R2-#06 Civil Procedure (Rule 2 – Case #06)

SPLITTING OF A SINGLE CAUSE OF ACTION

Strong, et. al. vs. Repide

Claim for Dividends should be included in an action to recover possession of shares of stocks

FACTS: Prior to October 10, 1903, Strong was the owner of 800 shares of stock of the Philippine Sugar Estates Development Company, with the par
value of P100 each. On October 10, 1903, Repide, by means subsequently found and adjudged to have been fraudulent, obtained possession of said
shares and thereafter alleged to be the owner thereof.

CFI of Manila – Strong prays that the fraudulent sale be declared null and void, and that the same be returned to her. The CFI ruled in Strong’s favor,
declaring that the said sale was fraudulent and thereby null and void. It further ordered the return of the said shares to Strong, however, Strong should
pay Repide $16,000 Mexican currency or its equivalent in Peso (P14,159.29).
SC of Phil. – appealed (most likely by Repide, not mentioned) the said decision with the SC, and the complaint was dismissed on the merits.
SC of US – Strong appealed the dismissal with the US SC, which ruled in her favor, affirming the decision of the CFI.

It was only on April 29, 1904 that Strong was able to recover the said shares as a satisfaction of the judgment. However, from October 10, 1903
(fraudulent sale) up to April 29, 1904, Repide held the said shares and collected its dividends, plus the dividends for 1905 to 1908, at the rate of 6% per
annum, with a total amount of P19,200.00. Repide refused to pay the amount, thus, Strong filed another suit.

CFI of Manila – rendered judgment in favor of Strong. It ordered Repide to pay P19,200 with 6% interest per annum from the date of the filing of the
complaint, allowing to the Repide as an offset interest on P14,159.29 at 6 per cent per annum from October 10, 1903, to July 27, 1909, being the dates,
respectively, of the purchase of the stock by Repide and the satisfaction of the judgment. Both parties excepted to this judgment and filed motions for
a new trial, and the court upon the hearings modified its judgment by allowing Repide to offset against Strong's judgment interest on P14,159.29 at the
rate of 6 per cent per annum from the 10th day of October, 1903, to the 12th day of January, 1904, the latter date being that of Strong's tender of
repayment of Repide.

Strong is satisfied with the judgment, while Repide is not. Hence this appeal to the SC of Phil.

ISSUE/s: WON an action to recover shares of stock should entail with it claim for dividends.

HELD: Technically, YES.

RATIO: It is true that the dividends were not included in the cause of action set forth in the complaint in cause No. 2365 and were not, therefore, a
subject of adjudication in that action. We are of the opinion, however, that they might have been, at least in part. The plaintiff in suing for the recovery
of shares illegally taken from her by the defendant had the right to demand their return and with them whatever damages she had sustained by reason

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of their retention, which would be in this case the dividends which had been collected on them by the defendant while they were in his possession.
That is, strictly speaking, what the plaintiff should have demanded in her complaint. Generally speaking, it is not permitted that a plaintiff sue for the
recovery of property which is illegally detained by another, and, after recovering that property, sue in a separate action for the damages sustained by
that illegal detention. The law seeks to prevent multiplicity of actions, and it is the duty of every person suing to join in one action every cause of action
which he has against the defendant, to the end that all questions between the parties be litigated in one suit and multiplicity of actions and resulting
expenses prevented. This is a question, however, which could have been raised in the court below by the defendant. He did not do so. Neither has he
raised the question in this court directly. We, therefore, do not pass upon it or base any finding upon it. The purpose which we have in referring to it at
all is to indicate that the real question arising from the controversy between the parties relative to this particular assignment of error really resolves
itself into one of multiplicity of actions, that is, of the duty of the plaintiff to join all her causes of action against the defendant in one complaint, and
not the one presented by the appellant in his argument relative to the reach which should be given to the document of satisfaction. We, therefore,
disapprove of the contention of the appellant that the satisfaction of the judgment reaches further than the terms of the judgment itself. It does not
embrace any other relations between the parties than those embraced in the plain wording of the judgment. While the dividends might, in part, have
been included in the cause of action set forth in the complaint in that action and, as far as possible, should have been incorporated therein,
nevertheless they were not so made and, therefore, formed no part of the judgment in which that action terminated. When, therefore, after the
satisfaction of that judgment, plaintiff began a separate action to recover the dividends, the only defense available to the defendant was the plea of
multiplicity. That plea not having been made, no question relating thereto is presented on this appeal. (Underscoring mine)

RULING: The Decision of the CFI of Manila is AFFIRMED.

- Michael Joseph Nogoy

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