Ang v.

Spouses Ang
G.R. No. 201675, 19 June 2013

FACTS:
Sunrise Marketing (Bacolod), Inc. (SMBI) is a duly registered corporation owned by the
Ang family. Its current stockholders and their respective stockholdings are Juanito,
Anecita, Jeannevieve, Roberto, and Rachel. Roberto, Juanito and Nancy are siblings.
Roberto was elected President of SMBI, while Juanito was elected as its Vice President.
Rachel Lu-Ang (Rachel) and Anecita are SMBI’s Corporate Secretary and Treasurer,
respectively. Nancy and her husband, Theodore Ang (Theodore), agreed to extend a
loan to settle the obligations of SMBI and other corporations owned by their family and
issued a check payable to “Juanito Ang and/or Anecita Ang and/or Roberto Ang and/or
Rachel Ang.” Nancy was a former stockholder of SMBI, but she no longer appears in
SMBI’s General Information Sheets as early as 1996. There was no written loan
agreement, in view of the close relationship between the parties. Part of the loan was
also used to purchase real properties for SMBI, for Juanito, and for Roberto.
When Nancy and Theodore, through their counsel, sent a demand letter to “Spouses
Juanito L. Ang/Anecita L. Ang and Spouses Roberto L. Ang/Rache lL. Ang” for payment
of the principal plus interest at ten percent (10%) per annum within ten days from
receipt of the letter, Roberto and Rachel sent a letter saying that they are not complying
with the demand letter because they have not personally contracted a loan from Nancy
and Theodore. On the other hand, Juanito and Anecita executed a Settlement
Agreement and an Extra-Judicial Real Estate Mortgage (Mortgage) and admitted that
they, together with Roberto and Rachel, obtained a loan from Nancy and Theodore.
Thereafter, Juanito filed a “Stockholder Derivative Suit with prayer for an ex-parte Writ
of Attachment/Receivership” (Complaint) before the lower court and alleged that “the
intentional and malicious refusal of defendant Sps. Roberto and Rachel Ang to settle
their 50% share x x x of the total obligation x x x will definitely affect the financial viability
of plaintiff SMBI.” Rachel then argued that the Complaint failed to allege that Juanito
“exerted all reasonable efforts to exhaust all intra-corporate remedies available under
the articles of incorporation, by-laws, laws or rules governing the corporation to obtain
the relief he desires,” as required by the Interim Rules. During cross-examination,
Juanito admitted that there was no prior demand for accounting or liquidation nor any
written objection to SMBI’s increase of capital stock.
ISSUE:
Whether based on the allegations of the complaint, the nature of the case is one of a
derivative suit.
RULING:
No. the complaint is not a derivative suit.
A derivative suit is an action brought by a stockholder on behalf of the corporation to
enforce corporate rights against the corporation’s directors, officers or other insiders.
Under Sections 23 and 36 of the Corporation Code, the directors or officers, as provided
under the bylaws, have the right to decide whether or not a corporation should sue.
Since these directors or officers will never be willing to sue themselves, or impugn their
wrongful or fraudulent decisions, stockholders are permitted by law to bring an action in
the name of the corporation to hold these directors and officers accountable. In
derivative suits, the real party in interest is the corporation, while the stockholder is a
mere nominal party. However, it cannot prosper without first complying with the legal
requisites for its institution.
Section 1, Rule 8 of the Interim Rules imposes the following requirements for derivative
suits:
1. The person filing the suit must be a stockholder or member at the time the acts or
transactions subject of the action occurred and the time the action was filed;
2. He must have exerted all reasonable efforts, and alleges the same with particularity
in the complaint, to exhaust all remedies available under the articles of incorporation,
by-laws, laws or rules governing the corporation or partnership to obtain the relief he
desires;
3. No appraisal rights are available for the act or acts complained of; and
4. The suit is not a nuisance or harassment suit
Applying the foregoing, the Complaint is not a derivative suit as it failed to show how the
acts of Rachel and Roberto resulted in any detriment to SMBI and that the loan was not
a corporate obligation, but a personal debt of the Ang brothers and their spouses. The
check was issued to “Juanito Ang and/or Anecita Ang and/or Roberto Ang and/or
Rachel Ang” and not SMBI. The proceeds of the loan were used for payment of the
obligations of the other corporations owned by the Angs as well as the purchase of real
properties for the Ang brothers.
Further, SMBI was never a party to the Settlement Agreement or the Mortgage. It was
never named as a co-debtor or guarantor of the loan. Both instruments were executed
by Juanito and Anecita in their personal capacity, and not in their capacity as directors
or officers of SMBI. Thus, SMBI is under no legal obligation to satisfy the obligation.
Since damage to the corporation was not sufficiently proven by Juanito, the Complaint
cannot be considered a bona fide derivative suit. A derivative suit is one that seeks
redress for injury to the corporation, and not the stockholder. No such injury was proven
in this case. Furthermore, The Complaint also failed to allege that all available corporate
remedies under the articles of incorporation, by-laws, laws or rules governing the
corporation were exhausted, as required under the Interim Rules.
The fact that SMBI is a family corporation does not exempt private respondent Juanito
Ang from complying with the Interim Rules. In the x x x Yu case, the Supreme Court
held that a family corporation is not exempt from complying with the clear requirements
and formalities of the rules for filing a derivative suit. There is nothing in the pertinent
laws or rules which state that there is a distinction between x x x family corporations x x
x and other types of corporations in the institution by a stockholder of a derivative suit.
The Complaint should be dismissed since it is a nuisance or harassment suit under
Section 1(b) of the Interim Rules. Section 1(b) thereof provides:
b) Prohibition against nuisance and harassment suits. – Nuisance and harassment suits
are prohibited. In determining whether a suit is a nuisance or harassment suit, the court
shall consider, among others, the following:
(1) The extent of the shareholding or interest of the initiating stockholder or member;
(2) Subject matter of the suit;
(3) Legal and factual basis of the complaint;
(4) Availability of appraisal rights for the act or acts complained of; and
(5) Prejudice or damage to the corporation, partnership, or association in relation to the
relief sought.
In case of nuisance or harassment suits, the court may, motu proprio or upon motion,
forthwith dismiss the case.