G.R. No. 136975 - Commissioner of Internal Revenue vs. Hantex Trading Co., Inc.

In 1948, then Assemblyman Emiliano Melgazo founded and organized CPA in Hilongos, Leyte to provide livelihood and generate income for his supporters.
In 1968, after being elected president of CPA, Emiliano Melgazo purchased a parcel of land on behalf of the association.
The property was later converted into a wet market where agricultural, livestock, and other farm products were sold and was also used for cockpits and various forms of amusement.
Income generated from the property (mostly rental fees) was remitted to CPA.

Upon Emiliano Melgazo’s death, his son, petitioner Manuel Melgazo, succeeded him as CPA president and administrator of the property.
Petitioners Eustacio Atwel and Lucia Pilpil held the positions of vice-president and treasurer of CPA, respectively.

In 1997, while CPA was undergoing registration as a stock corporation, other elected officers and members split off to form a separate group and registered themselves with the Securities and Exchange Commission (SEC) as Concepcion Progressive Association, Inc. (CPAI).
Petitioners were not listed among the officers or members of CPAI.
CPAI later objected to petitioners’ collection of rentals from the wet market vendors, prompting legal conflict.
In 2000, CPAI filed a case for a mandatory injunction in the SEC, which was later transferred to the special commercial courts (first Branch 24 of the Southern Leyte RTC and then Branch 8 of the Tacloban City RTC) following the passage of Republic Act No. 8799.

In the complaint, CPAI claimed ownership of the disputed property, alleging that the petitioners had no authority to collect rentals.
Petitioners countered that it was impossible for CPAI to have acquired ownership in 1968, noting that the property had been purchased using funds from Emiliano Melgazo and should rightfully belong to him.
On June 9, 2004, the special commercial court ruled that the deed of sale clearly named CPA as the vendee, not Emiliano Melgazo personally, thereby affirming CPA as the owner of the property.
The court ordered petitioners to cease collecting the vendor’s fee and to account for the collections made since October 1996.

Petitioners, aggrieved by the decision, contested before the Court of Appeals (CA) the jurisdiction of Branch 8 of the Tacloban City RTC, arguing that they were not members of CPAI and the dispute did not qualify as an intra-corporate controversy.
The CA acknowledged that the special commercial court should not have entertained the case due to lack of intra-corporate controversy among CPAI members.
Nevertheless, the CA held that petitioners, by their active participation in the proceedings, were estopped from questioning the jurisdiction of the special commercial court.
Petitioners then elevated the issue to the Supreme Court, arguing that estoppel should not apply to a court’s jurisdiction, which is conferred exclusively by law.

Whether Branch 8 of the Tacloban City RTC, acting as a special commercial court under RA 8799, had proper jurisdiction over the dispute.
Whether the matter falls within the ambit of intra-corporate controversies, given that petitioners were not members or officers of CPAI.

Whether petitioners, by participating in the trial proceedings, thereby waived their right to challenge the jurisdiction of the court.
Whether the principle of estoppel can bind a party to the outcome where jurisdiction is a matter of law and not merely a matter of party consent or agreement.

Whether the subject matter (determination of the true owner of the property and the rightful collection of rental fees) is a civil controversy that should be heard in a regular court rather than a forum limited to intra-corporate disputes.