#04 G.R. No.

L-31061 August 17, 1976

SULO NG BAYAN INC., plaintiff-appellant, vs.
GREGORIO ARANETA, INC., PARADISE FARMS, INC., NATIONAL WATERWORKS & SEWERAGE
AUTHORITY, HACIENDA CARETAS, INC, and REGISTER OF DEEDS OF BULACAN, defendants-
appellees.
ANTONIO, J.:

FACTS:
On 26 April 1966, Sulo ng Bayan, Inc. filed an accion de revindicacion with the Court of
First Instance of Bulacan, Fifth Judicial District, Valenzuela, Bulacan, against Gregorio Araneta Inc.
(GAI), Paradise Farms Inc., National Waterworks & Sewerage Authority (NAWASA), Hacienda
Caretas Inc., and the Register of Deeds of Bulacan to recover the ownership and possession of a
large tract of land in San Jose del Monte, Bulacan, containing an area of 27,982,250 sq. ms., more
or less, registered under the Torrens System in the name of GAI, et. al.'s predecessors-in-interest
(who are members of the corporation).

PLAINTIFF-APPELLANT: Sulo ng Bayan, Inc.

 a corporation organized and existing under the laws of the Philippines, with its principal office and place of
business at San Jose del Monte, Bulacan;
 that its membership is composed of natural persons residing at San Jose del Monte, Bulacan;
 that the members of the plaintiff corporation, through themselves and their predecessors-in-interest, had
pioneered in the clearing of the fore-mentioned tract of land, cultivated the same since the Spanish regime
and continuously possessed the said property openly and public under concept of ownership adverse
against the whole world;
 that defendant-appellee Gregorio Araneta, Inc., sometime in the year 1958, through force and intimidation,
ejected the members of the plaintiff corporation from their possession of the aforementioned vast tract of
land;
 that upon investigation conducted by the members and officers of plaintiff corporation, they found out for
the first time in the year 1961 that the land in question "had been either fraudelently or erroneously
included, by direct or constructive fraud, in Original Certificate of Title No. 466 of the Land of Records of
the province of Bulacan", issued on May 11, 1916, which title is fictitious, non-existent and devoid of legal
efficacy due to the fact that "no original survey nor plan whatsoever" appears to have been submitted as a
basis thereof and that the Court of First Instance of Bulacan which issued the decree of registration did not
acquire jurisdiction over the land registration case because no notice of such proceeding was given to the
members of the plaintiff corporation who were then in actual possession of said properties; that as a
consequence of the nullity of the original title, all subsequent titles derived therefrom are therefore void.

DEFENDANT-APPELLEE: Gregorio Araneta, Inc.

 On September 2, 1966, defendant-appellee Gregorio Araneta, Inc. filed a motion to dismiss the amended
complaint on the grounds that
o (1) the complaint states no cause of action; and
o (2) the cause of action, if any, is barred by prescription and laches

ISSUES:

1. Whether the corporation (non-stock) may institute an action in behalf of its individual members
for the recovery of certain parcels of land allegedly owned by said members, among others.
 2. Whether the complaint filed by the corporation in behalf of its members may be treated as a class
suit.

HELD:

1. NO.
It is a doctrine well-established and obtains both at law and in equity that a corporation is a distinct
legal entity to be considered as separate and apart from the individual stockholders or members who
compose it, and is not affected by the personal rights, obligations and transactions of its stockholders
or members. The property of the corporation is its property and not that of the stockholders, as owners,
although they have equities in it. Properties registered in the name of the corporation are owned by it as
an entity separate and distinct from its members. Conversely, a corporation ordinarily has no interest in
the individual property of its stockholders unless transferred to the corporation, "even in the case of a
one-man corporation." The mere fact that one is president of a corporation does not render the property
which he owns or possesses the property of the corporation, since the president, as individual, and the
corporation are separate similarities.
It has not been claimed that the members have assigned or transferred whatever rights they may
have on the land in question to the plaintiff-corporation. Absent of any showing of interest, therefore, a
corporation, like plaintiff-appellant herein, has no personality to bring an action for and in behalf of its
stockholders or members for the purpose of recovering property which belongs to said stockholders or
members in their personal capacities.

2. NO.
In order that a class suit may prosper, the following requisites must be present:
(1) that the subject matter of the controversy is one of common or general interest to
many persons; and
(2) that the parties are so numerous that it is impracticable to bring them all before court.

Here, there is only one plaintiff, and the plaintiff corporation does not even have an interest in
the subject matter of the controversy, and cannot, therefore, represent its members or stockholders who
claim to own in their individual capacities ownership of the said property. Moreover, a class suit does not
lie in actions for the recovery of property where several persons claim partnership of their respective
portions of the property, as each one could alleged and prove his respective right in a different way for
each portion of the land, so that they cannot all be held to have identical title through
acquisition/prescription.

OTHER TOPICS:

A. JURISDICTION

 Jurisdiction implies the power of the court to decide a case, while venue the place of action. There
is no question that respondent court has jurisdiction over the case. The venue of actions in the
Court of First Instance is prescribed in Section 2, Rule 4 of the Revised Rules of Court. The laying
of venue is not left to the caprice of plaintiff, but must be in accordance with the aforesaid
provision of the rules.
 The mere fact that a request for the transfer of a case to another branch of the same court has
been approved by the Secretary of Justice does not divest the court originally taking cognizance
 thereof of its jurisdiction, much less does it change the venue of the action. As correctly observed
by the trial court, the indorsement of the Undersecretary of Justice did not order the transfer of
the case to the Malolos Branch of the Bulacan Court of First Instance, but only "authorized" it for
the reason given by plaintiff's counsel that the transfer would be convenient for the parties.
 The trial court is not without power to either grant or deny the motion, especially in the light of a
strong opposition thereto filed by the defendant. We hold that the court a quo acted within its
authority in denying the motion for the transfer the case to Malolos notwithstanding the
authorization" of the same by the Secretary of Justice.

B. ELEMENTS OF CAUSE OF ACTION

(1) the right of the plaintiff; and

(2) the violation of such right by the defendant.

For these reasons, the rules require that every action must be prosecuted and defended in the name
of the real party in interest and that all persons having an interest in the subject of the action and in
obtaining the relief demanded shall be joined as plaintiffs (Sec. 2, Rule 3). In the amended complaint, the
people whose rights were alleged to have been violated by being deprived and dispossessed of their land
are the members of the corporation and not the corporation itself. The corporation has a separate. and
distinct personality from its members, and this is not a mere technicality but a matter of substantive law.

C. What constitute COMMON INTEREST IN THE SUBJECT MATTER OF THE CONTROVERSY

The interest that will allow parties to join in a bill of complaint, or that will enable the court to dispense
with the presence of all the parties, when numerous, except a determinate number, is not only an interest
in the question, but one in common in the subject Matter of the suit; ... a community of interest growing
out of the nature and condition of the right in dispute; for, although there may not be any privity between
the numerous parties, there is a common title out of which the question arises, and which lies at the
foundation of the proceedings ... (Scott v. Donald)