Making Enterprises v. Marfori
REITERATIONFacts
1. The Antecedents: The underlying dispute involves the ownership and management of the Marsman Building. Jose Marfori acquired the building and leased the land it stood on from the Philippine Ports Authority (PPA). He later executed a dacion en pago and assignment of rights transferring the building to Making Enterprises, Inc. (Making), with Making assuming his obligations. Marfori's wife, Emerenciana, alleged she did not consent to this transfer, claiming the building was conjugal property. This led to a civil complaint seeking to annul the transfer and for the appointment of a receiver. Concurrently, criminal charges for estafa and violation of Batas Pambansa Blg. 22 were filed against Jose Marfori by Cristina Lee, stemming from dishonored checks issued to her. These criminal cases were initially dismissed after a reinvestigation but were later reinstated. 2. Procedural History: Emerenciana Marfori filed a civil complaint for annulment of contract and receivership, which was denied by the Regional Trial Court (RTC) regarding preliminary injunction and receivership. Her subsequent petition for certiorari and receivership before the Court of Appeals (CA) was dismissed. Meanwhile, Jose Marfori, facing criminal charges for estafa and violation of BP 22, sought a reinvestigation, which led to the dismissal of the charges. However, upon motion by Angelita Tamano, the dismissal was set aside, and seventeen informations were filed. Marfori then filed a petition for certiorari and injunction with the RTC to stop the criminal cases, which was also dismissed. A consolidated petition by Jose and Emerenciana Marfori was filed with the Supreme Court, seeking receivership and an injunction against the criminal cases, which was referred to the CA. The CA, in its July 24, 2000 decision, granted the petition, permanently enjoining the criminal prosecution and ordering the appointment of a receiver. The CA denied motions for reconsideration in a February 12, 2002 resolution. 3. The Petition: The present petition for review on certiorari assails the CA's July 24, 2000 Decision and February 12, 2002 Resolution. Petitioners argue that the CA erred in granting the appointment of a receiver for the Marsman Building and in permanently enjoining the criminal prosecution of Jose Marfori. The Supreme Court noted that the consolidated petition filed with the CA was preceded by a similar petition filed with the Supreme Court that was referred to the CA, and that a motion for reconsideration of the CA's dismissal of a prior petition was still pending when the consolidated petition was filed, constituting forum shopping. The Court also found that the requirements for the appointment of a receiver were not met, as the property was not shown to be in danger of loss or material injury. Regarding the criminal cases, the Court noted the death of Jose Marfori during the pendency of the petition, which extinguished his criminal liability.
Issue(s)
Whether the Court of Appeals erred in granting the application for the appointment of a receiver for the Marsman Building. Whether the Court of Appeals erred in permanently enjoining the criminal prosecution of Jose Marfori.
Ruling
The petition for review on certiorari is PARTLY GRANTED. The July 24, 2000 Decision and February 12, 2002 Resolution of the Court of Appeals in CA-G.R. SP No. 43076, insofar as they ordered the appointment of a receiver in Civil Case No. 94-70092, are REVERSED and SET ASIDE. In view of the death of Jose Marfori, Criminal Case Nos. 170660 to 170676 before the Metropolitan Trial Court of Caloocan City are ordered DISMISSED.
Ratio Decidendi
On the appointment of a receiver: The Supreme Court found that the Court of Appeals erred in taking cognizance of the consolidated petition due to deliberate forum shopping. The respondents had filed a petition with the CA (CA-G.R. SP No. 39161) which was dismissed, and while a motion for reconsideration was pending, they filed a consolidated petition with the SC. The Court emphasized that forum shopping exists when two or more actions involve the same transactions, essential facts, and circumstances, raising identical causes of action, subject matter, and issues, which were present in this case. Furthermore, even on the merits, the application for a receiver must be denied. Section 1(a) of Rule 59 requires that the property be in danger of being lost, removed, or materially injured. The respondents failed to show how the building or its income would disappear or be wasted, nor did they prove material injury necessitating protection. Receivership is a harsh remedy requiring proof of a clear right, which was not established. The CA's conclusion that petitioners possessed absolute control and thus posed a danger was unsubstantiated. Until the dacion en pago and assignment of rights are rescinded or nullified, they remain valid, and courts of equity will not ordinarily appoint a receiver where rights depend on the determination of adverse claims of legal title to real property with one party in possession. On the injunction against criminal prosecution: The Court found it no longer necessary to pass upon the correctness of the CA's order permanently enjoining the prosecution of Jose Marfori. This is because, during the pendency of the petition, Jose Marfori passed away on October 2, 2004. Pursuant to Article 89, paragraph 1 of the Revised Penal Code, as amended, the death of an accused totally extinguishes his criminal liability. Since Marfori died before arraignment and trial, there is no relevance in declaring the extinction of civil liability that was based exclusively on the crime for which an accused is convicted (ex delicto). Only civil liability predicated on a source of obligation other than the delict, if any, survived the death of the accused, which the offended party can recover through a separate civil action.
Main Doctrine
The Supreme Court reversed the Court of Appeals' order for the appointment of a receiver, finding that the respondents failed to prove that the property was in danger of being lost, removed, or materially injured. The Court also dismissed the criminal cases due to the death of the accused, extinguishing his criminal liability.