THIRD DIVISION
G.R. No. 185979, March 16, 2016
BANGKO SENTRAL NG PILIPINAS, Petitioner, v. VICENTE JOSE CAMPA, JR., MIRIAM M. CAMPA, MARIA ANTONIA C. ORTIGAS, MARIA TERESA C. AREVALO, MARIA NIEVES C. ALVAREZ, MARIAN M. CAMPA AND BALBINO JOSE CAMPA, Respondents.
D E C I S I O N
PEREZ, J.:
This petition for review assails the 9 January 2009 Resolution1 of the Court of Appeals in CA-G.R. SP No. 99099. The Court of Appeals denied petitioner Bangko Sentral ng Pilipinas' (BSP) motion to reconsider the 15 July 2008 Decision2 which affirmed the Order3 dated 24 April 2007 of the Regional Trial Court (RTC) of Manila, Branch 36 in Commercial Case No. 06-114866 allowing the intervention in said case by respondents Vicente Jose Campa, Jr., et al.
The case stemmed from the following facts:
Bankwise applied for a Special Liquidity Facility (SLF) loan from BSP sometime in 2000. BSP advised Bankwise to submit mortgages of properties owned by third parties to secure its outstanding obligation to BSP. In compliance with the requirement, Bankwise mortgaged some real properties belonging to third-party mortgagors, as follows:
When Bankwise failed to pay its obligations to BSP, the latter applied for extra-judicial foreclosure of the third-party mortgages. All mortgaged properties were sold at public auction to BSP being the highest bidder and corresponding certificates of sale were registered.
THIRD-PARTY MORTGAG ORS TITLES LOCATION Eduardo Aliño and co-owners TCT Nos. T-4685 and T- 4686 Barrio Masiga, Gasan, Marinduque Haru Gen Beach Resort and Hotel Corporation TCT Nos. 11849 and 11850 Barrio Igang, Virac, Catanduanes Vicente Jose Campa, Miriam Campa, Maria Antonia Ortigas, Maria Teresa Arevalo, Maria Nieves Alvarez, Marian Campa, and Balbino Jose Campa TCT Nos. 25849, 25850, 25851 and 9087 Mandaluyong City4
2.8 Relying on BSP's assurance of a dacion en pago settlement of Bankwise's obligations, therefore -
2.8.1 The former owners of Bankwise agreed to the takeover of Bankwise by PVB;
2.8.2 The former owners of Bankwise agreed to assume the liability for the segregated obligation which at the time had ballooned to 1.027 Billion, inclusive of interest and penalties;
2.8.3 Pursuant to the dacion en pago arrangement for the settlement of Bankwise's outstanding obligation, the former owners started submitting no less than thirty-five (35) titles over several real estate properties located in different parts of the country beginning the second quarter of 2005. Roughly, the total value of the properties already offered by the former owners of Bankwise for dacion is in the vicinity of P2 Billion, more or less.
2.9 Proofs that BSP had agreed on a dacion en pago mode of settlement of Bankwise's obligation are:
2.9.1. BSP's letter dated 13 October 2004 [. . . addressed to PVB] explicitly stating that:The Monetary Board, in its Resolution No. 1450 dated 07 October 2004, decided to allow Bankwise, Inc. to execute Dacion en Pago to settle its outstanding loan with Banko Sentral ng Pilipinas (BSP), which settlement shall not be conditioned to the submission of an acceptable rehabilitation plan for Bankwise, Inc.
2.9.2 BSP wrote another letter to PVB dated 05 November 2004 confirming the dacion en pago arrangement. It reads:--
It will be recalled that the Bangko Sentral ng Pilipinas (BSP) agreed to provide additional credit facilities to Bankwise, Inc. and to accept its dacion en pago proposal to pay outstanding obligations with BSP only because of the assurance from PVB that it will take over management and control of the operations of the bank. Such commitment was made to us verbally by the President of PVB in several meetings with us as well as in writing.
2.9.3 On various dates, BSP already implemented the dacion en pago arrangement by accepting no less than fifteen (15) properties of Bankwise in partial settlement of its outstanding obligation, x x x8 (Emphasis omitted)
- Private respondents failed to satisfy the requisites for intervention.
- There is no legal basis to treat Private Respondents differently from Ham Gen, a third-party mortgagor similarly situated with Private Respondents, whose intervention had been denied with finality.13
- the party bringing suit should be a shareholder as of the time of the act or transaction complained of, the number of his shares not being material;
- he has tried to exhaust intra-corporate remedies, i.e., has made a demand on the board of directors for the appropriate relief but the latter has failed or refused to heed his plea; and
- the cause of action actually devolves on the corporation, the wrongdoing or harm having been, or being caused to the corporation and not to the particular stockholder bringing the suit.17
(l) The person filing the suit must be a stockholder or member at the time the acts or transactions subject of the action occurred and the time the action was filed;
(2) He must have 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.
