Professional Documents
Culture Documents
PERLAS-BERNABE, J.:
In an Order14 dated April 17, 2012, Branch 276 granted the motion to
This is a direct recourse to the Court, via a petition for review
dismiss filed by respondents. It found that the case involves an intra-
on certiorari,1 from the Orders dated April 17, 20122 and July 9,
corporate dispute that is within the original and exclusive jurisdiction
20123 of the Regional Trial Court (RTC) of Muntinlupa City, Branch 276
of the RTCs designated as Special Commercial Courts. It pointed out
(Branch 276) dismissing Civil Case No. 11-077 for lack of jurisdiction.
that the RTC of Muntinlupa City, Branch 256 (Branch 256) was
specifically designated by the Court as the Special Commercial Court, rights over the shares of stock offered for sale to other stockholders,
hence, Branch 276 had no jurisdiction over the case and cannot having paid the same in full. Applying the relationship test and
lawfully exercise jurisdiction on the matter, including the issuance of a the nature of the controversy test, the suit between the parties is
Writ of Preliminary Injunction.15 Accordingly, it dismissed the case. clearly rooted in the existence of an intra-corporate relationship and
pertains to the enforcement of their correlative rights and obligations
Dissatisfied, petitioners filed a motion for reconsideration,16 arguing under the Corporation Code and the internal and intra-corporate
that they filed the case with the Office of the Clerk of Court of the RTC regulatory rules of the corporation,24 hence, intra-corporate, which
of Muntinlupa City which assigned the same to Branch 276 should be heard by the designated Special Commercial Court as
by raffle.17 As the raffle was beyond their control, they should not be provided under A.M. No. 03-03-03-SC25 dated June 17, 2003 in relation
made to suffer the consequences of the wrong assignment of the case, to Item 5.2, Section 5 of RA 8799.
especially after paying the filing fees in the amount of P235,825.00 that
would be for naught if the dismissal is upheld.18 They further The present controversy lies, however, in the procedure to be
maintained that the RTC has jurisdiction over intra-corporate disputes followed when a commercial case - such as the instant intra-
under Republic Act No. (RA) 8799,19 but since the Court selected corporate dispute -has been properly filed in the official station of
specific branches to hear and decide such suits, the case must, at most, the designated Special Commercial Court but is, however, later
be transferred or raffled off to the proper branch.20 wrongly assigned by raffle to a regular branch of that station.
In an Order21 dated July 9, 2012, Branch 276 denied the motion for As a basic premise, let it be emphasized that a court's acquisition of
reconsideration, holding that it has no authority or power to order the jurisdiction over a particular case's subject matter is different from
transfer of the case to the proper Special Commercial Court, incidents pertaining to the exercise of its jurisdiction. Jurisdiction over
citing Calleja v. Panday22 (Calleja); hence, the present petition. the subject matter of a case is conferred by law, whereas a
The Issue Before the Court 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
The essential issue for the Court's resolution is whether or not Branch time by the Court.26 In Lozada v. Bracewell,27 it was recently held
276 of the RTC of Muntinlupa City erred in dismissing the case for lack that the matter of whether the RTC resolves an issue in the
of jurisdiction over the subject matter. exercise of its general jurisdiction or of its limited jurisdiction as a
The Court's Ruling special court is only a matter of procedure and has nothing to do
with the question of jurisdiction.
The petition is meritorious. Pertinent to this case is RA 8799 which took effect on August 8, 2000.
By virtue of said law, jurisdiction over cases enumerated in Section
At the outset, the Court finds Branch 276 to have correctly categorized 528 of Presidential Decree No. 902-A29 was transferred from the
Civil Case No. 11-077 as a commercial case, more particularly, an intra- Securities and Exchange Commission (SEC) to the RTCs, being courts
corporate dispute,23 considering that it relates to petitioners' averred
of general jurisdiction. Item 5.2, Section 5 of RA 8799
provides:chanRoblesvirtualLawlibrary As enunciated in Durisol Philippines, Inc. v.
