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    G.R. No. L-18216 October 30, 1962

    STOCKHOLDERS OF F. GUN!ON ND SONS, "NC., petitioners-appellants,

    vs.

    REG"STER OF DEEDS OF #N"L, respondent-appellee.

    Ramon C. Fernando for petitioners-appellants.

    Office of the Solicitor General for respondent-appellee.

    $UT"ST NGELO, J.:

    On September 19, 1960, the five stockholders of the F. Guanon and Sons, !nc. e"ecuted a certificate of

    li#uidation of the assets of the corporation recitin$, amon$ other thin$s, that b% virtue of a resolution of the

    stockholders adopted on September 1&, 1960, dissolvin$ the corporation, the% have distributed amon$

    themselves in proportion to their shareholdin$s, as li#uidatin$ dividends, the assets of said corporation,

    includin$ real properties located in 'anila.

    (he certificate of li#uidation, )hen presented to the *e$ister of +eeds of 'anila, )as denied re$istration on

    seven $rounds, of )hich the follo)in$ )ere disputed b% the stockholders

    . (he number of parcels not certified to in the ackno)led$ment

    /. 0./0 *e$. fees need be paid

    6. 90./ documentar% stamps need be attached to the document

    &. (he 2ud$ment of the 3ourt approvin$ the dissolution and directin$ the disposition of the assets of the

    corporation need be presented 4*ules of 3ourt, *ule 10, Sec. 5.

    +ecidin$ the consulta elevated b% the stockholders, the 3ommissioner of and *e$istration overruled $round7o. & and sustained re#uirements 7os. , / and 6.

    (he stockholders interposed the present appeal.

     8s correctl% stated b% the 3ommissioner of and *e$istration, the propriet% or impropriet% of the three $rounds

    on )hich the denial of the re$istration of the certificate of li#uidation )as predicated hin$es on )hether or not

    that certificate merel% involves a distribution of the corporations assets or should be considered a transfer or

    conve%ance.

     8ppellants contend that the certificate of li#uidation is not a conve%ance or transfer but merel% a distribution of

    the assets of the corporation )hich has ceased to e"ist for havin$ been dissolved. (his is apparent in the

    minutes for dissolution attached to the document. 7ot bein$ a conve%ance the certificate need not contain a

    statement of the number of parcel of land involved in the distribution in the ackno)led$ment appearin$ therein.

    :ence the amount of documentar% stamps to be affi"ed thereon should onl% be 0.0 and not 90./, as

    re#uired b% the re$ister of deeds. 7either is it correct to re#uire appellants to pa% the amount of 0./0 as

    re$istration fee.

    (he 3ommissioner of and *e$istration, ho)ever, entertained a different opinion. :e concurred in the vie)

    e"pressed b% the re$ister of deed to the effect that the certificate of li#uidation in #uestion, thou$h it involves a

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    distribution of the corporations assets, in the last anal%sis represents a transfer of said assets from the

    corporation to the stockholders. :ence, in substance it is a transfer or conve%ance.

    ;e a$ree )ith the opinion of these t)o officials. 8 corporation is a 2uridical person distinct from the members

    composin$ it. roperties re$istered in the name of the corporation are o)ned b% it as an entit% separate and

    distinct from its members. ;hile shares of stock constitute personal propert% the% do not represent propert% of

    the corporation. (he corporation has propert% of its o)n )hich consists chiefl% of real estate 47elson v. O)en,

    11 8la., &

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    G.R. No. 1%%80& '()e 8, 2006

    EDURDO *. L"NTON'U, 'R. +) NTON"O K. L"TON'U, etitioners,

    vs.

    ETERN"T CORORT"ON )o/ ETERTON #ULT"-RESOURCES CORORT"ON, ETEROUTRE#ER, S..

    +) FR EST $NK TRUST CO#N, *espondents.

    + C 3 ! S ! O 7

    CLLE'O, SR., J.:

    On appeal via a etition for *evie) on 3ertiorari is the +ecision1 of the 3ourt of 8ppeals 4385 in 38-G.*. 3D

    7o. /10&, as )ell as the *esolution6, Glanville tele"ed +elsau" in ?el$ium, in#uirin$ on his position

    counterproposal to the offer of the iton2ua siblin$s. !t )as onl% on Februar% 1& that +elsau" sent a tele"

    to Glanville statin$ that, based on the I?el$ianS)iss decision,I the final offer )as I@SJ1,000,000.00

    and

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    (he iton2ua brothers deposited the amount of @SJ1,000,000.00 )ith the Securit% ?ank = (rust 3ompan%,

    Crmita ?ranch, and drafted an Cscro) 8$reement to e"pedite the sale.&

    Sometime later, 'ar#ue and the iton2ua brothers in#uired from Glanville )hen the sale )ould be

    implemented. !n a tele" dated 8pril

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    cc. (o A. G87D!C 4Cternit 3orp.511

    ;hen apprised of this development, the iton2uas, throu$h counsel, )rote C3, demandin$ pa%ment for

    dama$es the% had suffered on account of the aborted sale. C3, ho)ever, re2ected their demand.

    (he iton2uas then filed a complaint for specific performance and dama$es a$ainst C3 4no) the Cterton 'ulti-

    *esources 3orporation5 and the Far Cast ?ank = (rust 3ompan%, and CS83 in the *(3 of asi$ 3it%. 8n

    amended complaint )as filed, in )hich defendant C3 )as substituted b% Cterton 'ulti-*esources 3orporation

    ?enito 3. (an, *uperto D. (an, Stock :a (. (an and +eo$racias G. Cufemio )ere impleaded as additional

    defendants on account of their purchase of CS83 shares of stocks and )ere the controllin$ stockholders of

    C3.

    !n their ans)er to the complaint, C3 and CS83 alle$ed that since Cteroutremer )as not doin$ business in the

    hilippines, it cannot be sub2ect to the 2urisdiction of hilippine courts the ?oard and stockholders of C3 never

    approved an% resolution to sell sub2ect properties nor authoried 'ar#ue to sell the same and the tele" dated

    October , 19>6 of Aack Glanville )as his o)n personal makin$ )hich did not bind C3.

    On Aul% , 199/, the trial court rendered 2ud$ment in favor of defendants and dismissed the amended

    complaint.1<

     (he fallo of the decision reads

    ;:C*CFO*C, the complaint a$ainst Cternit 3orporation no) Cterton 'ulti-*esources 3orporation and

    Cteroutremer, S.8. is dismissed on the $round that there is no valid and bindin$ sale bet)een the plaintiffs and

    said defendants.

    (he complaint as a$ainst Far Cast ?ank and (rust 3ompan% is like)ise dismissed for lack of cause of action.

    (he counterclaim of Cternit 3orporation no) Cterton 'ulti-*esources 3orporation and Cteroutremer, S.8. is

    also dismissed for lack of merit.1

    (he trial court declared that since the authorit% of the a$entsrealtors )as not in )ritin$, the sale is void and notmerel% unenforceable, and as such, could not have been ratified b% the principal. !n an% event, such ratification

    cannot be $iven an% retroactive effect. laintiffs could not assume that defendants had a$reed to sell the

    propert% )ithout a clear authoriation from the corporation concerned, that is, throu$h resolutions of the ?oard

    of +irectors and stockholders. (he trial court also pointed out that the supposed sale involves substantiall% all

    the assets of defendant C3 )hich )ould result in the eventual total cessation of its operation.1

    (he iton2uas appealed the decision to the 38, alle$in$ that I415 the lo)er court erred in concludin$ that the

    real estate broker in the instant case needed a )ritten authorit% from appellee corporation andor that said

    broker had no such )ritten authorit% and 4

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    On Aune 16,

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    respondent C3 to hold themselves out in the public as havin$ the po)er to sell the sub2ect properties.

    etitioners identified such evidence, thus

    1. (he testimon% of 'ar#ue that he )as chosen b% Glanville as the then resident and General

    'ana$er of Cternit, to sell the properties of said corporation to an% interested part%, )hich authorit%, as

    hereinabove discussed, need not be in )ritin$.

    etitioners insist that it is incon$ruous for Glanville and +elsau" to make a counter-offer to petitioners offer

    and thereafter re2ect such offer unless the% )ere authoried to do so b% respondent C3. etitioners insist that

    +elsau" confirmed his authorit% to sell the properties in his letter to 'ar#ue, to )it

    +ear Sir,

    *e and of Cternit 3orporation

    ! )ould like to confirm officiall% that our Group has decided not to proceed )ith the sale of the land )hich )as

    proposed to %ou.