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.20
2.22 Aside from his personal interest in having his Third-Party Mortgage released, plaintiff, as 10% stockholder of VR Holdings, which is 50.44% stockholder of Bankwise and 66% owner of Wise Holdings, stands to be adversely affected by the looming actions by Third-party Mortgagors.
x x x x
3.4 While making plaintiff and the other Third-Party Mortgagors and Bankwise believe that it was in the process of evaluating and considering the properties offered for dacion, BSP's simultaneous act of rapidly foreclosing on the Third-Party Mortgages, including plaintiffs is treacherous and confiscatory. x x x.
x x x x
3.6 Under these circumstances, plaintiff, acting as derivative suitor for VR Holdings, which is 50.44% owner of Bankwise and 66% owner of Wise Holdings, has the right, under Article 1191 of the Civil Code to:
x x x x
3.6.2 Compel defendant Bankwise to immediately return the properties covered by the Third-Party REMs to their rightful owners upon acceptance by BSP of the dacion properties.
x x x x
4.8. Thus, the agreement and execution of the dacion en pago between BSP and Bankwise in 2005, without the knowledge of plaintiff, effectively released plaintiff from any further obligations under his Third-Party REMs which he executed in the years 2000 to 2004, together with his co-owners of the properties.
4.9 Consequently, all the foreclosures undertaken by BSP of the REMs over the properties enumerated in paragraph 2.12 hereof are null and void because when the dacion en pago arrangement arose, the REMs over these properties ceased to exist.
4.10 Specifically in the case of plaintiff, Bankwise paid BSP P42 Million in cash in order to cause the release of plaintiff s TCT Nos. 4685 and 4686. But as BSP accepted said P42 Million payment, it held on to the properties of plaintiff and proceeded to foreclose on the same.
4.11 Under the premises, BSP has the duty to immediately cause the cancelling of all the remaining REMs in its custody, if any, and to release to the Third-Party Mortgagors, including plaintiff, the titles to their properties.
x x x x
5.2 Defendant Bankwise's failure to return plaintiff and the other Third-Party Mortgagor's properties as promised, and BSP's refusal to cause the release of the foreclosed properties as a result of the novation of the REMs, have caused the plaintiff to suffer serious anxiety, sleepless nights and wounded feelings for which reason BSP should be held liable to plaintiff for moral damages in the amount of ONE MILLION PESOS (PHP 1,000,000.00).22
WHEREFORE, plaintiff respectfully prays that -
1. Immediately upon the filing of this Complaint, this Honorable Court conduct an ex-parte hearing on plaintiffs application for the issuance of a TRO effective for seventy-two (72) hours prohibiting and enjoining BSP from consolidating in itself titles to plaintiff and the other Third-Party Mortgagor's foreclosed properties;
2. After due notice and summary hearing, this honourable court extend the 72-hour TRO to its full term of twenty (20) days;
3. Before the lapse of the 20-day TRO, and upon due notice and evidentiary hearing, this honorable court issue a writ of preliminary injunction -3.1 Prohibiting and enjoining BSP from consolidating in itself titles to plaintiff and the other Third-Party Mortgagor's foreclosed properties; and
3.2. Suspending the redemption period for the properties foreclosed by BSP, registered in the names of plaintiff Alifto, et al., while the merits of this complaint are being heard, conditioned upon the plaintiffs posting of a bond in an amount as may be determined by this court to answer for damages that defendant may suffer as a result of the preliminary injunction should it be finally decided that plaintiff was not entitled thereto.
4. After trial of the issues, this court render judgment -4.1 Making the preliminary injunction permanent;5. Finding defendants to pay plaintiff, as follows:
4.2 Declaring that the Third-Party Real Estate Mortgages had been released/discharged/extinguished by novation resulting from the subsequent dacion en pago arrangement between BSP and Bank Wise;
4.3 Compelling BSP to honor its commitment to allow BankWise to settle the segregate obligation by way of dacion en pago, and to accept so much of the titles/properties that have been submitted to it in payment of said entire segregated obligation, in substitution of the Third-Party Mortgages.
4.4 Compelling BankWise to make good its promise to return the titles that they borrowed from the Third-Party Mortgagors.5.1 PHP1,000,000.00, as moral damages;Plaintiff likewise respectfully prays for such other or further or reliefs as may be deemed just or equitable.23
5.2 PHP1,000,000.00, as attorney's fees;
5.3 PHP200,000.00, as exemplary damages, and,
5.4 Costs of suit.
2.19 Plaintiff called the attention of VR Holdings, as 50.44 % owner of BankWise and defendant BankWise itself, to honor their commitments mentioned in their assurance letters - that plaintiffs and the Third-Party Mortgagors' properties will be returned to them in no time and that they will not be exposed to the risk of foreclosure. All his supplications - oral or written - were both ignored by both corporations. VR Holdings and defendant BankWise were also uncooperative as regards BSP's requirements on plaintiff as contained in the letter of BSP's counsel. Copies of plaintiffs demand letters on VR Holdings and BankWise are attached and made integral parts hereof as Annexes "M" and "N".24
Section 81. Instances of appraisal right.- Any stockholder of a corporation shall 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 stockholder 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 the Code; and
3. In case of merger or consolidation.26
(b) Prohibition against nuisance and harassment suits. - Nuisance and harassment suits are prohibited. In determining whether a suit is a nuisance or harassment suit, the court shall consider, among others, the following:
(1) The extent of the shareholding or interest of the initiating stockholder or member;
(2) Subject matter of the suit;
(3) Legal and factual basis of the complaint;
(4) Availability of appraisal rights for the act or acts complained of; and
(5) Prejudice or damage to the corporation, partnership, or association in relation to the relief sought.