SEC. 5. Powers and Functionsof the Commission. - x x x CA:31chanroblesvirtuallawlibrary
The regional trial court, formerly the court of first instance, is a court of
xxxx general jurisdiction. All cases, the jurisdiction over which is not
specifically provided for by law to be within the jurisdiction of any
5.2 The Commission's jurisdiction over all cases enumerated under other court, fall under the jurisdiction of the regional trial
Section 5 of Presidential Decree No. 902-A is hereby transferred to court.32ChanRoblesVirtualawlibrary
the Courts of general jurisdiction or the appropriate Regional Trial cralawlawlibrary
Court: Provided, that the Supreme Court in the exercise of its
authority may designate the Regional Trial Court branches that To clarify, the word "or" in Item 5.2, Section 5 of RA 8799 was
shall exercise jurisdiction over the cases. The Commission shall intentionally used by the legislature to particularize the fact that the
retain jurisdiction over pending cases involving intra-corporate phrase "the Courts of general jurisdiction" is equivalent to the phrase
disputes submitted for final resolution which should be resolved within "the appropriate Regional Trial Court." In other words, the jurisdiction
one (1) year from the enactment of this Code. The Commission shall of the SEC over the cases enumerated under Section 5 of PD 902-A
retain jurisdiction over pending suspension of payments/rehabilitation was transferred to the courts of general jurisdiction, that is to say (or,
cases filed as of 30 June 2000 until finally disposed. (Emphasis otherwise known as), the proper Regional Trial Courts. This
supplied)cralawlawlibrary interpretation is supported by San Miguel Corp. v. Municipal
Council,33 wherein the Court held that:chanRoblesvirtualLawlibrary
The legal attribution of Regional Trial Courts as courts of general [T]he word "or" may be used as the equivalent of "that is to say" and
jurisdiction stems from Section 19 (6), Chapter II of Batas Pambansa gives that which precedes it the same significance as that which follows
Bilang (BP) 129,30 known as "The Judiciary Reorganization Act of it. It is not always disjunctive and is sometimes interpretative or
1980":chanRoblesvirtualLawlibrary expository of the preceding word.34cralawlawlibrary
Section 19. Jurisdiction in civil cases.- Regional Trial Courts shall
exercise exclusive original jurisdiction:chanRoblesvirtualLawlibrary Further, as may be gleaned from the following excerpt of the
Congressional deliberations:chanRoblesvirtualLawlibrary
xxxx Senator [Raul S.] Roco: x x x.
(6) In all cases not within the exclusive jurisdiction of any court, xxxx
tribunal, person or body exercising jurisdiction or any court, tribunal,
person or body exercising judicial or quasi-judicial functions; x x x x x x x. The first major departure is as regards the Securities and
cralawlawlibrary Exchange Commission. The Securities and Exchange Commission has
been authorized under this proposal to reorganize itself. As an
administrative agency, we strengthened it and at the same time we
take away the quasi-judicial functions. The quasi-judicial functions locality, i.e., the Special Commercial Court, to streamline the court
are now given back to the courts of general jurisdiction - the structure and to promote expediency.40 Accordingly, the RTC branch
Regional Trial Court, except for two categories of cases. so designated was mandated to try and decide SEC cases, as well as
those involving violations of intellectual property rights, which were,
In the case of corporate disputes, only those that are now submitted thereupon, required to be filed in the Office of the Clerk of Court in
for final determination of the SEC will remain with the SEC. So, all those the official station of the designated Special Commercial Courts, to
cases, both memos of the plaintiff and the defendant, that have been wit:chanRoblesvirtualLawlibrary
submitted for resolution will continue. At the same time, cases 1. The Regional Courts previously designated as SEC Courts through
involving rehabilitation, bankruptcy, suspension of payments and the: (a) Resolutions of this Court dated 21 November 2000, 4 July 2001,
receiverships that were filed before June 30, 2000 will continue with 12 November 2002, and 9 July 2002 all issued in A.M. No. 00-11-03-SC;
