THIRD DIVISION

[G.R. No. 219902. January 17, 2018.]

KELLY L. LU YM, VICTOR L. LU YM, AND PATERNO L. LU YM, JR.,

petitioners, vs. DAVID LU, JOHN LU YM, AND JOHNSON ERIC S. LU YM,
respondents.

[G.R. No. 219903. January 17, 2018.]

JOHN LU YM AND LUDO & LUYM DEV. CORP., petitioners, vs. DAVID
LU, respondent .

[G.R. Nos. 219943-44. January 17, 2018.]

DAVID LU, petitioner , vs. PATERNO LU YM, SR., PATERNO L. LU YM,

JR., VICTOR L. LU YM, JOHN LU YM, KELLY L. LU YM, AND LUDO &
LUYM DEVELOPMENT CORPORATION, respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated
January 17, 2018, which reads as follows:
"G.R. No. 219902 (Kelly L. Lu Ym, Victor L. Lu Ym, and Paterno L. Lu Ym,
Jr. vs. David Lu, John Lu Ym, and Johnson Eric S. Lu Ym); G.R. No. 219903 (John
Lu Ym and Ludo & LuYm Dev. Corp. vs. David Lu); and G.R. Nos. 219943-44
(David Lu v. Paterno Lu Ym, Sr., Paterno L. Lu Ym, Jr., Victor L. Lu Ym, John Lu
Ym, Kelly L. Lu Ym, and Ludo & LuYm Development Corporation). — Before this
Court are consolidated petitions for review under Rule 45 of the Rules of Court, which
commonly assail the December 16, 2014 Consolidated Decision 1 and July 16, 2015
Consolidated Resolution 2 of the Court of Appeals (CA) in CA-G.R. CV No. 81163 and
CA-G.R. SP No. 08034 entitled "David Lu, et al. v. Paterno LuYm, Sr., et al." and
"David Lu v. Kelly LuYm, et al."

Factual Antecedents

The parties in this case are shareholders, directors and/or officers of Ludo &
LuYm Development Corporation (LLDC), a domestic corporation engaged in the
business of real estate, with a capital stock of P100,000,000.00 divided into
1,000,000.00 shares at par value of P100.00 per share. 3
 On November 18, 1997, the LLDC Board of Directors issued a Resolution
authorizing the issuance of the company's 600,000 unsubscribed and unissued shares
of stock at par value. Paterno Lu Ym, Sr. (Paterno, Sr.) and his children, Paterno, Jr.,
Victor, John, and Kelly, all surnamed LuYm (collectively, Lu Ym father and sons),
availed of this issuance, thus, increasing their shareholdings in the company.
One of the directors of LLDC, David Lu, opposed the board's action since it led to
a substantial increase in Lu Ym father and son's stockholdings and a drastic decrease
in his and the other stockholders' shares in the company. Accordingly, on August 14,
2000, David and three other plaintiffs (Rosa Go, Silvano Lu Do, and CL Corporation;
collectively, David, et al.) instituted a complaint 4 against Paterno, Sr., Paterno, Jr.,
Victor, John, Kelly and LLDC 5 with the Regional Trial Court of Cebu City for the
declaration of nullity of the share issue, receivership, and dissolution of LLDC. The case
was raffled to Branch 5 of the Cebu City Regional Trial Court (RTC) and docketed as
CEB-22502.

CEB-25502

Lu Ym father and sons moved for the dismissal of the case on procedural
grounds, viz.: plaintiffs allegedly failed to attach a valid certification against forum
shopping since only David signed the same, and the failure of the parties to undergo
proceedings before the Lupong Tagapamayapa.
The RTC denied the motion to dismiss in a Resolution issued on December 4,
2000 and directed Lu Ym father and sons to file their answer. Defendants' motion to
reconsider the December 4, 2000 Resolution was likewise denied by the trial court.
On January 24, 2001, David, et al. filed an urgent motion to appoint a receiver,
averring that, since the filing of the complaint, Lu Ym father and sons have been:
distributing dividends based on their new shareholdings; planning to sell the company's
assets and to distribute the proceeds thereof in proportion to the new shareholdings;
entering, or are about to enter, into contracts that would result in the company's
indebtedness; and attempting to enter into self-dealing transactions.
The RTC granted David, et al.'s motion in a Resolution dated February 16, 2001
and placed LLDC under receivership pendente lite. On March 2, 2001, the RTC issued
orders appointing Edward Du and Luis Canete as LLDC's receivers.
Following the denial of their motion to dismiss, Lu Ym father and sons filed their
Answer with Compulsory Counterclaim, 6 insisting that the shares were validly issued
pursuant to the November 18, 1997 Board Resolution. They further averred, among
others, that David, et al. were duly notified of the issuance of the unsubscribed and
unissued shares to enable them to exercise their pre-emptive rights to avail of the
issued stocks, but they failed to do so without justifiable cause within the given period.
Lu Ym father and sons maintained that, contrary to David, et al.'s allegations, the latter's
shareholdings decreased due to their failure to exercise and/or willful abandonment of
their pre-emptive rights.
Lu Ym father and sons thereafter assailed the RTC's Resolutions denying their
motion to dismiss and granting David, et al.'s motion to appoint a receiver, as well as
the order appointing the two receivers, in a petition for certiorari before the CA,
docketed as CA-G.R. CV No. 64523.

CA-G.R. CV No. 64523

In a Decision dated December 20, 2001, the CA dismissed the complaint for the
failure of the other plaintiffs to sign the certificate of non-forum shopping. The appellate
court likewise annulled and set aside the questioned resolutions, thus:
WHEREFORE, the petition being impressed with merit is hereby
GRANTED. The challenged Order dated 04 December 2000, having been
issued with grave abuse of discretion amounting to excess of jurisdiction, is
hereby REVERSED, and the inceptive Complaint is DISMISSED. The three (3)
other impugned Orders are hereby ANNULLED and SET ASIDE.
SO ORDERED.
David, et al. questioned the CA's December 20, 2001 Decision in a petition for
review before this Court, docketed as G.R. No. 153690.
Pending resolution of G.R. No. 153690, the RTC issued an Order on August 19,
2002 declaring, inter alia , the continuance of the receivership.
The case was thereafter re-raffled to Branch 11 of the Cebu RTC, a Special
Commercial Court (SCC). The RTC issued an Order treating the case as an intra-
corporate dispute and docketing it as SRC Case No. 021-CEB. Thereafter, the parties
were ordered to amend their respective pleadings to conform to the requirements of
Sections 4 (2) 7 and 6 (7), 8 Rule 2 of the Interim Rules of Procedure Governing Intra-
Corporate Controversies (Interim Rules).
Lu Ym father and sons moved to lift the receivership of LLDC. David, et al.
opposed the motion and instituted a petition for certiorari and prohibition with urgent
application for a temporary restraining order (TRO) and writ of preliminary injunction
with the CA, docketed as CA-G.R. SP No. 73383. The petition sought to enjoin the RTC
from hearing Lu Ym father and sons' motion to lift the receivership and from conducting
any proceedings in relation thereto.