    (he 3ommittee for 8sia of our Group met recentl% 4meetin$ ever% si" months5 and e"amined the position as far

    as the hilippines are 4sic5 concerned. 3onsiderin$ the ne) political situation since the departure of '*.

    '8*3OS and a certain stabiliation in the hilippines, the 3ommittee has decided not to stop our operations

    in 'anilaK.L K!Ln fact production started a$ain last )eek, and 4sic5 to reor$anie the participation in the

    3orporation.

    ;e re$ret that )e could not make a deal )ith %ou this time, but in case the polic% )ould chan$e at a later

    sta$e )e )ould consult %ou a$ain.

    !n the meantime, ! remain

    Mours sincerel%,

    3.F. +CS8@N19

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    etitioners further emphasie that the% acted in $ood faith )hen Glanville and +elsau" )ere kno)in$l%

    permitted b% respondent C3 to sell the properties )ithin the scope of an apparent authorit%. etitioners insist

    that respondents held themselves to the public as possessin$ po)er to sell the sub2ect properties.

    ?% )a% of comment, respondents aver that the issues raised b% the petitioners are factual, hence, are

    proscribed b% *ule / of the *ules of 3ourt. On the merits of the petition, respondents C3 4no) C'35 and

    CS83 reiterate their submissions in the 38. (he% maintain that Glanville, +elsau" and 'ar#ue had no

    authorit% from the stockholders of respondent C3 and its ?oard of +irectors to offer the properties for sale to

    the petitioners, or to an% other person or entit% for that matter. (he% assert that the decision and resolution of

    the 38 are in accord )ith la) and the evidence on record, and should be affirmed in toto.

    etitioners aver in their subse#uent pleadin$s that respondent C3, throu$h Glanville and +elsau", conformed

    to the )ritten authorit% of 'ar#ue to sell the properties. (he authorit% of Glanville and +elsau" to bind

    respondent C3 is evidenced b% the fact that Glanville and +elsau" ne$otiated for the sale of 90E of stocks of

    respondent C3 to *uperto (an on Aune 1, 199&. Given the si$nificance of their positions and their duties in

    respondent C3 at the time of the transaction, and the fact that respondent CS83 o)ns 90E of the shares of

    stock of respondent C3, a formal resolution of the ?oard of +irectors )ould be a mere ceremonial formalit%.

    ;hat is important, petitioners maintain, is that 'ar#ue )as able to communicate the offer of respondent C3

    and the petitioners acceptance thereof. (here )as no time that the% acted )ithout the kno)led$e ofrespondents. !n fact, respondent C3 never repudiated the acts of Glanville, 'ar#ue and +elsau".

    (he petition has no merit.

     8nent the first issue, )e a$ree )ith the contention of respondents that the issues raised b% petitioner in this

    case are factual. ;hether or not 'ar#ue, Glanville, and +elsau" )ere authoried b% respondent C3 to act as

    its a$ents relative to the sale of the properties of respondent C3, and if so, the boundaries of their authorit% as

    a$ents, is a #uestion of fact. !n the absence of e"press )ritten terms creatin$ the relationship of an a$enc%, the

    e"istence of an a$enc% is a fact #uestion.

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    fact of the 3ourt of 8ppeals are premised on the absence of evidence and are contradicted b% the evidence on

    record.

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    director relatin$ to the affairs of the corporation, but not in the course of, or connected )ith, the performance of

    authoried duties of such director, are not bindin$ on the corporation. the ?oard of +irectors of

    respondent CS83,9 and the ?el$ianS)iss component of the mana$ement of respondent CS83.0  8s such,

     8dams and Glanville en$a$ed the services of 'ar#ue to offer to sell the properties to prospective bu%ers.

    (hus, on September 16, 'ar#ue )rote the petitioner that he )as authoried to offer for sale the

    propert% for

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    ;hile Glanville )as the resident and General 'ana$er of respondent C3, and 8dams and +elsau" )ere

    members of its ?oard of +irectors, the three acted for and in behalf of respondent CS83, and not as dul%

    authoried a$ents of respondent C3 a board resolution evincin$ the $rant of such authorit% is needed to bind

    C3 to an% a$reement re$ardin$ the sale of the sub2ect properties. Such board resolution is not a mere formalit%

    but is a condition sine #ua non to bind respondent C3. 8dmittedl%, respondent CS83 o)ned 90E of the shares

    of stocks of respondent C3 ho)ever, the mere fact that a corporation o)ns a ma2orit% of the shares of stocks

    of another, or even all of such shares of stocks, taken alone, )ill not 2ustif% their bein$ treated as one

    corporation.

    !t bears stressin$ that in an a$ent-principal relationship, the personalit% of the principal is e"tended throu$h the

    facilit% of the a$ent. !n so doin$, the a$ent, b% le$al fiction, becomes the principal, authoried to perform all

    acts )hich the latter )ould have him do. Such a relationship can onl% be effected )ith the consent of the

    principal, )hich must not, in an% )a%, be compelled b% la) or b% an% court.

    (he petitioners cannot fei$n i$norance of the absence of an% re$ular and valid authorit% of respondent C3

    empo)erin$ 8dams, Glanville or +elsau" to offer the properties for sale and to sell the said properties to the

    petitioners. 8 person dealin$ )ith a kno)n a$ent is not authoried, under an% circumstances, blindl% to trust the

    a$ents statements as to the e"tent of his po)ers such person must not act ne$li$entl% but must use

    reasonable dili$ence and prudence to ascertain )hether the a$ent acts )ithin the scope of his authorit%./

     (hesettled rule is that, persons dealin$ )ith an assumed a$ent are bound at their peril, and if the% )ould hold the

    principal liable, to ascertain not onl% the fact of a$enc% but also the nature and e"tent of authorit%, and in case

    either is controverted, the burden of proof is upon them to prove it.6 !n this case, the petitioners failed to

    dischar$e their burden hence, petitioners are not entitled to dama$es from respondent C3.

    !t appears that 'ar#ue acted not onl% as real estate broker for the petitioners but also as their a$ent. 8s

    $leaned from the letter of 'ar#ue to Glanville, on Februar% &, he confirmed, for and in behalf of the

    petitioners, that the latter had accepted such offer to sell the land and the improvements thereon. :o)ever, )e

    a$ree )ith the rulin$ of the appellate court that 'ar#ue had no authorit% to bind respondent C3 to sell the

    sub2ect properties. 8 real estate broker is one )ho ne$otiates the sale of real properties. :is business,

    $enerall% speakin$, is onl% to find a purchaser )ho is )illin$ to bu% the land upon terms fi"ed b% the o)ner. :ehas no authorit% to bind the principal b% si$nin$ a contract of sale. !ndeed, an authorit% to find a purchaser of

    real propert% does not include an authorit% to sell.&

    C#uall% barren of merit is petitioners contention that respondent C3 is estopped to den% the e"istence of a

    principal-a$enc% relationship bet)een it and Glanville or +elsau". For an a$enc% b% estoppel to e"ist, the

    follo)in$ must be established 415 the principal manifested a representation of the a$ents authorit% or

    kno)lin$l% allo)ed the a$ent to assume such authorit% 4 8n a$enc% b% estoppel, )hich is similar to the doctrine of apparent authorit%, re#uires proof of

    reliance upon the representations, and that, in turn, needs proof that the representations predated the actiontaken in reliance.9Such proof is lackin$ in this case. !n their communications to the petitioners, Glanville and

    +elsau" positivel% and une#uivocall% declared that the% )ere actin$ for and in behalf of respondent CS83.

