GR 218738; (March, 2022) (Digest)
G.R. No. 218738 . March 09, 2022
METROPOLITAN BANK & TRUST COMPANY (METROBANK), PETITIONER, VS. SALAZAR REALTY CORPORATION REPRESENTED BY INCORPORATORS/STOCKHOLDERS RAMON ANG SALAZAR, JR., ROBERT ANG SALAZAR, ROGER ANG SALAZAR, AND ROSEMARIE SALAZAR FERNANDEZ, RESPONDENTS.
FACTS
Salazar Realty Corporation (SARC) filed an action for quieting of title and nullification of contracts against Metropolitan Bank & Trust Company (Metrobank). SARC alleged that Tacloban RAS Construction Corporation (Tacloban RAS) obtained loans from Metrobank, secured by a mortgage over five SARC-owned parcels of land executed by Consuelo and Ralph Salazar on behalf of SARC. Upon Tacloban RAS’s default, Metrobank extrajudicially foreclosed the mortgage, emerged as the winning bidder, and obtained new certificates of title after consolidation of ownership. SARC, through incorporators/stockholders Ramon Ang Salazar, Jr., Robert Ang Salazar, Roger Ang Salazar, and Rosemarie Salazar Fernandez, claimed the mortgage was void because: Tacloban RAS had no authority to use SARC’s properties as collateral; SARC exceeded its corporate powers by securing the obligation of a separate corporation; the mortgage encumbered substantially all of SARC’s corporate assets without the required stockholder approval under the Corporation Code; and Metrobank failed to exercise due diligence in investigating the authority of the signatories. SARC also assailed the foreclosure proceedings as defective. Metrobank moved to dismiss, arguing SARC and its stockholders lacked standing, and the petition was a derivative suit constituting an intra-corporate controversy over which the regular RTC had no jurisdiction.
ISSUE
Whether the action filed by SARC, through its incorporators/stockholders, is a derivative suit constituting an intra-corporate controversy over which the regular Regional Trial Court lacks jurisdiction.
RULING
No. The action is not a derivative suit but a direct action for quieting of title. A derivative suit is filed by stockholders to enforce a corporate cause of action against officers, directors, or third parties, where the corporation is an indispensable party. The allegations in SARC’s petition show it is asserting its own direct cause of action against Metrobank for allegedly clouding its title to its properties through void mortgage contracts and foreclosure proceedings. The corporation itself is the real party-in-interest, and the incorporators/stockholders are merely representing SARC because the board of directors refused to act. The core issue pertains to the validity of the mortgage and foreclosure, which are not intra-corporate matters between the corporation and its stockholders or among stockholders themselves, but an ordinary civil action to remove a cloud on title. Therefore, the regular RTC properly exercised jurisdiction. The Court of Appeals’ dismissal of Metrobank’s petition for certiorari was affirmed.