4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S.

UMALE, IN SUBSTITUTION OF HERNAN…

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Philippine Supreme Court Jurisprudence > Year 2014 > September 2014 Decisions > G.R. No. 172843,
September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF
HERNANDO F. BALMORES, Respondent.; G.R. NO. 172881 - RODIVAL E. REYES, HANS M. PALMA AND DOROTEO
M. PANGILINAN, Petitioners, v. HERNANDO F. BALMORES, Respondent.:

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G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN
SUBSTITUTION OF HERNANDO F. BALMORES, Respondent.; G.R. NO. 172881 - RODIVAL E. REYES, HANS
M. PALMA AND DOROTEO M. PANGILINAN, Petitioners, v. HERNANDO F. BALMORES, Respondent.
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SECOND DIVISION

G.R. No. 172843, September 24, 2014

ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNANDO F.

BALMORES, Respondent.

G.R. NO. 172881

RODIVAL E. REYES, HANS M. PALMA AND DOROTEO M. PANGILINAN, Petitioners, v. HERNANDO

F. BALMORES, Respondent.

DECISION

LEONEN, J.:

Before us is a petition for review on certiorari 1

under Rule 45 of the Rules of Court, assailing the
decision2 of the Court of Appeals dated March 2, 2006 and its resolution3 dated May 29, 2006, denying
petitioners' motions for reconsideration. The Court of Appeals placed Pasig Printing Corporation (PPC)
under receivership and appointed an interim management committee for the corporation.4 cralawlawlibrary

MC Home Depot occupied a prime property (Rockland area) in Pasig. The property was part of the area
DebtKollect Company, Inc. owned by Mid-Pasig Development Corporation (Mid-Pasig).5 cralawlawlibrary

On March 1, 2004, PPC obtained an option to lease portions of Mid-Pasig's property, including the
Rockland area.6cralawlawlibrary

On November 11, 2004, PPC's board of directors issued a resolution7 waiving all its rights, interests, and
participation in the option to lease contract in favor o£ the law firm of Atty. Alfredo Villamor, Jr.
(Villamor), petitioner in G.R. No. 172843. PPC received no consideration for this waiver in favor of
Villamor's law firm.8 cralawlawlibrary

On November 22, 2004, PPC, represented by Villamor, entered into a memorandum of agreement (MOA)
with MC Home Depot.9 Under the MO A, MC Home Depot would continue to occupy the area as PPC's
sublessee for four (4) years, renewable for another four (4) years, at a monthly rental of P4,500,000.00
plus goodwill of P18,000,000.00.10 cralawlawlibrary

In compliance with the terms of the MOA, MC Home Depot issued 20 post-dated checks representing
rental payments for one year and the goodwill money. The checks were given to Villamor who did not
turn these or the equivalent amount over to PPC, upon encashment.11 cralawlawlibrary

Hernando Balmores, respondent in G.R. No. 172843 and G.R. No. 172881 and a stockholder and director
ChanRobles Intellectual Property of PPC,12 wrote a letter addressed to PPJC's directors, petitioners in G.R. No. 172881, on April 4, 2005.13
Division He informed them that Villamor should be made to deliver to PPC and account for MC Home Depot's

