THE Court of Appeals (CA) has reversed its November 2009 decision and dismissed the estafa charges filed by businessman Gonzalo Co against his siblings and relatives for alleged misappropriation of the shares he entrusted to them in the family-owned corporation, Green Cross Inc., 23 years ago.
Co filed the complaint after he found himself unceremoniously ousted from the multi-billion company, which made the popular rubbing alcohol brand and other health products.
The November 5, 2009 decision nullified a ruling of the Pasay City regional trial court dismissing the estafa charges filed by Co in 2006 on the ground of prescription.
Voting 4-1, the CA’s Special Former Fourth Division granted the motion for reconsideration filed by respondents and amended its November 2009 decision, saying the Pasay RTC did not commit grave abuse of discretion when it junked the estafa charges against the accused.
In a decision penned by Associate Justice Marlene Gonzales-Sison, the CA held that the “felony charged has already prescribed, as it was discovered by (Co) more than 20 years before the filing of the complaint.”
The appellate court likewise directed the Pasay court to go on hearing the estafa case.
The CA cited Articles 90 and 91 of the Revised Penal Code, which provide that “crimes punishable by death, reclusion perpetua or reclusion temporal shall prescribe in 20 years” and that the prescription period “shall commence to run from the day on which the crime is discovered by the offended party.”
The appellate court shared the observation of the Pasay RTC that Gonzalo’s discovery of the alleged misappropriation happened as early as December 29, 1986, based on the Certificate of Increase submitted by the prosecution to prove its allegation of misappropriation.
“Undoubtedly, based on the foregoing provisions, the felony charged has already prescribed, as it was discovered by the private complainant more than 20 years before the filing of the complaint, thus, the quashal of the Information is in order,” the Court said.
However, the CA said the subject shares were given in trust to the private respondents only for the purpose of complying, at least superficially, with the requirements of the Corporation Code, that there be at least five incorporators in a private corporation, and that each incorporator must own or be a subscriber to at least one share of the capital stock of the corporation.
It noted that Gonzalo’s signatures on the certificate proved that he knew and participated in the conversion of his shares in the company.
Concurring with the ponencia were Presiding Justice Andres Reyes Jr. and Associate Justices Juan Enriquez Jr. and Stephen Cruz, while Associate Justice Vicente Veloso, the one who wrote the previous ruling, dissented.
Named respondents in the suit were his siblings Anthony Co, Mary Co Cho, Peter Co, Michael Anthony Co; in-laws, nephews and nieces Mark David Cho, Dick Milton Cho, Ann Marie Co-Imperial, Joanna Liza Co Yap, Jim Lewis Co, Nessie Pearl Chan; Sandy Chan, Nancy Co and So Hua Co.
Based on records of the case, Co accused his relatives of misappropriating his shares of stock held in trust by them by subscribing on December 29, 1986 additional shares in the company, then known as Gonzalo Laboratories Inc., as if such shares were their own.
Co said his relatives failed and refused to return the shares despite his repeated demand.
In his complaint, Co claimed that he founded Gonzalo Laboratories in 1952 as a single proprietorship which he owned 100 percent with a capital of P3,300.
Since a corporation requires at least five incorporators, he assigned to his siblings Anthony, Joseph and Mary, and Mother Ang Si, shares that he placed and paid in their names by way of implied trust.
Co said he assigned 50 percent of the company shares to his siblings while retaining 50 percent under his name.
Later, also through implied trust, he placed 10 percent share in the name of his father, Co Ay Tian.
However, in February 11, 1978, Co said he was surprised to learn that his shares were reduced to 25 percent.
In December 1986, Co claimed that his shares were reduced further to 17.5 percent and on the same year, he was forced to sign a deed of absolute sale on his 874 shares under moral duress.
He added that all the shares that were reduced from him were gradually distributed over the years to the respondents.
On August 22, 1989, the corporate name of Gonzalo Laboratories Inc. was amended to Green Cross Inc. and by 1991, he did not even own a single share. (ECV/Sunnex)