THIRD DIVISION
G.R. No. 195215, March 06, 2019
EMPIRE INSURANCE, INC., MARIO A. REMOROSA (IN HIS CAPACITY AS APPROVING OFFICER OF EMPIRE INSURANCE COMPANY), VIRGINIA BELINDA S. OCAMPO, JOSE AUGUSTO G. SANTOS, AND KATRINA G. SANTOS, PETITIONERS, v. ATTY. MARCIANO S. BACALLA, JR., ATTY. EDUARDO M. ABACAN, ERLINDA U. LIM, FELICITO A. MADAMBA, PEPITO M. DELGADO, AND THE FEDERATION OF INVESTORS TULUNGAN, INC., RESPONDENTS.
D E C I S I O N
REYES, A., JR., J.:
This is a petition for review on certiorari1 under Rule 45 of the Revised Rules of Court which assails the Decision2 and Resolution3 of the Court of Appeals (CA) in CA-G.R. SP No. 95754, respectively, dated September 30, 2010 and January 17, 2011, which, in turn, affirmed the issuance of the assailed Orders by the Regional Trial Court (RTC) of Las Piñas City, Branch 253, in a complaint for securities fraud, annulment, specific performance, and preliminary injunction.
WHEREFORE, premises considered, finding merit to the instant petition for involuntary dissolution, the same is GRANTED.On August 25, 2005, Atty. Marciano S. Bacalla, Jr. (Bacalla), in his capacity as the court-appointed receiver of the Tibayan Group, filed a "Very Urgent" application for injunctive relief before the trial court, seeking to enjoin the holders of the Prudential Bank shares from selling or otherwise disposing the same to other parties. The trial court, in its Resolution dated September 15, 2005, granted the application and further authorized Bacalla to prosecute an action to recover the shares.
Accordingly, judgment is rendered declaring the dissolution of the hereunder-named respondent corporations pursuant to the provisions of Sections 121 and 122 of the Corporation Code of the Philippines:Tibayan Group of Investment Company, Inc.Likewise, all claims of the petitioners herein and all other creditors shall be paid, as far as practicable, out of the assets and other properties of respondents Jesus V. Tibayan, Palmy B. Tibayan, the above-named corporations and all other officers and directors, nominees and / or dummies.
Tibayan Management Group International Holdings Co. Ltd.
TG Asset Management Corporation
MATCOR Holdings Company Ltd.
JETCOR Equity Company Ltd.
Sta. Rosa Management and Trading Corporation
Westar Royalty Management and Trading Corporation
Starboard Management and Trading Corporation
United Alpa Management and Trading Corporation
Global Progress Management and Trading Corporation
Athon Management and Trading Corporation
Diamond Star Management and Trading Corporation
Furthermore, the Receiver Atty. Marciano S. Bacalla, Jr. is ordered to immediately effect the liquidation process pursuant to Section 122 of the Corporation Code and exercise any and all of the powers enumerated under Section 5, Rule 9 of the Interim Rules Governing Intra-Corporate Controversies under RA 8799, and such other powers as may be deemed necessary, just and equitable under the premises and / or circumstances.
Furnish a copy of this Decision to the Securities and Exchange Commission for its information and appropriate action.
SO ORDERED.5
I. THE CA COMMITTED AN ERROR OF LAW IN UPHOLDING THE TRIAL COURT'S ISSUANCE OF THE WRIT OF PRELIMINARY INJUNCTION, DESPITE THE BACALLA GROUP'S FAILURE TO PAY THE CORRECT FILING FEES; and
II. THE CA COMMITTED AN ERROR OF LAW IN REFUSING TO RECOGNIZE THAT THE EMPIRE GROUP WAS DENIED DUE PROCESS OF LAW WHEN THE INJUNCTION WAS ISSUED.14
A review of the jurisprudence of this Court indicates that in determining ' whether an action is one the subject matter of which is not capable of pecuniary estimation, this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, or where the money claim is purely incidental to, or a consequence of the principal relief sought like in suits to have the defendant perform his part of the contract (specific performance) and in actions for support, or for annulment of a judgment or to foreclose a mortgage, this Court has considered such actions as cases where the subject of the litigation may not be estimated in terms of money, and are cognizable exclusively by courts of first instance. The rationale of the rule is plainly that the second class [of] cases, besides the determination of damages, demand an inquiry into other factors which the law has deemed to be more within the competence of courts of first instance, which were the lowest courts of record at the time that the first organic laws of the Judiciary were enacted allocating jurisdiction.18 (Citations omitted and emphases Ours)In Lu v. Lu Ym, Sr., et al.,19 the Court held that an action for "Declaration of Nullity of Share Issue, Receivership and Dissolution" was incapable of pecuniary estimation, because "the annulment of the shares, the dissolution of the corporation and the appointment of receivers/management committee are actions which do not consist in the recovery of a sum of money. If, in the end, a sum of money or real property would be recovered, it would simply be the consequence of such principal action;"20 and the plaintiffs therein "do not claim to be the owners thereof entitled to be the transferees of the shares of stock. The mention of the real value of the shares of stock, over which [plaintiffs] do not, it bears emphasis, interpose a claim of right to recovery, is merely narrative or descriptive in order to emphasize the inequitable price at which the transfer was effected."21
