Chua V CA

G.R. No.
150793 November 19, 2004
FRANCIS CHUA, petitioner,
vs.
HON. COURT OF APPEALS and LYDIA C. HAO, respondents.
FACTS :
Private respondent Lydia Hao, treasurer of Siena Realty Corporation, filed a compliant-affidavit charging
Francis Chua and his wife, Elsa Chua, of four counts of falsification of public documents. The said
accused prepared, certified and falsified the Minutes of the Annual Stockholder’s meeting of the Board
of Directors of the corporation. The document made it appear in the Minutes that Lydia Hao was
present.
The accused prepared, certified, and falsified the Minutes of the Annual Stockholders meeting of the
Board of Directors of the Siena Realty Corporation, duly notarized before a Notary Public, Atty. Juanito
G. Garcia and entered in his Notarial Registry as Doc No. 109, Page 22, Book No. IV and Series of 1994,
and therefore, a public document, by making or causing it to appear in said Minutes of the Annual
Stockholders Meeting that one LYDIA HAO CHUA was present and has participated in said proceedings,
when in truth and in fact, as the said accused fully well knew that said Lydia C. Hao was never present
during the Annual Stockholders Meeting held on April 30, 1994 and neither has participated in the
proceedings thereof to the prejudice of public interest and in violation of public faith and destruction of
truth as therein proclaimed.
TRIAL :
Thereafter, the City Prosecutor filed the information for falsification of public document before the
MeTC against Francis Chua but dismissed the accusation against his wife, Elsa Chua. During the trial,
private prosecutors Atty. Evelyn Sua-Kho and Atty. Ariel Bruno Rivera appeared as private prosecutors
and presented Hao as witness. Chua moved to exclude complainant’s counsels as private prosecutors in
the case on the ground that Hao failed to allege and prove any civil liability. The MeTC granted Chua’s
motion and ordered the private counsels excluded. Hao moved for reconsideration but was denied.
Due MeTC’s grant of exclusion, Hao filed a petition for certiorari entitled Lydia C. Hao, in her own behalf
and for the benefit of Siena realty Corporation v. Francis Chua, and the Honorable Hipolito dela Vega,
Presiding Judge, Branch 22, Metropolitan Trial Court of Manila, before the RTC of Manila branch 19. The
RTC gave due course to the petition and reversed the MeTC order allowing the private prosecutors to
intervene in the civil aspect of the criminal case.
Chua moved for reconsideration but was denied. He then filed a petition for certiorari, alleging among
others that the court acted with grave abuse of discretion for allowing Siena Realty Corporation to be
impleaded as co-petitioner although it was not party to the criminal complaint. The CA denied the
petition.
Petitioner, Chua, had argued before the CA that respondent had no authority to bring suit in behalf of
the Corporation since there was no Board Resolution authorizing her to file the suit. Respondent, Hao,
countered that the suit was brought under the concept of a derivative suit.
ISSUE :
I. Whether or not the criminal complaint was in the nature of a derivative suit.
II. Is the corporation a proper party in the petition for certiorari under Rule 65 before the RTC?
III. Did the Court of Appeals and the lower court err in allowing private prosecutors to actively
participate in the trial of Criminal Case No. 285721?
HELD :
I. NO. The criminal case was not in the nature of a derivative suit.
Under Section 36 of the Corporation Code, read in relation to Section 23, where a corporation is an
injured party, its power to sue is lodged with its board of directors or trustees. An individual stockholder
is permitted to institute a derivative suit on behalf of the corporation wherein he holds stocks in order
to protect or vindicate corporate rights, whenever the officials of the corporation refuse to sue, or are
the ones to be sued, or hold the control of the corporation. In such actions, the suing stockholder is
regarded as a nominal party, with the corporation as the real party in interest.
A derivative action is a suit by a shareholder to enforce a corporate cause of action. The corporation is a
necessary party to the suit. And the relief which is granted is a judgment against a third person in favor
of the corporation. Similarly, if a corporation has a defense to an action against it and is not asserting it,
a stockholder may intervene and defend on behalf of the corporation.
Not every suit filed in behalf of the corporation is a derivative suit. For a derivative suit to prosper, it
is required that the minority stockholder suing for and on behalf of the corporation must allege in his
complaint that he is suing on a derivative cause of action on behalf of the corporation and all other
stockholders similarly situated who may wish to join him in the suit.
Furthermore, the SC stated that the appeal lacked the basic requirement of an allegation in the
complaint that the shareholder is suing on a derivative cause of action for and in behalf of the
corporation and other shareholders who wish to join. In the criminal complaint filed by the
respondent, nowhere is it stated that she is filing the same in behalf and for the benefit of the
corporation either in their complaint before the court a quo nor in the instant petition which, in part,
merely sates that this is a petition for review on certiorari on pure questions of law to set aside a portion
of the RTC decision in the said criminal cases since the trial courts judgment of acquittal failed to impose
civil liability against the private respondents. By no amount of equity considerations, if at all deserved,
can a mere appeal on the civil aspect of a criminal case be treated as a derivative suit.
II. YES. The petition was brought in her own name and in behalf of the Corporation. Although, the
corporation was not a complainant in the criminal action, the subject of the falsification was the
corporation's project and the falsified documents were corporate documents. Therefore, the
corporation is a proper party in the petition for certiorari because the proceedings in the criminal case
directly and adversely affected the corporation.
Rule 65 of the Rules of Civil Procedure, when a trial court commits a grave abuse of discretion
amounting to lack or excess of jurisdiction, the person aggrieved can file a special civil action for
certiorari. The aggrieved parties in such a case are the State and the private offended party or
complainant.
In Pastor, Jr. v. Court of Appeals26 we held that if aggrieved, even a non-party may institute a petition
for certiorari.
Appellate court committed grave abuse of discretion when it sanctioned the standing of a corporation to
join said petition for certiorari, despite the finality of the trial court's denial of its Motion for
Intervention and the subsequent Motion to Substitute and/or Join as Party/Plaintiff.
III. NO. When the civil action is instituted with the criminal action, evidence should be taken of the
damages claimed and the court should determine who are the persons entitled to such indemnity. The
civil liability arising from the crime may be determined in the criminal proceedings if the offended
party does not waive to have it adjudged or does not reserve the right to institute a separate civil
action against the defendant. Accordingly, if there is no waiver or reservation of civil liability, evidence
should be allowed to establish the extent of injuries suffered.
In the case before us, there was neither a waiver nor a reservation made; nor did the offended party
institute a separate civil action. It follows that evidence should be allowed in the criminal proceedings
to establish the civil liability arising from the offense committed, and the private offended party has the
right to intervene through the private prosecutors.

Chua V CA

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chua V CA

Uploaded by

Copyright:

Available Formats

G.R. No.

150793 November 19, 2004

FRANCIS CHUA, petitioner,

HON. COURT OF APPEALS and LYDIA C. HAO, respondents.

You might also like