospe Basa.

THE PRESIDING OFFICER.  All right.  Proceed.

REP. UMALI.  Mr. Witness, what proof, if any, do you have to show that this corporation was registered with the Securities and Exchange Commission?

JUSTICE CUEVAS.  Improper for the direct.

THE PRESIDING OFFICER.  That is not a pertinent question.  After all, it is a matter of record.  That it is registered with the SEC.

REP. UMALI.  Yes, Your Honor.  This is just the articles of incorporation.  The SEC registration is different from the articles of incorporation.

THE PRESIDING OFFICER.  All right.  Answer.

ATTY. CATARAN.  I have here the original copy of the  certificate of registration, Your Honor.

REP. 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.

REP. UMALI.  I am showing to you a copy, Mr. Witness of this certificate of registration.  Is this the same document that you mentioned?

MR. CATARMAN.  Yes, sir.

REP. UMALI.  And will you please read into the records this particular exhibit marked as Exhibit XXXXX.

MR. CATARMAN.  All these?

REP. UMALI.  The name and the registration number and the date.

MR. CATARMAN.  To all to whom this presents 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 of the act of  Philippine Commission No. 1459…

REP. 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. CATARMAN.  1961, Your Honor.

THE PRESIDING OFFICER.  1961.

MR. CATARMAN  This certificate of registration was signed by Securities Exchange Commissioner Mariano G. Pineda.

REP. UMALI.  Now, you were also required, Mr. Witness, to bring with you pursuant to the subpoena the general information sheet or GIS of Basa, Guidote Enteprises Inc. for the years 2000 to 2010.  Did you also bring this with you?

MR. CATARMAN.  We did not receive those reports.

REP. UMALI.  Will you amplify that point, Mr. Witness.

MR. CATARMAN.  Since we have no reports or general informations and financial statement as you requested, I just prepared a certificate of non-filing, if this court will accept this.

THE PRESIDING OFFICER.  What reports were requested?

REP. UMALI.  The reports, Your Honor, the general information sheet covering the periods 2000 up to year 2010, Your Honor.

JUSTICE CUEVAS.  We would like to know, with the kind permission of the honoraable court, we would like to know the materiality, the pertinence and the relevancy of all these documents, Your Honor.  Because up to now we are at a loss in deciphering or divining what is the reason or materiality…

THE PRESIDING OFFICER.  Let us proceed and let us see what is the connection of this corporation with this proceeding.

JUSTICE CUEVAS.  Thank you, Your Honor.

REP. 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. CATARMAN.  Just to prove that we did not receive any documents, meaning those reports you requested.

REP. UMALI.  Meaning the general information sheet for the years 2000 to 2010 are what, Mr. Witness?

MR. CATARMAN.  May I read this please.

REP. UMALI.  Yes, please.

MR. CATARMAN.  To whom it may concern.  This is to certify the records that the records of Basa, Guidote Enterprises Inc. with SEC No. 18884 and filed with this commission show that said corporation did not file its general information sheets and financial statements from 2000 to 2010 then my signature, Your Honor.

REP. UMALI.  So you mentioned, may we manifest, Your Honor, that this document was pre-marked as our Exhibit EEEEEE The name Basa-Guidote Enterprises as Exhibits EEEEEE-A and the signature of Benito Cataran Exhibit EEEEEE-B.

Whose signature is that, Mr. Witness?

MR. CATARAN.  This is my signature.

REP. UMALI.  Thank you, Your Honor.

May I request the defense to review the documents and compare the same to the original?

JUSTICE CUEVAS.  If the purpose is substitution, Your Honor, we have no objection.

THE PRESIDING OFFICER.  It is not objected to, so proceed, counsel.

REP. UMALI.  Now, Mr. Witness, when you determined that the documents being requested were not present in your records, what other actions did you take, if any, to find out compliance of certain reportorial requirements by this corporation?

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.

REP. 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 from 1991 …

THE PRESIDING OFFICER.  Witness, from what year to what year?

MR. CATARAN.  1991 up to 1997.

THE PRESIDING OFFICER.  All right.

MR. CATARAN.  Actually, it’s not—what happened is that …

THE PRESIDING OFFICER.  Just answer the question please.

MR. CATARAN.  I found out that the corporation is not submitting report from 1991 up to the time we revoked the Certificate of Registration of such corporation in 2003, Your Honor.

REP. UMALI.  Now, you said that they have not been reporting since 1991.  Would you have any report submitted, General Information Sheets submitted as existing in your record, Mr. Witness?

MR. CATARAN.  There are, GIS, General Information Sheet on our file.

REP. 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.

REP. 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 for Basa-Guidote Enterprises Inc. which may I manifest for the recorded, Your Honor, has been marked as Exhibit YYYYY.  The names of the directors and trustees thereof as …

THE PRESIDING OFFICER.  Trustees?

REP. UMALI.  Yes, Your Honor.  This is what it appears in the document, Your Honor.

THE PRESIDING OFFICER.  All right.  Go ahead.

REP. UMALI.  Will you please read to the record the names of the directors and trustees as appearing in this document?

MR. CATARAN.  C.M. Basa III, Randy Basa, Concepcion Basa, Flor Maria Basa, Asuncion B. Rocco, Vicente Rocco, as directors.

THE PRESIDING OFFICER.  Why did they use the term trustees?

MR. CATARAN.  No, actually, Sir, this is a form where it indicated the board of directors din/trustee, they are supposed to cross out the trustee, because a trustee refers to non-stock.  It so happen that they did not cross the term trustee.

THE PRESIDING OFFICER.  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.  Does that mean trustees for non-commercial corporations?

MR. CATARAN.  Yes, Sir, because this is a general form which non-stock corporation can use.  For non-stock, they usually use the term of trustee, instead of directors.

So, if they have this form, 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 happen that …

THE PRESIDING OFFICER.  Anyway, that is the legal issue.  Please proceed.

REP. 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 N. Basa, Chairman and President; Randy Basa, Vice President; Mario Basa Jr., Vice-President; Melissa Basa, Secretary, Treasurer.

REP. UMALI.  On the dorsal portion of this, appear the names of stockholders.  Will you also please read into the records the names of the stockholders appearing therein.

MR. CATARAN.  Jose N. Basa, Raymunda Basa, Cecilia H. Basa, Concepcion Basa, Flor Maria Basa, Asuncion Basa-Roco and Vicente Roco.

REP. UMALI.  Thank you, Mr. Witness.

May I request, Your Honor—may I propose and stipulate, Your Honor, that this exhibit which was earlier marked as Exhibit 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 as—the dorsal portion as Exhibit YYYYY-1, and the names of the stockholders appearing in the dorsal portion or Exhibit YYYYY as Exhibit YYYYY-1-A, and would like to request the defense to compare with the original.

May we propose stipulation on the matter with the defense.

JUSTICE CUEVAS.  Very willingly, Your Honor.  We admit, Your Honor, that what is being presented are faithful reproduction of the original.

THE PRESIDING OFFICER.  Proceed.

REP. UMALI.  Thank you.

Now, Mr. Witness, did you also bring with you, pursuant to the subpoena, the copies of financial statements of Basa, Guidote Enterprises, Inc., for the years 2000-2010?

MR. CATARAN.  We did not receive any financial statement within that period.

REP. UMALI.  So, these documents did not exist on your file?

MR. CATARAN.  Yes, Sir.

REP. UMALI.  Are there documents, financial statements appearing on your files with the Securities and Exchange Commission?

MR. CATARAN.  None.

REP. UMALI.  And what is the repercussion of this non-filing of the GIS and/or financial statements, Mr. Witness.

JUSTICE CUEVAS.  That will be asking for an opinion, Your Honor, and the witness is presented.

THE PRESIDING OFFICER.  What is the position of the …

REP. UMALI.  I withdraw, Your Honor, I withdraw.  I withdraw the question

THE PRESIDING OFFICER.  Your are withdrawing the question.

REP. UMALI.  Yes, Your Honor.

THE PRESIDING OFFICER.  Alright.  Reform.

REP. UMALI.  So, when you—when it was revealed that there was no financial statements appearing in your records nor this GIS, what action did your department take in relation to this matter, Mr. Witness?

JUSTICE CUEVAS.  The question is vague, Your Honor.  Because actually, what the witness stated is there is nothing in the record that will show these things.  It was not a revelation, Your Honor.

THE PRESIDING OFFICER.  Let the witness answer.  He is intelligent.  He in charge of records.

JUSTICE CUEVAS.  Submitted, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. CATARAN.  Well, based on the request, as I mentioned and I just presented, I just issue a certification that we did not receive such financial statement.

REP. UMALI.  And so, what is the effect when there was no submission of these financial statements?

THE PRESIDING OFFICER.  As a conclusion of law, don’t you think so, Counsel?  You are going on a conclusion of law.

REP. UMALI.  Yes, Your Honor.  I again will reform, Your Honor.  So, what is the present status of Basa, Guidote Enterprises, Your Honor?

JUSTICE 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.

THE PRESIDING OFFICER.  Let the witness answer.  Proceed.

ATTY. CATARAN.  The certificate of registration of Basa Guidote Enterprises, Inc. is already revoked, Your Honor.

REP. UMALI.  Do you have any proof of this revocation made on this corporation?

ATTY. CATARAN.  Yes, sir.

REP. 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 with what you testified on earlier, Mr. Witness?

THE PRESIDING OFFICER.  Please make your question more specific.  He has testified on so many things.

REP. UMALI.  Of this particular order, Your Honor.  I am showing him a document, Your Honor.

JUSTICE CUEVAS.  Still vague, Your Honor, and too general.

REP. 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 statements pursuant to Section 141 of the Corporation Code.  What is the relation of this to the statement you made earlier, Mr. Witness.

JUSTICE CUEVAS.  The question, Your Honor,  too long.  We would not know when to object and so on.  May we request that the question be simplified, Your Honor.  Because the witness is an intelligent witness, Your Honor.

THE PRESIDING OFFICER.  Let the witness answer.  Mr. Witness, what is Section 141 of the corporation?

ATTY. CATARAN.  This the particular provision of the Corporation Code, which requires the submission of reports to the commission.

THE PRESIDING OFFICER.  Which requires?

ATTY. CATARAN.  The submission of general information sheet and financial statement.

THE PRESIDING OFFICER.  So, that is the basis of your requirement that a corporation must submit a general information sheet and financial statements.

ATTY. CATARAN.  Yes, Your Honor.

THE PRESIDING OFFICER.  All right.  Proceed.

ATTY. CATARAN.  And with this order, it stated that because of the non-filing of this report, general information sheet and financial statement in a period of more than at least 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. CATARMAN.  We stated in this order which I signed, that the corporation has to, may I read, Your Honor, the order.

THE PRESIDING OFFICER.  Just tell us in a nut shell what was the action of your office.

MR. CATARMAN.  We notify the corporations to submit the cost 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.

MR. CATARMAN.  Yes, sir, we will consider their certificate of registration revoke.

THE PRESIDING OFFICER.  Alright.  Now, the Chair would like to post this question—what is the effect of that revocation of registration?

MR. CATARMAN.  When the corporation failed to file an appeal, it becomes effective and with the effectivity of this order its existence  is considered as none, no longer exist.  Meaning with this revocation order…

THE PRESIDING OFFICER.  Wait a ;minute.  You mean the corporation is dissolved.

REP. CATARMAN.  Yes, sir.  That’s the opinion of the commission that whenever a corporation…

THE PRESIDING OFFICER.  Wait a minute, let me clarify this.  Isn’t it that a corporation exist when it is incorporated as a person?

REP. CATARMAN.  Yes, Your Honor.

THE PRESIDING OFFICER.  That only the stockholders can dissolve it or the government through a quo warranto proceeding.

MR. CATARMAN.  We have the authority, the SEC has the authority to revoke, suspend, revoke Articles of Incorporation.

THE PRESIDING OFFICER.  So, therefore, do you consider this corporation as a corporation in liquidation?

MR. CATARMAN.  Well, it seems we already revoked…

THE PRESIDING OFFICER.  No, I am asking you—because when you say the  corporation is dissolved, it is not the end of the corporation.

MR. CATARMAN.  They can still exist.

THE PRESIDING OFFICER. It goes into a liquidation process.

REP. CATARMAN.  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?

REP. CATARMAN.  We don’t 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?

REP. CATARMAN.  We have opinions which says 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. CATARMAN.  We can consider this, Your Honor, as involuntary dissolution of the corporation through an act by the commission.