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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
September-2014 Jurisprudence
G.R. No. 205800, September 10, 2014 - MICROSOFT
CORPORATION AND ADOBE SYSTEMS
INCORPORATED, Petitioners, v. SAMIR FARAJALLAH,
VIRGILIO D.C. HERCE, RACHEL P. FOLLOSCO,
JESUSITO G. MORALLOS, AND MA. GERALDINE S.
GARCIA (DIRECTORS AND OFFICERS OF NEW FIELDS
(ASIA PACIFIC), INC.), Respondents.
G.R. No. 201237, September 03, 2014 -
PHILIPPINE TOURISTERS, INC. and/or ALEJANDRO R.
YAGUE, JR., Petitioners, v. MAS TRANSIT WORKERS
UNION-ANGLO-KMU* AND ITS MEMBERS,
REPRESENTED BY ABRAHAM TUMALA, JR.,
Respondents.
G.R. No. 199388, September 03, 2014 - OMNI
HAULING SERVICES, INC., LOLITA FRANCO, and
ANICETO FRANCO, Petitioners, v. BERNARDO BON,
ROBERTO TORTOLES, ROMEO TORRES, RODELLO*
RAMOS, RICARDO DELOS SANTOS, JUANITO BON,
ELENCIO ARTASTE,** CARLITO VOLOSO, ROMEL
TORRES, ROBERT AVILA, EDUARDO BAUTISTA, MARTY
VOLOSO, OSCAR JABEL, RICKY AMORANTO, BERNARD
OSINAGA, EDUARDO BON, JERRY EDUARCE, and
FEDERICO BRAZIL, Respondents.
G.R. No. 197329, September 08, 2014 - NATIONAL
POWER CORPORATION, Petitioner, v. LUIS SAMAR
AND MAGDALENA SAMAR, Respondents.
G.R. No. 205298, September 10, 2014 - LEOPOLDO
QUINTOS Y DEL AMOR, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.
A.C. No. 7474, September 09, 2014 - PRESIDING
JUDGE JOSE L. MADRID, REGIONAL TRIAL COURT,
BRANCH 51, SORSOGON CITY, Complainant, v. ATTY.
JUAN S. DEALCA, Respondent.
G.R. No. 199139, September 09, 2014 - ELSIE S.
CAUSING, Petitioner, v. COMMISSION ON ELECTIONS
AND HERNAN D. BIRON, SR., Respondents.
G.R. No. 197336, September 03, 2014 -
CORPORATION, Petitioner, v. ROLANDO CORDERO,
Respondent.
G.R. No. 195549, September 03, 2014 - the money proceeds of the 20 MC Home Depot checks taken by them and to account and
WILLAWARE PRODUCTS CORPORATION, Petitioner, v.
JESICHRIS MANUFACTURING CORPORATION,
Respondent.
G.R. No. 183360, September 08, 2014 - ROLANDO
C. DE LA PAZ,*, Petitioner, v. L & J DEVELOPMENT
COMPANY, Respondent.
G.R. No. 196182, September 01, 2014 - ECE REALTY
AND DEVELOPMENT INC., Petitioner, v. RACHEL G.
MANDAP, Respondent.
G.R. No. 178837, September 01, 2014 - COLEGIO
DE SAN JUAN DE LETRAN, Petitioner, v. ISIDRA DELA
ROSA-MERIS, Respondent.
G.R. No. 198139, September 08, 2014 - NATIONAL
POWER CORPORATION, Petitioner, v. FELICISIMO
TARCELO AND HEIRS OF COMIA SANTOS,
http://www.chanrobles.com/cralaw/2014septemberdecisions.php?id=793
checks or their equivalent value.14 cralawlawlibrary
Due to the alleged inaction of the directors, respondent Balmores filed with the Regional Trial Court an
intra-corporate controversy complaint under Rule 1, Section 1(a)(1) of the Interim Rules for Intra-
Corporate Controversies15 (Interim Rules) against petitioners for their alleged devices or schemes
amounting to fraud or misrepresentation "detrimental to the interest of the Corporation and its
stockholders."16 cralawlawlibrary
Respondent Balmores alleged in his complaint that because of petitioners' actions, PPC's assets were ". . .
not only in imminent danger, but have actually been dissipated, lost, wasted and destroyed."17 cralawlawlibrary
Respondent Balmores prayed that a receiver be appointed from his list of nominees.18 He also prayed for
petitioners' prohibition from "selling, encumbering, transferring or disposing in any manner any of [PPC's]
properties, including the MC Home [Depot] checks and/or their proceeds."19 He prayed for the
accounting and remittance to PPC of the MC Home Depot checks or their proceeds and for the annulment
of the board's resolution "vaiving PPC's rights in favor of Villamor's law firm.20 cralawlawlibrary
Ruling of the
Regional Trial Court
In its resolution21 dated June 15, 2005, the Regional Trial Court denied respondent Balmores' prayer for
the appointment of a receiver or the creation of a management committee. The dispositive portion
reads:chanRoblesvirtualLawlibrary
WHEREFORE, premises considered the appointment of a Receiver and the creation of a
Management Committee applied for by plaintiff Hernando F. Balmores are, as they
are hereby, DENIED.22 (Emphasis in the original)
According to the trial court, PPC's entitlement to the checks was doubtful. The resolution issued by PPC's
board of directors; waiving its rights to the option to lease contract in favor of Villamor's law firm, must
be accorded prima facie validity.23 cralawlawlibrary
The trial court also noted that there was a pending case filed by one Leonardo Umale against Villamor,
involving the same checks. Umale was also claiming ownership of the checks.24 This, according to the
trial court, weakened respondent Balmores' claim that the checks were properties of PPC.25 cralawlawlibrary
The trial court also found that there was "no clear and positive showing of dissipation, loss, wastage, or
destruction of [PPC's] assets . . . [that was] prejudicial to the interest of the minority stockholders,
parties-litigants or the general public."26 The board's failure to recover the disputed amounts was not an
indication of mismanagement resulting in the dissipation of assets.27 cralawlawlibrary
The trial court noted that PPC was earning substantial rental income from its other sub-lessees.28
cralawlawlibrary
The trial court added that the failure to implead PPC was. fatal. PPC should have been impleaded as an
indispensable party, without which, there would be no final determination of the action.29 cralawlawlibrary
Ruling of the
Court of Appeals
Respondent Balmores filed with the Court of Appeals a petition for certiorari under Rule 65 of the Rules of
Court.30 He assailed the decision of the trial court, which denied his "application for the appointment of a
[r]eceiver and the creation of a [management [c]ommittee."31 cralawlawlibrary
In the decision promulgated on March 2, 2006, the Court of Appeals gave due course to respondent
Balmores' petition. It reversed the trial court's decision, and issued a new order placing PPC under
receivership and creating an interim management committee.32 The dispositive portion reads:
chanRoblesvirtualLawlibrary
WHEREFORE, premises considered, the instant petition is hereby GRANTED and GIVEN
DUE COURSE and the June 15, 2005 Order/Resolution of the commercial court, the
Regional Trial Court of Pasig City, Branch 167, in S.E.C. Case No. 05-62, is hereby
REVERSED and SET ASIDE and a NEW ORDER is ISSUED that, during the pendency of
the derivative suit, until judgment on the merits is rendered by the commercial court, in
order to prevent dissipation, loss, wastage or destruction of the assets, in order to prevent
paralization of business operations which may be prejudicial to the interest of stockholders,
parties-litigants or the general public, and in order to prevent violations of the corporation
laws: (1) Pasig Printing Corporation (PPC) is hereby placed under receivership pursuant to
the Rules Governing Intra-Corporate Controversies under R.A. No. 8799; (2) an Interim
Management Committee is hereby created for Pasig Printing Corporation (PPC) composed
of Andres Narvasa, Jr., Atty. Francis Gustilo and Ms Rosemarie Salvio-Leonida; (3) the
interim management committee is hereby directed to forthwith, during the pendency of the
derivative suit until judgment on the merits is rendered by the commercial court, to: (a)
take over the business of Pasig Printing Corporation (PPC), (b) take custody and control of
all assets and properties owned and possessed by Pasig Printing Corporation (PPC), (c)
take the place of the management and the board of directors of Pasig Printing Corporation
(PPC), (d) preserve Pasig Printing Corporation's assets and properties, (e) stop and
prevent any disposal, in any manner, of any of the properties of Pasig Printing Corporation
(PPC) including the MC Home Depot checks and/or their proceeds; and (3) [sic] restore the
status quo ante prevailing by directing respondents their associates and agents to account
and return to the Interim Management Committee for Pasig Printing Corporation (PPC) all
surrender to the Interim Management Committee all subsequent MC Home Depot checks
or proceeds.33 (Citation omitted)
The Court of Appeals characterized the assailed order/resolution of the trial court as an interlocutory
order that is not appealable.34 In reversing tie trial court order/resolution, the Court of Appeals
considered the danger of dissipation, wastage, and loss of PPC's assets if the review of the trial court's
judgment would be delayed.35 cralawlawlibrary
The Court of Appeals ruled that the case filed by respondent Balmores with the trial court "[was] a
derivative suit because there were allegations of fraud or ultra vires acts ... by [PPC's directors]."36 cralawlawlibrary
According to the Court of Appeals, the trial court abandoned its duty to the stockholders in a derivative
suit when it refused to appoint a receiver or create a management committee, all during the pendency of
the proceedings. The assailed order of the trial court removed from the stockholders their right, in an
intra-corporate controversy, to be allowed the remedy of appointment of a receiver during the pendency
of a derivative suit, leaving the corporation under the control of an outsider and its assets prone to
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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
Respondents.
A.C. No. 10196, September 09, 2014 - MELODY R.
NERY, Complainant, v. ATTY. GLICERIO A. SAMPANA,
Respondent.
G.R. No. 194507, September 08, 2014 - FEDERAL
BUILDERS, INC., Petitioner, v. FOUNDATION
SPECIALISTS, INC., Respondent.; G.R. NO. 194621 -
FOUNDATION SPECIALISTS, INC., Petitioner, v.
FEDERAL BUILDERS, INC., Respondent.
G.R. No. 204233, September 03, 2014 - RICARDO
A. DALUSONG, Petitioner, v. EAGLE CLARC SHIPPING
PHILIPPINES, INC., NORFIELD OFFSHORE AS,
AND/OR CAPT. LEOPOLDO T. ARCILLAR, AND COURT
OF APPEALS, Respondents.
G.R. No. 197174, September 10, 2014 - FRANCLER
P. ONDE, Petitioner, v. THE OFFICE OF THE LOCAL
CIVIL REGISTRAR OF LAS PIÑAS CITY, Respondent.
A.C. No. 8637, September 15, 2014 - IMELDA CATO
GADDI, Complainant, v. ATTY. LOPE M. VELASCO,
Respondent.
G.R. No. 178733, September 15, 2014 - ELISA
ANGELES, Petitioner, v. HON. COURT OF APPEALS,
OFFICER-IN-CHARGE MARILOU C. MARTIN, DEPUTY
SHERIFF JOSELITO SP ASTORGA, MARCO BOCO, AND
JOHN DOES, REGIONAL TRIAL COURT OF PASIG,
BRANCH 268, Respondents.
G.R. No. 194946, September 03, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. ECO YABA Y
BASA A.K.A. “PLOK,” Accused-Appellant.
G.R. No. 205357, September 02, 2014 - GMA
NETWORK, INC., Petitioner, v. COMMISSION ON
ELECTIONS, RESPONDENT. SENATOR ALAN PETER
“COMPAÑERO” S. CAYETANO, Petitioner-Intervenor.;
G.R. NO. 205374 - ABC DEVELOPMENT CORPORATION,
Petitioner, v. COMMISSION ON ELECTIONS,
Respondent.; G.R. NO. 205592 - MANILA
BROADCASTING COMPANY, INC. AND NEWSOUNDS
BROADCASTING NETWORK, INC., Petitioner, v.
COMMISSION ON ELECTIONS, Respondent.; G.R. NO.
205852 - KAPISANAN NG MGA BRODKASTER NG
PILIPINAS (KBP) AND ABS-CBN CORPORATION,
Petitioners, v. COMMISSION ON ELECTIONS,
Respondent.; G.R. NO. 206360 - RADIO MINDANAO
NETWORK, INC., Petitioner, v. COMMISSION ON
ELECTIONS, Respondent.
G.R. No. 199898, September 03, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. LEO DE LA
TRINIDAD Y OBALLES, Accused-Appellant.
G.R. No. 157583, September 10, 2014 -
FRUMENCIO E. PULGAR, Petitioner, v. THE REGIONAL
TRIAL COURT OF MAUBAN, QUEZON, BRANCH 64,
QUEZON POWER (PHILIPPINES) LIMITED, CO.,
PROVINCE OF QUEZON,AND DEPARTMENT OF
FINANCE, Respondents.
G.R. No. 198656, September 08, 2014 - NANCY S.
MONTINOLA, Petitioner, v. PHILIPPINE AIRLINES,
Respondent.
A.C. No. 9925, September 17, 2014 - MARIANO R.
CRISTOBAL, Complainant, v. ATTY. RONALDO E.
RENTA, Respondent.
G.R. No. 212705, September 10, 2014 - ROBERTO
CO, Petitioner, v. KENG HUAN JERRY YEUNG AND
EMMA YEUNG, Respondents.
A.C. No. 7184, September 17, 2014 - FELIPE B.
ALMAZAN, SR., Complainant, v. ATTY. MARCELO B.
SUERTE-FELIPE, Respondent.
G.R. No. 190198, September 17, 2014 - can determine the issue-raised without reviewing or evaluating the evidence."53 Meanwhile, there is a
COMMISSIONER OF INTERNAL REVENUE, Petitioner,
v. CE LUZON GEOTHERMAL POWER COMPANY, INC.,
Respondent.
G.R. No. 184000, September 17, 2014 - PUERTO
AZUL LAND, INC., Petitioner, v. PACIFIC WIDE
REALTY DEVELOPMENT CORPORATION, Respondent.
G.R. No. 197857, September 10, 2014 - SPOUSES
FRANCISCO SIERRA (SUBSTITUTED BY DONATO,
