Aldersgate College v. Gauuan
REITERATIONFacts
The Antecedents: Petitioners Aldersgate College, Inc., Arsenio L. Mendoza, Ignacio A. Galindez, Wilson E. Sagadraca, and Filipinas Menzen, along with deceased individuals, filed a case against respondents before the Securities and Exchange Commission (SEC) in March 1991. Following the reorganization of the SEC under Republic Act 8799, the case was transferred to the Regional Trial Court (RTC) of Nueva Vizcaya. A Pre-Trial Order was issued, outlining issues concerning the legality of trustee elections, propriety of withdrawals and disbursements, accounting of corporate funds, liability for unaccounted funds, inspection rights, and damages. Procedural History: Respondents sought dismissal of the complaint or summary judgment, which the RTC denied on February 16, 2004, citing the need for evidence presentation. Respondents-intervenors later sought dismissal based on lack of authority to sue, which was also denied by the RTC on February 6, 2009. Subsequently, respondents-intervenors filed another motion to dismiss in February 2010, alleging the case was filed without board resolution and that the incumbent Board of Trustees passed a resolution recommending dismissal. The Petition: The RTC granted the motion to dismiss on March 30, 2010, based on the Board of Trustees' resolution, despite petitioners' opposition. The RTC denied petitioners' motion for reconsideration on June 29, 2010. Petitioners then filed the instant petition for review.
Issue(s)
Whether or not the RTC erred in dismissing the case.
Ruling
The petition is GRANTED. The assailed March 30, 2010 Resolution and June 29, 2010 Order of the Regional Trial Court, Branch 28, Nueva Vizcaya in SEC Case No. 3972 are REVERSED and SET ASIDE. The RTC is DIRECTED to proceed with the trial and to decide the case with dispatch.
Ratio Decidendi
On the issue of whether or not the RTC erred in dismissing the case: The Supreme Court held that the petition is meritorious. In ordinary civil actions, a motion to dismiss must be filed within the reglementary period and on specific grounds enumerated in Rule 16 of the Rules of Court. However, the rule differs for intra-corporate controversies, where a motion to dismiss is a prohibited pleading under Section 8, Rule 1 of the Interim Rules of Procedure for Intra-Corporate Controversies. Since the case involved an intra-corporate dispute, the motion to dismiss filed by the respondents-intervenors was a prohibited pleading. Furthermore, the Court found no justification for the dismissal of the case based solely on the issuance of a board resolution by the incumbent members of the Board of Trustees recommending its dismissal. This is especially true considering the various issues that had been raised by the parties before the lower court, which necessitated the presentation of evidence. Therefore, the RTC should not have entertained, let alone granted, the motion to dismiss.
Main Doctrine
A motion to dismiss is a prohibited pleading in intra-corporate controversies under the Interim Rules of Procedure for Intra-Corporate Controversies. The dismissal of such a case cannot be based merely on a board resolution recommending its dismissal, especially when various issues remain to be resolved.