THE PRESIDING OFFICER.  There is a provision, if I remember correctly, my Corporation Law, there is a provision in the Corporation Law regarding the dissolution and liquidation of a corporation.  Has that been removed and changed?

MR. CATARMAN.  No, no.  There is still a provision, Section 120 of…

THE PRESIDING OFFICER.  Still the same?

MR. CATARMAN.  Yes, sir.

THE PRESIDING OFFICER.  Since the Corporation Law was adopted in the early turn of the last century.

MR. CATARMAN.  Yes, Your Honor, 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…

MR. CATARMAN.  Your Honor, under PD 902-A, the SEC has the authority to suspend and revoke certificate of registration.

THE PRESIDING OFFICER.  Suspend the operation of the corporation.

MR. CATARMAN.  And revoke also.

THE PRESIDING OFFICER.  But you cannot kill that corporation.

MR. CATARMAN.  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. CATARMAN.  At present, our opinion is, as I mentioned…

THE PRESIDING OFFICER.  Anyway, proceed, counsel.

SEN. LEGARDA.  Mr. President.

THE PRESIDING OFFICER.  Yes, what is the pleasure of the Gentleman?

SEN. LEGARDA.  Gentle Lady, Mr. President.  Mr. President, I’m present here.  Yes, thank you.

Mr. President, may I just seek clarification from your previous statement …

THE PRESIDING OFFICER.  The Gentle Lady from the Philippines.

SEN. LEGARDA.  Thank you, Mr. President.

May I just seek clarification from you statement regarding the dissolution of a corporation.  May this Representation be allowed on 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 Representation’s entlightenment.

MR. CATARAN.  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 the revocation, the corporation has to liquidate its assets.

THE PRESIDING OFFICER.  This court directs the witness to submit a legal memorandum showing as the authority of the Securities and Exchange Commission to consider corporation which in is non-compliant with the provision of Section 141 of the Corporation Code who’s authorized to dissolve it, and what is the procedure of dissolution.

SEN. LEGARDA.  May I know, 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 and 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 a corporation, the Certificate of Registration of a corporation, whether it be one year, non-filing two years.  But usually, as a matter of practice, we revoke the registration if the corporation has not been submitting reports, for at least three years.

THE PRESIDING OFFICER.  With the permission of the Lady Senator, I’ll just want to clarify one point.  A corporation whose registration is revoked, can it be revived?

SEN. LEGARDA.  That was my question.

MR. CATARAN.  Before the …

THE PRESIDING OFFICER.  No, I’m asking you, can it be revived?

MR. CATARAN.  Yes, Your Honor.

THE PRESIDING OFFICER.  So, therefore, it’s not dissolved, because when you dissolve a corporation, you kill it, you cannot revive it.

SEN. LEGARDA.  Which brings me to my question before that, which is exactly the same question, is a dissolution of a corporation the same as the revocation of the Certificate of Registration?  And what happens to the assets of that corporation during the time after the revocation of the registration?

MR. CATARAN.  What I’m saying is that the effect of the revocation of corporate franchise is to dissolve the corporation.

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.  At any rate, the Lady Senator has the floor.

SEN. LEGARDA.  Well, I support the position of the Chair, of the Presiding Officer, that perhaps the SEC can provide the body with a legal memorandum to this effect so that the—we may fully understand this.  But my question is, is this an uncommon practice?

MR. CATARAN.  No, Your Honor.

SEN. LEGARDA.  There are many corporations who …

MR. CATARAN.  Yes, Your Honor.

SEN. LEGARDA.  The prosecution, of course, has not finished its direct examination.

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 suppose to have gone to the purchase of real estate property, for which he paid his cash advances at a time when the corporation was suppose to be not in active status.

Is that my understanding, Mr. Prosecutor?  Is my understanding correct?

REP. UMALI.  Yes…

SEN. LEGARDA.  Is that the point you are trying to make?

REP. 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, upon the issuance—pursuant to a subpoena issued by this honorable court.

As of December 31, 2003, there appeared in this particular SALN, marked as Exhibit C, and entry on liabilities, cash advance from Basa, Guidote, Enterprises, Inc., wife’s family corporation, in the amount of P11 million.  And likewise, in Exhibit B …

SEN. LEGARDA.  Thank you for that.  Excuse me, that was 2003 when the Chief Justice supposedly borrowed P11 million from Basa Enterprises.

REP. UMALI.  That is correct, Your Honor.

SEN. LEGARDA.  Just hold there.  May we ask from the SEC, during this time, was Basa Enterprises, in operation or was it already dissolved, using your word of dissolution of the corporation?

MR. CATARAN.  We cannot say whether it is still in operation because they are not submitting reports.

SEN. LEGARDA.  They have not been submitting reports and therefore, you were not familiar—and then in 2003, when the cash advance of P11 million was made, was whether the operation was ongoing, of Basa Enterprises.

MR. CATARAN.  Yes, Your Honor.

SEN. LEGARDA.  Yes, Mr. Prosecutor.

REP. UMALI.  Thank you, Your Honor.

SEN. LEGARDA.  2003, P11 million, after which, he declared that there was a decrease in cash advance until it was paid fully in 2010.  Is that what you are trying to say?

REP. UMALI.  That is correct, Your Honor.

SEN. 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 do not receive any report.

SEN. 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’s franchise has already been revoked, and we consider that corporation as dissolved.  We no longer ask for the submission of report.

SEN. LEGARDA.  My time is up.  I just have one question, Mr. Presiding Officer, only if you allow.

THE PRESIDING OFFICER.  Go ahead.

SEN. 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 non-disclosure in the SALN during that time?  It is a corporation of the wife, the wife’s family, and I want to see the connection of—but you can proceed.

REP. 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 been—the corporate franchise has already been dissolved or revoked, and therefore, the only action that can be taken by Basa, Guidote, is just to liquidate and wind up the affairs of the corporation and distribute the shares.

That is all that it could do at that point in time.  If I may just continue.

THE PRESIDING OFFICER.  Counsel.

REP. UMALI.  Yes, Your Honor.

THE PRESIDING OFFICER.  When was the revocation issued by the SEC?

REP. UMALI.  April 22, 2003, Your Honor.

THE PRESIDING OFFICER. 2003.

REP. UMALI.  Yes, Your Honor.

JUSTICE CUEVAS.  Your Honor please.

REP. UMALI.  I am not through, Your Honor, if I may just continue.

THE PRESIDING OFFICER.  Let the prosecution …

REP. UMALI.  If I may just continue, Your Honor.  Also in the SALN of Renato Corona, on the dorsal portion of Exhibit C is an entry where Cristina R. Corona with its firm name Basa Guidote Enterprises, Inc., wife’s family corporation, declared nature of business, interest and/or 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 we, 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.

JUSTICE CUEVAS.  If Your Honor please.

THE PRESIDING OFFICER.  Proceed, Counsel.  This will be addressed to the evaluation of this court.

JUSTICE CUEVAS.  Yes, Your Honor.

THE PRESIDING OFFICER.  Especially the effect of revocation.  And assuming that the SEC has the power to dissolve a corporation, which I doubt, and 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 grave doubt whether it has the authority to dissolve a corporation because my knowledge of corporation law suggests to me that only the stockholders can dissolve the 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 the 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.

JUSTICE 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.  Proceed.

JUSTICE CUEVAS.  Thank You, Your Honor.  In SEC opinion dated May 4, 1995, it is stated, The SEC has opined that hereinunder 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.  This honourable 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 non-payment of wages, or recovery of properties, and it is still pending, would 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.

JUSTICE CUEVAS.  I am just reading from the opinion, Your Honor.

REP. UMALI.  If Your Honor please, may I also be heard on this.

JUSTICE CUEVAS.  I am just reading from the  opinion, Your Honor.

THE PRESIDING OFFICER.  Let the defense counsel finish first.

REP. UMALI.  Yes, Your Honor.

JUSTICE 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 at this particular instance.  Thank you, Your Honor.

THE PRESIDING OFFICER.  Thank you.  What is the pleasure of the prosecution?

REP. UMALI.  Yes, Your Honor, first of all, we take exception to the statement that the prosecution is feeding erroneous information to this honourable court.

JUSTICE CUEVAS.  Sorry.

REP. 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 clarified that an order of revocation is immediately effective.  Once the revocation order is issued, a subject corporation’s existence is terminated at the very instant.  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 this 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 corporation’s 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’s leave the matter at that and that will be taken up by this court after we have finished the hearing.  Alright.  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.

REP. 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. CATARMAN.  The commission issued a circular reminding those covered corporations, those whose certificate of registrations were revoked to file within a period of one year a petition to lift the revocation order.

REP. 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. CATARMAN.  This indicated the date of revocation of the corporation, that is May 26, 2003.

REP. UMALI.  Which document, Your Honor, we have already previously marked as Exhibit DDDDDD and the first row of this document from 1936 to 1966 and the date mentioned which includes May—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.

JUSTICE 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.

THE PRESIDING OFFICER.  So, that’s it.  Counsel, proceed.

REP. 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 the Basa-Guidote Enterprises Inc. to revive the corporation?

MR. CATARAN.  None.  The corporation did not file any petition to appeal the revocation, Your Honor.

THE PRESIDING OFFICER.  By the way, counsel, what is the purpose of this line of questioning?  What are you trying to prove?  Your are trying to prove that this corporation is dead, …

REP. UMALI.  Yes, Your Honor.

THE PRESIDING OFFICER.  … dissolved and that it did not lend money?

REP. 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?

REP. UMALI.  Then the only matter that can be done by the corporation is just to liquidate …

THE PRESIDING OFFICER.  Yes, it liquidates.  What is the relevance of that fact of dissolutionment to this proceeding.

REP. UMALI.  Then, Your Honor, the corporation can no longer transact business …

THE PRESIDING OFFICER.  Can no longer advance money to anybody.

REP. UMALI.  Yes, Your Honor.

THE PRESIDING OFFICER.  Then go to that point.

Yes, Senator from Taguig, Minority Floor Leader.

SEN. CAYETANO (A.).  Mr. President, magandang hapon.

Can I just pursue your question, kung ano ang relevance?

THE PRESIDING OFFICER.  Yes.

SEN. CAYETANO (A.).  Just to clear things up no, kapagka ang korporasyon ay may ginawa na hindi nila pwedeng gawin, ultra vires yon ‘di ba?  Labag sa batas, labag sa kanilang charter.

Ang tao, ‘pag inutangan mo at patay na ang tao, mapapatunayan mo hindi nagpautang yung tao na yon dahil patay na siya e.  It can be his estate or pwedeng isang ano.

Pero yung korporasyon, ‘pag sinabi ng SEC na patay na, ang sinasabi nyo hindi na pwedeng magpautang.  Hindi ba irrelevant yon?  Kasi ang tanong dito, hindi yung batas ng SEC 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 merong 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 yung korporasyon,—family corporation ‘to e.  Kung may bank account o may pera sila, pwede pa rin sila magpautang e.

So, anong relevance kung buhay po yung korporasyon o hindi?  Hindi po ba ang dapat natin patunayan ‘to kung totoo o hindi na nagpautang yung corporation.  Yun ang pinupunto natin dito.  Hindi kung buhay ang korporasyon o hindi.  Kasi kahit patayt na ang korporasyon, de facto-wise, you can still get the money.  You can still loan the money out.

Can you clarify on that matter please.

REP. UMALI.  Yes, Your Honor.  There’s another point.  What we’re saying here has 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 ninyong—What is it?  What is untruthful if the question is, did that coroporation or body or group of persons lend money that is reflected in the SALN of the respondent?

REP. UMALI.  Kaya nga po, Your Honors, ang sinasabi po natin, dahil ni-revoke na po, at dissolved—at ang tanging pwede na lang pong gawin ng korporasyon ay i-liquidate at i-distribute iyong assets…

THE PRESIDING OFFICER.  We will take your opinion in advisement.

REP. UMALI.  Yes, Your Honor.

THE PRESIDING OFFICER.  We will take your opinion into consideration, but that is not—you have not established the connection of what you are saying with …

SEN. CAYETANO (A.).  Mr. President.

THE PRESIDING OFFICER.  … the present proceeding.

SEN. CAYETANO.  Mr. President.

THE PRESIDING OFFICER.  The Gentleman from Taguig has the floor.

SEN. CAYETANO (A.).  Mr. President, can I yield for a few minutes to Senator Lacson?  He wants to interject on this point.

