ISMAEL MATHAY vs.

THE CONSOLIDATED BANK AND TRUST COMPANY

(G.R. No. L-23136, August 26, 1974)
FACTS:
Petitioner along with other individuals were former stockholders of Consolidated Mines
Inc. (CMI). Petitioners filed a case for a class suit against CMI containing six causes of action.
Petitioners alleged that in violation of the Board resolution, the defendants unlawfully acquired
stockholdings in the defendant Bank in excess of what they were lawfully entitled, hence
depriving the petitioners of their right to subscribe at par value, in proportion to their equities
established under their respective "Pre-Incorporation Agreements to Subscribe" to the capital
stock and that the Articles of Incorporation were fraudulently amended by the defendants. The
complaint was dismissed by the Trial Court on the ground that the class suit could not be
maintained because of the absence of a showing in the complaint that the plaintiffs-appellants
were sufficiently numerous and representative, and that the complaint failed to state a cause of
action. The CA affirmed the ruling, hence, the appeal.

ISSUE:
Whether or not the instant action could be maintained as a class suit in concurrence
with Rule 3, Section 12 of the Rules of Court.

RULING:
The Court answered in the negative. The Court has detailed necessary elements for the
maintenance of a class suit are accordingly: (1) that the subject matter of the controversy be
one of common or general interest to many persons, and (2) that such persons be so numerous
as to make it impracticable to bring them all to the court. An action does not become a class
suit merely because it is designated as such in the pleadings. Whether the suit is or is not a class
quit depends upon the attending facts, and the complaint, or other pleading initiating the class
action should allege the existence of the necessary facts, to wit, the existence of a subject matter
of common interest, and the existence of a class and the number of persons in the alleged class,
in order that the court might be enabled to determine whether the members of the class are so
numerous as to make it impracticable to bring them all before the court, to contrast the number
appearing on the record with the number in the class and to determine whether claimants on
record adequately represent the class and the subject matter of general or common interest.
The complaint in the instant case explicitly declared that the plaintiffs- appellants
instituted the "present class suit under Section 12, Rule 3, of the Rules of Court in. behalf of
CMI subscribing stockholders" but did not state the number of said CMI subscribing
stockholders so that the trial court could not infer, much less make sure as explicitly required
by the sufficiently numerous and representative in order that all statutory provision, that the
parties actually before it were interests concerned might be fully protected, and that it was
impracticable to bring such a large number of parties before the court.
The statute also requires, as a prerequisite to a class suit, that the subject-matter of the
controversy be of common or general interest to numerous persons. Although it has been
remarked that the "innocent 'common or general interest' requirement is not very helpful in
determining whether or not the suit is proper", the decided cases in our jurisdiction have more
incisively certified the matter when there is such common or general interest in the subject
matter of the controversy. By the phrase "subject matter of the action" is meant "the physical
facts, the things real or personal, the money, lands, chattels, and the like, in relation to which
the suit is prosecuted, and not the delict or wrong committed by the defendant."