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GILBERT G. GUY, Petitioner, - versus
- THE
COURT OF APPEALS (8TH DIVISION), NORTHERN ISLANDS CO., INCORPORATED,
SIMNY G. GUY, GERALDINE G. GUY, GLADYS G. YAO, and EMILIA TABUGADIR,
Respondents. x
- - - - - - - - - - - - - - - - - - - - - - - - - - x IGNACIO
AND IGNACIO LAW OFFICES,
Petitioner, - versus
- THE
COURT OF APPEALS (7TH DIVISION), NORTHERN ISLANDS CO.,
INCORPORATED, SIMNY G. GUY, GERALDINE G. GUY, GLADYS G. YAO, and EMILIA A.
TABUGADIR, Respondents. x
- - - - - - - - - - - - - - - - - - - - - - - - - - x SMARTNET -
versus - THE
COURT OF APPEALS (7TH DIVISION), NORTHERN ISLANDS CO.,
INCORPORATED, SIMNY G. GUY, GERALDINE G. GUY, GLADYS G.
Respondents. x
- - - - - - - - - - - - - - - - - - - - - - - - - - x LINCOLN
CONTINENTAL DEVELOPMENT CO., INC., Petitioner, - versus - NORTHERN
ISLANDS CO., INCORPORATED, SIMNY G. GUY, GERALDINE G. GUY, GRACE G. CHEU,
GLADYS G. YAO, and EMILIA A. TABUGADIR, Respondents. x
- - - - - - - - - - - - - - - - - - -
- - - - - - - x LINCOLN
CONTINENTAL DEVELOPMENT COMPANY, INC., Petitioner, - versus - NORTHERN
ISLANDS CO., INCORPORATED, SIMNY G. GUY, GERALDINE G. GUY, GRACE G. CHEU,
GLADYS G. YAO, and EMILIA A. TABUGADIR, Respondents. |
G.R. No. 165849
G.R. No. 170185 G.R. No. 170186 G.R. No. 171066
G.R. No. 176650 Present: PUNO, c.j., Chairperson, *YNARES-SANTIAGO, Sandoval-Gutierrez, AZCUNA,
JJ. Promulgated: December 10, 2007 |
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D E C I S I O N
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SANDOVAL-GUTIERREZ, J.: |
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Before
us are five (5) consolidated cases which stemmed from Civil Case No. 04-109444
filed with the Regional Trial Court (RTC), Branch 24,
The instant controversies arose from a family dispute. Gilbert Guy is the son of Francisco and Simny
Guy. Geraldine, Gladys and Grace are his sisters. The family feud involves the ownership and
control of 20,160 shares of stock of Northern Islands Co., Inc. (
Simny and her daughters Geraldine, Gladys and Grace, as
well as
In 1984, spouses Guy found that their son Gilbert has been
disposing of the assets of their corporations without authority. In
order to protect the assets of
On January 27, 2004, during a special meeting of the stockholders
of Northern Islands, Simny was elected President; Grace as Vice-President for
Finance; Geraldine as Corporate Treasurer; and Gladys as Corporate Secretary. Gilbert retained his position as Executive
Vice President. This development started the warfare between Gilbert
and his sisters.
On
On
On
On
Meanwhile, on
On
Despite the TRO, the trial court proceeded to hear Lincoln
Continental’s application for a writ of preliminary injunction. This prompted respondents to file in the same
CA-G.R. SP No. 85069 a Supplemental Petition for Certiorari,
Prohibition, and Mandamus seeking to set aside the Orders of the trial
court setting the hearing and actually hearing Lincoln Continental’s
application for a writ of preliminary injunction. They prayed for a TRO and a writ of
preliminary injunction to enjoin the trial court (Branch 46) from further hearing
Civil Case No. 04-109444.
