Reyes vs. Regional Trial Court of Makati, Br.

142 561 SCRA 593 ,

August 11, 2008
FACTS:
Petitioner and private respondent were siblings together with two others,
namely Pedro and Anastacia, in a family business established as Zenith
Insurance Corporation (Zenith), from which they owned shares of stocks.
The Pedro and Anastacia subsequently died. The former had his estate
judicially partitioned among his heirs, but the latter had not made the same
in her shareholding in Zenith. Zenith and Rodrigo filed a complaint with the
Securities and Exchange Commission (SEC) against petitioner (1) a
derivative suit to obtain accounting of funds and assets of Zenith, and (2) to
determine the shares of stock of deceased Pedro and Anastacia that were
arbitrarily and fraudulently appropriated [by Oscar, and were unaccounted
for]. In his answer with counterclaim, petitioner denied the illegality of the
acquisition of shares of Anastacia and questioned the jurisdiction of SEC to
entertain the complaint because it pertains to settlement of [Anastacia’s]
estate. The case was transferred to. Petitioner filed Motion to Declare
Complaint as Nuisance or Harassment Suit and must be dismissed. RTC
denied the motion. The motion was elevated to the Court of Appeals by way
of petition for certiorari, prohibition and mandamus, but was again denied.
ISSUES:
(1) Whether or not Rodrigo may be considered a stockholder of Zenith with
respect to the shareholdings originally belonging to Anastacia.
(2) Whether or not there is an intra-corporate relationship between the
parties that would characterize the case as an intra-corporate dispute?
RULINGS:
(1) No. Rodrigo must, hurdle two obstacles before he can be considered a
stockholder of Zenith with respect to the shareholdings originally belonging
to Anastacia. First, he must prove that there are shareholdings that will be
left to him and his co-heirs, and this can be determined only in a settlement
of the decedent’s estate. No such proceeding has been commenced to date.
Second, he must register the transfer of the shares allotted to him to make
it binding against the corporation. He cannot demand that this be done
unless and until he has established his specific allotment (and prima facie
ownership) of the shares. Without the settlement of Anastacia’s estate,
there can be no definite partition and distribution of the estate to the heirs.
Without the partition and distribution, there can be no registration of the
transfer. And without the registration, we cannot consider the transferee-
heir a stockholder who may invoke the existence of an intra-corporate
relationship as premise for an intra-corporate controversy within the
jurisdiction of a special commercial court. The subject shares of stock (i.e.,
Anastacia’s shares) are concerned – Rodrigo cannot be considered a
stockholder of Zenith.
(2) No. Court cannot declare that an intra-corporate relationship exists that
would serve as basis to bring this case within the special commercial court’s
jurisdiction under Section 5(b) of PD 902-A, as amended because Rodrigo’s
complaint failed the relationship test above.