MARY JOY ANNE GUSTILO G.R. No. 175497
and BONIFACIO M. PEA,
Petitioners, Present:
VELASCO, JR., J., Chairperson,
- versus - PERALTA,
ABAD,
MENDOZA, and
PERLAS-BERNABE,
JJ.
JOSE
VICENTE GUSTILO III
and
TERESITA YOUNG also Promulgated:
known
as TITA SY YOUNG,
Respondents. October 19, 2011
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ABAD, J.:
This case is about the proper
characterization of a dispute between the president of a corporation and a
stockholder, both heirs to the corporations controlling shares of stock, over
the lease of a property that the president agreed to assign to the stockholder
as her inheritance.
The Facts and the Case
Petitioner
Mary Joy Anne Gustilo and respondent Jose Vicente Gustilo III are heirs of
their natural father, the late Atty. Armando Gustilo (they have different
mothers), who owned several properties and was, prior to his death, the
president of A.G. Agro-Industrial Corporation (A.G. Agro) in Cadiz City, Negros
Occidental. Petitioner Bonifacio Pea is Mary Joys attorney-in-fact whom she
authorized to exercise general control and supervision of her real
properties.
On
August 31, 1993, following their fathers death, Mary Joy and Jose Vicente
entered into a Memorandum of Agreement (MOA), adjudicating between themselves
their fathers properties. One of these
was Hacienda Imelda which the MOA assigned to Mary Joy. As it happened, however, the haciendas title
remained in the name of A.G. Agro. Mary
Joy immediately took possession of the land through Mila Barco, her mother and
natural guardian, and planted sugarcane on it.
Over
three years later or in 1997 Jose Vicente, as president of A.G. Agro, leased
Hacienda Imelda and its farm implements to respondent Tita Sy Young for five
agricultural crop years from 1997-1998 to 2001-2002. Being financially hard up, Mary Joy and her
mother were pained to watch Young take over the land.
When the lease contract was about to
expire, however, Mary Joy had her lawyer advise Young to surrender the land to
her. But the latter refused to yield
possession and continued to cultivate the same for sugarcane. This prompted Mary Joy to file an action
against Jose Vicente and Young for recovery of possession of the hacienda,
cancellation of the lease contract, and damages before the Regional Trial Court
(RTC) of Cadiz City. Jose Vicente filed
a motion to dismiss mainly on the ground that the Cadiz RTC had no jurisdiction
to hear and decide intra-corporate disputes, the proper forum being a specially
designated commercial court.
On
June 15, 2004 the RTC granted Jose Vicentes motion and dismissed the complaint
for lack of jurisdiction, without prejudice to its re-filing in the proper
court. On August 11, 2006 the Court of
Appeals (CA) affirmed the RTC decision, prompting Mary Joy to file the present
petition.
The Issue Presented
The only issue presented in this case
is whether or not Mary Joys action presents an intra-corporate dispute that
belongs to the jurisdiction of a specially designated commercial court.
The Ruling of the Court
It is a basic rule that jurisdiction
over the subject matter is determined by the allegations in the complaint.[1] It can be gleaned from Mary Joys allegations
in her complaint that her case is principally one for recovery of
possession. Immediately upon the
execution of the MOA in 1993, Mary Joy took possession of Hacienda Imelda,
through her mother, and started planting sugarcane on it. In 1997 Young, with the use of force, took
over the property with the farm equipment and implements. Despite several demands to vacate and
surrender Hacienda Imelda, Young continued to cultivate and plant sugarcanes on
the property up to 2002, and even entered into a new lease contract with Jose
Vicente. It must be stated that
regardless of the actual condition of the title to the property, the party in
peaceable quiet possession shall not be turned out by a strong hand, violence
or terror. Thus, a party who can prove prior possession, can recover such
possession even against the owner himself. Whatever may be the character
of his prior possession, if he has in his favor priority in time, he is
entitled to remain on the property until he is lawfully ejected by a person
having a better right.[2]
Here,
Jose Vicente and Young mainly argued in their Motion to Dismiss that inasmuch
as the subject property is in the name of A.G. Agro, the nature of the claim or controversy is
one of intra-corporate. The Court has
ruled in the past that an action to recover possession is a plenary action in
an ordinary civil proceeding to determine the better and legal right to
possess, independently of title.[3] But where the parties raise the issue of
ownership, as in this case, the courts may pass upon such issue to determine
who between the parties has the right to possess the property. This
adjudication, however, is not final and binding as regards the issue of
ownership; it is merely for the purpose of resolving the issue of possession
when it is inseparably connected to the issue of ownership. The adjudication on the issue of ownership,
being provisional, is not a bar to an action between the same parties involving
title to the property.[4] Also,
any intra-corporate issues that may be involved in determining the real owner
of the property may be threshed out in a separate proceeding in the proper
commercial court.
WHEREFORE, the Court GRANTS the petition and REVERSES
and SETS ASIDE the Decision of the
Court of Appeals in CA-G.R. SP 85887 dated August 11, 2006. The Court likewise ORDERS Jose Vicente Gustilo
III and Teresita Young to answer the complaint in Civil Case 723-C, Regional
Trial Court Negros Occidental, Branch 60.
SO
ORDERED.
ROBERTO A. ABAD
Associate Justice
WE
CONCUR:
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson
DIOSDADO M. PERALTA JOSE CATRAL MENDOZA
Associate Justice Associate Justice
ESTELA M. PERLAS-BERNABE
Associate Justice
ATTESTATION
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Courts Division.
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution and the Division Chairpersons Attestation, I certify that
the conclusions in the above Decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.
RENATO
C. CORONA
Chief Justice
[2] German
Management & Services, Inc. v.
Court of Appeals, 258 Phil. 289, 293 (1989).
[3] Bejar v. Caluag, G.R. No. 171277, February 17, 2007, 516 SCRA 84, 90.
[4] Urieta
Vda. de Aguilar v. Alfaro,
G.R. No. 164402, July 5, 2010, 623 SCRA 130, 140-141.