TERESITA, TEODORA, LORENZA, LUCINA, IMELDA,
VILMA, AND MILAGROS SIERRA) AND ANTONINA
SANTOS, SPOUSES ROSARIO SIERRA AND EUSEBIO
CALUMA LEYVA, AND SPOUSES SALOME SIERRA AND
FELIX GATLABAYAN (SUBSTITUTED BY
BUENAVENTURA, ELPIDIO, PAULINO, CATALINA,
GREGORIO, AND EDGARDO GATLABAYAN, LORETO
REILLO, FERMINA PEREGRINA, AND NIDA
HASHIMOTO), Petitioners, v. PAIC SAVINGS AND
MORTGAGE BANK, INC., Respondent.
A.M. No. P-13-3102 [Formerly OCA I.P.I. No. 07-
2562-P], September 08, 2014 - JOSE S. VILLANUEVA,
Complainant, v. ATTY. PAULINO I. SAGUYOD, CLERK
OF COURT VI, REGIONAL TRIAL COURT, BRANCH 6,
PANIQUI, TARLAC, Respondent.
G.R. No. 176121, September 22, 2014 - SPOUSES
TEODORICO AND PACITA ROSETE, Petitioners, v.
http://www.chanrobles.com/cralaw/2014septemberdecisions.php?id=793
dissipation.37 The Court of Appeals also ruled that this amounts to "despotic, capricious, or whimsical
exercise of judicial power"38 on the part of the trial court.
In justifying its decision to place PPC under receivership and to create a management committee, the
Court of Appeals stated that the board's waiver of PPC's rights in favor of Villamor's law firm without any
consideration and its inaction on Villamor's failure to turn over the proceeds of rental payments to PPC
warrant the creation of a management committee.39 The circumstances resulted in the imminent danger
of loss, waste, or dissipation of PPC's assets.40
cralawlawlibrary
Petitioners filed separate motions for reconsideration. Both motions were denied by the Court of Appeals
on May 29, 2006. The dispositive portion of the Court of Appeals' resolution reads: chanRoblesvirtualLawlibrary
WHEREFORE, for lack of merit, respondents' March 10/2006 and March 20, 2006 Motions
for Reconsideration are hereby DENIED.41 chanrobleslaw
Petitioners filed separate petitions for review under Rule 45, raising the following threshold issues: chanRoblesvirtualLawlibrary
I. Whether the Court of Appeals correctly characterized respondent Balmores' action as a derivative
suit
II. Whether the Court of Appeals properly placed PPC under receivership and created a receiver or
management committee
PPC's directors argued that the Court of Appeals erred in characterizing respondent Balmores' suit as a
derivative suit because of his failure to implead PPC as party in the case. Hence, the appellate court did
not acquire jurisdiction over the corporation, and the appointment of a receiver or management
committee is not valid.42 cralawlawlibrary
The directors further argued that the requirements for the appointment of a receiver or management
committee under Rule 943 of the Interim Rules were not satisfied. The directors pointed out that
respondent Balmores failed to prove that the assets of the corporation were in imminent danger of being
dissipated.44 cralawlawlibrary
According to the directors, assuming that a receiver or management committee may be appointed in the
case, it is the Regional Trial Court only arid not the. Court of Appeals that must appoint them.45 cralawlawlibrary
Meanwhile, Villamor argued that PPC's entitlement to the checks or their proceeds was still in dispute. In
a separate civil case against Villamor, a certain Leonardo Umale was claiming ownership of the
checks.46cralawlawlibrary
Villamor also argued that the Court of Appeals' order to place PPC under receivership and to appoint a
management committee does not endanger PPC's assets because the MC Home Depot checks were not
the only assets of PPC.47 Therefore, it would not affect the operation of PPC or result in its
paralysation.48 cralawlawlibrary
In his comment, respondent Balmores argued that Villamor's and the directors' petitions raise questions
of facts, which cannot be allowed in a petition for review under Rule 45.49 cralawlawlibrary
On the appointment of a receiver or management committee, respondent Balmores stated that the ". . .
very practice of waiving assets and income for no consideration can in fact lead, not only to the
paralyzation of business, but to the complete loss or cessation of business of PPC[.] It is precisely
because of this fraudulent practice that a receiver/management committee must be appointed to protect
the assets of PPC from further fraudulent acts, devices and schemes."50
cralawlawlibrary
The petitions have merit.
I
Petition for review on
certiorari under Rule 45
was proper
First, we rule on the issue of whether petitioners properly filed a petition for review on certiorari under
Rule 45.
Respondent Balmores argued that the petition raises questions of fact.
Under Rule 45, only questions of law may be raised.51 There is a question of law "when there is doubt or
controversy as to what the law is on a certain [set] of facts."52 The test is "whether the appellate court
question of fact when there is "doubt... as to the truth or falsehood of facts."54 The question must
involve the examination of probative value of the evidence presented.
In this case, petitioners raise issues on the correctness of the Court of Appeals' conclusions.
Specifically, petitioners ask (1) whether respondent Balmores' failure to implead PPC in his action with
the trial court was fatal; (2) whether the Court of Appeals correctly characterized respondent Balmores'
action as a derivative suit; (3) whether the Court of Appeals' appointment of a management committee
was proper; and (4) whether the Court of Appeals may exercise the power to appoint a management
committee.
These are questions of law that may be determined without looking into the evidence presented. The
question of whether the conclusion drawn by the Court of Appeals from a set of facts is correct is a
question of law, cognizable by this court.55 cralawlawlibrary
Petitioners, therefore, properly filed, a petition for review under Rule 45.
II
Respondent Balmores' action in
the trial court is not a derivative suit
A derivative suit is an action filed by stockholders to enforce a corporate action.56 It is an exception to
the general rule that the corporation's power to sue57 is exercised only by the board of directors or
trustees.58 cralawlawlibrary
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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
FELIX AND/OR MARIETTA BRIONES, SPOUSES JOSE
AND REMEDIOS ROSETE, AND NEORIMSE AND
FELICITAS CORPUZ, Respondents.
G.R. No. 206912, September 10, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v.
DEMOSTHENES BONTUYAN, Accused-Appellant.
G.R. No. 189850, September 22, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. REYNALDO
TORRES, JAY TORRES, BOBBY TORRES @ ROBERTO
TORRES Y NAVA, BRION, AND RONNIE TORRES,
Accused, BOBBY TORRES @ ROBERTO TORRES Y
NAVA, Accused-Appellant.
G.R. No. 174353, September 10, 2014 - NESTOR
CHING AND ANDREW WELLINGTON, Petitioners, v.
SUBIC BAY GOLF AND COUNTRY CLUB, INC., HU HO
HSIU LIEN ALIAS SUSAN HU, HU TSUNG CHIEH ALIAS
JACK HU, HU TSUNG HUI, HU TSUNG TZU AND
REYNALD R. SUAREZ, Respondents.
G.R. No. 188773, September 10, 2014 - HEIRS OF
VALENTIN BASBAS, ANSELMA B. ENDRINAL,
GERTRUDES BASBAS, RUFINA BASBAS, CEFERINA B.
CARTECIANO, ANACLETO BASBAS, ARSENIA BASBAS,
ANASTACIO BASBAS, BEDACIO BASBAS, TEODOCIA B.
OCAMPO, SEGUNDO C. BASBAS, MARIA B. RAMOS AND
EUGENIO BASBAS IN REPRESENTATION OF PEDRO
BASBAS; HERINO T. BASBAS AND NESTOR T. BASBAS
IN REPRESENTATION OF LUCAS BASBAS; ADELAIDA
B. FLORENTINO, RODRIGO BASBAS, FELIX BASBAS,
JR., TEODULO BASBAS, ANDRESITO BASBAS, LARRY
BASBAS AND JOEY BASBAS IN REPRESENTATION OF
FELIX BASBAS, SR., VICTOR BEATO, ALIPIO BEATO,
EUTIQUIO BEATO, JULIANA B. DIAZ, PABLO BEATO
AND ALEJANDRO BEATO IN REPRESENTATION OF
REMIGIA B. BEATO, AS REPRESENTED BY RODRIGO
BASBAS, Petitioners, v. RICARDO BASBAS AS
REPRESENTED BY EUGENIO BASBAS, Respondents.
G.R. No. 176697, September 10, 2014 - CESAR V.
AREZA AND LOLITA B. AREZA, Petitioners, v. EXPRESS
SAVINGS BANK, INC. AND MICHAEL POTENCIANO,
Respondents.
G.R. No. 197486, September 10, 2014 - RENATO L.
DELFINO, SR. (DECEASED), REPRESENTED BY HIS
HEIRS, NAMELY: GRACIA DELFINO, GREGORIO A.
DELFINO, MA. ISABEL A. DELFINO, RENATO A.
DELFINO, JR., MA. REGINA DELFINO ROSELLA, MA.
GRACIA A. DELFINO, MARIANO A. DELFINO, MA.
LUISA DELFINO GREGORIO AND REV. FR. GABRIEL A.
DELFINO, Petitioners, v. AVELINO K. ANASAO AND
ANGEL K. ANASAO (DECEASED AND REPRESENTED BY
HIS SOLE HEIR, SIXTO C. ANASAO), Respondents.
G.R. No. 193426, September 29, 2014 - SUBIC BAY
LEGEND RESORTS AND CASINOS, INC., Petitioner, v.
BERNARD C. FERNANDEZ, Respondent.
G.R. No. 176020, September 29, 2014 - HEIRS OF
TELESFORO JULAO, NAMELY, ANITA VDA. DE
ENRIQUEZ, SONIA J. TOLENTINO AND RODERICK
JULAO, Petitioners, v. SPOUSES ALEJANDRO AND
MORENITA DE JESUS, Respondents.
A.C. No. 7337, September 29, 2014 - ROLANDO
VIRAY, Complainant, v. ATTY. EUGENIO T. SANICAS,
Respondent.
G.R. No. 204160, September 22, 2014 - SPOUSES
MICHELLE M. NOYNAY AND NOEL S. NOYNAY,
Petitioners, v. CITIHOMES BUILDER AND
DEVELOPMENT, INC., Respondent.
G.R. No. 202701, September 10, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. EDILBERTO
BALIBAY Y LABIS AND MARICEL BALIBAY BIJA-AN,
Defendant-Appellants.
G.R. No. 178911, September 17, 2014 - EDUARDO
D. MONSANTO, DECOROSO D. MONSANTO, SR., AND
REV. FR. PASCUAL D. MONSANTO, JR., Petitioners, v.
LEONCIO LIM AND LORENZO DE GUZMAN,
Respondents.
G.R. No. 195289, September 24, 2014 -
ROBINSON’S BANK CORPORATION (FORMERLY THE
ROYAL BANK OF SCOTLAND [PHILS.], INC.),
Petitioner, v. HON. SAMUEL H. GAERLAN, HON. HAKIM
S. ABDULWAHID AND HON. RICARDO R. ROSARIO, IN
THEIR CAPACITY AS ASSOCIATE JUSTICES
RESPECTIVELY OF THE TENTH DIVISION OF THE
COURT OF APPEALS, AND TRADE AND INVESTMENT
DEVELOPMENT CORPORATION OF THE PHILIPPINES,
Respondents.
G.R. No. 181921, September 17, 2014
INTERORIENT MARITIME ENTERPRISES, INC.,
Petitioner, v. VICTOR M. CREER III, Respondent.
A.M. No. 2010-21-SC, September 30, 2014 - Re:
ANONYMOUS LETTER-COMPLAINT ON THE ALLEGED
INVOLVEMENT AND FOR ENGAGING IN THE BUSINESS
OF LENDING MONEY AT USURIOUS RATES OF
INTEREST OF MS. DOLORES T. LOPEZ, SC CHIEF
JUDICIAL STAFF OFFICER, AND MR. FERNANDO M.
MONTALVO, SC SUPERVISING JUDICIAL STAFF
OFFICER, CHECKS DISBURSEMENT DIVISION, FISCAL
MANAGEMENT AND BUDGET OFFICE.
http://www.chanrobles.com/cralaw/2014septemberdecisions.php?id=793
Individual stockholders may be allowed to sue on behalf of the corporation whenever the directors or
officers of the corporation refuse to sue to vindicate the rights of the corporation or are the ones to be
sued and are in control of the corporation.59 It is allowed when the "directors [or officers] are guilty of
breach of . . . trust, [and] not of mere error of judgment."60 In derivative suits, the real party in
interest is the corporation, and the suing stockholder is a mere nominal party.61 Thus, this court
noted:chanRoblesvirtualLawlibrary
The Court has recognized that a stockholder's right to institute a derivative suit is not
based on any express provision of the Corporation Code, or even the Securities Regulation
Code, but is impliedly recognized when the said laws make corporate directors or officers
liable for damages suffered by the corporation and its stockholders for violation of their
fiduciary duties. In effect, the suit is an action for specific performance of an obligation,
owed by the corporation to the stockholders, to assist its rights of action when the
corporation has been put in default by the wrongful refusal of the directors or management
to adopt suitable measures for its protection.62 chanrobleslaw
Rule 8, Section 1 of the Interim Rules of Procedure for Intra-Corporate Controversies (Interim Rules)
provides the five (5) requisites63 for filing derivative suits: chanRoblesvirtualLawlibrary
SECTION 1. Derivative action. - A stockholder or member may bring an action in the name
of a corporation or association, as the case may be, provided, that:
chanRoblesvirtualLawlibrary
(1) He was a stockholder or member at the time the acts or transactions subject of the
action occurred and at the time the action was filed;
(2) He exerted all reasonable efforts, and alleges the same with particularity in the
complaint, to exhaust all remedies available under the articles of incorporation, by-
laws, laws or rules governing the corporation or partnership to obtain the relief he
desires;
(3) No appraisal rights are available for the act or acts complained of; and
(4) The suit is not a nuisance or harassment suit.
In case of nuisance or harassment suit, the court shall forthwith dismiss the case.
