x x x

Considering that under the Compromise and Arbitration Agreement, the parties agreed that their respective claims be reduced to purely pecuniary/money claims, then MMIC and/or plaintiffs on behalf of all the other stockholders of MMIC are entitled to actual or compensatory damages equivalent to the present value of their equity over the MMIC assets, i.e. the total stockholders equity of P20,826,700,952.00 as of December 31, 1992. Further, since as held in the Decision that the DBP would have an 87% equity in MMIC as a consequence of the finding that the Financial Rehabilitation Plan (FRP) is valid (p. 64 of the Decision), then the amount of P18,119,229,828.24 (equivalent to DBPs 87% equity) should be deducted from the total stockholders equity of P20,826,700,952.00 leaving a net amount of P2,707,471,123.76 to be awarded to MMIC (excluding DBPs share) as actual or compensatory damages.

It is to be noted that defendant APT did not present any evidence rebutting the figures and computations made by witness Pastor. Since the Decision finds the FRP valid, then the stockholders of MMIC (excluding DBP) should be placed in the same position that they would have been where not for the fact that the FRP was improperly and illegally aborted by PNP/DBP. Accordingly, it is my submission that defendant APT should be ordered to pay MMIC (excluding DBP) the sum of P2,707,471,123.76 with legal interest thereon per annum from August 3, 1984 as and for actual damages.

x x x

Member Sison submitted a separate opinion reading as follows:

SEPARATE OPINION

x x x

It is clear and it cannot be disputed therefore that based on these stipulated issues, the parties themselves have agreed that the basic ingredient of the causes of action in this case is the wrong committed on the corporation (MMIC) for the alleged illegal foreclosure of its assets. By agreeing to this stipulation, PLAINTIFFS themselves (Cabarrus, et al.) admit that the cause of action pertains only to the corporation (MMIC) and that they are filing this for and in behalf of MMIC.

Perforce this has to be so because it is basic rule in Corporation Law that the shareholders have no title, legal or equitable to the property which is owned by the corporation (13 Am. Jur. 165; Pascual vs. Oresco, 14 Phil. 83). In Ganzon & Sons vs. Register of Deeds, 6 SCRA 373, the rule has been reiterated that a stockholder is not the co-owner of the corporate property. Since the property or assets foreclosed belongs to MMIC, the wrong committed, if any, is done against the corporation. There is therefore no direct injury or direct violation of the rights of Cabarrus et al. There is no way, legal or equitable, by which Cabarrus et al. could recover damages in their personal capacities even assuming or just because the foreclosure is improper or invalid. The Compromise and Arbitration Agreement itself and the elementary principles of Corporation Law say so. Therefore, I am constrained to dissent from the award of moral damages to Cabarrus.

Neither could I agree to the award of moral damages to MMIC. The acts complained of here in which the Committee based its award of moral damages to MMIC is the foreclosure of the various real estate and chattel mortgages. The majority of the Committee believes that these foreclosures constitute a violation of an agreement forged between PNB-DBP, on one hand, and MMIC, on the other, regarding the restructuring of the various past due loans of MMIC to what has been termed as the Financial Restructuring Program (FRP).

x x x

In this connection, it can readily be seen and it cannot quite be denied that MMIC accounts in PNB-DBP were past due. The drawing up of the FRP is the best proof of this. When MMIC adopted a restructuring program for its loan, it only meant that these loans were already due and unpaid. If these loans were restructurable because they were already due and unpaid, they are likewise forecloseable. The option is with the PNB-DBP on what steps to take.

The mere fact that MMIC adopted the FRP does not mean that DBP-PNB lost the option to foreclose. Neither does it mean that the FRP is legally binding and implementable. It must be pointed that said FRP will, in effect, supersede the existing and past due loans of MMIC with PNB-DBP. It will become the new loan agreement between the lenders and the borrowers. As in all other contracts, there must therefore be a meeting of the minds of the parties; the PNB and DBP must have to validity adopt and ratify such FRP before they can be bound by it; before it can be implemented. In this case, not an iota of proof has been presented by the PLAINTIFFS showing that PNB and DBP ratified and adopted the FRP. PLAINTIFFS simply relied on a legal doctrine of promissory estoppel to support its allegations in this regard.

x x x

All told, PNB and DBP had the right to foreclose and were justified in doing so. But were the foreclosure legally done or carried out? Were the requirements of notice, posting and publication required by Acts 3135 and 1508 substantially complied with?

x x x

I cannot, however, concur with the Committees for holding that such minor taint of illegality in the foreclosure is enough to justify the award of damages amounting to P19,486,118,654.00. Rules of law respecting the recovery of damages are framed with reference to just rights of both parties, not merely what may be right for an injured person to receive, but also what is just to compel the other party to pay, to accord just compensation for the injury (Kennings vs. Kline Ind. 602). Following this universally accepted rule on damages, I do not believe it is just to compel APT to pay such huge amount for such a minor technical infraction.

