BSP VS CAMPA

CORPORATION: the requirements for derivative suits were encapsulated in San Miguel
Corporation v. Kahn,16 to wit:

1. the party bringing suit should be a shareholder as of the time of the act or
transaction complained of, the number of his shares not being material;

2. he has tried to exhaust intra-corporate remedies, i.e., has made a

demand on the board of directors for the appropriate relief but the latter
has failed or refused to heed his plea; and

3. the cause of action actually devolves on the corporation, the wrongdoing

or harm having been, or being caused to the corporation and not to the
particular stockholder bringing the suit.17

FACTS:
Bankwise applied for Special liquidity facility loan from BSP in 2000ish.
With mortgaged properties owned by 3rd parties for it’s outstanding loans.

3rd party mortgagors

Eduardo Alino and co-owners Barrio Masiga, Gasan, Marinduque
Haru Gen Beach Resort and Hotel corp Barrio Igang, Virac, Catanduanes
Vincente Campa etc Mandaluyong city 4 TCT

Bankwise failed to pay, extrajudicial happened to 3rd party mortgages.

All mortgaged properties were sold at public auction to BSP being the highest
bidder and cert of sale were registered
April 18, 2006 Alino filed complaint for specific perf novation of contracts and TRO
against BSP and bankwise, Comm case no. 06114866.
Alino alleged he’s 10% stockholder of VR Holdings, and he allowed his properties
to be used by bankwise as collateral for the SLF loan because bankwise and VR
holdings assured him that properties will return and no risk of foreclosure, and
BSP reassured that outstading obligation will be settled by dacion en pago

Outline of complaint below

Former owners of BW agreed to assume the liability for the segregated obligation
which at the time had ballooned to 1.027b inclusive of in and pen.

Former owners started submitting no less than 35 titles beginning the 2 ndq of
2005, roughly 2b more or less for dacion

There’s a proof that bsp acknowledged.

Alino asserted that the value of the lots offered for dacion would be more than
sufficient to answer for the obligation of BW.

Alino also claimed that BW refused to honor its commitment to him and that BW
and BSP have allied together to deny the return to the 3rd party mortgagors aof
the forclosed properties.

Haru Gen Beach filed a motion for leave of court to admit complaint in
intervention, over properties 2 TCT in favor of BSP w/o any consideration;
The extrajudicial foreclosure has no consideration, null and void, signatory not
properly authorized by the BOD of the corp, and is entitled for declaration of
nullity of REM and return in its name of the said TCTs

BSP opposed, Oct 23m 2003 RTC, Judge Eugenio denied motion, haru’s cause of
action if any, is properly the subject of separate proceeding.

Jan 3 2007, Campa and etc filed motion for leave to intervene and admit their
complaint-in-intervetion.
Same with alino, registered owners of the real properties no risk of foreclosure.

BSP opposed the motion, but on Apr 24, 2007, The RTC, Judge Young granted the
motion and admitted their complaint in intervention

BSP appealed to CA
1. Intervention req was not meant
2. Respondent’s CII and its supplements were not met
3. Cause of action, separate proceeding
4. Considering the prev haru gen denial, no reason for intervention comm
case
5. Intervention scheme to delay consolidation of title to BSP
6. Allegations are patently devoid of merit

July 15 2008 the CA ruled in favor of respondents, BSP moved for

reconsidereation,
Insisting that respon not stockholders of VR holdings, no legal interest in
commercial case unlike alino as a stockholder of VR holdings. Motion denied jan 9
2009
PETITION for review BSP re asserted the ff grounds
1. Private resp failed to satisfy the requisited for intervention.
2. No legal basis to treat private resp differently from haru gen, who had been
denied

The damage in this case does not really devolve on the corporation. The harm or injury
that Aliño sought to be prevented pertains to properties registered under Aliño and
other third-party mortgagors.

*3.4 While making plaintiff and the other Third-Party Mortgagors and Bankwise believe
that it was in the process of evaluating and considering the properties offered for
dacion, BSP's simultaneous act of rapidly foreclosing on the Third-Party Mortgages,
including plaintiffs is treacherous and confiscatory.

* Thus, the agreement and execution of the dacion en pago between BSP and Bankwise
in 2005, without the knowledge of plaintiff, effectively released plaintiff from any
further obligations under his Third-Party REMs which he executed in the years 2000 to
2004, together with his co-owners of the properties.

*4.10 Specifically in the case of plaintiff, Bankwise paid BSP P42 Million in cash in order
to cause the release of plaintiff s TCT Nos. 4685 and 4686. But as BSP accepted said
P42 Million payment, it held on to the properties of plaintiff and proceeded to foreclose
on the same.