    7either ma% respondent C3 be deemed to have ratified the transactions bet)een the petitioners and

    respondent CS83, throu$h Glanville, +elsau" and 'ar#ue. (he transactions and the various communications

    inter se )ere never submitted to the ?oard of +irectors of respondent C3 for ratification.

    !7 !G:( OF 8 (:C FO*CGO!7G, the petition is +C7!C+ for lack of merit. 3osts a$ainst the petitioners.

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    G.R. No. L-31061 ((4t 15, 1956

    SULO NG $N "NC., plaintiff-appellant,

    vs.

    GREGOR"O RNET, "NC., RD"SE FR#S, "NC., NT"ONL TERORKS SEERGE

    UTHOR"T, HC"END CRETS, "NC, +) REG"STER OF DEEDS OF $ULCN, defendants-

    appellees.

    Hill & Associates Law Offices for appellant.

     Araneta, endo!a & "apa for appellee Gre#orio Araneta, $nc.

    Carlos, adaran#, Car%allo & alde! for "aradise Farms, $nc.

    Leopoldo . A%ellera, Arsenio '. a#pale & Raul G. (ernardo, Office of the Go)ernment Corporate Counsel

    for appellee *ational +aterwors & Sewera#e Authorit.

    Candido G. del Rosario for appellee Hacienda Caretas, $nc.

     

    NTON"O, J.:

    (he issue posed in this appeal is )hether or not plaintiff corporation 4non- stock ma% institute an action in

    behalf of its individual members for the recover% of certain parcels of land alle$edl% o)ned b% said members

    for the nullification of the transfer certificates of title issued in favor of defendants appellees coverin$ the

    aforesaid parcels of land for a declaration of Iplaintiffs members as absolute o)ners of the propert%I and the

    issuance of the correspondin$ certificate of title and for dama$es.

    On 8pril

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    such as (ransfer 3ertificate of (itle 7o. 90 issued in favor of Gre$orio 8raneta and 3armen Para$oa, )hich

    )as subse#uentl% cancelled b% (ransfer 3ertificate of (itle 7o. &/& in the name of Gre$orio 8raneta, !nc.,

    (ransfer 3ertificate of (itle 7o. 9>> issued in the name of, the 7ational ;ater)orks = Se)era$e 8uthorit%

    47;S85, (ransfer 3ertificate of (itle 7o. 9>6 issued in the name of :acienda 3aretas, !nc., and another

    transfer certificate of title in the name of aradise Farms, !nc., are therefore void. laintiff-appellant

    conse#uentl% pra%ed 415 that Ori$inal 3ertificate of (itle 7o. 66, as )ell as all transfer certificates of title

    issued and derived therefrom, be nullified 4

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    case, )hile venue the place of action. (here is no #uestion that respondent court has 2urisdiction over the

    case. (he venue of actions in the 3ourt of First !nstance is prescribed in Section

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    president of a corporation does not render the propert% )hich he o)ns or possesses the propert% of the

    corporation, since the president, as individual, and the corporation are separate similarities. 5 Similarl%,

    stockholders in a corporation en$a$ed in bu%in$ and dealin$ in real estate )hose certificates of stock entitled

    the holder thereof to an allotment in the distribution of the land of the corporation upon surrender of their stock

    certificates )ere considered not to have such le$al or e#uitable title or interest in the land, as )ould support a

    suit for title, especiall% a$ainst parties other than the corporation. 8

    !t must be noted, ho)ever, that the 2uridical personalit% of the corporation, as separate and distinct from the

    persons composin$ it, is but a le$al fiction introduced for the purpose of convenience and to subserve the ends

    of 2ustice. 9 (his separate personalit% of the corporation ma% be disre$arded, or the veil of corporate fiction

    pierced, in cases )here it is used as a cloak or cover for fraud or ille$alit%, or to )ork -an in2ustice, or )here

    necessar% to achieve e#uit%. 10

    (hus, )hen Ithe notion of le$al entit% is used to defeat public convenience, 2ustif% )ron$, protect fraud, or

    defend crime, ... the la) )ill re$ard the corporation as an association of persons, or in the case of t)o

    corporations, mer$e them into one, the one bein$ merel% re$arded as part or instrumentalit% of the other. 11 (he

    same is true )here a corporation is a dumm% and serves no business purpose and is intended onl% as a blind,

    or an alter e$o or business conduit for the sole benefit of the stockholders. 12 (his doctrine of disre$ardin$ the

    distinct personalit% of the corporation has been applied b% the courts in those cases )hen the corporate entit%is used for the evasion of ta"es 13 or )hen the veil of corporate fiction is used to confuse le$itimate issue of

    emplo%er-emplo%ee relationship, 1% or )hen necessar% for the protection of creditors, in )hich case the veil of

    corporate fiction ma% be pierced and the funds of the corporation ma% be $arnished to satisf% the debts of a

    principal stockholder. 1& (he aforecited principle is resorted to b% the courts as a measure protection for third

    parties to prevent fraud, ille$alit% or in2ustice. 16

    !t has not been claimed that the members have assi$ned or transferred )hatever ri$hts the% ma% have on the

    land in #uestion to the plaintiff corporation. 8bsent an% sho)in$ of interest, therefore, a corporation, like

    plaintiff-appellant herein, has no personalit% to brin$ an action for and in behalf of its stockholders or members

    for the purpose of recoverin$ propert% )hich belon$s to said stockholders or members in their personal

    capacities.

    !t is fundamental that there cannot be a cause of action )ithout an antecedent primar% le$al ri$ht conferred b%

    la) upon a person. 15 Cvidentl%, there can be no )ron$ )ithout a correspondin$ ri$ht, and no breach of dut% b%

    one person )ithout a correspondin$ ri$ht belon$in$ to some other person. 18 (hus, the essential elements of a

    cause of action are le$al ri$ht of the plaintiff, correlative obli$ation of the defendant, an act or omission of the

    defendant in violation of the aforesaid le$al ri$ht. 19 3learl%, no ri$ht of action e"ists in favor of plaintiff

    corporation, for as sho)n heretofore it does not have an% interest in the sub2ect matter of the case )hich is

    material and, direct so as to entitle it to file the suit as a real part% in interest.

    !!!

     8ppellant maintains, ho)ever, that the amended complaint ma% be treated as a class suit, pursuant to Section

    1< of *ule of the *evised *ules of 3ourt.

    !n order that a class suit ma% prosper, the follo)in$ re#uisites must be present 415 that the sub2ect matter of

    the controvers% is one of common or $eneral interest to man% persons and 4

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    @nder the first re#uisite, the person )ho sues must have an interest in the controvers%, common )ith those for

    )hom he sues, and there must be that unit% of interest bet)een him and all such other persons )hich )ould

    entitle them to maintain the action if suit )as brou$ht b% them 2ointl%. 21

     8s to )hat constitutes common interest in the sub2ect matter of the controvers%, it has been e"plained in Scott

    ). /onald  22 thus

    (he interest that )ill allo) parties to 2oin in a bill of complaint, or that )ill enable the court to

    dispense )ith the presence of all the parties, )hen numerous, e"cept a determinate number, is

    not onl% an interest in the #uestion, %ut one in common in the su%0ect atter of the suit1 ... a

    communit% of interest $ro)in$ out of the nature and condition of the ri$ht in dispute for,

    althou$h there ma% not be an% privit% bet)een the numerous parties, there is a common title out

    of )hich the #uestion arises, and )hich lies at the foundation of the proceedin$s ... KhereL the

    onl% matter in common amon$ the plaintiffs, or bet)een them and the defendants, is an interest

    in the uestion involved )hich alone cannot la% a foundation for the 2oinder of parties. (here is

    scarcel% a suit at la), or in e#uit% )hich settles a rinciple or applies a principle to a $iven state

    of facts, or in )hich a $eneral statute is interpreted, that does not involved a uestion in )hich

    other parties are interested. ... 4Cmphasis supplied 5

    :ere, there is onl% one part% plaintiff, and the plaintiff corporation does not even have an interest in the sub2ect

    matter of the controvers%, and cannot, therefore, represent its members or stockholders )ho claim to o)n in

    their individual capacities o)nership of the said propert%. 'oreover, as correctl% stated b% the appellees, a

    class suit does not lie in actions for the recover% of propert% )here several persons claim artnership of their

    respective portions of the propert%, as each one could alle$ed and prove his respective ri$ht in a different )a%

    for each portion of the land, so that the% cannot all be held to have !dentical title throu$h ac#uisition

    prescription. 23

    :avin$ sho)n that no cause of action in favor of the plaintiff e"ists and that the action in the lo)er court cannot

    be considered as a class suit, it )ould be unnecessar% and an !dle e"ercise for this 3ourt to resolve the

    remainin$ issue of )hether or not the plaintiffs action for reconve%ance of real propert% based uponconstructive or implied trust had alread% prescribed.

