Case Digest (G.R. No. 165744)
Facts:
Oscar C. Reyes v. Hon. Regional Trial Court of Makati, Branch 142, Zenith Insurance Corporation, and Rodrigo C. Reyes, G.R. No. 165744, August 11, 2008, Supreme Court Second Division, Brion, J., writing for the Court.Petitioner Oscar C. Reyes (Oscar) and respondent Rodrigo C. Reyes (Rodrigo) are two of the four children of Pedro and Anastacia Reyes; the family together owned shares in Zenith Insurance Corporation (Zenith). Pedro died in 1964 and Anastacia in 1993; as of June 30, 1990 the corporate books reflected Anastacia with 136,598 shares, Oscar with 8,715,637 shares and Rodrigo with 4,250 shares. Rodrigo and Zenith filed a complaint with the Securities and Exchange Commission (SEC) on May 9, 2000 (SEC Case No. 05-00-6615) alleging a derivative suit to obtain an accounting and to determine shares of the deceased spouses that Oscar had allegedly appropriated.
Oscar answered, denied unlawful acquisition, asserted he purchased the shares from unissued stock, and challenged the SEC’s jurisdiction because the controversy implicated settlement of Anastacia’s estate. After R.A. No. 8799 took effect transferring certain SEC adjudicatory functions to designated trial courts, Rodrigo’s SEC records were turned over to the Regional Trial Court (RTC), Branch 142, Makati, and docketed as Civil Case No. 00-1553 pursuant to A.M. No. 00-11-03 SC.
On October 22, 2002 Oscar moved to dismiss the complaint as a nuisance or harassment suit under the Interim Rules of Procedure for Intra‑Corporate Controversies and argued the action was really a petition for settlement of estate (outside the special commercial court’s jurisdiction). The RTC, in an Order dated November 29, 2002, denied the motion in part, holding that the complaint alleged two causes of action and that only the derivative suit portion would be cognizable by the court. Oscar filed a petition for certiorari, prohibition and mandamus to the Court of Appeals (CA); the CA, in CA‑G.R. SP No. 74970 (Decision penned by Justice Juan Q. Enriquez, Jr., with Justices Romeo A. Brawner and Aurora Santiago‑Lagman concurring), affirmed the RTC in a Decision dated May 26, 2004 and denied reconsideration on October 21, 2004.
Oscar sought relief from the Supreme Court by a petition for review on certiorari under Rule 45 of the Rules of Court. The core contested question before the Court wa...(Subscriber-Only)
Issues:
- Did the RTC sitting as a special commercial court have jurisdiction over Rodrigo’s complaint under Section 5 of P.D. No. 902‑A as transferred by R.A. No. 8799?
- Did Rodrigo sufficiently allege corporate fraud with the particularity required to invoke the special commercial court’s jurisdiction under Section 5(a) of P.D. No. 902‑A?
- Did the complaint present an intra‑corporate controversy under Section 5(b) of P.D. No. 902‑A when tested by the relationship and nature‑of‑the‑controversy tests?
- If framed as a derivative suit,...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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