G.R. No. 201675 ; June 19, 2013
JUANITO ANG, for and in behalf of SUNRISE MARKETING (BACOLOD), INC., Petitioner, vs. SPOUSES ROBERTO and RACHEL ANG, Respondents.

FACTS

Sunrise Marketing (Bacolod), Inc. (SMBI) is a family-owned corporation. Its stockholders are Juanito Ang (8,750 shares), Anecita Ang (1,250 shares), Jeannevie Ang (2,500 shares), Roberto Ang (8,750 shares), and Rachel Ang (3,750 shares). Roberto was elected President and Juanito Vice President. On July 31, 1995, Nancy Ang (sister of Juanito and Roberto) and her husband Theodore extended a $1,000,000.00 loan to settle obligations of SMBI and other family corporations, with the check payable to “Juanito Ang and/or Anecita Ang and/or Roberto Ang and/or Rachel Ang.” Part of the loan was used to purchase properties for SMBI, Juanito, and Roberto. On December 22, 2005, SMBI increased its authorized capital stock, a move Juanito later claimed was done in contravention of the Corporation Code.
Payments to Nancy and Theodore ceased after 2006. On November 24, 2008, Nancy and Theodore demanded payment of the loan plus interest. Roberto and Rachel refused, stating they did not personally contract the loan. On January 8, 2009, Juanito and Anecita executed a Deed of Acknowledgment and Settlement Agreement and an Extra-Judicial Real Estate Mortgage, admitting the loan and securing it with various properties belonging to themselves, SMBI, Roberto, Rachel, and their son.
On January 29, 2009, Juanito filed a “Stockholder Derivative Suit with prayer for an ex-parte Writ of Attachment/Receivership” before the RTC Bacolod. He alleged that Roberto and Rachel’s refusal to pay their share of the loan would affect SMBI’s financial viability and that he had been illegally excluded from management. The complaint sought attachment/receivership, an accounting, payment of 50% of the loan by Roberto and Rachel, restoration of Juanito’s management rights, and other reliefs. The RTC granted the ex-parte writ of attachment and break-open order on the same day. Roberto and Rachel moved to quash, arguing violation of due process. Rachel, in her Answer, contended the suit was not a bona fide derivative suit but a collection suit for the benefit of the creditors, Nancy and Theodore, and that Juanito failed to exhaust intra-corporate remedies.

ISSUE

Whether the complaint filed by Juanito Ang is a valid derivative suit.

RULING

No. The complaint is not a valid derivative suit. A derivative suit is an action filed by a stockholder on behalf of the corporation to redress wrongs committed against the corporation. For a derivative suit to prosper, the stockholder must prove that the cause of action accrues to the corporation, not to the stockholder personally. In this case, the alleged wrong is the non-payment of a loan obligation to third-party creditors, Nancy and Theodore. The cause of action to collect the loan belongs to the creditors, not to SMBI. The corporation itself is the debtor, not the creditor. Therefore, the suit is essentially for the benefit of the creditors to enforce payment, which is a personal action belonging to them, not a corporate right that can be asserted derivatively by a stockholder. The Court of Appeals correctly reversed the RTC’s orders, as the complaint failed to state a cause of action for a derivative suit. The real party in interest is not the corporation, and the relief sought (payment of the loan share) would not redound to the benefit of SMBI but to the private creditors.