THE PRESIDING OFFICER.  The Gentleman from Cavite.

SEN. 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 dito, tama, date of revocation, May 26, 2003.

Hindi naman po puwedeng sabihing patay ang korporasyon dahil mayroon naka-indicate sa another column, deadline to file petition to lift revocation …

REP. UMALI.  Tama po.

SEN. LACSON.  So, ang tanong ko po sa SEC, ano po ang status noong korporasyon between May 26, 2003 and May 26, 2010?  Ito po ba ay patay na?

Kasi puwedent i-resuscitate e, deadline to file petitioni to lift revocation, 2010, so, puwede pong ma-revive ito.

MR. CATARAN.  Yes, Your Honor.

SEN. LACSON.  So, active po iyong corporation, pwedeng maging active, buhay pa po, pwedeng naka-suwero pero buhay?

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 or we say …

SEN. LACSON.  But why do you have to give a deadline to file petition to lift revocation kung sinsasabi niyong dead na?

MR. CATARAN.  So that we can finalize the order, but it is already effective.

SEN. LACSON.  Thank you, Mr. President.

SEN. CAYETANO (A.).  Mr. President.

SEN. LACSON.  Thank you, Senator Cayetano.

SEN. CAYETANO (A.).  Just to continue and finish …

THE PRESIDING OFFICER.  Thank you, Gentleman from Cavite.

SEN. CAYETANO (A.).  Are you saying, Your Honor—may I ask the SEC director one question.

THE PRESIDING OFFICER.  Proceed.  Proceed.

SEN. CAYETANO (A.).  Iyon pong deadline, hanggang 2010?

MR. CATARAN.  Yes, Your Honor.

SEN. CAYETANO (A.).  Pwede po silang mag-liquidate?

MR. CATARAN.  If they will not file an …

SEN. CAYETANO (A.).  No, but they can liquidate the assets of the corporation?

MR. CATARAN.  It is up to them.

SEN. CAYETANO (A.).  So, isn’t cash advances a form of liquidation?

MR. CATARAN.  I do not think so, Your Honor.

SEN. CAYETANO (A.).  Hindi, di ba, kung sampu kayo sa korporasyon, may  P10 milyon iyong korporasyon, pare-pareho ang number of shares nyo, so, ibig sabihin, kapag wala na kayong ibang utang, ibabalik ang tig-iisang 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.

SEN. CAYETANO (A.).  Well, anyway, my time is up, Mr. President, but 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 o 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 na 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.

SEN. DRILON. Mr. President.

THE PRESIDING OFFICER.  The Gentleman from Cavite.

SEN. LACSON.  Thank you, Mr. President.

Lalo po kaming nalabuan doon sa sagot niyo, dahil sabi niyo, effective na iyong kamatayan ano?  Sabi niyo, revoked e.  Pero sino iyong sinulatan niyo na mag-file ng petition before the deadline imposed?  Kung patay na, kanino nyo inadress?

I am just talking practical terms ano?

MR. CATARAN.  Yes, kasi ano poi yon e, when we revoke, it means that it has no longer a corporate existence, that is the effect since we revoked, that is really 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.

SEN.LACSON.  Iyon nga po, doon nga po kami naguguluhan.  Ako, particularly, kasi ano po ang status nga noong 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.

SEN. DRILON.  Can I have two minutes, Your Honor.

THE PRESIDING OFFICER.  You have two minutes.

SEN. DRILON.  Mr. Witness, when a corporation’s license is revoked, am I correct in my understanding that under Section 122 of the Corporation Code and the SEC regulations, that this means that it can no longer operate except for purposes of winding up its affairs, is that correct?

ATTY. CATARAN.  Yes, Your Honor.

SEN. DRILON.  And the corporation is given three years to wind up its affairs, is that correct?

ATTY. CATARAN.  Yes, Your Honor.

SEN. DRILON.  And, therefore, it cannot continue in its regular business during the three-year period?

ATTY. CATARAN.  Yes, Your Honor.

SEN. 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?

ATTY. CATARAN.  Yes, Your Honor.

SEN. DRILON.  And the affairs of the corporation should be limited to those which would have a bearing to its liquidation, is that correct?

ATTY. CATARAN.  Yes, Your Honor.

SEN. 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?

ATTY. CATARAN.  Yes, Your Honor.

SEN. DRILON.  Now, you also mentioned that after the 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?

ATTY. CATARAN.  Yes, Your Honor.

SEN. DRILON.  So, insofar as the records are concerned, this corporation has ceased to operate because three years have lapsed since the time of revocation?

ATTY. CATARAN.  Yes, Your Honor.

SEN,. 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?

ATTY. CATARAN.  Yes, Your Honor.

SEN. DRILON.  That is all, Your Honor.

THE PRESIDING OFFICER.  Thank you.  The Gentleman from Pampanga.

SEN. PANGILINAN.  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, in the SALN, therefore, for lack of a better term, mayroong mga unexplained exclusions?  In this case, there is an inclusion, meaning, mayroong loan, me dineklara.  Iyong kahapon, may mga hindi dineklara.  Ngayon, sinasabi ninyo, may mga dineklara.  Subali’t, iyong mga dineklara eh kwestyonable.  And therefore, it goes again to the issue of the truthfulness of your SALN.

ATTY. CATARAN.  That is correct, Your Honor.

SEN. PANGILINAN.  So, kung kahapon, unexplained exclusions, for lack of a better term, ngayon nais ninyong patunayan eh unexplained inclusions.

ATTY. CATARAN.  Yes, Your Honor.

SEN. PANGILINAN.  Iyon lang po.  Salamat po.

THE PRESIDING OFFICER.  Thank you.  The Gentleman from Aurora has two minutes.

SEN. ANGARA.  Maraming salamat po, Pangulo.  Palagay ko, this is all much ado over nothing eh.  Sapagka’t. number one ho, wala namang disagreement ang prosecution and defense on the authenticity of this document.  So, it is up to us to draw the proper legal conclusion.  So, we don’t have to debate the conclusion because it is up to us.  Ngayon, ang confusion ho 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.  The distinction between revocation of license to operator, registration is entirely separate and distinct from dissolution of the corporation.  Revocation of the license to operate means cancellation of the registration.  But that doesn’t automatically result to the extinction of the corporation.  As Senator Drilon explained, there is still a three-year winding up period.  Why?  For a very practical reason.  If sinabi mo rinebok ko iyong lisensya mo, patay ka na, ay ano ang nangyari sa sweldo 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 corporate purpose you cannot pursue that anymore.  But can you pay out money?  Well, as Allan 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 the full confusion arose from the confusion of cancellation and dissolution, Mr. President, that is why it is important that our witness provides 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 thought 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 the corporation, that means talagang wala na, wala ka ng magagawa.  Salamat po, time ko na ho.

THE PRESIDING OFFICER.  Counsel for the prosecution, proceed.  The Gentleman from Makati and Bicol, Senator Arroyo, my equal senior Senator.

SEN. ARROYO.  Thank you, Mr. President, this is not a question.  You know, I once sat on the table of the prosecutors.  If you are not sure of your evidence, please do not present it.  That is all.  Like this portion of this evidence you submitted Exhibit DDDDD, it says there that they could  still petition the decision of the revocation up to sometime in 2010.  Now, why don’t you mark it?  I don’t really want to ask you anything because you have control of that.  But, Mr. President, in the legal memorandum, could you please include for the memorandum to be filed by the witness that if there’s revocation, what happens to the creditors?  What happens to the employees?  What happens to the suppliers?

THE PRESIDING OFFICER.  What happens to the titles in the name of the corporation, the lands, shares of stock and whatever property ito?  What happened to the books of accounts?

SEN. 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 a family corporation as Allan said.  That’s about all that I would like to point out.  Thank you very much, Mr. President.

THE PRESIDING OFFICER.  The Lady Senator from Taguig.

SEN. CAYETANO (P.).  Mr. President, just a few follow up questions.  May we ask the witness if he knows or if he does not know then can he include in the memorandum, the legal memorandum the basis for the setting of the deadline to file petition.  Is that based on the Corporation Code?  Because as Senator Ping Lacson pointed out, if it has already been revoked, then what is this extra life that is being given?

MR. CATARMAN.  It is not based on the Corporation Code?

SEN. CAYETANO (P.).  Okay.  So it is just a decision that the SEC made to give life again to a dead corporation.

MR. CATARMAN.  Yes, Your Honor.

SEN. CAYETANO (P.).  Okay.  And then what I would also like to be included in your legal memorandum, is it not possible that, in fact, a corporation that has been—whose certification has been revoked, they continue to conduct business, even if they are not allowed?

In other words, are there not—Because I was a practicing lawyer at some point, and I had so many clients who did not file their GIS, who receive circulars from the SEC telling them that they will be revoked, but meanwhile, all this time, they’re doing business.

So, in other words po, hindi man sila kilalanin ng SEC na buhay sila e buhay sila.  Sila ho ay may mga ginagawa.  And that brings me to my question to the prosecution, is it your intention to prove that money, in fact, did not—exchange of money did not take place?  Because it appears that there are many of us who feel that this whole discussion is irrelevant because even if the legal existence—even if the corporation has no legal existence, it appears that circulars are being sent to them and there is a 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.

REP. UMALI.  Yes, Your Honors.  What we’re trying to prove is that precisely this alleged cash advance is fictitious.  For so many reasons, and this is the reason why we mark in evidence.  And 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 Christina 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, …

REP. UMALI.  These are things that we’re trying to prove, Your Honor, and we’re just trying to lay the predicate, Your Honor, because this is just one of the witnesses that will prove many other aspects of this 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.

REP. UMALI.  Well, I think we’re 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.

SEN. SOTTO.  Mr. President.

THE PRESIDING OFFICER.  What’s the pleasure of the defense counsel?

JUSTICE CUEVAS.  We will …

SEN. SOTTO.  Mr. President.

THE PRESIDING OFFICER.  The Majority Floor Leader.

SUSPENSION OF TRIAL

SEN. SOTTO.  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 Senator’s lounge for a short caucus to take up a small detail in the proceedings of the Impeachment Court before the cross-examination of the defense, Mr. President.

I so move.

THE PRESIDING OFFICER.  Trial suspended.

It was 3:33 p.m.

The hearing was resumed at 4:09 p.m.

 

THE PRESIDING OFFICER.  The hearing is resumed.  Majority Floor Leader.

SEN. SOTTO.  Mr. President, we are ready for the cross-examination by the defense.

THE PRESIDING OFFICER.  The defense counsel may cross-examine, if he wishes.

JUSTICE CUEVAS.  Thank you, Your Honor.  With the kind permission of this honourable court, Your Honor.

THE PRESIDING OFFICER.  Proceed.

JUSTICE CUEVAS.  Now I would like to be informed, whether from the point of view of the SEC whether 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’s say, we issue license to a foreign corporation or to a broker, so we use that term, cancellation.

With respect to dissolution, it refers to corporation, it can be voluntary or involuntary.  That’s the difference.

JUSTICE CUEVAS.  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?

JUSTICE CUEVAS.  From the standpoint of effect, is there any difference between revocation of license and dissolution?  Because cancellation of license is equivalent to revocation.  Am I right?

MR. CATARAN.  There is a difference.  If we revoke, let’s say, the secondary license, meaning the authority to operate, the primary franchise will not be affected.

JUSTICE CUEVAS.  I see.  So, the corporation with revocation, the corporation is still there, only it cannot function, am I right in understanding you that way?

MR. CATARAN.  What is being revoked, the secondary license or the …

JUSTICE CUEVAS.  The secondary.

MR. CATARAN.  The secondary.  It has no effect.  It can operate.  It still exists because it still has its primary franchise.

JUSTICE CUEVAS.  Correct.  So much so that if the corporation, based on the purpose of its creation allows it to construct buildings for other structures in a land, with the revocation issued by your office, it can still continue with the construction, am I right?

MR. CATARAN.  Revocation of the primary franchise?

JUSTICE CUEVAS.  No, cancellation.

MR. CATARAN.  Cancellation.  Yes.

JUSTICE CUEVAS.  So that it can carry on the purposes of the corporation whether it consist of lending money or construction of buildings.  Am I right?

MR. CATARAN.  It depends on the authority given on the license.  Meaning, if you have the license, let’s say, to lend, that’s supposed to be the secondary license.  If we cancel that, he can no longer operate the business, but the corporation remains.

JUSTICE CUEVAS.  Now, may I direct your attention to the secondary purposes of this corporation known as Basa-Guidote Enterprises, Inc. 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 a 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?

