SECOND DIVISION
|
Petitioners, - versus - PHILIP KING, Respondent. |
G.R. No. 160358
Present: PUNO, J.,
Chairperson, SANDOVAL-GUTIERREZ, AZCUNA,
and GARCIA, JJ. Promulgated: |
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D E C I S I O
N
GARCIA, J.:
In
this petition for review on certiorari under Rule 45 of the Rules of Court, herein
petitioners Lydia Lao, William Chua Lian, Jeffrey Ong and Henry Sy assail and
seek to set aside the Decision[1] dated
April 30, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 74948, as reiterated in its Resolution[2] of
October 13, 2003, which held that Judge Apolinario D. Bruselas, Jr., presiding
judge, Regional Trial Court (RTC) of Quezon City, Branch 93, did not abuse his
discretion in granting the respondent's motion for execution in Civil Case No.
Q-01-42972.
The
facts:
Petitioners
and respondent Philip King are stockholders of the Philadelphia School, Inc., an
educational institution with principal office in P2,000,000.00, of which 4,600 shares
have been subscribed and paid-up.
Respondent's
father, Ong Seng, had the most number of the subscribed shares totaling 1,200. Before his death in 1994, Ong Seng requested for
the transfer of his shares of stock to his eldest son, Felimon Ong, who was
later known as Philip King, the herein respondent. Ong Seng's request was duly
approved by the board of directors of the corporation in its meeting on
On
Barely
four months after the
Further,
on
Then,
in April 1999, the respondent learned that petitioner Lao had filed with the
Securities and Exchange Commission (SEC) a General Information Sheet (GIS)
showing that a stockholders' meeting was held on March 19, 1999 during which
Lao herself and the other petitioners herein, namely, Chua Lian, Jeffrey Ong
and Henry Sy, were allegedly elected as new members
of the board. In the same GIS, it is also indicated that the respondent's
shares were only 500 instead of 1,200.
On
account of the petitioners' failure to notify the respondent of the alleged stockholders'
meetings on August 15, 1998 and on March 19, 1999, coupled with their refusal
to recognize his ownership of the 1,200 corporate
shares of stock, the respondent filed with the SEC a petition to enjoin the herein
petitioners from representing themselves as officers and members of the board
of directors of the Philadelphia School, Inc. and to nullify all acts done and
resolutions passed by them. The petition was docketed as SEC Case No. 05-99-6297.
While the case was pending with the SEC, Republic Act
No. 8799, otherwise known as the Securities Regulation Code, took
effect.[3] The statute transferred the jurisdiction
over intra-corporate disputes from the SEC to the RTCs.[4]
Consequent
thereto, SEC Case No. 05-99-6297 was transferred to the RTC of Quezon City, whereat
it was docketed as Civil Case No. Q-01-42972 and raffled to Branch 93 thereof
presided by Judge Apolinario D. Bruselas, Jr.
On
WHEREFORE, the foregoing premises considered,
the court finds for the [respondent] and as prayed for, hereby orders as
follows:
1)
The
meetings held by the [petitioners] on
2)
The
alleged election of [petitioner] Lydia Lao as president and other [petitioners]
as members of the Board of Directors of the corporation during the
aforementioned meeting, declared null and void;
3)
The
reduction in the shareholdings of [the respondent] from 1,200 shares to only
500 shares, declared null and void; the shares of the [respondent] should be
restored to 1,200 and which number he is entitled to vote;
4)
The
increase in the number of the shares of Mr. Sy Tian Ting and Dy Siok Bee,
declared null and void;
5)
The [petitioners]
to account for the funds of the corporation disbursed by them during the period
they took control;
6)
The new
elections of the corporate directors and officers should be based on the
shareholdings reflected in the Articles of Incorporation modified only by such
transfers as may be shown to be valid and legitimate.
SO ORDERED. (Words in brackets supplied.)
On
On
Section 4, Rule 1 of the Interim Rules of Procedure Governing
Intra-Corporate Controversies Under Republic Act No. 8799 provides as follows:
“Section
4. Executory nature of decisions and orders. — All decisions and orders issued
under these Rules shall immediately be executory. No appeal or petition taken
therefrom shall stay the enforcement or implementation of the decision or
order, unless restrained by an appellate court. Interlocutory orders shall not
be subject to appeal.”
In
its judgment, the court ruled in favor of the [respondent] who now invokes the
aforecited provisions in enforcing said judgment.
Given
the clear provision of the interim rules, the court cannot give credence to the
[petitioners’] “Notice of Appeal.”
ACCORDINGLY,
the court resolves to grant [respondent’s] “motion for execution” as it hereby
GRANTS the same.
