SPECIAL SECOND DIVISION
G.R. No. 198127, October 05, 2016
CO IT a.k.a. GONZALO CO IT, Petitioner, v. ANTHONY CO, MARY CO CHO, PETER CO AND LUCY SO HUA TAN CO, Respondent.
R E S O L U T I O N
PEREZ, J.:
We here have a case between members of the Co family, incorporating stockholders of Green Cross, Inc., manufacturer of the ubiquitous Green Cross alcohol.
We resolve the Respectful Motion to Reinstate Petition filed by petitioner Gonzalo Co It (Gonzalo) which we had allowed to be withdrawn, upon motion of Gonzalo, by Minute Resolution1 dated 30 January 2012.
Previously,. Gonzalo filed a petition for review on certiorari under Rule 45 of the Rules of Court assailing the Decision2 of the Court of Appeals in CA-G.R. CV No. 95095 which, in turn, affirmed the Regional Trial Court, Branch 114, Pasay City's dismissal of Gonzalo's complaint for Reconveyance with Damages against respondents Anthony Co (Anthony), Mary Co Cho (Mary), Peter Co (Peter), Gonzalo's siblings, and Lucy So Hua Tan Co, wife of Gonzalo's deceased brother Joseph Co (Joseph), involving shares of stock in the family-owned Green Cross, Inc.3chanrobleslaw
We have to consult the facts antecedent to the current events.
On 29 June 2009, Gonzalo filed the aforementioned complaint4 for Reconveyance with Damages against respondents alleging that:
chanRoblesvirtualLawlibrary1. In 1952, he established Gonzalo Laboratories, a sole proprietorship, formulator and maker of Green Cross alcohol, with the trade mark and name registered in his name with the Philippine Patent Office (PP0).5chanrobleslaw
2. He is the legitimate son and the eldest among the five children of the deceased spouses Co Ay Tian and Ang Si. The other legitimate children of said spouses are respondents Anthony, Mary and Peter.
3. In 1971, he incorporated the business as Gonzalo Laboratories, Inc. (GLI), subscribing to 20% of the authorized capital stock. To honor his parents, Gonzalo caused the registration of some GLI shares in the name of his mother, Ang Si.
4. Moreover, to comply with the five-incorporator requirement set by law, Gonzalo caused the registration of some GLI shares in the names of his siblings, herein respondents: 400 shares were registered in the name of Anthony; while Ang Si, Joseph and Mary each had 200 shares. Eventually, Gonzalo caused some shares to be registered in respondent Peter's name.
5. He paid for all the shares of his mother and respondent-siblings, who all simply held the shares in trust for him without payment of consideration therefor.
6. In 1977, he caused the registration of some of his shares in the name of his father, Co Ay Tian. By 1978, Gonzalo held 500 shares; Anthony, 300 shares; Joseph, 300 shares; Peter, 300 shares; Mary, 100 shares, Co Ay Tian, 250 shares; and Ang Si, 250 shares. At that time, Gonzalo was led to believe that this additional transfer of shares to his siblings did not affect the initial "trust" character thereof.
7. Through Gonzalo's efforts, GLI flourished and became very profitable. However, upon the increase in capital stock of GLI, respondents, taking advantage of their relationship as siblings, deceived Gonzalo into waiving his pre-emptive rights over the additional subscription thereby reducing his shareholdings to a lone stock. Correspondingly, respondents increased their shareholdings in GLI, to wit: Co Ay Tian held 759 shares; Ang Si, 910 shares; Anthony, 908 shares; Joseph, 1060 shares; Peter, 1060 shares; and Mary, 302 shares.
8. Respondents machinated the increase in GLI's capital stock from 5,000 to 25,000 which issuance of 20,000 additional stocks was subscribed to by respondents in total of 15,000 stocks, further diluting Gonzalo's share in GLI. The additional shares were distributed among respondents, thus: Joseph and Peter for 3,180 shares, respectively; Anthony for 2,725; Ang Si for 2,730; Mary, 910; and Co Ay Tian received 2,275 shares. These subscriptions were paid for by respondents through the unlawful distribution of dividends from transactions unknown to Gonzalo.
9. In August 1989, the corporate name of GLI was changed to its present name Green Cross, Inc. Within the same month, Ang Si died intestate. At the time of her death, she was the registered owner of 3,640 shares in Green Cross with a par value of P100.00 per share or an aggregate of P364,000.00.
10. At the time of Co Ay Tian's death in 1991, he held 3,034 Green Cross shares in his name, excluding his inchoate share in the stocks ostensibly owned by Ang Si at the time of her death. As of date of filing of the complaint, both Ang Si's and Co Ay Tian's estates have yet to be settled.