On
On
Meantime, on
On
On
On
On
On
On
Meanwhile, on
Likewise on
On
Subsequently, the presiding judge of the RTC, Branch 46,
On
On
On
WHEREFORE,
premises considered, the petition is hereby GRANTED and the October 13, 2004
Order and the October 13, 2004 Writ of Preliminary Mandatory Injunction issued
by Branch 46 of the Regional Trial Court of Manila are hereby REVERSED and SET
ASIDE. The December 17, 2004 Order and Writ of Preliminary Injunction issued by
this Court of Appeals are hereby MADE PERMANENT against all respondents herein.
SO ORDERED.
Meanwhile, in a Decision[3]
dated
WHEREFORE, in view of the foregoing, the Complaint and the Complaint-in-Intervention are hereby DISMISSED. Plaintiff and plaintiff-intervenor are hereby ordered to jointly and severally pay defendants the following:
(a)
Moral damages in the amount of Php2,000,000.00 each for
defendants Simny Guy, Geraldine Guy, Grace Guy-Cheu and Gladys Yao;
(b)
Moral damages in the amount of Php200,000.00 for
defendant Emilia Tabugadir;
(c)
Exemplary damages in the amount of Php2,000,000.00 each
for defendants Simny Guy, Geraldine Guy, Grace Guy-Cheu, and Gladys Yao;
(d)
Exemplary damages in the amount of Php200,000.00 for
defendant Emilia Tabugadir;
(e)
Attorney’s fees in the amount of Php2,000.000.00; and
(f) Costs of suit.
SO ORDERED.
The
trial court held that Civil Case No. 04-109444 is a baseless and an unwarranted
suit among family members; that based on the evidence, Gilbert was only entrusted
to hold the disputed shares of stock in his name for the benefit of the other
family members; and that it was only when Gilbert started to dispose of the assets
of the family’s corporations without their knowledge that respondent sisters caused
the registration of the shares in their respective names.
Both
Lincoln Continental and Gilbert timely appealed the RTC Decision to the Court
of Appeals, docketed therein as CA-G.R. CV No. 85937.
On
On
Meanwhile,
on October 10, 2005, Gilbert, petitioner in G.R. No. 165849 for certiorari,
filed with this Court a Supplemental Petition for Certiorari,
Prohibition, and Mandamus with Urgent Application for a Writ of
Preliminary Mandatory Injunction challenging the Decision of the Court of
Appeals (Seventh Division), dated August 19, 2005, in CA-G.R. SP No.
87104. This Decision set aside the Order
dated
On
On
On
In the
meantime, in a Decision dated
WHEREFORE,
the appeals are dismissed and the assailed decision AFFIRMED with modifications
that plaintiff and plaintiff-intervenor are ordered to pay each of the
defendants-appellees Simny Guy, Geraldine Guy, Grace Guy-Cheu and Gladys Yao
moral damages of P500,000.00, exemplary damages of P100,000.00
and attorney’s fees of P500,000.00.
SO ORDERED.
Lincoln
Continental and Gilbert filed their respective motions for reconsideration, but
they were denied in a Resolution promulgated on
Lincoln
Continental then filed with this Court a petition for review on certiorari
assailing the Decision of the Court of Appeals (Former Special Second Division)
in CA-G.R. CV No. 85937. This petition
was docketed as G.R. No. 176650 and raffled off to the Third Division of
this Court.
In our
Resolution dated
THE ISSUES
In G.R.
Nos. 165849 and 171066, petitioners Gilbert and Lincoln Continental raise
the following issues: (1) whether respondents are guilty of forum shopping; and
(2) whether they are entitled to the injunctive relief granted in CA-G.R. SP
No. 87104.
In G.R.
Nos. 170185 and 170186, the pivotal issue is whether the Court of Appeals committed
grave abuse of discretion amounting to lack or excess of jurisdiction in ruling
that petitioners Ignacio and Ignacio Law Offices and Smartnet are also covered
by its Resolution granting the writ of preliminary injunction in favor of
respondents.
In G.R.
No. 176650, the core issue is whether the Court of Appeals (Special Second
Division) erred in affirming the Decision of the RTC, Branch 25,
THE
COURT’S RULING
A. G.R. Nos.
165849 and 171066
On the question of forum shopping, petitioners Gilbert and
Lincoln Continental contend that the acts of respondents in filing a petition for
certiorari and mandamus in CA-G.R. SP No. 85069 and withdrawing
the same and their subsequent filing of a petition for certiorari in CA-G.R.
