I. The document discusses a petition seeking to reverse a Court of Appeals decision regarding a civil case involving a dispute over corporate assets and succession rights.
II. The petition argues that the case involves an intra-corporate controversy that falls under the exclusive jurisdiction of the Securities and Exchange Commission.
III. It also argues that the private respondent engaged in forum shopping by pursuing the same case in multiple forums, and that the case should be dismissed based on the principle of litis pendentia or pendency of another case.
I. The document discusses a petition seeking to reverse a Court of Appeals decision regarding a civil case involving a dispute over corporate assets and succession rights.
II. The petition argues that the case involves an intra-corporate controversy that falls under the exclusive jurisdiction of the Securities and Exchange Commission.
III. It also argues that the private respondent engaged in forum shopping by pursuing the same case in multiple forums, and that the case should be dismissed based on the principle of litis pendentia or pendency of another case.
I. The document discusses a petition seeking to reverse a Court of Appeals decision regarding a civil case involving a dispute over corporate assets and succession rights.
II. The petition argues that the case involves an intra-corporate controversy that falls under the exclusive jurisdiction of the Securities and Exchange Commission.
III. It also argues that the private respondent engaged in forum shopping by pursuing the same case in multiple forums, and that the case should be dismissed based on the principle of litis pendentia or pendency of another case.
I. The document discusses a petition seeking to reverse a Court of Appeals decision regarding a civil case involving a dispute over corporate assets and succession rights.
II. The petition argues that the case involves an intra-corporate controversy that falls under the exclusive jurisdiction of the Securities and Exchange Commission.
III. It also argues that the private respondent engaged in forum shopping by pursuing the same case in multiple forums, and that the case should be dismissed based on the principle of litis pendentia or pendency of another case.
112625 March 7, 2002 taking Hacienda Nangka and the commercial
lots of their late father, Mattias J. Hojilla, CMH AGRICULTURAL CORPORATION, situated in Silay City, while Corazon, Claudio CARLOS M. HOJILLA, CESAR M. and Cristobal were apportioned Hacienda HOJILLA, CLAUDIO M. HOJILLA, CORA Manayaosayao, the house and lots on 23rd M. HOJILLA AND CORNELIO M. Street, Bacolod City, and some lots which were HOJILLA, petitioners, not assigned to CMH. Thereafter, with the vs. promise that the title over the property would HON. COURT OF APPEALS AND be delivered to them, Corazon, Claudio and CRISTOBAL M. HOJILLA, respondents. Cristobal took possession of the subject house and lots. However, Cristobal claimed that the DE LEON, JR., J.: title over the said property had not been turned over to them and on several occasions Carlos, Cesar and Cornelio had, without his and his co- This is a petition for review on certiorari under owners' knowledge, mortgaged the said lots Rule 45 of the Rules of Court which seeks to comprising the 23rd Street property in Bacolod review and set aside the Decision1 of the Court City to several banking institutions and even of Appeals in CA-G.R. SP No. 28893 leased the same to Pilipinas Shell Petroleum promulgated on October 25, 1993 holding that Corporation, which, however, was only the Regional Trial Court (RTC) of Bacolod City, curtailed by court action. Thus, Cristobal Branch 45, did not commit grave abuse of prayed that the veil of corporate fiction be discretion in reconsidering its Order dated pierced as CMH was being used to deprive and November 22, 1991 dismissing Civil Case No. defraud him of his successional rights over the 6256 for lack of jurisdiction.2 house and lots on 23rd Street, Bacolod City. The antecedent facts show that the private Carlos, Cesar, Cornelio, Claudio and Corazon, respondent, Cristobal M. Hojilla, filed a as defendants therein, countered, by way of complaint for "Disregarding and Piercing the special and affirmative defenses: 4 first, regular Veil of Corporate Fiction, Formal Declaration courts had no jurisdiction over the subject or Recognition of Successional Rights and matter of the complaint since it involved an Recovery of Title with Damages"3 with the RTC intra-corporate controversy - the complaint of Bacolod City, Branch 45, docketed as Civil being instituted by Cristobal who is a Case No. 6256 against his siblings namely: stockholder and incorporator of CMH against Carlos M. Hojilla, Cesar M. Hojilla,Cornelio M. his siblings, who are likewise stockholders of Hojilla, Claudio