Mode of Appeal in Itra Corporate

7/24/2019 Mode of Appeal in Itra Corporate

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MODE OF APPEAL IN ITRA CORPORATE

G.R. No. 184622 July 3, 2013

PHILIPPINE OVEREA TELECOMM!NICATION

CORPORATION "POTC# AND PHILIPPINE

COMM!NICATION ATELLITE CORPORATION

"PHILCOMAT#,Petitioners,

vs.

VICTOR AFRICA, ERLINDA I. $ILDNER, %LVIA &.

IL!ORIO, HONORIO PO$LADOR III, VICTORIA C. DELO

RE%E, JOHN $ENEDICT IOON, AND JOHN'JANE

DOE.Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No(. 184)12*14

PHILIPPINE OVEREA TELECOMM!NICATION

CORPORATION "POTC# AND PHILIPPINE

COMM!NICATION ATELLITE CORPORATION

"PHILCOMAT#,Petitioners,

vs.

HON. JENN% LIN ALDECOA*DELORINO, PAIRING J!DGE

OF THE REGIONAL TRIAL CO!RT OF MA&ATI CIT%*$RANCH 138, VICTOR AFRICA, +u+o-/ly +(-

PHILCOMAT, AND JOHN'JANE DOE.Respondents.

x - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. 186066

PHILCOMAT HOLDING CORPORATION, +(-/ y

CONCEPCION PO$LADOR,Petitioner,

vs.

PHILIPPINE COMM!NlCATION ATELLITE

CORPORATION "PHILCOMAT#, +(-/ y VICTOR

AFRICA,Respondent.

x - - - - - - - - - - - - - - - - - - - - - - - x

G.R. No. 18650


ERLINDA I. $ILDNER,Petitioner,

vs.


ENRI!E L. LOCIN,Respondent.

Mercantile Law; Corporation Law; Intra-Corporate Controvers;

!"ere is an intra-corporate controvers w"en t"e disp#te

involves an o$ t"e $ollowing relations"ips, to wit% &a' (etweent"e corporation, partners"ip or association and t"e p#(lic; &('

(etween t"e corporation, partners"ip or association and t"e

State in so $ar as its $ranc"ise, per)it or license to operate is

concerned; &c' (etween t"e corporation, partners"ip or

association and its stoc*"olders, partners, )e)(ers or

o+cers; and &d' a)ong t"e stoc*"olders, partners or

associates t"e)selves.ot" Civil Case o. /0-1/0 o$ t"e

R!C &ranc" 123' in Ma*ati Cit and S Civil Case o. /13 o$

t"e Sandigan(aan involved intra-corporate controversies

a)ong t"e stoc*"olders and o+cers o$ t"e corporations. It is

settled t"at t"ere is an intra-corporate controvers w"en t"e

disp#te involves an o$ t"e $ollowing relations"ips, to wit% &a'


p#(lic; &(' (etween t"e corporation, partners"ip or association

and t"e State in so $ar as its $ranc"ise, per)it or license tooperate is concerned; &c' (etween t"e corporation,

partners"ip or association and its stoc*"olders, partners,

)e)-(ers or o+cers; and &d' a)ong t"e stoc*"olders,

partners or associates t"e)selves.

Sa)e; Sa)e; Sa)e; Sec#rities Reg#lation Code &R.4. o.

35'; 6pon t"e enact)ent o$ Rep#(lic 4ct o. 35 &!"e

Sec#rities Reg#lation Code', e7ective on 4#g#st 3, 8///, t"e

9#risdiction o$ t"e S:C over intra-corporate controversies and

t"e ot"er cases en#)erated in Section o$ P.D. o. /8-4 was

trans$erred to t"e Regional !rial Co#rt p#rs#ant to Section .8

o$ t"e law.6pon t"e enact)ent o$ Rep#(lic 4ct o. 35

&!"e Sec#rities Reg#lation Code', e7ective on 4#g#st 3, 8///,

t"e 9#risdiction o$ t"e S:C over intra-corporate controversies

and t"e ot"er cases en#)erated in Section o$ P.D. o. /8-4

was trans$erred to t"e Regional !rial Co#rt p#rs#ant to Section

.8 o$ t"e law, w"ic" provides% .8. !"e Co))ission


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decision or order, "owever, t"e second part o$ t"e provision

spea*s o$ an appeal or petition t"at needs to (e =led ( t"e

part concerned. In t"is appeal or petition, a restraining order

)#st (e so#g"t $ro) t"e appellate co#rt to en9oin t"e

en$orce)ent or i)ple)entation o$ t"e decision or order.

6nless a restraining order is so iss#ed, t"e decision or order

rendered #nder t"e Interi) R#les s"all re)ain to (e

i))ediatel exec#tor.

Sa)e; Sa)e; Sa)e; 4s a r#le, t"e =ndings o$ $act ( t"e Co#rt

o$ 4ppeals are not reviewed on appeal, (#t are (inding and

concl#sive.!"e Co#rt is not a trier o$ $acts, and t"#s s"o#ldnot reexa)ine t"e evidence in order to deter)ine w"et"er t"e

$acts were as P!C and PAC &ieto ro#p' now insist t"e

were. !"e Co#rt )#st respect t"e =ndings o$ t"e C4 s#staining

t"e $act#al =ndings o$ t"e R!C in Civil Case o. /0-1/0. 4s a

r#le, t"e =ndings o$ $act ( t"e C4 are not reviewed on appeal,

(#t are (inding and concl#sive. !"e reason $or t"is "as (een

well stated in J.R. lanco v. E#as"a, 213 SCR4 252 &1'% !o

(egin wit", t"is Co#rt is not a trier o$ $acts. It is not its $#nction

to exa)ine and deter)ine t"e weig"t o$ t"e evidence

s#pporting t"e assailed decision. In P"ilippine 4irlines, Inc. vs.

Co#rt o$ 4ppeals &85 SCR4 ?81 F15G', t"e Co#rt "eld t"at

$act#al =ndings o$ t"e Co#rt o$ 4ppeals w"ic" are s#pported

( s#(stantial evidence are (inding, =nal and concl#sive #pon

t"e S#pre)e Co#rt. So also, well-esta(lis"ed is t"e r#le t"at

H$act#al =ndings o$ t"e Co#rt o$ 4ppeals are concl#sive on t"eparties and carr even )ore weig"t w"en t"e said co#rt

a+r)s t"e $act#al =ndings o$ t"e trial co#rt. Moreover, well

entrenc"ed is t"e prevailing 9#rispr#dence t"at onl errors o$

law and not o$ $acts are reviewa(le ( t"is Co#rt in a petition

$or review on certiorari #nder R#le 0 o$ t"e Revised R#les o$

Co#rt, w"ic" applies wit" greater $orce to t"e Petition #nder

consideration (eca#se t"e $act#al =ndings ( t"e Co#rt o$

4ppeals are in $#ll agree)ent wit" w"at t"e trial co#rt $o#nd.

FP"ilippine verseas !eleco))#nications Corporation &P!C'

vs. 4$rica, 5// SCR4 02&8/12'G

$ERAMIN, J.:

4n intra-corporate disp#te involving a corporation #nderse#estration o$ t"e Presidential Co))ission on ood

overn)ent &PC' $alls #nder t"e 9#risdiction o$ t"e Regional

!rial Co#rt &R!C', not t"e Sandigan(aan.

!"e Cases

!"ese consolidated appeals via petitions $or review on

certiorari incl#de t"e $ollowing%

&a' .R. o.130?88 - t"e appeal $ro) t"e dis)issal ( t"e

Sandigan(aan o$ t"e petitioners< co)plaint $or in9#nction

doc*eted as Civil Case o. /13 on t"e gro#nd t"at t"e

Sandigan(aan "ad no 9#risdiction over t"e iss#e d#e to its

(eing an intra-corporate disp#te;

&(' .R. o.130518-10 and .R. o. 13?/?? - t"e appeals o$t"e Locsin ro#p &in representation o$ P"ilippine verseas

!eleco))#nications Corporation &P!C', P"ilippine

Co))#nications Satellite Corporation &PAILCMS4!', and

P"ilco)sat Aoldings Corporation &PAC' $ro) t"e consolidated

decision t"e Co#rt o$ 4ppeals &C4' pro)#lgated on Septe)(er

2/, 8//3 in C.4.-.R. SP o. 1/188, C.4.-.R. SP o. 3/5

and C.4.-.R. SP o. 32; and

&c' .R. o. 13?/ - t"e appeal o$ t"e Il#sorio ro#p see*ing

t"e reversal o$ t"e decision pro)#lgated ( t"e C4 on J#l 1?,

8//3 in C.4.-.R. SP o. 1/8025.

Co))on 4ntecedents

P!C is a do)estic corporation organiKed $or t"e p#rpose o$,a)ong ot"ers, constr#cting, installing, )aintaining, and

operating co))#nications satellite sste)s, satellite ter)inal

stations and associated e#ip)ents and $acilities in t"e

P"ilippines.1

PAILCMS4! is also a do)estic corporation. Its p#rposes

incl#de providing teleco))#nications services t"ro#g" space

rela and repeater stations t"ro#g"o#t t"e P"ilippines.

PAC is li*ewise a do)estic corporation, previo#sl *nown as

Li(ert Mines, Inc., and is engaged in t"e discover,

exploitation, develop)ent and exploration o$ oil. In 15,

Li(ert Mines, Inc. c"anged its na)e to PAC, declassi=ed its

s"ares, and a)ended its pri)ar p#rpose to (eco)e a "olding

co)pan.8

!"e owners"ip str#ct#re o$ t"ese corporations i)plies t"atw"oever "ad control o$ P!C necessaril "eld 1// control o$

PAILCMS4!, and in t#rn w"oever controlled PAILCMS4!

wielded 31 )a9orit control o$ PAC. Records reveal t"at

P!C "as (een owned ( seven $a)ilies t"ro#g" t"eir

individ#al )e)(ers or t"eir corporations, na)el% &a' t"e

Il#sorio a)il; &(' t"e ieto a)il; &c' t"e Po(lador a)il;

&d' t"e 4$rica a)il; &e' t"e enedicto a)il; &$' t"e Ponce

:nrile a)il; and &g' t"e :liKalde a)il.2

4tt. Potenciano Il#sorio, t"e patriarc" o$ t"e Il#sorio a)il,

owned s"ares o$ stoc* in P!C. 4 (loc* consisting o$ ,0//

P!C s"ares o$ stoc* "as (eco)e t"e (one o$ contention in a

prolonged controvers a)ong t"e parties. 4tt. Il#sorio

clai)ed t"at "e "ad inc#rred t"e ire o$ I)elda Marcos d#ring

t"e regi)e o$ President Marcos, leading to t"e Marcosspo#ses< gra((ing $ro) "i) t"e P!C s"ares o$ stoc* t"ro#g"

t"reats and inti)idation and wit"o#t an val#a(le

consideration, and placing s#c" s"ares #nder t"e na)es o$

t"eir alter egos, na)el% 2,?00 s"ares in t"e na)e o$

Independent Realt Corporation &IRC'; 1,5 s"ares in t"e

na)e o$ MidPasig Land Develop)ent &Mid-Pasig'; and one

s"are in t"e na)e o$ erdinand Marcos, Jr.0

n e(r#ar 8, 13?, t"e :DS4 People Power Revol#tion

deposed President Marcos $ro) power and $orced "i) and "is

$a)il to Nee t"e co#ntr. n e(r#ar 83, 13?, newl-

installed President CoraKon C. 4#ino iss#ed :xec#tive rder

o. 1 to create t"e PC w"ose tas* was to assist t"e

President in t"e recover o$ all ill-gotten wealt" a)assed (

President Marcos, "is i))ediate $a)il, relatives,s#(ordinates and close associates, w"et"er located in t"e

P"ilippines or a(road, t"ro#g" t"e ta*eover or se#estration o$

all (#siness enterprises and entities owned or controlled (

t"e) d#ring President Marcos< ad)inistration, directl or

t"ro#g" no)inees, ( ta*ing #nd#e advantage o$ t"eir p#(lic

o+ce and>or #sing t"eir powers, a#t"orit, inN#ence,

connections or relations"ips.

