Case Digest (G.R. No. 174909) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In MARCELINO M. FLORETE, JR., et al. v. ROGELIO M. FLORETE, SR., et al. (G.R. Nos. 174909 & 177275, January 20, 2016), petitioners Marcelino M. Florete, Jr., Maria Elena F. Muyco and Raul A. Muyco (the “Marcelino, Jr. Group”), children of the late spouses Marcelino Sr. and Salome Florete, assailed various issuances, transfers and stock subscriptions of People’s Broadcasting Service, Inc. (PBS), a radio‐television corporation incorporated in 1966 with an initial capital of ₱250,000 divided into 2,500 shares. Between 1967 and 1989, PBS’s board purportedly issued or transferred shares to Newsounds Broadcasting Network, Inc., Consolidated Broadcasting System, Inc., Diamel Corporation (a family‐controlled entity), and members of the Florete family, allegedly in violation of the Corporation Code (e.g., Sections 23, 25, 39, 62, 63, 65, 102) and PBS’s by‐laws. On June 23, 2003, the Marcelino, Jr. Group filed before the Regional Trial Court (Branch 39, Iloilo City) a Complaint for Declar Case Digest (G.R. No. 174909) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Corporate Subject
- Petitioners: Marcelino M. Florete, Jr., Maria Elena F. Muyco, Raul A. Muyco (“Marcelino, Jr. Group”).
- Respondents: Rogelio M. Florete, Sr., Imelda C. Florete, Diamel Corporation, Rogelio C. Florete, Jr., Margaret R. C. Florete (“Rogelio, Sr. Group”).
- Underlying Entity: People’s Broadcasting Service, Inc. (PBSI), a private corporation with radio/TV franchise.
- Corporate Capital and Share Movements
- Incorporation (March 8, 1966): Authorized capital stock ₱250,000 (2,500 shares at ₱100 par); initial subscription among Marcelino Sr., Salome, and others.
- Subsequent Transfers and Issuances (1967–1989):
- Resignations and transfers by Berlin, Sudario (1967);
- Death of Salome (1980) and stroke of Marcelino Sr. (1982);
- Board resolutions issuing 1,240 shares to Consolidated Broadcasting (1982) and 610 shares to Newsounds Broadcasting (1967), with later transfers to family and PBSI officers;
- Capital increase to ₱100,000,000 (1,000,000 shares at ₱100 par) approved by SEC (1989).
- Sycip Gorres Velayo & Co. Audit (1993): Tracked share movements to 1993, but declined to opine on corporate equity due to incomplete records; report approved by PBSI board (1997).
- Stockholders of Record (2002): Predominantly Diamel Corp. (30,000 shares), Rogelio Sr. (153,881.53), Marcelino Jr. (18,240.99), Ma. Elena (18,227.23), etc.
- Procedural History
- Complaint Filed (June 23, 2003): Marcelino, Jr. Group sought nullity of issuances/transfers, correction of capital structure, and damages.
- RTC “Placitum” Decision (August 2, 2005): Dismissed complaint for lack of cause of action and non-joinder of indispensable parties; granted Rogelio Sr.’s counterclaim for moral (₱25M) and exemplary damages (₱5M).
- First CA Proceedings (2005–2006): CA denied petition for review, affirmed RTC decision, lifted TRO/injunction, and identified indispensable parties not impleaded (PBSI, estates of Marcelino Sr./Salome, other transferees).
- Execution Proceedings (2005–2006): RTC ordered immediate execution (May 18, 2006); CA annulled execution order and writ of execution (November 28, 2006).
Issues:
- Was the RTC correct in dismissing the Marcelino, Jr. Group’s Complaint for lack of cause of action and non-joinder of indispensable parties?
- If the RTC erred, should the assailed share issuances and transfers be nullified?
- May the RTC’s award of moral (₱25M) and exemplary (₱5M) damages in favor of Rogelio Sr. be executed at this stage?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)