CA-G.R. SP No. 73383

The CA issued a TRO enjoining the RTC from hearing the motion to suspend the
receivership proceedings, and, consequently, issued a Decision 9 on February 27, 2003,
the dispositive portion of which states:
WHEREFORE, the instant Petition for Certiorari and Prohibition with
Urgent Application for Temporary Restraining Order and Writ of Preliminary
Injunction is hereby GRANTED. Public respondent is hereby ordered to desist
from conducting any proceeding relating to the receivership over Lu Do and Lu
Ym Development Corporation.
SO ORDERED.
The CA's February 27, 2003 Decision in CA-G.R. SP No. 73383 was questioned
by Lu Ym father and sons in a petition for review before this Court, docketed as G.R.
No. 157381. In the interim, David filed a motion 10 to admit his Amended Complaint 11
on March 21, 2003, detailing supervening acts and events from when the original
Complaint was filed that evince acts of mismanagement and fraudulent transactions by
Lu Ym father and sons that are detrimental to the interests of the other stockholders and
the corporation.
In a Resolution 12 issued on July 18, 2003, the RTC admitted the Amended
Complaint and directed Lu Ym father and sons to file their response thereto. The latter
moved for the suspension of the proceedings before the trial court and the period to file
their amended answer due to the pendency of G.R. No. 153960. The RTC denied the
motion and set the case for pre-trial.
Due to the denial of the afore-stated motion, Lu Ym father and sons moved 13 to
dismiss, or in the alternative, to re-raffle the case. The RTC, by its Order 14 dated
January 26, 2004: a) denied Lu Ym father and sons' motion to dismiss for being a
prohibited pleading in intra-corporate disputes; b) suspended the pre-trial; and c)
directed the parties to submit their respective memoranda instead.

Ruling of the RTC

On March 1, 2004, the RTC 15 rendered a Decision resolving SRC Case No. 021-
CEB on the merits based on the pleadings submitted by the parties and without
conducting a trial. In substance, the RTC: a) annulled the issuance of LLDC's 600,000
shares of stock to Lu Ym father and sons; b) ordered the dissolution of LLDC and the
liquidation of its assets; and c) created a management committee (Man Com) to take
over LLDC, viz.:
WHEREFORE
Order
Ruling No. 1
A Management Committee to manage Ludo and LuYm Development
Corporation, is hereby created under Section 6 (d) of PD 902-A, as amended.
The receivership, non-functioning for lack of quorum since the murder of
Atty. Edward Du, shall formally cease and all records shall be turned over to the
management committee.
The LudoDev management committee shall be composed of three (3)
members, who shall elect a chairman from among themselves and act by a
majority of (2).
The Court hereby appoints Mr. Luis Canete, one of the most
distinguished accounting and finance practitioners and corporate planners in
the Philippines, as its own nominee. Plaintiffs and defendants may nominate
one (1) member each to the management committee, and may replace their
respective nominees at will, subject to the veto power of the court, which shall
appoint such nominees only if it is satisfied that the qualifications for members
of the management committee set forth under Rule 5, Section 4 of the Interim
Rules are met. The court may, motu proprio, appoint additional members should
the plaintiffs or defendants fail to submit their respective nominations within
seven (7) days from receipt of this Order.
The LudoDev management committee shall have the following powers
enumerated in Section 6 (d) of PD 902-A (as amended):
xxx xxx xxx
In addition to the foregoing, the LudoDev management committee shall
have all the plenary powers under Rule 9, Section 5 of the Interim Rules.
The present board, management, officers, employees, and agents of
LudoDev shall henceforth cease and desist from in any manner acting for and in
behalf of or within the corporation. They shall no longer enter into contracts or
modify or revoke the same. They shall no longer sign checks or in any manner
operate bank accounts. They shall no longer collect rentals or any other
revenues and shall not in any manner whatsoever deal with corporate assets,
properties, documents and papers. They shall no longer hire and fire or in any
manner supervise personnel. All of the foregoing are now powers and
prerogatives solely to be exercised by the management committee. Bankers
and other persons holding corporate funds are hereby directed to take
instructions in regard to those funds only from the management committee. No
further orders addressed to any specific entity or individual shall be necessary,
disobedience after notice of this general order being sufficient to hold the
disobedient person (natural or juridical) in contempt of this court.
Ruling No. 2
The defendants are hereby divested of the 600,000 shares they issued to
themselves and related parties pursuant to the LudoDev board resolution of
November 18, 1997, and said shares are hereby cancelled. The divestment and
cancellation of the 600,000 shares are deemed executed by virtue of this order
without need for the surrender of the stock certificates or any further
documentation or act, as authorized by Rule 39, Sec. 10 (a) of the Rules of
Court, which says:
xxx xxx xxx
Ruling No. 3
Pursuant to the powers vested in the court by Sec. 6(d) of PD 902-A (as
amended), and in light of defendants' brazen, "in-your-face," continuing and
unrepentant fraud and plunder, the court hereby DISSOLVES Ludo and LuYm
Development Corporation. The management committee is hereby directed to
LIQUIDATE the corporation under court supervision. The P60 Million paid by
defendants and related parties for the 600,000 cancelled shares shall be
returned to them after payment of corporate debts.
Ruling No. 4
Pursuant to the powers vested in it by Section 6 (d) of PD 902-A (as
amended), the management committee is hereby directed to (a) review all
transactions and actions of the previous management and board of directors, (b)
overrule or revoke those that have been detrimental to the corporation, (c) cause
thorough legal and financial audits of Ludo and LuYm Development
Corporation, and (d) file appropriate civil and/or criminal cases to recover
corporate assets malversed or misappropriated.
Ruling No. 5
The provisions of Rule 1 Sec. 4 of the Intracorporate Rules shall be
observed. It says,
 "Sec. 4. Executory nature of decisions and orders. —
All decisions and orders issued under these Rules shall
immediately be executory. No appeal or petition taken therefrom
shall stay the enforcement or implementation of the decision or
order, unless restrained by an appellate court. Interlocutory orders
shall not be subject to appeal.
Damages, Attorney's fees, and Costs
No pronouncement as to damages, attorney's fees, and costs. x x x
Aggrieved, Lu Ym father and sons appealed the judgment to the CA, docketed as
CA-G.R. CV No. 81163. In view of the executory nature of the judgment, they likewise
applied for the issuance of a TRO and/or writ of preliminary injunction on March 30,
2004 to enjoin the RTC, David, and the Man Com from executing the March 1, 2004
Decision pending resolution of their appeal. They further filed an Urgent Motion with the
RTC to disqualify the nominees for the members of the Man Com.

