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3Republir of tbe tlbilippine% Third Division
~upreme <!Court
;!flllnniln DEC 1 4 2016

THIRD DIVISION

MAJESTIC PLUS HOLDING G.R. No. 201017

INTERNATIONAL, INC.,
Petitioner,

- versus -

BULLION INVESTMENT AND

DEVELOPMENT CORPORATION,
Respondent.
x--------------------------------------------------x
MAJESTIC PLUS HOLDING G.R. No. 215289
INTERNATIONAL, INC.,
Petitioner,
Present:

PERALTA, J, Acting Chairperson,

- versus - PEREZ,
REYES,
PERLAS-BERNABE,* and
BULLION INVESTMENT AND JARDELEZA, JJ
DEVELOPMENT CORPORATION,
GENESSON U. TECSON, ROLAND M.
LAUTCHANG, WILSON CHUNBON
CHENG KOA, LUIS K. LOKIN, JR., Promulgated:
JEFFERSON U. TECSON and
ROSALINE C. CHING,
Respondents. De~beu 5,~
x---------------------------------------------------------------------~-~

Designated Additional Member in lieu of Associate Justice Presbitero J. Velasco, Jr., per Rafne
dated December 5, 2016.

/I
 Decision 2 GR. No. 201017 and
GR. No. 215289

DECISION

PERALTA, J.:

Before the Court are two (2) consolidated petitions for review on
certiorari under Rule 45 of the Rules of Court.

In G.R. No. 201017, petitioner Majestic Plus Holdings International,

Inc. (Majestic) seeks to nullify the Decision 1 dated November 2, 2011 and
the Resolution 2 dated March 14, 2012, respectively, of the Court of Appeals
(CA) in CA-G.R. SP No. 121072.

In G.R. No. 215289, Majestic prays for the reversal and setting aside
of the Decision 3 dated October 23, 2013 and the Resolution 4 dated
November 4, 2014, respectively, of the CA in CA-G.R. CV No. 97537.

The factual and procedural antecedents follow.

In a Resolution passed on August 14, 2001, the City Council of

Manila authorized its Mayor to enter into a contract with any reputable
corporation for the long term lease and development of a 4,808.40-square-
meter non-income generating property of the City located within the vicinity
of Felipe II, Reina Regente and General La Chambre Streets in Binondo,
Manila. Pursuant to such authority, the Office of the City Mayor issued an
Invitation to Pre-qualify and Bid for the said development project.
Subsequently, herein respondent company, Bullion Investment and
Development Corporation (Bullion) participated and won in the bidding.

Thus, on June 30, 2003, the City of Manila, through then City Mayor
Joselito Atienza, and Bullion, represented by its President Roland
Lautachang, entered into a Contract5 for the lease of the said property for a
period of twenty-five (25) years. Under the Contract, Bullion, as lessee,
agreed to construct two 4-storey buildings, one of which shall be used as an
extension office of the Manila City Hall for its institutional services, while
the other shall be used for commercial purposes.

Penned by Associate Justice Rodil V. Zalameda, with Associate Justices Amelita G. Tolentino and
Normandic B. Pizarro, concurring, rollo (GR. No. 20I017), pp. 58-82.
2
Id. at 84-87.
Penned by Associate Justice Rosmari D. Carandang, with Associate Justices Ricardo R. Rosario
and Lconcia R. Dimagiba, concu1Ting, rollo (GR. No. 215289), pp. 52-69.

t/Y
4
!d.at71-74.
Records, Vol. I, pp. 22-30.
Decision 3 G.R. No. 201017 and
G.R. No. 215289

Bullion then commenced construction and was able to finish and turn
over the City Hall extension building to the Manila City Government.
However, Bullion was unable to finish the construction of the commercial
building. Bullion then sought the help of and was able to convince petitioner
corporation, Majestic Plus Holding International, Incorporation (Majestic),
to invest in Bullion's business venture, particularly the completion of the
construction of its commercial building which was intended to be used as a
mall (Meisic Mall).

On September 7, 2004, Bullion, represented by its President, entered

into a Memorandum of Agreement6 (MOA) with Majestic, which was
represented by one Dionisio N. Yao. Pertinent portions of the MOA read,
thus:

1. SUBJECT MATTER
MAJESTIC agrees to acquire 80% equity interest in BULLION,
subject to the following terms and conditions, and the completion
of the construction of the subject MALL by both parties.

2. CONSIDERATION
2.1. MAJESTIC and BULLION agree that the present
shareholdings and assets of BULLION shall be valued at ONE
HUNDRED TWENTY MILLION PESOS (Php 120,000,000.00).
2.2. It is expressly agreed that the 80% equity interest to be
acquired by MAJESTIC shall correspond to NINETY-SIX
MILLION PESOS (PhP96,000,000.00), payable by MAJESTIC
under the following Terms of Payment provided in the succeeding
section.
2.3 MAJESTIC agrees to infuse additional capital to cover the
expenditure for the completion of the construction of the MALL.

