Facts:

The case in question involved petitioners Maria Luisa Flor C. Banez, spouses Petronilo Esteves and Luisa Esteves, and Consuelo M. Caulboy, who filed a complaint against Dimensional Construction Trade and Development Corporation. The proceedings began on October 13, 1980, when the petitioners lodged a civil case, designated as Civil Case No. U-3569, seeking payment for sums of money due under promissory notes issued by the respondent corporation. The respondent was duly served with summons and complaint on November 18, 1980, but it failed to file any responsive pleading within the prescribed timeframe. As a result, the petitioners moved to declare the corporation in default, which the trial court granted on October 14, 1981, permitting the reception of ex-parte evidence from the petitioners on November 25, 1981. However, before a judgment could be rendered, the respondent filed an omnibus motion on December 16, 1981, contesting the court's jurisdiction and arguing that the Se

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Facts:

Procedural History

• On October 13, 1980, petitioners filed a complaint in Civil Case No. U-3569 before the Regional Trial Court, Branch IX at Urdaneta, Pangasinan, seeking payment of sums due under various matured promissory notes issued by the defendant corporation.
• The defendant, Dimensional Construction Trade and Development Corporation, was served a copy of the summons and complaint on November 18, 1980, but failed to file any responsive pleading.
• Petitioners moved for the declaration of default on August 20, 1981, which was granted on October 14, 1981, with the date for filing evidence set accordingly.
• Petitioners submitted their evidence ex-parte on November 25, 1981, before the duly commissioned Clerk of Court.
• On December 16, 1981, after petitioners had adduced evidence, the defendant filed an omnibus motion seeking:
• The annulment of all proceedings taken in the lower court;
• The lifting and dissolving of all attachments, levies, or executions; and
• The dismissal of the case, contending that the Securities and Exchange Commission (SEC) had exclusive jurisdiction under Section 5(a) of Presidential Decree No. 902-A.

Factual Background of the Complaint and Evidence

• The petitioners alleged that the defendant corporation owed them sums of money under matured promissory notes, which represented investments rather than payments for shares.
• There was no allegation or mention in the complaint of any device or scheme amounting to fraud or misrepresentation.
• The default order against the defendant was based on its failure to respond to the complaint, and its subsequent motion raised a jurisdictional issue only after evidence had been adduced.

Arguments Presented by the Parties

• The defendant argued that PD 902-A granted the SEC original and exclusive jurisdiction over cases involving fraudulent schemes or acts of misrepresentation.
• Petitioners maintained that their cause of action was strictly a collection suit involving matured promissory notes, falling squarely within the jurisdiction of the Court of First Instance.
• Petitioners contended that the defendant’s attempt to invoke the SEC’s jurisdiction was merely a tactic to counteract its default and delay the proceedings.

Additional Context and Considerations

• The promissory notes specified that the amounts received by the defendant were in the nature of investments, and the petitioners did not become members or shareholders of the corporation.
• Reference was made to the case of Sunset View Condominium Corporation vs. Hon. Jose C. Campos, Jr., et al., which underscored that collection cases cannot be recharacterized as controversies involving intra-corporate or partnership relations among stockholders, members, or associates.
• The overall approach of the defendant was seen as a tactical step designed to delay the proceedings and avoid the consequences of its failure to file a responsive pleading.

Issue:

Jurisdictional Competence

• Whether the trial court had original and exclusive jurisdiction to hear and decide a case for the collection of sums due under matured promissory notes, despite the defendant's argument that the SEC should have jurisdiction under PD 902-A.
• Whether the absence of any allegation of fraud or misrepresentation in the petitioners’ complaint precludes the application of PD 902-A, which confers jurisdiction on the SEC in cases involving fraudulent schemes.

Procedural and Tactical Considerations

• Whether the defendant’s omnibus motion, filed after the default order and after the submission of evidence by petitioners, was intended to unjustifiably delay the proceedings.
• Whether the challenge to jurisdiction raised by the defendant was a mere tactic to evade the consequences of its default standing in the lower court.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)