M. Hojilla and Corazon M. the same corporation, and as such within the Hojilla (with the latter two (2) impleaded as exclusive and original jurisdiction of the unwilling co-plaintiffs), and CMH Agricultural Securities and Exchange Commission (SEC for Corporation (CMH for brevity). Cristobal brevity); second, the creation of CMH as an alleged in his complaint that CMH was a alleged dummy corporation was a device or dummy corporation created to be the alter-ego scheme amounting to fraud, thus falling under of their mother, the late Concepcion the original and exclusive jurisdiction of the Montelibano-Hojilla, who purposely organized SEC; third, the claim of ownership over the the same in 1975 to shield her paraphernal house and lots by Cristobal which was properties from taxes by fictitiously assigning ventilated in the ejectment case filed by the them to CMH, with her children acting as said defendants against Cristobal in the dummy stockholders. Immediately upon its Municipal Trial Court in Cities (MTCC) of incorporation, the following properties of his Bacolod City, Branch III and docketed therein mother were assigned to CMH: Hacienda as Civil Case No. 17698, was resolved in favor Manayosayao, Hacienda Nangka and a house of CMH; fourth, Cristobal committed forum- and lots on 23rd Street, Bacolod City, shopping since he had previously filed a case consisting of Lot Nos. 240, 241, 242, 246, 247 against CMH, its incorporators and and 248. After their mother's death, Cristobal stockholders before the SEC, docketed as SEC and his siblings extrajudicially partitioned the Case No. 03559; fifth, Cristobal had no cause of properties with Carlos, Cesar and Cornelio action since the power to sue and be sued was PURELY AN INTRA-CORPORATE vested alone in the board of directors of the CONTROVERSY AND THEREFORE, corporation, CMH in particular, and not on a FALLS UNDER THE EXCLUSIVE mere stockholder. JURISDICTION OF THE SECURITIES AND EXCHANGE Finding the arguments meritorious, the trial COMMISSION PURSUANT TO P.D. court issued on November 22, 1991, an 902-A; order5 dismissing the complaint in Civil Case No. 6256. However, upon filing by Cristobal of II a motion for reconsideration6 dated December 6, 1991, the court a quo in its order7 dated THE HON. COURT OF APPEALS April 20, 1992 reversed itself and set aside its HAS AGAIN DECIDED A QUESTION previous order dismissing the complaint. OF SUBSTANCE, CONTRARY TO Thereafter, the defendant filed a motion for THE DECISIONS OF THE SUPREME reconsideration8 but it was denied in the COURT, IN NOT DISMISSING THE order9 dated August 17, 1992 of the trial court. CASE FILED BY THE PRIVATE RESPONDENT WHO PURSUED Carlos, Cesar, Cornelio, Claudio and Corazon SIMULTANEOUS REMEDIES IN elevated the case to the Court of Appeals TWO (2) DIFFERENT FORA, AND IS through a petition for certiorari10 alleging that THEREFORE GUILTY OF FORUM the trial court committed grave abuse of SHOPPING; discretion amounting to lack of jurisdiction in taking cognizance of Cristobal's motion for III reconsideration despite the absence of notice of time and place of hearing in violation of THE HON. COURT OF APPEALS procedural rules and in reconsidering its HAS DECIDED THE CASE NOT IN extensive and exhaustive order dated ACCORD WITH THE APPLICABLE November 22, 1991 with a minute resolution DECISIONS OF THE SUPREME denying their motion to dismiss.1âwphi1.nêt COURT, IN NOT DISMISSING THE COMPLAINT FILED BY THE Finding no abuse of discretion on the part of the PRIVATE RESPONDENT ON THE court a quo, the appellate court resolved on GROUND OF PENDENCY OF October 25, 1993 that the filing of the ANOTHER ACTION; opposition to Cristobal's motion for reconsideration cured the defect of lack of IV notice and hearing; and that the complaint in Civil Case No. 6256 did not involve an intra- THE HON. COURT OF APPEALS corporate controversy but Cristobal's HAS DECIDED THE CASE NOT IN successional rights which is within the ACCORD WITH THE APPLICABLE jurisdiction of the court.11 DECISIONS OF THE SUPREME COURT, IN NOT DISMISSING THE Hence, the instant petition which is anchored COMPLAINT OF A MERE on the following grounds: STOCKHOLDER, WITHOUT BEING AUTHORIZED BY THE BOARD OF I DIRECTORS;
THE HON. COURT OF APPEALS V