     833O*+!7GM, the instant appeal is hereb% +!S'!SSC+ )ith costs a$ainst the plaintiff-appellant.

    Fernando, C.'., (arredo, Auino and Concepcion, 'r., ''., concur.

     

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    7G.R. No. 12%51&. '+)(+r 2%, 2000

    RUF"N LU L"# petitioner , vs. COURT OF ELS, UTO TRUCK T$ CORORT"ON, SEEDD"STR"$UT"NG, "NC., CT"*E D"STR"$UTORS, LL"NCE #RKET"NG CORORT"ON, CT"ONCO#N, "NC. respondents.

    D E C " S " O N

    $UEN, J .:

    'a% a corporation, in its universalit%, be the proper sub2ect of and be included in the inventor% of the estate of adeceased personR

    etitioner disputes before us throu$h the instant petition for revie) on certiorari , the decisionK1L of the 3ourt of 8ppeals promul$ated on 1> 8pril 1996, in 38-G* S 7o. >61&, )hich nullified and set aside the orders dated0 Aul% 199/K,116&19 and /1>< and it is hereb% further ordered that the properties covered b% the same titlesas )ell as those properties b% 4sic5 (ransfer 3ertificate of (itle 7os. 619, 61

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     8lliance 'arketin$ ,!nc. ?lock , ot 6, +acca

    ?F :omes,

    araa#ue,

    'etro 'anila.

    N N N N

    Speed +istributin$ !nc. 910 ?arrio 7io$,

     8$uinaldo :i$h)a%,

    ?acoor, 3avite.

    N N N N

     8uto (ruck (?8 3orp.

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    I/. (hat the follo)in$ real properties, althou$h re$istered in the name of the above entities, )ereactuall% ac#uired b% astor M. im durin$ his marria$e )ith petitioner, to )it

    3orporation (itle ocation

    N N N N

    k. 8uto (ruck (3( 7o. 61&&, the crucial issue decided b% the re$ular court )as )hether thecorporation involved therein )as the mere e"tension of the decedent. 8fter findin$ in theaffirmative, the 3ourt ruled that the assets of the corporation are also assets of the estate.

    http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn12

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     8 readin$ of .+. 90

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    ;SectL held

    IN N N 8s a rule, the #uestion of o)nership is an e"traneous matter )hich the probate courtcannot resolve )ith finalit%. (hus, for the purpose of determinin$ )hether a certain propert%should or should not be included in the inventor% of estate properties, the robate 3ourt ma%pass upon the title thereto, but such determination is provisional, not conclusive, and is sub2ectto the final decision in a separate action to resolve title.I

    ;e reiterated the rule in PEREIRA vs. COURT OF APPEALS K19L

    http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn19

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    IN N N (he function of resolvin$ )hether or not a certain propert% should be included in theinventor% or list of properties to be administered b% the administrator is one clearl% )ithin thecompetence of the probate court. :o)ever, the courts determination is onl% provisional incharacter, not conclusive, and is sub2ect to the final decision in a separate action )hich ma% beinstituted b% the parties.I

    Further, in MORALES vs. CFI OF CAVITE K

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    modified in an appropriate ordinar% action, particularl%, )hen as in the case at bar, possessionof the propert% itself is in the persons named in the title. " " "I

     8 perusal of the records )ould reveal that no stron$ compellin$ evidence )as ever presented b% petitioner tobolster her bare assertions as to the title of the deceased astor M. im over the properties. Cven so, .+.1/

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    are mere dummies since the% have not actuall% contributed an% amount to the capital stock of the corporationand have been merel% asked b% the late astor M. im to affi" their respective si$natures thereon.

    !t is settled that a corporation is clothed )ith personalit% separate and distinct from that of the personscomposin$ it. !t ma% not $enerall% be held liable for that of the persons composin$ it. !t ma% not be held liablefor the personal indebtedness of its stockholders or those of the entities connected )ith it. KL

    *udimentar% is the rule that a corporation is invested b% la) )ith a personalit% distinct and separate from itsstockholders or members. !n the same vein, a corporation b% le$al fiction and convenience is an entit% shieldedb% a protective mantle and imbued b% la) )ith a character alien to the persons comprisin$ it.

    7onetheless, the shield is not at all times invincible. (hus, in FIRST P#ILIPPINE INTERNATIONAL AN$ vs.COURT OF APPEALS K

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    I8ffidavits are classified as hearsa% evidence since the% are not $enerall% prepared b% theaffiant but b% another )ho uses his o)n lan$ua$e in )ritin$ the affiants statements, )hich ma%thus be either omitted or misunderstood b% the one )ritin$ them. 'oreover, the adverse part% isdeprived of the opportunit% to cross-e"amine the affiants. For this reason, affidavits are$enerall% re2ected for bein$ hearsa%, unless the affiant themselves are placed on the )itnessstand to testif% thereon.I

     8s to the order K6L of the lo)er court, dated 1/ September 199/, the 3ourt of 8ppeals correctl% observed thatthe *e$ional (rial 3ourt, ?ranch 9 acted )ithout 2urisdiction in issuin$ said order (he probate court had noauthorit% to demand the production of bank accounts in the name of the private respondent corporations.

    HEREFORE, in vie) of the fore$oin$ dis#uisitions, the instant petition is hereb% +!S'!SSC+ for lack of meritand the decision of the 3ourt of 8ppeals )hich nullified and set aside the orders issued b% the *e$ional (rial3ourt, ?ranch 9, actin$ as a probate court, dated 0 Aul% 199/ and 1< September 199/ is 8FF!*'C+.

    SO ORDERED.

    http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn36http://sc.judiciary.gov.ph/jurisprudence/2000/jan2000/124715.html#_ftn36

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    G.R. No. 1&23%5 '()e 21, 2006

    UN"ON $NK OF THE H"L""NES, etitioner,

    vs.

    SS. LFREDO ONG ND SUSN ONG +) 'CKSON LEE, *espondents.

    + C 3 ! S ! O 7

    GRC", J.:

    ?% this petition for revie) under *ule / of the *ules of 3ourt, petitioner @nion ?ank of the hilippines 4@nion

    ?ank5 seeks to set aside the decision1 dated +ecember /,

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    !ssues havin$ been 2oined, trial follo)ed. On September 1 of the

    3ivil 3ode and notin$ that the evidence on record IpresentKsL a holistic combination of circumstances distinctl%

    characteried b% bad$es of fraud,I rendered 2ud$ment for @nion ?ank, the +eed of Sale e"ecuted on October

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    !!!. """ !7 F!7+!7G (:8( !( ;8S K*CSO7+C7(L CC ;:O :8S S@FF!3!C7(M *ODC7 (:8( (:C*C

    ;8S 8 D8!+ 87+ S@FF!3!C7( 3O7S!+C*8(!O7 FO* (:C S8C.

