Wee v. Wee
REITERATIONFacts
The Antecedents: Petitioners Dee Ping Wee, Araceli Wee, and Marina U. Tan are majority stockholders in Marcel Trading Corporation, Marine Resources Development Corporation, and First Marcel Properties, Inc. Respondents Lee Hiong Wee and Rosalind Wee are minority stockholders in these same corporations. The dispute arose when respondents, as minority stockholders, demanded to inspect the corporate records and be furnished financial statements for the years 2002 and 2003. Petitioners, through Dee Ping Wee, replied with a counter-demand, requiring respondents to provide financial reports of Rico Philippines Industrial Corporation, repay alleged cash advances, and account for export sales before allowing inspection. Procedural History: Following the exchange of demands, respondents filed three separate complaints with the Regional Trial Court (RTC) of Quezon City, seeking the inspection of corporate books and records, citing violations of Sections 74 and 75 of the Corporation Code. The RTC ruled in favor of the respondents, ordering the petitioners to allow inspection under certain conditions. Petitioners then filed petitions for certiorari with the Court of Appeals (CA), arguing that the RTC committed grave abuse of discretion. The CA's Twelfth Division dismissed the petition related to Marcel Trading Corporation (CA-G.R. SP No. 85878) for being a substitute for a lost appeal. However, the CA's Fourth and Eighth Divisions, in CA-G.R. SP Nos. 85880 and 85879 respectively, annulled the RTC decisions concerning Marine Resources Development Corporation and First Marcel Properties, Inc., finding that the respondents had not shown a proper motive for inspection. Meanwhile, the RTC granted a writ of execution for the Marcel Trading Corporation case, which petitioners sought to quash. The CA's First Division denied this motion, leading to the present petition. The Petition: Petitioners seek a review on certiorari under Rule 45 of the Rules of Court, aiming to reverse the CA's Resolutions that denied their petition for certiorari and prohibition. They argue that the CA erred in not considering the decisions in CA-G.R. SP Nos. 85880 and 85879, which annulled the inspection orders for Marine Resources Development Corporation and First Marcel Properties, Inc., as supervening events that should have warranted the suspension of the execution of the RTC's decision regarding Marcel Trading Corporation. Petitioners contend that these separate CA decisions, despite involving different corporations, should have been recognized as a basis to halt the execution due to the factual similarities and the prior dismissal of their certiorari petition on technical grounds. They also argue that the burden of proof for legitimate purpose should be on the corporation, not the stockholder.
Issue(s)
Whether the decisions in CA-G.R. SP No. 85880 and CA-G.R. SP No. 85879, rendered by separate divisions of the Court of Appeals, declaring as improper the intended inspection of corporate records of Marine Resources Development Corporation and First Marcel Properties, Inc., constitute a supervening event which would warrant the suspension of execution of the Regional Trial Court's decision granting inspection of corporate records of Marcel Trading Corporation. Whether the petitioners correctly availed themselves of the remedy of certiorari instead of appeal.
Ruling
The petition is denied. The Resolutions of the Court of Appeals in CA-G.R. SP No. 90024 are affirmed. The records are remanded to the Regional Trial Court for immediate execution of the Decision dated June 23, 2004 in Civil Case No. Q-04-091. The Temporary Restraining Order issued on October 17, 2005 is lifted.
Ratio Decidendi
On the existence of a supervening event: The Court disagreed with petitioners' contention that the CA's decision in CA-G.R. SP No. 85880 constituted a supervening event. While the cases involved similar legal rights and parties, they concerned distinct corporations (Marcel Trading Corporation vs. Marine Resources Development Corporation and First Marcel Properties, Inc.). The Court emphasized that the cases were independent and the ruling on one corporation's records would not materially alter the substance of the judgment concerning another corporation's records. The fact that the CA's Fourth Division found that respondents failed to show proper motive in seeking inspection of Marine Resources Development Corporation's records did not automatically invalidate the right to inspect Marcel Trading Corporation's records. The Court reiterated that the burden of proof lies with the corporation to show that a stockholder's demand for inspection is improper, not the other way around, citing Republic v. Sandiganbayan. On the propriety of certiorari and the loss of appeal: The Court held that petitioners had lost their right to question the RTC Decision dated June 23, 2004 in Civil Case No. Q-04-091 and to seek its suspension. The RTC decisions in intra-corporate controversies are immediately executory under the Interim Rules of Procedure Governing Intra-Corporate Controversies. While a restraining order from an appellate court is needed to stay execution, petitioners filed petitions for certiorari instead of appeals. The Court clarified that a petition for certiorari under Rule 65 is an extraordinary remedy for errors of jurisdiction, not errors of judgment, which are reviewable by appeal. The petitioners' choice of remedy was erroneous and filed beyond the reglementary period for appeal, thus, certiorari could not be used as a substitute for a lost appeal. The Resolution in A.M. No. 04-9-07-SC, which allowed petitions for review under Rule 43, did not apply to petitions for certiorari. Therefore, the CA's 12th Division correctly dismissed the petition in CA-G.R. SP No. 85878.
Main Doctrine
A petition for certiorari under Rule 65 cannot be used as a substitute for a lost appeal, especially when the remedy of appeal was available and lost due to the petitioner's own neglect. Furthermore, decisions in intra-corporate controversies under the Interim Rules are immediately executory unless restrained by an appellate court, and a subsequent decision in a separate but related case involving a different corporation does not constitute a supervening event that warrants the suspension of execution if it does not materially alter the substance of the original judgment.