Lee v. Lui Yick Fong

THIRD DIVISION

[G.R. No. 202814. July 10, 2017.]

TERESITA S. LEE, petitioner,vs. LUI YICK FONG, RIGOBERTO D. GALLARDO, JASON R. BARLIS, DELLA V. ROMERO, AND ARIANNA K. SANTOS A.K.A. ARIANNA KINGKINGAN, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution datedJuly 10, 2017, which reads as follows:

"G.R. No. 202814 (Teresita S. Lee, Petitioner, v. Lui Yick Fong, Rigoberto D. Gallardo, Jason R. Barlis, Della V. Romero, and Arianna K. Santos a.k.a. Arianna Kingkingan, Respondents). — This is a Petition for Review on Certiorari1 under Rule 45, assailing the Resolution 2 of the Court of Appeals (CA) dated January 12, 2012 in CA-G.R. SP No. 122207 entitled Pines Commercial Corporation, represented by its President Teresita S. Lee v. Lui Yick Fong, Rigoberto D. Gallardo, Jason R. Barlis, Della V. Romero, and Arianna K. Santos a.k.a. Arianna Kingkingan, which dismissed therein petitioner's Petition for Review under Rule 43 for being the wrong mode of appeal. The CA's Resolution 3 dated July 24, 2012, denying therein petitioner's motion for reconsideration, is likewise impugned herein. ICHDca

The Facts

The instant petition stems from a Complaint for Annulment of Document, Injunction, Recovery of Possession, Accounting, and Damages filed by petitioner, representing Pines Commercial Corporation (PCC) as its alleged President, with an application for the issuance of a Temporary Restraining Order (TRO) against respondents, for the latter to be restrained from acting as directors and officers of PCC. 4

This case was docketed as Civil Case No. 6415-R, initially raffled to Branch 6 of the Regional Trial Court (RTC) of Baguio City. 5 Upon motion by the respondents to transfer the case to the special commercial court on the ground that the dispute involves an intra-corporate controversy, the case was transferred to Branch 59, which is the special commercial court designated in Baguio City. 6 On August 3, 2010, respondents filed an Urgent Motion for Inhibition as they found out that Branch 59 was admittedly receiving information in connection with the case, from sources that are not coursed through the judicial proceedings. 7 This, according to the respondents, puts into serious question the impartiality of the said court in resolving the dispute. Hence, the case was transferred to Branch 7, as the pairing court of Branch 59, the special commercial court. 8

Proceedings before the RTC

In an Order dated November 8, 2011, the RTC dismissed Civil Case No. 6415-R for failure to state a cause of action. 9

In the main, the RTC found that petitioner has no authority to sue the respondents on behalf of the corporation. The Court found that the complaint contains a dubious statement as regards the status of a certain Conrado Romero being PCC's majority stockholder, owning 92% of the shareholdings, as of February 2006 when said Romero already died on January 17, 2006. According to the court, considering the death of the corporation's majority stockholder, there could not have been any meeting or election of new officers for lack of quorum. The Court also found that the General Information Sheet (GIS) submitted by the petitioner appears to be dubious considering that while it states that the corporation's actual meeting was held on February 8, 2005, the GIS was executed by Milagros Lee, the alleged corporate secretary, on January 24, 2006 only, or seven days after the death of Romero. 10

There was also a finding that upon investigation of the National Bureau of Investigation (NBI), the signatures of Romero on the stock certificates purportedly transferred to the petitioner and her siblings were forgeries. 11

It was also found that upon Romero's submission of an affidavit of non-operation of the corporation to the Securities and Exchange Commission (SEC), the SEC revoked PCC's registration on August 11, 2003. 12

These circumstances led the RTC to rule that petitioner, indeed, has no capacity to sue the respondents on behalf of the corporation. As petitioner's stock certificates are falsified documents, the RTC concluded that no intra-corporate dispute exists in Civil Case No. 6415-R, hence, the special commercial court has no jurisdiction over the case. The RTC ruled in its November 8, 2011 Order, thus:

WHEREFORE, the prayer for the dismissal of Civil Case No. 6415-R is hereby GRANTED and the said case is accordingly ordered DISMISSED. x x x.

xxx xxx xxx

SO ORDERED. 13

On November 15, 2011, PCC, represented by the petitioner as its alleged President, filed a Notice of Appeal 14 from the said RTC Order, which was given due course by the RTC in its Order 15 dated November 28, 2011. In the said Order, the RTC also directed the Branch Clerk of Court to forward the records of the case to the CA.

