Heirs of Del Fonso v. Guingona
REITERATIONFacts
The Antecedents: Petitioners, the heirs of Edgardo Del Fonso, Beacon Equities, Inc., and Daguma Agro-Minerals, Inc. (DAGUMA), filed an Amended Complaint for Quo Warranto, Annulment of Board Decisions, Inspection of Records, Audit, Appointment of Receiver and Damages with Application for Issuance of a Temporary Restraining Order (TRO) and Writ of Preliminary Injunction (WPI) against Benjamin Guingona, Mamerto Bocanegra, Tomas Prudencio, Antonio Ilomin, Christian Monsod, Epifanio Sedigo, Jr. (directors and officers of DAGUMA), and Levitico Toquero and Arnold Manat (stockholders). The complaint alleged unlawful acts, including the approval on June 16, 2005, of DAGUMA's Audited Financial Statements for 2002-2004, which erroneously reflected the conversion of Del Fonso's advances into equity despite his objections. Respondents countered that petitioners lacked cause of action as they were not stockholders of record. The RTC issued a WPI on January 16, 2006, enjoining respondents from divesting shares, conducting board or stockholders' meetings without notice to petitioners. Despite the WPI, respondents allegedly executed a Share Purchase Agreement with San Miguel Energy Corporation (SMEnergy) for the acquisition of 100% of DAGUMA's capital stock. Procedural History: Petitioners filed a Motion for Production of Documents on May 9, 2012, seeking the Share Purchase Agreement and related documents (SMEnergy Documents). Respondents opposed, questioning petitioners' stockholder status. The RTC granted the motion on July 13, 2012. Respondents' Motion to Vacate this order was denied on September 10, 2012. Respondents filed a Petition for Certiorari (CA-G.R. SP No. 127476) questioning the denial. While CA-G.R. SP No. 127476 was pending, respondents moved to defer production of the SMEnergy Documents based on judicial courtesy. The RTC granted this motion on April 2, 2013. Petitioners then filed a Petition for Certiorari (CA-G.R. SP No. 130341) questioning the deferment order. The CA, in its November 12, 2013 Decision, affirmed the RTC's deferment order, finding no grave abuse of discretion and citing judicial courtesy to avoid rendering the issue in CA-G.R. SP No. 127476 moot. The CA also cited Sections 5 and 6, Rule 135 of the Rules of Court. The CA's Resolution dated June 25, 2014, denied petitioners' motion for reconsideration. The Petition: The present Petition for Review on Certiorari assails the CA's Decision and Resolution, arguing that the CA erred in sustaining the RTC's deferment order. Petitioners pray for the lifting of the deferment order and for respondents to be directed to produce the SMEnergy Documents.
Issue(s)
Whether the Court of Appeals erred in sustaining the Regional Trial Court's Order deferring the production of the SMEnergy Documents to await the decision or resolution of the Court of Appeals in CA-G.R. SP No. 127476. Whether the petition has become moot and academic due to supervening events.
Ruling
The petition is denied for being moot and academic. The Court finds no need to resolve the issues presented due to supervening events that have rendered the case moot.
Ratio Decidendi
On the issue of whether the CA erred in sustaining the RTC's deferment order: The Court found no need to scrutinize the actions of both the trial court and the CA regarding the deferment order. This is because the RTC, in its Decision dated June 16, 2016, in Civil Case No. 05-739, had already dismissed petitioners' Amended Complaint, ruling that they were not stockholders of DAGUMA and thus had no legal personality to demand the production of the SMEnergy Documents. This ruling effectively overturned the earlier order allowing petitioners to inspect the documents. Therefore, this Court cannot order the production of documents based on an order that was subsequently overturned by the issuing authority. The Court also noted that petitioners' insistence on the production of the documents, despite the RTC's decision, would effectively be an attack on that decision, which should be raised through a proper appeal. Resolving the propriety of the deferment order would preempt the resolution of the main issue on appeal. The Court reiterated that it abstains from passing upon issues that have become moot and academic, unless exceptional circumstances like grave constitutional violations, paramount public interest, or issues capable of repetition yet evading review are present, none of which were found in this case. On the issue of whether the petition has become moot and academic: The Court ruled that the petition has become moot and academic. This is because the Court of Appeals had already disposed of the case (CA-G.R. SP No. 127476) which the Regional Trial Court (RTC) was awaiting when it issued the questioned deferment order. Furthermore, the RTC had also disposed of the main case (Civil Case No. 05-739) where the subject documents were sought to be produced. Consequently, any adjudication on the propriety of the deferment order would serve no practical purpose or legal effect, as it cannot be enforced. The Court cited Peñafrancia Sugar Mill, Inc. v. Sugar Regulatory Administration for the principle that courts generally decline jurisdiction over moot and academic cases because the judgment would not serve any useful purpose or have any practical legal effect.
Main Doctrine
A case or issue becomes moot and academic when it ceases to present a justiciable controversy due to supervening events, rendering any adjudication or declaration of no practical value or use. Courts generally decline jurisdiction or dismiss such cases as the judgment cannot be enforced.