The fifth requisite for filing derivative suits, while not included in the enumeration, is implied in the first
paragraph of Rule 8, Section 1 of the Interim Rules: The action brought by the stockholder or member
must be "in the name of [the] corporation or association. ..." This requirement has already been settled
in jurisprudence.
Thus, in Western Institute of Technology, Inc., et al v. Solas, et al,64 this court said that "[a]mong the
basic requirements for a derivative suit to prosper is that the minority shareholder who is suing for and
on behalf of the corporation must allege in his complaint before the proper forum that he is suing on a
derivative cause of action on behalf of the corporation and all other shareholders similarly situated who
wish to join [him]."65 This principle on derivative suits has been repeated in, among other cases, Tarn
Wing Tak v. Hon. Makasiar and De Guia66 and in Chua v. Court of Appeals,67 which was cited in Hi-Yield
Realty, Incorporated v. Court of Appeals.68 cralawlawlibrary
Moreover, it is important that the corporation be made a party to the case.69
cralawlawlibrary
This court explained in Asset Privatization Trust v. Court of Appeals70 why it is a condition sine qua non
that the corporation be impleaded as party in derivative suits. Thus: chanRoblesvirtualLawlibrary
Not only is the corporation an indispensible party, but it is also the present rule that it
must be served with process. The reason given is that the judgment must be made binding
upon the corporation in order that the corporation may get the benefit of the suit and may
not bring a subsequent suit against the same defendants for the same cause of action. In
other words the corporation must be joined as party because it is its cause of action that is
being litigated and because judgment must be a res judicata against it.71
chanrobleslaw
In the same case, this court enumerated the reasons for disallowing a direct individual suit.
The reasons given for not allowing direct individual suit are: chanRoblesvirtualLawlibrary
(1) . . . "the universally recognized doctrine that a stockholder in a corporation has no
title legal or equitable to the corporate property; that both of. these are in the
corporation itself for the benefit of the stockholders." In other words, to allow
shareholders to sue separately would conflict with the separate corporate entity
principle;
(2) . . . that the prior rights of the creditors may be prejudiced. Thus, our Supreme Court
held in the case of Evangelista v. Santos, that 'the stockholders may not directly claim
those damages for themselves for that would result in the appropriation by, and the
distribution among them of part of the corporate assets before the dissolution of the
corporation and the liquidation of its debts and liabilities, something which cannot be
legally done in view of Section 16 of the Corporation Law. . .";
(3) the filing of such suits would conflict with the duty of the management to sue for the
protection of all concerned;
(4) it would produce wasteful multiplicity of suits; and
(5) it would involve confusion in ascertaining the effect of partial recovery by an individual
on the damages recoverable by the corporation for the same act.72
While it is true that the basis for allowing stockholders to file derivative suits on behalf of corporations is
based on equity, the above legal requisites for its filing must necessarily be complied with for its
-
institution.73 cralawlawlibrary
Respondent Balmores' action in the trial court failed to satisfy all the requisites of a derivative suit.
Respondent Balmores failed to exhaust all available remedies to obtain the reliefs he prayed for. Though
he tried to communicate with PPC's directors about the checks in Villamor's possession before he filed an
action with the trial court, respondent Balmores was not able to show that this comprised -all the
remedies available under the articles of incorporation, bylaws, laws, or rules governing PPC.
An allegation that appraisal rights were not available for the acts complained of is another requisite for
filing derivative suits under Rule 8, Section 1(3) of the Interim Rules.
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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
G.R. No. 207950, September 22, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. MARK JASON
CHAVEZ Y BITANCOR ALIAS “NOY”, Accused-
Appellant.
A.M. No. 2008-23-SC, September 30, 2014 -
ALLEGED LOSS OF VARIOUS BOXES OF COPY PAPER
DURING THEIR TRANSFER FROM THE PROPERTY
DIVISION, OFFICE OF ADMINISTRATIVE SERVICES
(OAS), TO THE VARIOUS ROOMS OF THE PHILIPPINE
JUDICIAL ACADEMY.; [A.M. No. 2014-025-Ret.] -
RELEASE OF COMPULSORY RETIREMENT BENEFITS
UNDER R.A. NO. 8291 OF MR. ISIDRO P. AUSTRIA,
FORMER SUPPLY OFFICER II, PHILIPPINE JUDICIAL
ACADEMY, SUPREME COURT.
G.R. No. 202733, September 30, 2014 -
DEVELOPMENT BANK OF THE PHILIPPINES,
Petitioner, v. COMMISSION ON AUDIT, JANEL D.
NACION, DIRECTOR IV, LEGAL SERVICES SECTOR OF
COA, AND THE SUPERVISING AUDITOR OF THE
DEVELOPMENT BANK OF THE PHILIPPINES,
Respondents.
A.M. No. P-14-3260 (Formerly A.M. No. 12-2-38-
RTC ), September 16, 2014 - OFFICE OF THE COURT
ADMINISTRATOR, Complainant, v. EDGAR S. CRUZ,
CLERK III, REGIONAL TRIAL COURT, BRANCH 52,
GUAGUA, PAMPANGA, Respondent.
G.R. No. 210658, September 17, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. PRIMO P.
JAPSON ALIAS “LONGLONG”, Accused-Appellant.
G.R. No. 187144, September 17, 2014 - CARMEN T.
GAHOL, SUBSTITUTED BY HER HEIRS, RICARDO T.
GAHOL, MARIA ESTER GAHOL PEREZ, JOSE MARI T.
GAHOL, LUISITO T. GAHOL AND ALCREJ
CORPORATION, Petitioners, v. ESPERANZA
COBARRUBIAS, Respondent.
G.R. No. 191712, September 17, 2014 - EDITA S.
BUENO AND MILAGROS E. QUINAJON, Petitioners, v.
OFFICE OF THE OMBUDSMAN, NAPOLEON S.
RONQUILLO, JR., EDNA G. RAÑA AND ROMEO G.
REFRUTO, Respondents.
G.R. No. 204755, September 17, 2014 - SOLEDAD
TRIA, Petitioner, v. PEOPLE OF THE PHILIPPINES,
Respondent.
G.R. No. 189863, September 17, 2014 - PEDRO
LIBANG, JR., Petitioner, v. INDOCHINA SHIP
MANAGEMENT INC., MR. MIGUEL SANTOS AND
MAJESTIC CARRIERS, INC., Respondents.
A.C. No. 9115, September 17, 2014 - REBECCA
MARIE UY YUPANGCO-NAKPIL, Complainant, v. ATTY.
ROBERTO L. UY, Respondent.
G.R. No. 201644, September 24, 2014 - PEOPLE OF
THE PHILIPPINES, Petitioner, v. JOSE C. GO AND
AIDA C. DELA ROSA, Respondents.
G.R. No. 206555, September 17, 2014 - ATTY.
FORTUNATO PAGDANGANAN, JR., ATTY. ABIGAIL D.
SUAREZ, AND EUGENIO A. VILLANUEVA, Petitioners,
v. FLORENTINO P. SARMIENTO, Respondent.
G.R. No. 188909, September 17, 2014 - REPUBLIC
OF THE PHILIPPINES, REPRESENTED BY THE OFFICE
OF THE PRESIDENT, DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS AND PRESIDENTIAL ANTI-GRAFT
COMMISSION, Petitioners, v. FLORENDO B. ARIAS,
ASSISTANT DIRECTOR, BUREAU OF EQUIPMENT,
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS,
Respondent.
G.R. No. 158583, September 10, 2014 - ROSALIE L.
GARGOLES, Petitioner, v. REYLITA S. DEL ROSARIO,
DOING BUSINESS UNDER THE NAME AND STYLE JAY
ANNE'S ONE HOUR PHOTO SHOP, Respondent.
G.R. No. 158150, September 10, 2014 - AGRIEX
CO., LTD., Petitioner, v. HON. TITUS B. VILLANUEVA,
COMMISSIONER, BUREAU OF CUSTOMS (NOW
REPLACED BY HON. ANTONIO M. BERNARDO), AND
HON. BILLY C. BIBIT, COLLECTOR OF CUSTOMS, PORT
OF SUBIC (NOW REPLACED BY HON. EMELITO
VILLARUZ), Respondents.
G.R. No. 182794, September 08, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. BOBBY
BELGAR, Accused-Appellant.
G.R. No. 206510, September 16, 2014 - MOST REV.
PEDRO D. ARIGO, Vicar Apostolic of Puerto Princesa
D.D.; MOST REV. DEOGRACIAS S. INIGUEZ, JR.,
Bishop-Emeritus ofCaloocan, FRANCES Q. QUIMPO,
CLEMENTE G. BAUTISTA, JR., Kalikasan-PNE, MARIA
CAROLINA P. ARAULLO, RENATO M. REYES, JR.,
BagongAlyansang Makabayan, HON. NERI JAVIER
COLMENARES, BayanMuna Party-list, ROLAND G.
SIMBULAN, PH.D., Junk VFAMovement, TERESITA R.
PEREZ, PH.D., HON. RAYMOND V. PALATINO,
Kabataan Party-list, PETER SJ. GONZALES,
Pamalakaya, GIOVANNI A. TAPANG, PH. D., Agham,
ELMER C. LABOG, Kilusang Mayo Uno, JOAN MAY E.
SALVADOR, Gabriela, JOSE ENRIQUE A. AFRICA,
THERESA A. CONCEPCION, MARY JOAN A. GUAN,
http://www.chanrobles.com/cralaw/2014septemberdecisions.php?id=793
Section 81 of the Corporation Code provides the instances of appraisal right: chanRoblesvirtualLawlibrary
SEC. 81. Instances of appraisal right.— Any stockholder of a corporation shah1 have the
right to dissent and demand payment of the fair value of his shares in the following
instances:
1. In case any amendment to the articles of incorporation has the effect of changing
or restricting the rights of any stockholders or class of shares, or of authorizing
preferences in any respect superior to those of outstanding shares of any class, or
of extending or shortening the term of corporate existence;
2. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of
all or substantially all of the corporate property and assets as provided in this Code;
and
3. In case of merger or consolidation.
Section 82 of the Corporation Code provides that the stockholder may exercise the right if he or she
voted against the proposed corporate action and if he made a written demand for payment on the
corporation within thirty (30) days after the date of voting.
Respondent Balmores complained about the alleged inaction of PPC's directors in his letter informing
them that Villamor should be made to deliver to PPC and account for MC Home Depot's checks or their
equivalent value. He alleged that these are devices or schemes amounting to fraud or misrepresentation
detrimental to the corporation's and the stockholders' interests. He also alleged that the directors'
inaction placed PPC's assets in imminent and/or actual dissipation, loss, wastage, and destruction.
Granting that (a) respondent Balmores' attempt to communicate with the other PPC directors already
comprised all the available remedies that he could have exhausted and (b) the corporation was under
full- control of petitioners that exhaustion of remedies became impossible or futile,74 respondent
Balmores failed to allege that appraisal rights were not available for the acts complained of here.
Neither did respondent Balmores implead PPC as party in the case nor did he allege that he was filing on
behalf of the corporation.
The non-derivative character of respondent Balmores' action may also be gleaned from his allegations in
the trial court complaint. In the complaint, he described the nature of his action as an action under Rule
1, Section l(a)(l) of the Interim Rules, and not an action under Rule 1, Section l(a)(4) of the Interim
Rules, which refers to derivative suits. Thus, respondent Balmores said: chanRoblesvirtualLawlibrary
1.1 This is an action under Section 1 (a) (1), Rule 1 of the Interim Rules of
Procedure for Intra-corporate Controversies, involving devices or schemes employed
by, or acts of, the defendants as board of directors, business associates and officers of
Pasig Printing Corporation (PPC), amounting to fraud or misrepresentation, which are
detrimental to the interest of the plaintiff as stockholder of PPC.75 (Emphasis supplied)
Rule 1, Section 1 (a)(1) of the Interim Rules refers to acts of the board, associates, and officers,
amounting to fraud or misrepresentation, which may be detrimental to the interest of the stockholders.
This is different from a derivative suit.
While devices and schemes of the board of directors, business associates,-or officers amounting to fraud
under Rule 1, Section l(a)(l) of the Interim Rules are causes of a derivative suit, it is not always the case
that derivative suits are limited to such causes or that they are necessarily derivative suits. Hence, they
are separately enumerated in Rule 1, Section 1 (a) of the Interim Rules: chanRoblesvirtualLawlibrary
SECTION 1. (a) Cases covered. - These Rules shall govern the procedure to be observed in
civil cases involving the following: chanRoblesvirtualLawlibrary
(1) Devices or schemes employed by, or any act of, the board of directors,
business associates, officers or partners, amounting to fraud or
misrepresentation which may be detrimental to the interest of the public
and/or of the stockholders, partners, or members of any corporation,
partnership, or association;
(2) Controversies arising out of intra-corporate, partnership, or association relations,
between and among stockholders, members, or associates; and between, any or all of
them and the corporation, partnership, or association of which they are stockholders,
