G.R. No. 172843 - ALFREDO L. VILLAMOR, JR., VS. JOHN S. UMALE, IN SUBSTITUTION OF HERNANDO F. BALMORES. [G.R. NO. 172881] RODIVAL E. REYES, HANS M. PALMA AND DOROTEO M. PANGILINAN, VS. HERNANDO F. BALMORES.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE , premises considered the appointment of a Receiver and the creation of a Management Committee applied for by plaintiff Hernando F. Balmores are, as they are hereby, DENIED . [22] (Emphasis in the original) According to the trial court, PPC's entitlement to the checks was doubtful. The resolution issued by PPC's board of directors; waiving its rights to the option to lease contract in favor of Villamor's law firm, must be accorded prima facie validity. [23] The trial court also noted that there was a pending case filed by one Leonardo Umale against Villamor, involving the same checks. Umale was also claiming ownership of the checks. [24] This, according to the trial court, weakened respondent Balmores' claim that the checks were properties of PPC. [25] The trial court also found that there was "no clear and positive showing of dissipation, loss, wastage, or destruction of [PPC's] assets . . . [that was] prejudicial to the interest of the minority stockholders, parties-litigants or the general public." [26] The board's failure to recover the disputed amounts was not an indication of mismanagement resulting in the dissipation of assets. [27] The trial court noted that PPC was earning substantial rental income from its other sub-lessees. [28] The trial court added that the failure to implead PPC was. fatal. PPC should have been impleaded as an indispensable party, without which, there would be no final determination of the action. [29] Ruling of the Court of Appeals Respondent Balmores filed with the Court of Appeals a petition for certiorari under Rule 65 of the Rules of Court. [30] He assailed the decision of the trial court, which denied his "application for the appointment of a [r]eceiver and the creation of a [management [c]ommittee." [31] In the decision promulgated on March 2, 2006, the Court of Appeals gave due course to respondent Balmores' petition. It reversed the trial court's decision, and issued a new order placing PPC under receivership and creating an interim management committee. [32] The dispositive portion reads: WHEREFORE , premises considered, the instant petition is hereby GRANTED and GIVEN DUE COURSE and the June 15, 2005 Order/Resolution of the commercial court, the Regional Trial Court of Pasig City, Branch 167, in S.E.C. Case No. 05-62, is hereby REVERSED and SET ASIDE and a NEW ORDER is ISSUED that, during the pendency of the derivative suit, until judgment on the merits is rendered by the commercial court, in order to prevent dissipation, loss, wastage or destruction of the assets, in order to prevent paralization of business operations which may be prejudicial to the interest of stockholders, parties-litigants or the general public, and in order to prevent violations of the corporation laws: (1) Pasig Printing Corporation (PPC) is hereby placed under receivership pursuant to the Rules Governing Intra-Corporate Controversies under R.A. No. 8799; (2) an Interim Management Committee is hereby created for Pasig Pri