The suit clearly is not for the benefit of the corporation for a judgment in favor of the
complainant would mean recovery of his personal property. There is no actual or
threatened injury alleged to have been done to the corporation due to the foreclosure of
the properties belonging to third-party mortgagors.

A reading of the Interim Rules further demonstrates that the complaint could not be
considered a derivative suit.

First, Aliño failed to exhaust all remedies available to him as a stockholder of VR

Holdings.
The "supplications" referred to in the complaint are in the form of one demand letter
sent to each company, which does not suffice. Moreover, the letter was addressed to
the President of Bankwise and VR Holdings, and not to the Board of Directors. In Lopez
Realty v. Spouses Tanjangco,25 a demand made on the board of directors for the
appropriate relief is considered compliance with the requirement of exhaustion of
corporate remedies. Aliño failed to show that he exerted all reasonable efforts to
exhaust all remedies available under the articles of incorporation, by-laws, and laws or
rules governing the corporation to obtain the relief he desired.

Second, the unavailability of appraisal right as a requirement for derivative suits does
not apply in this case. A stockholder who dissents from certain corporate actions has
the right to demand payment of the fair value,of his or her shares. This right, known as
the right of appraisal, is expressly recognized in Section 81 of the Corporation Code, to
wit:

Section 81. Instances of appraisal right.- Any stockholder of a corporation shall have

the right to dissent and demand payment of the fair value of his shares in the following
instances:

1. In case any amendment to the articles of incorporation has the effect of changing or
restricting the rights of any stockholder or class of shares, or of authorizing preferences
in any respect superior to those of outstanding shares of any class, or of extending or
shortening the term of corporate existence;

2. In case of sale, lease, exchange, transfer, mortgage, pledge or other disposition of

all or substantially all of the corporate property and assets as provided in the Code; and

3. In case of merger or consolidation. 26

The appraisal right does not obtain in this case because the subject of the act
complained of is the private properties of a stockholder and not that of the corporation.

Third, the instant case is a harassment suit. In determining whether a complant is

considered a harassment suit, the following guidelines are provided in Section 1 (b),
Rule I of the Interim Rules of Procedure for Intra-Corporate Controversies, thus:

(b) Prohibition against nuisance and harassment suits. - Nuisance and harassment suits
are prohibited. In determining whether a suit is a nuisance or harassment suit, the
court shall consider, among others, the following:

(1) The extent of the shareholding or interest of the initiating stockholder or member;

(2) Subject matter of the suit;

(3) Legal and factual basis of the complaint;

(4) Availability of appraisal rights for the act or acts complained of; and

(5) Prejudice or damage to the corporation, partnership, or association in relation to the

relief sought.

Considering that the Aliño complaint is not a derivative suit, it would have been proper
to dismiss it the case for lack of jurisdiction. 

the new rule: Following Gonzales, the instant case, which we find to be an ordinary civil
case and the jurisdiction of which pertains to the RTC, should be re-raffled to all the
RTCs of the place where the complaint was filed. Dismissal of the action is no longer the
proper recourse.

In the case of Asian Terminals Inc. v. Bautista-Ricafort,36 we expounded that

"intervention is merely ancillary and supplemental to the existing litigation and never
an independent action, the dismissal of the principal action necessarily results in the
dismissal of the complaint-in-intervention. Likewise, a court which has no jurisdiction
over the principal action has no jurisdiction over a complaint-in-intervention.
Intervention presupposes the pendency of a suit in a court of competent jurisdiction.
Jurisdiction of intervention is governed by jurisdiction of the main action." In this case,
the RTC had already acquired jurisdiction upon filing of the complaint. The re-raffling of
the case is more administrative than it is judicial. By directing the re-raffling of the case
to all the RTCs, the Complaint-in-Intervention should be refiled in the court where the
principal action is assigned. chanrobleslaw

 the petition is PARTLY GRANTED The Decision and Resolution dated 15 July 2008 and
9 January 2009, respectively of the Court of Appeals, are set aside. The Complaint in
Commercial Case No. 06-114866 is REFERRED to the Executive Judge of the Regional
Trial Court of Manila for re-docketing as a civil case. Thereafter, the Executive Judge
shall RAFFLE the case to all branches of the Regional Trial Court of Manila. The assigned
Branch is ORDERED to resolve the case with reasonable dispatch. The Clerk of Court of
RTC Manila shall DETERMINE the appropriate amount of docket fees and, in so
doing, ORDER the payment of any difference or, on the other hand, refund any excess.