Dee v. Harvest All Investment
REITERATIONFacts
The Antecedents: Harvest All Investment Limited, et al. (minority stockholders of Alliance Select Foods International, Inc. (Alliance), with Hedy S.C. Yap Chua as director) filed a complaint against Alliance and its Board of Directors. The Board, over Hedy S.C. Yap Chua's objections, passed a resolution indefinitely postponing the 2015 Annual Stockholders' Meeting (ASM) pending complete subscription to a Stock Rights Offering (SRO) valued at ₱1 Billion. Harvest All, et al. claimed this would deprive them of their full voting rights. Procedural History: Harvest All, et al. initially prayed for the nullity of the resolution postponing the ASM and the resolution approving the SRO. The Clerk of Court assessed filing fees at ₱8,860.00, which they paid. They later amended their complaint, deleting the prayer to nullify the SRO resolution and instead praying to enjoin the Board from implementing the SRO prior to the ASM. The Regional Trial Court (RTC) dismissed the case for lack of jurisdiction due to insufficient filing fees, ruling that the ₱1 Billion SRO value should be the basis, requiring approximately ₱20 Million in fees, and finding bad faith. The Court of Appeals (CA) reversed, agreeing that the SRO value should be the basis for fees but finding no bad faith, reinstating the case for payment of proper fees. The Petition: Both parties filed petitions for review on certiorari. Jonathan Y. Dee (G.R. No. 224834) sought to affirm the CA's reversal of the RTC dismissal. Harvest All, et al. (G.R. No. 224871) sought to have the CA's ruling modified, particularly regarding the basis of filing fees and the finding of good faith.
Issue(s)
Whether Harvest All, et al. paid insufficient filing fees for their complaint, as the same should have been based on the ₱1 Billion value of the SRO. Whether Harvest All, et al.'s payment of insufficient filing fees, if any, was made in good faith and without any intent to defraud the government.
Ruling
The petition in G.R. No. 224834 is denied. The petition in G.R. No. 224871 is partly granted. The Decision and Resolution of the Court of Appeals are affirmed with modification, remanding the case to the RTC for further proceedings to determine the correct filing fees.
Ratio Decidendi
On the issue of insufficient filing fees: The Court ruled that the RTC and CA erred in relying on the obiter dictum in Lu v. Lu Ym, Sr. which suggested that all intra-corporate controversies always involve a property in litigation and are capable of pecuniary estimation. The Court clarified that the statements in Lu were non-determinative and constituted a mere "by the way" opinion regarding a hypothetical scenario. The Court further explained that depending on the nature of the principal action, an intra-corporate controversy may be capable or incapable of pecuniary estimation. Applying the criterion from Cabrera v. Francisco, the Court found that Harvest All, et al.'s action was primarily to preserve their voting interest by seeking the nullity of the resolution postponing the ASM and to have the ASM held as scheduled. These reliefs do not involve the recovery of a sum of money, making the action incapable of pecuniary estimation. The mention of the ₱1 Billion SRO was merely descriptive and did not transform the nature of the action. Therefore, the filing fees should not be based on the SRO's value. On the issue of good faith: Although the Court found that the obiter dictum in Lu was incorrectly applied, it affirmed the CA's finding that Harvest All, et al. were not in bad faith and had no intention of defrauding the government, as they relied on the assessment of the Clerk of Court. The Court noted that A.M. No. 04-02-04-SC, effective October 5, 2016, deleted Section 21(k) of Rule 141 and clarified that intra-corporate controversies would be assessed fees based on Section 7(a), 7(b)(1), or 7(b)(3) depending on the nature of the action, thereby recognizing that such cases may be capable or incapable of pecuniary estimation. This amendment, being procedural, could be given retroactive effect. Consequently, the case was remanded to the RTC to determine if the initial payment of ₱8,860.00 was sufficient under the applicable rules, and if not, to require Harvest All, et al. to pay the discrepancy within fifteen (15) days.
Main Doctrine
An intra-corporate controversy may be an action incapable of pecuniary estimation, and the determination of filing fees should be based on the nature of the principal action or remedy sought, not merely on the mention of a monetary value in the pleadings.