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MAGSAYSAY-LABRADOR vs. CA
FACTS
Adelaida Rodriguez-Magsaysay, widow and special administratix of
the estate of the lateSenator Genaro Magsaysay, brought before the
then Court of First Instance of Olongapo an
action against Artemio Panganiban, Subic Land Corporation
(SUBIC), Filipinas Manufacturer'sBank (FILMANBANK) and the Register
of Deeds of Zambales. In her complaint, she allegedthat she and her
husband acquired, thru conjugal funds, a parcel of land with
improvements,known as "Pequena Island". She further alleged that
after the death of her husband, shediscovered an annotation that
the land was acquired by her husband from his separatecapital, and
that the registration of a Deed of Assignment purportedly executed
by the lateSenator in favor of SUBIC, as a result of which TCT No.
3258 was cancelled and TCT No.22431 was issued in the name of
SUBIC. According to her the foregoing acts were void anddone in an
attempt to defraud the conjugal partnership considering that the
land is conjugal,her marital consent to the annotation on TCT No.
3258 was not obtained. She further allegedthat the assignment in
favor of SUBIC was without consideration and consequently null
andvoid.
Petitioners, sisters of the late senator, filed a motion for
intervention on the ground thattheir brother conveyed to them
one-half of his shareholdings in SUBIC or a total of
416,566.6shares and as assignees of around 41 % of the total
outstanding shares of such stocks ofSUBIC, they have a substantial
and legal interest in the subject matter of litigation and thatthey
have a legal interest in the success of the suit with respect to
SUBIC. The court deniedthe motion for intervention, and ruled that
petitioners have no legal interest whatsoever inthe matter in
litigation.
HELD
To allow intervention it must be shown that the movant has legal
interest in the matter inlitigation, or otherwise qualified; and
consideration must be given as to whether theadjudication of the
rights of the original parties may be delayed or prejudiced, or
whetherthe intervenor's rights may be protected in a separate
proceeding or not. Both requirementsmust concur as the first is not
more important than the second.
The interest which entitles a person to intervene in a suit
between other parties must be inthe matter in litigation and of
such direct and immediate character that the intervenor willeither
gain or lose by the direct legal operation and effect of the
judgment. Otherwise, ifpersons not parties of the action could be
allowed to intervene, proceedings will becomeunnecessarily
complicated, expensive and interminable. And this is not the policy
of the law.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 theprofits thereof and in the
properties and assets thereof on dissolution, after payment of
thecorporate 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 theproperty, 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 thecorporation as a distinct legal person.
STOCKHOLDERS OF GUANZON vs. CA
FACTS
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Five stockholders of F. Guanzon and Sons executed a certificate
of liquidation of the assetsof the corporation dissolving it, they
have distributed among themselves in proportion totheir
shareholdings, as liquidating dividends, the assets of said
corporation, including realproperties located in Manila.. The
certificate of liquidation, when presented to the Register ofDeeds
was denied because it did not contain a statement of the number of
parcel of landinvolved in the distribution.
As correctly stated by the Commissioner of Land Registration,
the propriety or impropriety ofthe three grounds on which the
denial of the registration of the certificate of liquidation
waspredicated hinges on whether or not that certificate merely
involves a distribution of thecorporation's assets or should be
considered a transfer or conveyance. However, appellantscontend
that the certificate of liquidation is not a conveyance or transfer
but merely adistribution of the assets of the corporation which has
ceased to exist for having beendissolved.
The Commissioner of Land Registration, however, entertained a
different opinion. Heconcurred in the view expressed by the
register of deed to the effect that the certificate ofliquidation
in question, though it involves a distribution of the corporation's
assets,represents a transfer of said assets from the corporation to
the stockholders. Hence, insubstance it is a transfer or
conveyance.
ISSUE
Whether or not the certification of liquidation involves a
conveyance or of the corporationsassets
HELD
Yes. A corporation is a juridical person distinct from the
members composing it. Propertiesregistered in the name of the
corporation are owned by it as an entity separate and distinctfrom
its members. While shares of stock constitute personal property
they do not representproperty of the corporation.
On the basis of the foregoing authorities, it is clear that the
act of liquidation made by thestockholders of the F. Guanzon and
Sons, Inc. of the latter's assets is not and cannot beconsidered a
partition of community property, but rather a transfer or
conveyance of thetitle of its assets to the individual
stockholders. Indeed, since the purpose of the liquidation,as well
as the distribution of the assets of the corporation, is to
transfer their title from thecorporation to the stockholders in
proportion to their shareholdings, and this is in effectthe purpose
which they seek to obtain from the Register of Deeds of Manila,
that transfercannot be effected without the corresponding deed of
conveyance from the corporation tothe stockholders.