JUSTICE CUEVAS.  Well, I’m 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.

REP. UMALI.  Objection, Your Honor.  The question is vague.  There is no question, Your Honor.

JUSTICE CUEVAS.  So, what is being objected to if there is no question?  My golly.

REP. UMALI.  You are asking the witness to answer without a question.  So, …

JUSTICE CUEVAS.  I thought you are objection because there is no question.  I would like to know what are you objecting?

REP. UMALI.  The objection is you are awaiting the answer for something of which you have not …

JUSTICE CUEVAS.  I have yet to save that kind of …

THE PRESIDING OFFICER.  Is the question misleading?

REP. UMALI.  No, Your Honor.  Vague because he made a statement and then he was awaiting the …

THE PRESIDING OFFICER.  You can only object in a cross-examination on misleading question, if the counsel is trying to mislead witness of having said something that he did not say.

JUSTICE CUEVAS.  My question, if Your Honor, 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 or the registration of a corporation, may it increase its capital through stockholder’s action?

MR. CATARAN.  No more, Your Honor.

THE PRESIDING OFFICER.  May it be sued by creditors?

MR. CATARAN.  If for the purpose …

THE PRESIDING OFFICER.  May it be sued by creditors?  Answer the question.

MR. CATARAN.  Yes, Your Honor.

THE PRESIDING OFFICER.  If it is dead, how can it be sued as a corporation?

MR. CATARAN.  Under Section 122, the dissolved corporation has three years, within which to prosecute or defend a case …

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.

THE PRESIDING OFFICER.  I think you are misinterpreting the corporation law.

Supposed—I will give you an example, supposed, a corporation is engaged in insurance or let us say, in lending money, and it does not comply with your reporting requirements, can you revoke 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 is …

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 quash the corporation, the premises?

MR. CATARAN.  No, Your Honor.

THE PRESIDING OFFICER.  Isn’t it your remedy will be quo-warranto proceeding?

MR. CATARAN.  No, Your Honor.

THE PRESIDING OFFICER.  Aaah, aaah, ano?  Aaaah …

MR. CATARAN.  No, Your Honor.

THE PRESIDING OFFICER.  You will not institute quo-warranto proceeding?

MR. CATARAN.  No, Your Honor, unless there is a complain, but …

THE PRESIDING OFFICER.  Ha?

MR. CATARAN.  … we never encounter such a case or complain …

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?

MR. CATARAN.  Well …

THE PRESIDING OFFICER.  Anyway, proceed, Mr. Counsel.

JUSTICE CUEVAS.  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, may its—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.  Proceed, counsel.

JUSTICE CUEVAS.  Okay, then, Your Honor.  Thank you.

I have a pending question.  Kindly go over it before I ask you …

MR. CATARAN.  Opo, opo.

JUSTICE CUEVAS.  Are you through reading it, Attorney …

MR. CATARAN.  Yes, Sir.

JUSTICE CUEVAS.  Kindly go to page 2, and there is name Fe P. Barin, Chairperson.  Did you notice that?

MR. CATARAN.  Yes, Sir.

JUSTICE CUEVAS.  Alright.  Fe P. Barin was once upon a time the chief or the highest official of the SEC, am I right?

MR. CATARAN.  Yes, Sir.

JUSTICE CUEVAS.  Alright.  Now, according to this circular, it states, failure to file petitions to set aside the order of revocation with the commission within the period cited above, shall render the revocation order as 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.

ATTY. CATARAN.  Yes.

JUSTICE CUEVAS.  So, which prevails, your opinion over the opinion of the SEC?

ATTY. CATARAN.  It says here, failure to file.  But if they file, it is not final and executory.

JUSTICE CUEVAS.  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.

ATTY. CATARAN.  Yes.

JUSTICE CUEVAS.  Now, the way I understood your statement on direct-examination, you made me understand that that is already final and executory or that is not correct?

REP. UMALI.  Objection, Your Honor.

ATTY. CATARAN.  That is not correct.

REP. UMALI.  Objection, Your Honor, the question is misleading.

JUSTICE CUEVAS.  I am asking him whether my understanding is correct or not.  It is only yes or no.  How could it be…

THE PRESIDING OFFICER.  Witness may answer.

ATTY. CATARAN.  No.

JUSTICE CUEVAS..  It is not immediately executory.

ATTY. CATARAN.  Will you kindly repeat your question.

JUSTICE CUEVAS.  Meaning, you have issued a revocation order.

ATTY. CATARAN.  Yes.

JUSTICE CUEVAS.  Because of non-compliance with the reportorial requirements.

ATTY. CATARAN.  Yes.

JUSTICE CUEVAS.  That is not immediately executory.

ATTY. CATARAN.  Yes, because they still have the right to appeal.

JUSTICE CUEVAS.  All right, so it may not be immediately enforceable.

ATTY. CATARAN.  Let me, I said before, it is not final but it is effective.

JUSTICE CUEVAS.  What do you mean final but not effective.

ATTY. CATARAN.  Meaning, when you say revoke, the revocation order is already effective.  We can already implement, that is the meaning of revocation, but it is not final in the sense that .they can still file a petition to lift the revocation order.

JUSTICE CUEVAS.  In the meanwhile, it is given effect although it is not final, is that what you wanted the court to understand?

ATTY. CATARAN.  Yes, Your Honor.

JUSTICE CUEVAS.  So, the corporation cannot act anymore, whether it is in connection with its business authorized under the articles of incorporation or not, is my understanding correct?

ATTY. CATARAN.  Yes, as I said …

JUSTICE CUEVAS.  So that if the corporation is engaged in a litigation, say recovery of money, or damages against another corporation, it may no longer act pursuant to your statement now, because if it is effective immediately, am I right?

ATTY. CATARAN.  No.

JUSTICE CUEVAS.  What do you mean no?

ATTY. CATARAN.  If we allow such kind of act, then what will happen?  The case will still proceed.

JUSTICE CUEVAS.  Kindly understand my question.  The way I understood you, based on your answer now, the order of revocation is final, right?  Is not final, but it is effective.

ATTY. CATARAN.  Yes.

JUSTICE CUEVAS.  So that, if a corporation, upon which corporation the order of revocation was issued, 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?

ATTY. CATARAN.  I don’t think the court will allow that.

JUSTICE CUEVAS.  I am not asking you whether the court will allow.  I am asking based on your procedure in the SEC, can it continue appearing in that case, whether as plaintiff or defendant, the answer is no?

ATTY. CATARAN.  Yes, because it is not related to the business.  What is being stopped is the operation of the business but litigation is not included.

JUSTICE CUEVAS.  So, if there are activities going on before you issued the order of revocation, it can continue with that?

ATTY. CATARAN.  As long as it is not part of the business of the corporation.

JUSTICE CUEVAS.  How can litigation be a part of the business of the corporation?  It is not a law office.

ATTY. CATARAN.  That is why I said, the litigation can proceed but the business, it cannot.

JUSTICE CUEVAS.  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 an order of revocation.  You said it is not final but it is effective.  My understanding of effective is it can be implemented, right?

ATTY. CATARAN.  Yes.

JUSTICE CUEVAS.  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?

ATTY. CATARAN.  What we mean by this effectivity is, as far the revocation order is concerned it can no longer do its business for profit but litigation I think it can proceed.

JUSTICE CUEVAS.  So you gave me the impression that there are other matters upon which the corporation can continue acting provided it is not in connection with this business.

MR. CATARAN.  Yes.

JUSTICE CUEVAS.  But in this case, specifically, let us say loan the 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.

JUSTICE 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 to dismiss.

JUSTICE CUEVAS.  I am asking you because you happen to impress us that you have the authority to act on this.  It loaned because it is engaged in lending secondary purpose.  Let us say P100 million had been extended by a loan to another individual, accidentally enough 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 don’t think it will be allowed by the court.

JUSTICE 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 because apparently you have testified with the…

MR. CATARAN.  I think it will not be allowed.

JUSTICE CUEVAS.  So it will not be allowed to continue.

MR. CATARAN.  No, it can continue.

JUSTICE CUEVAS.  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.

JUSTICE CUEVAS.  That is your answer.  Alright.  Now, in this particular case, you made me understood that you have examined the records of this corporation.  Will you kindly tell the honourable court what is the extent of that examination that you conducted.

MR. CATARAN.  I will just check whether as to the report submitted.

JUSTICE CUEVAS.  Only.

MR. CATARAN.  Yes, that is being asked whether you have to submit.  In the subpoena I received…

JUSTICE CUEVAS.  I am not referring to the subpoena, with due respect, 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’s all.

JUSTICE CUEVAS.  Alright.  Did you  happen to come across the statement or the facts that this corporation had properties subject of eminent domain by the city of Manila?

MR. CATARAN.  I did notice any document to that…

JUSTICE CUEVAS.  You did not .  Alright.  So you have no reason to deny that the properties of this corporation was expropriated by the city of Manila sometime in June…

REP. UMALI.  The witness is incompetent to answer, Your Honor.

THE PRESIDING OFFICER.  Let the witness answer.

MR. CATARAN.  I did not notice any document, I don’t know.

JUSTICE CUEVAS.  But you are not denying or contradicting that properties of this corporation had been expropriated by the city of Manila.  I’m sorry.

MR. CATARAN.  I don’t know I have not seen such a document.

JUSTICE CUEVAS.  Alright.   You do not know anything about that.

MR. CATARAN.  Yes.

JUSTICE CUEVAS.  Now, I have with me a photostat copy of a check paid to Cristina Corona care of Basa, Guidote Enterprises in the amount of P34,703,800.  You do not know anything about that?

REP. 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 that.

JUSTICE CUEVAS.  May we ask the witness to examine the xerox copy of the check.  Hindi ninyo alam iyan?

MR. CATARMAN.  No.

JUSTICE CUEVAS.  You did not have an inkling about the payment in terms of that check relative to the expropriation proceedings I mentioned in my cross-examination.

MR. CATARAN.  No, I have knowledge of that, Your Honor.

JUSTICE CUEVAS.  Alright.  Now, did you ascertain whether this payment of the lots belonging to the corporation subject matter of your testimony is true or not?

MR. CATARMAN.  I do not know I have not seen any document…

JUSTICE CUEVAS.  No investigation was made by you or any—kindly allow me to finish—and also you have never examined any aspect of this alleged expropriation proceedings 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 check as to the repose.  I have not seen such …

JUSTICE CUEVAS.  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 went that far?

MR. CATARAN.  No, because we already revoked the Certificate of Registration in 2003.

JUSTICE 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.

MR. CATARAN.  No.

JUSTICE CUEVAS.  So, you never came to know about these transactions I’m referring to?

MR. CATARAN.  Yes.

JUSTICE CUEVAS.  Now, after your 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 P10 million?  Because apparently that is the gist of your being presented here.

MR. CATARAN.  No, I did not …

JUSTICE CUEVAS.  Hindi po.  You are totally bankrupt of any knowledge of this transaction?

MR. CATARAN.  Well, I read in the newspaper but I did not see anything in the …

JUSTICE CUEVAS.  No, no, no.  That is not my question again.  Otherwise, I’ll be compelled to ask the honourable court to direct you to—My question is, you are totally bankrupt of any information relative to the expropriation of the property of this corporation for it was paid P34 million something.

REP. UMALI.  Already asked and answered, Your Honor.

JUSTICE CUEVAS.  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.

JUSTICE CUEVAS.  Because in cross-examination, Your Honor, a witness …

THE PRESIDING OFFICER.  Witness may answer.  (Gavel)

JUSTICE CUEVAS.  Thank you, Your Honor.

MR. CATARAN.  No.

JUSTICE CUEVAS.  That’s all with the witness, Your Honor.

THE PRESIDING OFFICER.  Redirect.

REP. UMALI.  Just a few redirect, Your Honor.

Mr. Witness, …

JUSTICE CUEVAS.  May we request, Your Honor, that the check we confronted the witness be marked as Exhibit …

THE PRESIDING OFFICER.  Mark it accordingly.  (Gavel)

JUSTICE CUEVAS.  I’m sorry, I’m sorry.

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?

JUSTICE CUEVAS.  We are merely asking that it be marked, Your Honor, as Exhibit 44.

THE PRESIDING OFFICER.  Mark it accordingly.

REP. UMALI.  Your Honor, please, what is being presented is just a Xerox copy of a check …

THE PRESIDING OFFICER.  You should have objected at the very instance, Your Honor, with respect to the character of the evidence presented.