S#(se#entl, Jose O. Ca)pos, a sel$-con$essed cron o$

President Marcos, vol#ntaril s#rrendered to t"e PC t"e

properties, assets, and corporations "e "ad "eld in tr#st $or

t"e deposed President. 4)ong t"e corporations s#rrendered

were IRC &w"ic", in t"e (oo*s o$ P!C, "eld 2,?00 P!C

s"ares' and Mid-Pasig &w"ic", in t"e (oo*s o$ P!C, owned

1,5 P!C s"ares'. 4lso t#rned over was one P!C s"are int"e na)e o$ erdinand Marcos, Jr.?

@it" Ca)pos< s#rrender o$ IRC and Mid-Pasig to t"e PC, t"e

owners"ip str#ct#re o$ P!C (eca)e as $ollows%

wner o$ S"are"oldings

Il#sorio, 4$rica, Po(lador,

enedicto and Ponce :nrile

a)ilies

0?.2

PC &IRC and Mid-Pasig' 2.8

ieto a)il 12.18
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:liKalde a)il /.5

!otal 1//.//

@it" 2.8 o$ t"e P!C s"are"oldings #nder its control, t"e

PC o(tained t"ree o#t o$ t"e seven seats in t"e P!C oard

o$ Directors. 4t t"e ti)e, Man#el ieto, Jr. was t"e President o$

(ot" P!C and PAILCMS4!. Aowever, ieto, Jr. "ad a $alling

o#t wit" ot"er stoc*"olders. !o *eep control o$ t"e P!C and

PAILCMS4!, ieto, Jr. aligned wit" t"e PC no)inees toena(le "i) to wrest $o#r o#t o$ seven seats in t"e P!C oard

o$ Directors and =ve o#t o$ t"e nine seats in t"e PAILCMS4!

oard o$ Directors. !"#s, ieto, Jr. re)ained as t"e President

o$ P!C and PAILCMS4!.5

n J#l 88, 135, t"e overn)ent, represented ( t"e PC,

=led in t"e Sandigan(aan a Co)plaint $or reconveance,

reversion, acco#nting, restit#tion and da)ages against Jose L.

4$rica, Man#el A. ieto, Jr., President Marcos, I)elda R.

Marcos, erdinand R. Marcos, Jr., Ro(erto S. enedicto, J#an

Ponce :nrile and 4tt. Potenciano Il#sorio.3!"e Co)plaint,

doc*eted as S Civil Case o. //, alleged t"at t"e

de$endants acted in colla(oration wit" eac" ot"er as

d#))ies, no)inees and>or agents o$ de$endants erdinand :.

Marcos, I)elda R. Marcos and erdinand R. Marcos, Jr. inseveral corporations, s#c" as t"e Mid-Pasig Land Develop)ent

Corporation and t"e Independent Realt Corporation w"ic",

t"ro#g" )anip#lations ( said de$endants, appropriated a

s#(stantial portion o$ t"e s"are"oldings in P"ilippine verseas

!eleco))#nications Corporation and P"ilippine

Co))#nications Satellite Corporation "eld ( t"e late Aonorio

Po(lador, Jr., Jose BaldeK and rancisco Rees, t"ere( $#rt"er

advancing de$endants< sc"e)e to )onopoliKe t"e

teleco))#nications ind#str; t"at t"ro#g" t"eir illegal acts,

t"e ac#ired ill-gotten wealt"; t"at t"eir acts constit#ted

(reac" o$ p#(lic tr#st and t"e law, a(#se o$ rig"ts and power,

and #n9#st enric")ent; and t"at t"eir illgotten wealt", real

and personal, are dee)ed to "ave (een ac#ired &( t"e)'

$or t"e (ene=t o$ t"e plainti7 &Rep#(lic' and are, t"ere$ore,

i)pressed wit" constr#ctive tr#st in $avor o$ &t"e latter' andt"e ilipino people.

!"e Co)plaint praed t"at all t"e $#nds, properties and assets

illegall ac#ired ( t"e de$endants, or t"eir e#ivalent val#e,

(e reconveed or reverted to t"e overn)ent; and t"at t"e

de$endants (e ordered to render an acco#nting and to pa

da)ages.1/

In "is 4)ended 4nswer wit" Cross-Clai) &against t"e

Marcoses' and !"ird-Part Co)plaint against Mid-Pasig and

IRC, 4tt. Il#sorio denied "aving ac#ired ill-gotten wealt" and

"aving #n9#stl enric"ed "i)sel$ ( conspiring wit" an o$ t"e

de$endants in co))itting a (reac" o$ p#(lic tr#st or a(#se o$

rig"t or o$ power, stating t"at "e "as never "eld an p#(lic

o+ce nor "as "e (een a govern)ent e)ploee; and t"at "ewas never a d#)) or agent o$ t"e Marcoses. Ae interposed

t"e a+r)ative de$ense t"at "e owned ,0// P!C s"ares o$

stoc*, "aving ac#ired t"e) t"ro#g" "is "onest toil, (#t t"e

Marcoses "ad ta*en t"e s"ares $ro) "i) t"ro#g" t"reats and

inti)idation and wit"o#t val#a(le consideration and t"en

placed t"e s"ares in t"e na)es o$ t"eir alter egos; and t"at "e

t"#s (eca)e t"e "apless victi) o$ in9#stice, wit" t"e rig"t to

recover t"e s"ares and t"eir corresponding dividends.11

n J#ne 83, 1?, a$ter a decade o$ litigation, t"e Rep#(lic,

IRC and Mid-Pasig, and t"e PC &acting t"ro#g" PC

Co))issioner Aer)ilo Rosal' entered into a co)pro)ise

agree)ent wit" 4tt. Il#sorio, w"ere( 4tt. Il#sorio

recogniKed t"e owners"ip o$ t"e Rep#(lic over 0,585 o$ t"e

P!C s"ares o$ stoc* in t"e na)es o$ IRC and Mid-Pasig, and,in t#rn, t"e Rep#(lic ac*nowledged "is owners"ip o$ ?52 o$

t"e P!C s"ares o$ stoc* and #ndertoo* to dis)iss Civil Case

o. // as against "i).

!"e co)pro)ise agree)ent relevantl stated%

@A:R:4S, t"is Co)pro)ise 4gree)ent covers t"e $#ll,

co)pre"ensive and =nal settle)ent o$ t"e clai)s o$ t"e

B:RM:! against IL6SRI in Civil Case o. S-//,

pending (e$ore t"e !"ird Division o$ t"e Sandigan(aan; t"e

Cross-Clai) involving several properties located in ParaQa#e,

Metro Manila; and t"e !"ird-Part Co)plaint =led ( IL6SRI,

in t"e sa)e case, involving t"e ive !"o#sand o#r A#ndred

&,0//' s"ares o$ stoc*s registered in t"e na)es o$ Mid-Pasig

Land Develop)ent Corporation &MLDC' and Independent

Realt Corporation &IRC', respectivel, in t"e P"ilippine

verseas !eleco))#nications Corporation &P!C';

x x x x

President Ra)os approved t"e co)pro)ise agree)ent, and

directed its s#()ission to t"e Sandigan(aan $or approval

t"ro#g" "is )arginal note dated cto(er , 1?.18

It was not #ntil J#ne 3, 13, or nearl two ears $ro) its

exec#tion, "owever, t"at t"e Sandigan(aan approved t"e

co)pro)ise agree)ent, t"e resol#tion $or w"ic" reads%

@A:R:R:, and as praed $or in t"e Motion dated J#ne 2,

13, w"ic" is "ere( granted.

1. !"e $oregoing Co)pro)ise 4gree)ent dated J#ne 83, 1?

exec#ted ( and (etween t"e plainti7 and de$endant

Potenciano !. Il#sorio is "ere( approved, t"e sa)e not (eing

contrar to law, good )orals and p#(lic polic. !"e parties

t"ereto are "ere( en9oined to strictl a(ide ( and co)pl

wit" t"e ter)s and conditions o$ t"e said Co)pro)ise

4gree)ent.

8. !"e co)plaint as against de$endant Potenciano !. Il#sorio

onl in t"e a(ove-entitled case o. /// is "ere( dis)issed.

2. !"e Motions $or In9#nction and Conte)pt, respectivel, =led

( de$endant Potenciano !. Il#sorio against t"e

overn)ent>PC, its o+cers and agents, in Civil Case o.

/// are "ere( wit"drawn;

0. !"e !"ird-Part Co)plaint and t"e Cross-Clai) o$ de$endant

Potenciano !. Il#sorio are "ere( dis)issed; and

. !"e oard o$ Directors, President and Corporate Secretar

o$ t"e P"ilippine verseas !eleco))#nications Corporation

are "ere( ordered to iss#e t"e corresponding stoc*

certi=cates to, and in t"e na)es o$ Potenciano !. Il#sorio, Mid-

Pasig Land Develop)ent Corporation, and Independent Realt

Corporation, respectivel.12

!"e res#lt was t"e redistri(#tion o$ t"e P!C s"are"oldings as

$ollows%

1wphi1

wner o$ S"are"oldings

Il#sorio, 4$rica, Po(lador,

enedicto and Ponce :nrile

a)ilies

1.25

PC &IRC and Mid-Pasig' 20.0

ieto a)il 12.18

:liKalde a)il /.5

!otal 1//.//

!"e Il#sorio a)il


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agree)ent tilted t"e control in P!C, PAILCMS4! and PAC,

s#c" t"at t"e alliance (etween t"e ieto a)il and t"e PC,

t"ereto$ore do)inant, (eca)e t"e )inorit.10

4$ter ass#)ing t"e Presidenc in )id-13, President :strada

no)inated t"ro#g" t"e PC Ronaldo Salonga and enito

4raneta, t"e latter a nep"ew o$ ieto, Jr., to t"e P!C oard o$

Directors to represent t"e IRC and Mid-Pasig s"are"oldings.1

4s to t"e PAILCMS4! oard o$ Directors, "owever, President

:strada t"ro#g" t"e PC no)inated $o#r no)inees, na)el%

Salonga, 4raneta, Car)elo 4$rica and :dgardo Billan#eva. !"eno)ination o$ t"e $o#r ignored t"e red#ction o$ t"e IRC and

Mid-Pasig s"are"oldings in P!C t"at s"o#ld "ave

correspondingl red#ced t"e (oard seats in PAILCMS4! t"at

t"e PC was entitled to $ro) $o#r to onl t"ree.1?

