XII.

JURISDICTION
STRATEGIC ALLIANCE DEVELOPMENT CORPORATION
vs.
STAR INFRASTRUCTURE DEVELOPMENT CORPORATION ET AL.
G.R. No. 187872
November 17, 2010
FACTS:
Respondents Aderito Z. Yujuico and Bonifacio C. Sumbilla, in their respective
capacities as then President and Treasurer of STRADEC, executed a Promissory Note
for and in consideration of a loan in the sum of P10,000,000.00 ostensibly extended in
favor of said corporation by respondent Robert L. Wong, one of the incorporators of
SIDC. As security for the payment of the principal as well as the stipulated interests
thereon, a pledge constituted over STRADECs entire shareholdings in SIDC was
executed by respondent Yujuico on 1 April 2005. In view of STRADECs repeated default
on its obligations,11 however, the shares thus pledged were sold by way of the 26 April
2005 notarial sale conducted in Makati City by respondent Raymond M. Caraos. Having
tendered the sole bid of P11,800,000.00, respondent Wong was issued the
corresponding certificates of stocks by respondent Bede S. Tabalingcos, SIDCs
Corporate Secretary for the years 2004 and 2005, after the transfer was recorded in the
corporations stock and transfer book.
On 17 July 2006, Cezar T. Quiambao, in his capacity as President and Chairman
of the Board of Directors of STRADEC, commenced the instant suit with the filing of the
petition which was docketed as Civil Case No. 7956 before Branch 2 of the Regional
Trial Court of Batangas City, sitting as a Special Commercial Court (SCC).
ISSUE:
Whether or not the RTC has jurisdiction over the case.
RULING:
YES.
In addition to being conferred by law, it bears emphasizing that the jurisdiction of
a court or tribunal over the case is determined by the allegations in the complaint and
the character of the relief sought, irrespective of whether or not the plaintiff is entitled to
recover all or some of the claims asserted therein. Moreover, pursuant to Section 5.2 of
Republic Act No. 8799, otherwise known as the Securities Regulation Code, the
jurisdiction of the SEC over all cases enumerated under Section 5 of Presidential Decree
No. 902-A has been transferred to RTCs designated by this Court as SCCs pursuant to
A.M. No. 00-11-03-SC promulgated on 21 November 2000.
It should be noted that the SCCs are still considered courts of general
jurisdiction. Section 5.2 of R.A. No. 8799 directs merely the Supreme Court's designation
of RTC branches that shall exercise jurisdiction over intra-corporate disputes. Nothing in
the language of the law suggests the diminution of jurisdiction of those RTCs to be
designated as SCCs. The assignment of intra-corporate disputes to SCCs is only for the
purpose of streamlining the workload of the RTCs so that certain branches thereof like
the SCCs can focus only on a particular subject matter.

The RTC exercising jurisdiction over an intra-corporate dispute can be likened to

an RTC exercising its probate jurisdiction or sitting as a special agrarian court. The
designation of the SCCs as such has not in any way limited their jurisdiction to hear and
decide cases of all nature, whether civil, criminal or special proceedings.

RENATO REAL
vs.
SANGU PHILIPPINES, INC. and/ or KIICHI ABE
G.R. No. 168757. January 19, 2011
FACTS:
Petitioner Renato Real was the Manager of respondent corporation Sangu
Philippines, Inc., a corporation engaged in the business of providing manpower for
general services, like janitors, janitresses and other maintenance personnel, to various
clients. In 2001, petitioner, together with 29 others who were either janitors, janitresses,
leadmen and maintenance men, all employed by respondent corporation, filed their
respective Complaints for illegal dismissal against the latter and respondent Kiichi Abe,
the corporations Vice-President and General Manager. These complaints were later on
consolidated.
With regard to petitioner, he was removed from his position as Manager through
Board Resolution 2001-033 adopted by respondent corporations Board of Directors.
Petitioner complained that he was neither notified of the Board Meeting during which
said board resolution was passed nor formally charged with any infraction. He just
received from respondents a letter4 dated March 26, 2001 stating that he has been
terminated from service effective March 25, 2001 for the following reasons: (1)
continuous absences at his post at Ogino Philippines Inc. for several months which was
detrimental to the corporations operation; (2) loss of trust and confidence; and, (3) to cut
down operational expenses to reduce further losses being experienced by respondent
corporation.
ISSUE:
Whether or not petitioners complaint for illegal dismissal constitutes an intracorporate controversy and thus, beyond the jurisdiction of the Labor Arbiter.
RULING:
NO.
With the elements of intra-corporate controversy being absent in this case, we
thus hold that petitioners complaint for illegal dismissal against respondents is not intracorporate. Rather, it is a termination dispute and, consequently, falls under the
jurisdiction of the Labor Arbiter pursuant to Section 217 of the Labor Code.
With the foregoing, it is clear that the CA erred in affirming the decision of the
NLRC which dismissed petitioners complaint for lack of jurisdiction. In cases such as
this, the Court normally remands the case to the NLRC and directs it to properly dispose