SP No. 87104 constitute forum shopping; that respondents withdrew their petition
in CA-G.R. SP No. 85069 after the Tenth Division issued a Resolution dated
October 20, 2004 denying their application for a writ of preliminary injunction;
that they then filed an identical petition in CA-G.R. SP No. 87104 seeking the
same relief alleged in their petition in CA-G.R. SP No. 85069; and that by
taking cognizance of the petition in CA-G.R. SP No. 87104, instead of dismissing it outright
on the ground of forum shopping, the Court of Appeals committed grave abuse of
discretion tantamount to lack or excess of jurisdiction.
A party is guilty of forum shopping when he repetitively
avails of several judicial remedies in different courts, simultaneously or
successively, all substantially founded on the same transactions and the same
essential facts and circumstances, and all raising substantially the same
issues either pending in, or already resolved adversely by some other court.[6] It is prohibited by Section 5, Rule 7 of the
1997 Rules of Civil Procedure, as amended, which provides:
SECTION 5. Certification
against forum shopping. – The plaintiff or principal party shall certify
under oath in the complaint or other initiatory pleading asserting a claim for
relief, or in a sworn certification annexed thereto and simultaneously filed
therewith: (a) that he has not theretofore commenced any action or filed any
other claim involving the same issues in any court, tribunal, or quasi-judicial
agency and, to the best of his knowledge, no such other action or claim is
pending therein; (b) if there is such other pending action or claim, a complete
statement of the present status thereof; and (c) if he should thereafter learn
that the same or similar action has been filed or is pending, he shall report
that fact within five (5) days therefrom to the court wherein his aforesaid
complaint or initiatory pleading has been filed.
Failure
to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for
the dismissal of the case without prejudice, unless otherwise provided, upon
motion and hearing. The submission of a false certification or non-compliance
with any of the undertakings therein shall constitute indirect contempt of
court, without prejudice to the corresponding administrative and criminal
actions. If the acts of the party or his counsel clearly constitute willful and
deliberate forum shopping, the same shall be ground for summary dismissal with
prejudice and shall constitute direct contempt, as well as a cause for
administrative sanctions.
Forum shopping is condemned because it unnecessarily
burdens our courts with heavy caseloads, unduly taxes the manpower and
financial resources of the judiciary and trifles with and mocks judicial
processes, thereby affecting the efficient administration of justice.[7]
The primary evil sought to be proscribed by the prohibition against forum
shopping is, however, the possibility of conflicting decisions being rendered
by the different courts and/or administrative agencies upon the same issues.[8]
Forum shopping may only exist where the elements of litis
pendentia are present or where a final judgment in one case will amount to res
judicata in the other.[9] Litis
pendentia as a ground for dismissing a civil action is that situation
wherein another action is pending between the same parties for the same cause
of action, such that the second action is unnecessary and vexatious. The
elements of litis pendentia are as follows: (a) identity of parties, or
at least such as representing the same interest in both actions; (b) identity
of rights asserted and the relief prayed for, the relief being founded on the
same facts; and (c) the identity of the two cases such that judgment in one,
regardless of which party is successful, would amount to res judicata in
the other.[10] From
the foregoing, it is clear that sans litis pendentia or res judicata,
there can be no forum shopping.
While the first element of litis pendentia –
identity of parties – is present in both CA-G.R. SP No. 85069 and CA-G.R. SP
No. 87104, however, the second element, does not exist. The petitioners in CA-G.R. SP No. 85069 prayed
that the following Orders be set aside:
(1)
the
Order of inhibition dated
(2)
the
Order dated
In their
petition in CA-G.R. SP No. 87104, respondents prayed for the annulment of the writ
of preliminary injunction issued by the RTC, Branch 46 after the expiration of
the TRO issued by the Tenth Division of the Court of Appeals. Evidently, this relief is not identical with
the relief sought by respondents in CA-G.R. SP No. 85069. Clearly, the second element of litis
pendentia – the identity of reliefs sought - is lacking in the two petitions
filed by respondents with the appellate court. Thus, we rule that no grave
abuse of discretion amounting to lack or excess of jurisdiction may be
attributed to the Court of Appeals (Eighth Division) for giving due course to respondents’
petition in CA-G.R. SP No. 87104.
