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    Title: Dee vs. Harvest All Investment Limited GR NO: G.R. No. 224834 YEAR: 2017 Topic: Corporation Code Doctrine

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    This case involves an intra-corporate controversy between minority stockholders (Harvest All, et al.) and the board of directors of Alliance Select Foods International, Inc. over the postponement of the company's annual stockholders' meeting. Specifically, Harvest All, et al. claimed that making subscription to a new stock rights offering a condition for voting rights in the meeting would deprive them of their proportional voting rights. The issue revolved around the proper filing fees for the complaint. The RTC and CA ruled that the fees should be based on the value of the stock rights offering, but the Supreme Court disagreed, finding that the complaint was not capable of pecuniary estimation. While earlier rules implied intra-corporate

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    Title: Dee vs. Harvest All Investment Limited GR NO: G.R. No. 224834 YEAR: 2017 Topic: Corporation Code Doctrine

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    nath
    136 views4 pages
    This case involves an intra-corporate controversy between minority stockholders (Harvest All, et al.) and the board of directors of Alliance Select Foods International, Inc. over the postponement of the company's annual stockholders' meeting. Specifically, Harvest All, et al. claimed that making subscription to a new stock rights offering a condition for voting rights in the meeting would deprive them of their proportional voting rights. The issue revolved around the proper filing fees for the complaint. The RTC and CA ruled that the fees should be based on the value of the stock rights offering, but the Supreme Court disagreed, finding that the complaint was not capable of pecuniary estimation. While earlier rules implied intra-corporate

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    This case involves an intra-corporate controversy between minority stockholders (Harvest All, et al.) and the board of directors of Alliance Select Foods International, Inc. over the postponement of the company's annual stockholders' meeting. Specifically, Harvest All, et al. claimed that making subscription to a new stock rights offering a condition for voting rights in the meeting would deprive them of their proportional voting rights. The issue revolved around the proper filing fees for the complaint. The RTC and CA ruled that the fees should be based on the value of the stock rights offering, but the Supreme Court disagreed, finding that the complaint was not capable of pecuniary estimation. While earlier rules implied intra-corporate

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    136 views4 pages

    Title: Dee vs. Harvest All Investment Limited GR NO: G.R. No. 224834 YEAR: 2017 Topic: Corporation Code Doctrine

    Uploaded by

    nath
    This case involves an intra-corporate controversy between minority stockholders (Harvest All, et al.) and the board of directors of Alliance Select Foods International, Inc. over the postponement of the company's annual stockholders' meeting. Specifically, Harvest All, et al. claimed that making subscription to a new stock rights offering a condition for voting rights in the meeting would deprive them of their proportional voting rights. The issue revolved around the proper filing fees for the complaint. The RTC and CA ruled that the fees should be based on the value of the stock rights offering, but the Supreme Court disagreed, finding that the complaint was not capable of pecuniary estimation. While earlier rules implied intra-corporate

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    of 4

    TITLE: DEE VS.

    HARVEST ALL INVESTMENT LIMITED

    GR NO: G.R. No. 224834

    YEAR: 2017

    TOPIC: CORPORATION CODE

    DOCTRINE:

    - BEFORE the effectivity of A.M. No. 04-2-04-SC, there could be an intra-


    corporate controversy where the value of the subject matter cannot be
    estimated.
    - AFTER the effectivity of A.M. No. 04-2-04-SC (July 20, 2004), there can be
    no case of intra-corporate controversy where the value of the subject
    matter cannot be estimated.

    FACTS:

    - Harvest All Investment Limited, Victory Fund Limited, Bondeast Private


    Limited, Albert Hong Hin Kay, and Hedy S.C. Yap Chua (Harvest All, et
    al.) are, in their own capacities, minority stockholders of Alliance Select
    Foods International, Inc. (Alliance), with Hedy S.C. Yap Chua acting as a
    member of Alliance's Board of Directors.5
    - As per Alliance's by-laws, its Annual Stockholders' Meeting (ASM) is held
    every June 15.6 However, in a Special Board of Directors Meeting held at
    three (3) o'clock in the afternoon of May 29, 2015, the Board of Directors,
    over Hedy S.C. Yap Chua's objections, passed a Board Resolution
    indefinitely postponing Alliance's 2015 ASM pending complete
    subscription to its Stock Rights Offering (SRO) consisting of shares with total
    value of ₱l Billion which was earlier approved in a Board Resolution passed
    on February 17, 2015.
    - As per Alliance's Disclosure dated May 29, 2015 filed before the Philippine
    Stock Exchange, such postponement was made "to give the stockholders
    of [Alliance] better representation in the annual meeting, after taking into
    consideration their subscription to the [SRO] of [Alliance]."7
    - This prompted Harvest All, et al. to file the instant Complaint (with
    TRO)8 involving an intra-corporate controversy against Alliance, and its
    (Alliance Board).
    - In said complaint, Harvest All, et al. principally claimed that the
    subscription to the new shares through the SRO cannot be made a
    condition precedent to the exercise by the current stockholders of their
    right to vote in the 2015 ASM; otherwise, they will be deprived of their full
    voting rights proportionate to their existing shareholdings.
    - The Clerk of Court of the RTC assessed Harvest All, et al. with filing fees
    amounting to ₱8,860.00 which they paid accordingly.11
    - For its part, the Alliance Board raised the issue of lack of jurisdiction on the
    ground of Harvest All, et al.'s failure to pay the correct filing fees. It argued
    that the latter should have paid P20 Million, more or less, in filing fees
    based on the SRO which was valued at Pl Billion.
    - RTC AND CA ruled in accordance with the court’s pronouncement in the
    case of Lu. “Court mentioned that in view of A.M. No. 04-2-04-SC dated
    July 20, 2004 which introduced Section 21 (k)27 to Rule 141 of the Rules of
    Court, it seemed that "an intra-corporate controversy always involves a
    property in litigation" and that "there can be no case of intra-corporate
    controversy where the value of the subject matter cannot be estimated."

