G.R. No.
181416; November 11, 2013
Posted by: Ocace Dave R. Maramara on July 26, 2018
FACTS:
Respondent (Cullen) purchased from Meridien Land
Holding,Inc. (MLHI) condominium Unit No. 1201 of the
petitioner. Old title was later cancelled and new title (CCT
64218) was issued in respondent's name. On 19 September
2002, petitioner (MPMCC) demanded from Cullen payment
for unpaid association dues and assessments claiming a
carry-over of MLHI. Cullen refused claiming they are being
religiously paid. Consequently, Cullen was prevented from
exercising his right to vote and be voted during election of
MPMCC's BOD. When MLHI clarified that his dues had
already been settled and upon MPMCC's failure to explain
why is such, he filed a Complaint for Damages against
MPMCC in RTC Makati, acting as a regular court. MPMCC
and MLHI moved to dismiss mainly on the ground of lack of
jurisdiction. On 9 September 2009, the RTC dismissed the
complaint on the ground that the action falls within the
exclusive jurisdiction of HLURB and that the issues raised
are intra-corporate between the corporation and member. On
appeal, the CA reversed RTC decision holding that the
controversy is an ordinary civil action for damages within the
jurisdiction of regular courts. When motions for
reconsideration was denied, petitioners filed the present
petition for review on certiorari under Rule 45.
ISSUE:
Whether or not the case falls within RTC sitting as a special
commercial court or an ordinary action for damages within
the jurisdiction of regular courts.
HELD:
The petition is meritorious.
It is a settled rule that jurisdiction over the subject matter is
determined by the allegations in the complaint. It is not
affected by the pleas or the theories set up by the defendant
in an answer or a motion to dismiss. Otherwise, jurisdiction
would become dependent almost entirely upon the whims of
the defendant. Also illuminating is the Court's
pronouncement in Go v. Distinction Properties Development
and Construction, Inc.:
Basic as a hornbook principle is that jurisdiction over the
subject matter of a case is conferred by law and determined
by the allegations in the complaint which comprise a concise
statement of the ultimate facts constituting the plaintiff's
cause of action. The nature of an action, as well as which
court or body has jurisdiction over it, is determined based on
the allegations contained in the complaint of the plaintiff,
irrespective of whether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein. The
averments in the complaint and the character of the relief
sought are the ones to be consulted. Once vested by the
allegations in the complaint, jurisdiction also remains vested
irrespective of whether or not the plaintiff is entitled to recover
upon all or some of the claims asserted therein.
In determining whether a dispute constitutes an intra-
corporate controversy, the Court uses two tests, 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.2
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, we find and so hold that the case
involves intra-corporate controversy. It obviously arose from
the intra-corporate relations between the parties, and the
questions involved pertain to their rights and obligations
under the Corporation Code and matters relating to the
regulation of the corporation.
CONCORDE CONDOMINIUM v. AUGUSTO H. BACULIO,
GR No. 203678, 2016-02-17
Facts:
Concorde Condominium, Inc., by itself and comprising the
Unit Owners of Concorde Condominium Building... a Petition
for Injunction... against respondents New PPI Corporation
and its President Augusto H. Baculio; Asian Security and
Investigation Agency and its security guards, Engr. Nelson
B. Morales... and any and all persons acting with or under
them (respondents).
(1) to enjoin respondents Baculio and New PPI Corporation
from misrepresenting to the public, as well as to private and
government offices/agencies, that they are the owners of the
disputed lots and Concorde Condominium Building, and from
pushing for the demolition of the building which they do not
even own... respondents Baculio and New PPI Corporation
filed an Urgent Motion to Re-Raffle dated April 25, 2012,
claiming that it is a regular court, not a Special Commercial
Court, which has jurisdiction over the case.
Respondents claimed that the petition seeks to restrain or
compel certain individuals and government officials to stop
doing or performing particular acts, and that there is no
showing that the case involves a matter embraced in Section
5 of Presidential Decree (P.D.) No. 902-A, which enumerates
the cases over which the SEC [now the RTC acting as
Special Commercial Court pursuant to Republic Act (R.A.)
No. 8799] exercises exclusive jurisdiction.
the RTC dismissed the case for lack of jurisdiction.
It noted that by petitioner's own allegations and admissions,
respondents Baculio and New PPI Corporation are not
owners of the two subject lots and the building. Due to the
absence of intra-corporate relations between the parties, it
ruled that the case does not involve an intra-corporate
controversy cognizable by it sitting as a Special Commercial
Court.