On the second issue, Section 3, Rule 58 of the 1997
Rules of Civil Procedure, as amended provides:
SECTION
3. Grounds for issuance of preliminary injunction. – A preliminary
injunction may be granted when it is established:
(a)
That the applicant is entitled to the relief demanded,
and the whole or part of such relief consists in restraining the commission or
continuance of the act or acts complained of, or in requiring the performance
of an act or acts, either for a limited period or perpetually;
(b)
That the commission, continuance, or non-performance of
the act or acts complained of during the litigation would probably work
injustice to the applicant; or
(c) That a party, court, agency, or a person is doing, threatening, or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual.
For a
party to be entitled to an injunctive writ, he must show that there exists a
right to be protected and that the acts against which the injunction is
directed are violative of this right.[11] In granting the respondents’ application for
injunctive relief and making the injunction permanent, the Court of Appeals (Seventh
Division) found that they have shown their clear and established right to the
disputed 20,160 shares of stock because: (1) they have physical possession of
the two stock certificates equivalent to the said number of shares; (2) Lincoln
Continental is a mere trustee of the Guy family; and (3) respondents constitute
a majority of the board of directors of Northern Islands, and accordingly have
management and control of the company at the inception of Civil Case No.
94-109444. The appellate court then
ruled that the trial court committed grave abuse of discretion in issuing a
writ of preliminary mandatory injunction in favor of Guy. The writ actually reduced the membership of
We thus find
no reason to depart from the findings of the Court of Appeals. Indeed, we cannot discern any taint of grave
abuse of discretion on its part in issuing the assailed writ of preliminary
injunction and making the injunction permanent.
B. G.R.
Nos. 170185 & 170186
Ignacio
and Ignacio Law Offices and Smartnet, petitioners, claim that the Court of
Appeals never acquired jurisdiction over their respective persons as they were
not served with summons, either by the MeTC or by the appellate court in
CA-G.R. SP No. 87104. Thus, they submit
that the Court of Appeals committed grave abuse of discretion amounting to lack
or excess of jurisdiction when it included them in the coverage of its
injunctive writ.
Jurisdiction
is the power or capacity given by the law to a court or tribunal to entertain,
hear, and determine certain controversies.[12] Jurisdiction over the subject matter of a
case is conferred by law.
Section
9 (1) of Batas Pambansa Blg. 129,[13]
as amended, provides:
SEC.
9. Jurisdiction. – The Court of Appeals shall exercise:
(1) Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction.
Rule
46 of the 1997 Rules of Civil Procedure, as amended, governs all cases originally filed with the Court
of Appeals. The following provisions of the Rule state:
SEC. 2. To what actions applicable. – This Rule shall apply to original actions for certiorari, prohibition, mandamus and quo warranto.
Except
as otherwise provided, the actions for annulment of judgment shall be governed
by Rule 47, for certiorari, prohibition, and mandamus by Rule 65,
and for quo warranto by Rule 66.
x x
x
SEC. 4. Jurisdiction over person of respondent, how acquired. – The court shall acquire jurisdiction over the person of the respondent by the service on him of its order or resolution indicating its initial action on the petition or by his voluntary submission to such jurisdiction.
SEC. 5. Action by the court. – The court may dismiss the petition outright with specific reasons for such dismissal or require the respondent to file a comment on the same within ten (10) days from notice. Only pleadings required by the court shall be allowed. All other pleadings and papers may be filed only with leave of court.
