~nn~igauhauatt - sandiganbayansb.judiciary.gov.ph/decisions/2009/j_civil_sb_08... · dispose of the...

Republic of the Philippines '

~nn~igauhauattQuezon City

THIRD DIVISION

REPUBLIC OF T!-L., PHILIPPINES,Plaintiff,

- versus -

AEROCOl'vi INV;~STORS &MANAGERS INC. & ISMCOMMUNICA TIJNSCORPORATION,

Respondents.

CIViL CASE NO. SB-08-CVL-OOOI

FOR: Declaration of Nullity and/orRescission of Contract

Present:

VILLARUZ, JR., J. ChairmanDELA CRUZ, J.QUIROZ, l

Promulgated:

x---------------------------------------------------------------------------------------------------------x

RESOLUTION

VILLARUZ, JR. J.:

For resoluti:m before this Court are the following:,

1. Defendant 'SM COMMUNICATIONS CORPORATION

(ISl\I), th.-u counsel's "MOTION FOR SUMMARY

JUnGlVIEr\TT" filed on March 12,2009.1

2. Plaintiff, Republic of the Philippines, thm the Office of the

Solicitor G:;neral (OSG)'s "MOTION" filed on May 4, 2009.2

I Records, Vol, 1, pgs. 253-2562 Records, Vol. 1. pgs. 260-265

I

i,

P '1 n ,. 12~ , I~•••••.

SB-08-CVL-OOO]

Republic VS. AerocomResolutionx--------------------------------x

3. Defendant IS0.,I, thru counsel's "COMl\'lENT /OPPOSITION

(to lVIotion dated APRIL 29, 2009)" filed on May 5,2009.3

4. Plaintiff, Republic of the Philippines, thm the OSG's

"CorvIMENr~. AND OPPOSITION" fijed on May 25, 2009.4

5. Defendant ISM, thm counsel's "REPLY (to

Comment/Opposition dated May 21, 2009)" filed on June 3,

2009.5

Defendant IS\1 fijed a Motion for Summary Judgment asking this Court to

dismiss the Complaznt 6 dated March 11, 2009. They aver that by filing a .Motion

to Dismiss 7 on :lvIa) l 5, 2008, they admit the truth of the relevant and material

facts pleaded in Ccmplaint. However, such admission does not extend to

conclusions or intcrpi'etations of law as alleged by the Plaintiff and the effect of

the Motion to Dism.'ss is that no issue has been raised as to any material fact that

",.'ould require presl'::ntation of evidence. Hence a summary Judgment is proper.

They also aver that tbe granting of the summary judgment will expeditiously

dispose of the case (Lndwill avoid the expense and loss oftime involved in a trial.

Plaintiff hmvever prays that the defendant be declared in default and also

cIain1 that they were not furnished a copy at the A10tion jor Summary Judgment

and \vere not infonncd of the date when the said motion was set for hearing and

thus were unable to comply with the Court's Order to make an intelligent

Comment/Opposition 011 the said motion. They also manifest that the period

granted to defendaLt ISM within which to file and answer has already elapsed and

the filing of a motior for summary judgment, which is not considered a responsive

pleading, did not toll the running ofthe period to file an answer.

In their Comment/Opposition (To Motion Dated April 29, 2009),

defendants counte:- that plaintiff is making false allegations and misleading this

Court by stating that it never received a copy of the Motion. They claim that they /

, Recmd" Vol. I. pg'. 266·292 /

4 RecQrds, Vol. 1. pgs. 2..96-302 ~ n5 Records, Vol. I. \

6 R . d V! •. '») r I \

ecor s, (\. J. pgs .• -L_ , .

, Recocd, Vol. ;, pg'. 6,'·"2 \ ~.

J'agl: :3SB-08-CVL-COO 1


even furnished plain.:ff a copy \vhich was received by plaintiff on March 13,

2009. They also aver t11atthe Complaint does not raise a genuine issue as to any

material fact that would require the presentation of evidence. The effect of filing

the Motion to Dismiss, and its denial, the material allegations in the Complaint are

hypothetically admitted and a summary judgment is only proper. Moreover, they

state that there is no ground to declare them in default as there is a proper motion

duly filed periding this Court's Resolution and its resolution would dispose of the

case and will avoid tde expense and loss of time involved in a trial.