Petitioner notes that R.A. 8799 merely transferred the
Securities and Exchange Commission's jurisdiction over
cases enumerated under Section 5 of P.D. No. 902-A to the
courts of general jurisdiction or the appropriate Regional Trial
Court, and that there is nothing in R.A. 8799 or in A.M. No.
00-11 -03-SC which would limit or diminish the jurisdiction of
those RTCs designated as Special Commercial Courts.
It insists that for purposes of determining the jurisdiction of
the RTC, the different branches thereof (in case of a multiple
sala court) should not be taken as a separate or
compartmentalized unit. It, thus, concludes that the
designation by the Supreme Court of Branch 149 as a
Special Commercial Court did not divest it of its power as a
court of general jurisdiction.
Issues:
whether Branch 149 of the Makati RTC, a designated Special
Commercial Court, erred in dismissing the petition for
injunction with damages for lack of jurisdiction over the
subject matter,
Ruling:
The nature of an action, as well as which court or body has
jurisdiction over it, is determined based on the allegations
contained in the complaint of the plaintiff, irrespective of
whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein. The averments in the
complaint and the character of the relief sought are the ones
to be consulted. Once vested by the allegations in the
complaint, jurisdiction also remains vested irrespective of
whether or not the plaintiff is entitled to recover upon all or
some of the claims asserted therein."
As a rule, actions for injunction and damages lie within the
jurisdiction of the RTC, pursuant to Section 19 of Batas
Pambansa Blg. 129
Meanwhile, Section 6 (a) of P.D. No. 902-A empowered the
SEC to issue preliminary or permanent injunctions, whether
prohibitory or mandatory, in all cases in which it exercises
original and exclusive jurisdiction
However, jurisdiction of the SEC over intra-corporate cases
was transferred to Courts of general jurisdiction or the
appropriate Regional Trial Court when R.A. No. 8799 took
effect on August 8, 2000.
In GD Express Worldwide N. V., et al. v. Court of Appeals
(4th Div.) et al,[12] the Court stressed that Special
Commercial Courts are still considered courts of general
jurisdiction which have the power to hear and decide cases
of all nature, whether civil, criminal or special proceedings
As a basic premise, let it be emphasized that a court's
acquisition of jurisdiction over a particular case's subject
matter is different from incidents pertaining to the exercise of
its jurisdiction. Jurisdiction over the subject matter of a case
is conferred by law, whereas a court's exercise of jurisdiction,
unless provided by the law itself, is governed by the Rules of
Court or by the orders issued from time to time by the Court.
the matter of whether the RTC resolves an issue in the
exercise of its general jurisdiction or of its limited jurisdiction
as a special court is only a matter of procedure and has
nothing to do with the question of jurisdiction.
Having clearly settled that as courts of general jurisdiction,
the designated Special Commercial Courts and the regular
RTCs are both conferred by law the power to hear and
decide civil cases in which the subject of the litigation is
incapable of pecuniary estimation, such as an action for
injunction
Applying the relationship test[18] and the nature of the
controversy test[19] in determining whether a dispute
constitutes an intra-corporate controversy, as enunciated in
Medical Plaza Makati Condominium Corporation v.
Cullen,[20] the Court agrees with Branch 149 that Civil Case
No. 12-309 for injunction with damages is an ordinary civil
case, and not an intra-corporate controversy.
A careful review of the allegations in the petition for injunction
with damages indicates no intra-corporate relations exists
between the opposing parties, namely (1) petitioner
condominium corporation, by itself and comprising all its unit
owners, on the one hand, and (2) respondent New PP1
Corporation which Baculio claims to be the owner of the
subject properties, together with the respondents Building
Official and City Fire Marshal of Makati City, the Regional
Director of the Bureau of Fire Protection, and the private
security agency, on the other hand.
Clearly, as the suit between petitioner and respondents
neither arises from an intra-corporate relationship nor does it
pertain to the enforcement of their correlative rights and
obligations under the Corporation Code, and the internal and
intra-corporate regulatory rules of the corporation, Branch
149 correctly found that the subject matter of the petition is
in the nature of an ordinary civil action.