3. TERMS OF PAYMENT
The 80% equity interest, corresponding to NINETY-SIX
MILLION PESOS (Php96,000,000.00), shall be payable by
MAJESTIC to the existing stockholders of BULLION as follows:
3.1 Upon execution of this MOA, MAJESTIC shall pay
THIRTY-FIVE MILLION PESOS (Php35,000,000.00).
3.2 The balance of SIXTY-ONE MILLION
PESOS(Php6 l ,OOO,OOO.OO) shall be payable as follows:
3.2.1. TEN MILLION PESOS (Php 10,000,000.00)
within 75 days from the execution of this MOA;
3.2.2. SIX MILLION PESOS (Php6,000,000.00)
payable 30 days thereafter;
3.2.3. SIX MILLION PESOS (Php6,000,000.00)
payable 30 days after 3.2.2;
3.2.4. SIX MILLION PESOS (Php6,000,000.00)

jl
payable 30 days after 3.2.3;

/d.at31-37.
Decision 4 G.R. No. 201017 and
G.R. No. 215289

3.2.5. SIX MILLION PESOS (Php6,000,000.00)

payable 30 days after 3.2.4;
3.2.6. ELEVEN MILLION PESOS
(Phpll,000,000.00) payable 30 days after 3.2.5;
3.2.7. EIGHT MILLION PESOS (Php8,000,000.00)
payable 30 days after 3.2.6;
3.2.8. EIGHT MILLION PESOS (Php8,000,000.00)
payable within two (2) years from the execution of
this MOA.
3.3 The above payments shall all be covered by post-dated
checks to be issued by MAJESTIC in favor of BULLION and/or
Bingson U. Tecson, duly-authorized representative of existing
stockholders.

4. TRANSFER OF SHARES
4.1. The shares representing the 30% equity of BULLION shall be
ceded and transferred to MAJESTIC only upon full payment of
the amount of THIRTY-FIVE MILLION PESOS
(Php35,000,000.00), pursuant to Sec. 3.1.
4.2. Additional shares representing the 10% equity of BULLION
shall be assigned and transferred to MAJESTIC upon payment of
the additional amount of TEN MILLION PESOS
(Phpl0,000,000.00) based on Sec. 3.2.l
4.3. Upon payment of the additional amount of TWENTY-FOUR
MILLION PESOS (Php24,000,000.00) based on Secs. 3.2.2, 3.2.3,
3.2.4 and 3.2.5, additional shareholdings representing 20% equity
of BULLION shall be assigned and transferred to MAJESTIC.
4.4. The parties undertake to execute the necessary documents for
the transfer of additional shares corresponding to another 20%
upon receipt of the full payment of the EIGHTY-EIGHT MILLION
PESOS (Php88,000,000.00).
4.5. BULLION shall provide and/or furnish MAJESTIC copies of
all corporate records, such as but not limited to [the] Article of
Incorporation, By-laws, Financial Statements, General Information
Sheets, Board Resolutions, etc.

5. CAPITAL INFUSION
5.1. The MAJESTIC shall infuse additional capital to cover the
construction cost for the full completion of the MALL. The
additional funding for the construction cost and completion of the
MALL shall be converted to increased equity for MAJESTIC.
5.2. BULLION and MAJESTIC agree to amend the Authorized
Capital Stock of BULLION from the existing THIRTY MILLION
PESOS (Php30,000,000.00) to at least TWO HUNDRED
MILLION PESOS (Php200,000,000.00) to reflect the actual capital
investments of the parties and for the construction and completion
of the MALL.
5.3. In the event of any capital call and infusion, existing
BULLION stockholders shall have the option to maintain their
20% percent equity. In case any stockholder waives his option to
subscribe to any additional capital call or infusion, the other
stockholders shall be given the option to subscribe to the remaining
unpaid subscription rights offering. ?If./
/
/
Decision 5 GR. No. 201017 and
GR. No. 215289

6. ACCELERATION CLAUSE
6.1. MAJESTIC shall have the option to accelerate the Terms of
Payment under Sec. 3 in order to expedite the implementation of
Sec. 4.
6.2. In the event that MAJESTIC fails to pay, despite written
demands, at least two (2) installment dues within the period
provided in this MOA, the full balance of the amount unpaid shall
become immediately due and demandable.

7. DEFAULT
7.1. Should MAJESTIC default in the payment of at least two (2)
installment dues under this contract, BULLION, at its sole option
may elect to rescind the contract in which event only half of the
total amount paid by MAJESTIC shall be refunded to it without
need of demand. MAJESTIC shall be considered in default upon
its failure to pay the full amount of the outstanding obligation
within fifteen (15) days from written demand of BULLION.
7.2 In the event BULLION elects to rescind the contract under this
provision, it shall serve a written notice of the rescission to
MAJESTIC.
7.3. In the event BULLION fails to comply with any of its
undertaking under this contract, a written demand shall likewise be
made giving it 15 days to comply. Upon failure to do so,
MAJESTIC shall serve a written notice of rescission to
BULLION. All sums paid by MAJESTIC shall be refunded to it
after written demand.
7.4. In the event that any of the parties should be compelled to seek
judicial relief against any of the parties, the aggrieved parties shall
pay an amount equivalent to 10% of the total amount claimed as
attorney's fees, plus cost of litigation and other expenses.

8. MANAGEMENT
Upon payment of Php35,000,000.00 by MAJESTIC, a joint
management committee shall be created and convened by the
Board of Directors that will oversee the construction and operation
of the MALL for a period of six (6) months.

xx x 7

Following the execution of the MOA, Majestic issued five (5) checks,
on various dates, for an aggregate amount of Fifty-Seven Million Pesos
(P57 ,000,000.00) in favor of Bullion, as partial payment of the 80% equity
interest in the latter. Bullion acknowledged such payment. However, it
alleged that an additional four (4) checks, representing a total amount of
P3 l ,OOO,OOO.OO, which were subsequently issued by Majestic were
dishonored because of "Stop Payment" orders. 8 As a result, Bullion sent
letters to Majestic demanding payment in full of the latter's outstanding

Id. at 32-35.
See Defendants' Answer, records, Vol. I, pp. 182-184; pp. 197-200.
11
 Decision 6 GR. No. 201017 and
GR. No. 215289

obligations, otherwise the former would be constrained to rescind the

MOA. 9 For Majestic's failure to heed Bullion's demands, the latter sent
another letter to the former, dated June 24, 2005, informing it that Bullion
had elected to rescind the MOA. 10

Meanwhile, Majestic took over the supervision and eventually

finished the construction of the Meisic Mall, except with respect to some
11
minor installations. Based on the Summary of Payments, attached to its
complaint, Majestic claims that, aside from the !!57,000,000.00 it had earlier
paid to Bullion, it also incurred expenses for the purpose of sustaining the
construction of Meisic Mall and the acquisition of various equipment for use
inside the mall in the sum of One Hundred Thirty-Four Million Five
Hundred Twenty-Two Thousand Eight Hundred Three Pesos and Twenty-
Two Centavos (Pl34,522,803.22). 12 Thus, the aggregate amount alleged to
have been invested by Majestic is I!l 91,522,803.22.