    !D. """ !7 7O( F!7+!7G (:8( A83HSO7 CC ;8S !7 ?8+ F8!(: ;:C7 :C @*3:8SC+ (:C

    *OC*(M.

    etitioner maintains, citin$ 3hina ?ankin$ 3orporation vs. 3ourt of 8ppeals,/ that the sale in #uestion, havin$

    been entered in fraud of creditor, is rescissible. !n the same breath, ho)ever, petitioner )ould fault the 38 for

    failin$ to consider that the sale bet)een the On$s and ee is presumed fraudulent under Section &0 of 8ct 7o.

    19/6, as amended, or the !nsolvenc% a). Claboratin$ on this point, petitioner states that the sub2ect sale

    occurred thirt% 405 da%s prior to the filin$ b% ?'3 of a petition for suspension of pa%ment before the SC3, thus

    renderin$ the sale not merel% rescissible but absolutel% void.

    ;e resolve to den% the petition.

    !n effect, the determinative issue tendered in this case resolves itself into the #uestion of )hether or not the

    On$-ee contract of sale partakes of a conve%ance to defraud @nion ?ank. Obviousl%, this necessitates an

    in#uir% into the facts and this 3ourt esche)s factual e"amination in a petition for revie) under *ule / of the

    *ules of 3ourt, save )hen, as in the instant case, a clash bet)een the factual findin$s of the trial court andthat of the appellate court e"ists,6 amon$ other e"ceptions.

     8s bet)een the contrastin$ positions of the trial court and the 38, that of the latter commends itself for

    adoption, bein$ more in accord )ith the evidence on hand and the la)s applicable thereto.

    Cssentiall%, petitioner anchors its case on 8rticle 1>1 of the 3ivil 3ode )hich lists as amon$ the rescissible

    contracts IK(Lhose undertaken in fraud of creditors )hen the latter cannot in an% other manner collect the claim

    due them.I

    3ontracts in fraud of creditors are those e"ecuted )ith the intention to pre2udice the ri$hts of creditors. (he%

    should not be confused )ith those entered into )ithout such mal-intent, even if, as a direct conse#uencethereof, the creditor ma% suffer some dama$e. !n determinin$ )hether or not a certain conve%in$ contract is

    fraudulent, )hat comes to mind first is the #uestion of )hether the conve%ance )as a %ona fide transaction or

    a trick and contrivance to defeat creditors.& (o creditors seekin$ contract rescission on the $round of fraudulent

    conve%ance rest the onus of provin$ b% competent evidence the e"istence of such fraudulent intent on the part

    of the debtor, albeit the% ma% fall back on the disputable presumptions, if proper, established under 8rticle 1>&

    of the 3ode.>

    !n the present case, respondent spouses On$, as the 38 had determined, had sufficientl% established the

    validit% and le$itimac% of the sale in #uestion. (he conve%in$ deed, a dul% notaried document, carries )ith it

    the presumption of validit% and re$ularit%. (oo, the sale )as dul% recorded and annotated on the title of the

    propert% o)ners, the spouses On$. 8s the transferee of said propert%, respondent ee caused the transfer of

    title to his name.

    (here can be no #uibblin$ about the transaction bein$ supported b% a valid and sufficient consideration.

    *espondent ees account, )hile on the )itness bo", about this an$le of the sale )as cate$orical and

    strai$htfor)ard. 8n e"cerpt of his testimon%

     8tt%. +e Aesus

    http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt4http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt4http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt5http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt6http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt7http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt8http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt4http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt5http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt6http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt7http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt8

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    ?efore %ou prepared the consideration of this formal offer, as standard operatin$ procedure of bu% and sell,

    )hat documents )ere preparedR

    """ """ """

    Aackson ee

     8. (here is a do)npa%ment.

    . 8nd ho) much )as the do)npa%mentR

     8.

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    (he e"istence of fraud or the intent to defraud creditors cannot plausibl% be presumed from the fact that the

    price paid for a piece of real estate is perceived to be sli$htl% lo)er, if that reall% be the case, than its market

    value. (o be sure, it is lo$ical, even e"pected, for contractin$ minds, each havin$ an interest to protect, to

    ne$otiate on the price and other conditions before closin$ a sale of a valuable piece of land. (he ne$otiatin$

    areas could cover various items. (he purchase price, )hile undeniabl% an important consideration, is doubtless

    onl% one of them. (hus, a scenario )here the price actuall% stipulated ma%, as a matter of fact, be lo)er than

    the ori$inal askin$ price of the vendor or the fair market value of the propert%, as )hat perhaps happened in

    the instant case, is not out of the ordinar%, let alone indicative of fraudulent intention. (hat the spouses On$

    ac#uiesced to the price of1

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    . ;ith such consideration 'r. ;itness and in the li$ht of the terms and conditions in the said Offer to

    urchase and +eed of 8bsolute Sale could %ou $ive %our opinion as to )hether the consideration is fair and

    reasonable.

    """ """ """

     8. ;ith our proposal of 1./ ' as compared no) to 1, of the 3ivil 3ode )hich the part% sufferin$ dama$e can avail of

    onl% )hen he has no other le$al means to obtain reparation for the same.1 !n net effect, the provision applies

    onl% )hen the creditor cannot recover in an% other manner )hat is due him.

    !t is true that respondent spouses, as suret% for ?'3, bound themselves to ans)er for the latters debt.

    7onetheless, for purposes of recoverin$ )hat the eventuall% insolvent ?'3 o)ed the bank, it behooved the

    petitioner to sho) that it had e"hausted all the properties of the spouses On$. !t does not appear in this case

    that the petitioner sou$ht other properties of the spouses other than the sub2ect Greenhills propert%. (he 38

    cate$oricall% said so. 8bsent proof, therefore, that the spouses On$ had no other propert% e"cept their

    Greenhills home, the sale thereof to respondent ee cannot simplisticall% be considered as one in fraud of

    creditors.

    http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt10http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt11http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt11http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt12http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt13http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt14http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt14http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt10http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt11http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt12http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt13http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt14

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    7either )as evidence adduced to sho) that the sale in #uestion peremptoril% deprived the petitioner of means

    to collect its claim a$ainst the On$s. ;here a creditor fails to sho) that he has no other le$al recourse to

    obtain satisfaction for his claim, then he is not entitled to the rescission asked.1/

    For a contract to be rescinded for bein$ in fraud of creditors, both contractin$ parties must be sho)n to have

    acted maliciousl% so as to pre2udice the creditors )ho )ere prevented from collectin$ their claims.16 8$ain, in

    this case, there is no evidence tendin$ to prove that the spouses On$ and ee )ere connivin$ cheats. !n fact,

    the petitioner did not even attempt to prove the e"istence of personal closeness or business and professional

    interdependence bet)een the spouses On$ and ee as to cast doubt on their true intent in e"ecutin$ the

    contract of sale. ;ith the vie) )e take of the evidence on record, their relationship vis-U-vis the sub2ect

    Greenhills propert% )as no more than one bet)een vendor and vendee dealin$ )ith each other for the first

    time. 8n% insinuation that the t)o colluded to $%p petitioner bank is to read in a relationship somethin$ )hich,

    from all indications, appears to be purel% business.

    !t cannot be overemphasied that rescission is $enerall% unavailin$ should a third person, actin$ in $ood faith,

    is in la)ful possession of the propert%,1& that is to sa%, he is protected b% la) a$ainst a suit for rescission b% the

    re$istration of the transfer to him in the re$istr%.