HAS DECIDED A QUESTION OF SUBSTANCE IN OBVIOUS THE HON. COURT OF APPEALS DEFIANCE OF THE DECISION OF HAS DECIDED THE CASE NOT IN THE SUPREME COURT, IN NOT ACCORD WITH THE APPLICABLE DISMISSING A CASE WHICH IS DECISIONS OF THE SUPREME COURT, IN TAKING COGNIZANCE paraphernal properties he claimed were OF A "MERE SCRAP OF PAPER", A fictitiously assigned to CMH to evade payment MOTION FOR RECONSIDERATION, of taxes. He alleged therein that the properties WHICH DOES NOT CONTAIN THE had already been the subject of extra-judicial NOTICE OF TIME AND PLACE OF partition between the heirs with the house and HEARING, IN VIOLATION OF THE lots on 23rd Street, Bacolod City, being MANDATORY REQUIREMENTS OF bestowed upon him and his co-heirs Corazon THE RULES OF COURT. and Claudia. He claimed that the failure of his other siblings, Carlos, Cesar and Cornelio, to At the outset, we note that the alleged errors turn over the title to him and his co-heirs attributed on the part of the Court of Appeals allowed CMH to continue claiming the house by the petitioners are mere reiteration of those and lots as its own and even attempted to lease already raised in the court below but which we a few of the lots to other persons without the will nonetheless consider to put an end to this knowledge of private respondent and his co- dispute. heirs. Thus, private respondent filed the complaint to consolidate his claim over the First, petitioners argue that the trial court has subject properties and forestall any further no jurisdiction over the complaint in Civil Case intrusive act from the CMH which would place No. 6256 as it involves a suit filed by a his and his co-heirs/co-owners' rights over the stockholder against other stockholders and the properties in constant peril. Private corporation itself; thus, it is an intra-corporate respondent's position as a stockholder of CMH controversy within the jurisdiction of the SEC and his relationship to the other stockholders, and not of the regular courts. Likewise, became incidental only to the issue of petitioners argue that the allegation of ownership over the subject properties and did fictitious creation of CMH as an alter-ego of the not convert the action into an intra-corporate late Concepcion M. Hojilla and the concomitant controversy within the exclusive jurisdiction of prayer to pierce the veil of corporate fiction falls the SEC but remained a civil action cognizable within the category of a device or scheme by the regular courts. employed by corporate officers cognizable by the SEC alone. Neither does the allegation about CMH's formation as an alleged dummy corporation The relationship of the parties to a suit has designed to be the alter-ego of the late formerly been the lone indicia for its Concepcion M. Hojilla and the prayer for classification either as an intra-corporate piercing the corporate veil convert the action controversy within the jurisdiction of the SEC into an intra-corporate controversy as the or a civil dispute within the jurisdiction of the former is merely cited as the ground relied regular courts. Thus, a dispute arising between upon by private respondent to prove his claim a stockholder and the corporation, without of ownership over the said house and lots distinction, qualification or exemption, was whereas through the said prayer, he in effect previously considered an intra-corporate exhorts the court to confirm his allegations and controversy within the jurisdiction of the SEC thus, protect his successional rights. and not of the regular courts. Recent jurisprudence, however, has established that in Thus, in Cease v. CA13 this Court took determining which body has jurisdiction over a cognizance of the civil case filed by respondents case, the better policy would be to consider not against their siblings (petitioners therein) and only the status or relationship of the parties the Tiaong Milling and Plantation Company, but also the nature of the question that is the Inc. praying that the corporation be declared subject of the controversy.12 identical to their deceased father, Forrest L. Cease, and that its properties be divided among A reading of the complaint filed by private his children as his intestate heirs. The Court respondent shows that its primary objective is treated the case as an action for partition and, to protect his successional rights as an heir of applying the doctrine of piercing the corporate his late mother, Concepcion M. Hojilla, whose veil, disregarded the separate personality of the corporation from that of its stockholders contended that CMH was a mere dummy reasoning that if the legal fiction of separate corporation and an alter-ego of his deceased corporate personality were sustained, then it mother and thus, sought the delivery of the would be used to delay and ultimately deprive title over the house and lots in question as his and defraud respondents of their successional share of inheritance from his deceased mother. rights over the estate of their deceased father. Third, petitioners argue that the MTCC's Second, petitioners argue that the appellate adverse decision in the ejectment case, Civil court erred in entertaining the complaint in Case No. 17698, which they had filed against Civil Case No. 6256 despite the existence of a private respondent Cristobal M. Hojilla, is similar complaint filed by Cristobal before the already final and conclusive with