Case Digest (G.R. No. 157479) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Philip Turner and Elnora Turner v. Lorenzo Shipping Corporation, petitioners Philip and Elnora Turner, holders of 1,010,000 shares in Lorenzo Shipping Corporation, voted against the June 1999 amendment of the corporate articles removing pre-emptive rights and, on that basis, demanded payment of their shares at book value (₱2.276/share, totaling ₱2,298,760.00). The corporation countered that only market value (₱0.41/share) applied and that payment could be made only if it had unrestricted retained earnings, which its December 31, 1999 financial statements showed it did not. The parties formed an appraisal committee under Section 82 of the Corporation Code, which on October 27, 2000 fixed fair value at ₱2.54/share (₱2,565,400.00). When the corporation again refused payment by letter of January 2, 2001, citing a ₱72,973,114.00 deficit, the Turners filed a collection suit on January 22, 2001 (Civil Case No. 01-086) in the RTC of Makati (later transferred to Branch 46, Manila). On Case Digest (G.R. No. 157479) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Petitioners’ shareholding and demand
- The Turners held 1,010,000 shares of Lorenzo Shipping Corporation and voted against a June 1999 amendment removing pre-emptive rights, demanding payment at P2.276/share (total P2,298,760).
- The corporation proposed P0.41/share based on market value and conditioned payment upon available unrestricted retained earnings.
- Appraisal committee and valuation
- Pursuant to Section 82, each party nominated an appraiser and jointly selected a chairman; on October 27, 2000 the committee fixed fair value at P2.54/share (P2,565,400 total).
- The Turners demanded payment of that amount plus 2%/month penalty and reimbursement of appraisal fees.
- Refusal and initial suit
- By letter dated January 2, 2001, the corporation refused payment, citing a deficit of P72,973,114 unrestricted retained earnings as of December 31, 1999.
- The Turners filed a collection suit (Civil Case No. 01-086) in the Makati RTC on January 22, 2001.
- Proceedings in the courts below
- On June 26, 2002, the Turners moved for partial summary judgment, asserting P11,975,490 unrestricted retained earnings as of March 31, 2002 and finality of the appraisal award.
- RTC Branch 46 (Manila) granted the motion and a writ of execution in November 2002; partial enforcement followed.
- Lorenzo Shipping filed certiorari in the CA, obtained a TRO, and on March 4, 2003 the CA dismissed the suit for lack of cause of action at the time of filing.
Issues:
- Whether the RTC acted beyond its jurisdiction in granting partial summary judgment and issuing a writ of execution when no unrestricted retained earnings existed at suit commencement.
- Whether the Turners had a valid cause of action on January 22, 2001, given the absence of unrestricted retained earnings as a condition precedent.
- Whether the CA properly dismissed Civil Case No. 01-086, notwithstanding the petition’s primary aim to annul only specific RTC orders.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)