    ISSUE:

    WON such complaint was capable of pecuniary estimation, thus the proper
    filing fees should be complied with.

    RULING: NO.

    - Certainly, Harvest All, et al.'s prayer for nullity, as well as the concomitant
    relief of holding the 2015 ASM as scheduled in the by-laws, do not involve
    the recovery of sum of money. The mere mention of Alliance's impending
    SRO valued at ₱l Billion cannot transform the nature of Harvest All, et al.'s
    action to one capable of pecuniary estimation.
    - If, in the end, a sum of money or anything capable of pecuniary
    estimation would be recovered by virtue of Harvest All, et al.'s complaint,
    then it would simply be the consequence of their principal action.

    DISCUSSION:

    - After a careful reading of Lu, it appears that the foregoing statements


    were in the nature of an obiter dictum. Thus, should not be binding.
    - The new Section 21 (k) of Rule 141 of the Rules of Court, as amended by
    A.M. No. 04-2-04-SC (July 20, 2004), expressly provides that "[f]or petitions
    for insolvency or other cases involving intra-corporate controversies, the
    fees prescribed under Section 7 (a) shall apply."
    - By referring the computation of such docket fees to paragraph (7a) only,
    it denotes that an intra-corporate controversy always involves a property
    in litigation, the value of which is always the basis for computing the
    applicable filing fees. The latest amendments seem to imply that there
    can be no case of intra-corporate controversy where the value of the
    subject matter cannot be estimated.
    - If the complaint were filed today, one could safely find refuge in the
    express phraseology of Section 21 (k) of Rule 141 that paragraph (a) alone
    applies.
    - In the present case, however, the original Complaint was filed on August
    14, 2000 during which time Section 7, without qualification, was the
    applicable provision. Even the Amended Complaint was filed on March
    31, 2003 during which time the applicable rule expressed that paragraphs
    (a) and (b) 1 & 3 shall be the basis for computing the filing fees in intra-
    corporate cases, recognizing that there could be an intra-corporate
    controversy where the value of the subject matter cannot be estimated,
    such as an action for inspection of corporate books.
    - Clearly therefore, Harvest All, et al.'s action was one incapable of
    pecuniary estimation.

    At this juncture, it should be mentioned that the Court passed A.M. No. 04-02-04-
    SC38 dated October 5, 2016, which introduced amendments to the schedule of
    legal fees to be collected in various commercial cases, including those involving
    intra-corporate controversies. Pertinent portions of A.M. No. 04-02-04-SC read:

    RESOLUTION

    xxxx

    Whereas, Rule 141 of the Revised Rules of Court, as amended by A.M. No. 04-2-
    04-SC effective 16 August 2004, incorporated the equitable schedule of legal
    fees prescribed for petitions for rehabilitation under Section 21 (i) thereof and,
    furthermore, provided under Section 21(k) thereof that the fees prescribed
    under Section 7(a) of the said rule shall apply to petitions for insolvency or other
    cases involving intra-corporate controversies;

    xxxx

    NOW, THEREFORE, the Court resolves to ADOPT a new schedule of filing fees as
    follows:

    xxxx

    4. Section 21 (k) of Rule 141 of the Revised Rules of Court is hereby DELETED as
    the fees covering petitions for insolvency are already provided for in this
    Resolution. As for cases involving intra-corporate controversies, the applicable
    fees shall be those provided under Section 7 (a), 7 (b) (1), or 7 (b) (3) of Rule 141
    of the Revised Rules of Court depending on the nature of the action.

    xxxx
    While the Court is not unaware that the amendments brought by A.M. No. 04-
    02-04-SC dated October 5, 2016 only came after the filing of the complaint
    subject of this case, such amendments may nevertheless be given retroactive
    effect so as to make them applicable to the resolution of the instant
    consolidated petitions as they merely pertained to a procedural rule, i.e., Rule
    141, and not substantive law.

    In view of the foregoing, and having classified Harvest All, et al.'s action as one
    incapable of pecuniary estimation, the Court finds that Harvest All, et al. should
    be made to pay the appropriate docket fees in accordance with the
    applicable fees provided under Section 7 (b) (3) of Rule 141 [fees for all other
    actions not involving property] of the Revised Rules of Court, in conformity with
    A.M. No. 04-02-04-SC dated October 5, 2016. The matter is therefore remanded
    to the R TC.

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