Title
Gonzales vs. GJH Land, Inc.
Case
G.R. No. 202664
Decision Date
Nov 20, 2015
Petitioners sought to enjoin share sale, claiming full payment. RTC dismissed for lack of jurisdiction; Supreme Court ruled it an intra-corporate dispute, ordered transfer to Special Commercial Court.

Case Summary (G.R. No. 202664)

Petitioner

Manuel Luis C. Gonzales and Francis Martin D. Gonzales sued to enjoin respondents from selling shares allegedly belonging to petitioners, claiming full payment recorded in corporate books and asserting imminent and irreparable injury from the proposed sale.

Respondent

GJH Land, Inc. and the individually named respondents defended and moved to dismiss on the ground that the dispute is an intra‑corporate matter falling within the exclusive original jurisdiction of Special Commercial Courts designated to hear cases formerly cognizable by the Securities and Exchange Commission (SEC).

Key Dates and Procedural Posture

  • Complaint filed: August 4, 2011 (docketed Civil Case No. 11‑077).
  • Temporary restraining order and writ of preliminary injunction issued by Branch 276: August 9 and August 24, 2011.
  • RTC Branch 276 granted respondents’ motion to dismiss for lack of subject matter jurisdiction: Order dated April 17, 2012.
  • Motion for reconsideration denied: Order dated July 9, 2012.
  • Petition for review on certiorari filed with the Supreme Court; Supreme Court decision rendered in favor of petitioners (see Court’s Ruling below).

Applicable Law and Authorities

  • 1987 Philippine Constitution (administrative supervision and rule‑making powers of the Supreme Court; Congress’ power to define jurisdiction).
  • Republic Act No. 8799 (Securities Regulation Code), especially Section 5.2 (transfer of SEC jurisdiction to “Courts of general jurisdiction or the appropriate Regional Trial Court,” with proviso allowing the Supreme Court to designate RTC branches to exercise such jurisdiction).
  • Presidential Decree No. 902‑A (SEC original jurisdiction items).
  • Batas Pambansa Blg. 129, Section 19 (RTC as courts of general jurisdiction).
  • Supreme Court administrative issuances implementing designations of Special Commercial Courts (A.M. No. 00‑11‑03‑SC, A.M. No. 03‑03‑03‑SC; SC administrative circulars and OCA circulars).

Facts (as alleged in the complaint)

Petitioners claim they acquired and fully paid for certain shares which were recorded as paid in S.J. Land, Inc.’s books; in May and July 2011 the corporation (through its officers) allegedly asserted unpaid subscriptions and offered the shares for sale to other stockholders, prompting petitioners’ injunctive relief to prevent the sale and avert irreparable injury.

Trial Court’s Ruling and Rationale

Branch 276 dismissed the complaint for lack of jurisdiction, reasoning that the subject matter was an intra‑corporate dispute within the original and exclusive jurisdiction of Special Commercial Courts designated by the Supreme Court (Branch 256 in Muntinlupa). The branch relied on precedent construing the effect of the Supreme Court’s designations and treated the misassignment by raffle as a jurisdictional defect requiring dismissal (citing Calleja v. Panday).

Issue Presented to the Supreme Court

Whether Branch 276 erred in dismissing Civil Case No. 11‑077 for lack of subject matter jurisdiction where the complaint was filed in the official station of the RTC that has a specially designated Special Commercial Court but was erroneously raffled to a regular branch.

Supreme Court’s Holding (majority)

The Supreme Court granted the petition. It held that:

  1. The complaint is properly characterized as a commercial case — an intra‑corporate dispute within the category of cases transferred from the SEC under RA 8799.
  2. Jurisdiction over the subject matter was conferred by law (RA 8799) to the RTC of the official station where the complaint was filed; the erroneous raffle to a regular branch of the same RTC is an incident of the exercise of jurisdiction (a procedural error) and does not deprive the RTC of subject matter jurisdiction.
  3. The proper remedy for a commercial case wrongly raffled to a regular branch of the station where a Special Commercial Court has been designated is not dismissal but administrative correction: the regular branch should refer the case to the Executive Judge for re‑docketing as a commercial case and assignment to the designated Special Commercial Court (or re‑raffle among designated special branches if multiple exist). If the station has no designated special branch, the case should be referred to the nearest RTC station with a designated Special Commercial Court.
  4. Dismissal was therefore improper; the RTC orders of April 17 and July 9, 2012 were reversed and set aside, and the case was ordered referred to the Executive Judge for re‑docketing and assignment to Branch 256.

Legal Reasoning — distinction between subject matter jurisdiction and exercise of jurisdiction

  • The Court emphasized the distinction between a court’s acquisition of subject matter jurisdiction (a matter conferred by statute) and procedural incidents of how that jurisdiction is exercised (governed by rules and administrative orders). RA 8799 transferred SEC subject matter jurisdiction to the “Courts of general jurisdiction” (i.e., RTCs). The Supreme Court’s subsequent designation of particular RTC branches as Special Commercial Courts was an administrative exercise under its rule‑making and supervisory powers aimed at expediting adjudication, but did not alter the statute’s conferral that RTCs as courts of general jurisdiction acquired the subject matter jurisdiction.
  • The Court treated the wrong raffle within the same RTC as procedural error, distinguishable from cases (like Calleja) where a complaint was filed in the wrong RTC station (i.e., a different court station that did not have the statutory authority to exercise the transferred SEC jurisdiction), in which dismissal may be appropriate.

Procedural Guidelines Announced by the Supreme Court

The Court prescribed prospective procedural rules to address similar misraffling issues:

  1. If a commercial case filed in the proper RTC station is wrongly raffled to a regular branch:
    • If the station has only one designated Special Commercial Court branch → refer to Executive Judge for re‑docketing as a commercial case and assign to that special branch.
    • If the station has multiple designated Special Commercial Court branches → refer to Executive Judge for re‑docketing and re‑raffle among those special branches.
    • If the station has no designated special branch → refer to the nearest RTC station within the judicial region that has a designated Special Commercial Court and follow that station’s assignment procedure.
  2. If an ordinary civil case is wrongly raffled to a branch designated as Special Commercial Court → refer to the Executive Judge for re‑docketing as an ordinary civil case and raffle among all branches of the RTC (including the special branch), subject to internal rules.
  3. Docket fees already paid shall be credited; differences ordered paid or excess refunded as appropriate.
  4. All initiatory pleadings must state the action’s nature both in the caption and body; failure to do so may result in dismissal without prejudice to re‑filing after rectification (this rule prospective in application).
  5. Existing inconsistent rules are superseded to the extent of inconsistency.

Distinction from Calleja and Relevant Precedent

The Court distinguished Calleja v. Panday on its facts: Calleja involved filing in a different RTC station (San Jose) rather than the RTC station in which a designated special branch (Naga) existed; that case implicated lack of statutory authority at the station where filed. In the present case the complaint was filed in the official station of the designated Special Commercial Court (Muntinlupa RTC) but was misraffled within that station to a regular branch; therefore the better course is administrative correction rather than dismissal. The Court relied on other precedent (e.g., Tan v. Bausch & Lomb) showing that where an RTC station acquires jurisdiction, transfer to the desig

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