The OSG in tllcir Comment/Opposition submits that Motion for Summary

Judgment filed by tile defendant should be discarded for being pro forma,

frivolous and prema.lIre since there was yet no responsive pleading filed so that

the issues could be joined and it also pre-empts the Comi from ruling that

defendant is already in default. They argue that defendant failed to comply with

Section 2, Rule 35 of the Rules of Court which provides that a motion should be

accompanied with supporting affidavits, depositions and admissions, that serve as

a basis for demonst-ating the lack of any genuine issue/s in the complaint. They

also argue, that on the basis of plaintiff s claim, defendant is already in default and

is devoid of personality to file the motion and may not resuscitate its standing as a

non-suited party ane substitute the same for the required answer.

In their Rep!y (to Comment/Opposition dated May 21, 2009), Defendants

contend that the Ph.lntiffs assertions deserve scant consideration for the reason

that filing of a respor.sive pleading is not a condition precedent for filing a motion

for summary judgment and the Rules of Court allow the filing of a motion for

summary judgmer-,t at any stage of the proceedings. Fmihermore, affidavits

depositions and adi1~issions supporting a motion for summary judgment are not

indispensible requirements, since, as long as there is no genuine issue of fact

involved, the trial::ourt is required to render a summary judgment. Furthermore,

they reiterate that '~hisCourt in its Resolution dated December 7, 2007, declared

that the subject transactions between ISM and co-Defendant Aerocom Investors &

Managers, Inc. we-:e not sequestered and a cursory reading of the Complaint will

show that trial is not necessary to ascertain if the allegations therein are true./

Finally, they assert that they are not yet in Default because this cou~as fV

SB-08-CVL-OOO 1

Republic VS. AerocomResolution)[--------------------------------x

declared them as such and a motion for surnmary judgment is a proper motion

duly filed and pending with this Court.

The issues to :)e resolved by this Court are the following:

1. 'Whether or not the Defendant should be declared in default

for not havhg filed an Answer in due time and instead fileda Motion:or Summary Judgment.

2. Whether or not a Motion for Summary Judgment may befiled by t1" e Defendant in lieu of its Answer.

3. 'Whether ')f not the Molion for Summary Judgment shouldbe granted.

Default and the pr.Jpriety of aMotion for Summ •.ry Judgmentin lieu of an Answer

Default presJpposes that the defending party failed to file the necessary or

required pleading wi~.hinthe reglamentary period. Section 3, Rule 9 of the Rules of

Court provides:

"SEC':'ION 3. Default,. Declaration of - If thedefending pc-rty fails to answer within the time allowedtherefor, the court shall, upon motion of the claiming partywith notice to the defending party, and proof of such failure,declare the defending party in default. Thereupon, the courtshall proceed to render judgment granting the claimant suchrelief as his pleading may warrant, unless the court in itsdiscretion "equires the claimant to submit evidence. Suchreception 0 'evidence may be delegated to the clerk of court."

Plaintiffs c.)ntend that defendant is already in default when it failed to fiie

its answer within tLe given period set by this Court. Instead of 11lingan answer,

defendant filed a Lv:otionfor Summary Judgment which cannot be substituted for

defendant's answer VIIf\I !

) J

SB-08-CVL-OOO 1


i

The records snow that the Defendant should have filed its answer on May

15, 2008. Instead of tiling an answer, it filcd a lvfotion to Dismiss on May 14,

2008. On Septe1110er19,2008 Defendant received a Resolution denying its JvJotion

to Dismiss. It filed a lvJotion for Reconsideration on October 6, 2008 and on

February 24, 2009., it received copy of the Resolution denying the same.

Defendant then filed a Motion for Extension to file an Answer on February 27,

2009 and prayed it be given an additional 15 days from March 1, 2009 to file and

submit its answer. This Court granted the motion and gave defendant an

inextendible period GiJ to March 16, 2009 to file its answer. On March 12, 2009,

instead of filing an answer the Defendant filed a Motion for Summary Judgment.

In the case at ba;:, the records show that the defendant filed a different

pleading, though not an answer, within the period given for it to file an answer.

The Rules of Court is silent as regards the filing of a Motion for Summary

Judgment in lieu of an answer. However, what the Rules provide is that a Motion

for Summary Judgment may be filed by the defendant at anytime and move with

supPOliing affidav::s depositions or admissions for a summary judgment in his

favor as to all or 81:Y part thereof. Thus, a defending party can move for summary

judgment anytime, that is, anytime after the filing and service of the complaint and

even before he ar.s'vers8.

On that premise, the filing of ,a motion for summary judgment is not

p:;ohibited by the m:es and may be admitted even though defendant has not filed

its answer.