of the case on the merits. "However, when there is enough bases on which a proper
evaluation of the merits of petitioners case may be had, the Court may dispense with
the time-consuming procedure of remand in order to prevent further delays in the
disposition of the case." It is already an accepted rule of procedure for us to strive to
settle the entire controversy in a single proceeding, leaving no root or branch to bear the
seeds of litigation. If, based on the records, the pleadings, and other evidence, the
dispute can be resolved by us, we will do so to serve the ends of justice instead of
remanding the case to the lower court for further proceedings."We have gone over the
records before us and we are convinced that we can now altogether resolve the issue of
the validity of petitioners dismissal and hence, we shall proceed to do so.

MEDICAL PLAZA MAKATI CONDOMINIUM CORPORATION, Petitioners, v.ROBERT

H. CULLEN, Respondent.
PERALTA, J.:
Facts:
Respondent purchased from Meridien Land Holding, Inc. (MLHI) a
condominium unit of the Medical Plaza Makati Condominium Corporation (MPMCC). On
September 19 2002, petitioner demanded from respondent payment for alleged unpaid
association dues and assessments amounting to P145,567.42.
Respondent disputed this demand claiming that he had been paying his dues
as shown by the fact that he was previously elected president and director of petitioner.
Petitioner, on the other hand, claimed that respondents obligation was a carry-over of
that of MLHI. Consequently, respondent was prevented from exercising his right to vote
and be voted for during the 2002 election of petitioners Board of Directors.
Respondent clarified from MLHI the said claim but MLHI claimed that such had
already been settled. Thereafter, a Complaint for Damages was filed by respondent
against petitioner and MLHI.
Petitioner filed a motion to dismiss, two of the grounds for the dismissal were the
RTCs lack of jurisdiction as the case involves an intra-corporate controversy and citing
prematurity for failure of respondent to exhaust all intra-corporate remedies.
Issues:
Whether or not the controversy involves intra-corporate issues as would fall
within the jurisdiction of the RTC sitting as a special commercial court.
Ruling:
Yes. In determining whether a dispute constitutes an intra-corporate controversy,
two tests are used, namely, the relationship test and the nature of the controversy test.
An intra-corporate controversy is one which pertains to any of the
following relationships: (1) between the corporation, partnership or association
and the public; (2) between the corporation, partnership or association and the
State insofar as its franchise, permit or license to operate is concerned; (3)
between the corporation, partnership or association and its stockholders,

partners, members or officers; and (4) among the stockholders, partners or

associates themselves. Thus, under the relationship test, the existence of any of
the above intra-corporate relations makes the case intra-corporate.
Under the nature of the controversy test, the controversy must not only
be rooted in the existence of an intra-corporate relationship, but must as well
pertain to the enforcement of the parties correlative rights and obligations under
the Corporation Code and the internal and intra-corporate regulatory rules of the
corporation. In other words, jurisdiction should be determined by considering
both the relationship of the parties as well as the nature of the question involved.
Applying the two tests it was held that the case involves intra-corporate
controversy. It obviously arose from the intra-corporate relations between the
parties as petitioner is a condominium corporation duly organized and existing
under Philippine laws, and respondent, on the other hand, is the registered
owner of Unit No. 1201 and is thus a stockholder/member of the condominium
corporation. Clearly, there is an intra-corporate relationship between the
corporation and a stockholder/member.
Further, the questions involved pertain to their rights and obligations
under the Corporation Code and matters relating to the regulation of the
corporation.

XIII. CORPORATE POWERS

REPUBLIC OF THE PHILIPPINES
vs.
ACOJE MINING COMPANY, INC.
G.R. No. L-18062. February 28, 1963
FACTS:
On May 17, 1948, the Acoje Mining Company, Inc. wrote the Director of Posts
requesting the opening of a post, telegraph and money order offices at its mining camp
at Sta. Cruz, Zambales, to service its employees and their families that were living in
said camp. Acting on the request, the Director of Posts wrote in reply stating that if aside
from free quarters the company would provide for all essential equipment and assign a
responsible employee to perform the duties of a postmaster without compensation from
his office until such time as funds therefor may be available he would agree to put up the
offices requested. The company in turn replied signifying its willingness to comply with all
the requirements.
On April 11, 1949, the Director of Posts again wrote a letter to the company
stating among other things that "In cases where a post office will be opened under
circumstances similar to the present, it is the policy of this office to have the company
assume direct responsibility for whatever pecuniary loss may be suffered by the Bureau
of Posts by reason of any act of dishonesty, carelessness or negligence on the part of
the employee of the company who is assigned to take charge of the post office," thereby
suggesting that a resolution be adopted by the board of directors of the company