CA-G.R. CV No. 81163

The CA, in a Resolution dated September 6, 2004, denied the application for
injunctive relief. Lu Ym father and sons thereafter moved for the reconsideration of the
adverted Resolution, questioning, in addition, the sufficiency of the docket fees paid by
David before the RTC. On December 8, 2005, the CA denied the motion.
Accordingly, Lu Ym father and sons challenged the CA's resolutions denying their
application for injunctive relief in a special civil action for certiorari and prohibition
before this Court, docketed as G.R. No. 170889.
The three cases stemming from CEB-22502/SRC Case No. 021-CEB that
reached this Court were consolidated and docketed as G.R. Nos. 153690, 157381, and
170889, as follows:
1) In G.R. No. 153690, David assailed the CA's December 20, 2001 Decision
and May 28, 2002 Resolution in CA-G.R. SP No. 64523 dismissing Civil Case No. CEB-
25502, then pending before Branch 5 of the Cebu City RTC, due to the procedural
infirmities of the complaint.
2) In G.R. No. 157381, Lu Ym father and sons and LLDC questioned the CA's
February 27, 2003 Resolution ordering Branch 11 of the Cebu RTC to desist from
conducting any proceeding relating to the receivership of LLDC.
3) In G.R. No. 170889, Lu Ym father and sons prayed for the reversal and
setting aside of the CA's September 6, 2004 and December 8, 2005 Resolutions denying
their application for injunctive relief to enjoin the enforcement of the March 1, 2004
Decision of Branch 12 of the Cebu RTC.
By Resolution dated January 23, 2006, this Court, in G.R. No. 170889, granted Lu
Ym father and sons' plea for a TRO and issued a Status Quo Order was issued, as
follows:
NOW, THEREFORE, you (respondents), your officers, agents,
representatives, and/or persons acting upon your orders or, in your place or
stead, are hereby ENJOINED from implementing the resolutions dated
 September 6, 2004 and December 8, 2005 of the Court of Appeals, Cebu City
both issued in CA GR CV No. 81163 entitled "Paterno Lu Ym, Sr., et al. vs.
David Lu, et al." which denied the application of herein petitioners (defendant-
appellants below) for the issuance of a writ of preliminary injunction and/or
temporary restraining order to restrain herein respondents (plaintiff-appellees
below), the management committee and its agents from implementing the
decision dated March 1, 2004 of the Regional Trial Court, Br. 12. Cebu City in
SRC Case No. 021-CEB entitled "David Lu vs. Paterno Lu Ym, Sr., et al. "
which, among others, ordered the dissolution of the LuYm Development
Corporation and created a management committee directed to liquidate the
corporation under court supervision; and ORDERED, COMMANDED and
DIRECTED to maintain the status quo effective today and until further orders
from this Court. 16
Meanwhile, the corporate life of LLDC ended on September 26, 2006. Hence, on
August 20, 2008, the LLDC Board issued Resolution No. 036, S. 2008 appointing
Timothy Ryan S. Lu Ym (Timothy) and Johnson Eric S. Lu Ym (Johnson) as trustees for
the purpose of liquidating the corporation.

