Case Digest (G.R. No. 142420)
Facts:
This case involves Hi-Yield Realty, Incorporated (petitioner) versus the Honorable Court of Appeals, Honorable Cesar O. Untalan in his capacity as Presiding Judge of RTC-Makati, Branch 142, Honorio Torres & Sons, Inc. (HTSI), and Roberto H. Torres (respondents), decided on June 23, 2009. On July 31, 2003, Roberto, representing HTSI, filed a Petition for Annulment of Real Estate Mortgage and Foreclosure Sale before the Regional Trial Court (RTC) of Makati City, Branch 148, docketed as Civil Case No. 03-892. The petition targeted two parcels of land in Marikina and Quezon City and was filed against Leonora, Ma. Theresa, Glenn, and Stephanie Torres, the Register of Deeds of Marikina and Quezon City, and petitioner Hi-Yield Realty, Inc. Respondent Roberto claimed that Leonora Torres acted without authority to bind HTSI to loan obligations, resulting in foreclosure of corporate properties.
Hi-Yield Realty moved to dismiss the petition on the grounds of improper venue and insuffi
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Case Digest (G.R. No. 142420)
Facts:
- Parties and Nature of Case
- Petitioner: Hi-Yield Realty, Incorporated (Hi-Yield).
- Respondents: Honorio Torres & Sons, Inc. (HTSI), Roberto H. Torres, and Hon. Cesar O. Untalan in his capacity as Presiding Judge of RTC-Makati, Branch 142.
- Case involves a Petition for Annulment of Real Estate Mortgage and Foreclosure Sale over two parcels of land located in Marikina and Quezon City.
- Suit was filed by Roberto H. Torres on behalf of HTSI against Leonora, Ma. Theresa, Glenn, Stephanie Torres, Register of Deeds of Marikina and Quezon City, and petitioner Hi-Yield.
- Procedural History and Motions
- Petition docketed as Civil Case No. 03-892, Branch 148, RTC Makati.
- Petitioner moved to dismiss for improper venue and insufficient docket fees; RTC denied motion via Order dated January 22, 2004.
- Petitioner’s motion for reconsideration was also denied on April 27, 2004.
- Petitioner filed a petition for certiorari and prohibition with the Court of Appeals (CA).
- CA dismissed petitioner’s petition via Decision dated March 10, 2005, and denied reconsideration through Resolution dated May 26, 2005.
- Nature of the Suit as Held by Trial Court and CA
- Both RTC and CA determined the action was essentially a derivative suit, although styled as Petition for Annulment of Real Estate Mortgage and Foreclosure Sale.
- The annulment of mortgage and foreclosure is incidental to the derivative suit.
- Petitioner’s Contentions in the Supreme Court
- Venue was improperly laid before the RTC of Makati since the properties are located in Marikina and Quezon City.
- Complaint violated rules on venue due to improper party joinder; petitioner wrongfully impleaded as a non-stockholder defendant.
- The main thrust of the case is the recovery of the lands, not a derivative suit.
- Alleged grave abuse of discretion by the CA in not dismissing the case.
- Respondents’ Position
- Case is primarily a derivative suit to address alleged unauthorized acts of certain corporate officers and majority stockholders.
- Annulment of mortgage and foreclosure sale is a consequence of redressing these alleged corporate wrongs.
Issues:
- Whether the Court of Appeals gravely abused its discretion in not dismissing the case against Hi-Yield for improper venue despite trial court’s finding of a real action.
- Whether the Court of Appeals erred in not dismissing the complaint against Hi-Yield due to violation of rules on venue through improper joinder of parties.
- Whether the Court of Appeals erred in ruling that the annulment of real estate mortgage and foreclosure sale is merely incidental to the derivative suit.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)