G.R. No. 132684 ; August 20, 2001
HERNANI N. FABIA, petitioner, vs. COURT OF APPEALS, DEPARTMENT OF JUSTICE, OFFICE OF THE CITY PROSECUTOR OF MANILA, REGIONAL TRIAL COURT OF MANILA-Br. 22, and THE MARITIME TRAINING CENTER OF THE PHILIPPINES (MTCP), respondents.

FACTS

Petitioner Hernani N. Fabia was the President, Director, and stockholder of private respondent Maritime Training Center of the Philippines, Inc. (MTCP) until his resignation on 10 August 1994. On 3 January 1996, MTCP filed an affidavit-complaint for estafa against Fabia with the Office of the City Prosecutor of Manila, alleging that from January to July 1994, Fabia drew cash advances amounting to P1,291,376.61 which he failed to liquidate despite demands. Fabia admitted receiving the amounts but claimed they were simple loans already paid and liquidated. The City Prosecutor dismissed the complaint for lack of jurisdiction, ruling it pertained to the relationship between a corporation and a former officer, thus falling under the original and exclusive jurisdiction of the Securities and Exchange Commission (SEC). MTCP’s motion for reconsideration was denied. MTCP then filed a petition for review with the Department of Justice (DOJ), which affirmed the dismissal. MTCP subsequently filed a petition for certiorari with the Court of Appeals. The Court of Appeals granted the petition, annulled the DOJ Resolution, and directed the filing of an information for estafa against Fabia, which was lodged with the Regional Trial Court of Manila as Crim. Case No. 98-162570. Fabia now questions the trial court’s jurisdiction, arguing the case involves an intra-corporate controversy primarily cognizable by the SEC.

ISSUE

Whether the case involves an intra-corporate dispute within the jurisdiction of the Securities and Exchange Commission (SEC), thereby divesting the regular courts of jurisdiction over the estafa complaint.

RULING

The Supreme Court ruled that the case involves an intra-corporate dispute within the jurisdiction of the SEC. The charge of estafa, while punishable under the Revised Penal Code, arose from acts committed by Fabia by virtue of his position as President, Director, and stockholder of MTCP and involved alleged fraud against the corporation. Jurisdiction is determined from the allegations in the complaint, which sufficiently establish an intra-corporate controversy. The doctrine of primary jurisdiction requires referral to the SEC. However, noting that Republic Act No. 8799 (The Securities Regulation Code) had transferred jurisdiction over intra-corporate cases from the SEC to the Regional Trial Courts, the Supreme Court reversed the assailed Decision and Resolution of the Court of Appeals. The Regional Trial Court was directed to dismiss Crim. Case No. 98-162570 without prejudice to the filing of the proper action, which shall then be raffled to the appropriate branch of the court pursuant to the rules.