On November 25, 2011, PCC, again represented by the petitioner as its alleged President, filed a Petition for Review under Rule 43, 16 also questioning the November 8, 2011 Order of the RTC.

Proceedings before the CA

In the Petition for Review under Rule 43 filed before the CA, petitioner averred, among others, in its certification against non-forum shopping the following:

a. It has not heretofore commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal agency; TCAScE

b. (T)o the best of my knowledge, no such action or proceeding is ending in the Supreme Court, the Court of Appeals, or any other tribunal agency except for the Petition for Review on Certiorari under Rule 45 field before the Supreme Court by Petitioner herein with Case No. SC-G.R. No. 199021 (CA-G.R. No. 115447) which is between the same parties and the Honorable Presiding Judge of RTC 59, Baguio City but involves different issues;

c. If it should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or any other tribunal agency, it undertakes to report such fact within five (5) days therefrom to this Honorable Court. A Notice of Appeal and payment of the Appellate Court Docket and other lawful fees have earlier been done, but this Petition for Review is being pursued within the reglementary period pursuant to A.M. No. 04-9-07-SC.17(emphasis supplied)

The said Petition for Review under Rule 43 questioned the RTC Order on its merits, viz.: (1) the grant of respondents' motion to dismiss Civil Case No. 6415-R when such motion is a prohibited pleading in an intra-corporate case proceedings; (2) the dismissal of Civil Case No. 6415-R on the ground that petitioner and her siblings are not stockholders of the corporation. 18

In its assailed Resolution dated January 12, 2012, the CA dismissed the petition, ruling that:

However, the aforesaid Order was rendered by the RTC in the exercise of its original jurisdiction hence, the appropriate mode of appeal is ordinary appeal. Thus, a notice of appeal under Rule 41, Section 2 (a) of the Rules of Court should have been filed with the lower Court instead of a Petition for Review.

IN VIEW OF THE FOREGOING, being the wrong mode of appeal, the Petition is hereby DISMISSED.

SO ORDERED. 19

Petitioner filed two motions for reconsideration, which were denied by the CA in this wise:

This Court anchored its order of dismissal on the findings of the lower court, to wit:

Consequently, no intra-corporate relationships exists (sic) in Civil Case No. 6415-R that could serve as basis to bring said case with the special commercial court's jurisdiction under Section 5 (b) of PD 902-A, as amended.

Subsequent pleadings of herein parties reveal that on November 15, 2011, petitioner filed a Notice of Appeal before the lower court and paid the corresponding appeal fee. Consequently, the Notice of Appeal was given due course. With this development, all is not lost for the petitioner. It has correctly availed itself of the proper remedy.

WHEREFORE, premises considered, the Motions for Reconsideration are hereby DENIED.

SO ORDERED. 20

This Petition for Review under Rule 45

Notably, this petition was filed by petitioner in her personal capacity as a stockholder. Petitioner argues that the CA erred in dismissing the Petition Review under Rule 43 for being a wrong mode of appeal. Petitioner invokes Administrative Matter No. 04-9-07-SC, 21 which states that "all decisions and final orders in cases falling under the Interim Rules of Corporate Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799 shall be appealable to the Court of Appeals through a petition for review under Rule 43 of the Rules of Court." Essentially, the petitioner argues that the case involves an intra-corporate controversy. Thus, the petitioner prays for the reinstatement of the dismissed Civil Case No. 6415-R to the special commercial court.