members, or associates, respectively;
(3) Controversies in the election or appointment of directors, trustees, officers, or
managers of corporations, partnerships, or associations;
(4) Derivative suits; and
(5) Inspection of corporate books. (Emphasis supplied)
Stockholder/s' suits based on fraudulent or wrongful acts of directors, associates, or officers may also be
individual suits or class suits.
Individual suits are filed when the cause of action belongs to the individual stockholder personally, and
not to the stockholders as a group or to the corporation, e.g., denial of right to inspection and denial of
dividends to a stockholder.76 If the cause of action belongs to a group of stockholders, such as when the
rights violated belong to preferred stockholders, a class or representative suit may be filed to protect the
stockholders in the group.77
cralawlawlibrary
In this case, respondent Balmores filed an individual suit. His intent was very clear from his manner of
describing the nature of his action: chanRoblesvirtualLawlibrary
1.1 This is an action under Section 1 (a) (1), Rule 1 of the Interim Rules of Procedure for
Intra-corporate Controversies, involving devices or schemes employed by, or acts of, the
defendants as board of directors, business associates and officers of Pasig Printing
Corporation (PPC), amounting to fraud or misrepresentation, which are detrimental to
the interest of the plaintiff as stockholder of PPC.78 (Emphasis supplied)
His intent was also explicit from his prayer:
chanRoblesvirtualLawlibrary
WHEREFORE, plaintiff respectfully prays that the Honorable Court -
2. After notice and due proceedings -
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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
NESTOR T. BAGUINON, PH.D., A. EDSEL F. TUPAZ,
Petitioners, v. SCOTT H. SWIFT in his capacity as
Commander of the U.S. 7th Fleet, MARK A. RICE in his
capacity as Commanding Officer of the USS Guardian,
PRESIDENT BENIGNO S. AQUINO III in his capacity as
Commander-in-Chief of the Armed Forces of the
Philippines, HON. ALBERT F. DEL ROSARIO, Secretary,
Department of Foreign Affairs, HON. PAQUITO
OCHOA, JR., Executive Secretary, Office of the
President, HON. VOLTAIRE T. GAZMIN, Secretary,
Department of National Defense, HON. RAMON JESUS
P. PAJE, Secretary, Department of Environment and
Natural Resources, VICE ADMIRAL JOSE LUIS M.
ALANO, Philippine Navy Flag Officer in Command,
Armed Forces of the Philippines, ADMIRAL RODOLFO
D. ISORENA, Commandant, Philippine Coast Guard,
COMMODORE ENRICO EFREN EVANGELISTA,
Philippine Coast Guard Palawan, MAJOR GEN.
VIRGILIO O. DOMINGO, Commandant of Armed
Forces of the Philippines Commandand LT. GEN.
TERRY G. ROBLING, US Marine Corps Forces, Pacific
and Balikatan 2013 Exercise Co-Director,
Respondents.
A.C. No. 10438, September 23, 2014 - CF SHARP
CREW MANAGEMENT INCORPORATED, Complainant, v.
NICOLAS C. TORRES, Respondent.
G.R. No. 209286, September 23, 2014 - LINA DELA
PEÑA JALOVER, GEORGIE A. HUISO AND VELVET
BARQUIN ZAMORA, Petitioners, v. JOHN HENRY R.
OSMEÑA AND COMMISSION ON ELECTIONS
(COMELEC), Respondents.
G.R. No. 182424, September 22, 2014 - NENITA
CARGANILLO, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.
G.R. No. 192957, September 29, 2014 - EMMANUEL
B. MORAN, JR., (DECEASED), SUBSTITUTED BY HIS
WIDOW, CONCORDIA V. MORAN, Petitioner, v. OFFICE
OF THE PRESIDENT OF THE PHILIPPINES, AS
REPRESENTED BY THE HONORABLE EXECUTIVE
SECRETARY EDUARDO R. ERMITA AND PGA CARS,
INC., Respondents.
G.R. No. 199133, September 29, 2014 - ESPERANZA
TUMPAG, SUBSTITUTED BY HER SON, PABLITO
TUMPAG BELNAS, JR., Petitioner, v. SAMUEL TUMPAG,
Respondent.
G.R. No. 179654, September 22, 2014 - HACIENDA
LEDDY/RICARDO GAMBOA, JR., Petitioner, v.
PAQUITO VILLEGAS, Respondent.
G.R. No. 206599, September 29, 2014 - 680 HOME
APPLIANCES, INC., Petitioner, v. THE HONORABLE
COURT OF APPEALS, THE HONORABLE MARYANN E.
CORPUS-MAÑALAC, IN HER CAPACITY AS THE
PRESIDING JUDGE OF THE REGIONAL TRIAL COURT
OF MAKATI CITY, BRANCH 141, ATTY. ENGRACIO
ESCASINAS, JR., IN HIS CAPACITY AS THE EX-
OFFICIO SHERIFF/CLERK OF COURT VII, OFFICE OF
THE CLERK OF COURT, REGIONAL TRIAL COURT,
MAKATI CITY, FIRST SOVEREIGN ASSET
MANAGEMENT (SPV-AMC), INC. AND ALDANCO
MERLMAR, INC., Respondents.
G.R. No. 198538, September 29, 2014 - EXOCET
SECURITY AND ALLIED SERVICES CORPORATION
AND/OR MA. TERESA MARCELO, Petitioner, v.
ARMANDO D. SERRANO, Respondent.
G.R. No. 192398, September 29, 2014 - On this basis alone, the Court of Appeals erred in giving due course to respondent Balmores' petition for
COMMISSIONER OF INTERNAL REVENUE, Petitioner,
v. PILIPINAS SHELL PETROLEUM CORPORATION,
Respondent.
A.M. No. SB-14-21-J [Formerly A.M. No. 13-10-06-
SB], September 23, 2014 - RE: ALLEGATIONS MADE
UNDER OATH AT THE SENATE BLUE RIBBON
COMMITTEE HEARING HELD ON SEPTEMBER 26, 2013
AGAINST ASSOCIATE JUSTICE GREGORY S. ONG,
SANDIGANBAYAN
G.R. No. 204369, September 17, 2014 - ENRIQUETA
M. LOCSIN, Petitioner, v. BERNARDO HIZON, CARLOS
HIZON, SPS. JOSE MANUEL & LOURDES GUEVARA,
Respondents.
G.R. No. 202666, September 29, 2014 - RHONDA
AVE S. VIVARES AND SPS. MARGARITA AND DAVID
SUZARA, Petitioners, v. ST. THERESA’S COLLEGE,
MYLENE RHEZA T. ESCUDERO, AND JOHN DOES,
Respondents.
G.R. No. 157633, September 10, 2014 -
NORTHWEST AIRLINES, INC., Petitioner, v. MA.
CONCEPCION M. DEL ROSARIO, Respondent.
G.R. No. 202066, September 30, 2014 - CBK
POWER COMPANY LIMITED, Petitioner, v.
COMMISSIONER OF INTERNAL REVENUE,
Respondent.; G.R. NO. 205353 - CBK POWER
COMPANY LIMITED, Petitioner, v. COMMISSIONER OF
INTERNAL REVENUE, Respondent.
G.R. No. 152334, September 24, 2014 - H.H.
HOLLERO CONSTRUCTION, INC., Petitioner, v.
GOVERNMENT SERVICE INSURANCE SYSTEM AND
POOL OF MACHINERY INSURERS, Respondents.
http://www.chanrobles.com/cralaw/2014septemberdecisions.php?id=793
Declare that the acts of defendant Directors in allowing defendant
VILLAMOR to retain custody of the MC Home checks and encash them upon
maturity, as well as their refusal or failure to take any action against
defendant VILLAMOR to make him account and deliver the MC Home checks
and/or their proceeds to Pasig Printing Corporation are devices, schemes
or acts amounting to fraud that are detrimental to plaintiff's interest
as a stockholder of PPC;79 (Emphasis supplied)
Respondent Balmores did not bring the action for the benefit of the corporation. Instead, he was alleging
that the acts of PPC's directors, specifically the waiver of rights in favor of Villamor's law firm and their
failure to take back the MC Home Depot checks from Villamor, were detrimental to his individual
interest as a stockholder. In filing an action, therefore, his intention was to vindicate his
individual interest and not PPC's or a group of stockholders'.
The essence of a derivative suit is that it must be filed on behalf of the corporation. This is because the
cause of action belongs, primarily, to the corporation. The stockholder who sues on behalf of a
corporation is merely a nominal party.
Respondent Balmores' intent to file an individual suit removes it from the coverage of derivative suits.
III
Respondent Balmores has no
cause of action that would entitle
him to the reliefs sought
Corporations have a personality that is separate and distinct from their stockholders and directors. A
wrong to the corporation does not necessarily create an individual cause of action. "A cause of action is
the act or omission by which a party violates the right of another."80 A cause of action must pertain to
complainant if he or she is to be entitled to the reliefs sought.
Thus, in Cua v. Tan,81 this court emphasized: chanRoblesvirtualLawlibrary
. . . where the acts complained of constitute a wrong to the corporation itself, the cause of
action belongs to the corporation and not to the individual stockholder or member.
Although in most every case of wrong to the corporation, each stockholder is necessarily
affected because the value of his interest therein would be impaired, this fact of itself is
not sufficient to give him an individual cause of action since the corporation is a person
distinct and separate from him, and can and should itself sue the wrongdoer. Otherwise,
not only would the theory of separate entity be violated, but there would be multiplicity of
suits as well as a violation of the priority rights of creditors. Furthermore, there is the
difficulty of determining the amount of damages that should be paid to each individual
stockholder.82 chanrobleslaw
In this case, respondent Balmores did not allege any cause of action that is personal to him. His
allegations are limited to the facts that PPC's directors waived their rights to rental income in favor of
Villamor's law firm without consideration and that they failed to take action when Villamor refused to turn
over the amounts to PPC. These are wrongs that pertain to PPC. Therefore, the cause of action belongs to
PPC — not to respondent Balmores or any stockholders as individuals.
For this reason, respondent Balmores is not entitled to the reliefs sought in the complaint. Only the
corporation, or arguably the stockholders as a group, is entitled to these reliefs, which should have been
sought in a proper derivative suit filed on behalf of the corporation.
PPC will not be bound by a decision granting the application for the appointment of a receiver or
management committee. Since it was not impleaded in the complaint, the courts did not acquire
jurisdiction over it. On this matter, it is an indispensable party, without which, no final determination can
be had.
Hence, it is not only respondent Balmores' failure to implead PPC that is fatal to his action, as petitioners
point out. It is the fact that he alleged no cause of action that pertains personally to him that disqualifies
him from the reliefs he sought in his complaint.
certiorari , reversing the trial court's decision, and issuing a new order placing PPC under receivership
and creating an interim management committee.
IV
Appointment of a management
committee was not proper
Assuming that respondent Balmores has an individual cause of action, the Court of Appeals still erred in
placing PPC under receivership and in creating and appointing a management committee.
A corporation may be placed under receivership, or management committees may be created to preserve
properties involved in a suit and to protect the rights of the parties under the control and supervision of
the court.83 Management committees and receivers are appointed when the corporation is in imminent
danger of "(1) [dissipation, loss, wastage or destruction of assets or other properties; and (2)
[p]aralysation of its business operations that may be prejudicial to' the interest of the minority
stockholders, parties-litigants, or the general public."84 cralawlawlibrary
Applicants for the appointment of a receiver or management committee need to establish the confluence
of these two requisites. This is because appointed receivers and management committees will
immediately take over the management of the corporation and will have the management powers
specified in law.85 This may have a negative effect on the operations and affairs of the corporation with
third parties,86 as persons who are more familiar with its operations are necessarily dislodged from their
positions in favor of appointees who are strangers to the corporation's operations and affairs.
Thus, in Sy Chim v. Sy Sly Ho & Sons, Inc.,87 this court said: chanRoblesvirtualLawlibrary
. . . the creation and appointment of a management committee and a receiver is an
extraordinary and drastic remedy to be exercised with care and caution; and only when the
requirements under the Interim Rules are shown. It is a drastic course for the benefit of
the minority stockholders, the parties-litigants or the general public are allowed only under
pressing circumstances and, when there is inadequacy, ineffectual or exhaustion of legal or
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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
other remedies . . . The power of the court to continue a business of a corporation . . .
G.R. No. 200077, September 17, 2014 - PEOPLE OF must be exercised with the greatest care and caution. There should be a full consideration
THE PHILIPPINES, Plaintiff-Appellee, v. ADEL RAMOS
of all the attendant facts, including the interest of all the parties concerned.88
Y ABELLANA, Accused-Appellant.
chanrobleslaw

