Case Digest (G.R. No. 174909)
Facts:
Marcelino M. Florete, Jr., Maria Elena F. Muyco and Raul A. Muyco v. Rogelio M. Florete, et al., G.R. No. 174909; and Rogelio M. Florete Sr. v. Marcelino M. Florete, Jr., et al., G.R. No. 177275, January 20, 2016, Second Division, Leonen, J., writing for the Court.The dispute arises from ownership and alleged wrongful issuances/transfers of shares in People’s Broadcasting Service, Inc. (People’s Broadcasting). The petitioners in G.R. No. 174909 (the “Marcelino, Jr. Group”) are three children/heirs of the late Marcelino and Salome Florete who filed on June 23, 2003 a Complaint in the Regional Trial Court (RTC) seeking declaration of nullity of numerous issuances, transfers and subscriptions of People’s Broadcasting shares and damages against members of the opposing family group (the “Rogelio, Sr. Group”). The Rogelio, Sr. Group answered and filed a compulsory counterclaim.
The RTC (Branch 39, Iloilo) dismissed the Marcelino, Jr. Group’s Complaint by Placitum dated August 2, 2005 for lack of merit and for failure to implead indispensable parties, while granting Rogelio, Sr.’s counterclaim only insofar as moral and exemplary damages — P25,000,000 and P5,000,000 respectively. Pursuant to the Interim Rules of Procedure Governing Intra-Corporate Controversies (Rule I, Sec. 4), Rogelio, Sr. moved for immediate execution; a writ of execution was issued May 23, 2006.
The Marcelino, Jr. Group sought relief from the Court of Appeals (CA) by petition for review; the CA initially issued a TRO and then a writ of preliminary injunction but in its Decision dated March 29, 2006 denied the petition and affirmed the RTC judgment, lifting the injunctions. The Marcelino, Jr. Group’s motion for reconsideration was denied (Sept. 15, 2006). The Marcelino, Jr. Group then filed a petition to the Supreme Court (docketed G.R. No. 174909 on Nov. 17, 2006). Meanwhile, Rogelio, Sr. challenged the CA’s earlier disallowance of immediate execution of the RTC award by filing a separate petition to the Supreme Court (docketed G.R. No. 177275 on May 7, 2007). The CA, in a separate proceeding, reversed the RTC order of immediate execution (Nov. 28, 2006) and annulled the writ of execution; its denial of reconsideration was final in Feb. 2007.
The factual backdrop includes People’s Broadcasting’s 1966 incorporation with an initially small subscribed capital; extensive later stock issuances, transfers and a 1989 authorized-capital increase that, according to an accounting report by Sycip Gorres Velayo & Co. (approved by the Board Feb. 1, 1997), resulted in a substantially different shareholdings register. Significant events relevant to the petitioners’ allegations: the death of Salome (Nov. 22, 1980); Marcelino Sr.’s stroke (July 12, 1982) and eventual death (Oct. 3, 1990); transfers of shares to family members and to entities such as Consolidated Broadcasting System, Inc. and Newsounds Broadcasting Network, Inc.; and the issuance/recording anomalies identified (and partially disclaimed) in the Sycip report. The Marcelino, Jr. Group alleges forgery of Board Resolution No. 4 (Aug. 5, 1982), invalid issuances/ transfers (including lack of physical certificates or endorsements), absence of quorum, and invalid capital increase procured by the allegedly illegitimate board; they prayed for nullification and reconstitution of...(Subscriber-Only)
Issues:
- Was the RTC correct to dismiss the Marcelino, Jr. Group’s Complaint?
- Assuming the dismissal was erroneous and the case decided on the merits, should the challenged issuances and transfers of People’s Broadcasting shares be nullified?
- May the RTC’s award of moral and exemplary damages in favor of Rogelio, Sr. be executed at thi...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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