BELO MEDICAL GROUP, INC.

, petitioner, vs. JOSE L. SANTOS and VICTORIA G. BELO, respondents.

DECISION
LEONEN,  J p:
DOCTRINE: A conflict between two (2) stockholders of a corporation does not automatically render their dispute as intra-corporate.
The nature of the controversy must also be examined. 
The controversy began on May 5, 2008 when Belo Medical Group received a request from Santos for the inspection of corporate
records.  Santos claimed that he was a registered shareholder and a co-owner of Belo's shares, as these were acquired while they
cohabited as husband and wife. Santos sought advice on his probable removal as director of the corporation considering that he was
not notified of meetings where he could have been removed. He also inquired on the election of Alfredo Henares (Henares) as
Corporate Secretary. Santos' concern over the corporate operations arose from the alleged death of a patient in one (1) of its clinics. 
Santos was unsuccessful in inspecting the corporate books as Henares, the officer-in-charge of corporate records, was travelling.
Belo Medical Group asked for time in order for Henares to accommodate Santos' request. 
After the first attempt to inspect, Belo wrote Belo Medical Group on May 14, 2007 to repudiate Santos' co-ownership of her shares
and his interest in the corporation. She claimed that Santos held the 25 shares in his name merely in trust for her, as she, and not
Santos, paid for these shares.
Belo also informed Belo Medical Group that Santos had a business in direct competition with it. She suspected that Santos' request
to inspect the records of Belo Medical Group was a means to obtain a competitor's business information, and was, therefore, in bad
faith. 
Thus, Belo Medical Group filed a Complaint for Interpleader 
Belo Medical Group alleged that while Santos appeared to be a registered stockholder, there was nothing on the record to show that
he had paid for the shares under his name.
The Complaint was filed "to protect its interest and compel [Belo and Santos] to interplead and litigate their conflicting claims of
ownership
Santos, for the third time, sent a letter on May 22, 2008 to schedule an inspection of the corporate books and warned that continued
rejection of his request exposed the corporation to criminal liability. 
Belo Medical Group's Complaint and Supplemental Complaint were raffled to Branch 149 of the Regional Trial Court of Makati, a
special commercial court, thus classifying them as intra-corporate. 
Belo further argued that the proceedings should not have been classified as intra-corporate because while their right of inspection as
shareholders may be considered intra-corporate, "it ceases to be that and becomes a full-blown civil law question if competing rights
of ownership are asserted as the basis for the right of inspection." 
Santos further argued that the filing of the complaints was an afterthought to take attention away from Belo Medical Group's criminal
liability when it refused Santos' demand to inspect the records of the corporation.
Santos also invoked the doctrine of piercing the corporate veil as Belo owned 90% of Belo Medical Group.
Belo Medical Group reiterated that Belo and Santos must litigate against each other to determine who rightfully owned the 25 shares.
Belo Medical Group argues that it is enough that there are two (2) people who have adverse claims against each other and who are
in positions to make effective claims for interpleader to be given due course. 
Trial Court: the Complaint could not flourish as Belo Medical Group "failed to sufficiently allege conflicting claims of ownership over
the subject shares" thus complaint failed to state a cause of action. 
MAIN ISSUE: W/N the present controversy is intra-corporate? YESSS
Belo Medical Group filed a case for interpleader, the proceedings of which are covered by the Rules of Court. At its core, however, it
is an intra-corporate controversy.
A.M. No. 01-2-04-SC, or the Interim Rules of Procedure Governing Intra-Corporate Controversies, enumerates the cases where the
rules will apply:
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. 
The same rules prohibit the filing of a motion to dismiss:
Section 8. Prohibited Pleadings. — The following pleadings are prohibited:
(1) Motion to dismiss;
(2) Motion for a bill of particulars;
(3) Motion for new trial, or for reconsideration of judgment or order, or for re-opening of trial;
(4) Motion for extension of time to file pleadings, affidavits or any other paper, except those filed due to clearly
compelling reasons. Such motion must be verified and under oath; and
(5) Motion for postponement and other motions of similar intent, except those filed due to clearly compelling
reasons. Such motion must be verified and under oath.
To determine whether an intra-corporate dispute exists and whether this case requires the application of these rules of procedure,
this Court evaluated the relationship of the parties. The types of intra-corporate relationships were reviewed in Union Glass &
Container Corporation v. Securities and Exchange Commission: For as long as any of these intra-corporate relationships exist
between the parties, the controversy would be characterized as intra-corporate. This is known as the "relationship test."
DMRC Enterprises v. Este del Sol Mountain Reserve, Inc.  employed what would later be called as the "nature of controversy test." It
became another means to determine if the dispute should be considered as intra-corporate. This Court held that it was not just the
relationship of the parties that mattered but also the conflict between them:
This Court now uses both the relationship test and the nature of the controversy test to determine if an intra-corporate controversy is
present. 
Applying the relationship test, this Court notes that both Belo and Santos are named shareholders in Belo Medical Group's Articles of
Incorporation and General Information Sheet for 2007. 
The conflict is clearly intra-corporate as it involves two (2) shareholders, although the ownership of stocks of one stockholder is
questioned.