the SEC. in other words, we are avoiding the possibility, upon approval (b) Resolution dated 27 August 2001 in A.M. No. 01-5-298-RTC; and (c)
of this bill, of people filing cases with the SEC, in manner of speaking, Resolution dated 8 July 2002 in A.M. No. 01-12-656-RTC are hereby
to select their court.35 DESIGNATED and shall be CALLED as Special Commercial Courts to try
and decide cases involving violations of Intellectual Property Rights
x x x x (Emphasis supplied)cralawlawlibrary which fall within their jurisdiction and those cases formerly cognizable
by the Securities and Exchange
Therefore, one must be disabused of the notion that the transfer of Commission:chanRoblesvirtualLawlibrary
jurisdiction was made only in favor of particular RTC branches, and not
the RTCs in general. xxxx
Consistent with the foregoing, history depicts that when the transfer of 4. The Special Commercial Courts shall have jurisdiction over cases
SEC cases to the RTCs was first implemented, they were transmitted to arising within their respective territorial jurisdiction with respect to the
the Executive Judges of the RTCs for raffle between or among its National Capital Judicial Region and within the respective provinces
different branches, unless a specific branch has been designated as with respect to the First to Twelfth Judicial Regions. Thus, cases shall be
a Special Commercial Court, in which instance, the cases filed in the Office of the Clerk of Court in the official station of the
were transmitted to said branch.36 It was only on November 21, 2000 designated Special Commercial Court;41
that the Court designated certain RTC branches to try and decide said
SEC cases37 without, however, providing for the transfer of the cases x x x x (Underscoring supplied)cralawlawlibrary
already distributed to or filed with the regular branches thereof. Thus,
on January 23, 2001, the Court issued SC Administrative Circular No. It is important to mention that the Court's designation of Special
08-200138 directing the transfer of said cases to the designated courts Commercial Courts was made in line with its constitutional authority to
(commercial SEC courts). Later, or on June 17, 2003, the Court issued supervise the administration of all courts as provided under Section 6,
A.M. No. 03-03-03-SC consolidating the commercial SEC courts and Article VIII of the 1987 Constitution:chanRoblesvirtualLawlibrary
the intellectual property courts39 in one RTC branch in a particular
Section 6. The Supreme Court shall have administrative supervision allegations that clearly make out an intra-corporate
over all courts and the personnel thereof.cralawlawlibrary dispute:chanRoblesvirtualLawlibrary
16. To the surprise of MLCG and FMDG, however, in two identical
The objective behind the designation of such specialized courts is to letters both dated 13 May 2011, under the letterhead of GJH Land, Inc.,
promote expediency and efficiency in the exercise of the RTCs' Yap, now acting as its President, Jang and Kim demanded payment of
jurisdiction over the cases enumerated under Section 5 of PD 902-A. supposed unpaid subscriptions of MLCG and FMDG amounting to
Such designation has nothing to do with the statutory conferment of P10,899,854.30 and P2,625,249.41, respectively.
jurisdiction to all RTCs under RA 8799 since in the first place, the Court 16.1 Copies of the letters dated 13 May 2011 are attached hereto and
cannot enlarge, diminish, or dictate when jurisdiction shall be made integral parts hereof as Annexes "J" and "K", repectively.
removed, given that the power to define, prescribe, and apportion 17. On 29 July 2011, MLCG and FMDG received an Offer Letter
jurisdiction is, as a general rule, a matter of legislative addressed to stockholders of GJH Land, Inc. from Yap informing all
prerogative.42 Section 2, Article VIII of the 1987 Constitution stockholders that GJH Land, Inc. is now offering for sale the unpaid
provides:chanRoblesvirtualLawlibrary shares of stock of MLCG and FMDG. The same letter states that the
Section 2. The Congress shall have the power to define, prescribe, and offers to purchase these shares will be opened on 10 August 2011 with
apportion the jurisdiction of the various courts but may not deprive the payments to be arranged by deposit to the depository bank of GJH
Supreme Court of its jurisdiction over cases enumerated in Section 5 Land, Inc.