It is thus
clear that in cases covered by Rule 46, the Court of Appeals acquires
jurisdiction over the persons of the respondents by the service upon them of
its order or resolution indicating its initial action on the petitions or by their
voluntary submission to such jurisdiction.[14] The reason for this is that, aside from the
fact that no summons or other coercive process is served on respondents, their
response to the petitions will depend on the initial action of the court
thereon. Under Section 5, the court may
dismiss the petitions outright, hence, no reaction is expected from respondents
and under the policy adopted by Rule 46, they are not deemed to have been
brought within the court’s jurisdiction until after service on them of the
dismissal order or resolution.[15]
Records
show that on
Private respondents SMARTNET PHILIPPINES, INC., IGNACIO & IGNACIO LAW OFFICE, SUNFIRE TRADING, INC., ZOLT CORPORATION, CELLPRIME DISTRIBUTION CORPO., GOODGOLD REALTY & DEVELOPMENT CORP., are hereby DIRECTED to file CONSOLIDATED COMMENT on the original Petition for Certiorari, the First Supplemental Petition for Certiorari, and the Second Supplemental Petition for Certiorari (not a Motion to Dismiss) within ten (10) days from receipt of a copy of the original, first and second Petitions for Certiorari.[17]
Pursuant
to Rule 46, the Court of Appeals validly acquired jurisdiction over the persons
of Ignacio and Ignacio Law Offices and Smartnet upon being served with the
above Resolution.
But neither
of the parties bothered to file the required comment. Their allegation that they have been deprived
of due process is definitely without merit. We have consistently held that when a party
was afforded an opportunity to participate in the proceedings but failed to do
so, he cannot complain of deprivation of due process for by such failure, he is
deemed to have waived or forfeited his right to be heard without violating the
constitutional guarantee.[18]
On the
question of whether the Court of Appeals could amend its Resolution directing the
issuance of a writ of preliminary injunction so as to include petitioners,
suffice to state that having acquired jurisdiction over their persons, the
appellate court could do so pursuant to Section 5 (g), Rule 135 of the Revised
Rules of Court, thus:
SEC.
5. Inherent powers of courts. – Every court shall have power:
x x x
(g) To amend and control its process and orders so as to make them conformable to law and justice.
In Villanueva
v. CFI of Oriental Mindoro[19]
and Eternal Gardens Memorial Parks Corp. v. Intermediate Appellate Court,[20]
we held that under this Rule, a court has inherent power to amend its judgment
so as to make it conformable to the law applicable, provided that said judgment
has not yet acquired finality, as in these cases.
C. G.R.
No. 176650
The
fundamental issue is who owns the disputed shares of stock in
We
remind petitioner Lincoln Continental that what it filed with this Court is a
petition for review on certiorari under Rule 45 of the 1997 Rules of
Civil Procedure, as amended. It is a
rule in this jurisdiction that in petitions for review under Rule 45, only
questions or errors of law may be raised.[21] There
is a question of law when the doubt or controversy concerns the correct
application of law or jurisprudence to a certain set of facts, or when the
issue does not call for an examination of the probative value of the evidence
presented. There is a question of fact
when the doubt arises as to the truth or falsehood of facts or when there is a
need to calibrate the whole evidence considering mainly the credibility of the
witnesses, the existence and relevancy of specific surrounding circumstances,
as well as their relation to each other and to the whole, and the probability of
the situation.[22] Obviously, the issue raised by the instant
petition for review on certiorari, involves a factual matter, hence, is outside
the domain of this Court. However, in
the interest of justice and in order to settle this controversy once and for
all, a ruling from this Court is imperative.
One
thing is clear. It was established before the trial court, affirmed by the
Court of Appeals, that Lincoln Continental held the disputed shares of stock of
Northern Islands merely in trust for the Guy sisters. In fact, the evidence proffered by Lincoln Continental
itself supports this conclusion. It
bears emphasis that this factual finding by the trial court was affirmed by the
Court of Appeals, being supported by evidence, and is, therefore, final and conclusive
upon this Court.
Article
1440 of the Civil Code provides that:
ART. 1440. A person who establishes a trust is called the trustor; one in whom confidence is reposed as regards property for the benefit of another person is known as the trustee; and the person for whose benefit the trust has been created is referred to as the beneficiary.