regard to SEC, docketed as SEC Case No. latter's claim of ownership over the house and 0355914 involving the same parties and the lots in question. Hence, petitioners contend same issues raised in Civil Case No. 6256. that Civil Case No. 6256 of the RTC should have been dismissed as it allegedly involves the We do not agree. As properly resolved by the same subject matter and the same issue. appellate court, the filing of SEC Case No. 03559 does not bar the subsequent filing of The record shows that the MTCC rendered a Civil Case No. 6256 because they refer to decision in the ejectment case, Civil Case No. different causes of action with distinct reliefs 17698, ordering private respondent to vacate prayed for. The private respondent in the SEC the premises; and that decision was affirmed by case prayed for the appointment of a receiver, the Court of Appeals. However, under Sec. 7, dissolution and liquidation of CMH, and to Rule 70 of the Rules of Court, the judgment enjoin petitioners from leasing the house and rendered by a municipal or metropolitan trial lots at 23rd Street, Bacolod City. However, in court in an action for forcible entry or detainer Civil Case No. 6256, he sought to preserve his shall be effective with respect to possession successional rights as heir of his deceased only and in no wise shall affect or bind the title mother by piercing the veil of corporate fiction of ownership of the land or building. Such to recover the title of the house and lots on 23rd judgment shall not bar an action between the Street, Bacolod City, and claim payment of same parties respecting the title to the land or damages for the injury he has suffered. building nor shall the facts found therein be held conclusive in another case between the Neither does the resolution of SEC Case No. same parties upon a different cause of action 03559 dismissing the petition of private not involving possession.16 Thus, the filing of respondent during the pendency of Civil Case Civil Case No. 6256 in the RTC was not barred No. 6256 constitute res judicata on the matter by the adverse decision of the MTCC in the since the cause of action and issues raised and ejectment case, Civil Case No. 17698, inasmuch resolved in the former are different from those as the issue raised in the former was one cited in the latter. The requirements of res regarding ownership while the issue resolved judicata are: (a) the former judgment must be in the ejectment case was priority of possession final; (b) the court which rendered it had alone.17 jurisdiction over the subject matter and the parties; (c) it must be a judgment on the merits; Fourth, petitioners contend that the complaint and (d) there must be, between the first and should have been dismissed as it was filed by a second actions, identity of parties, subject mere stockholder in behalf of the corporation matter, and causes of action.15 Notably, in the without being authorized by its board of SEC case, the private respondent averred that directors. petitioner stockholders and CMH committed acts to defraud the public such as the lack of On the contrary, authorization from the board accounting, lack of records, lack of proper of directors of the CMH in the case at bar was notice of meetings, and prayed for the not necessary inasmuch as private respondent dissolution of the corporation; whereas, in Civil was not acting on behalf of the corporation but Case No. 6256, the private respondent in his own personal capacity; and precisely he was suing the corporation itself (CMH) to preserve his successional rights.
Finally, petitioners point out that the lower
court erred in granting the motion for reconsideration of herein private respondent despite the lack of notice of time and place of hearing in violation of the mandatory provision of the Rules of Court. However, as correctly ruled by the appellate court, the requirement of notice of time and hearing in a party's pleading is necessary only to appraise the other party of the actions of the former. Inasmuch as petitioners have timely filed their Opposition18 on January 7, 1992 to private respondent's motion for reconsideration, any defect regarding such notice had been cured.1âwphi1.nêt
In view of the foregoing, the Court of Appeals
did not commit any reversible error in its challenged decision.
WHEREFORE, the assailed Decision dated
October 25, 1993 of the Court of Appeals in CA- G.R. SP No. 28893 holding that the RTC of Bacolod City, Branch 45, did not commit grave abuse of discretion in reconsidering its Order, dated November 22, 1991, in Civil Case No. 6256 is AFFIRMED. The Regional Trial Court of Bacolod City, Branch 45, is hereby ordered to resume forthwith the trial of Civil Case No. 6256 and to resolve the same with utmost dispatch.
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