hereof. 17.1 A copy of the undated Offer Letter is attached hereto and made
and made an integral part hereof as Annex "L".
xxxx 18. The letter of GJH Land, Inc. through Yap, is totally without legal and
cralawlawlibrary factual basis because as evidenced by the Deeds of Assignment signed
and certified by Yap herself, all the S.J. Land, Inc. shares acquired by
Here, petitioners filed a commercial case, i.e., an intra-corporate MLCG and FMDG have been fully paid in the books of S.J. Land, Inc.
dispute, with the Office of the Clerk of Court in the RTC of Muntinlupa
City, which is the official station of the designated Special Commercial 19. With the impending sale of the alleged unpaid subscriptions on 10
Court, in accordance with A.M. No. 03-03-03-SC. It is, therefore, from August 2011, there is now a clear danger that MLCG and FMDG
the time of such filing that the RTC of Muntinlupa City acquired would be deprived of these shares without legal and factual basis.
jurisdiction over the subject matter or the nature of the
action.43 Unfortunately, the commercial case was wrongly raffled to 20. Furthermore, if they are deprived of these shares through the
a regular branch, e.g., Branch 276, instead of being assigned44to scheduled sale, both MLCG and FMDG would suffer grave and
the sole Special Commercial Court in the RTC of Muntinlupa City, irreparable damage incapable of pecuniary estimation.
which is Branch 256. This error may have been caused by a reliance
on the complaint's caption, i.e., "Civil Case for Injunction with prayer 21. For this reason, plaintiffs now come to the Honorable Court for
for Status Quo Order, TRO and Damages,"45 which, however, injunctive relief so that after trial on the merits, a permanent injunction
contradicts and more importantly, cannot prevail over its actual should be issued against the defendants preventing them from selling
the shares of the plaintiffs, there being no basis for such (a) if the said RTC has only one branch designated as a Special
sale.46cralawlawlibrary Commercial Court, assign the case to the sole special branch; or (b) if
the said RTC has multiple branches designated as Special Commercial
According to jurisprudence, "it is not the caption but the allegations in Courts, raffle off the case among those special branches.
the complaint or other initiatory pleading which give meaning to the
pleading and on the basis of which such pleading may be legally In all the above-mentioned scenarios, any difference regarding the
characterized."47 However, so as to avert any future confusion, the applicable docket fees should be duly accounted for. On the other
Court requires henceforth, that all initiatory pleadings state the action's hand, all docket fees already paid shall be duly credited, and any
nature both in its caption and the body, which parameters are defined excess, refunded.
in the dispositive portion of this Decision.
At this juncture, the Court finds it fitting to clarify that the RTC
Going back to the case at bar, the Court nonetheless deems that the mistakenly relied on the Calleja case to support its ruling. In Calleja, an
erroneous raffling to a regular branch instead of to a Special intra-corporate dispute49 among officers of a private corporation with
Commercial Court is only a matter of procedure - that is, an incident principal address at Goa, Camarines Sur, was filed with the RTC of San
related to the exercise of jurisdiction - and, thus, should not negate the Jose, Camarines Sur, Branch 58 instead of the RTC of Naga City, which
jurisdiction which the RTC of Muntinlupa City had already acquired. In is the official station of the designated Special Commercial Court for
such a scenario, the proper course of action was not for the Camarines Sur. Consequently, the Court set aside the RTC of San Jose,
commercial case to be dismissed; instead, Branch 276 should have Camarines Sur's order to transfer the case to the RTC of Naga City and
first referred the case to the Executive Judge for re-docketing as a dismissed the complaint considering that it was filed before a court
commercial case; thereafter, the Executive Judge should then which, having no internal branch designated as a Special Commercial
assign said case to the only designated Special Commercial Court Court, had no jurisdiction over those kinds of actions, i.e., intra-
in the station, i.e., Branch 256. corporate disputes. Calleja involved two different RTCs, i.e., the RTC
of San Jose, Camarines Sur and the RTC of Naga City, whereas
Note that the procedure would be different where the RTC acquiring the instant case only involves one RTC, i.e., the RTC of Muntinlupa
jurisdiction over the case has multiple special commercial court City, albeit involving two different branches of the same
branches; in such a scenario, the Executive Judge, after re-docketing court, i.e., Branches 256 and 276. Hence, owing to the variance in the
the same as a commercial case, should proceed to order its re-raffling facts attending, it was then improper for the RTC to rely on the Calleja
among the said special branches. ruling.