REP. UMALI.  Yes, Your Honor.

JUSTICE CUEVAS.  Besides we have only had it identified and marked.  We’re not yet offering it.  For all you know, we may not offer it at all.

REP. UMALI.  Original marking, Your Honor, perhaps, but …

THE PRESIDING OFFICER.  The Chair rules that let this Xerox copy remain as an exhibit for the defense for the record.  (Gavel)

REP. UMALI.  If I may proceed, Your Honor.

THE PRESIDING OFFICER.  Proceed.

REP. UMALI.  Mr. Witness, you made mention earlier on cross-examination when asked of the primary franchise of BGI.  Can you clarify, what do you mean by primary franchise?

JUSTICE CUEVAS.  Witness in incompetent, Your Honor.

THE PRESIDING OFFICER.  Sustained.

JUSTICE CUEVAS.  I need not ask him on his knowledge …

THE PRESIDING OFFICER.  The next evidence is the Articles of Incorporation.

REP. UMALI.  No, Your Honor.  I’m asking just to explain what is meant by primary franchise.

THE PRESIDING OFFICER.  What is the relevance of that information to this proceeding?

REP. UMALI.  I would like to know, Your Honor, if what he meant by this is the primary purpose, Your Honor.  If that is equivalent to a …

THE PRESIDING OFFICER.  All right.  Okay.  You may answer.  (Gavel)

MR. CATARAN.  Primary franchise refers to the juridical personality of the corporation.  When we issue the primary franchise, we mean the Certificate of Registration, it is a juridical person. That is the primary franchise.

REP. UMALI.  And what do you mean by a secondary franchise?

REP. UMALI.   It is an authority to operate its business.

THE PRESIDING OFFICER.  Secondary what?

REP. UMALI.  Secondary franchise, that is what …

THE PRESIDING OFFICER.  There is no secondary franchise, primary purpose, secondary purpose.

REP. 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 …

THE PRESIDING OFFICER.  Witness may answer.

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.

REP. UMALI.  The secondary franchise is a keen 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 corporations, but a secondary franchise refers to the right of the corporation to operate.  Let us say, we can register or grant this primary franchise when you–you can incorporate, so that a corporation, let us say, a school, can have a juridical personality.

Right after registration, the SEC, since it is already a juridical person, before it can operate as 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?  Isn’t it that the incorporation gives the corporation the personality?  It is 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.  Isn’t it?

MR. CATARAN.  Yes, Your Honor, but with respect to the business, you need a secondary franchise.  Let us say for example, if you put up—let us say, you register an insurance company with SEC, we can approve it, we can grant the certificate of registration, meaning, it is now, has the primary franchise, but it cannot just engage insurance without securing anything or license or authority from the Insurance Commission, just like a bank.  You register with the SEC, as a bank, you can already open–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.  Isn’t it?

MR. CATARAN.  Yes, Your Honor, because …

THE PRESIDING OFFICER.  Then, if it wants to operate any of its secondary purposes, then, it will ask permission from the Securities and Exchange Commission.  Isn’t it?

MR. CATARAN.  From the SEC, no, but I do not know with respect to other government agency, they might …

THE PRESIDING OFFICER.  I am talking—we are talking of this corporation.  We are not talking of general—of other corporation, this corporation involving this proceeding.

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.  Well, precisely, so, what are you talking about secondary franchise and primary franchise?

MR. CATARAN.  I only answered the question of the prosecutor, to explain what is the difference between a primary and secondary franchise.

THE PRESIDING OFFICER.  Clarify your question to your witness.

REP. UMALI.  Yes, Your Honor.  Your Honor, I think, it has been sufficiently explained.  We are through with the witness, Your Honor.

JUSTICE CUEVAS.  No recross, Your Honor, for the defense.

Thank you, Attorney Cataran.

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  Mr. President, Senator Lito Lapid wishes to be recognized.

THE PRESIDING OFFICER.  The Gentleman from Pampanga is recognized.

SEN. LAPID.  Bakit tumatawa na naman kayo diyan?

Thank you po, Mr. President.  Sa prosecution 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 deprensya ang pagkakaiba ng cash advance loan o utang?

THE PRESIDING OFFICER.  Sino ang tinatanong ninyo?  Ginoong testigo, ang itinatanong ng …

SEN. LAPID.  Hindi po.  Hindi po.  Wala pong kinalaman dito ang testigo.

THE PRESIDING OFFICER.  Who is being asked?

SEN. LAPID.  The prosecution po.

THE PRESIDING OFFICER.  Ah, the prosecution.  Please answer.

REP. UMALI.  With the permission of this honourable court.  Iyon nga po ang inaalam naming na cash advance.  Hindi po naming maintindihan.  Hindi naman po shareholder si Chief Justice Corona maging si Cristina Corona pero nagka- cash advance po sila rito.  Kanya iyon po ang hindi naming maintindihan.  At ito po ay nakalagay kanya po ito ay piniprisinta naming at nililinaw po namin ngayon.

SEN. LAPID.  Hindi nap o siguro mahalaga kung nagsarado iyong kompanya o hindi.  Nangutang ba?

REP. 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 lisensya nito ay revoked na, hindi po nagko-comply ito pamula pa po noong 1991 hanggang sa kasalukuyan.

SEN. LAPID.  So ibig po ninyong sabihin, kanina, tanong kayo ng tanong. Ilang oras na tayo dito, iyan lamang ang gusto ninyong palabasin, iyong P11 million kung inutang o inadvance o niloan.

REP. UMALI.  Marami pa po.  Iyong P11 million na nag-reflect ho iyan sa SALN from 2003 hanggang 2009 tapos po doon po s a dorsal portion noong mga exhibits ng SALN na ito, ay lumalabas po doon na si Cristina Corona ay engaged sa real estate business pero wala naman pong record sa SEC, wala rin pong record sa BIR, wala pong record sa lahat.  Kanya po ay ito po ay nakapagtataka kung saan po nanggaling ito.  And eto po ang tinatanong po namin.  Eto po ang in-establish naming.  Ito po ay unexplained wealth.

SEN. LAPID.  Iyon lang po.  Maraming salamat.

JUSTICE CUEVAS.  If that is the purpose, with the kind permission of the court.  I though there is a resolution ..

SEN. SOTTO.  The defense wishes to be recognized, Mr. President.

JUSTICE 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.

SEN. SOTTO.  Anyway, Mr. President.

REP. UMALI.  Non-disclosure po ang isang nais ko pong linawin sa bagay na ito, Your Honor.

JUSTICE CUEVAS.  Thank you.

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.

REP. UMALI.  Sorry po, Your Honor.

THE PRESIDING OFFICER.  So ordered.

SEN. SOTTO.  Mr. President, may we recognize Senator Francis Escudero.

THE PRESIDING OFFICER.  The Gentleman from Sorsogon.

SEN. ESCUDERO.  Thank you, Mr. President.  Ilang katanungan lamang po s a testigo.  Ginoong testigo, kung ako po at apat o lima kong kaibigan nagdesisyon na magnegosyo, bumili ng lupa o magpautang, kailangan ko ho bang magpa rehistro sa inyo?

ATTY. CATARAN.  Kung gusto ninyong magkaroon ng juridical personality.

SEN. ESCUDERO.  Ibig sabihin po ng juridical personality, hindi po ba, kapagka demanda iyong kompanya, hindi puwedeng habulin hanggang salawal o brief ko, puwede lamang habulin iyong in-invest ko o shareholding ko sa kompanya.

ATTY. CATARAN.  Opo.

SEN. ESCUDERO.  Itinanong ko p o iyon dahil kanina pa po ninyo sinasabing hindi na puwede magnegosyo o mag-engage sa primary purpose iyong kompanya.  Liliwanagin ko p o.  As a corporation, it can no longer do that?  But as an association or co-ownership, it can do that?

ATTY. CATARAN.  Of course.

SEN. ESCUDERO.  Hindi po ba mayroon ding mga SEC resolution, noon pa ho ito, hindi ko alam kung napalitan na noong kami ay nasa eskwelahan pa, na kapagka ang isang korporasyon ay hindi na rehistrado sa SEC, ito ay nagiging isang asosasyon na lamang govern by the rules of co-ownership sa ilalim ng Civil Code.

MR. CATARAN.  Opo kasi maliban na lang kung mag-register uli sila as an association.  Pero kung hindi mag-register, ordinary association lang pero walang juridical personality.

SEN. ESCUDERO.  Ang pinupunto ko nga po iyong binabanggit ninyo kaninang bawal silang magnegosyo, 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 proteksyon ng batas na hindi sila pwedeng idemanda in their individual capacity.  Ngayon ho pwede na silang habulin hanggang personal nilang ari-arian.

MR. CATARAN.  Opo.

SEN. ESCUDERO.  Ngayon kaugnay po noong secondary franchise na nabanggit po ninyo, iyong secondary franchise hindi po ba iniisyu lamang iyan sa mga specific na negosyo na nire-require ng batas na mabigat ang regulasyon at superbisyon ng SEC.

MR. CATARAN.  Opo.

SEN. ESCUDERO.  Hindi po iyan sa lahat ng korporasyon at mga negosyong ordinaryo naman.  Nabanggit ninyo po kanina insurance.  Siguro banking kailangan din secondary franchise.

MR. CATARAN.  Opo.

SEN. ESCUDERO.  Pero kung benta at sangla ng lupa o oto o pagpapautang hindi na po kailangan ng secondary franchise.

MR. CATARAN.  Opo.

SEN. ESCUDERO.  In fact, ni hindi po kailangan rehistrado sa inyo, kanya nga lang pwede ho silang habulin at idemanda sa personal nilang kapasidad.

MR. CATARAN.  Opo.

SEN. ESCUDERO.  Thank you, Mr. President.

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  Thank you, Mr. President.  We are ready to discharge the witness.

THE PRESIDING OFFICER.  Any objection?  Witness dispensed.  Next witness.

SEN. SOTTO.  Yes, prosecution.

REP. TUPAS.  Thank you, Your Honor.  We will call now our second witness.  The name is Miss Nerissa Josef, the Vice President of the Ayala Land Inc. and may I 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…

REP. TUPAS.  Atty. Ginez, Your Honor.

THE PRESIDING OFFICER.  Atty. Ginez will make the direct examination.

ATTY. GINEZ.  Thank you, Your Honor.

THE PRESIDING OFFICER.  Welcome.

THE SECRETARY.  Miss 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, ma’am.

THE SECRETARY.  So help you God.

ATTY. GINEZ.  May I first qualify, Your Honor, the witness.

THE PRESIDING OFFICER.  Proceed.

ATTY. 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.

ATTY. 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?

ATTY. GINEZ.  Article II, Your Honor.  She will testify under paragraph 2.3 of the verified complaint, Your Honor.

JUSTICE CUEVAS.  With the kind permission of the honourable court.  I had statement qualified the witness.  Are we made to believe that the witness is an expert witness or she is being presented only as an ordinary witness.  Because if she is merely an ordinary witness, no need to qualify her.  That’s elementary.

ATTY. GINEZ.  No, Your Honor.  The qualification is asked to the name, personal circumstances of the witness.

THE PRESIDING OFFICER.  Only witness touch personal circumstances, that’s it.

JUSTICE CUEVAS.  Because there are a lot of people witnessing this—law students, law professors and hereon and we wanted to put the record clearly and succinctly, Your Honor.

THE PRESIDING OFFICER.  So let the witness now proceed as an ordinary witness.

JUSTICE CUEVAS.  As an ordinary witness.  Thank you, Your Honor.

ATTY. GINEZ.  Thank you, Your Honors.  Again, Your Honor, we are offering the testimony of the witness for the following purposes.  Number one, she will produce, identify and testify on the document she brought pursuant to the subpoena issued by this honourable court in connection with the purchase of honourable 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.  Number two, 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.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  She will also testify, Your Honor, that honourable Chief Renato C. Corona and Mrs. Corona had already paid 95% of the purchase 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 honourable Chief Justice Renato C. Corona.

May I proceed, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  Madam Witness, you said that you are presently employed as an Assistant Vice President of Ayala Land Inc.

MS. JOSEF.  Yes, Your Honor.

ATTY. 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.

ATTY. 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.

ATTY. 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.

ATTY. GINEZ.  What were your duties or 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.

ATTY. 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%-owned company of Ayala Land Inc.

ATTY. GINEZ.  Madam Witness, why did you appear into this hearing of the honourable Impeachment Court?

