G.R. No. 149351 - Speed Distributing Corp. vs. Court of Appeals

Pastor Y. Lim married Rufina Luy Lim on September 20, 1953.
Early in their marriage, Pastor organized several family corporations using conjugal funds, including Skyline International Corporation, which engaged in tire importation, sale, and real estate acquisition.
The couple, having no biological children, later adopted two children—Leonard Lim and Lita Lim Marcelo—from distant poor relatives in Zamboanga City without a formal court adoption.

Domestic problems emerged, leading to joint filing for the voluntary dissolution of conjugal properties on August 13, 1968.
Further marital discord resulted in Rufina filing a petition for legal separation against Pastor on January 27, 1971, on the ground of infidelity.
A decision rendered on February 17, 1972, awarded monthly support to Rufina and the children, and later, in 1975, a motion for execution led to the levy of corporate properties, triggering disputes over asset ownership.

During execution proceedings, a third-party claim was asserted by Skyline regarding the nature of the leveled properties, arguing they were personal, not conjugal assets.
The trial court quashed Skyline’s third-party claim, which led to subsequent filings for certiorari and temporary restraining orders before the Court of Appeals.
The appellate court eventually dismissed the petition for certiorari, effectively lifting the restraining order.

On August 21, 1987, Speed Distributing Corporation was registered with Pastor Y. Lim as one of its incorporators, and detailed share capital contributions were made by several parties, including Lita Lim Marcelo as treasurer.
On June 21, 1991, Leslim Corporation was organized with Pastor subscribing to the vast majority of shares, although later it was revealed that certain incorporators’ shares were nominal or served as dummies.
Under a purported board resolution, Leslim executed a deed of absolute sale on August 26, 1994, transferring a parcel of land (originally registered under TCT No. 36617) to Speed Distributing Corporation for P3,900,000.00, which led to the cancellation of the original title and the issuance of a new title in Speed’s name.

Pastor Y. Lim died intestate on June 11, 1994, leaving Rufina as the surviving spouse and a compulsory heir.
Rufina, through her attorney-in-fact, initiated probate proceedings on March 17, 1995, to administer Pastor Lim’s estate and to secure her conjugal share, which included properties held by corporate entities.
The probate court, during its proceedings, issued orders including the annotation of notices of lis pendens on properties registered in the names of the subject corporations.

Rufina filed a complaint before the RTC of Quezon City (Civil Case No. Q-95-24588) seeking nullification of the deed of sale and cancellation of the new title (TCT No. T-116716), alleging fraudulent corporate acts.
In her complaint, she contended that the deed of sale was simulated through a falsified secretary’s certificate and unauthorized board resolutions, and that as Pastor’s spouse she was entitled to his conjugal properties.
The RTC dismissed the complaint on several grounds, including that Rufina was not a real party in interest (as she was not a stockholder) and that the case involved intra-corporate controversies under the exclusive jurisdiction of the SEC.

Rufina appealed the RTC’s decision to the Court of Appeals, contending errors related to both jurisdiction and her standing as a real party in interest.
The Court of Appeals eventually remanded the case to the RTC, basing its decision on Republic Act No. 8799 (the Securities Regulation Code), which transferred such cases from the SEC to the RTC.
The petitioners (Speed Distributing Corporation, Lita Lim Marcelo, Ireneo Marcelo, and Pedro Aquino) argued that the RTC lacked jurisdiction given the case’s intra-corporate nature and the retroactive application of RA 8799.
Ultimately, the Supreme Court dismissed the petition for review, remanding the records to the RTC for further proceedings while emphasizing the necessity to join all indispensable parties.

Whether the Regional Trial Court had jurisdiction over the complaint in view of the nature of the alleged intra-corporate controversy.
Whether the transfer of jurisdiction under RA 8799 (which shifted cases from the SEC to the RTC) effectively applies to the instant case.

Whether the private respondent, as the surviving spouse and a compulsory heir of Pastor Lim, qualifies as a real party in interest despite not being a stockholder in the corporations involved.
Whether succession rights automatically confer the capacity to sue on behalf of the estate without formal appointment as administratrix.

Whether the deed of absolute sale executed by Leslim Corporation in favor of Speed Distributing Corporation was a simulated, fraudulent act involving falsified board resolutions and a secretary’s certificate.
Whether the cancellation of TCT No. 36617 and the issuance of the new TCT No. T-116716 were effected in an unlawful manner aimed at defrauding the heirs of Pastor Lim.

Whether all compulsory heirs and the corporate entity (Leslim Corporation), whose interests are directly affected, were properly joined in the proceedings.
The impact of failing to join these indispensable parties on the validity of the trial court’s proceedings.

Whether RA 8799 should have retroactive effect on the case, considering its effective date relative to the pendency of the dispute.
The application of Section 5.2 of RA 8799 in transferring jurisdiction over intra-corporate controversies to designated RTC branches.