G.R. Nos. 153690, 157381, and 170889

In a Decision 17 dated August 26, 2008, this Court disposed of the consolidated
petitions in this wise:
WHEREFORE, premises considered, the petitions in G.R. Nos. 153690
and 157381 are DENIED for being moot and academic; while the petition in
G.R. No. 170889 is DISMISSED for lack of merit. Consequently, the Status Quo
Order dated January 23, 2006 is hereby LIFTED.
The Court of Appeals is DIRECTED to proceed with CA-G.R. CV No.
81163 and to resolve the same with dispatch.
SO ORDERED.
Lu Ym father and sons moved for the reconsideration of the above-cited Decision,
which this Court granted in a Resolution dated August 4, 2009, viz.:
WHEREFORE, in view of the foregoing, the Motion for Reconsideration
filed by John Lu Ym and Ludo & LuYm Development Corporation is GRANTED.
The Decision of this Court dated August 26, 2008 is RECONSIDERED and
SET ASIDE. The Complaint in SRC Case No. 021-CEB, now on appeal with
the Court of Appeals in CA-G.R. CV No. 81163, is DISMISSED.
All interlocutory matters challenged in these consolidated petitions are
DENIED for being moot and academic.
SO ORDERED.
David filed several motions seeking reconsideration of the above Resolution and
for the referral of the case to the Court En Banc . Acting on the motions, this Court
issued a Resolution 18 on February 15, 2011 reinstating its August 26, 2008 Decision:
WHEREFORE, the assailed Resolutions of August 4, 2009 and
September 23, 2009 are REVERSED and SET ASIDE. The Court's Decision of
August 26, 2008 is REINSTATED.
 The Court of Appeals is DIRECTED to resume the proceedings and
resolve the remaining issues with utmost dispatch in CA-G.R. CV No. 81163.
SO ORDERED.
On May 3, 2012, John and LLDC filed an urgent motion with a plea, yet again, for
injunctive relief to enjoin the RTC, David, the Man Com and/or their representatives
from executing the March 1, 2004 decision pending the final resolution of their appeal.
The CA denied the motion in a Resolution issued on June 28, 2012.
Kelly, Victor, and Paterno, Jr. (Kelly, et al.), meanwhile, filed a Very Urgent
Reiterative Motion to Remove Members of the Management Committee on May 10,
2012, claiming that two members of the Man Com have shown bias and partiality in
favor of David.
Subsequently, in a sudden turnabout, David moved to withdraw his complaint.
While all the defendants-appellants, as well as LLDC, did not interpose any objection
thereto, Kelly, et al. moved to remand the case to the trial court for accounting by the
Man Com and Trustees, and for the liquidation of the assets of LLDC. 19
The CA, in an Omnibus Resolution issued on October 25, 2012, held the
resolution of the motion to withdraw the complaint in abeyance upon noting that the
same is subject to several conditions of the parties. It then required the parties to
submit a compromise agreement setting forth their respective conditions. Anent Kelly,
et al.'s motions, the CA likewise deferred the resolution of the motion to remand the
case to the RTC for accounting and liquidation. Their motion to remove the members of
the Man Com, however, was denied by the court a quo, stating that their rights are fully
protected by their representative in the Man Com. 20
The parties, except for Kelly, et al., moved to reconsider the October 25, 2012
Resolution.
On December 7, 2012, Kelly, et al. filed an Extremely Urgent Application/Motion
for Temporary Restraining Order (TRO) and Writ of Preliminary Injunction, averring that
David, in connivance with John, Douglas Lu Ym (Douglas), and Timothy Ryan S. Lu Ym,
the latter being one of the appointed trustees of LLDC, have been scheming to illegally
transfer LLDC's properties to his and Douglas' names and their dummy corporations. In
support thereof, Kelly, et al. submitted a copy of the LLDC Stockholders' Resolution 21
dated May 29, 2012, wherein the corporation resolved to convey and assign to David
and Douglas properties of the corporation in consideration of their interests and financial
claims in LLDC.
On April 25, 2013, the CA issued an Omnibus Resolution, 22 the fallo of which
states:
WHEREFORE, the Court hereby resolves to DENY the following
motions:
1. Plaintiff-Appellees' Motion for Leave to Withdraw Complaint;
2. Defendant-Appellant Ludo & LuYm Development Corporation
(LudoDev)'s Motion for Leave to File and Admit Motion (For the Release of
Funds to LudoDev) as well as the Motion (For the Release of Funds to
LuDoDev);
3. Plaintiffs-Appellees' Motion to Partially Reconsider the Omnibus
 Resolution dated 25 October 2012;
4. Defendants-Appellants John Lu Ym and Ludo & LuYm
Development Corporation's Motion for Reconsideration (To the Omnibus
Resolution dated 25 October 2012);
5. Defendants-Appellants John Lu Ym and Ludo & LuYm
Development Corporation's Motion for Early Resolution (seeking an early
resolution of their motion for release of funds and the motion to withdraw
complaint);
6. Defendants-Appellants Kelly Lu Ym and Victor Lu Ym and
Paterno Lu Ym Jr.'s Motion to Remand Case to the Trial Court for Accounting by
the Management Committee and Trustee and for the Liquidation of the Assets of
Ludo & Lu Ym Development Corporation;
7. Ludo & Lu Ym Foundation, Inc., Crane Holdings Corporation, and
Maria Elvira Kaye G. Lu Ym's Urgent Motion for Leave to Intervene and Motion-
in-Intervention and Opposition; and
8. Defendants-Appellants John Lu Ym and Ludo & Lu Ym
Development Corporation's Motion for Partial Reconsideration of the 15
February 2013 Resolution.
Further, the Court hereby issues a Writ of Preliminary Injunction
enjoining and restraining Messrs. David Lu, John Lu Ym, Timothy Ryan S. Lu
Ym, and Douglas Lu Ym, their agents, representatives or assignees or any
person acting for and in their behalf or under their direction from disposing,
distributing and/or transferring any of the remaining properties still in the name
of Ludo & LuYm Development Corporation. This Writ of Preliminary Injunction
also enjoins Messrs. David Lu, John Lu Ym, Timothy Ryan S. Lu Ym, and
Douglas Lu Ym, their agents, representatives or assignees or any person acting
for and in their behalf or under their direction from executing and signing any
document, deed or instrument that disposes, distributes and/or transfers any of
the remaining properties still in the name of Ludo & LuYm Development
Corporation. The Movants are required to post an injunctive bond in the amount
of Ten Million Pesos (Php100,000,000.00) within ten (10) days from notice
hereof.
xxx xxx xxx
SO ORDERED.
While granting the injunctive relief sought by Kelly, et al., the CA denied their
motion to remand the case to the trial court for accounting considering that it has yet to
act on the appeal on its merits. The CA likewise denied David's motion to withdraw his
complaint after the parties' failure to submit their compromise agreement.
The CA thereafter submitted the case for judgment and resolved: a) to deny the
motions for partial reconsideration filed by the parties of the CA's April 25, 2013
Resolution; b) that no ground exists to recall the writ of preliminary injunction it issued
against David and John, et al.; and c) to deny David's motion for leave to withdraw
complaint. 23
On September 3, 2013, Kelly, et al. filed with the CA an Extremely Urgent
Omnibus Motion 24 a) to declare null and void the May 29, 2012 Stockholders'
Resolution signed by David, John, and Timothy; b) to declare null and void the
distribution of liquidating dividends through deeds of conveyance executed by Timothy
involving the properties of LLDC, purportedly in custodialegis; c) to declare null and void
the deeds of absolute sale of the corporate properties executed by David and Douglas;
and d) to declare in contempt of court John, David, Johnson, Timothy, Douglas, Eusebio
Tanco, and the members of the Man Com. The Extremely Urgent Motion was met with
opposition from John and LLDC. The motion alleged that due to the May 29, 2012
Stockholders' Resolution, numerous deeds of conveyance involving corporate properties
were executed between Timothy, David, and Douglas while the appeal is still pending.
Kelly, et al. then filed another Omnibus Motion on October 11, 2013, praying: 1) to
change the members of the Man Com in view of their inaction on the alleged illegal
conveyance of LLDC properties; 2) to direct John to account for corporate funds; and 3)
to direct all tenants of LLDC to deposit all rent payments with a bank supervised by the
CA.
On November 11, 2013, David filed a petition for indirect contempt against Kelly,
et al., averring that the latter's filing of countless motions constitutes a defiance of the
CA's Omnibus Resolutions dated October 25, 2012 and April 25, 2013, and Resolution
dated July 2, 2013, docketed as CA-G.R. SP No. 08034.

Ruling of the CA

The CA rendered its assailed Consolidated Decision in CA-G.R. CV No. 81163

and CA-G.R. SP No. 08034 on December 16, 2014 with the following dispositive portion:
WHEREFORE, the Decision dated 1 March 2004 rendered by the
Regional Trial Court, Br. 12, Cebu City in SRC Case No. 021-CEB (formerly
docketed as Civil Case No. CEB-25502) is hereby REVERSED and SET
ASIDE. This case is REMANDED to the Special Commercial Court. Let the
records of this case be transmitted to the said court with dispatch. The Special
Commercial Court is hereby DIRECTED to hear the case and resolve the same
within sixty (60) days from notice. The petition in CA G.R. SP No. 08034 is
DISMISSED.
SO ORDERED.
In ruling thus, the court a quo observed that the RTC rendered its March 1, 2004
Decision based on David's complaint, amended complaint, pre-trial brief, case
memorandum, as well as affidavits and exhibits in support of his pleadings. On the other
hand, the trial court only considered Lu Ym father and sons' Answer to the original
Complaint, stating that the latter had no pre-trial brief, no counter-affidavits, no counter-
exhibits. 25 It added that the trial court did not endeavor to gather more facts, thru the
conduct of a full-blown hearing, with respect to David's claim that Lu Ym father and
sons premeditated to take control of the corporation by issuing the subject 600,000
shares and the factual necessity for the Man Com. The appellate court further found that
the trial court merely re-echoed the allegations of David in his Amended Complaint
allegedly showing how Lu Ym father and sons are dissipating the assets or diverting the
funds of LLDC.
The CA, therefore, concluded that the factual basis for the annulment of the share
issuance and receivership was not sufficiently established, and hence, it reversed and
set aside the RTC's judgment. Despite the reversal, the CA deemed it proper to remand
the case to the trial court for further proceedings.
As regards the petition for indirect contempt that David filed against Kelly, et al.,
the same was likewise dismissed by the CA.
Aggrieved, the parties separately moved for the reconsideration of the adverted
Consolidated Decision. In its Joint Resolution dated July 16, 2015, the CA disposed of
the motions in this wise:
WHEREFORE, the following are DENIED for lack of merit:
(1) Motion for Leave to File Motion to Cancel Lis Pendens with
attached Motion to Cancel Lis Pendens filed by the International
Buddhist Progress Society of Manila, Inc.
(2) Second Motion for the Release of Funds to Ludo & LuYm
Development Corporation filed by defendant-appellant John L.
LuYm and Ludo & LuYm Development Corporation.
(3) Motion for Partial Reconsideration of the December 16, 2014
Consolidated Decision filed by the defendant-
appellants/respondents Kelly, et al.
(4) Motion for Reconsideration of the December 16, 2014
Consolidated Decision filed by the plaintiff-appellee/petitioner
David, thru counsel.
(5) Motion for Partial Reconsideration of the December 16, 2014
Consolidated Decision filed by the defendant-appellants John L.
LuYm and Ludo & LuYm Development Corporation, thru counsel.
SO ORDERED.
Petitioners now come before this Court, seeking redress from the adverted
Consolidated Decision and Consolidated Resolution of the court a quo.

