Case Digest (G.R. No. 157479)
Facts:
Philip Turner and Elnora Turner v. Lorenzo Shipping Corporation, G.R. No. 157479, November 24, 2010, Supreme Court Third Division, Bersamin, J., writing for the Court. The petitioners are dissenting stockholders (Philip Turner and Elnora Turner); the respondent is Lorenzo Shipping Corporation.The Turners owned 1,010,000 shares of Lorenzo. In June 1999 Lorenzo amended its articles to remove stockholders’ pre-emptive rights; the Turners voted against the amendment, made a written demand within 30 days for payment based on book value (P2.276/share) and later pressed for the appraisal committee’s award (P2.54/share, reported October 27, 2000). Lorenzo refused payment, asserting that Section 41 and related provisions of the Corporation Code permit payment of withdrawing stockholders only when the corporation has unrestricted retained earnings to cover the purchase and that as of December 31, 1999 it had a deficit (P72,973,114).
The Turners filed suit for collection and damages in the Regional Trial Court (RTC) on January 22, 2001 (Civil Case No. 01‑086). The case was re‑raffled (initially Branch 132, then Branch 142 in Makati, and ultimately transferred to Branch 46 in Manila pursuant to the Interim Rules on Intra‑Corporate Controversies). On June 26, 2002 the Turners moved for partial summary judgment, alleging among other things that Lorenzo’s quarterly financial statement as of March 31, 2002 showed unrestricted retained earnings of P11,975,490 and that the appraisal committee’s valuation was final.
Judge Artemio Tipon of RTC, Branch 46, granted the motion for partial summary judgment on October 23, 2002, reasoning that the Corporation Code does not require retained earnings to have existed at the time of demand and that later existence suffices; on November 22, 2002 he denied reconsideration and granted a motion for immediate execution; a writ of execution issued November 28, 2002 and was partially enforced. Lorenzo sought relief in the Court of Appeals (CA) by petition for certiorari; the CA issued a temporary restraining order that later lapsed and then, in a decision promulgated March 4, 2003 in C.A.-G.R. SP No. 74156 (Lorenzo Shipping Corp. v. Hon. Artemio S. Tipon), held that the Turners’ right of action to demand payment had not yet accrued when they filed suit because Lorenzo had no unrestricted retained e...(Pro-only)
Issues:
- At the time the Turners filed their complaint on January 22, 2001, did they have a subsisting cause of action to collect the fair value of their shares?
- Did the RTC exceed its jurisdiction in granting partial summary judgment and ordering immediate execution?
- Was the Court of Appeals justified in dismissing the entire Civil Case No. 01‑086 rather than merely a...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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