n 4#g#st 1?, 13, Mid-Pasig, represented ( Salonga, =led

in t"e Sandigan(aan in Civil Case o. // a Motion to Bacate

t"e order dated J#ne 3, 13 approving t"e co)pro)ise

agree)ent. n cto(er 8, 13, IRC, also represented (

Salonga, =led a si)ilar )otion. ot" )otions insisted t"at t"e

co)pro)ise agree)ent did not (ind Mid-Pasig and IRC $or not

(eing parties t"ereto, alt"o#g" t"e "eld s#(stantial interests

in t"e P!C s"are"oldings s#(9ect o$ t"e co)pro)ise

agree)ent; and t"at t"e co)pro)ise agree)ent was void

(eca#se its ter)s were contrar to law, good )orals andp#(lic polic $or (eing grossl and )ani$estl disadvantageo#s

to t"e overn)ent.15

4side $ro) s#pporting t"e position ta*en ( Mid-Pasig and IRC,

PC added t"at t"e co)pro)ise agree)ent was $atall

de$ective $or lac* o$ an PC resol#tion a#t"oriKing

Co))issioner Rosal to enter into t"e co)pro)ise agree)ent

in (e"al$ o$ t"e overn)ent.13

n "is part, 4tt. Il#sorio vigoro#sl opposed t"e )otions.1

n 4#g#st 83, 13, PAILCMS4! stoc*"olders "eld an

in$or)al gat"ering at t"e Manila ol$ Cl#( $or t"e apparent

p#rpose o$ introd#cing t"e new PC no)inees to t"e

stoc*"olders. D#ring t"e proceedings, "owever, 4tt. L#is

Lo*in, Jr. anno#nced t"at t"e gat"ering was (eing consideredas a Special PAILCMS4! Stoc*"olders< Meeting. !"ose in

attendance t"en proceeded to elect as Directors and +cers

o$ PAILCMS4! ieto, Jr., Lo#rdes 4$rica, Aonorio Po(lador III,

Salvador AiKon, Salonga, 4raneta, Car)elo 4$rica, and

:dgardo Billan#eva &ieto ro#p-PC'.8/

4s a conse#ence, ot"er PAILCMS4! stoc*"olders &na)el,

Il#sorio, atrina Ponce :nrile, idelit ar)s, Inc., reat 4sia

:nterprises and J44 Invest)ents Corporation' instit#ted a

Co)plaint wit" application $or t"e iss#ance o$ te)porar

restraining order &!R' and writ o$ preli)inar in9#nction &@PI'

in t"e Sec#rities and :xc"ange Co))ission &S:C' assailing

t"e election o$ t"e Directors and +cers on several gro#nds,

s#c" as t"e lac* o$ s#+cient notice o$ t"e )eeting, t"e lac* o$

#or#), and t"e lac* o$ #ali$ing s"ares o$ t"ose w"o wereelected. !"e )aintained t"at ( reason o$ P!C


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Potenciano !. Il#sorio, s#(stit#ted ( Ma. :rlinda Il#sorio

ildner'.

n Marc" 8, 8///, t"is Co#rt iss#ed a !R to en9oin t"e

Sandigan(aan $ro) exec#ting its assailed resol#tion.21

n Septe)(er ?, 8///, President :strada no)inated anot"er

set to t"e PAILCMS4! oard o$ Directors, na)el% Car)elo

4$rica, ederico 4gcaoili, Paci=co Marcelo and :dgardo

Billan#eva. !"ere(, 4$rica and Billan#eva were retained as

PAILCMS4! Directors, w"ile 4gcaoili and Marcelo replaced

4raneta and Salonga.28

S#(se#entl, P!C, t"ro#g" t"e 4$rica-ildner ro#p,

decided to "old a Special Stoc*"olders< Meeting on Septe)(er

88, 8///. P!C Corporate Secretar de los Rees iss#ed a

otice o$ Meeting. 4tte)pting to stop t"e Stoc*"oldersor dis(arred $or iss#ing t"e

otice o$ Meeting.22

!"e Special Stoc*"olders< Meeting on Septe)(er 88, 8///

was attended ( stoc*"olders representing 31.28 o$ t"e

o#tstanding capital stoc* o$ P!C &incl#ding PC'. D#ring

t"e )eeting, a new set o$ P!C oard o$ Directors were

elected, na)el% ieto, Jr., atrina Ponce :nrile, Bictor B.

4$rica, Slvia . Il#sorio, Aonorio 4. Po(lador III, Car)elo 4$rica

and PC Co))issioner Jorge Sar)iento &t"e latter two (eing

no)inated ( PC'.20

P!C t"en convened a Special Stoc*"olders< Meeting o$

PAILCMS4!, at w"ic" t"e $ollowing were elected as Directors%

ieto, Jr., rancisca enedicto, atrina Ponce :nrile, Slvia

Il#sorio, Aonorio Po(lador III, and govern)ent representatives

4$rica, Marcelo, Billan#eva and 4gcaoili &t"e latter $o#r (eing

no)inated ( PC'.2

In line wit" existing corporate polic re#iring t"e elected

Directors to accept t"eir election (e$ore ass#)ing t"eir

positions, all t"e elected Directors &incl#ding ieto, Jr.' werere#ested to sign acceptance letters to (e s#()itted to P!C

Corporate Secretar de los Rees. 4 $ew das later, "owever,

ieto, Jr. re$#sed to accept and instead opted to assail t"e

validit o$ t"e Septe)(er 88, 8/// P!C Special Stoc*"oldersor Locsin

a#t"oriKing t"e) to represent P!C and vote t"e P!C s"ares

in t"e PAILCMS4! stoc*"olders< )eeting sc"ed#led on

4#g#st , 8//0.03

n 4#g#st , 8//0, t"e ieto-PC ro#p "eld t"e

stoc*"olders< )eeting $or PAILCMS4! at t"e Manila ol$

Cl#(. I))ediatel a$ter t"e stoc*"olders< )eeting, an

organiKational )eeting was "eld, and ieto, Jr. and Locsin

were respectivel elected as C"air)an and President o$

PAILCMS4!. 4t t"e sa)e )eeting, PAILCMS4! &ieto-PC

ro#p' iss#ed a prox in $avor o$ ieto, Jr. and>or Locsin

a#t"oriKing t"e) to represent PAILCMS4! and vote t"e

PAILCMS4! s"ares in t"e stoc*"olders< )eeting o$ PAC

sc"ed#led on 4#g#st 21, 8//0.0

n 4#g#st 11, 8//0, P!C &4$rica-ildner ro#p', Bictor 4$rica,Aonorio Po(lador III and atrina Ponce :nrile =led a Co)plaint

$or in9#nction wit" praer $or !R and @PI in t"e R!C in Ma*ati

Cit &ranc" 122' against ieto, Jr., L#is Lo*in, Jr., and 4l)a

ristina . 4lo((a see*ing to en9oin t"e latter $ro) acting as

Directors and +cers o$ P!C &Civil Case o. /0-2'.

n 4#g#st 85, 8//0, t"e R!C &ranc" 122' dis)issed Civil

Case o. /0-2 $or lac* o$ 9#risdiction over t"e s#(9ect

)atter, explaining its action t"#sl%

x x x x

4$ter a per#sal o$ t"e co)plaint and o$ t"e )e)oranda =led,

wit" partic#lar attention on t"e a#t"orities cited, t"e Co#rt is

o$ t"e opinion t"at it "as no 9#risdiction over t"e case (#t t"e

Sandigan(aan./

x x x x

!"erea$ter, t"e 4$rica-ildner ro#p =led a )otion $or

reconsideration.

:arlier, on 4#g#st 13, 8//0, PAC &ieto-PC ro#p'

s#()itted to t"e S:C a =nal list o$ candidates $or Independent

Directors o$ PAC $or t"e 8//0-8// ter), to wit%

Please (e in$or)ed t"at in connection wit" t"e ann#al

stoc*"oldersT )eeting o$ PAILCMS4! ALDIS

CRPR4!I &PAC' to (e "eld on 4#g#st 21, 8//0, and in

co)pliance wit" t"e rder dated 3 J#l 8//0 o$ t"e Sec#rities

and :xc"ange Co))ission in S:C Case o. 18-/2-/2 entitledIn t"e )atter o$ P"ilco)sat Aoldings Corporation, or% Calling

o$ Meeting, t"e oard o$ Directors o$ PAC, at its )eeting

toda constit#ted t"e o)ination Co))ittee wit" t"e

$ollowing persons as its )e)(ers%

Boting Me)(ers%

1. L#is . Lo*in, Jr. &representative o$ t"e ieto ro#p'

8. :nri#e L. Locsin &representative o$ t"e PC'

2. Bacant &to (e designated ( t"e Sec#rities and :xc"ange

Co))ission in de$a#lt o$ t"e designation o$ representative (

t"e 4$rica gro#p'

on-voting )e)(er%

1. P"ilip . rodett

!"e said o)ination Co))ittee w"ic" s"all act #pon t"e

a+r)ative vote o$ at least two &8' o$ its voting )e)(ers, s"all

"ave t"e $ollowing powers, d#ties and $#nctions%

&1' !o pre-screen and s"ortlist all candidates no)inated to

(eco)e )e)(ers o$ t"e (oard o$ directors in accordance wit"

t"e #ali=cations and dis#ali=cations and t"e proced#res

prescri(ed in t"e CorporationTs Man#al on Corporate

overnance and t"e Sec#rities Reg#lation Code &SRC' and its

I)ple)enting R#les and Reg#lations &SRC R#les';

&8' !o s#()it to t"e Sec#rities and :xc"ange Co))ission and

t"e P"ilippine Stoc* :xc"ange t"e inal List o$ candidates $or

Independent Directors as re#ired #nder t"e S:C R#les;
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt46http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt47http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt48http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt48http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt49http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt49http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt50http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt50http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt46http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt47http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt48http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt49http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt50


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&2' !o act as t"e co))ittee o$ inspectors wit" powers to pass

#pon t"e validit o$ proxies, to canvass and tall t"e votes $or

t"e election o$ directors and to certi$ t"e winning directors

(ased on t"e votes garnered;

&0' !o do s#c" acts or t"ings as )a $ro) ti)e to ti)e (e

directed or delegated ( t"e oard.1

n 4#g#st 8/, 8//0, t"e S:C iss#ed an order, pertinentl

stating%

n separate dates, t"e gro#p o$ 4tt. Bictor 4$rica &4$ricaro#por de$endant

:nri#e Locsin and in invalidating t"e prox iss#ed in $avor o$

Bictor 4$rica (e ann#lled;

2. !"e elections "eld and t"e procla)ation o$ winners d#ring

t"e 4nn#al Stoc*"oldersT Meeting o$ de$endant PAC "eld on 21

4#g#st 8//0 (e ann#lled;

0. De$endant PAC (e directed to recogniKe 4tt. Bictor 4$rica

as t"e prox o$ plainti7 and t"at "e (e allowed to vote t"e

s"ares standing in t"e na)e o$ plainti7 at s#(se#ent

elections $or t"e )e)(ers o$ t"e (oard o$ directors o$

de$endant PAC.3

n cto(er 81, 8//0, PAILCMS4! &ieto ro#p' and Lo*in, Jr.

=led t"eir 4nswer wit" ro#nds $or Dis)issal and Co)p#lsor

Co#nterclai)s, averring t"erein, a)ong ot"ers, as $ollows%

25. !"e instant co)plaint )#st (e DISMISS:D $or lac* o$

capacit and>or a#t"orit o$ t"e alleged representative, Bictor

B. 4$rica, to =le t"e sa)e and s#e t"e de$endants on (e"al$ o$

P"ilco)sat.

