DOLORES V. MENDOZA, AND SPOUSES ROGELIO AND FE TAGLE, PETITIONERS, VS. AGRIX MARKETING, INC., RESPONDENT.

The proverbialist who bequeathed to the
world the familiar adage, “You cannot have your cake and eat it,”^[1] hit upon one of the most common and
enduring of human frailties:  that of
wanting to get something for nothing, to give less than value received, or, in
a more recent and colorful phrasing, of trying to put one over the other
fellow.  The aphorism, as will presently
be seen, is not entirely without relevance to the case at bar.

Agrix Marketing, Inc., herein
respondent, was sued in the Court of First Instance of Manila by Dolores V.
Mendoza and the spouses Rogelio and Fe Tagle, who
sought to collect sums of money which they claimed to have entrusted to the
latter in reliance on its assurances, later contravened, that their money would
be invested and earn profit higher than the interest rates then prevailing.1 Agrix Marketing, Inc. (Agrix
Group of Companies) was also sued in the Securities and Exchange Commission by
many of its stockholders claiming to have been defrauded by it,2 in
consequence of which the premises of the corporation were sealed and
sequestered and its records seized by deputies of the Commission.

The President of the Philippines
then took over. He directed the National Development Company to formulate and
implement a rehabilitation program for the Agrix
Group of Companies, and deputized it as Rehabilitation Receiver.3
Subsequently, he promulgated Presidential Decree No. 1717,4 directing the dissolution of the Agrix Group of Companies and the transfer of its assets and
liabilities to a new corporation, the “New Agrix,
Inc.” The capitalization of the new firm was provided in Section 2 of the
Decree:

SEC. 2.***.

The provisions of the Corporate Code regarding watered stocks
notwithstanding, the paid up capital of New Agrix,
Inc. will consist of the sum of the valid claims of investors and shareholders
in the Agrix Group of Companies.  In the determination of valid claims, only
the principal amount, without interest and dividends, of investors and
shareholders **, excluding those against whom criminal charges have been or
will be filed, will be considered.

The decree also provided for the issuance
of stock in the new corporation to investors and shareholders shown to have
valid claims against the old company.

SEC. 3.  Procedure for
Issuance of Common Shares of the
New Agrix, Inc. – New Agrix, Inc. shall issue shares
of stock
equivalent to the principal amount of the valid claims of all Agrix investors and shareholders, other than those excluded
in Sec. 2, upon submission by such investors and shareholders of original
copies of proof of their investment.  A
Claim Committee consisting of a representative from the National Development
Company, the Securities and Exchange Commission and the Ministry of Justice is
hereby constituted to establish the rules and regulations for determining the
validity of claims.

The decree provided, too, for the
exclusive character of the proceedings in the Securities & Exchange
Commission laid down by it, barring interference by any court or other
adjudicatory body with the possession and ownership of the new company’s
assets.

SEC. 9.  Actions or
proceedings involving the Dissolved Corporations and/or their Assets. – All monetary claims against the dissolved
corporation which are presently pending or which may hereafter be filed, with
the Court or with any adjudicatory body, shall be dismissed.  In addition, in all legal proceedings of
whatever nature wherein a claim or charge is made against any of the assets of
the dissolved corporations, no order shall be issued which may in any manner
interfere with the full possession and ownership of said assets by the New Agrix, Inc.

While their action was pending in the Manila CFI (Br. XXXII), and
after having in fact obtained a writ of preliminary attachment therefrom, the petitioners filed with the Claim Committee
created by PD 1717 a Joint Affidavit dated November 17, 1980, for verification and validation of
their pecuniary interests in the defendant corporation.  Their claims were duly processed and found to
be legitimate; so the New Agrix, Inc. issued in their
favor some months later, a stock certificate (No. 09320), representing shares
valued at P40,000.00 in accordance with the provisions of the decree.  The certificate was delivered to and received
by Dolores V. Mendoza on April 13, 1981.  It is noteworthy that the acceptance
of the stock certificate was made without qualification or protest of any
nature whatsoever by Mendoza or her co-plaintiffs.