In their Comment 22 to the petition, respondents raised the issue on petitioner's lack of legal personality to file this petition. Respondents argue that a mere stockholder cannot file a suit on behalf of the corporation. The respondents also argue that the petitioner is guilty of forum shopping as this case is an appeal from the CA Resolution, which reviewed the RTC Order dismissing Civil Case No. 6415-R, while there is also an ordinary appeal filed by the petitioner before the CA.

Our Ruling

We deny the petition.

First. Petitioner, in her personal capacity as a stockholder, is not the proper party to file the instant petition. The respondents correctly pointed out that this petition is an appeal from the CA Resolution, subject of which was the RTC Order dismissing Civil Case No. 6415-R. It is important to emphasize that the parties in the said civil case, as well as in the case before the CA, are the corporation, represented by the petitioner as its alleged President, and the respondents. Thus, the aggrieved party in the dismissal of the civil case is the corporation, not the petitioner as a stockholder.

Section 36 23 of the Corporation Code, reads: in relation to Section 23, 24 where a corporation is an injured party, its power to sue is lodged with its board of directors or trustees. 25 An individual stockholder is permitted to institute a derivative suit on behalf of the corporation wherein he holds stocks in order to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue, or are to be sued, or hold the control of the corporation. 26 In such actions, the suing stockholder is regarded as a nominal party, with the corporation as the real party in interest. 27 Clearly, thus, the petitioner in her personal capacity as a stockholder has no legal personality to institute the instant petition.

Second. This is a clear case of forum shopping.

There is forum shopping when a party repetitively avails of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and raising substantially the same issues either pending in or already resolved adversely by some other court. 28 Forum shopping trifles with the courts, abuses their processes, degrades the administration of justice, and congest court dockets. 29 What is critical is the vexation brought upon the courts and litigants by a party who asks different courts to rule on the same or substantially the same reliefs and in the process creates the possibility of conflicting decisions being rendered by different fora upon the same issues. 30 cTDaEH

To put an end to this contemptible practice, this Court promulgated Administrative Circulars No. 28-91 and No. 04-94, which are now embodied as Section 5, Rule 7 of the Rules of Court, which reads:

SEC. 5. Certification against forum shopping. — The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim or relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or the initiatory pleading, but shall be a cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false certification of or non compliance with any of the undertakings therein shall constitute indirect contempt of court, without prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be a ground for summary dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative sanctions.

The test for determining the existence of forum shopping is whether a final judgment in one case would amount to res judicata in another or, whether the following elements of litis pendentia are present, to wit: (a) the identity of parties, or at least such as representing the same interests in both actions; (b) the identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) the identity of the two cases such that judgment in one, regardless of which party is successful, would amount to res judicata in the other. 31

The aforecited elements of litis pendentia are clearly present in this case: (a) There is no doubt that the parties in this case and the appeal pending before the CA are the same or representing the same interests; (b) the relief sought in both remedies is one and the same, i.e., the setting aside of the order dismissing Civil Case No. 6415-R; (c) the resolution of both actions is anchored upon the determination of whether or not Civil Case No. 6415-R involves an intra-corporate dispute, and the validity of petitioner's representation as President of the suing corporation. Petitioner's prayer in the instant petition precisely demonstrates why this petition should be denied. Petitioner seeks refuge from this Court for the reinstatement of Civil Case No. 6415-R to the special commercial court, which is the very issue in the ordinary appeal before the CA. Besides, granting the instant petition will not only result to the pre-emptive resolution of the issues pending before the CA on appeal, but will also result in the reinstatement of the Petition for Review under Rule 43 before the CA while the said ordinary appeal is also pending therein.

