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EMBASSY FARMS, INC. v.

CA [Ramos]  Jul 30, ‘87: Meanwhile, Embassy Farms instituted an action for Injunction with damages vs. EBE
(GR 80682; Aug 13, 1990) o Alleged that on Jul 11, ‘87, EBE forced his way inside Embassy Farms and took some cash
PETITIONER: Embassy Farms, Inc. and checks (P423,275.45)
RESPONDENT: Court of Appeals, Hon. Baltazar (RTC Pasig judge), Voltaire Cruz (Dep. Sheriff, RTC), o docketed as Civil Case No. 348-11-89 and raffled to RTC Malolos, Bulacan
Eduardo Evangelista  Aug 10, ’87: (upon a motion to dismiss by EBE), RTC Malolos denied the motion to dismiss and issued
PONENTE: Paras, J. a writ of preliminary injunction enjoining EBE, his agent and/or any person claiming right under him to
FACTS: refrain or desist from interfering in the management and operation of Embassy Farms until further
 Aug 2, ’84: Alexander G. Asuncion (AGA) and Eduardo B. Evangelists (EBE) entered into a orders from this Court,
Memorandum of Agreement (MoA). o subject to Embassy Farm’s filing of a P150K bond executed in favor of EBE conditioned for
o EBE to transfer to AGA 19 parcels of agricultural land (104,447 sq m) in Loma de Gato, the payment of all damages which the latter may sustain by reason of this injunction and in
Marilao, Bulacan registered in his name, together with the stocks, equipment and facilities case said defendant is adjudged entitled thereto
of a piggery farm owned by Embassy Farms (90% owned by EBE)  Aug 27, ’87: EBE filed a motion for the reconsideration of the above order of RTC Malolos
o EBE to cede, transfer and convey "in a manner absolute and irrevocable any and all of his  Sept 15, ’87: without awaiting the resolution of his MR, EBE filed a Petition for certiorari and
shares of stocks" in Embassy Farms to AGA or his nominees "until the total of said shares of Prohibition with preliminary injunction with CA (CA-G.R. No. 12817)
stock so transferred shall constitute 90% of the paid-in-equity of said corporation" within a  Oct 13, ’87: CA 5th Div issued a consolidated resolution in CA-G.R. Nos. 12817 and 12834 sustaining
reasonable time from signing of the document the Jul 30, 1987 of RTC Pasig. Accordingly, it lifted the Sept 22, ‘87 restraining order it issued
o EBE to turnover the effective control and management of the piggery upon the signing o Board of Directors of Embassy Farms are nominees of AGA (considered AGA and Embassy
o AGA, upon signing, to pay EBE P8.63M Farms as one and the same person)
o AGA, within reasonable time from signing, to organize and register a corporation with a o EBE has NOT delivered the certificate of stock outstanding in his name in the books of the
P10M authorized capital stock which, upon reg., will take over his rights and liabilities corporation to AGA because the latter has not complied with the MoA’s conditions
 Aug 2, ’84: EBE turned over to AGA the effective control and management of the piggery at Embassy o NO transfer of shares of stock has been made by EBE to AGA (no delivery of the certificate
Farms. EBE served as President and Chief Executive of Embassy Farms with a monthly salary of P15K. in order to produce or effect the transfer of such shares of stock)
o EBE also endorsed in blank all his shares of stock including that of his wife and 3 nominees  Nov 5, ‘87: Embassy Farms filed an MR, but it was denied
with minor holdings in Embassy Farms  PETITIONER
o Out of the total 3,125 shares of stocks EBE has 2,725 shares, his wife Epifania has 250 o RTC Pasig has no jurisdiction to hear and decide EBE's application for the issuance of a writ
shares, while Angel Santos, Armando Martin and Teofilo Mesina had 50 shares of preliminary injunction in Civil Case No. 53335 because the ouster of EBE and his
o shares of 3,125 correspond to the paid subscription because as reflected in the Articles of reinstatement as President and CEO of Embassy Farms is an intra-corporate matter within
Incorporation (Annexes "B") EBE subscribed 10,900 shares, Epifania Evangelista 1,000 the exclusive and original jurisdiction of the SEC
shares, while Angel Santos, Armando Martin and Teofilo Mesina had 200 shares each o RTC Pasig did NOT acquire jurisdiction over Embassy Farms because it was NOT made a
o However, despite the indorsement, EBE retained possession of said shares and opted to party in Civil Case No. 53335
deliver to AGA ONLY upon full compliance of the latter’s obligations o RTC Pasig’s orders could NOT be enforced at Loma de Gato, Marilao Bulacan, (principal
 Notwithstanding the non-delivery of the shares of stocks, in a Deed of Transfer of Shares of Stock office of the corporati•n), as it is outside the National Capital Judicial Region
(dated Aug ’84, but notarized on Jun 20, ’85), AGA transferred 8,602 shares to several persons o writ of preliminary injunction issued in Civil Case 53335 was irregularly issued because it
 For failure to comply with his obligations, EBE intimated the institution of appropriate legal action was issued 1 day ahead of the injunction bond
 Apr 10, ’86: AGA preempted EBE by filing an action for rescission of the MoA + damages
o case was docketed as Civil Case 53335 and assigned to Branch CLVIII, RTC Pasig ISSUE: WON CA erred when it sustained the RTC Pasig’s Jul 13, ‘87 order and lifted the restraining order
o alleging EBE's misrepresentation on the piggery business since said business is actually it issued in CA-G.R. SP No. 12834
losing and EBE's failure to execute the deeds of conveyance of the 19 parcels of land HELD: NO, CA did not err. Petition DENIED.