LET
therefore a writ of execution be issued in accordance with the disposition of
the issues as contained in the judgment of the court.
SO
ORDERED. (Words in brackets supplied.)
From the aforequoted Order, the petitioners
went on certiorari to the CA whereat their recourse was docketed as CA-G.R. SP No. 74948, imputing grave
abuse of discretion on the part of Judge Bruselas, Jr. in issuing said Order.
To the petitioners, the Order issued by the judge varied the terms of the
judgment in Civil Case No. Q-01-42972 sought to be executed in the respondent’s
motion for execution.
In
a decision[6] dated
A
cursory reading of the questioned motion reveals that what was sought for
therein was really the execution of the Judgment of
xxx xxx xxx
The
public respondent categorically stated that the writ to be issued must be in
accordance with the disposition of the issues as contained in the judgment of
Thus,
when respondent court issued the order dated
With their motion
for reconsideration having been denied by the CA in its reiteratory resolution of
(a) Whether an order of execution which
granted a motion for execution praying for reliefs not included in the decretal
portion of the judgment as well as for reliefs prayed for in another case is
valid.
(b) Whether a motion for execution which
prays for reliefs not included in the decretal portion of the judgment as well
as for reliefs prayed for in another case is legally defective and should be
denied.
We
DENY.
Prescinding from the premise that the
trial judge’s Order of
In
fine, the issues raised essentially boil down to the question of whether or not
the subject Order and the respondent's
motion for execution are at variance with the decretal portion of the judgment dated
Concededly,
it is a fundamental legal axiom that an order of execution must substantially
conform to the dispositive portion of the decision sought to be executed. The
order of execution may not vary, or go beyond, the terms of the judgment it
seeks to enforce. If it does, the order is null and void.[7]
But
did the Order herein involved really vary the terms of the judgment it seeks to
execute? It did not.
For
emphasis, we restate the dispositive portion of the trial court’s decision of
WHEREFORE, the foregoing premises considered,
the court finds for the [respondent] and as prayed for, hereby orders as
follows:
1)
The
meetings held by the [petitioners] on 15 August 1998 and all acts performed by
them as the alleged officers and Board of Directors of the corporation are
declared null and void;
2)
The
alleged election of [petitioner] Lydia Lao as president and other [petitioners]
as members of the Board Of Directors of the corporation during the
aforementioned meeting, declared null and void;
3)
The
reduction in the shareholdings of [respondent] from 1,200 shares to only 500
shares, declared null and void; the shares of the [respondent] should be
restored to 1,200 and which number he is entitled to vote;
4)
The
increase in the number of the shares of Mr. Sy Tian Ting and Dy Siok Bee,
declared null and void;
5)
The [petitioners]
to account for the funds of the corporation disbursed by them during the period
they took control;
6)
The new
elections of the corporate directors and officers should be based on the
shareholdings reflected in the Articles of Incorporation modified only by such
transfers as may be shown to be valid and legitimate.
SO ORDERED.
(Words on brackets supplied.)
On the other hand, the Order[8] in question reads in part:
ACCORDINGLY, the court resolves to grant
plaintiff's “motion for execution” as it hereby GRANTS the same.
LET
therefore a writ of execution be issued in accordance with the
disposition of the issues as contained in the judgment of the court.
SO
ORDERED. (Emphasis supplied.)
The Court does not find any inconsistency between
the trial court’s
Petitioners insist, however, that the respondent's
motion for execution is at variance with the
WHEREFORE, premises considered, it is
respectfully prayed that, to give immediate effect to the judgment dated
1.
Enjoining
respondents [herein petitioners] from continuing to act as the President and
members of the Board of Directors of Philadelphia School, Inc.
2.
Directing
the immediate holding of a new election under the supervision of
representatives of the Honorable Court wherein petitioner [herein respondent]
will be allowed to vote his 1,200 shares and Sy Tian Tin and Dy Siok Bee
prevented from voting more than 300 and 50 shares respectively.
3.
Declaring
illegal the declaration by [petitioners] of 300 percent stock dividends and
enjoining them from allowing the supposed stock dividends from being voted.
4.
Directing
the newly elected officers and members of the Board of Directors of
Philadelphia School, Inc. to pay [respondent] his 100 percent cash dividends.
5.
Directing
[petitioners] to immediately render an accounting of the finances of the
corporation and allowing [respondent] to examine the corporate and financial
records of the corporation.
Other reliefs which are just and
equitable under the premises are likewise prayed for.[9]
(Words in brackets supplied.)
We are far from convinced.
