G.R. No. 112625 ; March 7, 2002
CMH AGRICULTURAL CORPORATION, CARLOS M. HOJILLA, CESAR M. HOJILLA, CLAUDIO M. HOJILLA, CORA M. HOJILLA AND CORNELIO M. HOJILLA, petitioners, vs. HON. COURT OF APPEALS AND CRISTOBAL M. HOJILLA, respondents.

FACTS

Private respondent Cristobal M. Hojilla filed a complaint for “Disregarding and Piercing the Veil of Corporate Fiction, Formal Declaration or Recognition of Successional Rights and Recovery of Title with Damages” with the RTC of Bacolod City against his siblings and the CMH Agricultural Corporation (CMH). Cristobal alleged that CMH was a dummy corporation created by their late mother, Concepcion Montelibano-Hojilla, to shield her paraphernal properties from taxes by fictitiously assigning them to CMH, with her children as dummy stockholders. The assigned properties included Hacienda Manayosayao, Hacienda Nangka, and a house and lots on 23rd Street, Bacolod City. After their mother’s death, the heirs extrajudicially partitioned the properties. Cristobal, along with Corazon and Claudio, were apportioned the house and lots on 23rd Street. However, the title was not turned over to them, and his other siblings, Carlos, Cesar, and Cornelio, without their knowledge, mortgaged and attempted to lease the lots. Cristobal prayed for the piercing of the corporate veil to protect his successional rights. The defendants moved to dismiss, arguing the RTC lacked jurisdiction as it was an intra-corporate controversy within the exclusive jurisdiction of the SEC, that Cristobal was guilty of forum-shopping due to a pending SEC case, that he had no cause of action as a mere stockholder, and that a pending ejectment case had resolved ownership in favor of CMH. The RTC initially dismissed the complaint but later granted Cristobal’s motion for reconsideration and set aside the dismissal. The defendants elevated the case to the Court of Appeals via certiorari, which upheld the RTC. Hence, this petition.

ISSUE

1. Whether the complaint involves an intra-corporate controversy within the exclusive jurisdiction of the Securities and Exchange Commission.
2. Whether private respondent is guilty of forum-shopping.
3. Whether the complaint should be dismissed on the ground of pendency of another action.
4. Whether a mere stockholder can file the complaint without authorization from the board of directors.
5. Whether the motion for reconsideration filed in the RTC was fatally defective for lack of notice of time and place of hearing.

RULING

1. No. The complaint does not involve an intra-corporate controversy within the exclusive jurisdiction of the SEC. Jurisdiction is determined not only by the status or relationship of the parties but also by the nature of the question subject of the controversy. The primary objective of the complaint is to protect Cristobal’s successional rights as an heir to his late mother’s properties, which he claims were fictitiously assigned to CMH. His position as a stockholder and his relationship to other stockholders are incidental to the issue of ownership. The allegation that CMH is a dummy corporation and the prayer to pierce the corporate veil are grounds to prove his claim of ownership and protect his successional rights, not to convert the action into an intra-corporate dispute. The Court cited Cease v. CA, where a similar action for partition involving piercing the corporate veil was treated as a civil case cognizable by regular courts.
2. No. Private respondent is not guilty of forum-shopping. The complaint before the RTC (Civil Case No. 6256) and the case before the SEC (SEC Case No. 03559) are not identical. The SEC case sought the revocation of CMH’s certificate of registration and/or its dissolution and liquidation. In contrast, the RTC case aims to recover title and ownership over specific properties and protect successional rights. The causes of action and reliefs sought are different.
3. No. The complaint should not be dismissed on the ground of pendency of another action (lis pendens). For lis pendens to apply, the identity of parties, rights asserted, and reliefs prayed for must be substantially the same. As stated, the RTC case and the SEC case involve different causes of action and reliefs.
4. Yes, a mere stockholder can file the complaint under the circumstances. The general rule is that a stockholder cannot sue in his own name for a cause of action belonging to the corporation. However, an exception exists when the stockholder is suing to protect his own individual rights, as distinct from those of the corporation. Here, Cristobal is suing in his personal capacity to preserve his successional rights over properties he claims as his inheritance, not to redress a corporate wrong.
5. No. The defect in the motion for reconsideration (lack of notice of time and place of hearing) was cured. The requirement of such notice is to apprise the other party of the actions sought. Since the petitioners timely filed their Opposition to the motion for reconsideration, they were not deprived of due process, and the defect was deemed cured.
The Court of Appeals did not commit reversible error. The assailed Decision is AFFIRMED. The RTC of Bacolod City, Branch 45, is ordered to resume the trial of Civil Case No. 6256.