     8s recited earlier, ee )as - and ma% still be - in la)ful possession of the sub2ect propert% as the transfer tohim )as b% virtue of a presumptivel% valid onerous contract of sale. :is possession is evidenced b% no less

    than a certificate of title issued him b% the *e$istr% of +eeds of San Auan, 'etro 'anila, after the usual

    re$istration of the correspondin$ conve%in$ deed of sale. On the other hand, the bona fides of his ac#uisition

    can be deduced from his conduct and out)ard acts previous to the sale. 8s testified to b% him and dul% noted

    b% the 38, respondent ee undertook )hat amounts to due dili$ence on the possible defects in the title of the

    On$s before proceedin$ )ith the sale. 8s it )ere, ee decided to bu% the propert% onl% after bein$ satisfied of

    the absence of such defects.1>

    (ime and a$ain, the 3ourt has held that one dealin$ )ith a re$istered parcel of land need not $o be%ond the

    certificate of title as he is char$ed )ith notice onl% of burdens )hich are noted on the face of the re$ister or on

    the certificate of title.19 (he 3ontinuin$ Suret% 8$reement, it ou$ht to be particularl% pointed out, )as neverrecorded nor annotated on the title of spouses On$. (here is no evidence e"tant in the records to sho) that

    ee had kno)led$e, prior to the sub2ect sale, of the suret% a$reement adverted to. !n fine, there is nothin$ to

    remotel% su$$est that the purchase of the sub2ect propert% )as characteried b% an%thin$ other than $ood

    faith.

    etitioner has made much of respondent ee not takin$ immediate possession of the propert% after the sale,

    statin$ that such failure is an indication of his participation in the fraudulent scheme to pre2udice petitioner

    bank.

    ;e are not persuaded.

    ee, it is true, allo)ed the respondent spouses to continue occup%in$ the premises even after the sale. (his

    development, ho)ever, is not )ithout basis or practical reason. (he spouses continuous possession of the

    propert% )as b% virtue of a one-%ear lease

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    the same cannot be said here in the li$ht of the e"istence of )hat appears to be a $enuine lessor-lessee

    relationship bet)een the spouses On$ and ee. (o borro) from *e%es vs. 3ourt of 8ppeals,

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    etitioner avers that the On$-ee sales contract partakes of a fraudulent transfer and is null and void in

    contemplation of the afore#uoted provision, the sale havin$ occurred on October /< Aune 1&,

    *"RG"L"O S. DEL"# 4. SUSN #ERC"D GO"S"ECISION 

      NRES-SNT"GO, J .

    http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt24http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt24http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt25http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt25http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt24http://www.lawphil.net/judjuris/juri2006/jun2006/gr_152347_2006.html#fnt25

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    (his petition for revie) under *ule / of the *ules of 3ourt assails the +ecember

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    Filed b% (hird art% 3laimant S@S87 '. GO!S is a 'otion to *elease 'otor Dehicleafter substitutin$ same )ith a cash bond of 11/,/61.0/ under O.*. 7o. >0&06 )hich amountis e#uivalent to the 2ud$ment a)ard in the instant case, in the meantime that she has appealedthe Order den%in$ her (hird art% 3laim.

     Findin$ said 'otion in order and )ith merit, Sheriff Felicisimo (. ?asilio is directed to

    release from his custod% the !suu 2eep )ith late 7o. GC-/< and return same to S@S87 '.GO!S.

     

    SO O*+C*C+.K6L

     'ean)hile, on 'a% 1,

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    abor *elations 3ommission 47*35, th +ivision in 7*3 3ase 7o. D-0001>>-

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     !n the instant case, it is undisputed that )hen the entr% of 2ud$ment )as issued b% the 7*3

    on September 1

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    #O$"L" RODUCTS, "NC., "etitioners, ). H'"#E U#E!, Respondent .

    7G.R. NO. 1%9%03. #+rc= 0%, 200&

    EOLE OF THE H"L""NES, "etitioners, ). HON. 'UDGE RU#OLDO R. FERNNDE! +) H'"#E

    U#E!, Respondents.

    D E C " S " O N

    CLLE'O, SR., J .

    ?efore the 3ourt are t)o consolidated petitions a etition for *evie) on Certiorari  filed b% the eople of the

    hilippines, docketed as G.*. 7o. 190 of the *esolution1 of the 3ourt of 8ppeals 4385 in 38-G.*. S 7o.

    /

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    )ith his )ife, his sister 'itsu%o Ma$uchi, Moshikau :a%ano and Austin e$aspi, all )ith intent to $ain for

    themselves and for their compan% 8stem hilippines 3orporation, stole protot%pe furniture from petitioner

    'obilia so that the said pieces of furniture )ould be presented and e"hibited as belon$in$ to 8stem in the

    !nternational Furniture Fair 9/ in Sin$apore.

    !n order to avoid detection, @mea)a contacted :enr% 3hua, the o)ner of +e) Foam, one of the suppliers of

    'obilia, for that the latter to load several pieces of protot%pe furniture into a +e) Foam truck and store them at

    the +e) Foam )arehouse. (he first batch of furniture )as stolen on Februar% >, 199/, )hen 'r. :enr% 3hua,

    upon the re#uest of respondent @mea)a, caused to be loaded into his +e) Foam truck t)o protot%pe sofa

    models )orth /00,000.00, after )hich, the same )ere spirited from the 'obilia compound, then transported

    and stored in :enr% 3huas )arehouse.

     8$ain, on Februar% 1>, 199/, @mea)a, )ith $rave abuse of confidence and takin$ advanta$e of his position

    as resident and General 'ana$er, unla)full% stole e"pensive furniture from 'obilias factor%

    )orth &/.00. !n order to avoid detection, the said furniture )ere loaded in the truck belon$in$ to +e)

    Foam, )ith respondent @mea)a personall% supervisin$ the loadin$, the cartin$ and spiritin$ a)a% of the said

    furniture. (hus, takin$ advanta$e of his position as General 'ana$er, he mana$ed to have the said furniture

    taken out of the compan% premises and passed the compan% $uard )ithout an% problem and difficult%.

    Further, on Februar% 19, 199/, around 1 oclock in the afternoon, respondent @mea)a a$ain loaded into his

    motor vehicle, and took a)a% from compan% premises under the same irre$ular and unla)ful circumstances,

    an e"pensive three-seater sofa )orth95 pieces of furniture )ith a total value of 1&,10>,/00.00. (he said pieces of

    furniture )ere made )ith 'obilia supplies, materials and machineries, as )ell as )ith 'obilia time and

    personnel, all of )hich )ere under the administration and control of @mea)a as resident and General

    'ana$er. (he said materials and supplies, the time and labor, )ere supposed to be used for the manufacture

    and production of #ualit% furniture for the CN3@S!DC @SC of 'obilia. :o)ever, @mea)a, in violation of his

    dut% to appl% the same for the use of 'obilia and the dut% to account for the same, converted their use for thebenefit of 8stem or for the use and benefit of @mea)a, his )ife and sister, Moshikau :a%ano and e$aspi,

    much to the dama$e and pre2udice of 'obilia roducts.

    (he same furniture could also have been taken out of the compan% premises b% @mea)a and cohorts for

    shipment and deliver% to 8stem customers had it not been for the timel% discover% of the previous theft. <

    (he ?oard of +irectors of '!, consistin$ of its 3hairman Susumo Hodaira and members Masushi Hato and

    *olando 7onato, approved a *esolution on 'a% and 19, 199/. 8ttached to the complaint

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    )as the Aoint 8ffidavit of +anilo allaban, Geor$e del *io and Masushi Hato. (he case )as docketed as !.S.

    7o. 9/-

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    105 < pieces, 'odel edestal

    7o. 6, !talian marble pedestal, )orth - - - - - - - - - - - - - 1/0,000.00

    115 1 piece, 'odel 3olumn

    Standard 7o. 11, !talian marble )orth - - - - - - - - - - - - 9,&/0.00

    1&,/00.00

    15 1 piece, 'odel (able 7o. >,

    !talian marble table, )orth - - - - - - - - - - - - - - - - - - - - 1>&,/00.00

    1/5 1 piece, 'odel (able 7o. &

    !talian marble table, )orth - - - - - - - - - - - - - - - - - - - - 1>&,/00.00

    165 1 piece, 'odel (able 7o. /

    !talian marble table, )orth - - - - - - - - - - - - - - - - - - - - 11

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    On Aul% ,/00.005 esos, hilippine 3urrenc%, )hich )as the total

    value of the furnitures ordered and manufactured b% the accused or at his instance usin$ 'obilia supplies,

    materials and machineries, as )ell as time and personnel )hich )ere supposed to be for the e"clusive use of

    'obilia roducts, !nc. but )ere converted for the use and benefit of the accused and 8stem hilippines

    3orporation, a compan% or firm en$a$ed in the same business as that of 'obilia roducts, !nc., )hich is, KinL

    the manufacture and production of #ualit% furniture for e"port, o)ned b% the accused, to the dama$e and

    pre2udice of 'obilia roducts, !nc.

