Spouses Marcelino Florete, Sr.
Salome Florete
suffered stroke 7/12/82 died on 11/22/80
Marcelino Florete, Maria Elena Muyco Rogelio Florete, Sr. Teresita Menchavez
Authorized Shares: 2,500
1966 11/17/67
Additional Transfer of Transfer of
Shareholding Transfer of
Number of Subscription Shares of Shares of Shareholdings
Stockholder Beneficial Stockholder s Nov. 27, Shares of Increase (F) Shareholdings
Shares Sept. 1, Stock March Stock June Oct. 31, 1993
1967 (A) Stock (D)
1982 (B) 1, 1983 (C) 5, 1987 (E)
Marcelino Florete, Sr. (Marcelino, Sr.) 250 shares Marcelino M. Florete, Sr. 560 0 750 -680 0 62,344.19 62,974.19 630.00
Salome Florete (Salome) 100 shares Salome M. Florete 30 -30 0 0 0 0.00
Ricardo Berlin (Berlin) 50 shares resigned Rogelio M. Florete 20 5 1110 370 -5 149,624.75 151,124.75 1,500.00
Pacifico Sudario (Sudario) 50 shares resigned Ma. Elena F. Muyco 20 5 0 0 -25 2,493.68 2,493.68 0.00
Atty. Santiago Divinagracia (Divinagracia),
50 shares Teresita F. Menchavez 0 5 0 20 -25 2,493.69 2,493.69 0.00
now deceased9
Marcelino M. Florete, Jr. 0 5 0 20 -20 2,493.44 2,493.44 5.00
500
Santiago C. Divinagracia 20 0 0 270 75 29,925.25 30,290.25 365.00
Newsound
610 0 -610 0.00
Raul Muyco Broadcasting18
Consolidated
0 1,250 -1,250 0.00
Estrella Mirasol Broadcasting
Total 1,260 1,240 0 0 0 249,375 251,870 2,500
As of April 27, 2002, the stockholders of record of People’s Broadcasting were the following
Stockholder No. of Shares
1. Diamel Corporation 30,000.00
2. Rogelio Florete [Sr.] 153,881.53
3. Marcelino Florete, Jr. 18,240.99
4. Ma. Elena Muyco 18,227.23
5. Santiago Divinagracia 30,289.25
6. Imelda Florete 1,000.00
7. Rogelio Florete, Jr. 100
8. Margaret Ruth Florete 100
9. Raul Muyco 10
10. Manuel Villa, Jr. 10
11. Gregorio Rubias 1
12. Cyril Regaldao 1
13. Jose Mari Treñas 1
14. Enrico Jacomille 1
15. Joseph Vincent Go 1
16. Jerry Treñas 1
17. Efrain Treñas 10
251,875.00
Marcelino, Jr. Group Rogelio, Sr. Group
Marcelino, Jr. Diamel Corporation
Ma. Elena Rogelio, Sr.
Raul Muyco Imelda Florete
Margaret Florete
Rogelio Florete, Jr.
June 23, 2003 Marcelino, Jr. group filed against Rogelio, Sr. Group before the Regional Trial Court a Complaint for Declaration
of Nullity of Issuances, Transfers and Sale of Shares in People’s Broadcasting Service, Inc. and All Posterior
Subscriptions and Increases thereto with Damages against Rogelio, Sr. group
July 25, 2003 Rogelio, Sr. Group filed their Answer with compulsory counterclaim
August 2, 2005 RTC issued a Decision dismissing the Marcelino, Jr. Group's Complaint for lack of cause of action and that the
former is estopped from questioning the assailed movement of shares of People’s Broadcasting. It also ruled
that indispensible parties were not joined in their Complaint.
The Regional Trial Court granted Rogelio, Sr.’s compulsory counterclaim for moral and exemplary damages
amounting to ₱25,000,000.00 and ₱5,000,000.00, respectively, reasoning that Rogelio, Sr. suffered from the
besmirching of his personal and commercial reputation.
August 15, 2005 Rogelio, Sr. filed a Motion for the immediate execution of the award of moral and exemplary damages pursuant
to Rule I, Section 431 of the Interim Rules of Procedure Governing Intra-Corporate Controversies.
September 8, 2005 Marcelino, Jr. Group filed before the Court of Appeals a Petition for Review with a prayer for the issuance of a
temporary restraining order and/or writ of preliminary injunction to deter the immediate execution of the trial
court Decision awarding damages to Rogelio, Sr.