SECTION 1. (a) Cases Covered - These Rules shall govern the procedure to be observed in civil cases involving the following:
(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.29 (Emphasis ours).
[T]he re-raffling of an ordinary civil case in this instance to all courts is permissible due to the fact that a particular branch which has been designated as a Special Commercial Court does not shed the RTCs general jurisdiction over ordinary civil cases under the imprimatur of statutory law, i.e., Batas Pambansa Bilang (BP) 129. To restate, the designation of Special Commercial Courts was merely intended as a procedural tool to expedite the resolution of commercial cases in line with the court's exercise of jurisdiction. This designation was not made by statute but only by an internal Supreme Court rule under its authority to promulgate rules governing matters of procedure and its constitutional mandate to supervise the administration of all courts and the personnel thereof. Certainly, an internal rule promulgated by the Court cannot go beyond the commanding statute. But as a more fundamental reason, the designation of Special Commercial Courts is, to stress, merely an incident related to the court's exercise of jurisdiction, which, as first discussed, is distinct from the concept of jurisdiction over the subject matter. The RTCs general jurisdiction over ordinary civil cases is therefore not abdicated by an internal rule streamlining court procedure.35
Endnotes:
1Rollo, pp. 40-41; Penned by Associate Justice Arcangelita M. Romilla-Lontok with Associate Justices Mariano C. Del Castillo (now a member of this Court) and Romeo F. Barza concurring.
2 CA rollo, pp. 540-550.
3 Id. at 34-38; Presided by Judge Emma S. Young.
4Rollo, pp. 165-166; See Complaint.
5 Id. at 161-178.
6 Id. at 162; VR Holdings is a holding corporation which used to own 50.44% of the shares of stock of Bankwise before the latter was taken over by Philippine Veterans Bank. The other principal stockholder of Bankwise is Wise Holdings, owning 49.56% of the shares of stock thereof. See Complaint.
7 Id. at 163.
8 Id. at 164-165.
9 Id. at 240-242.
10 CA rollo, pp. 34-38.
11 Id. at 12-13.
12 Id. at 540-550.
13Rollo, pp. 27 & 29.
14 Hi-Yield Realty v. Court of Appeals, 608 Phil. 350, 358 (2009) citing R.N. Symaco Trading Corporation v. Santos, 504 Phil. 573, 589 (2005) and Filipinos Port Services, Inc. v. Go, 547 Phil. 360, 377 (2007).
16Ching v. Subic Bay Golf and Country Club, G.R. No. 174353, 10 September 2014, 734 SCRA 569, 585.
16 257 Phil. 459 (1989).
17 Id. at 473-474 citing Pascual v. Del Saz Orozco, 19 Phil. 82 (1911); Republic Bank v. Cuaderno, 125 Phil. 1076 (1967); Everett v. Asia banking Corporation, 49 Phil. 512 (1926); Angeles v. Santos, 64 Phil. 697 (1937); Evangelista v. Santos, 86 Phil. 387 (1950).
18Hi-Yield Realty v. Court of Appeals, supra note 14 at 359.
19 360 Phil. 768(1998).
20 Id. at 805 citing Agabayani's Commercial law of the Philippines, Vol. III, p. 566, further citing Ballantine, pp. 366-367.
21 Hi-Yield Realty v. Court of Appeals, supra note 14 at 3598.
22Rollo, pp. 169-173.
23 Id. at 175-176.
24 Id. at 168-169.cralawred
25 G.R. No. 154291, 12 November 2014.
26 Turner v. Lorenzo Shipping Corp., 650 Phil. 372, 384 (2010).cralawred
27 a) Devices or schemes employed by or any acts, of the board of directors, business associates, its officers or partners, 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 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;
c) Controversies in the election or appointments of directors, trustees, officers or managers of such corporations, partnerships or associations.
28Reyes v. RTC of Makati, Br. 142, et al., 583 Phil. 591, 602 (2008).
29 Aguirre v. FQB+7, INC, G.R. "No. 170770, 9 January 2013, 688 SCRA 242, 258.
30 583 Phil. 591 (2008).
31 667 Phil. 781 (2011).
32 Supra note 15.
33 G.R. No. 201675, 19 June 2013, 699 SCRA 272.
34 G.R. No. 202664, 10 November 2015.
35 Id.
36 536 Phil. 614 614, 630 (2006) citing Cariho v. Ofilada, G.R. No. 102836, 18 January 1993, 217 SCRA 206, 215; 671 C.J.S. Parties, p. 806 and Begg v. New York, 262 U.S. 196, 67 L.ed. 946. 43 S.Ct. 513.