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    3O7(*8*M (O 8;./

    On 8pril

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    c. (he accused could not claim o)nership nor co-o)nership of the properties of private complainant

    corporation.9

    (he '! maintained that the trial court had 2urisdiction over the cases and cited Section / of residential

    +ecree 4.+.5 7o. 90

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    properties does not ipso facto ne$ate the 2urisdiction of the *(3 over the criminal cases under ?.. ?l$. 1,

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    . (:C 3O@*( OF 8C8S 3O''!((C+ ?8(87( 87+ SC*!O@S C**O*S OF 8; !7 F!7+!7G (:8(

    (:C SC3@*!(!CS 87+ CN3:87GC 3O''!SS!O7 4SC35 :8S A@*!S+!3(!O7 ODC* (:C S@?AC3(

    3*!'!78 38SCS

    . (:C 3O@*( OF 8C8S 3O''!((C+ SC*!O@S C**O*S OF 8; 87+ G*8DC 8?@SC OF

    +!S3*C(!O7 !7 G!D!7G +@C 3O@*SC (O (:C *O-FO*'8 'O(!O7 FO* *C3O7S!+C*8(!O7 OF

    @'CP8;8.1

    (he t)o petitions )ere consolidated in the Second +ivision of the 3ourt.

    (he threshold issues for resolution are the follo)in$ 4a5 )hether or not the etition for Certiorari  of the eople

    of the hilippines in the 38 assailin$ the Aanuar%

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    Sandi#an%aan,1> )e held that under Section 16, *ule 110 of the *ules of 3riminal rocedure, the offended

    part% ma% intervene in the criminal action personall% or b% counsel, )ho )ill then act as private prosecutor for

    the protection of his interests and in the interest of the speed% and ine"pensive administration of 2ustice. 8

    separate action for the purpose )ould onl% prove to be costl%, burdensome and time-consumin$ for both

    parties and further dela% the final disposition of the case. (he multiplicit% of suits must be avoided. ;ith the

    implied institution of the civil action in the criminal action, the t)o actions are mer$ed into one composite

    proceedin$, )ith the criminal action predominatin$ the civil. (he prime purpose of the criminal action is to

    punish the offender in order to deter him and others from committin$ the same or similar offense, to isolate him

    from societ%, reform and rehabilitate him or, in $eneral, to maintain social order .19

    (he intervention of the private offended part%, throu$h counsel, and his prosecution of the case shall be under

    the control and supervision of the public prosecutor until the final termination of the case. 8 public prosecutor

    )ho has been entrusted b% la) )ith the prosecution of criminal cases is dut%-bound to take char$e thereof unti

    its final termination, for under the la), he assumes full responsibilit% for his failure or success since he is the

    one more ade#uatel% prepared to pursue it to its termination.

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    (he public and private prosecutors are not precluded, )henever feasible, from filin$ a 2oint motion for the

    reconsideration of the dismissal of the case or the ac#uittal of the accused, on the criminal and civil aspects of

    the cases.

    !n the present case, onl% petitioner '!, throu$h counsel, filed a motion for the reconsideration of the trial

    courts Aoint Order dated Aanuar%

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    (he 3ourt also held in Chua ). Court of Appeals0

    ;hile ordinaril%, certiorari  is unavailin$ )here the appeal period has lapsed, there are e"ceptions. 8mon$ them

    are 4a5 )hen public )elfare and the advancement of public polic% dictates 4b5 )hen the broader interest of

     2ustice so re#uires 4c5 )hen the )rits issued are null and void or 4d5 when the uestioned order amounts to an

    oppressi)e e2ercise of 0udicial authorit . - 1

    On the second issue, the petitioners assert that the 38 erred in holdin$ that the dispute bet)een it and the

    respondent is intra-corporate in nature hence, )ithin the e"clusive 2urisdiction of the SC3. 8s $leaned from the

    material alle$ations of the !nformations, the *(3 had e"clusive 2urisdiction over the crimes char$ed. etitioner

    '! further avers that even if there is no alle$ation in the !nformations identif%in$ it as the o)ner of the

    personal properties described in the !nformations, its o)nership of the properties can be inferred from the other

    alle$ations. (he petitioners maintain that even if the !nformations are deficient, the remed% is the amendment

    of the !nformations and not the dismissal of the cases.

    For his part, the respondent avers that the assailed *esolution of the 38 is correct, and that it is the appellate

    courts decision )hich is erroneous.

    ;e a$ree )ith the petitioners.

     8ccordin$ to Section

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    !n criminal prosecutions, it is settled that the 2urisdiction of the court is not determined b% )hat ma% be meted

    out to the offender after trial or even b% the result of the evidence that )ould be presented at the trial, %ut  b%

    the e2tent of the penalt which the law imposes for the misdemeanor, crime or violation char$ed in the

    complaint. !f the facts recited in the complaint and the punishment pro)ided for % law  are sufficient to sho)

    that the court in )hich the complaint is presented has 2urisdiction, that court must assume 2urisdiction.

    !n 3riminal 3ase 7o. 01

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    corporation. 3he corporation has propert of its own which consists chiefl of real estate ;*elson ). Owen, < So. =:1 orrow ). Gould, -A pro)ides that the S4C 7 shall ha)e ori#inal and e2clusi)e 0urisdiction to hear and

    decide cases in)ol)in# the followin#9

    ;a? de)ices or schemes emploed %, or an acts of, the %oard of directors, %usiness associates, its officers or

     partners, amountin# to fraud and misrepresentation which ma %e detrimental to the interest of the pu%lic

    andor of the stocholders, partners, mem%ers of association or or#ani!ations re#istered with the Commission,

    and 

    ;%? contro)ersies arisin# out of intra-corporate or partnership relations, %etween and amon# stocholders,mem%ers or associates1 %etween an or all of them and the corporation, partnership or association of which

    the are stocholders, mem%ers or associates, respecti)el.

    $n Fa%ia ). Court of Appeals,8D  the Court e2plained that Section : of "./. *o. D>-A should %e taen in

    con0unction with Section of the law. $t then proceeded to e2plain9

    $n snthesis, Sec. : of "/ D>-A mandates that cases in)ol)in# fraudulent actions and de)ices which are

    detrimental to the interest of stocholders, mem%ers or associates and directors of the corporation are within

    the ori#inal and e2clusi)e 0urisdiction of the S4C. 3aen in con0unction with Sec. of the same law, it will %e

    #athered that the fraudulent actsschemes which the S4C shall e2clusi)el in)esti#ate and prosecute are

    those Ein )iolation of an law or rules and re#ulations administered and enforced % the CommissionE alone.

