Case Digest (G.R. No. 191150)
Facts:
In First Corporation v. Former Sixth Division of the Court of Appeals, petitioner First Corporation, a trading company organized under Philippine laws, faced claims by private respondents Eduardo M. Sacris and Cesar A. Abillar. From 1991 to 1997, Sacris extended P2.2 million to First Corporation’s Rema Tip Top Division, initially as equity to be converted into shares but later treated as a loan at 1% monthly interest. Abillar, then President and Chairman (1993–1998), received these funds on behalf of the corporation, which issued receipts and made partial interest and principal payments, leaving an unpaid balance of P1.8 million. After Abillar’s ouster in February 1998, Sacris assigned his remaining claim to Abillar, who sued First Corporation in RTC Pasig City (Civil Case No. 66757). Sacris intervened, and the RTC admitted his complaint, dismissing Abillar’s suit. First Corporation obtained certiorari relief from the CA, which set aside the RTC orders and directed dismissal ofCase Digest (G.R. No. 191150)
Facts:
- Parties and Corporate Background
- First Corporation (Petitioner) – a duly organized Philippine corporation engaged in trade.
- Eduardo M. Sacris (Private Respondent) – alleged creditor who extended loans to First Corporation.
- Cesar A. Abillar (Private Respondent) – served as President and Chairman of First Corporation from 1993 to 26 February 1998.
- Investment-Loan Transactions and Corporate Actions
- Equity Infusion Agreement (1991)
- Corporate officers (Esmeralda, Cerbo, Esposado, La Rosa, Abillar) convinced Sacris to invest in Rema Tip Top Division.
- Promise to convert investment into corporate shares; pending conversion, treated as a loan at 1% interest per month.
- Loan Disbursements (1991–1997)
- 1991–1994: Sacris extended ₱1.2 million to Rema Tip Top Division.
- 1997: Sacris extended additional ₱1 million.
- Total loans reached ₱2.2 million; receipts issued in Abillar’s name; interest rate later adjusted to 2.5% per month.
- Partial payments: ₱400,000 principal; ₱33,750.27 and ₱23,250 interest, leaving ₱1.8 million outstanding.
- Ouster of Abillar and Deeds of Assignment/Rescission (February–August 1998)
- 27 February 1998: Special stockholders’ meeting removed Abillar for irregularities.
- 13 March 1998: Sacris assigned his ₱1.8 million collectible to Abillar for payment by 30 July 1998.
- Abillar filed suit (RTC Pasig, Civil Case No. 66757) on 10 April 1998; parties rescinded assignment on 27 August 1998 for nonpayment.
- Intervention and Certiorari in Pasig RTC and Court of Appeals
- Sacris moved to intervene with his complaint in intervention; Pasig RTC initially denied then admitted intervention, dismissing Abillar’s complaint.
- First Corporation petitioned CA (CA‐G.R. SP No. 54322) via certiorari; CA (31 May 2001) set aside RTC orders, directed dismissal of Abillar’s suit and Sacris’s intervention.
- New Action in Quezon City RTC (Civil Case No. Q01-44599)
- Sacris filed complaint for sum of money (₱1.8 million plus damages); First Corporation denied knowledge and filed third-party complaint against Abillar.
- 28 June 2004: Quezon City RTC rendered judgment in favor of Sacris and Abillar, ordering payment of ₱1.8 million plus 24% interest, attorney’s fees (₱50,000 for Sacris; ₱20,000 for Abillar), and costs.
- Court of Appeals Proceedings (CA-G.R. CV No. 84660)
- 29 November 2005: CA affirmed RTC decision, finding no reversible error.
- 14 February 2006: CA denied First Corporation’s motion for reconsideration.
- Petition for Certiorari to the Supreme Court (Rule 65)
- Filed 6 April 2006 alleging grave abuse of discretion by RTC and CA in:
- Finding loan claims supported by preponderance of evidence.
- Finding First Corporation benefited from loans.
- Finding Abillar authorized to borrow.
- Failing to award damages and dismiss third-party complaint.
Issues:
- Appropriateness of Certiorari
- Whether First Corporation properly invoked Rule 65 certiorari to challenge factual findings.
- Whether a Rule 45 appeal was the proper remedy.
- Merits of Alleged Grave Abuse
- Whether documentary evidence of loans was tainted or insufficient.
- Whether financial statements supported liability.
- Whether Abillar acted without corporate authority.
- Whether First Corporation was entitled to damages and relief on its third-party complaint.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)