MS. JOSEF.  I am here, Sir, because I was received a subpoena from this honourable Impeachment Court.

ATTY. GINEZ.  In the subpoena issued by the honourable court, Madam Witness, one of the documents you were required to bring the original of the Contract to Sell or Deed of Conditional Sale in connection with the purchase of the condominium unit covered by Condominium Certificate of Title No. 85716 in the name of Christina 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 honourable court?

MS. JOSEF.  I brought the original copy of the Contract to Sell dated January 20, 2004, Sir.

ATTY. GINEZ.  May I approach the witness, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. 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., Christina R. Corona.  The project involved, Your Honor, is The Columns, Ayala Avenue.  The unit purchased in paragraph 2, Your Honor, is Unit 31B, 1 bedroon, Tower One, 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 Christina R. Corona, purchases.

Madam Witness, I direct your attention above the printed name Nerissa N. Josef.  Do you know whose signature is that?

MS. JOSEF.  Yes, Sir.  That’s my signature.

ATTY. GINEZ.  May I manifest, Your Honor, that this Contract to Sell have been previously marked during the premarking as Exhibit MMM, 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?

ATTY. GINEZ.  January 20, 2004, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. 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?

ATTY. GINEZ.  Yes, Your Honor, it is an authorized document, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  I am waiting for the stipulation, Your Honor, that it is a faithful reproduction.

JUSTICE CUEVAS.  We stipulate or admit, Your Honor, that the documents being identified are faithful reproduction of the respective original.

ATTY. GINEZ.  Thank you, Justice.

Madam Witness, may I direct you to schedule C for 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 Honor.

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; down payment of P543,181.82 plus a value-added tax of P56,818.18, these were paid on March 28,2003.  And the monthly instalment schedule, the first instalment of P1,113,033.18 and a value added tax of P111,303.32, both were paid on April 28, 2003; second instalment of P1,728,270.23 and value added tax of P172,827.02 were paid on October 10, 2003; the final instalment of P179,446.59 and a value added tax of P17,944.66 would have been paid upon advice.

ATTY. GINEZ.  Thank you, Madam Witness.

THE PRESIDING OFFICER.  How many instalments are those?

Is that monthly, semi-annually or annually?

MS. JOSEF.  It was varied, Sir.  The first instalment was on April 28, 2003.  The second instalment was paid on October 10, 2003, Your Honor.  And the final payment of a third instalment was paid upon advice, which, based on our official receipts, were paid, if I may refer to the official receipt, …

THE PRESIDING OFFICER.  The instalment are covered in one year?

MS. JOSEF.  Yes, Sir.

ATTY. GINEZ.  May I proceed, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  Madam Witness, you had so far testified that, according to you, the deposit, the downpayment, first, second instalments were paid, all in one year.  And as you also said, that the third instalment, payable upon advice, was also paid according to you, what proof, if any, Madam Witness, do you have that all these instalment payments were indeed paid by Mrs. Corona.

MS. JOSEF.  I have with me, Sir, the original duplicate copy of the official receipts.

ATTY. GINEZ.  I will approach again the witness, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  I would like to manifest, Your Honor, that the witness handed to his representation various receipts, Your Honor, which were previously marked during the pre-marking conducted by the honourable 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 P25,000.00 issued to Corona Cristina R.

THE PRESIDING OFFICER.  Who was the issuing entity?

ATTY. GINEZ.  Community Innovations, Inc., Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. 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 P600.000.00 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 previous 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, 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 P290,922,037.00 which includes, if I may manifest for 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 service fee on issuance of title in the amount of P4,000.00.  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.

JUSTICE CUEVAS.  If the purpose is substitution, Your Honor, we have no objection, Your Honor.

ATTY. GINEZ. Thank you, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  Madam Witness, you have so far again testified that honourable Chief Justice Renato Corono 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?

JUSTICE 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.

ATTY. GINEZ.  We will reform, Your Honor.  I am just making a very respectful …to that honourable Chief Justice, the respondent in this case, Your Honor.

JUSTICE CUEVAS.  But you are dealing with the documents, that is why I said, there is no basis, Your Honor.

THE PRESIDING OFFICER,.  Let the document speak for itself.

ATTY. GINEZ.  Thank you, Your Honor.  What happened next, Madam Witness, after Renato Corona and Cristina Corona had made full payment of the purchase price?

JUSTICE CUEVAS.  Question too general, Your Honor.  What happened?  They may have celebrated their 50th anniversary.  Very general.  Too broad.

THE PRESIDING OFFICER.  Let us consider that as a preliminary question.  You may answer.  The witness may answer.

ATTY. GINEZ.  Thank you, Your Honor.

MS. JOSEF.  After full payment, sir, we executed the deed of absolute sale.

ATTY. GINEZ.  Madam Witness, one of the documents you were asked to bring to this honourable court is the deed of absolute sale.  What document did you bring, if any, in connection with that directive, Madam witness?

MS. JOSEF.  I brought with me an original copy of the deed of absolute sale dated October 1, 2004.

ATTY. 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, attorneys-in-fact.  Do you know whose signature is this, Madam witness?

THE PRESIDING OFFICER.  Wait a minute.  What is the date of that deed of sale?

ATTY. GINEZ.  Your Honor, the date is October 1, 2004.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  I have a pending question, your Honor.

THE PRESIDING OFFICER.  Yes, go ahead, answer the question.

MS. JOSEF.  Yes, that is my signature, sir.

ATTY. GINEZ.  There is also a signature above the printed name Grace Evangeline F. Mananquil-Sta. Ana.  Do you know whose signature is this, Madam witness?

MS. JOSEF.  Yes, sir, that is the signature of Grace Evangeline F. Mananquil Sta. Ana.

ATTY. GINEZ.  Why do you know that that’s her signature?

MS. JOSEF.  I am familiar with her signature, sir.  I have been working with her in Community Innovations for five years.

ATTY. GINEZ.  Thank you,Madam witness.  May I request, Your Honor, the defense counsel to manifest that a photocopy of the deed of absolute sale is a faithful reproduction of the original, Your Honor.  May I request, Your Honor, to manifest if it is a faithful reproduction.

JUSTICE CUEVAS.  It is, Your Honor.

ATTY. GINEZ.  Thank you, Justice.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  Madam witness, based on the documents that you brought with you in accordance with the subpoena issued by this honourable court, do you know when was this subject condominium unit turned over to the purchaser, Cristina R. Corona, married to Renato C. Corona?

MS. JOSEF.  Based on our records, sir, it was deemed accepted on June 7, 2008.

ATTY. GINEZ.  Madam witness, may we be given that copy of the letter.  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 and which says, Your Honor, and I would like to quote the last paragraph—“However, we seek your understanding that this should not hinder 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.  So 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.  May I request for the stipulation, Your Honor, that that photocopy is a faithful reproduction of the original.

THE PRESIDING OFFICER.  Defense may stipulate if they want.

JUSTICE CUEVAS.  We have no objection, Your Honor.

ATTY. GINEZ.  Thank you, Justice.

We request again that it be marked as our Exhibit PPP-4, Your Honor.

One of the documents that …

JUSTICE CUEVAS.  Wait, wait, wait.  We’re checking the document.

May we request, if Your Honor, please, that this Exhibit PPP-4 of prosecution be marked as Exhibit 45, Your Honor, for the defense, Your Honor.

THE PRESIDING OFFICER.  Mark it accordingly.

ATTY. GINEZ.  I will be on my last part, Your Honor.

One of the documents that we also premarked, Madam Witness, is a Buyer Information Sheet.  Did you bring the original copy of the said document, Madam Witness?

MS. JOSEF.  Yes, Sir.

ATTY. 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?

ATTY. GINEZ.  It seems there is no date, Your Honor, but I would like to read for the record, the project name is The Columns.  The principal buyer, Your Honor, is Corona Renato Coronado.  And the spouse, Your Honor, is Corona Christina Rocco.  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 Christina R. Corona.  The photocopy of this document has been premarked, 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.

JUSTICE CUEVAS.  No objection, Your Honor, to the proposed substitution.  We admit that the Xerox copies are faithful reproduction of their respective originals, Your Honor.

ATTY. GINEZ.  Thank you, Justice.

THE PRESIDING OFFICER.  Proceed, counsel.

ATTY. GINEZ.  We have no other direct examination questions, Your Honor.

THE PRESIDING OFFICER.  You want to discharge—Is there any cross-examination?

JUSTICE CUEVAS.  May we request, Your Honor, that we have to conduct the cross-examination tomorrow.

THE PRESIDING OFFICER.  Motion granted.  (Gavel)

Next witness, the prosecution panel.

The witness is discharged.  (Gavel)

JUSTICE CUEVAS.  Your Honor, please, what’s the pleasure of the defense counsel?

JUSTICE CUEVAS.  May we request that Atty. Esguerra be recognized for the defense, Your Honor.

THE PRESIDING OFFICER.  For cross?

JUSTICE CUEVAS.  No, Your Honor.  Only a short manifestation.

THE PRESIDING OFFICER.  Atty. Esguerra is recognized.

ATTY. ESGUERRA.  There is an accompanying note and we would request the witness that this handwritten note dated 7 June 2008 …

THE PRESIDING OFFICER.  2000—?

ATTY. ESGUERRA.  8, Your Honor.

It’s a cover note in connection with the 11 June 2008 letter of Community Innovations to Mrs. Christina 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?

ATTY. ESGUERRA.  Yes, Your Honor, for purposes of examination tomorrow because we don’t want this to be tampered with, Your Honor.

May we request that this exhibit be marked as our—This document, a handwritten note 7 June 2008, with the letterhead Community Innovations, signed by one Mrs. Tina Corona, be marked as our provisionally Exhibit 36, Your Honor.

THE PRESIDING OFFICER.  The Presiding Officer directs that that note be initialled by both the prosecution counsel and the defense counsel so that there will be no tampering.

ATTY. GINEZ.  Your Honor, I will go farther 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 initialled by both sides.

ATTY. GINEZ.  Thank you, Your Honor.

REP. TUPAS.  Can we discharge now the witness, Mr. President, Your Honor?

SEN. SOTTO.  If there is no …

ATTY. ESGUERRA.  We will conduct further cross examination …

THE PRESIDING OFFICER.  Is there any further question on the witness?

There being none, the witness is discharged.

REP. TUPAS.  May we call on now on our next witness, Your Honor.

THE PRESIDING OFFICER.  Please proceed.

REP. TUPAS.  Thank you.  Now, our third witness for the day is Mr. Greg Gregorio, the …

THE PRESIDING OFFICER.  Before we tackle the—before our second witness, May I propose to the—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.

ATTY. GINEZ.  Yes, Your Honor.  In fact, it was our request that 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 this—they will make the 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 and we welcome that, Your Honor.

THE PRESIDING OFFICER.  What is the pleasure of the defense/

ATTY. ESGUERRA.  That is not completely true, Your Honor, insofar as the birth certificates of the children of the Coronas, we stipulated on that, so 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, …

THE PRESIDING OFFICER.  Yes, proceed.

ATTY. ESGUERRA.  …insofar as the witness who just testified.

THE PRESIDING OFFICER.  Please proceed.

ATTY. ESGUERRA.  Your Honor, we just provisionally marked a memorandum, handwritten one, which is supposed 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.  The prosecution is hereby ordered to produce the witness that was earlier discharged by this court to come back tomorrow for cross examination.

ATTY. GINEZ.  Yes, Your Honor.

ATTY. ESGUERRA.  I am sorry.  Your Honor, I am so sorry.  My understanding is we are we temporarily discharge the witness  …

THE PRESIDING OFFICER.  Yes.

ATTY. 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.

REP. TUPAS.  Okay with us, that is fine with us, Your Honor.

ATTY. ESGUERRA.  Precisely, f she is still here, may we call her back to the stand, Your Honor.

THE PRESIDING OFFICER.  Who is being called to the stand?

SEN. SOTTO.  Mr. President, may we call back the previous witness.

THE PRESIDING OFFICER.  The previous witness?  Alright, the previous witness is being recalled to the witness stand for what purpose?

SEN. SOTTO.  For the cross examination, Mr. President, of the defense.

THE PRESIDING OFFICER.  Alright.  Proceed.

ATTY. 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.  May name is Nerissa Josef.

ATTY. ESGUERRA.  Nerissa Josef.

MS. JOSEF.  Yes, Sir.

ATTY. ESGUERRA.  And did I hear you right that you are still single?