In the
early case of Gayondato v. Treasurer of the Philippine Islands,[23]
this Court defines trust, in its technical sense, as “a right of property, real
or personal, held by one party for the benefit of another.” Differently stated,
a trust is “a fiduciary relationship with respect to property, subjecting the
person holding the same to the obligation of dealing with the property for the
benefit of another person.”[24]
Both
Lincoln Continental and Gilbert claim that the latter holds legal title to the
shares in question. But record shows
that there is no evidence to support their claim. Rather,
the evidence on record clearly indicates that the stock certificates representing
the contested shares are in respondents’ possession. Significantly, there is no proof to support
his allegation that the transfer of the shares of stock to respondent sisters is
fraudulent. As aptly held by the Court
of Appeals, fraud is never presumed but must be established by clear and
convincing evidence.[25] Gilbert failed to discharge this burden. We, agree with the Court of Appeals that
respondent sisters own the shares of stocks, Gilbert being their mere
trustee. Verily, we find no reversible
error in the challenged Decision of the Court of Appeals (Special Second
Division) in CA-G.R. CV No. 85937.
WHEREFORE, we DISMISS the petitions in G.R.
Nos. 165849, 170185, 170186 and 176650; and DENY the petitions in G.R.
Nos. 171066 and 176650. The Resolutions
of the Court of Appeals (Eighth Division), dated
SO ORDERED.
ANGELINA
SANDOVAL GUTIERREZ
Associate
Justice
WE
CONCUR:
REYNATO S. PUNO
Chief Justice Chairperson CONSUELO YNARES-SANTIAGO Associate Justice |
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RENATO C. CORONA Associate Justice |
ADOLFO S. AZCUNA Associate Justice |
REYNATO S. PUNO
Chief Justice
*
Designated to sit
as additional Member
of the First Division under
Special Order No. 474 dated
[1] Due to the inhibition of the presiding judge of Branch 24.
[2] Due to the retirement of the presiding judge of Branch 46.
[3] Vol. III, Rollo, G.R. No. 165849, pp. 1381-1399.
[4] Vol. IV, Rollo, G.R. No. 165489, p. 1901.
[5]
[6] Equitable Philippine Commercial International Bank and Buenaventura v. Court of Appeals, G.R. No. 143556, March 16, 2004, 425 SCRA 544, 550, citing Tantay, Sr. v. Court of Appeals, 357 SCRA 329 (2001).
[7] Guaranteed Hotels, Inc. v. Baltao,
G.R. No. 164338,
[8] Rudecon Management Corporation v.
Singson, G.R. No. 150798,
[9] Lugayan v. Spouses Tizon, G.R. No.
147958,
[10] Arquiza v. Court of Appeals, G.R. No.
160479,
[11] Rualo v. Pitargue, G.R. No. 140284, January 21, 2005, 449 SCRA 121, 137, citing Searth Commodities Corp. v. Court of Appeals, 207 SCRA 662 (1992).
[12] Dela Cruz v. Court of Appeals, G.R.
No. 139442.
[13] The Judiciary Reorganization Act of 1980.
[14] Feria and Noche, II Civil Procedure Annotated (2001 Ed.) 216-217. See also Herrera, VII Remedial Law (1997 Ed.) 542.
[15] Regalado, I Remedial Law Compendium (1997 Ed.) 553.
[16] Vol. II, Rollo, G.R. No. 170185, pp. 1212-1213.
[17]
[18] Bautista v. Court of Appeals, G.R. No. 157219, May 28, 2004, 430 SCRA 353, 357, citing Tiomico v. Court of Appeals, 304 SCRA 216 (1999).
[19] G.R. No. 45798,
[20] G.R. No. 73794,
[21] Torrecampo v. Alindogan, Sr., G.R. No.
156405,
[22] Mendoza v. Salinas, G.R. No. 152827,
[23] 49 Phil. 244 (1926).
[24] Development Bank of the Philippines v.
Commission on Audit, G.R. No. 144516,
[25] Autencio
v. Mañara, G.R. No. 152752,