G.R. No. L-19207 August 31, 1965
MARSMAN and CO., INC., ET AL., plaintiffs-appellants, vs. LEOPOLDO SYQUIA, ET AL., defendants-appellees.

FACTS

Marsman & Co., Inc. is a large corporation. The individual plaintiffs (including Mary A. Marsman) and the defendants (including Leopoldo Syquia) are rival groups fighting for its control. The struggle began at the general stockholders’ meeting of Marsman Investments Ltd. scheduled for December 28, 1960. Prior to this, Marsman Investments Ltd. owned 76% of Marsman & Co., Inc. On December 14, 1960, its board approved the sale of 2,500,000 shares of Marsman & Co., Inc. to J.H. Marsman, who later assigned them to Mary A. Marsman, thereby transferring control to her. The defendants, seeking to annul this sale and regain control through Marsman Investments Ltd., organized the Arayat Corporation and solicited proxies for the December 28 meeting. In response, Mary A. Marsman’s group passed a resolution to suspend the defendants’ proxies, alleging fraudulent solicitation. This triggered a series of lawsuits between the factions:
1. Civil Case No. 6427 (Rizal): Filed by Syquia et al. to disqualify Mary A. Marsman and her allied directors from presiding over the meeting.
2. Civil Case No. 45935 (Manila): Filed by Mary A. Marsman’s group to prevent Syquia’s group from taking over the corporations and implementing the resolution annulling the share sale.
3. Civil Case No. 6492 (Rizal): Filed by defendant Apolonio Aguirre to compel Marsman & Co., Inc. to allow inspection of its books.
4. Civil Case No. 6493 (Rizal): Filed by defendant Thelma Lebrun to compel inspection of the books of Itogon Mines, Inc., managed by Marsman & Co., Inc.
5. Civil Case No. 3513 (Davao): Filed by some defendants to collect loans from Philippine Abaca Development Co. and to annul a mortgage in favor of Mary A. Marsman.
The plaintiffs filed the present action (Civil Case Q-5934) in the Rizal court to enjoin the defendants from filing or prosecuting further allegedly vexatious suits related to the ownership of the shares. The trial court dismissed the complaint, prompting this appeal.

ISSUE

Whether the circumstances warrant the exercise of equity powers to enjoin the defendants from filing or prosecuting the mentioned lawsuits on the grounds of vexatious, oppressive, and interminable litigation.

RULING

No. The Supreme Court affirmed the dismissal. The Court held that the conditions did not justify the extraordinary exercise of equitable powers to restrain the litigations. The lawsuits were characterized as incidents of a legitimate struggle for corporate control, conducted within the framework of corporation rules and usual court procedures. The Manila case was filed by the plaintiffs themselves, not the defendants. Cases 6492 and 6493 were exercises of stockholders’ rights by individual defendants. The Rizal case (6427) appeared prima facie tenable as a preliminary injunction had been issued therein, and the Davao case could not be considered vexatious if the defendants’ claim about the invalidity of Mary A. Marsman’s share acquisition was true. The Court concluded that the plaintiffs had sufficient legal remedies (such as invoking the rule on pendency of another action) to protect themselves and that there was no showing of such harassing tactics as to call for equitable intervention.