MS. JOSEF.  Yes, Sir.

ATTY. ESGUERRA.  So, 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.

ATTY. ESGUERRA.  Which came first, the contract to sell was executed first, of course?

MS. JOSEF.  Yes, sir, that was executed  on January 20, 2004, sir.

ATTY. ESGUERRA.  And the deed of sale was executed when?

MS. JOSEF.  It was executed on October 1, 2004, sir.

ATTY. ESGUERRA.  Was there a capital gains tax ever paid by Community Innovations Inc. for purposes of the transfer, being the seller?

MS. JOSEF.  We paid our creditable withholding tax.

ATTY. ESGUERRA.  Not any capital gains tax on the transaction?

THE PRESIDING OFFICER.  Counsel, my understanding is that these corporations, selling corporation is engaged in real estate business and so these are ordinary assets not subject to capital gains tax.

ATTY. ESGUERRA.  We understand that, Your Honor, but the good commissioner, Commissioner Henares, identified a certificate of authorization to transfer or to register and I would like to find out from the witness whether or not they paid the taxes.  If they paid taxes, if any.

THE PRESIDING OFFICER.  Well, witness may answer.

MS. JOSEF.  Based on our records, sir, we do have a certificate authorizing registration which indicates that we have paid our taxes, sir, in order to transfer the title.

ATTY. ESGUERRA.  Do you have a copy of that with you, Madam Witness?

MS. JOSEF.  Yes, I have, sir.

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 stacked in trade in ordinary course of business and they are not capital assets.  They are ordinary assets not subject to capital gains but ordinary income tax.

MS. JOSEF.  Yes, Your Honor.  That is correct.  I am not aware that 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 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.

ATTY. ESGUERRA.  Thank you, Your Honor.  Do you have that certificate authorizing registration with you.  May I borrow it momentarily.  Miss 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 and a faithful reproduction.

ATTY. ESGUERRA.  Thank you.  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.

ATTY. ESGUERRA.  May I proceed, Your Honor, so as to save time.  Ms. Josef, you have the duplicate original with you?  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 is P3, 588,931.82.

ATTY. ESGUERRA.  How about an entry concerning assessed value?

MS. JOSEF.  Sir, there is a market zonal value, it says here P2,880,000 for Unit 31-B and for the parking, there is P250,000, sir.

ATTY. ESGUERRA.  So that value you just read is smaller.

MS. JOSEF.  Yes, sir.

ATTY. ESGUERRA.  Earlier you identified a letter and I heard the word or phrase “deemed accepted”, what is that letter you were 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.

ATTY. ESGUERRA.  And there is a covering note which I saw and caused to be provisionally mark as our Exhibit 46, defense.  Can you please state for the record what that note is all about?

MS. JOSEF.  It is a note, sir, if I may read dated June 7, 2008.  It says, “Dear Carmina.  This is Mrs. Corona.  I have been following up with your office with Charlene Pangilinan and Eds Fajardo about the originals of our tax declaration and RPT receipt for 2008 prorated so I can settle my payables and accept my unit, Columns, Tower I, Unit 31-B.  Please give me an update ASAP.  Thank you.  Mrs. Tina Corona.

ATTY. ESGUERRA.  We will request that the marking, Your Honor, be retained as our permanent marking at this particular exhibit.

THE PRESIDING OFFICER.  Mark it.

ATTY. 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.

ATTY. ESGUERRA.  Is she still connected with Community Innovations?

MS. JOSEF.  Yes, sir, she is still connected with Community Innovations.

ATTY. ESGUERRA.  When the reference is made to prorated for 2008, would you know what this means?

MS. JOSEF.  Sir, the RPT is usually prorated 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 prorated amount would be half the amount that is paid for the entire year.

ATTY. 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 marked as Exhibit PPP-4 and this particular note took place sometime in 2008.

MS. JOSEF.  Yes, sir, it is 2008.

MS. JOSEF.  Were there issues about the unit, if you know, Ms. Josef?

MS. JOSEF.  Based on our records, we have a series of letters actually leading to this letter.  And there was previous communication with the buyers, Sir.

ATTY. ESGUERRA.  So, there were issues on the basis of the letters you’re holding now concerning this unit?

MS. JOSEF.  Yes, Sir.  There were some …

ATTY. ESGUERRA.  Do you have the letters with you?

MS. JOSEF.  Yes, Sir.

ATTY. ESGUERRA.  May we see those letters, please.

SUSPENSION OF HEARING

THE PRESIDING OFFICER.  While counsel is examining the letters, let us recess the trial for one minute.  (Gavel)

It was 3:51 p.m.

THE PRESIDING OFFICER.  Proceed counsel.

ATTY. ESGUERRA.  You have given to me again, another letter dated for June 2008, addressed to one Cristina Corona, signed purportedly by one Carmina A. Cruz.  You have also handed to me, to what appears to me to be two copies of one letter, dated 26, February 2008, addressed to one Cristina Corona, consisting of two pages, again, appearing to me to have been signed by one Carmina A. Cruz on the second page.  Actually, there are two copies also of that same letter I referred to of, dated for June 2008.

Now, I note, Ms. Josef, that in this letter of 4, June 2008, there is mentioned 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 them, we shall already deem and consider the unit as having been delivered and accepted as of June 7, 2008.

ATTY. ESGUERRA.   Thank you.

This other letter of 26, February 2008, also mentions, if I may read, and please confirm if I am reading it right, the unit has been delivered and accepted as of February 28, 2008.  I am showing this letter again to you, which you have produced, and read the first paragraph thereof, insofar as that particular portion that I have read for the record.

MS. JOSEF.  Yes, Sir.  As we have written in our notice last October 17, 2006, please attach copy regarding the final reinspection of your unit, we would like to inform you that the unit has been deemed delivered and accepted as of February 28, 2008.  This is pursuant to Section 7of the contract to sell, which reads—shall I read the rest, Sir?

ATTY. 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 your unit, Sir.

ATTY. ESGUERRA.  Final reinspection.

MS. JOSEF.  Yes, Sir.

ATTY. ESGUERRA.  May we have this second, I mean, only one of the two letters–that last one, from where you read that particular portion, be marked as our Exhibit 48, consisting of two pages, Your Honor, please.

Can you state for the record then, just to clarify this matter, so I can read 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.

ATTY. 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.  Sir, based on our records, we have only a record that it has been deemed accepted, based on the provisions  of our contract to sell.

ATTY. 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 telling here.

MS. JOSEF.  Based on our records, sir, yes.

ATTY. ESGUERRA.  Can you confirm.  I have here a letter of 6 April 2011 addressed to the board of directors, the Columns, Ayala Avenue Condominium Corp., handwritten, I just have machine 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 PRESIDING OFFICER.  The letter is being shown to the witness.

MS. JOSEF.  No, sir.  I have not seen this before.

ATTY. ESGUERRA.  Would you know if after the deemed acceptance of the unit by Mrs. Corona, Mrs. Corona or a representative of hers for that matter, paid the association dues?

MS. JOSEF.  Sir, the dues are paid to the condominium corporation which is not part of the developer’s responsibility already, so we have no records of the payments of Mrs. Corona to the condominium corporation.

ATTY. 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 be, if it is still in the name of the Community Innovations, then Community Innovations pays the condominium corporation dues like any other member of the condominium corporation.

ATTY. 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 have been units at that time, yes, sir.

ATTY. 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 units have been transferred, sir, to the buyer then the buyer is now the owner of the unit.

THE PRESIDING OFFICER.  But 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.

ATTY. 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 is Mrs. 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 Mrs. Corona, sir.

ATTY. ESGUERRA.  When was this copy of the tax declaration delivered based on your record?  Witness, for the record, is examining two letters.

MS. JOSEF.  Sir, there is a date here of 6/29/2007.

ATTY. ESGUERRA.  2000…

MS. JOSEF.  2007, sir.

ATTY. ESGUERRA.  Okay.

ATTY. GINEZ.  May we request, Your Honor, that the said tax declaration produced by the witness be marked as prosecution’s Exhibit PPP-2, Your Honor.

THE PRESIDING OFFICER.  Mark it accordingly.

ATTY. ESGUERRA.  Is there a covering letter of that tax declaration, Ms. Josef?

MS. JOSEF.  We have a copy of the tax declaration, sir.

ATTY. ESGUERRA.  Is there a covering letter delivering that…

MS. JOSEF.  During the delivery, sir.

ATTY. ESGUERRA.  No, no.  A covering letter of that tax declaration addressed to Mrs. Corona.

THE PRESIDING OFFICER.  Kindly answer the question whether there is or there is none.

MS. JOSEF.  We have a covering letter, sir.  It’s dated June 11, 2008 where we had enclosed a copy of the tax declaration which is in the name of the buyer.

ATTY. GINEZ.  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.

ATTY. ESGUERRA.  The tax declaration also, Your Honor, we would like to be marked as our Exhibit 49, Your Honor.

THE PRESIDING OFFICER.  Mark it accordingly.

ATTY. ESGUERRA.  Ms. Josef, if you know, when were the keys to the unit actually given to Mrs. Corona, the buyer.

MS. JOSEF.  I don’t know, sir.

IATTY. ESGUERRA.  You don’t know.  And because you do not know, is it safe for me to say and correct me if I am wrong that there was no actual turn over of the unit?

MS. JOSEF.  We have no records, Your Honor, of physical turn over of the unit.

ATTY. ESGUERRA.  Thank you.  And you do not also know when the keys to the unit were delivered by Community Innovations to Mrs. Corona?

MS. JOSEF.  I wouldn’t know, sir.

ATTY. ESGUERRA.  Are you aware of any complaint or complaints brought to the attention of Community Innovations Inc. by the buyer, Mrs. Corona?

MS. JOSEF.  I am not personally aware, sir, but based on the letters, there appears to be some communication regarding that.

ATTY. 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 resinspection which I would think would mean that there was a previous inspection and there was an inspection again, sir.

ATTY. ESGUERRA.  Why would there be, tell me if you know, why would there be an inspection, a reinspection and a final inspection?

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.

ATTY. ESGUERRA.  When you talk of rectification, that mean 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.

ATTY. 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’m not aware of what changes were made.

THE PRESIDING OFFICER.  May I request the witness to please fix your microphone so that your words are clearer.

ATTY. 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.

ATTY. ESGUERRA.  You would not also be aware that at the time of the inspection, the unit was full of debris from other units?

MS. JOSEF.  I am not aware, Sir.

ATTY. ESGUERRA.  You would 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.

ATTY. ESGUERRA.  You would not also be aware that the roofs were leaking and the floors were damaged?

MS. JOSEF.  I am not aware, Sir.

ATTY. ESGUERRA.  You would not also be aware that the windows were unfinished?

MS. JOSEF.  I would not be aware, Sir.

ATTY. ESGUERRA.  Would that mean, just so I can conclude this examination, Miss Josef, would that mean that you’ve never examined the unit yourself?

MS. JOSEF.  No, Sir.  I have not been to the unit.

ATTY. ESGUERRA.  I think that will be all for the witness, Your Honor.

ATTY. GINEZ.  I have a redirect, Your Honor.  If I may be allowed.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  Thank you, Your Honor.

Madam Witness, your were shown a copy or in fact you were asked to produce a 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 property.”

Madam Witness, my question to you is, based on the records that you have and that you brought before the honourable court, do you know, whether or not, title of this condominium unit was already transferred to Christina R. Corona, married to Renato C. Corona?

THE PRESIDING OFFICER.  Don’t you think the title would be the best evidence for that?

ATTY. GINEZ.  Yes, Your Honor.  We would like to manifest …

THE PRESIDING OFFICER.  The witness may answer if she knows.

MS. JOSEF.  Yes, Sir.  The title was transferred in the name of the buyer.

ATTY. GINEZ.  I would like to show to you, Madam Witness, Condominium Certificate of Title No. 85716, for unit No. 31B, one 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 Christina R. Corona married to Renato C. Corona, both of legal age, Filipinos.

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?

JUSTICE CUEVAS.  Improper for redirect, Your Honor.

We have never touched on this title on our cross-examination, Your Honor.

THE PRESIDING OFFICER.  Sustained.  (Gavel)

ATTY. GINEZ.  Well, may I ask for reconsideration, Your Honor.  The Certificate Authorizing Registration was touched on redirect, Your Honor.  I have 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.

JUSTICE CUEVAS.  That is your conclusion.

ATTY. 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 awhile ago, Your Honor, is where the title was issued pursuant thereto.