But while I do not agree with this pronouncement of the Committee, I nevertheless concur with the result as far as the disposition of the award for actual damages is concerned. I agree that DEFENDANT APT can, and is still entitled to, collect the outstanding obligations of MMIC to PNB and DBP amounting to P22,668,537,770.05 with interest thereon as stipulated in the loan documents from the date of foreclosure until the time they are fully paid. The resultant effect of such a disposition is that APT can offset the said obligation due from MMIC such that ultimately no damages will be due and payable to MMIC. As there may be damage without injury, there can be injury without damage (15 Am. Jur., p. 388). This case is a case of injury without damage.

Both parties moved for reconsideration of the decision of the Arbitration Committee. In addition, respondents Cabarrus et al. filed a motion for clarification and to re-open the case to receive evidence. In a resolution dated July 26, 1984, with one member dissenting, the Arbitration Committee denied the motions for reconsideration of both parties as well as all other pending motions.

On October 17, 1984, respondents Cabarrus et al. filed directly with the Regional Trial Court, Makati, Branch 62, in the same Civil Case No. 9900, a pleading entitled application/motion for confirmation of arbitral award.

On November 4, 1994, petitioner APT filed an opposition and motion to vacate judgment, contending that respondents motion was improperly filed with the same branch of the court in Civil Case No. 9900, which was previously dismissed, and that the motion should have been filed as a separate special proceedings in the Regional Trial Court to be docketed by the Clerk of Court.

Nonetheless, acting on the application/motion, Judge Roberto C. Diokno, presiding judge, Regional Trial Court, Makati, Branch 62, on November 28, 1994, issued an order granting plaintiffs application confirming the arbitration award, and rendering judgment as set out in the opening paragraph of this opinion.

On December 12, 1994, petitioner APT received notice of the lower courts order. On December 27, 1994, petitioner APT filed a motion for reconsideration. By order dated January 18, 1995, the trial court denied the motion. On February 7, 1995, respondents Cabarrus, et al. filed a motion for execution and appointment of custodian of proceeds of execution. Petitioner opposed the motion. It is apparently still unresolved.

On February 15, 1995, petitioner APT filed with the Court of Appeals an original special civil action for certiorari with prayer for temporary restraining order or preliminary injunction¹ to annul the two (2) orders of the respondent Regional Trial Court above-mentioned confirming the arbitral award and denying its reconsideration.

The issue presented in said petition was whether respondent Judge Roberto C. Diokno, Regional Trial Court, Makati, Branch 62 had jurisdiction to act on private respondents application/motion for confirmation of arbitral award in the same Civil Case No. 9900, which had been dismissed earlier on motion of the parties, and thus the court gravely abused its discretion in confirming the arbitral award.

In its decision promulgated on July 17, 1995, the Court of Appeals denied due course and dismissed the petition for certiorari for lack of merit.

Hence, this petition for review filed on September 07, 1995.²cräläwvirtualibräry

The petition is impressed with merit.

First, the Regional Trial Court, Makati, Branch 62, did not validly acquire jurisdiction over the case by respondents filing of a mere motion in the same Civil Case No, 9900 because the case had been dismissed earlier and such dismissal had become final and unappealable. As heretofore stated, on October 6, 1992, the parties entered into a compromise and arbitration agreement expressly providing that they have agreed to withdraw their respective claims from the Trial Court and to resolve their dispute through arbitration by praying to the Trial Court to issue a compromise judgment based on this Compromise and Arbitration Agreement.

Clearly, the parties had withdrawn the action then pending with the Regional Trial Court, Makati, Branch, 62, in Civil Case No. 9900, and agreed that they would submit their dispute to arbitration and reduce their respective claims to purely money claims, waiving and foregoing all other forms of reliefs which they prayed for or could have prayed for in Civil Case No. 9900. The parties agreed to move for the dismissal of the case, to transform the reliefs prayed for therein to pure money claims and submit the controversy to arbitration under Republic Act (RA) 876 before a committee composed of three members.