11. In 1992, another family member, Joseph, died. By the year 1994, respondent Lucy transferred all of Joseph's shares in Green Cross in her name without proper documentation of the transfer and without payment of taxes and fees.
12. In the same narrative of deception, respondents appropriated for themselves alone their parents' shares in Green Cross, to the exclusion of their sibling, Gonzalo.
13. In any event, Gonzalo is a compulsory heir (as legitimate child) of his parents, entitling him to a share equal that of other legitimate children in Green Cross stocks registered in Co Ay Tian's and Ang Si's names.
Gonzalo, upon motion of respondents to the trial court, filed a Bill of Particulars. The RTC found it sufficient and admitted it as part of Gonzalo's complaint.
Thereafter, respondents filed a Motion to Dismiss the complaint on the following grounds: (1) the RTC has no jurisdiction over the subject matter of the complaint; (2) the causes of action are barred by the Statute of Limitations. In their motion to dismiss, respondents averred that: (1) only a probate court can settle the estates of the decedents Co Ay Tian and Ang Si which cannot be settled through the filing of an ordinary civil action; and (2) Gonzalo's cause of action is barred by prescription, respondents having acquired ownership of the shares of stock through eight years of uninterrupted possession, reckoned from the registration of the shares of stock in their name upon the death of the decedents in 1989 and 1991, respectively.
Gonzalo filed an Opposition to the Motion to Dismiss, contending that: (1) the motion is patently dilatory; (2) jurisdiction depends on the allegations of the complaint; (3) prescription does not run against a co owner; (4) and movable possessed through a crime can never be acquired through prescription.
On 11 January 2010, the RTC granted respondents' Motion to Dismiss on the ground that the causes of action in the Complaint are barred by the Statute of Limitations. On the issue of whether it has jurisdiction, the RTC ruled that the complaint properly pleaded a cause of action for reconveyance and thus it had jurisdiction over the subject matter of the case. Subsequently, the RTC denied Gonzalo's Motion for Reconsideration thereof.
On appeal by Gonzalo, the Court of Appeals affirmed the RTC's dismissal of Gonzalo's complaint.
As previously adverted to, Gonzalo appealed to us by certiorari on the lower courts' uniform dismissal of his complaint, positing the following Issues:
chanRoblesvirtualLawlibrary
I.
THE COURT OF APPEALS ACTED NOT IN ACCORD WITH LAW AND APPLICABLE JURISPRUDENCE OF THE HONORABLE COURT WHEN IT ISSUED A DECISION WHICH DID NOT, AND STILL DOES NOT, CONFORM, WITH EXISTING LEGAL AND JURISPRUDENTIAL REQUIREMENTS IN ISSUING DECISIONS.II.
THE COURT OF APPEALS ACTED NpT IN ACCORD WITH LAW AND APPLICABLE JURISPRUDENCE OF THE HONORABLE COURT WHEN IT RULED THAT THE COURT A QUO CORRECTLY ACQUIRED AND EXERCISED JURISDICTION OVER PETITIONER'S COMPLAINT WHETHER IT BE FOR RECONVEYANCE WITH DAMAGES OR FOR SETTLEMENT OF THE ESTATE OF A DECEASED PERSON.III.
THE COURT OF APPEALS ACTED NOT IN ACCORD WITH LAW AND APPLICABLE JURISPRUDENCE OF THE HONORABLE COURT WHEN IT RULED THAT PETITIONER IS ESTOPPED FROM ASSAILING THE JURISDICTION OF THE COURT A QUO.IV.
THE COURT OF APPEALS ACTED NOT IN ACCORD WITH LAW AND APPLICABLE JURISPRUDENCE OF THE HONORABLE COURT WHEN IT RULED THAT PETITIONER IS BARRED BY PRESCRIPTION FROM DEMANDING THE RECONVEYANCE OF THE "TRUST SHARES".V.
THE COURT OF APPEALS ACTED NOT IN ACCORD WITH LAW AND APPLICABLE JURISPRUDENCE OF THE HONORABLE COURT WHEN IT RULED THAT PETITIONER IS BARRED BY PRESCRIPTION TO DEMAND THE SETTLEMENT OF THE ESTATES OF HIS DECEASED PARENTS, CO AY TIAN ANDANGSI.VI.