With the completion of major construction works and the installation

of the aforementioned equipment, the Meisic Mall became operational as
early as May 2005. Majestic conducted business therein by renting out the
mall's leasable spaces to stallholders and by employing personnel for the
security, maintenance and upkeep of the mall's premises. 13

However, in the morning of June 25, 2005, respondent, aided by

several police personnel and security guards, entered the premises and took
physical possession and control of Meisic Mall.

This prompted Majestic to file a Complaint 14 for Specific

Performance, Injunction and Damages with a Prayer for Temporary
Restraining Order and/or Writ of Preliminary Injunction against Bullion,
together with several other persons. Majestic alleged that it has become a
majority shareholder of Bullion by reason of its P 191,522,803 .22
investment, which comprises 95.76% of the agreed I!200,000,000.00
authorized capital stock of Bullion. Majestic also claims that the subject
MOA remains valid and binding and that Bullion failed to comply with its
unde1iakings thereunder.

(fV
Records, Vol. I, pp. 201-204.
10
Id. at 205-206.
II
Id. at 41-44.
12
See Complaint, records, id. at 13-14.
13
Records, Vol. I, pp. 9 and 14.
14
ld.atl-19.
 Decision 7 G.R. No. 201017 and
G.R. No. 215289

In its Answer, 15 Bullion denied the material allegations of Majestic's

complaint alleging the defense that it was the latter which, in fact, violated
the provisions of the MOA causing Bullion to rescind the said agreement.

Initially, the instant case was treated as an intra-corporate dispute and

raffled to Branch 24 of the Regional Trial Court (RTC) of Manila, a
commercial court, wherein several Orders were issued against Bullion, and
eventually, a Decision 16 dated October 12, 2005 was rendered in favor of
Majestic. Bullion assailed the RTC Orders via a special civil action for
certiorari filed with the CA, docketed as CA-G.R. SP No. 91886, while
respondent's stockholders filed an appeal of the RTC Decision, docketed as
CA-G.R. CV No. 86167. These two (2) actions were subsequently
consolidated by the CA and in its Decision, 17 promulgated on February 19,
2008, via a special division of five, unanimously set aside the Decision of
the commercial court and remanded the case to Branch 24, RTC of Manila to
be tried as an ordinary specific performance case. However, on Majestic's
motion, the presiding judge of Branch 24 subsequently inhibited himself
from the case 18 prompting the executive judge to assign the same to Branch
46, RTC of Manila which is also a commercial court. 19 The parties did not
question the jurisdiction of Branch 46.

In the ensuing proceedings before Branch 46, the parties jointly

moved that the case be submitted for summary judgment, to which the RTC
acce ded. 20

On July 28, 2011, Branch 46, RTC of Manila rendered a Decision 21 in

favor of petitioner, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered

in favor of the plaintiff Majestic Plus Holding International, Inc. and
against the herein defendants, ordering the latter to:

1. Strictly comply and implement in full the terms and

conditions of the Memorandum of Agreement, more
particularly the acquisition of 80% shareholdings of
defendant Bullion by plaintiff Majestic;

2. Issue the shares of stock of defendant Bullion in favor

of plaintiff Majestic corresponding to 40% which ~

15

I<>
~ 1- I
17
Records, Vol. III, pp. 12-37.
18
See RTC Order dated June 15, 2010, id. at 120.
19
See RTC Order dated June 21, 20 I 0, id. at 123.
20
See Amended Pre-Trial Order dated July 18, 2011, id. at 340.
21
Records, Vol. III, pp. 468-478.
 Decision 8 GR. No. 201017 and
GR. No. 215289

long been paid by plaintiff Majestic and record the

same in its Stock and Transfer Book;

3. Maintain/restore plaintiff Majestic in the physical

possession and control of the entire Meisic Mall
premises;

4. Transfer the remaining shares of stock in the name of

plaintiff Majestic up to the extent of 80% shareholdings
upon payment of the balance of I!39,000,000.00 and to
record the same in the Stock and Transfer Book;

5. Furnish/provide plaintiff Majestic within reasonable

time all of defendant Bullion's corporate records;

6. Immediately cause the amendment of the authorized

capital stock of defendant Bullion from P30,000,000.00
to P200,000,000.00 and reflect the increased equity of
plaintiff Majestic brought about by the expenses it
incurred to complete the Meisic Mall; and

7. Pay the cost of this suit.

The counterclaims of the herein defendants are dismissed for lack

of merit.