23. @"ile t"e Co)plaint na)es P"ilco)sat as t"e plainti7,

allegedl represented ( Bictor 4$rica, at no ti)e did

FPG"ilco)sat, t"ro#g" its d#l constit#ted oard o$ Directors,

a#t"oriKe "i) to =le t"e sa)e.
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt51http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt52http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt52http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt53http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt54http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt55http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt56http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt56http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt57http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt58http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt51http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt52http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt53http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt54http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt55http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt56http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt57http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt58


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2. Bictor 4$rica (ases "is a#t"orit #pon t"e Secretar

Certi=cate, alleging t"at t"e P"ilco)sat oard o$ Directors,

d#ring its )eeting "eld on 83 J#l 8//0, a#t"oriKed "i) to =le

legal actions on (e"al$ o$ t"e corporation.

0/. It is respect$#ll averred, "owever, t"at P"ilco)sat,

t"ro#g" its d#l constit#ted oard o$ Directors DID ! ALD

an )eeting on 83 J#l 8//0, and DID ! 46!ARIW: 4$rica

to =le an action or to do an act or deed on its (e"al$. !"e

SecretarTs Certi=cate "e represented is not signed ( 4tt.

L#is . Lo*in, Jr., t"e d#l-elected Corporate Secretar o$

P"ilco)sat.

x x x x

/. !"ere was no P"ilco)sat oard )eeting "eld or a#t"oriKed

to (e "eld on 83 J#l 8//0. eit"er was t"ere an a#t"orit

vested #pon Bictor 4$rica to =le t"is n#isance s#it, w"ic" is

onl ai)ed at needlessl "arassing de$endants and t"e ot"er

law$#l stoc*"olders o$ P"ilco)sat and PAC and t"e p#(lic at

large.

1. or lac* o$ an $act#al and legal (asis o$ t"e alleged

a#t"orit o$ t"e person instit#ting and veri$ing t"e instant

co)plaint, it )#st (e declared as a 6IS4C: S6I! and

i))ediatel DISMISS:D ( t"e Aonora(le Co#rt, p#rs#ant to

Section 1 &(' o$ t"e Interi) R#les.

8. #rt"er)ore, not onl does 4$rica lac* an a#t"orit to =le

t"e instant action, t"e co)plaint itsel$ is devoid o$ an

)eritorio#s legal (asis.

2. !"e relevant $acts are as $ollows% In 8//2, a stoc*"older o$

PAC =led a letter-co)plaint &later doc*eted as S:C Case o.

18-/2-/2' wit" t"e S:C, alleging t"e non-"olding o$ t"e ann#al

stoc*"oldersT )eeting since 8//8. Aearings were cond#cted

w"erein t"e o+cers and directors o$ P!C and P"ilco)sat

were re#ired to (e present and to =le t"eir co))ents. Bictor

4$rica activel participated in t"e proceedings (e$ore t"e S:C,

in "is alleged capacit as o+cer o$ P!C, P"ilco)sat and PAC.

0. In view o$ t"e govern)ent interest in P!C w"ic" is t"e

sole (ene=cial owner o$ P"ilco)sat, w"ic" in t#rn, is t"e 3/stoc*"older o$ PAC, and t"e $act t"at P!C and P"ilco)sat are

#nder se#estration, t"e PC was li*ewise directed to =le

t"eir co))ents on t"e )atters raised ( t"e parties. PC,

t"ro#g" t"en Co))issioner Bictoria 4vena, asserted t"at t"e

govern)ent "olds 0/ interest in P!C. x x x.

. !"erea$ter, t"e S:C iss#ed t"e a$orestated rder on /3

J#l 8//0, directing t"e o+cers o$ P!C and P"ilco)sat to

cond#ct t"eir respective stoc*"oldersT )eetings. e$ore t"e

rendition o$ t"e /3 J#l 8//0 rder, t"e 4$rica gro#p did not

cond#ct an stoc*"oldersT )eeting o$ P!C or P"ilco)sat, (#t

t"e wo#ld later clai) t"at t"e "ad agreed, as earl as /8

J#l 8//0, to "old t"e )eetings on /3 J#l 8//0. iven t"e

ti)ing o$ t"e )eeting, "owever, w"ic" was "eld a$ter t"e /3

J#l 8//0 S:C rder, no credence co#ld (e given to s#c" sel$-serving clai). !"e ti)ing and dates are )ore t"an )ere

convenient coincidences.

?. 4$ter P!C and P"ilco)sat d#l "eld t"eir respective

stoc*"oldersT )eetings on / 4#g#st 8//0 and / 4#g#st

8//0, t"e S:C #p"eld t"e validit o$ t"eir )eetings in its

rder dated 8/ 4#g#st 8//0.

5. !"erea$ter, 4$rica initiated a series o$ actions in di7erent

tri(#nals in an atte)pt to (asicall prevent t"e P!C and

P"ilco)sat Directors and +cers $ro) acting in t"eir capacit

as s#c".

n ove)(er 13, 8//0, PC expressl adopted t"e 4nswer

o$ PAILCMS4! &ieto ro#p' as its own 4nswer in Civil Caseo. /0-1/0.?/

n Dece)(er 5, 8//0, t"e R!C denied t"e 4$rica ro#p


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previo#s arg#)ents in t"eir petitions alread considered and

ex"a#stivel passed #pon in o#r J#l 85, 8// &sic' Decision.

Indeed, we =nd no cogent reason to deviate $ro) o#r

Decision.

4s regards t"e second incident, respondent ildner see*s a

clari=cation on t"e e7ect o$ t"e !R, iss#ed ( t"is Co#rt on

Marc" 8, 8///, restraining t"e i)ple)entation o$ t"e

c"allenged Sandigan(aan Resol#tion dated Dece)(er 8/,

1 in Civil Case o. ///.

It )a (e recalled t"at in o#r J#ne 1, 8// Decision, wedis)issed t"ese consolidated petitions assailing t"e

Sandigan(aan Resol#tion o$ Dece)(er 8/, 1. !"is

Resol#tion &1' denied petitionersT separate )otions to vacate

t"e Sandigan(aan rder dated J#ne 3, 13 approving t"e

Co)pro)ise 4gree)ent; &8' declared t"e ,0// P!C s"ares

registered in t"e na)es o$ petitioners IRC and MLDC n#ll and

void as t"e categoricall ad)itted t"at s#c" s"ares are ill-

gotten wealt" o$ deposed President Marcos and "is a)il,

and t"at t"e sa)e were s#rrendered to t"e overn)ent w"ic"

now owns t"e sa)e; and &2' ordered t"e Corporate Secretar

o$ P!C, wit"in 1/ das $ro) receipt o$ t"e Resol#tion, to

iss#e 0,585 P!C s"ares in t"e na)e o$ t"e Rep#(lic, and ?52

P!C s"ares in t"e na)e o$ Potenciano Il#sorio, p#rs#ant to

t"e approved Co)pro)ise 4gree)ent. In co)pliance wit" t"e

Sandigan(aan Resol#tion, 4tt. Bictoria C. de los Rees,Corporate Secretar o$ t"e P!C, on Jan#ar 1/, 8///,

trans)itted to Mr. J#stice Magdangal . :l)a, t"en C"ie$

Presidential Legal Co#nsel and C"air)an o$ P"ilippine

Co))ission on ood overn)ent &PC', Stoc* Certi=cate

o. 121 &o$ even date' iss#ed in t"e na)e o$ t"e Rep#(lic o$

t"e P"ilippines, $or 0,585 P!C s"ares. !"#s, t"e Co)pro)ise

4gree)ent was partl i)ple)ented.

In "er present )otion $or clari=cation, respondent ildner

alleges inter alia t"at, on Marc" 8, 8/// or )ore t"an two &8'

)ont"s a$ter t"e Co)pro)ise 4gree)ent "ad (een

i)ple)ented on Jan#ar 1/, 8///, t"is Co#rt iss#ed a !R

restraining its i)ple)entation.

!"ere is no need $or #s to )a*e a clari=cation (eing so#g"t (respondent ildner in "er )otion. S#+ce it to sa t"at w"en

t"e !R was iss#ed on Marc" 8, 8///, t"e Sandigan(aan

Resol#tion o$ Dece)(er 8/, 1 directing t"e iss#ance o$

P!C s"ares in t"e na)es o$ t"e Rep#(lic and Potenciano

Il#sorio in accordance wit" t"e Co)pro)ise 4gree)ent "ad

(een partiall i)ple)ented on Jan#ar 1/, 8/// or )ore t"an

two &8' )ont"s earlier ( P!C Corporate Secretar Bictoria C.

de los Rees. S"e alread trans)itted to t"en PC C"air)an

Magdangal . :l)a Stoc* Certi=cate o. 121 iss#ed in t"e

na)e o$ t"e Rep#(lic o$ t"e P"ilippines, $or 0,585 P!C

s"ares. !"is was never )entioned ( petitioners in t"eir

petitions. In $act, even (e$ore t"e petitions in t"ese cases

were =led, t"e i)ple)entation o$ t"e Co)pro)ise J#dg)ent

"ad (een partiall e7ected. @e were t"#s )isled in iss#ing

t"e !R. In an case, t"e !R "as (eco)e )oot andacade)ic, t"e sa)e "aving no )ore legal $orce as t"e act

so#g"t to (e restrained "ad (een partiall i)ple)ented and

considering o#r Decision in t"is case.

@A:R:R:, petitioners< instant )otions $or reconsideration

are D:I:D wit" I4LI!O. n respondent ildnerTs )otion $or

clari=cation, t"e sa)e is considered )oot and acade)ic.?5

In t"e )eanti)e, t"e R!C &ranc" 123' re#ired t"e parties to

s#()it t"eir respective )e)oranda in Civil Case o. /0-1/0.

ot" parties co)plied.?3

n Septe)(er 10, 8//, t"e 4$rica ro#p (ro#g"t a special

civil action $or certiorari and pro"i(ition in t"is Co#rt assailing

t"e decision pro)#lgated on J#l , 8// in C.4.-.R. SP o.

33??0 &.R. o. 1515'.?

n Septe)(er 88, 8//, P!C and PAILCMS4! &4$rica-

Il#sorio ro#p' elected a new set o$ Directors and +cers. Ma.

:rlinda I. ildner was elected as t"e C"air)an o$ t"e oards o$

Directors o$ (ot" P!C and PAILCMS4!.5/

n Septe)(er 8?, 8//, P!C and PAILCMS4! &ieto ro#p'

initiated a Co)plaint $or in9#nction and da)ages wit" praer

$or !R and @PI in t"e Sandigan(aan &S Civil Case o.

/13'.51

!"e Sandigan(aan iss#ed a !R in S Civil Case o. /13,

en9oining t"e 4$rica-Il#sorio ro#p $ro) acting as +cers and

Directors o$ P!C and PAILCMS4!.58

n J#ne , 8//?, t"e Co#rt dis)issed .R. o. 1515, viK%

Considering t"e allegations, iss#es and arg#)ents add#ced int"e petition $or certiorari and pro"i(ition wit" praer $or writ o$

preli)inar in9#nction and>or te)porar restraining order

dated 10 Septe)(er 8//, t"e Co#rt Resolves to DISMISS t"e

petition $or $ail#re to s#+cientl s"ow t"at t"e #estioned

9#dg)ent o$ t"e Co#rt o$ 4ppeals is tainted wit" grave a(#se

o$ discretion.52

n cto(er 10, 8//?, t"e R!C &ranc" 123' rendered its

decision in Civil Case o. /0-1/0, t"#s%

In t"e case at (ar, t"e ieto ro#p did not speci=call den

plainti7Ts allegation t"at t"eir votes d#ring t"e 8//0 ann#al

stoc*"oldersT )eeting $or P!C and P"ilco)sat )ainl relied

on t"e IRC and Mid-Pasig s"ares. 6pon t"e pro)#lgation o$ t"e

a(ove-cited S#pre)e Co#rt Decision dated 1 J#ne 8//,

even as earl as 13?, (ot" IRC and Mid-Pasig corporations

"ave no )ore rig"t or interest over t"e s#(9ect P!C s"ares

w"ic" was alread s#rrendered ( Jose O. Ca)pos to t"e

overn)ent. Mid-Pasig and IRC t"e)selves were se#estered,

and t"en vol#ntaril s#rrendered as part o$ t"e res covered (

t"e Ca)pos Co)pro)ise 4gree)ent. Inso$ar as Mid-Pasig and

IRC are concerned, t"e "ave alread relin#is"ed all rig"ts or

interest over all P!C s"ares registered in t"eir na)es in $avor

o$ t"e Rep#(lic represented ( PC, even as earl as 13?.

