Bilyonaryo Ramon Ang won a years-old case punishing ex-government officials sitting on the board of the Land Bank of the Philippines for withholding the transfer of Meralco shares that his company, SMC Global Power, bought from the state-owned bank.
In 2008, Ang’s SMC Power paid P4.75 billion to Landbank to acquire over 46 million Meralco shares it owned, with the payment to made in four installments from 2009 to 2012. However, the same shares were also the subject of a different case and had been transferred instead to a person named Josefina Lubrica.
When the Lubrica concerns were resolved, Land Bank refused to carry on with the sale and transfer of the shares to SMC in June 2012, this time saying that the stock value of Meralco has more than doubled four years after the original agreement.
“Once the buyer has paid the price in full, the contract to sell is converted to an absolute sale, and the buyer has the right to demand the execution of a Deed of Absolute Sale in its favor,” the Court of Appeals’ Eighth Division said in its ruling.
The CA magistrates refuted Landbank’s claim that they did not transfer ownership of the Meralco shares to SMC because the company initially held back on its tranche payments later than the original schedule.
“The records disclose that SMC Global’s non-payment of subject Meralco shares was brought about by appellant Land Bank’s breach of its warranties under the SPA,” Associate Justice Manuel Barrios said, referring to the Lubrica debacle.
“On account thereof, it is only understandable, logical, and proper for SMC Global to defer payment until after said shares are restored in Land Bank’s name,” it added. “Indeed, no person of reason would part with money – especially in the instant case where the consideration amounted to billions of pesos – if he or she knew that the other party cannot possibly comply with his or her contractual obligations.”
CA justices even noted the Ang firm’s “good faith” when it regularly sent letters to Land Bank to follow up on the case status so that it can proceed with the purchase deal as planned.
The court also found the likes of former Finance Secretary Cesar Purisima, Agriculture Secretary Proceso Alcala, Labor Secretary Rosalinda Baldoz, and ex-Landbank President Gilda Pico responsible for delaying the purchase deal, even if they were not the ones who signed it in 2008.
“Individual appellants – being the decisionmakers of appellant Land Bank – failed to issue a final, definitive and conclusive statement on their stand on SMC Global’s request for the implementation of the SPA, thereby showing bad faith on their part,” the court said, pointing out their “unjustified refusal or neglect” to act.
“Worse, appellants have unjustly kept SMC Global in suspended state and waiting on their stance on whether or not to pursue the SPA, which constrained the latter to file the instant case,” the decision noted.