SO ORDERED. 22

Bullion and its directors appealed the above RTC Decision with the
CA.23

On August 22, 2011, Majestic filed a Motion for Execution Pending

Appeal 24 which was granted by the RTC by vi11ue of a Special Order25 and
26
two other related orders, all dated September 1, 2011. Consequently, a Writ
of Execution Pending Appeal 27 on even date was issued. Per Sheriffs Return
dated September 2, 2011, the Writ was served on Bullion and was thereby
immediately implemented. 28 In accordance with the Writ, the Sheriff was
able to completely and successfully remove the physical possession and
control of Meisic Mall from Bullion and deliver the same to Majestic. 29

22
fl
Id. at 477-478.
23
Id. at 489 and 495.
2·1
Id. at 479-488.
25
Id. at 513-5 14.
::(J
Id. at 5 I 5-5 16.
27
Id. at 517-518.
2.8
Id. at 519-520.
29
Id.
 Decision 9 G.R. No. 201017 and
G.R. No. 215289

In view thereof, Bullion filed a Petition for Certiorari30 before the CA

seeking the nullification of the: ( 1) Special Order granting the Motion for
Execution Pending Appeal; (2) Order granting police assistance to the
implementing Sheriff; (3) Order granting the appointment of a Special
Sheriff; and (4) Writ of Execution Pending Appeal. Bullion also prayed for
the issuance of a Temporary Restraining Order and Mandatory Injunction.

In its Decision 31 dated November 2, 2011, the CA granted the

aforesaid Petition and annulled and set aside the Special Order and the two
(2) other assailed Orders, all dated September 1, 2011, the dispositive
pmiion of which states:

WHEREFORE, premises considered, the instant Petition is

hereby GRANTED. The assailed Special Order and the two (2) other
Orders, all dated 02 September 2011 rendered by the public respondent
judge are ANNULLED and SET ASIDE. Any and all acts committed in
pursuance of the said Orders are necessarily NULLIFIED.

Accordingly, let a writ of final prohibitory and mandatory

injunction issue, as follows:

1. The public and private respondents, together with all

persons acting for and in their behalf are ENJOINED
from proceeding with the implementation of the public
respondent's Decision dated 28 July 2011 in Civil Case
No. 05-113352 entitled, "Majestic Plus Holding
International, Inc. vs. Bullion Investment and
Development Corporation, Genesson U. Tecson,
Roland M. Lautchang, Wilson Chun Bon Cheng Koa,
Luis K. Lokin, Jr., Jefferson U. Tecson and Rosalie C.
Ching," as well as the writ of execution pending appeal
dated 01 September 2011; and

2. The public and private respondents, and all persons

acting for and in their behalf, are ORDERED to
RESTORE the possession and control of the Meisic
Mall to petitioner in the same situation and condition
immediately before the Decision dated 28 July 2011 in
Civil Case No. 05-113352 aforecited.

SO ORDERED. 32

The CA basically ruled that the RTC committed grave abuse of

discretion in granting Majestic's motion for execution pending appeal since

JO

JI
:n
Rollo (G.R. No. 201017), pp. 259-275.
Id. at 58-82.
Id. at 81-82. (Emphasis in the original)
er
 Decision 10 GR. No. 201017 and
GR. No. 215289

the "good reasons" required by Rule 39 of the Rules of Court are found to be
absent in the instant case.

On November 14, 2011, Majestic filed a Motion for Reconsideration

with the CA, which was denied in its Resolution 33 dated March 14, 2012.
Thus, the filing of the present petition by Majestic, docketed as GR. No.
201017, raising the following grounds:

A.
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED
WHEN IT RULED THAT THE REQUISITE FILING OF A MOTION
FOR RECONSIDERATION WOULD ONLY DELAY THE URGENT
NECESSITY TO RESOLVE THE TEMPORARY RESTRAINING
ORDER AS CONTAINED IN THE PETITION ITSELF.

B.
THE HONORABLE COURT OF APPEALS COMMITTED
REVERSIBLE ERROR WHEN IT ACCEPTED A HIGHLY DEFECTIVE
VERIFICATION AND CERTIFICATION AS WELL AS SECRETARY'S
CERTIFICATE SUBMITTED BY BULLION.

C.
THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS
ERROR IN DISREGARDING THE UNDISPUTED FACT THAT
BULLION'S PETITION FOR CERTIORARI PRESENTS
ISSUES/MATTERS THAT ARE PROPER AND ALSO THE SUBJECT
OF THE APPEAL INTERPOSED BY BULLION.

D.
THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED
WHEN IT STRUCK DOWN THE "GOOD REASONS" AS FOUND BY
THE TRIAL COURT.

E.
THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN
ORDERING THE RESTORATION OF THE POSSESSION AND
CONTROL OF THE MEISIC MALL TO BULLION. 34

During the pendency of GR. No. 201017, the CA promulgated its

Decision 35 on Bullion's appeal of the July 28, 2011 Decision of the RTC. The
CA essentially ruled that since there are genuine issues of fact in the present
case which require the presentation of evidence, the RTC should have
proceeded to conduct a full-blown trial and should have refrained from
issuing a summary judgment. Hence, the assailed CA Decision disposed as
follows:

33
]4

:15
Id. at 84-87.
Id. at 26.
Rollo (GR. No. 215289), pp. 52-69.
tJI
 Decision 11 G.R. No. 201017 and
G.R. No. 215289

WHEREFORE, the appealed July 28, 2011 Decision of the

Regional Trial Court of Manila, Branch 46, National Capital Judicial
Region is hereby REVERSED AND SET ASIDE.

Accordingly, the portion of the Decision directing defendant-

appellant Bullion Investment and Development Corporation to
maintain/restore plaintiff Majestic in the physical possession and control of
the entire Meisic Mall premises is declared to be of no force and effect.
The right of defendant-appellant Bullion Investment and Development
Corporation to physically possess, manage and control the Meisic Mall,
now known as 11/88 Mall, is recognized. As to the other aspects of the
case, let this case be REMANDED to the RTC of Manila, to be re-raffled
to a regular court and not to a special commercial court, for further
proceedings and proper disposition, according to regular procedure.

