A. DissolutionAguirre vs FOB +7, INC. GR. 170770, January 09, 2013

Facts: On October 5, 2004, Aguirre filed in his individual capacity a complaint for intra corporate dispute, injunction, inspection of corporate books and records, and damages against respondent Nathaniel D. Bocobo, Priscila Bocobo and Antonio Bacobo.The dispute springs from the GIS that Nathaniel and Priscila submitted to the SEC on September 6, 2002 and the appointment of Antonio by Nathaniel as the corporations attorney-in-fact, with the power of administration over the corporations farm.The case, docketed as SEC Case No. 04-111077, was assigned to branch 24 of the RTC of Manila.Respondents failed, despite notice, to attend the hearing on Vitalianos application for preliminary injunction. Thus the RTC granted the application based only on Vitalianos testimonial and documentary evidence. The respondent filed a motion for an extension to file the pleadings warranted in response to the complaint. The RTC subsequently denied this motion for being a prohibited pleading under Section 8, Rule 1 of the Interim Rules of Procedure Governing Intra-Corporate Controversies.Aggrieved by the adverse decision, respondent filed a petition for certiorari in the CA for the annulment of all the proceedings and issuances in the RTC of Manila on the ground that it has no jurisdiction over the subject matter, which they defined as being an agrarian dispute. They theorized that Vitalianos real goal in filing the Complaint was to maintain custody of the corporate farm in Quezon Province. Since this land is agricultural in nature, they claimed that jurisdiction belongs to the Department of Agrarian Reform (DAR), not to the Manila RTC.The Court of Appeals ruled that, the RTC committed a grave abuse of discretion when it issued the preliminary injunction to remove the respondents from their positions in the Board of Directors based only on Vitalianos self-serving and empty assertions. The appellate court also held that the RTC does not have jurisdiction to entertain an intra-corporate dispute when a corporation is already dissolved. Hence, this instant petition.Issue:The petitioner main raised the issue whether the RTC has jurisdiction over an intra-corporate dispute involving dissolved corporation.Ruling:The Supreme Court ruled in affirmative. They explained that Board of directors of a dissolved corporation may continue to exercise its powers and act in behalf of the corporation for the limited purpose of winding up and liquidating its corporate affairs. For this reason, issues raised by the stockholder of the dissolved corporation against the board are still covered by the summary rules on intra-corporate disputes. The nature of the case as an intra-corporate dispute was not affected by the subsequent dissolution of the corporation.Jurisdiction over subject matter is conferred by law. RA 8799 conferred Jurisdiction over intra-corporate controversies on courts of general jurisdiction or RTCs, to be designated by the Supreme Court. Thus, as long as the nature of the controversy is intra-corporate, the designated RTCs have the authority to exercise jurisdiction over such cases.In the case of Speed Distribution, Inc. vs. CA, the court used the TWO- TIER Test to determine the nature of the dispute. In the said test two essential elements will determine the nature of the dispute. The first element to consider is the Status or relationship of the parties. The second element involves the nature of the question that is subject to their controversy. The first element requires that the controversy must arise out of intra-corporate or partnership relations between any or all of the parties and the corporation, partnership, or association of which they are stockholders, members or associates, between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively; and between such corporation, partnership, or association and the State insofar as it concerns the individual franchises. The second element requires that the dispute among the parties be intrinsically connected with the regulation of the corporation. If the nature of the controversy involves matters that are purely civil in character, necessarily, the case does not involve an intra-corporate controversy.The Court further held that the nature of the case as an intra-corporate dispute was not affected by the subsequent dissolution of the corporation.

