Case Digest (G.R. No. 172948) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
Philippine Associated Smelting and Refining Corporation (PASAR), a domestic corporation engaged in copper smelting and refining, filed on February 4, 2004 an Amended Petition for Injunction and Damages with prayer for Preliminary Injunction before the Regional Trial Court (RTC) of Pasig City, seeking to enjoin its former officers and present stockholders—Pablito O. Lim, Manuel A. Agcaoili, and Consuelo M. Padilla (each owning 500 shares)—from inspecting corporate records classified by PASAR as confidential or non-existent. On April 14, 2004, RTC Branch 158 granted the preliminary injunction, pending further proceedings to determine which records were confidential or inexistent, and required PASAR to post a ₱500,000 bond. Respondents moved to dissolve the writ and dismiss the petition; on January 10, 2005, the RTC denied those motions, citing prohibited pleadings under the Interim Rules on Intra-Corporate Controversies. Thereafter, respondents filed CA-GR SP No. 88975 with the Co Case Digest (G.R. No. 172948) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Corporate Structure
- Philippine Associated Smelting and Refining Corporation (PASAR)
- A corporation duly organized under Philippine laws engaged in copper smelting and refining.
- Respondents Pablito O. Lim, Manuel A. Agcaoili, and Consuelo M. Padilla
- Former senior officers of PASAR; each holds 500 shares as stockholders.
- Proceedings Below
- Petition for Injunction (February 4, 2004)
- PASAR filed an Amended Petition for Injunction and Damages with prayer for Preliminary Injunction/Temporary Restraining Order to restrain respondents from inspecting “confidential and inexistent” records.
- Preliminary Injunction Issued by RTC (April 14, 2004)
- RTC–Pasig City granted the writ, enjoining respondents from accessing records classified by PASAR as confidential or inexistent, pending further determination.
- PASAR posted a bond of P500,000.00.
- Respondents’ Motion for Dissolution of Injunction (May 26, 2004)
- Argued insufficiency, lack of irreparable injury, and that the right to inspect belongs to stockholders, not PASAR.
- RTC Order Denying Dissolution and Dismissal Motions (January 10, 2005)
- Denied Motion to Dismiss as prohibited under Interim Rules on Intra-Corporate Controversies.
- Denied Motion for Dissolution, finding potential ineffectual final judgment absent injunction.
- Petition for Certiorari to the Court of Appeals (CA-GR SP No. 88975)
- Respondents questioned the propriety of the preliminary injunction.
- CA lifted and canceled the injunction (Decision dated January 24, 2006; Resolution dated May 18, 2006), holding that the proper remedy for enforcement of inspection rights is mandamus by the stockholder, not injunction by the corporation.
- Petition for Review on Certiorari to the Supreme Court (G.R. No. 172948)
- PASAR sought reversal of CA decision and reinstatement of injunction; prayed also for TRO/status quo and further reliefs.
- SC denied application for TRO (Resolution, July 19, 2006); parties filed comments and memoranda; SC submitted case for decision.
Issues:
- Availability of Injunctive Relief
- Whether a corporation may file an action for injunction to restrain its own stockholders from inspecting corporate records.
- Proper Procedure and Remedy
- Whether the stockholders’ remedy to enforce inspection rights is exclusively mandamus or may include corporate-filed injunction.
- Whether the CA erred in cancelling the preliminary injunction by certiorari instead of via a motion to dissolve under Rule 58, Section 6 of the Rules of Court.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)