THE PRESIDING OFFICER.  That’s why the Chair ruled that let the title speak for itself because there’s no showing that the purported registered owner participated in the act of registration.

ATTY. GINEZ.  We submit, Your Honor.

THE PRESIDING OFFICER.  The objection is sustained.

ATTY. GINEZ.  We would like then, just to manifest for the record, Your Honor, as the condominium certificate of title exhibit 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.

JUSTICE 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.

ATTY. GINEZ.  Yes, Your Honor.  May we proceed, Your Honor.

THE PRESDING OFFICER.  Proceed.

ATTY. 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.

ATTY. 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?

JUSTICE 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 had been referring to actual turnover or possession of the property, Your Honor, material possession.

ATTY. GINEZ.  May I be allowed to make a rebuttal, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. 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 redirect, 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.

JUSTICE CUEVAS.  The same objection, Your Honor.  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, why 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 serving party.

So, I have to sustain the objection.

ATTY. GINEZ.  We submit, Your Honor, and we have no further redirect, Your Honor.

THE PRESIDING OFFICER.  Okay.

JUSTICE CUEVAS.  No recross, Your Honor.

SEN. SOTTO.  Mr. President.

THE PRESIDING OFFICER.  Let us dispose the witness first.

SEN. SOTTO.  Yes, we were about to—but, Mr. President, …

THE PRESIDING OFFICER.  Majority Floor Leader.

SEN. SOTTO.  … there are two members who wish to post question to the panels and also to the witness.  So, may we recognize Senator Francis Escudero and Senator Franklyn Drilon in that order, Mr. President, and then, Senator Francis Pangilinan and Senator Pimentel.

THE PRESIDING OFFICER.  Senator Escudero has the floor.

SEN. ESCUDERO.  Thank you, Mr. President.

Now, I will be very brief.  Ms. Josef, tama po ba ako kapag 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.

SEN. ESCUDERO.  Tapos, deed of sale.

MS. JOSEF.  Opo.

SEN. ESCUDERO.  Tapos, CAR.

MS. JOSEF.  Yes, Sir.

SEN. ESCUDERO.  Tapos, CCT o TCT

MS. JOSEF.  Yes, Sir.

SEN. ESCUDERO.  Tapos, turnover, tapos, acceptance, ganoon po ba iyon?

MS. JOSEF.  Yes, Sir.

SEN. ESCUDERO.  So, the final act is acceptance.

MS. JOSEF.  In this case, Sir, yes.

SEN. ESCUDERO.  Kapag tinanggap na iyong unit, tapos na, wala na kayong kailangang pag-usapan, bahala na siya sa buhay niya.

MS. JOSEF.  Yes, Sir.

SEN. ESCUDERO.  Mr. President, that is all for the witness.  Actually, may I ask with the lead 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 noong mga sumusubaybay nito, tama ba na ang teorya ng prosecution, Attorney, pag in-execute iyong deed of sale, ang teorya ninyo, dapat inilagay na sa SALN.  Is that your position?

ATTY. GINEZ.  Our position, that is correct, Your Honor.  Tama po iyon dahil ang deed of absolute sale ayon po sa ating Kodigo Sibil ay naita-transfer na ;po ang ownership pag mayroong public instrument delivering the property.  And that is called constructive …

SEN,. ESCUDERO.  That is your theory.

ATTY. GINEZ.  Yes, Your Honor.

SEN. ESCUDERO.  I presume the theory of the defense is acceptance, as you have been trying to harp on.

JUSTICE CUEVAS.  Oh yes, Your Honor.  Definitely yes because it is a statement made under oath by the declarant, Your Honor.

SEN. ESCUDERO.  Mr. President, I don’t 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 this.

ATTY. GINEZ.  Yes, Your Honor.  I am ready to cite, Your Honor, the authority.

JUSTICE CUEVAS.  Willingly, Your Honor.

THE PRESIDING OFFICER.  Wait a minute.

SEN. ESCUDERO.  No.  Just to submit a memorandum, Mr. President.

THE PRESIDING OFFICER.  So ordered.  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.

SEN. ESCUDERO.  Thank you, Mr. President.  That would be all, Mr. President.

THE PRESIDING OFFICER.  So ordered.

ATTY. GINEZ.  Thank you, Your Honor.

SEN. SOTTO.  Senator Drilon, Mr. President.

THE PRESIDING OFFICER.  The Gentleman from Iloilo has the floor.

SEN. DRILON.  Madam Witness, iyong susi ba ng apartment, nasaan?  Iyong susi ng apartment 31B.

MS. JOSEF.  I am not aware, sir, right now.

SEN. DRILON.  Iyong susi ba kinuha na ng mga Corona, hawak na ba nila iyong susi?

MS. JOSEF.  As far as I know, sir, they are already in possession of the unit.

SEN. DRILON.  As far as you know, they are already in possession of the unit.

MS. JOSEF.  Yes, sir.

SEN. DRILON.  Would you know when they had possession of the unit per your recollection?

MS. JOSEF.  In 2008, sir, I have no exact date.

SEN. DRILON.  They had possession in 2008 although you do not have the exact date.

MS. JOSEF.  Yes, sir.

SEN. DRILON.  Now, 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 pinag-uusapan 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 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 P726,000.00, current fair market value P1,210,000.00.  Ito ho ba iyong ating pinag-uusapan?  Alin ba ditong condominium ang ating pinag-uusapan dito?

ATTY. GINEZ.  We confirm, Your Honor, for the prosecution, that this is the condominium unit, Your Honor.  The number 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.

SEN. DRILON.  My problem is that, this year acquired is 2003 and from what I recall, the witness is saying this was acquired, this was paid for in 2004, that is why I am a little bit confused as to which unit they are talking about.  So, this is the unit?  Is this the unit which is described which is purchased in 2004?

ATTY. 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, Your Honor, the instalment in 2003 and made the full payment in March of 2004 and the deed of absolute sale in October 2004.  So the reason may be that is why they put year acquired 2003 because it was in that year that they paid deposit and subsequent instalment and as of December 31, 2003, Your Honor, 95% of the purchased price was already paid.

SEN. DRILON.  Okay, well, I am more confused—anyway, just to make clear, this is the entry that we are talking about.

ATTY. GINEZ.  Yes, Your Honor, because this is only the property that we know of as of now, Your Honor, of Chief Justice Corona in Makati City.  Thank you.

SEN. SOTTO.  Senator Francis Pangilinan, Mr. President.

THE PRESIDING OFFICER.  The Senator from Pampanga, Senator Pangilinan.

SEN. 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 actual acceptance of this property and, therefore, there was no transfer of ownership.  Is that my understanding?

JUSTICE 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 case of the violation of the law involving SALN, Your Honor.

SEN. PANGILINAN.  Okay, I understand that.  And, therefore, well, just as a clarification.  You may or may not reply, Justice Cuevas.  So it is just my understanding, therefore, that the condo unit in Makati that was acquired in 2003 according to the SALN by instalment, well, is now subject to discussion or debate as to whether it was actually acquired or transferred or not.  This is now where I am.  But I suppose when the defense comes to their turn and they will be able to..

JUSTICE 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.  Alright.  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 and so on.  That is our humble submission, Mr. Senator

THE PRESIDING OFFICER.  Just a minute.  If there is no more question for the witness, let the witness be discharged.  Is there any question?

ATTY. 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…

SEN. SOTTO.  Mr. President, Senator Osmeña wishes to ask the witness.

THE PRESIDING OFFICER.  Okay, alright.  Proceed.  Let the witness stay.

SEN. OSMEÑA.  Just a couple of short questions, Mr. President.  Madam witness, the Ayala Land or Community Innovations development condominium at the end of Ayala Avenue almost on the corner of Buendia called the Columns.

MS. JOSEF.  Yes, Your Honor.

SEN. OSMEÑA.  How many buildings or towers constitute the Columns?

MS. JOSEF.  There are three towers, Your Honor.

SEN. OSMEÑA.  And what is the total number of units in all three towers, more or less?

MS. JOSEF.  There are about 800 units.

SEN. OSMEÑA.  800 units.

MS. JOSEF.  Yes, sir.

SEN. OSMEÑA.  When did construction start?

MS. JOSEF.  The construction started 2003, Your Honor.

SEN. OSMEÑA.  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.

SEN. OSMEÑA.  Alright.  Can you tell us the type of discounts Ayala Land gave on the Columns?

MS. JOSEF.  It depends, sir,  on the buyer but we would have discounts based on the payment schemes of the buyers.

SEN. OSMEÑA.  Just on the payment scheme?

MS. JOSEF.  Yes, sir.

SEN. OSMEÑA.  Would this range from 5% to 15%.  What would be the maximum amount of discounts you would give for a cash buyer?

MS. JOSEF.  At that time, sir, it would probably range above 10%, sir.

SEN. OSMEÑA.  10%.  Did any of the units sell at 30% or 40% discount?

MS.JOSEF.  Not that I know of, sir.

SEN. OSMEÑA.  Alright.  Just place check so that you can confirm and notify the court if any sold even at 20%, 30%, 40% discount.  Thank you very much. SEN. SOTTO.  Your Honor, Mr. President, Senator Pimentel has withdrawn.

We are now ready to discharge the witness, Mr. President.

ATTY. GINEZ.  May I be allowed, Your Honor, to make my counter-manifestation to Justice Cuevas’ manifestation, Your Honor.

THE PRESIDING OFFICER.  Proceed.

ATTY. GINEZ.  Your Honor, Justice Cuevas, Your Honor, our esteemed colleague in the profession had said that we have not discharged our burden of proof, Your Honor.  We had proven so far that there was full payment, a Deed of Absolute Sale was executed, a title was issued, Your Honor.

So, our brethren in our 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 of 2004.

So, it was the duty then of the Chief Justice, Your Honor, to put this into his SALN as of December 31, 2004 and subsequent years, Your Honor.

That is all, Your Honor.  Thank you.

THE PRESIDING OFFICER.  Anyway, this is a disputed legal issue.  You’re required to submit your memoranda, your respective memorandum on this particular issue, 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.

ATTY. GINEZ.  We will, Your Honor.  We will submit the same on Monday, Your Honor.

THE PRESIDING OFFICER.  How long do you want to submit the memorandum?

ATTY. GINEZ.  Monday, Your Honor.

THE PRESIDING OFFICER.  Monday?

ATTY. GINEZ.  Yes, Your Honor.

THE PRESIDING OFFICER.  All right.

ATTY. GINEZ.  Thank you, Your Honor.

THE PRESIDING OFFICER.  You’re ordered to submit your respective memorandum on Monday.

Senator Pimentel has the floor.  Senator Pangilinan.

SEN. PANGILINAN.  It’s just that they may include in the memorandum, Mr. President, a clarificatory question.

His 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.

ATTY. GINEZ.  Thank you, Your Honor.

JUSTICE CUEVAS.  Thank you, Your Honor.

SEN. SOTTO.  Mr. President, as I said, we are ready to discharge the witness.

THE PRESIDING OFFICER.  The witness is discharged.  (Gavel)

No other matter being asked for this witness?

SEN. SOTTO.  No other matter, Mr. President.

THE PRESIDING OFFICER.  All right.  Your are discharged.  (Gavel)

SEN. SOTTO.  Mr. President, Mr. Noli Hernandez of Megaworld who testified yesterday was asked by the court to submit certain documents 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 you grant the request, Mr. President?

THE PRESIDING OFFICER.  The request is reasonable and the Chair grants the request.  (Gavel)

SEN. SOTTO.  Additional request from Senator Osmeña on this matter, Mr. President.

THE PRESIDING OFFICER.  The Gentleman from Cebu has the floor.

SEN. OSMEÑA.  Thank you, Mr. President.

In addition, may we request the court to subpoena, along with the date of turnover of Unit No. 38B or the Penthouse to Justice Corona, the deed of Justice Corona’s acceptance of 38B, and the date of the transfer of title.

And finally, to include the master deed of the Bellagio One Condo Corporation which includes attached floor plans or the condo layout plan.

Thank you very much, Mr. President.

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.  (Gavel)

SEN. SOTTO.  Mr. President, may I 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.

ADJOURNMENT OF HEARING

SEN. SOTTO.  Mr. President, I move to adjourn until two o’clock in the afternoon on Thursday, February 2, 2012.

THE PRESIDING OFFICER.  Is there any objection?

The motion of the Majority Floor Leader is approved.

It was 6:15 p.m.

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