Aence, t"e S#pre)e Co#rt Decision, in e7ect, invalidates t"e

elections "eld ( t"e ieto ro#p in t"e ann#al stoc*"oldersT

)eeting o$ P!C and P"ilco)sat on 4#g#st 8//0 and

4#g#st 8//0, $or not "aving t"e )a9orit control o$ t"e said

corporation. In t#rn, t"e de$endant ieto ro#p co#ld not

"ave, t"ere$ore, iss#ed a valid prox nor co#ld t"e "ave

appointed de$endant Locsin as P"ilco)sator de$endant Locsin $or

p#rposes o$ t"e 4nn#al Stoc*"oldersT Meeting $or t"e ear

8//0 and declaring t"e prox iss#ed in $avor o$ Bictor B. 4$rica

$or t"e said p#rpose, valid. Corollaril, t"e elections "eld and

t"e procla)ation o$ winners d#ring t"e ann#al stoc*"oldersT

)eeting o$ de$endant PAC "eld on 21 4#g#st 8//0 is "ere(

ann#lled.50

n cto(er 82, 8//?, t"e R!C &ranc" 123' dis)issed Civil

Case o. /1-30/ $or lac* o$ 9#risdiction. S#(se#entl, t"e R!C

&ranc" 123' denied t"e petitioners< Motion $or

Reconsideration, and treated it instead as a notice o$ appeal.5

n Marc" 1, 8//5, PAC &ieto ro#p' and rodett appealed

t"e decision dated cto(er 10, 8//? rendered in Civil Case

o. /0-1/0 to t"e C4 via a petition $or review &C4-.R. SP .

3/5'. n Marc" 85, 8//5, t"e 4$rica-Il#sorio ro#ps

s#()itted t"eir co))ent &wit" opposition to t"e application

$or !R and @PI'.5?

n Marc" 81, 8//5, P!C and PAILCMS4! &ieto ro#p'

(ro#g"t to t"e C4 a petition $or certiorari &wit" praer $or !R

and @PI', si)ilarl assailing t"e decision rendered on cto(er

10, 8//? in Civil Case o. /0-1/0 &C.4.-.R. SP o. 32'.55

n Marc" 85, 8//5, PAILCMS4! &4$rica ro#p' so#g"t t"e

exec#tion o$ t"e decision rendered on cto(er 10, 8//? inCivil Case o. /0-1/0 ( t"e R!C &ranc" 123'. 4lt"o#g" on

4pril 0, 8//5, PAC &ieto ro#p', Locsin and rodett opposed

t"e )otion $or exec#tion, t"e R!C &ranc" 123' granted t"e

)otion on 4pril 18, 8//5, to wit%
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@A:R:R:, pre)ises considered, t"e Co#rt "ere( grants

t"e plainti7Ts Motion. Let a writ o$ exec#tion (e iss#ed

directing t"e i)ple)entation o$ t"e $ollowing orders%

1' t"e individ#als elected ( de$endant Locsin in t"e 8//0 PAC

4SM, and so proclai)ed to (e PAC


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C"air)an; Pa(lo L. Lo(regat as Director and Bice-C"air)an;

Ra)on Jacinto as Director and C"air)an o$ t"e :xec#tive

Co))ittee; :rlinda I. ildner as Director and President>C:;

Marietta . Il#sorio as Director and Bice President; atrina

Ponce :nrile as Director and !reas#rer; Lorna P. ap#nan,

Aonorio 4. Po(lador III and Rodol$o . Serrano, Jr. as Directors;

Ra$ael 4. Po(lador as 4ssistant !reas#rer; and Jo"n enedict L.

Sioson as Corporate Secretar.0

!"erea$ter, Concepcion 4. Po(lador o$ t"e ieto ro#p =led a

Co)plaint $or in9#nction and declaration o$ n#llit &wit" praer

$or !R and @PI' wit" t"e Sandigan(aan, see*ing to en9oint"e PC $ro) recogniKing t"e stoc*"olders< )eeting "eld on

ove)(er 1, 8//5 &Civil Case o. /5-///1'.

Meanw"ile, PAC &4$rica ro#p', t"ro#g" :rlinda I. ildner, =led

a Co)plaint $or in9#nction against t"e an* o$ t"e P"ilippine

Islands &PI' wit" t"e R!C &ranc" ?8' in Ma*ati Cit, see*ing

to en9oin PI $ro) allowing $#rt"er dis(#rse)ents o$ PAC

$#nds to #na#t"oriKed persons co)prising t"ose w"o were no

longer )e)(ers o$ t"e PAC oard o$ Directors d#e to t"e

n#lli=cation o$ t"eir election.

n t"e (asis o$ t"e Co)plaint, t"e R!C &ranc" ?8' iss#ed an

order on Dece)(er 12, 8//5, as $ollows%

R:I CSID:R:D, pending =nal ad9#dication on t"e

principal action raised "erein and s#(9ect to t"e posting o$ t"e

inde)nit (ond in t"e s#) o$ !"ree Million Pesos &P"p

2,///,///.//' iss#ed in $avor o$ t"e de$endant an* o$ t"e

P"ilippine Islands and de$endant intervener PAC represented

( :nri#e M. Locsin, let a writ o$ preli)inar in9#nction iss#e,

en9oining t"e said de$endant (an*, its e)ploees, o+cers, and

representatives $ro) allowing t"e de$endant intervener,

Locsin ro#p, t"eir o+cers, e)ploees, agents, and>or

representatives to in#ire, wit"draw, and>or in an )anner

transact relative to an and all P"ilco)sat Aoldings

Corporation acco#nts )aintained wit" an* o$ t"e P"ilippine

Islands #ntil $#rt"er orders $ro) t"is Co#rt.

inall, t"e de$endant (an* is "ere( ordered to s#()it to t"is

Co#rt t"e latest &as o$ receipt o$ t"is rder' (an* state)ents

and>or certi=cates o$ all PAC acco#nts deposited wit" its (an*

wit"in ten &1/' das $ro) notice t"ereo$.

n Dece)(er 10, 8//5, P!C and PAILCMS4! &4$rica ro#p'

=led in C.4.-.R. SP . 32 a Mani$estation and 6rgent

Motion to @it"draw Petition, praing t"at t"e petition (e

considered wit"drawn, and t"at t"e @PI iss#ed on J#ne 8,

8//5 (e i))ediatel li$ted. In s#pport o$ t"e )otion, P!C

and PAILCMS4! &4$rica ro#p' averred%

&1' n 81 Marc" 8//5, Mr. :nri#e Locsin &Locsin' p#rportedl

representing P!C and PAILCMS4! =led t"e instant petition,

assailing t"e decision iss#ed ( t"e Regional !rial Co#rt &R!C'

o$ Ma*ati ranc" 123 in Civil Case o. /0-1/0 x x x.

x x x x

&2' @"at Mr. Locsin "as deli(eratel $ailed and>or re$#sed to

div#lge to t"is Aonora(le Co#rt #pon =ling t"e instant petition

are t"e $ollowing $acts% &1' Mr. Locsin and "is gro#p are exactl

t"e sa)e set o$ individ#als w"o co)prise t"e respondents in

Civil Case o. /0-1/0, t"e decision w"ic" is now "erein

assailed; and t"at &8' Mr. Locsin and "is gro#p, p#rportedl,

representing earlier or two wee*s prior to t"e =ling o$ t"e

instant petition, alread =led an appeal also wit" t"is

Aonora(le Co#rt, al(eit pending in a di7erent division,

doc*eted as C4-.R. SP o. 3/5, raising exactl t"e sa)e

iss#es and see*ing identical relie$s as t"e are now pending in

t"e case at (ar.

x x x x

&' !"e di+c#lt in resolving t"e present controvers lodged

(e$ore t"is Aonora(le Co#rt ste)s $ro) t"e $act t"at even t"e

legiti)ate P!C and PAILCMS4! representatives (eco)e

apparentl #ndeter)ina(le.

x x x x

&' onet"eless, t"e conNicting clai)s over P!C and

PAILCMS4! "ave =nall co)e to resol#tion wit" t"e recent

develop)ents.

&1/' n 12 ove)(er 8//5, t"e govern)ent appointed its

new no)inees to P!C and PAILCMS4!. or P!C, t"e

govern)ent, t"ro#g" 6ndersecretar :nri#e D. PereK wit"

t"e directive o$ President loria Macapagal 4rroo, appointed

4tt. Daniel C. #tierreK, 4tt. 4llan S. MontaQo and J#stice

Santiago J. Ranada &Ret.' to t"e P!C (oard and represent t"egovern)entTs 20. s"are"oldings in t"e (oard o$ directors o$

P!C. In t"e sa)e )anner and $or an a*in p#rpose, t"e

govern)ent appointed Mr. Ra)on P. Jacinto, Mr. Rodol$o .

Serrano, Jr. and Rad). 4(ra"a) R. 4(esa)is &Ret.' to

represent t"e govern)entTs 20. s"are"oldings on t"e (oard

o$ directors o$ PAILCMS4!. 4lt"o#g" t"is Aonora(le Co#rt

)a ta*e 9#dicial notice o$ t"ese appoint)ents, to evidence

s#c" new appoint)ents, copies o$ t"e prox iss#ed ( t"e

Rep#(lic o$ t"e P"ilippines to 6ndersecretar PereK and t"e I

desire letter o$ t"e +ce o$ t"e President $or t"e

govern)entTs no)inees to PAILCMS4!, (ot" dated 12

ove)(er 8//5, and t"e list o$ no)inees o$ 6ndersecretar

PereK $or P!C and "is letter to PC C"air)an Ca)ilo Sa(io,

(ot" dated 1 ove)(er 8//5, are attac"ed and )ade

integral parts "ereo$ as 4nnexes , , C and D,respectivel.

&11' eedless to state, wit" t"e designation and t"eir

selection o$ t"e new govern)ent no)inees to P!C and

PAILCMS4!, t"e old no)inees, na)el% Mr. Locsin, Mr.

Man#el 4ndal, Mr. J#lio Jalandoni and Mr. # de Leon are

a#to)aticall replaced. !"is is an #ndenia(le $act and "ad

alwas (een t"e proced#re in t"e appoint)ent and

replace)ent o$ govern)ent no)inees to t"e (oard o$

co)panies w"ere t"e govern)ent "as a s#(stantial interest.

