OFFICE OF SOLICITOR GENERAL v. AYALA LAND INCORPORATED, GR No.

177056, 2009-09-18
Facts:
Respondents Ayala Land, Robinsons, and Shangri-la maintain and operate shopping malls in
various locations in Metro Manila. Respondent SM Prime constructs, operates, and leases out
commercial buildings and other structures, among which, are SM City, Manila; SM Centerpoint,
Sta.
Mesa, Manila; SM City, North Avenue, Quezon City; and SM Southmall, Las Piñas.
The shopping malls operated or leased out by respondents have parking facilities for all kinds of
motor vehicles, either by way of parking spaces inside the mall buildings or in separate buildings
and/or adjacent lots that are solely devoted for use as parking spaces.
Respondents expend for the maintenance and administration of their respective parking facilities.
The parking tickets or cards issued by respondents to vehicle owners contain the stipulation that
respondents shall not be responsible for any loss or damage to the vehicles parked in respondents'
parking facilities.
In 1999, the Senate Committees on Trade and Commerce and on Justice and Human Rights
conducted a joint investigation for the following purposes: (1) to inquire into the legality of the
prevalent practice of shopping malls of charging parking fees; (2) assuming arguendo... that the
collection of parking fees was legally authorized, to find out the basis and reasonableness of the
parking rates charged by shopping malls; and (3) to determine the legality of the policy of
shopping malls of denying liability in cases of theft, robbery, or carnapping,... by invoking the
waiver clause at the back of the parking tickets.
In view of the foregoing, the Committees find that the collection of parking fees by shopping
malls is contrary to the National Building Code and is therefor [sic] illegal. While it is true that
the Code merely requires malls to provide parking spaces, without... specifying whether it is free
or not, both Committees believe that the reasonable and logical interpretation of the Code is that
the parking spaces are for free.
Respondent SM Prime thereafter received information that, pursuant to Senate Committee Report
No. 225, the DPWH Secretary and the local building officials of Manila, Quezon City, and Las
Piñas intended to institute, through the OSG, an action to enjoin respondent SM Prime and...
similar establishments from collecting parking fees, and to impose upon said establishments penal
sanctions under Presidential Decree No. 1096, otherwise known as the National Building Code of
the Philippines (National Building Code), and its Implementing Rules and Regulations
(IRR).
The RTC then held that there was no sufficient evidence to justify any award for damages.
The RTC finally decreed in its 29 May 2002 Joint Decision in Civil Cases No. 00-1208 and No.
00-1210 that:
FOR THE REASONS GIVEN, the Court declares that Ayala Land[,] Inc., Robinsons Land
Corporation, Shangri-la Plaza Corporation and SM Prime Holdings[,] Inc. are not obligated to
provide parking spaces in their malls for the use of their patrons or public in general,... free of
charge.
The fallo of the 25 January 2007 Decision of the Court of Appeals reads:
WHEREFORE, premises considered, the instant appeals are DENIED. Accordingly, appealed
Decision is hereby AFFIRMED in toto.
Issues:
THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING THE RULING OF THE
LOWER COURT THAT RESPONDENTS ARE NOT OBLIGED TO PROVIDE FREE
PARKING SPACES TO THEIR CUSTOMERS OR THE PUBLIC.
Ruling:
The Court finds no merit in the present Petition.
There is nothing therein pertaining to the collection (or non-collection) of parking fees by
respondents. In fact, the term "parking fees" cannot even be found at all in the entire National
Building Code and its IRR.
Without using the term outright, the OSG is actually invoking police power to justify the
regulation by the State, through the DPWH Secretary and local building officials, of privately
owned parking facilities, including the collection by the owners/operators of such facilities... of
parking fees from the public for the use thereof.
When there is a taking or confiscation of private property for public use, the State is no longer
exercising police power, but another of its inherent powers, namely, eminent domain. Eminent
domain enables the State to forcibly acquire private lands intended for public use upon... payment
of just compensation to the owner.
Although in the present case, title to and/or possession of the parking facilities remain/s with
respondents, the prohibition against their collection of parking fees from the public, for the use of
said facilities, is already tantamount to a taking or confiscation of their... properties.
The State is not only requiring that respondents devote a portion of the latter's properties for use
as parking spaces, but is also mandating that they give the public access to said parking spaces for
free.
In conclusion, the total prohibition against the collection by respondents of parking fees from
persons who use the mall parking facilities has no basis in the National Building Code or its IRR.
The State also cannot impose the same prohibition by generally invoking police... power, since
said prohibition amounts to a taking of respondents' property without payment of just
compensation.
WHEREFORE, the instant Petition for Review on Certiorari is hereby DENIED.
Principles:
Police power is the power of promoting the public welfare by restraining and regulating the use
of liberty and property. It is usually exerted in order to merely regulate the use and enjoyment of
the property of the owner. The power to regulate, however, does not include the... power to
prohibit.
Police power does not involve the taking or confiscation of property, with the exception of a few
cases where there is a necessity to confiscate private property in order to... destroy it for the
purpose of protecting peace and order and of promoting the general welfare; for instance, the
confiscation of an illegally possessed article, such as opium and firearms.
ANTHONY YU et al. vs. JOSEPH YUKAYGUAN et al. GR 177549, 18 June 2009