Meanwhile, if the RTC acquiring jurisdiction has no branch designated Besides, the Court observes that the fine line that distinguishes subject
as a Special Commercial Court, then it should refer the case to the matter jurisdiction and exercise of jurisdiction had been clearly blurred
nearest RTC with a designated Special Commercial Court branch within in Calleja. Harkening back to the statute that had conferred subject
the judicial region.48 Upon referral, the RTC to which the case was matter jurisdiction, two things are apparently clear: (a) that the
referred to should re-docket the case as a commercial case, and then: SEC's subject matter jurisdiction over intra-corporate cases under
Section 5 of Presidential Decree No. 902-A was transferred to the Muntinlupa City, subject to the parameters above-discussed is
Courts of general jurisdiction, i.e., the appropriate Regional Trial proper and will further the purposes stated in A.M. No. 03-03-03-
Courts; and (b) the designated branches of the Regional Trial Court, as SC of attaining a speedy and efficient administration of justice.
per the rules promulgated by the Supreme Court, shall exercise
jurisdiction over such cases. Item 5.2, Section 5 of RA 8799 For further guidance, the Court finds it apt to point out that the same
provides:chanRoblesvirtualLawlibrary principles apply to the inverse situation of ordinary civil cases filed
SEC. 5. Powers and Functions of the Commission. - x x x before the proper RTCs but wrongly raffled to its branches
designated as Special Commercial Courts. In such a scenario,
xxxx the ordinary civil case should then be referred to the Executive
Judge for re-docketing as an ordinary civil case; thereafter, the
5.2 The Commission's jurisdiction over all cases enumerated under Executive Judge should then order the raffling of the case to all
Section 5 of Presidential Decree No. 902-A is hereby transferred to branches of the same RTC, subject to limitations under existing
the Courts of general jurisdiction or the appropriate Regional Trial internal rules, and the payment of the correct docket fees in case
Court: Provided, that the Supreme Court in the exercise of its of any difference. Unlike the limited assignment/raffling of a
authority may designate the Regional Trial Court branches that commercial case only to branches designated as Special Commercial
shall exercise jurisdiction over the cases, x x x.cralawlawlibrary Courts in the scenarios stated above, the re-raffling of an ordinary civil
case in this instance to all courts is permissible due to the fact that a
In contrast, the appropriate jurisprudential reference to this case would particular branch which has been designated as a Special Commercial
be Tan v. Bausch & Lomb, Inc.,50 which involves a criminal complaint Court does not shed the RTC's general jurisdiction over ordinary civil
for violation of intellectual property rights filed before the RTC of Cebu cases under the imprimatur of statutory law, i.e., Batas Pambansa
City but was raffled to a regular branch thereof (Branch 21), and not to Bilang (BP) 129.52 To restate, the designation of Special Commercial
a Special Commercial Court. As it turned out, the regular branch Courts was merely intended as a procedural tool to expedite the
subsequently denied the private complainant's motion to transfer the resolution of commercial cases in line with the court's exercise of
case to the designated special court of the same RTC, on the ground jurisdiction. This designation was not made by statute but only by an
of lack of jurisdiction. The CA reversed the regular branch and, internal Supreme Court rule under its authority to promulgate rules
consequently, ordered the transfer of the case to the designated governing matters of procedure and its constitutional mandate to
special court at that time (Branch 9). The Court, affirming the CA, supervise the administration of all courts and the personnel
declared that the RTC had acquired jurisdiction over the subject thereof.53 Certainly, an internal rule promulgated by the Court cannot
matter. In view, however, of the designation of another court as the go beyond the commanding statute. But as a more fundamental