G.R. No. 219902 (Kelly L. Lu Ym, Victor L. Lu Ym, and Paterno L. Lu Ym, Jr. vs.
David Lu, John Lu Ym, and Johnson Eric S. Lu Ym)

Kelly, et al., in the main, bemoans the CA's failure to squarely address the issues
raised in their September 2, 2013 and October 9, 2013 Omnibus Motions (on the illegal
conveyances and misappropriation of LLDC assets by the trustees) in its Consolidated
Decision. The said issues, according to them, were merely addressed by the court a
quo in passing in the Consolidated Resolution by ruling that the same should be
resolved in an independent action. Disagreeing with the CA, they insist that the
jurisdiction to rule on the issues lies with the court a quo. They further insist that since
the case has not yet been resolved with finality, no distribution of liquidating dividends
should have been made by the trustees.
Hence, Kelly, et al. pray that, in the event that the case is remanded to the lower
courts, they be allowed to present evidence in support of their allegation of illegal
distribution of assets, and that the trial court be ordered to liquidate LLDC considering
that its corporate term had long ended. They further ask that Johnson and the Man Com
be ordered to account for LLDC funds that were entrusted to them, and for John, David,
and Johnson to be cited in contempt of court.

G.R. No. 219903 (John Lu Ym and Ludo & Lu Ym Dev. Corp. vs. David Lu)
G.R. No. 219903 (John Lu Ym and Ludo & Lu Ym Dev. Corp. vs. David Lu)

John, et al., on the other hand, assail the authority of the RTC to take cognizance
of the case based on the following premises: First , they allege that the charges of fraud
which David accuses Lu Ym father and sons to have committed were not supported by
the required factual allegations in the complaint. In the absence of any specific factual
allegation of fraudulent devices and schemes that the board of directors or corporate
officers employed, John, et al. contend that the RTC does not acquire jurisdiction over
the subject matter. 26 Second , the real party-in-interest in the present case is LLDC,
since it is bound to suffer in case corporate funds are dissipated and the purported
fraudulent transactions of John with third parties are proved. David is merely suing in
his capacity as stockholder to vindicate the rights of the corporation, which is in the
nature of a derivative suit. 27 He, however, failed to comply with the requirements of a
derivative suit under Sec. 1, Rule 8 of the Interim Rules.
John, et al. likewise question David's standing to institute the complaint, averring
that the annulment of the share issuances essentially assails the validity of the
stockholders' subscription agreement. With respect to the validity of the share issuance,
they counter that the same had not been attended by any irregularity, and that David
was aware of the stock offering but only failed to exercise his right of pre-emption.
Finally, considering that the corporate term of LLDC had ended and the
corporation had already been dissolved, John, et al. maintain that the authority given by
law to liquidate the properties of the corporation is properly lodged with the trustees
appointed and the matter of the creation of a Man Com is now moot and academic. 28

G.R. Nos. 219943-44 (David Lu v. Paterno Lu Ym, Sr., Paterno L.

Lu Ym, Jr., Victor L. Lu Ym, John Lu Ym, Kelly L. Lu Ym, and
Ludo & Lu Ym Development Corporation)

David, for his part, questions the CA's decision to remand the case to the trial
court for further reception of evidence as it will serve to delay resolution of the instant
case which has been awaiting resolution for over 15 years. Hence, David prays for the
final resolution of the instant case based on the merits. With respect to the dismissal of
the charge of indirect contempt against Kelly, et al., David laments that the CA merely
passed upon the issue without any explanation for the denial thereof.

Issues

Stripped of the non-essentials, the main issue for the resolution of this Court can
be narrowed down into:
1. Whether or not the RTC, acting as a special commercial court, has
jurisdiction over the complaint.
2. Whether or not David has the personality to institute the action.
3. Whether or not the RTC could have validly decided the case on the merits
without conducting a trial.

