G.R. No. 202205
March 6, 2013
FOREST HILLS GOLF & COUNTRY CLUB, Petitioner, vs. ERTE! S"LES "N# TR"#ING, INC., Respondent. DECISION BRION, J.: Before the Court is a petition for review on certiorari, 1 filed under Rule ! of the Rules of Court, assailin" the decision# dated $e%ruar& ##, #'1# and the resolution (dated )a& (1, #'1# of the Court of *ppeals +C* in C*-.R. C/ No. 0#2. Th$ Fac% Petitioner $orest 3ills olf 4 Countr& Clu% +$orest 3ills is a do5estic non-profit stoc6 corporation that operates and 5aintains a "olf and countr& clu% facilit& in *ntipolo Cit&. $orest 3ills was created as a result of a 7 oint venture a"ree5ent %etween 8in"s Properties Corporation +8in"s and $i l-Estate olf and Develop5ent, Inc. +$EDI. *ccordin"l&, *ccordin"l&, 8in"s and $EDI owned the shares of stoc6 of $orest 3ills, holdin" '9 and 2'9 of the shares, respectivel&. In *u"ust 1:, $EDI sold to RS *suncion Construction Corporation +RS*CC one +1 Class ;C; co55on share of $orest 3ills for P1.1 5illion. Prior to the full p a&5ent of the purchase price, RS*CC transferred its interests over $EDIradin", Inc. +/erte=. RS*CC advised $EDI of the transfer and $EDI, in turn, re?uested $orest 3ills to reco"ni@e /erte= as a shareholder. $orest 3ills acceded to the re?uest, and /erte= was a%le to en7o& 5e5%ership privile"es in the "olf and countr& clu%. Despite the sale of $EDIrial Court +R>C dis5issed /erte=he R>C noted that the sale was alread& consu55ated notwithstandin" the non-issuance of the stoc6 certificate. >he issuance of a stoc6
certificate is a collateral 5atter in the consu55ated sale of the share the stoc6 certificate is not essential to the creation of the relation of a shareholder. 3ence, the R>C ruled that the non-issuance of the stoc6 certificate is a 5ere casual %reach that would not entitle /erte= to rescind the sale. Th$ C" R'()*+ /erte= appealed the R>CC. It declared that ;in the sale of shares of stoc6, ph&sical deliver& of a stoc6 certificate is one of the essential re?uisites for the transfer of ownership of the stoc6s purchased.; 11 It %ased its rulin" on Section 2( of the Corporation Code, 1# which re?uires for a valid transfer of stoc6 +1 the deliver& of the stoc6 certificate +# the endorse5ent of the stoc6 certificate %& the o wner or his attorne&-in-fact or other persons le"all& authori@ed to 5a6e the transfer and +( to %e valid a"ainst third parties, the transfer 5ust %e recorded in the %oo6s of the corporation. ithout the issuance of the stoc6 certificate and despite /erte=s full pa&5ent of the purchase price, the share cannot %e considered as havin" %een validl& transferred. 3ence, the C* rescinded the sale of the share and ordered the defendants to return the a5ount paid %& /erte= %& reason of the sale. >he dispositive portion readsF 3ERE$ORE, in view of the fore"oin" pre5ises, the appeal is here%& R*N>ED and the )arch 1, #'': Decision of the Re"ional >rial Court, Branch 121, Pasi" Cit& in Civil Case No. 2 0:1 is here%& RE/ERSED *ND SE> *SIDE. *ccordin"l&, the sale of = = = one +1 Class ;C; Co55on Share of $orest 3ills olf and Countr& Clu% is here%& rescinded and defendants-appellees are here%& ordered to return to /erte= Sales and >radin", Inc. the a5ount it paid %& reason of the said sale.1( +e5phasis ours >he C* denied $orest 3ills< 5otion for reconsideration in its resolution of )a& (1, #'1#. 1 Th$ ar%)$- "r+'$*% $orest 3ills filed the present petition for review on certiorari to assail the C* rulin"s. It ar"ues that rescission should %e allowed onl& for su%stantial %reaches that would defeat the ver& o%7ect of the parties 5a6in" the a"ree5ent. >he dela& in the issuance of the stoc6 certificate could not %e considered as a su%stantial %reach, considerin" that /erte= was reco"ni@ed as, and en7o&ed the privile"es of, a stoc6holder. $orest 3ills also o%7ects to the C* rulin" that re?uired it to return the a5ount paid % & /erte= for the share of stoc6. It clai5s that it was not a part& to the contract of sale hence, it did not receive an& a5ount fro5 /erte= which it would %e o%li"ed to return on account of the rescission of the contract. In its co55ent to the petition, 1! /erte= disa"rees and clai5s that its co5pliance with its o%li"ation to pa& the price and the other fees called into action the defendants co5pliance with their reciprocal o%li"ation to deliver the stoc6 certificate, %ut the defendants failed to dischar"e this o%li"ation. >he defendants three +(-&ear dela& in issuin" the stoc6 certificate 7ustified the rescission of the sale of the share of stoc6. On account of the rescission, /erte= clai5s that 5utual restitution should ta6e