[N]o cogent reason appears, and none is here advanced by the parties, why an action for rescission (or resolution) should be differently treated, a "rescission" being a counterpart, so to speak, of "specific performance." In both cases, the court would certainly have to undertake an investigation into facts that would justify one act or the other. No award for damages may be had in an action for rescission without first conducting an inquiry into matters which would justify the setting aside of a contract, in the same manner that courts of first instance would have to make findings of fact and law in actions not capable of pecuniary estimation expressly held to be so by this Court, arising from issues like x x x the legality or illegality of the conveyance sought for and the determination of the validity of the money deposit made; x x x validity of a judgment; x x x validity of a mortgage; x x x the relations of the parties, the right to support created by the relation, etc., in actions for support; x x x the validity or nullity of documents upon which claims are predicated. Issues of the same nature may be raised by a party against whom an action for rescission has been brought, or by the plaintiff himself. It is, therefore, difficult to see why a prayer for damages in an action for rescission should be taken as the basis for concluding such action as one capable of pecuniary estimation — a prayer which must be included in the main action if plaintiff is to be compensated for what he may have suffered as a result of the breach committed by defendant, and not later on precluded from recovering damages by the rule against splitting a cause of action and discouraging multiplicity of suits.25 (Emphases Ours)Seen in light of these doctrines, the Court holds that the action filed by the Bacalla group in the case at bar is incapable of pecuniary estimation. The action has for its primary objective the nullification of the transactions which brought the shares in dispute outside the control of the debtor, i.e., Tibayan Group, and perforce to preserve them for inclusion in the assets to be liquidated. Furthermore, the Bacalla group does not assert direct, personal claims over the shares. Bacalla claims the shares only in his capacity as receiver of the Tibayan Group, while Abacan, et al. and FITI claim the shares only for purposes of having them included in the asset pool of the Tibayan Group, out of which their respective claims are to be paid. These circumstances distinguish the case at bar from those obtaining in National Steel Corporation v. CA,26 where the Court upheld the computation of filing fees on the basis of the market value of the shares in dispute, because the plaintiff therein lodged a direct and personal claim over the shares. The Court, therefore, held that the primary objective of the claim in that case was for recovery of property, hence, filing fees must be computed on the basis of the value of the shares as alleged by the claimant. Considering that the Bacalla group paid almost Php 1,100,000.00 in filing fees, they have more than complied with the requirements of the Rules of Court.
Private respondents (the Bacalla group) truly have a clear and present right to be protected insofar as the subject shares are concerned. To allow their further disposition would result in the continued dissipation and dispersal of the original assets of the [Tibayan Group]. It would be harder for private respondents to trace and pool them back together again. They would suffer serious damage for the assets sought to be protected may forever get lost if they continue to change hands. By then, any judgment in the case would become ineffectual.32WHEREFORE, premises considered, the petition is hereby DENIED. The Decision dated September 30, 2010 and the Resolution dated January 17, 2011 of the Court of Appeals in CA-G.R. SP No. 95754 are hereby AFFIRMED.
| Very truly yours, |
(SGD) WILFREDO V. LAPITAN | |
Division Clerk of Court |
Endnotes:
* Designated as additional Member per Special Order No. 2624 dated November 28, 2018.
1Rollo, Volume I, pp. 11-29.
2 Penned by Associate Justice Amy C. Lazaro-Javier, with Associate Justices Sesinando E. Villon and Mario V. Lopez concurring; id. at 44-63.
3 Id. at 65.
4 Rendered by Acting Presiding Judge Elizabeth Yu-Guray; id. at 453-462.
5 Id. at 346-347.
6 Of the defendants, Jamcor Holdings Corporation and Cielo Azul Holdings Corporation are either member corporations or alleged dummies of the Tibayan Group; while Jesus V. Tibayan and Liboro E. Elacio are corporate officers of the Tibayan Group.
7 Defendants First Orient Securities, Inc. and Trinidad Y. Kalaw.
8 All defendants other than those listed in footnotes 6 and 7, including herein petitioners EII, et al., are the end-buyers of the Prudential Bank shares. They are alleged to "have related interests with Prudential Bank in sales transactions coursed through the [Philippine Stock Exchange] but in reality were PRIVATELY NEGOTIATED BLOCK SALES and thus considered NON-EXCHANGE TRANSACTIONS." It is further alleged that the transactions which led to the acquisition of the shares by these defendants are "improper matched orders" which are considered unlawful and manipulative acts under Section 24.1(a)(ii) of the Securities Regulation Code; and that these transactions were committed by the Tibayan Group in conspiracy and collusion with the end-buyers, including the herein petitioners. See Complaint, rollo, Vol. I, pp. 107-112. The complaint further alleges, in its third cause of action, that petitioner Empire Insurance, Inc. was motivated to buy the shares in dispute to be rid of the embarrassing situation of having an affiliated company (Prudential Bank) whose major stockholders are persons and entities associated with the Tibayan Group, which at that time was under investigation by the Securities and Exchange Commission; and that the payment for the sale of the shares from Cielo Azul to Empire Insurance was tainted with irregularities. See Complaint, rollo, Vol. I, pp. 142-144. Finally, it was further alleged that the acquisition of Prudential Bank shares by herein petitioners Jose Augusto G. Santos and Katrina G. Santos was attended by irregularities which are indicia of fraudulent disposition of shares. See Complaint, rollo, Vol. I, pp. 117-130. In toto, these circumstances, among others, attendant to the sales of the shares are alleged to be in violation of Sections 24 and 26 of the Securities Regulation Code, hence, the sale transactions are void. See Complaint, rollo, Vol. I, p, 130.
