8/31/25, 11:21 AM Rural Bank of Lipa City, Inc. vs.
Court of Appeals
Title
Rural Bank of Lipa City, Inc. vs. Court of Appeals
Case Decision Date
G.R. No. 124535 Sep 28, 2001
Dispute over share transfer validity; Villanueva spouses retained stockholder rights due
to incomplete transfer process under Corporation Code.
Jur.ph - Case Digest (G.R. No. 124535)
Expanded Legal Reasoning Model
Facts:
Parties and Background
Petitioners: The Rural Bank of Lipa City, Inc., its officers and directors (Bernardo
Bautista, Jaime Custodio, Octavio Katigbak, Francisco Custodio, Juanita Bautista)
Private Respondents: Reynaldo Villanueva, Sr., Avelina M. Villanueva, Catalino
Villanueva, Andres Gonzales, Aurora Lacerna, Celso Laygo, Edgardo Reyes,
Alejandra Tonogan, Elena Usi
Deed of Assignment and Debt Acknowledgment
February 5, 1993: Reynaldo Villanueva, Sr. assigns his 10,467 shares (including
shares of eight other stockholders under his control) to the Bank’s directors.
November 10, 1993: Villanuevas acknowledge indebtedness of ₱4,000,000 to the
Bank, to be paid from proceeds of real property sale.
Failure to Pay and Conversion of Shares
December 31, 1993 due date passes; Board demands surrender of stock certificates
and additional collateral for ₱3,346,898.54 balance.
Villanuevas ignore demand; Bank converts their shares into treasury stock;
Villanuevas challenge legality.
Stockholders’ Meeting and SEC Proceedings
January 15, 1994: Annual stockholders’ meeting (without notice to Villanuevas)
elects new directors; Villanuevas file SEC petition for annulment, damages, and
preliminary injunction (SEC Case No. 02-94-4683).
SEC Hearing Officer issues TRO (February 16, 1994) and later preliminarily enjoins
new directors; SEC en banc on December 16, 1994 grants injunction; SEC orders
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8/31/25, 11:21 AM Rural Bank of Lipa City, Inc. vs. Court of Appeals
upheld on reconsideration.
Certiorari Proceedings and CA Review
January 1995: Petitioners file certiorari vs. SEC Hearing Officer’s orders before SEC
en banc (Case No. EB-440); SEC en banc denies relief (June 7 and September 29,
1995).
Court of Appeals (CA-G.R. SP No. 38861) dismisses petition for review (February 27,
1996) and denies reconsideration (March 29, 1996).
Issues:
Effectivity of Share Assignment
Whether Reynaldo and Avelina Villanueva’s Deed of Assignment effected a valid
transfer of their shares absent endorsement and delivery of certificates.
Validity of SEC Injunctions and Stockholders’ Meeting
Whether the SEC Hearing Officer and en banc committed grave abuse of discretion
in issuing TRO and preliminary injunction.
Whether the January 15, 1994 stockholders’ meeting and election of directors, held
without notice to the Villanuevas, was valid.
Ruling:
(Subscriber-Only)
Ratio:
(Subscriber-Only)
Doctrine:
(Subscriber-Only)
Note: AI summaries may not capture all details. Please refer to full text for complete accuracy.
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