Case Digest (G.R. No. 123639)
Facts:
Antonio M. Garcia v. Court of Appeals and Philippine Export & Foreign Loan Guarantee Corporation, G.R. No. 123639, June 10, 1997, Supreme Court First Division, Kapunan, J., writing for the Court.Petitioner Antonio M. Garcia was a major stockholder and president of Dynetics, Inc., originally owning about 43% of its shares; after certain transfers the ownership structure left Garcia with roughly 32.88%, Asia Reliability Co., Inc. (ARCI) with 28.78%, Vicente Chuidian with 26%, and others the remainder. In 1981 ARCI, through Chuidian and with a guarantee from private respondent Philippine Export & Foreign Loan Guarantee Corporation (Philguarantee), obtained a US$25,000,000.00 foreign loan whose proceeds were allegedly diverted and misapplied. When ARCI defaulted, foreign creditors sought recovery from Philguarantee, which in turn pursued Chuidian; control struggles over Dynetics ensued between Chuidian and Philguarantee.
By 1985 Philguarantee had four nominee representatives each holding a qualifying share and by 27 May 1985 three of those nominees were elected to Dynetics’ five‑member board (Garcia being the fifth director). On 27 November 1985 a Settlement and Mutual Release Agreement (SMRA) among Dynetics, Philguarantee and Chuidian was executed providing (inter alia) for dismissal of pending suits, assignments of Chuidian’s shares to Philguarantee, monthly payments to Chuidian, and Dynetics’ assumption of ARCI’s obligations.
On 12 December 1991 Garcia filed a complaint for damages in the Regional Trial Court (RTC) of Makati, Branch 58, alleging (1) breach of Philguarantee’s commitment under the SMRA to rehabilitate Dynetics and its subsidiary Chemark causing their ruin and forcing Garcia to compromise bank claims as guarantor (P145,000,000); (2) loss in book value of his Dynetics shares (P32,000,000); (3) loss of unrealized profit from unpaid Interlek remittances (P3,200,000); and (4–5) moral, exemplary damages and attorneys’ fees. Philguarantee moved to dismiss for lack of jurisdiction (filed 20 February 1992).
On 21 May 1992 the RTC denied Philguarantee’s motion to dismiss, concluding the action was essentially one for damages within the regular courts’ jurisdiction. Philguarantee petitioned the Court of Appeals (CA). In a decision dated 23 October 1995 in CA‑G.R. SP No. 27994 the Court of Appeals granted the petition, set aside the RTC order and held the dispute to be intra‑corporate in nature and therefore within the exclusive original jurisdiction of the ...(Pro-only)
Issues:
- Did the Court of Appeals err in declaring that the RTC lacked jurisdiction over Garcia’s complaint and that jurisdiction lay exclusively with the SEC under P.D. 902‑A?
- Is Garcia’s complaint essentially an intra‑corporate controversy such that it falls within the SEC’s jurisdiction despite being styled a...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)