9 The Complaint was captioned "Atty. Marciano S. Bacalla, Jr. in his capacity as court-appointed Receiver and as legal substitute of the Tibayan Group of Companies, Eduardo M. Abacan, Erlinda U. him, Felicito A. Madamba, Pepito M. Delgado, in their own behalf and as members of the Federation of Investors Tulungan, Inc., Federation of Investors Tulungan, Inc., plaintiffs, v. Prudential Bank Employees Retirement Fund, Lauro Jocson in his capacity as approving officer of Prudential Bank — Trust Division, Empire Insurance Company, Mario A. Remorosa in his capacity as approving officer of Empire Insurance Company, A.J. Thomas S. Barrera, Bella Aurora S. Barrera, Karla S. Barrera, Virginia Victoria S. Barrera, Ma. Remedios E. Camara, Augusto S. Estrada, Ramon S. Estrada, Augusto Angel S. Gonzales, Clarissa S. Gonzales, Ma. Blanquita S. Gonzales, Renato S. Gonzales, Jr., Susan S. Luk, Virginia Belinda S. Ocampo, Ana Maria G. Santos, Carlos Eduardo G. Santos, Jose Augusto G. Santos, Katrina G. Santos, Ma. Magdalena G. Santos, Ma. Rowena O. Santos, Ma. Virginia Isabel O. Santos, Patricia G. Santos, Raphael O. Santos, Roman O. Santos, Jr., Santiago S. Syjuco III, Sylvia S. Tantuico, Cecilia S. Verge! de Dios, Eric Thomas S. Vergel de Dios, Ernesto S. Verge/ de Dios, Felisa S. Vergel de Dios, Francisco Eduardo S. Vergel de Dios, Gloria Lee Carmen S. Vergel de Dios, Jose S. Vergel de Dios, Katherine Gail S. Vergel de Dios, Roman S. Vergel de Dios, First Orient Securities Inc., Trinidad Y. Kalaw in his capacity as President and General Manager of First Orient Securities, Inc., Prudential Bank and Trust Company, Felipe C. Gella in his capacity as Corporate Secretary of Prudential Bank, Jamcor Holdings Corporation, Cielo Azul Holdings Corporation, Jesus V. Tibayan in his capacity as former General Partner of Tibayan Management Group International Holdings Co., Ltd. and as officer and director of Jamcor Holdings Corporation, and Liborio E. Elacio in his capacity as officer and director of Cielo Azul Holdings Corporation, defendants." See rollo, Vol. I, pp. 66-68.
10Rollo, Vol. I, pp. 66-165.
11 Id. at 166-170.
12 Resolution dated May 30, 2006, penned by Judge Salvador V. Timbang, Jr.
13 Special Fifth Division, composed of Associate Justices Sesinando E. Villon (Acting Chairperson), Mario V. Lopez, and Amy C. Lazaro-Javier (ponente).
14Rollo, Vol. I, pp. 166-170.
15 RULES OF COURT, Rule 141, Section 7(a).
16 RULES OF COURT, Rule 141, Section 7(b), 8(d).
17 133 Phil. 526 (1968).
18 Id. at 528.
19 658 Phil. 156 (2011).
20 Id. at 181.
21 Id. at 180.
22 Id. at 181.
23See Genesis Investment, Inc., et al. v. Heirs of Ceferino Ebarasabal, et al., 721 Phil. 798, 801 (2013), and cases cited therein.
24 Supra note 17.
25 Id. at 529-530.
26 362 Phil. 150 (1999).
27Philippine National Bank v. Spouses Reblando, 694 Phil. 669, 679 (2012).
28 3 Oscar M. Herrera, Remedial Law 69 (1999); 1 Florenz D. Regalado, Remedial Law Compendium 720 (2005).
29BPI v. Judge Hontcmosas, Jr., et al., 731 Phil. 38, 54 (2014), citing City Government of Butuan, et al. v. Consolidated Broadcasting System, Inc., et al., 651 Phil. 37, 54 (2010).
30 Los Baños Rural Bank, Inc. v. Africa, 433 Phil. 930, 941 (2002).
31 Antonio R. Bautista, Basic Civil Procedure 140 (2009).
32Rollo, Vol. I, p. 62.