SO ORDERED. 36

Aggrieved by the CA Decision, Majestic comes to this Court via the

instant petition, docketed as G.R. No. 215289, on the following grounds:

I. THE HONORABLE COURT OF APPEALS SERIOUSLY

ERRED IN REVERSING THE DECISION OF THE REGIONAL TRIAL
COURT BRANCH 46 OF MANILA.

II. THE REGIONAL TRIAL COURT BRANCH 46 OF MANILA

HAS JURISDICTION OVER THE CASE.

III. THE REGIONAL TRIAL COURT BRANCH 46 OF MANILA

DID NOT EXCEED JURISDICTION.

IV. THE REGIONAL TRIAL COURT BRANCH 46 OF MANILA

DID NOT ERR IN GRANTING MAJESTIC CLAIMS AND
DISMISSING DEFENDANTS-APPELLANTS' COUNTER-CLAIM.

V. THE HONORABLE COURT OF APPEALS ERRED WHEN IT

DENIED MAJESTIC'S MOTION FOR RECONSIDERATION. 37

38
In a Resolution dated January 28, 2015, this Court resolved to
consolidate G.R. No. 201017 and 215289.

The petitions lack merit.

At the outset, it behooves this Court to determine the issue of whether

or not the RTC, Branch 46 of Manila has jurisdiction over the subject matter

36
37
38
Id. at 67-68. (Emphasis in the original)
Id. at 22.
Ro//o(G.R.No.201017), p.313.
;ft
 Decision 12 GR. No. 201017 and
GR. No. 215289

of the instant case. In its Comment in G.R. No. 215289, Bullion contends
that neither Branch 24 nor Branch 46 of the RTC of Manila has jurisdiction
over the suit for specific performance filed by Majestic. Bullion argues that
having been designated as special commercial courts, the jurisdiction of
Branches 24 and 46 is limited to trying and deciding special commercial
cases only. On the other hand, Majestic counters that the designation of
RTCs as special commercial courts has not, in any way, limited their
jurisdiction to hear and decide cases of all nature, whether civil, criminal or
special proceedings.

As a basic premise, the Court reiterates the principle that a court's

acquisition of jurisdiction over a particular case's subject matter is different
from incidents pertaining to the exercise of its jurisdiction. 39 Jurisdiction
over the subject matter of a case is conferred by law, whereas a court's
exercise of jurisdiction, unless provided by the law itself, is governed by the
Rules of Court or by the orders issued from time to time by the Supreme
Court. 40 The matter of whether the RTC resolves an issue in the exercise of
its general jurisdiction or of its limited jurisdiction as a special court is only
a matter of procedure and has nothing to do with the question of
jurisdiction. 41

Moreover, it should be noted that Special Commercial Courts (SCCs)

43
are still considered courts of general jurisdiction. 42 Section 5 .2 of R.A. No.
8799, otherwise known as The Securities Regulation Code, directs merely
the Supreme Court's designation of RTC branches that shall exercise
jurisdiction over intra-corporate disputes. The assignment of intra-corporate
disputes to secs is only for the purpose of streamlining the workload of the
RTCs so that certain branches thereof like the SCCs can focus only on a
particular subject matter. 44 Nothing in the language of the law suggests the
diminution of jurisdiction of those RTCs to be designated as SCCs. 45 The
RTC exercising jurisdiction over an intra-corporate dispute can be likened to

19
Concorde Condominium Inc., etc., et al. v. Augusto H. Baculio, G.R. No. 203678, February 17.
2016; Gonzales, el al. v. GJH land, Inc. et al., GR. No. 202664, November 10, 2015.
411 Id.
41
Id.
41
GD. Express Worldwide, N. V, et al. v. Court of Appeals (4' 11 Dvision), el al., 605 Phil. 406, 418
(2009); Strategic Alliance Development Corporation v. Star Infrastructure Development Cor11oratio11, et
al., 649 Phil. 669, 687 (20 IO); Concorde Condominium Inc., etc., et al. v. Augusto H. Baculio, supra note
39 .
.n
5.2. The Commission's jurisdiction over all cases enumerated under section 5 of Presidential
Decree No. 902-A is hereby transferred to the Courts of general jurisdiction or the appropriate Regional
Trial Court: Provided, That the Supreme Court in the exercise of its authority may designate the Regional
Trial Court branches that shall exercise jurisdiction over the cases. The Commission shall retain jurisdiction
over pending cases involving intra-corporate disputes submitted for final resolution which should be
resolved within one (I) year from the enactment of this Code. The Commission shall retain jurisdiction
over pending suspension of payment/rehabilitation cases filed as of30 June 2000 until finally disposed.
GD. /:,xpress Worldwide, N. V, et. al. v. Court of Appeals (-1' Dvision), et al., supra note 42, at:~
14 11
'

'" Id. (/'

 Decision 13 GR. No. 201017 and
GR. No. 215289

an RTC exercising its probate jurisdiction or sitting as a special agrarian

court. The designation of the SCCs as such has not in any way limited their
jurisdiction to hear and decide cases of all nature, whether civil, criminal or
. 1procee d"mgs. 46
spec1a

Stated differently, in the ruling case of Gonzales, et al. v. GJH Land,

Inc., et al. ,47 this Court held that:

x x x the fact that a particular branch x x x has been designated as a

Special Commercial Court does not shed the RTC's general jurisdiction
over ordinary civil cases under the imprimatur of statutory law, i.e., Batas
Pambansa Bilang (BP) 129. To restate, the designation of Special
Commercial Courts was merely intended as a procedural tool to expedite
the resolution of commercial cases in line with the court's exercise of
jurisdiction. This designation was not made by statute but only by an
internal Supreme Court rule under its authority to promulgate rules
governing matters of procedure and its constitutional mandate to supervise
the administration of all courts and the personnel thereof. Certainly, an
internal rule promulgated by the Court cannot go beyond the commanding
statute. But as a more fundamental reason, the designation of Special
Commercial Courts is, to stress, merely an incident related to the court's
exercise of jurisdiction, which, as first discussed, is distinct from the
concept of jurisdiction over the subject matter. The RTC's general
jurisdiction over ordinary civil cases is therefore not abdicated by an
internal rule streamlining court procedure. 48

Hence, based on the foregoing, it is clear that Branch 46, RTC of

Manila, despite being designated as an SCC, has jurisdiction to hear and
decide Majestic's suit for specific performance.