G.R. No. 208716, September 24, 2014 - PEOPLE OF

THE PHILIPPINES, Plaintiff-Appellee, v. ELADIO B.
LUMAHO ALIAS “ATTUMPANG,” Accused-Appellant.
G.R. No. 199780, September 24, 2014 -
GOVERNMENT SERVICE INSURANCE SYSTEM,
Petitioner, v. JOSE M. CAPACITE, Respondent.
A.M. No. P-13-3130 [Formerly OCA I.P.I. No. 11-
3668-P], September 22, 2014 - OFFICE OF THE COURT
ADMINISTRATOR, Petitioner, v. MAY F. HERNANDEZ,
CLERK III, REGIONAL TRIAL COURT, BRANCH 199,
LAS PIÑAS CITY, Respondent.
G.R. No. 182770, September 17, 2014 - WPM
INTERNATIONAL TRADING, INC. AND WARLITO P.
MANLAPAZ, Petitioners, v. FE CORAZON LABAYEN,
Respondent.
G.R. No. 192973, September 29, 2014 - PEDRITO
DELA TORRE, Petitioner, v. DR. ARTURO IMBUIDO,
DRA. NORMA IMBUIDO in their capacity as owners
and operators of DIVINE SPIRIT GENERAL HOSPITAL
AND/OR DR. NESTOR PASAMBA, Respondents.
G.R. No. 202354, September 24, 2014 - AMADA C.
ZACARIAS, Petitioner, v. VICTORIA ANACAY, EDNA
ANACAY, CYNTHIA ANACAY-GUISIC, ANGELITO
ANACAY, JERMIL ISRAEL, JIMMY ROY ISRAEL AND
PPC waived its rights, without any consideration in favor of Villamor. The checks were already in
Villamor's possession. Some of the checks may have already been encashed. This court takes judicial
notice that the goodwill money of PI 8,000,000.00 and the rental payments of P4,500,000.00 every
month are not meager amounts only to be waived without any consideration. It is, therefore, enough to
constitute loss or dissipation of assets under the Interim Rules.
Respondent Balmores, however, failed to show that there was an imminent danger of paralysis of PPC's
business operations. Apparently, PPC was- earning substantial amounts from its other sub-lessees.
Respondent Balmores did not prove otherwise. He, therefore, failed to show at least one of the requisites
for appointment of a receiver or management committee.
V
The Court of Appeals had no
jurisdiction to appoint the receiver
or management committee
The Court of Appeals has no power to appoint a receiver or management committee. The Regional Trial
Court has original and exclusive jurisdiction89 to hear and decide intra-corporate controversies,90
including incidents of such controversies.91 These incidents include applications for the appointment of
receivers or management committees.
"The receiver and members of the management committee . . . are considered officers of the court and
shall be under its control and supervision."92 They are required to report to the court on the status of the
corporation within sixty (60) days from their appointment and every three (3) months after.93 cralawlawlibrary