In its order dated October 12, 1992, in Civil Case No. 9900, the trial court presided over by respondent Judge categorically decreed that The complaint is hereby dismissed. Such disposition terminated the case finally and irretrievably disposed of the same.³ The term dismissed has a definite meaning in law. A judgment of dismissed, without qualifying words indicating a right to take further proceedings, is presumed to be dismissed on the merits.⁴ The dismissal could not have been a suspension of action provided for in the arbitration law, Republic Act No. 876.

Upon the finality of such order of dismissal, the case could no longer be revived by mere motion. The trial court had lost its authority over the case.⁵ We cite as squarely applicable the decision where this Court emphatically said But after the dismissal has become final through the lapse of he fifteen-day reglementary period, the only way by which the action may be resuscitated or revived, is by the institution of a subsequent action through the filing of another complaint and the payment of the fees prescribed by law. This is so because upon attainment of finality of a dismissal through the lapse of said reglementary period, the Court loses jurisdiction and control over it and can no longer make any disposition in respect thereof inconsistent with such dismissal⁶ It is true that the confirmation of an arbitral award is within the jurisdiction over the subject matter of a regional trial court. Such jurisdiction must be invoked by proper motion as a special proceedings with notice to the parties filed in the proper court with the clerk of court (and upon payment of the prescribed fees).⁷cräläwvirtualibräry

Second, the Arbitration Committee did not actually reach a valid decision on the subject controversy.

In the purported decision dated November 24, 1994, penned by Chairman Sarmiento, the Committee ordered petitioner APT to pay to MMIC the sum of P2,531,635,425.02, with interest thereon at the legal rate at 6% per annum August 3, 9 and 24, 1984, pari passu as actual damages; to pay MMIC P13 million, as moral and exemplary damages, and to pay Jesus S. Cabarrus, Sr. P10 million, as moral damages.

In the concurring and dissenting opinion of Member Elma, he agreed with the finding on the principal issue submitted for resolution. However, he dissented as to the manner or method of computation and amount of actual damages awarded to MMIC. He submitted that APT should be ordered to pay MMIC the sum of P2,707,471,123.76, with legal interest thereon per annum from August 3, 1984, as actual damages.

In his separate opinion, Member Sison stated that he concurred with the result as far as the disposition of the award of actual damages is concerned. He agreed that APT is entitled to collect the outstanding obligations of MMIC to PNB and DBP amounting to P22,668,537,770.05, with interest as stipulated in the loan documents from the date of foreclosure until fully paid. The resultant effect is that APT can offset said obligation due from MMIC such that ultimately no damages shall be due and payable to MMIC. He was against the award of moral and exemplary damages to MMIC and Jesus S. Cabarrus, Sr.

It is obvious that the disposition in Chairman Sarmientos award and the concurring and dissenting opinion of Member Elma do not tally and, hence, because of the dissent of Member Sison, the Arbitration Committee did not reach a majority decision constituting a valid judgment or fallo of the Committee.

The powers and duties of boards and commissions may not be exercised by the individual members separately. Their acts are official only when done by the members convened in session upon a concurrence of at least a majority and with at least a quorum present.⁸cräläwvirtualibräry

Respondent Cabarrus, et al. considered the disposition as confusing and incomplete as to the award of damages and thereby requiring the reception of further evidence as to necessitate the re-opening of hearings on the case. On May 20, 1994, they filed a motion for clarification seeking answer from the arbitration committee as to the final amount of actual damages the MMIC is entitled to, and, on June 9, 1994, they filed a motion to reopen the case and to receive evidence.

Even the Arbitration Committees resolution of the various motions for reconsideration and other reliefs was conflicting. For Chairman Sarmiento, respondents motion for reconsideration, dated December 15, 1993, and petitioners motion for reconsideration dated January 3, 1994, respondents motion for clarification dated June 8, 1994, and respondents urgent motion to re-open the case and to receive evidence were all DENIED for lack of merit.

Member Elma dissented from the denial of the parties motion for reconsideration, reiterating that MMIC is entitled to actual damages in the sum of P2,707,471,123.76, with legal interest thereon from August 3, 1984.

Member Azura (substituting Sison) concurred with the Chairman in denying respondents motion for reconsideration, motion for clarification to re-open the case but favored granting petitioners (APT) motion for reconsideration.