Ruling of the Court

 Republic Act No. 8799 (RA 8799), 29 in relation to Sec. 5 of Presidential Decree
(PD) No. 902-A, 30 confers jurisdiction to the RTCs, designated by this Court as SCCs,
over intra-corporate disputes. Concomitantly, this Court promulgated A.M. No. 01-2-04-
SC, or the Interim Rules of Procedure for Intra-Corporate Controversies (Interim Rules),
which took effect on April 1, 2001. Rule I thereof enumerates the circumstances with
more particularity where the jurisdiction of the RTCs may be invoked:
SECTION 1. (a) Cases Covered — These Rules shall govern the
procedure to be observed in civil cases involving the following:
(1) Devices or schemes employed by, or any act of, the board of
directors, business associates, officers or partners, amounting to fraud or
misrepresentation which may be detrimental to the interest of the public and/or
of the stockholders, partners, or members of any corporation, partnership, or
association;
(2) Controversies arising out of intra-corporate, partnership, or
association relations, between and among stockholders, members, or
associates; and between, any or all of them and the corporation, partnership, or
association of which they are stockholders, members, or associates,
respectively;
(3) Controversies in the election or appointment of directors, trustees,
officers, or managers of corporations, partnerships, or associations;
(4) Derivative suits; and
(5) Inspection of corporate books. (Emphasis supplied)
In addition to the grounds stated in the Interim Rules and Sec. 5 of PD 902-A,
jurisprudence instructs that two conditions must be satisfied for an action to be
considered as an intra-corporate dispute: the relationship test and the nature of
controversy test.
In Medical Plaza Makati Condominium Corporation v. Robert H. Cullen , 31 this
Court lengthily explained:
In determining whether a dispute constitutes an intra-corporate
controversy, the Court uses two tests, namely, the relationship test and the
nature of the controversy test.
An intra-corporate controversy is one which pertains to any of the
following relationships: (1) between the corporation, partnership or association
and the public; (2) between the corporation, partnership or association and the
State insofar as its franchise, permit or license to members of the Man Com are
considered as officers of the court who are subject to its control and supervision.
Consequently, the Court may issue orders to its members to be apprised of the
developments and status of the corporation: is concerned; (3) between the
corporation, partnership or association and its stockholders, partners,
members or officers; and (4) among the stockholders, partners or
associates themselves. Thus, under the relationship test, the existence of any
of the above intra-corporate relations makes the case intra-corporate.
Under the nature of the controversy test, "the controversy must not only
be rooted in the existence of an intra-corporate relationship, but must as well
pertain to the enforcement of the parties' correlative rights and obligations
 under the Corporation Code and the internal and intra-corporate
regulatory rules of the corporation." In other words, jurisdiction should be
determined by considering both the relationship of the parties as well as the
nature of the question involved. (Emphasis supplied)
Succinctly stated, under the relationship test, an intra-corporate controversy
arises when the conflict is between the corporation, partnership or association and its
stockholders, partners, members or officers. 32 While under the nature of the
controversy test, the incidents of that relationship must also be considered for the
purpose of ascertaining whether the controversy itself is intra-corporate. 33
The present case certainly satisfies the relationship test since David and Lu Ym
father and sons are all stockholders of LLDC. Anent the nature of the controversy, the
issues involved herein pertain to the parties' rights and obligations under Batas
Pambansa Blg. 68, or the Corporation Code of the Philippines (Corporation Code), and
fundamentally relate to David's status as a stockholder, his alleged divestment of his
stockholdings in LLDC, and the corporate fraud purportedly perpetrated by the
corporation's directors and officers that led to the dissipation of company assets.
Applying the two tests, We rule that this case is in the nature of an intra-corporate
controversy falling under Sec. 1 (a) (2) of the Interim Rules and properly cognizable by
the RTC.
Closely intertwined with the question of jurisdiction is the personality of David to
institute the complaint.
A stockholder suing on account of wrongful or fraudulent corporate actions
(undertaken through directors, associates, officers, or other persons) may sue in any of
three (3) capacities: as an individual, as part of a group or specific class of
stockholders, or as a representative of the corporation. 34
An individual suit may be instituted by a stockholder either against a) another
stockholder for wrongs committed against him personally, and to determine their
individual rights (individual suit between stockholders); orb) a corporation since the
latter is a separate juridical personality, which by its own may be sued. 35
On the other hand, a suit filed in the stockholder's capacity as a representative of
the corporation, commonly known as a derivative suit, is an action filed by stockholders
to enforce a corporate action. 36 In Villamor v. Umale , 37 We explained that a derivative
suit concerns "a wrong to the corporation itself. The real party in interest is the
corporation, not the stockholders filing the suit, and the latter are technically nominal
parties but are nonetheless the active persons who pursue the action for and on behalf
of the corporation."
It is settled doctrine that the nature of an action, as well as which court or body
has jurisdiction over it, is determined based on the allegations in the complaint of the
plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or some
of the claims asserted therein. 38 In addition to being conferred by law, the jurisdiction of
a court or tribunal over the case is determined by the allegations in the complaint and
the character of the relief sought. 39
Concededly, the allegations, causes of action, and reliefs sought in the Complaint
(such as the alleged imminent dissipation of corporate assets and funds, entering into
transactions grossly disadvantageous to the corporation, self-dealing transactions, and
abuse of powers by Lu Ym father and sons as majority stockholders, receivership, and
dissolution of the corporation) indicate that the instant action is in the nature of a
derivative suit since it is LLDC which stands to suffer due to these acts. Hence,
compliance with Sec. 1, Rule 8 of the Interim Rules is necessary, to wit:
Section 1. Derivative action. — A stockholder or member may bring
an action in the name of a corporation or association, as the case may be,
provided, that:
(1) He was a stockholder or member at the time the acts or
transactions subject of the action occurred and at the time the action was filed;
(2) He exerted all reasonable efforts, and alleges the same with
particularity in the complaint, to exhaust all remedies available under the
articles of incorporation, by-laws, laws or rules governing the corporation or
partnership to obtain the relief he desires;
(3) No appraisal rights are available for the act or acts complained of;
and
(4) The suit is not a nuisance or harassment suit.
It is not shown that David complied with all of these requirements prior to the
filing of the complaint. He failed to state with particularity in both the original and
Amended Complaint that he had exerted all reasonable efforts to exhaust all remedies
available under the articles of incorporation, by-laws, or any laws or rules governing the
corporation to obtain redress from the acts complained of.
The foregoing notwithstanding, David's allegations in both the original and
Amended Complaints clearly show that he is suing in both his capacities as an
individual and a representative of the corporation:
5. Prior to the acts complained of, Defendants Lu Ym father and sons
owned 29.99% of LuDo & LuYm Development Corporation, with a value of
P749,750,000.00. After the acts complained of, Defendants Lu Ym father and
sons, together with their spouses, children and holding companies, owned
73.48% (an absolute majority) of LuD & LuYm Development Corporation, with a
value of P1,837,000,000 — an increase of P1,087,250,000. This increase in
Defendants LuYm father and sons' voting power and in the value of their
holdings was at the expense of all the other stockholders of the defendant
corporation, who sustained a corresponding reduction of their holdings
amounting to P1,087,250,000. 40
xxx xxx xxx
8. Allegedly pursuant to a board resolution passed on November 18,
1997, Defendants Lu Ym father and sons issued to themselves and their
spouses, children, and holding companies, 600,000 unsubscribed/unissued
shares of LuDo & LuYm Development Corporation, for a capital contribution in
the amount of P60 million, the par value. The real value of these shares, based
on underlying real estate values, was One Billion Eighty Seven Million Fifty
Five Thousand One Hundred Five Pesos (P1,087,055,105). The shares were
thus issued for one-eighteenth of their value. Defendants, by contributing P60
million, obtained a gain of One Billion Eighty Seven Million Fifty Five Thousand
One Hundred Five Pesos (P1,087,055,105) — an instant profit of 1,800% of the
amount put in, with the corresponding instant loss of the same amount
 sustained by the other stockholders. 41 x x x
Locus standi , as explained by this Court in David v. Macapagal-Arroyo , 42 is "the
right of appearance in a court of justice on a given question." 43 It is "a party's personal
and substantial interest in a case where he has sustained or will sustain direct injury as
a result" of the act being challenged. 44 Used in the context of private suits, standing is
governed by Section 2, Rule 3 of the 1997 Rules of Court which provides that "every
action must be prosecuted or defended in the name of the real party in interest," the
party who stands to be benefited or injured by the judgment in the suit or the party
entitled to the avails of the suit. 45
Accordingly, LLDC and the minority stockholders whose shares were diluted,
David included, have causes of action separate and distinct from each other. David has
a substantial interest in the validity of the subscription and the amount for which the
