- The fact that the parties involved in the controversy are all
stockholders or that the parties involved are the stockholders and the
corporation does not necessarily place the dispute within the ambit of the
jurisdiction of the SEC (now the Regional Trial Court). The better
policy to be followed in determining jurisdiction over a case should be to
consider concurrent factors such as the status or relationship of the parties
or the nature of the question that is subject of their controversy. In
the absence of any one of these factors, the SEC will not have jurisdiction.
Furthermore, it does not necessarily follow that every conflict between the
corporation and its stockholders would involve such corporate matters as only
SEC (now the Regional Trial Court) can resolve in the exercise of its
adjudicatory or quasi-judicial powers. (Emphasis ours)
- A review of relevant jurisprudence shows a development in the Court’s
approach in classifying what constitutes an intra-corporate controversy.
Initially, the main consideration in determining whether a dispute constitutes
an intra-corporate controversy was limited to a consideration of the
intra-corporate relationship existing between or among the parties. The types
of relationships embraced under Section 5(b) x x x were as follows:
a) between the
corporation, partnership or association and the public;
b) between the
corporation, partnership or association and its stockholders, partners, members
or officers;
c) between the
corporation, partnership or association and the State as far as its franchise,
permit or license to operate is concerned; and
d) among the
stockholders, partners or associates themselves.
The existence of any
of the above intra-corporate relations was sufficient to confer jurisdiction to
the SEC (now the RTC), regardless of the subject matter of the dispute. This
came to be known as the relationship test.
However, in the 1984
case of DMRC Enterprises v. Esta del Sol Mountain Reserve, Inc., the
Court introduced the nature of the controversy test. We declared in this case
that it is not the mere existence of an intra-corporate relationship that gives
rise to an intra-corporate controversy; to rely on the relationship test alone
will divest the regular courts of their jurisdiction for the sole reason that
the dispute involves a corporation, its directors, officers, or stockholders.
We saw that there is no legal sense in disregarding or minimizing the value of
the nature of the transactions which gives rise to the dispute.
Under the nature of
the controversy test, the incidents of that relationship must also be
considered for the purpose of ascertaining whether the controversy itself is
intra-corporate. The controversy must not only be rooted in the existence of an
intra-corporate relationship, but must as well pertain to the enforcement of
the parties’ correlative rights and obligations under the Corporation Code and
the internal and intra-corporate regulatory rules of the corporation. If the
relationship and its incidents are merely incidental to the controversy or if
there will still be conflict even if the relationship does not exist, then no
intra-corporate controversy exists.
The Court then
combined the two tests and declared that jurisdiction should be determined by
considering not only the status or relationship of the parties, but also the
nature of the question under controversy. This two-tier test was adopted in the
recent case of Speed Distribution Inc. v. Court of Appeals:
‘To determine whether
a case involves an intra-corporate controversy, and is to be heard and decided
by the branches of the RTC specifically designated by the Court to try and
decide such cases, two elements must concur: (a) the status or relationship of
the parties, and (2) the nature of the question that is the subject of their
controversy.
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