March 29, 2006 In its Decision, the Court of Appeals denied the Marcelino, Jr. Group’s Petition and affirmed the trial court
Decision.37 It also lifted the temporary restraining order and writ of preliminary injunction
The Court of Appeals ruled that the Marcelino, Jr. Group did not have a cause of action against those whom they
have impleaded as defendants. It also noted that the principal obligors in or perpetrators of the assailed
transactions were persons other than those in the Rogelio, Sr. Group who have not been impleaded as parties.
Thus, the Court of Appeals emphasized that the following parties were indispensable to the case: People’s
Broadcasting; Marcelino, Sr.; Consolidated Broadcasting System, Inc.; Salome; Divinagracia; Teresita; and "other
stockholders of [People’s Broadcasting] to whom the shares were transferred or the nominees of the
stockholders
April 26, 2006 Marcelino, Jr. Group filed a Motion for Reconsideration dated April 24, 2006
Pending resolution of the Marcelino, Jr. Group’s Motion for Reconsideration,
Rogelio, Sr. filed before the Regional Trial Court a Motion to resolve his earlier motion for the immediate execution of the awards of moral and exemplary
damages, which was filed on August 15, 2005.
The Regional Trial Court granted the Motion in its Order dated May 18, 2006.44 On May 23, 2006, a Writ of Execution was issued to enforce the award of
moral and exemplary damages.
The Marcelino, Jr. Group filed a Petition for Certiorari before the Court of Appeals questioning the Regional Trial Court Order to immediately execute its
Decision.
On June 13, 2006, the Court of Appeals issued a temporary restraining order and, subsequently, a writ of preliminary injunction.
The Court of Appeals reversed the trial court Order of immediate execution in the Decision promulgated on November 28, 2006.
It also annulled the writ of execution issued pursuant to the Order of immediate execution.
Rogelio, Sr. filed a Motion for Reconsideration, but it was denied on February 23, 2007.
On September 15, 2006, the Court of Appeals denied the Marcelino, Jr. Group’s Motion for Reconsideration dated April 24, 2006.
Hence, on November 17, 2006, the Marcelino, Jr. Group filed the Petition docketed as G.R. No. 174909.
Issues:
(1) whether it was proper for the Regional Trial Court to dismiss the Complaint filed by the Marcelino, Jr. Group
Yes. While stockholders in the Marcelino, Jr. Group were permitted to seek relief, they should have done so not in their unique capacity as
individuals or as a group of stockholders but in place of the corporation itself through a derivative suit. As they, instead, sought relief in their
individual capacity, they did so bereft of a cause of action. Likewise, they did so without even the slightest averment that the requisites for the
filing of a derivative suit, as spelled out in Rule 8, Section 1 of the Interim Rules of Procedure for Intra-Corporate Controversies, have been
satisfied. Since the Complaint lacked a cause of action and failed to comply with the requirements of the Marcelino, Jr. Group’s vehicle for relief,
it was only proper for the Complaint to have been dismissed.
(2) assuming that it was error for the Regional Trial Court to dismiss the Complaint and that the case may be decided on the merits, whether the
transfers of shares assailed by the Marcelino, Jr. Group should be nullified
The second consequence is unavailing in this case. While "[n]either misjoinder nor non-joinder of parties is ground for dismissal of an
action"139 and is, thus, not fatal to the Marcelino, Jr. Group’s action, we have shown that they lack a cause of action. This warrants the dismissal
of their Complaint.
The first consequence, however, is crucial. It determines the validity of the Regional Trial Court’s award of damages to Rogelio, Sr.
(3) whether the Regional Trial Court’s award of moral and exemplary damages in favor of Rogelio, Sr. may be executed at this juncture of the
proceedings.
Since the Regional Trial Court did not have jurisdiction, the decision awarding damages in favor of Rogelio, Sr. is void.
Apart from this, there is no basis in jurisprudence for awarding moral and exemplary damages in cases where individual suits that were
erroneously filed were dismissed.
This is in keeping with the Civil Code provisions that stipulate when the award of such damages is proper. We find no reason to conclude that
the Marcelino, Jr. Group acted in so malevolent, oppressive, or reckless a manner that moral and exemplary damages must be awarded in such
huge amounts as the Regional Trial Court did.