THE COURT OF APPEALS ACTED NOT IN ACCORD WITH LAW AND APPLICABLE JURISPRUDENCE OF THE HONORABLE COURT WHEN IT RULED THAT THE CERTIFICATE OF INCREASE OF CAPITAL STOCK OF GREEN CROSS DATED 28 OCTOBER 1996, AND/OR THE EXECUTION THEREOF, WAS A VALID AND SUFFICIENT REPUDIATION OFTHE TRUST FOR PURPOSES OF APPLYING THE RULES ON ACQUISITVE PRESCRIPTION.6
1.1 The Petition is a case among relatives, to wit:
chanRoblesvirtualLawlibrary(a) Respondents Anthony Co, Mary Co Cho and Peter Co are the siblings of [Gonzalo]; and cralawlawlibrary
(b) Lucy So Hua Tan Co i$ the sister-in-law of [Gonzalo], the former being the wife of [Gonzalo's deceased' brother], Joseph Co.
2. However, in light of the upcoming yuletide season, not to mention [Gonzalo's] own failing health and advanced age, he honestly believes that it would be to his, his family and his relatives' best interest that the instant appeal be withdrawn to pave the way for a long-delayed reconciliation by and among blood relatives.
3. Thus, [Gonzalo], with utmost respect, most humbly moves for the withdrawal of his Petition and the dismissal of the above-captioned case.
4. This motion is being filed due solely to the foregoing reasons.8
4. Respondents do not object to, in fact greatly appreciate, the "Motion to Withdraw" of Co It [Gonzalo] as it will finally put to rest any misunderstanding among the parties.9
1. GRANT [Gonzalo's] motion to withdraw (re: the petition for review on certiorari dated 30 September 2011) with conformity of [Gonzalo], dated 28 November 2011, praying for the withdrawal of the petition and the dismissal of the case to pave the way for a long-delayed reconciliation by and among blood relatives; and cralawlawlibrary
2. INFORM the Court of Appeals and the parties that the judgment sought to be reviewed has now become final and executory, and to DECLARE this case CLOSED and TERMINATED.
Accordingly, respondents' manifestation (in lieu of comment to the petition) dated 16 January 2012 that they do not object to, in fact greatly appreciate, [Gonzalo's] "Motion to Withdraw" as it will finally put to rest any misunderstanding among the parties and that respondents be excused from filing comment on the petition is NOTED WITHOUT ACTION. 10
Please be notified that, upon the demand of Petitioner Co It a.k.a. Gonzalo Co It, the undersigned is hereby formally withdrawing as counsel of record in the above-captioned case. Petitioner's express conformity and consent is evidenced by Petitioner's letters dated 22 April 2014 and 6 May 2014, attached hereto as ANNEX "A-SERIES" and made integral parts hereof.12chanroblesvirtuallawlibrary
(06) [Gonzalo] was advised by his lawyers that respondents have decided to reconcile with him in the spirit of Christmas and in consideration of his olcJ age, and to settle the inheritance problem amicably. Naturally, [Gonzalo] welcomed this information. Thus, [Gonzalo] was expecting that the supposed reconciliation will bear fruit, and that his rightful share of the inheritance will be, upon the assurance of his lawyer, give to him at last. Accordingly, and upon the instruction and recommendation of his lawyers, [Gonzalo] signed his conformity to the MOTION TO WITHDRAW. At that time, [Gonzalo] was ninety-one [91] years old already. As of this writing, [Gonzalo] is ninety-four [94] years old. (Emphasis supplied)
(07) By way of its RESOLUTION promulgated on January 30, 2012, this Honorable Supreme Court granted the aforesaid MOTION TO WITHDRAW and declared the instant case terminated. Thereafter, the corresponding ENTRY OF JUDGMENT dated March 8, 2012 was issued.
(08) To the utmost disappointment and disgust of [Gonzalo], the "long delayed reconciliation by and among blood relatives" upon which the MOTION TO WITHDRAW was based, never materialized.
(09) But before the Honorable Supreme Court granted the petition to withdraw the case, [Gonzalo] had a meeting with respondents sometime January 16, 2012 at the Heritage Hotel to finalize their amicable settlement. In said meeting, [Gonzalo] was shocked to learn that respondents expressed no desire to amicably settle the case. Respondents even berated [Gonzalo] for the cases [Gonzalo] filed against them. Worse, respondents demanded that [Gonzalo] make a public apology to the chinese community in a chinese newspaper before they even talk of reconciliation or compromise.
(10) Equally disturbing for [Gonzalo] was his realization that his lawyers, led him to believe in a reconciliation that was never considered by respondents to begin with.
(11) As a consequence of the withdrawal of [Gonzalo's] PETITION FOR REVIEW ON CERTIORARI in G.R. No. 198127, respondents had their way with the inheritance from the deceased parents of [Gonzalo]. Sadly, [Gonzalo] was left with virtually nothing from the inheritance. [Gonzalo] is a victim of gross injustice which, regrettably, was visited upon him by reason of the misplaced trust he reposed in his lawyers.