It bears stressing that the rules of procedure are mere tools designed to

facilitate the attainment of justice and its strict and rigid application which would

result in technicaliti~s that tend to frustrate rather than promote substantial justice

must be always a'· aided. Section 6, Rule 1 of the Rules of Court provide that the

rules shall be liberally construed in order to promote their objective in securing a

8 Emilio L. Gayo, Handbook on Civil Procedure, i51 Ed., 1999, pg. 194 1~I '-./

SB-08-CYL-OGO 1

Republic vs. AerocomResolutionx--------------------------------x

just, speedy and in~xpensive disposition of every action or proceeding. We

reiterate our ruling ir. Resolution9 dated September 16,2008:

"The court has allowed some meritorious cases to

proceed despite inherent procedural defects and lapses. This isin keeping with the principle that rules of procedure are meretools. designed ~ofacilitate the attainment of justice and that thestrict and rizid application of rules which would result intechnicalities __Jhat tend to frustrate rather than promotesubstantial justice must be always avoided. It is a far better andmore prudent course of action for the court to excuse atechnical lapse and afford the parties a review of the case toattain the ends of justice, rather than dispose of the case ontechnicality 0.nd cause grave injustice to the parties, giving afalse impres~,jon of speedy disposal of cases while actuallyresulting in rnere delay if not miscarriage of justice.,,10[Emphasis m.rs]

On the l\1otion forSummary Judgmen:

In this casc, ':he Complaint substantially alleged the following:

"NATURE OF ACTION

1. This is a civil action seeking to declare the nullity and/orrescission oX the contract entered into by and between thedefendants j •.uocom Investors and Managers, Inc. (AEROCOMhereinafter) and ISM Communications Corporation (ISM),involving shares of stocl{ in Eastern TelecommunicationPhilippines, Incorporated (ETPI), consisting of 4,600,557 Class"A" commm1 shares subject of the Htigation before thisHonorable CGurt in the case entitled "Republic of the Philippinesvs. Jose L. .A/dca, et af.," docketed as Civil Case No. 0009. Thesale, transfer, or conveyance of said shares of stocIi.contraveneslaw and puhllc policy. Further, it was done without notice to andapproval by the Honorable Court. Hence, it is null and void and is

subject to reSC,SSion_1('---"-1')9 Records, Vol. 1, pgs" j 66- j 84 II10 Vallejo V.I'. COllr! of ,'Irypeals, 42 SGJl.A 658

\ \\V

Page !7SB-·08-CYL-OOO1

Republic vs. AemcomResolutionx--------------------------------x

x x x

ALLEGA.TIONS IN SUPPORT OF THE COMPLAINT

5. On M0.~·C(l 14, 1986, PCGG issued an Order pursuant toExecut,ve Order Nos. 1 and 2, directing the sequestrationlli'1dimmediate takeover of ETPI, among other companies,including their assets, funds and records.

6. On July 22, 1987 plaintiff, represented by PCGG, institutedCivil Case No. 0009, an action for reconveyance, reversion,accounting, restitution and damages against Jose L. Africa,Roberto Benedicta, Manuel H. Nieto, Jr., Ferdinand E.Marcos, Imelda Marcos, Ferdinand E. Marcos, Jr., JuanPonce:Znrile and Potenciano Ilusorio. The action seeks to

recover from therein defendants, ill-gotten wealth consistingof funds, assets and other property which the saiddefendants, acting singly, or collectively and/or in unlawfulconcert with one another, acquired and accumulated throughmisappropriation and theft of public funds, plunder of thenational wealth and such other illegal acts as aIleged in thecomplairJ, which resulted in their unjust enrichment duringthe rule of former President Marcos from December 30,1965 UJ to February 25, 1986.

7. Specifically, among the assets or property sought to berecove.-ed and reconveyed to Plaintiff in Civil Case No. 0009are the ETPI shares of stock recorded in the names of therein

defenc:ants Manuel H. Nieto, Jr., and AEROCOM, the latterhaving been organized purportedly as a family corporationbut was created and used as a conduit or device to hold and

conceal .II-gotten wealth of former President Marcos and hisfamily in such telecommunication companies as thePhilipriine Communication SatelJite Corporation(PHILCOMSA T), Overseas Wireless Network, Inc.,(OWNI) and Domestic Satellite Corporation (DOMSA T),includmg the majority shareholdings in ETPI.