same was issued since he stands to suffer a direct personal injury by reason thereof,
i.e., diminution of his shareholdings and, consequently, control in the corporation. The
decrease in his voting power will expectedly result in the loss of his control in the
corporate affairs of LLDC. Needless to state, David was well within his right as a
stockholder to challenge Lu Ym father and sons' actions that adversely affected his
personal interest in the corporation, such cause of action being anchored on Sec. 1 (a)
(2) of the Interim Rules.
The jurisdiction of the RTC having been settled, We now proceed to determine the
correctness of the CA's judgment, and whether remand to the trial court is warranted.
At the outset, We note that the resolution of the legal issues raised herein is
hinged on the determination of certain factual issues, which can only be settled by the
trial court.
It is undisputed that the LLDC Board issued a Resolution on November 18, 1997,
calling for the issuance of its remaining 600,000 unsubscribed and unissued shares of
stock at par value of P100.00 per share. In the same Resolution, the Board called for
the notification of the stockholders as of date of their respective rights of pre-emption
and to pay their subscriptions not later than January 31, 1998. 46
The parties' versions of what transpired thereafter vary. John, et al. averred that
since David and the other stockholders failed to exercise or abandoned their pre-
emptive right, Lu Ym father and sons ended up subscribing to all the shares issued and
acquiring majority control over LLDC. 47 On the other hand, David maintains that the
transfer was effected by Lu Ym father and sons through gross abuse of their powers
and in violation of their fiduciary duties.
The power to issue shares of stock in a corporation is lodged in the board of
directors 48 and no stockholders' meeting is required to consider it because additional
issuance of shares of stock does not need the latter's approval. What is only required is
the board resolution approving the additional issuance of shares. 49 Nevertheless, Sec.
39 of the Corporation Code vests upon the stockholders the right to subscribe to all
issues or disposition of shares of any class, in proportion to their shareholdings. And
yet, as found by the court a quo, the records are bereft of any proof that the said
stockholders were indeed notified of the issuance and who among them waived their
rights.
The parties' averments raise questions of fact that cannot be settled based
merely on the parties' allegations in their pleadings. Despite the numerous factual
issues raised in this case, the RTC merely based its decision on the pleadings
submitted by the parties. 50 A question of fact requires this Court to review the
truthfulness or falsity of the allegations of the parties. This review includes assessment
of the "probative value of the evidence presented." 51 Without going into trial, the parties
were unable to adduce evidence in support of their respective arguments, leaving
crucial factual issues unresolved, such as how the alleged fraud that led to the
dissipation of assets and acts of mismanagement was committed. As aptly observed by
the CA:
Significantly, in the excerpts of the minutes taken on the board meeting
held on 26 March 1998, five (5) members of the board constituting a majority
voted in favor of the motion "that those stockholders who did not exercise their
rights of pre-emption to subscribe to the remaining unissued portion of the
capital stock of the corporation be considered as having waived their respective
rights and that their stock rights shall be offered to non-waiving stockholders at
par value in proportion to their equity interest. Any offered shares not taken up
by the non-defaulting stockholders may be offered for sale to third parties at a
price recommended by investment banker to be commissioned for the purpose."
Only two (2) members voted against the said motion, one of whom is plaintiff-
appellee David Lu who at the same meeting was voted as SVP for
Administration. Yet, the RTC failed to make any finding that the defendant-
appellants failed to offer the subject 600,000 shares to all the stockholders
on record; that there were stockholders who waived (and who they are);
and that the stock rights of these waiving stockholders were offered to
those who did not waive at par value in proportion to their equity interest.
The RTC, likewise, did not touch on the regularity of the offering of the
subject shares.
To stress,
Pre-emptive right under Sec. 39 of the Corporation Code refers to
the right of a stockholder of a stock corporation to subscribe to all
issues or disposition of shares of any class, in proportion to their
respective shareholdings. The right may be restricted or denied
under the articles of incorporation, and subject to certain
exceptions and limitations. The stockholder must be given a
reasonable time within which to exercise their preemptive rights.
Upon the expiration of said period, any stockholder who has not
exercised such right will be deemed to have waived it.
On this note, the RTC did nothing to ascertain whether or not the
plaintiff-appellees and the rest of the stockholders were given reasonable
time to exercise their pre-emptive rights
xxx xxx xxx
In this instance, the RTC did not endeavor to gather more facts, thru the
conduct of a full-blown hearing, with respect to the plaintiff-apellees' claim that
defendant-appellants Paterno Lu Ym, Sr. and sons premeditated, in effect, to
take control of the corporation by issuing the subject 600,000 shares to
themselves and their families and holding companies, and thus, diluting their
(plaintiff-appellees') interest and shareholding in LuDoDev. 52 (Emphasis
 supplied)
To recall, the RTC set the case for pre-trial on November 18, 2003, which was
later reset to January 27, 2004. David filed his pre-trial brief, while Lu Ym father and
sons did not. The trial court then issued an Order on January 26, 2004 suspending the
pre-trial while simultaneously ordering the parties to submit their respective
memoranda, reasoning that "it appears that some issues may not be contested or may
be resolved without need of further evidence." Only David complied with the trial court's
directive. Lu Ym father and sons, meanwhile, moved for the clarification of the issues to
be discussed in the parties' memoranda and the suspension of the period to file their
memorandum pending resolution of their motion. Without terminating the pre-trial, the
RTC issued its Decision on March 1, 2004.
While Sec. 4, 53 Rule 4 of the Interim Rules provides that a judgment before pre-
trial, as in the present case, may be rendered after the parties' submission of their
respective pre-trial briefs, it should be stressed that the conduct of a pre-trial
conference in intra-corporate disputes is mandatory, as stated in Sec. 1 54 of the same
rule. Since Lu Ym father and sons have not yet submitted their pre-trial brief, the trial
court should have refrained from rendering judgment and proceeded with the pre-trial.
Fraud is never presumed; it must be established by clear and convincing evidence. 55
Certainly, the trial court could not have established clearly and convincingly the
fraudulent acts and abuses attributed to Lu Ym father and sons — such as what
constituted the fraud and how it was perpetrated — by mere reliance on the allegations
in the pleadings, more so when the pre-trial was suspended giving it less opportunity to
flesh out the case. The records, therefore, are bereft of significant details and concrete
facts that would aid in the proper disposition of the case.
The Court is mindful that the corporate term of LLDC had long ended and that the
case has been pending for a considerable length of time. The long delay in the final
resolution of the case, however, can only be attributable to the parties themselves due
to their filing of numerous motions and petitions questioning every disposition of
interlocutory matters by the courts a quo. Nonetheless, in the interest of substantial
justice, the determination of the factual circumstances of the case is warranted to finally
settle the rights of the parties. The appellate courts are prevented from conclusively
deciding cases on appeal where such records are manifestly incomplete as to certain
factual issues that require determination if the case were to be resolved completely.
In view of the foregoing, the Court hereby affirms the CA's judgment remanding
the case to the trial court for reception of evidence and further proceedings to facilitate
the orderly administration of justice. All matters raised herein not otherwise cognizable
by the Court in view of its limited jurisdiction to resolve only questions of law may be
raised by the parties and threshed out before the trial court.
In the interim, the Man Com, as accountable officers of the Court subject to the
latter's control and supervision pursuant to Sec. 3 56 Rule 9 of the Interim Rules, is
hereby ordered to submit a report and to account for the funds and properties of LLDC
which may have come into their custody and possession in the discharge of their duties.
With respect to the dismissal of David's charge of indirect contempt against Kelly,
et al., the same is upheld.
A person may be punished for indirect contempt of court if found guilty of
disobedience of or resistance to a lawful order of a court or commits any improper
conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration
of justice. 57 We agree with the CA's findings that the attempts of Kelly, et al. to
persuade the court a quo to rule on the legality or illegality of the May 29, 2012
Stockholders' Resolution and to nullify the purported transfers and conveyances of
LLDC's assets do not constitute indirect contempt of court. The filing of numerous
motions does not in and of itself constitute contemptuous conduct, particularly where
such is made to obtain relief, as in Kelly, et al.'s case.
In light of the above disquisition, the Court finds no need to further delve on the
other issues raised by the parties.
WHEREFORE, judgment is hereby rendered:
1. AFFIRMING the December 16, 2014 Consolidated Decision and July 16,
2015 Consolidated Resolution of the Court of Appeals in CA-G.R. CV No. 81163 and
CA-G.R. SP No. 08034. Let this case be remanded to the trial court for further
proceedings and to proceed with utmost dispatch.
2. PARTIALLY GRANTING the petition in G.R. No. 219902. The Management
Committee is hereby ORDERED to render a final report and to render an accounting of
the funds and properties of the LuDo & LuYm Development Corporation.
SO ORDERED."

