Primary Holding
The Supreme Court held that summary judgment was inappropriate due to genuine issues of fact that required a full trial, and affirmed the Court of Appeals' decision to reverse and set aside the Regional Trial Court's summary judgment.
Background
The case arose from a contract between the City of Manila and Bullion for the lease and development of a 4,808.40-square-meter property. Bullion won the bidding but needed additional funding to complete the commercial building (Meisic Mall). They entered into a MOA with Majestic Plus Holdings International, Inc. for 80% equity interest in exchange for funding.
History
-
June 30, 2003: Contract signed between City of Manila and Bullion
-
September 7, 2004: MOA signed between Bullion and Majestic
-
June 24, 2005: Bullion sent notice of rescission of MOA
-
June 25, 2005: Bullion took physical possession of Meisic Mall
-
July 28, 2011: RTC rendered decision via summary judgment
-
November 2, 2011: CA annulled RTC orders
-
October 23, 2013: CA reversed RTC decision
-
December 5, 2016: Supreme Court decision
Facts
-
1.
City of Manila authorized lease of property for development
-
2.
Bullion won bidding and contracted to build two 4-storey buildings
-
3.
Bullion completed City Hall extension but needed funding for commercial building
-
4.
Majestic agreed to acquire 80% equity for ₱96M plus additional construction costs
-
5.
Majestic paid ₱57M but subsequent checks worth ₱31M were dishonored
-
6.
Bullion rescinded MOA due to alleged payment defaults
-
7.
Dispute arose over possession and control of Meisic Mall
Arguments of the Petitioners
-
1.
Claimed majority shareholding due to ₱191.5M total investment
-
2.
Argued MOA remains valid and binding
-
3.
Contested Bullion's right to rescind MOA
-
4.
Claimed RTC had jurisdiction as special commercial court
Arguments of the Respondents
-
1.
Alleged Majestic violated MOA provisions
-
2.
Justified rescission due to payment defaults
-
3.
Contested RTC's jurisdiction as special commercial court
-
4.
Argued against propriety of summary judgment
Issues
-
1.
Whether RTC has jurisdiction over the case
-
2.
Whether summary judgment was appropriate
-
3.
Whether execution pending appeal was proper
-
4.
Who has right to possession and control of Meisic Mall
Ruling
-
1.
RTC has jurisdiction despite being a special commercial court
-
2.
Summary judgment was inappropriate due to genuine factual issues
-
3.
Execution pending appeal became moot
-
4.
Possession should remain with Bullion pending trial
-
5.
Case remanded to regular court for full trial
Rationale
-
1.
Special Commercial Courts retain general jurisdiction
-
2.
Genuine issues of fact require trial evidence
-
3.
Corporate control requires board action, not just shareholding
-
4.
Extrajudicial rescission requires judicial determination when contested
Doctrines
-
1.
Jurisdiction vs. Exercise of Jurisdiction: Court distinguishes between a court's acquisition of jurisdiction and incidents of exercising it
-
2.
Summary Judgment: Only proper when no genuine issues of material fact exist
-
3.
Corporate Control: Business affairs handled by Board of Directors, not controlling stockholder
-
4.
Extrajudicial Rescission: Requires judicial determination when opposed
Precedents Cited
-
1.
Gonzales v. GJH Land Inc.: Cited to establish that special commercial court designation doesn't limit jurisdiction
-
2.
Calubaquib v. Republic: Used to explain nature and requirements of summary judgment
-
3.
Subic Bay Metropolitan Authority v. Universal International Group: Referenced for rules on extrajudicial rescission
Statutory and Constitutional Provisions
-
1.
Securities Regulation Code (R.A. 8799) Section 5.2
-
2.
Rules of Court, Rule 45 (Appeal by Certiorari)
-
3.
Rules of Court, Rule 39 (Execution Pending Appeal)
-
4.
Batas Pambansa Bilang 129 (Judiciary Reorganization Act)