Case Digest (G.R. No. 172023)
Facts:
Heirs of Santiago C. Divinagracia assailed the RTC, Branch 39, Iloilo City issuances in Corporate Case No. 02-27050, which involved a mandamus petition and the nullification of delinquency call and issuance of unsubscribed shares filed by Santiago, a dissenting CBSDC stockholder, on 6 February 2002. The shares were sold on auction on 12 February 2002, and Santiago died on 14 April 2004; his heirs were substituted.On 12 August 2004, the RTC dismissed the petition and awarded exemplary damages and attorney’s fees to CBS Development Corporation, Inc. (CBSDC) and Diamel, Inc. The RTC later granted private respondents’ motion for immediate execution via a 13 October 2004 resolution and issued a writ of execution on 17 November 2004. The Court of Appeals dismissed the heirs’ Rule 65 certiorari petition and denied reconsideration, leading to this petition.
Issues:
- Whether the RTC’s awards of exemplary damages and attorney’s fees could be executed immediately pending appeal in an int
Case Digest (G.R. No. 172023)
Facts:
- Originating intra-corporate controversy in the Regional Trial Court
- Santiago C. Divinagracia (Santiago) filed before the Regional Trial Court of Iloilo City a Petition for Mandamus and Nullification of Delinquency Call and Issuance of Unsubscribed Shares under Corporate Case No. 02-27050.
- Santiago alleged that he was then a stockholder of CBS Development Corporation, Inc. (CBSDC), owning 3,000 shares, and that CBSDC had issued certificates of stock for 750 shares to him.
- Santiago alleged that he opposed a proposal to authorize respondent Rogelio Florete, as President of CBSDC, to mortgage all or substantially all of CBSDC’s real properties to secure a loan obtained by Newsounds Broadcasting Network, Inc. (NBN), Consolidated Broadcasting System (CBS), and People’s Broadcasting Services, Inc. (PBS).
- Despite Santiago’s opposition and the other stockholders’ protest, Santiago alleged that a majority representing more than 2/3 of CBSDC’s outstanding capital stock voted to approve the authority to the Board.
- Santiago, as a dissenting stockholder, wrote a letter objecting to the mortgage and exercising his appraisal right under Section 81 of the Corporation Code.
- Santiago was informed by CBSDC’s corporate secretary that a majority of CBSDC’s Board of Directors approved the exercise of his appraisal right.
- Santiago surrendered his stock certificates to CBSDC and then demanded an appraisal of his shares.
- The Board indefinitely postponed action on Santiago’s appraisal right, to which Santiago protested.
- CBSDC’s corporate secretary denied Santiago’s protest and informed him that his CBSDC shares, including those evidenced by the certificates issued to him, were declared delinquent and were to be sold on auction on 12 February 2002.
- On 6 February 2002, Santiago filed with the Regional Trial Court of Iloilo City a petition for mandamus and nullification of delinquency call and issuance of unsubscribed shares.
- On 12 February 2002, Santiago’s CBSDC shares were sold on auction to respondent Diamel, Inc. (Diamel).
- Santiago filed an amended petition on 10 June 2002.
- Private respondents filed an Answer with compulsory counterclaim.
- Substitution of parties and trial court judgment
- On 14 April 2004, Santiago died; his heirs were substituted in the case.
- On 12 August 2004, respondent Judge rendered a Decision dismissing the petition for lack of merit and giving due course and granting the compulsory counterclaims.
- The trial court dismissed the petition and/or amended petition.
- The trial court granted the compulsory counterclaims of CBSDC and Diamel.
- The trial court ordered the heirs of Santiago (enumerated in the Decision) to pay both corporations:
- PHP 100,000.00 as and for exemplary damages; and
- PHP 100,000.00 as and for attorney’s fees.
- The trial court made no pronouncement as to costs.
- Appeal, motion for immediate execution, and CA proceedings
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...(Subscriber-Only)
Issues:
- Whether the award of exemplary damages and attorney’s fees in favor of private respondents could be immediately executed pending appeal of the corporate case
- Petitioners raised the sole issue of whether the trial court’s award of exemplary damages...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)