Belo Medical Group argues that the case should not have been characterized as intra-corporate because it is not between two
shareholders as only Santos or Belo can be the rightful stockholder of the 25 shares of stock. This may be true. But this finding can
only be made after trial where ownership of the shares of stock is decided. 
The trial court cannot classify the case based on potentialities. The two defendants in that case are both stockholders on record.
They continue to be stockholders until a decision is rendered on the true ownership of the 25 shares of stock in Santos' name. If
Santos' subscription is declared fictitious and he still insists on inspecting corporate books and exercising rights incidental to being a
stockholder, then, and only then, shall the case cease to be intra-corporate.
Applying the nature of the controversy test, this is still an intra-corporate dispute. The Complaint for interpleader seeks a
determination of the true owner of the shares of stock registered in Santos' name. Ultimately, however, the goal is to stop Santos
from inspecting corporate books. This goal is so apparent that, even if Santos is declared the true owner of the shares of stock upon
completion of the interpleader case, Belo Medical Group still seeks his disqualification from inspecting the corporate books based on
bad faith
Belo Medical Group wants the trial court not to prematurely characterize the dispute as intra-corporate when, in the same breath, it
prospectively seeks Santos' perpetual disqualification from inspecting its books.
The primary aim of Belo and Belo Medical Group was to defeat his right to inspect the corporate books, as can be seen by
the filing of a Supplemental Complaint for declaratory relief.
As an intra-corporate dispute, Santos should not have been allowed to file a Motion to Dismiss.  The trial court should have continued
on with the case as an intra-corporate dispute considering that it called for the judgments on the relationship between a corporation
and its two warring stockholders and the relationship of these two stockholders with each other.
OTHER ISSUES (Remedial Law Issues):
1. NO FORUM SHOPPING:
Neither Belo nor the Belo Medical Group is guilty of forum shopping.
Belo Medical Group filed its Petition for Review on Certiorari under Rule 45 before this Court to appeal against the Joint Resolution of
the trial court. It did not file any other petition related to the case, as indicated in its verification and certification against forum
shopping. It was Belo, a defendant in Belo Medical Group's Complaint, who filed a separate appeal under Rule 43 with the Court of
Appeals primarily to protect her counterclaims.
The issue of forum shopping has become moot. The appeal under Rule 43 filed by Belo has been dismissed by the Court of Appeals
on the ground of litis pendentia.  The purpose of proscribing forum shopping is the proliferation of contradictory decisions on the
same controversy.  This possibility no longer exists in this case.
2. Rule 45 is the wrong mode of appeal.
A.M. No. 04-9-07-SC promulgated by this Court En Banc on September 14, 2004 laid down the rules on modes of appeal in cases
formerly cognizable by the Securities and Exchange Commission: AIDSTE
1. All decisions and final orders in cases falling under the Interim Rules of Corporate Rehabilitation and the Interim Rules of
Procedure Governing Intra-Corporate Controversies under Republic Act No. 8799 shall be appealable to the Court of
Appeals through a petition for review under Rule 43 of the Rules of Court.
2. The petition for review shall be taken within fifteen (15) days from notice of the decision or final order of the Regional Trial
Court. Upon proper motion and the payment of the full amount of the legal fee prescribed in Rule 141 as amended before
the expiration of the reglementary period, the Court of Appeals may grant an additional period of fifteen (15) days within
which to file the petition for review. No further extension shall be granted except for the most compelling reasons and in no
case to exceed fifteen (15) days.
On the other hand, Rule 43 of the Rules of Court allows for appeals to the Court of Appeals to raise questions of fact, of law,
or a mix of both. Hence, a party assailing a decision or a final order of the trial court acting as a special commercial court,
purely on questions of law, must raise these issues before the Court of Appeals through a petition for review. 
Belo Medical Group argues that since it raises only questions of law, the proper mode of appeal is Rule 45 filed directly to this Court.
This is correct assuming there were no rules specific to intra-corporate disputes. Considering that the controversy was still classified
as intra-corporate upon filing of appeal, special rules, over general ones, must apply.
Based on the policy of judicial economy and for practical considerations, this Court will not dismiss the case despite the wrong mode
of appeal utilized.
3. Declaratory Relief cannot be joined with interpleader
Assuming this case continues on as an interpleader, it cannot be joined with the Supplemental Complaint for declaratory relief as
both are special civil actions. However, as the case was classified and will continue as an intra-corporate dispute, the simultaneous
complaint for declaratory relief becomes superfluous. The right of Santos to inspect the books of Belo Medical Group and the
appreciation for his motives to do so will necessarily be determined by the trial court together with determining the ownership of the
shares of stock under Santos' name.
WHEREFORE, the Petition for Review of Belo Medical Group, Inc. is PARTIALLY GRANTED. The December 8, 2008 Joint
Resolution of Branch 149, Regional Trial Court, Makati City in Civil Case No. 08-397 is REVERSED regarding its dismissal of the
intra-corporate case. Let this case be REMANDED to the commercial court of origin for further proceedings.
SO ORDERED.