G.R. No. 153690, G.R. No. 157381 and G.R. No. 170889; August 4, 2009
DAVID LU, Petitioner, vs. PATERNO LU YM, SR., PATERNO LU YM, JR., VICTOR LU YM, ET. AL. & LUYM DEVELOPMENT CORP., Respondents. (Consolidated Cases)

FACTS

The consolidated cases originated from a complaint filed by shareholders David Lu, et al., against the Lu Ym family and Ludo & Luym Development Corporation (LLDC) for Declaration of Nullity of Share Issue, Receivership, and Dissolution. The plaintiffs alleged that the Lu Ym defendants, as directors, caused the issuance of 600,000 corporate shares to themselves at less than actual value. The case was re-docketed as an intra-corporate controversy. The Regional Trial Court (RTC) eventually ruled in favor of David Lu, annulling the share issuance, ordering LLDC’s dissolution, and creating a management committee.
The Lu Ym defendants appealed and filed a Motion for Reconsideration of the Supreme Court’s August 26, 2008 Decision, which had dismissed their petitions. The movants argued for dismissal on three primary grounds: first, that the respondents committed fraud by paying insufficient docket fees; second, that the case was not an intra-corporate controversy, stripping the RTC of jurisdiction; and third, that the RTC lacked jurisdiction to order corporate dissolution.

ISSUE

The core issue for resolution is whether the Motion for Reconsideration presents sufficient grounds to reverse the Court’s prior Decision which upheld the RTC’s proceedings and judgment.

RULING

The Supreme Court denied the Motion for Reconsideration. On the jurisdictional challenge, the Court affirmed that the controversy, involving conflicts among shareholders and directors regarding share issuance and corporate control, is quintessentially intra-corporate, falling within the jurisdiction of the specialized commercial court as mandated by law. Regarding the authority to order dissolution, the Court held that the RTC, acting as a special commercial court, possesses the statutory power to decree dissolution in appropriate intra-corporate cases.
Concerning the alleged insufficiency of docket fees, the Court found no merit. The complaint was filed in 2000, and the amended complaint in 2003, governed by procedural rules where the assessment of fees was the duty of the Clerk of Court. Any potential deficiency is not imputable to the respondents and can be treated as a lien on any judgment award. Moreover, the movants were estopped from raising this issue belatedly, having actively participated in the trial court proceedings without timely objection. The Court also declined to maintain the Status Quo Order or issue an injunction, finding the cited grounds—alleged denial of due process and the management committee’s status—unconvincing to overturn the final and executory RTC decision. The directive for the Court of Appeals to resolve the appeal with dispatch stands.