Vigilla et. al. vs Philippine College of Criminology GR. 200094, June 10, 2013

Facts:PCC is a non-stock educational institution, while the petitioners were janitors, janitresses and supervisor in the Maintenance Department of PCC under the supervision and control of Atty. Florante A. Seril, PCC Senior Vice President for Administration. However, the petitioners were made to understand upon application with the respondent school that they were under MBMSI, a corporation engage in providing janitorial services to clients, were Atty. Seril is also the president and General Manager of the said corporation.Sometime in 2008, The President of PCC, Mr. Gregory Bautista, discovered that the Certificate of Incorporation of MBMSI had been revoked as of July 2, 2003. The school then revoked and terminated their relationship with MBMSI, resulting to the dismissal of the employees of MBMSI.In September 2009, the dismissed employees filed their complaints for illegal dismissal, reinstatement and demands for other benefits against MBMSI, Atty. Seril, PCC and Bautista.The Labor arbiter favored the petitioners contending that it is the PCC who was actually the one which exercised control over the means and methods of the work of the petitioners, thru Atty. Seril, who was acting, throughout the time in his capacity as Senior VP of PCC, not as the President or GM of MBMSI.In February 11, 2011 the NLRC affirmed the decision of LA after finding out that MBMSI is just a labor only contractor. However, on April 28, 2011, it modified their previous decision ruling that their award has been superseded by their respective releases, waivers and quit claims. Aggrieved by the NLRC decision the petitioners appealed in the CA. However, the appellate court denied the petition and affirm the NLRC decisions in toto.

Issue: Whether their claims against the respondents were amicably settled by virtue of the releases, waivers and quitclaims which they had executed in favor of MBMSI.Sub- Issue Whether the petitioners executed the said releases, waivers and quitclaims. Whether or not a dissolved corporation can enter into an agreement such as releases, waivers and quit-claims beyond the 3-year winding-up period under section 122 of the Corporation Code. Whether there is labor only contracting agreement.Ruling:The executed releases, waivers and quitclaims are valid and binding notwithstanding the revocation of a Certificate of Incorporation. The revocation does not result in the termination of its liabilities. What is provided in Sec. 122 of the Corp. Law is that the conveyance to the trustees must be made within the three-year period but there is no time limit within which the trustees must complete a liquidation placed in their hands. Even if no trustee is appointed or designated during the three-year period of the liquidation of the corporation, the Court has held that the board of directors may be permitted to complete the corporate liquidation by continuing as "trustees" by legal implication.Furthermore, Sec. 145 of the same law provides that no liabilities, remedy or right in favor of or against any corporation, its stockholders, members, directors, trustees, or officers, shall be removed or impaired either by the subsequent dissolution of said corporation.

B. LiquidationBarrameda vs Rural Bank of Canaman GR. 176260, November 24 2010

Facts:

Lucia Barrameda Vda. De Ballesteros filed a complaint for annulment of deed of extrajudicial partition, Deed of Mortgage, and Damages with prayer for preliminary injunction against her children and the Rural Bank of Canaman Inc. before the RTC of Iriga.During the pre-trial, RBCIs counsel filed a motion to withdraw after being informed that PDIC would handle the case as RBCI had already been closed and placed under receivership of the PDIC. Subsequently, The RBCI, through PDIC, filed a motion to dismiss on the ground that the RTC of Iriga has no Jurisdiction over the subject matter of the action. They quoted RA 7653 or the New Central Bank Act, which constitutes the RTC of Makati as the liquidation court to assist PDIC in undertaking the liquidation of RBCI.The RTC of Iriga then issued an order granting the Motion to Dismiss based on the case of Ong vs. CA wherein the SC held that the liquidation court shall have the jurisdiction to adjudicate all claims against the bank whether they be against assets of the insolvent bank, for Specific Performance, Breach of Contract, Damages or whatever.Not in conformity, Lucia appealed the ruling of the RTC in the CA. However, the appellate court modified the RTC decision and ordered the consolidation of the Civil case and the Liquidation case pending before the RTC of Makati.Issue:Whether a liquidation court can take cognizance of a case wherein the main cause of action is not a simple money claim against a bank ordered closed, placed under receivership of the PDIC and undergoing a liquidation proceeding.Ruling:The liquidation court shall have jurisdiction to adjudicate all claims against the bank whether they be against assets of the insolvent bank, for Specific Performance, Breach of Contract, Damages or whatever.The petitioner contends that the RTC court of Iriga already acquired jurisdiction over the case and by applying the doctrine of the adherence of the jurisdiction the said court must continue to exercise jurisdiction over the case until it is terminated. However the Court posited that such doctrine is not without any exception. In Garcia vs Martinez, the court ruled that the rule on adherence of jurisdiction is not absolute and has exceptions, one exception is that when the change in jurisdiction is curative in character. RA 7650 is curative in nature since its main purpose is to prevent multiplicity of actions, establish due process and orderliness in the liquidation of the bank. ( Ong vs CA)The Petitioner also questioned the validity of the consolidation of her civil case and the liquidation case. The court upheld the validity of such consolidation considering that Liquidation is defined as a single proceeding which consists of a number of cases properly classified as claims. Lucias Complaint involving annulment of deed of mortgage and damages falls within the purview of a disputed claim in contemplation of section 30 of RA 7653. In the case of Miranda vs PDIC, the Court explained that regular courts do not have jurisdiction over actions filed by claimants against an insolvent bank unless there is a clear showing that the action taken by BSP in the closure of the financial institutions was in excess of jurisdiction or with grave abuse of discretion. C. RehabilitationHeirs of Santiago Divinagarcia vs Ruiz GR. 172023, July 7 2010