&18' ollowing t"e said appoint)ent o$ new no)inees,

necessaril, ann#al stoc*"olders )eetings o$ (ot" P!C and

PAILCMS4! were cond#cted and "eld on 1 ove)(er 8//5

in order to elect t"e new directors o$ t"e respective (oards o$t"e two co)panies. D#ring t"e said )eetings, w"ere over

/ o$ t"e s"are"olders were present and>or d#l

represented, t"e stoc*"olders elected t"e new (oard o$

directors o$ P!C and PAILCMS4!. !"ese elections are

evidenced ( t"e SecretarTs Certi=cates d#l exec#ted ( t"e

Corporate Secretaries o$ P!C and PAILCMS4!, copies o$

w"ic" are attac"ed and )ade integral parts "ereo$ as 4nnexes

: and , respectivel.

&12' !"#s, t"e new govern)ent no)inees, toget"er wit" t"e

private s"are"olders o$ P!C and P"ilco)sat are 9oined

toget"er in a #ni=ed (oard o$ directors $or t"e two co)panies.

In $act, a$ter t"e new sets o$ directors "ad (een elected, (ot"

co)panies cond#cted t"eir respective organiKational and

(oard )eetings.

&10' 4t t"e (oard )eetings o$ P!C and P"ilco)sat "eld on 0

Dece)(er 8//5, P!C and PAILCMS4! "ave decided, as t"e

new, #nassaila(l legiti)ate and onl (oard o$ directors o$

P!C and PAILCMS4!, to a#t"oriKe t"e wit"drawal o$ t"e

instant petition =led in t"e na)e o$ P!C and PAILCMS4!.

!"e (oards li*ewise in t"eir resol#tions, disallowed ot"er

persons to represent t"eir co)panies. Copies o$ t"ese

resol#tions iss#ed ( P!C and PAILCMS4! are attac"ed and

)ade integral parts "ereo$ as 4nnexes and A,

respectivel.

&1' !"#s, (ased on t"e $oregoing, P!C and PAILCMS4!,

w"o are s#pposedl t"e petitioners in t"is case, )ove $or t"e

i))ediate wit"drawal o$ t"e petition dated 10 Marc" 8//5

and t"e i))ediate li$ting o$ t"e @rit o$ Preli)inar In9#nction

dated 8 J#ne 8//5.?

!"e 6rgent Motion to @it"draw Petition was opposed in a

Co))ent and pposition =led on e(r#ar 12, 8//3 t"at

averred as $ollows%
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x x x x

0. !"ro#g" t"e )alicio#s )otion to wit"draw, t"ere is a veiled

atte)pt, to "ave t"is Aonora(le Co#rt #p"old and recogniKe

t"e validit o$ t"e s#pposed )eetings "eld ( r#)p (oards on

ove)(er 1, 8//5.!"is is a )atter t"at is properl

cogniKa(le onl ( t"e Sandigan(aan.

. In $act, t"ere is alread a pending co)plaint (e$ore t"e

Sandigan(aan t"at assails t"e s#pposed ove)(er 1, 8//5

)eetings stated in t"e )otion to wit"draw.

?. !"e Sandigan(aan, acting t"ro#g" t"e i$t" Division,

granted t"e iss#ance o$ a !e)porar Restraining rder on

Dece)(er 81, 8//5, to prevent and pro"i(it an recognition o$

t"ese ove)(er 1, 8//5 )eetings. x x x.

18. Petitioners, "owever, are co)pelled to address t"e

)isleading allegations and concl#sions in t"e )otion to

wit"draw. It is respect$#ll )ani$ested t"at t"ese alleged

ove)(er 1, 8//5 )eetings were not called ( t"e

legiti)ate (oards o$ petitioners P!C and P"ilco)sat. nl

t"e legiti)ate (oards, "ere represented ( Mr. Locsin, can

properl act #pon an c"ange in t"e govern)ent no)inees,

and it is onl t"e legiti)ate (oards t"at can install t"e). 4s

)ani$ested ( petitioners to t"is Aonora(le Co#rt, since t"ere

are no )ore legal c"allenges to t"e respective oards o$

Directors o$ petitioners originall led ( Ronaldo Salonga and

Man#el ieto, Jr., since 13, onl t"e s#ccessors o$ t"ese

(oards, "ere represented ( Mr. Locsin, can properl represent

petitioners P!C and PAILCMS4!.

18.1. !"e iss#e was settled wit" t"e dis)issal o$ t"e appeal in

C4 .R. CB o. 332?/, w"ic" ste))ed $ro) t"e original

petition =led in 13 ( Potenciano Il#sorio, atrina Ponce-

:nrile, and t"eir $a)il owned corporations, to #estion t"e

election o$ t"e ieto-Salonga (oard. !"e appeal was dis)issed

( t"e Aonora(le Co#rt o$ 4ppeals in its Resol#tion dated J#ne

3, 8//5, a cop o$ w"ic" is "ereto attac"ed as 4nnex .

12. It is signi=cant t"at t"e )ani$estation and )otion to

wit"draw )ade ad)issions t"at recogniKe t"e validit o$ t"e

(oards represented ( Mr. Locsin. @"ile petitioners do notad)it to t"e gen#ineness or d#e exec#tion o$ t"e SecretarTs

Certi=cates w"ic" were not signed ( t"e d#l-elected

Corporate Secretar x x x, it )#st (e noted t"at t"e a#t"orit

o$ Mr. Locsin to =le t"e instant petition was recogniKed and

ad)itted t"erein. It was onl clai)ed t"at s#c" a#t"orit was

lost w"en "e was allegedl replaced, w"ic" replace)ent, as

disc#ssed a(ove, is still disp#ted. !"#s, even t"e r#)p (oards

ad)it t"at t"e =ling o$ t"is petition ( Mr. Locsin was d#l

a#t"oriKed ( P!C and PAILCMS4!.5

x x x x

n Dece)(er 81, 8//5, t"e Sandigan(aan &i$t" Division'

iss#ed an order in Civil Case o. /5-///1, to wit%

x x x x

@"ere$ore, =nding t"e co)plaint to (e s#+cient in $or) and

s#(stance and considering t"e necessit to )aintain t"e

stat#s #o lest grave and irrepara(le in9#r wo#ld res#lt to

plainti7 pending t"e "earing o$ t"e )ain incident &In9#nction

and Declaration o$ #llit', let a !:MPR4RO R:S!R4II

RD:R iss#e ordering t"e de$endants, t"eir agents,

exec#tives and ot"er persons acting #pon t"eir instr#ctions,

$ro) recogniKing or acting p#rs#ant to t"e 1 ove)(er 8//5

stoc*"olders )eetings o$ P!C and PAILCMS4!. !"e

restraining order is good $or twent &8/' das $ro) notice to

de$endants or an o$ t"eir representatives.3

x x x x

n Ma 5, 8//3, t"e PC passed Resol#tion o. 8//3-//,

viK%

@, !A:R:R:, (e it R:SLB:D, as it is "ere( R:SLB:D,

t"at%

1. !"e PC recogniKe t"e validit o$ t"e 1 ove)(er 8//5

P!C>P"ilco)sat stoc*"oldersT )eeting and con=r) as valid

t"e election o$ t"e $ollowing govern)ent no)inees% 4tt.

Daniel C. #tierreK, J#stice Santiago J. Ranada and 4tt. 4llan

S. Montano to t"e oard o$ Directors o$ P!C and Rad).

4(ra"a) R. 4(esa)is, Mr. Ra)on P. Jacinto and Mr. Rodol$o .

Serrano, Jr. to t"e oard o$ Directors o$ P"ilco)sat;

8. !"e PC recogniKe t"e validit o$ t"e 11 Dece)(er 8//5

and 13 Jan#ar 8//3 special stoc*"oldersT )eetings o$

P"ilco)sat s#(sidiaries, PAC and !CI, at w"ic" t"e new

govern)ent no)inees were also elected as )e)(ers o$ t"eirrespective oard o$ Directors s#(9ect to t"e I Desire letter o$

t"e President re#iring t"e no)ination and installation o$ Mr.

:nri#e Locsin in PAC vice Mr. Rodol$o Serrano;

2. !"e PC direct t"e old govern)ent no)inees and t"eir

appointed Corporate Secretaries #nder pain o$ conte)pt to

s#()it to t"e Co))ission wit"in ten &1/' das $ro) t"eir

receipt o$ t"e Resol#tion%

a. 4 co)plete set o$ Min#tes o$ t"e Meetings o$ t"e oards o$

Directors, :xec#tive Co))ittee, Legal Co))ittee, 4#dit

Co))ittee and all ot"er co))ittees wit" a Certi=cation #nder

oat" o$ t"e co)pleteness t"ereo$ $ro) 13 #p to t"e present;

(. 4 co)plete and #pdated list o$ stoc*"olders o$ t"e

corporations wit" t"eir last *nown addresses and n#)(er o$

s"ares d#l certi=ed ( t"e Corporate Secretar and>or Stoc*

!rans$er 4gent;

c. Copies o$ all a#dited and interi) =nancial state)ents o$

t"ese corporations; and

d. !"e stoc* trans$er (oo* and stoc* certi=cate (oo*let o$ PAC

and !CI.

0. !"e PC re#est t"e Sec#rities and :xc"ange Co))ission

&S:C' and t"e P"ilippine Stoc* :xc"ange &PS:' to reg#late

and )onitor P!C, P"ilco)sat, PAC and !CI, to cooperate wit"

t"e new govern)ent no)inees and assist t"e) in co)pling

wit" t"e reportorial re#ire)ents o$ t"ese corporations,

incl#ding, (#t not li)ited to, co)pelling t"e old govern)entno)inees and t"eir appointed o+cers to s#()it copies o$ t"e

doc#)ents re$erred to a(ove;

R:SLB:D, 6R!A:R, t"at t"e Co))ission Secretar (e

directed to $#rnis" copies o$ t"is Resol#tion to t"e old

govern)ent no)inees>directors o$ P!C, P"ilco)sat, PAC and

!CI na)el :nri#e Locsin, Man#el 4ndal, J#lio Jalandoni, #

De Leon, enito 4raneta and Ronaldo Salonga, to t"e new

govern)ent no)inees Daniel #tierreK, Santiago Ranada,

4llan Montano, 4(ra"a) 4(esa)is, Ra)on Jacinto, Rodol$o

Serrano, Jr. :nri#e Locsin and to t"e S:C, PS: and SP $or

t"eir g#idance, o(servation and co)pliance.

n J#l 1?, 8//3, t"e C4 rendered its assailed decision in C.4.-

.R. SP o. 1/8025, ann#lling and setting aside t"e orderdated Dece)(er 12, 8//5 and t"e @PI iss#ed on Dece)(er

15, 8//5 ( t"e R!C &ranc" ?8'.1//

n e(r#ar 12, 8//, t"e C4 denied t"e )otion $or

reconsideration.1/1

n Septe)(er 2/, 8//3, t"e C4 pro)#lgated its assailed

consolidated decision in C.4.-.R. SP o. 3/5, C.4.-.R. SP

o. 32 and C.4.-.R. SP o. 1/188, dis)issing t"e

petitions.1/8!"e C4 "eld t"at t"e R!C acted wit"in its

9#risdiction in resolving t"e intra-corporate disp#te; t"at t"e

cond#ct o$ pre-trial was not re#ired in corporate election

cases; t"at t"e R!C "ad t"e a#t"orit to decide Civil Case o.