 Jul 30, ’87: RTC Pasig granted a writ of preliminary injunction  This case is merely an offshoot of a controversy yet to be decided on the merits by RTC Pasig
o restraining the plaintiff (AGA), his nominees, agents, security guards, employees and all o action for rescission filed by AGA in Civil Case No. 53335 now pending before RTC Pasig will
persons claiming under him from disposing of in any manner removing and carrying away ultimately settle the controversy as to whether it is AGA or EBE or both parties who have
the stocks including rights sucklings, equipment and other facilities in Embassy Farms reneged on their obligations under the MoA
o from harrassing defendant (EBE) and his employees and associates  although EBE has indorsed in blank the shares outstanding in his name he has NOT DELIVERED the
o preventing EBE from discharging, performing and exercising his duties, prerogatives as certificate of stocks to AGA because the latter has not fully complied with his obligations
director, president and chief executive of Embassy Farms o no delivery of the indorsed shares of stock = AGA CANNOT effectively transfer to other
 until further orders from this Court persons the undelivered shares of stock
 subject to EBE's filing of a P1.75M bond in favor of AGA, conditioned upon EBE’s  For an effective TRANSFER OF SHARES OF STOCK, the mode and manner of transfer as prescribed by
payment to AGA of all damages sustained by reason of this injunction in the law must be followed
event the Court decides otherwise and in case AGA is adjudged entitled o Sec 3, BP 68 (Corp Code): shares of stock may be transferred by DELIVERY TO THE
 Sept 14, ’87: RTC Pasig (on EBE's motion) issued an order to break open the premises of Embassy TRANSFERREE of the certificate properly indorsed
Farms to enforce the writ of preliminary injunction o Title may be vested in the transferree by the delivery of the indorsed certificate of stock
 Sept 18, ’87: Embassy Farms filed a petition with the CA for prohibition with preliminary injunction.  HOWEVER, NO transfer shall be valid, EXCEPT as between the parties UNTIL
o docketed as CA-G.R. 12834 the transfer is properly recorded in the books of the corporation (Sec. 63,
 Sept 22, ’87: CA 5th Div enjoined the enforcement of RTC Pasig's order (CA-G.R. SP No. 12834) Corporation Code of the Philippines) <not binding on 3rd parties until reg>
 Here, the indorsed certificate of stock was NOT ACTUALLY DELIVERED to AGA so EBE is still the
controlling stockholder of Embassy Farms despite the execution of the MoA and the turn-over of
control and management of the Embassy Farms to AGA on August 2, 1984
o When AGA filed an action for rescission, RTC Pasig merely restored and established the
status quo prior to the execution of the MoA by the issuance of a restraining order and
later the writ of preliminary injunction
o unjust and unfair to allow AGA and his nominees to control Embassy Farms despite the fact
that AGA (source of their supposed shares) is NOT asking for the delivery of the indorsed
certificate of stock BUT for the rescission of the MoA
o RESCISSION would result in mutual restitution, so EBE is allowed to manage the farm
o Compared to AGA/nominees, EBE would be more interested in the preservation of the
assets, equipment and facilities of Embassy Farms during the pendency of the main case
 dispute at bar is NOT an Intracorporate Controversy within SEC’s exclusive and original jurisdiction
o INTRACORPORATE CONTROVERSY it must pertain to any of the following relationships:
1. between the corporation, partnership or association and the public;
2. between the corporation, partnership or association and the state in so far as
its franchise, permit or license to operate is concerned;
3. between the corporation, partnership or association and its stockholders,
partners, members or officers; and
4. among the stockholders, partners or associates themselves
o conflict here is between AGA and EBE arising from the MoA (contractual obligations – NOT
the enforcement of rights and obligations under the corporation code or the internal or
intracorporate affairs of the corporation)
 AGA/nominees are NOT even the lawful stockholders of Embassy Farms
because EBE justifiably withheld the delivery of the indorsed certificates
(supposed transfer by virtue of the MoA could not be properly recorded in the
book of the corporation)
o Thus, the dispute does NOT fall within SEC’s special jurisdiction, but with regular Courts.
o AGA or his nominees unduly dragged Embassy Farms in order to resist the order of RTC
Pasig and to confuse the real and legitimate issue in the case at bar
 Re: enforceability of the RTC Pasig’s order
o no reason to depart from the ruling of the RTC (sustained by CA)
o GEN RULE: injunction under Sec 21, BP 129 is enforceable within the region
 trial court has no jurisdiction to issue a writ of prelim injunction to enjoin acts
being performed or about to be performed outside its territorial boundaries
o EXCEPTION: to avoid an irreparable prejudice SC has allowed the enforcement of an
injunction to restrain acts committed outside the territorial jurisdiction of the issuing court
 In the Dagupan case, We ruled that a CFI has jurisdiction to try a case although
the acts sought be restrained are committed outside its territorial jurisdiction
where the principal business addresses of the parties and the decisions on the
acts to be restrained are located and originated within the Court's jurisdiction
o Here, to avoid an injustice and irreparable injury We apply the exception
 Both parties are residents of NCR
 AGA filed the case with the RTC Pasig and the injunction as an equitable remedy
intended to preserve the status quo is directed against AGA/nominees
 All orders to be enforced and executed at Embassy Farms in Loma de Gato,
Marilao, Bulacan emanated from its main office which is located at the 2nd
Floor, Agora Complex, Domingo Street, San Juan, Metro Manila
 Re: regularity of the writ’s issuance (1 day ahead of the injunction bond)
o factual findings of the CA that the date Jul 31, ‘87, appearing on the bond is a
typographical error
o with the injunction bond the party enjoined is amply protected against loss or damage in
case it is finally decided that the injunction ought not to have been granted