Facts:

• Oscar C. Reyes and Rodrigo C. Reyes are two of the four children of Pedro and Anastacia Reyes.
• Pedro and Anastacia owned shares in Zenith Insurance Corporation, a family-established domestic corporation.
• Pedro died in 1964, and Anastacia in 1993.
• Pedro's estate was partitioned in the 1970s, but Anastacia's estate, including her Zenith shares, was not.
• As of June 30, 1990, Anastacia owned 136,598 shares, Oscar owned 8,715,637 shares, and Rodrigo owned 4,250 shares.
• On May 9, 2000, Zenith and Rodrigo filed a complaint with the SEC against Oscar.
• The complaint alleged that Oscar fraudulently appropriated shares of the deceased spouses Pedro and Anastacia Reyes and sought an accounting of Zenith's funds and assets.
• Oscar denied the allegations, claiming he purchased the shares with his own funds and questioned the SEC's jurisdiction, arguing the matter pertained to the settlement of Anastacia's estate.
• With the enactment of Republic Act No. 8799, the case was transferred to the RTC of Makati, Branch 142, designated as a special commercial court.
• Oscar filed a motion to declare the complaint a nuisance or harassment suit, which the RTC denied, recognizing only the derivative suit aspect of the complaint.
• Oscar's petition to the CA to annul the RTC's order was denied, prompting him to appeal to the Supreme Court.

Issue:

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Ruling:

1. The Supreme Court found the petition meritorious and ruled that the complaint is not a bona fide derivative suit but pertains to the settlement of the estate, which is outside the jurisdiction of the RTC acting as a special commercial court.
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Ratio:

• The Supreme Court held that the RTC, sitting as a special commercial court, does not have jurisdiction over the subject matter of Rodrigo's complaint.
• The Court emphasized that jurisdiction is determined by the allegations in the complaint.
• The complaint fail...continue reading