Magsaysay-Labrador vs. Court of Appeals, GR. No. 58168, December 19, 1989 (FERNAN, C.J.)

Tolentino, Harvin Jay C ATTY. Danilo Barde LLB.
, LLM
2nd yr - Commercial law
Doctrine: "While a share of stock represents a proportionate or aliquot

interest in the property of the corporation, it does not vest the owner thereof
with any legal right or title to any of the property, his interest in the
corporate property being equitable or beneficial in nature. Shareholders are
in no legal sense the owners of corporate property, which is owned by the
corporation as a distinct legal person."
Case Title: CONCEPCION MAGSAYSAY-LABRADOR, SOLEDAD

MAGSAYSAY-CABRERA, LUISA MAGSAYSAY-CORPUZ, assisted be
her husband, Dr. Jose Corpuz, FELICIDAD P. MAGSAYSAY, and
MERCEDES MAGSAYSAY-DIAZ, petitioners,
vs.
THE COURT OF APPEALS and ADELAIDA RODRIGUEZ-MAGSAYSAY,

Special Administratrix of the Estate of the late Genaro F. Magsaysay
respondents. G.R. No. 58168 - 19 December 1989
Facts:
On 9 February 1979, Adelaida Rodriguez-Magsaysay, widow and special

administrative of the estate of the late Senator Genaro Magsaysay, brought
before the then Court of First Instance of Olongapo an action against
Artemio Panganiban, Subic Land Corporation (SUBIC), Filipinas
Manufacturer’s Bank (FILMANBANK) and the Register of Deeds of
Zambales, for the annulment of the Deed of Assignment executed by the
late Senator in favor of SUBIC (as a result of which TCT 3258 was
cancelled and TCT 22431 issued in the name of SUBIC), for the annulment
of the Deed of Mortgage executed by SUBIC in favor of FILMANBANK
(dated 28 April 1977 in the amount of P 2,700,000.00), and cancellation of
TCT 22431 by the Register of Deeds, and for the latter to issue a new title
in her favor. On 7 March 1979, Concepcion Magsaysay-Labrador, Soledad
Magsaysay-Cabrera, Luisa Magsaysay-Corpuz, Felicidad Magsaysay, and
Mercedes Magsaysay-Diaz, sisters of the late senator, filed a motion for
intervention on the ground that on 20 June 1978, their brother conveyed to
them 1/2 of his shareholdings in SUBIC or a total of 416,566.6 shares and
as assignees of around 41 % of the total outstanding shares of such stocks
of SUBIC, they have a substantial and legal interest in the subject matter of
litigation and that they have a legal interest in the success of the suit with
respect to SUBIC. On 26 July 1979, the trial court denied the motion for
intervention, and ruled that petitioners have no legal interest whatsoever in
the matter in litigation and their being alleged assignees or transferees of
certain shares in SUBIC cannot legally entitle them to intervene because
SUBIC has a personality separate and distinct from its stockholders.On
appeal, the Court of Appeals found no factual or legal justification to disturb
the findings of the lower court. The appellate court further stated that
whatever claims the Magsaysay sisters have against the late Senator or
against SUBIC for that matter can be ventilated in a separate proceeding.
The motion for reconsideration of the Magsaysay sisters was denied.
Hence, the petition for review on certiorari.
Issue:
Whether the Magsaysay sister, allegedly stockholders of SUBIC, are

interested parties in a case where corporate properties are in dispute.
Held:
Viewed in the light of Section 2, Rule 12 of the Revised Rules of Court, the
Magsaysay sisters have no legal interest in the subject matter in litigation
so as to entitle them to intervene in the proceedings. To be permitted to
intervene in a pending action, the party must have a legal interest in the
matter in litigation, or in the success of either of the parties or an interest
against both, or he must be so situated as to be adversely affected by a
distribution or other disposition of the property in the custody of the court or
an officer thereof. Here, the interest, if it exists at all, of the Magsaysay
sisters is indirect, contingent, remote, conjectural, consequential and
collateral. At the very least, their interest is purely inchoate, or in sheer
expectancy of a right in the management of the corporation and to share in
the profits thereof and in the properties and assets thereof on dissolution,
after payment of the corporate debts and obligations. While a share of
stock represents a proportionate or aliquot interest in the property of the
corporation, it does not vest the owner thereof with any legal right or title to
any of the property, his interest in the corporate property being equitable or
beneficial in nature. Shareholders are in no legal sense the owners of
corporate property, which is owned by the corporation as a distinct legal
person.
WHEREFORE, the instant petition is hereby DENIED. Costs against
petitioners.

Magsaysay-Labrador vs. Court of Appeals, GR. No. 58168, December 19, 1989 (FERNAN, C.J.)

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Magsaysay-Labrador vs. Court of Appeals, GR. No. 58168, December 19, 1989 (FERNAN, C.J.)

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Tolentino, Harvin Jay C ATTY. Danilo Barde LLB.

2nd yr - Commercial law

Doctrine: "While a share of stock represents a proportionate or aliquot

Case Title: CONCEPCION MAGSAYSAY-LABRADOR, SOLEDAD

THE COURT OF APPEALS and ADELAIDA RODRIGUEZ-MAGSAYSAY,

On 9 February 1979, Adelaida Rodriguez-Magsaysay, widow and special

Whether the Magsaysay sister, allegedly stockholders of SUBIC, are

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