Having disposed of the question of jurisdiction, the Court will now

proceed to delve into the merits of the present petitions.

There are two basic issues posed in these two petitions. First is the
correctness of the July 28, 2011 Decision of the RTC via summary
judgment. Second is the propriety of ordering the execution of such Decision
pending appeal. In turn, the Court notes that both these issues hinge on the
preliminary determination of whether or not the RTC was correct in
considering the case appropriate for summary judgment. The Court will,
thus, follow the course taken by the CA and proceed to determine first if it
was proper for the RTC to render its assailed summary judgment.

4(,
Id.
[JI
47
Supra note 39.
48
Id.
 Decision 14 GR. No. 201017 and
GR. No. 215289

Summary judgment is a procedural device resorted to in order to avoid

long drawn out litigations and useless delays. 49 Relief by summary judgment
is intended to expedite or promptly dispose of cases where the facts appear
undisputed and certain from the pleadings, depositions, admissions and
affidavits. 50 Summary judgments are proper when, upon motion of the
plaintiff or the defendant, the court finds that the answer filed by the
defendant does not tender a genuine issue as to any material fact and that
one party is entitled to a judgment as a matter of law. 51 But if there be a
doubt as to such facts and there be an issue or issues of fact joined by
the parties, neither one of them can pray for a summary judgment. 52
Where the facts pleaded by the parties are disputed or contested,
proceedings for a summary judgment cannot take the place of a trial. 53

In Calubaquib, et al. v. Republic of the Philippines, 54 this Court had

the occasion to discuss the nature of a summary judgment and to reiterate the
conditions that should be met before it can be resorted to, to wit:

xx xx

An examination of the Rules will readily show that a summary

judgment is by no means a hasty one. It assumes a scrutiny of facts in a
summary hearing after the filing of a motion for summary judgment by
one party supported by affidavits, depositions, admissions, or other
documents, with notice upon the adverse pm1y who may file an opposition
to the motion supported also by affidavits, depositions, or other documents
x x x. In spite of its expediting character, relief by summary .iudgment
can only be allowed after compliance with the minimum requirement
of vigilance by the court in a summary hearing considering that this
remedy is in derogation of a party's right to a plenary trial of his case.
At any rate, a party who moves for summary judgment has the burden of
demonstrating clearly the absence of any genuine issue of fact, or that the
issue posed in the complaint is so patently unsubstantial as not to
constitute a genuine issue for trial, and any doubt as to the existence of
such an issue is resolved against the movant.

As mentioned above, a summary judgment is permitted only if

there is no genuine issue as to any material fact and the moving party is
entitled to a judgment as a matter of law. The test of the propriety of
rendering summary judgments is the existence of a genuine issue of fact,
as distinguished from a sham, fictitious, contrived or false claim. A factual

49
Spouses Villuga v. Kelly Hardware and Construction Supply, Inc., 691 Phil. 353, 364(2012).
50
YKR Corporation, et. al., v. Philippine Agri-Business Center Corporation, GR. No. 191838,
October 20, 2014, 738 SCRA 577, 598.
51
,)pouses Soller v. Heirs qi.Jeremias Ulayao, 691 Phil. 348, 351 (2012), citing Caluhal/Uib, et al. 1•.
Republic of the Philippines, 667 Phil. 653, 661 (2011 ).
52
YKR Corporation, et al., v. Philippine Agri-Business Center Corporation, supra note 50.
(Emphasis ours)
53

'''
Id. (Emphasis ours)
Supra note 5 I. ff
 Decision 15 G.R. No. 201017 and
G.R. No. 215289

issue raised by a party is considered as sham when by its nature it is

evident that it cannot be proven or it is such that the party tendering the
same has neither any sincere intention nor adequate evidence to prove it.
This usually happens in denials made by defendants merely for the sake of
having an issue and thereby gaining delay, taking advantage of the fact that
their answers are not under oath anyway.

In determining the genuineness of the issues, and hence the

propriety of rendering a summary judgment, the court is obliged to
carefully study and appraise, not the tenor or contents of the
pleadings, but the facts alleged under oath by the parties and/or their
witnesses in the affidavits that they submitted with the motion and the
corresponding opposition. Thus, it is held that, even if the pleadings on
their face appear to raise issues, a summary judgment is proper so long as
"the affidavits, depositions, and admissions presented by the moving party
show that such issues are not genuine."

The filing of a motion and the conduct of a hearing on the

motion are, therefore, important because these enable the court to
determine if the parties' pleadings, affidavits and exhibits in support
of, or against, the motion are sufficient to overcome the opposing
papers and adequately justify the finding that, as a matter of law, the
claim is clearly meritorious or there is no defense to the action. The
non-observance of the procedural requirements of filing a motion and
conducting a hearing on the said motion warrants the setting aside of
the summary judgment. 55

In the present case, it is true that both parties moved for the rendition
of a summary judgment. 56 However, it is apparent that the RTC did not
comply with the procedural guidelines when it ordered that the case be
submitted for summary judgment without first conducting a hearing to
determine if there are indeed no genuine issues of fact that would necessitate
trial. The trial court merely required the parties to submit their respective
memoranda, together with their affidavits and exhibits and, although the
parties presented opposing claims, the RTC hastily rendered a summary
judgment. Thus, the trial court erred in cursorily issuing the said judgment.

