G.R. No. L-1981 October 30, 1953
EUGENE ARTHUR PERKINS, plaintiff-appellee, vs. BENGUET CONSOLIDATED MINING COMPANY, ET AL., defendants-appellants.
FACTS
This case involves a protracted marital dispute over conjugal property between Eugene Arthur Perkins and his wife, Idonah Slade Perkins. The litigation has a long history:
1. In 1930, Idonah Slade Perkins filed a case in the Manila Court of First Instance for the liquidation of their conjugal property. Eugene Perkins, in his answer and counterclaim, alleged she had illegally deprived him of possession and administration of a large part of the conjugal assets and asked that she render an accounting and deliver said property to him.
2. On August 4, 1930, the court, acceding to the parties’ requests, dismissed Idonah’s complaint and ordered her to render an accounting to Eugene of the conjugal property in her possession and to transfer and deliver all such property to him.
3. Idonah failed to comply, was found in contempt, and was ordered imprisoned until she complied. Her motions for relief from the judgment (alleging fraud) and appeals from the contempt order were denied by the Supreme Court in 1932. A petition for habeas corpus was also denied.
4. On August 8, 1933, Eugene Perkins filed a suit in the New York Supreme Court against Idonah and the Guaranty Trust Company of New York, claiming the right to possess and administer, as conjugal property under Philippine law, 24,000 shares of Benguet Consolidated Mining Company stock issued in Idonah’s name and held by the Trust Company. The New York Court of Appeals, on May 25, 1937, decided in favor of Idonah, declaring her the absolute owner of the 24,000 shares and all dividends thereon, and ordering Eugene to account for and pay over to her all dividends received. The appeal to the U.S. Supreme Court was abandoned.
5. On July 6, 1938, Eugene Perkins filed the present case (Civil Case No. 53317) in the Manila Court of First Instance against Benguet Consolidated Mining Company. He prayed for judgment ordering Benguet to pay him declared but unpaid dividends on 52,874 shares registered in his name (amounting to P71,379.90) and future dividends, and to recognize his control over said shares.
6. Benguet, in its answer, admitted the material allegations but stated it suspended dividend payment because Idonah also claimed them, and it was willing to pay whoever the court authorized. Benguet moved to include Idonah as a party, which was granted. Idonah appeared and moved to dismiss for lack of jurisdiction, which was denied. Her petition for certiorari to the Supreme Court was denied in 1939.
7. Idonah filed an answer with special defenses and counterclaims, alleging the New York decision constituted res judicata. Eugene, in his reply, alleged the New York decision was null, void, and without effect and should not be recognized in the Philippines.
8. Trial began. Idonah refused to present evidence. Eugene presented evidence to support his contention that the New York court lacked jurisdiction and its judgment was obtained by fraud. During trial, Idonah personally appeared, accused her lawyer of collusion, and later took over her own representation. Due to her disorderly conduct, the court suspended the hearing and ordered Eugene to institute guardianship proceedings to determine her capacity. She fled the Philippines without appointing a representative.
9. During the Japanese occupation, the cases remained inactive. Meanwhile, Idonah litigated against Benguet in California and succeeded in attaching its funds on deposit in a bank.
10. On November 30, 1942, the California Court of Appeal decided a related case. After liberation, the trial court in Manila rendered a decision on February 26, 1946, in favor of Eugene Perkins, ordering Benguet to pay him the dividends. Benguet moved for reconsideration and a new trial, which was denied. Benguet appealed.
ISSUE
The core issue is whether the plaintiff, Eugene Arthur Perkins, is entitled to receive the dividends on the shares of stock in question from Benguet Consolidated Mining Company, in light of the prior New York judgment declaring his wife, Idonah Slade Perkins, the absolute owner of 24,000 of those shares.
RULING
The Supreme Court reversed the trial court’s decision and dismissed the complaint.
1. The Court held that the New York judgment, which declared Idonah Slade Perkins the absolute owner of the 24,000 shares and all dividends thereon, is conclusive upon the parties and must be given effect in the Philippines under the principles of international comity. The New York court had jurisdiction over the parties and the subject matter (the shares were in New York custody), and there was no proof that the judgment was fraudulently obtained. Eugene Perkins invoked the New York court’s jurisdiction by filing the suit there.
2. The Court rejected the application of the doctrine of “neutralization of judgments” (where conflicting judgments from courts of different states or countries cancel each other out) to this case. It found the doctrine inapplicable because the Philippine judgment (the 1930 order) was not on the merits of ownership but was a consent judgment based on Idonah’s withdrawal of her complaint. In contrast, the New York judgment was a definitive adjudication on the merits of the ownership of the specific 24,000 shares.
3. The Court noted that the prayer in Eugene’s amended complaint did not ask to be declared owner of the 24,000 shares; it only asked for payment of dividends. Since dividends are accessories of the shares, the owner of the shares is the owner of the dividends. As the New York court had already duly decided the ownership of the 24,000 shares in favor of Idonah, the dividends must be paid to her. The Court also noted that the accrued dividends on these shares (amounting to P1,019,245.92) had already been satisfied by execution in California. Therefore, the dismissal of the complaint was proper.
The motion for reconsideration was denied.