Very truly yours,

(SGD.) WILFREDO V. LAPITAN

Division Clerk of Court

Footnotes

1. Penned by Associate Justice Gabriel T. Ingles, with the concurrence of Associate Justices
Edgardo L. Delos Santos and Renato C. Francisco; rollo (G.R. No. 219902), pp. 60-108.

2. Id. at 109-140.

3. As of September 30, 1993.

4. Rollo (G.R. Nos. 219943-44), pp. 122-129.

5. For brevity, both defendants shall hereinafter be referred to as "LuYm father and sons."

6. Rollo (G.R. Nos. 219943-44), pp. 130-135.

7. Sec. 4. Complaint. — The complaint shall state or contain:

xxx xxx xxx

  (2) all facts material and relevant to the plaintiff's cause or causes of action, which shall
be supported by affidavits of the plaintiff or his witnesses and copies of documentary and
 other evidence supportive of such cause or causes of action; x x x

8. Sec. 6. Answer . — The defendant shall file his answer to the complaint, serving a copy
thereof on the plaintiff, within fifteen (15) days from service of summons. In the answer,
the defendant shall:

xxx xxx xxx

  (7) State the facts upon which he relied for his defense, including affidavits of witnesses
and copies of documentary and other evidence supportive of such cause or causes of
action; x x x

9. As reproduced in the Consolidated Decision; Rollo (G.R. No. 219903), p. 96.

10. Rollo (G.R. Nos. 219943-44), pp. 166-169.

11. Id. at 170-193; only David appeared as plaintiff in the Amended Complaint.

12. Id. at 270-274.

13. Id. at 428-441.

14. Id. at 442.

15. The case was again re-raffled, this time to Branch 12 of the Cebu City RTC.

16. As reproduced in the Consolidated Decision; rollo (G.R. No. 219903), p. 102.

17. Penned by retired Associate Justice Eduardo B. Nachura.

18. Penned by retired Associate Justice Conchita Carpio-Morales.

19. Motion to Remand the Case to the Trial Court for Accounting by the Management
Committee and Trustees for the Liquidation of the Assets of Ludo & LuYm Development
Corporation filed on October 18, 2012; Rollo (G.R. Nos. 219943-44), pp. 497-503.

20. Id. at 24.

21. Rollo (G.R. No. 219902), pp. 241-246.

22. Rollo (G.R. Nos. 219943-44), pp. 190-195.

23. In a Resolution dated July 2, 2013.

24. Rollo (G.R. No. 219902), pp. 199-234.

25. Rollo (G.R. Nos. 219943-44), pp. 78-79.

26. Rollo (G.R. No. 219903), p. 33.

27. Id. at 54-55.

28. Id. at 74.

29. Otherwise known as the Securities Regulation Code.

30. The SEC Reorganization Act.

31. G.R. No. 181416, November 11, 2013.

32. Philippine Communications Satellite Corporation v. Sandiganbayan, G.R. No. 203023,

June 17, 2015.

33. Aguirre II v. FQB+7, Inc., G.R. No. 170770, January 9, 2013.

34. Florete, Jr. v. Florete, G.R. Nos. 174909 and 177275, January 20, 2016.

35. Guy v. Guy , G.R. No. 189486, September 5, 2012.

36. Villamor, Jr. v. Umale, G.R. No. 172843, September 24, 2014 (citations omitted).

37. Id.

38. Go v. Distinction Properties Development and Construction, Inc. , G.R. No. 194024, April
25, 2012, 671 SCRA 461, 471-472.

39. Strategic Alliance Development Corporation v. Star Infrastructure Development

Corporation, et al., G.R. No. 187872, November 17, 2010. (citations omitted)

40. Rollo (G.R. Nos. 219943-44), pp. 123 and 173.

41. Par. 8 in Amended Complaint.

42. G.R. No. 171396, May 3, 2006, 489 SCRA 160.

43. Id.

44. Id.

45. Section 2, Rule 3, Rules of Court.

46. Rollo (G.R. No. 219903), pp. 176-177.

47. Rollo (G.R. Nos. 219943-44), p. 131.

48. Majority Stockholders of Ruby Industrial Corporation v. Lim; China Banking Corporation v.
Lim, G.R. Nos. 165887 and 165929, June 6, 2011.

49. Id.

50. Consolidated Decision, pp. 38-39.

51. Pascual v. Burgos, G.R. No. 171722, January 11, 2016. (citations omitted)

52. Rollo (G.R. Nos. 219943-44), pp. 86-87.

53. Sec. 4. Judgment before pre-trial . — If, after submission of the pretrial briefs, the court
determines that, upon consideration of the pleadings, the affidavits and other evidence
submitted by the parties, a judgment may be rendered, the court may order the parties to
file simultaneously their respective memoranda within a non-extendible period of twenty
(20) days from receipt of the order. Thereafter, the court shall render judgment, either full
 or otherwise, not later than ninety (90) days from the expiration of the period to file the
memoranda.

54. Section 1. Pre-trial conference; mandatory nature . — Within five (5) days after the period
for availment of, and compliance with, the modes of discovery prescribed in Rule 3
hereof, whichever comes later, the court shall issue and serve an order immediately
setting the case for pre-trial conference and directing the parties to submit their
respective pre-trial briefs. The parties shall file with the court and furnish each other
copies of their respective pre-trial brief in such manner as to ensure its receipt by the
court and the other party at least five (5) days before the date set for the pre-trial. x x x

55. Autencio v. City Administrator of the City of Cotabato , G.R. No 152752, January 19, 2005,
citing Cathay Pacific Airways, Ltd. v. Sps. Vazquez , G.R. Nos. 149872-73, March 14,
2003, 399 SCRA 207.

56. Sec. 3. Receiver and management committee as officers of the court . — The receiver and
the members of the management committee in the exercise of their powers and
performance of their duties are considered officers of the court and shall be under its
control and supervision.

57. Capitol Hills Golf & Country Club, Inc. v. Sanchez , G.R. No. 182738, February 24, 2014.