/0-1/0; t"at t"e decision o$ t"e R!C was valid and correct;

and t"at t"e petition $or conte)pt =led against 4tt. Si*ini C.La(astilla was wit"o#t (asis. !"e C4 li$ted and dissolved t"e

@PI iss#ed on J#ne 8, 8//5.1/2

n Dece)(er 82, 8//3, t"e C4 denied t"e )otion $or

reconsideration.1/0
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt97http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt98http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt99http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt99http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt100http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt101http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt101http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt102http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt103http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt104http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt104http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt97http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt98http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt99http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt100http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt101http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt102http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt103http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt104


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Iss#es

.R. o. 130?88

@A:!A:R !A: S4DI44O4


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re)ained cogniKa(le ( t"e sa)e (ranc";122and t"at t"e

cond#ct o$ t"e pre-trial was not re#ired in election cases.120

R#ling o$ t"e Co#rt

@e D:O t"e petitions in .R. o. 130?88, .R. os.130518-

10, and .R. o.13?/??; (#t R4! t"e petition in .R. o.

13?/.

1.

R!C &ranc" 123' "ad 9#risdiction

over t"e election contest (etween t"e

Il#sorio-4$rica ro#ps and ieto-Locsin ro#ps

ot" Civil Case o. /0-1/0 o$ t"e R!C &ranc" 123' in Ma*ati

Cit and S Civil Case o. /13 o$ t"e Sandigan(aan

involved intra-corporate controversies a)ong t"e stoc*"olders

and o+cers o$ t"e corporations. It is settled t"at t"ere is an

intra-corporate controvers w"en t"e disp#te involves an o$

t"e $ollowing relations"ips, to wit% &a' (etween t"e

corporation, partners"ip or association and t"e p#(lic; &('


State in so $ar as its $ranc"ise, per)it or license to operate is

concerned; &c' (etween t"e corporation, partners"ip or

association and its stoc*"olders, partners, )e)(ers or

o+cers; and &d' a)ong t"e stoc*"olders, partners or

associates t"e)selves.12

Conse#entl, we agree wit" t"e C4re"a(ilitation cases =led as o$ 2/ J#ne 8/// #ntil

=nall disposed.

!o i)ple)ent Rep#(lic 4ct o. 35, t"e Co#rt pro)#lgated

its resol#tion o$ ove)(er 81, 8/// in 4.M. o. //-11-/2-SC

designating certain (ranc"es o$ t"e R!C to tr and decide t"e

cases en#)erated in Section o$ P.D. o. /8-4. 4)ong t"e

R!Cs designated as special co))ercial co#rts was t"e R!C

&ranc" 123' in Ma*ati Cit, t"e trial co#rt $or Civil Case o.

/0-1/0.

n Marc" 12, 8//1, t"e Co#rt adopted and approved t"e

Interi) R#les o$ Proced#re $or Intra-Corporate Controversies

#nder Rep#(lic 4ct o. 35 in 4.M. o. /1-8-/0-SC, e7ective

on 4pril 1, 8//1, w"ose Section 1 and Section 8, R#le ? state%

Section 1. Cases covered. V !"e provisions o$ t"is r#le s"all

appl to election contests in stoc* and non-stoc* corporations.

Section 8. De=nition. V 4n election contest re$ers to an

controvers or disp#te involving title or clai) to an elective

o+ce in a stoc* or non-stoc* corporation, t"e validation o$

proxies, t"e )anner and validit o$ elections, and t"e

#ali=cations o$ candidates, incl#ding t"e procla)ation o$

winners, to t"e o+ce o$ director, tr#stee or ot"er o+cer

directl elected ( t"e stoc*"olders in a close corporation or

( )e)(ers o$ a non-stoc* corporation w"ere t"e articles o$

incorporation or (-laws so provide. &(old #nderscoring

s#pplied'

Con$or)a(l wit" Rep#(lic 4ct o. 35, and wit" t"e ens#ing

resol#tions o$ t"e Co#rt on t"e i)ple)entation o$ t"e trans$er

o$ 9#risdiction to t"e Regional !rial Co#rt, t"e R!C &ranc" 123'

in Ma*ati "ad t"e a#t"orit to "ear and decide t"e election

contest (etween t"e parties "erein. !"ere s"o#ld (e no

disagree)ent t"at 9#risdiction over t"e s#(9ect )atter o$ an

action, (eing con$erred ( law, co#ld neit"er (e altered nor

convenientl set aside ( t"e co#rts and t"e parties.125

!o (#ttress its position, "owever, t"e ieto-Locsin ro#p relied

on Section 8 o$ :xec#tive rder o. 10,123w"ic" expressl

)andated t"at t"e PC s"all =le all s#c" cases, w"et"er

civil or cri)inal, wit" t"e Sandigan(aan, w"ic" s"all "ave

excl#sive and original 9#risdiction t"ereo$.

!"e reliance was #nwarranted.

Section 8 o$ :xec#tive rder o. 10 "ad no application "erein

si)pl (eca#se t"e s#(9ect )atter involved was an intra-corporate controvers, not an incidents arising $ro),

incidental to, or related to an case involving assets w"ose

nat#re as ill-gotten wealt" was et to (e deter)ined. In San

Mig#el Corporation v. a"n,12t"e Co#rt "eld t"at%

!"e s#(9ect )atter o$ "is co)plaint in t"e S:C does not

t"ere$ore $all wit"in t"e a)(it o$ t"is Co#rt


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)isappropriated ( Marcos, et al., or an incidents arising

$ro), incidental to, or related to an case involving s#c"

propert, (#t assets indisp#ta(l (elonging to San Mig#el

Corporation w"ic" were, in "is &de los 4ngelesT' view, (eing

illicitl co))itted ( a )a9orit o$ its (oard o$ directors to

answer $or loans ass#)ed ( a sister corporation, ept#nia

Co., Ltd.

De los 4ngeles< co)plaint, in =ne, is con=ned to t"e iss#e o$

t"e validit o$ t"e ass#)ption ( t"e corporation o$ t"e

inde(tedness o$ ept#nia Co., Ltd., allegedl $or t"e (ene=t o$

certain o$ its o+cers and stoc*"olders, an iss#e evidentldistinct $ro), and not even re)otel re#iring in#ir into t"e

)atter o$ w"et"er or not t"e 22,122,8?? SMC s"ares

se#estered ( t"e PC (elong to Marcos and "is cronies or

d#))ies &on w"ic", iss#e, as alread pointed o#t, de los

4ngeles, in co))on wit" t"e PC, "ad in $act espo#sed t"e

a+r)ative'. De los 4ngeles< disp#te, as stoc*"older and

director o$ SMC, wit" ot"er SMC directors, an intra-corporate

one, to (e s#re, is o$ no concern to t"e Sandigan(aan, "aving

no relevance w"atever to t"e owners"ip o$ t"e se#estered

stoc*. !"e contention, t"ere$ore, t"at in view o$ t"is Co#rtTs

r#ling as regards t"e se#estered SMC stoc* a(ove adverted

to, t"e S:C "as no 9#risdiction over t"e de los 4ngeles

co)plaint, cannot (e s#stained and )#st (e re9ected. !"e

disp#te concerns acts o$ t"e (oard o$ directors clai)ed to

a)o#nt to $ra#d and )isrepresentation w"ic" )a (edetri)ental to t"e interest o$ t"e stoc*"olders, or is one

arising o#t o$ intra-corporate relations (etween and a)ong

stoc*"olders, or (etween an or all o$ t"e) and t"e

corporation o$ w"ic" t"e are stoc*"olders.10/

Moreover, t"e 9#risdiction o$ t"e Sandigan(aan "as (een "eld

not to extend even to a case involving a se#estered

co)pan notwit"standing t"at t"e )a9orit o$ t"e )e)(ers o$

t"e (oard o$ directors were PC no)inees. !"e Co#rt

)ar*ed t"is distinction clearl in Aolida Inn &P"ils.', Inc. v.

Sandigan(aan,101"olding t"#sl%

!"e s#(9ect-)atter o$ petitionerors"o#ld "ave (een o(served, (ased on t"e

4ddend#)>4gree)ent o$ J#l 10, 133, w"ic" extended t"e

ter)s and conditions o$ t"e original agree)ent o$ Jan#ar 1,

15?. !"e #estion o$ w"et"er or not t"e se#estered

propert was law$#ll ac#ired ( Ro(erto S. enedicto "as no

(earing on t"e legalit o$ t"e ter)ination o$ t"e )anage)ent

contract ( RADC


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s"all (e (ased on t"e pleadings, a+davits, doc#)entar and

ot"er evidence attac"ed t"ereto and t"e answers o$ t"e

witnesses to t"e clari=cator #estions o$ t"e co#rt given

d#ring t"e "earings.

0.

R#ling in .R. o. 1015? and

.R. o. 1013/0 was properl applied

to Civil Case o. /0-1/0

It was not t"e principle o$ res 9#dicata, as clai)ed ( t"eieto-PC ro#p, t"at 9#sti=ed t"e application to Civil Case

o. /0-1/0 o$ t"e Co#rtor Locsin to vote t"e proxies o$ t"e

gro#p in t"e PAILCMS4! )eeting.

or t"e sa)e reason, t"e P!C proxies #sed ( ieto, Jr. and

Locsin to elect t"e)selves respectivel as C"air)an and

President o$ PAILCMS4!; and t"e PAILCMS4! proxies #sed

( ieto, Jr. and Locsin in t"e 4#g#st 21, 8//0 PAC elections

to elect t"e)selves respectivel as President and 4cting

C"air)an o$ PAC, were all invalid $or not "aving t"e s#pport o$

t"e )a9orit s"are"olders o$ said corporations.

@"ile it is tr#e t"at 9#dicial decisions s"o#ld (e given a

prospective e7ect, s#c" prospectivit did not appl to t"e J#ne

1, 8// r#ling in .R. o. 1015? and .R. o. 1013/0

(eca#se t"e r#ling did not en#nciate a new legal doctrine or

c"ange t"e interpretation o$ t"e law as to pre9#dice t"e parties

and #ndo t"eir sit#ations esta(lis"ed #nder an old doctrine or

prior interpretation. Indeed, t"e r#ling onl a+r)ed t"e

co)pro)ise agree)ent cons#))ated on J#ne 83, 1? and

approved ( t"e Sandigan(aan on J#ne 3, 13, and

accordingl i)ple)ented t"ro#g" t"e cancellation o$ t"e

s"ares in t"e na)es o$ IRC and MLDC and t"eir registration in

t"e na)es o$ 4tt. Il#sorio to t"e extent o$ ?52 s"ares, and o$

t"e Rep#(lic to t"e extent o$ 0,585 s"ares. In a )anner o$

spea*ing, t"e decision o$ t"e Co#rt in .R. o. 1015? and.R. o. 1013/0 pro)#lgated on J#ne 1, 8// declared t"e

co)pro)ise agree)ent valid, and s#c" validation properl

retroacted to t"e date o$ t"e 9#dicial approval o$ t"e

co)pro)ise agree)ent on J#ne 3, 13.
http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt142http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt143http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt143http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt143http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt144http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt145http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt145http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt146http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt146http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt142http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt143http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt144http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt145http://www.lawphil.net/judjuris/juri2013/jul2013/gr_184622_2013.html#fnt146


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Conse#entl, alt"o#g" t"e assailed elections were cond#cted

( t"e ieto-PC gro#p on 4#g#st 21, 8//0 (#t t"e r#ling in

.R. o. 1015? and .R. o. 1013/0 was pro)#lgated onl

on J#ne 1, 8//, t"e r#ling was t"e legal standard ( w"ic"

t"e iss#es raised in Civil Case o. /0-1/0 s"o#ld (e resolved.

.

