STRONGHOLD INSURANCE v. CUENCA

STRONGHOLD INSURANCE COMPANY, INC. vs. TOMAS CUENCA, MARCELINA CUENCA, MILAGROS CUENCA, BRAMIE T. TAYACTAC,

and MANUEL D. MARANON, JR.

G.R. No. 173297, March 6, 2013

FACTS:

Marañon filed a complaint with an application for the issuance of a writ of preliminary attachment in the RTC against the Cuencas and Tayactac for the collection of a sum of money and damages. The RTC granted the application for the issuance of the writ of preliminary attachment conditioned upon the posting of a bond of P1 Million executed in favor of the Cuencas. Marañon posted bond in the amount of P1 Million issued by Stronghold Insurance.

Enforcing the writ of preliminary attachment, the sheriff levied upon the equipment, supplies, materials and various other personal property belonging to Arc Cuisine, Inc., to which the respondents where stockholders. But the levied properties were ordered by the CA to be delivered back to the Cuencas and Tayactac due to the damages sustained from the enforcement of the writ.

During the inventory, however, the levied properties were reportedly lost and allegedly seen in a bakeshop owned by Maranon. Cuencas and Tayactac prayed that said attached properties be immediately deliver to them; Stronghold Insurance be directed to pay them the damages under the surety bond for P1 Million; Marañon be held personally liable to them considering the insufficiency of the amount of the surety bond; and the latter to be held liable for moral and exemplary damages, as well as attorney's fees.

The RTC held Marañon and Stronghold Insurance jointly and solidarily liable for damages to the Cuencas and Tayactac. The CA affirmed the RTC decision.

ISSUE:

Whether the Cuencas and Tayactac recover damages arising from the wrongful attachment of the assets of Arc Cuisine, Inc.

RULING:

            No. The SC held that the Cuencas and Tayactac cannot recover damages because they are not the real-party in interest. To ensure the observance of the mandate of the Constitution, Section 2, Rule 3 of the Rules of Court requires that unless otherwise authorized by law or the Rules of Court every action must be prosecuted or defended in the name of the real party in interest. Under the same rule, a real party in interest is one who stands to be benefited or injured by the judgment in the suit, or one who is entitled to the avails of the suit. Accordingly, a person , to be a real party in interest in whose name an action must be prosecuted, should appear to be the present real owner of the right sought to be enforced, that is, his interest must be a present substantial interest, not a mere expectancy, or a future, contingent, subordinate, or consequential interest.

There is no dispute that the properties subject to the levy on attachment belonged to Arc Cuisine, Inc. alone, not to the Cuencas and Tayactac in their own right. They were only stockholders of Arc Cuisine, Inc., which had a personality distinct and separate from that of any or all of them. The damages occasioned to the properties by the levy on attachment, wrongful or not, prejudiced Arc Cuisine, Inc., not them. As such, only Arc Cuisine, Inc. had the right under the substantive law to claim and recover such damages. This right could not also be asserted by the Cuencas and Tayactac unless they did so in the name of the corporation itself. But that did not happen herein, because Arc Cuisine, Inc. was not even joined in the action either as an original party or as an intervenor.

The Cuencas and Tayactac were clearly not vested with any direct interest in the personal properties coming under the levy on attachment by virtue alone of their being stockholders in Arc Cuisine, Inc. Their stockholdings represented only their proportionate or aliquot interest in the properties of the corporation, but did not vest in them any legal right or title to any specific properties of the corporation. Without doubt, Arc Cuisine, Inc. remained the owner as a distinct legal person.

Given the separate and distinct legal personality of Arc Cuisine, Inc., the Cuencas and Tayactac lacked the legal personality to claim the damages sustained from the levy of the former’s properties. According to Asset Privatization Trust v. Court of Appeals, even when the foreclosure on the assets of the corporation was wrongful and done in bad faith the stockholders had no standing to recover for themselves moral damages; otherwise, they would be appropriating and distributing part of the corporation’s assets prior to the dissolution of the corporation and the liquidation of its debts and liabilities.