ALL OTHER PERSONS CLAIMING AUTHORITY UNDER

THEM, Respondents.
When respondent Balmores filed his petition for certiorari with the Court of Appeals, there was still a
pending action in the trial court. No less than the Court of Appeals stated that it allowed respondent
G.R. No. 173168, September 29, 2014 -
PHILIPPINE AMANAH BANK (NOW AL-AMANAH
Balmores' petition under Rule 65 because the order or resolution in question was an interlocutory one.
ISLAMIC INVESTMENT BANK OF THE PHILIPPINES, This means that jurisdiction over the main case was still lodged with the trial court.
ALSO KNOWN AS ISLAMIC BANK), Petitioner, v.
EVANGELISTA CONTRERAS, Respondent. The court making the appointment controls and supervises the appointed receiver or management
committee. Thus, the Court of Appeals' appointment of a management committee would result in an
G.R. No. 200065, September 24, 2014 - CAPITAL absurd scenario wherein while the main case is still pending before the trial court, the receiver or
SHOES FACTORY, LTD., Petitioner, v. TRAVELER KIDS, management committee reports' to the Court of Appeals.
INC., Respondent.
WHEREFORE, the petitions are GRANTED. The decision of the Court of Appeals dated March 2, 2006
G.R. No. 195889, September 24, 2014 - and its resolution dated May 29, 2006 are SET ASIDE.
PHILIPPINE NATIONAL BANK, Petitioner, v. SPOUSES
EDUARDO AND MA. ROSARIO TAJONERA AND
SO ORDERED.
EDUAROSA REALTY DEVELOPMENT, INC.,
Respondents.
Carpio, (Chairperson), Brion, Del Castillo, and Mendoza, JJ., concur.
G.R. No. 211356, September 29, 2014 -
CRISOSTOMO B. AQUINO, Petitioner, v.
MUNICIPALITY OF MALAY, AKLAN, REPRESENTED BY Endnotes:
HON. MAYOR JOHN P. YAP, SANGGUNIANG BAYAN OF
MALAY, AKLAN, REPRESENTED BY HON. EZEL FLORES,
1Rollo (G.R. No. 172843), pp. 2-32.
DANTE PASUGUIRON, ROWEN AGUIRRE, WILBEC
GELITO, JUPITER GALLENERO, OFFICE OF THE
MUNICIPAL ENGINEER, OFFICE OF THE MUNICIPAL 2 Id. at 36-56.
TREASURER, BORACAY PNP CHIEF, BORACAY
FOUNDATION, INC., REPRESENTED BY NENETTE 3
GRAF, MUNICIPAL AUXILIARY POLICE, AND JOHN Id. at 58-59.
AND JANE DOES, Respondents.
4 Id. at 55-56.
G.R. No. 205561, September 24, 2014 - DIONISIO
B. COLOMA, JR., Petitioner, v. HON. SANDIGANBAYAN 5 Id. at 39-40.
(THIRD DIVISION) AND PEOPLE OF THE
PHILIPPINES, Respondents. 6Rollo (G.R. 'No. 172843), p. 63 and rollo (G.R. No. 172881), p. 53.
G.R. No. 209195, September 17, 2014 - MANUEL J.
7 Rollo (G.R. No. 172843), pp. 138-139.
JIMENEZ, JR., Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.; G.R. NO. 209215 -
PEOPLE OF THE PHILIPPINES, Petitioner, v. MANUEL 8 Id. at 68 and rollo (G.R. No. 172881), pp. 53-54.
J. JIMENEZ, JR., Respondent.
9Rollo (G.R. No. 172881), p. 54.
G.R. No. 195594, September 29, 2014 - REPUBLIC
OF THE PHILIPPINES, REPRESENTED BY THE
10 Id. and rollo (G.R. No. 172843), p. 64.
NATIONAL IRRIGATION ADMINISTRATION,
Petitioner, v. SPOUSES ROGELIO LAZO AND DOLORES
LAZO, Respondents. 11Rollo (G.R. No. 172881), p. 54.
G.R. No. 200566, September 17, 2014 - JEBSEN 12Rollo
MARITIME INC., APEX MARITIME SHIP MANAGEMENT
(G.R. No. 172843), p. 78.
CO. LLC., AND/OR ESTANISLAO SANTIAGO,
13Rollo (G.R. No. 172881), p. 55.
Petitioners, v. WILFREDO E. RAVENA, Respondent.

G.R. No. 180290, September 29, 2014 -
COMMISSIONER OF INTERNAL REVENUE, Petitioner,
v. PHILIPPINE NATIONAL BANK, Respondent.
G.R. No. 167454, September 24, 2014 - EMERITU C.
BARUT, Petitioner, v. PEOPLE OF THE PHILIPPINES,
Respondent.
14 Id. and rollo (G.R. No. 172843), p. 67.
15 Interim Rules of Procedure for Intra-Corporate Controversies (A.M. No. 01-2-04-SC,
hereinafter "Interim Rules")
Rule 1, Sec. 1(a) Cases Covered - These rules shall govern the procedure to be observed
in civil cases involving the following: chanRoblesvirtualLawlibrary

G.R. No. 191237, September 24, 2014 - ROBERT

KUA, CAROLINE N. KUA, AND MA. TERESITA N. KUA, (1) Devices or schemes employed by, or any act of, the board of directors, business
Petitioners, v. GREGORIO SACUPAYO AND associates, officers or partners, amounting to fraud or misrepresentation which may be
MAXIMINIANO PANERIO, Respondents. detrimental to the interest of the public and/or of the stockholders, partners, or members
of any corporation, partnership, or association;
A.M. No. MTJ-13-1837 [formerly OCA IPI No. 12-
2463-MTJ], September 24, 2014 - CONRADO ABE 16Rollo
LOPEZ, REPRESENTED BY ATTY. ROMUALDO JUBAY, (G.R. No. 172881), p. 55.
Complainant, v. JUDGE ROGELIO S. LUCMAYON,
MUNICIPAL TRIAL COURT IN CITIES, BRANCH 1, 171Rollo (G.R. No. 172843), pp. 69-70.
MANDAUE CITY, CEBU, Respondent.
18 Id. at 71.
G.R. No. 198314, September 24, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. RICHARD 19
GUINTO Y SAN ANDRES, Accused-Appellant. Id. at 72.

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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
20 Id. at 72-73.
G.R. No. 185345, September 10, 2014 - RONNIE L.
ABING, Petitioner, v. NATIONAL LABOR RELATIONS 21
COMMISSION, ALLIED BANKING CORPORATION,
Id. at 315-318.
FACILITATORS GENERAL SERVICES AND MARILAG
22 Id. at 318.
BUSINESS AND INDUSTRIAL MANAGEMENT
SERVICES, INC., Respondents.
23 Id. at 316.
G.R. No. 173632, September 29, 2014 - AMBROSIO
ROTAIRO (SUBSTITUTED BY HIS SPOUSE MARIA 24
RONSAYRO ROTAIRO, AND HIS CHILDREN FELINA Id. at 317.
ROTAIRO, ERLINDA ROTAIRO CRUZ, EUDOSIA
25 Id.
ROTAIRO CRIZALDO, NIEVES ROTAIRO TUBIG,
REMEDIOS ROTAIRO MACAHILIG, FELISA ROTAIRO
LEGASPI, JOSEFINA ROTAIRO TORREVILLAS, AND 26 Id.
CRISENCIO R. ROTAIRO, MARCIANA TIBAY, EUGENIO
PUNZALAN, AND VICENTE DEL ROSARIO, Petitioners, 27
v. ROVIRA ALCANTARA AND VICTOR ALCANTARA,
Id. at 317-318.
Respondents.
28 Id. at 318.
G.R. No. 194176, September 10, 2014 - LIMUELL C.
NARCISO, OMAR C. MATUGUINA, ERIC MATUGUINA, 29 Id.
AZENITH MAG-ASO, LILIBETH MASCARIÑAS,
LUTGARDO OGAMA, LOLITO COLLAMAT, IRIS 30
MATUGUINA AND ELMER BANILAD, CARLOS B.
Id. at 39.
MATUGUINA, JR., BIBIANO ESTRERA, JR., PEDRO
31 Id.
LINABOG, BOBBY ALQUEZA, SANTIAGO ATIS,
MARLON DAMAYO, CASINILLO NESTRO, BERNARDITO
DACAN, SABINIANO PATATAG, JOLLYBOY MONICIT, 32 Id. at 55-56.
RODRIGO DAYDAY, REY ESTRERA, CRESENCIO CASIO,
DOMINICO AVILA, ERVERT RICAZA, ENRIQUE 33
PANTILGAN, JONARDEN E. GONZAGA, RENATO CASIO,
Id.
BENNY BOOC, DUA CORSINO, RANILO IGOT, NARCISO
34 Id. at 43-44.
PATERNO, ROBERTO RABAL, JULITO MONSALES,
LEOPOLDO MONGUEZ, JR., ROWEL NEIGAS, EPIFANIO
PIAMIL, LOUIE JUDILLAS AND MANUEL CENIZA, 35 Id. at 44-45.
Petitioners, v. PACIFIC TRADERS & MANUFACTURING
CORPORATION (PTMC)/TABOK WORKERS MULTI- 36
PURPOSE COOPERATIVE (TWMPC), Respondents.
Id. at 51.

37 Id. at 47.
G.R. No. 195443, September 17, 2014 - JUANARIO
G. CAMPIT, Petitioner, v. ISIDRA B. GRIPA, PEDRO
BARDIAGA, AND SEVERINO BARDIAGA, 38 Id.
REPRESENTED BY HIS SON ROLANDO BARDIAGA,
Respondents. 39 Id. at 52-54.
G.R. No. 196508, September 24, 2014 - LEONARDO
40 Id. at 53-55.
A. VILLALON AND ERLINDA TALDE-VILLALON,
Petitioners, v. AMELIA CHAN, Respondent.
41 Id. at 59.
G.R. No. 185267, September 17, 2014 - CESAR T.
QUIAMBAO AND ERIC C. PILAPIL, Petitioners, v. 42Rollo
PEOPLE OF THE PHILIPPINES, ADERITO Z. YUJUICO
(G.R. No. 172881), pp. 22-28.
AND BONIFACIO C. SUMBILLA, Respondents.
43 Rule 9. Management Committee
G.R. No. 187621, September 24, 2014 - MOUNT
CARMEL COLLEGE EMPLOYEES UNION Section 1. Creation of a management committee. - As an incident to any of the cases filed
(MCCEU)/RUMOLO S. BASCAR, MARIBEL TESALUNA, under these Rules or the Interim Rules Corporate Rehabilitation, a party may apply for the
ROLANDO TESALUNA, KENNETH BENIGNOS, MARILYN appointment of a management committee for the corporation, partnership or association,
MANGULABNAN, EMELINA I. NACIONAL, JODELYN when there is imminent danger of:
REBOTON, EVERSITA S. BASCAR, MAE BAYLEN, ERNA
chanRoblesvirtualLawlibrary