x x x

10. Later, it was found out that on July 11, 2005 defendantAERCCOM entered into a Memorandum of Agreement(MOA) with defendant ISM. Pursuant to the terms andcondiLons of said agreement, AEROCOM sold, transferredand conveyed to ISM Four Million Six Hundred ThousandFive Hundred Fifty Seven (4,600,557) fully paid commonClass "A" shares of stock in ETPI in consideration for the

transfer and conveyance by ISM to AEROCOM, of its SixBillion 2ight Hundred Sixteen Million Seven Hundred SixtyOne Thousand and Ninety Three (6,816,761,093.) new,registered and listed shares, with a par value of PO.Ol pershare. For this purpose, AEROCOM would subscribe to theISM stares and pay for such subscription through the

assignment and transfer of the ETPI shares. 1\1( \

V )

Page !8SB-08-CVL-OCO 1

Republic vs. Ae:-ocomResolutionx--------------------------------x

x x x

CAUSES OF ACTION

MAIN CAUSE OF ACTION(Declaration of NuHity of Contract)

12. It bears stressing that the entire shan-holdings ofAEROCOM in ETPI forms part of the ill-gotten wealthof former President Ferdinand E. Marcos and is thesubjec;; of recovery by the Republic in Civil Case No.(J009 for the benefit of the Filipino people.

x x x

14. ExecuLive Order (E.O.) No.2, Series of 1986, issued by thePresident of the Philippines on March 12, 1986, effectivelyfroze all the assets and property in which former PresidentMarcos and his family have interest an.d participation, andexpressly prohibited any person from transferring,conveying or otherwise depleting or concealing such assetsor properties or from assisting or taking part in their transferor dissipation under pain of such penalties as are provided bylaw.

15. The ~r10Aentered into between AEROCOM and ISMconcerning the sale, transfer and conveyance of the4,600.557 shares of stock of AEROCOM and ETPIcontravenes E.O. No.2, S. 1986 and defeats the publicpolicy ordained therein.

x x x

17. Since the questioned MOA between defendantsAEROCOM and ISM contravenes E.O. No.2, S. 1986which expressly prohibits the transaction, therefore, thesaidwntract is inexistent and void ab initio pursuant tothe above provision of the Civil Code.

AL TERNA TIVE CAUSE OF ACTION

(Rescission of Contract)

18. The assailed MOA is likewise subject to rescission underArticle 1381 of the Civil Code which provides:

"( 1; Those which are entered into by guardianswhenever the wards whom they represent

suffer lesion by more than one fourth of thef1

SB-08-CYL--OOO 1


vaiue of the things which are the subjectthereof;

(2) 'r;iose agreed upon in representation ofabsentees, if the laTter suffer lesion stated in.he preceding number;

(3) TilOse undertaken in fraud of creditors when.he latter cannot in any other manner conect,he claims due them;

(4) Those which refer to things under1;1tigation if they have been entered into bythe defendant without the knowlcdf!c anda~>proval of the litif!ants or of competentfudicial authority;

x x x

19. Indubitably, CivH Case No. 0009, a suit instituted by theRepublie to recover the entire equity of AEROCOM inETPI for being ill-gotten, is still pending litigation beforethis Honorable Court.

20. The txecution of the questioned MOA was donesurreptitiously without the knowledge and approval ofthe plaintiff and PCGG and worse, without securing theapproval of this Honorable Court which took cognizancethat the property or shareholdings under litigation hasbeen established by prima facie evidence to be ill-gotten."(Emphasis Supplied)

From the allegations in the Complaint, the following issues of fact can be

gathered:

1.) Did the transfer and conveyance of the 4,600,557 shares ofstock of AEROCOM in ETPI to ISM contravene E.O. No.2,S. 1986 and defeat the public policy ordained therein, hencesub,ject to nullification '!

2.) Are the shares of AEROCOM in ETPI under litigation in CivilCase No. 0009 such that the transfer should have been approvedby the Plaintiff or the Court ? If so, is the MOA between

AEROCOM and ISM subiect to reci5sioB ?if\I! )

V

P age ! 10SB-08-CVL-OOO 1

Republic vs. AerocomResolutionx---------------------------------x

Section 2, Rule 35 of the Rules of Court provides:

Se~. 2. Summary judgment for defending party. - Aparty against \vhom a claim, counterclaim, or cross-claim isasserted or a declaratory relief is sought may, at any time,move with supporting affidavits, depositions or admissions fora summary jt,dgment in his favor as to all or any part thereof.