FACTS:

Petitioners and the respondents were all stockholders of Winchester Industrial Supply, Inc. On 15
October 2002, respondents filed against petitioners a verified Complaint forAccounting, Inspection
of Corporate Books and Damages through Embezzlement and Falsification of Corporate Records and
Accounts [6] before the RTC of Cebu. The said Complaint was filed by respondents, in their own
behalf and as a derivative suit on behalf of Winchester, Inc., and was docketed as SRC Case No. 022-
CEB. The factual background of the Complaint was stated in the attached Affidavit executed by
respondent Joseph. According to respondents, Winchester, Inc. was established and incorporated
on 12 September 1977, with petitioner Anthony as one of the incorporators, holding 1,000 shares of
stock worth P100,000.00. Petitioner Anthony paid for the said shares of stock with respondent
Joseph‘s money, thus, making the former a mere trustee of the shares for the latter. The case at
bar was initiated before the RTC by respondents as a derivative suit, on their own behalf and on
behalf of Winchester, Inc., primarily in order to compel petitioners to account for and reimburse to
the said corporation the corporate assets and funds which the latter allegedly misappropriated for
their personal benefit.

ISSUE:

Whether or not the derivative suit is valid.

RULING:

YES.

The general rule is that where a corporation is an injured party, its power to sue is lodged with its
board of directors or trustees. Nonetheless, an individual stockholder is permitted to institute a
derivative suit on behalf of the corporation wherein he holds stocks in order to protect or vindicate
corporate rights, whenever the officials of the corporation refuse to sue, or are the ones to be sued,
or hold the control of the corporation. In such actions, the suing stockholder is regarded as a
nominal party, with the corporation as the real party in interest. A derivative action is a suit by a
shareholder to enforce a corporate cause of action. The corporation is a necessary party to the suit.
And the relief which is granted is a judgment against a third person in favor of the corporation.
Glaringly, a derivative suit is fundamentally distinct and independent from liquidation proceedings.
They are neither part of each other nor the necessary consequence of the other. There is totally no
justification for the Court of Appeals to convert what was supposedly a derivative suit instituted by
respondents, on their own behalf and on behalf of Winchester, Inc. against petitioners, to a
proceeding for the liquidation of Winchester, Inc. While it may be true that the parties earlier
reached an amicable settlement, in which they agreed to already distribute the assets of Winchester,
Inc., and in effect liquidate said corporation, it must be pointed out that respondents themselves
repudiated said amicable settlement before the RTC, even after the same had been partially
implemented; and moved that their case be set for pre-trial. Attempts to again amicably settle the
dispute between the parties before the Court of Appeals were unsuccessful.