place. It ar"ues that $orest 3ills should %e held solidaril& lia%le with $EDI and $EAI, since the dela& was caused %& $orest 3ills refusal to issue the share of $EDI, fro5 who5 /erte= ac?uired its share. Th$ Co'r%- R'()*+ >he assailed C* rulin"s +a declared the rescission of the sale of one +1 Class ;C; co55on share of $orest 3ills to /erte= and +% ordered the return %& $orest 3ills, $EDI, and $EAI to /erte= of the a5ount the latter paid %& reason of the sale. hile $orest 3ills ar"ues that the rulin" rescindin" the sale of the share is erroneous, its ulti5ate pra&er was for the reversal and settin" aside of the rulin" holdin" it lia%le to return the a5ount paid %& /erte= for the sale. 12 Th$ Co'r% /)* For$% H)((- ra$r '%)/)$. Ruling on rescission of sale is a settled matter *t the outset, we declare that the ?uestion of rescission of the sale of the share is a settled 5atter that the Court can no lon"er review in this petition. hile $orest 3ills ?uestioned and presented its ar"u5ents a"ainst the C* rulin" rescindin" the sale of the share in its petition, it is not the proper part& to appeal this rulin". *s correctl& pointed out %& $orest 3ills, it was not a part& to the sale even thou"h the su%7ect of the sale was its share of stoc6. >he corporation whose shares of stoc6 are the su%7ect of a transfer transaction +throu"h sale, assi"n5ent, donation, or an& other 5ode of conve&ance need not %e a part& to the transaction, as 5a& %e inferred fro5 the ter5s of Section 2( of the Corporation Code. 3owever, to %ind the corporation as well as third parties, it is necessar& that the transfer is recorded in the %oo6s of the corporation. In the present case, the parties to the sale of the share were $EDI as the seller and /erte= as the %u&er +after it succeeded RS*CC. *s part& to the sale, $EDI is the one who 5a& appeal the rulin" rescindin" the sale. >he re5ed& of appeal is availa%le to a part& who has ;a present interest in the su%7ect 5atter of the liti"ation and ) a++r)$4$ or r$')c$ %h$ '+$*%. * part&, in turn, is dee5ed a""rieved or pre7udiced h$* h) )*%$r$%, r$co+*)7$ (a )* %h$ '$c% a%%$r o/ %h$ (a')%, ) )*'r)o'( a//$c%$ %h$ '+$*%, or$r or $cr$$.81: >he rescission of the sale does not in an& wa& pre7udice $orest 3ills in such a 5anner that its interest in the su%7ect 5atter the share of stoc6 is in7uriousl & affected. >hus, $orest 3ills is in no position to appeal the rulin" rescindin" the sale of the share. Since $EDI, as part& to the sale, filed no appeal a"ainst its rescission, we consider as final the C*s rulin" on this 5atter. Ruling on return of amounts paid by reason of the sale modified >he C*s rulin" orderin" the ;return to G/erte=H the a5ount it paid %& reason of the sale; 10 did not specif& in detail what the a5ount to %e returned consists of and it did not also state the e=tent of $orest 3ills, $EDI, and $EAIs lia%ilit& with re"ard to the a5ount to %e returned. >he records, however, show that the followin" a5ounts were paid %& /erte= to $orest 3ills, $EDI, and $EAI %& reason of the saleF a$$ $EDI
#a%$ o/ a$*% $e%ruar& , 1
'ro$ Purchase price for one +1 Class ;C;
"o'*% a) P:0','''.''1
co55on share $EDI For$% H)((
$e%ruar& , 1 F$r'ar 23, 1999
>ransfer fee M$$rh) /$$
$EAI
Septe5%er #!, #'''
Docu5entar& Sta5ps
$EDI
Septe5%er #!, #'''
Notarial fees
P 2','''.''#' 150,000.00#1 P 2,(''.''## P #''.''#(
* necessar& conse?uence of rescission is restitutionF the parties to a rescinded contract 5ust %e %rou"ht %ac6 to their ori"inal situation pri or to the inception of the contract hence, the& 5ust return what the& received pursuant to the contract.# Not %ein" a part& to the rescinded contract, however, $orest 3ills is under no o%li"ation to return the a5ount paid %& /erte= %& reason of the sale. Indeed, /erte= failed to present sufficient evidence showin" that $orest 3il ls received the purchase price for the share or an& other fee paid on account of the sale +other than the 5e5%ership fee which we will deal with after to 5a6e $orest 3ills 7ointl& or solidaril& lia%le with $EDI for restitution. *lthou"h $orest 3ills received P1!','''.'' fro5 /erte= as 5e5%ership fee, it should %e allowed to retain this a5ount. $or three &ears prior to the rescission of the sale, the no5inees of /erte= en7o&ed 5e5%ership privile"es and used the "olf course and the a5enities of $orest 3ills. #! e consider the a5ount paid as sufficient consideration for the privile"es en7o&ed %& /erte=I*AA R*N>S the petition for review on certiorari. >he decision dated $e%ruar& ##, #'1# a nd the resolution dated )a& (1, #'1 # of the Court of *ppeals in C*-.R. C/ No. 0#2 are here%& )ODI$IED. Petitioner $orest 3ills olf 4 Countr& Clu% is *BSOA/ED fro5 lia%ilit& for an& a5ount paid %& /erte= Sales and >radin", Inc. %& reason of the rescinded sale of one +1 Class ;C; co55on share of $orest 3ills olf 4 Countr& Clu%. SO ORDERED.
