Case Digest (G.R. No. L-57936) Core Legal Reasoning Model
Facts:
The case stems from a legal dispute between DMRC Enterprises (the petitioner) and Este del Sol Mountain Reserve, Inc. (the respondent). DMRC, a partnership primarily engaged in general construction and the leasing of heavy equipment, entered into a lease agreement with Este del Sol Mountain Reserve, Inc. on May 12, 1978, concerning three units of heavy equipment. The terms stipulated the hourly rates for the equipment and required the respondent to advance a sum of P5,000.00 per unit, which was to be deducted from future collections. Additionally, the agreement mandated that 30% of the collected rentals be invested in shares of stock priced at P37,000.00 per share.
Between September 1 and October 15, 1978, DMRC executed the contract, contributing to a total job performance amounting to P122,207.31, with P87,106.83 due in cash and P35,100.48 allocated for stock purchases per their agreement. Despite DMRC’s continued requests for payment, the respondent failed to fulfill its obl
Case Digest (G.R. No. L-57936) Expanded Legal Reasoning Model
Facts:
- Background of the Parties
- Petitioner: DMRC Enterprises, a partnership engaged in the business of general construction, heavy equipment leasing, and related transactions.
- Respondent: Este del Sol Mountain Reserve, Inc., a private corporation involved in a transaction with DMRC Enterprises.
- The Agreement
- On May 12, 1978, DMRC Enterprises made a written offer to lease three units of heavy equipment to the respondent.
- Equipment details included:
- One unit Payloader “KIMCO” (2-1/2 cubic yard) at P130.00 per hour;
- The agreement provided that the expenses for transporting the equipment to the jobsite were for the account of the respondent.
- Payment Terms and Conditions
- Part payment of the lease was to be made in cash, and another part through the acquisition of shares in the respondent corporation.
- It was stipulated that an amount equivalent to 30% of the collection would be invested in shares of stock valued at P37,000.00 per share.
- Respondent was also required to advance P5,000.00 per unit, to be deducted from the first collection.
- Performance and Dispute
- Performance by the Petitioner
- DMRC Enterprises performed its contractual obligations from September 1, 1978 to October 15, 1978.
- Total job performance was credited at P122,207.31, broken down into P87,106.83 in cash and P35,100.48 in share-based payments.
- Default by the Respondent
- Despite periodic submission of statements of account and repeated demands, the respondent failed to pay the outstanding obligations.
- This failure led DMRC to file a complaint for the recovery of money and the delivery of personal property in Civil Case No. Q-29585.
- Procedural Posture
- Filing of the Complaint
- The complaint was filed before the Court of First Instance of Rizal, Quezon City, Branch LII.
- The basis of jurisdiction was anchored in Section 44 of the Judiciary Act of 1948.
- Motion to Dismiss by the Respondent
- The respondent moved to dismiss the case on the ground of lack of jurisdiction.
- The respondent argued that under Section 5 of Presidential Decree No. 902-A, the Securities and Exchange Commission (SEC) holds original and exclusive jurisdiction over matters involving issuance of shares as payment, enabling it to hear controversies arising from intra-corporate or partnership relations.
- Respondent’s Jurisdictional Argument
- Argument on SEC's Exclusive Jurisdiction
- The respondent contended that compelling the corporation to issue shares of stock, in payment of a valid debt, amounts to an intra-corporate controversy.
- The SEC’s jurisdiction under PD 902-A was cited, particularly emphasizing that disputes involving internal corporate relations belong exclusively to the SEC.
- Petitioner’s Counterargument
- DMRC argued that the dispute was essentially an action for the collection of money arising out of a lease contract.
- The petitioner maintained that the claim, despite the inclusion of share issuance, was primarily a monetary claim and thus well within the regular courts’ jurisdiction.
Issues:
- Jurisdictional Competence
- Whether the regular courts have jurisdiction over a dispute involving a contract that provides for lease payments partly in cash and partly in the form of shares of stock.
- Whether the inclusion of the issuance of shares as partial payment transforms the nature of the dispute into an intra-corporate controversy subject to the exclusive jurisdiction of the Securities and Exchange Commission under PD 902-A.
- Classification of the Dispute
- Whether the dispute, characterized by a breach of contractual obligations for payment, constitutes a matter of basic contract enforcement or an intra-corporate issue.
- Whether the allegation of non-payment for lease services could be separated from the provision involving share issuance to fall exclusively under the SEC’s purview.
- Proper Forum Determination
- Whether the complaint, as framed by the petitioner, properly submits to the jurisdiction of the regular courts based on the allegations and the nature of the claim.
- Whether the alleged intra-corporate facet (issuance of shares) is substantive enough to invoke the SEC’s original and exclusive jurisdiction.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)