    3his in)esti#ati)e and prosecutorial powers of the S4C are further Ewithout pre0udice to an lia%ilit for )iolation

    of an pro)ision of 3he Re)ised "enal Code.E 

    From the fore#oin#, it can thus %e concluded that the filin# of the ci)ilintra-corporate case %efore the S4C

    does not preclude the simultaneous and concomitant filin# of a criminal action %efore the re#ular courts1 such

    that, a fraudulent act ma #i)e rise to lia%ilit for )iolation of the rules and re#ulations of the S4C co#ni!a%le %

    the S4C itself, as well as criminal lia%ilit for )iolation of the Re)ised "enal Code co#ni!a%le % the re#ular

    courts, %oth char#es to %e filed and proceeded independentl, and ma %e simultaneousl with the other. 8

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    3hus, the filin# of a petition in the S4C for the nullification of the Resolution of a >,   3hus, notwithstandin# the fact that respondent

    5me!awa was the president and #eneral mana#er of petitioner "$ and a stocholder thereof, the latter ma

    still %e prosecuted for the crimes char#ed. 3he alle#ed fraudulent acts of respondent 5me!awa in this case

    constitute the element of a%use of confidence, deceit or fraudulent means, and dama#e under Article 7-A, the law re-or#ani!in# the Securities and 42chan#e Commission. 3he %etter polic in

    determinin# which %od has 0urisdiction o)er a case would %e to consider not onl the relationship of the

     parties %ut also the nature of the uestions raised in the su%0ect of the contro)ers .88

    On the last issue, we find and so hold that the $nformations state all the essential elements of estafa and

    ualified theft. $t was adeuatel alle#ed that respondent 5me!awa, %ein# the "resident and General ana#erof petitioner "$, stole and misappropriated the properties of his emploer, more specificall, petitioner "$.

     As e2postulated % the CA in its decision9

    @$n an e)ent, the alle#ations in the informations, if hpotheticall admitted, are sufficient to %ind 5me!awa to

    the char#es of ualified theft and estafa. As aptl ruled % the court a uo in its Order of 'ul >:,

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    does not materiall affect either the informations filed a#ainst 5me!awa or the pendin# criminal proceedin#s.

     As petitioners contend, the action is now %etween the "eople of the "hilippines and herein pri)ate

    respondent.8: 

    IN LI%#T OF ALL T#E FORE%OIN%, the petitions are GRA*34/. 3he Resolution of the Court of Appeals in

    CA-G.R. S" *o. :>88D dated Au#ust B, >DD< is R44RS4/ and S43 AS$/4. 3he /ecision of the Court of

     Appeals dated Septem%er >,

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    7G.R. No. 1%3312. ((4t 12, 200&

    R"CRDO S. S"L*ER"O, 'R., ESSES DE*ELO#ENT CORORT"ON, +) TR"-STR FR#S"NC., petitioners, vs. F"L""NO $US"NESS CONSULTNTS, "NC., respondent .

    D E C " S " O N

    CR"O, J .:

    T=e C+4e

    ?efore us is a petition for revie) of the Order of the *e$ional (rial 3ourt, Fourth Audicial *e$ion, ?ranchN!, ?ala%an, ?atan$as 4W*(3 ?ala%anX5 dated

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    On 1 8pril 1999, the *(3 ?ala%an modified its +ecember 199> Order b% upholdin$ F?3!s possessionof the 3alata$an ropert%. (he *(3 ?ala%an ruled that F?3! could not be deprived of possession of the3alata$an ropert% because F?3! made substantial improvements on it. ossession could revert to SilverioAr., Csses and (ri-Star onl% if the% reimburse F?3!. (he *(3 ?ala%an $ave Silverio, Ar., Csses and (ri-Star 1/da%s to file their responsive pleadin$s.

    Silverio, Ar., Csses and (ri-Star moved for the partial reconsideration of the 1 8pril 1999 Order. Silverio,Ar., Csses and (ri-Star ar$ued that since the 2ud$ment b% default )as nullified, the% should be restored to theirpossession of the 3alata$an ropert%. F?3! did not file an% opposition to the motion.

    On 9 7ovember 1999, the *(3 ?ala%an reversed its 1 8pril 1999 Order b% holdin$ that Silverio, Ar.,Csses and (ri-Star had no dut% to reimburse F?3!. (he *(3 ?ala%an pointed out that F?3! offered noevidence to substantiate its claim for e"penses. (he 9 7ovember 1999 Order also restored possession of the3alata$an ropert% to Silverio, Ar., Csses and (ri-Star pursuant to *ule 9, Section / of the 199& *ules of 3ivirocedure. (his provision provides for restitution in case of reversal of an e"ecuted 2ud$ment. On & Aanuar% 'a%

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    !

     8n e2 parte motion cannot le$all% constitute an initiator% basis for the *(3 ?ala%an to conduct additionalhearin$s in order to validate certain ne) alle$ations. 7either can said e2 parte motion be the basis for thesuspension of a )rit of possession bein$ implemented.

    !!

    ;hen the *(3 ?ala%an suspended the )rit of possession, it )as barred from hearin$ intra-corporate disputes. 8nd thou$h 3on$ress has no) amended our la) on the matter, the *(3 still cannot proceed because of dueprocess and res 0udicata reasons.

    !!!

     8 final and e"ecutor% 2ud$ment cannot be en2oined e"cept b% an appropriate petition for relief, a direct attackin another action or a collateral act in another action.

    !D

    *espondent F?3! is askin$ for a suspension of the )rit of possession )hile at the same time threatenin$

    violence if the )rit of possession )ere to be implemented. (he *(3 ?ala%an had no la)ful basis to suspendthe )rit under these admitted circumstances.

    D

    *espondent has not directl% ans)ered petitioners le$al theor%. (he petition is founded on admitted facts upon)hich relief is sou$ht under *ule /. *espondent has altered these facts Q presentin$ its so calledWcounterstatements of facts and issuesX Q )hich involve #uestions of fact that are still litis pendentia at the *(3?ala%an. 8nd )hich even involve an attempt to var% res 0udicata.

    D!

    3ontrar% to respondents claims, that the *(3 order of 1/ Aune

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    *espondents ar$uments in his 11-06-01 'emo Q on 4a5 Wforum shoppin$X, 4b5 Wpetitioners lack of capacit% tosueX, 4c5 Wservice of summons alread% servedX 4d5 Wno intra-corporate disputeX and 4e5 Wthe relief hereinpreempted b% eventsX Q are ratiocinations of miniscule )ei$ht, meritin$ onl% the sli$htest comment. K6L

    F?3! raises the follo)in$ issues

    1. ;hether the present case has been rendered moot and academic b% the Order of the *(3 ?ala%andated 1/ Aune

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    T=

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    !n this case, there is no 2ud$ment on the merits, onl% a 2ud$ment on a technicalit%. Cven then, the 2ud$ment of default rendered in F?3!s favor )as voided because the *(3 ?ala%an did not ac#uire 2urisdictionover Silverio, Ar., Csses and (ri-Star due to a fraudulent service of summons. (he case for consolidation oftitle, from )hich this petition stemmed, is in fact still bein$ liti$ated before the *(3 ?ala%an.

    (he issuance of the )rit of possession in favor of Silverio, Ar., Csses and (ri-Star is also not a 2ud$ment onthe merits.K, /6 So.,

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    interest in Csses and (ri-Stars corporate properties that is onl% e#uitable or beneficial in nature. Cvenassumin$ that F?3! is the controllin$ shareholder of Csses and (ri-Star, it does not le$all% make it the o)ner ofthe 3alata$an ropert%, )hich is le$all% o)ned b% Csses and (ri-Star as distinct 2uridical persons. 8s suchF?3! is not entitled to the possession of an% definite portion of the 3alata$an ropert% or an% of Csses and (ri-Stars properties or assets. F?3! is not a co-o)ner or tenant in common of the 3alata$an ropert% or an% ofCsses and (ri-Stars corporate properties.

    ;e see no reason )h% the e"ecution of the )rit of possession has been lon$ dela%ed. ossession of the3alata$an ropert% must be restored to Csses and (ri-Star throu$h their representative, Silverio, Ar. (here is

    no proof on record that Silverio, Ar. has ceased to be the representative of Csses and (ri-Star in this case.HEREFORE, )e G*87( the petition. (he *e$ional (rial 3ourt, ?ranch N!, ?ala%an, ?atan$as is

    ordered to immediatel% e"ecute the )rit of possession in 3ivil 3ase 7o. /6 in favor of Csses +evelopment3orporation and (ri-Star Farms, !nc. throu$h their representative, *icardo S. Silverio, Ar. 7o costs.

    SO ORDERED.

    /a)ide, 'r., C.'., ;Chairman?, 6uisum%in#, Inares-Santia#o, and A!cuna, ''., concur .