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24 Stratdev V Radstock
24 Stratdev V Radstock
When a director, trustee or officer attempts to acquire or acquires, Section 20(1), Chapter IV, Subtitle B, Title I, Book V of the
in violation of his duty, any interest adverse to the corporation in Administrative Code of 1987 applies to PNCC, which indisputably is a
respect of any matter which has been reposed in him in confidence, government owned or controlled corporation.
as to which equity imposes a disability upon him to deal in his own
behalf, he shall be liable as a trustee for the corporation and must In the same vein, the COAs stamp of approval on the Compromise
account for the profits which otherwise would have accrued to the Agreement is void for violating Section 20(1), Chapter IV, Subtitle B,
corporation. Title I, Book V of the Administrative Code of 1987.
Soon after the short-lived Estrada Administration, the PNCC Board
revoked its previous admission of liability for the Marubeni loans. PNCCs express admission of liability for the Marubeni loans is
During the oral arguments, Atty. Sison narrated to the Court: essentially the premise of the execution of the Compromise
x x x After President Estrada was ousted, I was appointed as President Agreement. In short, Radstocks claim against PNCC is settled by
and Chairman of PNCC in April of 2001, this particular board virtue of PNCCs express admission of liability for the Marubeni
resolution was brought to my attentionand I immediately put the loans. The Compromise Agreement merely reduced this settled
matter before the board. I had no problem in convincing them to liability from P17 billion to P6.185 billion.
reverse the recognition as it was illegal and had no basis in fact. The
vote to overturn that resolution was unanimous. Strange to say that The provision of the Revised Administrative Code on the power to
some who voted to overturn the recognition were part of the old settle claims or liabilities was precisely enacted to prevent
board that approved it. Stranger still, Renato Valdecantos who was government agencies from admitting liabilities against the
still a member of the Board voted in favor of reversing the resolution government, then compromising such settled liabilities. The present
he himself instigated and pushed. Some of the board members who case is exactly what the law seeks to prevent, a compromise
voted to recognize the obligation of Marubeni even came to me agreement on a creditors claim settled through admission by a
privately and said pinilit lang kami. x x x.[53] (Emphasis supplied) government agency without the approval of Congress for amounts
In approving PNCC Board Resolution Nos. BD-092-2000 and BD-099- exceeding P100,000.00. What makes the application of the law even
2000, the PNCC Board caused undue injury to the Government and more necessary is that the PNCC Boards twin moves are manifestly
gave unwarranted benefits to Radstock, through manifest partiality, and grossly disadvantageous to the Government. First, the PNCC
evident bad faith or gross inexcusable negligence of the PNCC Board. admitted solidary liability for a staggering P10.743 billion private
Such acts are declared under Section 3(e) of RA 3019 or the Anti-Graft debt incurred by a private corporation which PNCC does not even
and Corrupt Practices Act, as corrupt practices xxx and xxx unlawful. control. Second, the PNCC Board agreed to pay Radstock P6.185
Being unlawful and criminal acts, these PNCC Board Resolutions are billion as a compromise settlement ahead of all other creditors,
void ab initio and cannot be implemented or in any way given effect including the Government which is the biggest creditor.
by the Executive or Judicial branch of the Government.
The PNCC is not just like any other private corporation precisely
because it is not a private corporation but indisputably a
government owned corporation. Neither is PNCC an autonomous
entity considering that PNCC is under the Department of Trade and
Industry, over which the President exercises control.