To our mind, there is no significant
point of variance between the judgment and the respondent's motion for
execution. For sure, the reliefs prayed for by the respondent in his motion are
intertwined with the disposition of issues in the trial court’s decision of
First, the respondent's prayer to
enjoin the herein petitioners from continuing to act as officers and members of
the board of directors is obviously consistent with the first item in the
decretal portion of the decision which states that all acts performed by the herein
petitioners as the alleged officers and members of the board are null and void.
Inasmuch as the trial court declared all acts done by the petitioners as null
and void, it is only appropriate for the respondent to ask that the petitioners
be prohibited from continuing to act as officers and members of the board.
Second, the respondent's prayer to hold
a new election of officers to allow him to vote his 1,200 shares and to prevent
Sy Tian Tin and Dy Siok Bee from voting more than 300 and 50 shares,
respectively, is indubitably in consonance with the following pronouncements in
the dispositive portion of the trial court’s decision: (1) the election of the petitioners
as officers and members of the board is null and void, (2) the shareholdings of
the respondent should be restored to 1,200 which number he is entitled to vote,
(3) the increase in the number of shares of Sy Tian Tin (from 300 to 400
shares) and that of Dy Siok Bee (from 50 to 100 shares) is null and void, and
(4) the new elections of the corporate directors and officers should be based
on the shareholdings of the stockholders.
Third, the respondent’s prayer that the
petitioners should immediately render an accounting of the finances of the corporation clearly conforms with the
judgment ordering the petitioners to account for the funds which they disbursed
during the time they took control of the corporation.
Thus, the alleged variance between the trial
court’s decision of
Besides, and as correctly pointed out
by the CA, the respondent's motion prayed
for the issuance
of an order
of execution so as “to
give immediate effect to
the judgment dated 25 September 2002.”
This only shows that the respondent merely intended to enforce the
necessary implications of what was adjudged by the trial court in its decision.
Too, the petitioners might have lost
sight of the fact that there was no order by the trial court which specifically
granted the reliefs prayed for by the respondent. As it is, the questioned Order merely directed, in general
terms, the issuance of a writ of execution in accordance with the court’s
resolution of the issues, as embodied in the dispositive portion of its decision.
Clearly, the Order did not grant any relief not otherwise granted in the decision
of
Finally, it bears
stressing that under
Section 4, Rule 1 of the Interim Rules of
Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799, the
prevailing party has
the right to file a motion for the
immediate execution of a decision or judgment. The law explicitly provides:
Section 4. Executory nature of decisions and orders.
— All decisions and orders issued under these Rules shall immediately be
executory. No appeal or petition taken therefrom shall stay the enforcement or implementation
of the decision or order, unless
restrained by an appellate court. Interlocutory orders shall not be subject to
appeal.
WHEREFORE, the petition is DENIED and the assailed decision of the
CA is AFFIRMED.
Costs against the petitioners.
SO ORDERED.
CANCIO C. GARCIA
Associate Justice
WE
CONCUR:
REYNATO S. PUNO
Associate
Justice
Chairperson
(ON LEAVE)
|
ANGELINA
SANDOVAL-GUTIERREZ Associate
Justice |
RENATO C.
CORONA Associate
Justice |
ADOLFO S. AZCUNA
Associate
Justice
A T T E S T A T I O N
I attest that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
REYNATO S. PUNO
Associate
Justice
Chairperson,
Second Division
C E R T I F I C A T I O N
Pursuant to Article VIII, Section 13 of the Constitution,
and the Division Chairperson's Attestation, it is hereby certified that the
conclusions in the above decision were reached in consultation before the case
was assigned to the writer of the opinion of the Court.
ARTEMIO V. PANGANIBAN
Chief
Justice
[1] Penned by Associate Justice Bienvenido L. Reyes, with then Associate Justices Salvador J. Valdez, Jr. and Danilo B. Pine (both ret.), concurring; Rollo, pp. 32-42.
[2]
[3] IBC v. Jalandoon, G.R. No. 148152,
[4] SEC. 5.2. The Commission's jurisdiction over all cases enumerated under Section 5 of Presidential Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional Trial Court xxx.
[5] SEC. 4. Judgments not stayed by appeal. – Judgments in actions for injunction, receivership, accounting and support, and such other judgments as are now or may hereafter be declared to be immediately executory, shall be enforceable after their rendition and shall not be stayed by an appeal taken therefrom, unless otherwise ordered by the trial court. xxx.
[6] Rollo, pp. 39-41.
[7] Development Bank of the Philippines v. Union Bank of the Philippines, G.R. No. 155838, January 13, 2004, 419 SCRA 131.
[8] Rollo, p. 207.
[9]