expressing conformity to the above condition relative to the responsibility to be assumed

buy it in the event a post office branch is opened as requested.
On September 2, 1949, the company informed the Director of Posts of the
passage by its board of directors of a resolution The letter further states that the
company feels that that resolution fulfills the last condition imposed by the Director of
Posts and that, therefore, it would request that an inspector be sent to the camp for the
purpose of acquainting the postmaster with the details of the operation of the branch
office.
ISSUE:
Whether or not the act of the Board in issuing the said resolution of conformity
was ultra vires.
RULING:
NO.
The corporate act was a necessary corollary to promote the interest and welfare
of the corporation. This is further bolstered by the fact that the opening of the post was
upon the request of the company for the convenience and benefit of its employees, and
not an idea of the Director of Posts. Thus, having benefited from the agreement, the
corporation is estopped from raising the defense that the said corporate act by its board
in conforming to the condition imposed by the Director of Posts is ultra vires.
Neither can the corporation interpose the defense that its liability is only that of a
guarantor. A mere reading of the resolution of the Board of Directors dated August 31,
1949, upon which the plaintiff based its claim, would show that the responsibility of the
defendant company is not just that of a guarantor. The phraseology and the terms
employed are so clear and sweeping and that the defendant assumed 'full responsibility
for all cash received by the Postmaster.' Here the responsibility of the defendant is not
just that of a guarantor. It is clearly that of a principal."

DATU TAGORANAO BENITO

vs.
SECURITIES AND EXCHANGE COMMISSION and JAMIATUL PHILIPPINE-AL
ISLAMIA, INC.
G.R. No. L-56655. July 25, 1983
FACTS:
On February 6, 1959, the Articles of Incorporation of respondent Jamiatul
Philippine-Al Islamia, Inc. (originally Kamilol Islam Institute, Inc.) were filed with the
Securities and Exchange Commission (SEC) and were approved on December 14,
1962. The corporation had an authorized capital stock of P200,000.00 divided into
20,000 shares at a par value of P10.00 each. Of the authorized capital stock, 8,058
shares worth P80,580.00 were subscribed and fully paid for. Petitioner Datu Tagoranao
Benito subscribed to 460 shares worth P4,600.00.

On October 28, 1975, the respondent corporation filed a certificate of increase of

its capital stock from P200,000.00 to P1,000,000.00. Thus, P110,980.00 worth of shares
were subsequently issued by the corporation from the unissued portion of the authorized
capital stock of P200,000.00. Of the increased capital stock of P1,000,000.00,
P160,000.00 worth of shares were subscribed by Mrs. Fatima A. Ramos, Mrs. Tarhata A.
Lucman and Mrs. Moki-in Alonto.
Petitioner Datu Tagoranao filed a petition alleging that the additional issue (worth
P110,980.00) of previously subscribed shares of the corporation was made in violation of
his pre-emptive right to said additional issue and that the increase in the authorized
capital stock of the corporation from P200,000.00 to P1,000,000.00 was illegal
considering that the stockholders of record were not notified of the meeting wherein the
proposed increase was in the agenda.
Respondents denied the material allegations of the petition and claimed that
petitioner has no cause of action and that the stock certificates covering the shares
alleged to have been sold to petitioner were only given to him as collateral for the loan of
Domocao Alonto and Moki-in Alonto. The SEC affirmed the sale.
ISSUE:
Whether or not the issuance of the unissued shares was subject to the preemptive right of the stockholders.
RULING:
NO.
The Court held that the questioned issuance of the unsubscribed portion of the
capital stock worth P110,980.00 is not invalid even if assuming that it was made without
notice to the stockholders as claimed by petitioner. The power to issue shares of stocks
in a corporation is lodged in the board of directors and no stockholders' meeting is
necessary to consider it because additional issuance of shares of stocks does not need
approval of the stockholders.
Petitioner bewails the fact that in view of the lack of notice to him of such
subsequent issuance, he was not able to exercise his right of pre-emption over the
unissued shares. However, the general rule is that pre-emptive right is recognized only
with respect to new issue of shares, and not with respect to additional issues of originally
authorized shares. This is on the theory that when a corporation at its inception offers its
first shares, it is presumed to have offered all of those which it is authorized to issue. An
original subscriber is deemed to have taken his shares knowing that they form a definite
proportionate part of the whole number of authorized shares. When the shares left
unsubscribed are later re-offered, he cannot therefore claim a dilution of interest.

XIV. CONTROL AND MANAGEMENT