Undoubtedly, the case at bar may not, even by the most liberal or
strained interpretation, be considered as one not involving genuine issues of
fact which necessitates presentation of evidence to determine which of the
two conflicting assertions is correct. A careful examination of the pleadings
will show that Majestic's causes of action in its Complaint are anchored on
Bullion's supposed violations of the provision of the subject MOA. On the
other hand, Majestic's allegations are controverted by Bullion who, in a like
manner, asserts that by virtue of Majestic's failure to comply with the

55
Calubaquib, et al. v. Republic of the Philippines, id. at 661-663, citing Viajar v. Estenzo, 178 Phil.
561, 572-573 ( 1979). (Emphases supplied; citations omitted)
56
See RTC Order dated June 23, 2011, records, Vol. III, p. 267.
(/JI
 Decision 16 G.R. No. 201017 and
G.R. No. 215289

prov1s10ns of the said MOA, it decided to rescind the same. These

diametrically opposed and conflicting claims present a factual dispute which
can be resolved and settled only by means of evidence presented during trial.
The documents and memorandum submitted by the parties all the more show
that the facts pleaded are disputed or contested. It is true that the main
document from which the parties base their claims and defenses is the same
MOA and that the issue submitted for resolution before the RTC is which of
the parties complied with or violated the provisions of the said MOA.
However, arising from this main issue are conflicting allegations coming
from both parties. In turn, these allegations tender genuine issues of fact
necessitating the presentation of evidence, thus, precluding the rendition of a
summary judgment. Certainly, the issue as to who violated the subject
MOA, thus, raised by the parties and formulated by the RTC in its Amended
Pre-Trial Order, as well as the particular matters as to whether or not the said
MOA has been validly rescinded and whether or not Majestic has, in fact,
incurred I! 134,522,803 .22 in completing the construction of and in
maintaining the operation of the Meisic Mall, are issues which may not be
categorized as frivolous and sham so as to dispense with the presentation of
evidence in a formal trial.

As to the issue of rescission of the subject MOA, Bullion contends

that it rescinded the MOA because Majestic failed to pay several
installments of its obligations which are due thereunder, which failure gives
Bullion the right to rescind the same. On the other hand, Majestic opposes
the rescission insisting that the MOA remains valid and binding for Bullion's
failure to comply with the conditions of a valid rescission as set under the
MOA. Majestic likewise argues that it was, in fact, Bullion which violated
the provisions of the MOA. It is a settled rule that extrajudicial rescission
has a legal effect where the other party does not oppose it. 57 Where it is
objected to, a judicial determination of the issue is still necessary. 58 Thus,
considering Majestic's strong opposition to Bullion's rescission of the MOA,
and since both parties allege that the other had violated the MOA, the Com1
agrees with the CA that the issue of rescission necessitates judicial
intervention which entails examination by the trial com1 of evidence
presented by the parties in a full-blown trial.

Also, the Court finds no error in the ruling of the CA that the
aggregate sum of !!134,522,803.22 alleged by Majestic as expenses it
incurred in completing the construction of the Meisic Mall, as well as in the
acquisition of equipment and facilities used therein, is yet to be substantiated
by competent proof. The only evidence presented by Majestic to support its

57
Suhic Bay Metropolitan Authority, et. al. v. Universal International Group of Taiwan, et al., 394
Phil. 691, 711 (2000); Palay, Inc., et al. v. Clave. et al., 209 Phil. 523, 530 (1983).

~
sR Id.
 Decision 17 G.R. No. 201017 and
G.R. No. 215289

claims is an Affidavit 59 executed by the Finance Comptroller of its allied

corporation, accompanied by a summary of Payments Made to Meisic
Mall. 60 Majestic has yet to present receipts or other competent documentary
evidence to prove the said payments. Moreover, these claims were
specifically denied by Bullion in its Answer to the Complaint. In view of
such denial, Majestic's claims are, thus, subject to confirmation and
validation by proof during trial proper.

Moreover, in a Special Division composed of five (5) Justices, the CA

in its February 19, 2008 Decision, which remanded the case to the RTC to be
tried as an ordinary specific performance case, held that Majestic's
Complaint raises many factual issues which, while refuted by Bullion's
Answer, would still have to be disproved by evidence in further
proceedings. 61 Also, in its presently assailed Decision dated November 2,
2011, another Division of the CA, which annulled the RTC Order granting
Majestic's motion for execution pending appeal, expressed misgivings with
respect to the trial court's disposition of the case by ratiocinating in this
wise:

What is more, the Court is mystified [perplexed?] on how the

public respondent judge came to rule as to the actions sought to be
implemented or enforced in the assailed Orders. Of course, the Court is
aware that the entry of private respondents shareholdings in the stock and
transfer books, the amendment of value of its investments and the award of
physical possession of the Meisic Mall, are all contained in the dispositive
portion of the lower court's Decision. However, it appears in the very same
Decision that the proceedings before the public respondent are summary in
nature and that the sole issue which the parties agreed upon is who
between these parties violated the Memorandum of Agreement. Nothing
. less. 62
more, not h mg