Proper )ode o$ appeal in intra-corporate cases

is ( petition $or review #nder R#le 02

In Dee Ping @ee v. Lee Aiong @ee,

105

t"e Co#rt "as expo#ndedt"at t"e appropriate )ode o$ appeal $or an aggrieved part in

an intra-corporate disp#te is a petition $or review #nder R#le

02 o$ t"e R#les o$ Co#rt, to wit%

Beril, t"e =rst part o$ Section 0, R#le 1 o$ t"e Interi) R#les is

categorical. Save $or t"e exceptions clearl stated t"erein, t"e

provision en#nciates t"at a decision and order iss#ed #nder

t"e Interi) R#les s"all (e en$orcea(le i))ediatel a$ter t"e

rendition t"ereo$. In order to assail t"e decision or order,

"owever, t"e second part o$ t"e provision spea*s o$ an appeal

or petition t"at needs to (e =led ( t"e part concerned. In

t"is appeal or petition, a restraining order )#st (e so#g"t

$ro) t"e appellate co#rt to en9oin t"e en$orce)ent or

i)ple)entation o$ t"e decision or order. 6nless a restraining

order is so iss#ed, t"e decision or order rendered #nder t"e

Interi) R#les s"all re)ain to (e i))ediatel exec#tor.

n Septe)(er 10, 8//0, t"e Co#rt iss#ed a Resol#tion in 4.M.

o. /0--/5-SC to recti$ t"e sit#ation w"erein lawers and

litigants are in a #andar on "ow to prevent #nder

appropriate circ#)stances t"e exec#tion o$ decisions and

orders in cases involving corporate re"a(ilitation and intra-

corporate controversies. !o address t"e need to clari$ t"e

proper )ode o$ appeal in Fcases involving corporate

re"a(ilitation and intra-corporate controversiesG in order to

prevent cl#ttering t"e doc*ets o$ t"e co#rts wit" appeals

and>or petitions $or certiorari, t"e Co#rt t"ere( resolved

t"at%

1. 4ll decisions and =nal orders in cases $alling #nder t"e

Interi) R#les o$ Corporate Re"a(ilitation and t"e Interi) R#leso$ Proced#re overning Intra-Corporate Controversies #nder

Rep#(lic 4ct o. 35 s"all (e appeala(le to t"e Co#rt o$

4ppeals t"ro#g" a petition $or review #nder R#le 02 o$ t"e

R#les o$ Co#rt.

8. !"e petition $or review s"all (e ta*en wit"in =$teen &1'

das $ro) notice o$ t"e decision or =nal order o$ t"e Regional

!rial Co#rt. 6pon proper )otion and t"e pa)ent o$ t"e $#ll

a)o#nt o$ t"e legal $ee prescri(ed in R#le 101 as a)ended

(e$ore t"e expiration o$ t"e regle)entar period, t"e Co#rt o$

4ppeals )a grant an additional period o$ =$teen &1' das

wit"in w"ic" to =le t"e petition $or review. o $#rt"er

extension s"all (e granted except $or t"e )ost co)pelling

reasons and in no case to exceed =$teen &1' das. &:)p"ases

o#rs.'

x x x x

!"e iss#e t"at needs to (e resolved at t"is point is w"et"er or

not petitioners p#rs#ed t"e correct re)ed in #estioning t"e

R!C Decisions in Civil Case os. E-/0-/1, E-/0-/8 and E-

/0-/2. Corollar to t"is is w"et"er or not t"e petitions $or

certiorari =led ( petitioners co#ld "ave (een treated as

petitions $or review #nder R#le 02 o$ t"e R#les o$ Co#rt, in

accordance wit" t"e provisions o$ t"e Resol#tion in 4.M. o.

/0--/5-SC, s#c" t"at petitioners can (e considered to "ave

availed t"e)selves o$ t"e proper re)ed in assailing t"e

r#lings o$ t"e R!C.

@e answer in t"e negative.

!"e ter) petition in t"e t"ird and $o#rt" paragrap"s o$ 4.M.

o. /0--/5-SC, cannot (e constr#ed as to incl#de a petition

$or certiorari #nder R#le ? o$ t"e R#les o$ Co#rt. !"e rationale

$or t"is lies in t"e essential di7erence (etween a petition $or

review #nder R#le 02 and a petition $or certiorari #nder R#le

? o$ t"e R#les o$ Co#rt.

x x x x

!"e R!C Decisions in Civil Case os. E-/0-/1, E-/0-/8 and

E-/0-/2 are =nal orders t"at disposed o$ t"e w"ole s#(9ect

)atter or ter)inated t"e partic#lar proceedings or action,

leaving not"ing to (e done (#t to en$orce ( exec#tion w"at

"as (een deter)ined. 4s t"e R!C was #n#estiona(l acting

wit"in its 9#risdiction, all errors t"at it )ig"t "ave co))itted

in t"e exercise o$ s#c" 9#risdiction are errors o$ 9#dg)ent,w"ic" are reviewa(le ( a ti)el appeal.

x x x x

!"e Co#rt o$ 4ppeals &18t" Division' was, t"ere$ore, correct in

dis)issing t"e petition $or certiorari in C4-.R. SP o. 3353,

w"ic" assailed t"e R!C Decision in Civil Case o. E-/0-/1. x

x x103

!"e r#le providing t"at a petition $or review #nder R#le 02 o$

t"e R#les o$ Co#rt is t"e proper )ode o$ appeal in intra-

corporate controversies, as e)(odied in 4. M. o. /0--/5-SC,

"as (een in e7ect since cto(er 1, 8//0. Aence, t"e =ling (

P!C and PAC &ieto ro#p' o$ t"e petition $or certiorari on

Marc" 81, 8//5 &C.4.-.R. SP o. 32' was inexc#sa(l

i)proper and ine7ect#al. virt#e o$ its (eing an

extraordinar re)ed, certiorari co#ld neit"er replace nor

s#(stit#te an ade#ate re)ed in t"e ordinar co#rse o$ law,

li*e appeal in d#e co#rse.10Indeed, t"e appeal #nder R#le 02

o$ t"e R#les o$ Co#rt wo#ld "ave (een ade#ate to review and

correct even t"e grave a(#se o$ discretion i)p#ted to t"e

R!C.1/

4s a conse#ence o$ t"e i)propriet and ine7ect#alit o$ t"e

re)ed c"osen ( P!C and PAC &ieto ro#p', t"e !R and

t"e @PI initiall iss#ed ( t"e C4 in C.4.-.R. SP o. 32 did

not prevent t"e i))ediatel exec#tor c"aracter o$ t"e

decision in Civil Case o. /0-1/0.

?.

Petition $or conte)pt against ildner "ad no (asis

!"e =ling ( ildner and "er co#nsel 4tt. ManKanal o$ t"e

co)plaint $or per9#r against Locsin and "is co#nsel 4tt.

La(astilla in t"e +ce o$ t"e Cit Prosec#tor o$ Manila did not

a)o#nt to #nlaw$#l inter$erence wit" t"e processes o$ t"e C4.

!"ere is no dening t"at ildner was wit"in "er rig"t as a

part in interest in t"e proceedings t"en pending in t"e C4 to

(ring t"e per9#r c"arge against Locsin and "is co#nsel $or

t"eir $ail#re to aver in t"e certi=cation against $or#) s"opping

attac"ed to t"e petition $or certiorari in C.4.-.R. SP o. 32

o$ t"e pendenc o$ anot"er petition in C.4.-.R. SP o. 3/35

despite t"eir *nowledge t"ereo$. Aer co)plaint $or per9#r

co#ld reall (e dealt wit" ( t"e +ce o$ t"e Cit Prosec#tor

o$ Manila independentl $ro) an action t"e C4 wo#ld ta*e ont"e iss#e o$ $or#) s"opping. 4s s#c", t"e =ling o$ t"e

co)plaint did not inter$ere wit" t"e C4


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to "is rig"ts. !o constit#te conte)pt, t"e act )#st (e done

will$#ll and $or an illegiti)ate or i)proper p#rpose.

onet"eless, t"e Co#rt states t"at t"e power to p#nis" $or

conte)pt is in"erent in all co#rts, and is essential to t"e

preservation o$ order in 9#dicial proceedings and to t"e

en$orce)ent o$ 9#dg)ents, orders, and )andates o$ t"e co#rt,

and #lti)atel, to t"e d#e ad)inistration o$ 9#stice. #t s#c"

power s"o#ld (e exercised on t"e preservative, not on t"e

vindictive, principle. nl in cases o$ clear and cont#)acio#s

re$#sal to o(e s"o#ld t"e power (e exercised. S#c" power,

(eing drastic and extraordinar in its nat#re, s"o#ld not (eresorted to #nless necessar in t"e interest o$ 9#stice.18

5.

ildner ro#p entitled to in9#nctive relie$

Concerning t"e propriet o$ t"e iss#ance o$ t"e @PI to en9oin

PI $ro) letting t"e Locsin ro#p wit"draw $#nds or transact

wit" PI on PAC


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ac#ired =nalit, incl#ding )atters w"ic" t"e parties were not

aware o$ prior to or d#ring t"e trial as t"e were not et in

existence at t"at ti)e. 4 s#pervening event a7ects or

c"anges t"e s#(stance o$ t"e 9#dg)ent and renders t"e

exec#tion t"ereo$ ine#ita(le. S"o#ld s#c" an event occ#r

a$ter a 9#dg)ent (eco)es =nal and exec#tor, w"ic" event

)a render t"e exec#tion o$ t"e 9#dg)ent i)possi(le or

#n9#st, Ra)ireK v. Co#rt o$ 4ppeals, 8/5 SCR4 835 &18',

dictates t"at a sta or precl#sion o$ exec#tion )a properl (e

so#g"t.

Corporation Law; Interi) R#les o$ Proced#re $or Intra-Corporate Controversies &4.M. o. /1-8/-/0-SC'; 4ppeals;

Inspection o$ Corporate oo*s; Civil cases involving t"e

inspection o$ corporate (oo*s are governed ( t"e r#les o$

proced#re set $ort" in t"e Interi) R#les o$ Proced#re $or Intra-

Corporate Controversies #nder Rep#(lic 4ct o. 35 &Interi)

R#les'; In order to assail t"e decision or order iss#ed #nder t"e

Interi) R#les, an appeal or petition t"at needs to (e =led (

t"e part concerned, in w"ic" appeal or petition a restraining

order )#st (e so#g"t $ro) t"e appellate co#rt to en9oin t"e

en$orce)ent or i)ple)entation o$ t"e decision or order, and

#nless a restraining order is so iss#ed, t"e decision or order

rendered #nder t"e Interi) R#les s"all re)ain to (e

i))ediatel exec#tor.Civil cases involving t"e inspection o$

corporate (oo*s are governed ( t"e r#les o$ proced#re set

$ort" in 4.M. o. /1-8-/0-SC, ot"erwise *nown as t"e Interi)R#les o$ Proced#re $or Intra-Corporate Controversies #nder

Rep#(lic 4ct o. 35 &Interi) R#les'. Section 0, R#le 1 o$ t"e

Interi) R#les de=nes t"e nat#re o$ t"e 9#dg)ents rendered

t"ere#nder as $ollows% HS:C. 0. :xec#tor nat#re o$ decisions

and orders.4ll decisions and orders iss#ed #nder t"ese R#les

s"all i))ediatel (e exec#tor, except t"e awards $or )oral

da)ages, exe)plar da)ages and attorne

Documents

Mode of Appeal in Itra Corporate