Case Digest (G.R. No. L-31490)
Facts:
Republic of the Philippines v. Bisaya Land Transportation Company, Inc., G.R. No. L-31490, January 06, 1978, the Supreme Court First Division, Castro, C.J., writing for the Court. The petition arose from a quo warranto filed by the Republic of the Philippines (through the Solicitor General, originally Edilberto Barot) on March 21, 1959 in the Court of First Instance of Manila (Special Civil Case No. 39766) seeking dissolution of Bisaya Land Transportation Company, Inc. (a corporation organized c. 10 June 1935) on grounds of alleged repeated corporate misconduct set out in nine causes of action; the petition also prayed for appointment of a receiver pending the action pursuant to Rule 61, sec. 1(a), Rules of Court.The complaint alleged corporate acts beyond its charter (amendment of corporate purposes in 1948, acquisition of public lands and timber concessions, unauthorized leasing and cattle ranching, operation of general merchandise store, mining activities, black-market importation and sale of parts, payment of sub-minimum wages, and failure to keep accurate stock and transfer books) and charged misuse of corporate assets by majority directors (naming Miguel, Manuel and Mariano Cuenco, Jose P. Velez and others). Respondent Miguel Cuenco filed an answer and a cross-claim (seeking P4,336,701.19 for the benefit of the corporation) alleging misappropriations by the other directors and asking for a receiver without bond.
In the lower court the Solicitor General moved to dismiss the quo warranto (motion denied June 27, 1959), a commissioner was appointed to take evidence (Feb. 23, 1960), and hearings proceeded with three State witnesses and multiple exhibits. On February 28, 1962 the corporation (through majority directors) filed a motion for judgment on consent, asking for voluntary dissolution and liquidation by the board; the Republic manifested that implementation should be left to the court’s discretion, and Miguel Cuenco agreed to judgment on consent only if a receiver were appointed and his cross-claim adjudicated. Later the corporation attempted to withdraw its motion for judgment on consent (May 27, 1963); the trial court denied withdrawal and granted receivership (Dec. 3, 1963).
Several collateral and appellate petitions ensued: respondents filed certiorari (G.R. No. L-16593) attacking interlocutory orders which this Court dismissed (Feb. 11, 1960); respondents filed a prohibition petition (G.R. No. L-22097) which was dismissed; the Court of Appeals in CA-G.R. No. 33266-R issued an ex parte writ enjoining enforcement of the receivership, and this Court annulled the Court of Appeals proceedings in G.R. No. L-23012 (Jan. 29, 1968) for lack of jurisdiction. Meanwhile, Solicitor General Barredo (later Justice Barredo) filed a motion to dismiss the quo warranto on October 20, 1966.
On April 3, 1968 the Court of First Instance of Manila issued a resolution granting the Republic’s motion and dismissing the quo warranto and also dismissing Miguel Cuenco’s cross-claim. Miguel Cuenco appealed to the Supreme Court to challenge that resolution. The appeal presents a long procedural history spanning nearly two decades and several related petitions (including references to G.R. Nos. L-16593, L-22097, L-23012 and, in the diss...(Subscriber-Only)
Issues:
- Did the lower court err in refusing to enter judgment dissolving the respondent corporation on the strength of its motion for judgment on consent?
- Was the evidence adduced by the Republic sufficient to warrant forcible dissolution of the corporation?
- Was the Solicitor General vested with the authority to discontinue the quo warranto and move for dismissal of the State’s action?
- Did Miguel Cuenco’s cross-claim preclude dismissal of the quo warranto without his consent, and...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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