Furthermore, a perusal of the records of the case would show that

Majestic itself is not totally convinced that the case is, indeed, ripe for
summary judgment. In its Motion for Reconsideration of the May 13, 2010
Order of the RTC of Manila, which initially dismissed its Complaint on the
ground of lack of cause of action, Majestic argued for the need of a full-
blown trial to thresh out the parties' conflicting claims, to wit:

xx xx

As regard[ s] defendant Bullion's alleged non commission of any

act or omission in violation of IMajestic's] rights and the failure of~

59
Records, Vol. III, p. 387.
60
Id. at 388-391.
(Ji
See records, Vol. III, p. 36.
(ll
Rollo (GR. No. 201017), p. 76.
 Decision 18 GR. No. 201017 and
GR. No. 2 l 5289

latter to comply with its obligations, these arc in no doubt, evidentiary

matters which have yet to be established in a full blown trial. As the
records would show, the case has not even reached the pre-trial hearing
and therefore, it becomes too premature for the Honorable Court to make a
definite ruling on the alleged lack of cause of action.

Indeed, unless the parties have presented their respective evidence

in chief, any findings on the alleged lack of cause of action will be highly
. at best. 63·
premature an d specu 1atlve

In granting Majestic's Motion for Reconsideration, the RTC agreed

with Majestic's above-quoted argument and ruled, thus:

xx xx

A perusal of the complaint hypothetically admitting all the facts and

allegations in the subject complaint [shows that] there [are] sufficient
factual averrnents where this Court can render valid judgments. Essentially,
these causes of action raise many factual issues traversing on the
Memorandum of Agreement and the obligation of the defendant[s] to the
plaintiff which indeed have to be disproved by the defendants in a full
blown trial as this was refuted in the Answer. Even the comment in the
motion for reconsideration establishing the circumstances involving the
rescission of the Memorandum of Agreement are clear factual matters
which should be proved and threshed out in a full blown trial. 64

On the basis of the foregoing, it is clear that the RTC erred in

rendering its assailed summary judgment. Thus, the CA did not commit
error in setting aside the said summary judgment.

In view of this Court's affirmance of the CA ruling which reversed and

set aside the July 28, 2011 Decision of the RTC, there is no longer any RTC
judgment that may be executed. Hence, the issue as to whether or not there
are "good reasons" to execute the assailed Decision of the RTC has become
moot and academic. This is in accordance with our ruling in Osmena fl/ v.
Social Security System of the Philippines, 65 where we defined a moot and
academic case or issue as follows:

A case or issue is considered moot and academic when it ceases to

present a justiciable controversy by virtue of supervening events, so that
an adjudication of the case or a declaration on the issue would be of no
practical value or use. In such instance, there is no actual substantial relief

/
(iJ
Records, Vol. III, p. 115.
(>4
Sec RTC Order dated January 11, 2011; id. at 146.
6'
559 Phil. 723 (2007).
 Decision 19 GR. No. 201017 and
GR. No. 215289

which a petitioner would be entitled to, and which would be negated by

the dismissal of the petition. Courts generally decline jurisdiction over
such case or dismiss it on the ground of mootness - save when, among
others, a compelling constitutional issue raised requires the formulation of
controlling principles to guide the bench, the bar and the public; or when
the case is capable of repetition yet evading judicial review. 66

Consequently, this Court no longer finds any need to discuss and

resolve the other issues raised in G.R. No. 201017.

As to who between the parties has the right of possession, control and
operation of the Meisic Mall, suffice it to say that the Court agrees with the
disquisition of the CA in its October 23, 2013 Decision in CA-G.R. CV No.
9753 7, which sustains the restoration of possession and control of the Mei sic
Mall in favor of Bullion, to wit:

Basic is the rule in corporation law that the business and affairs of a
corporation [are] handled by a Board of Directors and not the controlling
stockholder. All corporate powers are exercised, all business conducted
and all properties controlled by the Board of Directors. Hence, [even
granting that] Majestic has become the controlling stockholder of the
Bullion x x x by itself alone, it cannot have the physical possession and
operate the business of the Meisic Mall. 67

Finally, the Court agrees with the ruling of the CA which ordered the
remand of the case to the RTC of Manila to be re-raffled to a non-
commercial court for further proceedings and proper disposition.

WHEREFORE, the instant petitions are DENIED. The November

2, 2011 Decision and March 14, 2012 Resolution of the Court of Appeals in
CA-G.R. SP No. 121072 are AFFIRMED. The October 23, 2013 Decision
and November 4, 2014 Resolution of the Court of Appeals in CA-G.R. CV
No. 97537 are, likewise, AFFIRMED. The Executive Judge of the
Regional Trial Court of Manila is hereby ORDERED to PROMPTLY RE-
RAFFLE the case among the non-commercial courts with a directive that
the same be resolved with deliberate dispatch.

66
Osmena Ill v. Social Security System of the Philippines, supra, at 735, citing Governor Mandanas
v. Honorable Romulo, 473 Phil. 806 (2004); Olano/an v. Comelec, 494 Phil. 749, 759 (2005); Paloma v.
Court ofAppeals, 461 Phil. 269, 276-277 (2003). (Citations omitted)
" Rollo (ClR. No. 215289), p. 67.
.di
(11/
Decision 20 GR. No. 201017 and
GR. No. 215289

SO ORDERED.

WE CONCUR:

EZ

~~ES Associate Justice

ESTELA J.ff,E~-BERNABE
Associate Justice

Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court's Division.

Associate Justice
Acting Chairpersbn, Third Division
Decision 21 G.R. No. 201017 and
G.R. No. 215289

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the

Division Acting Chairperson's Attestation, I certify that the conclusions in
the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Court's Division.

MARIA LOURDES P.A. SERENO

Chief Justice

Third Division
DEC 1 4 2016