For a summary judgment to be proper, the movant must establish two

requisites: (a) there ;nust be no genuine issue as to any material fact, except for the

amount of damages; and (b) the party presenting the motion for summary

judgment must be enUled to a judgment as a matter of law. 1i

A "genuine issue" is an issue of fact which requires the presentation of

evidence as distinguished from a sham, fictitious, contrived or false claim. The

trial court can determine a genuine issue on the basis of pleadings, admissions,

documents, affidavits or counter-affidavits submitted by the parties. \Vhen the

facts as pleaded appear uncontested or undisputed, then there is no real or genuine

issue or question as to the facts, and summary judgment is called for. 12

The lack of supporting affidavits, depositions or admissions are not

indispcnsible and not fatal to Defendant ISM's Motion. This Court may render

summary judgment even if there are no attached affidavits or depositions to the

motion for summacy judgment as long as there is no genuine issue of fact. The

absence of any genuine issue of fact may be determined by taking judicial notice

of Decisions of the Supreme Court or previous resolutions of the same court

resolving the same issues of fact.

As held in Repub~ic vs. Sandiganbayan et. aI., 13 :

"In fac~, it is the law itself which determines when summaryjudgment is called for. Under the rules, summary judgment isappropriate ',,'hen there are no genuine issues of fact requiring the

11 Ontimarc YS. Spouses Elep, 479 SCRA 25712 Rivera v. Solidbank Cm poration, 487 SCRA 512, 53513 GR No. 152] 54, July] 5,2003

Pd. g c ! 11SB-08-CVL-OCOl


presentation of evidence in a full-blown trial. Even if on their facethe pleadings appear to raise issue, if the affidavits, depositions andadmissions show that such issues are not genuine, then summaryjudgment as prescribed by the rules must ensue as a matter of law.

In sum, mere denials, if unaccompanied by any fact whichwill be admissi')le in evidence at a hearing, are not sufficient to raisegenuine issues of fact and will not defeat a motion for summaryjudgment. A suri1mary judgment is one granted upon motion of aparty for an ex;)cditious settlement of the case, it appearing from thepleadings, depositions, admissions and affidavits that there are noimportant questions or issues of fact posed and, therefore, themovant is entitled to a judgment as a matter of law. A motion forsummary jadgment is premised on the assumption that the issuespresented need not be tried either because these are patently devoidof substance cr that there is no genuine issue as to any pertinentfact. It is a method sanctioned by the Rules of Court for the promptdisposition of a civil action where there exists no seriouscontroversy. Summary judgment is a procedural device for theprompt disposition of actions in which the pleadings raise only alegal issue, no: a genuine issue as to any material fact. The theory ofsummary judgment is that, although an answer may on its faceappear to ter~dcr issues requiring trial, if it is established byaffidavits, depositions or admissions that those issues are notgenuine but flc1itious, the Court is justified in dispensing with thetria! and rendering summary judgment for petitioner.

In this case, Vie cannot avoid taking judicial notice of the Decisions of the

Scpreme Court dealing with the matter of sequestration of AEROCOM as well

proceedings and resolutions We promulgated in Civil Case No. 0009 as these two

cases are inextricabiy linked to each other by virtue of their consolidation.

In PCGG vs Salldiganbayan, 14 the Supreme COUl1held:

"Thuc is no existing sequestration to tall{ about in thiscase, as the writ issued against Aerocom, to repeat, is invalid forreasons hereinbefore stated. Ergo, the suit in Civil Case No.0009 against Mr. Nieto and MI:". Africa as shareholders inAcrocom is not and cannot ipso facto be a suit against theunimpleaded Aerocom itself without violating the fundamentalprinciple that a corporation has a legal personality distinct andseparate from its stockholders. Such is the ruling laid down inPCGO v. Inf.;;rco reiterated anew in a case of more recent vintage Republic v. Sandiganbayan, Sipalay Trading Corp. and AlliedBanking Co:p. where this Court, speaking through Mr. JusticeRicardo J. Francisco, hewed to the lone dissent of Mr. Justice

14 GR No. 125788, June 5, J 998

y

P a ? e i 12SB-08-CVL-OOO 1


Teodoro R. Padilla in the very same Republic v. Sandiganbayancase herein invoked by the PCGG, to wit:

'x x x failure to implead these corporations asdefendants and merely annexing a list of suchcorponnions to the complaints is a violation of theirright to due process for it would in effect bedisregai"ding their distinct and separate personalitywithoul 8 hearing.'

