Magsaysay-Labrador v. CA

11.
Magsaysay-Labrador v CA
FACTS:
Adelaida Rodriguez-Magsaysay, widow and special administratix 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.
In her complaint, she alleged that in 1958, she and her husband
acquired, thru conjugal funds, a parcel of land with improvements,
known as "Pequena Island", covered by TCT No. 3258; that after the
death of her husband, she discovered [a] an annotation at the back of
TCT No. 3258 that "the land was acquired by her husband from his
separate capital;" [b] the registration of a Deed of Assignment dated
June 25, 1976 purportedly executed by the late Senator in favor of
SUBIC, as a result of which TCT No. 3258 was cancelled and TCT No.
22431 issued in the name of SUBIC.
Herein petitioners, sisters of the late senator, filed a motion for
intervention on the ground that on June 20, 1978, their brother
conveyed to them one-half (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.
The 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, respondent Court of Appeals affirmed the lower court.
The appellate court further stated that whatever claims the petitioners
have against the late Senator or against SUBIC for that matter can be
ventilated in a separate proceeding, such that with the denial of the
motion for intervention, they are not left without any remedy or judicial
relief under existing law.
ISSUE: WON petitioner may rightfully intervene
HELD:
NO.
The words "an interest in the subject" mean a direct interest in the
cause of action as pleaded, and which would put the intervenor in a
legal position to litigate a fact alleged in the complaint, without the
establishment of which plaintiff could not recover. 7
Here, the interest, if it exists at all, of petitioners-movants 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.
The petitioners also argues that they are more interested in the
outcome of the case than the corporation-assignee, owing to the fact
that the latter is willing to compromise with widow-respondent and
since a compromise involves the giving of reciprocal concessions, the
only conceivable concession the corporation may give is a total or
partial relinquishment of the corporate assets.
Such claim all the more bolsters the contingent nature of petitioners'
interest in the subject of litigation.
The petitioners cannot claim the right to intervene on the strength of
the transfer of shares allegedly executed by the late Senator. The
corporation did not keep books and records. Perforce, no transfer was
ever recorded, much less effected as to prejudice third parties.
The transfer must be registered in the books of the corporation to
affect third persons. The law on corporations is explicit. Section 63 of
the Corporation Code provides, thus: "No transfer, however,
shall be valid, except as between the parties, until the transfer
is recorded in the books of the corporation showing the names
of the parties to the transaction, the date of the transfer, the
number of the certificate or certificates and the number of
shares transferred."
And even assuming arguendo that there was a valid transfer,

petitioners are nonetheless barred from intervening inasmuch as their
rights can be ventilated and amply protected in another proceeding.

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11.

And even assuming arguendo that there was a valid transfer,

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