Case Digest (G.R. No. 233646) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Florencio T. Mallare, Aristotle Y. Mallare and Melody Tracy Mallare v. A&E Industrial Corporation (G.R. No. 233646, June 16, 2021), an intra-corporate dispute arose between two factions of A&E’s stockholders: the Mallare Group (Florencio, Aristotle and Melody Mallare) and the Hwang Group (Anthony, Evelyn, Elizabeth, Stefan and Sarah Patricia Hwang). A&E, a real estate corporation incorporated in 1975, failed to hold its 2012 stockholders’ meeting for lack of quorum, prompting both factions to claim holdover authority. After Jane Mallare’s death on December 9, 2011, her 120,000 shares became subject to competing estate settlement petitions. On February 23, 2013, the Hwang Group convened a separate meeting, allegedly representing 50.2% of outstanding shares through an Assignment of Voting Rights from the deceased Jane, and elected itself as A&E’s new board and officers. The Mallare Group refused to recognize this election, continued performing corporate functions and filed a ve Case Digest (G.R. No. 233646) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Corporate Structure and Stocks
- A&E Industrial Corporation (A&E) was incorporated on December 16, 1975 to engage in real estate management and operations. Its March 14, 2011 General Information Sheet (GIS) showed 625,000 subscribed shares distributed among Florencio T. Mallare (117,500 shares), Jane Y. Mallare (120,000), Anthony Edmund Hwang (118,750), Evelyn L. Hwang (75,000), Aristotle Y. Mallare (118,750), and Melody Tracy Mallare (75,000).
- The board of directors and officers in 2011 were:
- Florencio T. Mallare, President
- Jane Y. Mallare, Chief Finance Officer & Corporate Secretary
- Anthony Edmund Hwang, Vice-President
- Aristotle Y. Mallare, Chief Executive Officer
- Post-2011 Developments and Dual Claims
- December 9, 2011: Jane Mallare died, leaving vacancies in CFO and corporate secretary roles. The Mallare Group (Florencio, Aristotle, Melody) claimed holdover directorship and appointed Aristotle as interim corporate secretary. No stockholders’ meeting was held in 2012 for lack of quorum, sustaining holdover status.
- July 5, 2012 & August 13, 2012: Competing petitions for judicial settlement of Jane’s estate were filed by Florencio/Aristotle (Mallare Group) and by Anthony Hwang (Hwang Group); Anthony’s petition was denied due to litis pendencia.
- February 23, 2013: A&E’s annual stockholders’ meeting was convened but adjourned for alleged lack of quorum (Mallare Group’s testimony: 49.8% shares present). Aristotle filed the 2013 GIS on April 1, 2013, certifying no quorum.
- Concurrently, the Hwang Group conducted its own annual meeting on February 23, 2013, claiming 50.2% quorum (including Anthony’s vote on Jane’s 120,000 shares via prior Assignment of Voting Rights). They elected a new board and officers and filed a Verified Complaint with application for TRO/WPI before RTC Manila on January 6, 2014, to enjoin the Mallare Group from usurping corporate functions.
- RTC Manila, Branch 46: January 23, 2014 – Denied TRO for lack of urgency. October 6, 2015 – Denied WPI, ruling injunction issues intertwined with merits of main case and should proceed to trial.
- Court of Appeals (CA): August 18, 2017 – Annulled RTC’s denial for grave abuse of discretion; issued WPI enjoining Mallare Group from acting as directors/officers, conditioned on bond.
Issues:
- Primary Issue
- Whether the Court of Appeals committed grave abuse of discretion in granting the writ of preliminary injunction (WPI) when the Regional Trial Court (RTC) had denied the same.
- Subsidiary Questions
- Whether the Hwang Group demonstrated a clear and enforceable right to the corporate offices and shares (particularly Jane Mallare’s 120,000 shares) sufficient to warrant injunctive relief.
- Whether issuing WPI would prejudge the main action for injunction, quo warranto, and damages, thus violating the rule against dispositional interlocutory orders.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)