Special Commercial Court in the interim (Branch 11 of the same Cebu reason, the designation of Special Commercial Courts is, to stress,
City RTC), the Court accordingly ordered the transfer of the case and merely an incident related to the court's exercise of jurisdiction, which,
the transmittal of the records to said Special Commercial Court as first discussed, is distinct from the concept of jurisdiction over the
instead.51Similarly, the transfer of the present intra-corporate subject matter. The RTC's general jurisdiction over ordinary civil cases
dispute from Branch 276 to Branch 256 of the same RTC of is therefore not abdicated by an internal rule streamlining court
procedure. 1.3 If the RTC has no internal branch designated as a Special
Commercial Court, then the case shall be referred to the nearest RTC
In fine, Branch 276's dismissal of Civil Case No. 11-077 is set aside and with a designated Special Commercial Court branch within the judicial
the transfer of said case to Branch 256, the designated Special region. Upon referral, the RTC to which the case was referred to should
Commercial Court of the same RTC of Muntinlupa City, under the re- docket the case as a commercial case, and then: (a) if the said RTC
parameters above-explained, is hereby ordered. has only one branch designated as a Special Commercial Court, assign
the case to the sole special branch; or (b) if the said RTC has multiple
WHEREFORE, the petition is GRANTED. The Orders dated April 17, branches designated as Special Commercial Courts, raffle off the case
2012 and July 9, 2012 of the Regional Trial Court (RTC) of Muntinlupa among those special branches.
City, Branch 276 in Civil Case No. 11-077 are 2. If an ordinary civil case filed before the proper RTC is wrongly raffled
hereby REVERSED and SET ASIDE. Civil Case No. 11-077 to its branch designated as a Special Commercial Court, then the case
is REFERRED to the Executive Judge of the RTC of Muntinlupa City for shall be referred to the Executive Judge for re-docketing as an ordinary
re-docketing as a commercial case. Thereafter, the Executive Judge civil case. Thereafter, it shall be raffled off to all courts of the same RTC
shall ASSIGNsaid case to Branch 256, the sole designated Special (including its designated special branches which, by statute, are equally
Commercial Court in the RTC of Muntinlupa City, which is ORDERED to capable of exercising general jurisdiction same as regular branches), as
resolve the case with reasonable dispatch. In this regard, the Clerk of provided for under existing rules.
Court of said RTC shall DETERMINE the appropriate amount of docket
fees and, in so doing, ORDER the payment of any difference or, on the 3. All transfer/raffle of cases is subject to the payment of the
other hand, refund any excess. appropriate docket fees in case of any difference. On the other hand,
all docket fees already paid shall be duly credited, and any excess,
Furthermore, the Court hereby RESOLVES that henceforth, the refunded.
following guidelines shall be observed:
1. If a commercial case filed before the proper RTC is wrongly raffled to 4. Finally, to avert any future confusion, the Court requires that all
its regular branch, the proper courses of action are as follows: initiatory pleadings state the action's nature both in its caption and
1.1 If the RTC has only one branch designated as a Special Commercial body. Otherwise, the initiatory pleading may, upon motion or by order
Court, then the case shall be referred to the Executive Judge for re- of the court motu proprio, be dismissed without prejudice to its re-
docketing as a commercial case, and thereafter, assigned to the sole filing after due rectification. This last procedural rule is prospective in
special branch; application.
1.2 If the RTC has multiple branches designated as Special Commercial 5. All existing rules inconsistent with the foregoing are deemed
Courts, then the case shall be referred to the Executive Judge for re- superseded.cralawlawlibrary
docketing as a commercial case, and thereafter, raffled off among
those special branches; and SO ORDERED.