The existence of forum shopping being established, it is well-settled that once there is a finding of forum shopping, the penalty is summary dismissal not only of the petition pending before this Court, but also of the other case that is pending in a lower court. 32 The twin dismissal is a punitive measure to penalize those who put the administration of justice in disarray. 33

In fact, it was an error on the part of the CA to have not dismissed outright the Petition for Review under Rule 43 on the ground of forum shopping when the certification against forum shopping attached to the said petition already stated that an appeal from the same questioned RTC Order had already been previously filed. 34

In this case, petitioner's certification against forum shopping states that:

3. In compliance with the provisions of Section 5, Rule 7 of the 1997 Rules on Civil Procedure, I hereby state that:

a. I have not heretofore commenced any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal agency;

b. (T)o the best of my knowledge, no such action or proceeding is pending in the Supreme Court, the Court of Appeals, or any other tribunal agency;

c. If I should thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals, or any other tribunal agency, I undertake to report such fact within five (5) days therefrom to this Honorable Court. 35

As can be gleaned from the aforequoted certification, petitioner did not disclose to this Court the pendency or the previous filing of a notice of appeal. Petitioner's willful and deliberate act of forum shopping is, thus, clearly evident in this case.

Considering the foregoing circumstances, We find no reason to reverse the CA's dismissal of petitioner's Petition for Review under Rule 43. In addition, the pending appeal before the appellate court should also be dismissed as discussed above.

WHEREFORE, premises considered, the instant petition is DENIED. The appeal filed by the petitioner with the CA is ordered DISMISSED on the ground of forum shopping. (Jardeleza, J., on wellness leave.)

SO ORDERED."

Very truly yours,

(SGD.) WILFREDO V. LAPITANDivision Clerk of Court

 

Footnotes

1.Rollo, pp. 9-24.

2. Penned by Associate Justice Socorro B. Inting, concurred in by Associate Justices Fernanda Lampas Peralta and Mario V. Lopez, CA rollo, pp. 68-70.

3.Rollo, pp. 71-73.

4.Supra note 1, at 12.

5. RTC Order dated November 8, 2011 penned by Judge Mona Lisa V. Tiongson-Tabora, rollo, p. 123.

6.Id.

7.Id. at 125.

8.Id. at 126.

9.Id. at 121-135.

10.Id. at 131-133.

11.Id.

12.Id.

13.Id. at 135.

14.Rollo, p. 165.

15.Id. at 166.

16.Id. at 26-67.

17.Id. at 66.

18.Supra note 16.

19.Supra note 2.

20.Supra note 3.

21. RE: MODE OF APPEAL IN CASES FORMERLY COGNIZABLE BY THE SECURITIES AND EXCHANGE COMMISSION.

22.Rollo, pp. 156-164.

23. SECTION 36. Corporate powers and capacity. — Every corporation incorporated under this Code has the power and capacity:

1. To sue and be sued in its corporate name;

xxx xxx xxx.

24. SECTION 23. The board of directors or trustees. — Unless otherwise provided in this Code, the corporate powers of all corporations formed under this Code shall be exercised, all business conducted and all property of such corporations controlled and held by the board of directors or trustees to be elected from among the holders of stocks, or where there is no stock, from among the members of the corporation, who shall hold office for one (1) year until their successors are elected and qualified.

xxx xxx xxx.

25.Francis Chua v. Hon. Court of Appeals and Lydia C. Hao, G.R. No. 150793, November 19, 2004.

26.Id.

27.Id.

28.Fontana Development Corp., Dennis Pak as General Manager, Pastor Isaac as Director of Human Resources, Chris Cheng as Deputy Group Financial Controller, Jesus Chua, Representative Michael Feliciano, Alma Erediano, Leilani Valiente, Man Choi as Group Financial Controller, and Jaime Villareal as Chief Engineer v. Sascha Vukasinovik, G.R. No. 222424, September 21, 2016.

29.Jesse Yap v. Court of Appeals (Special Eleventh 11th Division), and Eliza Chua and Evelyn Te, G.R. No. 186730, June 13, 2012.

30.Id.

31.Supra note 29.

32.Supra note 28 and Section 5, Rule 7 Rules of Court.

33.Supra note 28.

34.Supra note 17.

35.Supra note 1, at 23.