GR 138542; (August, 2000) (Digest)
G.R. No. 138542; August 25, 2000
ALFREDO P. PASCUAL and LORETA S. PASCUAL, petitioners, vs. COURT OF APPEALS, ERNESTO P. PASCUAL and HON. ADORACION ANGELES, in her capacity as Presiding Judge, RTC, Kalookan City, Branch 121, respondents.
FACTS
Private respondent Ernesto P. Pascual filed a complaint against his brother, petitioner Alfredo Pascual, and Alfredo’s wife, for accounting, reconveyance of property, and damages. The complaint alleged that Alfredo, as president of the family’s Phillens Manufacturing Corp. and L.R. Pascual & Sons, Inc., held family properties in trust for his siblings. Upon the dissolution of Phillens, Alfredo fraudulently represented himself as the majority owner, assumed corporate liabilities, and caused the transfer of corporate land in Kalookan to himself and his wife for a grossly undervalued price, in breach of this trust.
Petitioners moved to dismiss the case, arguing it constituted an intra-corporate dispute over which the Securities and Exchange Commission (SEC) had exclusive original jurisdiction. The trial court initially agreed but, upon reconsideration, reinstated the complaint, holding the action was essentially for breach of an implied trust and not purely intra-corporate. The Court of Appeals sustained the trial court’s order.
ISSUE
Whether the action for reconveyance, accounting, and damages involves an intra-corporate dispute beyond the jurisdiction of the Regional Trial Court.
RULING
The Supreme Court affirmed the appellate court’s decision, ruling that the RTC properly exercised jurisdiction. The complaint’s core allegations centered on a breach of an implied trust arising from fraud, not from intra-corporate relations. The Court emphasized that the existence of an intra-corporate controversy is determined by the nature of the controversy and the status of the parties. Here, the cause of action stemmed from Alfredo’s alleged fraudulent acts in transferring corporate property to himself in his personal capacity, in violation of a fiduciary duty to his brother as a beneficiary of the family trust, which existed independently of their corporate relations. The action was thus personal and fell within the general jurisdiction of regular courts.
Furthermore, the Court noted the issue had become largely academic due to the enactment of the Securities Regulation Code (R.A. No. 8799), which transferred jurisdiction over intra-corporate disputes from the SEC to the Regional Trial Courts. Even if the case were deemed intra-corporate, it would properly be within the RTC’s jurisdiction under the new law. The amendments to the complaint were merely clarificatory and did not alter its fundamental character as an action for breach of trust.