"In cases whe;"c stocks of a corporation were allegedly the fruits ofill-gotten wealth, it should be remembered that in most of thesecases the stocks involved constitute a substantial if not controllinginterest in the corporations. The basic tenets of fair play demandthat these corporations be impleaded as defendants since a judgmentin favor of 1he government will undoubtedly substantially anddecisively affec: the corporations as distinct entities. The judgmentcould strip them of everyt~ling without being previously heardas they are nOL parties to the action in which the judgment isrendered. "

In a ResolutIOn promulgated on December 7, 2007 in Civil Case No. 0009,

15 We ruled:

"We also take note that only 22% of the shares ofETPI is under sequestration. Apropos to the preservation ofthe 22% sequestered shares is the right of the 78% ofETPI's stockholders whose shares remain unsequestered. Asto the latter shares, the stockholders may dispose of themfree from restrictions and interventions from the State, foras far as these unseQu.estered shares are concerned, thevremain to be 'free' property of the stockholders who ownthem." (Emphasis Supplied)

The Decision of the Supreme Court in PCGG vs. Sandiganbayan and this Court's

resolution in Civil Case No. 0009, lead to the ineluctable conclusion that:

1.) AEROCJ\1 shares in ETPI are not sequestered nor subject of

any freezc order;

2.) The suit in Civil Case No. 0009 against Mr. Nieto and Mr.

Africa as shareholders in Aerocom is not and cannot ipso facto

15 Annex "8", Comment/:Jpposition, Records, YoU, pp.280-281

be a suit agaiast the unimpleaded Aerocom. ,

0(\II )~ y J

!IdV

Pagci13SB-08-CVL-000 1


For the [orego~Jg reasons, there is no need to present any evidence on the factaal

issue of whether there has been a violation of EO No, 2, series of 1986 since no less than

the Supreme Court has resolved that AEROCOM shares in ETPI were not covered by any

sequestration or freeze order and We had previously ruled that the unsequestered shares

in ETPI may be freely disposed of by the stockholders. There being no need to present

evidence on this particu.ar fact, the violation of EO NO.2 series of 1986 is not a genuine

issue of fact and summary judgment may ensue.

As to the alternative cause of action of the Plaintiff praying for the recission of the

MOA oetween AEROCOM and ISM on the ground that the propeliy subject of the MOA

was property in iitigation in Civil Case No.0009 and that the approval of the litigants and

the proper judicial mthority should have been secured, a reading of the Complaint in

Civil Case No. 0009, ,:r.d the Decision of the Supreme Court in PCGG vs. Sandiganbayan

i6will readily disclose the folJowing:

1.) The suit is against Jose Africa, Manuel Nieto, k Ferdinand

E. Marcos, Imelda R. Marcos, Ferdinand R. Marcos, Jr.,

Roberto S. Benedicto, Juan Ponce Emile, Potenciano

Ilusorio ;

2.) What is sought to be recovered, inter alia, are the shares of

stock of Jose Africa and Manuel Nieto Jr. in AEROCOM; 17

3.) The CO[;lplaint does not seek to recover the shareholdings of

AEROCOM in ETPI.

Undisputably, assets of AEROCOM ( which include ETPI shares) are not

assets of the stockhGlders of AEROCOM because of the separate personality of a

corporation from its stockholders.

The issue of whether the shares transferred by AEROCOM to ISM are

subject of litigation in Civil Case No. 0009 having been resolved by no less than the

Supreme Court, no genuine issue of fact, i.e. whether the shares transferred are

involved in iitigatioil- exists.

Assuming ex gratia argumenti that the 4,600,557 ETPI shares of AEROCOM

are subject of litigation in Civil Case No. 0009, as admitted by the Plaintiff, Civil

16 Supra.]7 Annex "A" of the Complaint

P age 114SB-08-CYL-OOO 1

Republic YS. AerocomResolutionx--------------------------------x

Case No. 0009 is stm Gngoing and the subject sharcs have not "-Icen adjudged in

favor of the Plaintiff. Hence, the present suit against ISM is premature.

WHEREFORE, the Motion to Declare Defendant ISM in Default is

DENIED. The Motion For Summary Judgment is GRANTED. The case against

Defendant ISM COinmmications Corporations (ISM) is DISMISSED.

SO ORDERED

Quezon City, 7hilippines.

FRANCI£.~ARUZ' JR.Associate Justice

Chairman

We concur:

EFREN~.(~A CRUZ

Assodate Ju~ticeI' JV

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