G.R. No. 147745 - Obra vs. Social Security System

Petitioner, Strategic Alliance Development Corporation (STRADEC), a development company, together with five individuals and three corporations, incorporated respondent Star Infrastructure Development Corporation (SIDC) on October 28, 1997, for general construction business.
STRADEC owned 2,449,998 shares or 49% of SIDC’s 5,000,000 authorized shares.

SIDC amended its Articles of Incorporation on June 5, 1998, transferring its principal place of business from Pasig City to Bayambang, Pangasinan, and later to Lipa, Batangas.
On October 8, 2004, respondents Yujuico and Sumbilla, then President and Treasurer of STRADEC, executed a Promissory Note for a loan of P10,000,000.00 from respondent Wong.
As security, Yujuico executed a pledge over STRADEC’s entire shares in SIDC on April 1, 2005.

STRADEC defaulted on its obligations, leading to a notarial sale of the pledged shares on April 26, 2005, conducted by respondent Caraos in Makati City.
Respondent Wong, being the sole bidder at P11,800,000.00, was issued the share certificates by SIDC’s Corporate Secretary, Tabalingcos, and the transfer was recorded in SIDC’s stock and transfer book.
Wong allegedly further transferred the shares to Cypress Tree Capital Investment, Inc. (CTCII), a corporation formed by his family.

On July 17, 2006, STRADEC filed a petition (Civil Case No. 7956) in the Regional Trial Court (RTC) of Batangas City to nullify:

The loan agreement and pledge made by Yujuico and Sumbilla with Wong.
The notarial sale conducted by Caraos.
The registration of the transfer of shares in SIDC’s books.
SIDC’s July 30, 2005 annual meeting and July 20, 2006 special stockholders’ meeting.

STRADEC sought a temporary restraining order and a writ of preliminary injunction to restrain CTCII's exercise of proprietary rights over the shares, SIDC’s implementation of certain resolutions, and the Securities and Exchange Commission (SEC) from acting on related reports.

RTC denied the application for a writ of preliminary injunction on August 30, 2006, citing uncertainty of the right claimed and ongoing related cases involving share ownership and directors' legitimacy.
The RTC ruled on venue that:

The first and second causes of action (nullity of loan and sale) should be filed where STRADEC or principal defendants reside (e.g., Bayambang, residences of respondents).
For the third and fourth causes (cancellation of registrations and invalidation of meetings), the court held action in abeyance pending Supreme Court ruling on legitimate directors of STRADEC.

The motion for reconsideration filed by STRADEC was denied; the RTC maintained venue was improper and refused to act on the third and fourth causes.

STRADEC filed a petition for certiorari before the CA, challenging RTC’s rulings on venue, abeyance of proceedings, and denial of injunction.
The CA, in a December 22, 2008 decision, upheld the RTC’s rulings, finding the first and second causes purely civil actions and not intra-corporate disputes, thus venue was improper; it also agreed with holding further actions in abeyance and denying the writ of preliminary injunction.
STRADEC’s motion for reconsideration was denied on April 30, 2009.

STRADEC filed a petition for review on certiorari to the Supreme Court assailing the CA decision and resolution for grave abuse of discretion in:

Whether STRADEC’s first and second causes of action (nullification of loan and pledge, and avoidance of sale) constitute intra-corporate disputes, thereby affecting venue and jurisdiction.
Whether the RTC gravely abused its discretion in ruling that venue was improperly laid in Batangas City for the first and second causes of action.
Whether the RTC erred or abused discretion in holding in abeyance further proceedings on the third and fourth causes of action (canceling registration of share transfers and invalidating stockholders’ meetings) because of unrelated pending cases.
Whether the RTC and CA erred in denying STRADEC’s application for a writ of preliminary injunction despite showing clear and unmistakable rights and continuing violation thereof.