SC resolves 3-D ownership issue

The Supreme Court has finally settled the issue of who owns Northern Islands Co. Inc., the firm behind the manufacture, distribution and sale of the “3-D” brand of home appliances.

In its 23-page decision penned by Associate Justice Angelina Sandoval-Gutierrez, the high court ruled that matriarch Simny Guy and her three daughters Geraldine, Gladys and Grace are the rightful owners of the 20, 160 shares of stock of Northern Islands and not Lincoln Continental Development Co., Inc. (LCDCI) headed by her son Gilbert Guy.

The Court affirmed the Nov. 27, 2006 decision of the Court of Appeals (CA) returning the control of “3-D” to the family’s matriarch and her daughters.

“Both Lincoln Continental and Gilbert (Guy) claim that the latter holds legal title to the shares in question. But record shows that there is no evidence that the stock certificates representing the contested shares are in respondents’ possession,” the court said.

The Tribunal stressed that petitioners LDCCI and Gilbert Guy failed to show proof to support their allegation that the transfer of the shares of stock to his sisters was fraudulent.

“As aptly held by the Court of Appeals, fraud is never presumed but must be established by clear and convincing evidence. We agree with the Court of Appeals that respondent sisters own the shares of stock, Gilbert being their mere trustee. Verily, we find no reversible error in the challenged decision of the Court of Appeals,” the Court added.

According to records, Northern Islands was organized by spouses Francisco and Simny Guy in 1957. In 1986, the couple incorporated LCDCI as a holding company of the 50 percent shares of stock of Northern Islands in trust for their three daughters.

In December 1986, on instruction of the spouses Guy, lawyer Andres Gatmaitan, president of LCDCI, indorsed in blank stock certificate no. 132 covering 8,400 shares and stock certificate no. 133 covering 11,760 shares and delivered them to Simny.

Subsequently, the Guy couple found that their son Gilbert had been disposing of the assets of their corporations without authority.

In order to protect the assets of Northern Islands, Simny surrendered stock certificate nos. 132 and 133 to Emilia Tabugadir, an officer of Northern Islands.

The 20,160 shares covered by the two stock certificates were then registered in the names of their three daughters, thus, enabling them to assume an active role in the management of Northern Islands.

On Jan. 27, 2004, a special meeting of stockholders of Northern Islands was conducted where Simny was elected president; Grace vice president for finance; Geraldine corporate treasurer; and Gladys corporate secretary; while Gilbert retained his position as executive vice president.

On March 18, 2004, LCDCI filed with the Manila Regional Trial Court, Branch 24, a complaint for annulment of transfer of shares of stock against respondents.

The complaint alleges that LCDCI owns the subject shares of stock in Northern Islands and that respondents falsely transferred the said shares in respondent sisters’ names to oust their brother from the management of Northern Islands.