E. MAHILUM, EVELYN R. ANTONES, Petitioners, v.

(1) Dissipation, loss, wastage or destruction of assets or other properties; and
MOUNT CARMEL COLLEGE, INCORPORATED,
Respondent. (2) Paralyzation of its business operations which may be prejudicial to the interest of the
minority stockholders, parties-litigants or the general public.
G.R. No. 183345, September 17, 2014 - MA.
GRACIA HAO AND DANNY HAO, Petitioners, v. PEOPLE 44Rollo (G.R. No. 172881), pp. 37-38.
OF THE PHILIPPINES, Respondent.
45 Id. at 19.
G.R. No. 187401, September 17, 2014 - MA.
ROSARIO P. CAMPOS, Petitioner, v. PEOPLE OF THE 46Rollo
PHILIPPINES AND FIRST WOMEN’S CREDIT (G.R. No. 172843), p. 15.
CORPORATION, Respondents.
47 Id. at 23-24.
G.R. No. 180144, September 24, 2014 - LEONARDO
BOGNOT, Petitioner, v. RRI LENDING CORPORATION, 48 Id. at 24.
REPRESENTED BY ITS GENERAL MANAGER, DARIO J.
BERNARDEZ, Respondent. 49Rollo (G.R. No. 172881), p. 526.
G.R. No. 200055, September 10, 2014 - STANDARD
INSURANCE CO., INC., Petitioner, v. ARNOLD 50 Id. at 537.
CUARESMA AND JERRY B. CUARESMA, Respondents.
51 Rules of Court, Rule 45, sec. 1.
G.R. No. 202838, September 17, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. JULITO 52
GERANDOY, Accused-Appellant. Central Bank of the Philippines v. Castro, 514 Phil. 425, 434 (2005) [Per J. Puno,
Second Division].
G.R. No. 172843, September 24, 2014 - ALFREDO L.
VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN 53 I d.
SUBSTITUTION OF HERNANDO F. BALMORES,
Respondent.; G.R. NO. 172881 - RODIVAL E. REYES, 54 Id.
HANS M. PALMA AND DOROTEO M. PANGILINAN,
Petitioners, v. HERNANDO F. BALMORES, Respondent. 55Cunanan v. Lazatin and Lazatin, 74 Phil. 719, 724 (1944) [Per J. Ozaeta, En Banc].
G.R. No. 200729, September 29, 2014 - TEMIC
AUTOMOTIVE (PHILIPPINES), INC., Petitioner, v. 56Hi-YieldRealty, Incorporated v. Court of Appeals, 608 Phil. 350, 358 (2009) [Per J.
RENATO M. CANTOS, Respondent. Quisumbing, Second Division], citing R.N. Symaco Trading Corporation v. Santos, 504 Phil.
573, 589 (2005) [Per J. Callejo, Sr., Second Division].
A.M. No. RTJ-08-2140 (Formerly A.M. No. 00-2-86-
RTC), October 07, 2014 - OFFICE OF THE COURT 57
ADMINISTRATOR, Complainant, v. EXECUTIVE JUDGE
CORP. CODE, sec. 36(1).
OWEN B. AMOR, REGIONAL TRIAL COURT, DAET,
58 CORP. CODE, sec. 23; cf. sec. 36(1).
CAMARINES NORTE, Respondent.

A.M. No. RTJ-14-2394 (Formerly OCA IPI No. 12-
3847-RTJ), September 01, 2014 - GEORGE T. CHUA,
Complainant, v. JUDGE FORTUNITO L. MADRONA,
Respondent.
G.R. No. 189812, September 01, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. REYNALDO
59Hi-Yield Realty, Incorporated v. Court of Appeals, 608 Phil. 350, 358 (2009) [Per J.
Quisumbing, Second Division], See also Asset Privatization Trust v. Court of Appeals, 360
Phil. 768, 805 (1998) [Per J. Kapunan, Third Division] and Republic Bank v. Cuaderno, 125
Phil. 1076, 1082 (1967) [Per J. J.B.L. Reyes, En Banc].
60Bitong v. Court of Appeals, 354 Phil. 516, 545 (1998) [Per J. Bellosillo, First Division].

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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
BATURI, Accused-Appellant.
61Hi-Yield Realty, Incorporated v. Court of Appeals, 608 Phil. 350, 358 (2009) [Per J.
G.R. No. 200729, September 29, 2014 - TEMIC
Quisumbing, Second Division], citing Filipinos Port Services, Inc. v. Go, 547 Phil. 360, 377
AUTOMOTIVE (PHILIPPINES), INC., Petitioner, v.
(2007) [Per J. Garcia, First Division]. See also Asset' Privatization Trust v. Court of
RENATO M. CANTOS, Respondent.
Appeals, 360 Phil. 768, 805 (1998) [Per J. Kapunan, Third Division], citing Gamboa v.
Victoriano, 179 Phil. 36, 43 (1979) [Per J. Concepcion, Jr., Second Division].

62Cua, Jr. v. Tan, G.R. Nos. 181455-56 and 182008, December 4, 2009, 607 SCRA 645,
696 [Per J. Chico-Nazario, Third Division].

63 See also Filipinos Port Services, Inc. v. Go, 547 Phil. 360, 378 (2007) [Per J. Garcia,
First Division].

64 343 Phil. 742 (1997) [Per J. Hermosisima, Jr., First Division].

65Id. at 753, citing A. F. AGBAYANI, COMMENTARIES AND JURISPRUDENCE ON THE

COMMERCIAL LAWS OF THE PHILIPPINES, vol. III, 543 (1988).

66 403 Phil. 391 (2001) [Per J. Quisumbing, Second Division].

67 485 Phil. 644 (2004) [Per J. Quisumbing, First Division].

68 608 Phil. 350 (2009) [Per J. Quisumbing, Second Division].

69Republic Bank v. Cuaderno, 125 Phil. 1076, 1084 (1967) [Per J. J.B.L. Reyes, En Bane].

70 360 Phil. 768 (1998) [Per J. Kapunan, Third Division].

71 Id. at 805, citing A. F. AGBAYANI, COMMERCIAL LAW OF THE PHILIPPINES, vol. III, 566,
citing BALLANTINE, 366-367.

72Id. at 805-806, citing A. F. AGBAYANI, COMMERCIAL LAW OF THE PHILIPPINES, vol. III,
565-566.

73Cua, Jr. v. Tan, G.R. Nos. 181455-56 and 182008, December 4, 2009, 607 SCRA 645,
696 [Per J. Chico-Nazario, Third Division].

74See Filipinos Port Services, Inc. v. Go, 547 Phil. 360, 377 and 379 (2007) [Per J. Garcia,
First Division].

75 Rollo (G.R. No. 172843), p. 60.

76Cua, Jr. v. Tan, G.R. Nos. 181455-56 and 182008, December 4, 2009, 607 SCRA 645,
690 [Per J. Chico-Nazario, Third Division], citing J. Campos, Jr. and M. C. L. Campos, The
CORPORATION CODE: Comments, Notes and Selected Cases, vol. 1,819 (1990).

77Cua, Jr. v. Tan, G.R. Nos. 181455-56 and 182008, December 4, 2009, 607 SCRA 645,
690 [Per J. Chico-Nazario, Third Division].

78Rollo (G.R. No. 172843), p. 60.

79 Id. at 71-72.

80 RULES OF COURT, Rule 2, sec. 2.

81G.R. Nos. 181455-56 and 182008, December 4, 2009, 607 SCRA 645 [Per J. Chico-
Nazario, Third Division].

82 Id. at 690.

83 See also Interim Rules, Rule 9, Sec. 3: chanRoblesvirtualLawlibrary

SEC. 3. Receiver and management committee as officers of the court. - The receiver and
the members of the management committee in the exercise of their powers and
performance of their duties are considered officers of the court and shall be under its
control and supervision.

The principle behind receivership under Rule 59 of the Rules of Court

as explained in F. D. REGALADO, REMEDIAL LAW COMPENDIUM, vol. 1, 9th
ed., 732 (2005), citing Compania General de Tabacos v. Gauzon and Pomar,
20 Phil. 261 (1911) [Per J. Johnson, En Bane]; Normandy v. Duque, 139
Phil. 800 (1969) [Per J. Barredo, En Banc]; and Mallari v. Court of Appeals,
et al., 192 Phil. 679 (1981) [Per J. Melencio-Herrera, First Division] may be
applied by analogy to receivership under the Interim Rules.

84 Interim Rules, Rule 9, sec. 1.

85Sy Chim v. Sy Siy Ho & Sons, Inc., 516 Phil. 256, 282 (2006) [Per J. Callejo, Sr., First
Division].

86 Id. at 284.

87 516 Phil. 256(2006) [Per J. Calleja Sr., First Division].

88 Id. at 284.

89 Pres. Decree 902-A (1976), otherwise known as SEC Reorganization Act.

Sec. 5. In addition to the regulatory and adjudicative functions of the Securities and
Exchange Commission over corporations, partnerships and other forms of associations
registered with it as expressly granted under existing laws and decrees, shall have original
and exclusive jurisdiction to hear and decide cases involving: chanRoblesvirtualLawlibrary

(a) Devices or schemes employed by or any acts, of the board of directors, business
associates, its officers or partnership, amounting to fraud and misrepresentation which
may be detrimental to the interest of the public and/or of the stockholder, partners,
members of associations or organizations registered with the Commission;
(b) Controversies arising out of intra-corporate or partnership relations, between and
among stockholders, members, or associates; between any or all of them and the

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4/14/2018 G.R. No. 172843, September 24, 2014 - ALFREDO L. VILLAMOR, JR., Petitioner, v. JOHN S. UMALE, IN SUBSTITUTION OF HERNAN…
corporation, partnership or association of which they are stockholders, members or
associates, respectively; and between such corporation, partnership or association and the
state insofar as it concerns their individual franchise or right to exist as such entity; and
(c) Controversies in the election or appointments of directors, trustees, officers or
managers of such corporations, partnerships or associations.

90 Rep. Act No. 8799 (2000), otherwise known as The Securities Regulation Code.

Sec. 5.2. The Commission's jurisdiction over all cases enumerated under Section 5 of
Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or
the appropriate Regional Trial Court: Provided, that the Supreme Court in the exercise of
its authority may designate the Regional Trial Court branches that shall exercise
jurisdiction over these cases. The Commission shall retain jurisdiction over pending cases
involving intra-corporate disputes submitted for final resolution which should be resolved
within one (1) year from the enactment of this Code. The Commission shall retain
jurisdiction over pending suspension of payments/rehabilitation cases filed as of 30 June
2000 until finally disposed. (Underscoring supplied)

See also Interim Rules, Rule 1, sec. 9.

Sec. 9. Assignment of cases. - All cases filed under these Rules shall be tried by judges
designated by the Supreme Court to hear and decide cases transferred from the Securities
and Exchange Commission to the Regional Trial Courts and filed directly with said courts
pursuant to Republic Act No. 8799, otherwise known as the Securities Regulation Code.
(Underscoring supplied)

91 Interim Rules, Rule 9, sec. 1.

92 Interim Rules, Rule 9, sec. 3.

93 Interim Rules, Rule 9, sec. 10.

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