G.R. No. L-63558 and G.R. No. L-68450-51 May 19, 1987
SPOUSES JOSE ABEJO AND AURORA ABEJO, ET AL. vs. HON. RAFAEL DE LA CRUZ, ET AL. and POCKET BELL PHILIPPINES, INC., ET AL. vs. THE SECURITIES AND EXCHANGE COMMISSION, ET AL.

FACTS

The consolidated cases stem from a dispute over the control of Pocket Bell Philippines, Inc. The spouses Abejo, minority stockholders, sold their 133,000 shares to Telectronic Systems, Inc. Telectronics also purchased 63,000 shares from Virginia Braga, evidenced by stock certificates endorsed in blank. These purchases would give Telectronics majority control. The corporate secretary, Norberto Braga (son of the majority stockholders, spouses Agapito and Virginia Braga), refused to register the transfers. He asserted the Bragas’ preemptive rights over the Abejo shares and claimed Virginia Braga’s certificates were lost, not sold.
This refusal triggered parallel legal actions. The Abejos and Telectronics filed petitions for mandamus and injunction with the Securities and Exchange Commission (SEC Cases Nos. 02379 and 02395) to compel the registration of the share transfers and to restrain the Bragas from managing corporate assets. Concurrently, the Bragas filed a civil case with the Regional Trial Court (Civil Case No. 48746) seeking rescission of the Abejo-Telectronics sale for violating their preemptive rights and annulment of the transfer of Virginia Braga’s shares.

ISSUE

The central issue is whether the SEC or the RTC has original and exclusive jurisdiction over the controversy.

RULING

The Supreme Court ruled that the SEC possesses original and exclusive jurisdiction. The legal logic hinges on the nature of the dispute as intracorporate. The Court emphasized that jurisdiction is determined by the allegations in the complaint and the character of the relief sought. The core action filed by the Abejos and Telectronics with the SEC was a petition for mandamus to compel the corporate secretary to perform a ministerial duty: recording the transfer of shares in the corporate books. This duty is mandated by the Corporation Code, and the SEC is expressly empowered under its rules to issue writs of mandamus in such cases.
The Court rejected the Bragas’ argument that the case involved an ordinary question of ownership or contract rescission falling under regular court jurisdiction. It found that the claim of preemptive rights and the validity of the share transfers were incidental to the main issue of the corporate secretary’s refusal to perform a duty arising from his corporate office. Since the controversy arose from intra-corporate relations—between purchasers of shares and the corporate secretary, and affecting corporate control—it was properly within the SEC’s jurisdiction under Presidential Decree No. 902-A. The RTC case was deemed an attempt to divest the SEC of its jurisdiction over the same subject matter. The Court ordered the dismissal of the RTC case and directed the SEC to proceed with the adjudication of the dispute.