(12) It appears that at the time [Gonzalo] was made by his lawyers to sign his conformity to the MOTION TO WITHDRAW dated November 28, 2011, his lawyers had absolutely nothing in their possession, not even a single document, which will protect the interests of their client [the herein petitioner Co It] in the event that respondents refused to reconcile with their client, or in the event that no amicable settlement is reached by the parties.
(13) At the very least, [Gonzalo] respectfully submits that there was negligence on the part of his lawyers when they advised [Gonzalo] to sign his conformity to the MOTION TO WITHDRAW. [Gonzalo] maintain that his lawyers failed to protect the interests of their client [Gonzalo].
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(16) Undoubtedly, the withdrawal of the PETITION FOR REVIEW ON CERTIORARI resulted in gross injustice to [Gonzalo] inasmuch as the reason for withdrawal of the PETITION, which is, the reconciliation never materialized, hence, the withdrawal was based on a non-existent consideration. Certainly, [Gonzalo], did not intend to cause such injustice to be visited upon himself. Being a non lawyer and being a person of advance age, (Gonzalo] completely relied on the advice given by his legal counsel. That is why he signed his conformity to the MOTION TO WITHDRAW. [Gonzalo], therefore, humbly submits that the withdrawal of the PETITION FOR REVIEW ON CERTIORARI was sought with excusable improvidence.
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ALL TOLD, and in the interest of substantial justice, [Gonzalo] respectfully moves for the reinstatement of the PETITION FOR REVIEW ON CERTIORARI dated September 30, 2011.14chanroblesvirtuallawlibrary
The Court has recognized instances when reinstatement of an appeal was deemed just and proper considering the greater interest of justice. This case is one of them. The lAC, on April 19, 1983, dismissed Belen de Guia's appeal for non-payment of docket fees. It is settled however that failure to pay the appeal docket fee confers on the court a mere directory power to dismiss an appeal which must be exercised with sound discretion and with a great deal of circumspection considering all attendant circumstances. Dismissal of an appeal based on this ground is discretionary with the appellate court and should be exercised wisely and prudently with a view to substantial justice.
As noted by the IAC in its decision dated May 21, 1984 in AC G.R. CV No. 5524-UDK, Belen failed to pay the appeal docket fee, not because of lack of interest, but because of lack of proper notice. It was only upon the inquiry of Belen's corroborating counsel that they found out, for the first time, the dismissal of her appeal. The Court is aware of its ruling in Arambula vs. Court of Appeals that failure of the counsel to inquire from either the trial or the appellate court the status of their appeal particularly as to the payment of docket fees, constitutes negligence sufficient to merit the dismissal of the appeal. However, the fact that the appeal of Belen involved her claim that her own son Carlos de Guia forged her signature in a deed of sale transferring to him the ownership of her two parcels of land, the IAC did not commit any reversible error nor grave abuse of discretion in reinstating the appeal. The interest of substantial justice far outweighs whatever negligence Belen and her counsel might have committed.21 (Emphasis supplied)
Rule 19.03 A lawyer shall not allow his client to dictate the procedure in handling the case.We are not now resolving the merits of this case. Considering that the parties have not reconciled and reached an agreement which petitioner was led to believe as possible, we simply allow the reinstatement of the instant Petition to provide Gonzalo the opportunity to avail of) and pursue) all his legal remedies concerning his supposed stake in Green Cross Incorporated, such issue not having been definitively resolved by this Court. Considering all attendant circumstances, especially that which has led to Gonzalo's initial Motion to Withdraw Petition, the following issues must be allowed to determine the respective rights of the herein parties:
Endnotes:
1Rollo, p. 529.
2 Id. at 192-208; Penned by Associate Justice Hakim S. Abdulwahid with Associate Justices Ricardo R. Rosario and Samuel H. Gaerlan concurring.
3 Id. at 278-284.
4 Id. at 214-225.
5 Renamed as the Intellectual Property Office pursuant to Republic Act No. 8293.
6 Id. at 52-53.
7 Id. at 512.
8 Id. at 513-514.
9 Id. at 521.
10 Id. at 529.
11 Id. at 531.
12 Id. at 537-539.
13 Id. at 540-541.
14 Id. at 545-548.
15Ocampo v. RPN-9, G.R. No. 192947, 9 December 2015.
16Siy v. National Labor Relations Commission, 505 Phil. 265, 273 (2005)
17Filipro, Inc. v. Permanent Savings & Loan Bank, 534 Phil. 551, 560 (2006).
18 Id.
19 472 Phil. 652 (2004).
20 Supra note 19.
21 Id. at 667-668.
22 The complaint of Gonzalo was dismissed after the grant of respondents' Motion to Dismiss.
23 See Article 2 of the Corporation Code.
24 Article 1410 of the Civil Code.