Facts:Santiago alleged that he was then a stockholder of respondent CBS Development Corporation, Inc. (CBSDC). He opposed to the proposal to authorize respondent Rogelio Florete, in his capacity as President of CBSDC, to mortgage all or substantially all of CBSDCs real properties to secure the loan obtained by Newsounds Broadcasting Network, Inc. (NBN), Consolidated Broadcasting System (CBS), and Peoples Broadcasting Services, Inc. (PBS).However, despite Santiagos and the other stockholders protest, a majority, representing more than 2/3 of the outstanding capital stock of CBSDC, voted and approved the grant of such authority to the Board.Subsequently, Santiago, as a dissenting stockholder, wrote a letter objecting to the mortgage and exercising his appraisal right under Section 81 of the Corporation Code.In response, the corporate secretary informed Santiago that a majority of CBSDCs Board of Directors approved the exercise of his appraisal right. Thereafter, Santiago surrendered his stock certificates to CBSDC and then demanded an appraisal of his shares.The Board indefinitely postponed action on Santiagos appraisal right, to which Santiago protested.The corporate secretary denied Santiagos protest and informed him that his CBSDC shares, including those for which he was issued Certificates of Stock, were declared delinquent and were to be sold on auction on 12 February 2002.On 6 February 2002, Santiago filed with the Regional Trial Court of Iloilo City a Petition for Mandamus and Nullification of Delinquency Call and Issuance of Unsubscribed Shares. However, on 12 February 2002, Santiagos CBSDC shares were sold on auction to respondent Diamel, Inc. With this, Santiago then modified his petition including Diamel as one of the respondents. The respondents filed an answer with Compulsory Counterclaims.On April 14, 2004, Santiago died and His Heirs substituted him in the case.The RTC dismissed the petition filed by Santiago and give due course to the Compulsory Counterclaims filed by the respondent. The court ordered the heirs of Santiago to pay the respondents 200,000.00 pesos for exemplary damages and attorneys fees.Petitioners then filed a Notice of Appeal of the RTCs decision. On the other hand, private respondents then filed motion for immediate execution of the trial courts decision, which petitioners opposed. The RTC grants the respondents motion and issued an ordered for the issuance of a writ of execution.Petitioners subsequently filed a petition for certiorari with Prayers for TRO and Writ of Injunction before the CA. However, the CA dismissed the said petition. The dismissal is based on Section 4, Rule 1 of the interim Rules of Procedure for Intra-Corporate Controversies which provides that all decision rendered in intra-corporate controversies shall immediately be executory.ssue:Whether the awards of exemplary damages and attorneys fees can be immediately executed pending appeal of the corporate case.Ruling:The Supreme court held in negative. The court issued an A.M. No. 01-2-04-SC entitled Re: Amendment of Section 4, Rule 1 of the Interim Rules of Procedure Governing Intra-Corporate Controversies. This said memorandum clarifies that Decisions issued pursuant to said Rule are immediately executory except the awards for moral damages, exemplary damages and attorneys fees, if any.Even before the promulgation of the said memorandum, the Court in International School, INC. vs. CA, ruled that the execution of any award for moral and exemplary damages is dependent on the outcome of the main case for their exact amounts remain uncertain and indefinite pending resolution by the CA or SC..