Here, no clear and convincing evidence is shown to overturn
the legal presumption that official duty has been regularly
performed when the Clerk of Court of the Makati RTC
docketed the petition for injunction with damages as an
ordinary civil case -not as a commercial case - and,
consequently, raffled it among all branches of the same RTC,
and eventually assigned it to Branch 149. To recall, the
designation of the said branch as a Special Commercial
Court by no means diminished its power as a court of general
jurisdiction to hear and decide cases of all nature, whether
civil, criminal or special proceedings. There is no question,
therefore, that the Makati RTC, Branch 149 erred in
dismissing the petition for injunction with damages, which is
clearly an ordinary civil case. As a court of general
jurisdiction, it still has jurisdiction over the subject matter
thereof.
In view of the above discussion, the Court finds no necessity
to delve into the other contentions raised by the parties, as
they should be properly addressed by the Makati RTC,
Branch 149 which has jurisdiction over the subject matter of
the petition for injunction with damages.
Principles:

---
This petition is without merit.
First, we review whether the CA erred in taking cognizance
of the petition for review under Rule 43 of the Rules of Court.
Petitioners argue that since the petition for review involved a
pure question of law - whether the RTC erred in dismissing
the complaint filed for lack of jurisdiction - the CA did not have
jurisdiction to resolve the petition.
Respondent, however, argues that the appeal to the CA
under Rule 43 of the Rules of Court is correct under A.M. No.
04-9-07-SC16 which provides that the proper mode of appeal
in cases involving corporate rehabilitation and intra-
corporate controversies - which include 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 RA No. 8799 - is a
petition for review under Rule 43 of the Rules of Court filed
with the CA.
Thus, to determine whether or not the appeal to the CA via a
petition for review under Rule 43 of the Rules of Court was
proper, we determine whether this case involves an intra-
corporate dispute.
To determine whether or not a case involves an intra-
corporate dispute, two tests are applied - the relationship test
and the nature of the controversy test.
Under the relationship test, there is an intra-corporate
controversy when the conflict is (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.17
On the other hand, in accordance with the nature of
controversy test, an intra-corporate controversy arises when
the cor:1troversy is not only rooted in the existence of an
intra-corporate relationship, but also in the enforcement of
the parties' correlative rights and obligations under the
Corporation Code and the internal and intra-corporate
regulatory rules of the corporation.18
Based on the foregoing tests, it is clear that this case involves
an intra-corporate dispute. It is a conflict between a
stockholder and the corporation, which satisfies the
relationship test, and it involves the enforcement of the right
of Ozamiz, as a stockholder, to inspect the books of PHC and
the obligation of the latter to allow its stockholder to inspect
its books.
More importantly, we also note that in Abad v. Philippine
Communications Satellite Corporation,19 one of the issues
resolved by this Court was whether it was the
Sandiganbayan or the RTC which had jurisdiction over a
stockholder's suit to enforce its right of inspection under
Section 74 of the Corporation Code against PHC, the same
corporation involved in this present case. We categorized the
concern of its stockholder as an intra-corporate dispute, to
wit:
In the case at bar, the complaint concerns PHILCOMSAT's
demand to exercise its right of inspection as stockholder of
PHC but which petitioners refused on the ground of the
ongoing power struggle within POTC and PHILCOMSAT that
supposedly prevents PHC from recognizing PHILCOMSAT's
representative (Africa) as possessing such right or authority
from the legitimate directors and officers. Clearly, the
controversy is intra-corporate in nature as they arose out of
intra-corporate relations between and among stockholders,
and between stockholders and the corporation.20 (Boldfacing
and underscoring supplied)
In this wise, we find that the dispute at hand, which involves
the stockholder, Ozamiz, demanding to inspect the books of
PHC and the consequent refusal of the corporation to show
its books, is simply an intra-corporate dispute. And because
this is an intra-corporate dispute, the matter was properly
elevated to the CA. A.M. No. 04-9-07-SC21 provides:
WHEREFORE, the Court Resolves:
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. (Boldfacing and
underscoring supplied)
The order of the RTC dismissing the case for lack of
jurisdiction was a final order under the Interim Rules of
Procedure Governing Intra-Corporate Controversies under
RA No. 8799, which was the effective set of rules when the
complaint and subsequent appeal were filed. Thus, the
proper remedy was to appeal the order to the CA through a
petition for review under Rule 43 of the Rules of Court. The
CA was therefore correct in taking cognizance of the appeal.
Next, we discuss whether the CA erred in remanding the
case back to the RTC after finding that the complaint was
within the jurisdiction of the RTC.
Petitioners argue that since the majority of the stocks of PHC
is owned by corporations sequestered by the PCGG, the
case concerns assets of sequestered corporations, and thus
the Sandiganbayan is the proper court with jurisdiction.