These events were brought to the attention of the Court (Manila
CFI, Br.
XXXII, as aforesaid) in which the petitioners’ action was pending, and led to the promulgation by it of an
Order on June 1, 1981,1
now assailed in the present proceedings. 
The order reads as follows:

It appearing that the claim of plaintiffs had been validated by the
Claim Committee formed by the National Development Company as Rehabilitation
Receiver of the defendant; that the New Agrix, Inc.
has recognized plaintiffs’ claim and is willing to settle its obligation; and
that the New Agrix, Inc. has issued Stock Certificate
No. 09320 in favor of plaintiffs which was received by plaintiff Dolores V.
Mendoza on April 13, 1981, in accordance with the provisions of PD 1717, the
complaint is hereby DISMISSED, without pronouncement as to costs.

SO ORDERED.

The petitioners appealed to this Court from this Order, and now
plead for its reversal on the following arguments:  (1) they never intended to waive their right
to judicial relief; (2) they were denied due process in the validation of their claims before the Claim
Committee; (3) they had delivered money to the old Agrix
company as a loan, and not as an investment; and (4) PD 1717 was
unconstitutional because it deprived courts of jurisdiction, and authorized
reduction of claims without due process.

Upon the undisputed facts, it is not possible for the petitioners
to succeed.  With full awareness of the
provisions of PD 1717, particularly those already cited herein, i.e., those
relating to the valuation of claims in the Agrix
Group of Companies, and the rules laid down by the Claim Committee conformably
therewith, as well as those mandating the dismissal of all “monetary
claims against the dissolved corporation which are presently pending ** ,”
they voluntarily and unqualifiedly submitted their claims to the Claim
Committee precisely for valuation conformably with its rules and the aforementioned
provisions of the decree.  Subsequently,
on being officially advised that said Committee had placed on their claims an
aggregate value of P40,000.00 (instead of P58,000.00, as proposed by them) and
that a certificate of stock in the new corporation representing this declared amount of P40,000.00 had been issued
in their favor, they accepted and took delivery of the certificate as
voluntarily and unqualifiedly as they had initially presented their
claims.  It is in the premises certainly
duplicitous for petitioners now to assert that by thus receiving equity in the
New Agrix, Inc., they had not waived the right they
originally tried to litigate in court against the same corporation, or that the
valuation of their claim had been attended by irregularity.  It is as duplicitous for them to assail the
very law and implementing rules under which they had applied for and received
benefits; in truth the impugnation of the law as unconstitutional at this time
appears to be nothing but a mere afterthought. 
What at bottom the petitioners desire is to receive and retain benefits
under a law without being bound by the conditions laid down by that law for the
grant thereof, and of which conditions they were fully cognizant at the time
they applied for those benefits.  They
want, in a word, to have their cake and eat it, too.  This the Court will not permit.

WHEREFORE, the petition is DISMISSED lack of merit, with
costs against petitioners.

SO ORDERED.

Fernan, C.J., Melencio-Herrera,
Gutierrez, Jr., Cruz, Paras, Feliciano, Gancayco, Padilla, Bidin, Sarmiento, Cortes, Griño-Aquino, Medialdea, and Regalado, JJ., concur.

^[1]
Others put it somewhat differently, viz:
“You can’t ‘have’ your
pudding unless you can ‘eat’ it” (Ruskin), “Would you both eat your cake
and have your cake?” (Hending’s Proverbs, compiled about the year 1300) and, “You cannot sell the cow and have the milk, too” (Dr.
Thos. Fuller’s Gnomologia, circa 1732).

1
The case was docketed as Civil Case No. 129917 and assigned to the sala (Br. XXXII) of Judge Artemon
D. Luna.

2
SEC Case No. 01868 entitled “Francisco Santos, et al. v. Sofronio Blando“

3
Letter of Instructions
No. 1021, May 15, 1980. The
SEC later confirmed the deputization of NDC as
Rehabilitation Receiver

4
On Aug. 21, 1980, to take
effect 90 days from date of issuance (Sec. 11) or on November 19, 1980

1
In connection with petitioners’ motion to hold the NDC
in contempt for refusing to respect the writ of preliminary attachment earlier
issued at their instance, and as to which the New Agrix, Inc.
had invoked Section 9 of PD 1717 providing for the dismissal of all pending
actions against the dissolved corporation and prohibiting the issuance of any
order which may in anyway interfere with the full possession and ownership of the old
corporations’ assets by the New Agrix, Inc. The
contempt incident became academic upon the subsequent dismissal of the action.